Siemens Healthineers : Presentation 'J.P. Morgan Healthcare Conference' () 1.36 MB

J.P. Morgan

Healthcare Conference

Siemens Healthineers AG

Dr. Bernd Montag, CEO

Jan 13, 2021

Unrestricted © Siemens Healthineers, 2020

Frei verwendbar

Safe Harbour Statement

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 held or accessing this presentation, you agree to be bound by the following limitations.

This presentation has been prepared for information purposes only and the information contained herein (unless otherwise indicated) has been provided by Siemens Healthineers AG. It does not constitute or form part of, and should not be construed as, an offer of, a solicitation of an offer to buy, or an invitation to subscribe for, underwrite or otherwise acquire, any securities of Siemens Healthineers AG or any existing or future member of the Siemens Healthineers Group (the "Group") or Siemens AG, nor should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities of Siemens Healthineers AG, any member of the Group or Siemens AG or with any other contract or commitment whatsoever. This presentation does not constitute a prospectus in whole or in part, and any decision to invest in securities should be made solely on the basis of the information to be contained in a prospectus and on an independent analysis of the information contained therein.

Any assumptions, views or opinions (including statements, projections, forecasts or other forward-looking statements) contained in this presentation represent the assumptions, views or opinions of Siemens Healthineers AG, unless otherwise indicated, as of the date indicated and are subject to change without notice.

Siemens Healthineers neither intends, nor assumes any obligation, unless required by law, to update or revise these assumptions, views or opinions in light of developments which differ from those anticipated.

All information not separately sourced is from internal company data and estimates. Any data relating to past performance contained herein is no indication as to future performance. The information in this presentation is not intended to predict actual results, and no assurances are given with respect thereto.

The information contained in this presentation has not been independently verified, and no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information contained herein and no reliance should be placed on it. None of Siemens Healthineers AG or any of its affiliates, advisers, affiliated persons or any other person accept any liability for any loss howsoever arising (in negligence or otherwise), directly or indirectly, from this presentation or its contents or otherwise arising in connection with this presentation. This shall not, however, restrict or exclude or limit any duty or liability to a person under any applicable law or regulation of any jurisdiction which may not lawfully be disclaimed (including in relation to fraudulent misrepresentation).

This document contains statements related to our future business and financial performance and future events or developments involving Siemens Healthineers that may constitute forward-looking statements. These statements may be identified by words such as "expect", "forecast", "anticipate", "intend", "plan", "believe", "seek", "estimate", "will", "target" or words of similar meaning. We may also make forward-looking statements in other reports, in presentations, in material delivered to shareholders and in press releases. In addition, our representatives may from time to time make oral forward-looking statements. Such statements are based on the current expectations and certain assumptions of Siemens Healthineers' management, of which many are beyond Siemens Healthineers' control. As they relate to future events or developments, these statements are subject to a number of risks, uncertainties and factors, including, but not limited to those described in the respective disclosures. Should one or more of these risks, uncertainties or factors materialize, or should underlying expectations not occur or assumptions prove incorrect, actual results, performance or achievements of Siemens Healthineers may (negatively or positively) vary materially from those described explicitly or implicitly in the relevant forward-looking statement.

This document includes - in the applicable financial reporting framework not clearly defined - supplemental financial measures (financial key performance indicators) that are or may be alternative performance measures (non-GAAP measures). These supplemental financial measures may have limitations as analytical tools and should not be viewed in isolation or as alternatives to measures of Siemens Healthineers' net assets and financial positions or results of operations as presented in accordance with the applicable financial reporting framework in its half-year consolidated financial statements and consolidated financial statements. Other companies that report or describe similarly titled alternative performance measures may calculate them differently, which may therefore not be comparable.

Please find further explanations regarding our financial key performance indicators in chapter "A.2 Financial performance sys tem" and in the notes to the consolidated financial statements note 29 "Segment information" in the Annual Report 2019 of Siemens Healthineers. Additional information is also included in the Quarterly Statement. These documents can be found under the following internet linkhttps://www.corporate.siemens-healthineers.com/investor-relations/presentations-financial-publications. As of beginning of fiscal year 2020, Siemens Healthineers applies the accounting standard IFRS 16, Leases. Comparative figures for the preceding fiscal year were not adjusted. Instead, the overall insignificant transition effects were recognized in equity as of October 1, 2019.

Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures to which they refer. Due to technical reasons, there may be discrepancies in formatting of the accounting data included in this document and made publicly available according to applicable legal rules.

