Image Credit: DMS Imaging Booth, JFR 2018
On October 23rd, Diagnostic Medical Systems Group, the French-based healthcare technology company published its financial results for Q3 2020. These show that the company continued to deliver strong sales growth during the quarter, despite challenging market conditions. The quarterly sales revenue reached €7.9m, compared with €7.3m during Q3 2019, an increase of approximately +9% year-on-year. This took cumulative 2020 sales to €23.5m, compared with €21.4m in 2019, an increase of approximately +10% year-on-year. These figures reflect the sales performance of the DMS Group, which comprises of three operational segments, DMS Imaging, DMS Wellness and DMS Biotech.
The DMS Imaging 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 and AXS Medical for 3D modelling and posturology systems. During the third quarter, sales revenue originating from DMS Imaging reached €7.7m an increase of approximately +7% year-on-year. This took cumulative 2020 sales to €23.1m, an increase of approximately +10% year-on-year.
During the third quarter, sales originating from radiology solutions were approximately +8% higher year-on-year, resulting in cumulative sales growth of +15% year-to-date. This sales growth was driven by a combination of increasing OEM business, sustained demand from key export markets as well as continued local domestic demand. DMS Imaging has international trade agreements with Carestream and Fujifilm Europe which significantly contributed toward sales growth, particularly within Europe.
During the third quarter, sales originating from bone densitometry solutions returned to growth and were approximately +5% higher year-on-year. This took cumulative sales growth to -11% year-to-date. The return to sales growth was driven by partial normalisation of healthcare operations as the Coronavirus pandemic caused a slow down in orders and deliveries in key markets. Sales were also interrupted during the first-quarter as a result of an operational disruption relating to a third-party supplier. The Q3 report indicates that the group aims to return to a normalised pace of activity by the end of the year, thanks in particular to increased distribution with Fujifilm Europe in the EMEA region. The agreement with Fujifilm enables for the distribution of the DMS Stratos and Stratos DR systems under the brand name FDX Visionary-DR across Europe as well as the MEA region.
The DMS Biotech segment 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. The sales revenue of the segment is essentially from the sales Adip’Sculpt lipofilling devices.
During the third quarter, sales returned to grow and were approximately +30% higher year-on-year. The demand for Adip’Sculpt lipofilling devices was significantly impacted by the Coronavirus pandemic during the first-half of 2020 as the activity of plastic surgeons were disrupted. The pandemic also delayed the reporting of a clinical trial related to using adipose tissue cells in the treatment of osteoarthritis which has temporarily delayed market development within this area.
The DMS Wellness segment is involved with the manufacture and sale of the companies CELLISS device aimed at the physiotherapy, beauty and aesthetic markets. The product was first commercialised during H2 2019 with the majority of product shipments going to luxury hotels and beauty centres in China. The segment remains a small contribution to overall company sales revenue. New sales were achieved during the third-quarter all demand remained low, in part, driven by the pandemic which has interrupted many luxury hotels and spa operations. The company is due to deliver the first device to the American market during the fourth-quarter and also noted interest from customers based in Belgium and Mexico.
Sales results by major geography
The Group is currently present on all continents through a network of distributors, subsidiaries and joint ventures. The Group publishes sales results by major geography within annual and half-yearly reports, therefore specific data for Q3 is not publicly available. Historically, sales origination from customers based in Europe has accounted for approximately 60% of total company revenues, although this increased significantly during the first half of 2020, primarily due to OEM partnerships. Sales growth from Europe was partially offset by steep declines in other international markets, particularly within the Middle East and the Americas.
Construction of a new factory completed
During June-19 the Group began the construction of a new factory located in Gallargues-le-Montueux (France). During Q3 2020, the construction of this facility was completed and from October-20 this site is expected to become operational. Built on a total area of 16,800 m², this new facility offers a floor area of 5,500 m², of which approximately 50% is office space, 25% production space and the remaining 25% dedicated to storage and shipping. The site enables a double in production capacity as well as significant efficiency gains through consolidating multiple operations at Montpellier and Nîmes. The site has 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 realise a project of extension according to the subsequent needs of the group.