Euroeyes International Eye Clinic Ltd
HKEX:1846
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Earnings Call Analysis
Summary
Q2-2024
EuroEyes reported a 6% increase in revenue for the first half of 2024 despite difficult economic conditions globally. The company's focus on lens-based treatments, particularly presbyopia, has helped stabilize revenue, offsetting declines in high-end laser vision correction. Geographic diversification also supported growth, with Germany contributing 55% of revenue and China experiencing significant gains. The opening of new clinics in Hong Kong, London, and Wiesbaden has led to initial losses but is expected to positively impact financials by the end of the year. EuroEyes plans to double revenue by 2026 and achieve breakeven for its new clinics by early next year.
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Good afternoon, everyone. Welcome to EuroEyes 2024 Interim Results Investor Presentation. It is my pleasure to introduce to you the management joining us today: Dr. Jörn Jörgensen, Chairman, Executive Director and Chief Executive Officer; Dr. Markus Braun, Executive Director and Chief Financial Officer. Following the management presentation, there will be a Q&A session. [Operator Instructions]
May I now pass the time to Dr. Jörgensen to start the presentation first, please?
Yes. Good morning, everybody here from Frankfurt in Germany, from our EuroEyes headquarter in Frankfurt. I'm sitting here together with Markus Braun, CFO, and we are going to report our first half year results 2024.
Cathy, please, the first -- yes, so this is first. Well, the first half year has been, from economical, worldwide, a difficult year. We have seen a lot of big risk in the market in consumer confidence, people who are sitting more in their pocket before. And this also have been shown in our numbers what you are seeing here today, especially in laser vision correction, especially in the high-end laser vision correction, like SMILE, which represent, let's say, the premium laser branding. It looked like the very cheap people are going over to the cheap LASIK, what we are seeing worldwide. And -- but for the high-end laser vision correction, it has been a little, let's say, slow.
However, EuroEyes have since many years pushed on laser or the lens-based treatments like presbyopia. And this has been a very good idea, while we have seen that has stable our numbers and stable our things. We have seen that the market for intraocular surgery in -- based on lenses in Europe is about a CAGR, until 2028, of about 7.5%. When we go into China, it's about 9%. So the future seems to be lens-based, and there seems to be that all the people older than 40, they have the money, they wish to pamper themselves, and this seems to be a very stable and a trend in the market.
Next one. You are seeing here 3 key numbers, and this is revenue. We have a high revenue, increased by 6%. However, we saw a downturn in adjusted EBITDA and also in adjusted net profit after tax of first half year HKD 62 million and adjusted EBITDA of HKD 136.4 million. You can -- many will ask me today the revenue go up and EBITDA and net profit go down, why has that happened? It has happened while we invested in the future. We started for about 1.5 years to 2 years ago to -- let's see, to a range opening up of 2 -- 4 new clinics.
In the meantime, we have opened up 3 of them. We have opened up in Hong Kong. We have opened up in London, Brompton Road, and we have also opened up in Wiesbaden. All these clinics, it has not been difficult from a regulatory point of view. Hong Kong, the most expensive one, we first got approval to do lens-based surgery in March, this year. And also the same was the case in London.
And we also now just finished Wiesbaden, which took longer than we expected because of short of construction workers and many reasons. So what will they say? You can say it in this way, we have invested in the future the last 18 months, and especially in the last half year, we have had all people on board, all equipment on board, say, we have had a lot of differentiation. And all the people have also mean we have a lot of costs. And this is what you can see here in the adjusted EBITDA and then the adjusted net profit. However, a very good thing, we already see now that Brompton Road might in the end of the year already have a breakeven.
We see also Hong Kong is going -- it has grown in the last few months fast. We have already more than HKD 1 million in as a revenue, and it's going very -- since we opened up the possibility to operate lenses, it seems to grow quicker. And the last clinic, Wiesbaden, is looking very good already. After 2 to 3 months, we see something like breakeven. So you can say what you are seeing here the downturn in EBITDA, the downturn in net profit because it was in investing. It seemed in the end of the year or this year already to have been a very good investment.
