Earnings Call: Q1 2021

May 7, 2021

Quarterly report

Good morning, everyone. Thank you for joining today's call. My name is Priscilla Casumba. I'll be your moderator today. We have changed the format of our presentation. I hope you will enjoy it. Today's webcast is presented to you by Tim Turrin, our CEO and Henrik Bergentaust, the CFO. The presentation will address the Q1 of the fiscal year 2021, but also the CEO's speech as part of our virtual annual general meeting. In the first part, Tim will give a short introduction and comment on the financial highlights of Q1, followed by an analysis of the sales development before he finishes with commenting on the key events. Henrik will guide you through the financial review before he hands over the microphone to Tim, who will wrap up the year 2020. We have also changed the format of our Q and A session. In case you wish to ask question, please press the raise your hand button. It's a yellow button with a hand and I will open the microphone at the end of the presentation. If you wish to access the presentation later on, a recording The webcast will be available on the CRAD website after the presentation. Bear with, I hand over the microphone to Tim. Perfect, Priscilla. Thank you very much. Let's get started with an introduction and the financial highlights. CRAD is active in the field of cancer treatment. Our customers are hospitals that fight cancer with radiation. In modern high precision radiation therapy, Accurate tumor alignment is crucial for a safe and successful treatment. C RAT positioning products are supporting this process and are fully integrated in the clinical workflow. Over the past years, Seaweret has been growing significantly and generated last year SEK 200,000,000 in revenue and an operating profit Of approximately SEK 17,000,000. The revenue growth combined with Marginal cost increases deliver a record high first quarter operating profit for the company. But let's take a closer look. We are starting the year with an order intake of SEK 66,300,000. This is reflecting a growth of 39% or 49% in constant currencies year on year. Revenue amounted to SEK 60,000,000 reflecting a growth of 16 Or 23% in constant currencies compared to the Q1 2020. Due to COVID, deliveries to various countries Somewhat restricted last year. As a consequence, order backlog grew by 30%. With a stable cost base compared to previous year, we are delivering an operating profit of SEK 6,200,000 During the Q1 corresponding to a margin of 10.4%. This is a very positive development and underlines the demand of our technology And Advanced Radiation Therapy. Let's take a closer look at our sales performance. We are starting off 2021 with another very solid quarter. The growth in order intake of almost 50% in constant Currencies is very satisfying. Order intake continues to grow at high pace in all our product segments. The cooperation with Elekta in North America is developing well and the region has achieved a strong recovery compared to last year. Both companies' teams I'm working tight together to develop the market and to present the combined value proposition to customers. The strong momentum in the APAC region, Driven by the Chinese market continues in the Q1, reflected in order intake, but also in revenue. In the EMEA region, the purchasing behavior is still somewhat affected by COVID-nineteen. Our business is subject to a distinct seasonality pattern, whereas usually the beginning of the year is weak And the second half and especially the Q4 is coming in very strong. This is affecting revenue, but even more order intake. COVID-nineteen is still affecting our business, but it is very encouraging to see that customers refocus on upgrading their cancer centers The surface tracking on the journey to establish our technology as the standard of care. The impact partly correlates with COVID-nineteen policies of the respective governments, but we also noted that the approval process for capital investments, Both for private and governmental healthcare providers became longer. Notwithstanding, we have a largely stable result, both in order intake As in revenue within the regions. Very solid revenue growth. In the Americas, we see a decline Due to the gravity of orders in the Americas during the last year being booked very late in the year. Very encouraging, The continued dynamic in the APAC region. The service or life cycle business continues to grow at accelerated speed. The service agreements are usually long term commitments from our customers to purchase services to the system. It's a great opportunity to build up and maintain a relationship with our customers beyond the initial product sale. With the implementation of vaccination programs progressing and COVID-nineteen related legal going down, The focus in the healthcare sector is shifting back on cancer care. The clinical advantages of high precision radiation therapy Our widely researched and recent developments in the recent reimbursement systems in major markets enable customers to invest in required equipment To