As a reminder, Cellis is the group’s cellulite and lymphatic drainage solution, part of the Wellness division.
The agreement should lead to 400 deliveries in the next five years (the first ones are supposed to occur in the next few weeks) with a turnover that could reach €10m altogether (or €2m per year on average).
This is undoubtedly good news, with the first revenues of the Wellness division now in reach. However, this does not hide the fact that FY17 revenues were disappointing (see our Latest dated 4 February 3017) and that FY17 results due on 30 April are very likely to be weak.
Also, given the lack of details of the release on this matter, we fail to understand why total revenues for the 400 pieces of equipment “could” reach €10m: does this mean that the selling price per equipment is not fixed in the contract? Or that it is subject to changes/indexation in the future? Or that DMS is selling different versions of the equipment, the price of which is not the same?
Anyway, we find the phrasing of the release a bit weird and raises some doubts. In any case, the news is still positive and comes at a time when DMS is finding it difficult to grow (FY17 sales down 9% on a comparable basis). Let’s hope that this new inroad into side-segments (on top of the core radiology/bone densitometry businesses) enables the group to post a stronger top-line growth for the years to come.
We will not change our forecasts at this stage since the FY17 results are due in two weeks (with a likely disappointment as earlier indicated) and also since we lack details on the contract to translate it into estimates.
The AlphaValue Corporate Services analysts are AlphaValue’s sector specialists. Their robust knowledge of the business models in their sectors enables the rapid generation of incisive, relevant research and advantageous interaction with the management teams.