Finnish Medical Technology Companies Revenio and Optomed Report Mixed Half-Year Results for 2024

Revenio Group Corporation: Half year financial report 1 January 30 June, 2024

Q2/2024: Expectedly strong second quarter, excellent net cash flow from operations The figures in parentheses refer to the corresponding period in the previous year unless otherwise stated. Financial guidance for 2024 Revenio Group's exchange rate-adjusted net sales are estimated to grow 5-10 percent from the previous year and profitability, excluding non-recurring items, is estimated to remain at a good level. President and CEO Jouni Toijala comments on the second quarter of 2024 As expected, the second quarter of the year was a strong one for us. Our net sales increased by 14.2%, totalling EUR 25.4 million. Our adjusted operating profit was at a good level, at EUR 6.0 million, or 23.5% of net sales, which is clearly above the average in our industry. Sales development in the second quarter of the year was strong, particularly in the US, and very strong in EMEA and APAC. Sales of fundus imaging devices developed very strongly, and sales of tonometers developed strongly during the review period. Of our products related to intraocular pressure measurement, iCare IC200 tonometer and probes sold particularly well. The sales of iCare DRSplus fundus imaging devices also continued to be strong throughout the first half of the year. In addition, the sales of iCare COMPASS and iCare EIDON product family developed very well in the second quarter. Exchange rates contributed favourably to net sales in the second quarter of the year. Our reported operating result was weakened by the write-off of capitalizations, totalling EUR 0.73 million. The capitalizations were mainly related to Ventica, a non-strategic children's asthma product. In line with our strategy, we are focusing our capital allocations on eye care solutions. For this reason, we have not updated the CE certification pursuant to the MDD (Medical Device Directive) of Ventica to comply with the requirements of the new European Medical Device Regulation (MDR). The update would have required significant investment; instead, we decided to discontinue the product, leading to the write-off of the remaining assets. Unlike the first quarter, the second quarter did not include significant costs related to the FDA approval process for the iCare ILLUME screening solution. The clinical trials are progressing and corresponding costs will be incurred as the trials progress during the latter part of the year and early 2025. Our net cash flow was very strong. Net cash flow from operating activities was increased by the year-on-year improvement in net profit, and changes in working capital. Our continued profitable growth is based on our state-of-the-art products and solutions. We have significant product development projects underway, including the development of the successor to the iCare MAIA microperimeter, which is progressing on schedule towards its launch during the second half of the year and first commercial deliveries in early 2025. The new iCare TONOVET Pro was launched during the review period. Other product development projects will be discussed in more detail during the year. iCare ILLUME is a unique screening solution that combines images captured with the iCare DRSplus fundus imaging device with the iCare ILLUME cloud platform and AI. We have successfully expanded the sales of the iCare ILLUME screening solution to Germany, Spain, and the Middle East, which has brought us numerous new customers. The iCare ILLUME screening solution has been actively showcased at key industry conferences and the feedback has continued to be extremely positive. iCare ILLUME is clearly considered the most effective and usable screening solution for both clinicians and patients. The process related to the iCare HOME2 tonometer reimbursement policy with the US CMS (Centers for Medicare & Medicaid Services) regarding the HCPCS reimbursement code for the iCare HOME2 tonometer continues. We estimate the process to be completed during the last quarter of the year. Our goal is to expand the reimbursement policy to cover the device either in full or in part as part of the patient's care pathway in addition to the existing codes. The code is necessary for insurance companies to reimburse patients for the purchase of a tonometer. In the United States, the willingness to invest among the private equity-funded optician chains is showing positive momentum compared to last year, even though the recovery has not yet materialized in the form of larger orders. The implementation of our strategy is progressing with determination. In recent years, we have undergone a significant transformation from an ophthalmic device provider focused on eye health to a supplier of total eye care solutions. Our software solutions significantly streamline the patient's eye care pathways and the work processes of ophthalmologists and opticians. This improves both the productivity and quality of eye care. Recovery of the global macro economy, especially in terms of the interest rate environment, is currently progressing slower than expected, and the geopolitical situation continues to be challenging. Visibility around the future is still quite limited. We are committed to our growth targets despite the challenging operating environment. I would like to thank our partners and the entire organization for their commitment to our strategy and their daily work for it. April-June 2024 Revenio Group's net sales April 1-June 30, 2024, totaled EUR 25.4 (22.3) million. Net sales increased by 14.2%. The currency-adjusted growth of net sales in April-June was 13.5%. The operating profit in April-June was EUR 5.3 (4.7) million, up by 12.6%. The reported operating profit was weakened by write-offs of non-strategic capitalizations, a total of EUR 0.73 million, mainly related to the children's asthma product Ventica. Adjusted EBITDA for the review period was EUR 6.0 (5.5) million, or 23.5% of net sales, up by 8.9%. Profit before taxes was EUR 5.5 (4.4) million, up by 23.1% year-on-year. Earnings per share came to EUR 0.155 (0.122). Equity per share came to EUR 3.66 (3.30). January-June 2024 Revenio Group's net sales January 1-June 30, 2024 totaled EUR 49.1 (45.5) million. Net sales increased by 7.9%. The currency-adjusted growth of net sales in January-June was 