deliver safe and accurate radiation therapy for patients in need. I believe this slide is displaying a fantastic journey with surface tracking Technology becoming standard of care in advanced radiation therapy. Coming to the key events during the period. The Patent and Market Court of Appeal issues a judgment confirming Seabed's entitlement to Beam Ocular's invention. Therewith, the court is following largely Seabed's claim. Parts of the invention originate from CYRAT. Certainly a success with, however, limited impact on our operations and the foreseeable business outlook. The Invention is related to the GEMINI product and CRAD has seized the development efforts in December 2019 related to this product. To sum up, we are excited by the results of our work and what we have achieved so far And look optimistically in the future. With that said, the market continues to be volatile and comes with a distinct seasonality pattern. This might have an impact on both order intake and revenue in individual quarters. I'm very confident about our mid- And long term opportunity. Thank you. And there is, I hand over to Henrik, who will guide us through the financial review. Thank you, Tim. So we'll start off with a closer look at our P and L statement. And as Tim already commented, We saw revenue growth of 16% to SEK 60,000,000 in the Q1 or in constant currencies, growth of 23%. And the currency effect is much due to a stronger SEK versus the U. S. Dollars in 2021 compared to 2020. Related to the pandemic, but mainly due to a long period of strong order intake that now converts into revenue. Revenue in Americas is decreasing due to the fact that order intake did not recover in the region until the end of 2020. And those orders are yet to be delivered and hence not yet recognized as revenue. Revenue in EMEA generated a growth of 2%, If anything, signaling that despite pandemic challenges, deliveries and installations can still take place. Moving down, the gross profit margin was 61% during the Q1 2021 compared to 58% last year. Our external expenses for the quarter amounted to SEK 12,800,000 compared to SEK 11,400,000 last year. And last year included a positive outcome in a court appeal on trade secrets, returning fees previously paid by the company Amounting to some SEK 1,700,000. Hence, the underlying level of operating expenses are approximately in line with last year. With regards to personnel expenses, they amounted to SEK 16,000,000 in the quarter. Last year, we also had a non Recurring item, a cost of approximately SEK 2,000,000 related to changes in the executive team. The average numbers of employees amounted to 57 during the Q1 2021 compared to 61 during the corresponding period in 20 And we end the quarter with 57 of employees compared to 63 last year. To sum it up, operating income for the quarter amounted to SEK 6,200,000 compared to SEK 1,000,000 last year, Constituting a margin of 10.4% compared to 1.9% last year. And the increase in the operating margin And improved margin is a function of the growth in revenue with improved gross margins and only with a slight increase of our operating expenses. The net result of the tax in the quarter amounted to SEK 3,200,000 compared to SEK 400,000 last year. The tax expense that we account for in this quarter refers only to the reversal of the deferred tax asset related to Swedish entities. This does no impact on cash flow whatsoever, and we end the quarter with a total deferred tax asset of SEK 20.7 million. So this slide displays our revenue and our gross margin And as said, the reported gross margin in the quarter was 61% compared to 58% last year. And as we can see on this graph, the gross margin is improving over time. However, Fluctuations in the gross margin can be expected between periods as it is dependent on mainly two factors. 1 is the product mix, and the other one is The use of different sales channel partners. So the purpose of this slide is to put CRAD's growth journey into a context, and that is a context where investments have been made in the organization to support Growth. And this has, of course, generated an increase in operating expenses over time. This graph outlines operating Expenses and revenue for the last 4 years and where we can see that these investments, they are in fact paying off in the sense that the revenue trend line has a steeper Upward leaning curve as compared to operating expenses, equally meaning that the average yearly operating expense in relations to sales is going down. So this slide shows our operating profit and revenue over a longer period of time. And as seen, the business of CERAD is volatile between the quarters and also expected to be so going forward Since larger single order has an effect in the quarter when they are delivered. However, the trend line clearly shows that CRAD is on a growth journey, But the company also since mid-twenty 18 has reached an important milestone in the sense that the company is delivering Not only growth, but profitable revenue growth, which significantly improved during the 3rd and through