Notes to consolidated
financial statements
statements
forward-looking
Notes and
C.5
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statement
C.4 Corporate governance
Page 105
C.3 Report of the
Supervisory Board
Page 100
report
C.2 Independent auditor's
Page 93
statement
C.1 Responsibility
Page 92
Consolidated
statements of
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A.7 Siemens Healthineers AG
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A.8 Takeover-relevant
system
A.2 Financial performance
Page 10
Business principles
A.1
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03
60
Consolidated
management report
A.
02
B.6
Page 47
changes in equity
statements of
explanatory report
information and
Combined
Page 46
B.5
risks and opportunities
A.6 Report on material
Business principles
A.1
Additional
information
C.
Page 42
statements
financial
Consolidated
B.1
B.
report
Combined
management
A.
Table of contents
SIEMENS
Healthineers
siemens-healthineers.com
2021
Annual Report
Page 04
Page 11
Page 10
system
cash flows
Page 24
B.4
Page 45
A.5 Report on expected
developments
Page 22
A.4 Nonfinancial matters
Consolidated
A.2 Financial performance
Page 44
B.3
statements of
financial position
of comprehensive
income
Consolidated statements
B.2
Page 43
statements of income
A.3 Business development
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A.3
Consolidated
Page 21
In the field of cardio-vascular applications Varian's cardiac
radioablation (hereinafter "CRA") system has recently been
designated a "breakthrough device" by the FDA because of
its potential to offer a more effective treatment for selected
patients with refractory ventricular tachycardia. Unlike con-
ventional catheter ablation it may lead to better outcomes for
patients. As a non-invasive therapy, CRA procedures may prove
safer and require less time than current surgical modalities.
In the field of interventional Oncology a new cryoablation con-
sole, CryoCare Touch, was launched in early fiscal year 2021.
This launch sets the stage for continued innovation with im-
provements in cryo probes compatible with this platform in the
coming years. Additionally Embozene microspheres, an integral
part of the Varian Interventional Solutions portfolio, received
US Food and Drug Administration's (hereinafter: "FDA") "break-
through device" designation for genicular artery embolization
for symptomatic knee osteoarthritis. We received this award
for the potential to offer a more effective treatment for appro-
priate patients with osteoarthritis of the knee. It provides cli-
nicians with a new, non-invasive treatment option, which may
not only ameliorate pain, but reduce the economic burden of
this common disease.
Siemens Healthineers extended its portfolio in the field of can-
cer care in fiscal year 2021 with the completion of the Varian
acquisition. The combined company pursues an intelligent can-
cer care strategy, harnessing advanced technologies such as
Al and data analytics to improve cancer treatment and expand
global access to cancer care.
Business principles
Siemens Healthineers Annual Report 2021
Combined management report
90
06
In the Point of Care (hereinafter "POC") field we launched the
CLINITEST® Rapid COVID-19 Antigen Test in fiscal year 2021 and
will continue to leverage new opportunities for rapid testing at
the point of care in the new fiscal. POC will also expand into
new markets with the Atellica® VTLi Patient-side Immunoassay
Analyzer to reduce emergency department overcrowding with
the first highly sensitive test for cardiac troponin (hs-cTnl assay)
that provided accurate lab-comparable results in 8 minutes at
the patient's side. Additionally in fiscal year 2022, POC plans to
further strengthen its leadership in chronic disease manage-
ment with new offerings in diabetes monitoring.
In our Diagnostics portfolio we continue to leverage Al-based
technology. The Atellica COVID-19 Severity Algorithm, for ex-
ample, uses Al to help predict the likelihood of progression to
severe disease and life-threatening multiorgan dysfunction
among hospitalized patients diagnosed with the SARS-CoV-2
virus. Additionally, using Al, the Atellica Solution can help im-
prove workflow by enabling the evaluation of up to 7,500 fea-
tures of a sample or a sample carrier. Also, thousands of remotely
connected Atellica Solution instruments can transmit real-time,
Al-powered data for continuous product and individual customer
network improvements.
In the field of Magnetic Resonance Imaging (hereinafter "MRI"),
we launched the MAGNETOM Free. platform which is designed
to improve global access to care, simplify infrastructure require-
ments, to automate scan operation with myExam Companion,
and all of that with the first 80 cm patient bore. MAGNETOM
Free.Max also comes with Al-powered reconstruction engines
enabling MRI acquisition and processing with sharper image
quality. For MRI and other imaging systems, Syngo Virtual
Cockpit, our software solution for remote operation of equip-
ment, enables our customers to optimize the utilization of their
scanner fleet and achieve a higher quality standard.
Alongside Al, sensing technology is another core technology
and innovation field. Here we have developed a new innova-
tive technology in computed tomography: the photon-counting
computed tomography scanner. It comes with a novel system
concept and a new direct-converting detector. It adds new clin-
ical information to every image and improves image sharpness
and contrast.
In addition to launching new products, such as in our modal-
ities business, that rely strongly on the application of new Al
technologies, Siemens Healthineers is also strengthening its
offerings in the area of digital Al-based products and solutions.
The major additions are extensions of our Al-Rad Companion,
our Al-Pathway Companion and Syngo Carbon products and
solutions. For fiscal year 2022, for example, we plan Al-Rad
Companion extensions for Mammography. In addition, we
brought to market an Al-Pathway Companion application for
lung cancer. Our Al applications are supported by our teamplay
digital health platform. This platform connects data, systems,
applications, people, and entire institutions, securely and from
different sources, and was awarded the European Privacy Seal
for data protection. Today, already more than 6,500 institutions
across the world are using teamplay. It connects more than
32,000 systems and gives respective healthcare institutions
access to millions of patient records.
Our research and development activities (hereinafter "R&D")
are aimed at providing our customers with innovative and sus-
tainable solutions while safeguarding and improving our com-
petitiveness. We therefore focus our R&D activities on selected
technologies and innovations. In particular, we have further
expanded our R&D activities in the area of digitalization and
artificial intelligence (hereinafter "AI"). This development is re-
flected in the expansion of our product and solution portfolio
in this area: We now have 67 Al-based products and applica-
tions on the market, as well as 15 in the innovation pipeline at
various stages of productization, which are designed to further
increase our customers' productivity and enable more precise
and patient-specific clinical decisions.
Research and development
In the Access to Care vector, we will be focusing on the approx.
three billion people worldwide who still do not have access to
adequate healthcare today. The main obstacles here are a lack
of infrastructure, financial affordability of treatment, and a lack
of health awareness. As non-communicable diseases are set to
become more prevalent in the coming years, affordable medical
technology will need to cover a broader base than before. We
will double down on our efforts to provide good access to global
healthcare in the future, establish local networks actively, and
develop on-site solutions. We will initially target selected coun-
tries with dedicated resources. These local teams will identify
country-specific success factors and pursue relevant business
opportunities. To ensure scaling is a success, we will construct
a global network for the ongoing exchange of information. This
network will consolidate country-specific findings at a global
level, leverage synergies, and develop appropriate local busi-
ness solutions that will be scaled at global level.
Measures will include new local business models, as well as
solutions tailored to meet local needs and requirements. We
will also expand the local diagnostics portfolio in the area of
immunoassays and in clinical chemistry to become a leading
market player in the burgeoning diagnostics segment. Digital
healthcare and technology-enabled services are a key differ-
entiator and stated priority of the Chinese healthcare system.
Business principles
For future treatment of cancer, Varian recently received an in-
vestigational device exemption from FDA and launched the first
FLASH therapy clinical trial. FLASH therapy refers to the deliv-
ery of a high dose of radiation at very short treatment times.
Hence an entire 6-week-dose of a radiation could be delivered
in potentially less than 1 second. Radiation delivered at such a
high dose rates may substantially reduce treatment side effects,
which may allow physicans to increase the therapeutic window
for patients.
The development of new, pioneering technologies such as CRA
and FLASH therapies may experience challenges and uncertain-
ties inherent in innovation and development of new and im-
proved therapy products and technologies. These risks include
uncertainty of clinical outcomes, additional analysis of existing
clinical data, obtaining regulatory approvals, gaining health plan
coverage, and initial and continued commercial success.
In the field of Advanced Therapies we are continuously devel-
oping enhancements for our interventional imaging platform
ARTIS icono and plan to release new workflow and integration
improvements with the next software version.
The endovascular robotics system CorPath GRX from Corindus
will be further developed to expand the scope into the field of
neurovascular procedures with focus on aneurysm treatment.
Business development
80
08
-
In the coming years, two of our most important markets, the
U.S. and China, will face additional uncertainty when it comes
to health policy and financing. With the new U.S. administra-
tion heavily focused on the COVID-19 crisis, the regulatory en-
vironment for healthcare has remained largely unchanged. At
the moment, topics such as the expansion of Medicare health
services and other associated questions are addressed in bills
before Congress, and these could have an impact on our mar-
ket in the U.S. The impact of COVID-19 on government and
private-sector finances has increased pressure on both device
utilization and reimbursement systems. In spring 2021, China
published its 14th Five-Year Plan, in which innovation, industrial
modernization, digitalization and a "healthy China" will play a
key role for the healthcare industry in the period 2021-2025.
China is expected to continue establishing and modernizing
primary care and expanding the number of high-quality medical
centers in order to level up the uneven provision of health ser-
vices, both in geographical and social terms. China will continue
its "dual-circulation" economic model, with the aim of reducing
external uncertainties and expanding domestic consumption.
On the one hand, China wants to continue opening its markets
in order to spur growth and make progress with globalization
and integrative development. On the other, the government's
support for the modernization of local manufacturing and a
policy of local preferment will increase competition between
multinationals and local providers. Reform of the healthcare
system will be further stepped up in order to improve qual-
ity and efficiency. Centralized procurement will be expanded,
while reform of the reimbursement system for example,
flat-rate-per-case billing (known as Diagnosis-Related Groups
or DRG) and a new health insurance reimbursement method
(known as the Diagnosis Intervention Packet or DIP) - will be
extended in further regions. The rapid approval process of the
National Medical Products Administration (NMPA) creates more
opportunities for foreign products.
