Siemens Healthineers aims for $300 million in savings

  • The overhaul will cost between 350 million and 450 million euros by 2025
  • Planned job cuts

ERLANGEN, Germany, November 9 (Reuters) – Siemens Healthineers (SHLG.DE) will restructure its diagnostics division to save around 300 million euros ($302 million) each year from 2025, the US-German medical device maker announced on Wednesday.

He said he would spend a similar amount on the redesign, though those costs are one-time while the savings will reoccur.

Shares of Siemens Healthineers rose nearly 2% at 1126 GMT after the announcement.

After the introduction of its Atellica lab system, older systems – mostly acquisitions – are to be taken off the market sooner than expected to simplify the portfolio.

For the financial year which began in October, Healthineers has forecast costs of 150 to 200 million euros for the restructuring, a presentation to shareholders shows.

Until 2025, the overhaul is expected to cost between 350 and 450 million euros, chief executive Bernd Montag said in Erlangen on Wednesday.

He said the restructuring would mean less focus on certain sites for the diagnostics division, with fewer staff required in some areas.

Sources within the company said the plan involves cutting jobs and abandoning some sites.

Siemens Healthineers also said it was lowering its targets for the laboratory division, with comparable sales growth of 3% to 5% per year through 2025, down from 4 to 6% previously. The adjusted return on sales before interest and taxes (EBIT margin) is estimated at 8%-12% by 2025 instead of the previously expected 15%.

The group is targeting adjusted basic earnings per share of between 2 euros and 2.20 euros for the 2023 financial year.

In fiscal 2022, it achieved comparable revenue growth of 5.9% to around €21.7 billion. That compares to a target range of 5.5% to 7.5% and an average analyst estimate of 21.5 billion euros in revenue.

Annual net profit rose 18% to 2.05 billion euros, partly thanks to lucrative activities with COVID-19 tests.

The company proposed a 10 cent increase in the dividend to 0.95 euros.

($1 = 0.9943 euros)

Reporting by Alexander Huebner and Rachel More, editing by Barbara Lewis, Kirsten Donovan

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