Careium AB (Publ)

enabled care company Carium this morning published their report for the first quarter of 2024. Will they bounce back from the somewhat slower growth in Q4? Let's see what they have to say. Christian Wallén, CEO and Mattias Karlsson, CFO. Welcome.

Thank you so much. Great to be here for kicking off the year in relation to the markets. As you can tell, we are quite happy to comment on your question there regarding the bounce back with the resounding yes not to the level that we wanted but definitely indicative of us moving in our plan direction and look forward to be able to give some more clarity on the quarter and the start of the year.

Sounds great. I also want to remind the viewers that you are able to ask your questions in the live chat. And with that, please, Christian and Mattias, go ahead with your presentation and I will be back for the Q&A.

Thank you. I'm just waiting there. I got it on my screen, so it seems to be up. So again, a super warm welcome to the first quarter of 2024 for us at Carriam. I am, as stated, Christian Wallén, CEO and President of Carriam. And with me is my fantastic colleague, Mattias Karlsson, my CFO. So let's open up with the highlights of the quarter. If we can move one slide ahead. So, first off, to the question that I think most people were wondering. Yes, we are delivering growth, stable, solid profitability, and positive cash flows as we kick off the year. More on that in detail when we talk on our markets to understand it a little bit better. Second, what I want to highlight is that our development in what we call other markets, that is, Daesh and France, reached over 80% compared to the same period of last year in terms of the net sales, which I think is absolutely phenomenal. It speaks volumes about the changes in our strategy and resource allocation and the fact that we are now very, very serious about these huge European markets where we previously might not have been as active. And last but not least, the quarter was the first quarter wherein our latest product, this mobile social alarm, known as the ABBYY, which is for seniors who are on the go, out and about. Fantastic product, jam-packed with innovation, everything from two-way communication, data in regards to geofencing, GPS positioning, fall sensors and so on. And it has actually, for its first quarter in the market, been our highest selling product in the history of the company. We've never seen a product having this type of reception from our customers, which is absolutely fantastic. So with those highlights out of the way, let's move to the next slide and the sales and gross margin. So in Q1 of 2024, we increased overall organics growth with about 8.6% compared to the same period in 2023. Adjusted for currency effects, this amounts to about 7.7%. The total sales delivered for the first quarter was 210 million SEK compared to 194 in the same period last year. Service sales were 155 million up from 142 compared to last year, which is reflective of an increase of about 8.8%. For product sales, we delivered 55.8 million compared to last year's 51.6% in the first quarter of 2023. So this corresponds to an increase of 8.1%. We kicked off the quarter with a gross margin of 42.9% compared to 38.9% in the same period of last year. And the reason for this is, of course, the steering of the product mix, which means that we are focusing and driving sales around products that might have a higher level of margins. And also efficiency in our services organization, which we are constantly driving towards. And with that, we go over to our markets. And starting out our business in the Nordics, so it says increased by 8.9% compared to the same period of 2023. The service sales were growing at an 11.4% compared to same period in last year. And this is driven both by new customers and contracts and some temporary prolongations, which are gradually decreasing. The increase in gross margin for the Nordics was mainly down to efficiencies in our operation. And this concerns everything from being smart about our resourcing, implementing AI-based clever systems for resource planning and so on. If we move to the UK, which has probably been for a lot of the people following us, one of the bigger questions, The sales decreased 0.1% compared to the same period in 2023. However, the service sales increased by 2.9%. And what is most important is, as you know, ever since October, we've had a strong headwind on some confusion from the UK government in regard to the transition from analogue down the old PSDN infrastructure in favor of digital. And when the UK's government announced that there would be a new deal in terms of what the timeline would be, we effectively saw a really, really strong challenge to our product sales in the UK. That persisted all the way into January, at which point the UK's government came up with a new timeline, which was clarified. And as soon as that was in place for February and March, we saw sales normalize more or less overnight. So it's very clear that that was the main effect. And the impact of the changes that are sort of in place now is effectively that the grace period for this transition is extended by one year. So instead of closing down on the last of December 2024, it now closes down on the last of December 2024. So moving on, we can go to the next slide and visit our colleagues in the Netherlands who delivered a quarter one for 2024, increasing sales with 9.2% compared to the same period in last year in 23. This is both driven by price increases and adding more customers and connections into the business. Gross margin was improved to 61.5% in the first quarter of 24 compared to 58.6% in the first quarter of 23. Now, as some of the people following us, we have a slightly different operating model, which is explaining why we have such strong gross margins in the Netherlands compared to other markets, simply because of idiosyncratic factors of how the Netherlands market works. And as I've already mentioned in what we call other markets, that is Dutch, predominantly Germany and France, we saw sales increase 80.1% compared to the