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Good afternoon, and welcome to Revenue Group earnings call for Q1. My name is Jouni Toijala, and I'm the group CEO. And with me here, as normally, we have as well our CFO, Robin Pulkkinen. Agenda for today. So I'll start with the highlights for the Q1. Then Robin is going to go through the financials, a shareholder structure plus reiterate the guidance.
So let's move on to the Q1. So the Q1 started slightly softly, as expected. However, the cash flow was strong. So net sales ended up to $23.6 million reported growth, 1.8%. If we look the currency adjusted numbers, so that was slightly down, 0.5% EBIT down from 6.2% to 5.1%. The biggest contributor for that one was the FDA approval related costs, and Robin is going to do a bit more deeper dive to the cost side in his part of the presentation. Cash flow was strong. So, $4.6 million for the Q1 and the big contributor for the good cash flow was related to the nonpayment for the long-term incentive scheme plus also really, really minor payments for the short-term incentive schemes.
So if going to the business highlights for the Q1. So, sales in the U.S. and Europe, Middle East and Africa was strong. A couple of highlights from the product side, IC200 continued to sell really well like during the Q4. Also the DRSplus sales was really good during the Q1. Then as mentioned earlier -- so we have started to work with the FDA approval related to the DRSplus iCare ILLUME cloud platform plus the AI, and that caused -- cured partly during the Q1 this year, so roughly EUR 600,000. Then if going back to the Q2-Q3 last year, so we had a lots of headwind from the private equity-owned optometry sector in the U.S.A. So on the positive note, we saw some increased activity now during the Q1 from the private equity driven optometry. So that's clearly the positive side. On the product side, iCare Maia Micro perimeter is progressing according to the plan. So based on the current plan, we have intention to launch the product towards the end of Q4 this year. And then as in all quarters -- so lots of activities, of course, related to sustainability themes and especially now during the Q1, lots of activities around the double materiality assessment. So that's working according to the plan as well. But over to you, Robin.
Thank you, Jouni. So like Jouni mentioned, Q1 sales slightly soft. Of course, just looking at the numbers, you may say it's a -- well, that's what we think when we say it's soft, but then we did have tough comparables and the good news is also that it did go pretty much like we planned. So we were not internally surprised. It has no impact on our longer-term guidance. So, we knew Q1 is going to be challenging. Q2/Q3 are the ones, quarters, where we are having easier comparables and then, of course, Q4, again, we have challenging comparables. So I think the Q1 and Q4 also internally were expected to be a bit softer year-over-year.
Gross margin, we were able to predict well. So the -- not big change there, so 70.3%. And like Jouni mentioned, the profitability is down, driven by the FDA approval related costs. We did highlight at the end of the last year, or the Q4, that we do have some cost headwinds this year. So the FDA trials for the new products were expected to be roughly EUR 1.5 million to EUR 2 million this year. And then, of course, the salary side, where we did pay record low incentives this spring, but those, of course, were accrued last year. So, in the costs in the books for last year, but the cash flow impact this year. Earnings per share of $0.137 and the net gearing minus 7 versus minus 13 (sic) [ minus 13.1 ] last year. So here, you can see the -- a bit more of the sales trend. Q1, again, slightly below the trend line, but that's been the case for every Q1, also, earlier. So the 1.8% reported growth, a slight decline on the FX adjusted and especially the EMEA and the U.S. sales were performing really well.
And then the profitability side. so that we can see here that it did come down, but we did kind of anticipate this to happen also. So the FDA costs, I think, seems to be a bit higher than maybe the market was expecting for the first quarter. This -- the analyst report, I think they were, in average, expecting a lower cost for Q1. We haven't really specified what quarter these costs are coming in this year. And I think it's fair to expect that there will be quite a bit of quarterly fluctuations in how those costs come in. And of course, the -- the bonus growth, looking at the profitability for this year. So like I mentioned, the bonus growth last year were pretty quite small. So looking at this year, expecting to remain within the guidance, the payroll costs will be higher this year compared to the last year.
Cash flow, a record high. I think we haven't been even close to this level in the earlier years, for many years going back. So traditionally, we -- all the STI and LTI incentive programs are paid out in first quarter. And now that this -- those payments were smaller, that is the main reason for the increase in the operating cash flow. Of course, then also, we did pay taxes less than the comparable period and then the trade receivables came down. Which we also, at the end of Q4, discussed that the AR was quite high due to a really strong end of the year. So they are coming down was also pretty much what we have planned and foreseen earlier. The balance sheet remains strong. So the equity ratio almost 75%. It's up actually more than 10% year-over-year. One big reason there is that last year, the -- I think the dividend was paid in Q2, like this year, but the AGM was in March. So the equity postings for the dividends were already in the balance sheet. So that was one reason. So Q2 this year, we'll also have the dividend payment in the equity. So the equity ratio probably will come down slightly. So $0.38 of dividend paid based on the AGM decision on the April 4, and those payments went out around mid-April this year.
