Welcome to the first Acuvi Capital Markets Day. Hopefully it won't be the last. We'll have started to build up the company to a different scale and a different type of business. We feel it's a good time to start talking a bit more about what our ambitions are and also to introduce a little bit more of the team members who is building this, helping us build it up. We have a few people in the room here that I would like to introduce before I go into the agenda. Starting with Mikko Vähäsöyrinki, Chief Technology Officer. Also actually the founder of Sensapex, by the way for those of you who don't know him from that role. Then we have sitting next to him, Mika Niemi, so he's the Chief Operating Officer.
Also has a background in from Sensapex, but before that from several large companies. Then we have online, I don't know, you can't see him here right now, but Barry, are you on Teams?
I am. Good day.
He's working with, coming from the TPA side of the business and is also helping us expand our business in North America, plus other things. We have sitting to the right on my side here, Rolf Kohler, who is the Chief Commercial Officer. He is coming from a little bit industry background and some of the people that we're stealing business from in the future. It's good to have him on board. Next to him, we have our Chief Financial Officer, Olof Stranding. Some of you have seen him before, I think. He's been in the business for quite some time now. No gold watch yet, but getting there. Myself, of course, Anders Kottenauer. With this introduction, we stick to English today.
We have Q&A later on, so we take the questions at the end of the presentation. Unless there's something really stupid we say, you can point that out, of course, during the presentation, but we try to keep the questions at the end. Hope you find that we have some interesting things to say. Here is the agenda. We covered the first part. We will do some for those of you maybe who are new to the business, but also can be good with a refresh, really what we are doing, our business model, and what our key priorities are at the moment. Following that, we will cover the markets and applications.
We have some application examples we will go through, some of them quite in-depth, and some a little bit more on the surface, but to give you a feeling for some of the opportunities we work with, but also to hear it from the people who are actually very close to the customers that we're working with. We will have a short break. We'll get some coffee and things out here, and we aim for 10 minutes break. After that, besides the growth that we have in our existing customer base and existing application areas that we're targeting, we also have some growth initiatives that we're driving, so we'll cover some of that. There's another important aspect of what in our change, and that is the go-to-market, how we commercialize our products.
Rolf will cover that in quite a bit of detail so you can see the ongoing expansion that we're doing and explain how we meet our customers and how we close business with our customers. At the end, given that we have done, we're a totally different group now since the beginning of 2021, it can also be good to understand a little bit about the organization and the way we have been driving the integration. It's been a lot of change in a short period of time. Mikko will cover that. Then we finish off with a Q&A. With that, some of you might know this already, but the company Acuvi, we changed name in the beginning of the year.
We have three businesses in it, PiezoMotor, the Sensapex business, and the TPA business. Together, we had a pro forma in 2021 of about SEK 150 million If you look, call it rolling 12 months and similarly, we had a pretty good growth of 30%, compared with the period, 12 months before that. We are targeting high growth. I'll come back to that a little bit later. We mainly have industrial OEMs as customers. That brings us a repeated business. Basically, we design in products, and once designed in, they will usually last quite long, very long in some cases. We also then have research institutes. Mikko will cover that a little bit more.
You can see the type of customers we're working with. We are global. We actually have our products quite well spread out throughout the world. We are in niches, meaning that we are targeting niches that are more or less all of them global. I mean, sometimes you need the size they need to be global, but it's also that the growth opportunities in those niches are really good. We see that we can leverage our business across the world. We are R&D focused. We will cover a bit more of that here, of what the initiatives that we drive. IP is one part of it, but it's also the internal know-how that is really important and something we will continue to invest in.
We are just shy of 70 employees right now, so if you count the revenue by employees, it's gonna be pretty decent in the future here. We have people mostly in Europe, but it's also a team then, of course, at TPA in the U.S. If you look at the core markets that we're really going after today, and in those markets, there are niches. We are not covering the full MedTech market. We're really targeting niches inside those markets. The four that we're really focusing on right now, we can add more in the future, is Life Science Instrumentation. We have a big part of the Sensapex business in that domain.
MedTech, Semicon, where we have a good brand name we have a very good pipeline, and also we are working with some of the biggest customers in that field, basically the tier one supplying into the Intel and similar. Then we have what we call advanced industrial which is a mixed, there's some defense, there's some different industrial applications, and there can be in optics, can be different types of solutions. All of them are markets that have good growth. We also believe, sure there's a recession coming, but these markets that we're in, I think should be. We'll all be affected at one point, but it should be relatively stable. That's at least our current working hypothesis.
We really are a niche player, but we're really trying to use our platforms and scale that up to customers that even if they're big customers, they might not buy huge volumes. And also part of our strategy is really to sell more systems step by step, to capture more value on the core technologies that we have. That's really our strategy, and that's also part of the reason for the acquisitions. It's really scaling up both in terms of being in the market, but also really selling more value per sales opportunity. That's really the focus of what we're driving in terms of the strategy. We have four brands, three brands today. Might add more in the future.
If you look at these brands, you think, what's the purpose of them working together? We're actually targeting the same markets. Most of the applications can vary, but the markets are the same, meaning that we can share both certain technologies. We can also share the approach, how we go to market. For instance, right now we have not invested a lot in marketing. We haven't had the resources. Now we are building up a common marketing organization starting now actually that will serve all these brands and same with the commercial organization. There will be specialists in different areas, but we will share a lot of processes, people, competences throughout the organization. Also R&D is same thing.
There will be specialized solutions, but there are things that we can really share between these businesses. There is a brand value for each one of these businesses in their respective fields. Sensapex, for instance, is really well known in certain parts of the life science domain. Same with TPA in their domains. PM has a good brand value in specific applications in MedTech, Semicon. That's something we want to continue to develop, and we really want to drive also the brand awareness through the websites. We will have a common platform but there will be brand-specific sites, how we push our solutions out to the customers. These businesses are all global in a sense. I would say if you look at TPA is the biggest part of the business today.
That is today very U.S. centric, and there's still a lot of room for growth in the U.S., but we also want to replicate that and push it into, for example, Europe as well. The primary focus we have is and has always been organic growth. The M&A we have done is to really combine it, to make it a more attractive solution for the end customer, and also in the case of TPA, for us also to establish a base in the U.S., which is a really important market for us, for all the products. That said, we are interested in add-on M&A, and it will be added into these sectors that we have here. Could be that we also add in the future additional brands.
I would definitely say that might be the case or will be the case. The idea is to drive according to these kind of concepts that we have with these three businesses. What are we really doing right now that is important for us and for our customers? One of them is that Rolf will cover that later, is really to improve our market coverage. Historically, there has been with the exception of TPA, which is more or less direct sales to OEMs. The other businesses have been much more indirect sales. There has been a shift already on the PM side, and we will do it even more to go more direct, and the reason for that is that the customer wants it.
We in any case end up dealing directly with OEM design teams. Even if the initial contacts go through a reseller, it always ends up in that more or less. There are standard products that we will push through resellers, distribution partners, sometimes for bundling reasons, sometimes can be geographical reasons. Like take the case of Japan, it's very hard to sell directly yourself unless you really buy a company in Japan. There are reasons that we will continue to drive that, but the intention is not to reduce the sale through percentage-wise yet, but not the absolute amount through resellers. We wanna grow both channels. As mentioned, we will expand our marketing capabilities. We have quite an ambitious plan for that ambitious budget for that.
We also have invested in product management, and that is really to understand better the end applications and to really improve our capabilities and figure out exactly the right product configurations for the future. That's something we're investing in. We cover that a little bit more where we have worked on making R&D more efficient, and it's not about reducing the ambition. It's really about getting more, both in terms of time shorter lead times but also more out of the investments that we do in terms of making sure we really develop the right products and deliver it on the right time. That's a key thing that Mikko's been driving. We also collaborate much more in terms of the processes and the platforms, as mentioned throughout the group. We also want to make sure that we really
We have in some parts of the business, we're used to quite a lot of consultants, and we are insourcing that much more. It's not about cost saving. Partly it can be but it's really about controlling the capabilities, the ones that are core for us. Then really where we have spent quite a bit of time on, Mikko will talk about that, is to establish a platform that we can grow from, with this new group. That is anything from processes to IT systems and, also the type of roles that we have established. We will cover that a little bit more in detail. These are really the things that we have been driving and are driving right now, and we'll try to present more details about that throughout the day. Now, if you look at.
I was actually hoping to some degree to be able to present some long-term financial targets here. We will come to that point not today, but hope not too long in the future. I will give you some details anyhow on what our ambitions are and what we see in the market that can give you an idea of how things are, where things are heading, and what we are seeing out there. We have faced throughout this year, we have seen longer lead times for critical components. It has not only affected us, it has also affected our customers. Meaning that we have new products that are ramping up that have been delayed because of that.
We can also see it from shifts of products that are orders from one quarter to the other because there's some or a couple of critical components missing. We have been suffering from that. I think it should step by step improve, maybe for the fact that the overall economy is slowing down a bit. I think also it takes a while to catch up in supply chains in general. We can see the situation in Asia is getting better, but there's still lockdowns in China, which has been impacting us in the beginning of the year and for some specific products has also continued to continually impact us in terms of the delays.