The COVID-19 pandemic, too, impacted regulatory environments
and practices, presenting governments and healthcare provid-
ers with unprecedented challenges. Regulatory authorities have
utilized targeted methods to get diagnostic products to market
faster. Governments have also been quick to establish reim-
bursement systems for testing. This includes changes in existing
reimbursement structures as well as accelerated regulatory and
emergency approval pathways. This had a positive influence on
the availability of diagnostic tests and access to reimbursement,
for example, for digital solutions such as telehealth in countries
including China, the U.S. and Germany. This has underscored
and increased the importance and value of such technologies
during the pandemic. However, these changes in health policy
and reimbursement may be only temporary and could poten-
tially be reversed or modified in the mid-term.
for healthcare services, leading to a shift in healthcare reim-
bursement systems away from a pay-per-procedure towards
an outcome-based model. Most developed countries are cur-
rently considering or undergoing regulatory changes within
their healthcare systems.
Driven by the need of healthcare systems worldwide to deliver
better outcomes at lower costs, regulators around the world
are increasingly seeking to introduce new remuneration models
Siemens Healthineers Annual Report 2021
Combined management report
The first trend are demographic developments, especially the
world's growing and aging population. This trend poses major
challenges for global healthcare systems, both in developed and
in emerging and developing economies. At the same time, how-
ever, it offers opportunities for players in the healthcare industry
because demand for cost-efficient healthcare solutions contin-
ues to intensify. The second trend is economic development in
emerging countries, which is improving access to healthcare for
many people. Significant investments will persist, driving overall
demand for healthcare products and services and hence market
growth. The third trend is the increase in chronic diseases as a
consequence of an aging population, and of environmental and
lifestyle-related changes. This trend results in far more patients
with multiple morbidities, putting further pressure on health-
care systems and leading to higher costs; it also increases the
need for new, more timely ways to detect and treat disease. The
fourth global trend with a significant impact on our business de-
velopment is the transformation of healthcare providers, which
stems from a combination of societal and market forces driving
healthcare providers to operate and organize their businesses
differently. Increasing cost pressure on the healthcare sector
is prompting the introduction of new remuneration models
for healthcare services, such as value-based, rather than fee-
for-service, reimbursement. Digitalization and Al are likely to
become key enablers for healthcare providers as the latter in-
creasingly focus on enhancing the overall patient experience,
with better outcomes and a general reduction in the cost of
care. This trend is driven partly by society's increasing resistance
to healthcare costs, the growing professionalization of paying
entities, burdens from chronic disease, rapid scientific progress
and staff shortages. In response to these factors, healthcare
providers are consolidating into networked structures, resulting
in larger, often international, clinic and laboratory chains that
increasingly act like large corporations. Applying this industrial
logic to the healthcare market can lead to systematic improve-
ments in quality, while at the same time reducing costs.
Healthcare market trends and developments
in health policy
We operate in a growth market characterized by long-term sta-
bility, which is supported by the major trends described below.
Within the market's long-term development, it may also expe-
rience shorter-term fluctuations arising from macroeconomic
and political developments, such as changes in health policy,
regulation, and reimbursement systems. Because a substantial
portion of Siemens Healthineers' revenue stems from recurring
business, we pursue our growth opportunities with a stable
foundation for profits.
A.1.2 Business environment
40
07
As of September 30, 2021, we had about 23,000 technical intel-
lectual property rights. This figure includes more than 14,000
granted patents, above the level of fiscal year 2020.
In fiscal year 2021, we reported R&D expenses of €1,546 mil-
lion (2020: €1,342 million). The resulting R&D intensity, de-
fined as the ratio of R&D expenses to revenue, was 9% (2020:
9%). Additions to capitalized development expenses amounted
to €179 million (2020: €245 million). Therefore, the ratio of
capitalized development expenses to total R&D expenses was
12% (2020: 18%). Amortization of capitalized development ex-
penses totaled €126 million (2020: €99 million).
In addition to expanding our portfolio, our R&D teams strive
for continuous improvement of existing products and solu-
tions. Our R&D workforce already exceeds 10,000 employees
(including Varian) and operates at a number of R&D sites around
the world, mainly in Germany, the U.S., China and India. The
distribution of our R&D workforce across an international net-
work of sites enables us to meet the needs of local markets and
gives us access to local job markets, allowing us to hire the best
employee for the respective job. We supplement our internal
capabilities through our relationships with strategic partners.
Healthcare markets worldwide are affected by four sustained
major trends, which are unlikely to be affected by the COVID-19
pandemic.
50
Siemens Healthineers Annual Report 2021
Combined management report Business principles
The China Healthcare growth vector will concentrate on what
is set to be the biggest global market in medical technology by
the year 2030. As part of the five-year plan, China aims to adapt
its own healthcare and medical technology sector to new de-
velopments. Our ambition is to strengthen our role as a trusted
partner of the Chinese healthcare system and its patients by
addressing the most urgent social needs in terms of healthcare.
Organization
A.1.1 Business description
A.1 Business principles
Siemens Healthineers Annual Report 2021
Combined management report
Business principles
explanatory report
information and
Takeover-relevant
A.8
Siemens Healthineers is a global provider of healthcare solu-
tions and services, with activities in numerous countries
around the world. Siemens Healthineers Group (hereinafter
"Siemens Healthineers", the "Company", "we" or the "Group")
comprises the parent company Siemens Healthineers AG, a
stock corporation under the laws of the Federal Republic of
Germany, and its subsidiaries. Siemens Healthineers AG is in-
corporated in the commercial register in Munich, Germany.
The Company's business operations are conducted by the di-
rect and indirect subsidiaries of Siemens Healthineers AG. As
of September 30, 2021, the Siemens Group owned just over
75% of Siemens Healthineers AG (previous year: around 79%).
This was due to a second capital increase that was carried out
in the first half of fiscal year 2021 without the participation
of Siemens AG. The purpose of the capital increase was to
partially finance the acquisition of Varian Medical Systems,
Inc (hereinafter "Varian"), which was completed on April 15,
2021. Siemens Healthineers had about 66,000 employees as of
September 30, 2021 (September 30, 2020: about 54,300). The
increase was primarily due to the acquisition of Varian.
Page 36
Page 32
risks and opportunities
A.6 Report on material
Page 24
A.5 Report on expected
developments
Page 22
05
A.4 Nonfinancial matters
Siemens Healthineers AG
Siemens Healthineers has a strong presence and scale in an
attractively growing market and is directly represented in more
than 70 countries worldwide. Our main production sites are
in the United States, China and Germany. With holistic sys-
tem competence, we develop, manufacture and sell a diverse
range of innovative diagnostic and therapeutic products and
services to healthcare providers in more than 180 countries.
We also provide clinical consulting services, complemented
by an extensive range of training and service offerings. This
comprehensive portfolio supports customers all along the care
continuum, from prevention and early detection to diagnosis,
treatment and follow-up care.
A.7
Since the acquisition of Varian on April 15, 2021, our business
operations are divided into four segments: Imaging, Diagnostics,
Varian and Advanced Therapies. In all these segments, we are a
leading global provider.
In the Cardiovascular and Neurovascular Care vector, we want
to use our strengths in imaging and endovascular robotics to
further enhance our relevance in the field of cardiovascular
and neurovascular treatments. To achieve this goal, we intend
to bolster our core business in diagnostic and interventional
imaging and further extend the field of application of these
technologies to include the treatment of cardiovascular and
neurovascular disease. We will also develop digital offerings
and expand the installed base and areas of application of our
robotics solutions.
The Networked Care & Digitally-enabled Services vector ad-
dresses the biggest challenges currently facing our customers,
such as staff shortages, rising labor costs, increasing demand,
and rapid technological and scientific progress. Our ambition
is to put healthcare providers in a position to provide more
patients with better care by improving and automating manual
workflows that have previously drained resources and given
rise to inefficiencies. Our planned offering of digitally-enabled
services aims to make healthcare more efficient, while broad-
ening access to care. We intend to leverage this potential by
offering a tailored, modular range of consulting services for
new customers in both developing and developed countries,
providing specific software and service solutions for workflows
in the various customer segments and specialist fields, and
developing software and service solutions geared to specific
clinical treatment pathways.
Delivering high-quality, affordable healthcare requires scalable
solutions to meet the needs of a broad spectrum of healthcare
providers and related organizations. Siemens Healthineers is
strongly positioned along this spectrum. It ranges from pub-
lic and private healthcare providers, including hospitals and
hospital systems, public and private clinics and laboratories,
universities, physicians/joint medical practices, public health
agencies, state-run and private health insurers, through to
pharmaceutical companies and clinical research institutes. We
offer different solutions tailored to the customers' needs in all
market segments.
In the Comprehensive Cancer Care vector, we want to expand
our leading position in oncology by addressing an even broader
market along the entire disease pathway. To this end, we in-
tend to enhance and strongly integrate our radiotherapy and
imaging products, build a strong portfolio in interventional
oncology, expand our multidisciplinary software solutions and
technology-enabled services, and expand our cancer decision
support for better therapy guidance. We will also look into how
new technologies could complement our current portfolio in
the future.
The goal of this New Ambition phase is to help fight complex
diseases worldwide, while entering new growth markets and
remaining successful in our core markets. Our businesses and
regions have developed strategies to help us attain our New
Ambition. These strategies complement and support our pur-
suit of five priorities, so-called growth vectors (see below),
which will be the focus of our attention in the New Ambition
phase.
to 8% p. a. (per annum) and growth of adjusted basic earnings
per share of 12% to 15% p. a.
Against the backdrop of the healthcare trends described in
→ A.1.2 Business environment. Siemens Healthineers has de-
fined strategic priorities to ensure our competitiveness and
market leadership beyond 2025. Phase one, called Reinforcing,
of the Siemens Healthineers Strategy 2025, was concluded at
the end of fiscal year 2019. This phase focused on introducing
new products and platforms to the market, and on a cost-cut-
ting program with measures to enhance productivity.
Siemens Healthineers Strategy 2025
Within these four segments we provide comprehensive services
all along the customer value chain, among them planning and
design, maintenance, operational management, training and
education services. Our service offerings include equipment
performance management, clinical education and e-learning,
asset management, managed departmental services for labo-
ratories and healthcare facilities, consulting and digital health
products and services.