first quarter of 2023. This is really a testament to our great teams in these markets. It is also a testament to how well of fits where these countries are in terms of their response and uptake to modern innovative products in the sector and so on. So clearly, we're very happy about that. Also good with the slight gross margin increase, which is predominantly driven by the sales mix. And with that, we move on to profitability. So EBITDA amounted to 34.9 million SEK in the first quarter of 2024. Same period last year was 25.4. EBITDA for the first quarter of 2024 sat at 16.6% compared to the same period last year where it landed at 13.1. EBIT delivered was 19.1 million SEK for the first quarter of 2024. which is markedly improved from the same period last year, where it landed at 7.3%. So this corresponds to an EBIT margin of 9.1% for the first quarter in 2024, and at the same period in 2023, it was at 3.8%. And this is of course reflective of our efforts to get more efficient, implement smarter processes, better systems, and thus being able to drive quite substantial cost takeout. Also, more sales, more new contracts and so on that contribute to this. And with that, we move on to the next slide on cash flow. And the cash flow for current activities for the first quarter of 24 amounted to 32.9 million. which is compared to last year's same period, where it was at 37.9. And I will comment a little bit on what seems like a negative decrease, but in my view, it is actually not. Free cash flow for the first quarter landed at 16.6 million SEK compared to the same period last year, where it was at 28.2. So for many of those reading the report or watching this webcast, you would think, well, this isn't such a great development. But I think the important part here is to look at both the fourth quarter of 23 and the first quarter of 21, because right in the midst of those, and both of them are impacted by the Chinese New Year, which is effectively a one month long, more or less closed down of production in China. So you need to plan around this in a very, very smart way to manage your working capital. And if we compare how we did last year, and Q1-23 compared to where we are now, we can see that today, Q4-23 and Q1-24, we actually have a free cash flow of 52.4 million. And if we compare that to the same period in the previous year, we were at minus 25.2. So in my view, I don't see this as a bad outcome, but rather the opposite. It is very much a result of hard work good integration between finance and supply chain and so on. So total cash was at 46.4 million SEK at the end of the first quarter for 2024 compared to 53.4 in the same period in 2023. The bank overdraft facility at the end of the first quarter of 2024 showed 50 million compared to 28.3 in 2023. Our net debt amounted to 182.5 million for the first quarter of 2024 compared to the same period last year where it was at 223.5. So with that, let's move to the summary and an outlook for what's to come. And as mentioned, in spite of these slight challenges to the UK in January, we are very happy with the normalization and the growth that we delivered in relation to sales. Really solid profitability that we're proud of and a positive cash flow. All of them highlights to us. Second, we have the really great development in Dutch and France, which we are very proud of. Now, let's remember, Germany is by far the largest country in Europe in terms of people. And France is a very, very good second there together with the UK. So really important markets for us for the future. And I would like to highlight again this really, really good docking station. The Abbey, really impressive to see thousands and thousands of units fly off the shelf to the level where we were barely able to accommodate all customer requests. This is really positive, not just for the sales of this product, but for the entire category of mobile and social alarms. There's a lot of innovation to be done here. The fact that you can get into these form factors that are suitable perhaps an earlier stage of older age and might not feel as if the traditional fixed alarm is the best solution for them. And we also believe that looking somewhat to the future, these products are absolutely essential for anything related to retail, e-commerce or the business to consumer segment in which we are also a player in some of our markets. So in terms of the challenges, I don't think any company dependent on freights have not been impacted by the fact that the Suez Canal situation is having an effect on us. We are definitely trying to be as smart as we can in regards to the balancing of air freight versus shipping. We do prefer shipping, but the timelines have been extended quite a lot due to the situation there. and it is hard to manage, and sometimes that leads to customers actually not getting the right equipment. But it is a global challenge and we genuinely hope that we will be able to solve it, of course, as well as we can. And looking ahead, our focus will be to be a key player in this major transition that is ongoing, infrastructure closing down in the Nordics, 2G and 3G, UK with its new timeline, The rumblings have started in France, where they have a target date for 2030 in terms of when they close down their analog infrastructure. And that process has taken sort of more center stage in the discussions in France. So we are really, really keen on being a part of that. Of course, we also need to up our activity in developing both hardware and software, and we hope to be able to release some really, really interesting news for the second quarter, since we are hard at work across both of these categories in shaping what will be the innovation and technology platform that Carium is for the EU ecosystem. Lastly, we want to comment on the guidance where we conclude that we have not attained the full 12 to 15% for the first quarter. However, our guidance is for the full year and we retain it both in relation to the sales development and growth, but equally also the increase in profitability. And with that, we conclude the presentation and move into the questions.

