Siemens Healthineers Touts Photon-Counting CT, PETNET Growth as Tariffs and China Pressure Build

Executives from Siemens Healthineers (ETR:SHL) used a J.P. Morgan-hosted event in London to outline the company’s market positioning, innovation priorities, and financial framework, while also addressing China demand, tariff headwinds, and the evolving role of its diagnostics business.

Positioning as an imaging and precision therapy leader

CEO Dr. Bernd Montag described the company as a “clear market leader and compounder,” emphasizing leadership positions in imaging and precision therapy and a customer footprint concentrated among major institutions. Montag said Siemens Healthineers is present in 70 countries, with an installed base of roughly 700,000 systems and around 3 billion patient touchpoints annually.

Montag highlighted a focus on non-communicable diseases such as cancer and cardiovascular disease, arguing that the future of care requires earlier detection and “personalization at scale.” He framed Siemens Healthineers’ strategy around two pillars—patient imaging and precision therapy—supported by healthcare AI to automate and optimize workflows from scan acquisition through reporting and treatment planning.

R&D investment and “physical AI” emphasis

R&D was repeatedly characterized as central to the company’s approach. Montag said Siemens Healthineers invests about €2 billion in R&D and employs 13,000 R&D staff, describing the company as a leader in AI for its field. He also referenced “physical AI,” describing AI algorithms tightly integrated with hardware to accelerate image acquisition and improve image quality.

He also pointed to customer engagement via more than 200 value partnerships and cited an order backlog of €6 billion from large arrangements.

Product highlights: Photon-counting CT, PETNET, and pipeline commentary

In imaging, Montag cited strength in MRI and said the company is rolling out Dry Cool technology. He also said Siemens Healthineers is expanding in mammography and sees growth in molecular imaging driven by theranostics and Alzheimer’s-related applications.

Montag said the company’s radiopharmaceutical distribution business, PETNET, could reach €1 billion in revenue, potentially as soon as this year. CFO Jochen Schmitz later referenced PETNET as part of a growing procedure-based revenue stream and said the company’s interventional oncology business contributes to procedure-based revenues, which he said are now above €1 billion.

Photon-counting CT was positioned as a flagship innovation. In the Q&A, management provided specific figures on adoption, saying cumulative equipment orders are €1.7 billion. They added that roughly half of that total came in the last fiscal year, with around €500 million in equipment orders and roughly €350 million in equipment revenue in that period. Management said photon-counting CT represented roughly 30% of the company’s CT equipment business and was associated with high-margin equipment and “great service contracts.” Montag also said there are close to 1,000 peer-reviewed publications discussing the clinical impact of the technology.

Within precision therapy, Montag highlighted a newly launched angiography portfolio featuring real-time AI denoising, aimed at providing clearer images or maintaining image quality at lower dose. He also previewed what he described as a potential “breakthrough” in radiation oncology expected to be discussed at ASTRO in September, calling it a new treatment device or “almost” a new kind of therapy, while stressing it was framed as a “rumor” previously referenced at the company’s Capital Markets Day.

Financial framework: recurring revenue, cash conversion, and capital allocation

Schmitz outlined what he called a plan to be a “reliable revenue earnings and cash compounder,” supported by ESG principles. On recurring revenue, he said diagnostics has a recurring revenue share of 90%, while imaging and precision therapy each generate about 50% of revenue from recurring streams, primarily service and long-term contracts, with procedure-based revenues growing.

Schmitz said the company targets R&D spending of 8%-9% annually (again described as more than €2 billion) and expects SG&A to remain in a 15%-17% range over the next five years (currently about 17%), while continuing to seek productivity improvements. He said Siemens Healthineers generates a 0.8-0.9 cash conversion rate annually and committed to that range for the next five years, noting diagnostics has become a cash conversion contributor over time.

On capital allocation, Schmitz said the company intends to maintain a stable and growing dividend policy, and—given changes in shareholder structure—will consider share buybacks if they make sense. He also discussed deleveraging following the Varian acquisition, stating net debt to EBITDA has fallen from about 4x to 2.8x, with a commitment to reach 2.5x over the next 24 months. He noted an A-category rating from Moody’s and said the company is not planning a major acquisition in the near term, but will consider “meaningful tuck-in acquisitions” if they create shareholder value.

Guidance, tariffs, and China commentary

For the fiscal year, Schmitz said Siemens Healthineers expects 5%-6% revenue growth, assuming no tailwind from China, and guided to adjusted EPS of €2.20 to €2.40. He said the midpoint is below the prior year due to foreign exchange headwinds from a strong euro of about €0.15 and tariff headwinds of about €0.15, for a combined €0.30 impact. He said underlying EPS improvement would be in the double-digit range despite not expecting to offset the full headwind this year.

Schmitz described 2026 as a “year of transition” for EPS and said the company commits to returning to double-digit EPS growth starting in 2027. He outlined a plan to mitigate tariff impacts by 2028, targeting a total offset of a €400 million tariff headwind through a combination of an additional productivity program (intended to cover half) and “market adaptive and smart pricing” to add €200 million of profit.

In the Q&A, management said shifting value-add or manufacturing is complex and competency-driven, though they indicated they have plans and could execute changes if necessary, including a potential shift to the U.S. among other options.

On China, Montag said the company has grown globally without China contributing meaningfully in recent years, adding that over the last two years the company grew around 6% and delivered double-digit EPS growth despite China and diagnostics not contributing. For the current year, the company is assuming flat development in China. For its midterm outlook, management said it has baked in an assumption of 5% growth in China for both the market and Siemens Healthineers, describing expectations for a return to growth but not to prior historical levels. Montag added that in China the goal is to grow with the market and defend its position.

Schmitz also warned of a “slightly weaker start” to the fiscal year, citing diagnostics headwinds in China tied to volume-based procurement, which he said is primarily price-driven and therefore flows “one-to-one” into the P&L. He also noted a softer start in the more “lumpy” advanced therapies business, while describing imaging and Varian as expected to have a normal start.

Management also addressed imaging guidance after an 8.5% growth year, characterizing the current mid-single-digit outlook as prudent rather than a change in underlying dynamics.

Finally, Montag reiterated that diagnostics has limited synergies with the rest of the portfolio and is operationally more independent, with its own sales force and service structure. He said “conglomerate” structure is not the company’s goal and suggested that whether diagnostics should remain under the same roof long term is a legitimate question, while noting that the business currently does not operate with separate legal entities or separate IT.

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.