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 Q3 2025 earnings call. It's great that you are tuning in again today. At 7 a.m., we published our Q325 results. Since then, all the related materials for today's results release are available on the IR section of the Healthineers webpage. In a moment, our CEO, Bernd Montag, and our CFO, Johann Schmitz, will be presenting to you what you need to know about our fiscal 25 Q3 and about the near-term outlook. After the presentations, we'll have a Q&A session. To ensure everyone gets the opportunity to engage, we kindly ask that each participant limit themselves to one question each. That worked quite well last time. So, I'm sure you will manage again. Last time, you will also have, like last time, you will also have the chance to follow up and get back into the queue. 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, Ben Motag.

Thank you, Mark. Dear analysts and investors, welcome to our Q3 earnings call. Many thanks for joining. Today, I am happy to report that we are well on our way to achieve our targets as we add a further successful quarter to the fiscal year 2025. In Q3, we grew by 7.6% with all regions growing. We again outpaced the growth target we had set ourselves for the full year. Adjusted EPS grew significantly as well, by 23% to 64 cents per share. Growth was also driven by strong margin expansion. And that said, let me highlight that we achieved this margin expansion despite the impact of tariffs, which was constituting a roughly 100 million euros headwind in the quarter. Based on our strong performance and due to the now additional certainty on tariffs, we raised our outlook for fiscal year 25. We raised the midpoints of the ranges for comparable revenue growth and for adjusted earnings per share. The new range also entails an underlying operational improvement to our initial outlook for this fiscal year from November 24. Jochen will lay out the details later in his presentation. Now let us have a look under the hood and then Jochen will give you a run through of all the specs as usual. Equipment book to build was again good this quarter at 1.09. Imaging had impressive revenue growth of almost 12%, with margins improving nicely despite tariff headwinds to a strong 21%. Varian continued its growth path with 9% comparable revenue growth. While these strong growth rates feel almost in quotation marks normal for Varian, The recovery of the margin compared to Q2 is indeed noteworthy. The strong 18.8% margin has clearly brought the segment back on track. Advanced therapies had solid growth with 10.5% margin. Diagnostics transformation is on track, with margins going to 9.2%, while growth was slightly negative. Free cash flow was again strong this quarter, bringing our leverage factor below three times for the first time since the Varian acquisition. When considering the current geopolitical and macroeconomic context, our results underscore the resilience of our business. As a global leader, we might not be immune to terrorists in the short term, but we are well harnessed thanks to our unique capabilities. I would go so far to call these unique capabilities superpowers. We continue strengthening this power by innovating in each capability, in patient training, in precision therapy, and in digital data and AI. Why are these capabilities of such importance? Patient-winning creates a dynamic digital representation of an individual patient to support personalized, predictive and precise medicine. This approach goes far beyond collecting static electronic records. It combines real-time imaging, diagnostics, clinical data and AI models into a live model of the patients. Diagnosis, therapy decisions and response control can be based on this. Precision therapy means cutting-edge technologies to deliver individualized therapies with highest accuracy. This is exactly what Varian does with its unique technologies to personalize treatment in cancer care. We take advanced therapies with its next-level image guidance for stroke and cardiac interventions, as well as its push into robotic-assisted procedures. Our third capability is our competence in digital data in AI and the ability to scale this on a global level. AI algorithms are trained on vast clinical data sets to simulate and predict disease progression or therapy response. AI can assess tumor growth, evaluate cardiovascular risks, or guide surgical planning with greater accuracy. and digital solutions are the connecting element between our capabilities in which data is passed on between diagnosis and therapy, evaluated with algorithms alongside the customer workflow. Mastering and combining these three capabilities is at the heart of our efforts to ultimately achieve better patient outcomes and increase efficiencies of healthcare systems. This goes along with our second superpower, our unmatched relevance as a holistic partner for hospitals and healthcare systems. Why are we relevant to hospitals and healthcare systems? It is the depth and breadth of our portfolio and our strong teams in the different geographies that make us such a powerful partner. We enable hospitals and healthcare systems to improve the quality of care while reducing costs and unlocking new revenue streams. With our so-called value partnerships, we enter into long-term collaborative relationships with the customer that entails not only product and service business, but improves the customer's delivery of healthcare in a joint endeavor. These value partnerships transform our revenue streams from classical transactional product business into recurring revenue streams, thanks to their long-term nature. We have by now entered into more than 200 value partnerships and since the IPO, the order backlog of these deals has increased threefold. Consequently, the revenue share of these partnerships has consistently grown, also threefold, of what it was at the time of the IPO. elevating the revenue share to above 5%. By larger deals with healthcare systems, such as the deal with the Canadian province of Alberta, obviously move the needle a bit more than the average-sized partnership. There's a continuous flow of deals across regions and of different scale. And there's much more potential. To illustrate this, I will give you a few examples from the past quarter. In the U.S., we extended an existing value partnership that initially signed in 2021 into the radiation therapy space. A nice and typical example for how these partnerships can be prolonged or broadened. So often, the signing of the initial agreement opens additional opportunities which we can unlock in the years to come. A second example highlighting the importance of the breadth of our portfolio and our innovation leadership was a deal we signed with a hospital chain in Germany with a focus on comprehensive cancer care. This deal also included several photon counting CT systems. Adding the third partnership in France, which was focused on diagnostic imaging, we booked in total north of 100 million euros of orders only in these three deals. So, to summarize. Value partnerships are not only a witness to the relevance of our superpowers, they also over time reshape our revenue mix and increasingly contribute to our recurring revenue. Having now mainly spoken about the business in our synergistic core, I would like to also touch on our second core, the diagnostics business. Now that our CoreLab product portfolio is complete with Atelika solution and Atelika CI analyzer, the Atelika franchise is growing double digit and already accounts for 60% of our CoreLab revenues. The Atelika portfolio is shaping up as the winning offering in the CoreLab space and we continue to strengthen it. Atelika integrated automation makes automation accessible even for the smallest labs. It has built-in automation with revolutionary sample management technology, intelligent software and informatics to provide workflow efficiency and improve operator safety. We are the only major in vitro diagnostics manufacturer currently with a built-in integrated automation offering. However, it's not only the state-of-the-art equipment that drives productivity for our customers and makes us attractive, we also continue to innovate and add to our already competitive menu. So, as we speak, we are showing great things at the ADLM, the biggest trade show in the space, and all lights are on green for future growth. Thanks to the successful transformation program that we have embarked upon, our bottom line is already working very well. The decent margin expansion, which we have seen in the past years, proves this. We are also on a good track to get into the margin expansion range that we guided to at the beginning of the fiscal year, despite the bigger-than-expected headwinds from China. To maintain the momentum, we further sharpened the portfolio and have taken several decisions this quarter, leading to further portfolio simplification, which you see reflected in the transformation cost for the third quarter. With this, I would like to close my part for today and hand it over to Jochen.