What we can also see that the instrumentation market or the business that primarily Sensapex is in, it was seriously impacted by COVID, but that has now come back to, I would say pre-COVID levels. We can see it's step by step getting back there. Right now it's for us, it's really to be out there and we have really, really good solutions and to push that into the customers. The other thing worth mentioning in the market is that we have the ability to raise prices, and we are doing it. I don't want to give you the exact amount, but in all businesses, we are either continuously or step-by-step increasing prices. We do that, and it's quite high. Some cases double digits.
We have a good situation to manage cost increases that we see coming from suppliers. I wouldn't say they have been extreme, but we have the ability to manage. Looking at long-term growth, I think it's first of all worthwhile to point out that we have three different brands with quite different growth opportunities, mainly because partly because of size, but also the markets they're in. If you take the TPA business, that has been over, you could say 10%-15% type of growth historically. We are investing in sales capacity and other things. Wanna keep a good level of growth on that business.
If you take the PM part and the Sensapex part, that has much potential for much faster growth given the size, but also the good pipelines that we have. On average, we will come back later what we see in the future. What I can say is that we want to grow quite a bit faster than the market, that I can say. We also are in markets with good underlying growth. I think this is good in these times that there is a, besides that we wanna grow faster, we have solutions that in our view makes it possible to grow quite faster than the market. There is also a demand in the market just for volume increases.
As mentioned already, some of these markets are not super price sensitive either, in that sense. There is opportunities to drive top line in different ways. It's also the fact that we are putting emphasis on selling more value per sales opportunity. It's also important to know we have, we communicate, you know, orders on and off. It is not the fact that we don't get orders. We have, you know, orders numbers in the thousands every year. We also have hundreds of customers.
The fact that we don't communicate orders every day is the fact that there might be we can have a big customer buying big throughout the year, but maybe the order value for each time is not that big that we value the communication of it to see that it's important for our investors. We have a continuously good flow of orders. It's very much more transactions than people might think if you look at it from an external point of view. Now, if you look at the profitability, we have proven we will come back to that also in the near term here with some targets. What we have presented that before as part of the acquisition of the TPA business.
We have had over a period of time a very good profitability. What we also know that for the PM part and the Sensapex part, we have very good gross margins, and we also have a very good scale effect. Also in the near term now, we have done quite a bit of investments, and we'll do some additional ones. We have, we're at the point where we know there will be very good throughput to EBITDA level for additional revenue increases. We are good, in a good position to really capture value now. With this, I'll hand over to you, Rolf. Thank you. Talk to you soon at the Q&A.
Okay Thank you Anders for the introduction. Let's have a look to the markets and applications. You have seen already the four fields where we are in, and I think it's important to know the market is big. We are talking about a $3.5 billion market where we think that we can go in. This is really huge for us. What we need to do to be successful, I think we need to focus on applications, and this is what we are doing. We are targeting high-tech applications. All three brands are really in high-tech environments. These are niches. We are in these niches, and we are doing good business in these niches. What we have with the three brands, we have a very good overlap.
All three brands have very different offers to the market, but we are in the same markets. This is very interesting because we can really doing an overlapping also in sales and in marketing. The markets where we are in, this is very interesting for us. They have all a very strong CAGR in the last years and in the coming years, and they are very resistant against recession. We think they are resistant enough for us to also get good growth in the next years. Let's have a look to Life Science Instrumentation. This is a $900 million market for us, and there are different applications we are in, and three of them are very interesting for us. Light sheet microscope stages, where we are using LEGS piezomotor actuators. This is a high-precision positioning of stages.
We have microinjection from Sensapex, so injecting and contracting of cell materials. This is also a very good market for us. A very strong field is digital pathology scanners. You see these are all fields where we need a very high precision, very accurate movements, and this is what we are strong in all three brands. We have a very strong market position, of course in this field also because Sensapex is very strong in that. We can expand our activities in the lab automation technology. For example, TPA is actually developing an automated plate handler. Later, we will see more of that. We have a growing market share in lab automation, diagnostics, and digital scanning generated by PiezoMotor, especially with the LEGS platform we have.
In MedTech, this is really actually a boosting market for us, so we are here in niches because we can be very strong in products for MRI environment. This is again piezomotor. We have activities at Sensapex to enter in the IVF market. This, Mikko will later on tell us about more about that field. We have a lot of other applications, for example, MRI surgical robots. We are going into this field where we can do very, again, very high-precision movements to do surgeries. For example, cochlear implants, so to move cochlear implants into the ear of humans again, on nanoscale. This is very important again, for LEGS products, for PM, and the same nanomechanical tissue diagnostics. These are real applications where we are today in and ramping up a serial business.
The Semicon market for us a not so easy market to go. The requirements of this market are very high. I think we need to do in future investments in infrastructure and the supply chain to cover this really high demand of this industry. You can imagine they are asking for cleanroom production and things like that. If we really want to get into these big systems for these leading companies, we need to invest something. We are already in most of the big, just a few names that we can tell, Applied Materials, KLA Corporation. We are supplier of these companies. For example, in lithography machines, so a very upcoming market. Lithography is you can imagine the most important step in chip manufacturing. Without lithography machines nothing happens in our life, actually.
We are actually working with the two biggest, I would say the nearly only two big lithography machine builders. In one, we are in a project, and in another, we are in serial production already. Again, this is only possible with our high-tech products, with our high precision that we can produce. We can deliver solutions that with standard technologies are not possible. This is one example from the lithography application. We have a strong business here. The two years' volumes have doubled actually, so we are in serial production here for LEGS actuator. What happens here is we are offering a solution for the light source objective, so the movement of the light source.
Lithography works with light sources, and we can deliver products that are enabling these customers to do these solutions. Before they used for example, DC motors for that, but actually, they are going so much down in nanoscale that they cannot do this with DC motors. They need more precise technology. They can use magnetic actuators, of course, but they are very expensive and very big. Our products are very compact, and I would say not so expensive like magnetic actuators. We have here a multi-year potential of over $5 million actually. That is a pipeline that we are working on in lithography application. The fourth market is advanced industrial. We said we are here in, for example, in drones application, testing machines, some defense applications, machine tools, and in general, industrial automation.
For example, one example is the testing robot for touch screens of smartphones. Again, you can test this all what you are doing with your finger, you can test this with these machines. This has to be very automated and high precision actually. 3D printing is a very interesting field actually for us because it's a fast-growing market, and also they need very accurate movements, and we can do that with our products. What we will do in this field also, TPA is very strong in that field, so this is the biggest market actually of TPA in the USA. What we can do that, we can use this strong integrator position of TPA. These capabilities we want to use also in other markets in Europe, of course, but probably also in Asia.
With the Sensapex brand, what we can do in advanced industrial is for example expand the Sensapex offer that today is concentrated on research labs, and things like that. We can expand that to OEM customers, for example in testing machines in industrial automation, where very precise handling movements are necessary. Sensapex will offer their new solutions with an OEM approach. Very interesting for us. Okay. This was the part of the market, and now we will go to Sensapex and look what they can offer to the market.
Thanks Rolf Okay As Anders mentioned, I'm presenting this not just because I'm Chief Technology Officer, but I was the founder of the company, so I still probably know it best out of the new management here. But basically the market we are looking here is or have been historically looking is very specific. It's about measuring the electrical signals from the cells under the microscope environment. That can be thought to be part of the like the bigger overall microscope market, which is a big market, $10 billion, growing pretty fast, like 8% rate. There you have big microscope companies like ZEISS, Nikon, Leica, these kind of bigger players. The sort of the very targeted niche we've been looking at there is a smaller one, roughly EUR 100 million per year or U.S. dollars nowadays.
It's the same thing. Since we started the company from scratch, we had to focus pretty tightly, and that's what we have been really focusing and trying to first succeed in there before we look elsewhere. Now we are ready, as Rolf mentioned, to really look outside these niches also. They are immediate things like OEM business opportunities to motorized microscopes. We have our own microscope products already, but to make OEM applications for it. Also, as you can see from that, you know, the bottom figure there, the life science market in general is only about 1/3 of the whole microscope market. There are also applications in the materials science and nanotechnology side, also in Semicon that we are covering, where the similar products are used in a sense.
From the last, let's say 10 years ago, then since 10 years ago, we've accumulated about 800 customers worldwide, which includes all the best universities. I'm not sure how many Nobel Prize winners we have nowadays as customers, but I can name more than five for sure who I've met myself. We are really like, you know, had the privilege to work with the smartest mind in the world, and that's really interesting. Now it's the next step to see how we put that to the bigger volume applications in a sense. We developed something that is like really high technology that enables you to do advanced things, but there's lots more other things in the market that again where we can apply the same things, and that's where we are going next.
If we think about our products and applications, all the Sensapex products have been based on their own technologies. The type of things we needed that we developed the basic technologies in-house. There are patents for all the core features of the products and the platforms we use there. The main application historically and still for the Sensapex standard product is to record the electrical activity of brain cells. The brain cells are roughly like 10 micrometer in diameter, which is 1/10 of the diameter of the human hair, basically. You put the small needle there that is less than 1 micrometer. The cells are super floppy, so it's really important you get there precisely. When you get there, you don't want them to move around between each others.
