Dynavox Group Ab

All right. Good morning, everyone, and welcome to this earnings call. We will cover the first quarter, summarizing our business in January, February and March of 2025. So I am Fredrik Rubin. I'm the CEO of Dynavox Group.

And hello, I'm Linda Teibring. I'm the CFO of Dynavox Group, and I will cover the financials.

So for those of you who have participated in these calls before, you will be familiar with the fact that we will start with a quick recap of what Dynavox Group is about. We will then summarize the main takeaways from the quarter. We will then dive deeper into the financials and thereafter we will have a Q&A session. And you will be able to submit your questions during this live session in the chat function here in Teams. But we, of course, always welcome offline questions sent by email to Linda at linda.pybring at dynavoxgroup.com. All right. So if we start with the brief overview of Dynavox Group. We first and foremost, it's important to reiterate what our mission and our vision is, which I know is very dear not only to the roughly 900 plus colleagues around the world, but also to our ecosystem of partners and investors. And 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 this also summarizes two of our main user stories. So the first one is that do what you once did that could refer to a 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 other story, the never thought possible that can refer to a child diagnosed at an early age with a condition such as autism, 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, you can see Christopher from California in the US. He's one of our amazing young users diagnosed with a nonverbal form of autism, and he's a great example of that. The market that we service is hugely underserved. It's estimated that 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. And yet we estimate that only some 2% of those are actually being helped, which means that the rest, they remain silent. The main reasons for this spells lack of awareness, but also among the professionals and the prescribers that are tasked to assist these users and in combination with poor health care reimbursement systems. We operate this business 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, 30 years ago. Our products are outside of that sold in some 65 markets around the world, of which the US, Canada, UK, Ireland, Denmark, Sweden, Norway, Australia, New Zealand and very soon France. or markets where we sell directly, while the others 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 60% or so of our staff are based in North America with our US headquarters in Pittsburgh in Pennsylvania. Our second largest office is here in Stockholm, which is also our headquarter. But we also have branch offices in several European countries, as well as in Suzhou in China, Adelaide, Australia as well, and some 900 employees in total. With prior acquisitions, we established or increased our presence specifically in Belgium, France, Germany, Ireland, Denmark, Australia, New Zealand, and again, most recently in France. But more about that later. We provide a comprehensive portfolio of solutions, which means that you range from the content and the language system, such as the world leading library of communication symbols called PCS and the leading solutions of off the shelf or custom made synthetic voices of the highest quality with a large variety of diversity, languages, ages and ethnicities. highly sophisticated communication software is tailored to the type of user which of course can vary greatly based on the needs if we move on we see the development of and we design devices with the cutting edge technology and medically certified durability including of course communication aids controlled via eye tracking and accessories such as the rehab mounts If you move forward, we have services portfolio to help our users through the complexity of obtaining and getting funding for solutions. And then last but not least, we are there to help our users, the therapist, the caregivers and so forth through our global team of support resources. We operate this model globally, and it's important to note that each piece on this picture is critically important and also a significant differentiator for us, making us absolutely unique. Our go-to-market model is predominantly as prescribed aids, which means that some 90% of our revenue comes from either public or private insurance providers. But this also means that we have solid paying customers and we have always been resilient towards changes in the overall economic climate. But now we'll go back to focusing on the main topic of the day, namely our earnings report for the first quarter of 2025. so if we look at the highlights we had a strong quarter when it comes to revenue growth the growth compared to the same quarter previous years sums up to 34 after adjusting for currency effects and this continues and actually further accelerates the trend that we now have seen for the 12th consecutive quarter in a row The demand for our solutions remain high, proving the solidity of our underlying business, and the North American market continues to show strong growth. It is by far the largest and most influential market in our industry for us and other players. The strong momentum among the younger user base continues. Often those are children with autism diagnoses that rely on our symbol communication solutions, and in particular a software called the TD snap. The non and they are non eye tracking users. They typically control their devices using touch and their fingers, and that's the communication portfolio that grows the fastest. Our OPEX levels did also increase, but this is a consequence of investment to secure future growth and building the foundation for becoming a much bigger company. So we continue to invest in our staff, mainly within sales and marketing, as well as in new backend systems and tools. In the past year, we have grown the team by some 150 new colleagues, where almost 100 of them are within the global sales team. In the quarter, we made planned investments of a non-recurring nature in new backend systems and tools, plus the earlier announced restructuring of our product development organization. And that equates to some 22 million sec corresponding to almost four percentage points on EBIT. In spite of all these investments, we continue to improve our profits. Our operating profits increased by 32% in the quarter. On April 8th, we announced that we have entered into an agreement to acquire our French longstanding reseller partner, Zenomi, which I will speak to more momentarily. But before doing that, one topic that is on everyone's mind these days centers around the macroeconomic climate and various policies, particularly in the US. And I'd like to bring some more clarity on how this affects us. So if I start with the tariffs, so our overall exposure to import tariffs to the US is limited since the tariffs are based on the cost of the material that is imported to the US. And for our products, the material cost represents only some 20% of the retail value. However, and more importantly, our products are generally classified as medical certified assistive technology devices. making them exempt completely from customs duties and tariffs under the so-called nairobi protocol secondly reimbursement policies so as of today there are no announced changes to the policies related to reimbursement of our products in our largest individual market the us however obviously we are monitoring this situation closely And then lastly, currency exchange rates. So approximately 80% of Dynavox Group's revenue is billed and paid for in US dollars, which means our revenue does fluctuate with the SEC to US dollar exchange rate. However, since the majority of our costs of goods sold and approximately 60-70% of our operating expenses are also in US dollars, this does create a natural hedge against currency fluctuations on our profit margin. So consequently, while our top line revenue may fluctuate, the impact on our EBIT margin is not significant. And on the topic of growth, on April 8th, we announced that we have entered into an agreement to acquire our long-standing French reselling partner, Zenomi. This acquisition supports our growth ambitions to give more people with disabilities a voice and brings us closer to our customers specifically than in France. Zenemy's revenue in 2024 was around 5 million euro. We pay 5 million euro to the current owner in cash at closing with a potential additional consideration after a period of two years. I personally very much look forward to welcoming some 20 new colleagues to Dynavox Group after the closing of this transaction, which is expected to be concluded during the coming six months. But now I hand over to you, Linda, to take us deeper into the financials. Yes.