Siemens Healthineers Ag

Ladies and gentlemen, while we are waiting to begin, may I just remind you that today's conference call is also being webcast live on the investor relations section of the Siemens Healthineers website. A recording of the webcast will be available shortly after the close of the call. Ladies and gentlemen, while we are waiting to begin, may I just remind you that today's conference call is also being webcast live on the investor relations section of the Siemens Healthineers website. A recording of the webcast will be available shortly after the close of the call. Ladies and gentlemen, while we are waiting to begin, may I just remind you that today's conference call is also being webcast live on the investor relations section of the Siemens Healthineers website. A recording of the webcast will be available shortly after the close of the call. Ladies and gentlemen, while we are waiting to begin, may I just remind you that today's conference call is also being webcast live on the Investor Relations section of the Siemens Healthineers website. A recording of the webcast will be available shortly after the close of the call. Good morning, ladies and gentlemen, and welcome to Siemens Healthineers Conference Call. As a reminder, this conference is being recorded. Before we begin, I would like to draw your attention to the Safe Harbor Statement on page 2 of the Siemens Healthineers presentation. This conference call may include forward-looking statements. These statements are based on the company's current expectations and certain assumptions, and are therefore subject to certain risks and uncertainties. At this time, I would like to turn the call over to your host today, Mr. Marc Koebernick, Head of Investor Relations. Please go ahead, sir.

Thank you, operator. Good morning and welcome to our Q3 earnings call for fiscal 2026. I'd like to thank all of you for joining us today. This morning at 7 a.m., we published our Q3 2026 results. All related materials for today's results call and release are available on the IR section of the Siemens Healthineers webpage. Our CEO, Bernd Montag, and CFO, Jochen Schmitz, will be taking you through today's presentation as usual. After the presentations, we will have a Q&A session. As this has been working out nicely in the past quarters, we kindly ask that all participants limit themselves to one question each with the option to get back into the queue for a follow-up. Additionally, please note that a full transcript and recording of today's call will be made available on our investor relations webpage shortly after the session ends. Again, thank you for being here and now I'll turn it over to our CEO, Bernd Montag.