Thank you so much Christian and Mattias and we will start off actually passing the word over to equity analyst from ABG Sundell Collier, Alice Beer. Could you please go ahead with your questions?

Hi, good morning. I'll jump right into the top line. So top line growth was better than last quarter, but as you said, it's still affected by the delay in the UK. Could you maybe quantify or expand a bit on how much of that growth was affected by the delay in the UK? And also just regarding the announced timeline for A2D, when do you think that will see an effect on demand from that?

So first off, I'd argue that throughout the fourth quarter of 23, we were heavily impacted. Obviously, sales did not, you know, go down to zero or anything like that. But we were maybe at 60, 70 percent of what we expected to be doing. And that is also in part what persisted into January. Now, what the UK, the UK situation is important. I mean, it's really important for us, but we are doing a lot of things in other markets also. But the UK is the number one technology-enabled care market in Europe. And the reason being is that it's a very numerous population, and the adoption levels of technology-enabled care, they're at some 16% of all people over 65. Compare that to Germany, for example, where the same figure would be around 5%. So obviously the potential in Germany is huge, but the UK is the market to be in for the moment. So I'd argue that since the announcement in October, we've maybe been able to deliver 60-70% or so of the sales. And what the government has stated is essentially that they are prolonging the period that all the local authorities, B2B players and so on, have available to them to make this transition is essentially one year longer. So in our view, what we saw in February and March is effectively sales reverting to what we expected to be kind of a planned, normalized scenario. And we expect that to keep going. We also have some interesting wins in the UK, both on services and hardware sales. And at the moment, when we look at our pipeline data for deals and opportunities, UK is actually one of the most active markets. So we can see that speed is picking up there. Now, for a lot of the public side buyers in the UK, they actually break their financial year in April. So that means that there's always a little bit of a confusion around that. can go either dramatically up or slightly down, you never really know. But so far, so good. We seem to be tracking towards more on what we planned or expect.

All right, great. Thank you for that. And also on the organic growth, would you say that that's attributable mostly to price increases? Or is it mainly volumes? And also, are you seeing any opportunities for price increases in the current connections that could be implemented, like in the upcoming quarters, or should we see opportunities for price increases, mainly on new contracts?