6.1%. EBITDA was EUR 13.3 (12.7) million, or 27.1% of net sales, up by 4.7%. The reported operating profit was weakened by write-offs of non-strategic capitalizations, a total of EUR 0.73 million, mainly related to the children's asthma product Ventica. The adjusted EBITDA for the review period was EUR 11.1 (11.7) million, 22.7% of net sales. The Group's operating profit in January-June was EUR 10.4 (10.8) million, down by 4.0%. Profit before taxes was EUR 10.3 (10.2) million, up by 0.8% year-on-year. Earnings per share came to EUR 0.291 (0.281) Equity per share came to EUR 3.66 (3.30). Balance sheet, financial position, and cash flow The Group's balance sheet total on June 30, 2024 totaled EUR 130.7 (124.0) million. The value of goodwill on the balance sheet on June 30, 2024 totaled EUR 59.5 (59.4) million. The Group's equity was EUR 97.7 (88.1) million. The Group's net debt at the end of the review period totaled EUR -3.0 (1.6) million, and net gearing was -3.0% (1.9). The Group's equity ratio was 74.7% (71.1). The Group's liquid capital at the end of the review period on June 30, 2024 totaled EUR 18.3 (17.9) million. Cash flow from operations totaled EUR 11.2 (0.1) million. The cash flow from operations was increased by changes and more efficient use of the working capital. The cash flow from operations from the comparison period was significantly affected by the Italian subsidiary's income tax payments, which included tax payments for year 2022. Administration Personnel and management On June 30, 2024 the members of the Leadership Team of Revenio Group are Revenio Group Corporation's President & CEO Jouni Toijala, Vice President, Sales John Floyd, Vice President, Quality Heli Huopaniemi, Vice President, Operations Ari Isomäki, CFO Robin Pulkkinen, Vice President, R&D Marco Rizzardo, Vice President, Products, Brand and Marketing Erkki Tala, Vice President, Strategy and Business Development Kate Taylor and Vice President, People & Culture Hanna Vuornos. Personnel at the end of the review period on June 30, 2024, was 229 (217). Board of Directors The Annual General Meeting 2024 decided to elect Arne Boye Nielsen, Riad Sherif, Ann-Christine Sundell, Pekka Tammela, and Bill Östman as Board members. In the board meeting held after the AGM, the Board of Directors elected Arne Boye Nielsen as Chair of the Board and Bill Östman as Vice Chair of the Board. Audit Committee At its organization meeting, held after the Annual General Meeting 2024, the Board elected the members of the Audit Committee amongst the Board members. Pekka Tammela (Chair of the Audit Committee), Arne Boye Nielsen, and Ann-Christine Sundell were elected to the Committee. The duties of the Audit Committee are described in more detail in the 2023 Report by the Board of Directors, 2023 Corporate Governance Statement, and on the company's website at www.reveniogroup.fi/en/investors/corporate_governance/board_of_directors Nomination and Remuneration Committee At its organization meeting, held after the Annual General Meeting 2024, the Board elected the members of the Nomination and Remuneration Committee amongst the Board members. Bill Östman (Chair of the Committee), Arne Boye Nielsen and Riad Sherif were elected. The duties of the Nomination and Remuneration Committee are described in more detail in the 2023 Report by the Board of Directors, 2023 Corporate Governance Statement, and on the company's website at www.reveniogroup.fi/en/investors/corporate_governance/board_of_directors Auditor Deloitte Oy, Authorized Public Accountants, were re-appointed as the company's auditors, with Mikko Lahtinen, Authorized Public Accountant, as the principal auditor. The Auditor's Fee is paid upon the invoice approved by the company. Shares, share capital, and management and employee holdings On June 30, 2024, the Revenio Group Corporation's fully paid-up share capital registered with the Trade Register was EUR 5,314,918.72 and the number of shares totaled 26,681,116. The company has one class of share, and all shares confer the same voting rights and an equal right to dividends and the company's funds. On June 30, 2024, the President & CEO, members of the Board of Directors, the Leadership team members and their related parties held 0.24% of the Company's shares, or 63,635 shares. During the review period, the company did not buy its own shares. At the end of the review period, the company held 85,142 of its own shares, representing 0.32% of the total number of all shares. In late 2015, the employees of Revenio Group established a personnel fund, into which any bonuses earned by employees working in Finland on the basis of incentive schemes can be paid. The arrangement is widely used by the personnel. The valid authorizations of the Board of Directors are documented in the Annual general meeting section below. Existing incentive schemes Information on the remuneration schemes used currently in the Revenio Group can be found at the company's website at www.reveniogroup.fi/en/investors/corporate_governance/remuneration. At the end of the review period, the company has no valid stock option plans. Flagging notifications The company was not notified of any flaggings during the review period of January 1-June 30, 2024. Management transactions Transactions in Revenio securities by members of Revenio Group Corporation's management during the review period have been published as stock exchange releases and can be viewed on the company website at www.reveniogroup.fi/en/releases. Trading on Nasdaq Helsinki During the period January 1-June 30, 2024, Revenio Group Corporation's share turnover on the Nasdaq Helsinki exchange totaled EUR 73.6 (128.0) million, representing 2.8 (3.6) million shares or 10.4% (13.5) of all shares outstanding. The highest trading price was EUR 30.24 (41.50) and the lowest was EUR 23.36 (30.44). At the end of the period, the closing price was EUR 27.50 (31.72), and the average share price was EUR 26.58 (35.45). Revenio Group Corporation's market value stood at EUR 733.7 (846.3) million on June 30, 2024. Summary of trading on Nasdaq Helsinki on January 1-June 30, 2024 Risks and uncertainty factors Risks Revenio Group is exposed to include strategic, operational, business cycle, damage, financial, and political risks. In addition, the threat of the global impact of pandemics and the risk of cyber threats have increased. The Group's strategic risks