The biggest and most important performance feature we've always had is the stability. When you put the needle there, it has to stay there for one hour without moving. That's how we won the business originally, and that's really the still, like, the really good performance feature that we have. More recently, we've expanded the whole complete system offering for the customized microscope, some other products around it. Unfortunately COVID came in between just when we piloted that to the first customer, so now we are starting to relaunch that to the market. The, you know, the university was in the lockdown during the COVID periods, for example. Now they are open and we can activate really there.
This is a really good opportunity also for us to increase the revenues in a sense that we can increase our mean delivery price quite a lot, going from just one product that is part of the system to more complete offering in a sense. We've started now activities as part of the like the common Acuvi commercial organization to really start to push the OEM applications to the market. This is also important for us to grow the business. Now I'm gonna show the like a roughly one-minute video that just gives you an idea how these products look like. Let's see, after the text disappears. Basically all the things that are black here are Sensapex products. There's a microscope stage where you would put the sample there.
Like, the small towers around it were the micromanipulators itself. We have a control interface that has a touchscreen controller, some wheels you can rotate around. The microscope lens is motorized and automated in a sense, so you can change the lens when you want to look at the, let's say, higher details in the cells instead of just browsing the area. There are many of these kind of unique or really useful features, like you can dip the lens bit deeper to pull the water column, which you need to do to be able to see the cells. Do this manually takes quite a bit more time. What we can basically do here is that we can, in a very precise manner, move the sample around the focus plane or what the camera is looking at.
We can move each of the needle where we want in that working area. The same unique characteristics sort of happen throughout the products here. They are all very precise. They are fully integrated. They can be controlled through the one interface so that we can really offer system-level features to start automating things. Instead of doing things manually one at a time, you can press a button and really run like a small automated workflow to make it fast. We have partnered with this product with Nikon, which, you know, we get optics from them and some microscope parts. They are also our reseller for the business, and that's a really interesting partnership we are looking forward to develop further. Let's see. The automations are really something, sort of a theme for us as a company.
Of course, we are really interested to sell the standup products to more typical applications, but I think the automations are also going to be important for these application areas. The reasons are that to do this recording with the small pipette from the small cells, it's a really difficult task for a human to learn, and then it's really slow also to perform. When you automate these things, you can really increase the throughput, and that makes these type of tests also more interesting for pharmaceutical companies, for example, because you get to the scale where you can get the data points fast enough. The applications we are looking are not only these electrical recordings but also microinjection.
There are also things in the more in the genetic space where you pick the cell, and then you sort of check what kind of genetics it had inside it. We piloted this now just before the COVID and during the COVID time with some customers. I think we have, like, close to 10 pilot customers who have these whole systems now with the motorizations and the automations. The results have been very interesting and promising in a sense. In this picture you would see the. If you know what to look at here, two needles there. They are roughly like one micron in size. If you put the human hair here, it's like a size of the whole gray area there, basically.
In one application, there's a customer in the U.S. in one flagship institute, and they are screening for new genetic tools for the cells. It's important for them to be able to record the electrical signals and do some image analysis at the same time pretty efficiently. We did a project for them where we automated the ways to put the needle automatically to the cell to do that recording. The results there, what we achieved was that we get about 10 x higher accuracy for the automated needle positioning in a 2000 x bigger sample area than what they had earlier from some research studies. It really shows that we sort of have a really strong platform to automate things, these things going forward.
There's also another application we've been automating a bit, which is that when you record these cells, you have to change the pipette after each cell to go to the next one typically. We have some new method and some patents for it that you can reuse the same pipette by cleaning it automatically. If you record from many pipettes, it makes a big difference, and there are some publications out there, actually one of our customers, where they saw that they can get 74% increase in the throughput in these type of experiments. We think that these kind of new methods are emerging in this market space also that will help to increase our product business in this segment.
Also these automations that we do here are among the most difficult ones you can do. These can be applied to many other things that are not as demanding in a sense. That's also where we see lots of potential. I think that was it. I think it's then Barry.
One more. Next slide. You can go back one. That's fine. Yeah, that's good. The welcome and good afternoon. Welcome from Charlotte, North Carolina with TPA Motion. We're a 20-years-old company, roughly actually 21-years-old company that has cut its teeth in the linear motion industry. We primarily segregate our business into specials and standards, but our specialty is really in the special products. We do sell standards however, we basically sell those as somewhat boutique products. In other words, people that want something slightly different or slightly modified. We try to stay away from straight commodity markets as much as possible. The first example here I'm gonna talk about is actually a job that we got in through a referral.
Most of our marketing is through the web, through web and referrals, and referrals has been a really strong part for us. This was a designer came up with a concept for basically for. It's a three-axis plate handler for inspecting subparticles in basically IV bags. It's turned into, as you can see, a multi-year potential of SEK 8 million. We're currently at that pace, and it is a complete special, and we lock ourselves into this business. The business is either through IP or through, in some cases, patents. We form a strong partnership with the companies, with our sales customers.
This is a case that one of the cases, a real big case of our success. Next. Similar to that is another plate handler, and you're gonna hear the theme of plate handlers through ours because we've got them around the world. We ship our largest shipment of plate handlers goes to Singapore into a Thermo Fisher application. And our sales are quite large. It's the second-largest customer that we have. This case here is another similar case to the one previous. Covaris found us. They sought us out through the internet, and we've designed two separate systems for them. Basically, both are based on plate handlers. However, there's a lot of specialty in this.
I didn't add that in our business, we have slightly over 50 years of linear motion expertise and about 15 years of electronic expertise with Todd, and we pretty much can design around any kind of corners that customers will give us. We focus on products that are difficult to fit that require odd environments, that require very strict precision and repeatability, and that is how we won the Covaris business. It's looking as a strong business going forward, and there's more applications at Covaris to be won. Next. The last, this kind is grouped together, the last slide that I'm gonna talk about is what we call advanced industrial. Advanced industrial includes military applications.
In the military arena we don't work on any kind of defense products like missiles or anything like that. We're much simpler than that. We've carved a niche for heavy-duty drawer slides. Basically, they're slides that would go underneath artillery in ground equipment that would allow maintenance to service in the field. In the past, if you look at the Patriot missile program, if you look at our previous tank generations, it was very difficult to service equipment. To pull things apart, a lot of times they'd have to run the equipment back into a service bay hoist it out, and so on and so forth.
Now with the heavy-duty slides that we supply to them, and that is becoming a standard in the military market, they can easily pop a couple bolts, pull the unit out, and service it right in the field. This is a trend that's not just occurring in the U.S., but this is occurring in defense equipment in Europe, as you probably well know over there. It's quite a good marketplace. The multi-year potential for those types is SEK 10 million+. I skipped past the top. The top, we also, as I spoke briefly about it in the previous slide, we get into high-temperature slides.
In this case here it was a glass-making equipment, and it went into glass-making equipment, and it basically has to sustain. That's actually it should be 250 degrees Celsius, but that's okay. It's basically around 550 degrees Fahrenheit continuous operation. Prior to us working out the solution, the company, and I can't use their name, was basically having to replace units every 41 production days, and literally cost hundreds of thousands of dollars . We, as of current, the slides that we designed and are sold into this application now, it's been five years and we've gotten back out of probably close to 3,500 pieces, we've got back like four that failed. It's been a phenomenal. Originally, they said they wanted a three-years warranty, a three-years guarantee on them.
We said, "We can give you a three-years guarantee." We couldn't give any more, but it's gone over five- years. We actually ended up giving more than we probably should have. It's a fabulous story for us. Next.
Thank you, Barry.
I think the first one is, if you go to the
Yeah, of course. Yeah
Next one.
Yeah. Other one. Okay. Thank you very much. Barry?
It's your turn. Do you want to talk about it?
I think yeah I think Barry will then talk about that, but I just want to point out here that it's really great to have TPA in our group actually, because the colleagues in USA, they are really strong in doing system integration. So they are the typical system integration company that PiezoMotor and Sensapex can learn a lot from them. So we will really appreciate in future to have more competence of TPA in our group. Now, this is one really good example because I can tell you in my past every salesman was eager to be in that surgical robot. Every. With each component. There are a lot of components here in this surgical robot. It's the most famous surgical robot, called da Vinci, in the world, and Barry knows a lot about that.
Yeah Thank you Thank you, Rolf. I'll pay you later for the endorsement. This is another interesting case, and this is where we fortunately used our engineering prowess and our partners in this to solve this issue. The customer needed a way. If you can see, there's four arms on each one of the da Vinci robots. For those of you that aren't familiar with a da Vinci robot it is they are the largest robot manufacturer in the world.
They're one of the largest users of ball screws to drive basically, if you see the four probes, to drive those probes into a like a thoracic section of the body that they are the largest consumer of screws for those applications. Matter of fact they're one of the largest users of screws in the United States. Anyways, the customer needed a very special screw. It had to be bi-metal, non-magnetic on part of it where there was gonna be a motor and basically the other part a bearing grade magnetic steel, magnetic version steel. With that, it had to be corrosion-free.
It had to have a back drive of less than nine newtons with the motor in case a failure occurred and the backup system broke and so on and so forth. There were specification after specification after specification. Everybody in the marketplace was after this screw. Anybody that was making miniature screws was after this screw. We won this because we offered the best technology, and we offered the best solution. This business has been going strong for six years, and hopefully it'll go for at least another six years.
