Hey everyone, a warm welcome to you all to this earnings call for Tobii for the first quarter of 2021. Today, in this session, we will start by talking about our progress in the first quarter specifically, but we will be a bit quicker than usual on that because, of course, after that, we want to take some time to present the big and exciting news from this morning that we are planning the spinoff and subsequent public listing of Tobii Dynavox, and we want to make sure that we have some time to describe that to you as well. Towards the end of our session, we will have time for questions and answers, and we've actually extended that in time to make sure that there is ample opportunity for you to ask questions both around the quarter, of course, but also specifically on the announcement around the spinoff. In this forum, the way we're doing this session today, all of you will be able to ask any questions through the chat window. You can do that at any time through the presentation or later when we are at the Q&A session. If you want to ask a question verbally, you can contact ir@tobii.com even now during the meeting, and we can invite you to ask questions verbally in the meeting. That is also available as an option. Magdalena, our CFO, is also here today to share some of the details of the quarter together with you. Let us start with a summary of the first quarter. We report organic growth and a significant improvement of the operating result in the quarter. We do this despite the fact that we continue to see strong headwinds from the pandemic, also now in the first quarter. On top of the headwinds from the pandemic, we also had an early negative effect from the supply chain disruptions that we have announced a couple of weeks ago, specifically in Tobii Dynavox. Despite this, we delivered on an organic growth of 1% in the quarter. We do see that the gradual recovery from the pandemic is continuing, and we saw a clear trend of increased sales activity across all of the different parts of our business. We saw very different patterns in different geographies. That's very clear and that correlates quite closely with how we see the pandemic developing and unfolding in different parts of the world. In addition to growing traction in day-to-day sales, we also closed half a dozen design wins and several new products. We delivered a significantly improved operating result with only a small loss of SEK 9 million. This means that we are on good track towards reaching our goal of profitability for Tobii Group for the full year of 2021. As mentioned, before we get into the big announcement of today, let's start by going into a little bit more detail on the business. As usual, let us start with Tobii Dynavox. Tobii Dynavox continued to be significantly impacted by the pandemic since restrictions in society continue to make it difficult both for us as well as for others in the ecosystem to really serve our end users effectively with assistive technology for communication. Given that we are still in the pandemic and seeing these effects, the comparison to the first quarter last year is really tough because first quarter last year for Tobii Dynavox was before we saw any impact of the pandemic. On top of that, as mentioned, we had early impact of the supply disruptions that we have announced. We have challenges in the supply chain right now with our flagship product in Tobii Dynavox, the I-Series. This is similar to many other companies that are also facing challenges with the semiconductor components in the current climate. To overcome this, we have already found alternative sourcing routes, and we're also making some smaller redesign to the I-Series product. This comes with a bit of lead time, we are confident that we will be back in full production capacity towards the end of the second quarter. This does mean that we will see some revenue essentially being postponed a little bit from the first quarter and specifically from the second quarter into the third quarter of this year. That we expect to be in the range of SEK 40 million-SEK 80 million in terms of this postponement effect. We did see a bit of that already towards the last few weeks of the first quarter. One reason that we're confident that this is a postponement effect, and we expect to get most of this back, is that we have ended the first quarter with an exceptionally high sales pipeline for Tobii Dynavox. That makes us optimistic for the actual traction in the sales. It's interesting to note that we also continue to see a positive trend, long-term trend for reimbursement, specifically for assistive technology for communication. In the first quarter, President Biden signed a new law which makes it easier for individuals with ALS to obtain access to communication devices faster. Magdalena, over to you and some of the financials for Tobii Dynavox Thank you, Henrik, and hi, everyone. Yes, as Henrik already mentioned, Tobii Dynavox revenue was negatively affected by both the pandemic and the supply chain disruptions. Revenue declined 6% organically in this first quarter. We can conclude that around 7% of the decline was due to the supply chain disruptions. Without these, organic revenue would have grown by about 1%, despite the pandemic headwinds. Gross margin was 68%, in line with last year's quarter, and costs were in line with last year, except for salary increases, leaving us with an EBIT of 13% compared to last year's 15%. In conclusion, we would like to caution here, if you only add back incremental gross profits on the missing revenue from supply chain issues, you would arrive at a profit of around 19%. This is, however, not a fair description of the underlying trend, since we also have tailwinds from translation effects and from a higher pace of capitalization compared to amortization R&D. If we adjust both quarters for this and for the supply chain disruption within this quarter, we would have seen a positive EBIT margin trend of around 1-2 percentage points. Back to you, Henrik. Thank you, Magdalena. Let us turn our eyes to Tobii Pro. Revenue grew at a good pace in Tobii Pro in the quarter. We still see that also Tobii Pro's business is still clearly impacted by the pandemic. The regional differences are very large for Tobii Pro in this impact. The regional differences correlate very closely to restrictions in society from the pandemic. Asia showed a very strong year-on-year growth for Tobii Pro, in particular in Japan. Even though if we look at China, even though sales for Tobii Pro in China grew significantly over the first quarter last year, we're still actually far from a normalized level in China, because in China, actually, universities were still closed for about one and a half months of the first quarter. This was due to a bit of a second wave effect in China, and the Chinese government took actions to impose restrictions to make sure that that did not catch on. The U.S. continued to lag severely in terms of sales for Tobii Pro, and also Europe remained slow. Despite this rather mixed picture, Tobii Pro in totality grew revenue organically with 13% compared to last year. These regional differences and the fact that they correlate to the pandemic situation makes us quite optimistic about the significant growth opportunity once more regions come out of the effects from the pandemic. In the first quarter, Tobii Pro also launched a new solution for reading analytics in our Tobii Pro Lab software. Eye- tracking is a very powerful tool to understand reading and to use this to enhance both assessment and the learning of reading skills. We see opportunities in this education and reading space, both in our Tobii Pro as well as in our Tobii Tech business. With that, Magdalena, over to you and some more financials. Yes. Again, as Henrik mentioned, Tobii Pro had an organic revenue growth of 13% organically. Yes. Gross margin was up three percentage points, mainly related to economies of scale since part of the cost of goods sold are fixed. The operating costs were organically 3% lower than Q1 last year, which is an effect of continued good cost control, but also a combination of it still not being able to travel and meet customers. The EBIT margin was 2% compared to last year's 1%. Note that the discrepancy