Siemens Healthineers ((DE:SHL)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Siemens Healthineers’ recent earnings call painted a picture of robust performance, with the company achieving notable growth across key segments. The sentiment was largely positive, driven by successful initiatives such as Value Partnerships and a transformative approach in Diagnostics. However, challenges such as tariff and foreign exchange headwinds, coupled with difficulties in the Chinese market, were highlighted as potential concerns for upcoming quarters.
Strong Revenue and EPS Growth
In the third quarter of 2025, Siemens Healthineers reported a commendable revenue growth of 7.6% and a significant EPS increase of 23% to EUR 0.64 per share. This growth was achieved despite a substantial EUR 100 million impact from tariffs, showcasing the company’s resilience and effective management strategies.
Impressive Imaging and Varian Segment Performance
The Imaging segment was a standout performer, with revenue growth nearing 12% and a strong margin of 21%. Similarly, the Varian segment reported a 9% comparable revenue growth, with margins recovering to 18.8%, underscoring the strength of these segments in driving overall company performance.
Expansion of Value Partnerships
Siemens Healthineers’ Value Partnerships have seen substantial growth, with revenue tripling since the IPO. These partnerships now contribute over 5% of the company’s total revenue, with significant deals in major markets like the U.S., Germany, and France, each exceeding EUR 100 million.
Diagnostics Margin Improvement
Despite facing slightly negative growth, the Diagnostics segment achieved a margin of 9.2%. The Atellica franchise was a key driver, growing double digits and accounting for 60% of core lab revenues, indicating a successful transformation within this segment.
Free Cash Flow and Deleveraging
The company reported a 50% year-over-year increase in free cash flow, which has helped reduce the leverage factor below 3x for the first time since the Varian acquisition. This financial strength positions Siemens Healthineers well for future investments and growth opportunities.
Tariff Headwinds
Tariffs posed a significant challenge, with a EUR 100 million impact in Q3 alone. The company anticipates a EUR 200-250 million impact on pretax profit for the full fiscal year 2025, with potential further impacts in FY 2026, highlighting a key area of concern.
China Market Challenges
Revenue growth in China was recorded at 6%, primarily due to lower prior-year comparisons. However, the market continues to face challenges, with no clear signs of recovery and a book-to-bill ratio around 1, indicating ongoing difficulties.
Foreign Exchange Headwinds
The depreciation of the U.S. dollar presented significant challenges, impacting revenue year-over-year. This trend is expected to continue into FY 2026, posing a risk to future financial performance.
Diagnostics Volume-Based Procurement Impact
The Volume-Based Procurement (VBP) in China led to a slight decline in Diagnostics revenue, with a notable negative impact on margins. This reflects the broader challenges faced in the Chinese market.
Forward-Looking Guidance
Siemens Healthineers has raised its fiscal year 2025 outlook, buoyed by strong performance metrics. The company has increased the midpoints for comparable revenue growth and adjusted EPS, reflecting confidence in its strategic initiatives and market positioning. Key highlights include a strong equipment book-to-bill ratio of 1.09 and significant growth in imaging and Varian segments.
In summary, Siemens Healthineers’ earnings call conveyed a generally positive outlook, with strong performance across several key segments. While challenges such as tariffs and foreign exchange headwinds remain, the company’s strategic initiatives and robust financial management provide a solid foundation for future growth.