Siemens Healthineers : with strong finish in record year 2021

Siemens Healthineers with strong finish in record year 2021

Erlangen, November 4, 2021 - Siemens Healthineers AG today announced its results for the fourth quarter of fiscal year 2021 that ended September 30, 2021.

Fiscal Year 2021 - Outstanding performance in a challenging environment

• Record revenue of around €18 billion; comparable growth of 19.3% compared to the prior year which was challenged by the COVID-19 pandemic
• Very good comparable revenue growth of 11.8%, excluding rapid COVID-19 antigen tests; revenue contribution from rapid antigen tests of around €1.1 billion
• Considerable comparable revenue growth of 11.2% in Imaging, 8.6% in Advanced Therapies, and 42.3% in Diagnostics, excluding rapid antigen tests at 14.7%
• Excellent start of Varian within Siemens Healthineers; strong revenue contribution of €1.3 billion since the closing of the acquisition on April 15, 2021
• Adjusted EBIT margin increases by 190 bps to 17.4%
• Adjusted basic earnings per share up 26% to €2.03
• Free cash flow reaches record level of around €2.3 billion
• Proposed dividend of €0.85 per share (corresponding to a 55% pay-out ratio of net income)

Q4 Fiscal Year 2021 - Strong final quarter with peaks in order intake and revenue

• Very good revenue development also in the fourth quarter - comparable growth of 14.4% from prior-year quarter which was considerably challenged by the COVID-19 pandemic; excluding rapid antigen tests, it was 10.3%
• Equipment book-to-bill ratio at a very good 1.17
• Diagnostics revenue with excellent increase of 22.3% year-over-year; excluding the revenue contribution of around €160 million from rapid COVID-19 antigen tests, comparable revenue growth at 7.0%
• Comparable revenue growth of 11.6% in Imaging; Advanced Therapies grows by 14.5%
• Continued strong Varian development with equipment book-to-bill ratio of 1.59
• Adjusted EBIT up to €793 million compared to €631 million in the prior year - margin at 15.3%
• Adjusted basic earnings per share up 10% to €0.53 from €0.48 in the prior-year quarter

Outlook for Fiscal Year 2022

• Comparable revenue growth between 0% and 2% expected
• Excluding revenue from rapid COVID-19 antigen tests, comparable revenue growth between 5% and 7% expected
• Adjusted basic earnings per share between €2.08 and €2.20

Bernd Montag, CEO of Siemens Healthineers AG:

»The Siemens Healthineers team successfully ended the record year 2021 with a strong quarter. We demonstrated an agile and prudent response to the pandemic. As a result, we were able to gain further market shares. At the same time, we have introduced significant innovations to the market and adopted an ambitious sustainability program. Together with our colleagues from Varian, we have defined our strategic priorities for the coming years. We start the new fiscal year as an even more holistic and relevant healthcare company with a record order backlog, and we expect to continue our strong business development.«

Quarterly Statement Fiscal Year 2021 | Siemens Healthineers

Business Development

Siemens Healthineers

	Q4	Q4		%-Change
(in millions of €)	2021	2020	Act.	Comp.¹
Revenue	5,164	3,876	33.2%	14.4%
Adjusted EBIT²	793	631	26%
Adjusted EBIT margin	15.3%	16.3%
Net income	466	432	8%
Adjusted basic earnings per share³	0.53	0.48	10%
Basic earnings per share	0.41	0.42	−3%
Free cash flow⁴	380	708	−46%

1. Year-over-yearon a comparable basis, excluding currency translation and portfolio effects as well as effects in line with revaluation of contract liabilities from IFRS 3 purchase price allocations.
2. Adjusted EBIT is defined as income before income taxes, interest income and expenses and other financial income, net, adjusted for expenses for portfolio-related measures, severance charges and centrally carried pension service and administration expenses (only excluded from adjusted EBIT of the segments).
3. Adjusted basic earnings per share are defined as basic earnings per share, adjusted for portfolio-related measures and severance charges, net of tax.
4. Free cash flow comprises the cash flows from operating activities and additions to intangible assets and property, plant and equipment included in cash flows from investing activities.

