Modulight: Positive development continued, start-up of local operations in USA progressed well
Modulight Corporation | Company Release | August 18, 2023 at 13:00:00 EEST
This release is a summary of Modulight's half year report for January-June 2023. The whole report is attached to this stock exchange release as a pdf file, and is also available on the Modulight website at https://www.modulight.com/reports-presentations/.
The figures in brackets refer to the corresponding period of the previous year. This half year report is unaudited.
Highlights in April–June 2023
- Product development projects and customer relationships progressed well, and the number of customer meetings continued to grow.
- The R&D pipeline stayed on a record level and several projects progressed close to the commercialization phase.
- Revenue was EUR 1,107 (498) thousand.
- EBITDA was EUR -1,581 (-2,176) thousand. Profitability was impacted by the planned investments in developing and growing the business.
- EBITDA margin was -142.8 (-436.8) % of revenue.
- Operating result (EBIT) was EUR -2,095 (-2,610) thousand.
- Operating result (EBIT) margin was -189.2 (-524.2) % of revenue.
- Earnings per share was EUR -0.05 (-0.07).
- In May 2023, Modulight’s Board of Directors decided on a new stock option program for key persons of the company. The options entitle holders to subscribe for a total of up to 500,000 new shares in the company or shares held by the company between 31 December 2025 and 31 December 2028.
Highlights in January–June 2023
- In January 2023, Modulight received a pre-market approval (PMA) from the U.S. Food and Drug Administration (FDA) for its laser device for the treatment of wet age-related macular degeneration (AMD) in the United States.
- Revenue was EUR 2,600 (2,100) thousand.
- EBITDA was EUR -3,010 (-2,594) thousand. Due to the execution of the growth strategy, the company's expenses in the first half of the year were significantly higher than before.
- EBITDA margin was -115.8 (-123.5) % of revenue.
- Operating result (EBIT) was EUR -3,998 (-3,480) thousand.
- Operating result (EBIT) margin was -153.8 (-165.7) % of revenue.
- Earnings per share was EUR -0.09 (-0.10).
Key figures
| Group EUR 1,000 unless otherwise noted | 4–6/2023 | 4–6/2022 | 1–6/2023 | 1–6/2022 | 1–12/2022 1) |
| Revenue | 1,107 | 498 | 2,600 | 2,100 | 4,599 |
| EBITDA | -1,581 | -2,176 | -3,010 | -2,594 | -5,936 |
| EBITDA, % | -142.8% | -436.8% | -115.8% | -123.5% | -129.1% |
| Operating result (EBIT) | -2,095 | -2,610 | -3,998 | -3,480 | -7,792 |
| Operating result (EBIT), % | -189.2% | -524.2% | -153.8% | -165.7% | -169.4% |
| Earnings for the period | -2,093 | -3,145 | -3,831 | -4,370 | -8,552 |
| Earnings per share (EPS, EUR) | -0.05 | -0.07 | -0.09 | -0.10 | -0.20 |
| Acquisition of fixed and intangible assets | -3,262 | -1,536 | -6,745 | -5,164 | -13,694 |
| Free cash flow from operating activities | -4,843 | -3,711 | -9,755 | -7,758 | -19,630 |
| Cash and cash equivalents 2) | 32,661 | 53,802 | 32,661 | 53,802 | 43,870 |
| Net debt 2) | -25,122 | -44,917 | -25,122 | -44,917 | -35,586 |
| Gearing ratio 2) | -39.4% | -62.6% | -39.4% | -62.6% | -52.7% |
| Equity ratio 2) | 87.0% | 86.1% | 87.0% | 86.1% | 86.3% |
| Headcount (FTE) 2) | 74 | 72 | 74 | 72 | 62 |
1) Audited
2) Figure refers to the end of the review period
Outlook for 2023
Modulight has not issued guidance for revenue or profitability in 2023. As the company’s customer projects are still distributed across varying early stages of development, and predicting developments in the market remains challenging, it is difficult to forecast performance in 2023. However, the company expects that the macroeconomic and geopolitical uncertainty will still impact its financial performance in the short term.
Seppo Orsila, CEO
The positive development of our business continued in the second quarter. Product development projects and discussions with new partners progressed well, and the number of customer meetings continued to grow. With the market authorization we received in the United States, the development of SaaS-based business models and the start-up of local operations progressed well.
Our revenue grew, and our profitability improved compared to the weak figures in the corresponding period last year. Our revenue in the second quarter of 2023 was EUR 1.1 million. It increased by 122 percent compared to the same period a year ago but decreased 26 percent compared to the first quarter of this year. Our operating margin (EBITDA) was EUR -1.6 million (EUR -2.2 million). Our profitability was impacted by our planned investments in business development and growth.
Our R&D pipeline with 27 projects at different stages remained at a record level. Overall, the development of the projects was even more positive, and several projects progressed close to the commercialization phase. We estimate that their revenue potential is significant. As a result of the market authorization in the United States, the first patients were treated with our laser device for the treatment of wet age-related macular degeneration (AMD). In addition, discussions with a large dental company progressed well, and the start of cooperation was confirmed at the beginning of July.
We have expanded our comprehensive analysis of the potential of the product development pipeline, combining economic and medical information, and used the results in particular for the pricing of the Pay Per Treatment (PPT) payment model. We estimate that the price per treatment session is around €1,000 - €10,000, which typically represents 1–10% of the total cancer treatment costs. We believe that using our treatment with this pricing model would reduce the overall cost of treatment, in addition to the other benefits it brings to patients. We are now gradually implementing this pricing model and believe it will have a financial impact in the short term.
Our research and development work continued actively. We continued high-quality research, our patenting projects progressed, and we started a project that will further support the information security of our solutions even better and speed up our quality and product certification processes.
The development of SaaS-based business models has progressed well. The productization of the service and the introduction of a new operational model to the market will continue actively. Revenue from the SaaS model typically accumulates more evenly than from equipment sales and only after the service, i.e., the treatment session, has been performed.
Our ambition to expand our operations in the U.S. has progressed well since receiving the FDA approval and establishing the first product support center on the East Coast. We have been actively visiting customers in hospitals and have continued discussions especially about the PPT business model and developed our local organization.
The positive development is also indicated by the increase in customer meetings before the start of the summer holiday period. Our head office and production facilities in Tampere, Finland were also visited by many visitors during the global photodynamic therapy IPA conference we organized in July. The conference brought together some 250 leading experts and scientists in the field. The successful event arrangements and factory visits were a good opportunity for us to increase awareness of Modulight and expand our network. Discussions with our partners also confirmed that we are known in the industry for our excellent capabilities and long-term high-quality research.
We believe that actions in line with our growth strategy and our long-term investment program will contribute to the return of our business to strong, profitable growth.
Financial reporting in 2023
In 2023, Modulight will publish the following financial reports:
- Business review January–September 2023: October 20, 2023
Webcast
Modulight's CEO Seppo Orsila will present the result in an English-language webcast, which will be held on August 18, 2023, at 2:30 p.m. EEST. The broadcast can be followed at https://modulight.videosync.fi/q2-2023-results. Questions are to be submitted in writing in the webcast portal. CFO Anca Guina will also be present to answer questions. Presentation materials will be available before the start of the event on the company’s website at www.modulight.com/reports-presentations/.