Next one. A little about Germany, double-digit grow, more than 10%. It's also here, especially lenses. It's also our FreeVis Clinic. It is a difficult time -- of the time right now with the economy, increase in interest rate. And this has been, let's see, something where, otherwise, we will have grown even more in terms of revenue.
Next one. I told you about Wiesbaden, our lens clinic. It's next to Frankfurt, where we are sitting today, about 50 kilometers from here, is a very good high-end location. And we already now here, within a few months see a breakeven, very nearby. So it will outperform more than expectation.
U.K., next one. The U.K. also grow here of 21%, mostly because of our new clinic, LEC. London Vision Clinic has been a little disappointing. One of the reasons for this is that probably it's a lens space -- it's a laser-based clinic only as a SMILE, and Presbyond is the main product there. It has been the main product of London Vision Clinic always. We are now trying to implement since half year. We are trying to implement lenses in the clinic in the form of cataract and ICL, and we have exchanged also the marketing agency so that we have taken action. So we will need to wait and see.
The next one. Greater China have seen here an increase in revenue, about 4%, year-on-year. Mostly also here, it was a good trend to be specialized on lens-based surgery and also presbyopia. What has been difficult in terms of prices has been laser vision correction. Laser vision correction is difficult in China at the moment because of the huge unemployment rate, the huge, let's say, low consumer confidence. And this is something where we -- let's see, we have been longing that we have had the right product in the form of lenses, but it is a difficult market. We are pushing now with new marketing concept. We are pushing with Presbyond campaign in China, and we are also pushing in our -- let's see, our 2 latest clinics, Chengdu and Chongqing, really to achieve a breakeven.
Next one. So demand for presbyopia is continuing to surge. As I said here, you see here it's a long trend, and it's also what we are seeing worldwide. We also see in worldwide the same trend. We see it when we speak with industries. They are also most confident in presbyopia treatment. So it seems we have created the right mix.
The next one. Next one, please. We have 33 clinics worldwide. And most of them have been, let's say, made organically. We have -- last year, I told about -- you can take the next slide, please, last -- by the last press conference, I told about M&A. M&A, yes, I'm sorry, I cannot announce something here today. But it is a process where you can say it -- for a listed company in Hong Kong, it's something which takes time. It is more, let's say, difficult as we expected because of many, many regulatory things and maybe also because we wish to find the right partner.
We have been on the -- let's say, on the M&A in North America, in Europe and in Asia. So talks is -- right now, it's ongoing talks. And I hope that I can come up with something this half year, and -- but I will only here try to say, it's something -- it's an ongoing work every week where things is going on in the M&A area.
So now I will give the word to Dr. Markus Braun, and he will make a financial overview of 2024.
Yes. Thank you very much, Dr. Jörgensen. Also, welcome from my side to our half year results 2024. As you have seen, it is a mixed picture there. I think revenue-wise, we are lagging behind what we wanted to achieve or what we want to achieve in our 3-year outlook. However, I think in the difficult economic environment, not only in China but also in Europe, it is a good achievement to have 6% revenue growth to HKD 368 million.
The next slide, please, Cathy. As you have seen, our margins went down slightly. That is mostly explained by the fact that our 2 new flagship clinics, Hong Kong and also LEC, are now fully up and running, put in our figures, not adjusted. So the downturn you see here is really what Dr. Jörgensen told the investment in the future. We are building up our revenues there. We are contributing to our increased revenue potential with these new clinics while we already bear the depreciation, the rent, the staff cost for these clinics, which are below their capacity there.
As we also said, we are doing well there, LEC. Last time we met, we said we need something like 9 to 12 months. Now I'm quite confident that end of the year, January, February, we will see a breakeven on a monthly basis for LEC. And also, for the Hong Kong clinic, we see a good increase in our consultations and also in our surgery, so reaching breakeven there next year is our goal.