Our Advanced Therapies segment's portfolio consists of highly
integrated products, solutions and services across multiple
clinical fields, which we provide to the therapy departments
of healthcare providers. Our Advanced Therapies products are
designed to support image-guided minimally invasive treat-
ments, in areas such as cardiology, interventional radiology
and surgery. Our most important products in this segment are
angiography systems and mobile C-arms, including a robotic-
assisted platform for endovascular coronary and peripheral vas-
cular interventions. Our integrated business model provides a
solid foundation for our business activities in this field, with
recurring revenues generated through our strong installed base
and our customer service business (services and spare parts).
The start of fiscal year 2020 saw the beginning of the second
strategic phase, called Upgrading, the aim of which was to take
our business to the next level by accelerating growth and ex-
panding into adjacent growth markets. The initially planned
aim is for these targets to be met by the end of fiscal year 2022.
Thanks to the acquisitions of ECG Management Consultants and
Corindus Vascular Robotics, a company for robotic-assisted vas-
cular treatment methods, and the transformational merger of
Siemens Healthineers with Varian, we were able to expand into
adjacent markets. At the same time, we managed to expand
and grow our core business. This meant that we reached the
key goals defined for the Upgrading phase one year earlier than
planned and were able to launch phase three of the Strategy
2025, called New Ambition, at the start of fiscal year 2022.
During the New Ambition phase Siemens Healthineers aims for
fiscal years 2023 to 2025 at comparable revenue growth of 6%
Business principles
Siemens Healthineers Annual Report 2021
Combined management report
Our Imaging segment provides imaging products, services
and solutions. Our most important products within this seg-
ment are equipment, including magnetic resonance imaging,
computed tomography, X-ray systems, molecular imaging and
ultrasound. All our imaging and therapy systems are supported
by shared software platforms. We offer a broad and scalable
range of software solutions to support multi-modality reading
and structured reporting of diagnostic images. We generate a
significant amount of recurring revenues from our customer
services business (services and spare parts) due to our strong
installed base and long-term service relationships. These pro-
vide a stable foundation for profits.
04
4
The Varian business segment provides innovative, multi-modality
cancer care technologies as well as solutions and services to
oncology departments in hospitals and clinics globally. Its port-
folio is designed to enable clinicians to perform new, innovative
radiotherapy and other oncology treatments. Varian's Radiation
Oncology business serves the end-to-end needs of customers
with integrated equipment and digital solutions, and applica-
tions that are designed to enable increased access to quality
care as well as improved treatment planning and delivery.
High-quality imaging and digital solutions and applications en-
able image-guided, more precise cancer treatments. The Proton
Solutions business utilizes conventional radiotherapy expertise
to develop integrated solutions for proton therapy, the goal
being to increase clinical utility and improve patient outcomes
through increased radiation precision. Other offerings include
technology-enabled optimized workflows, clinical services and
consulting capabilities, and innovative digital solutions and ap-
plications for managing treatment and therapy. With a large in-
stalled base, Varian generates recurring revenue from services
and spare parts. At the same time, Varian is expanding its range
of consumables for interventional solutions.
The portfolio of our Diagnostics segment comprises in-vitro
diagnostic products and services that we offer to healthcare
providers in laboratory, molecular and point-of-care diagnos-
tics. Spanning a breadth of test settings, from centralized ref-
erence and hospital laboratories to clinical and physician office
laboratories, our comprehensive portfolio covers a range of
testing disciplines, including immunochemistry, hematology,
coagulation, urinalysis, blood gas and molecular diagnostic
testing. Siemens Healthineers provides laboratories and points
of care with a range of PCR, antigen and antibody tests specifi-
cally designed to identify the SARS-CoV-2 respiratory pathogen.
Diagnostics' product range also includes workflow solutions
in laboratories and informatics products that are integrated in
our offerings and improve provider efficiency and productivity.
The bulk of Diagnostics' business model is based on long-term
contracts that include an initial instrument placement followed
by ongoing reagent sales, which results in a predictable and
resilient revenue stream.
93
In addition, in accordance with Art. 10 (2) f) of the EU Audit
Regulation, we declare that we have not provided non-audit
services prohibited under Art. 5 (1) of the EU Audit Regulation.
We believe that the audit evidence we have obtained is suffi-
cient and appropriate to provide a basis for our opinions on
the consolidated financial statements and on the group man-
agement report.
We conducted our audit of the consolidated financial state-
ments and of the group management report in accordance with
Sec. 317 HGB and the EU Audit Regulation (No 537/2014, re-
ferred to subsequently as "EU Audit Regulation") and in compli-
ance with German Generally Accepted Standards for Financial
Statement Audits promulgated by the Institut der Wirtschafts-
prüfer [Institute of Public Auditors in Germany] (IDW). In con-
ducting the audit of the consolidated financial statements we
also complied with International Standards on Auditing (ISA).
Our responsibilities under those requirements, principles and
standards are further described in the "Auditor's responsibilities
for the audit of the consolidated financial statements and of
the
group management report" section of our auditor's report.
We are independent of the group entities in accordance with
the requirements of European law and German commercial
and professional law, and we have fulfilled our other German
professional responsibilities in accordance with these require-
ments.
Basis for the opinions
⚫ the accompanying group management report, as a whole,
provides an appropriate view of the Group's position. In all
material respects, this group management report is consis-
tent with the consolidated financial statements, complies with
German legal requirements and appropriately presents the
opportunities and risks of future development. Our opinion
on the group management report does not cover the content
of the Corporate Governance statement referred to above.
Pursuant to Sec. 322 (3) Sentence 1 HGB, we declare that
our audit has not led to any reservations relating to the legal
compliance of the consolidated financial statements and of
the group management report.
⚫ the accompanying consolidated financial statements comply,
in all material respects, with the International Financial Report-
ing Standards (IFRSS) as adopted by the European Union (EU),
and the additional requirements of German commercial law
pursuant to Sec. 315e (1) HGB ["Handelsgesetzbuch": German
Commercial Code] as well as with full IFRSS as issued by the
International Accounting Standards Board (IASB), and, in com-
pliance with these requirements, give a true and fair view of
the assets, liabilities and financial position of the Group as of
September 30, 2021 and of its financial performance for the
fiscal year from October 1, 2020 to September 30, 2021, and
In our opinion, on the basis of the knowledge obtained in the
audit,
Siemens Healthineers Annual Report 2021
Additional information - Independent auditor's report
We have audited the consolidated financial statements of Siemens
Healthineers AG, Munich, and its subsidiaries (the Group), which
comprise the consolidated statements of income and compre-
hensive income for the fiscal year from October 1, 2020 to
September 30, 2021, the consolidated statements of financial
position as of September 30, 2021, the consolidated statements
of cash flows and changes in equity for the fiscal year from
October 1, 2020 to September 30, 2021, and notes to the con-
solidated financial statements, including a summary of signifi-
cant accounting policies. In addition, we have audited the group
management report of Siemens Healthineers AG, which is com-
bined with the management report of Siemens Healthineers AG,
for the fiscal year from October 1, 2020 to September 30, 2021.
In accordance with the German legal requirements we have not
audited the content of chapter A.7.4 Corporate Governance
statement of the Combined Management Report, including
chapter C.4 Corporate governance statement of the Annual
Report 2021 referred to in chapter →A.7.4 Corporate Governance
statement.
Opinions
Key audit matters in the audit of the consolidated
financial statements
Furthermore, we assessed the application of uniform account-
ing policies, tax effects resulting from the acquisition and the
accounting for the first-time consolidation of the Varian entities
in the consolidation system. In addition, we assessed the acqui-
sition-related disclosures (including financing and hedging) in
the notes to the consolidated financial statements taking into
account the respective IFRS requirements.
Below, we describe what we consider to be the key audit matters:
Accounting for the acquisition of Varian Medical Systems, Inc.
Reasons why the matter was determined to be a key audit matter:
The acquisition of Varian Medical Systems, Inc., USA (Varian), was
completed on April 15, 2021. Since then, Siemens Healthineers AG
holds all shares in Varian. The acquisition was accounted for in
accordance with IFRS 3, Business Combinations, on the basis of a
preliminary purchase price allocation. To finance the acquisition,
Siemens Healthineers carried out a further capital increase in fis-
cal year 2021 by issuing new shares. Furthermore, Siemens Group
granted loans denominated in USD and EUR. To hedge foreign
currency risks in connection with the acquisition and its financ-
ing, Siemens Healthineers entered into hedging transactions with
Siemens Group which were designated as hedging instruments
in hedging relationships.
The accounting for the acquisition, including financing and
hedging of foreign currency risks, was a key audit matter due
to the estimation uncertainties and judgments involved in the
preliminary purchase price allocation (particularly regarding
the measurement of acquired intangible assets) and due to the
overall significant impact on the assets, liabilities, financial po-
sition and financial performance of the Group, the complexity
of the transaction and the associated significant risk of material
misstatement.
Auditor's response: Our audit procedures in relation to the pre-
liminary purchase price allocation included the assessment of
the consideration transferred by Siemens Healthineers and
an evaluation of the methodology applied by the external
appraiser engaged by management with respect to the iden-
tification and valuation of the assets acquired and liabilities
assumed in accordance with the requirements of IFRS 3. We
assessed the suitability of the preliminary external appraisal
as audit evidence, among other things, through inquiries of
management as well as of the external appraiser. With the
assistance of internal valuation specialists, we also analyzed
whether the assumptions and estimates (particularly growth
rates, cost of capital, royalty rates and remaining useful lives)
used in determining the fair values of the identifiable assets
acquired (particularly the acquired customer relationships and
trade names as well as technologies) and liabilities assumed
correspond to general and industry-specific market expecta-
tions. In addition, we used the expertise of internal industry
specialists for the assessment of the recognition and valuation
of identified intangible assets and liabilities assumed. Further,
we reperformed the calculations in the valuation models and
reconciled the expected future cash flows underlying the val-
uations with, inter alia, internal business plans. As part of our
audit procedures, we also assessed the earnings effects in fis-
cal year 2021 resulting from the subsequent accounting for
assets acquired and liabilities assumed, particularly taking into
account the remaining useful lives of the acquired assets.
