Siemens Healthineers : with strong revenue and profit growth

• Revenue rises 5.8 percent in fiscal year 2019 on a comparable basis, driven by Imaging and Advanced Therapies
  
• Adjusted profit up 9 percent year on year; adjusted profit margin of 17.3 percent despite lower profitability at Diagnostics
  
• Dividend increase of 14 percent to EUR 0.80 per share planned
  
• Start of second phase of 'Siemens Healthineers Strategy 2025' launched - further revenue and earnings growth expected in coming years

'Thanks to a strong year-end finish, we clearly exceeded our growth outlook in fiscal year 2019. Adjusted profit also rose significantly, even though the adjusted profit margin was slightly below our expectations due to a weaker performance at Diagnostics. We are tackling the challenges at Diagnostics vigorously while we continue to expand the strong positions of Imaging and Advanced Therapies. As part of the implementation of our 2025 strategy, we are now entering the next, so-called Upgrading phase in order to achieve the next level of profitable growth in the coming years.' said Bernd Montag, CEO of Siemens Healthineers AG.

Siemens Healthineers AG recorded strong growth in the past fiscal year 2019 that ended in September, mainly due to strong momentum in the Imaging and Advanced Therapies segments. On a comparable basis, meaning excluding currency translation and portfolio effects, revenue rose 5.8 percent from the previous year and reached EUR 14.5 billion. All three regions contributed to this development, with particularly strong growth coming from Asia, Australia. Reported growth was around eight percent. Adjusted profit¹ rose nine percent year on year to EUR 2.5 billion, despite low profitability in the Diagnostics segment as a result of ramp-up costs for the Atellica Solution laboratory diagnostics system and negative currency effects. This translates into an adjusted profit margin of 17.3 percent, compared to 17.2 percent in fiscal year 2018. Net income rose 24 percent to almost EUR 1.6 billion, helped by lower financing interest expenses, among other things. Basic earnings per share² also increased 24 percent. Against this backdrop, it is planned to propose a dividend increase of 14 percent to EUR 0.80 per share for fiscal year 2019 at the annual general meeting. The beginning of fiscal year 2020 also marks the start of the second phase of the 'Siemens Healthineers Strategy 2025', during which the company is anticipating further growth in revenue and adjusted earnings.

Siemens Healthineers in the fourth quarter
In the traditionally strong fourth quarter, the company's revenue rose to around EUR 4.1 billion. On a comparable basis, this corresponds to an outstanding growth rate of 8.5 percent from the year-earlier period, driven by double-digit growth in the Imaging and Advanced Therapies segments and, from a regional perspective, in particular by the Americas and Asia, Australia regions. Adjusted profit rose 17 percent to EUR 791 million, also helped by positive currency effects, translating into an adjusted profit margin of 19.1 percent, compared with 18.2 percent in the previous year. Net income increased 36 percent year on year to EUR 507 million. Basic earnings per share also increased 36 percent to EUR 0.50.

Siemens Healthineers reporting segments in the fourth quarter
Revenue of the Imaging segment rose ten percent in the fourth quarter on a comparable basis from a year earlier and reached almost EUR 2.6 billion, with significant growth in the Americas and Asia, Australia regions. From a business perspective, Magnetic Resonance as well as Molecular Imaging recorded particularly strong growth. At 21.9 percent, the segment's adjusted profit margin was above the already good level of the prior year and benefited from minor currency effects and cost savings.

The Diagnostics segment recorded revenue of around EUR 1.1 billion in the fourth quarter, which corresponds to an increase of two percent on a comparable basis. Growth was driven by the Asia, Australia region, primarily in China. The segment's profit margin reached 9.9 percent and was again negatively impacted year on year by increased ramp-up costs for Atellica Solution and currency effects. More than 1,820 Atellica Solution systems were shipped during fiscal year 2019.

Advanced Therapies generated revenue of EUR 481 million in the fourth quarter, corresponding to growth of 14 percent on a comparable basis. This performance was driven by all regions. Helped by positive currency effects and cost savings, the adjusted profit margin reached 22.7 percent, surpassing the already very good level of the prior year.

Start of the second phase of 'Siemens Healthineers Strategy 2025'
Fiscal year 2020 also marks the beginning of the second phase of the 'Siemens Healthineers Strategy 2025'. For this so-called Upgrading phase, the company has defined clear priorities for its three segments. In the Imaging segment, the focus is on continuously innovating the core business, the expansion of diagnostic offerings and taking a leading role in clinical decision-making enabled by Artificial Intelligence. In the Diagnostics segment, the main task is to exploit the opportunities offered by the market trend towards automated workflows in laboratory diagnostics and to bring the segment up to market-growth level in the mid term. The Advanced Therapies segment is set to further improve precision in minimal invasive procedures and to expand in highly growing procedures.

At the same time, Siemens Healthineers has also defined three cross-segment priorities for the Upgrading phase: Market share gains in geographic growth markets, market share gains with leading healthcare providers and driving forward the company's digital transformation.

Outlook on further business performance
Starting in fiscal year 2020, Siemens Healthineers will refer to adjusted basic earnings per share as the key earnings indicator in its outlook. The figure will be adjusted for amortization of intangible assets acquired in business combinations, severance charges, and acquisition-related transaction costs net of tax.

For fiscal year 2020, the company expects comparable revenue growth in the range of five to six percent compared to fiscal year 2019. Furthermore, adjusted basic earnings per share are expected to be six to twelve percent above the level of fiscal year 2019, when the figure was EUR 1.70. The outlook is based on current foreign exchange rate assumptions and on the current portfolio (including signed or closed M&A-transactions).

For fiscal years 2021 and 2022, the company expects comparable revenue growth of more than five percent for each year. Adjusted basic earnings per share are expected to increase by around ten percent in fiscal year 2021 and also by this amount in fiscal year 2022. The outlook is based on current foreign exchange rate assumptions and on the current portfolio.