include competition in all sectors, the threat posed by new competing products, and any other actions of the Company's rivals that may affect the competitive situation. Another strategic risk is related to the ability to shift the strategic focus towards integrated and predictive eye care pathways and to succeed in R&D activities and to maintain a competitive product mix. The Group develops new technologies under Icare Finland Oy, Revenio Research Oy, CenterVue Spa and iCare World Australia Pty Ltd, and any failure in the commercialization of individual development projects may result in the depreciation of capitalized development expenses, with an impact on the result. Strategic risks in the Group's segments that require special expertise are also associated with the successful management and development of key human resources and the management of the subcontractor and supplier network. The range and probability of cyber threats has increased. When realized, a cyber threat can affect the continuity of Revenio Group's business, the Group's reputation, or lead to significant sanctions. Risks caused by cyber threats are prepared with technical, administrative and organizational information security development. Corporate acquisitions and the purchase of assets with growth potential related to eye health are part of the Group strategy. The success of these acquisitions has a significant impact on the achievement of growth and profitability targets. Acquisitions may also change the Group's risk profile. Strategic risks and the need for action are regularly monitored and assessed in connection with day-to-day management, monthly Group reporting, and annual strategy updates. Operational risks are associated with the retention and development of major customers, the operations of the distribution network, and success in extending the customer base and markets. Operational risks in the eye health sector that the Company specializes in include, in particular, factors related to expansion into new markets, such as various countries' national regulations of marketing authorizations for medical instruments and the related official decisions concerning the health care market. Success in eye health R&D projects launched in accordance with the strategy can also be classified as an operational risk. Furthermore, the global availability challenges related to electronic components may cause operational risks. The operational risks related to the manufacture, product development, and production control of medical instruments are estimated to be higher than average due to the sector's ambitious requirements concerning quality. Damage-related risks are covered by insurance. Property and business interruption insurance provides protection against risks in these areas. The business activities of the Group are covered by international liability insurance. Financial risks can be further categorized into credit, interest-rate, liquidity, and foreign exchange risks. The Board assesses financial risks and other financial matters in its monthly meetings, or more frequently, as necessary. If required, the Board provides decisions and guidelines for the management of financial risks including, for example, interest-rate and currency hedging decisions. Liquidity risk can be affected by the availability of external financing, the development of the Group's credit standing, trends in business operations, and changes in the payment behavior of customers. Liquidity risks are monitored by means of cash forecasts, which are drawn up for periods of, at most, 12 months at a time. The management of corporate responsibility risks is a part of the Company's risk management process, according to which risks are assessed annually. Corporate responsibility is viewed through economic, environmental and social responsibility. Revenio Group offers eye health diagnostics solutions under the iCare brand. Reputational damage might have a negative impact on Revenio Group's business. Possible causes for reputational damage include cyber security or compliance challenges or notable delivery or product quality issues. Leakage of sensitive employee or customer data might also lead to reputational damage and notable financial consequences. Revenio Group products are sold in nearly 100 countries. Economic and political uncertainties, interest and inflation risks and the unstable geopolitical situation may affect the demand for Revenio Group products. Revenio actively monitors political developments in different market areas from a risk management perspective. Developments in national government policies or changes to relevant legislation may have an impact on the Group's business. The security situation in Europe has changed drastically since the Russia invasion of Ukraine. Revenio stopped all its business in Russia and Belarus in the first quarter of 2022. Revenio's sales in Russia have been limited prior to the war, accounting for less than two per cent of Revenio's net sales. Moreover, global pandemics such as Covid-19 could have direct and indirect effects on Revenio Group's business, including and an increased risk of personnel being incapacitated. Government-mandated closures of factories or borders may weaken Revenio Group's operating environment and restrictions on the movement of people could hamper the sales and delivery of Revenio's products. Annual General Meeting and currently valid authorizations of the Board of Directors Decisions by the Annual General Meeting of Revenio Group Corporation on April 4, 2024 Financial statements, Board and Auditors The AGM confirmed the company's financial statements for the financial year 1 January - 31 December 2023 and discharged the members of the Board of Directors and the Managing Director from liability. The AGM decided that five members be elected to the Board of Directors and elected Arne Boye Nielsen, Riad Sherif, Ann-Christine Sundell, Pekka Tammela, and Bill Östman as members of the Board of Directors. In the board meeting held after the AGM, the Board of Directors elected Arne Boye Nielsen as Chair of the Board and Bill Östman as Vice Chair of the Board. The Board of Directors also decided the members of Audit Committee and elected Pekka Tammela, Ann-Christine Sundell, and Arne Boye Nielsen. The Board of Directors elected Pekka Tammela as Chair of the Audit Committee. The Board of Directors also decided