Who is Siemens Healthineers

Siemens Healthineers is a leading medtech company headquartered in Erlangen, Germany. The company was formerly known as Siemens Healthcare, Siemens Medical Solutions, and Siemens Medical Systems. The German company specialises in healthcare solutions and services and is a spin-off of its parent company Siemens which retains a 75% stake. Siemens Healthineers is also the parent company for other medical technology companies.

In 2001, the company was named Siemens Medical Solutions and was later renamed to Siemens Healthcare in 2008. Bernd Montag became the company’s new global CEO in 2015. The company was rebranded into Siemens Healthineers in May 2016. Overall, there are around 69,500 employees working for various global companies owned by Siemens Healthineers.

Siemens Healthineers Overview

The first Siemens company, Telegraphen-Bau-Anstalt von Siemens & Halske (“Telegraph Construction Firm of Siemens & Halske”), began in Berlin in 1847 with Werner von Siemens (1816–92), Johann Georg Siemens (1805–79), his cousin, and Johann Georg Halske (1814–90) at the helm.

The company first started with the aim to create telegraph installations and other electrical equipment. It spread telegraph lines across Germany and built its first branch in 1855 in St. Petersburg for Russian lines. This was followed by another in London in 1858 for English lines. As the company grew, Halske withdrew in 1867, with the four Siemens brothers and their descendants the sole owners of the company.

The company’s activities expanded and included electric power, dynamos, cables, telephones, electric lighting, and more. In 1890, the company became a limited partnership, while in 1897 it became a limited-liability company, called Siemens & Halske AG. In 1903 Siemens & Halske moved its power-engineering activities to a new company, Siemens-Schuckertwerke.

The two companies were chaired from 1919 by the same officer who was also a member of the Siemens family. In 1932, Reiniger Gebbert & Schall merged with Siemens and formed Siemens-Reiniger-Werke AG. The new company produced medical diagnostic and therapeutic equipment, such as X-ray machines and electron microscopes.

The dark years of the House of Siemens

The House of Siemens, which included all the companies, experienced significant expansion during the Third Reich (1933–45). All facilities operated at full capacity during World War II and were scattered throughout the country to avoid air strikes in 1943–44. After the end of the war, the head of the group, Hermann von Siemens (1885–1986), was briefly incarcerated (1946–48), while Siemens officials were charged with employing slave labour from captive nations. They were also connected to the construction and operation of the extermination camp at Auschwitz and the concentration camp at Buchenwald.

From its base in West Germany, the House of Siemens increasingly grew its share of the electrical market in Europe and internationally, during the 1950s. By the 1960s it had become one of the world’s largest electrical companies.

In 1966, following the merging of various companies, Siemens AG was created. The company grew globally and, during the early 21st century, its products included the creation and operation of telecommunications networks and the production of diagnostic imaging systems, mobile telephones, hearing aids, mass transit systems, ground movement radar for airfields, and power generating equipment.

The downturn in business activities in China

Following the Chinese government’s anti-corruption campaign, the significant downturn in business activities in the Chinese medical sector has begun to relax, Siemens Healthineers chief financial officer Jochen Schmitz said. Speaking at the Jefferies 2023 London Healthcare Conference, Schmitz noted that around 15% of the global revenue for Siemens Healthineers was represented by the Chinese market.

The anti-corruption campaign was launched by the Chinese government in July, and targeted corrupt doctors and senior hospital staff. However, this has affected medical equipment demand, with Siemens Healthineers taking a hit in Q3 2023 revenue. Its revenue experienced a decline due to additional issues regarding its cancer treatment business Varian and Covid-19 test sale drop-offs.

Schmitz stated that Siemens Healthineers’ business suffered as a result of the campaign, which resulted in approximately 30% less order intake. Despite the drop in demand from China, Schmitz clarified that the situation was just temporary, and that Siemens Healthineers expects that the effects will not be present by Q1 2025. The freeze in demand may actually push up demand for equipment in 2025, he added.

In November, the company had to let go around 300 members of staff from its diagnostics and manufacturing division in an attempt to save €300m. Schmitz emphasised that despite these changes, the diagnostics arm remained a core business along with its imaging devices and accessories.

Earnings and Revenue

Siemens Healthineers announced better-than-expected Q4 results and anticipates similar revenue growth of 4.5% to 6.5% for the 2024 fiscal year compared to 2023.

For the fiscal year 2023, the company’s targets for revenue growth and earnings per share were met.

For fiscal year 2024, they also expect comparable revenue growth of between 4.5% to 6.5% compared with fiscal year 2023. With the exclusion of revenue from rapid COVID-19 antigen tests, this means that they anticipate comparable revenue growth of between 5.0% and 7.0%. They also anticipate adjusted basic earnings per share to be between €2.10 and €2.30.

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