Siemens Healthineers : Präsentation Q1 GJ2021 (Englisch) - 1. Februar 2021 (pdf) 0.78 MB

Q1 Analyst Call

Dr. Bernd Montag, CEO | Dr. Jochen Schmitz, CFO

February 1, 2021

Safe Harbour Statement

This presentation has been prepared solely for use at this meeting. This material is given in conjunction with an oral presentation and should not be taken out of context. By attending the meeting where this presentation is held or accessing this presentation, you agree to be bound by the following limitations.

This presentation has been prepared for information purposes only and the information contained herein (unless otherwise indicated) has been provided by Siemens Healthineers AG. It does not constitute or form part of, and should not be construed as, an offer of, a solicitation of an offer to buy, or an invitation to subscribe for, underwrite or otherwise acquire, any securities of Siemens Healthineers AG or any existing or future member of the Siemens Healthineers Group (the "Group") or Siemens AG, nor should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities of Siemens Healthineers AG, any member of the Group or Siemens AG or with any other contract or commitment whatsoever. This presentation does not constitute a prospectus in whole or in part, and any decision to invest in securities should be made solely on the basis of the information to be contained in a prospectus and on an independent analysis of the information contained therein.

Any assumptions, views or opinions (including statements, projections, forecasts or other forward-looking statements) contained in this presentation represent the assumptions, views or opinions of Siemens Healthineers AG, unless otherwise indicated, as of the date indicated and are subject to change without notice.

Siemens Healthineers neither intends, nor assumes any obligation, unless required by law, to update or revise these assumptions, views or opinions in light of developments which differ from those anticipated.

All information not separately sourced is from internal company data and estimates. Any data relating to past performance contained herein is no indication as to future performance. The information in this presentation is not intended to predict actual results, and no assurances are given with respect thereto.

The information contained in this presentation has not been independently verified, and no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information contained herein and no reliance should be placed on it. None of Siemens Healthineers AG or any of its affiliates, advisers, affiliated persons or any other person accept any liability for any loss howsoever arising (in negligence or otherwise), directly or indirectly, from this presentation or its contents or otherwise arising in connection with this presentation. This shall not, however, restrict or exclude or limit any duty or liability to a person under any applicable law or regulation of any jurisdiction which may not lawfully be disclaimed (including in relation to fraudulent misrepresentation).

This document contains statements related to our future business and financial performance and future events or developments involving Siemens Healthineers that may constitute forward-looking statements. These statements may be identified by words such as "expect", "forecast", "anticipate", "intend", "plan", "believe", "seek", "estimate", "will", "target" or words of similar meaning. We may also make forward-looking statements in other reports, in presentations, in material delivered to shareholders and in press releases. In addition, our representatives may from time to time make oral forward-looking statements. Such statements are based on the current expectations and certain assumptions of Siemens Healthineers' management, of which many are beyond Siemens Healthineers' control. As they relate to future events or developments, these statements are subject to a number of risks, uncertainties and factors, including, but not limited to those described in the respective disclosures. Should one or more of these risks, uncertainties or factors materialize, or should underlying expectations not occur or assumptions prove incorrect, actual results, performance or achievements of Siemens Healthineers may (negatively or positively) vary materially from those described explicitly or implicitly in the relevant forward-looking statement.

This document includes - in the applicable financial reporting framework not clearly defined - supplemental financial measures (financial key performance indicators) that are or may be alternative performance measures (non-GAAP measures). These supplemental financial measures may have limitations as analytical tools and should not be viewed in isolation or as alternatives to measures of Siemens Healthineers' net assets and financial positions or results of operations as presented in accordance with the applicable financial reporting framework in its half-year consolidated financial statements and consolidated financial statements. Other companies that report or describe similarly titled alternative performance measures may calculate them differently, which may therefore not be comparable.

Please find further explanations regarding our financial key performance indicators in chapter "A.2 Financial performance system" and in the notes to the consolidated financial statements note 29 "Segment information" in the Annual Report 2020 of Siemens Healthineers. Additional information is also included in the Quarterly Statement. These documents can be found under the following internet link https://www.corporate.siemens- healthineers.com/investor-relations/presentations-financial-publications.

Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures to which they refer. Due to technical reasons, there may be discrepancies in formatting of the accounting data included in this document and made publicly available according to applicable legal rules.

This document is an English language translation of the German document. In case of discrepancies, the German language document is the sole authoritative and universally valid version. The information contained in this presentation is provided as of the date of this presentation and is subject to change without notice.

Q1 FY2021

Unrestricted © Siemens Healthineers AG, 2021 l 2

Strength across the board, supported by pandemic-related demands; Outlook raised for revenue and adjusted EPS

• Very strong start into the fiscal year with 13% comparable revenue growth1 in Q1
• Continuous high equipment book-to-bill of 1.16
• Outstanding 23% growth1 in Diagnostics with significant contribution from rapid COVID-19antigen test sales and core business returning to solid growth1
• Imaging and Advanced Therapies with very strong comparable revenue growth1 of 9% and 6%, driven by EMEA and Asia; CT2 posted clear double-digitgrowth
• High profitability with an adjusted EBIT margin of 19.1%, +550 bps y-o-y
• Adjusted basic earnings per share of €0.49 vs. €0.36 in prior-year quarter
• Free cash flow more than doubled in Q1 to €668 m compared to prior-year quarter
• Outlook 2021 raised to 8-12% comparable revenue growth1 and €1.63-1.82 adj. EPS

1 Year-over-year on a comparable basis, excluding currency translation and portfolio effects as well as effects in line with revaluation of contract liabilities from IFRS 3 PPA |	Q1 FY2021
2 CT: Computed Tomography	Unrestricted © Siemens Healthineers AG, 2021 l 3

Industry-leading Imaging business in full swing

Highlights

Healthy growth in Q1 across modalities

• Exceptionally strong revenue growth with Computed Tomography and X-ray
• Equipment revenue growth in all modalities

Well-built global presence paying off

• Exceptionally strong revenue growth in Europe and China
• U.S. temporarily soft, rebound in the course of FY21 expected

Record Q1 margin

• Strong margin due to healthy revenue growth, mix and lower discretionary spend

1 Refers to revenue of products introduced over the last 3 years | 2 Share of recurring Service revenue as % of total Imaging revenue | 3 R&D for Imaging in % of revenue in FY2020

Attractive fundamentals

~2/3 revenue from innovations1

Consistent above market growth due to continued roll-outof breakthrough innovations

~40% of revenue highly resilient2

High recurring Service revenues, regional diversification and value partnerships

>20% industry-leading margins

Further expansion of leading margins

>9% of revenueinvest and re-invest3

Industry leading R&D intensity ensuring Innovation Pipeline for future growth

Q1 FY2021 Unrestricted © Siemens Healthineers AG, 2021 l 4

Diagnostics business normalizing - Rapid Antigen test with significant positive contribution

Core business back to growth

On track with solid growth

• margin recovery

Solid progress on Atellica performance with major installations on track

Transformation progressing well

with commercial execution

improvement across all regions

Continued success in market adoption of Atellica manifesting in further large deals

COVID-19 portfolio well positioned

Strong uptake of our Rapid

SARS-CoV-2 POC Antigen Test1,3

Continued growth in

Molecular SARS-CoV-2 test1,2

Right design choice (Spike protein) for identifying & quantifying

neutralizing Antibodies1,2

25 critical care test assays1 for COVID-19patients (eg D-Dimer1,IL-61,2, SAA1,3)

1 Product availability may vary from country to country and is subject to varying regulatory requirements. | 2 These tests have not been FDA cleared or approved. They have been authorized by FDA under an EUA for use by authorized laboratories. The molecular ("PCR") test has been authorized only for the detection of nucleic acid from SARS-CoV-2, not for any other viruses or pathogens. The serology ("antibody") test has been authorized only for detecting the presence of antibodies against SARS-CoV-2, not for any other viruses or pathogens. The IL-6 test has been authorized only to assist in identifying severe inflammatory response, when used as an aid in determining the risk of intubation with mechanical ventilation in confirmed COVID-19 patients. These tests are only authorized for the duration of the declaration that circumstances exist justifying the authorization of emergency use of in vitro diagnostics for detection and/or diagnosis of COVID-19 under Section 564(b)(1) of the Act, 21 U.S.C. § 360bbb-3(b)(1), unless the authorization is terminated or revoked sooner.| 3 Not available for sale in the U.S.

