Siemens Healthineers ETR: SHL executives told investors the company’s “synergetic core” of Imaging and Precision Therapy remained on track through the first half of fiscal 2026, offsetting a sharp downturn in Diagnostics tied primarily to a structural market “rebasing” in China. Management also outlined major strategic initiatives, including preparations for a potential Diagnostics carve-out, a leadership transition, and ongoing work ahead of a planned spin-off from Siemens that is expected to go to a shareholder vote in early 2027.
Management highlights: portfolio strength, Diagnostics headwinds, and outlook update
CEO Bernd Montag said Imaging and Precision Therapy “continue to show strong underlying operational performance and [are] fully on track after the first half of FY 2026,” even as the company faced “substantial headwinds from tariffs and FX.” By contrast, he said Diagnostics “continues to face the structural market rebasing in China,” which “substantially” affected growth and margin in the first half.
Partly reflecting the “temporary harsh dip” in Diagnostics and a “more inflationary macroeconomic and geopolitical environment,” Montag said the company updated its fiscal 2026 outlook.
Strategic moves: Diagnostics carve-out preparations, leadership change, and spin-off timeline
Montag said Siemens Healthineers is “preparing the carve-out” of the Diagnostics business to create “full flexibility for a wide range of possible development paths.” CFO Jochen Schmitz will accompany the carve-out process, Montag added.
On governance and organization, Montag announced a “comprehensive generational change” in the leadership team, with new segment and regional leaders named and a renewed focus on “healthcare AI.” He said four leaders are stepping aside: André Hartung (previous Head of Diagnostic Imaging), Carsten Bertram (previous Head of Advanced Therapies), Bernd Ohnesorge (previous Head of EMEA), and Peter Schardt (previous Chief Technology Officer). Montag introduced successors including Andreas Schneck (Diagnostic Imaging), Philipp Fischer (Advanced Therapies), Sonja Wehsely (EMEA), and Martin Stumpe (CTO), describing Stumpe as bringing “deep expertise in software development and AI.”
Montag also discussed Siemens’ planned timeline to put a spin-off of Siemens Healthineers to a vote at “the next regular general meetings in early 2027.” He said preparations were progressing and cited, as one example, that the company has a “banking consortium for debt refinancing in place.”
Q2 segment performance: Imaging and Precision Therapy grow; Diagnostics declines
Schmitz said Imaging revenue grew 6.1% in Q2, driven by “ongoing high growth” in photon-counting CT and radiopharmaceuticals as well as “significant growth” in MRI. He highlighted momentum for Siemens Healthineers’ DryCool MRI technology, saying “nearly half” of global MRI deliveries are DryCool magnets requiring “only 0.7 liters of helium,” with the share increasing.
Imaging posted an adjusted EBIT margin of 22.4%. Schmitz attributed performance to “decent operational margin expansion,” while noting that prior-year positive special items and current-period headwinds from tariffs and foreign exchange affected comparability.
Precision Therapy grew 4.7% against what Schmitz called a “tougher comp” from the prior year. Varian delivered 7.5% growth in the quarter, contributing to 8.3% comparable growth in the first half, according to Schmitz. He said operational margin expansion in Precision Therapy was “strong” excluding FX and tariffs and that mix also helped; he described an “outstanding” first-half operational margin expansion of around 300 basis points year-over-year.
Diagnostics, however, saw revenue and margin pressure continue in Q2. Schmitz said the decline was driven by China, citing volume-based procurement and reimbursement reductions that “continue to be a major headwind,” as well as “muted demand.” He also noted tougher year-over-year comparisons because Diagnostics China grew “mid-single digits” in the prior-year quarter. In addition, he said the business is undergoing a transformation that is “muting growth” due to “tailing off” in legacy core lab products. Still, Schmitz pointed to the Atellica franchise as a key midterm driver, saying Atellica is growing in the “mid-teens” and reached “more than 70%” of core lab revenue in the last quarter.
Orders, regional trends, and tariff/FX impacts
Montag said equipment orders grew 6% and the order book continued to expand, with an equipment book-to-bill of 1.02. He described the slightly lower ratio as “just the result of phasing” and said the company expects a “significant stronger number in Q3.”
