Dynavox Group Ab

All right. Good morning. Happy Wednesday, everyone. Welcome to this earnings call where we will cover the third quarter 2024, summarizing our business in July, August and September. So I'm Fredrik Rubin. I'm the CEO of Dynavox Group.

And I'm Linda Tyring, the CFO of Dynavox Group, and I will present the financial later on.

Great. So for those of you who have participated in these calls before, you will be familiar with, we will start with a recap of what the Dynavox group is about. We will then summarize the main takeaways from the quarter. We will dive deeper into the financials and thereafter we will open up for a Q&A session. And you will be able to submit your questions during the live session in the chat function here in Teams. And we, of course, always welcome offline questions sent by email to Linda's email, which you can see on the slide here, linda.tybring at dynavoxgroup.com. Okey dokey. So a brief overview of Dynavox Group then first. First and foremost, it's super important to reiterate our mission and our vision, and I know it's super dear to not only the roughly 800 plus colleagues of ours around the world, but also to our ecosystems of partners and investors. and our vision is a world where everyone can communicate 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 this also summarizes two of our main user stories the first one the do what you once did that might be the person who led a normal life until a diagnosis such as als which rendered her unable to control her body or communicate like before And the never thought possible that can refer to a child diagnosed at an early age with the conditions such as autism or cerebral palsy, where thanks to our solutions, he can do much more than the world around him ever thought possible. And on the picture here to the right, you see Christopher. He is from California in the US, and he's one of our amazing young users diagnosed with nonverbal autism. And he's a great example of that. The market that we serve is hugely underserved. Some 50 million people have a condition so grave they simply cannot communicate unless they have a solution like ours. We estimate that every year about 2 million people are being diagnosed, and yet we estimate that only some 2% of those are actually being helped, and that means that the rest remain silent. The main reason for this spells lack of awareness. also among the professionals and the prescribers tasked to assist these users and combined with poor healthcare reimbursement systems we operate on a global footprint today some three quarters of our business stems out of the us and that's largely because of a reasonably well functioning funding system that was established some 20 to 30 years ago However, our products are sold in about 65 markets around the world, of which US, Canada, UK, Ireland, Denmark, Sweden, Norway, and now most recently, Australia and New Zealand are markets where we sell directly, while the other markets are served by a network of some 100 plus reseller partners. Our staff is distributed in a similar way as the revenue, meaning that some 70% Plus percent of our staff is based in North America with our U.S. headquarters in Pittsburgh in Pennsylvania. And 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. And we are today over one hundred eight hundred employees in total in the group. With prior acquisitions, we established or increased our presence specifically in Belgium, France, Germany, Ireland, Denmark, and then, as I said, most recently in Australia and New Zealand, but I'll come back to that. We provide a comprehensive portfolio of solutions ranging from, if we start on this slide to the left, the content and the language system, such as the world's leading library of communication symbols, they're called PCS. and the leading solutions of off-the-shelf or custom-made synthetic voices of the highest quality and with a large diversity of languages, ages, ethnicities. Then if we move on, we have highly sophisticated communication software, which is then obviously tailored towards the type of user, which can vary greatly based on the needs. Moving on, we develop and design devices with cutting edge technology and medically certified durability, including communication aids controlled via eye tracking and accessories such as our ReHadapt mounts. We have a services portfolio to help our users through the complexity of obtaining and getting funding for solutions. And last but not least, we are there to help our users, the therapists, the caregivers through our global teams of support resources. As mentioned, we operate this model globally, and it's important to note that each piece of this pie is critically important and also a significant differentiator, making us absolutely unique. Our go-to-market model is predominantly as prescribed aids. So some 90% of our revenue comes from either public or private insurance providers. But this also means that we have a solid paying customers and we have always been resilient towards changes in the overall economic climate. Okie dokie. But now we will go back to focusing on the main topic of today, namely the earnings reports for the third quarter here in 2024. And if we're looking at the highlights, we had another solid quarter when it comes to revenue growth. The growth compared to the same quarter previous year sums up to 18% if we adjust for a four percentage point negative currency effect. This continues the trend that we've had now for the past nine quarters. However, revenue in this specific quarter was negatively affected short term by actually a successful product launch that happened in early September. And if we're just for this, the underlying growth is estimated to be over 20% in the quarter in local currencies. Some further background on the reason for what I just said. So our products are prescribed