Thanks Marc and also a warm welcome from my side. Let me start with a brief look at the key takeaways for today's call. This quarter we had an outstanding equipment book to build of 1.27 driven by our product strength and supported by new value partnerships. The letter includes two new sizable value partnerships with highly ranked healthcare institutions in the US, clearly underlining our market leading position. But even excluding all value partnerships, our equipment book to build was strong at about 1.17 in Q3, undoubtedly making up for the softness we saw in Q2. Operationally, our synergetic core of imaging and precision therapy performed solidly, growing 5% in Q3. While precision therapy had a very strong growth with 9% this quarter, the imaging growth was soft on tough comms of 12% in the prior year quarter and saw some revenue shifts into the next quarter. This shift will only be temporary and we expect a clear acceleration in Q4 to get to decent mid-single-digit growth in fiscal year 26 in the imaging segment as guided in November last year. However, diagnostics is still challenged by the structural market rebasing in China and revenue dilution from our legacy platforms. This does not come as a total surprise, but the expected slowdown of the decline for Q3 has not materialized in the diagnostics business. When it comes to profitability, the reported excellent margin level was boosted by tariff refunds that we received in Q3. Excluding tariffs, we saw a decent underlying margin level despite headwinds like FX and inflation. As a consequence of the continued top-line weakness in diagnostics and due to the tariff refunds, we update our outlook for fiscal 2026. We are lowering the revenue outlook range from 4.5 to 5% growth to now 3.5 to 4%. In addition, we raise the lower and upper end of the EPS outlook range by 15 cents, which is exactly the impact of tariff refunds received in Q3. This shows that despite the lower revenue growth, the earnings are on track. Now let me briefly touch on two topics relevant for shaping our company of the future. Just this week we are showing great developments at ADLM, the biggest trade show in the diagnostic space, with very promising customer feedback paving the way for future growth. Also, let me share a brief update on the upcoming deconsolidation by Siemens. This deconsolidation is the final step in a journey that started with our legal separation 10 years ago. We are well advanced with our preparations for the spin and in very constructive discussions with Siemens AG. We are on track with our refinancing preparations as well as the discussions regarding remaining shared services and IT infrastructure. Having said that, now over to our latest value partnerships. We are very proud to announce that we have entered two large partnerships with highly renowned institutions in the US. Those partnerships are in total very sizable, altogether amounting to several hundred million euros in terms of equipment order intake. Let me start on the left-hand side of the chart. We are further strengthening our 35-year-long relationship with Cleveland Clinic, one of the leading healthcare systems in the US. We are moving to the next level of cooperation with a new 10-year strategic alliance. For Cleveland Clinic, we will not only be the provider of multiple imaging and therapeutic technologies, but also jointly develop a state-of-the-art Theranostics cancer treatment program. We also signed a multi-year value partnership with Vanderbilt Health, a nationally recognized top-tier academic medical center. In this partnership, we will also serve as the provider of advanced technology for diagnostic imaging and radiation oncology. In addition, this close collaboration will empower healthcare innovation through scalable AI uses in radiology, personalized medicine, and workflow automation. In essence, both partnerships underscore two things. First, Our unmatched relevance as a holistic partner for hospitals and healthcare systems and second, the growing need for our unique capabilities of mastering patient training, precision therapy and healthcare AI. We are reinforcing this position by continuously innovating in each capability, in patient winning, in precision therapy and in healthcare AI. And the growth dynamics of our latest innovations are proof of that. We are gaining market share in CT based on our unique fleet of photon counting CTs now accounting for roughly 30% of our total CT equipment order volume. We have increased market shares of CT in the US to levels we are used to from MRI. Another example is our dry-cool technology in MR. This innovation now accounts for half of the units ordered in MR. It broadens the market for various use cases based on reduced total cost of ownership and a smaller footprint. With regards to the other half, we have a clear commitment to significantly expand the reach of dry-cool technology in the mid-term. Our radiopharmaceuticals business is also gaining further traction in the U.S. The business delivers double-digit growth rates and is surpassing the 1 billion U.S. dollar mark this year. Due to our broad distribution network and manufacturing capabilities, we