As part of our audit of the accounting for the capital increase,
we compared the change in equity with the underlying reso-
lutions of the Managing Board and the Supervisory Board of
Siemens Healthineers, the register entries as well as other con-
tractual agreements with third parties. For the USD and EUR
loans received from Siemens Group, we compared the recog-
nized amounts with the respective underlying contractual agree-
ments. With regard to the accounting for hedging relationships,
we assessed whether the requirements for hedge accounting in
accordance with IFRS 9, Financial Instruments, were satisfied
based on the documentation prepared by Siemens Healthineers
and the underlying contractual agreements. We also assessed
the accounting for hedging relationships and reconciled the
amounts with the respective line items in the consolidated state-
ment of financial position, consolidated statement of income
and consolidated statement of comprehensive income. In this
context, we further assessed the methodology applied to de-
termine the fair values of hedging instruments and the clerical
accuracy of the respective calculations.
Our audit procedures did not lead to any reservations relating
to the accounting for the acquisition of Varian.
Reference to related disclosures: With regard to the accounting
and measurement policies applied in connection with the busi-
ness combination refer to → Note 2 Accounting policies in the
notes to the consolidated financial statements. An explanation of
the transaction including the related financing and hedging trans-
actions as well as disclosures on the preliminary purchase price
allocation are included in Note 3 Acquisitions, Note 16 Finan-
cial debt, Note 23 Equity and Note 25 Financial instruments
and hedging activities in the notes to the consolidated financial
statements.
94
Siemens Healthineers Annual Report 2021
Additional information - Independent auditor's report
Report on the audit of the consolidated
financial statements and of the group
management report
Revenue recognition
Reasons why the matter was determined to be a key audit matter:
The Group's revenue stems from the sale of imaging, diagnos-
tics and therapy products and related maintenance and other
services. In fiscal year 2021, significant additional revenue re-
sulted from the sale of rapid COVID-19 antigen tests. Financial
management and measurement of the operating results of
the segments is based on comparable revenue growth and ad-
justed EBIT-margin. The development of these key performance
indicators is primarily determined by the amount of revenue
recognized. In view of the materiality of revenue and its signif-
icance for the financial management of the Group, we consider
revenue recognition to be an area posing a significant risk of
material misstatement (including the potential risk of managers
circumventing controls) and one of the key audit matters.
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the consol-
idated financial statements for the fiscal year from October 1,
2020 to September 30, 2021. These matters were addressed
in the context of our audit of the consolidated financial state-
ments as a whole and in forming our opinion thereon; we do
not provide a separate opinion on these matters.
To Siemens Healthineers AG, Munich
C.5
Siemens Healthineers Annual Report 2021
Additional information - Independent auditor's report
C.2 Independent auditor's
Auditor's response: As part of our audit, we identified all sig-
nificant revenue streams subject to different processes, risks
and controls. For these revenue streams we assessed the dif-
ferent revenue recognition processes and the effectiveness
of the accounting-related internal control system in relation
to revenue recognition. We planned the nature, timing and
scope of substantive audit procedures according to our indi-
vidual assessment of the risk inherent in the different reve-
nue streams. Our substantive procedures primarily involved
analyses of disaggregated data to determine whether there
are any unexpected discrepancies between revenue, cost of
sales and trade receivables or contract assets, or any signifi-
cant or extraordinary changes in key performance indicators
(e.g., revenue or gross profit). We also performed correlation
analyses and cut-off analyses of revenue transactions around
the reporting date. We supplemented data analytics with sam-
ple testing specifically focusing on revenues for imaging and
therapy products as well as revenues related to the sale of rapid
COVID-19 antigen tests and assessed the amount and timing
of revenue recognized on the basis of contracts, invoices and
delivery notes. As part of these procedures, we also obtained
external customer confirmations and reviewed credit notes
issued after the reporting date.
report
Page 100
C.3
Report of the
Supervisory Board
Page 105
C.4 Corporate governance
statement
Page 114
Notes and
forward-looking
C.2 Independent auditor's report
statements
C.1 Responsibility statement
To the best of our knowledge, and in accordance with the
applicable reporting principles, the consolidated financial
statements give a true and fair view of the net assets, financial
position and results of operations of the Group, and the Group's
management report, which has been combined with the man-
agement report for Siemens Healthineers AG, includes a fair
review of the development and performance of the business
and the position of the Group, together with a description of the
material opportunities and risks associated with the expected
development of the Group.
Munich, November 23, 2021
Siemens Healthineers AG
The Managing Board
B. Ulanta.
Dr. Bernhard Montag
Daufere Con
Darleen Caron
Schmit
Dr. Jochen Schmitz
Dr. Christoph Zindel
92
42
Siemens Healthineers Annual Report 2021
Additional information - Responsibility statement
Our audit procedures did not lead to any reservations relating
to the recognition of revenue from the sale of products and the
provision of services.
• Evaluate the consistency of the group management report
with the consolidated financial statements, its conformity
with German law, and the view of the Group's position it
provides.
Recoverability of goodwill and capitalized development costs
Reasons why the matter was determined to be a key audit matter:
Testing impairment for goodwill and capitalized development
costs involves considerable judgment in estimating future cash
flows and discount rates. Estimation uncertainty in relation to
future net cash flows exists also due to the impact of COVID-19
pandemic. Consequently, the recoverability of goodwill and
capitalized development costs was one of the key audit matters.
Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with Sec.
317 HGB and the EU Audit Regulation as well as in compliance
with German Generally Accepted Standards for Financial State-
ment Audits promulgated by the IDW and in supplementary
compliance with ISA will always detect a material misstate-
ment. Misstatements can arise from fraud or error and are con-
sidered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of
users taken on the basis of these consolidated financial state-
ments and this group management report.
We exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the
consolidated financial statements and of the group manage-
ment report, whether due to fraud or error, design and perform
audit procedures responsive to those risks, and obtain audit ev-
idence that is sufficient and appropriate to provide a basis for
our opinions. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the
audit of the consolidated financial statements and of ar-
rangements and measures (systems) relevant to the audit of
the group management report in order to design audit pro-
cedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of
these systems.
• Evaluate the appropriateness of accounting policies used by
management and the reasonableness of estimates made by
management and related disclosures.
• Conclude on the appropriateness of management's use of the
going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt
on the Group's ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to
draw attention in the auditor's report to the related disclosures
in the consolidated financial statements and in the group
management report or, if such disclosures are inadequate, to
modify our respective opinions. Our conclusions are based
on the audit evidence obtained up to the date of our audi-
tor's report. However, future events or conditions may cause
the Group to cease to be able to continue as a going concern.
• Evaluate the overall presentation, structure and content of the
consolidated financial statements, including the disclosures,
and whether the consolidated financial statements present
the underlying transactions and events in a manner that the
consolidated financial statements give a true and fair view of
the assets, liabilities, financial position and financial perfor-
mance of the Group in compliance with IFRSS as adopted by
the EU and the additional requirements of German commer-
cial law pursuant to Sec. 315e (1) HGB as well as with full IFRSS
as issued by the IASB.
• Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities
within the Group to express opinions on the consolidated
financial statements and on the group management report.
We are responsible for the direction, supervision and perfor-
mance of the group audit. We remain solely responsible for
our opinions.
• Perform audit procedures on the prospective information pre-
sented by management in the group management report. On
the basis of sufficient appropriate audit evidence we evaluate,
in particular, the significant assumptions used by manage-
ment as a basis for the prospective information and evaluate
the proper derivation of the prospective information from
these assumptions. We do not express a separate opinion on
the prospective information and on the assumptions used
as a basis. There is a substantial unavoidable risk that future
events will differ materially from the prospective information.
97
46
Siemens Healthineers Annual Report 2021
Additional information - Independent auditor's report
We communicate with those charged with governance regard-
ing, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a state-
ment that we have complied with the relevant independence
requirements and communicate with them all relationships and
other matters that may reasonably be thought to bear on our
independence and where applicable, the related safeguards.
From the matters communicated with those charged with gov-
ernance, we determine those matters that were of most sig-
nificance in the audit of the consolidated financial statements
of the current period and are therefore the key audit matters.
We describe these matters in our auditor's report unless law or
regulation precludes public disclosure about the matter.
Other legal and regulatory requirements
Report on the assurance on the electronic
rendering of the consolidated financial
statements and the group management
report prepared for publication purposes
in accordance with Sec. 317 (3a) HGB
Opinion
We have performed assurance work in accordance with Sec. 317
(3a) HGB to obtain reasonable assurance about whether the ren-
dering of the consolidated financial statements and the group
management report (hereinafter the "ESEF documents") con-
tained in file,,siemenshealthineers-2021-09-30-de.zip" (SHA-
256-checksum: 17b8662c77c76d8ec2c34c6d3871c62971b86b
1c08d4c8a286cf10040e732ff3) and prepared for publication
purposes complies in all material respects with the require-
ments of Sec. 328 (1) HGB for the electronic reporting format
("ESEF format"). In accordance with German legal requirements,
this assurance work extends only to the conversion of the in-
formation contained in the consolidated financial statements
and the group management report into the ESEF format and
therefore relates neither to the information contained within
these renderings nor to any other information contained in the
file identified above.
In our opinion, the rendering of the consolidated financial state-
ments and the group management report contained in the file
identified above and prepared for publication purposes complies
in all material respects with the requirements of Sec. 328 (1) HGB
for the electronic reporting format. Beyond this assurance opin-
ion and our audit opinions on the accompanying consolidated
financial statements and the accompanying group management
report for the fiscal year from October 1, 2020 to September 30,
2021 contained in the "Report on the audit of the consolidated fi-
nancial statements and of the group management report" above,
we do not express any assurance opinion on the information
contained within these renderings or on the other information
contained in the file identified above.
Basis for the opinion
We conducted our assurance work on the rendering of the
consolidated financial statements and the group management
report contained in the file identified above in accordance with
Sec. 317 (3a) HGB and the IDW Assurance Standard: Assurance
on the Electronic Rendering of Financial Statements and Man-
agement Reports Prepared for Publication Purposes in Accor-
dance with Sec. 317 (3a) HGB (IDW ASS 410) and the Interna-
tional Standard on Assurance Engagements 3000 (Revised).
Our responsibility in accordance therewith is further described
in the "Group auditor's responsibilities for the assurance work
on the ESEF documents” section. Our audit firm applies the
IDW Standard on Quality Management 1: “Requirements for
Quality Management in the Audit Firm" (IDW QS 1).
