VibroSense Dynamics AB

Yes, hello and welcome to today's webcast, where VARBUSN's part-year report for the period from October 1st to December 31st 2023 will be presented. My name is Tony Speidel, I am CEO and co-founder of the company. Today I have Hans Wallin, the CEO of the company, with me. The presentation will take about 15 minutes, after which it is time to ask questions. You can do this by clicking on the chat icon or Q&A. For those who don't have the opportunity to see it all or have missed parts of it, the presentation will also be posted on our YouTube channel, so you can watch it afterwards. So, this will be recorded. And with those words, I'll hand it over to Hans.

Thank you, Tony, and above all thanks to all of you who took the time to listen to us. We appreciate it very much. As usual, I will I'll go through a little slide deck and then, as Torne mentioned, it's possible to ask questions afterwards. The main points of today's presentation follow a pattern. I will comment on the part-year report and summarize the second quarter and also go into the outlook for the rest of the fiscal year and note that we have, as you probably know, a broken fiscal year from the first of July to the last of June. Vi har två slides som jag alltid brukar börja med ifall det finns människor som folk som inte har lyssnat på oss tidigare och vet exakt vad vi sysslar med. Det kliniska problemet som vi adresserar kallas periferneuropati, eller om vi ska ta ner det på jorden, närskador i händer och fötter. Vi jobbar inom tre stycken kliniska områden eller affärsområden för oss, diabetes, vibration eller HAFs, hand-on vibration syndrome, och onkologi. And before these areas, there are an incredible number of people who are affected by peripheral neuropathy, nerve injuries in the hands and feet, and very many also who are in the risk zone to get this. So it's a big problem. The problem in healthcare today is that this type of nerve injury is discovered too late, and it often has very devastating consequences for those who are affected. The reason for the delay is that the clinical methods, the instruments that are available, are too insufficient and unspecific. And I want to be clear that this is not something that we claim, but this is what we say ourselves within healthcare, not only in Sweden, but also abroad. We use the same type of instrument in principle everywhere. For those who see the presentation on the web, you have it down to the left. What we use today is a stem gaffer or monofilament. There is also something called a biotesiometer. These instruments have about 50 years on their necks. There is a great need, a pronounced need within the health sector from staff to be able to work with better and more precise analysis methods and instruments. So there is a window on the market. There is a possibility. There is above all a need, as I said. There we will introduce our product, and our solution to this is the product we are working with, VibroSense Meter 2, and the software applications that we use for different clinical indications. The solution we have and offer, the technology is called multi-frequency vibrometry, and it is something that we ourselves have developed for a long time, a lot of studies behind it, and it has been developed in collaboration with Swedish healthcare and Swedish research. The easiest way to compare it is to do a hearing test on the skin. I'm not going to go into too much on the products now, but with our product, with our technology, you can identify very early and also follow up with time to clarify injuries, and this is a big advantage within healthcare. If we go into the last quarter and look at the figures we have achieved, both when it comes to sales and costs, In fact, the net turnover has increased for the sixth quarter in a row. And when I say the sixth quarter in a row, it is a comparison with the same period preceding the fiscal year. We have a stable trend where we are growing. The turnover during the second quarter increased by over 22% and accumulated during the first two quarters 2.7%. Still relatively small figures. We have higher ambitions. We will grow more. But it is important to have these figures with us. We still have a very good control over what we do and how we spend our money on company deposits. Income comes from sales, as most of you probably know today, from the instrument, every license that is not two, but also from running licenses and rental payments, which is a base, an important base for us. Every new instrument we put on the market, we either have a license or a rental income. And this builds our base also in recurring factors, which is very important. What we call FHV, company health care, is still the largest source of income where we come from. But diabetes increases and stands for an increasingly large part of the company's net turnover, about 30% today. So as I said, a very stable and up-and-coming sales trend, and we are happy to be able to deliver this quarter as well. If we go into the business area of diabetes and a little summary, Over Q2, the first two steps, step 1 and step 2, we always choose to keep here so that you can know how we work. We work a lot to establish heavier reference clinics. It can be a private clinic, it can also be the public health. And what we call KOL or Key Opinion Leaders, those who are heavy and normative within, perhaps diabetes in this case, within the health system, as the rest of the health system listens to. En av de viktigaste milstolparna i bolaget för sig i historia faktiskt och absolut under förra året och det sista kvartalet är att vi den 20 december skickade in en ansökan avseende regulatoriskt godkännande till den kinesiska myndigheten NMPA. Det är ett krav för att kunna sälja produkten i Kina och på alla marknader att man har ett regulatoriskt godkännande. En väldigt viktig milstolpe när vi får ett godkännande så innebär det att vi kan börja sälja produkten i princip omedelbart. Så spännande för oss och som sagt väldigt, väldigt viktigt. Vi har också registrerat produkten i England. Orsaken till det är egentligen att vi har fått förfrågan ifrån en väldigt duktig professor, en högt ansedd professor, som arbetar vid University of Exeter och som har börjat forska med hjälp av vårt instrument. Det föranledde att vi var tvungna att ta det steget i England. Väldigt positivt, för nu har den marknaden också öppnat för oss. Vi har möjligheter att sälja där. Jag ska inte säga att vi går in och aktivt the British market, but it opens up opportunities for us, and we have gotten some contacts that we have to see where it takes us internationally. And as everyone knows, the international market is important for us, for us to get a quick expansion, a faster expansion as well. As with Aron, good events continue during the quarter. We have delivered new instruments, including Sweden, There is one more instrument in Stockholm, which now has two of the instruments. You are obviously