between the good revenue growth and the improved gross margin, but only modest EBIT growth is explained by a higher R&D amortization and lower R&D capitalization in this quarter compared to Q1 last year. This means that the cash flow metrics for Tobii Pro improved significantly more than the EBIT margin reflects. Back to you, Henrik. Let's cover Tobii Tech briefly as well. In the first quarter, we saw a good trend in terms of increasing sales activity and engagements in customer projects. During large parts of last year in 2020, Tobii Tech also saw a lower activity level due to the pandemic. Tobii Tech has quite long sales cycles. The impact of that lower activity level is something that we see in revenue numbers, et c., also still now in the first quarter of this year. In this quarter, we saw the activity level clearly picking up. We have a good flow of new design wins coming in. We are engaging in several new projects that aim at future design wins, and business volumes are starting to pick up for several of our customers or OEM customers where we have existing design wins already. In total, we landed six new design wins in the first quarter, including two design wins in the personal computing space and four wins for different medical applications. That's great. We continue to see good trends in the VR market, both overall in the VR market as well as for eye- tracking continuing to gain traction as a key technology within the VR ecosystem. During the quarter, and we mentioned this in our previous earnings call already, we announced a research collaboration with Valve and OpenBCI around eye- tracking in VR. Worth mentioning is also that our PC gaming peripheral continues to show very strong year-on-year growth. Revenue for our gaming peripheral roughly doubled in the first quarter compared to the same period last year. We also launched our new Tobii Horizon offering, which is essentially our Tobii Aware offering, but tuned specifically to gaming. This is our low-cost solution for attention computing, but that also marries it together with many of the investments we've done over the past years in the gaming space. We also announced Lenovo as our first customers to implement Tobii Horizon in their flagship Lenovo Legion gaming PCs. A quick, I think with that, Magdalena, your turn again on financials for Tech and then for the group. Yes. Looking at Tobii Tech, the revenue declined organically with 1% during the first quarter. The pandemic was still affecting negatively. Internal sales declined 14% organically, mainly been due to the supply chain disruptions experienced within Tobii Dynavox. The external revenue grew with 4% organically, where we saw the strongest development within the XR segment, as well as within the business -to- consumer sales for our gaming peripheral. Gross margin came in at 59%, 5 percentage points lower than last year due to the different proportions of revenue mix between the years. The costs were organically 24% lower than Q1 2020. This was achieved through the cost reduction measures implemented during 2020. The operating loss continued to develop in the right direction, going from -SEK 61 million in Q1 2020 to -SEK 40 million in this quarter, which is an improvement with SEK 21 million between the quarters and thus in the right direction. If we take the next page to look at the group. The group had an organic revenue growth of 1% in the quarter. This growth was achieved despite the supply chain disruption in Tobii Dynavox and despite the pandemic's continued negative effect in all business units. For the group, the supply chain issues had a 5 percentage point negative impact on revenue. Gross margin came out on the same level as last year, 71%. Cost control continued, and we lowered our operating expenses with 9% organically versus Q1 2020. This was achieved through the cost reduction measures initiated during last year, in combination with the pandemic dampening effect on travel and sales activities. Tobii's EBIT for this quarter was - SEK 9 million, which was an improvement with SEK 14 million compared to last year. This first quarter is thus another good step in the direction to deliver profitability for the whole year of 2021. Last quarter, we introduced the measure EBITDA less capitalized R&D, which you see here. This is a KPI that we work with internally. It is a measure that's a bit closer, or it's closer to cash flow than EBIT, and it is independent of the ratio of R&D capitalization and amortization, since it is the equivalent of seeing R&D costs as ongoing OpEx rather than CapEx investments. As you can see in the chart, we are now very happy to deliver two consecutive quarters with a positive EBITDA less capitalized R&D. We are moving in the right direction. Then we have our last slide on the financials, looking at the cash flow after continuous investments, which ended out on -SEK 4 million. This was an improvement with SEK 58 million versus last year, thanks to improved operating result in combination with lower investments and less negative effect from change in working capital. Cash at hand was SEK 422 million. Net debt was SEK 187 million, or if we exclude IFRS 16 Leases, it was SEK 42 million. The IFRS 16 debt grew this quarter, since we have set a new lease agreement for our headquarter office in Danderyd. Our bond will expire in February 2022 and is thus now reclassified as being short-term financing. We have a well-established plan for how to secure refinancing, and we will come back to that when everything is in place. With that, I leave it back to you, Henrik. Thanks, Magdalena. If we again summarize the first quarter, we're happy that in the first quarter, we delivered organic revenue growth and clearly improved operating result despite the continued headwinds from the pandemic and despite the early effects from the supply chain disruptions. We continue to see gradual recovery from the pandemic and increasing sales activity across all of our businesses, so that's great. The underlying momentum is good. We have a solid financial position with plenty of cash in the bank and a very low net debt. We are optimistic about the outlook for the year based on both of this improving sales activity in all of our divisions and also this clear pattern where we see actual sales revenue correlating very closely to how different regions are coming out of restrictions from the pandemic. Of course, we still have to be mindful that we expect the supply chain disruptions in Tobii Dynavox to have an impact of deferring some revenue from the second to the third quarter, so we need to keep that in mind. All in all, we are definitely on track to deliver on our target for positive earning operating result for the full year of 2021. That concludes sort of the first part of today's call and specifically the presentation around the first quarter. With that, we shift over the focus to our biggest news of today, which is the natural and the big next step in Tobii's evolution. As we announced this morning, we are currently conducting a review of Tobii Group's structure, and we have a clear intent to spin off Tobii Dynavox and publicly list Tobii Dynavox on Nasdaq Stockholm. With this, we will create two fully independent companies, both of them very clear world leaders in their respective domains. A new Tobii, which continues to be the world leader in eye-tracking technology and solutions, and a standalone Tobii Dynavox continuing to be the world leader in assistive technology for communication. The rationale for doing this is clear and strong. Again, to a large extent, this is a very natural progression of a path that we've on for a long time already. As our businesses have grown and evolved and matured, Tobii Dynavox has also become increasingly autonomous and separate from the other parts of Tobii. To the point that today we actually see very low synergies between Tobii Dynavox and the rest of Tobii. We do, however, see significant and actually growing synergies and benefits of working closely together between the Tobii Pro and the Tobii Tech parts of the business. Therefore, there is a strong rationale for keeping these two parts together. By creating two separate companies, we will be able to maximize the long-term potential