the members of Nomination and Remuneration Committee and elected Bill Östman, Riad Sherif and.Arne Boye Nielsen. The Board of Directors elected Bill Östman as Chair of the Nomination and Remuneration Committee. The AGM decided that the Chair of the Board be entitled to an annual emolument of EUR 60,000, the possible deputy chair of the Board of Directors be entitled to an annual emolument of EUR 45,000, the Board Members be entitled to an annual emolument of EUR 30,000, the chair of the Audit Committee be entitled to an annual emolument of EUR 20,000, the chair of the Nomination and Remuneration Committee be entitled to an annual emolument of EUR 10,000, and the members of the Board Committees be entitled to an annual emolument of EUR 5,000. Approximately 40 per cent of the Board members' annual remuneration (gross) will be settled in the form of the company's shares held in its treasury, however not exceeding a maximum of 3,200 shares in total, while approximately 60 per cent will consist of a monetary payment. Tax will be deducted from the monetary payment, calculated on the amount of the entire annual remuneration. The shares will be assigned to the Board members within two weeks of the release of Revenio Group Corporation's interim report for the period of 1 January - 31 March 2024, using the trade volume weighted average price on the day following the release of the interim report as the share value. The AGM further decided that an attendance allowance of EUR 1,000 for members of the Board or Board Committees per Board or Committee meeting and EUR 600 per short teleconference, Board members EUR 600 for Board and Board Committee meetings and EUR 300 for short teleconferences per meeting, yet so that the aforementioned attendance allowance for the Board and Board Committee meetings for Board and Committee chairs who live outside of Finland and travel to Finland for the meeting is EUR 2,000 and the aforementioned attendance allowance for the Board and Board Committee meetings for members is EUR 1,200. Any travel expenses of the members of the Board or Board Committees will be compensated in accordance with the company's travel expense regulations. The AGM re-elected Deloitte Ltd, Authorized Public Accountants, as the company's auditors, with Authorized Public Accountant (KHT) Mikko Lahtinen acting as the principal auditor. The AGM decided to pay the auditors' fees as invoiced and approved by the company. Annual profit distribution, dividend distribution and capital repayment The AGM decided to accept the Board's proposal on profit distribution, according to which a dividend of EUR 0.38 per share will be paid. The dividend will be paid to shareholders who have been registered in the company's shareholder register, maintained by Euroclear Finland Ltd, by the dividend record date on April 8, 2024. The dividend payment date was April 15, 2024. Authorizing the Board of Directors to decide on the acquisition of own shares The AGM authorized the Board of Directors to resolve on the acquisition of a maximum of 1,334,055 of the company's own shares in one or more tranches using the company's unrestricted equity. The company may buy back shares in order to develop its capital structure, finance or implement any corporate acquisitions or other transactions, implement share-based incentive plans, pay board fees or otherwise transfer or cancel them. The company may buy back shares in public trading on marketplaces whose rules and regulations allow the company to trade in its own shares. In such a case, the company buys back shares through a directed purchase, i.e. in a proportion other than its shareholders' holdings of company shares, with the consideration paid for the shares based on their publicly quoted market price so that the minimum price of the purchased shares equals the lowest market price quoted in public trading during the authorization period and their maximum price equals the highest market price quoted in public trading during that period. The authorization is effective until the end of the Annual General Meeting held in 2025, yet no further than until June 30, 2025. This authorization shall supersede the authorization granted at the Annual General Meeting of March 23, 2023. Authorizing the Board of Directors to decide on a share issue and on granting stock options and other special rights entitling to shares The AGM decided to authorize the Board of Directors to decide on issuing a maximum of 2,668,111 shares in a share issue or by granting special rights (including stock options) entitling holders to shares as referred to in Chapter 10 Section 1 of the Companies Act, in one or several tranches. This authorization is to be used to finance and implement any prospective corporate acquisitions or other transactions, to implement the company's share-based incentive plans, or for other purposes determined by the Board. The authorization grants the Board the right to decide on all terms and conditions governing the share issue and the granting of said special rights, including on the recipients of the shares or special rights and the amount of payable consideration. The authorization also includes the right to issue shares by deviating from the shareholders' pre-emptive rights, i.e. by issuing them in a directed manner. The authorization of the Board covers both the issue of new shares and the transfer of any shares that may be held by the company. The authorization is effective until the end of the Annual General Meeting held in 2025, yet no further than until June 30, 2025. This authorization shall supersede the issue authorization granted at the Annual General Meeting of March 23, 2023. Events after the review period No events after the review period. Financial information in 2024 Interim report 1-9/2024 will be published on Thursday, October 26, 2024. Major shareholders on June 30, 2024* * Monitor by Modular Finance AB. Compiled and processed ownership data from various public sources, including Euroclear Finland and Morningstar, and from direct shareholder disclosures. Whilst all efforts have been made to secure as updated and complete information as possible, neither Modular Finance nor Revenio Group can guarantee the completeness or accuracy of the data. HALF-YEAR REPORT JANUARY 1-JUNE 30, 2024, TABLES Accounting policies applied in the preparation of the half-year report This half-year report has