Welcome to Nexstim's Webinar for Investors, Analysts, and Media. Nexstim CEO, Mikko Karvinen, and CFO, Joonas Juokslahti, will be giving a presentation that will take about half an hour, and after that, they are available for answering any questions you might have. You can send questions through the Q&A chat at any time, but they will be replied to only after the presentation. When you write a question, please state your name and optionally, your organization. As you send a question, it will first be visible for us organizers only. The webinar will be recorded, and we will inform you later on where you can find the recording. We've booked an hour for the webinar. In case we do not have time to answer all questions, we will email you later, given that you have given us your full name within any questions.
Now, let's move on to the webinar. First presenting us, Nexstim CEO Mikko Karvinen. Go ahead.
Thank you, Essi, and welcome on behalf of myself. My name is Mikko Karvinen, I'm the CEO of Nexstim. I'll be joined in this webinar also by our CFO, Joonas Juokslahti, later on. I'll begin with sharing a slide deck. About Nexstim. We are a company that focuses on personalized brain diagnostics and therapy, and in this cover slide, you can also see a glimpse of our latest system, the NBS 6, on, on the background software, and then you have also the, the, the treatment coil and, and the head tracker placed on the, on the patient's head. I'll begin with a few general slides about Nexstim, if there are some, some new listeners. First about the Nexstim story, we are a Finnish, globally operating, growth-oriented medical technology company.
We have a very important mission, which is that we enable personalized and effective therapies and diagnostics for challenging brain diseases and disorders. These type of diseases and disorders include, for example, mapping the brain's motor and speech functions for tumor patients that will undergo a surgery, and then also patients that suffer from major depressive disorder or chronic neuropathic pain. We help these with our therapy system. Our innovations create a possibility for these patients for a better life. We vision that with our technology, technological know-how and superior services, we ensure the best treatments for our patients, deliver the greatest value for our customer hospitals, clinics, and business partners, and long-term growth in shareholder value for our investors.
A bit about our values, which are solidly grounded on science and clinical evidence, which we base, of course, our system and the research done upon the system. We strive for financial success in all that we do, and I can see clearly the passion and commitment from the Nexstim team and also our customers and business partners that are in our network. Finally, very importantly, the ethics and responsibility. We take this seriously. Our systems, as an example, are designed in Finland, they're also manufactured in Finland, and as one particular example, we have our one-time use head trackers are already produced in a carbon-neutral factory. You can see the picture of the fully integrated Nexstim NBS 6 system on the right, and, of course, we deliver, I say, fully integrated.
Everything you see on the right, except, of course, the patient, is, is something that is delivered by, by Nexstim, so it's the full, full system. It's a unique proprietary neuro navigated TMS technology for both diagnostic and therapy applications. TMS is short for transcranial magnetic stimulation, and our uniqueness is in navigating the actual electric field that gets induced into the patient's brain, and we do this using a 3D model of the patient's own MRI. Number one mega trend that supports our growth is aging population. Population aging, and a significant decline in the working age-enabled population is happening in the Western countries broadly, and brain diseases increase with aging. Diseases such as brain tumors or certain mental, mental health disorders, they increase, in general, with aging.
Also, technological development in healthcare is, is constant, and we're very happy that there is active research, using Nexstim systems as example. There are new, new applications in treatment of challenging brain diseases and disorders that we believe that are going to be available in the future, on top of what we already have. Then finally, in all healthcare systems, there is pressure and need to be more effective and faster in rehabilitation, rehabilitation of the patients, and as an example, chronic neuropathic pain patients, which, typically are, are still working age and, can be, rehabilitated as, as full members of the society if, if they get, successful, clinical, meaningful pain relief. This can be achieved by, for example, by using Nexstim, Nexstim TMS systems.
Then finally, before going into the business update and the numbers, I want to update in general, what kind of businesses and products we, we have in Nexstim available at the moment. They're the same system platform that you saw in, in the previous slide, can be used for both diagnostics and therapy businesses. We call the system a Navigated Brain Stimulation device, a marketing name when we sell it for diagnostic purposes, and then we call it NBT, Navigated Brain Therapy system, when we use it for therapy business. The NBS 6 system, the newest system that I'll tell you about is, is basically having a therapy in an NBS system, but that's an example of something that we are moving forward with.
The NBT systems, the vast majority of the therapy systems, if not all, over 70 of them, have been sold with the NBT marketing name. There are over 220 systems sold in the diagnostic business, where we started off with pre-surgical mapping of the brain, which is the main application. We map the brain's motor and speech functions, and this helps the surgeon in better resecting more tumor as much as possible, but doing this also in a safe manner so that the patient is treated safely during the surgery. We are the only TMS manufacturer in the world who has both FDA approval and CE marking for pre-surgical mapping of the brain's motor and speech areas. The only TMS system having both FDA and CE marking.