are highly relevant for medical centers but also for the IP holders. The next step is to drive this growth also in Europe. We have just announced a new 8X radiopharmacy, the first in the UK, delivering output at eight times the capacity of a single radiopharma facility today. In precision therapy, our all-new angiography portfolio is now delivering the expected acceleration in revenue growth following FDA approval. It covers all clinical needs in interventional radiology, cardiology and neurointerventions and is powered by Optic AI, delivering a new level of image quality and reducing x-ray dose. Variant's position as a strong growth engine in Healthineers is unchanged. Key here is the continuous innovation momentum. The new platform, which will be launched at Astro, is expected to further contribute to this momentum. Healthcare AI and the ability to scale this on a global level is another strong capability of ours and is highly relevant for our customers. Our single CT coronary cockpit has just received FDA approval. This AI-powered application helps our customers to bring critical CT information into the cath lab. The cockpit is designed to automatically segment and label coronaries. It visualizes and quantifies plaque types for the whole coronary tree or individual lesions. This makes treatment better and faster. And finally, we have strong traction for AI tools for radiation therapy planning. We can enhance our large installed base easily with tools like autocontourings of organs at risk. This enables dosimetrists and radiation oncologists to focus on review and fine-tuning, resulting in faster radiation treatment planning and higher patient throughput. To sum it up, we continue to strengthen our unique capabilities, fostering our leading market positions across modalities. But also our diagnostics business has important innovations to showcase. At this year's ADLM, the biggest trade show in this space, Diagnostics launched Atelika Forte, an evolution of our proven Atelika solution, chemistry and immunoassay platform. The Atelika Forte series represents meaningful innovation, reliability and progress, while also reinforcing continuity, confidence and investment protection across the Atelika Systems portfolio. It pumps with a new digital architecture the integration of AI agents with new productivity features and expands patients access to care with diverse sample types from venous blood to urine and even fecal samples. And now with innovative low volume sampling options and integrated capillary workflows. Atelical Forte can run 24 assays with CEE-marked capillary claims, including a comprehensive metabolic panel, using as little as a finger stick of blood, and industries best. Adding capillary capability helps CoreLab scale testing offerings easily and using existing infrastructure. This offers clinical labs greater patient reach and access to more testing volume without requiring expensive healthcare specialists. However, we are not only upgrading our analyzer, we are also focusing on clinical relevance by expanding our competitive diagnostics menu in the area of brain health. Our blood-based Alzheimer's research essays and a CE-marked NFL essay for multiple sclerosis, now under FDA review. We are building a comprehensive biomarker portfolio to help advance earlier detection, monitoring and understanding of neurological diseases. With the updated Atelika platform, and the great set of brain health research essays, the diagnostics team is clearly differentiating from peers and improving its competitiveness. Now let me briefly summarize the quarter before Jochen will run you through the financials in more depth. The revenue growth picture is broadly unchanged compared to the second quarter. The synergetic core is performing well, especially having in mind strong outcomes in the prior year quarter, while diagnostics suffers from the market rebasing in China and from revenue dilution from our legacy platforms. In terms of comparing quarters, the equipment booked to build in Q2 was clearly a weak spot. We committed to this recovery in Q3 and I'm very happy that it did more than that. The Outstanding Equipment Book to Build of 1.27 is a documentation of our continued strength in the market. The 5% growth in the synergetic core was driven by a strong precision therapy quarter, which itself saw the strong swing back to growth of advanced therapies as flagged. Imaging posted softer growth this quarter. However, this is not a fundamental topic, but a temporary topic of comps and shifts. The tariff refunds supported the very high profitability this quarter. Excluding tariffs, we had a decent margin level despite low absolute conversion and year-over-year headwinds from FX and inflation. The contribution from tariff refunds was 490 base points in imaging and 350 base points in precision therapy respectively. In diagnostics, the continued year-over-year decline was expected and well-flagged. The extent of the decline, however, higher Jochen will now guide you through the financials and with this over to you. Thank you Bernd and good morning. Let us start with the financial performance of the imaging segment in Q3.

