Siemens Healthineers Ag · XETR:SHL
Siemens Healthineers — Q4 2018 Earnings Presentation
23 slides from Siemens Healthineers's earnings presentation, Nov 5, 2018
Slide 1: Q4 Analyst Call
Q4 Analyst Call Dr. Bernd Montag, CEO | Dr. Jochen Schmitz, CFO November 5th, 2018
Slide 2: Notes and forward looking statements
Notes and forward looking statements This presentation has been prepared solely for use at this meeting. This material is given in conjunction with an oral presentation and should not be taken out of context. By attending the meeting where this presentation is made or accessing this presentation, yo
Slide 3: FY18 – a successful & exciting year
FY18 – a successful & exciting year Key achievements Targets achieved Comparable growth2) Adj. profit margin3) • Successful IPO 3.7% Guidance Guidance 3-4% • New agile organization 17-18% 17.2% • Cost-savings program on track 2018 Actual 2018 Actual • Healthineers Performance System launched to esta
Slide 4: Q4 FY18 – strong finish of fiscal year
Q4 FY18 – strong finish of fiscal year • Comparable1) revenue up by 4.2% driven by strong Imaging business with 6% growth • Diagnostics with improving growth dynamics (+3%) and continued double-digit instrument sales growth • Atellica Solution2) ramp-up on track with 990+ analyzers shipped by end of
Slide 5: We are partnering with our customers to jointly solve their key challenges
We are partnering with our customers to jointly solve their key challenges Recent large deals and cooperations Strategic partnership to reshape health delivery Primary Health Care, Australia • Second largest lab provider in Australia • Retention deal for 74 Atellica Solution analyzers Catholic Medic
Slide 6: Major product innovations expand our leading position in precision medicine
Major product innovations expand our leading position in precision medicine Biograph Vision More to ACUSON Sequoia RT edition syngo.via Frontier Lung Analysis Suite (AI)1) come at MAGNETOM Sola RSNA 2018 1st 1.5T with BioMatrix MAMMOMAT Revelation ACUSON Juniper MAGNETOM Sola New SOMATOM - Cardiac E
Slide 7: We are at the forefront of digitalization and AI, driving the transformation of healthcare
We are at the forefront of digitalization and AI, driving the transformation of healthcare Strong foundation for AI AI suited to recognize & quantify abnormalities in chest CT scans Superior Scale • 240,000 patient touchpoints/h • 40+ AI enriched offerings • 4,400 clinical collaborations Strong IP P
Slide 8: Atellica Solution FY2018 shipment target achieved
Atellica Solution1) FY2018 shipment target achieved Ramp-up of analyzer shipments (cumulative) Comments 7,000 • New customer wins continue to be >35% • Recent customer wins, e.g. • Australia: Primary Health Care (74 analyzers) • France: Laborizon (40 analyzers) • Regional split EMEA2): ~55%, America
Slide 9: Healthineers Performance System will drive our “lean“ culture
Healthineers Performance System will drive our “lean“ culture People Execution Strategy Practices & People & Leadership Practices Advanced Methods Annual Operating Plan Advanced Methods for every Healthineer for dedicated processes for the business Core Methods Structured Value Agile GROWs Healthy D
Slide 10: Standalone cost-saving program on track
Standalone cost-saving program on track Development of savings and implementation costs Comments in €m 240 Savings • Program on track, 60 mio. savings 200 40 therein ~50 therein achieved in FY18 re-invest therein ~50 • Majority of implementation costs 140 booked in FY18, ~30 mio. in FY19 60 • Re-Inv
Slide 11: Strong Q4 led by Imaging segment
Strong Q4 led by Imaging segment Revenue (€m) Adj. profit2) (€m) Adj. net income2) (€m) Comparable Margin Growth1) +4.2% -70 bps Adj. EPS3) 0.44 0.43 Y-o-Y 3,647 3,704 18.9% 18.2% Y-o-Y -3% 689 674 444 430 Q4 FY2017 Q4 FY2018 Q4 FY2017 Q4 FY2018 Q4 FY2017 Q4 FY2018 • Solid revenue growth, led by str
Slide 12: Organic growth in Imaging and Advanced Therapies drives strong underlying profit conversion in Q4