Shareholders, a couple of changes here. The forum seem to be noticed also that the demand invest has increased their ownership. So went from slightly below 18% at the end of the year to 18.73% now at the end of Q1. And then also, we have a new -- not new shareholder, but bed -- embedded funds. They have been our shareholders for already a long time back, but then have now increased their ownership and become the sixth largest shareholder. On the top 10 list. So other than that, all the others are in the same order and pretty much in the same level as they were at the end of the year. Foreign ownership also now slightly above 50%, again, after being just under 50% at the end of the year. The country split hasn't much changed. So nothing really to highlight there.
The guidance remains the same. Revenue group exchange rate adjusted net sales are estimated to grow 5% to 10% from the previous year, and profitability, excluding nonrecurring items, is estimated to remain at a good level. And no change here. Good. And I think we're good for questions.
Yes. Thank you, Robin, and it's time for questions, please.
[Operator Instructions] The next question comes from Nikko Ruokangas from SEB. Please go ahead.
I have a couple of questions. So starting with the you say that you have seen some improvement in activity around the RFQ segment. So how much was this already visible in Q1 numbers? And what kind of level is currently contested level prior the challenges in the segment?
So some order activity and then increase on the pipeline related to the RFQs. So I think that's the current status, Nikko. And thank you for the questions.
Yes. Great. Okay. Then has anything changed? How do you view that market trends developing compared to Q4 conference call 3 months ago? So do you still see some light in the trends?
I would say that the -- if not -- so not too much change. So I think it's -- the private equity-driven optometry, that's more positive. Then if you go back to Q2, we go back to Q3. So I think that there's a bit more footfall on the optometry side. I think what we were expecting from the interest rate perspective, Q3 and Q4 last year. So we were -- perhaps we were expecting interest rates to come down slightly faster than now what is planned. But in summary, so be driven optometry now more activity. So that's not totally stand still. I think that's a good sign and perhaps a bit more footfall to the optometry as well.
Okay. Okay. Then still one question related to your costs, even though you already opened it a bit around the FDA cost. But in general, the fixed cost side, I understand the reason for the increase that -- and what kind of level expect fixed costs to be, rest of 2024 compared to Q1?
I think the biggest variable items are related to the clinical trials we have ongoing and have starting this year. In general, as long as we expect to remain, and do remain, within the guidance, then the bonus accruals are going to be higher than last year. So the payroll costs are going up. We hired -- I think the average headcount went up 7 people last year, so from $212 million to $219 million. So the total payroll package is also slightly increasing, but not that much. Of course, then the salary inflation has been around 4%/5%. So -- so those kind of together are probably the variable parts there. But I'd say the biggest bit open one still how the costs are coming for each quarter is related to the clinical trials, which is something we keep on working on. But we don't have a full schedule for every quarter of how it's going to hit yet.
Okay. And do you expect also inflation of 0.5% also for this year?
Sorry, the line was a little bit bad. I didn't catch the question.
So, you said the [indiscernible] impact has been on 4% to 5% [indiscernible]. Do you expect for this year, or were you talking about. . .
It was this year. So...
Okay, thank you.
That was for this year, the salary inflation roughly there.
The next question comes from Daniel Lepistö from Danske Bank.
Hi, it's Daniel Leviste from Danske Bank. I have also a few questions here. Maybe on the cost side, on the R&D cost headwinds that lie as you highlighted already in the Q4 report, I do remember that the talked range was about $1.5 million to $2 million extra for this year. So are you still within this previously talked range, now after the Q1?
Yes, that hasn't changed. So, it's still the same range. I think -- but it seems like the market expected it to be more end heavy, but we did have quite a bit of cost already in Q1. But there is a good chance that there is going to be big quarterly fluctuations there. So it's hard to say exactly how it's going to play.
All right. That's very clear. And maybe just to continue that this Maia-related R&D costs, are this included in this figure as well?
Yes, yes. Yes.
Okay. Then the second topic on the HOME2 reimbursement, I guess that as well in Q4, you talked about H1 '25, when you would be expecting the decision on that. So I guess you are seeing to get some news of this maybe a bit faster than previously anticipated. So has something changed, or more positive, or where it's just faster on your sort of submittal of the data and so on?
There's two milestones on this one, which is -- which we are following carefully. So first one is Q4, when we should get the information related to application for the codes. And the one key -- really the first step is to get the codes, so the reimbursement codes and that's a time for Q4 this year. And then, of course, after that, one comes, the payer insurance company side alignment in order to be able to get the reimbursement. So then we are wiser on that one, Q2 2025. So I think those are the two things that everybody should be following up that those are going according to the plan.
All right. Thanks for the clarification. I guess also on that topic, I think it's still open whether you will be taking -- or whether you will be getting the full or partial coverage? I mean, do you have any sort of scenarios on this one? And what's your view on this topic?
So we are looking the codes for the hardware. So currently, there's remote monitoring, training-related codes existing. But now we are looking at the reimbursement codes for the hardware side. And then, of course, we are looking as high as we can, but that's not fully on our control what's going to be the result. But really, the debt or the time period is Q4. So we have to come back to this one Q4.
All right. That's clear. I guess the final question on the ILLUME plus AI FDA approval and the time line on that one. Are you sticking with the time line of H1 '25 on that one as well? Or has there been any development on that?
