Siemens Healthineers reports temporary logistics challenges

August 2, 2023 By Chris Newmarker

News of some outbound logistics challenges holding back revenue at Varian helped send Siemens Healthineers (ETR: SHL) stock down today.

SHL shares were down more than 5% to €49.16 apiece on the Xetra exchange in Germany.

Excluding the declining rapid COVID-19 antigen test business at Siemens Healthineers, comparable revenue growth was at 10.1% during the third quarter ended June 30, 2023. Taking the COVID tests into account, revenue grew 3.6% to €5.2 billion on a comparable basis. Net income was up 24% year-over-year to €451 million.

Siemens Healthineers CEO Bernd Montag acknowledged to analysts today that Varian’s comparable revenue growth of 6.7% during Q3 was held back by outbound logistics challenges that the company considers temporary. Montag said Varian needs to work through an order backlog; he was optimistic that the orders that didn’t make the cutoff in Q3 would make it into Q4 results.

“We are in a very strong position, and what is fundamentally weighing on margins is that we have not gotten back to the economic equation you are used to this business out of price and costs because of the long cycle nature of the business. And I believe that we still have good opportunities to work on this,” Montag said.

The Imaging business saw comparable revenue growth of 15.2%, and Advanced Therapies was up 11.9%. Declining COVID test sales sent Diagnostics’ revenues down 20.1%, but it was up 2% excluding the antigen tests.

Montag said Advanced Therapies, Imaging and Varian were clearly core, while Diagnostics is a separate entity not interdependent on the other businesses. However, Montag did not see the need to streamline the Siemens Healthineers portfolio within what he saw as two cores or two stories.

In fact, Montag was excited about Diagnostics after FDA clearance of the Atellica CI Analyzer, which he described as a missing puzzle piece to complete what he described as the youngest platform on the market. He said savings from Diagnostics portfolio simplification are kicking in.

Siemens Healthineers also continues to ramp down the use of its Corindus surgical robotics for cardiology procedures.

The German medtech giant is sticking with its expectation for comparable revenue growth of -1% to 1% (6% to 8% excluding rapid COVID-19 antigen tests) and adjusted basic EPS of €2.00 to €2.20.

Filed Under: Business/Financial News, Featured, MassDevice Earnings Roundup, News Well, Wall Street Beat Tagged With: Siemens Healthineers