Siemens Healthineers Q3 Earnings Call Highlights

Siemens Healthineers ETR: SHL lowered its fiscal 2026 revenue growth outlook after continued weakness in its Diagnostics business, while raising its adjusted earnings-per-share guidance to reflect tariff refunds received during the third quarter.

Chief Executive Officer Bernd Montag said the company recorded an equipment book-to-bill ratio of 1.27 in the fiscal third quarter, supported by product demand and new value partnerships. Excluding value partnerships, equipment book-to-bill was approximately 1.17, which Montag said more than offset the weaker order performance seen in the second quarter.

The company reduced its fiscal 2026 comparable revenue growth forecast to between 3.5% and 4%, from a prior range of 4.5% to 5%. It raised adjusted EPS guidance by €0.15 to a range of €2.35 to €2.45, reflecting the impact of tariff refunds. CFO Jochen Schmitz said the underlying EPS range was unchanged, as the company’s core Imaging and Precision Therapy businesses remain on track.

Core Segments Show Different Growth Rates

Siemens Healthineers said its “synergetic core” of Imaging and Precision Therapy grew 5% during the quarter. Precision Therapy grew 9%, with growth across Varian, Advanced Therapies and Ultrasound. Advanced Therapies benefited from the rollout of the company’s angiography platforms following FDA approval.

Imaging growth was softer, affected by a 12% growth comparison in the prior-year quarter and by revenue that shifted into the fourth quarter. Schmitz said site readiness for installations did not keep up with factory output, particularly amid demand for the company’s DryCool MRI portfolio. He characterized the issue as temporary and said Imaging is expected to accelerate into higher-single-digit growth in the fourth quarter.

Before tariff refunds, Imaging’s third-quarter margin was 21.6%, compared with 23.7% in the prior-year quarter. Precision Therapy’s margin before tariff refunds was 14.1%. The company said foreign exchange and inflation were headwinds, although stronger conversion from Precision Therapy growth supported profitability.

Diagnostics remained the company’s main challenge. The segment continued to face a structural market rebasing in China and revenue dilution from legacy platforms, particularly in North America. Schmitz said the anticipated moderation in the Diagnostics decline did not materialize during the third quarter.

Diagnostics posted a 3% margin before tariff refunds, though the company reported slight sequential margin improvement. Siemens Healthineers expects a mid-single-digit percentage revenue decline in Diagnostics in the fourth quarter and said full-year segment margin, excluding refunds, is expected to approach its prior full-year assumption from below.

Tariff Refunds Lift Profitability and Cash Flow

Tariff refunds boosted reported margins by 490 basis points in Imaging and 350 basis points in Precision Therapy, according to Montag. At the group level, Siemens Healthineers said profitability excluding the refunds was 15.4%, despite softer growth, foreign-exchange pressure and initial supply-chain inflation.

The company reported cash flow of more than €1 billion in absolute terms and a cash conversion rate of 1.12, which Schmitz said was driven by strong collections rather than tariff refunds. Net debt fell by roughly €800 million from the second quarter to approximately €12 billion, while leverage declined to 2.8 times from 3.1 times.

For the full year, Siemens Healthineers expects a tax rate close to 23%, compared with its initial assumption of 24% to 26%, and financial income net of about negative €330 million. The latter figure includes interest received on the tariff refund.

U.S. Partnerships and Product Developments

Montag highlighted two new multiyear U.S. value partnerships with Cleveland Clinic and Vanderbilt Health. The partnerships total several hundred million euros in equipment order intake, he said.

The 10-year strategic alliance with Cleveland Clinic expands a 35-year relationship and includes imaging and therapeutic technologies as well as joint development of a theranostics cancer-treatment program. The Vanderbilt Health partnership covers advanced diagnostic imaging and radiation oncology technology, along with collaboration on artificial intelligence applications in radiology, personalized medicine and workflow automation.

Montag said photon-counting CT systems now account for about 30% of the company’s total CT equipment order volume. He also said Siemens Healthineers has increased its U.S. CT market share to a level comparable with its MRI position. DryCool technology represented half of MRI units ordered during the quarter.

In Precision Therapy, the company said its U.S. radiopharmaceutical business is growing at double-digit rates and is expected to surpass $1 billion in the U.S. this year. Siemens Healthineers also announced an 8X Radiopharmacy in the U.K., which it said will provide eight times the output capacity of a single radiopharmaceutical facility.

In Diagnostics, the company launched the Atellica Forte chemistry and immunoassay platform at the ADLM trade show. The platform includes a new digital architecture, AI agents, low-volume sampling and capillary workflows. The company also cited developments in brain-health testing, including blood-based Alzheimer’s research assays and a CE-marked NfL assay for multiple sclerosis that is under FDA review.

Initial View on Fiscal 2027

Schmitz said the company views the midpoint of its fiscal 2026 EPS guidance excluding tariff refunds, or €2.25, as the baseline for fiscal 2027. He said Siemens Healthineers expects growth from that baseline but did not provide a formal 2027 outlook.

The company expects inflation in memory chips, raw materials and logistics to become a more meaningful headwind in fiscal 2027. Management currently expects that pressure to be roughly offset by the ramp-up of tariff-mitigation measures. Siemens Healthineers has previously said it plans to mitigate a €400 million tariff impact by 2028, with positive contributions beginning in 2027.

Schmitz also said the company expects its tax rate to normalize toward 24% to 26% in fiscal 2027, while financing costs are expected to increase as loans are refinanced at higher rates. The company expects recurring separation costs related to Siemens AG’s planned deconsolidation to be in the mid-double-digit-million-euro range, though the full annual impact would not occur in fiscal 2027 if deconsolidation takes place no earlier than April.

Management said discussions with Siemens AG on deconsolidation preparations, refinancing, shared services and IT infrastructure remain constructive. Schmitz added that the company does not currently expect a branding fee in the coming years.

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.

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