the Q4 in 2020 and now continues in the Q1 of 2021. This slide displays on the left hand side our balance sheet and on the right And side, the cash flow statement for the Q1 with a couple of condensed comments to be made. First off, on the balance sheet, We have a relatively low level of immaterial assets. We are completely debt free. We have a solidity of 77%. With regards to cash flow, we have a positive cash flow from our operations, and we end the quarter with liquid funds amounting to SEK 112,000,000. And on top of that, we have an unused credit facility of SEK 20,000,000. This slide displays our order backlog and how it has developed over the recent quarter. And as I think you all know, the order backlog represents orders that have been received but not yet delivered nor invoiced. The backlog amounts to SEK 340,000,000 at the end of the quarter, an increase of 30% compared to same period last year. From the total order backlog, about half relates to products and the other half relates to service contracts. Close to SEK 28,000,000 of the order backlog will be recognized as revenue for service contracts within the Coming 12 month periods as service contracts are recognized as revenue over the contract period. The The service contract can be up to 8 years, while the most common contract period is 3 to 5 years. And by that, I end the financial presentation and I hand back to you, Priscilla. Thank you for the presentation, Henrik. We would like to inform you that as a consequence of the COVID-nineteen pandemic, The Board of Directors has decided that the Annual General Meeting shall be conducted without the physical presence of shareholders, proxies and third parties, and that voting rights may only be exercised by postal voting before the Annual General Meeting. I'll now hand over the mic to Tim. Thank you, Priscilla. So let's move on. Our mission summarizes our overall goal. CRAD's cutting edge solutions Ensure exceptionally high precision, safety and efficiency and advanced radiation therapy, helping to cure more Cancer patients and improve their quality of life. Cancer is among the leading causes of death worldwide. Three methods have been established to treat cancer, which is surgery, drug therapy or chemotherapy, and radiation therapy. CRAD is active in the field of radiation therapy, and our products are used to improve patient safety and increase efficiency. The demand for our products is driven by the worldwide implementation of high precision treatment techniques. I would like to start with the highlights from last year. Beginning of the year, Cira carried out the direct New share issue of 2,500,000 shares. And we were raising proceeds of approximately SEK108,000,000. Shortly after COVID-nineteen affect the whole world and also cigarette, of course, measures were quickly taken to protect employees, Maintain focus on our customers and reduce cost. What happened then, an former employee has filed a lawsuit For compensation, which is still ongoing. And several important customer orders have been Last year despite the situation and despite the pandemic. And I would like to name a few of them. In China, we succeeded to Received an order from the Shenzhen Proton Therapy Treatment Center for several catalyst systems. That was a project that we won together with The proton therapy company IBA from Belgium. A customer in Germany and Berlin has selected also The CRAD solution to equip the linac fleet with surface tracking and implement high precision radiation therapy with supporting Positioning devices from Seabrad. Towards the end of the year, we received a large order from a Partner in the US, for proton therapy as well, for several sites that have started to be implemented, And a few slides are still pending. Also, success in Australia where several customers in the state of New South Wales selected CRAD or CRAD solution, as their surface tracking Solution. Those installations are ongoing and implementation takes place as we go. Another proton project from China again, Shanghai Proton and Heavy Ion Hospital decided also for the CERiD solution And implements currently the, Catalyst system for their workflow. Another point worth mentioning Yes, Seabed and Elekta have expanded the corporation. As you know, we are cooperating and cooperated already before last year with, Since 2019 with Elekta, there's a focus on the North American market, and this cooperation has now been expanded to include also China. Coming to the financial highlights from last year. We are closing the year with a record order intake of Close to SEK 313,000,000. This is reflecting a growth of 16% compared to 2019 full year. Despite all pandemic related challenges, we were able to grow revenue by 8% on the full year side. And I would like to mention here, I think the focus from customers on surface tracking was given. I think the challenges customers were experiencing, and that is partly reflected in the revenue. Due to the pandemic, customers were closed down or governments closed down the country, so installation could not proceed