Michael Sen, Member of the Managing Board of Siemens AG. Michael Sen is responsible within Siemens' Managing Board for the company's healthcare business and its global services unit. Photo courtesy of Siemens AG

London, UK – January 16, 2018

• Siemens Healthineers well prepared to take advantage of paradigm shift and structural growth opportunities in healthcare

• 2015 - 2017 performance illustrates strong financial profile

• Strategy aimed at accelerating profitable growth and delivering return

Siemens Healthineers today laid out its strategy to bolster its market leadership by 2025 and beyond.

Siemens Healthineers at RSNA 2017: Let's shape the future of imaging together. Walter Märzendorfer, President Diagnostic Imaging of Siemens Healthineers, talked about new innovations designed to increase outcomes and to reduce costs. Speakers at the at this year's Annual Meeting of the Radiological Society of North America (RSNA) in Chicago, USA (from left): André Hartung, Head of Computed Tomography, Siemens Healthineers; Walter Maerzendorfer, President Diagnostic Imaging, Siemens Healthineers; Peter Seitz, Head of Surgery, Siemens Healthineers. Photo courtesy of Siemens AG

"It is a pleasure to talk about Siemens Healthineers, a business well prepared to take advantage of the paradigm shifts in healthcare," said Michael Sen, Chairman of the Supervisory Board of Siemens Healthineers and member of the Siemens Managing Board also responsible for the company's healthcare activities.
"As a separate listed entity, Siemens Healthineers will have the entrepreneurial flexibility to actively shape its industry with a view to accelerating profitable growth and deliver return. It will also have direct access to the capital market, which will improve its ability to fund investment. Siemens will continue to actively support Siemens Healthineers as a majority shareholder."

Michael Sen, Member of the Managing Board of Siemens AG. Michael Sen is responsible within Siemens' Managing Board for the company's healthcare business and its global services unit. Photo courtesy of Siemens AG

Global powerhouse in healthcare

With revenue in fiscal 2017 of €13.8 billion, of which more than 55 percent is recurring, and an adjusted Profit of €2.5 billion (equalling approximately an adjusted Profit margin of 18 percent), Siemens Healthineers is a global powerhouse in healthcare.

More than 47,000 highly skilled employees in 75 countries have helped build an installed base of approximately 600,000 active systems, which, in turn, enable around 240,000 patient touchpoints every hour.

Through the breadth and depth of its portfolio at the core of clinical decision-making, the company enjoys what it believes to be a unique relevance in the healthcare industry.

Bernd Montag, CEO of Siemens Healthineers. Photo courtesy of Siemens AG

Bernd Montag, CEO of Siemens Healthineers, said:
"Siemens Healthineers is a truly global innovator with unique scale. Our excellent strategic positioning, our strength in innovation and our balanced geographic footprint make us one of the main long-term beneficiaries of the significant structural growth inherent in our markets. We have every intention of capturing these opportunities in the long term."


Financials

Siemens Healthineers' revenue in fiscal 2017 was broadly balanced across geographies: 41 percent Americas, 32 percent EMEA, 28 percent Asia-Pacific.

Importantly, more than 55 percent was generated by reagents and consumables as well as services and is therefore recurring.

Organic annual revenue growth has been around four percent on average since 2015.

Nexaris Therapy Suites In the area of surgical procedures, nexaris Angio-MR-CT can be used to combine the robot-supported angiography system Artis pheno, the MR systems Magnetom Aera and Skyra, and Somatom CT Sliding Gantry systems to form a multi-room solution. Photo courtesy of Siemens AG

During that period, the company expanded its profitability to an adjusted Profit margin of 18.3 percent in fiscal 2017, from 17.2 percent in fiscal 2015.

Free cash flow conversion (as a percentage of reported Profit) has been continuously high with approximately 90 percent throughout.


Paradigm shifts in global healthcare

Siemens Healthineers estimates its core markets at more than €50 billion per year and expects these markets to grow from 2016 to 2021 by three to five percent on average annually, with spending driven by the megatrends of a growing and aging population, the rise of chronic diseases, as well as improved access to healthcare in emerging markets.

Given that healthcare productivity has historically lagged behind that of other industries, horizontal and vertical consolidation is progressing in the industry, and governments and insurers are changing financial incentive systems to transform healthcare delivery from volume to value.

Siemens Healthineers strengthens its CT portfolio by improving patient experience and expanding precision medicine. The picture shows the scanning of a patient by the new single-source Somatom Edge Plus system. Photo courtesy of Siemens AG

At the same time, medicine is becoming more precise and more accessible – and patients are becoming empowered.

These changes are being accelerated by digitalization and the use of artificial intelligence.

Benefiting from an abundant availability, big data is becoming a source of value creation in the sector.

With its strong market positions across the continuum of care Siemens Healthineers is well positioned to capture the opportunities the market has to offer.

The company will continue to be an innovating and transforming force in its industry.


Leading Imaging Business

Siemens Healthineers is a leader in the global imaging industry.

It estimates the industry to be a €17 billion equipment market that will grow at an annual rate of around three percent on average.

Siemens Healthineers strengthens its CT portfolio by improving patient experience and expanding precision medicine. With innovative technologies, Siemens Healthineers can contribute to the success of healthcare providers by helping them to tap the full potential of computed tomography and to offer high-quality examinations while also reducing costs. Photo courtesy of Siemens AG

The Imaging segment offers an innovative, comprehensive product portfolio in magnetic resonance, computed tomography, X-ray products, ultrasound and molecular imaging technologies.

It is the company's largest revenue contributor, generating €8.2 billion in fiscal 2017, of which approximately 40 percent is recurring service revenue split almost evenly between the Americas, EMEA and Asia-Pacific.