There's a movement on that one. So we did the presub, then we got just a couple of days back. So we got the information related to the clinical trial requirements. So what's the scope of the clinical trials. We are analyzing the data as we speak, and there seems to be a wish from the FDA that the clinical trial scope perhaps should be extended. So we are discussing with the FDA. So I think that it is going to have an impact to the time line. And I would say that most probably not first half next year. So that's my current understanding. I would perhaps, to be sure, push it to the second half next year. And of course, it's an FDA approval process. So they tend to have tendency to take time. But that's the latest and we just got the info from FDA a couple of days ago. So we are analyzing that one and being in contact with the FDA on that. But that's the latest really, I mean, really in a couple of days.
Okay. And this scope extension, it won't have any impact on the R&D cost side at least this year?
This year no. So we were putting from 1.2 to 1.5 for ILLUME, then the remaining part for the Maia, as Robin explained. So no change on the cost side for this year, for sure.
The next question comes from Joni Sandvall from Nordea.
Thanks for the good presentation. Joni from Nordea. You had some larger multiyear orders in Q4 too, if I remember correct in Germany and also some U.S. deliveries scheduled for this year. So can you give any comment on deliveries of these and time line?
So we did first deliveries for both countries, so imaging devices, tonometers already Q4. So during the Q1, we also continued to deliver DRSpluses to the clients. So that's going according to the rollout plan.
Okay. Perfect. Then maybe a follow-up on the pipeline situation. You said that Maia towards the end of Q4, and I think we went through the HOME2 FDA approval situation. But is there some other new product launches now scheduled for the '24?
That's an interesting question. I would love to give an answer to that one. So I think this is perhaps a bit teflon statement that we have been working quite a lot on the R&D side related to coming years. So I think the time will show in the coming quarters, that if there's something new to come. Sorry for the unclear answer.
That's okay. That's okay. Then maybe lastly on the guidance. You are intact with the guidance and after the bit soft Q1, as you said, how is your visibility now going forward? How long visibility you have? And how confident are you with your guidance?
Yes, I think the Q1 went very much like we thought it's going to go. So the way that we thought it's going to go when we gave the guidance. So nothing has really changed there. The Q2/Q3 are from the comparable points, hopefully, the easier quarters. But of course, the visibility for us hasn't really changed. So we deliver tonometers. Our backlog is maximum 2 weeks. And then for imaging, it's not more than 4 weeks in rare cases. So our visibility -- what we've sold for Q2 is probably a couple of 20%, 30% so far. So we don't even know yet what the Q2 is going to be like. So the visibility is quite short, and...
And that's normal.
Normal for us. Yes.
Yes. Okay. Well, maybe a follow-up on that. Can you give any sequential color maybe -- maybe on the sales trend now towards the end of Q1?
If looking the April, we are executing according to the plan, I think that's -- Robin, fair to say?
Yes. Yes.
So if you look at the current numbers, what we have, so we are executing according to the plan. which is, of course, good.
[Operator Instructions] The next question comes from Pia Rosqvist-Heinsalmi from Carnegie Investment Bank. Please go ahead.
I'm going back to the demand situation in Q1, and you said -- or you reported sales growth of slightly [indiscernible] 2%. But can you give some more color on the different products in addition to DRSplus, which you said grew strongly? And I think you also said IC-200 grew well? So what happened in the other product categories?
Yes, those two were -- thanks, Pia, and hi. Those two were the -- kind of the highlights. So I mean, we saw really, really big and strong growth on the IC, especially in IC-200. Same for the DRS. And then, of course, the EIDON family, according to the normal steady growth strength and then same applies also for the other products. But those were kind of the two highlights that we -- actually went slightly better than expected. So that was a logic why we put them up. Anything, Robin, any flavor you would like to add?
Yes. The IC-200, it's good to understand. It's partly cannibalizing the IC-100 sales. So kind of it's not only new -- new add-on sales. So like in the U.S., it seems like the sales are transferring more towards the highest end device, which is the IC-200, which has been then playing or showing as a decline partly on the IC-100 sales.
Okay, thank you. I'm just trying to understand if there are any product categories which declined since -- I mean, the reported sales of the FX-adjusted sales were actually down slightly. So if IC-200 and DRSplus are growing very strongly or strongly -- so what kind of products are there, then, may be declining?
Well, often, it's difficult -- one quarter is a short review period. So there are big -- especially like the imaging devices. There are big differences between months and quarters. So definitely, like the biggest growth are from there. And then I think for the perimeters is pretty small still for us. So the products that go up, some have gone up, some have go slightly down. But kind of overall, I think the comparable quarter was so challenging or tough that the sales was quite okay from our view, when it comes to Q1. But I wouldn't necessarily disclose exactly what happened to each product group, but there's some that went up, some of what went down.
All right. That's clear, thank you. Then do you have any comments on the Home device? How is that performing; any numbers to share?
Steadily growing like in earlier quarters. So -- and of course, not the step change growth but steady growing as before. And of course, the key to this step change growth is the reimbursement, but that's that one we covered already. Any other flavor, Robin, on that?
Yes. Maybe the screening, if you want to say a few words on what do you think about the new screening accounts we have been...