been drawn up in accordance with IAS 34 Interim Financial Reporting and the same principles as the financial statements for 2023, with the exception of the following amendments to the existing standards, which the Group has applied as of January 1, 2024: Amendments made to IAS 1, IAS 7, IFRS 7 and IFRS 16. In the management's estimate, the adoption of the above-mentioned standards does not have a material impact on the Group's financial statements. The figures of the half-year report are unaudited. Contingent liabilities Revenio Group has made a minority investment during year 2023 and has a commitment to acquire the remaining shares if certain criteria are met at the latest in the third quarter of 2024. The maximum contingent liability is 8.1 million euros. Alternative growth indicators used in financial reporting Revenio has adopted the guidelines of the European Securities and Market Authority (ESMA) on Alternative Performance Measures. In addition to the IFRS-based key figures, the company will publish certain other generally used key figures that may, as a rule, be derived from the income statement and balance sheet. The calculation of these figures is presented below. According to the company's view, these key figures supplement the income statement and balance sheet, providing a better picture of the company's financial performance and position. Revenio Group's net sales are strongly affected by fluctuations in the exchange rate between the euro and the US dollar. As an alternative growth indicator, the company also presents net sales with the exchange rate effect eliminated. Alternative profitability indicator EBITDA (EUR thousand) EBITDA = Operating profit + depreciation + impairment As an alternative growth indicator, the company also presents profitability as an operating margin (EBITDA) key figure. Formulas Audiocast and conference call Revenio will hold an audiocast and teleconference, primarily for investors, analysts, and the media, on Thursday, August 8, 2024, at 3:00 p.m. Finnish time. In the event, Revenio's President and CEO Jouni Toijala and CFO Robin Pulkkinen will present the Company's results for Q2/2024. The invitation to the event was published as a press release on July 24, 2024. Audiocast: https://revenio.videosync.fi/q2-2024 To ask questions, please join the teleconference by registering using the following link: https://palvelu.flik.fi/teleconference/?id=50048931 After the registration, you will be provided with phone numbers and a conference ID to access the conference. To ask a question, please press #5 on your telephone keypad to enter the queue. A recording of the audiocast will be published on www.reveniogroup.fi/en/ after the event. General statement This report contains certain statements that are estimates based on the management's best knowledge at the time they were made. For this reason, they involve a certain amount of inherent risk and uncertainty. The estimates may change in the event of significant changes in the general economic conditions. Revenio Group in brief Revenio is a global provider of comprehensive eye care diagnostic solutions. The group offers fast, user-friendly, and reliable tools for diagnosing glaucoma, diabetic retinopathy, and macular degeneration (AMD). Revenio's ophthalmic diagnostic solutions include intraocular pressure (IOP) measurement devices (tonometers), fundus imaging devices, and perimeters as well as clinical software under the iCare brand. In 2023, the Group's net sales totaled EUR 96.6 million, with an operating profit of EUR 26.3 million. Revenio Group Corporation is listed on Nasdaq Helsinki with the trading code REG1V.

Optomed Plc: Half year Report, January June 2024

Optomed Plc Stock Exchange Release 8 August 2024 at 9.00, Helsinki and EBITDA was EUR -1.2 (-0.5) million corresponding to -33.8 (-12.4) percent of revenue and *) Alternative performance measures, see section Alternative Performance Measures for definitions and calculations. Optomed presents Adjusted EBITDA and Adjusted operating result as alternative performance measures to enhance comparability of business performance between reporting periods. In Q2 2024, items affecting comparability amounted to EUR 383 thousand and related to increased credit risk with respect to an overdue trade receivable from a customer in China. As we review the second quarter of 2024, it is crucial to reflect on our achievements, challenges, and the strategic decisions we are implementing to drive future growth. Our revenue for Q2 2024 was EUR 3.5 million, representing a decrease of 6.4% compared to the same period last year. This decline is attributable to reductions in both our Devices and Software segments, In Devices, revenue decreased by 15.7% to EUR 1.1 million from EUR 1.3 million. In Software, revenue decreased by 1.6% to EUR 2.4 million from EUR 2.5 million. The adjusted EBITDA stood at EUR -0.8 million, corresponding to -22.9% of revenue. Despite the relatively soft sales in both business segments, we have made substantial progress in the most important strategic areas: We remain optimistic about our growth prospects. Our outlook for the full year 2024 remains unchanged, with an expectation of revenue growth compared to 2023. We are committed to executing our strategic plan, improving operational efficiencies, and expanding our market footprint. In accordance with our strategy, we will continue to invest in product development, clinical trials, and finally bringing new products to markets. In conclusion, while the second quarter presented some financial challenges, we have made significant strides in key strategic areas that position us well for the future. Our focus remains on delivering long-term value to our shareholders through innovation, strategic partnerships, and market expansion. Thank you for your continued support and confidence in Optomed. We look forward to updating you on our progress in the coming quarters. Optomed expects its full year 2024 revenue to grow compared to 2023. A telephone conference for analysts, investors and media will be arranged on 8 August 2024 at 11.00 EET, (10.00 CET). The event will be held in English. The presentation material will be available at www.optomed.com/investors 10.00 EET at the latest. Please note that by dialing into the conference call, the participant agrees that personal information such as name and company name will be