Responsibilities of management and the Supervisory Board
for the ESEF documents
Management is responsible for the preparation of the ESEF doc-
uments including the electronic rendering of the consolidated
financial statements and the group management report in ac-
cordance with Sec. 328 (1) Sentence 4 No. 1 HGB and for the
tagging of the consolidated financial statements in accordance
with Sec. 328 (1) Sentence 4 No. 2 HGB.
In addition, management is responsible for such internal control
as it has determined necessary to enable the preparation of ESEF
documents that are free from material intentional or uninten-
tional non-compliance with the requirements of Sec. 328 (1) HGB
for the electronic reporting format.
The Supervisory Board is responsible for overseeing the pro-
cess for preparing the ESEF documents as part of the financial
reporting process.
98
Page 93
Our objectives are to obtain reasonable assurance about
whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error,
and whether the group management report as a whole pro-
vides an appropriate view of the Group's position and, in all
material respects, is consistent with the consolidated financial
statements and the knowledge obtained in the audit, complies
with the German legal requirements and appropriately presents
the opportunities and risks of future development, as well as
to issue an auditor's report that includes our opinions on the
consolidated financial statements and on the group manage-
ment report.
Auditor's responsibilities for the audit of
the consolidated financial statements and
of the group management report
Siemens Healthineers Annual Report 2021
Additional information - Independent auditor's report
96
Auditor's response: To assess the recoverable amounts of good-
will and capitalized development costs determined by manage-
ment, we examined the underlying processes. We obtained an
understanding of the underlying valuation models used to
determine the recoverable amounts by verifying the applied
methodology and arithmetical correctness. To assess estimates
of future net cash flows, we reconciled approved budgets with
the valuations provided to us. We also examined whether the
budget reflects general, industry and product-specific mar-
ket expectations, including potential COVID-19 impacts. We
performed a budget-to-actual comparison of historically fore-
casted data and actual results, where available, on a sample
basis to assess forecast accuracy. We examined the inputs used
to estimate recoverable amounts, such as the estimated growth
rates and the discount rates, by comparing them with publicly
available market data and assessing them in light of changes in
key assumptions, including future market conditions.
We also performed sensitivity analyses to assess the impairment
risk in case of changes in significant assumptions. In addition,
we analyzed the disclosures in the notes to the consolidated fi-
nancial statements on the measurement of goodwill in relation
to the requirements of IAS 36. We consulted internal valuation
specialists to assess the recoverable amounts.
Our audit procedures did not lead to any reservations relating
to the recoverability of goodwill and capitalized development
costs.
Reference to related disclosures: With regard to the testing of
impairment of goodwill and other intangible assets, including
capitalized development costs, refer to → Note 2 Accounting
policies in the notes to the consolidated financial statements. For
explanatory notes on goodwill and other intangible assets, refer
to the disclosures in Note 12 Goodwill and → Note 13 Other
intangible assets and property, plant and equipment in the notes
to the consolidated financial statements.
95
Siemens Healthineers Annual Report 2021
Additional information - Independent auditor's report
Other information
The Supervisory Board is responsible for the Report of the Super-
visory Board in the Annual Report 2021. Management and the
Supervisory Board are responsible for the declaration pursuant
to Sec. 161 AktG ["Aktiengesetz”: German Stock Corporation Act]
on the Corporate Governance Code, which is part of the Corpo-
rate Governance Statement. In all other respects, management
is responsible for the other information. The other information
comprises the Corporate Governance statement referred to
above.
In addition, the other information comprises parts to be in-
cluded in the Annual Report, of which we received a version
prior to issuing this auditor's report, in particular:
⚫ the Responsibility Statement in chapter
→ C.1 Responsibility statement of the Annual Report 2021,
⚫ the Report of the Supervisory Board in chapter
Reference to related disclosures: With regard to the recognition
and measurement policies applied for the recognition of rev-
enue, refer to → Note 2 Accounting policies in the notes to the
consolidated financial statements.
→ C.3 Report of the Supervisory Board of the Annual Report 2021,
→ C.5 Notes and forward-looking statements of the Annual
Report 2021.
but not the consolidated financial statements, not the disclo-
sures of the combined management report whose content is
audited and not our auditor's report thereon.
Our opinions on the consolidated financial statements and on
the group management report do not cover the other informa-
tion, and consequently we do not express an opinion or any
other form of assurance conclusion thereon.
In connection with our audit, our responsibility is to read the
other information and, in so doing, to consider whether the
other information
⚫ is materially inconsistent with the consolidated financial state-
ments, with the group management report or our knowledge
obtained in the audit, or
• otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in
this regard.
Responsibilities of management and the
Supervisory Board for the consolidated
financial statements and the group
management report
Management is responsible for the preparation of the consoli-
dated financial statements that comply, in all material respects,
with IFRSS as adopted by the EU and the additional requirements
of German commercial law pursuant to Sec. 315e (1) HGB, as
well as with full IFRSS as issued by the IASB and that the consol-
idated financial statements, in compliance with these require-
ments, give a true and fair view of the assets, liabilities, financial
position and financial performance of the Group. In addition,
management is responsible for such internal control as man-
agement has determined necessary to enable the preparation
of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, manage-
ment is responsible for assessing the Group's ability to continue
as a going concern. It also has the responsibility for disclosing,
as applicable, matters related to going concern. In addition,
management is responsible for financial reporting based on the
going concern basis of accounting, unless there is an intention
to liquidate the Group or to cease operations, or there is no
realistic alternative but to do so.
Furthermore, management is responsible for the preparation
of the group management report that, as a whole, provides an
appropriate view of the Group's position and is, in all material
respects, consistent with the consolidated financial statements,
complies with German legal requirements, and appropriately
presents the opportunities and risks of future development. In
addition, management is responsible for such arrangements
and measures (systems) as management has considered neces-
sary to enable the preparation of a group management report
that is in accordance with the applicable German legal require-
ments, and to be able to provide sufficient appropriate evidence
for the assertions in the group management report.
The Supervisory Board is responsible for overseeing the Group's
financial reporting process for the preparation of the consoli-
dated financial statements and of the group management report.
96
• Notes and forward-looking statements in chapter
statement
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
C.1
George Town/Cayman Islands
PT Siemens Healthineers Indonesia,
Jakarta/Indonesia
100
Varian BioSynergy, Inc.,
100
Wilmington, DE/United States
100
Scion Medical Limited, Hong Kong/Hong Kong
Varian Medical Systems Africa Holdings, Inc.,
Wilmington, DE/United States
Varian Medical Systems Brasil Ltda.,
ㅎㅎ
100
Scion Medical Technologies (Shanghai) Ltd.,
100
100
Talent Choice Investment Limited,
100
PETNET Radiopharmaceutical Solutions Pvt. Ltd.,
Mumbai/India
100
Wilmington, DE/United States
Hong Tai Health Management Co. Ltd.,
100
Siemens Medical Solutions USA, Inc.,
100
Taipei/Taiwan, Province of China
Wilmington, DE/United States
New Century Technology Co. Ltd.,
100
Siemens S.A., Montevideo/Uruguay
100
Taipei/Taiwan, Province of China
Siemens-Healthcare Cia. Ltda., Quito/Ecuador
100
Shanghai/China
100
100
100
Wilmington, DE/United States
Siemens Healthcare Limited, Bangkok/Thailand
100
Varian Medical Systems International Holdings, Inc.,
100
Siemens Healthcare Limited,
100
100
Ho Chi Minh City/Viet Nam
Varian Medical Systems Latin America, Ltd.,
100
Siemens Healthcare Limited,
100
Wilmington, DE/United States
Wilmington, DE/United States
Varian Medical Systems India Private Limited,
Auckland/New Zealand
100
São Paulo/Brazil
Siemens Healthcare Diagnostics Manufacturing Ltd.,
100
Varian Medical Systems Canada Holdings, Inc.,
Shanghai, Shanghai/China
100
Wilmington, DE/United States
Siemens Healthcare Inc., Manila/Philippines
Varian Medical Systems Canada, Inc.,
100
Siemens Healthcare K.K., Tokyo/Japan
Ottawa/Canada
Siemens Healthcare Limited,
100
100
Siemens Healthcare Diagnostics K.K., Tokyo/Japan
Hangzhou Alicon Pharm Sci & Tec Co., Ltd.,
Hangzhou/China
Siemens Healthineers Holdings, LLC,
Antiguo Cuscatlán/El Salvador
PETNET Solutions, Inc., Knoxville, TN/United States
100
Varian Medical Systems Puerto Rico, LLC,
Guaynabo/Puerto Rico
100
Siemens Healthcare Diagnósticos Ltda.,
100
Wilmington, DE/United States
São Paulo/Brazil
100
Siemens Healthcare Diagnostics Inc.,
100
Los Angeles, CA/United States
Asia, Australia (51 companies)
Siemens Healthcare Diagnostics S.A.,
Varian Medical Systems, Inc., Wilmington,
DE/United States
63
PETNET Solutions Cleveland, LLC,
Wilmington, DE/United States
100
Responsibility
Equity interest
Sept 30, 2021
P.E.T.NET Houston, LLC, Austin, TX/United States
Page Mill Corporation, Boston, MA/United States
in %
Sept 30, 2021
51
100
Varian Medical Systems Netherlands Holdings, Inc.,
Wilmington, DE/United States
Equity interest
in %
100
PETNET Indiana, LLC, Indianapolis, IN/United States
501
Varian Medical Systems Pacific, Inc.,
100
Acrorad Co., Ltd., Okinawa/Japan
96
San José/Costa Rica
100
Siemens Healthcare S.A., Buenos Aires/Argentina
100
Asiri A O I Cancer Centre (Private) Limited,
Colombo/Sri Lanka
50²
Siemens Healthcare S.A., Caracas/Venezuela
Siemens Healthcare S.A.C., Surquillo/Peru
Siemens Healthcare S.A.S., Tenjo/Colombia
Siemens Healthcare, Sociedad Anonima,
1005
100
Cancer Treatment Services Hyderabad Private Limited,
Hyderabad/India
100
100
Fang Chi Health Management Co., Ltd,
100
Taipei/Taiwan, Province of China
100
Siemens Healthcare Limited, Oakville/Canada
1 Control due to a majority of voting rights.
Hyderabad/India
100
Siemens Healthcare Diagnostics, S. de R.L. de C.V.,
100
Acuson (Shanghai) Co., Ltd., Shanghai/China
Acuson Korea Ltd., Seongnam-si/Korea
1005
1005
Mexico City/Mexico
Acuson Singapore Pte. Ltd., Singapore/Singapore
1005
Siemens Healthcare Equipos Médicos Sociedad por
100
Acciones, Santiago de Chile/Chile
American Institute of Pathology and Laboratory
Sciences Private Limited, Hyderabad/India
100
Siemens Healthcare Laboratory, LLC,
Artmed Healthcare Private Limited,
Wilmington, DE/United States
2 Control due to rights to appoint, reassign or remove members of the key management
personnel.