as planned. But still, 8% growth is a remarkable result. With a well controlled cost structure, we succeeded to generate an operating Profit of SEK17,100,000 which will reflect a profit margin of 7.5 7.7 percent for the full year 2020. This is a very, very positive development and underlines the demand for our technology even in such turbulent years as 2020 certainly was. Especially the APAC region showed a very dynamic development also during 2020, measured in order intake. Whereas the COVID related measures were taken very early in the year by various governments, We achieved a recovery phase already during the summer. EMEA and especially the U. S. Were affected much longer into the year. Despite that we were able to deliver growth, I'm very pleased with the result. However, most important is that continuously increasing demand for cancer care and the overall trend within radiation therapy Towards high precision treatments is creating an underlying growth for technology like ours. According to research, the RT market as the radiation therapy market is growing with Approximately 7.8% annually until 2025. The driving factors are a global shortage of cancer care, an aging population and improvements in the diagnostics. As a consequence, the clinical focus Has shifted towards quality of life after the treatment and high precision therapy is becoming increasingly important. We are convinced that accurate patient positioning is on its way to become standard of care. And there are several indications The majority of oil tenders for new linear accelerators in the Western world include positioning products. So customers are asking To include positioning products in the offering. Major vendors of linear accelerators, Varian, Elekta, also Accuray, Have all included in different ways and started to incorporate positioning products in their product catalog and in their offering towards the customer. And the third point, the last technology within radiation therapy, Which is proton therapy or proton, or particle therapy simply requires a degree of precision That requires also positioning product. So that are 3 very strong indications that this technology is on its way to become standard of care. If you look at the market and the market opportunity, our focus is on the advanced markets within radiation therapy. Worldwide, there's an installed base of linear accelerators of around 12,000 units. If we focus on the advanced markets, we can say that roughly 9,000 out of out of the 12,000 are installed in these regions. If we follow the thought this technology is becoming standard of care, we would say around 75 Percent of the accelerators in the advanced market, sooner or later, will be equipped with surface tracking. If we then take a look at the current market penetration from CRAD, but also from other vendors in this space, we can say that Roughly 20% of the market are already equipped with surface tracking. So there's another 80% or roughly 5,000 Linux to go after. If we look take a closer look at our installed base, we have Around 600 plus systems worldwide. Here in this slide, the orange mark countries are the countries where we have installed systems. If we then take a look at the 5,500 Linux that are still to be equipped, We see an annual market potential of around SEK 1,000,000,000. So if we look at the implementation and the adoption of surface trackings over the last 5 years, what we see on this slide is The distribution of different cancer indication treated with randomized gene therapy at a given cancer centers in in in the US. So we see that the different indication, the fluctuation between the different indications is basically minimal. So our expectation is also that This will, remain unchanged for the foreseeable future. If we then take a look at the table in the middle of this slide, It is basically showing the adoption of surface tracking in the year 2015 and also and compares this with the year 2020. The focus, the clinical focus of surface tracking 5 years back was only on breast patients. This has expanded. Research at various universities, has led and shown the advantages of using surface tracking for other indications as well. And now we can say that 5 indications where customers, that have surface tracking are using the system For at least these 5 indications, maybe more. And that reflects roughly 70% of the population, of the patient population that is Getting treatment at the radiation therapy, center. Also here, another indication for the technology, the surface tracking technology Becoming standard of care. What are the advantages with the C. Wright solution? If you take a look on the, yeah, clinical advantages, I think there are 4 5 points to to be mentioned. It is dose 3. So It definitely caused less side effects compared to, X-ray based systems. It's non invasive, Which creates an ease of use for the patient, of course, but more important even for the operator. It is markerless. Here, clearly an advantage for the patient. The patient comfort has highest priority there. And it has less