Next slide, please. Besides being not only pure refractive laser surgery clinic, but having a strong focus on refractive lens exchange, also, we are also hedged by our geographical coverage. As you can see, Germany is now contributing 55% to our global revenue, while China is at 21%, U.K. 15%, Denmark, 9%. So with that in place, we managed to actually increase our revenue by 6% by being active in different markets and not only being focused on refractive laser surgery. I think that something that differentiates us from some of our competitors where we have seen -- which are focused on China or Greater China purely.
Next slide, please. If we look a little bit more in detail into Germany, we see that the demand for presbyopia treatment is very high. We still increased our lens exchange surgeries 15% year-over-year, and that actually enabled us to make up for the slight downturn in myopia correction demand where refractive laser surgery actually dropped slightly. And with that in place, we were able to keep up our strong results in Germany to increase our revenue and being able to help and support our other countries.
And also, it is helpful that the FreeVis Clinic in Mannheim has actually done better than we expected. As Dr. Jörgensen already said, end of June, we opened up our new clinic in Wiesbaden, and first results there are very promising. I'm also confident that we will reach breakeven there on a monthly basis end of the year. We have a different cost structure there compared to our flagship clinics in London and Hong Kong, which enables us to bring them to breakeven quite fast.
And also in Kiel, where we had some problems in building it, we now foresee that we will open in November, but latest end of this year. And all this lays the foundation to the further growth in Germany with these 2 new clinics adding value to our German brand and also pushing with FreeVis in Mannheim to contribute to our revenue.
Next slide, please. For China, we have seen revenue growth 4%. Part of that is coming from the Hong Kong clinic, but also the Mainland China organization has grown its revenue. And that in China is even stronger supported by the increase in presbyopia correction. Lens exchange surgery grew 28% year-over-year, now contributing nearly 60% of our total revenue in China. And you can see by these numbers that we managed to make up for the decrease in myopia correction by this surge in presbyopia correction surgeries. And I think that's really due to the fact also that we are the established market leader in presbyopia correction, that we're the first ones to perform a TLE in China back in 2014 and that people are looking for a high quality in that area.
Okay. Next slide, please. In the U.K., we have seen a revenue increase of 21%, driven naturally by LEC, by our new clinic, which is very much focused on presbyopia treatment, very much focused on trifocal lens exchange. We see that the location in Knightsbridge is the right one that we have a lot of walk-ins, that we have a lot of international patients there as well. So we are well on track to reach breakeven until end of the year, latest January or February.
And on the other hand, London Vision clinic, as you all know, we weren't happy with their performance in 2023. We took a much closer look at them and had a better overview and better control -- or implemented a better control of London Vision Clinic. And it seems that it's working out now that they have bottomed out in 2023, that they are back on a growth track now. We changed the marketing agency. We pushed for social media activities there.
We also had some discussions with them that they should, besides offering Presbyond for presbyopia treatment also push for more trifocal lens exchange, got a new surgeon there as well who is very proficient in trifocal lens exchange. So on the revenue side, we have done a lot. But also on the cost side, we have reduced staff there. We have changed processes, which all of that will help to further increase the main financial KPIs there.
Okay. Next slide. For Denmark, that is really not what we expected. We knew in the beginning of the year that they wouldn't grow as much as in 2023 because we needed to close our second biggest clinic in Denmark in Aarhus for renovation for roughly 3 months, which -- where we already anticipated that we will have a downturn in our surgery numbers there. But on the other hand, we also experienced some downturn in our other clinics, especially in Copenhagen, as the consumer confidence in Denmark has dropped and also our peers were lowering their prices to keep up their market share, to boost their volume. And we have adjusted now to that by new marketing strategies, by pushing more for our happy patients, again, because also in Denmark, we have a strong and big snowball and we want to make use of that. And since July, we have seen that the numbers are coming back, but anyhow, I think they will reach the levels of 2023 only in the last few months of this year.