Yes. Yes. So then, of course, the --the -- on the positive note when it comes to the ILLUME and the DRSplus plus the AI. So we have been getting now quite a lot of traction, especially in the Europe. So -- so, I mean, we start to have tens of clients in a live use for screening here in Europe. So that's, of course, good progress on the ILLUME side.
That sounds good. And when will the needle move in terms of revenues for that?
It's 12-month subscriptions that they sign up for the -- Yes, it's not very fast to get it to [ hockey sticks ]. But at least there's a good traction, a lot of requests, even for larger programs in different countries for kind of screening the population. So looks quite good from our end.
And of course, for this year, we have budgeted in the hardware sales for the screening. So it's coming back to the business model. So it's a combination of the additional hardware sales to the new segments, plus then the report base invoicing for the AI-based reports plus then, of course, the ILLUME platform. So...
Right. Good. Thank you. Then if I still can continue -- regarding the plans for the clinical study, you mentioned that you have got some indications to broaden the scope. But what kind of scope are we talking about? Can you share any color on the number of patients, how many locations, etcetera? And just to make it clear, so when you talk about the second half of 2025, that's when you plan to be able to submit the application? Have I understood correctly?
That's a good -- thank you for asking the other question and clarifying the situation. So -- so, we are now in -- so we did the so-called presub already earlier. And then after we did the presub. So then there's roughly 90 days, 3 months to FDA to come back. So they came back on last week, on Friday. And now we are looking their feedback, what kind of sites to include, what kind of patient population to include. So that's still on the progress. And then after we have now done the study, made revisions, then we do a new [indiscernible] up, then we start the clinical trials. And when I was referring to the to the second half next year -- so I'm really hoping that we are able to submit the application way before that one. So that was the logic. But now we are now crunching and analyzing the feedback from the FDA. So not -- so we have to run the power calculation and certain things, again, based on the FDA feedback. So not able to answer yet in detail to your question.
All right. So just to clarify, you expect to receive news from the -- do you expect to receive a market approval during the second half of next year?
If everything would go in extremely nice and smooth way that would be nice. But then I think always when dealing with the FDA and this bit more complex clinical studies. So of course, there's risks that it's not going to happen, but that's a direction towards where we are working currently.
Good. That's clear. Thank you. Then -- let me check my questions. Yes, finally, maybe still a comment on the contingent consideration of roughly EUR 8 million you have referred to in your report. So do you have any more -- any additional color on the likelihood of this occurring and what kind of technology or what kind of company investment are we talking about?
Currently, I would say that everything is going according to the plan, and that's all because of the NDAs and confidentially that we are able to say. So currently, everything is going according to the plan, and then we come back to this one during the Q3.
[Operator Instructions] The next question comes from Charles Weston from RBC. Please go ahead.
I'm on for Jack Reynolds-Clark. Just one, please. Could you comment on what you think -- the look -- the trajectory of Home2 might be once you do get the reimbursement and it is kind of on the schedule for the insurance companies? What will be required after that to get to that [ hockey stick ] that you mentioned? And how fast might that be? What time frame were thinking?
So hopefully, everything goes smooth and we get the codes and the reimbursement, and we also agreed with the insurance companies early next year. There is quite a bit of sales already today where -- like in Europe, more than half of our unit sales are paid by the patients out of their own pocket. So -- and there's this clear evidence and common understanding among KOLs that measuring the eye pressure at home is the best way to manage glaucoma. And like for an insurance company, if a person goes blind, it's a 7 number -- 7 number sum of money that it costs for them to pay to the patient that goes blind. So it seems to be that the insurance companies fully understand also that they're paying 2,500, 3,000 reimbursement for a device that helps to protect the sight of the patients hasn't been a very big obstacle to convince them. So in a way, if the device is free for the patients, of course, we do think that there is a very good chance for very strong growth on those sales. But the market, what we expected and kind of in the CMD disclosed our understanding of the home market is roughly $750 million annually by 2030. And there is no other device available than our device. So of course, hard to exactly say. I think your guess would be almost as good as my guess what it could be. It's still early and difficult to forecast.
I'm sure your guess would be better perhaps in terms of the marketing effort that you'll put behind it, once you do get that, if you do get that and it's an attractive number, would that trigger a material investment from you in terms of marketing and getting that message out, but it's now available [indiscernible] for free for the patients?
The current distribution model is following that we have the distributors in the U.S.A. And -- and they -- and their growth is really good. So they are going to cover part of the burden in terms of the marketing. Of course, if we get the codes, if we get payers aligned. So then according to the normal process, we are then going to evaluate how much more money we are going to put behind the Home2 marketing. But I think we would perhaps target the marketing more towards the eye care professionals because they have to prescribe the device. And then it, of course, would require lots of money to start business to consumer side of the marketing. So I would say that -- okay, marketing spend increased but not endless amount of money because we are not planning to do direct marketing straight to consumers. Rather the eye care professionals and also the distributors are covering part of the marketing spend.
There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.
Thank you for the participation. And next time, early August related to the Q2 earnings call. And let's hope that the spring is coming here in Finland. It doesn't look like it yet. But have a good spring and have a good summer all. And next time, let's talk early August. Thank you. Bye-bye.
Bye. Thank you.
