Optomed Oyj : Interim Report, January - March 2024

Optomed Plc: Interim Report, January - March 2024

January - March 2024

• Revenue decreased by 4.4 percent to EUR 3.3 (3.5) million.
• Devices segment revenue increased by 0.1 percent to EUR 0.9 (0.9) million.
• Software segment revenue decreased by 5.9 percent to EUR 2.4 (2.6) million.
• EBITDA and adjusted EBITDA amounted to EUR -0.6(-0.5) million corresponding to -26.3(-14.8) percent of revenue.
• Outlook unchanged: Optomed expects its full year 2024 revenue to grow compared to 2023.
• Optomed Aurora with AEYE-DS AI has successfully received FDA clearance after the review period.
• Discussions with a prominent eye hospital and private equity fund to establish a joint venture for eye screening services in China.

Key figures

EUR, thousand	Q1/2024	Q1/2023	Change, %	2023
Revenue	3,327	3,478	-4.4%	15,100
Gross profit *	2,213	2,476	-10.6%	10,292
Gross margin % *	66.5%	71.2%		68.2%
EBITDA	-648	-513	-26.3%	-1,781
EBITDA margin *, %	-19.5%	-14.8%		-11.8%
Adjusted EBITDA *	-648	-513	-26.3%	-1,470
Adjusted EBITDA margin *, %	-19.5%	-14.8%		-9.7%
Operating result (EBIT)	-1,191	-1,043	-14.2%	-3,974
Operating margin (EBIT) *, %	-35.8%	-30.0%		-26.3%
Adjusted operating result (EBIT) *	-1,191	-1,043	-14.2%	-3,663
Adjusted operating margin (EBIT margin) *,	-35.8%	-30.0%		-24.3%
%
Net profit/ loss	-1,090	-1,157	5.8%	-4,441
Earnings per share	-0.06	-0.08	15.8%	-0.27
Cash flow from operating activities	-515	-440	-17.1%	-615
Net Debt	-2,585	-2,136	-21.0%	-3,768
Net debt/ EBITDA (LTM) *	1.3	1.4		2.1
Net debt/ Adjusted EBITDA (LTM) *	1.6	1.4		2.6
Equity ratio *	69.5%	64.7%		70.0%
R&D expenses personnel	299	283	5.6%	1,280
R&D expenses other costs	144	163	-11.7%	644
Total R&D expenses	443	446	-0.7%	1,924

*) Alternative performance	measures, see section Alternative Performance Measures for definitions and	calculations.
Optomed presents Adjusted EBITDA and Adjusted operating result as alternative performance measures	to enhance comparability
of business performanc e	between reporting periods. In 2023, items affecting comparability amounted to EUR 311 thousand and
related to increased credit risk with respect to an overdue trade receivable from a customer in China.

CEO Review

I am pleased to announce that Optomed Aurora, equipped with AEYE-DS AI technology, has received FDA clearance, a pivotal achievement in our company's history. This approval marks the introduction of the first handheld AI fundus camera for immediate detection of diabetic retinopathy in the U.S., establishing a new benchmark in diabetic eye care. Our solution has shown unparalleled performance, achieving 92-93% sensitivity and 89-94% specificity in two comprehensive studies, with a remarkable 99% imageability rate. Notably, our technology simplifies the diagnostic process by using just a single image from each eye. This achievement comes from our diligent collaboration with our esteemed partner AEYE Health.

Turning to our financial performance for the first quarter, while we fell slightly short of our expectations, particularly in the software segment, our full-year outlook remains positive. Notably, we received promising customer orders from China during the quarter, suggesting potential growth in that region. We've also reevaluated our strategy in China and are presently engaged in discussions with a prominent eye hospital and private equity fund to establish a joint venture for eye screening services, aiming for implementation in either Q2 or Q3. The business model for this venture will be a recurring revenue model, ensuring sustainability and long-term success.

Additionally, we successfully halted the decline in our OEM business and resumed our growth trajectory. Despite facing challenges, our team's dedication and strategic execution have yielded excellent outcome as two of our main strategic goals were achieved. Additionally, we are delighted to share that we have emerged victorious in a public tender within the software segment which we have discussed in our previous reports, a result to the quality and competitiveness of our offerings.