Well, price increases for us is a bit funny because normally you'd expect them to take precedence from sort of the break of the year, right? But that is not the case in our industry. So some are, since they are contractor driven to a large extent, and that means that they can happen sort of little bit spread out all over the year. So in terms of what is attributable to price increases, we would say that, well, not so much in terms of the organic growth just for the first quarter. Now, over the span of the assumed with some kind of indexes, which, again, might be very different in different markets. So it will impact a little bit differently. However, it is not one big effect that comes into play during the first quarter and the break of the year. That is not our situation. So it's an ongoing thing. And for us, I think price increases are twofold because one part of it is, of course, the increased price, which are usually regulated by the contracts, what you can do and what you can't. The other side is, of course, that we are much more dynamic on our cost. And that means that we can sometimes drive down costs. We can switch out some components to the hardware, for example, which can have quite a substantial unit impact. Or we can do things in our services side that could have an effect. So for us, it kind of goes both ways in how we can work with this. And thankfully, we have really good market leaders who are on this all the time. Is there an opportunity for us to increase prices? Yes, certainly. But a lot of what we do is, of course, regulated by long multi-year contracts. So they follow some kind of index. And that is probably the more larger part of the basket of customers and contracts that follow that logic.

All right, great. Very helpful. And then just on the gross margin was obviously a very positive this quarter. Was that mainly on the product mix or were there any one-offs and how should we think about the gross margin going forward? Is this a run rate or are you expecting it to come down a bit?

I would say that the gross margin was affected of a lot of things, of course, but I would say that the most important thing is that we had a good development in the service delivery area in all markets, I would say. We didn't have as much problems with sick leave as we could have from time to time when the flu season kicks in and so on. We had some issues with that in Q4, for example. But we are also managing the service functions better and better all over the group. And then of course, product mix passive. Well, both the product mix and market mix a bit, you can say, because it is favorable for the group normally to have a lot of sales in other markets in Germany and France and so on, because we manage often to have quite good margins on that type of product sales.

And this is also down to, I mean, we have a sort of innovation slash quality technology position in the eyes of our customers. And that means that in some markets who are perhaps long-term really good for us, but at present, the uptake on our type of solutions is probably quite low, even if that is where the world is heading. That means, of course, that we have really good price position in this market because we are seen as the sort of number one most advanced most capable kind of partner to work with and whereas in other markets such as the nordics for example then you know it is a very high bar for technology and of course we we don't have the same sort of innovation premium as we might have in other markets and and that is due to to a ton of regulatory factors that you need to adapt to and so on that can see prices normalize a little bit Maybe it means that some of our other competitors are operating at lower margins, but we are happy to do what we can. And I always think our gross margin will fluctuate a little bit. I don't think you can sort of consider it the run rate going forward, but there will always be things in terms of product mix, flu seasons and whatnot. But should we be in and around this area and strive to constantly make it better? For sure.

All right, great. So moving on to OPEX, we saw that both R&D and SDNM picked up a bit. And also, I believe this is sixth consecutive quarter with negative admin costs year over year. So just two questions on that. First, generally, how are you feeling about the operating leverage going forward in general and specifically on admin costs? Do you expect the decrease to continue or are you seeing need for increasing the headcount in near future?

I can answer both, I think. I mean, we are a technology company. And that means that, of course, I think we're doing it with really good teams and really good focus on doing the right things. I personally, having had some experience, I don't believe in massive R&D organizations. I think that creates a lot of bloat and inefficiencies. I think it's much better to have high-level talent in small, very focused teams. But we actually do see now, let's remember, we were in a quite different position about a year and a half ago. And of course, you need to make some changes to accommodate for getting back to profit and whatnot. But where we are now, we see that the value of accelerating some of these hardware and software developments is probably far greater than retaining some part of a percentage on the EBIT line in terms of how it drives the value of the company for our shareholders and so on. So we are going to up that a little bit. Now, to what extent, you know, we're not going to be some crazy scale up running in the red, right? We're a listed company and we're also very focused on making or having a good profitability. But we definitely see we can get much better returns from investing more into our R&D. And in relation to the administrative costs, I think this is one of the changes we have done. We have actually gotten smarter about how we set ourselves up. Of course, that means a little bit of a cost takeout and so on. And it can also be done in certain markets where we are, as we have communicated, really serious about integrating our business. And while we've come a long way, which explains some of this drop, we still have more to do. And this is absolutely fantastic because Carrium is a result of a sort of serial acquisition spree across a number of years and very low levels of integration. So for us, this is not just about freeing up resources to go to the bottom line. It's also a little bit of a lift and shift going on where we are allocating resources into the right places. And we expect this to continue because we are not happy until we are truly running as one sort of joint entity. And we have a little bit way to go, so there's a little bit more potential still. So I wouldn't be super surprised if maybe the decrease on the admin side slows down a little bit, but we should not be looking at increasing it in any way, rather getting it to a very good level.