impact on the daily workflow. The CRAD system is very well integrated into the clinical workflow, integrated into treatment systems, and they have this Easy to operate, which clearly translates into usability advantages for the operator. And lastly, I would like to mention the patient compliance. So we saw on the previous slide, the SAC technology can be used on on the majority of of of patients And to support the treatment process for those patients. Taking a quick look at the CRAD business model, I mentioned already that our focus is the advanced radiation therapy clinics essentially worldwide. We are addressing those customers through 3 Sales channels. The largest part is still our direct sales, organization that is covering the major markets. In other markets, we have distributors, markets where we are not present represented ourselves. We have distributors. But I think the important, part or the important sales channel is our industrial partners. And the Elekta Corporation, for example, is falling into this bucket. So I think here we see the largest growth rates, over the last years. The CRAD organization, the focus is On product management, of course, product development. We, as a medtech company, we Have a pretty, sophisticated quality and, test department, marketing, sales and service are, in house. Oil contraction Construction manufacturing related activities we have outsourced to contract suppliers in Finland. If you take a look at our team, Henrik mentioned already, by the end of last year, we were around The employees in the organization, a very strong focus for us is the development of our products. We are working in an high-tech environment. So 20% of our employees are related directly related to the development activities. Taking a look at the service, we mentioned both from a business perspective, but also from building up the relationship on the long term relationship with our customers, How important this is for our business in the long run. 33% of our employees are related to the service activities. Almost 30% related to sales and marketing and then 20% are occupied with other activities. Looking at the our strategy. Service excellence is one of the Key pillars of our, overall strategy. We saw high growth rates over the past years, Also in 2020. And revenue amounted to SEK 24,000,000 only for the service business, with an order intake of SEK 80,000,000, Reflecting a growth rate to the previous year of close to 40%. We consider the service business Short term, but also long term, and especially long term, to be an important contribution to our revenue stream. When we look at the attachment rates, We see a very clear pattern where in North America, essentially, all systems are sold with a service contract. So that might be that the service contract is sold at the point of sales when the customer is deciding on the product, but it might also be that the customer selects The service contract after the warranty has expired. In the EMEA region, we are Above 60% attachment rate, APAC is slightly behind. However, we if we speak about APAC, we need to take a closer look. Markets like Japan, Australia, usually customers go also with a service contract. However, in China, for example, customers are not yet At the position that they always sign up for service contracts. There was I finish my presentation. CRAD ends the year 2020 with several positive factors For further success in terms of our compelling solutions and the high market potential supported by a great team, A solid financial platform and a record high order backlog. We are very proud on what we have achieved last year. And I want to take this opportunity to extend my appreciation to all the CRAD employees for their great contribution during this very challenging year, But we still were successful. We can continue to expect volatility in individual quarters, And it is still unknown what further impact COVID nineteen might have, but I'm convinced That we will continue to see a growing demand for our solutions in high precision radiation therapy. I'm very much looking forward to this New Year. I'm closing the presentation with our financial calendar. But I want specifically point the attention to the left side of this slide. There are 2 investor presentations coming up End of May with ABG in Stockholm. And in September, beginning of September, Sivrat is going to present also at the Pareto Healthcare Conference. Derbis, I want to close this presentation. I want to thank you for attending today's webcast and Hand over the microphone back to Priscilla. Thank you, Tim. So, now we'll have the Q and A session, we already have some people who submitted some questions. I'll start with the first one. Can you elaborate on the potential on the existing installed base of Linux? Sorry, the sound was a little bit bumpy. Could you just open the microphone and then The person that asked the question could perhaps. Yes. This person does not have a mic. Okay. Can you just repeat the question, please? Can you elaborate on the potential on the existing installed base of Linux? So I mean, for us, of course, there are 2 opportunities. 