Q1 FY2021 Unrestricted © Siemens Healthineers AG, 2021 l 5

Very strong revenue growth and high profitability

Revenue (€m)

Adjusted basic earnings per share (€)

	Net Income	304	437
	(€m)
Comparable
+13.3%
Growth1		+37%
Y-o-Y

	3,587		3,868	0.49
				0.36

Q1 FY2020

Q1 FY2021

• Significant revenue growth1 of 13% on solid comps (PYQ: 5%)
• Very strong growth1 with excellent revenue growth1 from equipment and Antigen test sales, while service growth remains stable
• EMEA with excellent growth1 of 26% (PYQ:10%), driven by growth in all geographies and Antigen contribution
• Very strong growth1 in Asia of 13% (PYQ: 9%), driven by China
• Americas with soft growth1, lagging U.S. recovery as expected

Q1 FY2020

Q1 FY2021

• Adj. basic EPS up on very strong revenue and high profitability
• Adj. EBIT margin significantly up y-o-y from excellent conversion in Imaging and Diagnostics, ongoing tailwind from discretionary spend
• Reported financial income net at -€77 m, therein -€70 m related to the planned Varian acquisition, mainly for purchase price hedging and bridge financing costs; adjusted financial income net in Q1 at -€7 m
• Tax rate with 28% roughly on PY level (PYQ: 27%)

	Q1 FY2021
1 Year-over-year on a comparable basis, excluding currency translation and portfolio effects as well as effects in line with revaluation of contract liabilities from IFRS 3 PPA	Unrestricted © Siemens Healthineers AG, 2021 l 6

Very strong growth across the board with Diagnostics standing out; Imaging with record Q1 profitability

Imaging (€m)

Comparable	+9.3%
Growth1
Adjusted	2,221	2,319
revenue
	Q1 FY2020	Q1 FY2021
Margin Y-o-Y	+590 bps
Adj. EBIT	387	542
(23.4%)
(margin)	(17.4%)
	Q1 FY2020	Q1 FY2021

Diagnostics (€m)

	+23.5%
1,013	1,183
Q1 FY2020	Q1 FY2021

	+840 bps
32	137
(3.1%)	(11.6%)
Q1 FY2020	Q1 FY2021

Advanced Therapies (€m)

	+6.3%
404	412
Q1 FY2020	Q1 FY2021
	-80 bps
79	78
(19.6%)	(18.8%)
Q1 FY2020	Q1 FY2021

• Strong growth1 in all businesses, excellent growth1 in CT2 clearly in the double-digits, very strong growth1 in X-Ray Products
• Record Q1 margin from excellent conversion and less discretionary spend

• Revenue significantly up, driven by COVID-19 testing and core business returning to solid growth1
• Margin up from additional volume from COVID-19 testing contribution and conversion in core business

• Strong growth1 of 6% on tough comps (PY: 9%) driven by excellent equipment revenue growth1
• Margin stable y-o-y excl. FX headwind

1 Year-over-year on a comparable basis, excluding currency translation and portfolio effects as well as effects in line with revaluation of contract liabilities from IFRS 3 PPA |	Q1 FY2021
2 CT: Computed Tomography	Unrestricted © Siemens Healthineers AG, 2021 l 7