On the therapy side, we have over 70 systems that include the therapy software. Some NBS systems have also an NBT software, but there are over 70 in total, NBTs and then systems, NBS systems having a therapy software. The application area is depression and chronic pain, which are both CE-marked in Europe, so we can sell and market the device for depression and chronic pain treatments. In the United States, we have a FDA approval for major depressive disorder treatment, and there is also a wide existing insurance coverage reimbursement for treating major depressive disorder with TMS systems. This benefits, of course, private clinics in particular, when they treat, treat patients, so the patient flow is larger due to the reimbursement in place. We, we can see very good efficacy results in both depression and chronic pain.
In the depression area, we have a patient registry that we, we have been operating, that gets input from the private clinics in the U.S. After a bit more than 400 patients, we can see that there's a 50%, 5 0% remission rate among the depressed patients, and also, 76% response rate. These are very high numbers for patients that suffer from treatment-resistant depression, so they have undergone, pharma, pharma treatment, so depression pharma treatment before, before seeking help with TMS. In the chronic pain side, we are CE-marked, but we do not have FDA approval.
We are looking for additional clinical trials that would be needed, and we are working with key opinion leaders in this area in Europe and also in the U.S., to possibly facilitate, a approval process further in the future. We have already European centers, such as Helsinki University Hospital, that use our Nexstim system for chronic neuropathic pain treatments. We can see that the results are such that about half of the patients, between 40%-50% of the patients that are treated with the Nexstim system, get clinically meaningful pain relief. This is also a very effective therapy for those suffering from serious, chronic pain, or issues. These are typically patients that have not got, help, either fully or partially, pain relief from, from using drugs.
Very, very much needed form of pain treatment. We published our H1 2023 numbers this morning, Finnish time, 9:00 A.M. Our CFO is going to talk about them in the next slide. Before going into the numbers in detail, I want to share a few highlights of the business and the financial summary of the first half of 2023. First of all, the first half of 2023, we had a special focus on projects that are crucial for the company's strategic competitive advantage. These including, include the improving the cost efficiency through our new global team structures. We implemented a new global team structure during the winter and springtime.
As an example of that, we have a global sales and marketing team, led by our Vice President, Sales and Marketing, Henri Hannula. Then we have also other teams, such as the clinical application team and the technical services team, are now global. They are led by one team leader, and then the team has knowledge sharing and also discussion and operative excellency throughout the company. The quality, quality, and the procedures we do globally are at the same, same format, and they are shared upon the same team. This will bring cost efficiency in the long run. It's a strategic change for us. It will also help us grow in the future when we have these global teams. We also launched the new NBS 6 system, which I already mentioned, in both the EU and U.S. markets.
This was also a big strategic initiative for us, so it means that we have a regulatory approval for the NBS 6 system therapy in the EU for both major depressive disorder and chronic neuropathic pain, and then in the U.S. market for major depressive disorder. We launched the system in Colorado Springs as part of the Clinical TMS Society meeting held in May, and now we are ready for orders and also deliveries of the NBS 6 in both markets. We are wait for such orders and deliveries to happen in the second half of this year. Then we also continued the discussions on new strategic partnerships to further scale the use of our technology in care.
Here I want to highlight that we have discussions that are possible in areas such as, indications where new indications, where Nexstim technology could be used, that we have not invested, time or research into ourselves. This is a path that we want to follow in the future, and we did already license our technology last year to Magnus Medical, Inc., a company located in U.S., California, that focus on depression treatments with the same protocol, but we are also looking for, for other possible partners in the therapy area to use our technology in the future.
When we look at the diagnostics area of our business, we are in discussions with partners who could help us scale our business in diagnostics, and these are in particular companies that already work in the area, larger companies. The Nexstim and we can, we could utilize to begin with the marketing, sales, and distribution network together. There will be more news flow about this once we are ready to inform the markets. The system sales, if we break down the system sales for the first half, was EUR 1.1 million. There was a decrease of 37.4%.
I want to highlight that in the system sales side, the comparative period, so last year, 2022, first half, when we started off the year 2022, we had a EUR 1 million order backlog of systems. We highlighted in the report that this year, 2023, beginning, we didn't have an order backlog of systems. There's a EUR 1 million difference. A lot of the decrease can be explained by not having the backlog in the system sales. All the systems we sold during the first half of 2023, we also got the orders in the same first half. The order delivery process was done fully in this half year period. The recurring net sales accounted for EUR 1.4 million.