Good afternoon, and welcome to Revenue Group earnings call for Q1. My name is Jouni Toijala, and I'm the group CEO. And with me here, as normally, we have as well our CFO, Robin Pulkkinen. Agenda for today. So I'll start with the highlights for the Q1. Then Robin is going to go through the financials, a shareholder structure plus reiterate the guidance.
So let's move on to the Q1. So the Q1 started slightly softly, as expected. However, the cash flow was strong. So net sales ended up to $23.6 million reported growth, 1.8%. If we look the currency adjusted numbers, so that was slightly down, 0.5% EBIT down from 6.2% to 5.1%. The biggest contributor for that one was the FDA approval related costs, and Robin is going to do a bit more deeper dive to the cost side in his part of the presentation. Cash flow was strong. So, $4.6 million for the Q1 and the big contributor for the good cash flow was related to the nonpayment for the long-term incentive scheme plus also really, really minor payments for the short-term incentive schemes.
So if going to the business highlights for the Q1. So, sales in the U.S. and Europe, Middle East and Africa was strong. A couple of highlights from the product side, IC200 continued to sell really well like during the Q4. Also the DRSplus sales was really good during the Q1. Then as mentioned earlier -- so we have started to work with the FDA approval related to the DRSplus iCare ILLUME cloud platform plus the AI, and that caused -- cured partly during the Q1 this year, so roughly EUR 600,000. Then if going back to the Q2-Q3 last year, so we had a lots of headwind from the private equity-owned optometry sector in the U.S.A. So on the positive note, we saw some increased activity now during the Q1 from the private equity driven optometry. So that's clearly the positive side. On the product side, iCare Maia Micro perimeter is progressing according to the plan. So based on the current plan, we have intention to launch the product towards the end of Q4 this year. And then as in all quarters -- so lots of activities, of course, related to sustainability themes and especially now during the Q1, lots of activities around the double materiality assessment. So that's working according to the plan as well. But over to you, Robin.
Thank you, Jouni. So like Jouni mentioned, Q1 sales slightly soft. Of course, just looking at the numbers, you may say it's a -- well, that's what we think when we say it's soft, but then we did have tough comparables and the good news is also that it did go pretty much like we planned. So we were not internally surprised. It has no impact on our longer-term guidance. So, we knew Q1 is going to be challenging. Q2/Q3 are the ones, quarters, where we are having easier comparables and then, of course, Q4, again, we have challenging comparables. So I think the Q1 and Q4 also internally were expected to be a bit softer year-over-year.
Gross margin, we were able to predict well. So the -- not big change there, so 70.3%. And like Jouni mentioned, the profitability is down, driven by the FDA approval related costs. We did highlight at the end of the last year, or the Q4, that we do have some cost headwinds this year. So the FDA trials for the new products were expected to be roughly EUR 1.5 million to EUR 2 million this year. And then, of course, the salary side, where we did pay record low incentives this spring, but those, of course, were accrued last year. So, in the costs in the books for last year, but the cash flow impact this year. Earnings per share of $0.137 and the net gearing minus 7 versus minus 13 (sic) [ minus 13.1 ] last year. So here, you can see the -- a bit more of the sales trend. Q1, again, slightly below the trend line, but that's been the case for every Q1, also, earlier. So the 1.8% reported growth, a slight decline on the FX adjusted and especially the EMEA and the U.S. sales were performing really well.
And then the profitability side. so that we can see here that it did come down, but we did kind of anticipate this to happen also. So the FDA costs, I think, seems to be a bit higher than maybe the market was expecting for the first quarter. This -- the analyst report, I think they were, in average, expecting a lower cost for Q1. We haven't really specified what quarter these costs are coming in this year. And I think it's fair to expect that there will be quite a bit of quarterly fluctuations in how those costs come in. And of course, the -- the bonus growth, looking at the profitability for this year. So like I mentioned, the bonus growth last year were pretty quite small. So looking at this year, expecting to remain within the guidance, the payroll costs will be higher this year compared to the last year.
Cash flow, a record high. I think we haven't been even close to this level in the earlier years, for many years going back. So traditionally, we -- all the STI and LTI incentive programs are paid out in first quarter. And now that this -- those payments were smaller, that is the main reason for the increase in the operating cash flow. Of course, then also, we did pay taxes less than the comparable period and then the trade receivables came down. Which we also, at the end of Q4, discussed that the AR was quite high due to a really strong end of the year. So they are coming down was also pretty much what we have planned and foreseen earlier. The balance sheet remains strong. So the equity ratio almost 75%. It's up actually more than 10% year-over-year. One big reason there is that last year, the -- I think the dividend was paid in Q2, like this year, but the AGM was in March. So the equity postings for the dividends were already in the balance sheet. So that was one reason. So Q2 this year, we'll also have the dividend payment in the equity. So the equity ratio probably will come down slightly. So $0.38 of dividend paid based on the AGM decision on the April 4, and those payments went out around mid-April this year.