and opportunity for growth for both of these two companies, both for Tobii Dynavox and for Tobii. This will enable us to unleash their full power and even more, create truly empowered teams, become even more agile as organizations, create an increased, much clearer focus for both of these companies, enable us to come even closer to our customers and the market, and just generally reducing complexity overall in the organizations. I personally am very confident that this will drive even stronger growth, even stronger long-term success, and of course, with that, drive significant shareholder value for both. Another strong benefit of doing this, is that it forms two very clear-cut investment opportunities, and I truly believe that this will make it clearer and easier to really in-depth understand both Tobii Dynavox and Tobii, and make it easier for you as investors to appreciate both of these companies in their own rights. Based on good performance in the past several years and strong revenue growth, in combination of course, with a strong outlook for the future, both parts are now ready to take this step where we can be confident that both Tobii Dynavox and Tobii will have what it truly takes to succeed as standalone companies. Let us take a little bit of time to talk briefly about both of these companies, and I have invited also Fredrik Ruben to join us today, and Fredrik is today Division CEO of Tobii Dynavox, but also of course, intended to be CEO of Tobii Dynavox, also standalone. Fredrik, do you want to share some thoughts on Tobii Dynavox with us? Sure. Hi, everyone. Good morning. I am, for those of you who don't know me, Fredrik Ruben. I am the CEO of Tobii Dynavox. This is a position I have held for the past seven years. My background prior to that was predominantly from the software space, where I also was the CEO, also in a publicly listed setting. Tobii Dynavox is the undisputed world leader in assistive technology for communication. In essence, that means that we provide a rich portfolio of products and services to help people with disabilities to communicate. The products that Tobii Dynavox has are life-changing in such a fundamental way. We provide them, not only our users with a life-changing opportunity, but also the people around them, the families, the caregivers, in that setting. This is, of course, a quite unique proposition we have to the market. I think we can't overestimate the power of independence, of being a person who is able to learn, interact, work, and be a part of society, thanks to the products and solutions that Tobii Dynavox does. Our products come in in two main scenarios, either because of a condition that you have gained later in life, something has happened to you later in life, or we also have the segment of users where you had a condition that came to you at birth. Examples of those conditions could be ALS, spinal cord injuries, MS, but also conditions such as autism, Down syndrome, aphasia, cerebral palsy, and many more. As you can imagine, we have a highly mission-driven organization of some 500 fantastic colleagues of mine, but yet we're actually extremely performance-oriented, in doing that. This is a team that really lives by the values and in our mission, as you can see on the screen, to empower people with disabilities to do what they once did or never thought possible. We're also a company that's been growing steadily over the years, both organically and through acquisitions, and we currently have a revenue of just under SEK 1 billion at a healthy profit margin. The market in which Tobii Dynavox operate is highly or even hugely underserved. Unlike other assistive technologies such as wheelchairs or hearing aids, where there is a solid reimbursement system in most markets, the market that we operate in has a extremely bad reimbursement system in most markets. That includes markets such as France, the U.K., or even Finland. It is in fact estimated that less than 2% of the users that every year are diagnosed with a condition that warrants our communication devices are being served. The rest are left silent. Tobii Dynavox don't only have the products, we also have the infrastructure and the expertise to counter that and to basically help these users to come back in communicating. We also see that there are other large societal factors that works in our favor. As I'm sure everybody knows, the topic of inclusion, both in society at large and in workplaces, is definitely high up on the agenda for most. Also the improved healthcare systems in most markets works in our favor. Tobii Dynavox, as well as our industry peers, also puts huge efforts into explaining, educating not only the professionals and the caregivers and the prescribers in our industry, but also the policymakers and the legislators to make sure that we have a difference. We have a solid underlying opportunity for a long-term, steady growth of this industry and our business as a whole. If you look a little bit on our offering in Tobii Dynavox as a company, we have a set of products that has been built up over decades. It's both hardware and software, and it's clearly leading, and this in combination with the expertise we have in the medical space as well as in the clinical space. Not only do we do the products, we also take an active part in the reimbursement processing to making sure that the process from identifying that you need a device until you actually get the device is something we take as a part of our responsibility, too. We're currently available with our products in over 70 countries. That is done in some countries where we have our own staff, some of the key markets, but also through a network of almost 100 distributors, resellers, and partners. The 500 or so employees that we have in my organization spans from everything from the full research and development, finance and supporting functions. Of course, we have all these specialists, whether they're clinical specialists or whether they're specialists that actually does the processing of reimbursement, in those markets. We also collaborate closely with tens of thousands of prescribers and professionals out there, both helping them to educate in functionality and best practices, but also, of course, to ultimately give success to some of our users. With that said, and almost a 40% world market share, Tobii Dynavox, if you put the perspective as an investment, we are extremely established in what we do, both when it comes to our products that are truly life-changing. They have revolutionary benefits to most of our users, but also the people around these users, which cannot be underestimated. It's a significantly under-penetrated market, and it's also non-cyclical, which of course bodes well for a long-term sustainable growth in our business. Tobii Dynavox is truly the only global player in this space. We have the most comprehensive offering, and it's available everywhere, more or less. We also have not just the products and the competence, we also have an unmatched access to the reimbursement. That's actually a super important part of getting a device. Our offering is compliant with medical standards. We have the clinical expertise. We are right now coming out of a period of significant product investment focus. We stand really strong and shifting gears right now to sales expansion and margin expansion, which I think we're well-positioned for to do both organically and through M&A. That's Tobii Dynavox at a glance. Great. Thank you, Fredrik. Let's have a quick look at Tobii as well, or the new Tobii. Of course, Tobii also after this split, will continue to be the undisputed global leader in eye-tracking technology and solutions. Tobii's mission statement stays intact: to improve the world with technology that understands human attention and intent. Eye-tracking, as we know, is a very powerful enabling technology, which brings value to many types of devices, for many different applications and across a broad range of different industries. Tobii addresses a broad range of markets, of which many of these have tremendous opportunity and potential for growth and long-term value creation. In most of these use cases, eye-tracking is still early on the adoption curve, but the technology is today