What Siemens Healthineers (SHL) Said on Its Q4 Earnings Call

Siemens Healthineers ETR: SHL expects comparable revenue growth of 4% to 5% in fiscal 2027 as it prepares for a proposed spin-off from Siemens and a separation of its Diagnostics business. The outlook comes after a strong finish to fiscal 2026, although management expects inflation, financing and separation costs to weigh on earnings.

The medical technology company forecast adjusted earnings per share of €2.20 to €2.40 for fiscal 2027, compared with €2.42 in fiscal 2026. Chief Financial Officer Jochen Schmitz said the new outlook was more prudent than guidance in much of the recent past, incorporating known pressures while leaving some room for unexpected developments.

For fiscal 2026, comparable revenue grew 4%, at the upper end of the company’s amended guidance range. Fourth-quarter group revenue increased 5.9%, led by 8.1% growth in the “synergetic core,” which includes Imaging and Precision Therapy. Full-year growth in that core was 6.1%.

Chief Executive Officer Bernd Montag said equipment demand remained healthy across geographies, with a fourth-quarter book-to-bill ratio of 1.15 and a full-year ratio of 1.14. The company proposed a dividend of €1 per share, unchanged from the prior payout.

Inflation and China Shape 2027 Outlook

Schmitz said the 2027 revenue forecast includes approximately 70 basis points of growth dilution from the partial exit from general imaging ultrasound. It also assumes a slight revenue decline in China for Imaging and Precision Therapy, reflecting caution around centralized bidding and potential pricing pressure.

China group revenue fell 2% in the fourth quarter. Schmitz said Diagnostics revenue in China declined by more than 30% in fiscal 2026, primarily because of pricing, and the company expects that business to stabilize at the lower level.

The earnings forecast includes an incremental supply-chain inflation headwind of approximately €0.15 per share, on top of €0.04 experienced in the second half of fiscal 2026. Schmitz described the assumption as prudent, while acknowledging that an extreme deterioration could make it insufficient.

Management also expects roughly €0.20 per share of combined year-over-year pressure from a higher tax rate, refinancing, recurring Siemens separation costs and stranded costs associated with the ultrasound decision. A cost and pricing program launched in fiscal 2026 is expected to provide approximately €0.10 per share of benefit in fiscal 2027, Schmitz said.

The 2026 adjusted EPS figure included €0.16 per share from tariff refunds. After removing those refunds and accounting for material fourth-quarter one-offs, management put the underlying 2026 base at approximately €2.30 per share.

Diagnostics Carve-Out and Cost Programs

Siemens Healthineers has started carving out Diagnostics with the intention of separating the business and establishing it as a standalone company by mid-calendar 2028. The business will adopt the name Olyrian Diagnostics. Schmitz said completion of the carve-out would be the earliest point for a separation, with the eventual transaction structure still open.

Diagnostics revenue fell 4.2% year over year in the fourth quarter but stabilized sequentially. Its margin improved sequentially to the mid-single digits, helped by tariff refunds and another one-off benefit. Excluding those effects, Schmitz put the normalized margin at around 4%.

Management reiterated its medium-term ambition for Diagnostics to reach mid-teens margins and is targeting an additional €400 million in savings. Schmitz said the program includes consolidating core laboratory operations around the Atellica platform and streamlining support functions. The company also extended its relationship with Quest Diagnostics for five years.

Separately, a new productivity program called Transform4 Future is intended to more than offset over €300 million in stranded and recurring costs associated with the Diagnostics carve-out, the ultrasound changes and deconsolidation from Siemens. The program is expected to affect earnings from fiscal 2028 through 2030, though management warned of a potential lag between costs arising and savings taking effect.

Spin-Off, Branding and Portfolio Changes

Shareholders of Siemens and Siemens Healthineers are due to vote in February on the proposed spin-off. Siemens Healthineers shareholders will also be asked to approve a name change to Healthineers.

The company agreed to a three-year brand transition period beginning with deconsolidation, with a fixed €300 million fee payable in three annual installments. Schmitz said the fee forms part of approximately €600 million in additional fiscal 2027 adjustments related to deconsolidation, the Diagnostics carve-out and the ultrasound decision.

Siemens Healthineers plans to wind down conventional general imaging ultrasound equipment sales rather than sell the business, while retaining procedural ultrasound and continuing to service the installed base. Schmitz said the company expects strategic share buybacks to become an option after it reaches its leverage target zone, starting at approximately 2.5 times net debt to EBITDA.

Imaging and Cancer-Care Products

Fourth-quarter Imaging revenue grew 10%, driven by photon-counting CT, Radiopharmaceuticals and a rebound in magnetic resonance imaging. Within Precision Therapy, Varian grew 7%.

Montag highlighted Accela, a new radiation therapy system, as an important product launch. The company expects European regulatory approval soon and anticipates treating the first patients later in the calendar year. Schmitz said it was too early to assume the product would accelerate Varian’s growth in fiscal 2027, although management sees potential for market expansion and faster replacement cycles over time.

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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