Shareholders, a couple of changes here. The forum seem to be noticed also that the demand invest has increased their ownership. So went from slightly below 18% at the end of the year to 18.73% now at the end of Q1. And then also, we have a new -- not new shareholder, but bed -- embedded funds. They have been our shareholders for already a long time back, but then have now increased their ownership and become the sixth largest shareholder. On the top 10 list. So other than that, all the others are in the same order and pretty much in the same level as they were at the end of the year. Foreign ownership also now slightly above 50%, again, after being just under 50% at the end of the year. The country split hasn't much changed. So nothing really to highlight there.
The guidance remains the same. Revenue group exchange rate adjusted net sales are estimated to grow 5% to 10% from the previous year, and profitability, excluding nonrecurring items, is estimated to remain at a good level. And no change here. Good. And I think we're good for questions.
Yes. Thank you, Robin, and it's time for questions, please.
[Operator Instructions] The next question comes from Nikko Ruokangas from SEB. Please go ahead.
I have a couple of questions. So starting with the you say that you have seen some improvement in activity around the RFQ segment. So how much was this already visible in Q1 numbers? And what kind of level is currently contested level prior the challenges in the segment?
So some order activity and then increase on the pipeline related to the RFQs. So I think that's the current status, Nikko. And thank you for the questions.
Yes. Great. Okay. Then has anything changed? How do you view that market trends developing compared to Q4 conference call 3 months ago? So do you still see some light in the trends?
I would say that the -- if not -- so not too much change. So I think it's -- the private equity-driven optometry, that's more positive. Then if you go back to Q2, we go back to Q3. So I think that there's a bit more footfall on the optometry side. I think what we were expecting from the interest rate perspective, Q3 and Q4 last year. So we were -- perhaps we were expecting interest rates to come down slightly faster than now what is planned. But in summary, so be driven optometry now more activity. So that's not totally stand still. I think that's a good sign and perhaps a bit more footfall to the optometry as well.
Okay. Okay. Then still one question related to your costs, even though you already opened it a bit around the FDA cost. But in general, the fixed cost side, I understand the reason for the increase that -- and what kind of level expect fixed costs to be, rest of 2024 compared to Q1?
I think the biggest variable items are related to the clinical trials we have ongoing and have starting this year. In general, as long as we expect to remain, and do remain, within the guidance, then the bonus accruals are going to be higher than last year. So the payroll costs are going up. We hired -- I think the average headcount went up 7 people last year, so from $212 million to $219 million. So the total payroll package is also slightly increasing, but not that much. Of course, then the salary inflation has been around 4%/5%. So -- so those kind of together are probably the variable parts there. But I'd say the biggest bit open one still how the costs are coming for each quarter is related to the clinical trials, which is something we keep on working on. But we don't have a full schedule for every quarter of how it's going to hit yet.
Okay. And do you expect also inflation of 0.5% also for this year?
Sorry, the line was a little bit bad. I didn't catch the question.
So, you said the [indiscernible] impact has been on 4% to 5% [indiscernible]. Do you expect for this year, or were you talking about. . .
It was this year. So...
Okay, thank you.
That was for this year, the salary inflation roughly there.
The next question comes from Daniel Lepistö from Danske Bank.
Hi, it's Daniel Leviste from Danske Bank. I have also a few questions here. Maybe on the cost side, on the R&D cost headwinds that lie as you highlighted already in the Q4 report, I do remember that the talked range was about $1.5 million to $2 million extra for this year. So are you still within this previously talked range, now after the Q1?
Yes, that hasn't changed. So, it's still the same range. I think -- but it seems like the market expected it to be more end heavy, but we did have quite a bit of cost already in Q1. But there is a good chance that there is going to be big quarterly fluctuations there. So it's hard to say exactly how it's going to play.
All right. That's very clear. And maybe just to continue that this Maia-related R&D costs, are this included in this figure as well?
Yes, yes. Yes.
Okay. Then the second topic on the HOME2 reimbursement, I guess that as well in Q4, you talked about H1 '25, when you would be expecting the decision on that. So I guess you are seeing to get some news of this maybe a bit faster than previously anticipated. So has something changed, or more positive, or where it's just faster on your sort of submittal of the data and so on?
There's two milestones on this one, which is -- which we are following carefully. So first one is Q4, when we should get the information related to application for the codes. And the one key -- really the first step is to get the codes, so the reimbursement codes and that's a time for Q4 this year. And then, of course, after that, one comes, the payer insurance company side alignment in order to be able to get the reimbursement. So then we are wiser on that one, Q2 2025. So I think those are the two things that everybody should be following up that those are going according to the plan.
All right. Thanks for the clarification. I guess also on that topic, I think it's still open whether you will be taking -- or whether you will be getting the full or partial coverage? I mean, do you have any sort of scenarios on this one? And what's your view on this topic?
So we are looking the codes for the hardware. So currently, there's remote monitoring, training-related codes existing. But now we are looking at the reimbursement codes for the hardware side. And then, of course, we are looking as high as we can, but that's not fully on our control what's going to be the result. But really, the debt or the time period is Q4. So we have to come back to this one Q4.
All right. That's clear. I guess the final question on the ILLUME plus AI FDA approval and the time line on that one. Are you sticking with the time line of H1 '25 on that one as well? Or has there been any development on that?