much closer to large-scale commercialization than they were only a few years ago. As part of the review of the group's overall structure, we have decided to merge our current Tobii Pro and Tobii Tech business units together. Between these two businesses, we see significant synergies and opportunities to leverage the combined strengths. As I mentioned before, over time, we've actually seen these two businesses, Tobii Pro and Tobii Tech, grow closer and closer together. Today, we see a significant overlap in customers and the customer journeys. We see overlap and potential in leveraging combined marketing, in core technology development, in leveraging the product portfolios, and of course, also see opportunities for economies of scales and leveraging these and internal efficiencies by working much closer between the Tobii Pro and the Tobii Tech divisions. If we end up completing the intended spin-off, then I personally plan to hand over the CEO role to two new, very capable CEOs. Not just one, but two new CEOs. Fredrik on the one side for Tobii Dynavox, and Anand Srivatsa for the new Tobii. Anand is today the division CEO of Tobii Tech since about one and a half years back. Anand comes with a wealth of experience from the high-tech industry, mainly from very senior roles at Intel. Anand has, in a short time at Tobii, proven to be an amazingly good and appreciated both leader and strategist and colleague. I am absolutely convinced that Anand is going to be an awesome CEO of this new Tobii, once we have completed the separation. If we take a quick look at Tobii, also after the separation, as an investment opportunity, of course, eye-tracking provides strong value across this very wide portfolio of different applications, devices, industries. It has a significant long-term volume potential in the range of a billion units per year, making this a very attractive and valuable industry. Several of these are close to large-scale commercialization today. Tobii is very firmly established as the global market leader for eye-tracking technology and solutions. It is also very clearly the technology leader in this space, both when it comes to know-how, product solutions, and IP. Taken together, if we summarize Tobii Pro and Tobii Tech, over the five-year period, if we look before the pandemic, so the period 2014 to 2019, these two businesses together grew revenue on average by more than 20% per year. We expect, of course, Tobii to continue going forward with very rapid revenue growth as eye-tracking proliferates deeper and deeper into several of these very exciting growth markets. Worth mentioning further is that the gross margins are quite high in Tobii, also that further revenue growth comes with a low need for incremental OpEx growth. That provides a very strong leverage all the way down to the bottom line on any additional revenue growth that we expect over the coming several years. We do look forward to presenting this new Tobii to you in more detail, we plan to organize capital market days, actually both for Tobii as well as for Tobii Dynavox later in the fall as a part of this process to provide you with more information. Let's look briefly at the timeline. Super high level. We are obviously in the middle of preparations. We are conducting this review of the group structure right now. We are announcing that today publicly. Of course, there is a lot of work still to be done here in terms of planning and actual preparations for this. That will take us most part of this year. We do plan to update you on the progress with this, also in our earnings call for the second quarter. As mentioned, we plan to have capital markets days both for Tobii Dynavox and for Tobii during the fall. A note, perhaps obvious, is that there is of course no guarantee that this decision will ultimately be taken to pursue a Lex Asea distribution and subsequent listing of Tobii Dynavox, even though it, of course, is a clear plan. A little bit of a final comment on this. Personally, I am really excited about this step. As you know, I believe tremendously much in the opportunity and the potential of both of these businesses. My personal ambition is, even as I hand off the CEO role to Fredrik and Anand, is to stay deeply engaged in both Tobii Dynavox as well as in Tobii. My ambition is to be on the board of both companies, as well as to continue in an operational role in Tobii also after the separation. Of course, I remain also as the Group CEO until the separation is complete at the end of this year. I truly believe that this step will unleash even more greatness and really unleash the full power of both Tobii Dynavox and Tobii. We have been building Tobii for some time already. It's 20 years ago that we started Tobii in a garage, and it has been growing ever since. Still, our journey has just begun, and in many ways, I think this announcement today and this step of creating two world-leading successful companies marks the start of the next amazing and exciting chapter of the Tobii's, both Tobii and Tobii Dynavox. With that was what we wanted to cover in presentation form today. Of course, we're keen to hear any questions you may have. Let's switch into Q&A mode. Joining us for this is also Henrik Mawby, Head of IR in Tobii. As we mentioned before, we're happy to take questions both through the chat, and potentially also if we have some verbal questions, with folks invited. Henrik? Absolutely. Thank you, Henrik. Analysts, a gentle reminder, if you wish to speak, give us a ping and we will unmute you, and give you the word. Otherwise, I will start. While waiting for that, you can use the chat or the Q&A to ask for the word. I will start with some questions that we've already received through the chat. The first one being, can you, Henrik, give an updated overview of Tobii's roadmap for the big eye-tracking categories like XR headsets, computers, vehicles, phones, etc.? When do you think they will really start to be valuable to Tobii? That is a large, comprehensive question. I'll try to address parts of it at least. First of all, if we look at some of the core segments that we are addressing specifically in Tobii Tech, which this question relates to, we have VR, we have PC market, we have exciting applications in the medical space, education space. These are the areas where Tobii Tech is currently mainly focused, and where we are doing proactive investments both in core technology and market creation. In VR, we see significant traction for eye-tracking. We have over the past few years, we've seen eye-tracking become well-established on the enterprise side of the market with major headset manufacturers like HTC, Pico, HP, launching VR headsets targeting the enterprise customers with Tobii eye-tracking incorporated. We see a rapid proliferation of eye-tracking as a technology through the VR ecosystem, and we expect that this will also start hitting into the consumer devices of the VR market over the next one to three years. VR is definitely a market where eye-tracking will rapidly reach high adoption, high penetration over the near future, and Tobii is well-positioned to be a significant player and supplier of eye-tracking technology in this. Of course, the VR market as a whole is also seeing growth, and is expected to grow rapidly over the past several years. This has been further accelerated even by the pandemic and humans interacting in virtual ways even deeper. VR is growing, both enterprise consumer. Eye-tracking is coming big time. Tobii is there. If we look at the PC space, we believe that eye-tracking has a significant role to play in the PC market as well. We have multiple engagements with major PC manufacturers. We also have our own product with our gaming peripheral that we sell directly to consumers. We work tightly with game studios for game development and other types of application partners also outside of gaming. Where we see significant traction in the PC space right now is for our gaming peripheral, which as I mentioned, grows at very rapid pace currently. We also see significant interest for our lower cost offerings for attention computing for the PC market with Tobii Aware, Tobii Horizon. We do expect the PC market, though, to take more time to reach really high adoption