Strong foundation in Diagnostics

With revenue of €4.2 billion in fiscal 2017, of which more than 90 percent is recurring, and No. 2 market positions across all geographic regions, the company's second largest business by revenue is Diagnostics, which operates in an estimated €30 billion global market, which the company expects to grow at around five percent on average annually from 2016 to 2021.

Siemens Healthineers strengthens its CT portfolio by improving patient experience and expanding precision medicine. The touch-operated control panels fitted directly on the scanner allow radiology staff to stay close to the patient during the majority of the time needed for scan preparation. Photo courtesy of Siemens AG

Siemens Healthineers recently launched Atellica Solution, which holds great potential for becoming one of the company's future growth and profitability engines.

Atellica Solution is aimed at addressing the key productivity challenges of today's diagnostic laboratories, being capable of running up to 440 tests per hour and of transporting samples up to ten times faster than conventional conveyers.

It includes an efficient sample management system designed to address common clinical laboratory challenges, thus allowing diagnostic professionals to concentrate on driving better outcomes.


Market leader in Advanced Therapies

Siemens Healthineers is also a market leader, across all geographies, in Advanced Therapies.

Advanced Therapies is at the forefront of the paradigm shift in healthcare, particularly in transforming surgery toward minimally invasive procedures empowered by image-guided therapy.

Siemens Healthineers strengthens its CT portfolio by improving patient experience and expanding precision medicine. With its new models Somatom go.All and Somatom go.Top, Siemens Healthineers is strengthening further the Somatom go. platform and expanding the range of clinical applications for its patient-centric mobile workflow operated via tablet. Photo courtesy of Siemens AG

A measure of Siemens Healthineers' leadership in this area is the fact that it generated revenue of €1.5 billion in fiscal 2017 with a 40 percent service share in a market estimated to be around €3 billion in 2016.

The company estimates the equipment market to grow at about four percent per year on average until 2021.

The company collaborates with technology partners, device companies and customers in its product ranges in angio systems, mobile c-arms and hybrid operating rooms.


Strategy and outlook

Siemens Healthineers intends to drive profitable growth in its core business further and has a roadmap to improve future profitability.

Structural cost savings initiatives are targeting €240 million of cost savings per year with a first full impact visible in 2020, and the company aims to achieve continuous productivity improvements going forward.

The company's strategic focus on adjacent growth markets serves as a basis to generate incremental growth and improve its market leadership by 2025 and beyond.

Siemens Healthineers strengthens its CT portfolio by improving patient experience and expanding precision medicine. The two new scanners in the Somatom go. platform – Somatom go.All and Somatom go.Top – now make the mobile workflow available for advanced clinical fields such as  cardiology and  CT-guided intervention. Photo courtesy of Siemens AG

Siemens Healthineers' Strategy 2025 is focused specifically on five future-oriented areas:

• Utilizing its unique position in the in-vivo and in-vitro markets to combine data and knowledge around precision medicine and make it relevant for clinical use

• Using data and artificial intelligence to integrate existing and innovative technologies for therapy

• Coordinating and optimizing the patient journey through the healthcare continuum

• Developing a full range of technical, operational and clinical service offerings that are more effective and more efficient by using technologies from Siemens Healthineers

• Continuing to develop and invest in capabilities in artificial intelligence that support the above areas

Based on certain assumptions, Siemens Healthineers expects comparable revenue growth of between three and four percent for 2018, similar to the average growth rate of 3.8 percent over the last three years.

The company expects an adjusted Profit margin of between 17 and 18 percent for 2018.

Photo courtesy of Siemens AG

In the medium term, Siemens Healthineers targets organic revenue growth of four to six percent and aims to achieve adjusted Profit margins of 20 to 22 percent for the segments Imaging and Advanced Therapies and of 16 to 19 percent for the Diagnostics segment.

Siemens Healthineers is planning a dividend payout ratio of 50 to 60 percent of the Siemens Healthineers group's net income.

"We expect our sustained and profitable revenue growth and continued strong cash flow to support our planned dividend policy," emphasized Bernd Montag.

Siemens corporate headquarters, Munich, Germany. Photo courtesy of Siemens AG

Planned Listing

Siemens AG is preparing to list Siemens Healthineers on the Prime Standard segment of the Frankfurt Stock Exchange's Regulated Market, targeting a liquid market for the Siemens Healthineers share.

The listing is planned for the first half of calendar year 2018.


Siemens AG

Siemens AG (Berlin and Munich) is a global technology powerhouse that has stood for engineering excellence, innovation, quality, reliability and internationality for 170 years.

The company is active around the globe, focusing on the areas of electrification, automation and digitalization.

Siemens corporate headquarters, Munich, Germany. Photo courtesy of Siemens AG

One of the world's largest producers of energy-efficient, resource-saving technologies, Siemens is a leading supplier of efficient power generation and power transmission solutions and a pioneer in infrastructure solutions as well as automation, drive and software solutions for industry.

The company is also a leading provider of medical imaging equipment – such as computed tomography and magnetic resonance imaging systems – and a leader in laboratory diagnostics  as well  as clinical IT.

In fiscal 2017, which ended on September 30, 2017, Siemens generated revenue of €83.0 billion and net income of €6.2 billion.

At the end of September 2017, the company had around 377,000 employees worldwide.

Further information is available on the Internet at www.siemens.com 


Contact

Mr. Robin Zimmermann
Siemens AG
Werner-von-Siemens-Straße 1
80333 Munich
Germany
Tel: +49 (89) 636-22804
r.zimmermann@siemens.com  

Mr. Richard Speich
Siemens AG
Werner-von-Siemens-Straße 1
80333 Munich
Germany
Tel: +49 (89) 636-30017
richard.speich@siemens.com  


Source: Siemens AG

https://www.siemens.com/press/en/  



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