As we look ahead, we are energized by this momentum and remain committed to delivering value to our shareholders. We sincerely thank you for your continued support and confidence in Optomed.

Juho Himberg

CEO

Outlook 2024

Optomed expects its full year 2024 revenue to grow compared to 2023.

Telephone conference

A telephone conference for analysts, investors and media will be arranged on 7 May 2024 at 11.00 EET, (10.00 CET). The event will be held in English. The presentation material will be available at www.optomed.com/investors 10.00 EET at the latest.

The participants are requested to register for the call-in advance by email to [e-mail].

Please see the call-in numbers below:

FI [phone]

SE [phone]

UK [phone]

US [phone]

FR [phone]

The conference id is 398 980 747 974#

Please note that by dialing into the conference call, the participant agrees that personal information such as name and company name will be collected.

Group performance

January - March 2024

In January - March 2024, Group revenue decreased by 4.4 percent to EUR 3,327 (3,478) thousand. Devices segment had a slow quarter and the revenue increased to EUR 890 (888) thousand. The Software segment revenue decreased by 5.9 percent to EUR 2,437 (2,590) thousand.

In January - March 2024, the gross margin decreased to 66.5 from 71.2 percent of last year.

EBITDA decreased and it was EUR -648(-513) thousand. The decrease was mainly due to weakened revenue and, therefore, gross profit.

EBIT decreased and it was EUR -1,191(-1,043) thousand.

In January - March 2024, net financial items amounted to EUR 94 (-134) thousand and consisted mainly of interest payments to financial institutions and the translation effect of CNY and USD to EUR.

Cash flow and financial position

January - March 2024

In January - March 2024, the cash flow from operating activities amounted to EUR -515(-440) thousand. Net cash used in investing activities was EUR -534(-545) thousand and relates to capitalized development expenses. Net cash from financing activities amounted to EUR -366(-349) thousand.

Consolidated cash and cash equivalents at the end of the period amounted to EUR 5,706 (7,179) thousand. Interest- bearing net debt was EUR -2,585(-2,136) thousand at the end of the period.

Net working capital was EUR 2,364 (3,658) thousand at the end of the period.

Optomed has large trade receivables from a Chinese customer. The customer missed payments since H2-2023 and, consequently, the specific loss allowance weighted average loss rate was increased from 30% to 50% in Q3-2023. The payment negotiations continue with the said customer. The total amount of the receivable in the balance sheet is now EUR 778 thousand.

Devices segment

Optomed has two synergistic business segments: Devices and Software.

The Devices segment develops, commercializes, and manufactures easy-to-use, and affordable handheld fundus cameras, that are suitable for any clinic for screening of various eye diseases, such as diabetic retinopathy, glaucoma and AMD (Age Related Macular Degeneration).

EUR, thousand

Revenue

Gross profit *

Q1/2024		Q1/2023	Change, %	2023
890	888	0.1%	5,009
516	559	-7.6%	2,947

Gross margin % *

58.0%

62.9%

58.8%

EBITDA

-361

-426

15.3%

-1,264

EBITDA margin *, %

-40.5%

-47.9%

-25.2%

Operating result (EBIT)

-705

-779

9.5%

-2,707

Operating margin (EBIT) *, %

-79.2%

-87.7%

-54.0%

*) Alternative performance measures, see section Alternative Performance Measures for definitions and calculations .

January - March 2024

In January - March 2024, the Devices segment revenue increased by 0.1 percent to EUR 890 (888) thousand. The OEM and China revenue increased slightly whereas the global distributor sales declined slightly. In the US, the focus of the sales organization was on preparing for the possible Aurora AEYE launch.

The gross margin was 58.0 (62.9) percent. During the quarter, the Company sold an amount of Smartscope Pros which had a slight negative effect on the gross margin.

EBITDA was EUR -361(-426) thousand or -40.5(-47.9) percent of revenue.

Software segment

Optomed has two synergistic business segments: Devices and Software.

