Gerald Pötzsch, CEO of ContextVision. You've been here now for a few months, you know. What's your take so far?
Well, it's been very rewarding first two months. I experienced a very welcoming, open, inclusive culture. ContextVision, for me, has simply proven to be a great place to work. let me also mention two fundamental insights. Number one, very positively perceived from my side and I guess also externally, is that we have a very healthy business. We're growing stronger than the market. We're having a very positive cash flow position. Margins look good. We're debt-free. overall, good opportunities moving forward. Number two, our tech drive and position is very strong. We almost have 50% capacity allocated to it, and that gives us a you know likewise a strong momentum into the future.
What would be your main focus going forward?
Well, next to the technology focus that I mentioned, we're already investing into our sales and marketing organization, and we're also investing into service as a business. Just as an example, we've just completed the recruitment of two very skilled and fantastic people added to our team.
Yeah. You know, skilled people, they can pick and choose. How easy is it to get skilled people to ContextVision?
It's been a journey, but I think we're a very attractive place to work, as a global company, yet giving the opportunity to enjoy downtown Stockholm or Linköping. It's exciting projects to work with machine learning, artificial intelligence, et cetera.
Okay, 2022 so far has been a fantastic year for ContextVision. Will this continue?
Well, I can confirm the first nine months have been very good. It's been very exciting for ContextVision, and 23% growth for the first three quarters on the top line can't indicate a bad year, right? Q4 is going to be an important quarter for us. RSNA is coming up, new product releases. It's looking very nice. Let me also mention a few key effects that we saw in Q3 comparable to last year. One, currency effects are continuing to help us in a positive way. We still see beneficial contributions from the Inify spin-off, now restated as other income. If you look to net sales comparable to last year, we still see a significant high single-digit growth.
Overall, I'm very impressed on the performance and the opportunities moving forward.
You know, when I look at your margins, you know, close to 50%, you know, it's like you're printing money, you know. How can you improve such a business model?
Yeah. Printing money is. Well, we're not doing as good as the money markets, I guess. Fundamentally there's nothing wrong, right? Indeed, Q3 margins have even outperformed Q2, which is fantastic to see. We do need this to invest into executing our growth strategy moving forward. We certainly will also optimize our capital allocation strategy. Just to add to that, the main challenge for us is to get OpEx under control and set a new baseline after the spin-off. I think we've done very good and according to plan. What you see throughout the first three quarters, I do think is a good you know new baseline that we've established.
Yeah. Okay. I know you're in the middle of a strategy discussion as we speak, but, you know, can you reveal some part of it now?
Well, I'm happy to give you a few thoughts on what we're up to. Number one, I think the insight is that our focus on the core, which we set as a strategy after the spin-off of Inify, has proven and shown to be very successful, right? Using and working within our customer segments that we're addressing now, building on the technology and product portfolio that we have, still allows us to significantly grow the share of wallet, mainly within larger OEM and accounts. That is true for ultrasound, but we're also going to reenter stronger into the X-ray market. There are good opportunities by focusing on the core.
Next to that, I think the stronger partnership approach and collaboration approach, especially with the larger OEMs, is going to show us more opportunities in adjacent business areas, right? To grow with our customers is going to be a very, you know, good opportunity moving forward.
Yeah. You come from one of these big conglomerates, you know. How will that impact?
I hope that is going to help, right? To some extent, we know what they work on, how they think, what they need. I do see we're able to deliver on those needs.
Exciting times, but you know and ContextVision is doing well. You know, the world is, you know, it's difficult times. The U.S. is going into recession, you know. Many European countries are doing the same. How do you think that will affect ContextVision?
Yeah. We're carefully following the situation and indeed, it's very dynamic. Overall, we're depending on the business of our customers, and their business, at least when it comes to the European and U.S. markets, to a large extent is anti-cyclical. In that sense, I would not expect a very significant impact. Plus, we're having a very strong growth pattern in Asia, so that might help as well. Number three, when it comes to potential crisis situations which we're also you know following, that could hit us, we're still a lean and dynamic organization, so I think we're well set up to weather that storm.
Yeah. That's cool. Well, you know, it's looking good for ContextVision. That's good. You know, good luck.
Thank you.