1 is to upgrade the installed base, but then also to Sell in conjunction with larger projects, typically when the customer is replacing the linear accelerator or Makes other larger investments and CRAD is part of the package. I think what we see is very different pattern. In the more private sectors, investments are usually taken when, there is the need or when customers see the need and The desire to to have this technology so they can act a little bit more fleet freely to to do this investment. And that is something what we see, for example, in In North America. Then on the other hand, in Europe, the market is still dominated by Public hospitals and public publicly funded, funded by the local governments. Usually, they are bound to a long term budget process. And here we see More a patent where customers are deciding for the Zebra technology in conjunction with a replacement of the treatment system. Okay. We have a person who raised their hand. I'll just allow them to talk. Hello. Can you hear us? I just had do you have your mic on? Sorry. Hello. Is that me? Yes. Okay. Sorry. Hi, just a couple of questions quickly. Just on the pickup of order that you've seen in the U. S. And the continuation in China, and I was just wondering if you could give us a Sense of the market share of the new orders that you're having in the various region? The first question. The second one was, do you believe that Europe is sort of 1 quarter behind the U. S. Or because We've seen more problems and it's been longer that it's going to take a bit longer for European Investment to catch up with what's happened in the U. S. And then the third question was, I think you mentioned in your presentation that you were The positioning market should be about SEK 1,000,000,000. I don't know if you said roughly when you think that would be. And I know that, that would be clear to forecast, but sort of sense of what share of that market In the long term, you would assume to take. Okay. Thank you very much for the questions. So the first question was related to the market share of the orders. And I assume now This market share, you mean the split between the different vendors. I can't give you the exact numbers now. I mean, it is still so that we, in general, are delivering to oil vendors. Having this set, I think especially for the North American market where we engaged in this cooperation with Elekta and this is turning out very successful. Yeah. We are leaning more towards systems that are installed, on an ELECTA machine. The second question was related to the delay in orders. If I understood the question right, it is related to Specifically to the European region and what we see there, I mentioned already earlier that in Europe, The majority of the hospitals are public hospitals, are the publicly funded hospitals. What we certainly see is that the decision making process The approval process of investments is getting longer. I think that is nothing what is only affecting CRAD, but we see That also with other vendors in our space. So it is not that the investments have been stopped, but the approval process has simply been, You know, it's becoming more complex and therefore it takes more time for the decision. And I think that's also what We see reflected especially on the order intake side. So the third question was related to the market potential. I think where we are coming from is if we look at the total market we believe that there is still around 5,005 100 Linux That are supposed to be equipped with surface tracking. If we if the assumption that it is standard of care, If we assume that C RAT technology C RAT's technology will be installed on this Linux For surface tracking, we believe that there are still 5,500 linacs to be equipped. Having this said, over the next years, I mean, we will still see a ramp up curve. And I think this 1,000,000 would be Ultimately, the annual market potential for oil companies in that space. Then we come to the next. Okay. I will, so there's the next person who raised their hand, I'll just unmute them. Hello, Hans. I unmuted you. You can ask your question. Hello, May. Hello. Yes, we can hear you. Yes, we can hear you. So first, really attack. Yeah. Man, they want to divert. You have you have under our own. I'm not even sure. I'm not even sure. I'm not sure. I think the connection is breaking a little bit. Could you just repeat your question? Okay. So I mean, the StarLeap project was kicked off by various companies in Cooperation with universities around, yeah, around Elekta, basically, around MR Linac. Seabird was contributing in this project actually on 2 angles. But the main focus for us was to explore the Technology, the surface tracking technology and an MR environment and how surface tracking could contribute, can contribute into The MR workflow. I don't want to go too deep now into the the results. I think we found very, very interesting results as part of this research project. And that might have influence on our products