Imaging posted soft growth this quarter due to tough comps of 12% in the prior year quarter and due to some revenue shifts into Q4. Consequently, we expect a clear acceleration of the imaging growth in Q4. I will give you more color on the sequential acceleration of the imaging growth later in the call. The imaging margin benefited from tariff refunds in Q3. Before refund, the imaging margin was at 21.6%. Thank you very much. Our precision therapy segment showed growth in all its businesses, varying advanced therapies and also ultrasound, led obviously by advanced therapies. As expected, advanced therapies showed strong momentum due to the launch of the entire NGO platforms, which started to ramp up throughout Q3. On the bottom line, the precision therapy margin benefited also from tariff refunds. Before tariff refund, the Q3 margin was at 14.1%. Looking back, similar to imaging, we saw very strong margins in the prior year quarter based on a very favorable mix. Year-over-year foreign exchange was an additional headwind, yet the precision therapy margin declined only slightly after the strong prior year quarter due to conversion from strong growth. And now let's complete the segment run-through with diagnostics. In diagnostics in Q3 we saw a continuation of the year-over-year revenue and margin decline. Due to the structural market rebasing in China and the revenue dilution from the tailing off of our legacy platforms, especially in North America, where the installed base of our legacy is particularly large. Looking at the bottom line, prior year strong margin of 9.2% benefited from a positive one-off from a release of pension liabilities related to prior year periods. Excluding the positive one-off, the year-over-year margin decline is still material. It was driven by negative conversion from the significant revenue decline and additionally by headwind from foreign exchange. While margin ex-refunds of tariffs of 3% is still low in Q3, we saw slight sequential margin improvement as laid out last quarter. Let us now have a look at how this all adds up to the group numbers. Let's start with the top line. Revenue growth this quarter was against tough comms of 7.6%, which obviously is also visible in certain regions. Americas and Asia Pacific were going against very strong comms, especially in the Americas of 14%. EMEA returned to growth after being flattish on a high absolute level in the fiscal year. So EMEA was the growth driver in the region this quarter. China was down by 10% this quarter. On the one hand, diagnostic in China continues to decline due to the structural market rebasing in China. And on the other hand, The synergetic core in China declined against very tough comms of mid-teens growth in the prior year quarter. In absolute terms, the revenue in the synergetic core is over the years sequentially flat in line with our assessment that the Chinese equipment market is currently muted, yet relatively stable at a low level. Now let's have a look at the earnings momentum in Q3. Earnings this quarter benefited from the tariff refunds. Thank you very much. In the year-over-year comparison, next to the tough comms and revenue, we also had very good segment margins in the prior year quarter, in imaging and variant from very good mix, and in imaging and diagnostic from positive one-offs in the prior year. Finally, the valuation of share-based payments linked to Siemens AG Thank you very much. Highlight, cash in absolute terms amounting to over 1 billion euros, also benefiting from the tariff refunds. The cash conversion rate was very good with 1.12, driven by strong cash collection and not by the refunds. The tariff refunds have a cash conversion rate of, so to say, only one based on the cash-based accounting treatment of the matter. This means the cash conversion rate of 1.12 was even diluted by the tariff refunds. Consequently, we reduced the net debt compared to Q2 by around 800 million euros to around 12 billion and reduced leverage from 3.1 in Q2 to 2.8 times in Q3. Growth in Q3 was slower than anticipated, primarily to the continued decline of diagnostics, but also due to softer growth in imaging. In imaging, we had already anticipated and flagged softer imaging growth due to the very tough comms in imaging with 12% in the prior year quarter. What we did not anticipate was that, for example, the site readiness in Q3 for installations in the field did not keep up with the very high factory output in Q3, driven by the very high demand for our dry-cool portfolio. This is only a temporary topic. Hence, Thank you very much. Prime and Pro caused a step change in revenue after their FDA approval. Now in Q4 this year, these two photon-counting CT platforms are also available in China. This is just one driver of many for the accretion to growth from our photon-counting CT business to continue. Together with continued strong momentum in advanced therapies, we expect growth in the synergetic core to clearly accelerate in Q4 compared to Q3. Exceptional growth in our procedure business, our continuously nicely growing service business and the strong order book backing our equipment business are the building blocks for the expected revenue acceleration in Q4. In diagnostics, the rebasing of the Chinese market and the revenue dilution driven by the decline in legacy platforms continues. What did not materialize this quarter was a relapse of the OEM volume particular out of China, although the year-over-year decline in the legacy platforms continues. Segmentally, though, the quarter of this fiscal year were on a stable yet low level in terms of absolute revenue, and we expect this level to slightly increase only in Q4. Hence, we expect a mid-single-digit percentage decline also in Q4, similar to what we have seen so far this fiscal year. Despite the weak year for the diagnostic business, the