Diagnostics - Accretion from Antigen test assumed to decline in H2 FY21

			DX incl. COVID-19 tests		DX excl. COVID-19 tests
Comparable revenue growth1 in FY21		•	Good uptake of Antigen tests, sales of €130 m in Q1
							•	Updated Antigen revenue assumption for FY21 at €300-350m,
					easy comps			front-loaded due to expected slowing demand in H2 FY21
							•	PCR and Antibody sales support y-o-y Q1 growth
							•	DX excl. COVID-19 tests with solid growth1 in Q1 from recovered
								routine testing and customer pull-ins
	Q1	Q2		Q3	Q4

Adjusted EBIT margin in FY21

• Antigen test volumes accretion to decline significantly in H2 FY21 from expected slowing demand and price erosion
• DX excl. COVID-19tests with improved profitability in Q1 from reagent recovery and improved utilization

Q1	Q2	Q3	Q4
Note: indicative graph only, not to scale			Q1 FY2021
1 Year-over-year on a comparable basis, excluding currency translation and portfolio effects as well as effects in line with revaluation of contract liabilities from IFRS 3 PPA.	Unrestricted © Siemens Healthineers AG, 2021 l 8

Testing and examination normalized despite volatility in COVID-19 incidence

Central lab test volumes1

China

Typical	19-COVIDcases
testsof#
test level

Jan

Feb Mar

Apr May Jun

Jul Aug Sep Oct Nov

Dec Jan

Magnetic resonance exams2

China

Typical
exam level				COVID-19 cases
# of exams
0
Jan	Feb Mar	Apr May Jun	Jul Aug Sep Oct Nov	Dec Jan

USA

USA

Typical

Typical

exam level

test level

COVID-19 cases

# of exams

COVID-19 cases

# of tests

0

Jan

Feb Mar

Apr May Jun

Jul

Aug Sep Oct Nov

Dec Jan

Jan

Feb Mar

Apr May Jun

Jul

Aug Sep Oct Nov

Dec Jan

New COVID-19 cases per week³

Patient tests per system

New COVID-19 cases per week³

Number of MRI exams per system

1 Data limited to certain Siemens Healthineers instruments connected to Smart Remote Services, which may not be representative of overall testing across all instruments

Q1 FY2021

and all sites in the respective location | 2 Based on connected Siemens Healthineers equipment | 3 Source: Johns Hopkins University

Unrestricted © Siemens Healthineers AG, 2021 l 9

Raised outlook for FY2021 (ex Varian)

Comparable revenue growth1,3		Adj. basic EPS2,3 (€)

8% to 12%

2021E Old

2021E New

• Higher Growth in FY21 due to faster recovery and higher than expected opportunities
• Imaging returning to growth at or above 7%
• Diagnostics to grow at least in the mid-teens
• Advanced Therapies returning to growth at or above 6%

Comp.4 adj.	~16% to ~28%
EPS growth:
				1.63 to 1.82

2021E Old

2021E New

• Higher adj. EPS in FY21 on higher revenue
• Adj. EBIT margin2 for the group to improve >100 bps y-o-y
• Imaging margin to improve ~100 bps y-o-y
• Diagnostics margin to recover to >7%, driven by COVID-19-related opportunities and recovering core business
• Advanced Therapies to keep industry leading margins
• Adjusted financial income net expected at -€40to -€60m
• Tax rate expected at 27% to 29%

1 Year-over-year on a comparable basis, excluding currency translation and portfolio effects as well as effects in line with revaluation of contract liabilities from IFRS 3 PPA | 2 Adjusted for expenses for portfolio-related measures, and severance charges, for EPS net of tax and calculated for FY2021 with 1,072 m av. shares outstanding |

3 The outlook is based on certain assumptions for antigen test revenue, pandemic-related demand and the investment activity in the U.S., further assumptions of the previous outlook remain unchanged (see quarterly statement Q1) | 4 excl. y-o-y effects from FX and from share count dilution

Q1 FY2021 Unrestricted © Siemens Healthineers AG, 2021 l 10

We are well on track to complete a transformative acquisition

Q1 FY21 results	Post Q1	Annual Shareholders'	Post Q1	Q2 FY21 results	Capital Market
and Analyst Call	roadshows	Meeting	conferences	and Analyst Call	Day
Feb 1, 2021	Feb 2/3, 2021	Feb 12, 2021	thru Mar, 2021	May 3, 2021	Autumn 2021

