Siemens Healthineers starts carve-out of diagnostics business

Siemens Healthineers Begins Carve-Out of Diagnostics Business, Targets 2028 Completion

Siemens Healthineers' Diagnostics Business Separation and Future Plans

By Kira Britten and Paolo Laudani

Initiation of Carve-Out and Rebranding

Nov 5 - German medical technology company Siemens Healthineers said on Thursday it had begun carving out its diagnostics business, which it plans to rebrand as Olyrian Diagnostics ahead of a future divestment.

The company said the separation process had started and was expected to be completed by mid-2028.

Timeline and Strategic Outlook

Siemens Healthineers had previously said the separation could take around two years and indicated the business might no longer form part of the group by 2030.

Financial Performance and Transformation Goals

Transformation Programme and Margin Targets

In a call with analysts, chief financial officer Jochen Schmitz said the diagnostics unit would continue its transformation programme with the aim of achieving mid-teens margins over the medium term.

Recent Financial Results

The unit reported an adjusted EBIT margin of 5.4% in the fourth quarter.

Cost Savings and Margin Ambitions

Schmitz said the business was targeting an additional €400 million ($450 million) of savings while maintaining its medium-term margin ambitions.

Challenges and Long-Term Benefits

Schmitz added that the planned separation of diagnostics and spin-off from Siemens would create short-term challenges through carve-out and stranded costs, but it would support a more focused business over the longer term.

Role of Olyrian Diagnostics During Transition

Operational Scale and Workforce Impact

Olyrian Diagnostics will remain part of Siemens Healthineers during the transition period. The business produces more than 16 billion diagnostic tests annually. It also accounts for approximately 20% of Healthineers' workforce and generates 17% of its total revenue.

Branding and Positioning Strategy

The company, which is renaming itself "Healthineers," said a separate name and brand would help position the unit as a standalone business during the transition.

Additional Information

($1 = 0.8880 euros)

(Reporting by Kira Britten and Paolo Laudani in Gdansk; Editing by Matt Scuffham)