Siemens Healthineers AG

Siemens Healthineers anticipates negative translational headwinds on Q4 FY2025 revenue and EBIT due to a roughly 6% USD devaluation, despite hedging. While Q4 is expected to be the strongest quarter in absolute terms, growth will be below the 6.8% achieved in the first nine months, attributed to active resource management rather than a business slowdown, with increasing tariff impacts weighing on segment margins. Looking ahead to FY2026, the company projects significant EPS headwinds totaling approximately EUR 0.30, primarily from an annualized EUR 400M-EUR 500M tariff impact (EUR 0.15 EPS), a weaker USD (EUR 0.10 EPS), and non-recurring financial income (EUR 0.05 EPS), which collectively represent 12%-13% of their past medium-term annual EPS growth ambition.

Analysis

Siemens Healthineers is signaling significant headwinds for Q4 FY2025 and, more critically, for fiscal year 2026. For the upcoming quarter, a roughly 6% devaluation of the U.S. dollar is expected to create a negative translational impact on both absolute revenue and EBIT, meaning reported growth will lag the comparable (ex-FX) rate. While management anticipates Q4 will be the strongest quarter of the year in absolute terms, growth is guided to be below the 6.8% rate achieved in the first nine months, a dynamic attributed to active resource management rather than a business slowdown. Segment margins are expected to be pressured by increasing tariffs, with Imaging's margin likely to be closer to Q3 levels and below the prior year's stellar Q4. Looking ahead, the company has pre-emptively guided for substantial FY2026 challenges, quantifying three distinct EPS headwinds that total approximately EUR 0.30. These include a EUR 0.15 impact from an annualized tariff burden of EUR 400-500 million, a EUR 0.10 impact from the weaker U.S. dollar, and a EUR 0.05 impact from non-recurring financial income. Critically, this EUR 0.30 drag is equivalent to 12-13% of EPS, effectively neutralizing the company's entire medium-term annual EPS growth ambition before accounting for any operational performance in the new fiscal year.

Key Decisions for Investors

• Investors should adjust Q4 FY2025 models for slower top-line growth compared to the first nine months and for margin pressure from both foreign exchange translation and increasing tariffs.
• The primary focus should be on the FY2026 outlook, where investors must factor in the pre-announced EUR 0.30 EPS headwind, which equates to a 12-13% growth drag, before modeling any underlying operational growth.
• Monitor segment performance closely, particularly the impact of volume-based procurement in China on the Diagnostics business and whether the Imaging segment's margin can withstand tariff pressures while Varian maintains its strong performance.