group is on track for underlying earnings growth this fiscal year. On the left side, slightly faded, you see the same earnings per share bridge from Q2, which is unchanged. Operational improvement in earnings per share is on track, despite the continued weakness from diagnostics, and the headwind from foreign exchange and tariffs are as expected, so all as expected. Inflation in the supply chain, notable from memory chips, raw materials and logistics, started to come in with around 1 cent headwind only in Q3 and we expect the P&L impacts from inflation to intensify obviously in Q4. With this, our assumption of around 5 cent headwinds in the second half from inflation in the supply chain is also unchanged. The only change in our 2026 earnings per share budget is the tariff refunds, which are roughly equivalent to 15 cents EPS. Therefore, we raise our EPS guidance for fiscal year 2026 by exactly the amount of the tariff refunds. And this brings me to the next slide, the outlook slide. We update our outlook for fiscal year 2026. We lowered the revenue growth guide to 3.5 to 4%, primarily due to diagnostic revenue not recovering in the second half of this fiscal year. As outlined before, the slower than expected revenue performance in diagnostic is due to the rebasing of the Chinese market and the revenue dilution of the decline in legacy platforms. For adjusted earnings per share, we raised the guide to be between €2.35 and €2.45, so the EPS range is raised by the tariff refunds, which amount to around 15 cents in EPS. Thereby, the underlying EPS range remains unchanged due to the fact that the synergetic core is well on track. The downgrade in the diagnostic revenue does not have a material impact on earnings due to the currently low profitability in diagnostics. As outlined before, we expect the tax rate to be close to 23%, coming from the initial assumption of 24 to 26%. In financial income net, we expect around minus 330 million euros in fiscal year 2026, including a one-off tailwind from interest for the tariff refund. Let me also update you with our latest view on Q4. As outlined before, we expect a clear acceleration of revenue growth in the synergetic core, with imaging accelerating into the higher single digits and precision therapy continuing growth in the higher single digits, maybe not fully at the 9% level of the current quarter. In diagnostics, we expect a continuous decline at a mid-single-digit percentage level also in Q4. On margins, we expect an imaging sequential margin expansion compared to the Q3 margin X refunds from the accelerated growth. In precision therapy, year-over-year margin expansion will be tough against the very high prior year quarter of 17%. but we expect a good sequential improvement with the 14% margin X tariff refunds from Q3 this quarter. In diagnostics, we continue to expect a significant year-over-year margin decline at least Thank you very much. Now that we have updated you for fiscal year 2026 and our upcoming Q4, let me now share some of our current expectations regarding already known impacts for the next fiscal year, 2027. As we come closer to fiscal year's end and being in the midst of our budget planning phase for 2027, we want to provide with some thoughts on the 2027 earnings per share drivers. Baseline for 2027 is our 2026 adjusted EPS guide without the tariff refund, i.e. a midpoint of €2.25 as the baseline in 2026. On our last Capital Markets Day, we committed to double-digit EPS growth year over year over the mid-term. We stated that we will be mitigating the 400 million tariff impact by 2028. We're seeing positive contributions starting in 2027. The mitigation measures, as indicated, will not ramp up in a straight line. The 400 million mitigation will be somewhat back-end loaded now. What changed since the cattle market is that additional inflation in the supply chain became a material macroeconomic headwind, especially in memory chips and certain raw materials and also in logistic costs. Currently, we would assume that the inflation headwind in fiscal year 2027 will be roughly offset by the mitigation ramp for tariffs in 2027. While we are at the topic of headwinds in 2027, let me point out some other more technical effects that we already know today. The tax rate this fiscal year is expected to be closer to 23%, coming from our initial assumption of 24 to 26%. We do not expect this low level to be sustainable, so we expect a normalization towards the normal tax rate of 24 to 26%. In financial income net, we previously pointed to minus 340 million in fiscal year 2026. With the tariff refund, we also received a refund for interest, so we now expect around minus 330 million for this year. From this 2026 level, we see three main effects next year. The refinancing at higher rates that we did in March 2026 will annualize next year. Early next year, another loan is due to be refinanced at higher rates. The higher financing costs from higher rates will partly be offset by a decreasing loan volume from organic deleveraging. In total, we would currently expect financial income net to decrease, meaning becoming more negative, by a mid to high double-digit million euro number next year from the basis of the minus 330 million this year. The refinancing is expected a normal course of business. This is not related to the deconsolidation by Siemens AG. As said, we do not expect a material impact from the deconsolidation on our financial income net and from what we know now, this also holds for fiscal year 2027. What we see next year related to the deconsolidation by Siemens AG are other recurring separation costs. We pointed to a mid-double-digit million number for this topic. With the deconsolidation happening earliest in April next year, the cost will not reach the full fiscal year level in the next year. And with this, back to you, Marc.

