Life Sciences Insight

Siemens posts record year on the back of Varian acquisition, COVID antigen test sales

In the five-and-a-half months following the closure of Siemens Healthineers’ massive deal to absorb the radiation cancer therapy provider Varian Medical Systems, the acquisition has added more than a billion euros to the company’s bottom line.

Joined by another €1.1 billion in annual COVID-19 rapid antigen test sales, or about $1.27 billion, the company posted record revenues of nearly €18 billion for its 2021 fiscal year, which wrapped up at the end of September.

Outside of pandemic-related diagnostic sales, Siemens posted growth of 11.8% compared to the year before, driven by expansions in its core testing, imaging and advanced therapy segments.

“We demonstrated an agile and prudent response to the pandemic. As a result, we were able to gain further market shares,” CEO Bernd Montag said in a statement.

For the 2022 fiscal year, the company expects to see comparable revenue growth between 0% and 2%. However, that includes a projected shrinking of COVID antigen test demand, down to about €200 million in sales. With those numbers removed from the equation, Siemens hopes to see its growth rate stretch out to 5% to 7% across its base businesses.

Varian’s revenues, meanwhile, are expected to produce growth in the low teens compared to the latter half of this past fiscal year and weigh in at about €3 billion, or about $3.4 billion.

“Together with our colleagues from Varian, we have defined our strategic priorities for the coming years,” Montag said. “We start the new fiscal year as an even more holistic and relevant healthcare company with a record order backlog, and we expect to continue our strong business development.”

The mid-pandemic $16.4 billion acquisition of Varian’s radiotherapy hardware and software offerings was designed to transform Siemens’ cancer care portfolio into a platform encompassing patient screening, diagnosis, treatment delivery and recovery.

That includes the addition of Varian’s linear accelerators, radiosurgery devices and proton therapy suites to Siemens’ various imaging systems, lab diagnostics and hospital consulting services as well as the combination of Varian’s analytics software with Siemens’ healthcare IT offerings. The deal serves as a pillar in Siemens’ “Strategy 2025” scheme, which is slated to produce nearly $360 million in cost cuts annually before the end of that fiscal year.

For the fourth quarter of the companies’ 2021 fiscal year, Varian contributed €709 million, or about $818 million, with about half coming from the Americas and about €1.3 billion in total since the acquisition deal closed on April 15. 

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