H1 17 sales: a bit weak at first sight, but no dramas
EARNINGS/SALES RELEASES
FACT

On 25 July, DMS released H1 17 sales, which reached €12.7m vs €13.3m in H1 16 (-4%, on a comparable basis). This figure thus excludes AlphaMos for both periods, deconsolidated as from 1 January 2017).


ANALYSIS

At first glance, the performance may look a bit weak, DMS Imaging posting a 4% decline in sales to €12.4m, while DMS Biotech and Wellness were still hardly significant (€0.3m). In fact, this is mainly due to single order in bone densitometry in H1 16 worth €1.9m in Southern Europe (15% of H1 16 sales). In radiology, the group enjoyed a +16% sales increase in H1 17 thanks to the distribution agreement with Carestream Healthcare (see our previous comments) which gives a better feeling of the group’s potential and underlying growth. In total, we expect the group to post a level of growth of c.9.5% for FY16 (excluding AlphaMos of course), which still looks achievable (albeit demanding in H2) given the comment on the extraordinary item in H1 16 and the underlying trend in H1 17, even if the gross number released for H1 may seem a tick disappointing. Also, note DMS Biotech should be able to book first sales in H2 (Cellis, in the field of cellulite and lymphatic drainage).


IMPACT

We will revise our numbers when the group releases H1 results on 29 September, but will most likely not materially change our current forecasts and valuation, also taking into account that the deconsolidation of AlphaMos is earnings accretive given the fact the company is still loss-making.