The information contained in this presentation is provided as of the date of this presentation and is subject to change without notice.

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Unrestricted © Siemens Healthineers, 2020

Four important pillars to create shareholder value

1	2	3
Attractive structural	Sector leading margins	Expanding portfolio
and innovation	with further upside	into adjacent growth
driven growth		markets

4

Resilient performance at all times

• Leading positions in attractive, structurally growing end- markets
• Consistent roll-outof

• Scope for further expansion of our sector leading margins in Imaging and Advanced
  Therapies

• Varian: New level of profitable growth; become even more holistic partner for the entire customer spectrum

• High share of recurring

revenues from reagents in

Diagnostics and our service

business in Imaging and

innovative technologies	• On track to drive higher	• Corindus: Continued market
and products to strengthen our	growth and better margins	creation in a tough environ-
market leading positions	in our Diagnostics business	ment reinforcing our value
• Benefitting from growing		proposition
importance of holistic
partnerships and increasing
shift to c-level decision taking

Advanced Therapies

• Regional diversification and

significantly increasing order

backlog from Value Partnerships

further increase resilience in our

business

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Unrestricted © Siemens Healthineers, 2020

Healthcare trends unchanged …

… and with them our growth drivers

Ideal portfolio to enable healthcare providers to address challenges

Healthcare trends	Procedure growth	Transforming providers
Demographic shift	+8% in lung cancer1	Managing health
Population growth		Staff shortage
Increase in chronic diseases	+20% in stroke1	Increasing cost pressure
Growing access in emerging	+10% in percutaneous	Value-based reimbursement
countries	Industrialization
coronary interventions2
	Consolidation
	Growth of Siemens Healthineers
Value Added Services,		Advanced	Cancer
Software & Digital	Imaging Diagnostics
Therapies	Care
Offerings
Diagnosis	Therapy

1 CAGR 2013-2024: DRG Medtech 360 report 2018, Canaccord Genuity Analyst Report (May 2019)	4
2 Global Data 2018, own extrapolation	Unrestricted © Siemens Healthineers, 2020

Three globally leading businesses create unique value for our customers and allow for operational synergies

Total1)

Revenue

€14.5bn

Adj. EBIT

€2.2bn

Margin

15.4%

Total FTEs

~53,000

Imaging

Diagnostics

Advanced Therapies

Global Position2)

Financials Business Areas1)

Recurring revenue3)

Portfolio

1

2

1

Revenue

Adj. EBIT

Margin

Revenue

Adj. EBIT

Margin

Revenue

Adj. Profit

Margin

€9.1bn

€1.9bn

21%

€3.9bn

€0.1bn

2%

€1.6bn

€0.3bn

18%

~40%

~90%+

~40%

•

•

Computed tomography

Clinical chemistry,

•

Angio systems

•

Magnetic resonance

Immunoassay

•

•

Mobile C-arms

•

Molecular imaging

Hemostasis,

hematology

•

Hybrid ORs

•

X-ray products

•

Blood gas, urinalysis

•

Imaging for radiation

•

syngo software

•

Molecular virology and

oncology

•

Ultrasound

liquid biopsy

•

Endovascular Robotics

•

Automation and IT

Customer Services: world-class service

organization (onsite and online)

~15,000

Service FTEs (Group)

Enterprise Services: long-term partnerships

to improve performance

~€2.7bn

Contract backlog4)

1) Refers to FY 2020. Revenue incl. intersegment sales. Profit adjusted for severance and IPO. 2) Based on FY16 equipment orders. 3) Refers to FY2018. Recurring revenue	5
includes services, reagents and consumables; non-recurring revenue includes equipment and instruments. 4) As of Sep 2020	Unrestricted © Siemens Healthineers, 2020

Value Partnerships: Capitalizing on the depth and breadth of our portfolio and unique C-level access

Significant increase in

Value Partnerships to ~€1 bn in FY2020

• Creating high visibility of revenues

over multiple years

• AI, digitalization and consulting increasingly important elements of these partnerships

• Attractive multi-year service contracts for equipment

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Unrestricted © Siemens Healthineers, 2020

Innovation engine runs at full speed - despite the pandemic

RSNA 2020

Imaging	Diagnostics	Advanced Therapies
Digital	Workflow	Procedures
Continuously innovating and making	Path to market growth and expanding	Transforming to new levels of
new markets	workflow leadership	profitable growth

