DMS : FY18 revenues: uninspiring

DMS released FY18 sales which reached €24.3m (-10%), including a 12% fall in the historic Imaging business to €23.3m (95% of total revenues) and an increase in Wellness and Biotech (from €0.5m to €1m).

The same story as previous quarters: new segments are growing (from scratch) while the historic Imaging business was still down, but at a slower pace (around 5% according to us). As a result, revenues in FY18 landed significantly under our estimate (€28.3m) and remain disappointing given the group’s previous comments. Note that the long-promised Egyptian order (after the group won a tender in early FY18) has still not been billed. The group indicates that French sales were up 20% in Imaging in FY18, which implies rather weak international sales. As far as new segments are concerned, the situation has not changed much: DMS Biotech sales were up 26% (again from a low basis), with a ramp-up in the number of countries where Adip’Sculpt devices are sold (23 currently). DMS Wellness booked sales of €0.3m, quite a small number, with management expecting an uptake in revenues in FY19.
The due-diligence process with a view to contributing the Imaging business to a new entity (see our comment dated 7 February 2019) is still ongoing, with no guarantee that the deal will go through, even if we are still not quite convinced by this mysterious move. We will of course reconsider this opinion once (and if) the deal succeeds, with DMS giving some more insight on their intentions.

We will revisit our numbers and model when the group releases FY18 results (together with Q119 sales) on 29 April.