Revenue in the fourth quarter of fiscal year 2021 increased substantially over the prior-year quarter that was notably challenged by the COVID-19 pandemic. On a comparable basis, revenue rose by 14.4 percent and, excluding rapid COVID-19 antigen tests, by

10.3 percent. The Advanced Therapies and Imaging segments achieved considerable growth. The Diagnostics segment recorded a very good development, driven both by the routine care business and the sale of rapid antigen tests. As the rapid antigen tests were distributed mainly in Europe, this had a significant positive impact on growth in the EMEA region. The two other regions, the Americas and Asia, Australia, posted double-digit percentage growth on a comparable basis. On a nominal basis, revenue in the fourth quarter rose 33.2 percent to almost €5.2 billion, benefiting from the contribution of the Varian reporting segment.

The equipment book-to-billratio, i.e. the ratio of new orders to revenue, was at a very good 1.17 in the fourth quarter. In par- ticular, demand in the U.S. again developed very positively after an already strong prior-year quarter.

Adjusted EBIT increased 26 percent in the fourth quarter over the prior-year period to €793 million. This translates into an adjusted EBIT margin of 15.3%, below the prior-year level. In light of the very positive business development, expenses for performance -related remuneration components increased significantly. The margin was also affected by expenses for a one-time special payment to employees of around €56 million and negative currency effects. Excluding these effects, the adjusted EBIT margin was significantly above prior-year level.

Net income in the fourth quarter rose eight percent from the prior year to €466 million. The tax rate was 22 percent, following 21 percent in the prior-year quarter. Adjusted basic earnings per share increased ten percent to €0.53, following €0.48 in the prior-year quarter.

Free cash flow reached €380 million in the fourth quarter after three very good previous quarters and was thus below the strong prior-year quarter. Lagging supplier payments in connection with the rapid antigen testing business in the Diagnostics segment and higher tax payments had an impact, among other factors.

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Quarterly Statement Fiscal Year 2021 | Siemens Healthineers

Imaging

	Q4	Q4		%-Change
(in millions of €)	2021	2020	Act.	Comp.²
Total adjusted revenue¹	2,757	2,447	12.7%	11.6%
Adjusted EBIT³	605	551	10%
Adjusted EBIT margin	22.0%	22.5%

1. Total adjusted revenue is defined as total revenue adjusted for effects in line with revaluation of contract liabilities from IFRS 3 purchase price allocations.
2. Year-over-yearon a comparable basis, excluding currency translation and portfolio effects.
3. Prior-yearfigures adjusted in line with updated definition of adjusted EBIT.

The Imaging segment achieved revenue of almost €2.8 billion in the fourth quarter, corresponding to growth of 11.6 percent on a comparable basis over the prior-year quarter, which was challenged by the COVID-19 pandemic. Double-digit percentage growth was recorded in Computed Tomography, Molecular Imaging and Ultrasound. From a regional perspective, revenue in EMEA and Asia, Australia, developed very strongly, and the Americas region even posted sharp growth.

The segment's adjusted EBIT margin reached 22.0 percent and was impacted especially by higher expenses for performance- related remuneration components and negative currency effects.

Diagnostics

	Q4	Q4		%-Change
(in millions of €)	2021	2020	Act.	Comp.²
Total adjusted revenue¹	1,278	1,038	23.2%	22.3%
Adjusted EBIT³	93	8	1101%
Adjusted EBIT margin	7.3%	0.7%

1. Total adjusted revenue is defined as total revenue adjusted for effects in line with revaluation of contract liabilities from IFRS 3 purchase price allocations.
2. Year-over-yearon a comparable basis, excluding currency translation and portfolio effects.
3. Prior-yearfigures adjusted in line with updated definition of adjusted EBIT.

Revenue in the Diagnostics segment was up 22.3 percent on a comparable basis in the fourth quarter from the prior-year quar- ter, which was challenged by the COVID-19 pandemic, and reached almost €1.3 billion. Revenue of around €160 million was generated in the fourth quarter with rapid COVID-19 antigen tests. Excluding these rapid antigen tests, growth was 7.0 percent supported by the normalization of testing volumes for routine care. The segment's growth was driven by all three regions, particularly by EMEA due to rapid antigen test sales.

