Hi, welcome to this update call on the new focus for Webdoc and the cost savings program. Today, we go through the change of focus, the cost reductions, and then we'll have a Q&A at the end. Just please post your questions as we go. My name is Daniel Öhman. I'm the CEO of Multiple Acquisitions, large new development projects and very rapid hiring. We've grown too fast and in too many directions at once. What we really need to do now is to focus and increase efficiency. Starting with focus, we have taken the decision to focus Webdoc on Sweden and close down the Webdoc Norway project.
To give a little bit of background on that, Webdoc today in the Swedish market has a TAM of somewhere around been running Webdoc Norway, where we have a possible market of around SEK 350 million, and where we still have 24-48 months of development remaining to be able to address that market. We have one customer in Norway at the moment, that's a customer which uses very little functionality. They don't even prescribe drugs, it's a very limited version that's up and running. We also have other projects which are in the pipeline, which is segments, they do lack some very important functionality which hinders our growth within those segments. If we talk about Region Stockholm, just briefly, their most care providers use the public system, which is called Take Care.
It's going to be closed down. That's been decided. It has also been decided that it will not be replaced by a new system for everyone. It will still be open for each private provider to choose their own systems. Today, if you use our product, you will not pay Webdoc. That's a lot of extra work, and there's also a lot of extra risk involved in that process. That's the downside for using our system today. Still, quite a lot of providers do it already anyway, because they see the other upsides. If we can add e-referrals, it will really help. The second area, surgery, is those clinics who has operating theaters and both outpatient and inpatient surgery. That is surgery, what you need.
That's which drives all your income and most of your costs. You really want to optimize surgery, and we need to give them the tools to be able to do that if we want to address that market properly. That being said, there are not really any competitors offering that today, not while at the same time being good at other things Webdoc is good at. We think we have a really, really good chance within both the segments if we give them the functionality. We already have all operations in place to be successful, and we have a good reputation. It will really increase and improve our growth possibilities quite a lot by making this change. We need to focus. We cannot do both.
It just gets very inefficient if you try to build too much at once in the same system. We have since before, Webdoc X, which is from the foundation made to move between over, which means that you need less functionality to be able to really use the system. It's attractive for smaller clinics than what Webdoc is. I find this a very natural conclusion we have drawn on this subject, and which will really strengthen us going forward and lessen complexity, which I think is an important goal in itself. Looking at the other decision that we have made, it is that we need to increase efficiency. Able to have about the same development capacity as before. Diving into the cost-cutting program, it's mostly related to staff and consultants.
It's around 42 full-time equivalents that will leave the organizations. Most of them are employees. The total cost of realizing this program is around SEK 4 million, we expect, and which will take place in the second quarter this year, by the end of Q3. It's really an efficiency change. We need to get down our running cost, and I still expect us to have the same capacity as before to develop new solutions and going forward. In conclusion, we focus Webdoc on Sweden, with new functionality to new segments. What's also important here, when we add functionality for new segments, also present segments and customers will gain from it. We focus Webdoc X on going international.
and instead of having two cross-border projects, we have only one, which decreases complexity and increases the likelihood of success, also in that part. Even if these savings are quite large, we will still be staffed for expansion and we will be able to grow quite a lot within the same cost structure that we have now. There might be minor additions we need to make, for example, within quality, where we need to improve efficiency. Especially we focus on sales. Today, we only have inbound sales. All sales within all of our products are emails coming in from customers who wants to change their products. I believe we can do quite a lot with outbound, and that's the next step of development for the group.
together with the new structures within R&D, where we aim to increase the velocity of development.
About your big cash position, are you considering share buybacks?
We have not decided yet how to handle the cash position. There are many interesting acquisition we could make, which will strengthen our present products and also for going into new countries. We will have to choose between how much acquisitions we want to do and make, and possible buybacks or dividends. We'll come back to you on that.
Medrave continue investments as before? Question mark.
The savings are within the entire group. We're doing savings in Norway within Ad Curis. We're doing savings within HPI and so on. The savings are not only within Webdoc, even if the most part of the savings are within Webdoc. This is a program for the group where we aim to increase efficiency. We still do a lot of investments within Ad Curis and gain market shares there. Same for HPI. They have a very interesting new platform coming out, where we aim to continue to grow. Nothing of what we do now is in any way a break on the expansion. We see how much we can grow. We change focus for Webdoc to a larger market, and we continue to invest in products we have, and we increase efficiency.
