Comments by
Our underlying growth continues with undiminished momentum despite facing a tougher comparison quarter from last year's Q2. We see strong momentum in the business across the board, including outside the US. At the same time, profitability continues to strengthen, driven by volume effects, gradually higher reimbursement levels in the insurance systems, and the fact that the pandemic no longer negatively impacts gross margin. We see a clear trend where growth is fastest in markets where we sell directly, boding well for the future. The acquisition of our German supplier Rehadapt has full potential to add profitable growth from day one. We remain optimistic about both growth and profitability going forward and are therefore investing in competencies, systems and tools to further increase scalability.
QUARTER APRIL -
- Revenue grew 32% to
SEK 381 million (288). The currency adjusted growth was 24%.
- Gross margin was 68% (64).
-
Operating profit totaled
SEK 29 million (16), corresponding to an operating margin of 7.6% (5.4). The operating margin was 9.2%, excluding non-recurring costs ofSEK 6 million .
-
Cash flow after continuous investments was
SEK 30 million (-30).
-
Basic and diluted earnings per share were
SEK 0.16 (0.05).
PERIOD JANUARY -
- Revenue grew 34% to
SEK 716 million (535). The currency adjusted growth was 24%.
- Gross margin was 67% (64).
-
Operating profit totaled
SEK 50 million (33), corresponding to an operating margin of 7.0% (6.1). The operating margin was 7.8%, excluding non-recurring costs ofSEK 6 million .
-
Cash flow after continuous investments was
SEK 47 million (-58).
-
Basic and diluted earnings per share were
SEK 0.23 (0.15).
SIGNIFICANT EVENTS DURING THE QUARTER
- On
June 30, 2023 ,Tobii Dynavox entered into an agreement to acquire all shares in the German company Rehadapt Engineering forEUR 15 million in cash on a debt-free basis. Additionally, a potential earn-out considera-tion of up toEUR 3.5 million 12 months after closing of the transaction will be paid depending on the continued financial development of Re-hadapt. The transaction is subject to relevant regulatory approvals and other customary conditions, which are expected to be completed in the third quarter of 2023.
- The company launched the TD I-Series, a fast, lightweight and durable eye-controlled communication aid. Specially designed for people with disabilities such as ALS, cerebral palsy, and Rett syndrome, the TD I-Series is equipped with enhanced eye tracking and a wide range of pre-installed applications for simplified communication.
SIGNIFICANT EVENTS AFTER THE END OF THE QUARTER
Tobii Dynavox signed a partnership agreement withTeam Gleason Foundation , the leading provider of technology solutions for people with ALS, to improve access to assistive technology for communication and enable more people to live a more meaningful life.
COMMENTS FROM THE CEO
Our underlying growth continues with undiminished momentum despite facing a tougher comparison quarter from last year's Q2. We see strong momentum in the business across the board, including outside the US. At the same time, profitability continues to strengthen, driven by volume effects, gradually higher reimbursement levels in the insurance systems, and the fact that the pandemic no longer negatively impacts gross margin. We see a clear trend where growth is fastest in markets where we sell directly, boding well for the future. The acquisition of our German supplier Rehadapt has full potential to add profitable growth from day one. We remain optimistic about both growth and profitability going forward and are therefore investing in competencies, systems and tools to further increase scalability.
Sales growth, denominated in local currency, was well above our long-term target at 24 percent. Growth was robust across all product and user groups. US Medicare's increase in the reimbursement level for our products by more than 9 percent will gradually affect revenues in 2023. Our income statement now reflects almost half of these price adjustments. As before, we expect to see the full impact by the end of the second half of the year.
Gross margin increased by 4 percentage points to 68 percent. The main reasons were the normalization of component and freight costs, as well as progressively higher sales prices.
Clearly, the distinct break in the trend toward increased sales growth that we saw just over a year ago was not temporary in nature. Our own large scale investments to educate prescribers and improve our products, along with constantly improving reimbursement systems in many countries, are producing clear results.
Our direct markets, including the recently added Irish and Danish markets, show the strongest growth. The main reason is that we have a much greater ability to effectively educate and support prescribers while gaining a deeper understanding of local requirements, processes and reimbursement systems. Educating the market about the potential of our products is key and critical for us to deliver on our major growth and profitability opportunities.
Our customer offering is highly competitive, and it is gratifying that our recently launched software titles have drawn so much attention. We can see rapid growth in their use. TD Browse, a browser specifically designed for users who control their device with eye movements, has also been nominated for several prominent awards. We continue to invest in development to gradually strengthen our product offering. New hardware,
The acquisition of our long-standing German supply partner Rehadapt, which we agreed on at the end of June, naturally complements our offering while also strengthening our position in
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