• Breaking barriers in MR: Scanner with	• CLINITEST® Rapid COVID-19 Antigen Test2:	• ARTIS icono: Successful launch, strong
unique compact system design	High quality test with only 15min to results	market acceptance and excellent
• Enterprise Imaging: Transforming reading &	• Atellica designed for lower volume labs:	clinical and operational feedback
reporting - driving efficiency via data	Integrated chemistry and IA analyzer	• Corindus: Development to
integration into one enterprise IM solution	• ELF Test2: Noninvasive blood test that	combine endovascular robotics
• CT Photon Counting1: Helps to provide higher	measures three direct markers of liver fibrosis	with imaging
clinical value & reduced radiation dose;
Clinical evaluation phase with selected
customers about to start FY21

Our priorities

1 This product is under development; it is not for sale in the U.S.A. and not commercially available in all countries. Its future availability cannot be	7
guaranteed | 2 Product availability varies by country	Unrestricted © Siemens Healthineers, 2020

MAGNETOM Free.Max - Breaking Barriers in MRI

• Leveraging digitalization: high-quality MR exams regardless of operator's skill level with myExam Companion
• Making access affordable: minimal siting requirements;

virtually helium-free

The product is still under development and not yet commercially available.

• World's Itsfirstfuture availability80cmcannotborebe guaranteed- new. paradigm in patient

comfort

• Creating access to new markets for MRI e.g. urgent care centers, orthopedics or ICU

Breaking Barriers for MRI in affordability, in addressing new clinical fields and bringing it to spaces where it has never been before

MAGNETOM Free.Max

New launch

The product is still under development and not yet commercially available.	8
Its future availability cannot be guaranteed.	Unrestricted © Siemens Healthineers, 2020

Syngo Carbon

The connecting element that gives rise to knowledge

• Transforming reading and reporting - integration from acquisition to final reporting over the entire radiology workflow
• Driving efficiencyThe product is still underviadevelopmentdataandintegrationot yet commercially availableinto. one enterprise

Its future availability cannot be guaranteed.

imaging solution

• Upgrading potential for >20k syngo sites worldwide

Syngo Carbon

New launch

Scalable deployment and consolidation of IT assets with recurring business streams

The product is still under development and not yet commercially available.	9
Its future availability cannot be guaranteed.	Unrestricted © Siemens Healthineers, 2020

Photon Counting - A quantum leap in innovation

						The future of Intelligent Imaging
Photon Counting
Future	for Computed Tomography
						• Significantly more details with ultra-highspatial
				yet4 mm Stent	resolution (2x higher compared to current technology)1
			development and not
				commercially available. Its future availability cannot be guaranteed.
		bench tests in our own lab; data on file.	• Drastically lower patient dose, up to 50% less1
						• Providing multi-energy information with every scan
				Current	• Clinical evaluation phase with luminary customers to be
				started in FY21
				Technology
					Today

Photon

Counting CT

					Tomorrow
The product is still under development and not yet commercially available. Its future availability cannot be guaranteed.				10
1 Results are based on bench tests in our own lab; data on file.			Unrestricted © Siemens Healthineers, 2020

Establishing the foundation to advance stroke treatment

20%	Only 10%
Procedure growth1	of thrombectomy eligible population in
	the US receive mechanical thrombectomy2

FY19	FY20	FY21	FY21
First in-human remote	First transcontinental remote	First clinical trial on	Begin of integrated
clinical case3,4	simulated cases5	robotic neuro	development, e.g., joint
		procedures	user interface, guidance
			and tracking features

Boston

3,087 miles

San Francisco

FY22

Initiate first

REMOTE ROBOTIC CLINICAL TRIALS3

SpokesSpokes

Hub

1 CAGR 2013-2024: DRG Medtech 360 report 2018, Canaccord Genuity Analyst Report (May 2019) | 2 In the US, Rai AT, et al., J Neurointervent Surg (9) 2017 | 3	11
Based on CorPath GRX for PCI procedures | 4 www.thelancet.com/journals/eclinm/article/PIIS2589-5370(19)30137-3/fulltext | 5 Madder R., et al. Catheter	Unrestricted © Siemens Healthineers, 2020
Cardiovasc Interv., 2020; Image: Courtesy of Jan Gralla, MD, Pasqulae Mordasini, MD, Department of Neuroradiology, Inselspital, Bern, Switzerland

COVID-19 impacted performance - improvement expected in FY21

Delivering on the promise of Atellica

						Development of adjusted EBIT
						margin (illustrative)
FY19	Volume	COVID-19	Atellica	Other	FY20	FY21

