NEW YORK (360Dx) – Siemens Healthineers late Tuesday announced planned cost savings of €240 million ($294 million) per year and its intention to go public by listing its shares on the Frankfurt Stock Exchange.
The firm said that the impact of the cost savings initiative will become fully apparent starting in 2020, and it "aims to achieve continuous productivity improvements going forward."
Those efforts, part of its 'Strategy 2025,' will be focused on five areas: utilizing its capabilities in the in vivo and in vitro markets to combine data and information around precision medicine to make it relevant for clinical use; using data and artificial intelligence to integrate existing new technologies for therapy; "coordinating and optimizing the patient journey through the healthcare continuum"; developing effective and efficient technical, operational, and clinical service offerings leveraging the company's technologies; and investing and developing artificial intelligence capabilities.
The firm also said that during the first half of 2018 it expects to list Siemens Healthineers on the Prime Standard segment of the Frankfurt Stock Exchange's Regulated Market.
For fiscal 2017, Siemens Healthineers posted €13.8 billion in revenues and an adjusted profit of €2.5 billion, it said. Reagents, consumables, and services comprised 55 percent of its revenues, it said, adding that since 2015 organic revenues have increased about 4 percent, on average.
Siemens Healthineers' largest segment is its imaging business, which generated €8.2 billion in revenues in fiscal 2017, it said.
The diagnostics business posted €4.2 billion in revenues in fiscal 2017. The company noted the recently launched Atellica Solution, consisting of immunoassays and chemistry analyzers, "holds great potential for becoming one of the company's future growth and profitability engines." Atellica can run up to 440 tests per hour and transport samples up to 10 times faster than conventional conveyors.
Siemens Healthineers' advanced therapies business recorded €1.5 billion in revenues in fiscal 2017, the company said.
Overall, it anticipates comparable revenues to grow between 3 and 4 percent in fiscal 2018, with organic revenue growth in the 4 to 6 percent range. Siemens Healthineers said it plans a dividend payout ratio of 50 to 60 percent of its net income.
Globally, the company has more than 47,000 employees in 75 countries, and an installed base of about 600,000 active systems. It said that its core markets are estimated at more than €50 billion per year and anticipates these markets to grow at between 3 and 5 percent annually from 2016 to 2021, driven by a growing and aging population, the rise of chronic diseases, and improved access to healthcare in emerging markets.
Siemens Healthineers also noted that the delivery of healthcare is moving away from being volume-based to being value-based, driven by digitalization and the use of artificial intelligence. "Benefitting from an abundant availability, big data is becoming a source of value creation in the sector," it said.
"Our excellent strategic positioning, our strength in innovation, and our balanced geographic footprint make us one of the main long-term beneficiaries of the significant structural growth inherent in our markets," Siemens Healthineers CEO Bernd Montag said in a statement. "We have every intention of capturing these opportunities in the long term."