very pleased with the first delivery last summer and use this routinely in your clinical work. There are two different departments, two completely different clinics. Sofiahemmet, for those who do not know it, is a private clinic, a paraplegic hospital in Stockholm. where different clinics exist in different categories, different clinical indications, but a very, very, very heavy and important reference clinic that you, in many clinical indications, want to have as a customer. When I worked with Osteopathy before, it was very important to have Sofia at home in Stockholm, so we are proud to be able to deliver instrument number two to them. We have also talked about Skånes University Hospital in Lund. They have had as many of you probably know, one of our instruments, or two of our instruments, for a longer period, but have now officially confirmed and made a decision to introduce the procedure, the Diabetes Code Screening, in their daily clinical activities. So it's also a very important milestone for us. That we can go out now officially and work with those who are reference customers. And we have made the decision to rely on what we do, on technology. And this is one of the absolutely largest, most important, most well-respected clinics that exist. I would say not only in Sweden, but definitely in the Nordic countries and also in Europe. So very important for us. We also have further discussions with a number of new clinics within the private sector. And when we say private sector, it is for example in likeness to Sofiahemmet. So, very important for us. Our resource in Germany, and with resources, it is a person who works with sales, to work with a larger number of clinics during the quarter that has passed, so that we can meet potential customers. And we have begun to look at the possibility of also expanding this work to other regions. We are still working in southern Germany with this, to be able to limit ourselves to a strong focus. But we are looking at opportunities to extend this to northerly parts of Germany as well and be able to do the same thing to get a little better pressure. But it will be more if it takes longer. Very exciting for us at least. HAFs, Hand Arm Vibrations Syndrome. Avalova, as you know, Avalova Health in Sweden, one of the three major actors in corporate health, is still of course our most important customer. They use our instrument, they have a larger number in their network in Sweden. We had an exhibition in Gothenburg on the 26th of January. Tony, who is with us today, was up in Gothenburg with another colleague. I think it was 800-1000 people from Abanova around Sweden who were there at an internal meeting. We were one of the few suppliers who were invited to exhibit our product. Tony and Per, our other colleague, had it worse for three to four hours and did a lot of measurements, vibration measurements on Avonovas staff, had good interaction with them and they are still very, very interested in this instrument and continue to work with it. So it is a heavy and important basis for us. And we also see that we need and will also do to step up our activities during the coming months within company health care on the Swedish market. This is important for us. We talk a lot about diabetes in these presentations, but I want to be clear that we have absolutely not forgotten company health care and vibration damage, because it is an important area for us. For those of you who have listened to us before, I hope you recognize some of this. We have a plan to work on. We are aware of the goals and focus on those activities, but we also adjust along the way. We are working towards scaling up the company and increasing revenue, both with national and trying to find national cooperation partners for distribution and sales. We are not aware of this, but we are working on it. As I said, we are looking at new activities within company healthcare that we will start to roll out within the coming months. We have three geographical areas that you probably know that have priority. It is the Nordic countries, not just Sweden. It is Germany and China that are extremely important to us now that we have started and sent in our registration application. We continue to roll out diabetes screening in the Nordic countries and in Germany, where we work with establishing reference clinics and what we call key opinion leaders. We have a heavy clinic in Germany that we are working with. Lund gave its confirmation now also, very important, so now we have two clinics that are important co-operative partners. And this is what we do to be able to sell our product to further segments of the market, so other clinics in what we call level 2. We have also said earlier that we will invest in Swedish and international congresses, because there we have the opportunity to meet not only caregivers, but also companies that, for example, work with distribution. An example of this is that we have made a decision, and we will be at an international fair, or congress I should say, with an exhibition, leverantören inom diabetes. Den heter ATTD, förkortningen Advanced Technologies and Treatment for Diabetes. Den går i Italien, Florens den 6-9 mars och där kommer Tony och jag att finnas på plats. Så det blir spännande för oss och det är också ett viktigt steg för oss i den här utlandssatsningen som vi är mitt inne i. Sist men inte minst då Nu sitter vi, jag ska inte säga att vi sitter och väntar bara för vi gör många andra saker men nu blir det ett vänteläge för oss att få en återkoppling ifrån den kinesiska myndigheten för lanseringen i Kina. Vi börjar titta på förberedande aktiviteter men som sagt beslutet från den kinesiska myndigheten NMPA kommer att vara väldigt viktigt för oss under de närmaste perioden, de närmaste månaderna. Vår geografiska kundbas As you probably know, we have talked about how it looks now. The Nordic countries, Germany, should add England here, but they don't want to do it yet. It's a clinic that works with the instrument. We'll see where that takes us and what focus we have on the British market. It hasn't been decided yet. My closing words for this presentation today, where I actually started, we have a Svagt skulle jag säga, men ändå en gedigen och positiv försäljningstrend. Den fortsätter och vi ökar omsättningen successivt. Det är vi väldigt glada för. Drygt 32 procent under årets första sex månader jämfört med samma föregående år. Vi har under kvartalet som gått fått nya kunder inom diabetes i Sverige. Vi skruvar upp temperaturen lite i Tyskland framöver. Och vi har en ansökan inne på regulatoriskt godkännande i Kina. i de tre viktiga bitarna under det här kvartalet. Vi är stärkta över den här perioden som har gått, de första sex månaderna, och vi ser att vi ska ha bra förutsättningar att fortsätta den trenden genom hela det här räkenskapsåret som sträcks fram till den sista juni. Med det, tack så mycket för mig. Och då, Tony, finns det tid för lite frågor?

