Dive Brief:
- Siemens Healthineers saw year-over-year revenue decline 2% in its most recent fiscal fourth quarter, but still notched its highest-grossing quarter of fiscal 2020 as diagnostics and imaging both rebounded from the worst pandemic impacts earlier in the year.
- In the diagnostics business, the tailwind from COVID-19 testing has been "limited" thus far, the company reported. But Siemens Healthineers hopes its recently launched rapid antigen test for the coronavirus will be an important catalyst for growth. The 15-minute test was rolled out in CE mark countries beginning last month.
- Siemens Healthineers expects revenue growth between 5% and 8% in fiscal year 2021 on strength of COVID-19 test sales and, depending on the pandemic's effect on routine healthcare, more demand for imaging and advanced therapies. The company also expects to finalize its acquisition of Varian Medical Systems in the first half of 2021.
Dive Insight:
On the whole, Siemens Healthineers closed its fiscal year 2020 with almost flat revenue. Of its three business units, only diagnostics declined during the year. Margins in that business were under pressure during the quarter due to impacts from COVID-19 and spending on the ramp up of certain immunoassay and analyzer products in its Atellica line. But the company expects that trend to turn as revenues from Atellica and reagents pick up.
In an interview with Bloomberg TV, CEO Bernd Montag said the company is in contact with multiple governments and intends to ship 30 million of its rapid antigen tests come mid-November, with more to follow.
Siemens Healthineers expects its industry-leading $16.4 billion acquisition of Varian Medical to close in the first half of 2021. The deal was approved by Varian shareholders on Oct. 15 and gained U.S. antitrust approval a week later.
Given the pending acquisition, Varian did not host an earnings conference call but did release quarterly results last week. Varian exceeded consensus expectations with approximately $850 million in revenue, down 4% versus the prior year in constant currency.
Excluding impact from the Varian acquisition, in its fiscal year 2021 Healthineers expects year-over-year revenue growth between 5% and 8%. More specifically, the company expects its imaging unit to return to growth of at least 5%, and its diagnostics unit to see mid-single digit to high-single digit growth with "upside potential from further COVID-19 opportunities."