collected. In April - June 2024, Group revenue decreased by 6.4 percent to EUR 3,505 (3,744) thousand. In spite of strong sales of the US and China channels, Devices segment had a slow quarter due to softness of the global distributor sales and OEM channel. The revenue decreased 15.7 percent to EUR 1 073 (1,273) thousand. The Software segment revenue was fairly stable and decreased by 1.6 percent to EUR 2,432 (2,471) thousand. In April - June 2024, the gross margin increased to 69.9 from 66.4 percent of last year. Adjusted EBITDA decreased and it was EUR -802 (-462) thousand. EBIT decreased and it was EUR -1,869 (-1,009) thousand. In April - June 2024, net financial items amounted to EUR 53 (-325) thousand and consisted mainly of interest income and the translation effect of CNY and USD to EUR. In late April, Optomed Aurora with AEYE-DS AI received FDA clearance which was the requirement to start sales and marketing activities of the Optomed Aurora-AEYE AI fundus camera service in the US. The device is the first handheld device + a fully autonomous AI to receive FDA clearance for diagnosis of referable diabetic retinopathy. The clinical results were: 92% - 93% sensitivity, 89% - 94% specificity, and 99+% imageability. Screening for diabetic retinopathy with AI is reimbursable in the United States using the newly approved, first ever AI CPT code 92229 for autonomous screening. Additionally, it serves as a major HEDIS measure for most health plans. In June, Optomed signed a shareholder's agreement with regards to a joint venture in China with Zhongbao, a Chinese private equity firm based in Shenzhen, China. The firm focuses on growth opportunities, and it invests in a diversified range of industries. Optomed will own 19.9% of the joint venture and Zhongbao 80.1%. The business model for this venture will be a recurring revenue model, ensuring sustainability and long-term success. In January-June 2024, Group revenue decreased by 5.4 percent to EUR 6,832 (7,222) thousand. Devices segment's revenue decreased by 9.2 percent while the Software segment's revenue decreased by 3.8 percent. The gross margin decreased to 68.2 percent from 68.7 percent last year. Adjusted EBITDA amounted to EUR -1,450 (-976) thousand and EBIT was EUR -3,061 (-2,052) thousand. Net financial items amounted to EUR 147 (-459) thousand and consisted mainly of interest income and the translation effect of Chinese RMB to EUR. In April - June 2024, the cash flow from operating activities amounted to EUR -560 (-468) thousand. Net cash used in investing activities was EUR -534 (-668) thousand and relates to capitalized development expenses. Net cash from financing activities amounted to EUR 7,506 (-348) thousand. Optomed completed a directed share issue consisting of 1,500,000 shares and collected gross proceeds of approximately EUR 7.9 million in June 26 2024. Consolidated cash and cash equivalents at the end of the period amounted to EUR 12,106 (5,691) thousand. Net debt was EUR -9,221 (-883) thousand at the end of the period. Net working capital was EUR 1,306 (3,537) thousand at the end of the period. Optomed has large trade receivables from a Chinese customer. The customer has missed several payments since H2-2023 and, consequently, the specific loss allowance weighted average loss rate was increased to 75% in Q2-2024. The payment negotiations continue with the said customer. The total amount of the receivable in the balance sheet is now EUR 387 thousand. In January-June 2024, the cash flow from operating activities amounted to EUR -1,071 (-913) thousand. Net cash used in investing activities was EUR -1,068 (-1,213) thousand and relates to capitalized development expenses. Net cash from financing activities amounted to EUR 7,139 (-696) thousand. Optomed has two synergistic business segments: Devices and Software. The Devices segment develops, commercializes, and manufactures easy-to-use, and affordable handheld fundus cameras, that are suitable for any clinic for screening of various eye diseases, such as diabetic retinopathy, glaucoma and AMD (Age Related Macular Degeneration). *) Alternative performance measures, see section Alternative Performance Measures for definitions and calculations. In April - June 2024, the Devices segment revenue decreased by 15.7 percent to EUR 1,073 (1,273) thousand. The revenue declined due to slow quarter of the global distributor sales and OEM channel. Revenue of the US and China channels increased. The gross margin was 64.8 (53.0) percent. The increase was due to a single high margin delivery. EBITDA was EUR -686 (-217) thousand or -64.0 (-17.1) percent of revenue. The decline was mainly due to the previously mentioned EUR 383 increase of the credit risk accrual with regards to China. In January-June 2024, the Devices segment revenue decreased by 9.2 percent to EUR 1,963 (2,161) thousand. The decrease was driven by weaker than expected sales of the global distributor sales and OEM channels. The gross margin increased to 61.7 percent from 57.0 percent. EBITDA was EUR -1,047 (-643) thousand or -53.3 (-29.8) percent of revenue. Optomed has two synergistic business segments: Devices and Software. The Software segment develops and commercializes screening software for diabetic retinopathy and cancer screening for healthcare organizations. The segment also distributes off-the-shelf products from selected partners to supplement its own solutions and expertise and provides software consultation to support the Devices segment screening solution projects. *) Alternative performance measures, see section Alternative Performance Measures for definitions and calculations. In April - June 2024, the Software segment was stable and decreased by 1.6 percent to EUR 2,432 (2,471) thousand. The gross margin decreased and was 71.8 (73.3) percent. EBITDA was EUR 456 (578) thousand or 18.7 (23.4) percent of revenue. During the quarter, Software segment won a contract to provide non-healthcare development services to a Finnish governmental agency. Optomed has been providing the services since 2003 but the contract was subject to a procurement process. In January-June 2024, the Software segment revenue decreased by 3.8 percent to EUR 4,869 (5,061) thousand. Gross margin increased and it was 70.7 (73.7) percent. EBITDA was EUR 982 (1,368) thousand or 20.2 (27.0) percent of revenue. Group-wide expenses relate to functions supporting the entire