rates. It's not as fast-moving as the VR space, and frankly, in VR, eye-tracking provides very fundamental values for optimizing graphics and device efficiency that we expect drives the adoption there faster. PC will come, but it will also likely be more of a gradual growth over a longer period of time. We have now dozens of design wins in the medical and education space. These are vertical markets where we see large margin opportunities, and we work together with really innovative companies that are developing new diagnostics or treatments or interaction methods in surgical environments, et c., where eye-tracking plays a crucial role in these products. We're working both with small startups and larger established companies in the medical space. Common for all of them is actually many of these are really exciting products and product opportunities, creating in themselves new niches, new markets through innovation powered by eye-tracking. Most of these are still early-stage. Several of them are in the market with products. We definitely see significant opportunity for these products and for us providing a core eye-tracking technology with high margin into many of these. Those are the three areas that we are focusing mostly on proactively. Of course, beyond that, we see additional opportunities in other areas as well, but that is currently less of a focus area for Tobii today. Thanks for that. Daniel Juhlin, I see you want to ask a question, so you go ahead and unmute yourself, and then you should be able to ask your question. Daniel, I don't know if you're on the line and if you can hear this, but unmute yourself, and then you should be able to ask your question. Okay, I'll move on and ask some other questions until we get Daniel on the line again. What is your view on being acquired by a synergistic tech giant like Facebook or Google? Clearly, that would accelerate the adoption of your incredible technology, and your valuation would no doubt be very high. It's a good question, I think. Yeah. That's not entirely up to me to make that decision as such. No, I think that Tobii actually is of the size that we are really well equipped to continue to evolve and grow our world-leading position in eye-tracking also as a standalone company. We have the sort of size of engineering capabilities. We have the brand recognition. We are the world leader in this space, and I think we really can grow tremendously as eye-tracking proliferates across all of these different markets and opportunities. That said, of course, there could be other constellations, other situations, other opportunities that can emerge. Some of those potentially maybe could accelerate this even further. Of course, if such opportunities arise, then of course, it's definitely the job of the board of directors of Tobii to take those into consideration and with a mind to the long-term best interest of Tobii shareholders and other key stakeholders. That could also be a great situation. On that note, let's continue on the strategic trajectory here. Does the split also open up opportunities for both new companies and for more strategic partnership? I'm not sure about the formulation here, but for both new companies and for more strategic partnerships. I'm a little bit unsure what is meant by the question. Maybe focus on new strategic partnerships. I think that might be possible to answer while the person asking the question maybe can reformulate what you mean by new companies. I think that one thing that's quite clear is, as Fredrik mentioned, there are some really exciting opportunities to have a forward-leaning agenda when it comes to both sales and market expansion in Tobii Dynavox. Part of this is organic, but part of this is also through acquisitions as well as deep partnerships with companies in this space. I do think that this split for Tobii Dynavox to be a standalone company does actually open up for some additional possibilities and tools to actually accelerate and expand those opportunities. I don't know if you want to add to that, Fredrik. Yeah, I can add to that, if you think about just on the partnership side, the announcement that we made a couple of months ago together with Google kind of solidifies our role. We are the world leader in assistive technology for communication, which means that features such as, in this case, Google Home, fits really well into someone like Google because we're the specialist in what they do, and they're, of course, the specialist in what they do. When it comes to acquisitions or other opportunities for us to grow in an inorganic way grow our business faster. It is, as I mentioned before, we have a fantastic platform to stand on from products, relationships, and infrastructure. Of course, we could accelerate that both organically by simply growing our own team, but also through acquisitions, improve our presence in specific markets, in specific segments. I think we have, to summarize, partnerships in the true meaning of partnerships, a fantastic opportunity, which again, is proven by the likes of Google, as well as slightly more concrete M&A activities, which will strengthen our current platform. I hope that answered the question to some degree. I think it does. Okay. One more question here. Could you provide any guidance on the capital structure for Tobii Dynavox and the new Tobii? Given Dynavox is more mature and cash generative than Pro and Tech, do you envision that the separation leaving new Tobii with a strong balance sheet to support the investment necessary for its high growth trajectory? This is a great question. We are still in the preparation and planning phase for this split. One thing that, of course, is going to be an important part of these preparations is to do deep detail planning around the capital structure, both for Tobii Dynavox as well as for the new Tobii. Today, Tobii Group as a whole, we have a strong financial position with plenty of cash in the bank and very low net debt. We are confident that we have several tools at our disposal to ensure that we create optimal capital structures in both of these companies. That exactly as you say, that will be important. Obviously, Tobii Dynavox has a strong cash generation capacity. Tobii, and sort of the new Tobii, will also, of course, need to have a solid financial position to support exactly as you said in the question, the continued strong revenue growth, and expansion of Tobii going forward as well. We will come back with more details on this during the fall. Let's try with Daniel Juhlin again. You should be able to unmute by pressing star six. That goes for the rest of you as well if you called in using a cell phone or phone. Looks like he's not on the call, perhaps. Okay. We're sorry about that. I'll just continue with more questions from the web then. How will the spin-off of Tobii Dynavox affect the existing shareholders in terms of receiving new shares in Dynavox versus new Tobii? The plan is to do this split and spin-off according to the rules of Lex Asea. That essentially means that we would distribute the shares of Tobii Dynavox to Tobii's existing shareholders in proportion to the current ownership in Tobii. Existing shareholders of Tobii would receive for free new shares in Tobii Dynavox. Then after that, we would publicly list Tobii Dynavox. As a shareholder of Tobii, you would end up keeping your share in Tobii and receiving new shares in Tobii Dynavox. Once the split is complete, at day one of trading, you would be a shareholder of both companies. Fredrik, what are you most excited about with this split? How does this make your future brighter for Tobii, or how does this make the future for Tobii Dynavox brighter? Yeah. Like we at least tried to explain also previously, Tobii Dynavox currently stands on very solid grounds. We are fundamentally growing. We have a very solid both product platform and infrastructure. Of course, what this enables me to do is to further accelerate the expansion of what we do. That is in practice meant that we will spend more effort, energy, focus on expanding sales and marketing, creating awareness, educating the world, making our products better and more available out there. That is really what the shift that we're going to. That's why this is not