There's a movement on that one. So we did the presub, then we got just a couple of days back. So we got the information related to the clinical trial requirements. So what's the scope of the clinical trials. We are analyzing the data as we speak, and there seems to be a wish from the FDA that the clinical trial scope perhaps should be extended. So we are discussing with the FDA. So I think that it is going to have an impact to the time line. And I would say that most probably not first half next year. So that's my current understanding. I would perhaps, to be sure, push it to the second half next year. And of course, it's an FDA approval process. So they tend to have tendency to take time. But that's the latest and we just got the info from FDA a couple of days ago. So we are analyzing that one and being in contact with the FDA on that. But that's the latest really, I mean, really in a couple of days.
Okay. And this scope extension, it won't have any impact on the R&D cost side at least this year?
This year no. So we were putting from 1.2 to 1.5 for ILLUME, then the remaining part for the Maia, as Robin explained. So no change on the cost side for this year, for sure.
The next question comes from Joni Sandvall from Nordea.
Thanks for the good presentation. Joni from Nordea. You had some larger multiyear orders in Q4 too, if I remember correct in Germany and also some U.S. deliveries scheduled for this year. So can you give any comment on deliveries of these and time line?
So we did first deliveries for both countries, so imaging devices, tonometers already Q4. So during the Q1, we also continued to deliver DRSpluses to the clients. So that's going according to the rollout plan.
Okay. Perfect. Then maybe a follow-up on the pipeline situation. You said that Maia towards the end of Q4, and I think we went through the HOME2 FDA approval situation. But is there some other new product launches now scheduled for the '24?
That's an interesting question. I would love to give an answer to that one. So I think this is perhaps a bit teflon statement that we have been working quite a lot on the R&D side related to coming years. So I think the time will show in the coming quarters, that if there's something new to come. Sorry for the unclear answer.
That's okay. That's okay. Then maybe lastly on the guidance. You are intact with the guidance and after the bit soft Q1, as you said, how is your visibility now going forward? How long visibility you have? And how confident are you with your guidance?
Yes, I think the Q1 went very much like we thought it's going to go. So the way that we thought it's going to go when we gave the guidance. So nothing has really changed there. The Q2/Q3 are from the comparable points, hopefully, the easier quarters. But of course, the visibility for us hasn't really changed. So we deliver tonometers. Our backlog is maximum 2 weeks. And then for imaging, it's not more than 4 weeks in rare cases. So our visibility -- what we've sold for Q2 is probably a couple of 20%, 30% so far. So we don't even know yet what the Q2 is going to be like. So the visibility is quite short, and...
And that's normal.
Normal for us. Yes.
Yes. Okay. Well, maybe a follow-up on that. Can you give any sequential color maybe -- maybe on the sales trend now towards the end of Q1?
If looking the April, we are executing according to the plan, I think that's -- Robin, fair to say?
Yes. Yes.
So if you look at the current numbers, what we have, so we are executing according to the plan. which is, of course, good.
[Operator Instructions] The next question comes from Pia Rosqvist-Heinsalmi from Carnegie Investment Bank. Please go ahead.
I'm going back to the demand situation in Q1, and you said -- or you reported sales growth of slightly [indiscernible] 2%. But can you give some more color on the different products in addition to DRSplus, which you said grew strongly? And I think you also said IC-200 grew well? So what happened in the other product categories?
Yes, those two were -- thanks, Pia, and hi. Those two were the -- kind of the highlights. So I mean, we saw really, really big and strong growth on the IC, especially in IC-200. Same for the DRS. And then, of course, the EIDON family, according to the normal steady growth strength and then same applies also for the other products. But those were kind of the two highlights that we -- actually went slightly better than expected. So that was a logic why we put them up. Anything, Robin, any flavor you would like to add?
Yes. The IC-200, it's good to understand. It's partly cannibalizing the IC-100 sales. So kind of it's not only new -- new add-on sales. So like in the U.S., it seems like the sales are transferring more towards the highest end device, which is the IC-200, which has been then playing or showing as a decline partly on the IC-100 sales.
Okay, thank you. I'm just trying to understand if there are any product categories which declined since -- I mean, the reported sales of the FX-adjusted sales were actually down slightly. So if IC-200 and DRSplus are growing very strongly or strongly -- so what kind of products are there, then, may be declining?
Well, often, it's difficult -- one quarter is a short review period. So there are big -- especially like the imaging devices. There are big differences between months and quarters. So definitely, like the biggest growth are from there. And then I think for the perimeters is pretty small still for us. So the products that go up, some have gone up, some have go slightly down. But kind of overall, I think the comparable quarter was so challenging or tough that the sales was quite okay from our view, when it comes to Q1. But I wouldn't necessarily disclose exactly what happened to each product group, but there's some that went up, some of what went down.
All right. That's clear, thank you. Then do you have any comments on the Home device? How is that performing; any numbers to share?
Steadily growing like in earlier quarters. So -- and of course, not the step change growth but steady growing as before. And of course, the key to this step change growth is the reimbursement, but that's that one we covered already. Any other flavor, Robin, on that?
Yes. Maybe the screening, if you want to say a few words on what do you think about the new screening accounts we have been...