group such as treasury, group accounting, marketing, legal, HR, and IT. Group-wide operating expenses amounted to EUR 963 (823) thousand. Group-wide operating expenses amounted to EUR 1,777 (1,700) thousand. Number of personnel at the end of the reporting period. Optomed complies with Finnish laws and regulations, Optomed's Articles of Association, the rules of Nasdaq Helsinki and the Finnish Corporate Governance Code 2020 issued by the Securities Market Association of Finland. The code is publicly available at http://cgfinland.fi/en/. Optomed's corporate governance statement 2023 is available on the company website www.optomed.com/investors/. The Annual General Meeting held on 10 May 2024 adopted the financial statements for the financial period ended on 31 December 2023, discharged the members of the Board of Directors and the CEO from liability for the financial period ended on 31 December 2023 and adopted the Company's Remuneration Report and Remuneration Policy for Governing Bodies. The Annual General Meeting resolved in accordance with the proposal of the Board of Directors that no dividend will be paid for the year 2023. The number of members of the Board of Directors was confirmed as six. Catherine Calarco, Ty Lee, Seppo Mäkinen, Petri Salonen, Reijo Tauriainen and Anna Tenstam were re-elected as members of the Board. The Annual General Meeting confirmed the annual Board remuneration as follows: In addition, a meeting fee in the amount of EUR 300 is paid to the Chairpersons and EUR 200 to members of the Committees for each Committee meeting. 40 percent of the Board remuneration is paid in Optomed shares and 60 percent in cash. The part of the Board remuneration paid in Optomed shares will, if possible, be conveyed from the treasury shares of the Company in accordance with the authorization of the Board of Directors to resolve on the issuance of shares and special rights entitling to shares. The remuneration will be paid once a year in August, after Optomed's H1 report has been announced. The Annual General Meeting decided to re-elect KPMG Oy Ab, a firm of authorized public accountants, as the Company's auditor. KPMG Oy Ab has informed the Company that Authorized Public Accountant Heidi Hyry acts as the auditor with principal responsibility. The auditor's remuneration will be paid in accordance with an invoice approved by the Company. The Annual General Meeting resolved in accordance with the Board's proposal to amend the terms and conditions of the Stock Option Plans 2017B, 2018C, 2019A and 2019C so that the subscription periods for shares pursuant to all option rights granted under each Stock Option Plan will end on 31 December 2027. The Annual General Meeting approved the authorization for the Board of Directors to repurchase Optomed's own shares and to accept them as pledge. Altogether no more than 1,813,039 shares may be repurchased or accepted as pledge. The authorization will be valid until the earlier of the end of the next Annual General Meeting or 18 months from the resolution of the Annual General Meeting. The Annual General Meeting authorized the Board of Directors to decide on the issuance of shares and other special rights entitling to shares referred to in Chapter 10, Section 1 of the Finnish Companies Act. The number of shares to be issued based on this authorization may not exceed 1,813,039. The Board of Directors is authorized to resolve on all terms and conditions of the issuance of shares and special rights entitling to shares, including the right to derogate from the pre-emptive right of the shareholders. The authorization will be valid until the earlier of the end of the next Annual General Meeting or 18 months from the resolution of this Annual General Meeting. Decisions of the Board of Directors: At its meeting held after the Annual General Meeting, the Board of Directors elected from among its members Petri Salonen as its Chairman. The committee members were elected as follows: The Company has one share series with all shares having the same rights. At the end of the review period Optomed Plc's share capital consisted of 18,130,397 shares and the Company held 353,973 shares in the treasury which approximately corresponds to 1.95 percent of the total amount of the shares and votes. Additional information with respect to the shares, shareholding and trading can be found on the Company's website www.optomed.com/investors/. Optomed completed a directed share issue consisting of 1,500,000 shares and collected gross proceeds of approximately EUR 7.9 million in June 2024. According to the assessment of the Company, the Share Issue supports the Company's target best compared to other equity financing options. The Board has considered other financing options, including various capital market financing options. According to the assessment of the Board, the other alternatives involved significant costs, timetable requirements as well as uncertainties related to the implementation which are not in the interest of the Company and its shareholders when taking into account the Company's capital needs and the need for rapidly developing the Company's business to utilise its market position. Therefore, the Board of the Company has considered that there is a weighty financial reason for the Company to deviate from the pre-emptive subscription rights, and according to the Board of the Company, the Share Issue is in the interest of the Company and its shareholders. The subscription price was EUR 5.25 per Share. The subscription price represented a discount of approximately 13.8 per cent compared to the closing price of the Company's share on 26 June 2024. The subscription price has been determined through negotiations corresponding to a bookbuilding, involving a limited number of institutional and qualified investors. The investors were identified on the basis of their investment potential, expertise in the Company and its industry, and knowledge of the Finnish market. The purpose of the procedure has been to ensure the realisation of the financing arrangement and the subscription price being market based. The subscription price was credited in full to the Company's reserve for invested unrestricted equity. New shares subscribed for in Optomed Plc's directed share issue have been registered into the Finnish Trade Register, and the shares were admitted to trading on the official list of Nasdaq