Yes, thank you, Jochen. Let's go to the Q&A. And as stated earlier, we would like to ask you to limit yourselves to one question each. And if you wish to ask a question, please press the star key followed by the digit 5 on your telephone keypad. Again, ladies and gentlemen, please press star 5 on the keypad. and for transparency reasons I will just kind of now give you the order of appearance of the first three callers. First I have Graham, then I have Veronica and then I have Hassan on the line. So let me now first go to Graham Doyle from UBS. Graham, the line is yours.

Morning guys, thanks a lot for taking my question. Jochen, just to the slide you ran through there on slide 15 where you're plotting the sort of EPS path for 2027. Thank you.

Graham, thanks for your question. Obviously, we try to be as transparent as we can based on the current planning status we are in, and therefore we provide this slide. When I look at it, I think this is a This is, I would say, a very complete picture based on what we know today. That is always, I would say, the disclaimer. We don't know what we don't know. And I would see it the following. If you really want to base it out, I would say we start with 2 euros 25 cents as the baseline for 2026. And I would consider us to be in the position to show net-net of all the effects of Thank you very much, Jakob.

Thanks, Graham. So over to Veronica. Veronica, the floor is yours.

Thank you so much. I'm going to just follow up on that fiscal 27 bridge, if that's okay, Jochen. One of the things that comes up a lot in discussions is obviously still the question of the separation cost, in particular the branding fee. I'm just curious if you can share some preliminary thoughts on whether that's included in that bridge that you've presented. And then obviously also as you work towards the diagnostic separation, any costs related to that, you know, is that included in that bridge as well? So if you can give us some color on those two items, that would be super helpful. Thank you.

Yeah, obviously both topics were not mentioned. That is a signal on the bridge. When we talked about the separation costs from Siemens, we talked about recurring costs in the ballpark of 50 or mid-double-digit 50 million. This does obviously not include any branding fees. and based on the current assumptions and the discussions we have with Siemens, which are very constructive, we don't expect to have a branding fee in the coming years. Just to say this clearly. On the separation cost for for potential separation costs for diagnostics. They are not built into that bridge because if and when they would occur, we would also adjust for them because that would be then a portfolio measure. And I think that as we also adjust potential gains and losses from portfolio transactions, we also adjust the related cost of it. So therefore, this is not in, but would be adjusted.

That's very clear. And can I just quickly check? On my math, it's 5 cents from tax, 5 cents from the net interest expense, and 2 to 3 cents from separation. So does the headwind sort of 10 to 15 seem reasonable to you, or I guess 15 maybe?

Say that again. Sorry, it was difficult to hear in the beginning.

I was just double-checking my math. So from what you said, it's about 5 cents headwind from the tax rate, 5 cents headwind from the higher interest expense. and somewhere less than five cents had went from the separation. So I was just kind of trying to quantify that. Is it a fair assumption? It makes a lot of sense.

I didn't hear it at the beginning. It makes a lot of sense. I think these are meaningful. Perfect. Yep, absolutely.

Yeah, brilliant. Thank you so much.

Great. Thanks, Veronica. So next one would be Hassan from Barclays. Go ahead, Hassan.

Thank you. Good morning. Another follow-up on the helpful bridge. Can you quantify the impact from inflation as it relates to tungsten and memory costs into FY27 at current spots? And if the lower end that you're pointing to of, you know, what I think we're interpreting as mid-single digit, whether that assumes any deterioration in inflation from here, and then what drives the acceleration beyond 27 back to double digit and beyond given the midterms.

Thank you. On the tungsten side, I think that is also a volatile topic. We have seen it peaking to six times, I would say, the prices and it came down again to two to three times the pricing. We need to see what it does. That's maybe also more the reason why I would say this bridging item is also a bit fading because we don't know exactly and we need to, before we go out with a concrete guide, we take every second we get in additional information about the future to quantify that more clearly. Just to say this on the thing. The question is on memory chips. We expect to see this topic on an ongoing basis now for this year, 26 and 27. The question is how long will that last and will then create additional year-over-year effects. From our standpoint, at some point in time that should be over because otherwise you can make also so much money with that stuff that people will start Thank you very much. Thank you. Is that clear, Hassan? It is, thank you.

Okay, then next three people on the line would be first Julien Dormois, then Julien Wardot, and then Olli Reinberg. So I'm starting with Julien from Jefferies.

Yes, hi, good morning, Bert. Good morning, Jeroen. Good morning, Marc. Thanks for taking my question. Probably more of a high-level question, and you obviously signed to high-profile partnerships this quarter. But we also had some mixed messages, I would say, from hospitals in the US about procedure trends and that sort of stuff. So just curious how your conversations are going with US hospitals these days. Do they seem a little bit cautious for the second half and maybe for 2027? and the question would also extend to Europe. We start to hear a bit more about potential healthcare reforms, also heating hospitals at some stage. Just curious how your conversations are going with your customers. Thank you.

Thank you, Julien. I mean, first message is certainly that when health systems like Vanderbilt and Cleveland Clinic commit to such substantial partnerships. It shows here that they feel very comfortable with where healthcare is going and how central the piece, the role of imaging, of interventional techniques, of radiation oncology The debate is also very much about how can we support them Thank you very much. The demand for our equipment is so robust because you came from the procedure angle. The other angle is the productivity angle which is needed. And our systems help to exactly make a system deliver high quality care in the most efficient way. When it comes to procedures in terms of In terms of direct, how much imaging is there and how much radiation oncology is being done, we continue to see very good growth also when you talk to these institutions. and we also see as and to some extent when looking at the businesses we have which are procedure related directly because otherwise we are more in that investment good type of situation. When you look at the procedure dependent businesses we have which is PetNet, and also the ultrasound catheter business, they deliver, as you know, quite significant growth. So we are very positive that the momentum, or the momentum sounds so temporary, but that the continued growth and demand for our solutions in the US remains and the topic of productivity is also what more and more governs the discussion in Europe and which is a good topic for us.

