CEO: Bernd Montag
Based: Munich, Germany
2016 sales: $15 billion**
2015 sales: $14.8 billion
*FY 2016 ended Sept. 30, 2016
Siemens, which had already broken out healthcare as a separately managed business, rebranded it in May 2016 as Siemens Healthineers. The move followed a turbulent 2015, during which the conglomerate posted an 18% slump and announced more than 7,000 layoffs across the company.
At the time, the company said it would add new offerings, including managed services, consulting and digital services in addition to strengthening its position in medical imaging and molecular diagnostics.
And it made good on that commitment; just ahead of the rebrand, Siemens integrated Thermo Fisher’s real-time PCR technology into its own molecular testing system. And later in May, it picked up Neo New Oncology to get its hands on its liquid biopsy platform that helps physicians choose targeted cancer therapies for their patients.
In November, the company bought Berlin-based Conworx Technology, which would become part of Siemens Healthineers’ new Point of Care Informatics unit, offering open connectivity for more than 100 point-of-care devices. This was a nod to an industry trend: “As hospitals consolidate and acquire physician offices, there is a huge need by emerging healthcare networks for seamless integration of hundreds of decentralized devices that are spread across dozens of sites,” said Peter Koerte, president of Siemens’ point-of-care diagnostics division, at the time.
A month later, the company announced it would invest about $300 million over four years into its Walpole, Massachusetts research and manufacturing facility for laboratory diagnostics.
“The expansion of the Walpole facility fits into the strategic growth plans for the company and allows us to increase our manufacturing footprint in the United States, the largest healthcare market in the world,” Siemens Healthineers CEO Bernd Montag said at the time.
So, in the meantime, how did the Healthineers do? For 2016, diagnostic imaging led the pack. Ultrasound and in vitro diagnostics also grew thanks to greater access to healthcare and an increasing importance of diagnostics in emerging markets.
Asian markets grew the most, while sales in the Americas, Europe and the Middle East remained “somewhat flattish,” said Siemens CEO Joe Kaeser on the Q4 2016 call.
For the future, the company expected to benefit from growing and aging populations, as well as broader access to healthcare, but noted that growth might be curbed by “public spending constraints” and hospital consolidation.
As a result of its separate status, Healthineers has “gone from good to great,” Kaeser said. At the end of 2016, Siemens said it planned to publicly list Healthineers. But in March 2017, Kaeser said that the company plans to keep a majority stake after a spinoff or IPO. And, in May, it hinted it might go public via a reverse merger instead.
** Used the 2016 average exchange rate of Euro € (million) / US $ (million) – 1.106/1