necessarily related to this project. It's actually the reason why the timing is partly really good right now, because this is the position we have reached. Our solid performance through the pandemic kind of solidifies that we stand on extremely solid financial and operational grounds to do that. Full throttle ahead is probably a short summary of that. Good. Mikael Laséen, you want to ask a question? Go ahead and unmute yourself, please. Hi, can you hear me? Yes. Oh, excellent. Yeah. Interesting news today. I had a question on the capital structure as well, just to follow up, maybe clarification. Do you think it's possible for Dynavox to have net debt to EBITDA of around two, three approximately, or is that a bit too much? Any sort of initial thoughts would be great. I think it's a little bit too early to be maybe quite that specific, to be honest. We do need to come a little bit further in preparations. Obviously, again, given the strong cash generation capacity of Tobii Dynavox as a business, if we believe that to be the right strategy and capital structure going forward, it has the capacity to have a reasonably significant debt leverage on that type of business. We definitely believe that there is opportunity and potential to use debt as a tool as part of the optimal capital structure. Got it. I'm just curious about the Dynavox pipeline that you mentioned here in the report and during the call, that it's stronger than or unusually strong. Can you elaborate a bit on what does that mean in total? Difficult to know. You are the expert, Fredrik. Yeah. We have two parallel forces here right now. We have the pandemic, which of course has affected our ability to go out and sell, and meet with our customers. We should remember that a lot of our customers are vulnerable per definition. We entered the pandemic being unsure how exactly do we translate that. It has turned out that we're very capable of doing that. We're still able to meet customers to fill up the pipeline. We also should remember that almost exactly a year ago, we stood there with a bright, shiny new product in our new I-Series, which has continued to win significant approval rates out in the market. This is kind of the platform we stand on. At the same time, we, as many other companies, are feeling the headwinds of the supply chain of certain components. Even though we have fairly low volumes, so we're not as exposed as a high-volume semi technology company. We have, as we have experienced right now, but fairly temporary, slowdown in our ability to deliver products. With these two forces combining, we see that the need and the underlying market need for our products, even during a pandemic, is super strong. Hampered by the fact that we have been, and will be for weeks, unable to deliver certain parts of our portfolio. We can pretty much see that the underlying momentum and the need for our products is really high. It's actually way higher than we've ever seen before. Since we have high confidence in that we will get supply back in due course, that will basically be simply a backlog effect on our books. I feel confident in the longer term, thinking 2021 as a whole. We will have headwind in the Q2 in our ability to deliver those products. Maybe one addition to that could be that specifically in the Tobii Dynavox business, there is actually a, in particular in the U.S., which is about 70% of sales. No comment. There is a particular and pretty lengthy reimbursement process that each of our solutions typically goes through in order for the end user to obtain funding from the insurance company. That process typically takes anywhere from one to four months. Yes. Which means that that's for us sort of the sales pipeline as we see this building up through the insurance pipeline. The size simply of cases sitting in that insurance pipeline, it was exceptionally high at the end of the first quarter. Of course, the reason why it's still in the pipeline is because of some of these supply chain challenges. We're simply not able to ship them, even though the reimbursement process is essentially done. We sometimes refer to as the supertanker effect of Tobii Dynavox, which really is partly what Henrik referred to, that also when we launch new products, the uptake isn't instant. On the other hand, when things like this happen, we can still have quite good visibility on what future and near and mid or long-term performance will actually look like. Strong confidence in that. Great. That's really helpful. Thanks. Have you heard anything about competitors taking market share during this time? Is it the same for everybody? No is the short answer. We haven't heard anything about that. We should also, again, put into the perspective, this is a prescribed product. It's actually quite complex and long process just to come to the point where, okay, there is a decision, there is the right stamp and of approval to make sure that you get the product. It's not that you say, "Okay, this one wasn't in stock. I'll click on this one and get it instead." That's really not how the industry works. Got it. Just a final one on Dynavox. Would be interesting to hear more thoughts on this new law in the U.S., how this will affect you and when. What we're referring to is a specific law, which is almost a continuation of work that we've been doing throughout the years, which specifically then targets users with a diagnosis of ALS in the U.S. In essence, what happens if we roll back the tape a little bit, as Henrik mentioned, the process of obtaining a device could be long. We're not just talking about the one to three months once you basically have a heads up, this is what's happening. Before that, someone diagnosed with ALS, which is a neurodegenerative condition, and sometimes quite rapid, it could still take a year before you obtain the device. We fixed that in the so-called Steve Gleason Act, which we had enacted a couple of years ago and actually extended. Enacted by President Obama, extended by President Trump. We have President Biden who basically i mproves that law a little bit more, saying that as soon as you have a diagnosis of ALS, you should almost be fast-tracked to be able to obtain a communication device like the ones we do for Tobii Dynavox. Don't expect anything to happen overnight, but this is a typical case of the gradual improvements of the reimbursement systems that we are highly active in making happen, but they also sometimes actually happen without our involvement. Great. Can I ask one more question? Sure. Okay, great. Just wondering how you're doing in VR. The market activity, of course, is, I guess, well-known, but the eye-tracking part, and especially within consumer, when do you expect that to take off? Any sort of input on timing would be great. Thanks. We expect the first consumer VR headsets with natively integrated eye-tracking to hit the market next year, and then to grow and expand from that. All right. Thank you. We've received a few questions from Daniel via the email. I'll try to read them here. After that, we'll take Erik's questions. Will Tobii Pro and Tobii Tech be more integrated now or still seen as two different companies? Will Tech still have internal sales to Pro and external to Dynavox and the rest of the market? I think also we can take a question from the chat into that question as well. You're merging Tobii Pro and Tobii Tech. What benefits are you seeing from that? Yep. That's good. Good questions. Yes, we are merging Tobii Pro and Tobii Tech together, and the one CEO and with a cohesive management team. As we mentioned previously, whereas for Tobii Dynavox, we've actually seen as Tobii has grown and grown and grown, Tobii Dynavox has grown further apart. Tobii Pro and Tobii Tech have gone in the other direction, actually growing closer together. We see a lot of opportunity to actually become stronger together between these two parts. There's a lot of customer and customer journeys that overlap, where actually the current structure can be confusing with customers going from one division and then maturing and becoming an OEM customer in the other division, things like that. It is easy that it becomes confusing in terms of understanding the marketing messages. There's, of course, a pretty