We very rarely ever have a return from this for a return of a damaged product, and if it is, it's typically from being applied in the factory. That's probably all I have. Thank you, Rolf.
Thank you very much, Barry.
Unless you got something to add.
I think you know this is really. We have seen a lot of applications now and you see we are really becoming a very, very technical company. It's really amazing to see in the last two years to what our group has grown actually, you know, and we are really proud about that, to have Sensapex, to have TPA. We are entering in new fields now, and surgical robot and surgical instrumentation is one of these very, very interesting fields for us because all the things that they need we can provide, and this is something that is, it's a huge market for us actually. For this is one example that is in series actually. It's a MRI surgical miniature robot, so you see that in the circle.
This is in fact a miniature surgical robot. You can place this in every MRI field, so this is MRI capable. You can. We are using LEGS, PiezoMotor LEGS motors that are non-magnetic. In fact, there are also applications where they are doing surgeries in vacuum actually also. This company that is doing that is also doing testing that in vacuum. This is very interesting. It's a $1 million turnover in multi-year potential. It's still in series with low volumes, but we hope to have getting bigger volumes in the future. This is also an interesting case.
What this company is doing, they are doing a nanomechanical tissue analysis. You can imagine they take tissue out of our body, and then they do with a lever, they push the lever on the tissue, and with the force that the lever gives back, they can then, through a software, analyze the tissue, and it's used mainly in cancer diagnostics today. Just to give you a figure, normally you have to wait one week to having the result of a cancer diagnostics. With this system, you can have it in a few hours, 30 minutes to one hour. This is a very groundbreaking technology, and also here we are really proud to be in, and this is only possible with the technology that we can provide to the customers.
This for example here it's a startup company, and without our product, this device would not exist. This is very interesting for us. Here, as a similar thing, you can imagine here in this case, you can implant cochlear implants, so they are implanting, for example, synthetic nerves into the ear with surgery systems. Here they are using nanoscale movement with piezomotors. Nanoscale precision is very interesting in the field of surgery you can imagine so the surgery is becoming more and more precise, and it's automated. The surgery is automated.
You have seen it with the da Vinci robot, but there are other instruments that are used in surgery to make the surgery faster, to make it more precise, and to make it more healthy for the people that needs a surgery. Okay, that was the first wave of applications.
Next Yeah Thanks for taking a 10-minutes break. Try to be back here then by, let's aim for 3:00 P.M. or just about yeah, let's say 3:00 P.M. I think there's some coffee outside, right? If I'm not wrong, or maybe something else to drink. Thanks for that. See you at 3:00 P.M. then.
Let's have a look to our growth initiatives. I think it's very important that we plan how we do our growth, and we have developed some growth initiatives. Very ambitious, I have to say actually but I'm sure we will tackle that. We have three parts of these growth initiatives: commercial expansion, product platform expansion, and application initiatives. In the commercial expansion, what we want to do is increase our market presence in USA. I think this is very important. We have a huge potential there with TPA, but also with our other brand products. Sensapex is quite present in USA with resellers actually. PiezoMotor is not so strong in USA, so we have a big potential there for the market expansion. What we also want to do is, of course expand our presence in Asia.
I would say we are not strong in Asia, actually. I think it's about 5% of our turnover, so very very small actually. That means there is a big potential for growth. We want to expand the OEM, we have mentioned that before, for Sensapex OEM expansion. Go globally to the OEMs and sell Sensapex products and solutions. All what is TPA Motion solutions to bring this to other markets. This is what we're doing in the commercial expansion. What we do anyway is improve our direct market coverage. We want to go direct. I think, we will see later on what that means for us indirect direct.
I think both channels are important, but the direct market is so important for us because we can learn by working with the OEMs, we can learn about our markets, we can understand what products we need, what solutions we need for the future. In the product platform expansion, we have the ultrasonic motor, a new ultrasonic motor product line. Probably most of you know our concept that we had for Link. We started this many years ago, I think PiezoMotor, before I'm in PiezoMotor, they started that. Based on this concept, we are now working on a new ultrasonic product line, a completely new one. We are working now on this to understand what the market is, to understand what technology can we use.
This technology can be used in a lot of applications actually, in many applications in life science, in MedTech, and also in industrial automation, for example. It can be also used, also very famous, I think, within PiezoMotor in the mobile phone market, for example. This can also be used there, downsized to very small ultrasonic applications. On that we are working strongly in R&D actually. The automated plate handler. This is something that we will see later on in detail from Barry, it's his team. We are also working on precision linear stages. This is an interesting market for us because we have all the parts that are needed to do stages. Often stages are used everywhere at Sensapex, TPA is using stages. PiezoMotor often components are used in stages.
The idea was why not do ourselves stages and attack this market. We are working on a new motion control platform. I think this is very important because all our products, TPA, Sensapex or PiezoMotor has to be controlled. Without a controller without a driver nothing works. We need a very good motion control platform, and this is what our R&D is working on actually. I think very important here is on the product platform why do we develop these products? We actually develop these products to enhance our system capabilities. What we want to do is put together all these components and deliver complete system solutions to our customers. We have the application initiatives. One of them is the surgery instruments and robotics. We have seen a few of the existing applications actually with very good business for us.
We see that this is business that will bring recurring business in the next years. The question was why not expand this? Why not expand this capability that we have built up now to new fields, to new niches, and there we will do an application initiative and working hard to bring new customers of this field in our portfolio. The EVF product offering. This is a very interesting field that Mikko will explain to you later on a little bit more in detail. This is a very interesting and big market for Acuvi. Semicon, you have seen some of the application. We have talked about lithography. There are many other niches where we are not in today, but we have all the capabilities, we have all the technology to be in there.
As I said before probably we need to do a little bit of investments in infrastructure. Probably in future, we need a cleanroom not only for semicon, probably also for medical. All these things we need to do, we need to improve our supply chain to adapt our offer to the semicon customers. What we can do in the application initiatives, we can leverage the existing technologies and capabilities to enter in new high growth areas. Okay. I give to Mikko for the EVF.
Thank you Maybe first, a couple of quick words what this term means. I think this is quite commonly known in the other markets, especially because there are also some Swedish players in this market space. It's basically their in vitro fertilization or IVF market. In total, it's very big. It consists also of the service providers, the different kind of you know, the media providers, consumables, and these kind of things. What's most interesting for us is the instrumentation part of it, which is basically the equipment that you use in these labs.
It's roughly about $1 billion per year, the whole instrumentation segment. Now this market is very interesting and quite hot because it's riding on one of the biggest mega trends in the world, which is that, you know, the people are getting babies older than earlier. This often means that they need these, you know, treatments to succeed in getting pregnant. Also, single parenthood by choice is driving this bit. Very importantly in, at least in some countries especially, the patients are also getting more aware of these treatments, and they have access to that because the insurances are starting to cover the treatments, for example. So this is really booming and increasing. Thus, the current, like, third-party market reports indicate that it be something 8%-9% growth over next 10 years.
I don't think this trend will end in the 10 years. It probably will continue quite a long time from now on. The thing that we are specifically looking at is the ICSI procedure, which is basically where you capture the egg cell with one pipette, like the blunt one, and then you catch the sperm with the sharper needle, and then you inject the sperm directly inside the egg. That's very similar application environment to the existing Sensapex business. You have a microscope where you put your sample, then you have micromanipulators that are moving the needles, and you have microinjectors that are controlling the pressure. This is obviously something why we are also interested in that, because it's close to what we do.
The second thing that has been really coming into this application area and that is growing is the genetic testing of the embryo. Not only are these devices used in the injections, but there's the sampling that you take, for example, from five day embryo. You take bit of material, and you run some genetic testing to see, for example, if there's some chromosomal abnormalities that would reduce your chance of, you know, having a healthy baby, basically. This is coming up, and you can basically use the embryos that are good and give you the good outcome. Many companies are entering in this space at the moment. It basically means that more you do the sampling, more you also need this micromanipulation and injection systems because you use same devices to do the procedure.
What is also happening is that the market is consolidating both in terms of the delivery content, meaning that the companies are delivering bigger packages. The customers don't want to buy equipment from different places, but buy more complete packages. Also, the clinics are consolidating. In Europe, the private equity players have started to consolidate the market a bit for the service providers, for example. Now, if we then really think that what is the market where we focus with our new product offerings, it's really these micromanipulation and injection system setups with the microscope, micromanipulators, microinjector, some you know the sample holder that is heated, these type of things that we've been doing in Sensapex business actually already for quite a while.
I've been personally following this for, you know, as long as Sensapex has been around because it's another main application area where you use micromanipulators in life science. It's also, you know, somewhat different segment, and we had to focus on something first. Being smart now afterwards, one would of course, you know, kick own butt a bit and think that why didn't we go to this bigger and more lucrative one instead of the electrical recordings? I'm scientist by background. I happen to be doing those electrical recordings in past as a neuroscientist, and that's why we got there. This is of course something that is very interesting. Now we see that as, with the wider shoulders, we can really get here. It's not only about making the product, but also having the commercial abilities then to penetrate that market.