Ja, tack så mycket Hans. Då ska vi se här. Det är ganska många deltagare. Det är trevligt. Ska vi se om vi har några frågor som kommer in här. Det går alltså nu alldeles utmärkt att ställa frågor via chatten som finns längst ner på skärmen. Frågan är, när kommer ni börja sälja er produkt i Kina?

Jag svarade, vill du ta det Tony? Jag var inne på det lite tidigare. Vår ansökan om regulatoriskt tillstånd eller godkännande är inskickad. Sen har då myndigheten en tid på sig för att behandla den här ansökan och ge oss ett svar och den tidsrymden är tre månader. De har inte missmedelmetoder, det kan du bara bekräfta att det var rätt eller inte. Men tre månader är det som NMPA var på sig att behandla den här. Then we get a response, either we get a approval straight up and down, or we get a message back where we may need to do some less completions on the application we have sent in. So it's a normal procedure. If you apply for approval for, for example, a CE mark in Sweden, then there is a large regulator in Germany called TÜV. It's about the same procedure. The same procedure if you are I applied for regulatory approval in the US. The agency is called FDA. They had the time to act, so the answer was very important to us. We'll see if we need a minor complement to our application or if we get approval immediately. Anything to add, Tony?

Yes, I can say that we have already started to do competition. We did that in January. So we have been running, filling in with information. You have run like a bullet between Notarius Publicus and Valvesen. I have to add something.

I almost died under the question. I do not answer the concrete question of when we can start selling in China. The sale starts when we get the approval. So we are ready to start delivering directly. This is what we have in the agreement with UM Care, our Chinese partner. A reminder in the agreement we have with UM Care, the exclusive distributor agreement, there is an order for a value of over 40 million kronor today, so 3.8 million euro. So the products are ready to be delivered from the fact that we have a approval, in general.

