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Siemens Healthineers Fiscal Q1 Dx Revenues Rise 23 Percent on COVID-19 Rapid Antigen Test Demand

NEW YORK ─ Siemens Healthineers on Thursday reported a 31 percent year-over-year increase in its fiscal 2022 first quarter revenues and a 23 percent year-over-year increase in diagnostics revenues on the back of continued high demand for its COVID-19 antigen tests.

For the quarter ended Dec. 31, the Erlangen, Germany-based company posted revenues of €5.07 billion ($5.75 billion) compared to revenues of €3.87 billion in Q1 2021. On a comparable basis, revenues rose 10 percent year over year.

Siemens Healthineers posted diagnostics revenues of €1.45 billion on an adjusted basis compared to €1.18 billion in Q1 2021. On a comparable basis, its diagnostics revenues rose 20 percent year over year.

In the recently completed quarter, the firm booked revenues of €329 million from COVID-19 rapid antigen tests. Excluding rapid antigen test revenues, diagnostics revenues grew 3 percent in Q1.

In diagnostics, its Europe, Middle East, and Africa region benefited most from the distribution of rapid antigen tests, with year-over-year diagnostics revenues growing in the double digits.

Meanwhile, its Asia and Australia region posted strong year-over-year revenue growth in diagnostics, the firm said, while revenues in the Americas region declined slightly compared to the prior-year quarter, which had benefited from a large order for its Atellica Solution immunoassay and clinical chemistry analyzers.

Siemens Healthineers CEO Bernd Montag said on a conference call to discuss the financial results that the company recently inked a contract for more than 40 Atellica Solution analyzers with Ascend, a dialysis testing laboratory based in Sunnyvale, California, "making it one of the country's largest single-site Atellica Solution locations." Further, the firm is developing the Atellica CI 1900 for midsized laboratories in developed and emerging countries.

On the back of US Food and Drug Administration Emergency Use Authorization for its rapid antigen test in December, Siemens Healthineers is primarily targeting government testing programs, Montag said, adding that the company is also "looking at larger retail chains, and we'll see how that market develops."

Q1 imaging revenues on an adjusted basis were €2.53 billion, up 9 percent year over year from €2.32 billion and up 6 percent on a comparable basis.

Advanced therapies adjusted revenues in the recently completed quarter were €437 million, up 6 percent year over year from €412 million and up 3 percent on a comparable basis.

Siemens Healthineers posted Q1 revenues of €750 million for its Varian business, acquired last April for $16.4 billion.

Siemens Healthineers posted a fiscal Q1 net income of €472 million, or €.41 per share, compared to €437 million, or €.40 per share, in the prior-year quarter. Its adjusted earnings per share was €.55.

In fiscal Q1, the firm's R&D expenses rose 24 percent year over year to €408 million from €329 million, while its SG&A expenses grew 46 percent year over year to €803 million from €549 million.

At the end of the quarter, the firm had cash and cash equivalents of €1.31 billion.

Siemens Healthineers raised its outlook for fiscal year 2022 due to the increased demand for its COVID-19 antigen test in Europe and the test's authorization in the US. It now expects comparable year-over-year revenue growth of 3 percent to 5 percent, compared to its previously announced revenue growth of 0 percent to 2 percent, and adjusted basic earnings per share of €2.18 to €2.30, compared to its previously announced adjusted EPS of €2.08 to €2.20.

In its diagnostics segment for the full year, Siemens Healthineers anticipates a low single-digit decline in comparable revenues though it anticipates generating around €700 million in revenues from COVID-19 rapid antigen tests, up from its previous expectation of around €200 million.

The outlook includes an expectation that current and potential future measures to keep the COVID-19 pandemic under control will not negatively impact the demand for and the provision of its products and services, and that procurement and logistics costs will start to normalize in the second half of the fiscal year, the firm said.

"Since our fiscal year 2022 outlook announced in November, the situation has changed significantly with the Omicron variant wave," Jochen Schmitz, CFO of Siemens Healthineers, said on the conference call. Neither the increase in cases and testing due to the Omicron wave nor the FDA EUA for its antigen test were factored into previous 2022 guidance, he said.

"However, the full-year visibility on testing demand is still relatively low, and the situation is still very dynamic," Schmitz said. "Based on the trends we experienced over the last year, we anticipate strong demand [for antigen tests] in Q1 and Q2 and then softening demand during the summer. Additionally, pricing has come down substantially for tenders in Germany, and considering we are not the only player to receive the US [authorization] for its COVID 19 antigen test, we should see our pricing and volumes [decline] over time in the United States," he added.