Siemens Healthineers ((DE:SHL)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Siemens Healthineers’ recent earnings call painted a picture of a company that has successfully navigated a strong fiscal year 2025, showcasing impressive growth and robust segment performance. However, the sentiment was tempered by the acknowledgment of significant challenges ahead, particularly in China and due to macroeconomic factors like tariffs and foreign exchange fluctuations. Despite these hurdles, Siemens Healthineers remains optimistic about its solid foundation for future growth and profitability.
Solid Fiscal Year 2025 Performance
Siemens Healthineers concluded fiscal year 2025 on a high note, achieving growth at the upper end of its outlook range. The company’s book-to-bill ratio stood at a healthy 1.14, and adjusted EPS was within the upper half of the forecast. Additionally, the improvement in free cash flow resulted in a leverage ratio of 2.8x EBITDA, underscoring the company’s strong financial health.
Strong Segment Growth
The Imaging, Varian, and Advanced Therapies segments were standout performers, collectively driving nearly 8% revenue growth. Varian, in particular, has consistently grown by high single-digit percentages annually, while Advanced Therapies maintained solid growth with stable margins, contributing significantly to the company’s overall success.
Diagnostics Profitability Improvement
Despite facing market challenges in China, Siemens Healthineers’ Diagnostics segment achieved a notable improvement in profitability. This was attributed to a successful transformation program that helped the segment navigate through the tough market conditions.
Healthy Global Demand
Excluding China, Siemens Healthineers experienced robust revenue growth across all regions, with particularly strong performances in the Americas and EMEA. This global demand highlights the company’s ability to capitalize on opportunities outside of the Chinese market.
China Market Challenges
The Chinese market posed significant challenges, with revenue stagnating at around EUR 620 million in Q4 and no signs of a sustained recovery. This situation is expected to impact the fiscal year 2026 outlook, with projections indicating flattish revenue in China.
Tariff and Foreign Exchange Headwinds
Tariffs and a strong euro are anticipated to negatively affect earnings growth in fiscal year 2026. The tariffs alone contributed to a EUR 0.15 year-over-year headwind, with a total impact of approximately EUR 400 million expected, posing a considerable challenge for the company.
Diagnostics Segment Pressure
The Diagnostics segment faced pressure with flattish year-over-year revenue, primarily due to volume-based procurement in China. This challenge is expected to persist into the next fiscal year, adding to the company’s hurdles.
Forward-Looking Guidance
Looking ahead to fiscal year 2026, Siemens Healthineers’ leadership expressed confidence in continued growth despite the challenges. The company anticipates comparable revenue growth of 5% to 6% and adjusted EPS between EUR 2.20 and EUR 2.40. While macroeconomic challenges such as tariffs and a strong euro are expected to impact margins, Siemens Healthineers plans to mitigate these effects through pricing strategies, cost control, and potential shifts in value-add locations.
In conclusion, Siemens Healthineers’ earnings call reflected a company that has achieved strong performance in fiscal year 2025, with significant growth across key segments. However, challenges in China and macroeconomic headwinds present hurdles for fiscal year 2026. Despite these obstacles, the company remains optimistic about its future growth prospects, supported by strategic initiatives and a solid financial foundation.