Yes, thank you. We have a question here that sounds like this. Are you counting on a new NIR emission, even if China starts? What do you say, Hans?

As the head of the company, I don't know what to answer.

It's hard to say. We don't have any plans to strengthen the stock market right now. But at the same time, it's a matter of how long it takes to get started and, above all, what opportunities we want to ramp up even faster. Another question is if we plan to strengthen the organisation. The answer is yes, we do. We need more feet on the ground. This will be a decision depending on how fast we get started- and how big volumes China decides. It may be like that, but it may not be like that. At the same time, you might think that the Chinese can't wait for China to step in and do that. Of course, you can do that, but from a company's perspective, and also from an owner's perspective, it's always a risk. If it goes well, then it works, but if it doesn't, then we can have acute economic problems, and we don't have that today. So, it will be a decision, that's what you can say today.

Just to add, Tony, what's important, and we've talked about this before, so it's nothing new, but are we planning to hire more people? As Tony said, we need more feet on the ground. To be clear on what that means, it's mainly in sales, so that we can continue this expansion journey. That's where we see that we need to strengthen.

Vi har en annan fråga. Den är intressant. Jag är lite nyfiken själv. Vi får se om du klarar att svara på den. En stor del av nettomsättningen i kvartalet utgörs av återkommande licens- och hyresintäkter kontra nyförsäljning av instrument.

Jag ska veta tydligt, den frågan svarar vi inte på. Av det enkla skälet att vi lämnar inte den informationen. Vi är inte så transparenta. Vi tycker vi är jättetransparenta i de rapporterna vi lämnar. Men hur stor del är det? Vi har valt hittills att inte göra det. Det kan ändras i framtiden, men just nu lämnar vi inte den informationen.

Yes, it is a matter of building it up. For each instrument we sell, we have a recurring income. But as I said, we are not really ready to be that transparent yet, but it will come. How many instruments has the University Hospital of Skåne taken to be able to use it as a standard measurement method? I don't really understand the question.

I interpret it as the question is how many instruments are on that clinic. It's a clinic, the endocrinologist in Lund. So I interpret the question.

Yes, I can just add that they have two instruments, but they have set up their own room and started what is called a one-stop shop. Which means that all diabetic patients who come to them, they will be brought into this room where they will not only be investigated. In the current situation, if I'm not mistaken, the clinic in Lund has 1,000 patients. And there they now have the opportunity to measure with two. But we'll see, there may be more. It depends entirely on how the patient flow looks. It tends to be a little shaky sometimes.

I often say that there is another aspect, which is also that Ludd is one of the clinics in Sweden, Lunds Universitetsbygd som rätte förut, Skånes Universitetsbygd idag. which is research intensive and it is also a reason that it is valuable for us that there are two instruments, because then you can run research in parallel and collect the result. We save all data in this, our customers save that data on the measurements they make on the patients in the product, in the software, and you can actually do studies on it later when you use it in clinical research. So for the type of clinic that Lund represents, it is also a That's why it's valuable for us to have those who, I say, are ambassadors in the next step, who can stand behind and recommend this product. That's where we come with what we call Key Opinion Leaders, that you choose to think it's so good that you can influence your colleagues, not just in Sweden, but also abroad.

In the beginning, it was as much for them to collect information and data. Because these old instruments give nothing, but we will discover a lot. With our instrument, you can easily take out statistics and we will help them with that as well. It's all about optimizing the patient's health. Those who become green with our instrument do not need to get all the other investigations. That's where we work. We're not there yet, but that's where they want to get to. Now let's see another question here. It seems that many people who work in diabetes do not know your instrument. It feels as if the information does not reach those who work in diabetes. So I can say that it is absolutely so. Hans, what are we going to talk about now?

Tony has been talking about it. We need more 40 marks, but there is something else. We need to be broader communication. We are at the beginning of... We started with a journey. We need to be more communicative, broader and more visible. And this is a very hard work. It takes some time in the beginning before you get through the clinics and then it spreads. That's why we also want to be out at different events and be visible in the company. I said that we talked about Swedish We will also be attending a medical congress in Västerås, and another medical congress that focuses on the target group diabetes. We have been there for three years now. It is a way for us to spread the knowledge, the knowledge of our company, our technology to clinical care. It is one way, but we need to be even broader in our communication towards customers. Then there is the resource issue. We can't run to the right or left, because then we throw away... Communication costs money as well. So it's a balancing act. This is how fast we can do this.