Okay. Next slide, please. Having said all that, you see, and we already announced that the number of surgeries has been roughly the same, around 14,000 surgeries for the first half year. And you can also see the switch -- you can also see that Denmark has gone down while China has been growing, U.K. has been growing, yes, while China has been not going down as well. Overall, utilization rate is now at 23.4%.
Next slide, please. From a cost perspective, if we are looking at the cost of goods sold, where most of the salaries are included, it is mainly due to the fact that we have now these 2 new clinics up and running with their salaries, with their doctors, with the depreciation and all of that, that is mainly the driver for the increase in our salaries and doctors' fees.
On the salary side, we have also seen an increase due to higher wages because of the inflation. There is a certain pressure to pay higher wages. On the other hand, inflation is now going down. So we hope that in the future, we don't need to follow that trend so much. Depreciation is up also because of the 2 new clinics, but also due to the fact that we started to exchange our Visumax and change to the new Visumax 800 there.
I know that some of you were wondering why the margin or the ratio for raw materials and consumables was increasing. That is not due to increased prices by our suppliers, by our main suppliers, especially for the lenses and laser equipment there, but due to the quite drastic and faster shift to lens exchange surgery than in the last years.
And while lens exchange surgery is in absolute terms contributing more to our margins because of the higher prices, on the other hand, we have to pay the lenses itself. So the cost side, the raw materials for performing a lens exchange surgery is also higher, and that leads overall when you see that with the shift, lenses making up for the, let's say, decrease in laser surgery, leads to that effect of an increased ratio for raw materials and consumables.
On the marketing front, we have this snowball. We have this happy patients, and that's what we are mainly focusing on that we try to push our happy patients to recommend friends and families. And on the other hand, spending our money on online marketing and social media. But overall, we were able to keep that at around 10% of our revenue. And admin expenses were going slightly up. That's at least partly driven by the fact that we have increased our activities in the M&A area. Dr. Jörgensen said that we are in talks with quite a few groups and practices and that also led to some additional costs there.
Next slide, please. From a cash perspective, we still have a very strong cash position and also a strong operating cash flow. The decrease in both positions is mainly due to the negative cash impact from the 2 new clinics with the rent being payable, with salaries being fully payable, while on the other hand, the revenue side, and therefore, the cash inflow doesn't yet make up for that. But as we have already seen, until the end of the year, beginning of next year, we'll see a -- we will see a breakeven with London -- with LEC and also with the other clinics later next year. So I think that trend won't continue there.
Next slide, please. Yes. I think everybody wish to know about what will go on, how is the future. We have talked a little about the existing business that we have, let's see -- we have invested in 4 new clinics in the last 18 months, cost a lot of money and cost a lot of depreciation. What is the future? At the same time, opening up a few new clinics, we have, of course, be on M&A discussion. As I also told you for half -- for last year, half a year ago, it is something -- it has -- I'm sorry, not to announce something today, but I'm sure something will happen within this year. So it is something where we are looking into. And I think it's also very promising.
What we are looking into is mostly laser vision correction, clinics are cataract clinics. And so this is, of course, something we will continue, but we see the huge advantage that we are able to add to this existing business in such industries, our lens-based presbyopia treatment. It is something what is the main driver in all congresses today in the industries, you see the industries where they really are doing, let's see, investment is in laser vision -- is in presbyopia treatment. So, therefore, our M&A, I think it will work out to be a win-win where we also would add a new -- many, many new products next to the already existing clinic's products.
So I hope to come back to you saying much more. We have a strong cash flow. We have a lot of cash in the bank where -- but we are maybe a little too conservative. We wish to have the right partner. We have always gone through doctors owned clinic. We have many famous doctors in our group. And these know other doctors who all of them wish to have an exit strategy. So what we are working on, if we talk with such group, who wish to come to us, they wish doctor to doctor's talk, they trust us, but it is some regularity things need to do, and it is valuation in this due diligence. It's also regular -- legal due diligence, and it takes time. So, well -- and I'm hoping that I can tell you much more about that later on.