Yes. Yes. So then, of course, the --the -- on the positive note when it comes to the ILLUME and the DRSplus plus the AI. So we have been getting now quite a lot of traction, especially in the Europe. So -- so, I mean, we start to have tens of clients in a live use for screening here in Europe. So that's, of course, good progress on the ILLUME side.
That sounds good. And when will the needle move in terms of revenues for that?
It's 12-month subscriptions that they sign up for the -- Yes, it's not very fast to get it to [ hockey sticks ]. But at least there's a good traction, a lot of requests, even for larger programs in different countries for kind of screening the population. So looks quite good from our end.
And of course, for this year, we have budgeted in the hardware sales for the screening. So it's coming back to the business model. So it's a combination of the additional hardware sales to the new segments, plus then the report base invoicing for the AI-based reports plus then, of course, the ILLUME platform. So...
Right. Good. Thank you. Then if I still can continue -- regarding the plans for the clinical study, you mentioned that you have got some indications to broaden the scope. But what kind of scope are we talking about? Can you share any color on the number of patients, how many locations, etcetera? And just to make it clear, so when you talk about the second half of 2025, that's when you plan to be able to submit the application? Have I understood correctly?
That's a good -- thank you for asking the other question and clarifying the situation. So -- so, we are now in -- so we did the so-called presub already earlier. And then after we did the presub. So then there's roughly 90 days, 3 months to FDA to come back. So they came back on last week, on Friday. And now we are looking their feedback, what kind of sites to include, what kind of patient population to include. So that's still on the progress. And then after we have now done the study, made revisions, then we do a new [indiscernible] up, then we start the clinical trials. And when I was referring to the to the second half next year -- so I'm really hoping that we are able to submit the application way before that one. So that was the logic. But now we are now crunching and analyzing the feedback from the FDA. So not -- so we have to run the power calculation and certain things, again, based on the FDA feedback. So not able to answer yet in detail to your question.
All right. So just to clarify, you expect to receive news from the -- do you expect to receive a market approval during the second half of next year?
If everything would go in extremely nice and smooth way that would be nice. But then I think always when dealing with the FDA and this bit more complex clinical studies. So of course, there's risks that it's not going to happen, but that's a direction towards where we are working currently.
Good. That's clear. Thank you. Then -- let me check my questions. Yes, finally, maybe still a comment on the contingent consideration of roughly EUR 8 million you have referred to in your report. So do you have any more -- any additional color on the likelihood of this occurring and what kind of technology or what kind of company investment are we talking about?
Currently, I would say that everything is going according to the plan, and that's all because of the NDAs and confidentially that we are able to say. So currently, everything is going according to the plan, and then we come back to this one during the Q3.
[Operator Instructions] The next question comes from Charles Weston from RBC. Please go ahead.
I'm on for Jack Reynolds-Clark. Just one, please. Could you comment on what you think -- the look -- the trajectory of Home2 might be once you do get the reimbursement and it is kind of on the schedule for the insurance companies? What will be required after that to get to that [ hockey stick ] that you mentioned? And how fast might that be? What time frame were thinking?
So hopefully, everything goes smooth and we get the codes and the reimbursement, and we also agreed with the insurance companies early next year. There is quite a bit of sales already today where -- like in Europe, more than half of our unit sales are paid by the patients out of their own pocket. So -- and there's this clear evidence and common understanding among KOLs that measuring the eye pressure at home is the best way to manage glaucoma. And like for an insurance company, if a person goes blind, it's a 7 number -- 7 number sum of money that it costs for them to pay to the patient that goes blind. So it seems to be that the insurance companies fully understand also that they're paying 2,500, 3,000 reimbursement for a device that helps to protect the sight of the patients hasn't been a very big obstacle to convince them. So in a way, if the device is free for the patients, of course, we do think that there is a very good chance for very strong growth on those sales. But the market, what we expected and kind of in the CMD disclosed our understanding of the home market is roughly $750 million annually by 2030. And there is no other device available than our device. So of course, hard to exactly say. I think your guess would be almost as good as my guess what it could be. It's still early and difficult to forecast.
I'm sure your guess would be better perhaps in terms of the marketing effort that you'll put behind it, once you do get that, if you do get that and it's an attractive number, would that trigger a material investment from you in terms of marketing and getting that message out, but it's now available [indiscernible] for free for the patients?
The current distribution model is following that we have the distributors in the U.S.A. And -- and they -- and their growth is really good. So they are going to cover part of the burden in terms of the marketing. Of course, if we get the codes, if we get payers aligned. So then according to the normal process, we are then going to evaluate how much more money we are going to put behind the Home2 marketing. But I think we would perhaps target the marketing more towards the eye care professionals because they have to prescribe the device. And then it, of course, would require lots of money to start business to consumer side of the marketing. So I would say that -- okay, marketing spend increased but not endless amount of money because we are not planning to do direct marketing straight to consumers. Rather the eye care professionals and also the distributors are covering part of the marketing spend.
There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.
Thank you for the participation. And next time, early August related to the Q2 earnings call. And let's hope that the spring is coming here in Finland. It doesn't look like it yet. But have a good spring and have a good summer all. And next time, let's talk early August. Thank you. Bye-bye.
Bye. Thank you.