Great. Thanks, Junior. So moving over to the next Junior from Bank of America. Please go ahead.

Hi, good morning. Thanks for taking my question. Ben, I just wanted to come back on a comment you made about the city market share in the US now matching your MRI level. I mean, I only know your global market share, 35% for city and 50% for MRI. Does it mean that you increase city share to 50% in the US already? And do you expect the same kind of development in all the regions as well?

Okay, thank you for the question and maybe we were really a little bit mysterious. I think you are guessing not very wrong, yeah? And why this is a topic. I mean, when it comes to the U.S. market, when we look at our market share Olympics, MR stands out traditionally, and followed by... by Molecular Imaging and CT. Why CT now has a boost is basically the following aspect here. We had the discussion now and then that the spread of price points in CT is the most pronounced. There's a factor of 10 between entry level and the high end photon counting CT. and being a clear market, a super strong market share is basically only possible when you really really have super strong differentiation across the entire product line which is The case in MR where it's from the nature of the technology a bit easier, while in CT it is a testament to what extent our unique position in the high end with the photon counting CT, the new opportunities we open up, to what extent this is changing the CT market. And that is why we have now, even from that point of view, sometimes more of a street fight in the CT space, now also significantly uplifted our market share because of the rollout and all the excitement and market resonance in more and more segments for photon counting CT.

Great. Thanks. And moving over to you, Olli Reinberg from Kepler. Olli.

Good morning, guys. I just wanted to discuss a bit more in detail the kind of imaging performance. I mean, Q3 was softer. You don't see any kind of change to the fully guide. Can you just give us a bit of a feeling like how significant has been this kind of shift from Q3 into Q4? And also, what is your visibility on the kind of Q4 performance? and probably if we allow any kind of chance for a sneak preview next year, can you just talk about the pull and pushes that we have to consider when thinking about imaging roles for 27? Thank you.

Yeah, Olli, thanks for the question. I think it's a... Justifiable question, fully. First of all, when we talked about the Q3 at the end of Q2, or when we announced Q2, we said we were referring to the tough comms. We were also in the podcast referring to a mid-single digit and deliberately said four to six. It was clear that this will be not... Thank you very much. So one and a half is 75 million, a bit more, 75 to 80 million. So it's a big number, but also not a big number considering, so say, the big numbers of imaging in general. And again, looking... Back to how we guided imaging for the year, we said mid-single digit, and then I got a bit pushed on, is that really four to four, does it really entail a four, and then I think we clarified and said decent mid-single digit, and said, okay, that means it's five percent plus, that's what we said, and we feel Thank you. Clear, Olli?

The next three in the line would be then David Edlington, Aisha and Hugo. So David Edlington from JP Morgan, please go ahead.

Good morning guys, thanks for the question. Maybe I'll give you the opportunity to touch on China and what you're seeing there, both on the diagnostic side, but also imaging, given the latest discussions around centralised procurement.

Yeah, thank you, David. I mean, I've dissected into the two segments here. I mean, in diagnostics, we go through this rebasing, and it is a bit of a different topic for also when you look at how Thank you very much. The market volume in China is about... Thank you very much. But it also means, and I think that is also an important topic when assessing the importance and materiality of Chinese developments for the overall company, that now the China revenue is in the 10% or so range in China. for the company in total probably below that in diagnostics, which also means that changes in China are also, let's say, a bit of quote-unquote diluted with the now lower importance and ratio of that market. Thank you very much. I'm nervous whether people kind of look at, oh, here's VBP, and now you will see VBP in a capital good type of business. I mean, what we are seeing in China is a... It's a refinement of the centralized bidding policies, which very often is a provincial central bidding. It's not a surprise for us. It is a topic we are very well prepared for. And there are also... Some positive aspects are in there because there is a better balance between quality and price while driving the expansion of the central buildings. There is also the fear of a destructive price war which led to quote-unquote weird companies winning some tenders in some of the provinces here. and then also the topic that in a business like ours one cannot have a one-size-fits-all approach like in a pharma industry or for certain diagnostic tests. So we will see the amount of central breedings The percentage of the market is slowly and steadily increasing, but we also believe that we are well prepared for it and we have changed our go-to-market. and again a balanced topic. There is also an advantage of being more direct in this topic because the whole topic of having to work with business partners and so on and so on is in this purchasing theme on a provincial level not as necessary anymore. I hope this helped a little bit.