moving forward. Okay. Thank you. Do we have any other questions? Yes. We have more questions. So now I just hand over the mic to Oscar. You can ask your question. Hi. Thank you for your presentation. I have two questions to Tim initially and that is how is the collaboration with Elekta progressing in Asia? And then I also would like to know if you can make any comments on the current dispute with the former employee. And then towards Henrik, I would like to know Whether the current cost base will look, can we expect a similar cost base in the coming 12 months? Thank you. Do you want to start, Henrik? Well, I can start off with the question on the cost base. And the rough answer on that is, I mean, we Are clearly on a growth journey, as Tim has described. I mean, we have various factors supporting that growth. And but one factor is, of course, further investments in our organization. But we still expect That cost wise, the investments in your organization will be lower than the growth in revenue. So I mean, the short answer is yes, you can expect it to go upwards, but over time, revenue will increase more. So putting more on the bottom line. Perfect. So then, the other question was the elector cooperation In in Asia, to be precise, I mean, right now, this is China, specific to to China. So I think, I mean, Also, what we have learned in the in the process of getting the cooperation implemented in the US, I mean, it takes some time to train and educate the sales organization, To align the messaging, to align the approach towards the customer. But I think we made good progress. We have received the first orders out of this collaboration also in China. Having the set, there is, of course, still a way to go. And we, I think, see in North America, where it could take us. Well, today is still something to be done, but China simply started much later in this cooperation. So, but I mean, I'm very optimistic. I think Customers in general appreciate that. I think what is also very important, I mean, this approach of Thinking of making this technology to standard of care, I think the customers like the idea that, the vendors take a position And select one vendor as their partner. So customers are usually taking a decision for the next 10 years. And from that perspective, they also want to be reassured that compatibility is guaranteed over the next year. Okay. So sorry. And then the other question, the second question was related to the dispute with For my employee, I can't give much more details at this moment. I mean, the hearing is scheduled for end of this month. It starts on May 17th. Yeah. That's the only update I can give at this moment. Perfect. Thank you. Thank you. Priscilla, do we have more questions? Yes, we have more questions. We have Peter, who is trying to ask some questions, but they are in Swedish. I'm just going to see if I can allow him to talk so he could ask his questions. Hello, Peter? Okay. Maybe, he doesn't want to talk. If you can send your questions in English, then maybe I can Read them out loud. We have some other questions from people who cannot use their mic. I can read out this one. When do you expect to have cannabis plus version approved in all markets? Well, I mean, the major markets are already Covered, I mean, we obtained CE approval. Yes, basically, it's now a year ago, or CE clearance for the European market. The U. S. During last summer, so these two major blocks are covered. The countries that typically have a longer lead time is China and Japan. In both countries, the approval process is ongoing. And, yeah. We do our best to do it as quickly as possible. So I can't give an exact date simply because it is not following a very, how should I say, a very clear and obvious Time pattern, but I'm confident that, yes, next year, we will have it cleared also in those markets. And we have a following question. Can you comment a slight decrease in the number of employees? Is that a result of COVID-nineteen or other reasons? Yeah. I mean, CEVA took active measures during last year To also and that affected also some of our employees. So that is the main reason, yes. And we have one question. What's the plan with cash of $111,000,000 Do you have any plans to buy other companies. I mean, that is certainly an option. And the sort of the core reason for the ride It's a share issue that was conducted a little bit more in a year ago. That was to add funds to the company to enable Growth for the company, and that growth could be accomplished by investing in an organization or perhaps acquiring another company. So that is sort of Yeah. That could be part of the agenda, yes. But that said, not too many target companies within our Space of Technology. But again, yes, could be. Okay. And we have this question. The next question, in the reports you state that you expect the product sales will continue to grow in a notably higher paced than the overall market. Could you give some flavor on how much your overall radiation therapy is estimated to grow the coming years to put your prediction into some