Helsinki Ltd on 1 July 2024. The key risks and uncertainties are described in the company's Annual Report 2023 which was published on 29 February 2024. The complete report is available at https://www.optomed.com/investors/. The risk position of Optomed has not changed since then, except for that the risks titled "AURORA AEYE FDA CLEARANCE PROCESS" and "PUBLIC PROCUREMENT" are no longer applicable. This financial report has not been audited by the company's auditors. Optomed is a Finnish medical technology company and one of the leading providers of handheld fundus cameras. Optomed combines handheld fundus cameras with software and artificial intelligence with the aim to transform the diagnostic process of various eye diseases, such as rapidly increasing diabetic retinopathy. In its business Optomed focuses on eye screening devices and software solutions related R&D in Finland and sales through different channels in over 60 countries. www.optomed.com Optomed uses certain alternative performance measures (APMs) with the purpose to provide a better understanding of how the business develops. These APMs, as defined, cannot be fully compared with other companies' APMs. Corporate information Optomed is a Finnish medical technology group (hereafter 'Optomed' or 'Group') that specialises in handheld fundus cameras and solutions for screening of blinding eye diseases, established in 2004. The Group's parent company, Optomed Plc (hereafter the 'Company'), is a Finnish public limited liability company established under the laws of Finland, and its business ID is 1936446-1. It is domiciled in Oulu, Finland and the Company's registered address is Yrttipellontie 1, 90230 Oulu, Finland. Basis of accounting Optomed's consolidated financial statements has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The preparation of this Half-year Report also takes into account the amendments to IFRS standards that have become effective by January 1, 2024. This Half-year financial statement is prepared in accordance with IAS 34 Interim Financial Reporting and should be read in conjunction with Group's last annual consolidated financial statements as at and for the year ended 31 December 2023. These Half-year financial statements do not include all of the information required by IAS 34: selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual financial statements. All presented figures have been rounded so the sum of the individual figures may differ from the presented total figure. Financial ratios have been calculated using exact figures. This report has been authorized for issue by the company's board of directors. Critical management judgments and related estimates and assumptions The preparation of financial statements under IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the end of the reporting period as well as the reported amounts of income and expenses during the reporting period. These estimates and assumptions are based on historical experience and other justified assumptions, such as future expectations, that Optomed management believes are reasonable under the circumstances at the end of the reporting period and the time when they were made. Although these estimates are based on management's best knowledge of current events and actions, actual results may ultimately differ from those estimates. The estimates and underlying assumptions are reviewed on an on-going basis and when preparing financial statements. Changes in accounting estimates may be necessary if there are changes in the circumstances on which the estimate was based, or as a result of new information or more experience. Such changes are recognized in the period in which the estimate or the assumption is revised. Use of judgment and estimates Judgements that management has made in the process of applying accounting policies and that have the most significant effect on the amounts recognized in the financial statements, relate to the following areas: - Determining trade receivables credit risk - capitalization of development costs: determination of development expenditure eligible for capitalization - impairment testing of development expenditures Other operating expenses also comprise changes in expected credit losses and realized credit losses. The above liabilities are presented on the line item Lease liabilities (non-current / current) in the consolidated balance sheet, based on their maturity. June 30, 2024 Impairment losses consist of terminated project cost. Due to overdue trade receivables, financial assets are subject to an increased risk of credit loss. Optomed successfully completed directed share issue at the end of June raising approximately EUR 7.9 million, which increased Cash and cash equivalents significantly. Optomed considers it has heightened risk regarding Chinese customer's trade receivables. The credit risk concentration has been formed and is associated with an increased credit loss risk due to overdue trade receivables. Specific loss allowance weighted average loss rate% increased from comparison period 30% first to 50% and then to 75%. Company has paid one loan in October 2023. Fair values - financial liabilities measured at amortized cost. Optomed considers that the carrying amounts of the financial liabilities measured at amortized cost substantially equal to their fair values. Optomed's borrowings from financial institutions contain a financial covenant (equity ratio). Optomed has to comply with the financial covenant terms specified in the loan agreement terms at the financial year-end. Equity ratio is calculated using the agreed formula. The table below summarizes the Group's financial covenant term and compliance during the reporting period. Comparison period number has been adjusted and is calculated using below mentioned formula. Company's Equity ratio is calculated as follows. OP loan equity ratio calculation formula: Adjusted equity/(Balance sheet total- received advances-goodwill) Optomed was in compliance with the covenant as at June 30, 2024. Revenue and trade receivables and some of the other expenses relate to the major shareholders of Optomed Ltd considered to be related parties to the parent company. Other expenses consist of consulting fees paid to the Chairman of the Board of Directors. New shares subscribed for in directed share issue have been registered into the Finnish Trade Register on July 1, 2024.