CEO’s review

Modulight’s CEO Seppo Orsila in connection with the business review for January-September 2022:

During the third quarter, we made significant progress with projects in our R&D pipeline including the cloud strategy, continued to execute our growth strategy by investing in production capacity and increased sales visits and marketing activities.

After having been affected by restrictions for a long period of time, we have now been able to travel and visit U.S. customers and clinics every week last month. We also held a record number of exhibits in the U.S., where the number of visitors is far below the preCOVID era but has clearly increased from the spring. All this has benefited the dialogue with both existing and new customers and as a result, we have made significant progress in our R&D project pipeline, including the identification of promising opportunities to accelerate our pay per treatment cloud strategy in the short term.

During the quarter, the component availability eased somewhat, and we were able to send the deliveries that were delayed in the second quarter. Our revenue in the third quarter was EUR 1,232 (2,137)
thousand and our EBITDA was EUR 1,342 (1,025) thousand.

The most important indicator of our strategic performance, the product development pipeline, remained solid with 26 projects. There are a few large projects in the pipeline that have progressed well, and we were happy to start a new parallel project with an existing customer during the third quarter. Other highlights of the quarter include the good progress of our bladder cancer study with the first patient being treated with our laser, as well as positive development in an FDA audit related to a major project with a leading customer in ophthalmology.

During the quarter, our patent application in the field of remote monitoring and configuring a cloudbased medical device was approved in the U.S. This follows the patent we were granted last year also in the area of remote-controlled medical devices. Additionally, we filed one new patent application during the third quarter in the field of fluorescence imaging. We expect to continue filing other important patent applications this and next year.

The aftermath of COVID-19 still continues to affect us as the restrictions on travelling and site visits slowed down our customers’ research projects and our sales efforts for a long period of time. However, during the third quarter, we were already able to increase our sales and marketing activities despite the remaining restrictions. As our sales cycles are long, we expect that our efforts will support our development in the medium term. Additionally, Russia’s war on Ukraine continues to cause uncertainty in our business environment.

Thanks to our strong balance sheet we have been able to continue the implementation of our strategy and to keep on investing both in people and in equipment. During the quarter, we also celebrated our one millionth entity manufactured. Additionally, I was happy to see that the results of our Employee Satisfaction Survey were again very positive, despite our team’s fast growth and challenging financial performance this year.
In addition to several customer visits, we were also very actively participating in important marketing events. During the quarter we also announced that we were trusted to organize a prestigious congress in the photodynamic field in Tampere, Finland in July next year. Moreover, we were invited as the first Finnish company to join the Quantum Economic Development Consortium (QED-C) to further support quantum ecosystem initiatives in the U.S. In my opinion, these signify the great appreciation of our stakeholders towards us and our long-term partnership with many of the leading researchers in the field.

We firmly believe that our long-term success is based on our unique technology, and all customer feedback we have received implies that they appreciate our technology and knowhow. This is also very visible in our projects, where customers are increasingly interested in the opportunity provided by our cloud-based services. We are confident that in the long term, we can achieve our financial targets of maintaining our high-rate revenue growth and high degree of profitability. We are currently reviewing our strategy and updating especially the go-to-market strategy. The updates will be announced later this year.”