Interview with ContextVision’s CEO Gerald Pötzsch


CEO Gerald Pötzsch

For those who have not heard of ContextVision, can you tell us more about your business, what you do, and what market you address?

 ContextVision is a medical technology software company established in 1983 based in Sweden with local representation in the U.S, Japan, China and Korea with customers on a global scale. We offer medical image analysis and medical image enhancement solutions to leading manufacturers of ultrasound, X-Ray and MRI equipment worldwide. We work through an “intel-inside” business model where medical imaging OEM:s implement our image-processing software into their products. Thanks to over 40 years of experience, a strong focus on innovation, and heavy investments in RnD, we have become the leader in the market for Medical Imaging, as we provide unrivalled solutions to the majority of the prominent system manufacturers in the world.

What trends and drivers in society do you see benefiting your company in the future? 

Number one is global development of the growing population and and people living longer, thus the healthcare sector will have to deliver more in relation to today’s already rapid growth. The domain we are working in, medical imaging, is expected to remain a critical diagnostic approach and medical tool with a market size of ~USD 30bn with an anticipated CAGR of 4-5%. However, the healthcare sector already faces shortages of experienced staff like radiologists or sonographers. Given the growing demand for medical imaging, enhanced image quality in both diagnosis and treatment guidance will play a crucial role in the future, as it will enable the treatment of more patients with better outcomes in a shorter period.

Secondly, we can simplify image acquisition so non-specialists can use ultrasound systems. We are thereby benefiting from the latest technological advancements, such as cloud processing, machine learning, and miniaturisation of devices. In that respect, ContextVision contributes to delivering in regards to the increased demand for cost-effective healthcare.

How will you deploy excess cash and profits now that ContextVision generates significant free cash flow following the spinoff of Inify?

 ContextVision does not have a dividend policy; we evaluate our financial position and cash flow in relation to our future investment needs. This year, for instance, we decided upon a cash dividend of SEK 23m or 0,3 SEK/share. Moving forward in the short term, we have decided to reinvest in an organic growth program, which we announced in Q2-22, to further enhance the profitability of our core image enhancement business by economy of scale.

What is your growth strategy going forward?

It is a two-pronged approach. Firstly, we will continue the growth journey of our core business which has grown with a CAGR of ~6 % in the last decade and 20 % in 2022.  Although we are already working with some of the biggest global OEMs, there is still room for substantial market share wins. We will increase our coverage by growing the number of imaging systems and imaging systems platforms covered in our current product portfolio. We have also ramped up our sales and service capacity to deliver on the increased market demand.

Secondly, we have launched a program to grow beyond image enhancement and expand our solution portfolio mid-term. This requires investments and the development of new technologies, and we will do that in partnership with the leading OEM:s. We will have an increased focus on a very attractive and currently not addressed market segment, POCUS (Point of Care Ultrasound).

In summary, we will continue to grow our core business and invest substantially in new business areas adding additional revenue streams.

What are ContextVision’s goals in the short and medium term, and what are the most significant challenges going forward?

We are currently managing the spin-off effects after Inify Laboratories, and we see that the profitability of our core business is rebounding very positively. In the mid-term, we are committed to delivering on our growth ambitions both in the existing portfolio and the launches of adjacent business segments. If we successfully deliver on these two fronts, ContextVision will transform to a completely different company in 5 years. On that journey, we face challenges recruiting the best talent in regards to image processing and machine learning. Times have changed, and we are working at fast pace by further developing our RnD and product organisation, working less with consultants and strengthening our capabilities, in order to be the leading actor in the market.

Can you name three reasons as to why ContextVision is a good investment today?

Firstly, we operate in a globally stable and continuously growing market, namely the medical imaging market. There will always be a need for medical equipment and medical services, a market in which we are a leader.

Secondly, we are a profitable software company with a high degree of recurring license revenues and a low churn rate. We are self-financed, have no debt and show strong and positive cash flows.

Thirdly, we have a very strong competitive advantage towards other players in the market. During our 40-year-long history, we have built substantial intellectual property of our technologies. Our patents prevent competitors from copying our technology, and our proprietary algorithms give us a solid competitive advantage in developing new products. Furthermore, we have access to large amounts of image data from early parts of the image chain due to how we work with OEMs, which enables us to create more accurate and effective solutions that competitors cannot replicate.