The segment's adjusted EBIT margin reached 7.3 percent, considerably higher than in the prior-year quarter. The increase in margin was supported by contributions from the rapid antigen testing business, the recovery of the routine care business and slightly positive currency effects. This was partly offset by higher expenses for performance-related remuneration components.

Varian

	Q4	Q4		%-Change
(in millions of €)	2021	2020	Act.	Comp.²
Total adjusted revenue¹	709	-	-	-
Adjusted EBIT	122	-	-
Adjusted EBIT margin	17.3%	-

1. Total adjusted revenue is defined as total revenue adjusted for effects in line with revaluation of contract liabilities from IFRS 3 purchase price allocations.
2. Year-over-yearon a comparable basis, excluding currency translation and portfolio effects.

The Varian segment achieved revenue of €709 million in the fourth quarter, around half of it in the Americas region. The adjusted EBIT was €122 million, resulting in a very high adjusted EBIT margin of 17.3, which was at the upper end of the expected range. A one-time effect from risk provisions had a positive impact.

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Quarterly Statement Fiscal Year 2021 | Siemens Healthineers

Advanced Therapies

	Q4	Q4		%-Change
(in millions of €)	2021	2020	Act.	Comp.²
Total adjusted revenue¹	499	432	15.6%	14.5%
Adjusted EBIT³	82	83	−2%
Adjusted EBIT margin	16.3%	19.3%

1. Total adjusted revenue is defined as total revenue adjusted for effects in line with revaluation of contract liabilities from IFRS 3 purchase price allocations.
2. Year-over-yearon a comparable basis, excluding currency translation and portfolio effects.
3. Prior-yearfigures adjusted in line with updated definition of adjusted EBIT.

The Advanced Therapies segment recorded revenue of €499 million in the fourth quarter. This corresponds to significant growth of around 14.5 percent on a comparable basis from the prior-year quarter, which was challenged by the COVID-19 pandemic. From a geographical perspective, revenue in the Americas and Asia, Australia regions developed very positively, while the EMEA region was slightly above the prior-year level.

The adjusted EBIT margin of 16.3% was below the level of the prior-year quarter. This was due to markedly negative currency effects and higher expenses for performance-related remuneration components. Higher expenses for the further development of the Corindus business also had an impact. Excluding these effects, the margin was clearly above prior-year quarter.

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Quarterly Statement Fiscal Year 2021 | Siemens Healthineers

Reconciliation to consolidated financial statements

Adjusted EBIT

	Q4	Q4
(in millions of €)	2021	2020
Total Segments	902	642
Corporate items, eliminations, other items	−109	−11
Adjusted EBIT	793	631
Amortization, depreciation and other effects from IFRS 3 purchase price allocation adjustments	−141	−39
Transaction, integration, retention and carve-out costs	−14	−10
Gains and losses from divestments	3	‐
Severance charges	−19	−22
Total adjustments	−171	−71
EBIT	623	560
Financial income, net	−27	−10
Income before income taxes	596	550
Income tax expenses	−130	−118
Net income	466	432

Basic earnings per share

	Q4	Q4
(in €)	2021	2020
Basic earnings per share	0.41	0.42
Amortization, depreciation and other effects from IFRS 3 purchase price allocation adjustments	0.13	0.04
Transaction, integration, retention and carve-out costs	0.01	0.01
Gains and losses from divestments	−0.00	‐
Severance charges	0.02	0.02
Transaction-related costs within financial income	0.00	0.01
Tax effects¹	−0.03	−0.02
Adjusted basic earnings per share	0.53	0.48

1 Calculated based on the income tax rate of the respective reporting period.

Corporate items, eliminations and other items amounted to negative €109 million and included expenses for a one-time special payment to employees of around €56 million. The prior-year quarter included income related to the U.S. CARES Act.

Amortization, depreciation and other effects from IFRS 3 purchase price allocation adjustments increased to €141 million. This is against the backdrop of the acquisition of Varian Medical Systems, Inc.

Net income in the fourth quarter rose eight percent from the prior year to €466 million. The tax rate was 22 percent, following 21 percent in the prior-year quarter.

Adjusted basic earnings per share increased ten percent to €0.53. The higher adjustments compared to the prior-year quarter resulted from expenses in connection with the acquisition of Varian.

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