Tobii Dynavox Interim report Q1 2022

Tobii Dynavox AB (publ) today announced its results for the first quarter of 2022. 

Comment by Tobii Dynavox CEO Fredrik Ruben: 

“The first quarter was characterized by several important events, while the pandemic initially continued to impact the business and earnings. Towards the end of the period, however, we saw clear signs of an increased growth in our North American business as a result of the easing of restrictions. The underlying demand for our products is high and continues to grow, this gives us confidence for the year ahead.” 

QUARTER JANUARY – MARCH 2022 

• Revenue grew 9% organically to SEK 246 million (207)  
• Gross margin was 64% (67%).  
• Operating profit totaled SEK 17 million (28), corresponding to an operating margin of 7.0% (13.5%). 
• Cash flow after current investments was SEK -28 million (48). 
• Basic earnings per share were SEK 0.09 (0.16) and diluted earnings per share were SEK 0.09 (0.16). 

SIGNIFICANT EVENTS DURING THE QUARTER 

• In March, it was announced that the acquisition of the Belgian company Acapela Group will be completed on April 29, 2022, since the deal has been approved by the relevant authorities and all conditions of the agreement have been met. 
• February saw the launch of a new version of the TD I-110, our best-selling touch-based product which marked a clear upgrade in durability and powerful performance.  
• In January, the group entered into a strategic partnership with Tencent-owned Sogou. Sogou is used by over 600 million to type Mandarin on computers and mobile devices. The partnership enables people who use Tobii Dynavox eye tracking to use the Sogou technology.  
• Mikael Bäckström was appointed as the new Chief People and Sustainability Officer. 

SIGNIFICANT EVENTS AFTER THE END OF THE QUARTER 

• On April 1, the Group acquired 100% of the shares in the Irish company Obear Technologies Limited, operating under the name Safe Care Technologies. The company is a Tobii Dynavox reselling partner in Ireland. 

COMMENTS FROM THE CEO 

“The first quarter was characterized by several important events, while the pandemic initially continued to impact the business and earnings. To-wards the end of the period, however, we saw clear signs of an increased growth in our North American business as a result of the easing of restrictions. The underlying demand for our products is high and continues to grow, this gives us confidence for the year ahead”. 

In the first half of the quarter in particular, the spread of the omicron virus variant and associated restrictions continued to limit our ability to meet with customers, prescribers and users. Challenges in logistics and component supply resulted in a lower than normal gross margin, but in line with the previous quarter. We have taken a strategic decision to increase our finished goods inventory to minimize the risk of delivery problems, and hence it was not a limiting factor for sales. 

Despite the difficult pandemic situation, mainly in January and February, our revenues grew organically by 9% in the quarter. Sales of communication aids in North America continued to develop well, with steady growth in both revenue and new insurance applications. The easing of re-strictions was evident in a higher growth rate of business volume toward the end of the quarter. As in previous quarters, other markets, including our special education products, were more hampered by continued pandemic-related effects. 

The Apple-based TD Pilot communication device, launched in mid-November, has received a positive response from the market. The medically certified device enables people with disabilities to control an iPad with their eyes. As we have previously communicated, it will probably take until the summer before sales truly takes off, since the communication aid is primarily sold as a pre-scribed product, which often involves longer processing times. 

SEVERAL IMPORTANT EVENTS  

In January, we entered into a strategic partnership with Tencent-owned Sogou. Through our TD Control software, it is now possible to use the Sogou Input Method, which has over 600 million users, to be able to type in Mandarin using eye tracking. This represents a significant step forward in accessibility for people with disabilities in China.  

In mid-February, we launched a new version of the TD I-110, our best-selling touch-based communication aid for people with conditions such as autism, cerebral palsy and aphasia. The launch marked a clear upgrade of the medical-grade I-110, especially in terms of durability, battery life and speed.  

The acquisition of Belgian Acapela Group was, as expected, given the green light by the relevant authorities at the end of the quarter and will be formally closed on April 29. The company is a global provider of synthetic voices and AI-driven voice synthesis technology. The deal means that we are adding Acapela’s innovative team and leading products to Tobii Dynavox. This allows new and important solutions to be created for our users. 

Our acquisition of Safe Care Technologies at the beginning of April means that we get closer to our customers in the Irish market and thereby can help more people with communication impairments. The deal is in line with our strategy of complementing organic growth with acquisitions that bring us closer to our end customers. Safe Care's focus on educating the market about the often life-changing possibilities of our products is a great fit for us. 

Our commercial exposure to Russia and Ukraine is insignificant. Nonetheless, a strong commitment to Ukraine permeates the entire organization. Through our extensive expertise in assistive technology for communication, we can assist in overcoming the language barriers created by the huge influx of refugees. The communication boards between Ukrainian and an array of languages, which we have published online to be printed out locally, are an important part of this effort. 

Finally, I would like to thank all our employees, especially for their wholehearted commitment to improving the lives of our users. I look forward to another exciting year. 

Fredrik Ruben, CEO 

Webcast 
Today at 09:00 a.m. CET, Tobii Dynavox will host a webcast presentation for media, analysts and investors. If you want to attend the webcast click the following link. The interim report and a recording of the webcast will be available here. 

This is a translation of the Swedish original. In case of any inconsistency between the Swedish and English version, the Swedish version shall prevail. 

This information is inside information that Tobii Dynavox AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out below, at 07.30 CET on April 27th, 2022.