Siemens Healthineers Adr

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.