Siemens Healthineers plans to halve the number of diagnostic platforms it offers in coming years as it seeks to overcome supply chain and other external challenges.
In its Q4 earning announcement today, the German medtech giant said the €1.5-billion-a-year Diagnostics business faces procurement and logistics challenges. Also, there are foreign currency headwinds and COVID-related lockdowns in China.
Siemens Healthineers recently started the controlled rollout of its CI 1900 low-to-mid-volume analyzer in Europe.
“We will undertake significant measures to reduce complexity by reducing the number of our platforms by more than 50% over time following the CI 1900 platform launch,” CEO Bernd Montag said during the company’s earnings call today, transcribed by Seeking Alpha.
“Our portfolio complexity has been a particular burden in the current challenging environment and supply chain environment. … We will streamline our supply chain and service setup and run a leaner and more clinically focused R&D operation.”
Montag said Siemens Healthineers expects cost savings of around €300 million by 2025. There will be one-time costs of €350–450 million.
Siemens Healthineers goal is to have revenue growth of 3% to 5% per year until 2025.
Siemens Healthineers grows profits and sales
Siemens Healthineers reported €636 million in profits, or €0.56 per share, on sales of €6 billion for the three months ended Sept. 30, for a bottom-line gain of 36.5% on sales growth of 16.19% compared with Q4 2021.
Adjusted to exclude one-time items, earnings per share were €0.65. Revenues were €230 million ahead of The Street as analysts were expecting sales of €5.77 billion.
Siemens Healthineers also reported €21.7 billion in revenue for the full year, representing a comparable year-over-year growth from €17.9 billion in FY 2021. Adjusted basic earnings per share were 13% to €2.29.
For fiscal 2023, Siemens Healthineers anticipates comparable revenue growth between -1% and 1% compared with fiscal year 2022. Excluding rapid COVID-19 antigen test revenues, the company’s revenue growth corresponds to comparable revenue growth of between 6-8%.
Senior Editor Danielle Kirsh contributed to this report.