On the group level, Schmitz said the Americas continued to post “strong growth,” while EMEA returned to growth after being “flattish” in recent quarters. He said the China revenue decline in Q2 was “just due to diagnostic market rebasing” and that excluding Diagnostics, China revenue was flat year-over-year, consistent with the company’s assumptions for Imaging and Precision Therapy.
Schmitz said the biggest year-over-year headwinds were foreign exchange and tariffs of around 200 basis points. Excluding these effects, he said adjusted EBIT margin was flat year-over-year and adjusted EPS rose 16%. He also reported “strong” free cash flow with a cash conversion rate of 0.81, and noted an approximately EUR 40 million reversal of an intangible asset impairment in Precision Therapy that had no cash impact and was excluded from adjusted EBIT.
Updated fiscal 2026 outlook and Q3 expectations
Schmitz said Siemens Healthineers now expects fiscal 2026 revenue growth of 4.5% to 5%, attributing the revision “solely” to China Diagnostics market rebasing. The company now expects adjusted EPS of EUR 2.20 to EUR 2.30, with the midpoint reduced by EUR 0.05 to reflect “additional inflation in the supply chain,” including memory chips, raw materials, and logistics costs tied to the Middle East crisis.
For Diagnostics, the company now expects a “low to mid-single-digit” percentage revenue decline year-over-year and a “mid-triple digit basis points” margin decline year-over-year due to the China market reset, according to Schmitz. He said weaker Diagnostics growth and margins are expected to be “roughly offset” by more favorable financial income net and lower tax expenses than previously assumed. Based on first-half actuals, the company now expects financial income net of around EUR -340 million for the full year and a tax rate of around 24%.
Looking to Q3, Schmitz said the company expects group revenue growth “above our updated outlook range,” in the 5% to 6% range, with mid-single-digit Imaging growth and accelerating Precision Therapy growth, particularly in Advanced Therapies. For Diagnostics, he said a year-over-year decline is still expected in Q3 but less severe than the first half, suggesting roughly “half” the first-half decline as a “good ballpark.”
On margins, Schmitz said foreign exchange headwinds on margins are expected to persist due to hedging roll-off, while tariff impacts are not expected to be material year-over-year. He said Imaging and Precision Therapy could see year-over-year margin declines in Q3 due to foreign exchange and added inflation, while Diagnostics margin is expected to contract by about five percentage points year-over-year against a “very tough” comparison, though sequential improvement is expected as top line recovers and cost reductions continue.
During Q&A, executives also addressed investor questions on inflation, China, the Diagnostics carve-out, and the Siemens separation. Montag said inflation was “manageable” based on what the company currently sees, noting active price management and a “Lean for Growth” program that could be accelerated if needed. On China outside Diagnostics, Montag said the company continues to see a “positive development” in market share and noted a shift toward local competitors among “the others” category, while “subcritical multinationals are losing ground.”
Addressing carve-out questions, Montag emphasized that Siemens Healthineers is building stand-alone capabilities for Diagnostics, but said any action would be guided by shareholder interests: “the shareholders of Siemens Healthineers own Diagnostics,” he said, adding that it is “not a source of funds for us.” He also said discontinuing operations accounting would require higher certainty of a transaction within 12 months, which he said was not the case at present.
On branding and separation costs, Montag said discussions with Siemens were “extremely constructive” and he sought to alleviate concerns about “a sudden material change in costs.” Schmitz said separation costs for remaining services sourced from Siemens, such as resetting IT contracts, were expected to be in the “mid-double-digit million” euro range and that one-time separation costs would be adjusted in EBIT and EPS.
About Siemens Healthineers ETR: SHL
Siemens Healthineers AG, through its subsidiaries, develops, manufactures, and sells a range of diagnostic and therapeutic products and services to healthcare providers worldwide. It operates through four segments: Imaging, Diagnostics, Varian, and Advanced Therapies. The Imaging segment provides magnetic resonance imaging, computed tomography, X-ray systems, molecular imaging, and ultrasound systems. Its Diagnostics segment offers in-vitro diagnostic products and services to healthcare providers in laboratory and point-of-care diagnostics; and workflow solutions for laboratories and informatics products.
Further Reading
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider Siemens Healthineers, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Siemens Healthineers wasn't on the list.
While Siemens Healthineers currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Explore Elon Musk’s boldest ventures yet—from AI and autonomy to space colonization—and find out how investors can ride the next wave of innovation.
Get This Free Report
