Imaging sales help bolster Siemens Healthcare’s Q4 profits

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 - business, financials

While Siemens said its total sector profit of €2.12 billion ($3.37 billion) was “held back by substantial profit impacts in the energy sector,” its healthcare unit delivered €631 million ($1 billion) in profit in the fourth quarter, compared with €494 million ($627.53 billion) in the same period a year earlier, led by “strong earnings performance from its imaging and therapy systems businesses.”

The company also said its healthcare sector took €40 million ($63.51 million) in charges related to its Agenda 2013 initiative, which was “more than offset” by its €49 million ($77.8 million) portion of the other post-employment benefits (OPEB) gain in the U.S. For comparison, profit in the prior-year period included a loss of €32 million ($50.81 million) on the sale of a healthcare IT business in France, largely offset by the release of reserves totaling €26 million ($41.28 million) related to a customer loan and receivables in the audiology business. Siemens said the healthcare unit expects additional charges related to Agenda 2013 in coming quarters.

Within Siemens Healthcare, the company said the profit at the diagnostics unit rose to €86 million ($136.55 million) from €63 million ($100.03 million) in the prior-year period, driven primarily by higher revenue and also benefiting from €9 million ($14.29 million) of the OPEB gain. The current period included €14 million ($17.82 million) of the Agenda 2013 charges.  

Healthcare revenue came in 11 percent higher compared to the prior-year quarter, including broad-based growth among its businesses. Order development reflected the high basis of comparison in the prior-year period as well as healthcare’s previously disclosed exit from the radiation oncology business. Favorable currency translation effects contributed seven percentage points to both revenue and order growth for the current quarter.

On a geographic basis, Asia, Australia and the Americas contributed double-digit growth to revenue, according to Siemens. Orders growth was driven by a double-digit increase in Asia and Australia. Healthcare’s book-to-bill ratio was 1.05, and its order backlog was €7 billion ($11.11 billion) at the end of the quarter.

The diagnostics business made a strong contribution to healthcare’s growth in the fourth quarter. Revenue climbed 13 percent, to €1.055 billion ($1.68 billion) from €935 million ($1.19 billion) in the prior-year period, including 8 percentage points from positive currency translation effects. Diagnostics showed the same revenue development as the sector with regard to the regions.

"A strong fourth quarter enabled us to fulfill our expectations for fiscal 2012 and achieve one of our best years ever," said Siemens CEO and President Peter Loescher. “Even so, we didn’t fully succeed in significantly boosting our performance vis-à-vis our competitors, as we did in recent years. To get back to reaching our own goals, we've launched Siemens 2014, a company-wide program aimed at raising our total sectors profit margin to at least 12 percent. We know what we have to do—and we’re doing it.”