The estimates we've seen is that this is roughly like SEK 250 million business, not only for the IVF, but other type of micro injections that are also done in the research settings with the similar hardware. With the IVF side, the customers are mainly hospitals and clinics who provide these services. For the research applications, they are bit similar labs as what we are serving with the existing products, but more doing things for the gene editing stem cells, single cell research, these type of things. I should say that this, especially gene editing technologies, is really booming also. There was a Nobel Prize a few years back for the CRISPR technique, for example, where you can edit the genomes for the cells, and that's really growing fast. Now, I'm not gonna cover much details today.
Maybe we tell bit later when we are further with this. The basic idea here is that, you know next year third quarter, we should come up with the product launch to first do the research application space. That's the area where you don't need the medical certificates, for example. You can offer the similar products, but the tailored versions for these type of applications. In practice, it means developing new product variants that are based on existing Sensapex products and technologies. Just tailored for these applications. They need bit different kind of user interface, bit different kind of, let's say, feature sets. That's something that is technically pretty straightforward but requires, of course doing it. We will bundle these, our own core products with third-party things, for example, for the microscope.
One of the companies we already work with could be a good partner to put the microscope to that package so that we can sell the complete microinjection package to these customers. Where we see our main advantage is that we really have a higher technology and performance than the existing players for these devices. We've been doing a bit more demanding things than what this application as such is from positioning performance. Of course there are many different things for this application that need to be done very well. From the like, the technical perspective, we can bring some new technology and performance.
What we can also do is that now that we have complete integrated systems in our own architectures, we can start to work on the automations. Put some feature there that instead of operator doing the hard thing, you know, him or herself, we can automate that thing and make it more efficient. For the sales and customer support, we are gonna do it mostly through the partnerships, at least to start with because we need to be able to serve the customers globally. The good news is that we also already work with many of the suitable partners for this for example microscope companies. We think it will be quite interesting for our current partners or good news that they hear also after today that we are really going after this.
Commercially, one very interesting feature of this market is that for this injection and IVF applications, the similar micromanipulators cost more than two times than what they cost in our current research business. That means that you know there are really good margins available there when we just meet the market price point with the good technology we can provide. I think longer term our vision here is also to try to automate the ICSI technique, also for humans. I mentioned a few words earlier that we have already this automated microscope platform where you can move the sample and the needles based on the camera image very accurately. We also have ways to control the pressure very accurately as part of these applications that we are addressing for the electrical recordings.
We have in a way validated building blocks for that. Now to automate the actual application is still a different thing, but at least the basic, let's say, engineer parameters we can produce, we can put the needle there, we can control the pressure in a way that's needed, and thus, we have a really good starting point for that purpose. There's a possibility to do this in phases. We can start from the research applications in the microinjection side. When it's working, maybe it's not full automation, just partial automations, we can start to put those to the market and start to really make money with this, you know, value-adding automations. In the end, we would aim for automated boxed IVF system, but that's still a bit further away for many reasons.
I think we also have to be responsible as a company that, for the human IVF, the samples are highly valuable. We really want to make sure that our things are working robustly in the field before we put the products into that application space. There's a good business to do already before going there. I think we also see that while we develop these kind of things, we are most likely going to find new opportunities also for some consumable business. For example, how to deal with the samples in these applications or with the software. There's lots of activities going in the software side for the IVF at the moment. Let's see if we find partnerships or we do some things ourselves, but I think it's something where we most likely find something to offer also to customers.
We are also looking or monitoring if we can find some interesting, M&A opportunities related to this application space. I think we would be looking at the things that help us to speed up our market penetration or add something unique to the offering. This is something that we are also interested in. I think that's what I had to say about it today. I think it's for Barry. Do we have Barry online?
We have Todd.
Todd. Sorry, Todd.
Yes, Todd's here. Hello, everyone. I, you wanna back up just one slide? I think there's a kind of a introduction just slide here. We're gonna, I just wanna review with you, just another initiative that we have here at TPA, and it's related to this automated microplate handler. You can go ahead and go to the next slide. The first application I really wanna talk about is something Barry alluded to earlier, which is this automated microplate handling device. The instrument that you see is currently available, you know, in the market, and inside that we supply a three-axis robot. The instrument itself is used to just position the samples inside the instrument.
For us, this is some really good business. We've delivered 3,600 units so far, you know, these are scattered all over the world. They, you know, the customer is using this for basically they call it forensic DNA analysis. You know, they came to us, and the company had developed some really interesting technology a number of years ago and had commercialized it as in this machine that was probably the size of a small car. You'd find this in like a state crime lab or something like that to do DNA analysis. They commercialized their technology for maybe 20 to 30 years that way.
They decided to miniaturize it and take all of that technology and fit it into something the size of, you know, an instrument that would sit on your desk or a countertop. With that came a lot of challenges with the robotics that go inside the device to take you know as far as just functionality, you know, achieve the travels and the precision, but then also fit in the really, really small space. That's where the opportunity for us at TPA came in, was to you know solve all of those problems for the customers. We developed that.
This was kind of one data point for us, and it's you know, a significant part of our business that we manufacture here. You know earlier in the presentation, Barry talked a little bit about Halo Labs and an instrument that we built for them. It was very similar in that this company had developed some intellectual property around some optics that they and a way of image processing so that they could analyze small particles. They're really, really good at that but just the XYZ, the robotics that go underneath that to bring the sample to it, and their sample happened to be the size and shape of a microplate.
They came to us to kind of design those robotics. The other application that Barry had discussed a little bit was Covaris. In a similar, that company processes samples for, again, DNA analysis. It's a different DNA analysis process, but their artwork and their expertise has to do with ultrasonics and how they can use ultrasonic technology to shred DNA into very consistent pieces for that further analysis. Again, they needed an ultra-compact.
It was a very awkward set of space constraints, and we were able to, you know, to step into that application and provide the motion with, you know, with the water that they were dealing with, because they had to have water with the ultrasonics and so forth. These are three examples we've given, but there's been four or five other customers that we have that have similar applications where they're basically handling a microplate. After designing six or eight solutions for these different OEM customers, all really doing the same thing, where they have a microplate with some that they need to carry around inside an instrument, and they're trying to monetize this intellectual property that they've developed.
In addition to that, there is we've had six or eight applications that we've turned down and you know declined developing a system for them where, you know, basically because they were too small, you know, not enough volume. From those we've I guess the best way to say it is from this collective voice of the customer saying, "These are things that we need, and these are the requirements we have when we handle these microplates," that we kind of conceived the idea of, "Let's try to build a standard microplate robot that can meet the majority of these applications," where there's, you know a certain set of precisions that they need.
There's a certain set of envelope requirements and other features that go with that. We've developed basically a platform or a standard robot to attempt to solve a lot of these applications for the market. Currently, we're in what we would call a beta test mode, where we've designed a thing, we've done quite a bit of testing on robustness. We're working through design for manufacturability-type issues and so forth. We're pretty far down the path. We've got a few more things that we're working to before it's fully ready to launch. We've had tremendous response from the market.
Right now we've got eight customers that are kind of beta test. We're adding about one beta test customer a month. You know, if all of these customers you know, bring their instruments to market, you know, you're looking at somewhere between 50-1,000 systems a year that each of those companies represents. We just consider that you know, really significant that we've gotten this much interest with almost no marketing. You know, the people are hunting us out for it.
Another very encouraging thing about it is that it is global, is that we kinda expected. In the U.S., there are a few hotspots and northern, southern California and the Boston area are kinda hotspots for instrument development. The interest that we're getting is global. Some of those beta customers are actually located in Europe. It's exciting to see that as well. We kinda expect that probably in about six months we'll be ready to fully roll it out and actually begin to promote and push it into the market. If, as we do that in the U.S., we'll follow up with Europe shortly after that.
You know, we kinda say here the volume potential is in the thousands. It's easily in the thousands. I think it's actually, you know, it's quite large. Next slide. You know, this is just kind of an image of the product itself. It's an OEM component. It gets buried and gets hidden away. We've identified, you know, three, kind of three customer categories that, you know over our time as we've been kind of investigating this. You know, the first is the large OEM customers, and, you know, these guys are going through kind of a make versus buy.
You know, most companies like to buy. If they can buy it, if it's available on the market, they'd rather buy it than reinvent the wheel. Sometimes they do that because of costs. One of the benefits of having the standard product is we think we can drive the manufacturing costs down to a level where we can make it for less and profit from it, and still offer a better value than they can get if they just engineer it themselves. There are these medium-sized OEMs, 50-200 instruments a year that they build. These companies tend to have some engineering resources, but they would rather deploy those elsewhere in developing their technology.
For example, Halo would fall into that category. They have quite a few engineers, including some mechanical engineer that could design these kinds of things, but they choose to outsource it because we have just better technology, better experience. We can make it, and they can just offload that to us. The last group are the tech startups, and these are the most interesting. We actually think about half the business will fall into this, where these companies, especially you know, in the U.S. and around the world, is that you have MIT and Cornell and these other universities that are developing very unique technologies, you know.
These guys call us, and they have some type of IP around some microscopy or biology or chemistry or something of that nature. They’re really good at that, and they’re really excited about that. This robot thing of how to get the sample to that point of work where their microscope can do its thing, and that's where they really struggle. You know, these even though the volumes are small, they're very easy. They take the off-the-shelf product. We sell it at basically list price because the volumes are smaller. There is a lot of them. There are a lot of guys trying to commercialize different types of technologies and so forth.
