Dynavox Group Ab

Okay, good morning everyone and welcome to this earnings call where we will cover the second quarter 2022 and summarizing our business in the month of April, May and June for Tobii Dynavox. I'm Fredrik Ruben, I'm the CEO of Tobii Dynavox.

And I'm Linda Theibring, I'm the CFO of Tobii Dynavox.

And in this call, uh, we will cover the second quarter of 2022, but first we'll take you some brief fundamentals about the company, uh, summarize the main takeaways from the quarter. We will obviously dive deeper into the financials and thereafter, there will be a Q and a session. Uh, we have received questions prior to the call. Uh, you can also submit questions through email to Linda's email, which you can see on the slide here. All right. But again, before digging deeper into the financials of the second quarter, I'd like to make a summary of what Tobii Dynavox is about. First and foremost, and this is important for not only us, but also investors and the ecosystems in partner around us, is to reiterate our mission, which reads to empower people with disabilities to do what they once did or never thought possible. And this mission statement summarizes two main user stories. The do what you once did, that may be the person who led a normal life until a diagnosis such as ALS, which rendered her unable to control her body and limbs or communicate like before. The other story is the never thought possible. That's the child that is being diagnosed at an early age with a condition such as autism, cerebral palsy, where thanks to our solutions, she can do much more than the world around her ever thought possible. And on the picture here, you see Delaina Parrish from Florida. She was born with cerebral palsy, and she's a great example of exactly this. The market that Tobbe de Hannevoort serves is hugely underserved. Some 50 million people on the face of this earth have a condition so grave they simply cannot communicate unless they have a solution like ours. Every year, some 2 million people are being diagnosed, but only about 2% of them are actually being helped and the rest remain silent. The main reasons for this spells lack of awareness, also among the professionals, the prescribers, but also poor healthcare and reimbursement systems in most countries in the world. We operate with a global footprint. Today, some three quarters of our business stems out of the US and North America, and largely because of a reasonably well functioning and established funding system, which was founded some 20 years ago. Our products are sold in some 65 markets around the world. Our staff is distributed in a similar way as the revenue, meaning that some 75% of our staff are also based in North America with our US headquarters in Pittsburgh, Pennsylvania. Our second largest office is our headquarter here in Danderyd outside of Stockholm, but we also have branch offices in several European countries, as well as in Suzhou in China. At this point, we employ a total of roughly 550 employees. With the recent acquisitions, which we'll talk a little bit more about, we have also established or increased our presence specifically in Belgium, France, Ireland and Denmark, in addition to a smaller number of remote employees, primarily in Central Europe. Tobii Dynavox provides a comprehensive portfolio of solutions. And if you look at this picture from left to right, we start with the content where Tobii Dynavox has the leading library of communication symbols, but also synthetic voices. Specifically, the voices is a new component that we now have in-house through the acquisition of Acapella Group. If we then move to the right, we take this content and develop a highly sophisticated communication software tailored to the type of users. And during the quarter that has passed, we have both expanded the number of languages in our symbol communication software called TD Snap, but also enhanced our software for literacy users in the software TD Talk. And we will also cover that a little bit more in detail. We then build devices with cutting edge technology. They are typically medically certified, including communication aids that can be controlled using your eyes. And then we have a comprehensive services portfolio to help our users through the very often complex journey of obtaining a device and getting it prescribed. And last but not least, we are there to help our users, therapists, caregivers, et cetera, with a worldwide support network. Tobii Dynavox's go to market model is predominantly as prescribed aids. Some 90% of our revenue comes from some sort of public or private insurance provider. And this also means that we have solid paying customers and we are quite resilient towards changes in the overall economic climate. In addition to that, our market is extremely under penetrated. So that was a quick recap about Tobii Dynavox and now we will go back and focus on the past three months. If I start with some of the highlights of the quarter, we saw a very strong and solid sales growth in the quarter. In total, our revenue grew by a staggering 75% compared to the same quarter 2021. However, this comparison must be seen in the light of a rather problematic Q2 last year. We had severe supply chain disruptions last year, and we also now have favorable currency impact. But still, if we adjust for both currency and last year's backlog effects, the underlying revenue growth was a solid 23%. We saw growth in all major regions, but in particular, our North American region was the clear locomotive for this quarter. One of the reasons is that we see a faster pickup from the pandemic in the US compared to Europe, mainly due to longer lead times from assessment to prescription and funding and delivery in non-US markets. In the same way, we saw that the first quarter, our margins our margins were heavily impacted by the abnormally high component and freight charges. These are burdensome, but also largely of a temporary nature, why we feel that this is less concerning long term. In June, we also launched a very important product launch around the concept of voice banking, which essentially means that with the use of Acapella's artificial intelligence solutions, we can offer a user to make a recording of your own voice and thereby create a synthetic version of that person's own voice, which is then being used in our leading communication software for literate users, TD Talk. A common user group for this use case are people diagnosed with ALS who eventually, in many cases, lose their own voice as the condition progresses. We've also been very active on the M&A field. We have closed two acquisitions in the quarter. That was first the Belgian Acapella Group. and then irish safe care technologies but we also announced a deal where we acquire all the assets and operations from our danish reseller ask and that deal was then eventually closed on first of july these three acquisitions shares some varying rationale so one of our objectives is to grow or complement our product portfolio towards the existing markets that we serve The acquisition of Acapella is a great example of where we bring a solution that is closely tied and integrate to our offering, naming the synthetic voices and thus enable our teams to work much closer and innovate at a much faster pace. It's also a great company with very solid financials, hence also adding to our overall critical mass and financials. That's one type. The other type or the other objective is to grow our geographic reach. and to come closer to the prescribers, the users and the legislators in specific markets and regions. And in some cases, when we have seen that removing that one layer enables us to better serve the local market, the acquisitions of both safe care technologies in Ireland and us in Denmark are two good examples of such. And if I look Back into the history of Tobii Dynavox, our entry into our currently largest market and best performing market in this quarter, the US, that actually stems out of two acquisitions made a number of years ago. It is, however, important to note that acquisitions should only be seen as a sprinkle on the cake or such in our future growth, which is largely based on organic growth and a much improved penetration of this hugely underserved market. With that said, I'd like to hand over the microphone to Linda for a moment to talk us through the financials.