Siemens lifts growth targets, will cut stake in MRI maker
The company will hand a 30% stake in its former medical equipment unit to its own shareholders
[FRANKFURT] Siemens set new near and medium-term financial targets, amid a revamp that includes trimming its stake in Siemens Healthineers, to fund investments in software and artificial intelligence (AI).
The German industrial company raised its outlook late on Wednesday (Nov 12), announcing a plan to hand a 30 per cent stake, valued at roughly 15 billion euros (S$22.63 billion), in its former medical equipment unit to its own shareholders.
The move to reduce its majority holding will help free Siemens up to look for more acquisitions.
“Siemens is poised to capitalise on opportunities in its addressed markets, and is actively looking to further expand them,” it said on Thursday.
For the upcoming fiscal year, Siemens expects comparable revenue growth in the range of 6 to 8 per cent, though negative currency effects will be a heavy burden on growth rates, as well as profit, it said on Thursday.
Revenues rose 5 per cent in FY 2025, with Siemens lifting its dividend to 5.35 euros a share.
Siemens has whittled down holdings in its energy and medical businesses, to become less complex and expand in high-margin areas such as software and AI.
While the conglomerate spun off Healthineers in 2018 by listing it in Frankfurt, it has sold only smaller parcels of shares so far.
Higher margins
Chief executive officer of Siemens, Roland Busch, has been shifting the German industrial stalwart to software-driven product lines that generate higher margins.
On Wednesday, he said the company was looking for “targets in the digital space, software or hardware that generates data”, citing further acquisitions in the range of its US$5.1 billion Dotmatics deal.
Investors will look for more details later on Thursday, during Siemens’ strategy day.
For the medium term, the company raised its mid-term revenue growth ambition to a range of 6 to 9 per cent.
This includes growing its digital business by 15 per cent on average annually from current levels.
Sales have been subdued, and margins have shrunk in its factory automation division, with customers in China holding back on buying its devices and software.
For FY 2026, Siemens expects the unit’s comparable revenue to rise by as much as 10 per cent, with a profit margin of up to 19 per cent. That is on par with its Smart Infrastructure units making technology for buildings.
On Siemens Healthineers, analysts have long criticised the high amount of capital locked in the stake, as well as the lack of synergies between Healthineers and Siemens, which makes products including trains and software for factory automation.
The deconsolidation was “a logical step to simplify the group”, analysts from investment banking and capital markets firm Jefferies, led by Rizk Maidi, said in a note.
The so-called direct spinoff of the maker of MRI scanners and lab-testing devices, set to take place in the second quarter of 2027 at the latest, still requires approvals and a shareholder vote. The plan will reduce Siemens’ stake to below 40 per cent.
In the medium term, Siemens targets to reduce the shareholding to a financial asset, aiming for a less than 20 per cent stake in Healthineers, Busch said.
The company also confirmed that it is committed to paying out progressively higher dividends in the future. BLOOMBERG
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