We just see a lot of profit coming out of that segment as well. I think that's kinda all I have, and I'm not sure who's next, but. I'll be around in the Q&A if you have any questions.
Thank you very much, Todd.
All right.
Now we have seen, or you have also seen all this, the homework that Acuvi has done in the technology space. We have the technology available. Now, the big question is, how do we bring this amazing stuff to the market? For that, we think we need to do a commercial expansion. Otherwise, these really good things that we have in the group will just go to a small part of the market. How do we want to do that? We have actually a quite complicated channels how we sell today our products. This is due to the different brands, of course. If we start at Sensapex, you see that there are actually three different channels we are selling. We are selling through indirect channels that then are going to the research institutes.
We are also going directly to the research institutes, and we are also going directly to OEMs. This is all the three channels that we could use is Sensapex is using. We have to fill in all these channels, actually. PiezoMotor is also doing indirect sales. Again, we are going through resellers, and the reseller is going to the OEM. We are more and more also doing direct going to OEMs. TPA Motion today is going directly to OEM. It's clear why, because they are doing systems that are customized, and this is the only way you can sell this. I think this is important, so we have to stick on this multiple go-to-market. We need all these channels. What we need also is a close customer support.
You can imagine sometimes in indirect channels, this is not so easy because we are not directly involved sometimes in the OEM customer support because the reseller is doing that. That means we have really to look to have very good resellers. We think actually that our primary setup will be direct sales. Direct sales, we think this will be in future 80% direct sales. Direct sales is the best way to go. You can also imagine that if you go through resellers with our high technology products, we are not selling just simple components where you can use every reseller you want. We have high technology components, and you can imagine if the reseller sells our high technology, he wants also to have a quite good margin himself.
That means the customer will always pay this add up from the reseller, and that means just we can. If we do more direct, we can also do better margins, actually. This is quite an easy calculation. What we can do with these different channels also, we can create in scale for customers and for Acuvi by using these different channels, because sometimes the customers want to go through resellers because they are used to because they probably buy other things from this reseller so they want to have. We have big OEMs that they want to go to reseller. Other OEMs, they want to go direct because they want to talk more about technology with us. I think this is important.
We can give the support that the customer needs, and we can decide ourselves what is the best way for each product, each brand to go to the market. Indirect, direct, this is interesting question. 2020, this was only PiezoMotor actually. In 2020, PiezoMotor has done 30% direct and 70% indirect. Today we are at 60/40, so we have completely changed this picture by doing more direct sales, by going more directly to OEMs. The aim that we have is to have 80/20, actually. This is, I would say, in our business, we think this is the normal way we need to do business. The 20% will be a hopefully huge part of our big business that we'll do in future, and 20% is not.
We need to look to this 20% also. We need to have people that are also working on the indirect channels. How do we want to make this growth very fast? You have seen we have now a strategic period of three years. In three years, we want really to scale up the business with Acuvi. What we need to do, we need to strengthen the OEM business. We need to go to the OEMs. We are doing that. With TPA, we are doing that. With PiezoMotor, big part today is OEM, and we will do it in future also with Sensapex. What is if you are going OEM, that means you are more customer-centric. You are really knowing the customer you are knowing his problems, you are knowing the application he needs, you know the solutions that he needs.
This again brings us to the focus application. We need to be focused on the applications. We need not so much be focused on our products and our markets. We need really to be focused on the applications, to understand what applications can we fill in with our technology. To doing that all, we need to go direct to OEMs, because this is the best business you can do, because OEM business means you can do recurring business. Normally, if you are in a machine or a device, this is for 10 years today in the OEM markets that we are. If then the customer is doing a new design, normally you can jump in directly. Sometimes you do not have competition on that. This is the OEM business, very important for us.
All these elements will give the accelerated organic growth for Acuvi. Now, how we want to do that? Today you see we have the headquarter here in Sweden, PiezoMotor production in Sweden. We have Sensapex in Finland with production and also with the whole customer support. All the things are also in Finland. We have created Acuvi GmbH in Switzerland, where we have centralized the whole global sales and marketing activities. We have TPA Motion that is doing this engineering, most engineering production, doing the system integration. You heard from Barry, they are doing much, most of their activities in the market are through web. This is very interesting for us. We want also to learn from TPA how they do that.
We will also expand these activities where we, in the past, at least PiezoMotor has not been so strong on that. We have some strong distributors. In USA, we have a distributor. In China, we have the distributor. You know, we are working with FAULHABER. FAULHABER is the strongest distributor we have. Actually, in PiezoMotor is FAULHABER. This is quite strong in Semicon. We have also in Japan. You see, this is not so much today. What we want to do from today to 2025, we have already started to do this expansion. We have expanded, for example, the global sales and marketing. We have added people for marketing, for product management. We have two salespeople that are now working globally. All these people are working globally.
This is important. These are set up in Europe today. We will do the same in the USA. It's planned to work now on the commercial setup in the USA. You know there is a big difference between western part and eastern part. Western Coast is more Semicon oriented. The Northeast is more Life Science and medical oriented. We will try to build up something also in the USA, always with the base of TPA Motion. In Asia, it's a little bit more difficult. In Asia, we have only, I would say, two strong resellers today, 5% of the business, but this is a very important market for us in future. We need to be more close to these customers in future, in China, in Japan, in South Korea, but also in the APAC and Asian region.
The plan there is to build up a good reseller base as starting, so to have better resellers in Asia. We call them premium distributors, so they need to have a little bit more capabilities than just to sell a product. They need to be able to give technical support to our customers. I think in future we will set up service and support centers in Asia. This is something that we have to develop in the next years. Probably, we will have one day a physical presence also in Asia. That's it. Now Mikko will tell us about organization and integration.
Okay. Thank you, Rolf. I will share a little bit about the kind of internal development what we have done in Acuvi and talk about the organization and integration. If we go back a little bit more than a year ago, we were three individual companies, and we had just recently acquired TPA. End of the last year, we launched a new organization, global organization, including the global sales and marketing, R&D, operations, and finance. We launched these global organizations in order to kind of be effective in our operations, work between the companies and really enable to utilize the skills and knowledge from the each company what we have. Today, you have heard actually several initiatives and ongoing actions that what we are doing as a group.
In addition to that we created the new operational setup with these global organizations, we have developed several new roles. Like, Rolf mentioned, there are some group level roles like product management, business development, group marketing, roles that have been already filled as well. In R&D, it is really the global R&D, so there is no basically any brand level R&D left at all. It is just the one R&D. In operations, we have introduced group sourcing and quality roles as well. In addition to roles, of course, we have needed some new tools and processes in order to work together. In IT, what we have done, we have created the Acuvi level intranet.
We have same common basic tools used in every people in every site what we have, with some improved security as well. One very important thing is the new product development process. In the past, we have had own processes to develop the products, all. I guess very good. Now we have defined the one process which really enables us from different organizations to work together to develop the new products. In that process, it really the kind of a responsibility starts from the concepting phase in a product management is driving it. It goes to R&D, and then in the end, it goes back to the product management and sales as a go-to-market activities.
Every organization is involved, operations, and the finance as well in each step of the process. We are now piloting this process in our first group level activities like what we have heard before. Control platform and ultra platform products. In R&D, we've also done a lot of the you know tool side. There's now one single PDM product data management system and design tools that everybody's using. Also the projects are managed with the same tools and resources with the same tools. One big thing is that what we have just recently decided is that we have selected the group-level ERP/CRM system.
What we have started to implement now in TPA Motion as first, and then we will continue to other sites first half of the next year. If I go back. These new processes and tools are kind of tying and enabling us to work between these new global or group level organizations. We have done a lot already and there's definitely a way to go, but already on a daily basis we are working as one organization.
That's all. We've got Q&A already. Before we go into Q&A, I just thought I'll do a quick summary, a little bit of the key takeaways, maybe what you've seen and heard here today. Without giving exact details on how much we expect to grow in the near next, we actually have a three-year plan for our growth, which is quite ambitious and full speed on that. I think we will be successful in driving a good continued high growth in this group. With the additional initiatives that we have, we will grow even faster. We really are in a good place. We are in good markets that have good growth in themselves. We have, as Rolf mentioned, really put emphasis on expanded coverage in the market.
Not least we really are doing investments in marketing. We have quite a lot of initiatives going on there that will start launching now as of Q4. The expanded product portfolio, there has been mentioned a few platforms. I just mentioned that we have some existing platforms that we are expanding. We're talking about ultrasonic. We are really the plan that we've had some initial products there solutions, but we're expanding it into covering a broader range of applications. As part of that, we have these product management resources that are really doing in-depth analysis of the markets. We really have the right products coming out of those platforms. There's a lot of work on that side. We have these new initiatives as well.
Some of them are what we like about them ourselves is that we're not really stretching both new technologies and new customers at the same time. We're really leveraging technologies that we have. The idea is the most difficult thing you can do in business is to do, you know, find new customers with new technologies. It's really the most difficult one. What we're really focusing on is to be tangible things that we do, that were really existing platforms that we can enhance and apply them into new application areas or standardizing platforms from them. It's technically advanced for sure, but it is not new of everything. It's really something that we have already. The other thing is that I think we have been, I don't want to do.
