3. Siemens Healthcare
$16.7 Billion ($103B total)
KEY EXECUTIVES:
Peter Loscher, President & CEO, Siemens AG
Hermann Requardt, President & CEO, Siemens Healthcare
Michael Sen, CFO, Siemens Healthcare
Michael Reitermann, CEO, Siemens Healthcare, Diagnostics
Bernd Montag, CEO, Siemens Healthcare, Imaging &Therapy Systems
Norbert Gaus, CEO, Siemens Healthcare, Clinical Products
Barbara Kux, Head of Supply Chain Management & ChiefSustainability Officer
NO. OF EMPLOYEES: 49,000 (405,000)
GLOBAL HEADQUARTERS: Munich, Germany
Timing is everything is how the axiomatic saying goes. Well, the leadership of the Healthcare division of Siemens AG believes it. With the world population expected to grow 32 percent by 2050—close to 9 billion people—the healthcare industry, even considering the regulatory and financial challenges inherent in it, seems like a solid bet. Add to that increasing life expectancy and you’re bordering on a sure thing. They think they’re in the right place at the right time.
“All over the world, healthcare costs are already straining the financial resources of governments and insurance providers. In some industrialized countries, they now consume more than ten percent of gross national product—and the figure is rising,” said Peter Loscher, president and CEO of Siemens. “In the rapidly growing emerging and developing countries, healthcare quality is not improving as rapidly as inhabitants would like. That’s why our challenge now is to boost the efficiency and affordability of medical services while improving the quality of individual patient care.”
Within that challenge lies opportunity—for patients as well as Siemens’ bottom line.
For the company as a whole, it was a record year for profits. Net income for the fiscal year (ended Sept. 30), climbed 63 percent to approximately $5.5 billion on sales of roughly $103 billion. Growth picked up speed once again during the year. While declining in the first two quarters, new orders and revenue rebounded sharply in the second half of the year.
“We completed fiscal 2010 very successfully. Were coming out of the economic downturn with full momentum,” Loscher said. “Our growth is gaining speed. Operationally, we achieved record profit twice in a row. We expect to take this positive momentum into the next fiscal year. We have to keep winning, order by order.”
Loscher said that because his company’s products serve the “entire healthcare continuum from prevention, early detection and diagnosis to treatment and follow-up care” the company’s product lines are better bolstered against shifts that might affect other medtech firms. The company also spent a significant amount on new product research—approximately $1.5 billion in fiscal 2010 on R&D activities.
For fiscal 2010 Siemens’ healthcare unit reported sales of approximately $16.7 billion, an increase of 4 percent (in euros), and a profit of approximately $1 billion, thanks in part to a strong year in its imaging devices business. Profit for the healthcare unit dropped off 48 percent (in euros), which the company attributed to one-time “impairment charges” related to the diagnostics business. This impairment is being made in connection with a reevaluation of medium-term growth prospects and long-term market developments of the laboratory diagnostics business, the company said. Siemens acquired Bayer Diagnostics and Dade Behring in 2006 and 2007, respectively, merging them to create one of the world’s leading providers of laboratory diagnostics. By far, the largest single national market for Siemens Healthcare was the United States, accounting for 36 percent of Siemens Healthcare’s international revenue (42 percent overall for the Americas—approximately $2.1 billion in sales).
The laboratory diagnostics business has been under new management since May 1, 2010, when Michael Reitermann—previously responsible for sales and service for Siemens’ healthcare business in the United States—was appointed CEO of the diagnostics division.
“Our new management team is focusing its strategy on expanding the [diagnostic] division’s power of innovation—one of the traditional strengths of Siemens. This should enable the laboratory diagnostics business to achieve the targeted high level of performance,” said Hermann Requardt, president and CEO, Siemens Healthcare.
In October last year, the company reorganized the way it categorizes its healthcare holding. Following the reorganization, the sector comprises the three divisions: Imaging and Therapy Systems, Clinical Products and Diagnostics.
Notably in 2010, Siemens’ Mammomat Inspiration full-field digital mammography system became available in the United States. According to the company, the device combined digital screening and diagnostic mammography, stereotactic biopsy, and upgrade capability to future technologies all in one system. Siemens conducted customer workshops around the world, in which radiologists, radiology technologists and physicists contributed details and suggestions on their vision for a next generation digital mammography system.
In recognition of its achievement in imaging technology, global consulting company Frost & Sullivan awarded Siemens Healthcare its Award for Technology Leadership in the computed tomography imaging market. The award was based on industry analysis and cited Siemens’ history in dose reduction solutions as well as the company’s ongoing commitment to research and development.