obvious deep synergy in the core technology evolution with eye-tracking technology we do for the glasses in Tobii Pro, for instance, with the technology that we're developing for VR and AR. Of course, these teams have been collaborating also in the past, but by actually fusing the organizations tighter together, we can kind of put that collaboration on steroids. There's also overlaps in the product portfolio and so forth. We definitely think that it's going to be great to actually fuse these tighter together. This means that we will no longer have internal sales from Tobii Tech to Tobii Pro because Tobii Tech and Tobii Pro will not sort of exist per se as concepts in the future. Rather, we will have different market segments in this business that all sort of can tap into a strong pool of engineering capabilities and competence. However, what has previously been internal revenue from Tobii Dynavox to Tobii Tech will of course actually become external revenue from a standalone Tobii Dynavox to a standalone Tobii. Thank you. Another question from Daniel. You speak about unleashing the power, clearer focus, etc., with the spin-off. Most likely that's true, but what has been the constraints in the current setup that now will be solved? I don't think there is any hard, tangible thing as such. I think the structure that we've had in Tobii Group has actually served us really well. Both Tobii Dynavox and Tobii Pro and Tobii Tech, all of these three businesses, we have given birth to them inside of Tobii. These have been inception initiatives from the beginning. We started with a business that's today Tobii Pro, and then we started what is today Tobii Dynavox, and then we sort of put power behind what is now Tobii Tech. Each of them have grown and grown. Early on, we realized very clearly that actually, even if they have a common origin in eye-tracking as a technology, they actually address fundamentally very different customers, very different markets, who need different solutions and who we also reach through different channels. That's why we very early on created three autonomous divisions, with a lot of autonomy to be able to do that. Of course, we realized that at some point in time, it's actually going to make sense. These are going to evolve and grow where it's going to make sense to actually separate them. That's essentially what we've seen happening, that as time has passed, all of them have grown and grown and grown, and this is now just sort of a natural step to become even more efficient in the organizations. The structure we've had has been the right one based on where we are, but now we're at a stage where the business have matured, and we can become even better. One of our core values in Tobii is beat yesterday, and this is beat yesterday on a grand scale. It's almost like- We can do this even better. The synergies are now so low between Tobii Dynavox and the other parts that there is really no benefit with keeping it together. There is always a benefit in the power of entrepreneurship, in the power of focus, in the power of the entire organization, but also customers and other stakeholders, investors, truly understanding and appreciating a focused, crisp, and clear business. I believe a lot in that, but it's subtle, but very strong and powerful, I think. Quite human. Very human in many ways. Fredrik, can you elaborate from your perspective, what are you seeing as the benefits of getting to stand on your own two feet? Well, if you look on the internal aspects, of course, Tobii Dynavox will have its own dedicated board of directors who will focus only on the matters that matters to Tobii Dynavox. It's, I would assume, quite difficult to have the split vision of the eye- tracking conglomerate that we're running today, jumping from reimbursement in the U.S. for people with ALS to the next stage in virtual reality. That to some degree applies to me and a set of colleagues as well within the group. Because of course, what's happening is that I will personally focus 100%, even though I must say I'm quite focused already today on Tobii Dynavox. As another consequence of this split, we have shared functions today, which are super important for us to be successful as a company. These individuals will also only have one mission, one type of customers, even though you work in a more supporting function. I am looking forward to a slightly more pointy and slightly more focused internal aspect. I think I mentioned the external factors about full throttle ahead on sales expansion. Thank you. Last question from Daniel. Can you comment a bit more on your world-leading IP positions? I guess OEMs like Apple, Microsoft, et c., hold on to strong IPR portfolio. When eye- tracking goes consumer mass market, I guess other OEMs are on the verge to launch new XR headsets, glasses, et c. How would you see your IP position here? Any chance to get a decent IP licensing revenue stream ahead? Do you pursue this? Tobii has a strong IP position in eye- tracking, that's correct. Obviously, as eye- tracking continues to proliferate in bigger and bigger scale, the value of a strong IP position increases. One really important part of strong IP is that this becomes a value to our customers. It's part of our sales proposition to our customers that working with us means that you have a good freedom to operate, and that you're implementing technology that sort of has a robust IP associated with it. This is already today a strong selling proposition for us in discussions and close deals with OEM customers and other types of partners. We also see opportunity for long term for licensing revenue from IP. This is still something that is relatively immature in this market, simply because the market as a whole is still at a very early stage. We already have several licensees to IP, and we have been in processes in the past with partners and competitors around IP that have resulted in licensing arrangements. Again, we're still at an early stage, so it will be quite interesting to see how this evolves and how we are able to capture value from this as the eye- tracking market continues to grow. Good. With that, Erik Larsson, please unmute yourself and you should be able to ask questions. Yes. Can you hear me? Yes. Okay, that's great. A lot of interesting news, of course, a lot has been covered already. If I may, I'm going to ask a few questions on the quarter. First off, you talked a bit about this earlier, regarding the supply chain disruption, I estimated on your estimates there that about SEK 20 million, just shy of SEK 20 million headwind here in Q1. I assume that this is in addition to the SEK 40 million-SEK 80 million that you guided for in Q2, if so, will these almost SEK 20 million also be recovered around Q3? That's my first question. Yeah, it's in the range of SEK 10 million-SEK 20 million in Q1, is an estimate from our perspective as well. That's correct. We do see the SEK 40 million-SEK 80 million to be inclusive of the effect that we've seen in the first quarter. These are fairly round numbers. It actually depends a lot on the exact timing of when we regain full supply capacity to our customers and exactly how that falls around sort of the quarter cut between Q2 and Q3. According to the current status, we expect to be back in supply during the month of June. Of course, how much of that we are able to translate into revenue during Q2 is going to depend on the final outcome. That's why the span is quite wide. The SEK 40 million-SEK 80 million should be considered to be inclusive of the effect that we've seen in the first quarter. Okay. That's super clear. Thanks. Just one more question, really on Pro. You mentioned that the gross margin increase was mainly driven by leverage of fixed costs. Could you perhaps quantify how much of these are fixed and how much is variable? Magdalena, do you want to give a stab at that one? It's a difficult question that is difficult to answer right off. It's fixed in steps. Where you add a proportion of working hours, and then you can leverage on that up to a certain step, and then comes the new step. It varies over time. It's difficult to give a very clear answer. I see. No worries. I was just curious. Just one final, maybe, after this, if this spin-off