Siemens Healthineers (SHL) Status update summary

Financial performance and outlook

• Achieved a positive equipment book-to-bill ratio of 1.07, with all segments above one and year-to-date over 1.1.

• Revenue grew 4.3% year-over-year despite tough comparables and headwinds in China.

• Margins expanded by 60 basis points, overcoming 100 basis points of foreign exchange headwinds.

• Outlook for revenue and EPS remains confirmed, even as the anti-corruption campaign in China is now expected to impact growth by 250 basis points, higher than the initial 100 basis points estimate.

• Group outlook for fiscal 2024 is confirmed, with revenue growth expected at the lower end of the range and diagnostics margins moving toward the upper end.

China market dynamics

• Q4 is expected to see a significantly lower revenue decline in China compared to Q2 and Q3, due to weaker comparables and signs of stabilization.

• Equipment book-to-bill in China was above one for two consecutive quarters, indicating stabilizing demand.

• Government stimulus is anticipated to support healthcare demand, with revenue impact expected in the first half of the next fiscal year.

• Normalization, pent-up demand, and stimulus are expected to drive optimism for China in the next fiscal year.

Segment performance and guidance

• Imaging margin guidance was previously lowered to the lower half of the range due to China, with margin risk considered ring-fenced.

• Diagnostics segment transformation program delivered strong initial margin improvements, with future gains expected to be evolutionary.

• Diagnostics margins are expected to be in the lower half of the 8%-12% guidance range next year.

• No current plans to sell the diagnostics business; focus remains on margin expansion.