Next one. Next one again. You see here, again, organic net profit to more than doubled by 2026. You are seeing here what we believe until 2026, in terms of revenue, EBITDA and also in terms of net profits. We hope that the markets see what we are seeing right now, feeling right now, is this that the consumer confidence is going a little up again. It always go a little hand-in-hand with the sentiment on the stock market, with the sentiment on the interest rate and so on. And it seems that we have got a soft landing, and this will also probably spread over here in our industries.
Next one. And coming again here, I think we are in a fantastic situation. We have a lot of cash. We have many on the -- all the private equity are little sidelined right now. They are cautious. They are not on the market. So we have very good target. I said that last year also. I'm sorry not to announce anything now, but it takes time, and we have to do that later this year. We have a strong cash flow. And we also wish to have a good partner in M&A. And it is many, many private doctors, 60-plus, who wish to have an exit strategy, and we are looking around also in North America. So a little near to the next one and to the latest one.
I told you about that we are a fantastic clinic group with -- we have a low cost and a high EBITDA. We have been punished a little while we took longer to open up 4 new clinics. Because -- mostly because of regulatory things, we were not allowed to do our surgery, but we have our staff and all these equipments, and this will drag on our financial parameters. But we will expand, and hopefully, can tell you much more within the end of this year or maybe even earlier. Many thanks for your attention.
[Operator Instructions] We have received a few frequently asked questions in par to the investor presentation, and we will take those questions first. The first one, why did the gross profit and margin dropped while revenue was up with more lens exchange surgeries done?
Yes. Thank you for the question. I tried to answer that before and already -- we addressed that before already. On the one hand, we have these 2 new clinics now fully integrated into our numbers, not adjusted, something like that. So we are really in a situation where especially LEC and the new Hong Kong flagship clinic are contributing revenue, but also contributing on a larger scale to the salaries, to the depreciation, and by that dragging down our gross profit, so which is also a downturn in our gross profit is due to that. Besides that, yes, we also have an increase in our salary structure, which also contributes there. And I also explained on the increase in our raw materials that was the switch of the -- strong switch to especially trifocal lens exchange. We see a little bit of a different cost structure on the raw materials there.
The next question is, why did the revenue from Denmark drop over 21%? And what's included in your revenue elimination? And why is this much higher than last year?
So the revenue in Denmark, on the one hand we anticipated that, also aimed in our 3 years budget, we knew that we needed to do some innovation in Aarhus, which took us like 3 months. So part of the downturn was coming from a decreased number of surgeries in our Aarhus Clinic. But on the other hand, the consumer confidence in Denmark also decreased quite a lot, and we saw increased competition, especially in the Copenhagen market. And we took measures already with an adjustment in our marketing strategy while not compromising on our quality leader position we have built up in them.
And for the intercompany elimination, there are, from my perspective, 2 main reasons for the increase. The one was that we transferred some money, especially from Asia to Europe to profit from -- for better -- from better interest rates here in Europe. And on the other hand, we also incurred some of the M&A costs in Germany and transferred that to our EuroEyes International Eye Clinic Limited to the listed company.
Next one is, why did your cash from operation drop?
Well, it dropped because the 2 new clinics are still cash-negative. That will change in end of the year, beginning of next year. This was LEC reaching breakeven, and also, Hong Kong Clinic generating more revenue, but the drop is attributable to these 2 new clinics.
Maybe why we saw that in the press conference, and I have the feeling -- we have medically a question to down-regarding cash flow, dropping cash flow -- dropping net earning after tax. And the main reason is here, you for 18 months ago, started a huge, let's say, investment in 4 to 5 new clinics. These clinics, some of them are in very high, let's see, some like Russell Street, Brompton Road, it costs in rent a huge lot of money. And it's really prime location.