context. So the research that I was quoting here now In the presentation, we're foreseeing 7.8% annual growth rate. Okay. And we have some final anonymous questions. I'm just going to it's about 3 questions. I'm going to read them out loud. You highlight a strong performance and development with Elekta in North America. Do you see the region In the future, can become of similar importance as EMEA in terms of volume? Well, I mean, in the first place, the North GenMarket is reflecting roughly 40%, 45% of the global market. So, I mean, there is a significant In North America, there's no doubt about this. I think what we saw now for the first time In, yeah, in the Q1 this year, basically, North America and APAC region was roughly were both Roughly on the same level in terms of order intake, which is certainly a step forward compared to what we have seen before. I think what is important for us is, to focus now on developing this market further, to Utilize and work with our partners to develop the market and develop the marketing And to save strategy even further, but at the same time also, to continue working with our direct sales force towards the end customers. And I think what we have also seen last year that the proton market gives us a good opportunity. I think XERAD is Well recognized as vendor for surface tracking for the proton market. And I think that's also something what customers see and understand. And The proton, let's say, the dynamic in the proton sector in the U. S. Currently is fairly good. Okay. You mentioned that the average delivery time for products in the quarter was 7 months, which is slightly higher than usual. Is there anything particular behind this? And do you expect longer delivery times going forward? Thank you for that question. No, I would say there's nothing particular in that. But just taking a step back, I mean, during 2020 delivery times were actually a bit lower than usually, and the mechanics behind that was sort of that a lot of already ordered Projects were stalled due to the pandemic coming as a great surprise and shock to everyone, but whereas orders that were placed In 2020, during the pandemic, we're sort of done with, no, eyes wide open from the customer perspective. I mean, they placed the order And want to chip in fairly quick. So that's why delivery times in 2020 were fairly low. So What we see now in 2021, at least the Q1, that we have been able to ship out a couple of sort of Older projects or orders in the order backlog, which essentially is a good thing, but that is what sort of Mathematically drives that number up a little bit. But, I mean, going forward, it's it's, of course, difficult to say exactly how the Ongoing pandemic is going to play out in various regions. But I would say that where we ended up now in q1 and what we had in 2020, I mean, the average of those 2 is is probably what we could expect for the foreseeable future. Okay. Can you elaborate on the development and reimbursements you are seeing and how these are driving the adoption of service tracking? Well, I mean, in general, if we look at major markets, I mean, the implementation or adoption of High precision radiation therapy is in general incentivized. And as such, also surface tracking is one of the Tools that are required to deliver these treatment or these techniques in a safe and efficient way. So, I mean, in some markets in North America, for example, there are direct reimbursements, but otherwise, there are indirect reimbursements for investments in this technology. Okay. We have just two final questions from that I received in the chat. Any plans to present CRAD for investors outside Sweden? Well, I mean, among the larger investors, we have a few international investors as well. Yes. And we have some investors From Europe mainland, but also from overseas. So yes, I mean, the focus is not now to make roadshows abroad, but or target investors abroad. But I think Europe and Europe mainland is within reach for us. Okay. And now the final question. Are CRAD going to try to buy the rest of the 50% of patent from Bimoccular, and if so soon or later in future, our and our bankruptcy trustee That part, Srachal negotiate with. That one is not pretty clear. So, If I may comment to the extent I can at the moment. So the other 50% are Owned by the bankrupt estate, and the other 50% are owned by CRAD. I mean, at the moment, we have no active plans to to take this any, any further. Having just said, I mean, Plans might change, over time. But I want to emphasize, I mean, this patent is related to the GEMANI product. And this is nothing what we are Actively pursuing from a development perspective, as we speak. So the focus of our organization and where we really see the opportunity in the market It's related to our positioning products. And yeah, basically, that's also what we have presented here. The results are Not related to Geminidare, related to our positioning products. Okay. That's it for the questions. Perfect. Then I would like to take the opportunity to thank everyone for attending this