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Siemens Healthineers Fiscal Q2 Dx Revenues Rise 43 Percent on Continued COVID-19 Antigen Test Demand

NEW YORK – Siemens Healthineers on Wednesday announced that its fiscal year 2022 second quarter revenues rose 38 percent year over year on a reported basis and 16 percent on a comparable basis.

For the three months ended March 31, the Erlangen, Germany-based company posted total revenues of €5.46 billion ($5.74 billion) compared to €3.97 billion in the prior-year quarter.

The firm's Q2 Diagnostics revenues were €1.77 billion, up 43 percent year over year from €1.24 billion, driven by high demand for COVID-19 rapid antigen tests.

In the recently completed quarter, Siemens Healthineers booked €680 million in revenues from sales of COVID-19 rapid antigen tests, a more than threefold increase over revenues of €190 million in the prior-year quarter. Excluding such rapid antigen test revenues, core diagnostics revenue growth was flat year over year.

The diagnostics segment recorded high double-digit growth rates in the Americas region, driven by sales of COVID-19 rapid antigen tests launched in the US in early January. Though Siemens Healthineers posted double-digit diagnostics revenue growth for its Europe, the Middle East, and Africa region, revenues were slightly less than in the prior year in the Asia-Australia region. There, the firm saw significant declines in China where fewer routine tests were performed due to COVID-19 restrictions.

"We have shown throughout the pandemic that we can adapt in an agile fashion to a changing environment, for example, by building a rapid antigen test business to capture pandemic related opportunities from scratch," Siemens Healthineers CEO Bernd Montag said on a conference call to discuss the financial results. "We have been able to overcome supply chain challenges and [with] our strong global footprint, we are able to balance the impacts of COVID-19 lockdowns."

On the call, Montag announced that Sharon Bracken, a former Abbott Diagnostics executive, will join Siemens Healthineers as head of diagnostics at the end of May. Bracken will replace Deepak Nath, who has been appointed CEO of Smith & Nephew.

In its other businesses, Siemens Healthineers posted Q2 imaging segment revenues of €2.62 billion, up 11 percent year over year from 2.37 billion; and advanced therapies segment revenues of €456 million, an increase of 12 percent year over year from €408 million. It posted €706 million in Q2 revenues for its Varian business, acquired last April for $16.4 billion.

The company reported a Q2 net income of €583.0 million, or €.52 per share, compared to €447.0 million, or €.41 per share, in Q2 2021. Its adjusted EPS was €.67 per share.

Its fiscal Q2 R&D expenses were €444 million, up 34 percent year over year from €331 million, while its SG&A expenses were €826 million, up 45 percent year over year from €569 million.

At the end of fiscal Q2, Siemens Healthineers had €1.08 billion in cash and cash equivalents.

For the second consecutive quarter, the company raised its outlook for fiscal year 2022. Overall, the company expects comparable revenue growth between 5.5 percent and 7.5 percent, compared to previously announced revenue growth of 3 percent to 5 percent, and adjusted basic earnings per share between €2.25 and €2.35, compared to €2.18 to €2.30 announced previously.

Siemens Healthineers now anticipates fiscal year 2022 diagnostics revenue growth in the mid-single digits compared to a previously announced expectation for a low-single digit drop in revenue growth. It expects to generate around €1.3 billion in revenues during the year from COVID-19 rapid antigen tests, which would compare with around €700 million in fiscal year 2021.

On the conference call Siemens Healthineers CFO Jochen Schmitz noted that its COVID-19 rapid antigen test sales peaked in the recently completed quarter. The firm is €300 million ahead of its forecast for COVID-19 antigen test revenues for the first half of fiscal year 2022. "As we mentioned last quarter, the full-year visibility on testing demand is still relatively low and the situation is very dynamic," Schmitz said. "Nevertheless, we still expect revenues to decline sharply in the second half as we move from a pandemic to an endemic environment."

The company expects a drop in overall Q3 diagnostics revenue growth due to a tough comparison with the prior-year quarter when it booked around €600 million for COVID-19 rapid antigen test sales. Its core diagnostics business, removing revenues for COVID-19 diagnostic products, will also "remain impacted in Q3 by the [pandemic-related] lockdown situation in China," Schmitz said.

The firm said it anticipates that the war in Ukraine will not have a material adverse effect on its business activities during the year.