	Integration			Milestones
✓ Integration Plan and Day 1 readiness on track	+	✓ U.S. antitrust and CFIUS cleared
✓	Culture and People Engagement programs set up	✓	Regulatory approvals on track
✓	Positive momentum in dedicated integration workstream		✓	Expected closing in H1 CY2021

Q1 FY2021

Unrestricted © Siemens Healthineers AG, 2021 l 11

Sustainability - an inherent element of our purpose and our leadership model

Innovating to sustainably enable healthcare

for everyone everywhere

	Improve quality		Contribute to a		Advance diversity
	of live through		regenerative		and inclusion and
	access to		and healthy		drive employee
	healthcare and		environment		engagement
	innovation

Create sustainable value through responsible business and leadership

• ESG targets part of the LTI compensation for MBM and eligible senior management
• Website launch on
  Feb 12, 2021

Q1 FY2021 Unrestricted © Siemens Healthineers AG, 2021 l 12

Set for further structural and innovation-driven growth

Syngo Carbon	Photon Counting1
The connecting	Introducing a new
element that gives	era of Computed
rise to knowledge	Tomography

Today

MAGNETOM	CI19001	Tomorrow
Free.Max1	Bringing Atellica
Breaking Barriers	technology into low-to-
in MRI	mid volume labs and
	hub and spoke settings

Corindus2 Continued market creation and advancing into robotic supported stroke treatment

• Highly innovative upcoming product and technology roll-outsto underpin market leadership positions
• Ideal portfolio to benefit by structural growth trends and the shift to holistic partnerships and c-level decision taking
• With Varian our portfolio becomes even more holistic and we enter an attractive adjacent growth market

1 Currently under development and not yet commercially available. Its future availability cannot be guaranteed. | 2 Neurointerventions and remote technologies are	Q1 FY2021
currently under development. Not for sale in the U.S. Its future availability cannot be guaranteed	Unrestricted © Siemens Healthineers AG, 2021 l 13

A compelling investment case

	1	2	3
Attractive structural	Sector leading margins	Expanding portfolio
and innovation	with further upside	into adjacent growth
driven growth		markets
•	Leading positions in attractive,	• Scope for further expansion	• Varian: New level of profitable
	structurally growing end-	of our sector leading margins	growth; become even more
	markets	in Imaging and Advanced	holistic partner for the entire
• Consistent roll-outof	Therapies	customer spectrum
	innovative technologies	• On track to drive higher	• Corindus: Continued market
	and products to strengthen our	growth and better margins	creation in a tough environ-
	market leading positions	in our Diagnostics business	ment reinforcing our value
•	Benefitting from growing		proposition

importance of holistic partnerships and increasing shift to c-leveldecision taking

4

Resilient performance at all times

• High share of recurring revenues from reagents in Diagnostics and our service business in Imaging and Advanced Therapies
• Regional diversification and significantly increasing order backlog from Value Partnerships further increase resilience in our business

Q1 FY2021 Unrestricted © Siemens Healthineers AG, 2021 l 14

Appendix

Q1 FY2021 Unrestricted © Siemens Healthineers AG, 2021 l 15

Strong cash conversion in a strong revenue quarter

Q1 FY21 Siemens Healthineers EBIT to Free Cash Flow (€m)

									2	Imaging	1.2
									CCR	Diagnostics	0.7
										Adv. Therapies	0.9
						CCR1 1.04
			889′			-61′		925′
			12′
				137′		-52′				30′
	722′	167′						749′
683′								668′
						-146′
							-30′
	39′								-111′

Healthineers

PPA

EBIT excl.

Depr. of PPE EBITDA

Change in

Change in

Add. to

Other

Operating

Add. to

Repayment FCF pre tax - Repayment

Income

Free Cash

EBIT

Amortization

PPA

& Amort. of

OWC

other assets

operating

Cash Flow

intangible

of 3rd

Repayment

of 3rd

taxes

Flow

AmortizationIntang. excl.