Right, great. Thank you. Okay, so moving on to the EBIT, we touched on that, but obviously a great EBIT increase compared to last year, which bodes well for your target. But how should we think about the EBIT margin going forward? Do you feel like this is more of a normalized EBIT or was there any positive one-off effects that we should take into account?

So always difficult to say what is the normal EBIT level, but But this quarter was not in any way heavily affected by any one loss. So I would say that the debit margin will vary with sales a bit. The better the top line, the better the debit margin.

And I think we quite clearly state that there are no extraordinary, impactful things going on for the first quarter. It's a fairly pure outcome, so to speak. But I mean, you always want to be more profitable, right? But we have also been clear that our target for the year is to deliver better profitability than last year, but we have not communicated to what extent. And of course, for those who are reading between the lines, that means that we see that we can do things with investments that are so value-adding that we want to have the headroom to do them, but we will never allow profitability to be lower than it was last year. And of course, we want to deliver as strongly as we can, having both of this. We want to have the cake and eat it, of course.

Of course. Okay, great. Just one final question. You spoke a bit in the presentation about the cash flow, which was obviously positive with a very modest change in working capital, which was maybe a bit surprising as you generally expect some inventory build up in Q1. Could you maybe expand some more about that and what drove this and how would you think about the cash flow going forward?

Well, I mean, we really, really worked hard throughout the quarter to manage this. And I mean, this is managing the sales, managing all the planning and forecasting for products and production and so on. So I think a lot of it is down to the fact that we've done a good job, both in our commercial side and also in our supply chain and finance side to always keep tabs on this in a smart way. As for inventory buildup going forward, well, I think we are sort of settling around. We have implemented some new processes for how we think about our stock. effectively having more of a clarified idea of how components, units in manufacturing, goods in transit, centralized warehousing, local warehouse, how it all comes together. As you know, during the late fall, early winter, we set up a dedicated supply chain office, which we did not have previously. And the work coming out of those teams is really, really good conjunction with finance and the commercial teams. So we expect to do as well as we can. Can't say much more than that. But we also have a lot more hands, brains and eyes on these processes. And that is what we can see delivering. So big inventory buildups, well, we'd rather avoid those. Now, the reason for why we could possibly take on a little bit more stock is that For some of our markets with these transitions, it is quite hard to predict when a large volume very quickly needs to be made available to the customer. So we're having a lot of discussions on what is sort of the safety stock level and it could potentially increase a little bit. particularly with the Suez Canal situation and so on, is not to be fully just in time. That is probably dangerous, especially in our industry. So it could potentially increase a bit, but then it would probably increase for the right reasons.

All right, great. Thank you. I think that was it for me.

Okay, thank you, Alice Peer, ABG Sundal Collier. Great questions there. And Mattias, how are you affected by and how do you handle the volatility in currencies?

Now Mattias is happy. He loves this kind of question. Yeah, you could say that for the product side, of our business, which is quite substantial. We source more or less everything from the East Asia and paying in US dollar. And as you can see, we are not present in the US from a sales point of view. So we don't really have any inflow in dollars. So we always have FX risk when it comes to the US dollar. This is something we keep an eye on all the time considering whether we should hedge or not and so on. It's an important factor and of course have a great effect on the gross margin in the end if the dollar would be

and more quickly would be much stronger towards especially towards the british pound and the euro so i i think as part of all the work we are doing we we have our strategy process also which starts now in this period of time and we do functional strategies and market strategies and overall strategies of course but the edging issue is one of the top top strategic issues for for the finance function so hopefully we will come up with a really good format to work with and have updated our treasury policies and so on to be able to do this and have more flexibility. So Mathias will be sitting there on the FX platforms and monitoring all the futures in the near future.

