Philips Healthcare Q1 2020 Revenues vs. Q1 2019 Revenues -2.0% Q1 2020 Orders vs. Q1 2019 Orders +23%
– 80% increase in order intake for Connected Care, namely ventilators and patient monitors.
– Diagnostic imaging grew mid single digits, offset by a low single digit decline in Image Guided Therapy business
– Planning fourfold production increase of ventilators from 3Q20.
– Expects to return to growth and profitability in the 2H of 2020, assuming planned elective procedures volume normalises.
– Emerging market sales down 12% comparable, with China a clear double digit decline due to COVID-19.
– No cancellation of orders due to COVID-19 outbreak cited.
Philips Healthcare offered a mixed set of results with an overall slight revenue decline in Q1. However, the sudden surge in the Q1 order book (most notably a 50% increase in Western Europe) suggests COVID-related products in the Connected Care division (24% of total sales) will offset near term impacts to its Diagnosis and Treatment (44% of sales) and Personal Health (30% of sales) divisions. Postponement of orders was a clear pointer that interventional X-ray and big-iron modality demand will be further impacted in Q2. However, the firm also cited strong demand for Telehealth and Command Centre products, with its current order book from Q1 2019 and Q1 2020 requiring the rest of CY2020 to fulfill.
Siemens Healthineers(FY2020 Q2 results) Q2 2020 Revenues vs. Q2 2019 Revenues +3.3% Q2 2020 Orders vs. Q2 2019 Orders Not released
– Imaging and Advanced Therapies revenues both up ~6%; offset by drop of ~2% in Diagnostics business
– Expecting next quarter (Q3 Siemens fiscal, Q2 calendar) to be “trough” with some pent-up demand from Q1 2021 (Q4 2020 calendar)
– EMEA and Americas robust results; Asia impacted due to early COVID-19 impact in China
– Recovery timing uncertain for Siemens Q4 and beyond; FY20 guidance no longer valid
Siemens Healthineers’ results suggest that its business has only been marginally impacted so far from the COVID-19 pandemic, namely from demand in China and falling reagent volume demand in its Diagnostics business. However, it is clearly expecting a far more negative “trough” in its equipment business into the next two quarters. Moreover, with no ventilation or patient monitoring equipment business in its portfolio buoyed by COVID-19-related demand to offset declines, the impact of the pandemic will probably be more keenly felt near term. Travel restrictions and slower implementation of equipment were cited as challenges, with an overall more significant hit to equipment than its services businesses, which should be a “stabilising element” (CEO Bernd Montag). The company has already cited expected margin pressure near term.