There's a slight decrease of 6.4% in this area, and this is mainly due to pricing pressure in some of the consumable items we sell, but also certain contracts facing pricing pressure when renewed. There's a slight decrease in here, but we are knowledgeable about this, and this was of no surprise, and we are dealing with it. For example, with the new system, we have a modular licensing approach that can help us in increasing the amount of recurring net sales in these type of cases. Finally, the licensing business accounted for zero for.
It was a zero for the H1 2023. Last year, 2021, H1, we had our first, and largest licensing, revenue, where we had EUR 3.5 million signing fee for the Magnus Medical licensing agreement, where we license our NBT technology for Magnus for treating, depression patients with the same technology. No one, one- off revenue, such as last year. That also explains a lot of the decrease in the revenue. The net sales in total amounted to EUR 2.5 million. As I explained, there was a decrease, partially from the license revenue, and then otherwise because of the lesser order backlog. Comparable net sales, we only decrease, or subtract the, the licensing revenue away.
We have EUR 2.5 million. There's a decrease from EUR 3.3 million as a comparative net sales. EBITDA was -EUR 1.1 million. Result of the period was -EUR 1.4 million. Looking at the diagnostic business separately, the net sales were EUR 1.3 million, which was a decrease of 36% from H1 2022. Again, a lot of this is explained through the lesser amount of diagnostic systems sold. This relates a lot into the comparative period, larger backlog when beginning the year. In the therapy side, the net sales were EUR 1.2 million, which was a decrease of 75.2%, and it's almost exactly the $3.5 million technology license fee that we recognized during the spring of 2022.
Explains the difference between H1 2023 and H1 2022. This Magnus Medical license was one, one time, one-off revenue, which we got in spring of 2022, and we await the royalty period to begin 2024, second half in our estimates, which is in line with the public knowledge we get from, from the Magnus Medical press releases and also discussions with their team. As a final point, I want to highlight that the company achieved savings of approximately EUR 0.5 million in operating expenses compared to the comparison period.
This is something that we did as a precautionary manner, measure because we knew that the start of the year for is in system sales, is going to be slower than the second half, and then also as a strategic objective, we also want to be cost efficient, and in that way, help, help our profitability when moving forward. There are also going to be cost savings that will benefit us from the actions we've already taken during the first half of this year. With this business and financial summary, I would want to have our CFO, Joonas Juokslahti, go through some of the details of the numbers. Please, Joonas.
Thank you, Mikko. Good afternoon, everyone. Let's take a look at some of the key financials of the H1. If we go from the top, the group total net sales were EUR 2.5 million, which means a decrease of 63%. It's really important to understand that the comparative period was extraordinary in more than one way. I mean, the H1 2022, we recognized the one-off license payment worth $4 million. We started the year with an order backlog of EUR 1 million of system sales. This year, we didn't have any of those. All the system sales in the H1 were orders received during the review period.
We generated EUR 2 million of gross margin in H1, and it was great to see that the gross margin ratio has remained on a very good level of 80%, which is the same level of comparative gross margin we saw last year. As already stated in the heading of the report, we mainly focused on the cost efficiency in the first half of this year. The personal expenses were EUR 2.3 million, with a decrease of 9% year-on-year. Other operating expenses, EUR 1.5 million, and we saw cost savings of 17% in comparison to 2022. In total, we achieved operating expense savings of over EUR 500,000, or 12%, when comparing to first half 2022.
We have, we have shifted into this global process organization. We are, we are looking for added cost efficiency wherever possible. For example, by utilizing digitalization as widely as possible, we can, we can achieve cost savings in, for example, travel expenses globally. The operating result was - EUR 1.4 million, whereas last year it was EUR 2.3 million. Here, again, it's important to remember the license payment of $4 million in the comparative year, which was mostly margin for us. The operating cash flow was - EUR 1.4 million, and the cash balance was EUR 2.1 million at the end of the period. We are not planning new funding rounds at the moment.
So after the review period, as you might have noticed in the company announcement, we have agreed on a bank loan with Nordea Bank of EUR 1.5 million, that is to be used for strategic investments. With the first half of the year behind us, the future outlook remains the same, it goes as follows: Based on the business forecast, the company expects that its comparable net sales will grow in 2023, and its EBITDA, meaning operating result before depreciations, for the financial year, will be positive. We have still a few more slides before we go into the Q&A session, where we would be happy to answer any and all of your questions that you might have.
Mikko will go through a few more slides and then to the Q&A. Thank you.