The Software segment develops and commercializes screening software for diabetic retinopathy and cancer screening for healthcare organizations. The segment also distributes off-the-shelf products from selected partners to supplement its own solutions and expertise and provides software consultation to support the Devices segment screening solution projects.

EUR, thousand	Q1/2024	Q1/2023	Change, %	2023
Revenue	2,437	2,590	-5.9%	10,091
Gross profit *	1,697	1,917	-11.5%	7,346
Gross margin % *	69.6%	74.0%		72.8%
EBITDA	526	790	-33.4%	2,629
EBITDA margin *, %	21.6%	30.5%		26.1%
Operating result (EBIT)	329	615	-46.5%	1,889

Operating margin (EBIT) *, %

13.5%

23.8%

18.7%

*) Alternative performance measures, see section Alternative Performance Measures for definitions and calculations .

January - March 2024

In January - March 2024, the Software segment revenue decreased by 5.9 percent to EUR 2,437 (2,590) thousand as there were no major projects deliveries during the quarter. There were no updates in terms of the large Finnish public procurement process during the quarter. After the review period, Optomed announced that it has won a contract to provide non-healthcare development services to a Finnish governmental agency. Optomed has been providing the services since 2003 but the contract was subject to a procurement process. The decision can be appealed against.

Gross margin decreased and was 69.6 (74.0) percent. EBITDA was EUR 526 (790) thousand or 21.6 (30.5) percent of revenue.

Group-wide expenses

Group-wide expenses relate to functions supporting the entire group such as treasury, group accounting, marketing, legal, HR, and IT.

January - March 2024

Group-wide operating expenses amounted to EUR 816 (877) thousand.

Personnel

Number of personnel at the end of the reporting period.

	3/2024	3/2023

12/2023

Devices

Software

Group common

Total

51

47

16

114

48

45

22

115

47

47

20

114

Corporate Governance

Optomed complies with Finnish laws and regulations, Optomed's Articles of Association, the rules of Nasdaq Helsinki and the Finnish Corporate Governance Code 2020 issued by the Securities Market Association of Finland. The code is publicly available at http://cgfinland.fi/en/.Optomed's corporate governance statement 2023 is available on the company website www.optomed.com/investors/.

Annual General Meeting

Optomed's Annual General Meeting will be held on Friday, 10 May 2024 at 10:00 a.m. (EEST) at Life Science Center Keilaniemi, Keilaranta 16 C, FI-02150 Espoo, Finland. The reception of persons who have registered for the meeting and the distribution of voting tickets will commence at 9:30 a.m. (EEST).

The invitation and other material is available at: https://www.optomed.com/investors/annual-general-meeting-2024/

Shares and shareholders

The Company has one share series with all shares having the same rights. At the end of the review period Optomed Plc's share capital consisted of 18,130,397 shares and the Company held 353,973 shares in the treasury which approximately corresponds to 1.95 percent of the total amount of the shares and votes. Additional information with respect to the shares, shareholding and trading can be found on the Company's website www.optomed.com/investors/.

Risks and uncertainties

The key risks and uncertainties are described in the company's Annual Report 2023 which was published on 29 February 2024. The complete report is available at https://www.optomed.com/investors/.The risk position of Optomed has not changed since then, except for that the risks titled "AURORA AEYE FDA CLEARANCE PROCESS" and "PUBLIC PROCUREMENT" are no longer applicable.

Audit review

This financial report has not been audited by the company's auditors.

Financial reporting in 2024

• 8 August 2024 Half-Year Financial Report for 1 January - 30 June 2024
• 7 November 2024 Interim Report for 1 January - 30 September 2024

For more information, contact

Sakari Knuutti, CFO

E-mail: [e-mail]

Juho Himberg, CEO

E-mail:[e-mail]

About Optomed

Optomed is a Finnish medical technology company and one of the leading providers of handheld fundus cameras. Optomed combines handheld fundus cameras with software and artificial intelligence with the aim to transform the diagnostic process of various eye diseases, such as rapidly increasing diabetic retinopathy. In its business Optomed focuses on eye screening devices and software solutions related R&D in Finland and sales through different channels in

over 60 countries. www.optomed.com