COV2T antibody test1

COV2 Rapid Antigen Test2

SARS-CoV-2RT-PCR1

Performance in FY20 significantly impacted by COVID

• Severe decline in routine care testing, partial recovery in Q4
• Continued "investment" in service and maturing Atellica systems: foundational to margin improvement in FY21, high seeding rates for Atellica instruments

Outlook FY21: improvement expected in both top and bottom line

• Routine care recovers but remains below 2019 levels
• Good progress in maturing of
  Atellica platform
• Improved factory utilization
• Strengthened leadership team

We reacted adeptly to the crisis

• Robust portfolio of COVID tests → high quality COVID-19antibody test
• Positioned to substantially participate if uptake of antibody testing materializes
• Potential upside with lateral flow antigen; lab based antigen testing Q2/Q3

1 This test has not been FDA cleared or approved. This test has been authorized by FDA under an EUA for use by authorized laboratories. |	12
2 Not available for sale in the U.S. Product availability may vary from country to country and is subject to varying regulatory requirements.	Unrestricted © Siemens Healthineers, 2020

Resilient performance at all times

Regional - Diversification as stabilizing factor

• Business in Europe and China grew mid-single digit in FY20 counterbalancing temporary weakness in Americas due to COVID-19
• Emerging markets gaining importance with attractive market growth rates

Reagents - High recurring revenues

• Reagents account for a ~90% of revenues in Diagnostics with long contract duration of 5 - 7 years
• Quick response to COVID-19 related market
  needs by launching new tests (SARS-CoV-2 antibody, PCR, antigen) and expanding our test menu

Value Partnerships - Significant contribution in 2020

• Significantly increased order backlog from Value Partnerships creates high visibility of revenues over multiple years
• Ideally positioned as partner of the consolidators

Service - Growth in every single quarter 2020

• Steady Service revenue growth throughout the COVID-19pandemic enabled by remote operations and digitalization
• Multi-yearservice contracts for equipment, driven by underlying installed base growth

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Unrestricted © Siemens Healthineers, 2020

Outlook for FY2021 (ex Varian)

Comparable revenue growth1,3		Adj. basic EPS2,3 (€)

5 - 8%

0%

2020

2021E

• Growth in FY21 subject to both recovery and opportunities
• Imaging returning to growth at or above 5%
• Diagnostics ranging from mid-single digit up to high-single digit growth, upside potential from further COVID-19 opportunities
• Advanced Therapies returning to growth at or above 5%

Comp.4 adj. EPS growth: +10 to +18%

	1.61		1.58 to 1.72

2020

2021E

• Adj. EBIT margin2 for the group to improve >100 bps y-o-y
• • Imaging margin to improve ~100 bps y-o-y
  • Diagnostics margin to recover to >5%, further margin expansion from additional COVID-19 opportunities possible, e.g. Antigen testing
  • Advanced Therapies to keep industry leading margins
• Financial income net expected at €-60 to €-80 mio.
• Tax rate expected at 27% to 29%

1 Y-o-y on a comparable basis, excluding currency translation and portfolio effects | 2 Adjusted for expenses for mergers, acquisitions, disposals and other portfolio-related measures, and severance charges, for EPS net of tax and calculated for FY2020 with 1,002 and for FY2021 with 1,074 av. shares outstanding |

3 The outlook is based on certain assumptions for business environment, on current FX assumptions, on the current portfolio, excludes charges related to legal and regulatory matters and material changes from SAG share plans (see quarterly statement Q4) | 4 excluding y-o-y effects from FX and from share count dilution

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Unrestricted © Siemens Healthineers, 2020

Underlying ambition unchanged

Comparable revenue growth		Adj. EPS growth

>5% p.a.

~10% p.a.

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Unrestricted © Siemens Healthineers, 2020

Acquisition of Varian is the logical step in upgrading to the next level: One step - Two leaps

A leap in cancer care

• Most comprehensive portfolio along the complete cancer pathway
• Accelerated digital AND AI-enriched offerings enabling precision medicine
• Access to significantly broader sales, service, R&D and production network

A leap in impact

• Moving our value partnership approach to the next level
• Holistic partner for the entire customer spectrum
• Most comprehensive portfolio for all major diseases
• Further improved scale in sales, service, R&D and production network

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Unrestricted © Siemens Healthineers, 2020

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Unrestricted © Siemens Healthineers, 2020