100
4 No significant influence due to contractual arrangements or legal circumstances.
5 Not consolidated due to immateriality.
Varian Medical Systems International (India) Private
100
Asia, Australia (2 companies)
Limited, Mumbai/India
Varian Medical Systems K.K., Tokyo/Japan
100
Beijing/China
HEALTH CONTINUUM PRIVATE LIMITED,
Bangalore/India
Varian Medical Systems Korea, Inc., Seoul/Korea
100
Xi'An X-Ray Target Ltd., Xi'an/China
436
Sept 30, 2021
Other Investments
306
100
Fort Lauderdale, FL/United States
Varian Medical Systems China Co., Ltd.,
476
Ltd. of Beijing, Beijing/China
TRIXELL SAS, Moirans/France
25
Siemens X-Ray Vacuum Technology Ltd.,
100
Wuxi, Wuxi/China
Americas (2 companies)
Varian Medical Systems Australasia Pty Ltd.,
100
PhSiTh LLC, New Castle, DE/United States
33
Belrose/Australia
USARAD Holdings, Inc.,
306
Europe, C.I.S., Africa, Middle East (EMEA) (without Germany)
(1 company)
Medical Systems S.p.A., Genoa/Italy 10
Equity interest
7
-36
-11
211
25
6 Not accounted for using the equity method due to immateriality.
7 Exemption pursuant to Section 264b of the German Commercial Code.
8 Exemption pursuant to Section 264 (3) of the German Commercial Code.
9 A consolidated affiliated company of Siemens Healthineers AG is a shareholder with
unlimited liability of this company.
10 Values according to the latest available local GAAP financial statements; the underlying
fiscal year differs from the Siemens Healthineers fiscal year.
90
C.
Additional
information
91
3 Control due to contractual arrangements to determine the direction of the relevant
activities.
Page 92
-4
Meomed s.r.o., Prerov/Czech Republic
7
204
Net income
Equity
in %
in millions of €
in millions of €
454
12
Americas (3 companies)
Babson Diagnostics, Inc., Dover, DE/United States 10
Berkeley Lights, Inc., Dover, DE/United States 10
Imricor Medical Systems, Inc., Dover, DE/United States 10
1 Control due to a majority of voting rights.
² Control due to rights to appoint, reassign or remove members of the key management
personnel.
3 Control due to contractual arrangements to determine the direction of the relevant
activities.
4 No significant influence due to contractual arrangements or legal circumstances.
5 Not consolidated due to immateriality.
0
90
122
31
Siemens Healthcare Ltd., Dhaka/Bangladesh
100
Varian Medical Systems Philippines, Inc.,
100
Siemens Healthcare Private Limited, Mumbai/India
Siemens Healthcare Pte. Ltd., Singapore/Singapore
Siemens Healthcare Pty. Ltd., Melbourne/Australia
100
City of Pasig/Philippines
100
Varian Medical Systems Taiwan Co., Ltd.,
100
100
Taipei/Taiwan, Province of China
Siemens Healthcare Sdn. Bhd.,
100
Varian Medical Systems Trading (Beijing) Co., Ltd.,
100
100
Varian Medical Systems Malaysia Sdn Bhd,
Kuala Lumpur/Malaysia
Taipei/Taiwan, Province of China
6 Not accounted for using the equity method due to immateriality.
Siemens Technology Development Co.,
7 Exemption pursuant to Section 264b of the German Commercial Code.
8 Exemption pursuant to Section 264 (3) of the German Commercial Code.
9 A consolidated affiliated company of Siemens Healthineers AG is a shareholder with
unlimited liability of this company.
10 Values according to the latest available local GAAP financial statements; the underlying
fiscal year differs from the Siemens Healthineers fiscal year.
89
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Equity interest
Equity interest
Sept 30, 2021
in %
Sept 30, 2021
in %
Hong Kong/Hong Kong
100
Petaling Jaya/Malaysia
Siemens Healthcare Limited,
Siemens Healthineers Diagnostics (Shanghai) Co.,
49
Siemens Healthineers Ltd., Seoul/Korea
100
MeVis BreastCare Verwaltungsgesellschaft mbH,
496
Siemens Healthineers Ltd., Shanghai/China
Bremen
Siemens Shanghai Medical Equipment Ltd.,
100
Shanghai/China
Siemens Shenzhen Magnetic Resonance Ltd.,
Shenzhen/China
100
Beijing/China
Europe, C.I.S., Africa, Middle East (EMEA)
(without Germany) (3 companies)
Impilo Consortium (Pty.) Ltd., La Lucia/South Africa
MeVis BreastCare GmbH & Co. KG, Bremen
Germany (2 companies)
100
SIEMENS HEALTHINEERS INDIA MANUFACTURING
PRIVATE LIMITED, Mumbai/India
100
Varian Medical Systems Vietnam Co Ltd,
1005
Ltd., Shanghai/China
Ho Chi Minh City/Viet Nam
Siemens Healthineers Digital Technology
Vertice Investment Limited, Hong Kong/Hong Kong
100
100
(Shanghai) Co., Ltd., Shanghai/China
Siemens Healthineers India LLP, Bangalore/India
100
100
Joint ventures and associates
Managing Board of
Occupation
Siemens Healthineers Annual Report 2021
Additional information - Corporate governance statement
Prof. Dr. Ralf P. Thomas
Chairman
Name
In fiscal year 2021 the Supervisory Board comprised the fol-
lowing members:
Members of the Supervisory Board and positions
held by Supervisory Board members
Member of the
106
rate-governance/supervisory-board-compensation.
Compensation Report 2021 including the auditor's report in
accordance with Section 162 of the German Stock Corporation
Act is available at www.siemens-healthineers.com/investor-re-
bylaws.
Bylaws of the Supervisory Board are available at → www.sie-
mens-healthineers.com/investor-relations/corporate-governance/
lations/corporate-governance.
Compensation system of the Supervisory Board including
resolution on compensation in accordance with Section
113 (3) of the German Stock Corporation Act is available at
→ www.siemens-healthineers.com/investor-relations/corpo-
•
•
The curricula vitae of the members of the Supervisory Board are
available on the Company's website at www.siemens-health-
ineers.com/investor-relations/supervisory-board.
Siemens Aktiengesellschaft
(Chief Financial Officer)
You will find further information about the Supervisory Board
on our website:
•
The Supervisory Board of Siemens Healthineers AG comprises
ten members. It is composed entirely of shareholder represen-
tatives. The terms of office of the members of the Supervisory
Board who were appointed in 2018 will expire at the conclusion
of the Annual Shareholders' Meeting in 2023. The terms of of-
fice of the members who were appointed in 2020 (Dr. Roland
Busch) and 2021 (Mr. Peer M. Schatz) will expire at the conclu-
sion of the Annual Shareholders' Meeting in 2025 and 2026,
respectively.
Year of birth
1961
Siemens Mobility GmbH (Chair)
2018
German positions:
•
Siemens Healthcare GmbH
⚫Heineken N.V., The Netherlands
British American Tobacco p.l.c., United Kingdom
•
Positions outside Germany:
•⚫ ProSiebenSat.1 Media SE (Deputy Chair)
German positions:
German positions:
Siemens Healthcare GmbH
German positions:
• Siemens Proprietary Ltd., South Africa
Positions outside Germany:
Siemens Healthcare GmbH (Chair)
Siemens Energy Management GmbH
Siemens Energy AG
•
.
German positions:
Memberships in supervisory boards whose establishment
is required by law or in comparable domestic or foreign
controlling bodies of business enterprises
(as of September 30, 2021)
Member since
The activities of the Supervisory Board and its committees
during the reporting period are discussed in the Report of the
Supervisory Board → C.3 Report of the Supervisory Board.
Year of birth
The Supervisory Board oversees and advises the Managing Board
in its management of the Company's business. At regular inter-
vals, the Supervisory Board discusses business development,
planning, strategy, and strategy implementation. It reviews
the annual financial statements of Siemens Healthineers AG,
the consolidated financial statements, and the combined man-
agement report, as well as the proposal for the appropriation
of net income. It approves the annual financial statements of
Siemens Healthineers AG as well as the consolidated financial
statements, based on the results of the pre-examination con-
ducted by the Audit Committee and taking into account the
reports of the independent auditors. The Supervisory Board de-
cides on the Managing Board's proposal for the appropriation of
net income and the Report of the Supervisory Board to the An-
nual Shareholders' Meeting. In addition, the Supervisory Board
or the Audit Committee, as appropriate, concerns itself with
monitoring the Company's compliance with the requirements
of legislation, government regulations, and internal Company
guidelines. The Supervisory Board also appoints the members
of the Managing Board and determines each member's business
responsibilities. Important Managing Board decisions - such as
those regarding major acquisitions, divestments, investments
in property, plant, and equipment, or financial measures - are
subject to Supervisory Board approval, unless the bylaws for
the Supervisory Board specify that such authority is delegated
to one of the Supervisory Board committees. The bylaws of the
Supervisory Board set out not only its tasks and responsibili-
ties, but also the procedure for holding meetings and adopting
resolutions.
(as of September 30, 2021)
Term expires
2026
2018
1969
Dr. Bernhard Montag
First appointed
Name
Group company positions
(as of September 30, 2021)
External positions
Memberships in supervisory boards whose establishment
is required by law or in comparable domestic or foreign
controlling bodies of business enterprises
In fiscal year 2021 the Managing Board comprised the follow-
ing members:
held by Managing Board members
Members of the Managing Board and positions
Siemens Healthineers Annual Report 2021
Additional information - Corporate governance statement
105
bylaws.
