Tobii Interim Report following the Second Quarter of 2019 - Seite 2

• After the end of the quarter the Company announced that Anand Srivatsa joins Tobii as the new CEO of the Tobii Tech division.

Comments from the CEO

Sales in the quarter increased 21 percent, or 13 percent adjusted for currency effects, compared to the second quarter of 2018. External sales in Tobii Tech grew by 87% and we have in the quarter seen several interesting initiatives and launches related to eye tracking from important players in the ecosystem.

Tobii Dynavox grew sales with 24% compared with the second quarter of 2018. The increase can be attributed to the acquisition of Smartbox, favorable currency effects and robust underlying demand, but was offset by delays in our administrative process of handling customer funding cases together with insurance companies in the US. Adjusted for acquisitions and currency effects, sales growth was 3 percent in the second quarter and 7 percent for the first half of the year. The value of ongoing, but not completed, customer funding cases during the quarter increased by over 10%, corresponding to about SEK 15 million. I expect that both this backlog of customer funding cases and the flow in our process will normalize during the second half of the year.

Investments in product and market development continue. We have several important products under development and during the quarter we trained an additional approximately 9,000 prescribers, therapists and other key individuals worldwide.

On May 30 the UK Competition and Markets Authority (CMA) announced its provisional findings from the second phase of the investigation regarding our acquisition of Smartbox. In summary, the CMA continues to hold the position that the acquisition of Smartbox may result in a reduction of competition in the UK. On the contrary, Tobii believes that the acquisition benefits users. We expect more information from CMA in late July and work with several scenarios and action plans in parallel.

In the last two quarters, Tobii Pro has delivered strong results, but this quarter was weaker. Sales growth was 1 percent compared with the second quarter the previous year and –5 percent adjusted for currency effects. The second quarter is usually seasonally weaker for Tobii Pro, but this quarter's low sales growth is mainly attributed to an increased order backlog since a larger proportion of the orders consisted of services and larger solutions with longer delivery times. In addition, we saw lower order income in certain geographic regions. Naturally we are not satisfied with the result, but remain positive about the market development and opportunities for Tobii Pro.