Thank you, Joonas. Yes, there's a few more things I want to, to mention, which I think are relevant before we go to the Q&A session. I want to remind us about the Nexstim key strategic objectives for this year. There are three of them. The first one is profitable comparable net sales growth, leading to a positive EBITDA operating result before depreciation for the financial period, while minimizing future capital needs. We have a -EUR 1.1 million , minus in EBITDA for the first half of this year. There's, there's, of course, work that needs to be done in this area for the, for the second half. There's a, a strong pipeline in sales for, for new systems, and majority of the, the positive EBITDA, the DA relates to, to scaling our sales.
Selling more systems in particular, and of course, being also cost conscious. Our expenses are mainly fixed in nature. By scaling our sales, the profitability in also in the EBITDA increases quite fast. Finally, while minimizing future capital needs, means that as Joonas mentioned, we have a cash balance that is sufficient for running our operational business at the moment. We also have a loan that we drew from Nordea Bank that we will use for long-term strategic investments. There is no need that we see right now for future capital or fundraising. Number two, I'm very happy about the fact that we have launched the new NBS 6 product, enabling easy-to-use systems and the use of future additional models in the same system.
The NBS 6 therapy was launched in spring of this year. It's out now. We've already fulfilled this strategic objective, but of course, we are awaiting the system orders and then deliveries to happen in the second half. We can follow the, we will follow with the diagnostic modules that we estimate to be added in the next year of 2024. For this year, important milestone to get the R&D work ready to get it regulatory approved in both EU and U.S. markets and begin selling and delivering the systems. Number three, finally, not the least, expanding the network of Nexstim exclusive collaboration clinics, primarily in the USA and Europe.
Of course, this is an area where we have difficulty to tell about all the details, because we do most of the negotiations in under strict confidentiality agreements. I can tell you that there are several discussions now moved into negotiation phase, and we are negotiating with clinics in clinic partners in the U.S. and in Europe. Of course, we hope to get news flow out of these partnership clinics during the second half of 2023. That's the detail I can share now. Then you need to follow the Nexstim news flow to find out more in the future. As Joonas mentioned, our future outlook holds from February.
Based on business forecast, the company expects that its comparable net sales will grow in 2023, its EBITDA operating result before depreciations for the financial year will be positive. Finally, a quick peek into the NBS 6 system, the future of Nexstim system. I want to highlight that developing and launching a new product generation is an essential part of Nexstim's work during this 2020-2024 strategy period. Next year we are ending this strategy period, and one of the big objectives for us was to get the NBS 6 new product generation launched. We've partially done it now because we have the therapy launched, and we are looking forward to getting the diagnostics also as part of the Nexstim system, as a combined system, during next year, 2024.
This combined system, NBS 6, is a new system that has been built on Nexstim's unique, clinically established technology. Most of the changes have been done in the software side. We've taken a look a lot into the usability of the system, and also a modular product design that allows for an expansion of system capabilities over time. As a first example, we start off with the therapy modules now, and there's going to be the diagnostic modules added. Even further, when we have new features or new indications that are relevant for our customers, we, we need not necessarily have new hardware, but it's instead, our customers can upgrade their update their softwares, and upgrade their licenses. Through this modular type of structure, this also creates long-term value for Nexstim's customers and investors.
Customers for ease of upgrading, for investors, in a sense that we can scale the customer business without necessarily updating the hardware itself. This is something that we do responding to customer demands. The NBS 6 software has been developed in close collaboration with Nexstim customers, ensuring the best possible level of usability. Usability, easy to use, easy to train, that is very important now because there's a lot of staffing pressure in a lot of places, especially with nurses and technicians, whether they're in hospitals or in private clinics. We want the customer to be able to treat the patients within the same day that they have received the training for the system. With our new NBS 6 software, the usability and the training capabilities are such that we can give this promise to our customers.
The new combined system responds to the great customer dema- demand for system that allow the delivery of both diagnostic and therapeutic applications. That's the final part that will happen next year, estimated to happen next year, which is that the diagnostic modules are added, then the NBS 6 has both therapy and diagnostic applications in the same system. With that happy news about our current and future NBS 6, I thank you, I welcome you to follow us on the social media, X, LinkedIn, and Facebook, there's the addresses. I thank you for your interest already for viewing this presentation, I welcome you to join also the Q&A session if there are any questions you would want to ask me or Joonas. Thank you.
If there's any questions you would want to type, there's the live event Q&A, where you can type your question and it should be visible for, for us participating, and then we can try to answer with our best, best capabilities. Okay, it seems that there are no, no questions at the moment. I, I hope that you follow our, our news flow. We will be, of course, doing a lot of releases towards the end, end of this year, during the second half of 2023, and we will be publishing as a, as a financial information package, the next full year numbers and the H2 numbers on the 27th of February of the year 2024. Thank you for your interest, and I wish you all a very good weekend. Thanks!