Bylaws of the Managing Board are available at → www.sie-
mens-healthineers.com/investor-relations/corporate-governance/
•
Positions outside Germany:
pensation.
• Compensation Report 2021 including the auditor's report in
accordance with Section 162 of the German Stock Corporation
Act is available at www.siemens-healthineers.com/inves-
tor-relations/corporate-governance.
None
In the bylaws for the Managing Board, the Supervisory Board has
established the rules that govern the Managing Board's work.
None
Darleen Caron
C.4.1.2 Composition and working methods of
the Supervisory Board
None
None
2022
2019
1961
Dr. Christoph Zindel
Augsburg
• Universitätsklinikum
None
German positions:
2026
2018
1966
Dr. Jochen Schmitz
(since February 1, 2021)
None
None
2024
2021
1964
Chief Executive Officer
Dr. Norbert Gaus
Deputy Chairman
Committees
1961
Chairman's
The Supervisory Board has four committees, whose duties, re-
sponsibilities, and procedures fulfill the requirements of the
German Stock Corporation Act and the GCGC. The chairpersons
of these committees provide the Supervisory Board with regu-
lar reports on the committees' activities.
Supervisory Board committees
Siemens Healthineers Annual Report 2021
Additional information - Corporate governance statement
107
Technikwissenschaften
•
2018
1952
Committee
President of acatech -
Deutsche Akademie der
• Münchener Rückversicherungs-Gesellschaft AG
• Software AG (Chair)
Deutsche Telekom AG
German positions:
• Invicro, LLC, USA
⚫ DFP Healthcare Acquisitions Corp., USA
Positions outside Germany:
• Fresenius Medical Care AG & Co. KGaA
⚫Fresenius Medical Care Management AG
German positions:
• EssilorLuxottica S.A., France
Karl-Heinz Streibich
Audit
Committee
Innovation and Finance
Committee
The Audit Committee oversees, in particular, accounting and the
accounting process. It conducts a pre-examination of the annual
financial statements of Siemens Healthineers AG, the consol-
idated financial statements, and the combined management
report, as well as the report on relationships with affiliated com-
panies. On the basis of the independent auditors' report on their
audit of the financial statements, the Audit Committee makes,
after its own pre-examination, recommendations regarding
the Supervisory Board's approval of the annual financial state-
ments of Siemens Healthineers AG and the consolidated finan-
cial statements. The Audit Committee discusses the quarterly
statements and half-year financial report with the Managing
Board and the independent auditors and deals with the audi-
tors' reports on the review of the Group's half-year consolidated
financial statements and interim management report. It con-
cerns itself with questions of risk management and oversees the
suitability and effectiveness of the systems for internal control,
risk management, and internal auditing. The Audit Committee
receives regular reports from the internal audit department.
It prepares the Supervisory Board's recommendation to the
Annual Shareholders' Meeting concerning the election of the
independent auditors and submits the corresponding proposal
to the Supervisory Board. Once the Annual Shareholders' Meet-
ing has made a resolution, the Audit Committee awards the
audit contract to the independent auditors and monitors the
independent audit of the financial statements, particularly the
selection, independence, and qualification of the auditors. It
evaluates the quality of the audit and the work of the indepen-
dent auditors, including the additional services they provide. In
this regard, the committee complies with the applicable legal
requirements, including in particular the requirements under
the EU Audit Regulation (Regulation (EU) No. 537/2014 of the
European Parliament and of the Council of 16 April 2014 on
specific requirements of statutory audits of public-interest en-
tities and repealing Commission Decision 2005/909/EC). The
Audit Committee furthermore concerns itself with monitoring
compliance, and with nonfinancial reporting and exemptions
from such reporting.
investor-relations/corporate-governance/managing-board-com-
In fiscal year 2021, the Chairman's Committee had the follow-
ing members: Prof. Dr. Ralf P. Thomas (Chairman), Dr. Norbert
Gaus and Dr. Andreas C. Hoffmann.
been authorized by the Supervisory Board to decide on the
approval of Managing Board proposals regarding appointment
or dismissal of persons in certain management positions at the
first level below the Managing Board, and the main principles
of the compensation and incentivization system for employees.
The Chairman's Committee coordinates the work of the Supervi-
sory Board and prepares the meetings of the Supervisory Board.
It t prepares the self-assessment of the Supervisory Board's work
and monitors the implementation of the resolutions adopted
by the Supervisory Board or its committees. It makes proposals
regarding the appointment and dismissal of Managing Board
members and handles contracts with members of the Man-
aging Board. When making recommendations for first-time
appointments, it takes into account that the term of these ap-
pointments should not, as a rule, exceed three years. In prepar-
ing recommendations on the appointment of Managing Board
members, the Chairman's Committee takes into account the
candidates' professional qualifications, international experience
and leadership qualities, the age limit specified for Managing
Board members, the long-range plans for succession, and diver-
sity. It also takes into account the targets that the Supervisory
Board has specified for the share of women on the Managing
Board. It decides on approving contracts and transactions with
members of the Managing Board and their related parties,
whether individuals or entities. The Chairman's Committee
submits proposals to the Supervisory Board for setting the
compensation of the individual Managing Board members. The
Chairman's Committee prepares resolutions of the Supervisory
Board regarding the systems of Managing Board and Super-
visory Board compensation, including the regular review of
those systems. The Chairman's Committee furthermore has the
task of providing the Supervisory Board with recommendations
of suitable candidates for the board to nominate for election
by the Annual Shareholders' Meeting as new members of the
Supervisory Board. It therefore has the tasks of a nomination
committee. In preparing these recommendations, the targets
defined by the Supervisory Board for its composition are to be
given due consideration, along with the proposed candidates'
required knowledge, abilities, and professional experience.
Fulfillment of the profile of required skills and expertise is also
to be aimed for. The Chairman's Committee has furthermore
• Dr. Marion Helmes (Chair)
• Dr. Andreas C. Hoffmann
• Karl-Heinz Streibich
Karl-Heinz Streibich
•Dr. Gregory Sorensen
• Peer M. Schatz
• Dr. Norbert Gaus
•
• Dr. Roland Busch
• Prof. Dr. Ralf P. Thomas (Chair)
• Prof. Dr. Ralf P. Thomas
• Dr. Andreas C. Hoffmann
• Dr. Marion Helmes (Chair)
• Dr. Andreas C. Hoffmann
• Dr. Norbert Gaus
• Prof. Dr. Ralf P. Thomas (Chair)
Members
Related-Party Transactions
Committee
Positions outside Germany:
TÜV SÜD AG
•
• Siemens Healthcare GmbH
Managing Director of
PS Captial Management
GmbH
Peer M. Schatz
(since March 23, 2021)
2018
1973
Supervisory board member
Dr. Philipp Rösler
2018
1964
General Counsel of
Siemens Aktiengesellschaft
Dr. Andreas C. Hoffmann
2018
1965
Chief Executive Officer of
Siemens Aktiengesellschaft
Supervisory board member
Dr. Marion Helmes
2020
1964
President and
Dr. Roland Busch
•
Corporate Technology of
Siemens Aktiengesellschaft
2018
1965
Executive Vice President
2021
Supervisory board member
Siemens Aktiengesellschaft
• Messer Group GmbH
German positions:
⚫ CENTOGENE N.V., The Netherlands (Chair)
Positions outside Germany:
• Resolve BioSciences GmbH (Chair)
German positions:
• Loc Troi Group, Vietnam
• Fortum Corporation, Finland
Positions outside Germany:
• Brainloop AG
German positions:
Siemens Ltd., China
•
Executive Chairman of IMRIS
(Deerfield Imaging, Inc.)
2018
1962
Founder and CEO of
DeepHealth, Inc. (artificial
intelligence division of
RadNet, Inc.) and
Dr. Gregory Sorensen
2018
1971
Dr. Nathalie von Siemens
• Compensation of the Managing Board in accordance with Sec-
tion 87a AktG is available at www.siemens-healthineers.com/
The meeting on September 27, 2021, focused on the budget
2022 and on various aspects of the strategic project to define
new long-term goals (New Ambition). Furthermore, we exam-
ined the German Act to Strengthen Financial Market Integrity
(Gesetz zur Stärkung der Finanzmarktintegrität) in relation to
its impact on the Company. We also approved the latest Dec-
laration of Conformity with the GCGC, prepared in accordance
with Section 161 of the German Stock Corporation Act.
Information on the areas of responsibility and the curricula
vitae of the members of the Managing Board are available on
the Company's website at www.siemens-healthineers.com/
company/management.
No.
in %
Committee
Innovation and Finance Related-Party Transactions
Committee
Deputy Chairman
Dr. Norbert Gaus
Prof. Dr. Ralf P. Thomas
Chairman
meetings/participation in %)
(Number of
in %
For the fiscal year overall, the participation rate of members
in meetings of the Supervisory Board and its committees
was 100%.
The Related-Party Transactions Committee met once during the
reporting period. The meeting focused on centralizing and sim-
plifying the Siemens Healthineers Group's financing structure
and on the associated transactions.
The Audit Committee also dealt with the Company's accounting
and accounting process, the suitability and effectiveness of the
risk management and internal control systems, the effective-
ness, resources, findings and audit plan for the internal audit,
and also the reports concerning compliance, regulatory com-
pliance, and potential and pending legal disputes.
In view of the Wirecard case, a particular subject of discussion
for the Audit Committee during the reporting period was the
role of Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft,
Stuttgart, as the auditors of Wirecard AG. The Audit Commit-
tee questioned the auditors on this matter and evaluated the
effects on Siemens Healthineers AG. Nothing was identified
that could hinder the appointment of Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft, Stuttgart, as auditors of the
Company's financial statements for fiscal year 2021.
The Audit Committee met six times during the reporting period
(with one meeting being extraordinary). Together with the
Managing Board and the independent auditors, the commit-
tee discussed the annual financial statements, consolidated
financial statements and combined management report for
Siemens Healthineers AG and the Group for fiscal year 2020,
and the half-year financial report and quarterly statements for
fiscal year 2021. In the presence of the independent auditors,
the Audit Committee also discussed the audit reports on the
annual financial statements, the consolidated financial state-
ments and the combined management report, and the report
on the auditors' review of the Group's half-year consolidated
financial statements and of the interim Group management
report. The committee engaged the independent auditors to
audit the annual and consolidated financial statements for fiscal
year 2021 and to review the interim financial statements and
financial information; it defined the focal points for the audits
and determined the auditors' fee. The committee monitored the
selection, independence, qualification, rotation and efficiency
of the independent auditors. In the course of this, the qual-
ity of the audit of the financial statements was also evaluated.