The question is, do you think that the choice of the University Hospital in Skåne will give a ring on the water? We absolutely think that it will. Hans, what do you think?

Absolutely, that's a good question. It's always difficult for us to predict how fast this will go. Now this is a clinic that we can refer to, with good conscience, be clear that we have been in a PM, and say that this is one of the important customers who work with this instrument, we can refer to them, they can contact the superiors at the clinic if they want information, and we have agreed with the clinic. It has been difficult to do it in the same way during the period they have established, even though they have had the instrument with them for a period now, we have not wanted, and it is really a, what should I say, from our side, to refer to a clinic that has not taken the active decision, that this is part of their business, feels wrong to us. We are a little more serious than that, but now we can do it and it is a big win for us of course.

According to Magnus Lundahl, head of the department, Skåne has very good statistics regarding the treatment of diabetic patients and especially foot examinations. And that means that you look a lot at what is happening here in Lund. Then that a lot of what is used today is underground, that's another question. But with our instrument, you get a much greater opportunity to step up a real step compared to what you can do today. I get another question, it says like this, you can answer it, I think I know you can answer. In the order value that is in China, is it only instruments or license plates included in the order value?

No, in the order value lies both the license and the income for the instrument, so it's bought instruments. Then we'll see... We can also add, Tony, to be a little more transparent, this contract runs over three years, and it's actually a minimum order. It may increase, but it's for Vi var tvungna att säkra i det här avtalet för att kunna lägga ner all den tiden. Och de investeringar som det krävs för att gå in i den kinesiska marknaden för bolaget så är det minimiorder som sträcker sig över tre år, alltså de här 3,8 miljonerna.

Yes, thank you. I have another one here. How many employees are there in sales? Are there any specific markets to focus on? As the head owner, how many do you want to give, Tony? Ideally, we need two or three employees, but we'll start with one. Absolutely.

We have no ambition to build a large sales team. There are different ways to work. We have a goal, we have a plan, but we can tweak it along the way depending on where you go. We have a model and a philosophy that we are working on, that we are not going to hire a full sales board. We will hire a salesperson who also has the capacity to be what you call a CAM, as you probably said earlier, a Key Camp Manager. Responsible for a country or a region that can be a support to a reseller or distributor for us. That's the model we're building. Successively, we will increase. We have to focus on sales to expand this, so it is very important for us.

So, we have a final question here. I see that the time starts, we have one minute left, but I think we can take this one too. No plans to run ads and information on Facebook? We actually had a board meeting yesterday where we discussed our communication strategy. And there we can say that we have just made the judgment that Facebook is not the right channel for us in this situation. But for those who have not noticed, we have actually stepped up a good bit on LinkedIn, where we are now trying to bring in new information, follow new events and also report things that we do. So if you don't have LinkedIn at that level, I would just say that You can follow the company there. We have a slowly but surely stable increase of followers on LinkedIn. Hans, anything else you want to say?

I challenge you, we are trying to put out as much as possible. As Tordi says, we have made decisions on Facebook, we are not supposed to be there. We have also discussed Twitter, but we feel that it is too short, it is not called Twitter anymore, it is called X, but you know what I mean. It is too short, it is too tight communication media for us. LinkedIn, yes. Sign up for our company, connect with us, follow us. You are welcome to connect with me personally as well. I answer yes to everyone who seems to be serious. And I also publish a part and parts of what the company does. So welcome to follow us and we will spread as much information as we can.

Yes, just LinkedIn. It has turned out that there is a lot in the profession that is there. Absolutely. So we have quite a lot of questions and discussions along the way as well. So it is important for us. Ja, nu har klockan 10.31, förlåt, ursäkta, en minut sen. Men med det så vill jag tacka så mycket för mig. Och som sagt, ni är alltid välkomna att kontakta oss via mail eller telefon och prata lite mer om ni vill.

Tack så mycket. Och är det någon som känner, som Tony säger, att ni inte har fått svar på någon fråga eller har ytterligare någon fråga, ni hittar oss, ni vet var vi finns, skicka bara till mig. Tack så mycket och en trevlig helg.

Hejdå.