Okay, thank you. We'll keep Mattias in the hot seat here with a question from a viewer. What is your plan with the hybrid loan? Is it correct that you cannot pay dividends as long as you still have that loan?

Yeah, that's correct. You could say that we also cannot pay dividend or we cannot pay the loan without permission from the main bank also. So we have this hybrid loan for now, and we'll see what will happen with it in the long run, of course. But it was a setup when we split out of Douro. There is no plans to do anything about it in the near future. It's a pretty favorable loan.

And we don't foresee, we have our AGM here today and so on, and it's not on the agenda to propose any dividends.

Okay, thank you. We'll move on with two more questions from the viewers. And the first one is, how large is the addressable market for your offering in other markets? Can you give some more info on what your offering is in these other markets and where do you see the largest potential?

That's an extremely good question. So in terms of the addressable market, it's a little bit hard to make assessments on that. There is an industry report that we take a lot of information from and we also contribute to it that comes up with some periodicity and the new version was just released. And across Europe, you would argue that for now, maybe it's around 13 billion euros or something. Depends a little bit on how you cut and slice the market, right? But what we do see in this other market, Dash France, is that these are markets where, surprise, surprise, the level of digitization is not so very high. In addition to this, the level of uptake for the percentage of the population who are getting access to these services is pretty low. So in Sweden, you'd have 9% of everyone over the age of 65 having these type of services and solutions. UK, 16%. Germany, 5, 5.5. France, 6, something like that. So what we see then is that given the amount of people and the demographics of these markets, this is where it will happen over time. Because there are so many people transitioning into these stages that you will probably see an uptick in adoption rates. And I think a clever way of thinking about the addressable market is to take the overall market volumes and basically cut it back based on the population, current adoption rates, and make some kind of projection of what this can be assumed to happen. And the reason for why you can do that is that these systems, aside from maybe the private pay side, they are quite slow to change. So the reimbursement system for Germans or the reimbursement system for these services for a Swede, they are probably not going to see dramatic change since a lot of it is down to how the care system works and how it is funded. So in our view, we would argue that we will probably see over time Germany, France, these countries coming up to the level of some of these other markets, probably landing at around the 10 percent adoption rate. And given that there's, what, 89 million people in Germany, that, of course, means that quite a substantial portion of those would be part of that addressable market. Since pricing levels and so on are quite different, then that's also something that models the view a little bit on what market is the one to go for. But if you make things really, really simple, you could argue that while we are very strong in the Nordics, which is fantastic, it allows us to have a very, very high level of innovation because that's what you need to be a player in the Nordics. Where it will really happen is the UK, France, Spain and Germany. Those are the giants of technology-enabled care in Europe. So as to how large a part of those 13 billion euros that would go into those markets, I would say that that is well more than half of that, so to speak. And for many other potential markets in the European landscape, we feel that 85% of total spend is in the markets where we are at present. So we are not super keen to go on to an adventure to Greece or Portugal because we feel that there is so much to do where we currently have our basis, where we are doing great work, where we're really appreciated by customers and end users. So we will probably keep tracking on that for the foreseeable future.

Okay, thank you. And how do you look at mergers and acquisitions currently? Do you plan to go into new markets as a full service provider or are you mainly looking at expanding existing markets?

I think that's a very good question. We note that if we compare the situation to one year ago, there was absolutely no structural movements within our markets. um so no acquisitions being done everything was extremely stable and if we fast forward from 12 months back to today uh things are heating up quite considerably really huge deals announced just two days ago lots of changes in different markets and also across the european landscape um and i mean our our view is very clear if we go back to the very notion of the of the why Carium was spun out of Doro. The idea there was that this is a super fragmented landscape all over the EU. You could do great work continuously in a programmatic manner doing acquisitions. That was one of the core hypotheses of why the spin-off was relevant. Now, since I came in and we as a management team and our board We've been very clear on saying that a lot of the carium headaches have stemmed from the lack of integration. So we bought a bunch of companies that did the same thing, but we did not make them play well together. And that has cost us a lot of money. So we've been extremely busy getting everything on the same platforms, same systems, good balance between central and local and so on. And as we've communicated many, many times, we've said that Once we feel confident that we have integrated and elevated our business to the level where we can take on a new company and within six to nine months dramatically improve its profitability, then we will start our M&A activity. And when that time comes, we're pretty happy with how we're progressing on the integration front. Still some bits and pieces to do, but overall some really, really good developments there. So we are definitely keeping our eyes on what's going on in the industry, what opportunities we have, but we have nothing ready to communicate in any way right now.

