Executives from Siemens Healthineers (ETR:SHL) highlighted what they called a “very solid start” to fiscal 2026 in a podcast-style recap of the company’s Q1 2026 reporting and a subsequent virtual roadshow. Management emphasized strength in the company’s “synergistic core” of Imaging and Precision Therapy, while acknowledging continued pressure in Diagnostics tied largely to market changes in China.
Q1 performance: core businesses grow; group margin holds steady
Bernd said the quarter’s “big highlight” was the 6% revenue growth in Imaging and Precision Therapy, coupled with “very, very good” margins in both businesses. Despite headwinds from tariffs and foreign exchange, Siemens Healthineers reported an unchanged company EBIT margin of 15% versus the prior-year quarter, according to management’s comments.
Diagnostics: China-related structural changes weigh on revenue and margin
Management said Diagnostics remained impacted by structural changes in China. In the quarter, Diagnostics revenue declined 3.1%, and the segment’s margin was 2.1%. Jochen said investors focused heavily on Diagnostics during the roadshow, seeking clarity on what drove the weakness and why the impact was larger than expected.
Executives cited several contributors:
- Market changes in China, including volume-based procurement and reimbursement reductions.
- A short-term unfavorable instrument/reagent mix, described as beneficial in the mid-to-long term but a near-term margin drag.
- Order patterns from partners: a large distribution partner in China ordered relatively low volumes, and an OEM partner in the special lab solutions business ordered “far below” expectations, with management saying a catch-up is not expected because orders were higher in the prior year.
Looking ahead, management said it is “more confident about the second half” for Diagnostics. Executives pointed to lapping the OEM volume shortfall that affected Q1 and Q2, expected benefits from “volume conversion in the core lab” with the Atellica franchise, and additional cost reductions tied to the ongoing transformation program. Examples cited included further platform consolidation, additional savings in in-service, and incremental benefits from site consolidation measures implemented last fiscal year.
Strategic posture for Diagnostics and potential next steps
Executives addressed questions about whether the weak Diagnostics quarter could limit strategic flexibility. Management said it had anticipated a period of roughly “give or take, 6 quarters” during which China’s purchasing schemes and reimbursement changes would pressure Diagnostics’ top line, though Q1 was “definitely more than expected.” Still, management said the situation is not changing how the company thinks about Diagnostics and does not put the transformation program in question.
Bernd said the team has progressed to “almost 70%” of core lab revenues based on Atellica, noted strong instrument deliveries in the quarter, and cited winning a “big deal in Brazil” with one of the company’s biggest customers worldwide. He added that Siemens Healthineers views synergies between Diagnostics and the rest of the portfolio as “very limited,” which is why the segment has its own structure and strategy. Management also said it is “very likely” the company will inform investors about further steps regarding Diagnostics “within this year,” without providing additional detail.
Imaging and Precision Therapy: growth drivers, margin context, and Q2 setup
Management repeatedly emphasized that Diagnostics represents about 20% of group revenue, while the remaining 80% performed well and “was actually outperforming expectations” in Q1. In Imaging, executives highlighted photon-counting CT and the radiopharmaceuticals business (formerly PETNET) as ongoing growth drivers. They reiterated prior commentary around reaching about $1 billion of radiopharmaceuticals revenue this year in dollars, while noting that in euros the figure could be “slightly shy” of that level.
Bernd also discussed Imaging margin dynamics, noting Q1 in prior years was not especially strong and that the quarter included a negative one-time item of about 50 basis points. He said that excluding special items as well as roughly 200 basis points of headwinds from tariffs and foreign exchange, Imaging saw operational margin expansion of about 100 basis points or more. On PETNET specifically, he said the business has a lower gross margin because Siemens Healthineers pays licenses and does not own the IP, but it is “almost an OpEx-free business,” making profit margin broadly comparable with Imaging margins overall.
In Precision Therapy, management said the business grew nearly 6% on tougher comparisons. Varian delivered 9% growth and profitability “above 19%,” with some benefit from a special item; without it, management said profitability was around 18%. Advanced Therapies (AT) had a “softer start,” which executives linked to lower fixed-cost absorption and weaker margin conversion.
For Q2, Jochen said Siemens Healthineers expects group revenue growth to be below the 5%–6% range assumed for the full fiscal year. Diagnostics is expected to face continued “material market challenges” in China, with a revenue decline in Q2 that management expects to be “even more pronounced” than in Q1 due to a strong prior-year comparison. Diagnostics margins are expected to improve slightly on a better instrument/reagent mix. Imaging and Precision Therapy growth is expected to align with full-year assumptions (mid-single-digit to mid-to-high-single-digit), while tariffs and foreign exchange are expected to pressure margins versus the prior-year quarter across all segments. Management also noted last year’s Q2 Imaging margin was unusually high due to a positive one-off, and said it expects Q4 to be the strongest Imaging margin quarter this year, alongside sequentially higher Imaging revenues through the year.
Visibility, product launch timing, AI positioning, and spin preparation
Management said it confirmed it is “well on track” for full-year guidance, citing strong orders and visibility. Executives pointed to the equipment book-to-bill of 1.12 and a “very strong order book,” adding that service—described as primarily contracted—accounts for around 40% of Imaging and Precision Therapy revenue. They also said procedure-based businesses continue to show strong momentum and that they expect regional revenue momentum to improve in the second half, with continued strength in the U.S., EMEA growth picking up after stabilizing at high levels, and APJ growth improving as comparisons ease.
On innovation, Bernd said Varian’s next-generation high-end system (a new LINAC) remains on track for a 2026 launch, with “extremely positive” feedback from early collaboration customers. He said the product builds on the TrueBeam installed base and could enable new treatment approaches, including for patients with multiple metastases who previously could not be treated with radiation oncology. Management said the launch is expected at ASTRO in late September, rather than at ASCO.
Executives also described AI as both an enhancer of existing systems and a way to expand the addressable market. Bernd highlighted Deep Resolve in MRI and an “OPTIQ AI” denoising feature in the new AT portfolio as examples intended to improve image quality and enable lower-dose imaging. He also said AI could increasingly support areas traditionally dependent on human labor at customer sites, such as treatment planning and image interpretation.
Finally, management addressed questions about the timing of a potential spin, noting Siemens AG is “in the driver’s seat” and that the company could only reference public comments. Executives said plans are on track with continued uncertainty on timing, and that Siemens has pointed to calendar Q2 for more clarity. Siemens Healthineers said it is preparing for a “fast track,” which could involve a spin happening “earliest somewhere in October,” and plans to ramp up investor relations activity, conduct detailed investor targeting, and work with two major global investment banks supporting the process.
About Siemens Healthineers (ETR:SHL)
Siemens Healthineers AG, through its subsidiaries, develops, manufactures, and sells a range of diagnostic and therapeutic products and services to healthcare providers worldwide. It operates through four segments: Imaging, Diagnostics, Varian, and Advanced Therapies. The Imaging segment provides magnetic resonance imaging, computed tomography, X-ray systems, molecular imaging, and ultrasound systems. Its Diagnostics segment offers in-vitro diagnostic products and services to healthcare providers in laboratory and point-of-care diagnostics; and workflow solutions for laboratories and informatics products.