Thanks David. Moving on to Aisha from Mong Stanley. Please go ahead.

Hi, good morning, Bernd and Johan. Thanks for taking my question. Thanks for providing the color on the imaging growth outlook for, I guess, 2027. I would love to know the equipment order growth for the quarter, how that trended and the mix between imaging and precision therapy. And if you could provide a similar outlook on the variant business for 2027, given the new innovation coming into that portfolio. Thank you.

Let me start with order growth. As you know, we don't talk about the growth number, not directly, but with a book-to-bill of 1.27, you can envision that this was also a very good order growth quarter. and as you can see we don't talk about the growth number independent if it's not good or good so it's not that we don't want it because we don't feel that this is a good indicator of really a quarter number is not a good indicator of Thank you very much. Just as a general explanation now, when we look at the book-to-bill ratio, I think it was as normal, a bit more pronounced from a book-to-bill ratio, a bit more pronounced towards precision therapy than to imaging, but imaging was also well above 1.1, well above 1.1 in it, so a very good imaging quarter. Also in book to build a very strong precision therapy quarter. You ask about variant prediction for next fiscal year. And also the new platform or new treatment system or treatment technology or whatever we bring to market. I think in general, We see Varian as, and I think Bern even used the word in his speech, as the growth engine or so, something like this for Siemens Healthineers. And I believe that this will also stay intact in the coming years. So we expect... Thank you very much. and high expectations should be, I would say, a good testament to that, this being stable on a high single-digit level.

Yeah, maybe to add on, I mean, because I think we have quite well-substantiated hopes when it comes to this new, I mean, what Jochen said, you know, new platform slash new treatment, because it's actually the exciting aspect of it, that it is Thank you very much. and yes, this platform will also contribute to the top line but we will of course also see that in a situation like this it takes also a little bit of time until the whole production is ramped up so we pretty much know how many systems we can We can deliver, and that will definitely be less than the market demand on the one hand. On the other hand, we have a very good order backlog and good order momentum. And we'll then have the further ramp up of the new system with new opportunities for radiation therapies in the years to come.

Perfect, thank you very much. So then we move on to, I think, probably the last caller because we're almost on time. So Hugo from Exxon, please go ahead.

Thank you for taking my question. Hi guys. Just wrapping up on the China and 2027 topic, following up on Graham's question earlier on what's reflected in that 2027 EPS bridge based on what you know or not at the moment. Have you reflected centralized procurement programs for imaging in your 2027 assumptions? Thank you.

Should I start? Okay, first of all, the announcement we saw, and we were very clear about this also to the markets, we saw a few weeks ago was, I would say, was fully anticipated by us. Actually, our anticipation for this year was that the central bidding in imaging would accelerate quicker than it did, because obviously the government was still organizing it well, and therefore it took a bit longer. Therefore, the percentage of Thank you very much. Thank you very much. Thank you very much.

Good. Well, that brings us to the end of our call today. I'm totally aware there were a few people more in the queue. We'll make sure that either the team gets back to you quickly or you get a premium spot on Monday's sell-side breakfast for your question. So just to close it up and get your heads to some events coming up, we'll be at Astro and we'll be facilitating investor meetings as far as we have slots. and also obviously at RS&A in December we will be there and facilitating management meetings and booth tours so if you want to take part in this either go via a broker of your choice who's already there or directly to us and we'll try and make it happen and beyond that of course we have our IR program coming up That will conclude today's conference call.

Thank you for your participation, ladies and gentlemen. A recording of this conference call will be available on the Investor Relations section of the Siemens Healthineers website.