Diagnostic Medical Systems (DMS) Group, the French-based healthcare technology company, published its latest turnover performance last month ahead of its full audited financial results. Its financial press release indicates that sales revenue continued to grow during the third quarter, reaching €7.3 million, an increase of approximately 18% year-on-year (YoY). On a calendar year-to-date basis, cumulative sales revenue reached €21.4 million, compared with €16.9 million in 2018, an increase of approximately +27% YoY.
The DMS Group comprises of three operational segments; DMS Imaging, DMS Wellbeing and DMS Biotech. The recent growth spurt has been centred upon DMS Imaging, which accounted for approximately 85% of total Group revenues during the first half of 2019. This segment is responsible for the development and manufacture of medical imaging solutions for radiology, osteodensitometry and posturology. During the first nine months of 2019, cumulative sales revenue reached €20.9 million, an increase of approximately +30% YoY relative to 2018. DMS Imaging trades under four brand names; DMS and Medilink for bone densitometry systems, Apelem for radiology systems and AXS Medical for 3D modelling and posturology systems. The recent sales growth was driven predominately by increased demand for Apelem radiology and AXS Medical posturology systems, although demand increased across the companies portfolio of imaging solutions. During the first nine months of 2019, sales revenue from radiology systems increased by approximately +36% YoY, relative to 2018. For full-body 3D modelling and posturology systems, sales revenue increased by approximately +42% YoY over the same period. During October this year, AXS Medical received CE mark approval for its latest Biomod MI 3D modelling solution which is anticipated to drive further in the coming periods with the support of the companies distribution agreement with FUJIFILM Europe. During the previous quarter, the first unit was installed within the Norimagerie group, the largest private medical imaging centre in the north of the Lyon region. In contrast, the demand for DMS and Medilink bone densitometry systems contracted during the first half of 2019. The company attributed this to an operational disruption as a result of changing a subcontractor which interrupted customer deliveries for several weeks. During the third quarter, this segment returned to sales growth with cumulative revenues increasing by approximately +6% YoY over the first nine months. The company noted that the extension of its commercial distribution agreement with Fujifilm Europe materially supported this return to sales growth.
DMS Biotech is a relatively new branch of the Group and forms a core part of the companies longer-term development strategy in the field of biotechnologies. The business unit is primarily involved with the research and development of adipose tissue and regenerative medicine solutions for both human and veterinary medicine. During the first nine months of 2019, sales revenue from DMS Biotech was stable, relative to 2018. Sales are estimated to be approximately €0.4 million and made up exclusively of sales from its Adip’Sculpt lipofilling devices. In mid-October, DMS Group finalized the takeover of Hybrigenics, giving birth to a dedicated biotechnology company, listed on Euronext Growth in Paris. Simultaneously, the group obtained 510k approval from the U.S. Food & Drug Administration for its lipofilling medical devices. The firm is in the process of entering into commercial partnerships for the sale and distribution of these systems throughout North America. In addition, the companies Japanese distributor is still waiting for approval from the authorities to allow it to sell on the local market.
DMS Wellness is involved with the manufacture and sale of the companies CELLISS device aimed at the physiotherapy, beauty and aesthetic markets. This product has recently been commercialised and sales revenue was approximately €0.1 million for the first nine months of 2019. The first product shipments are anticipated to begin shortly, mainly to luxury hotels and spa centres within China. The company has also secured commercial deals with customers based in Japan, although DMS is still awaiting regulatory product approval.
Sales Results by Geography
The Group is currently present on all continents through a network of distributors, subsidiaries and joint ventures. The sales results by geography for the third quarter are yet to be published, although revenue segmentation was reported within the H1 2019 financial results. Sales revenue from customers based in Europe, the companies largest market, increased by approximately +70% YoY reaching €8.3 million. Sales from Europe accounted for approximately 60% of total Group revenues during the first half, in comparison with 46% during the same period in 2018. The revenue generated domestically was primarily from the hospital purchasing Groups UniHA and UGAP, as well as private radiology centres. At the recent DCF Montpellier awards, DMS Imaging was awarded for its favourable 2019 commercial performance and recognised the impetus of Caroline Simonin, the companies French Commercial Manager, for leading these strong sales results. The company also experienced explosive sales growth from customers based in the Middle East as well as North and South America which was partially offset by declines from Asia and Africa.
Construction of a new factory
During June earlier this year, the Group began the construction of its future industrial production and assembly unit which will be located in Gallargues on Montueux. Built on a total area of 16,800 m², this future production unit will represent a floor area of 5,500 m² (2,600 m² of offices, 1,400 m² of production and 1,500 m² dedicated to storage and shipping). The site will have 115 parking spaces and will accommodate around 150 employees. The land also benefits from a land reserve of the order of 2,000 m² allowing to realize a project of extension according to the subsequent needs of the group. The delivery of this future production facility is planned for Q2 2020.
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