and hence undergo a sometimes lengthy and administratively complex funding process before they can be approved for payment by the insurance provider and then eventually shipped from us to the customer. And when we launch a new product, a customer who is already in the funding process for an equivalent product of the current portfolio, then he or she may elect to resubmit their order with a newly launched product instead. And the switch adds anywhere from days to weeks before we can finalize the order. in this specific case the suite of new touch control products launched in september there are clearly upgrades from the then current product and hence orders that would have otherwise been finalized and shipped in september now slips into the coming quarter there are no other effects such as significant obsolescence or customer churn that will affect coming quarter it's merely a timing effect and that happens over the shift from one quarter to the other and As mentioned, we continue to improve our product portfolio then with products and services that really sets the, this recent launch solidifies our already strong offering. And I will actually come back a little bit more on specifically these new products later on. Our work to improve awareness and competence continues specifically among the prescribers and the professionals in our space. Our North American market, remember the biggest market, continues to show solid, strong growth. And it's by far the largest and most influential market, both for us and actually for the entire industry. Our strong momentum, which we've seen lately among the younger user base, continues. Often these are children and young users with autism. They rely on our symbol communication solutions and in particular our software called TD Snap. and the non-eye-tracking touch-controlled communication devices portfolio. Our OpEx levels increase, but this is merely a consequence of the investments to secure our future growth, building the foundation for a much, much bigger company in the future. And we continue to invest in our staff, mainly in sales and marketing functions, as well as in backend systems and tools. We also continue to improve our profitability at an even faster pace. So our operating profits increased by more than 25% in the quarter, despite the push revenue from the product launches in September. And then last but not least, on October 1, we closed the acquisition of Link Assistive, which has been our longstanding reseller partner in Australia and New Zealand. And I would like to shed a little bit more light on this acquisition in specific. So the acquisition of Link Assistive in Australia and New Zealand brings us closer to our customers in these markets. It facilitates our work to support people with disabilities and communicate more effectively. Dynavox Group's solutions comprise the majority of Link Assistive's revenues already today, and as our companies, we have been longstanding partners. Australia, as a market, is already one of the countries with the best reimbursement system for our types of assistive technology. But even here, we feel that there's much, much more to be done. We have proven before that going direct in more markets enable us to grow much faster organically. And of course, we believe that the same case will be relevant here also in Australia and New Zealand. We closed this deal on October 1 and thus we welcomed some 20 new colleagues to the team. From a financial perspective, Link Assistive's turnover in 2023 was over 8 million Australian dollars with an adjusted EBIT margin of around 10%. And we paid 8 million Australian dollars upfront in cash, but with a potential earn out of up to an additional 5 million Australian dollars after two years based on the financial development of the company. And of course, Link Assistive will carry our complete portfolio of products and solutions, including then the newly launched products, TDI Navio and TDI 110. And that brings me to my next slide where I would like just to briefly mention what they're all about. So TDI Navio and the new TDI 110 that you can see on the picture here, they were launched on September 5, and we are already shipping them to customers around the world. They are extremely robust and do an all-day active life and can be personalized to meet the user's various needs. TD Navio, which is an iPad OS-based device, comes in three different sizes, allowing for a diverse set of use cases, while the TD i110 is a 10-inch Windows-based device. This product basically replaces the user's language and voice, and hence They can, if they need to be, be very, very loud. And they sport a full range of sounds allowing the user to be heard in all types of situations. I believe that this product sets a new standard for some of the most important features of our user group. And those, just to understand what the needs for our user group are, is portability, of course. They're lightweight, specifically designed for easy carrying. They're available in different sizes and for different hand sizes. They're durable. I mean, you can safely take them wherever you go because it has the built-in supports, glass screen protectors, protective cases, and they're actually backed by a five-year warranty from us. And they're dependable. They allow for all-day communication because it has a very long battery life and they charge really, really fast via a single port. And these products are purpose-built. These are not consumer products. They have... Access ports for assistive technology switch buttons can be mounted on beds, wheelchairs, and much more. And again, they come including all our software titles, which of course means that it's the leading symbol communication software called TD Snap. Okie dokie. Now I will actually hand over to you, Linda, to take us deeper into the financials for the quarter.