Image Credit: DMS Imaging Booth, JFR 2018
Diagnostic Medical Systems Group, the French-based healthcare technology company, published unaudited financial results for Q4 2019, ahead of its full-year annual report. These provisional results show that sales growth continued during the fourth quarter, at an explosive pace. The overall group sales revenue reached €9.6 million during Q4 2019, in comparison with €7.3 million during Q4 2018, an increase of approximately +30% year-on-year. This propelled full-year cumulative sales revenue to €31.0 million, compared with €24.3 million during 2018, an increase of approximately +28%.
The DMS Group comprises of three operational segments; DMS Imaging, DMS Wellbeing and DMS Biotech. The explosive growth during 2019 has been centred upon the DMS Imaging segment, which accounts for the majority of the Group’s revenue. The full-year 2019 cumulative sales revenue from DMS Imaging reached €30.2 million. This segment is responsible for the development and manufacture of medical imaging solutions for radiology, osteodensitometry and posturology 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. Within the Q4 earnings release, Jean-Paul Ansel President and CEO, commented: “ 2019 was an excellent year, in particular for our medical imaging activity in the DMS Imaging division, which experienced growth of + 29% compared to 2018″. The sales growth during 2019 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%, relative to 2018. For full-body 3D modelling and posturology systems, sales revenue increased by approximately +42% over the same period. During October-19, AXS Medical received CE mark approval for its latest Biomod MI 3D modelling solution which is anticipated to drive sales growth in the coming periods. During Q3 2019, 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 second half of 2019, this segment returned to sales growth with full-year cumulative sales revenue increasing by approximately +14%, relative to 2018. The company noted that the extension of its commercial distribution agreement with Fujifilm Europe materially supported this return to sales growth.
Finally, and still within the DMS Imaging division, revenue originating from after-sales services (SAV) increased by approximately +24% year-on-year. This was due to the higher installed base of imaging solutions as well as from the implementation of a new supply strategy for services.
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. Sales are currently predominately made up of equipment sales of Adip’Sculpt lipofilling devices. For the full-year 2019, this division generated sales revenue of €0.7 million, an increase of approximately +4% year-on-year. During October-19, the Group completed the takeover of Hybrigenics, which resulted in the formation of a dedicated biotechnology company, listed on Euronext Growth in Paris. Simultaneously, the group obtained 510k approval from the U.S. FDA 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 regulatory approval in order to begin sales within 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 with sales of €0.1 million during 2019. The first product shipments are 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 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 fourth quarter are yet to be published, although revenue segmentation was reported within its half-yearly 2019 report. Sales from Europe accounted for approximately 60% of total Group revenues during the first half of 2019, 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. The Q4 earnings release noted that the distribution agreement with Carestream supported growth within the United States.
Construction of a new factory
During June-19 the Group began the construction of its future industrial production and assembly unit which will be located in Gallargues, Montueux. Built on a total area of 16,800 m², this future production unit will represent a floor area of 5,500 m², of which approximately 50% will be office space, 25% production space and the remaining 25% 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.