& liabilities

leases

pre tax

assets, PPE

party lease

of lease

party lease

PPA

liabilities

liabilities

liabilities

1 Healthineers CCR=(Free Cash Flow pre tax - Repayment of 3rd party lease liabilities) / (Healthineers EBIT excl. PPA) |

Q1 FY2021

2 Segment CCR = (Free Cash Flow) / (Segment EBIT excl. PPA)

Unrestricted © Siemens Healthineers AG, 2021 l 16

Q1 balance sheet and net debt bridge

Net debt overview

in €bn	Sep 30, 2020	Dec 31, 2020
Cash and cash equivalents	0.7	0.6
Current receivables from the
Siemens Group from financing	3.3	4.0
activities
Short-term and long-term	(0.5)	(0.5)
financial debt
Current liabilities and liabilities to
the Siemens Group from financing	(4.9)	(5.1)
activities2
Net debt	(1.5)	(1.0)
Provisions for pensions and similar	(1.0)	(1.1)
obligations
Net debt (incl. pensions)	(2.5)	(2.1)

1 Leverage is net debt incl. pension over EBITDA rolling four quarters | 2 Includes market values from derivatives

Capital structure development in Q1 (in €bn)

Leverage1	0.9x	0.7x
	2.5
		2.1
Pensions	1.0
		1.1
		-0.8
		0.2
Net Debt	1.5	0.2
		1.0

01-Oct-20 CF from CF from CF from 31-Dec-20

operating act. investing act. financing act. and others

Q1 FY2021

Unrestricted © Siemens Healthineers AG, 2021 l 17

SHS loan maturity profile

SHS loans with Siemens Group as of 31.12.20201 (in €m)

Comments

Other	1,856
85
EUR
USD	1,5142
	1,000

807

6672

7712

FY 2021

FY 2023

FY 2027

FY 2046

• Total loan volume ~€5 bn equivalent
• Average interest rate ~0.7%3

Top 5 loans

Currency	Volume	Volume	Interest	Maturity
		in €	rate
USD	$1,689	€1,5142	0.26%2	FY 2027
EUR	€1,000	€1,000	0.25%4	FY 2021
USD	$990	€807	3.4%	FY 2046
USD	$859	€7712	-0.7%2	FY 2021
USD	$743	€6672	-0.2%2	FY 2023

1. Maturity profile based on Fiscal Year start October 1 - translation to EUR according to spot rate as of Dec 31th 2020
2. USD loans addressed by SHS debt & capital restructuring project resulting in synthetic EUR debt; EUR volume and interest rate are calculated with underlying hedge rates
3. Average interest rate for FY21 after implementation of debt and capital restructuring project
4. Floating interest rate

Q1 FY2021 Unrestricted © Siemens Healthineers AG, 2021 l 18

Funded status unchanged

Q1 FY2021 Key financials - Pensions and similar obligations

in €bn1	FY2018	FY2019	FY2020	Q1
FY2021
Defined benefit obligation (DBO)2	(3.4)	(3.8)	(3.8)	(3.9)
Fair value of plan assets2	2.6	2.8	2.8	2.9
Provisions for pensions and similar	(0.8)	(1.0)	(1.0)	(1.0)
obligations
Discount rate	2.9%	1.8%	1.5%	1.2%
Interest Income	0.1	0.1	0.0	0.0
Actual return on plan assets	0.1	0.3	0.1	0.1

1 All figures are reported on a continuing basis | 2 Difference between DBO and fair value of plan assets additionally resulted in net defined benefit assets (Q1 FY2021: €+0.0bn);	Q1 FY2021
Defined Benefit Obligation (DBO) including other post-employment benefit plans (OPEB) of ~€-0.1bn	Unrestricted © Siemens Healthineers AG, 2021 l 19

Q1 FY2021 Unrestricted © Siemens Healthineers AG, 2021 l 20