Siemens Healthineers Adr

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. Mark Kubanek, Head of Investor Relations. Please go ahead, sir.

Thank you, operator. Good morning and welcome to our Q2 2025 earnings call. It's great that you're listening again today. At 7 a.m., we published our Q2 2025 results. All the related material for today's results release is available on the IR section of the Siemens Healthineers webpage. In a moment, our CEO, Bernd Montag, and our CFO, Jochen Schmitz, will be presenting to you what you need to know about our fiscal 25 Q2 and about the near-term outlook. After that presentation, we will have a Q&A session. To ensure everyone gets an opportunity to engage, we kindly ask that each participant limit themselves to one question. Yes, you heard correctly, one question. You will also have the chance to follow up and get back into the queue, of course. 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 Ben Montag.

Thank you, Mark. Dear analysts and investors, welcome to our Q2 earnings call. Many thanks for joining. Following a successful start to the new fiscal year, we have been able to add another excellent quarter. In Q2, we grew by nearly 7% above the pace we have guided for the full year. Adjusted EPS also grew, driven by top-line growth and margin expansion. Regarding the outlook, we confirm our revenue outlook for fiscal year 2025. And without the current tariff environment, we would have discussed the achievability of the upper end of the guidance ranges for revenue growth and adjusted earnings per share. However, we have to cater for these new tariffs and the rapidly changing global trade environment and so cautiously decided to broaden the bandwidth by lowering the bottom end of our EPS outlook range. As we have already taken first measures to adopt to the new tariff environment, we feel very comfortable with this new EPS range, assuming that the currently formulated tariffs stay in place. By this we mean the imposed tariffs of 10% and from July on 20% tariffs for European goods into the US, the tariffs for China, Canada and Mexico, as well as the tariffs for US goods going into China. As the situation is still in flux, especially with regard to European goods going to the US, it is too early for larger structural decisions in terms of adopting our production footprint. But let me be clear, we would have all the means to mitigate potential impacts from tariffs, thanks to our existing global production footprint over the medium term. Looking at the quarter in detail, We once again had a very good order in TechQuarter. We achieved a strong equipment book-to-bill of 1.14. Imaging, our biggest segment, grew at close to 9%, with an impressive margin uplift to 22.4%. At Varian, growth continued on very attractive levels, while the margin was temporarily held back by a very high equipment share in revenue. Advanced therapies had solid growth with a strong 18.5% margin. Diagnostics margin expansion is on track with an expansion of more than 200 base points year-on-year to 6.3%. And finally, it was another strong quarter in terms of cash performance. Free cash was up 64% year-over-year. For the first quarter, half of fiscal year 2025 this adds up to a free cash flow of 1 billion euros significantly higher compared to last year's first half when we consider the current geopolitical and macroeconomic context our relevance our innovation strength our scale and global reach remain key advantages let me explore this from different perspectives on the next three slides I would like to start with our largest ever value partnership, documenting our unique position in the field of cancer care. We have entered into a comprehensive oncology value partnership with the provincial government of Alberta, a province on Canada. Why does it stand out? First of all, with 800 million Canadian dollars, it is the biggest value partnership that we have ever concluded. It clearly documents that the depth and breadth of our unique portfolio gives us particular relevance to our customers, and it just underlines how strong our offering is, especially in the field of cancer care. It combines state-of-the-art radiotherapy and imaging technologies with our leading digital solutions and consulting. We will support Alberta to modernize its healthcare infrastructure and to improve quality of patient care, and we will jointly develop education and workforce solutions. While there should be no doubt about the competitive strength and uniqueness of our portfolio, I would like to briefly remind you of our sources of growth which remain unchanged also in a changing global trade environment. You are aware of the secular growth drivers such as growing and aging population and the rise in non-communicable diseases. For the treatment of these non-communicable diseases such as cancer, cardio and neurovascular diseases, healthcare systems need exactly what our portfolio offers. Increasing cost pressure in healthcare systems combined with staff shortages are further increasing the need for substantial innovations. The rising clinical need was not broken by micro-shocks like the financial crisis, COVID, sudden changes in the interest environment also this time it will not be different we offer breakthrough innovations for better patient outcomes we are market leader in the vast majority of our offerings and the purchase of products we provide is not really a discretionary decision it's the clinical need that drives the decision Consequently, the clinical need for our products and services is the driving element. It is unbroken and steadily increasing worldwide. And finally, I come to the benefits of our diverse business profile and our global footprint in the current environment. Thanks to our setup, we have all the means to mitigate potential impacts from tariffs over the medium term. Let's narrow down the topic. Since the tariffs put in place by the new US administrations are currently focused on goods, they basically address only the equipment part of our business, i.e. the non-recurring part. This non-recurring part of our revenues is about 55% of imaging, variant and AT revenues and around 10% of the diagnostics revenue. A short remark on the latter, diagnostics is not purely US-based, but it has sufficient value-add in the US and so is not subject to US tariffs. When talking about the value-add, we have a well-diversified global footprint. We are not overly exposed to one region or another in terms of revenue or in terms of our setup. Everything is well balanced. Please note that especially on the revenue side, the Americas share of 40% obviously represents more than the US only. The US was about 36% of our revenues in 2024. What you can observe is that the revenue shares of the regions largely correspond to the share of employees, which is in the end largely consistent with our production and R&D footprint. Currently, we do not produce all products in all regions. However, thanks to our existing global footprint, we are able to implement changes in our value-add structure should adjustments ultimately be deemed as economically meaningful. That said, we do have a very strong footprint in the US. We see ourselves well positioned to adapt to changes in any tariff environment to come. However, obviously such decisions are not taken overnight. The situation still very much is in flux and we need good visibility for such longer-term investment decisions. Now I hand it over to Jochen for the Financial Party.