Organic growth in Imaging and Advanced Therapies drives strong underlying profit conversion in Q4 Imaging (€m) Diagnostics (€m) Advanced Therapies (€m) Comparable +6% +3% +4% Growth1) Revenue 2,210 2,287 1,061 1,056 399 407 Q4 FY2017 Q4 FY2018 Q4 FY2017 Q4 FY2018 Q4 FY2017 Q4 FY2018 Margin Y-o-Y -30
Slide 13: Strong free cash flow conversion in Q4
Strong free cash flow conversion in Q4 Q4 Healthineers Profit to Free Cash Flow Imaging 1.1 Diagnostics 1.0 Adv. Therapies 0.8 CCR1) 1.05 -88 10 851 738 -14 206 -191 627 111 -46 660 614 Healthineers Depreciation, EBITDA Change in Change in Add. to Other Operating Add. to Free Cash Income Free Cash P
Slide 14: Our targets for FY19
Our targets for FY19 Comparable revenue growth1) Adj. Profit margin2) Earnings per share (in €) 4 - 5% 17.5 - 18.5%3) +20 to +30%3) 3.7% 17.2% 1.26 2018 2019E 2018 2019E 2018 2019E • Continued strong growth in Imaging and • Execution on cost-savings program • Tax rate: 28 - 30% Advanced Therapies •
Slide 15: Appendix
Appendix Q4 FY2018 Analyst Call Unrestricted © Siemens Healthineers AG, 2018 | Page 15
Slide 16: Mid-term guidance
Mid-term guidance Mid-term comp. revenue growth1) target Mid-term profitability2) targets 20-22% 20-22% 4-6% 16-19% 3.7% 2.7% 2017 2018 Mid-term Imaging Adv. Therapies Diagnostics Dividend policy Capital structure EPS3) Solid investment grade rating DPS 50-60% as a minimum 1) Comparable growth exclu
Slide 17: Q4 reconciliations and KPIs for group and segments
Q4 reconciliations and KPIs for group and segments Q4 FY2018 Q4 FY2017 Advanced Advanced Healthineers Imaging Diagnostics Healthineers Imaging Diagnostics Position (€m) Therapies Therapies Profit 627 458 126 86 668 466 147 94 Severance charges 38 23 8 4 21 10 8 1 IPO costs 9 4 3 1 0 0 0 0 Adjusted p
Slide 18: FY18 reconciliations and KPIs for group and segments
FY18 reconciliations and KPIs for group and segments FY2018 FY2017 Advanced Advanced Healthineers Imaging Diagnostics Healthineers Imaging Diagnostics Position (€m) Therapies Therapies Profit 2,110 1,533 455 275 2,401 1,567 561 325 Severance charges 96 48 22 14 57 23 21 2 IPO costs 103 4 3 1 0 0 0 0
Slide 19: Q4 group profit to adjusted net income reconciliation
Q4 group profit to adjusted net income reconciliation Position (€m) Q4 FY2018 Q4 FY2017 FY2018 FY2017 Profit 627 668 2,110 2,401 Financial income from operations, net -4 -5 -12 -22 Amortization of intangibles assets acquired in business combinations -33 -34 -131 -147 Interest expenses, net -32 -64 -
Slide 20: Q4 EPS and adjusted EPS reconciliation
Q4 EPS and adjusted EPS reconciliation Position (€m) Q4 FY2018 Q4 FY2017 FY2018 FY2017 Net income 374 405 1,284 1,396 Non-controlling interest 4 5 19 17 Net income excl. non-controlling interest 369 400 1,265 1,379 Earnings per share (in €) 0.37 0.40 1.26 1.38 Adjusted net income1) 430 444 1,544 1,5
Slide 21: Healthy Balance sheet, ongoing focus on cash management
Healthy Balance sheet, ongoing focus on cash management Net debt overview (in €bn) Capital structure development in Q4 (in €bn) Leverage2) 1.7x 1.5x in €bn March 31st 2018 Sept. 30th 2018 4.4 Cash and cash equivalents 0.2 0.5 Pensions 1.0 3.6 Receivables from Siemens Group 1.71) 1.4 (financial cash)
Slide 22: SHS loan maturity profile: debt mainly driven by long-term loans denominated in USD
SHS loan maturity profile: debt mainly driven by long-term loans denominated in USD SHS loans with Siemens Group as of 30.09.20181) (in €m) Comments 1,459 Total loan volume ~4’’6 EUR equivalent Other Average interest rate ~2.6% USD Main loan volume (~91%) denominated in USD Majority of matur
Slide 23: Slight reduction of pension deficit
Slight reduction of pension deficit Q4 FY2018 Key financials – Pensions and similar obligations Q1 Q2 Q3 Q4 in €bn1) FY2015 FY2016 FY2017 FY2018 FY2018 FY2018 FY2018 Defined benefit obligation (DBO)2) (3.3) (4.6) (4.1) (3.5) (3.4) (3.4) (3.4) Fair value of plan assets2) 2.0 2.4 2.4 1.7 2.4 2.6 2.6 P