After significant sales losses in China in the past quarter, Siemens Healthineers is scrapping its forecast for the 2025/26 financial year and is putting its diagnostics business to the test.
The medical technology group justified the forecast reduction with a structural change in the Chinese market for laboratory diagnostics and increased inflation expectations.
Trade tariffs and negative exchange rate effects also had a negative impact in the past quarter. “Although the environment remains difficult, our synergistic core of imaging and precision therapy remains on track with good momentum,” said CEO Bernd Montag. “We are also taking measures for the future of the company: We are taking the next steps to create options for Diagnostics.”
In the Diagnostics business, revenue fell 6.5 percent on a like-for-like basis and the margin fell to 0.9 percent. Group-wide, Healthineers recorded an adjusted operating result (EBIT) of 836 million euros in the past quarter with 3.1 percent comparable growth – a decline of 14.9 percent. The corresponding margin was 14.7 percent – 1.9 points below the previous year’s value and below the market expectation of almost 15.1 percent. Nominally, sales fell by 3.9 percent to 5.68 billion euros. Analysts had expected sales of 5.77 billion euros and adjusted EBIT of 868 million euros.
For the year as a whole, Siemens Healthineers now expects comparable growth of 4.5 to 5 percent instead of the previously expected 5 to 6 percent. Adjusted earnings per share are expected to be in the range of EUR 2.20 to EUR 2.30 instead of the previous EUR 2.20 to EUR 2.40.
Weak diagnostics weigh heavily on Siemens Healthineers
The downward pressure on Siemens Healthineers’ shares, which have already fallen by almost a fifth this year, increased after the quarterly balance sheet on Thursday. With a discount via XETRA of ultimately 4.72 percent to 33.93 euros, the shares were the biggest loser in the DAX behind Hannover Re and Rheinmetall. However, the reinsurer’s loss was due to the dividend discount.
Around midday, the medical technology manufacturer’s papers narrowly avoided a fall back to the lowest level in more than six years. Ongoing problems in the laboratory diagnostics division in China as well as rising inflation are making the medical technology group more pessimistic for the current financial year. Sales are expected to only increase by 4.5 to 5.0 percent on a comparable basis in 2025/26. The company had previously forecast growth of 5.0 to 6.0 percent.
The reduction in the sales forecast is based on the diagnostics segment, wrote Sven Kürten from DZ Bank in an initial assessment. “Diagnostics again clearly disappoints” A decline in comparable growth of 6.5 percent and a margin of just 0.9 percent showed that the structural weakness in the Chinese sales market was more pronounced than expected.
With a share price loss of almost a quarter in the 2026 stock market year, Siemens Healthineers is one of the biggest losers in the DAX. Only QIAGEN and SAP performed even worse. The price has now halved from the record high in November 2021. At the low price level, 17 of 23 analysts who evaluate the shares according to Bloomberg recommend buying or overweighting them in the portfolio. According to Bloomberg, there are currently no sales recommendations.
Bernstein leaves Siemens Healthineers at ‘Outperform’
The US analysis firm Bernstein Research has left Siemens Healthineers at “Outperform” with a price target of 52.15 euros according to quarterly figures. The medical technology group’s sales growth and adjusted operating earnings (EBIT) missed consensus estimates, while adjusted earnings per share were above them, wrote Susannah Ludwig in an initial reaction on Thursday. The lowering of the outlook due to the challenges in the diagnostics business and rising inflation does not come as a complete surprise, given previous signals from the company. However, the market is likely to view the weak order situation in relation to sales with caution.
Dow Jones Newswires / dpa-AFX Broker
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