Siemens Healthineers hit by China order delays in Q3, but sees 2025 turnaround

By Marleen Kaesebier and Louis van Boxel-Woolf

London: German medical technology company Siemens Healthineers said on Wednesday its sales were hit by continued order delays in China in the third quarter, sending its shares more than 6 per cent lower.

Healthcare technology companies are grappling with China's anti-corruption campaign that has made promotional and sales activities harder in the country.

Siemens Healthineers reported a revenue of 5.42 billion euros ($5.87 billion) for the third quarter, while analysts had expected 5.54 billion on average in a poll by Vara Research.

Revenue grew across its other markets, but declined 13 per cent on a comparable basis in China due to temporary delays in orders, it said.

Dutch Peer Philips also reported lower half-year sales in China on Monday, citing the anti-corruption campaign.

Siemens Healthineers' CEO Bernd Montag said on a call that he expected the orders delayed by the campaign to materialise as soon as 2025.

"Structural demand in China is completely intact," Montag said, adding business in the country should stabilise in the fourth quarter.

The company expects more orders for its CT and MRI products from Chinese hospitals and healthcare facilities over the next fiscal year, he said.

It said it had seen signs of China preparing a government stimulus programme to boost investments in the healthcare system, which should help med-tech companies once implemented.

"The question remains when will China improve," Jefferies analysts said in a note, adding an improvement from here would be critical to back the 2025 estimates.

Sales in the group's Medical Imaging unit, which makes up about 55 per cent of its revenue, declined by a low double-digit percentage in China, it said.

The company lowered its revenue outlook for the unit, expecting it to grow by 4.5 per cent to 5.5 per cent this year, compared with the previous forecast of 6 per cent to 8 per cent .

On the group level, annual sales growth is expected to come at the lower end of the guidance range of 4.5 per cent to 6.5 per cent , CFO Jochen Schmitz said during the call. ($1 = 0.9239 euros) (Reporting by Marleen Kaesebier and Louis van Boxel-Woolf in Gdansk and Alexander Hubner in Munich; Editing by Milla Nissi)