I mean what we have been, and I think we have been successful, is really to integrate the businesses in a pretty quick way. I find the most important thing to me is not necessarily to have the same processes and tools, et cetera. What is really the most important thing is that it leaves a good collaboration. In the end, you were working as a team. We are backing up whatever we can and finding the right solutions to our customers, and also to become more efficient. I think we have done really a lot in a very short period of time, which I think is just a very good base for us to do further acquisitions in the future.
Because with the platform that we have now implemented, we have a really good base that we can explore for additional acquisitions in the future. But of course, there are other things that has to happen to make acquisitions. There is the financial markets, you have to find the right targets, et cetera, but that will come, I'm sure. We also have, if you look at the growth potential that we have, but also the possibility for being very profitable. So I think it's worthwhile to mention we have a very good customer base already today, which is really important when you get into the world markets that you have today. We don't need to, we have customers we can grow with.
We have applications that are growing, so we don't need new applications necessarily. We see a good potential to really use that to drive even faster growth. We also have good pricing power. We are pushing through price increases, as mentioned. We will do that not only because we have higher costs, we'll also do it to optimize our pricing with our customers. There's a scalability we have also, and definitely we know that we have it. We see it already. We have a good M&A, as I say, list of things we wanna do. We'll see when the opportunity shows up, if we activate some of those. That's just as a key takeaway before we go into Q&A then, which is where we are right now.
There might be some questions here in the room. There might also be some questions coming from online participants. I'll leave it over to Charlotte and to manage that.
Hi. Thank you. It's on.
You need to enable it.
Now it's on. Hi I'm Charlotte. I'm helping Anders a bit with this today. We have some questions from the web. I have some questions, and perhaps you have any questions. Please wait for the microphone if you want to ask anything. It's a really interesting business you have here. You've been talking about yourself a lot today. Can you talk about the competition that you see?
Yes.
How far ahead are you?
That's a good point. First of all, I would say the competition varies by business we have.
Of course.
Of course. If you look at some of the segments we are, there's very little competition. I'm always respectful of competition, and I think it's sometimes good to have competition because it also helps the customer to make a decision to buy if they know they can source, if needed, from someone else in the future. I would say on the PM side, it's very limited. Sensapex, it depends on the niche. We believe on the Sensapex side that we have very good technologies. We are leading there in terms of performance. TPA has been very, very successful in picking profitable products. I mean, they have turned down so many products so we know the market is there but they're very, very selective because they've been TPA has historically not been focused on growth.
They have been primarily focused on profitability. We wanna combine both because we think there is both an opportunity in the U.S. to grow. It's a very big market, but also to copy that over to Europe as the first step. I would say there is competition, but it depends a lot by segment. We are in a position to really grow, that's for sure.
Is there any of your businesses that is in some kind of market where you can say that you're aiming for a certain market share, or is it always gonna be a bit here and there?
For some markets, there are, for instance, if you take on the PM side, there is a replacement part of the business, right? There's also where we enable new things that can't be done today. If you look at the enabling part, of course there is your maybe one you or another competitor are doing the work. If you look at replacing it, I think the niches that we are, I mean we target to be you know, number one or number two in those areas that we are really targeting. There can be steps in certain niches that will take longer. Some of them we want to really be leading, the ones that we are prioritizing.
There is a question from the web. I believe you've addressed this, but perhaps you could elaborate some more on this. No, sorry. Have you already seen any form of cross-benefits related to sales and/or CapEx between, or cost between Piezo, Sensapex, and TPA?
We can start with operations. There are certain capabilities that are overlapping between the sites. I think there will be some focus on, if, for instance, certain capabilities that we have in one location, we will not necessarily duplicate in terms of investments. There is also, on the sourcing side, we can work together. As Mikko pointed out, we're already pushing through common sourcing step by step and common quality, that type of thing. Those are. It's not necessarily all the time that you find cost savings. It's also that the size enables you to do things you can't do before. It gives you an opportunity to add a specialist in an area that you can't do as a smaller company. It's impossible.
We know that for some of these customers, I mean take the semiconductor, as Rolf mentioned before. Some of these demands they have are very, very tough. They buy from us, but because they don't have any choice. The opportunities that we have to grow is through some of these investments that we're now able to do. If you look on the cross-platforms that we're developing it's mainly on electronics. We can do a lot together. Sensors, electronics, software, of course, same thing. Some of the mechanical aspects of these platforms, we can also share between the groups. You know, putting PiezoMotor technology into the different platforms that we supply to customers, et cetera. There is an opportunity there.
On the commercial side marketing by far is an area we can really have specialists now that we couldn't do in the past. But also on the sales side, we will have specialists that go deep into certain applications, but there also will be, for instance, now we can afford to have somebody who works part-time with resellers. We couldn't have that before, really to develop a reseller network as an example. Of course, we have opportunities to share customers.
You said that there is potential for higher growth in margins when you shift to direct sales.
Yeah.
Now you're talking about marketing, but isn't there gonna be higher costs than for sales and marketing?
Yeah, of course there will be some higher costs that we will take on. Of course yes. The margins that you give away in some of our applications and for some of our businesses are quite high, actually. We think that we don't intend to use the full you know, coverage that we'll get or improved margin. We will do investments, of course, but we still see margin improvements in that.
Another thing I thought about margins that's good to mention is that historically, I would say with exception of maybe TPA, the other business have not really had a focus to drive up margins through, you know, buying, purchasing focus or sourcing focus, and that's something that we will do now as well improve processes.
Another question from the web: How do you assess the ability to modularize or scale your wide array of customer-tailored solutions? What is the scalability in your business?
Maybe Mikko, you should answer that question.
Yeah, sure.
If they connect you.
Yeah. I think one of the main things we've been really looking at now is to develop these new platforms with the sole idea that, you know, for example, positioning, it's about moving things between two locations with certain speed. You can use the same basic technology for most applications. The range may be a bit different. The force may be a bit different. We have selection of different motors to put there. We can use same electronics. There's lots of commonalities on them, so although the application space is sort of large, if you do proper job in defining your platform correctly, you can cover like 80% of that with the one platform in a way. Of course, there are some customer-specific modifications like the mechanical adaptations mostly. That's very efficient to do.
Let's say you do a bit different kind of mechanical interface so that customer can bolt on their thing on it. The electronics software, which is very large part of these kind of high-tech products, will be about the same for everyone. That's really way to scale in a cost-efficient way because if you customize everything for each customer it's like it's never gonna be a very scalable business. The whole idea with the platform is that the platforms are the ones that we can cost efficiently provide lots of value to the customers and go deep into applications in certain areas if we like.
Really to have a full solution from this platform. That, that's like we have many projects now going on, ongoing where we are developing the new platforms, and I think that's really critical for us also.
I think it's worthwhile to mention also that what Todd mentioned is, in his presentation, that even if some of our customers are very big they still mightn't buy you know, maybe 500,000 units per year. For them to get the scale for, from these, they either have to do it themselves, which they might not have the either the will or the know-how to do. What we can support them with is to create these platforms and help them to get scale in the business to maybe even make a product cost-efficient enough to launch it. That's a little bit the idea of some of these platforms as well.
We actually have two questions on this. Some years ago, you talked a lot about the Link motor. Today, you haven't mentioned it at all. Can you elaborate on-
That is actually the ultrasonic one that we are talking about. It's just a new. What we have done is we've broadened the concept so to cover more applications. There will be a range of products coming from that. We didn't present so much on it today. It's in a lot of focus in R&D to broaden the platform. We also are. First of all, we have customers that, you know, we already have in our pipeline we're building up. We also have new ones that we have done a lot of market research right now as part of this broadening of the platform. It's for sure a lot of activities ongoing, so more will come.
A question, I was thinking you have many customers, many projects. Can you say anything about how much of that is in volume production and how much is ramping up?
Ooh, that's a good question. Rolf, do you have any good answer to that?
Yeah. I think you have to know that we are just ramping up now this OEM business. I would say we have a few customers that traditionally came from PiezoMotor that have been now really in series in, I would say, low to medium volumes. This is 20-50, I would say. Now we have new projects that are ramping up with really higher volumes. We are talking about 100, 200, 500, sometimes thousands. This is the change, and these are ramping our projects. Then we have I think quite a lot of good recurring business that is coming up. I would say the peak volume, the peak growth will of course come from this ramp-up business.
If you look to TPA Motion, they have still good, I would say, series business, but you have seen these systems, these are not thousands. They are doing quite mid low to mid-size volumes. These are volume and series production that TPA Motion is doing actually a lot of the business.
Hello Thanks I have well, two questions maybe. First well maybe we can relate to that, what we just discussed. About a year ago, before you started acquiring companies or made these two acquisitions, you presented your project pipeline a couple of times or a few times actually. It was in the region of SEK 500 million over a three-years period or something like that, if I am not mistaken. Could you give us an idea of this project pipeline? I mean, is that a pipeline where the success rate is like one out of four or one out of five, or how should we view this?
The question is good. We are actually. We can calculate with 30% hit rate on the pipeline. In our case, this is depending a lot on the commercial expansion, you know. Normally what today happens, and this is not just because we are saying that. We are actually. Nearly each project that we are starting on is coming to a success actually. We are not so big in commercial expansion today. I think in future, if we are going more out in the market, we will find more projects, and then probably the hit rate will be 30%. Probably today it's higher because we are not able to work on the SEK 500 million pipeline.
