Siemens Healthineers posts double-digit rise in Q4 sales, profit, topping forecasts

Headline results for the fourth quarter:

Revenue

€4.1 billion ($4.6 billion; forecasts of €4 billion)

+12%

Profit

€507 million ($564 million; forecasts of €483 million)

+36%

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

"Thanks to a strong year-end finish, we clearly exceeded our growth outlook in fiscal year 2019," remarked CEO Bernd Montag. The executive added "adjusted profit also rose significantly, even though the adjusted profit margin was slightly below our expectations due to a weaker performance at diagnostics."

Montag, who took over responsibility for the diagnostics business in July following Michael Reitermann's departure, said "we are tackling the challenges at diagnostics vigorously while we continue to expand the strong positions of imaging and advanced therapies."

Siemens Healthineers noted that increased ramp-up costs for its Atellica blood-testing machines weighed on the diagnostics division. More than 1820 Atellica systems were shipped during fiscal 2019, in line with the company's forecast, which it lowered in July from a previous target of 2200 to 2500. "Atellica is the right product, but clearly the roll-out did not work out as planned," Montag said, adding that "we have learned our lessons and took the right conclusions. We see diagnostics as a key value driver to harvest, you have to place the instrument first." 

Other results:

  • Imaging segment sales: €2.6 billion ($2.9 billion), up 13%, with significant gains in the Americas and Asia, Australia regions, and "particularly strong growth" in magnetic resonance as well as molecular imaging
  • Diagnostics segment sales: €1.1 billion ($1.2 billion), up 5%, driven by the Asia, Australia region, primarily in China, offset by higher costs for the Atellica ramp-up and currency effects.
  • Advanced therapies segment sales: €481 million ($535 million), up 18%, driven by all regions. In August, the company bolstered the division by agreeing to purchase Corindus Vascular Robotics for $1.1 billion to gain a foothold in the robotics segment.
  • Full-year revenue: €14.5 billion ($16.1 billion), up 8%
  • Full-year net income: €1.6 billion ($1.8 billion), up 24%

Looking ahead:

Siemens Healthineers said that for fiscal 2020, comparable revenue growth is expected to be in the range of 5% to 6% year-on-year, while earnings per share are forecast to be 6% to 12% above the level of fiscal 2019, when the figure was €1.70 ($1.90) per share.

The company added that for fiscal years 2021 and 2022, it expects comparable revenue growth of more than 5% for each year, while earnings per share are predicted to increase by around 10%.

What analysts said:

"The guidance is in a new format, making consensus comparisons difficult, but we think revenue growth for 2020 looks better, but margin expectations are in line," noted Citigroup analyst Martin Wilkie. Shares in Siemens Healthineers rose as much as 8% on the financial results.

Did you like this article?