And in this period of time, because of regulatory reason, you need to have full staff, and you have started operation, but you have done an investment, and you have done a good investment. You got the lease in COVID time where it was suppressed and so -- but now we are starting. And I think the good news is we see earlier breakeven as we have expected. So it's capturing off. But, of course, it has punished us a little in this half year in the cost and the depreciation and also in human resources. So I think many of the current today is the best out there, but we made an investment in the future.
[Operator Instructions] Moving on to the questions submitted just now. The first question comes from [ Sairo ]. His questions are, is it correct that revenue in Germany is flat if you exclude Dr. Knorz' acquisition? Please explain pre-operating expenses and to which clinics this relates to. How long do you expect that it takes until both clinics are in steady state or on par with the other clinics of the group?
Let's take the last one first. We said when we'll reach breakeven. And after that, it really depends on developments there. We will build a snowball there. But I would say we need perhaps another 1 year, 1.5 years to actually reach the level of our normal clinics concerning EBIT and net profit for these clinics.
Pre-operating expenses are related to our operations here in Germany, to the Wiesbaden, to the Kiel clinic. And in addition to the beginning of the year of the Hong Kong Clinic, as we said in our April announcement, we take the full license of the clinic, so the full allowance to perform also surgeries in our portfolio as a cutoff point for pre-operating expenses there.
Sorry, can you repeat the first question -- Knorz, sorry, yes. Yes, you're right. It's -- I mean, Knorz was doing very well. London Clinic has been doing better than we had expected. And most of the growth in Germany is attributable to the Knorz Clinic. We are pushing also for the other clinics, especially in the laser area with summer special and everything, which just ended yesterday, which generates the additional revenue also for the other clinics. And also, from what we see from the market, we'll be able to need to go back to our usual prices there as well, so that's good.
Maybe I can add on the revenue in Germany. I've seen in the Germany, you can see presbyopia is growing. It's really growing double digit, but this will have been slow, it's laser vision correction. You see it worldwide. You see it in the U.S., you see it in China, you see it in the U.K. and the rest of Europe. You'll see that laser vision correction, which is paid by young people, it started making, especially the high-priced laser vision correction, while EuroEyes is doing.
We are doing the high price for SMILE, ReLEx SMILE, where we are doing the latest and best technologies. And you have seen this has really dragged down, whereas as LASIK, the old-fashioned LASIK model, seems to -- which is cheaper, much cheaper, seems to be rising. So, therefore, in Germany, in our businesses, we keep growing. The trend is different in lens-based presbyopia, but we have seen a drag on in laser vision correction, especially in SMILE, high-end best technologies, yes.
Our next question comes from Augustine. What are the most promising technological improvements for the field of ophthalmology that you see in 5 and 10 years? How is EuroEyes positioned compared to other peers? I'll come to you to this question first.
So can you repeat the question again because we had some connection problem here?
Sure. What are the most promising technological improvements for the field of ophthalmology that you see in 5 and 10 years? How is EuroEyes positioned compared to other peers?
Well, I think we are again going over to presbyopia. I think the most promising development is the treatment of presbyopia. To get a customized treatment, depending on the age, depending on which -- if they have hyperopia or myopic or have astigmatisms, I think you are going more and more over to make a tailor-made solution for people coming in and are already presbyopic with the age of 38 plus. This is something which will happen more and more. And I think this is for the -- for 10 years, it's too long to say, but for the next 4 to 5 years and also improvement of lenses. The lenses, of course, have some side effects. And we are going to see fewer and fewer of these side effects. And in some of them you will have our lens material and you will have optics to treat these refractive errors. So this is my evaluation what I'm going to see in our area.
The next question, on the geographical side, if you plan to continue growing in the U.K., how do you expect the number of employees per clinic to be in the future? There is a clear divergence between the cost of sales in Germany and the other segments. What are the chances that the cost of sales in China and Denmark will come close to those in Germany? And Clinica Baviera competes with EuroEyes in Germany and the United Kingdom. What competitive advantages does EuroEyes have over Clinica Baviera?