Okay. And what would you say are the key factors that made your mobile social alarm, Abbey, performing so well?

Well, I think it's about the industry. Because if you reverse the clock 10 years, you would find that a lot of the seniors who got access to these types of technologies, they were in a state where they are probably not so much outside of the home. They would go shopping, meet some friends, have a lot of visits, of course. But then the fixed alarm was probably the best solution because it could also connect some other sensors or important pieces of information. What we're seeing now is that people are healthier longer. but they are still at an increased risk. So that puts a huge demand on the need for these mobile solutions, which also are not limited to just doing the same thing as the fixed alarm, but in a sort of carry about kind of form factor. This is also fully integrated with the corresponding app so that friends, family and those invited in the care circle can be more active in being closer to the senior and knowing if things are deviating based on whatever information is inputted. This is also a super important aspect of how we see care systems developing over time, where we want to bring seniors and their near and dear ones even closer, because that would be a survival factor with the strain put on care systems. So I think the category of mobile social alarms is something that has been around for some time, To be very honest, a lot of the products in the category, they have been extremely basic. And this is a very, very powerful device that can do a lot of things. Communicating with IoT backends to connect sensors. It can involve friends and family in the care around the individual. We can geofence areas so we can trigger a lot of automation on alarms and so on if we see behavior that is... moving out of what is to be expected or could signal that there is an issue. So it's a very, very intelligent piece of technology that has a lot of benefits for the user. So I think that is the reason. We had one of our partners in France who did an extremely thorough evaluation of all the mobile systems on the market before opting what to go for. And the Abbey came out on the absolute top in their evaluation because it's just a really, really smart, feature-rich and user-centric device. And that is how we do our development. Our R&D teams are extremely committed to understanding what does it mean for an individual at that stage of age in terms of how they live their life, what they need, how they want to in terms of privacy and everything, how they want to be engaged with and so on. And I think we just hit the sweet spot with the app.

Okay, and another important product, you state in the report that you surpassed 100,000 units installed of your ELISA family 4G hub. How will this number increase and how does it affect your profitability?

Well, I mean, we see that the ELISA has a lot of life in it still. I mean, it builds on the notion that it sits at the center of an ecosystem around an individual where you can integrate sensors and radars, IR, what have you. There is a plethora of really smart solutions from super advanced smoke detectors to plugs that detect changes in behavior based on electricity usage and whatnot. And the ELISA is the foundation for making all that information meaningful. Now, what does it mean to have an installed base within this family of 100,000? Well, For us, it means that we can do over the air updates and everything. That means we can add functionalities, for example. We can also do things like add on new technologies that are software based. And we can also actually do things, even if we would require a visit, that could possibly change its physical capabilities. So we see it as an installed base that we can offer greater value around. And hopefully that is something that we we will be able to capitalize a bit on. Now, an important part here is also going back to the dedicated supply chain, that products are never a fixed thing. There is a constant work in switching out components, optimizing, and a lot of that is driven by customs, of course. So just the fact that we have so many units out in the field, it also has an impact on future bill of material costs and whatnot, because we can, of course, drive the prices down on the union somewhat, so get some better scale economies there.

Okay, thank you. And that was all my questions for you today. So, Mattias and Christian, thank you so much.

Thank you, both of you. Really good also to all the involved people who sent in some really good questions. Maybe that goes for many companies, but I take a lot of calls, emails, LinkedIn messages from shareholders out there. Really smart questions. We really want to be a company who is there for our shareholders. So please keep doing that. We really appreciate it.

Thank you. And this show will be back in three months. See you then.