It's depending on how many projects you can work, you know. I would say 30% would be a good target for us.
Long term.
Long-
Just to comment on that, what happens with the 2/3 then? What happens with them? Well, they can be either. I would say that normally the case, what happens. This is my history from previous companies. In our case, we have limited competition, actually. It's very seldom that we lose something to a competitor. It can be that either company, the company's priorities have changed, not ours, but the customer's. It can be that they are delaying something. They're shifting out of a certain period that we measure. It can also be the fact that they basically cancel the product for different reasons. Now we have seen some shifts. You're right, Rolf.
In the case that we have had a severe shortage of resources that can really work with these products. I mean we have I won't go into how many headcounts we have really selling, but it's not many. We are now investing in that, and they will become. What this will happen is that you will be better at selecting before products coming through the door. Basically we will never accept even putting in our pipeline. Second thing is that we will have a faster way to close with customers.
The other question I was wondering about, because you talked about some of the business projects that you're working on. Should we be prepared for higher R&D costs or other related costs in the, well, going from here to 2025, like a ramp up of those costs maybe?
Mikko you wanna answer that? Please, please.
Put on R&D.
Yeah, it's just Mikko on R&D. I forgot
I think one way to put it is that, I've been having sometimes difficulties putting away my entrepreneur hat, so I've been not increasing the costs in R&D. Actually, we are saving costs compared to before the companies joined. The idea is still to produce much more results. Of course, we need to resource the things we want to do properly. I think we have achieved already lots of efficiencies from integration. I think the sort of the budget we are making will cover what we have in a roadmap, in a sense. I would not expect that our let's say R&D cost level goes up that much from, for example, this year level to do those things. Of course, we need to set the priorities.
If we really want to accelerate something or do more, then we have to resource it more. I think the like the main products we are looking at the launch, we are having resources to do it. Yeah.
Some of the new growth initiatives, some of them are uh yes R&D driven a little bit, but we're talking not about a huge amount of headcount. The other thing though is we have a discussion with the board coming back to financial targets you know long-term financial targets. It's a balance between, you know our profitability levels and of course the growth rates that we want to have. This is a debate we're having right now, what we should aim for. Part of the reason we're not talking about long-term targets here today, but we'll come back to that later.
Yes. One question regarding like the marketing and combined with the sales activity, and do the customers who don't want to be named, like when you get a design win or get designed into an application? Like, we had a presentation today regarding the da Vinci, which is a really great company and a great logo for the company, and how you can capitalize on that on, like, your website with your example of design wins and so on. Because I like for FAULHABER, which is a premium partner to you, they use that a lot in.
Yeah
T heir website and communication with new customers.
It's a good question. I think, we have room for improvement there. I agree with you on that point. There are sensibilities a lot with these customers. Some are very militant about not wanting their name on there. Some maybe it's more that we can push them more, on it. We also want to have more in these type of events. In the future, we want more customers to participate in them as well. It's a step-by-step process. We didn't have the opportunity or time to do it this year really. We had some issues with that. It's a good point. We will try to do that more. It's sometimes you don't want to share all the details with the potential competition.
Also, it's a balance you need to keep. For sure, some names, even if we mention them, people might not know what we are doing with them specifically, so.
Yeah.
Yeah.
Regarding to pricing, like, can you raise prices for all customers because they are recurring, or do they have frameworks with a time, like three years that you have a yeah a price? Or
Normally we have flexibility to raise prices. Frame orders are most of the time used for order planning right? You can plan your material and stuff like that but there is flexibility. I would say mostly the frame orders are within maybe one year, maybe you have them, but they can be longer as well. Roughly, I don't know if they normally have. It depends a little bit. I think the ones that are using most of the time frame orders are actually TPA. There's most history of it.
Okay.
Bigger programs and such. They do price revisions more on a product-by-product basis. So they don't like generally just increase prices. They do it when they have opportunity to do it.
They're doing it now though, right?
Yeah. They do it step by step all the time. If you take PM, for instance, we have an initiative ongoing right now to increase prices quite significantly. That is more. There's some exceptions, but most of the time we do it across the board.
Okay.
Yeah.
Yep. Yep.
Okay. I just had a question about capacity in the three legs. We've talked a bit about the throughput in PiezoMotor. We can scale. You talked about scaling. You can have the same cost base and maybe scale well adding some workers, I guess. I think it was 2x or 3x, 4x, something like that. I was wondering just 'cause you have so few workers in say TPA, for example, how much more capacity can you take on before you have to scale up the organization?
Yeah.
I was wondering the same for Sensapex, 'cause we have no numbers to crunch. I was wondering, 'cause it's relevant for the cost base as well. Do we have to build a factory, or is it like do you have like a note or Hanza or something created doing the products for us, in that sense?
You want to comment on that, Mikko?
Yeah. I can comment. Maybe starting from the Sensapex. Sensapex originally is a small company with 10 people and, you know, what comes to operations and building capability. We have a facility and basically we are using all the local supply or the, not only the local, but the suppliers, and we are assembling the products in-house. We have today two full-time assembly people, and I think we can very easily.
Double or triple whatever is needed. What comes to Sensapex, the piezo motor side, we have a factory here in Uppsala, and that capacity is still okay for actually the next year. Of course, requires a lot of process improvements and such, and some minor investments. Going further, yes, there are some plans to expand the capacity by investing on ceramic processes and such. Yeah. Not a new factory. We don't need that. Yeah. Keep in mind what we need in most of the cases is so the parts of the process we want to automate more in the future, the added resources are mostly direct labor, basically.
The overhead is already in place.
Okay. In Finland, we have expanded a bit the space. We have done that already. In the U.S., we're looking at capacity expansion, basically a bigger facility. In Sweden, we don't need a bigger facility. We need more capacity in some parts of the process. Yeah.
Okay. I want another question.
Yeah
Be cause in the last report, you mentioned a stock build-up for piezo motors.
Yeah
Specifically. I think it's probably about SEK 5 million in the quarter or something. Can you just mentioned it. It's like it's gonna be pushed to next this quarter or next quarter or because it's quite significant. It's like half of piezo motors revenue.
Yeah
Last quarter or compared to.
We have products that are ramping up. We have, because of long lead time for certain components, we had to build up stock. Now, if I tell exactly when how that will come, I'm giving you a forecast. I can't do that. The principle is that we are doing this to make sure that we can deliver to our customers. We don't necessarily taking a risk on it in the sense that there are things that we can, you know, should it be delays, we can, of course, use it for other customers. That's the intention, yes.
Okay.
Yeah. We'll take more questions.
Okay. I think most of us are very interested in the progress with the Asian partner within cell phone modules.
Yeah.
What's the status?
We are still. We have a good collaboration with our partner. We are in the customer discussion phase still. There's ongoing work also on the technical side that we are working on some based on feedback that we're getting from the market and stuff. That's what I can say right now. We will come back to that later in the fall with some more updates on it. That's where we are.
Are the shutdowns in China still?
Yeah, they have.
Stalling you?
There's still problems with that, with customer interface. There is still some problems. Because what we have here is the physical demos. It's not that was something we can do online. We were hoping. There's been, you know, shifts between the country, right? In the country. You never know. There's always a new place that it pops up, which I assume is the what happens with these pandemics. Yeah, so there will be ongoing activities with the customers, as much as we can right now. Yeah.
We have one last question from the web. You mentioned niche end markets such as life science and semiconductor. How should one look upon the market growth potential? Do you grow mainly with customers' CapEx? And are customers' investments cyclical in nature?
Yeah. I would, and yeah, I wouldn't say we grow with CapEx with these customers because it, I mean if you look at the I don't know the exact off the top of my head. Their growth rates varies a lot by the markets we're in. We are in niches. One thing that's very difficult to, what people can look at are third-party reports on high level for our markets. We keep in mind, we are in niches. In these niches, it's sometimes very difficult to get third-party reports. What we do, we do our own estimations together with our customers based on their volume planning.
We are also in the future gonna do more reports that we develop specifically for our niches together with third-party vendors, so we can get more feedback into these type of sessions. In general, I mean, if the question is about the, if you look at the individual markets, we have Life Science Instrumentation, which is really recovering from COVID, I would say. We see, we know that it's coming back to good growth levels. MedTech, we know the application we are in. We don't see any change in demand or anything. It's just ongoing, what they want to do. We don't see any impact there.
Semiconductor we know is in an investment cycle in general right now, driven by political reasons, but also demand reasons from the customers. There we also see a continued, actually see our products really ramping up, as well, and demand ramping up. Then on the advanced industry, we have such a wide spread there. Some areas, we know will not at all be impacted. Right now, the actual demand is going up because the investments by governments are similar. On average, I think we will, of course, at the end be affected like anyone else, one way or the other, but I think we are in a pretty good niches for the near term.
Any last questions from the audience? No? Any last words from you, Anders, or?
No, I just want to thank everyone who is here, who is online, and I think you are. What we tried to do today is to give you a little bit more in-depth about the business, about the applications we're in, about the technologies that we use, but also to meet some other faces than myself. There are that are dedicated to growing this business, and I think we're in a very good position to deliver, to build up a really interesting group. We are already an interesting group, but I think we have good potential for the future. Hope you keep following us, and I hope you stay invested. Thanks a lot, everyone.