Siemens Healthineers CEO Bernd Montag said Wednesday the company is “very, very well positioned” for “a U.S. versus China situation” that could arise when Donald Trump returns to the White House in January.
The Germany-based firm held its fourth-quarter earnings call as the U.S. presidential results began to point toward a victory for Trump. During the campaign, Trump, who put tariffs on medtech imports in his first term as president, threatened to impose a 60% tax on products entering the U.S. from China if re-elected for a second term.
An analyst asked Siemens about the impact of Trump tariffs on the earnings call.
Montag gave a positive assessment of Siemens’ ability to cope with a U.S.-China trade war, explaining that its “twin factory setup” would insulate the company from tariffs. The setup allows Siemens to deliver “from China to China, and deliver to the U.S. from the U.S. and from Europe,” Montag said.
Europe is beginning to impose higher tariffs on certain Chinese imports, too. Yet while Siemens is based in Europe, Montag said the company’s flow of trade “is much more balanced than sometimes people assume.” Two of Siemens' four units are based in the U.S., and it has more employees in the U.S. than its native Germany.
China problems drag on
Siemens is among the medtech companies that have reported facing problems in China. Montag said the impact on growth and margins in China has been “much more intense and longer-lasting than we assumed initially.”
The CEO’s statement echoes comments from Philips, one of the company’s competitors. Montag made the case that all imaging companies, including those based in China, are being affected by the country’s anti-corruption campaign.
“We have, overall in the last 12 months, slightly gained market share in China in this difficult situation,” Montag said. “When you look at the numbers of United Imaging, as one of the local companies, you also see that they saw a significant decline in their numbers, including some heavily loss-making quarters.”
Siemens expects China to remain a drag on results in the coming quarters. The company is assuming sales in China will fall by mid-single digits to high single-digit percentage points in the first half of its 2025 financial year. Siemens expects the situation to stabilize in the second half of 2025, when revenues are forecast to be roughly at the level of the second half of 2024.
CFO Jochen Schmitz said “there is obviously a lot of pent-up demand, but it's unclear when this will come back.” Equipment orders have been relatively stable but at a low level in recent quarters, Schmitz added, and in the absence of an uptick, Siemens has changed its assumptions “to be a bit more prudent with regard to China.”