Okay. Let me -- let's take the latest first, Clinica Baviera, well, we are not in Spain, so we'll need to say it here in Germany. In Germany, Clinica Baviera is represented by a clinical called Care Vision. And Care Vision is mostly doing LASIK, and they are not doing SMILE. They are doing old -- I can say, a little old-fashioned LASIK, but EuroEyes is not doing anymore. We stopped doing this form of LASIK with a knife or, let's say, with the blade for more than 20 years ago. We didn't do that. But it's a very cheap way of doing laser vision correction as a LASIK with keratomes. So we don't do that, and -- but they are able to keep a very, very low price. And this is something when in this economical turmoil, what you are seeing now, where many young people don't have money anymore, it is sometimes something which can grow revenue. And that's what you probably are seeing right now. And so that's coming to Clinica Baviera in Germany.
Going to U.K. Yes, we find the U.K. market is very good. We will definitely open up clinic more and some referral center in London. And we are always looking outside London to see what possibilities we have for an M&A structure. So U.K. is very -- we have a strong partner. We have some very good doctors. We have 4 very good surgeons there who are famous, who are fantastic. I know how difficult it is to get good surgeon, and we are really good equipped with surgeon and specialties and specialists in the U.K., and we should definitely use that.
A question, when will U.K. -- when will China and when will Denmark be as profitable as we see in Germany? Germany have a longer -- much, much longer history than we have in China, as we have in Denmark comparing with Germany. It will depend on the revenue. When you see a higher revenue, you will also see a higher net earning rate, so we expect that it will pick up. Denmark have been very profitable until now. We had some reconstructions going on in the clinic as Dr. Braun told me, and -- but we already see us picking up again.
And China, yes, China, we will all -- always see the main market for us, China. And COVID interrupted. We have now an economical downturn a little in China, consumer confidence. Everybody read about that in the press every day. We are able to keep lenses, but we are losing revenue in laser vision correction by the young people who really cannot afford it. It is something we see in all clinics over there, also by our competitors. So yes, I hope I have answered your question.
The next question is from [ Chaw Wei ]. Please share the trend of the unit price for presbyopia lens exchange surgeries. Please also share the net profit situation for profitable clinics and clinics under construction, respectively.
Sorry, we again had a small breakdown. So can you repeat that?
No problem. Please share the unit price trend for presbyopia lens exchange surgeries. Please also share the net profit situation for profitable clinics and clinics under construction, respectively.
Well, maybe take the last thing again, the clinic under construction, I say, it's, of course, always, you are greenfield, you are opening up a new clinic. So it's always the most difficult thing in the very beginning. But I think when we see and we were new in -- let's say, in Brompton Road. We were new there, and we were also new in Russell Street. I think when we can manage from a clinic to have a breakeven, let's see, within 1 to 1.5 year, I think it's fantastic. While we must know after this time, after breakeven, you will have the set in of the snowball effect. You will have new patients coming from, let's see, not from those by mouth, but from other people. And you will see the snowball effect, and then, you really will see a speeding up of new patients.
The next question is from William. Are you impacted in any ways by the volume-based procurement for IOLs in China? And can you give your feel on the market for premium IOLs in China for the next 6 to 12 months? This is...
I will take this question. I'll take this question from here. So the volume-based purchase happened in China, it's mainly targeted public. And we see that the hospitals are lowering the prices in their lenses because of the so-called VBP. But, however, mostly they offered monofocal lens, EDOF lens and also bifocal lens. For trifocal lens, gave it to take, you can take it in the statistics, it's only, I think, 25,000 multifocal lens who are in sole China public system VBP process. So if you -- I would say, evenly distributed to 1,000 hospitals in China that could be minimal impact towards -- I would say, towards our business.
I think in the end, the public system offering the basic or fundamental treatment and for these elective treatment is still -- will be -- the patient will be directed to the private clinics. And right now, we don't see price drop in our practice. I also don't see price drop in competitors' prices, like Aier and other hospitals, but it's no dramatic lowering in the prices of trifocal lens exchange. For other types, for monofocal, for EDOF, it is, but that's something EuroEyes, we don't currently offering.
