January 16, 2018 / 10:06 AM / a year ago

Siemens Healthineers in cost cutting drive ahead of IPO

FRANKFURT, Jan 16 (Reuters) - Healthineers, Siemens AG’s medical equipment division, will launch a cost-cutting drive to address modest earnings growth this year as it prepares for a separate listing expected to value it at around 40 billion euros ($49 billion).

“Structural cost savings initiatives are targeting 240 million euros of cost savings per year with a first full impact visible in 2020, and the company aims to achieve continuous productivity improvements going forward,” Siemens Healthineers said in a statement on Tuesday, ahead of an event for analysts and investors.

The maker of medical gear such as X-ray and MRI machines expects an adjusted operating profit margin of 17-18 percent for 2018 and comparable revenue growth of 3-4 percent.

Healthineers made a profit margin of 18.1 percent in the fiscal year to September, while comparable revenue growth was 3 percent.

Siemens plans to list its healthcare unit in March, two people close to the matter told Reuters last week. The German industrial conglomerate reiterated on Tuesday the listing was planned for the first half of 2018. ($1 = 0.8174 euros) (Reporting by Ludwig Burger; Editing by Georgina Prodhan)

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