All right. Thank you.
In our organization. Obviously, we communicated this today to most part of the organization. I think that in most parts, Had a positive reaction to this, not to colleagues leaving, of course, but they see the rationale behind it, and they see the need to improve how we work and the process we have. I believe we'll come out very strong out of this.
Have the facts changed over time?
Yeah. I cannot really comment on the original decision. I was not part of it. To me, from where we stand now, it's quite obvious that we have a larger market to go after in Sweden, which with less risk and less investment. We also have Webdoc X for going international and it's better to focus on that. I cannot really comment on the historical decision.
Some decisions that looked like it could be dangerous for our situation in Sweden, but now the wind is blowing in the direction that the market is opening up more and more in Sweden as well. This also favors Sweden versus Norway, I would say. Next question, what happened with the Norway sum? It went from NOK 500-NOK 350. What were the major differences in how you evaluated the market there? The new figure of NOK 350 is a result of the strategy process that we have gone into very great lengths of detail in looking at the different markets and different segments, in both Norway and Sweden. I don't know if you have anything to add, Daniel.
No, it's yeah. It's like you said, Martin, we have really gone in deep into all aspects of this and really been digging into exactly what functionality the different parts needs and where our strength for us and so on.
Especially those who are using the Swedish Webdoc, but also has operations in Norway.
I think that our Swedish customers will be very happy about this. I know when I started the discussion was that where is Webdoc today? People used to say, Webdoc, they are using Webdoc. Where is Webdoc today? We don't see them anymore. It seems like the development we need doesn't happen anymore. I think that's part of why our sales have slowed down a bit. Whereas they use Metodika, our other system in Norway and Denmark. I think we still have joint meetings with our largest customers on both markets, actually.
Great. Next question. Could you elaborate a bit on Webdoc X? When do you expect customers to start using it? What segments are you targeting more specifically? In addition.
Countries which really have been a lot of struggle with Webdoc. It was never meant to move it over borders. There's a lot of things that are hard coded into the code, which is a lot of work to find everywhere in the code. Also within Webdoc, we cannot have too many development projects at once, we had to choose. Even if I had to continue with Webdoc Norway, we couldn't have done the move towards Stockholm and surgery at the same time. Within Webdoc X, we don't have to make that choice.
We expect more customers to be added during the year, not that will move the needle on our income in any way, but pilots at different parts of the system, but using more functionality than Webdoc do today, but less than a typical Webdoc users. It will be, you know, psychiatrists, physiotherapists and so on. Then we'll add functionality as we go. There are very different situations for the two.
We add approximately a little more than 60% of our total CapEx was related to these two projects. The split within them, we haven't provided specifically, but around a bit less than a half of it was related to Webdoc Norway. Half of the 60%. Next question, the cost savings, how much of it is tied to a large extent related to R&D, primarily related to CapEx, as we wrote in the release. We have also some savings related to other areas such as HQ, for example. I don't know, Daniel, if you have anything to add.
But I think it's important to see it in the light of R&D growing very rapidly during last year. But it comes from R&D growing very rapidly last year. At the same time, we have also increased our capacity within operations, that is sales and also delivery. I think that's necessary for us going forward.
Great. Next question. You talked about additional SEK 500 million in TAM in Sweden. Could you provide more granular take on those millions?
Decision to make, how much to tell investors and how much not to tell competitors. This is the level we have chosen. We're being quite transparent on TAM, I think, given the situation, we felt a strong need to explain this decision to investors. Still, we don't want to go more granular because this is our own information, which we want to keep for ourselves.
Great. Next, question. These numbers, or should we expect additional existing market CapEx in 2023? I would say that these are new initiatives that we look at now. This is a matter of prioritization of the investments that we do within the existing markets. It won't be any major additional levels, rather a choice of what the opportunity... Yeah, I think you already answered that question, Daniel.
Yeah.
Next question. Should we expect personnel costs to be up, down, or flat in 2023 compared to 2022? specifically, in, the Q4 earnings, release, we mentioned that. Then we do these initiatives now to decrease costs again. I would say, we can't be any more specific related to that. A final question in the chat now. how will you handle the current Norway user? Will there be any costs for Carasent?
No, we don't expect any major costs.
There are no more questions in the chat. Daniel, you want to wrap up?
Yeah. I just want to thank everyone for your time today and all the questions. It's always fun. Just let us know if you have any other questions. We are always available. Thank you.
Thank you.