Image credit: Samsung booth, RSNA 2015, business wire
On 15th May, Samsung Medison, the Korean originated medical device OEM, published its audited financial results for Q1 2020. These show that sales returned to growth during the first quarter following weaker sales results toward the end of 2019. The total company sales revenue reached ₩84.6 billion, compared with ₩83.2 billion during Q1 2019, an increase of +1.7% year-on-year.
The sales growth during the first quarter was driven by higher revenue from the sale of mobile x-ray imaging solutions, partially offset by lower revenue from the sale of ultrasound imaging solutions. Although typically a small proportion of overall revenue contribution, sales of x-ray imaging solutions significantly increases due to the urgent need for diagnostic solutions in response to COVID-19, particularly within South Korea. In contrast, sales revenue from the companies core ultrasound portfolio decreased by approximately -11%, relative to Q1 2019. This was driven by the market disruptions caused by the Coronavirus pandemic as hospitals deferred installations of new medical equipment non-critical to the response to the pandemic. Despite difficult trading conditions, the company reported that the demand for premium ultrasound solutions amongst US and European hospitals remained strong at the start of the year. For example, the sales performance of HERA W10 remained strong going into the pandemic situation. The company estimates that it captured approximately 5.5% of the global market share of ultrasound imaging sales during the first quarter.
The outlook for Q2 2020
The company anticipates that it is highly likely that the global market for ultrasound diagnostics solutions will contract further due to the spread of COVID-19, particularly across Europe, North America as well as emerging markets.
Production volumes and portfolio pricing
At its Hongcheon manufacturing plant, the company reported maximum production capacity for ultrasonic products of 3,900 units during the first quarter, compared with 3,705 units during Q1 2019. The company reported a total production volume of 3,109 units during the first quarter, compared with 3,582 units during Q1 2019. Based on a proprietary calculation, the pricing index strength for ultrasound units is estimated to be in the -5% range, relative to unit prices during Q1 2016 (base period). This price index calculation is less reliable during periods of sharp revenue decline, such as the results reported during the first quarter.