Dynavox Group Ab

so good morning everyone welcome to this earnings call where we will cover the first quarter 2023 summarizing our business in january february and march of this year and now we're going to kick to the next slide and so i'm frederick rubin i am the ceo of toby dynabox and i'm linda tybring the cfo of top of dynamics And like I said, we will cover the first quarter of 2023. But first we will take you some brief fundamentals about the company. We will summarize the main takeaways from the quarter, and then we will dive a little bit deeper into the financials. And thereafter, there will be a Q&A session. And you can submit questions live in this session in the chat function in Teams. And we of course always welcome offline questions and you can direct them to in Linda's email that you see here on the screen. All right. So as I said, before we dive deeper into the first quarter of 2023, I'd like to make a short summary about what Tobii Dynavox is about. This may be repetition for some, but it's still fundamental to really understand the company and our business. First and foremost, uh, in very important for us to reiterate our mission and vision, which I know is very dear, not only to our roughly 600 colleagues around the world, but also to our ecosystems of partners and investors. Um, our vision is a world where everyone can communicate and we will contribute to this via focusing on our mission, which reads to empower people with disabilities to do what they once did or never thought possible. And in this story, you basically have two of our main user stories embedded. The first one is 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 the body or communicate like before. The other story is that never thought possible. And that can refer to the child diagnosed at an early age with a condition such as autism, cerebral palsy or like where thanks to our solutions, she can do much more than the world around her ever thought possible. And we have on the picture here to the right, Delaina Parrish from Florida. She was born with cerebral palsy and she is a great example of exactly that. If we look at the market that we served, it's hugely underserved. Some 50 million people have a condition so grave. They simply cannot communicate unless they have a solution like ours. And every year, some 2 million people are being diagnosed yet. It's estimated that only 2% of those are actually being helped. The rest remain silent. And the main reason for this, uh, spells lack of awareness. also among the professionals and the prescribers tasked to assist these users. And in combination with typically a poor healthcare reimbursement system. We operate with a global footprint today, some three quarters of our business stems out of the U S and largely because of a reasonably well functioning funding system established some 20, 30 years ago. Our products are, however, also sold and available in some 65 markets around the world. Our staff is distributed in a similar way as our revenue. So that means some 70% of our staff are based in North America with our US headquarters in Pittsburgh, Pennsylvania. Our second largest office is our headquarter here in Stockholm. But we have branch offices in several European countries as well as in Suzhou in China. As of today, again, we are some 600 employees in total. With the recent acquisitions, we now also have established or increased our presence specifically in Belgium, in France, in Ireland, and in Denmark, in addition to a smaller number of remote employees, primarily in Central Europe. We provide, Tobin Anubox provides a comprehensive portfolio of solutions and that ranges, as you can see on the list on this picture. If we start from the top, the content such as the world leading library of communication symbols, they're called PCS and synthetic voices, specifically the voices is a component that we now have in-house through the acquisition, which we closed last year of acapella group. Uh, uh, it's the world leading world's leading provider of, of naturally sounding and diverse synthetic voices. If we then go down, we have highly sophisticated communication software, which is tailored to the type of user. And that can of course vary greatly based on the needs. then further go down we develop and design devices and hardware with cutting edge technology that is typically medically certified and is very very durable and that includes then communication aids that you controlled using eye tracking we have services a services portfolio to help our users through the complexity of obtaining and getting funding for a device And then last but not least, we are there to help our users, the therapist, the caregivers through a global team of support resources. And like I said, we operate this model globally, and it's important to note that each piece of this, this each layer here is, is critically important and also significant differentiator for us, uh, making us absolutely unique as a company. Our go-to market model is predominantly as prescribed aids. Some 90% of our revenue stems out of public or private insurance provider. And this, this also means that we have solid paying customers and we have always historically and still been very resilient towards changes in the overall economy, economic climate. Uh, in addition to that, our market is as mentioned, uh, severely under penetrated. But now we'll get back to the main topic of today, which is the earnings report for the first quarter of 2023. So if I look at the highlights, we had another very strong quarter when it comes to revenue development. The revenue growth compared to the same quarter last year sums up to 36%, partly boosted by foreign exchange and a strong performance by our recent acquisitions. And the organic growth was 15%, which continues basically on the same trend that we saw starting in the second quarter of last year and continued throughout 2022. During the first quarter, which is seasonally our weakest quarter, we continue to report good growth across the board in different geographies and different products and across various user groups. So we feel that the strength of an up-to-date product portfolio is continuously improved with new products and features. We launched several new products quite recently in the end of 2022. We continue to grow our sales and marketing organizations, including furthering strengthening our US funding organization, and this is key to navigate each customer through the complexities of obtaining funding for their new communication aid through public or private insurance systems. Our work to improve awareness and competence continue specifically among prescribers and professionals, and the value of being able to meet Every person, again, typically face-to-face is of major significance for us, both internally within the company, but also with our customers, obviously. The North American market, our biggest market, continues to show strong growth. This is the largest and most influential market in our industry, both for us and for everyone else. But it's also good that we continue to see the trend that the growth rates also in Europe and other countries are pretty much on the same level. If there's one trend worth singling out is that we now have particularly good, good momentum among conditions that are children or, uh, or, or conditions that have a younger user base. A good example of that is autism. And they rely typically heavily on our symbol communication solutions. And in particular, our software called TD snap. Um, our OPEX levels are higher than a year ago, but this has to be seen in the light that a year ago, we still had the pandemic, uh, that impacted our business. And we have made since significant investments in our staff again, mainly within sales and marketing. Going forward, comparisons will be easier since the impact on OPEX created by the pandemic kind of faded out a year ago. And since then it's been more or less business as usual. We closed three acquisitions during 2022, and it's also very encouraging to see that all of them are developing very well, both commercially as well as operationally and integration wise. The largest acquisition that we did was a Capella group that I mentioned before they have headquarters in Belgium. They have rendered significant momentum and attention to its world leading synthetic voice portfolio, but not only the significant catalog of high quality synthetic voices in many languages and variants, but also the, the solution called my own voice. which enables people with only a few small voice recordings to create a naturally sounding synthetic voice that they can do on their own, based on their own voice, which can then at the latest stage perhaps be used on a communication device. This was among much picked up by the news outlet Voice of America. in an interview with one of our users his aid and with the acapella group ceo remy kadic and i would like to play a little video to for you to see that interview which hopefully gives you a good flavor it's amazing i love it when bradley heaven talks it sounds like this kind of ha ha heaven has cerebral palsy and is non-verbal

He uses an eye tracking device to communicate his thoughts. But until recently, the digital voice that spoke for him sounded pretty digital. But a company called Acapella Group has come up with a way to turn his voice from this.

It's really cool and unique.