happens, how much of the internal revenues today goes to Dynavox, and how much will thus become external, say, for the new Tobii? The internal sales from Tobii Tech to Tobii Dynavox is around SEK 45 million a year. Okay, thanks. That's all from me. Thank you so much. Thanks, Erik. Good. A few more questions from the chat. Quite short ones, I think. Will the spin-off of Dynavox happen regardless of whether a future stock exchange listing will be proven possible for Dynavox or not? Not necessarily. We have to be a bit humble to the fact that, of course, we are still early in the preparation for this. The planned spin-off is subject to both the outcome of these preparations, as well as the fact that market conditions also, of course, have to be favorable to do this. The intent is crystal clear, and our plan to do this is crystal clear. Unless something comes in the way, then this is absolutely what we intend to do. I think also the question maybe is phrased, will we distribute Tobii Dynavox even if it's going to be listed? The answer to that is probably not. We will not distribute a company that you will not be able to trade as a shareholder. Exactly. Correct. We would keep it. Should Tobii Pro see a strong acceleration of its business during the second half as the pandemic weans off or weaken? That is absolutely our expectation. Let's move to Tobii Tech. Impact of Horizon going forward. How important is that business, or can that business be? It is pure software, so it should have good margins, right? It is pure software. It has essentially 100% gross margin. The long-term opportunity for Horizon as well as Tobii Aware, and they're sort of cousins, where significant parts of the core technology is the same. The long-term potential is significant. Of course, again, we're still early on the adoption curve. This year, we should not expect a very large impact on the total revenues. Over the coming several years, there could be a significant opportunity. Good. Can you comment a little bit about the competitive landscape for Tobii Tech, maybe around the U.S. military order that went to Microsoft for their HoloLens? I think in general, and maybe if I even broaden the question, if we look for across all of our divisions, both Tobii Dynavox, Tobii Pro, and Tobii Tech, we feel that our very strong market positions and market share, they remain intact and even grow slightly across the board, also over the past year or years. Specifically in Tobii Tech, we have a very strong position, I would say, relative to other independent third-party suppliers of core eye-tracking technology to OEM customers, both in the VR space and the PC space for these medical and education devices, our market position is really, really strong. It does mean that we, in many cases, actually see our de facto main competition to be rather from internal initiatives for eye-tracking development, which exists in only a few cases with some of the absolutely largest companies on the planet. Microsoft being one of them, where Microsoft has actually developed their own eye-tracking technology for the HoloLens headset. Apple being another example with rumors around upcoming VR headset from Apple. It's very, very few companies that can actually afford developing such complex technology as eye-tracking, and frankly, where it would even be rational. Doesn't mean that it's impossible for us to win these companies even as customers, and that's definitely part of the long-term ambition, of course. It leaves us with a very, very strong position towards 99% of all the integration customers out there. Thank you. Can you talk a little bit more about how you see the integration of eye-tracking and brain-computer interfaces into products? Yeah. Far out there. Yeah, that's pretty far out. It is interesting. I think, as a general caution, I think we believe that brain computer interfaces on any kind of meaningful scale is still very far out. We don't foresee that that's something that's going to be in our daily lives in any kind of near term. Of course, there is a potential long-term that brain computing interfaces could become important and relevant, at least, for instance, for certain types of user groups, like on the assistive technologies side. Like for us, absolutely. What's interesting is that eye-tracking and brain signals are actually a great combination. We have already today in our Tobii Pro division, we do have a fair number of customers, actually, that work with different kinds of technology for measuring brainwaves and combining that with eye-tracking to gain a really in-depth understanding of human behavior. Using both EEG and other forms of even brain scanning technologies in combination with eye-tracking. When you know sort of what's happening in the brain and you know what you're paying attention to, that combination allows you to actually understand what the person is really thinking, what information they're processing, what kind of reaction that gives. It's actually a very potent combination. The project that we announced now in the first quarter with Valve and OpenBCI for virtual reality actually also aims to explore a combination of other types of input, including brain signals in VR with eye-tracking. We also have some research engagements on the Tobii Dynavox side. Absolutely. I think it's fair to say that as new technologies emerge, that makes you able to control something, in spite of the fact that you can't control your limbs or your hands, that's super relevant for Tobii Dynavox. Thus far, what we see is exciting, but it's exciting. We embrace everything that will come out and both at a distance or internally. I think it's safe to say that right now I'm not super keen to be the company who implants chips into people's brains. I think someone else can do that for the time being. We will be happy to read the signals and interpret that into a communication device. As Henrik alluded, it's still some time out, but it's by no means a competitive thing. It's actually something I would embrace highly. No, from a Tobii Dynavox perspective, you are actually agnostic to the actual input technology. Correct. Already today, this is sort of a fan-out that happened for us very much strategically through the acquisition of DynaVox Systems back in 2014, where we originally were an eye-tracking-focused company in assistive technology. Today, big parts of our solution portfolios are based on touch interface or different kinds of joysticks or buttons or inputs. Eye- tracking is just one of many inputs. As you said, if we can add brainwave to that equation and make communication solutions even more powerful, well, that's just another tool in Tobii Dynavox's future potential technology portfolio. Exactly. Cool. I think we need to start to round off here. We will finish off with two last questions, that is, Henrik, why are you not going to be leading the new Tobii? Secondly, will your new work, your new duties at Tobii be equally engaging? Or are you going to be more of a family father now, spending more time at home? It's kind of funny. I've shared it internally a little bit. When me and John and Mårten, when we started Tobii once upon a time 20 years ago, we sat at a coffee shop in downtown Stockholm, and we shook hands and said, "We're going to do this." I said, "Yes, let's do it. Let's start the company." John and Mårten, they pointed at me, and they said, "Henrik, you get to be the CEO." I'm like, "Really? Okay, I can be the CEO, but only until we're 10 people, then we'll hire a real CEO." I guess it's taken us 20 years, and I've been clinging on for 20 years, but I really do think that now is an excellent time and excellent opportunity to hand over to two real CEOs, Fredrik and Anand, for the new Tobii side. I think there's always something fantastic that comes from doing things a little bit different and not getting stuck in old tracks, et cetera. I have been CEO of Tobii for 20 years. I'm personally really looking forward to contributing and being deeply engaged in other ways, both from a board level as well as operationally in Tobii. That's going to be a lot of fun. We're looking forward to that. With that, I'm done with all the Q&A. Thank you for listening in. Yeah. Thanks, everyone, for joining us.