The next question from William will be. The picture on refractive volumes is heterogeneous by country. Where do you think procedures have bottomed? And what are your expectations for a recovery?
For refractive laser surgery, as Dr. Jörgensen said, I mean, it is a difficult business with -- if we -- yes, with the economic downturn coming to an end and perhaps bottoming out, we would also expect that the demand for the refractive laser surgery is picking up again, but won't make up all what they have lost, like during the last year. And on the other hand, we are really focusing on these presbyopia treatments trying to convince as many patients as possible of this treatment. And, therefore, we will see what's happening in the refractive laser surgery market, but we don't see that they will come back to double-digit growth rates again globally.
The next question is from [ Zanki ]. Can you please give details on the differences in GP, gross profit margin in between laser and lens surgeries? Can you please also give details as to what share of overall procedures are lens versus laser? And how has this evolved from last year? We'll come to you on this question first.
Okay. Biggest difference, in the price structure, in its cost structure, from a raw material perspective is actually the lens itself. And the price of the lens is much higher than the price of the SMILE procedure of a LASIK procedure. So that's driving the cost difference on that side.
And as I said, with the actual revenue just increasing by 6%, but seeing, especially in China, but also in Germany, a steep downturn of our refractive laser surgeries, the mix has changed significantly. And you can see that also from the revenue side, where the part of the lens exchange has increased by more than 2 percentage points compared to last year.
The next question is, can you please comment on the current pipeline of new openings? What's the plan for committed capital on new clinic openings? Given the current environment, are there plans to reduce the pace of rolling out?
Well, right now, we are really focusing on bringing Kiel over the finishing line so that at the end of the year we have 34 clinics up and running. We are always looking at opportunities to open up consultation centers in China. We are actually looking -- or actively looking into a consultation center location in London because we strongly believe that the London market is able to handle that. But we don't have any detailed plans right now for the second half of 2024. And once we are a step further there, we will announce that.
Thank you. Due to time constraints, we'll accept 2 more questions. The next one is from Jacques. How are you planning to improve your clinic utilization in the new clinics?
Well, as I said, what we already see in LEC and also in Hong Kong, with marketing activities, with social media, but also having kind of ambassadors and building up that snowball, we see that we can increase our surgery numbers quite fast, and I think for LEC to reaching breakeven within, let's say, 1.5 years now until end of the year, perhaps. That's already a big achievement, and that's what we are pushing for. And also in Hong Kong, we see that the numbers are picking up, that we are able to acquire more and more presbyopia patients there every month, and hope that this trend will go on.
The last question is from Joachim. What can you do to step up your buyback amounts given the very low valuation versus your midterm guidance?
Well, we have announced a share buyback program. We have ramped that up and are continuously buying back shares. And that shows the belief in our brand, in EuroEyes, and that we are seriously undervalued, especially in light of the 3-year forecast that we will actually double revenue until the end of 2026. And I'm confident that we are able to reach that with the new clinics ramping up, but also with the existing structure going back on a growth path again after, hopefully, bottoming out of the economic situation in 2023 and first few months of 2024.
Before we close, would management like to share a few remarks?
Yes. Thank you very much for your time. Thank you very much for your patience also with EuroEyes. As a German company, we are sometimes not as pushy as Asian companies are. We are -- especially on the M&A side, are very cautious that we actually buy targets that match our offering as well and are able to perhaps expand, especially to the presbyopia area. But I also hope that the second half will show some better numbers, that our new clinics will reach breakeven like LEC in end of the year. And then we will see that the investment we have done over the last 1.5 years really was worth it. And yes, I hope you got some answers to your questions. And, otherwise, you can always reach out to SPRG or Cathy for additional questions.
This concludes our investor presentation today. Should you have any questions later on, please feel free to contact SPRG. Thank you for your participation. You may now disconnect.