Siemens Healthineers to Spin Off Diagnostics Unit Amidst Cautious Outlook

Siemens Healthineers announced it will spin off its struggling laboratory diagnostics division, to be named Olyrian Diagnostics, while simultaneously issuing a cautious financial outlook for the coming year, signaling a strategic shift amidst ongoing challenges in that business segment. The move comes as the diagnostics unit continues to underperform, burdened by difficulties in the Chinese market and the phasing out of older analysis systems.

The planned spin-off reflects a broader effort to streamline the company’s portfolio and focus on higher-growth areas. While the diagnostics business will initially remain part of Siemens Healthineers during the transition, the separation indicates a lack of synergy with the company’s other core operations. This decision follows a period of placing the division under review, suggesting a long-recognized need for a fundamental change in strategy.

Financially, Siemens Healthineers reported comparable revenue growth of 4% to €23.63 billion in the past fiscal year, hitting the upper end of its guidance. Net profit rose 3.5% to €2.2 billion, with adjusted earnings per share reaching €2.42. However, the outlook for fiscal year 2026/27 is more subdued, with projected comparable revenue growth of only 4-5%, below the 5.5% expected by analysts. The company anticipates adjusted earnings per share between €2.20 and €2.40, also below the prior year’s €2.42 and below analyst estimates of €2.37. Despite a strong fourth quarter, driven by double-digit growth in imaging and a 4.8% increase in Precision Therapy—including Varian—the ongoing weakness in lab diagnostics weighed on overall performance.

Despite the conservative outlook, Siemens Healthineers intends to maintain its dividend at €1.00 per share. While the past fiscal year saw growth, the forthcoming year's projections suggest a slowdown, and the spin-off of Olyrian Diagnostics highlights a strategic recalibration aimed at addressing persistent weaknesses within a key segment of the business.