The Innovation and Finance Committee met four times during the
reporting period. Its discussions centered on the Company's in-
novation and digitalization strategy, and on capital expenditure
projects. The latter primarily concerned modernization of the
production landscape. The committee also regularly discussed
the reports of the business units.
Siemens Healthineers Annual Report 2021
Additional information - Report of the Supervisory Board
101
The Chairman's Committee met ten times in the reporting period
(three of these meetings were extraordinary). It also adopted
two resolutions by written circulation. Between meetings, the
Chairman of the Supervisory Board discussed topics of major
importance with the members of the Chairman's Committee.
The Chairman's Committee concerned itself, in particular, with
personnel issues, such as the appointment of a new Managing
Board member and the reallocation of responsibilities among
the Managing Board members. It also dealt with the Managing
Board compensation, the compensation system for the Manag-
ing Board, including its implementation, and the compensation
system for the Supervisory Board. The Chairman's Committee
was also involved in organizing the capital increase required
to finance the acquisition of Varian. In the process, the Chair-
man's Committee either adopted certain appropriate resolu-
tions itself, or prepared resolutions requiring adoption by the
Supervisory Board.
In order to perform our duties efficiently, we have established
a total of four committees, which prepare proposals for reso-
lutions and issues to be dealt with at the Supervisory Board's
plenary meetings. Some of the Supervisory Board's decision-
making powers have also been delegated to these committees
within the permissible legal framework. The committee chairs
report to the Supervisory Board on their committees' work at
the subsequent Board meeting. Details of the members and
the tasks of the individual Supervisory Board committees are
provided in C.4.1.2 Composition and working methods of the
Supervisory Board.
Personalized disclosure of the individual
Supervisory Board members' attendance rates
4/4
100
Supervisory Board
(plenary meetings)
4/4
100
10/10
100
717
44
100
6/6
100
10/10
100
717
No.
in %
No.
in %
No.
in %
No.
Audit Committee
Chairman's Committee
Work in the Supervisory Board committees
In addition to dealing with the Managing Board's report on the
net assets, financial position and results of operations as of the
end of the third quarter, including the COVID-19 issue, at our
meeting on July 29, 2021, we also reviewed the results of our
questionnaire-based self-assessment. Other topics discussed at
the meeting included the integration of Varian and the strategic
project to define new long-term goals (New Ambition).
up the issue of Varian again, examining the individual steps
leading to conclusion of the transaction (closing) on April 15,
2021 and discussing the subsequent implementation phase.
At the meeting on April 30, 2021, the Managing Board reported
to us on the net assets, financial position and results of oper-
ations as of the end of the second quarter, including current
developments as regards the COVID-19 pandemic. We also took
Wirtschaftsprüfer
Keller
Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft
Munich, November 23, 2021
99
The German Public Auditor responsible for the engagement is
Siegfried Keller.
German Public Auditor responsible for the
engagement
Our auditor's report must always be read together with the au-
dited consolidated financial statements and the audited group
management report as well as the assured ESEF documents.
The consolidated financial statements and the group manage-
ment report converted to the ESEF format – including the ver-
sions to be published in the Bundesanzeiger [German Federal
Gazette] |– are merely electronic renderings of the audited con-
solidated financial statements and the audited group manage-
ment report and do not take their place. In particular, the ESEF
report and our assurance opinion contained therein are to be
used solely together with the assured ESEF documents made
available in electronic form.
use of the auditor's report
-
Other matter
We declare that the opinions expressed in this auditor's report
are consistent with the additional report to the Audit Commit-
tee pursuant to Art. 11 of the EU Audit Regulation (long-form
audit report).
We were elected as group auditor by the Annual Sharehold-
ers' Meeting on February 12, 2021. We were engaged by the
Supervisory Board on March 8, 2021. We have been the group
auditor of Siemens Healthineers AG without interruption since
the fiscal year from October 1, 2017 to September 30, 2018.
Further information pursuant to Art. 10
of the EU Audit Regulation
• Evaluate whether the tagging of the ESEF documents with
Inline XBRL technology (iXBRL) in accordance with the re-
quirements of Arts. 4 and 6 of Commission Delegated Regu-
lation (EU) 2019/815, in the version in force at the date of the
financial statements, enables an appropriate and complete
machine-readable XBRL copy of the XHTML rendering.
• Evaluate whether the ESEF documents enable an XHTML ren-
dering with content equivalent to the audited consolidated
financial statements and to the audited group management
report.
• Evaluate the technical validity of the ESEF documents, i.e.,
whether the file containing the ESEF documents meets the
requirements of Commission Delegated Regulation (EU)
2019/815, in the version in force at the date of the financial
statements, on the technical specification for this file.
Identify and assess the risks of material intentional or uninten-
tional non-compliance with the requirements of Sec. 328 (1)
HGB, design and perform assurance procedures responsive to
those risks, and obtain assurance evidence that is sufficient
and appropriate to provide a basis for our assurance opinion.
• Obtain an understanding of internal control relevant to the
assurance on the ESEF documents in order to design assurance
procedures that are appropriate in the circumstances, but not
for the purpose of expressing an assurance opinion on the
effectiveness of these controls.
•
Our objective is to obtain reasonable assurance about whether
the ESEF documents are free from material intentional or un-
intentional non-compliance with the requirements of Sec. 328
(1) HGB. We exercise professional judgment and maintain pro-
fessional skepticism throughout the assurance work. We also:
In fiscal year 2021, the Audit Committee had the following
members: Dr. Marion Helmes (Chairwoman since September 28,
2021), Dr. Andreas C. Hoffmann (Chairman until September 27,
2021) and Prof. Dr. Ralf P. Thomas.
[German Public Auditor]
100
Dr. Eisele
Wirtschaftsprüfer
Siemens Healthineers Annual Report 2021
Additional information - Report of the Supervisory Board
At the meeting on January 29, 2021, the Managing Board re-
ported on the net assets, financial position and results of op-
erations as of the end of the first fiscal quarter, including the
effects of the COVID-19 pandemic. We also discussed the Annual
Shareholders' Meeting 2021 and the next steps in planning the
integration of Varian. In addition, we examined the details of
the proposed appointment of Ms. Darleen Caron to the Man-
aging Board and subsequently passed the resolution regarding
her appointment.
On November 20, 2020, we dealt with the financial statements
and combined management report for Siemens Healthineers AG
and the Group for the year ended September 30, 2020; the re-
port on relationships with affiliated companies as of Septem-
ber 30, 2020, pursuant to Section 312 of the German Stock
Corporation Act; the 2020 Annual Report, including the report
of the Supervisory Board, the compensation report and the
corporate governance report; and the agenda for the Annual
Shareholders' Meeting on February 12, 2021. We also discussed
the proposal to the Annual Shareholders' Meeting to confirm
the existing compensation system for the Supervisory Board.
In addition, we examined the current status of the Corindus
Vascular Robotics (Advanced Therapies) and ECG Management
Consultants (global Enterprise Services business) integration
projects. As regards Varian, we discussed the key integration
planning steps up to conclusion of the transaction. We also dealt
with the current status of business activities in the Laboratory
Diagnostics area.
At the meeting on October 30, 2020, we discussed the key
financial data for the fourth quarter and for fiscal year 2020.
We also dealt with the current planning status of the integra-
tion of Varian. The Supervisory Board also determined the com-
pensation for the members of the Managing Board for fiscal
year 2020 on the basis of the calculated target achievement.
We also adopted the targets for the Managing Board's compen-
sation for fiscal year 2021 on the basis of the proposal made by
the Chairman's Committee.
After in-depth consultations at our meeting on October 2,
2020, we approved the Managing Board's medium-term plan
and budget for 2021, and examined in this context the second
phase of Strategy 2025 ("Upgrading").
The Supervisory Board held seven regular meetings and ad-
opted three resolutions by written circulation in fiscal year 2021.
Topics of discussion at our regular plenary meetings were
the net assets, financial position and results of operations of
Siemens Healthineers, including the effects of the COVID-19
pandemic, and the Company's workforce trend.
Topics at the plenary meetings of
the Supervisory Board
Siemens Healthineers Annual Report 2021
Additional information - Report of the Supervisory Board
100
The Supervisory Board held regular meetings, also in the ab-
sence of members of the Managing Board, especially to discuss
Supervisory Board matters and personnel issues affecting the
Managing Board.
As Chairman of the Supervisory Board, I maintained regular
contact with the Managing Board between meetings, in par-
ticular with the Chief Executive Officer, and conferred with him
on issues of strategy, business development, the risk situation,
risk management and compliance.
The Supervisory Board and its relevant committees examined
and deliberated in detail on the proposals made by the Manag-
ing Board. Deviations of the course of business from plans were
explained to us in detail and discussed in depth.
The Managing Board involved us in a direct, timely and com-
prehensive manner in all decisions of a fundamental nature. By
means of written and verbal reports, both during and outside of
meetings, the Managing Board provided us with regular, prompt
and thorough information. We were informed of all relevant
aspects of the Company's business planning (including finan-
cial, investment and personnel planning), financial position and
profitability.
In the fiscal year under review, all of us on the Supervisory
Board executed, with due diligence, the duties assigned to us
by law, by the Siemens Healthineers articles of association and
our own bylaws, also taking into account the German Corpo-
rate Governance Code ("GCGC"). In this respect, we assisted
and monitored the Managing Board in its management of the
Company.
Against a backdrop of increasing challenges within the health-
care sector and the growing importance of the Company for
this infrastructure that is so critical in both humanitarian and
economic terms, I am delighted that we were able to enlarge
the Supervisory Board in 2021 with the addition of Peer M.
Schatz, an IT and biotechnology expert of global repute. As
Chairman of the Supervisory Board, it has been a great pleas-
ure, together with my colleagues, to contribute to the positive
growth of Siemens Healthineers.
Siemens Healthineers in the long term. It will also benefit our
shareholders, who have a stake in the success of the Company.
Prior to this development, we took into account legal changes
applicable to listed companies. In this context, the Supervi-
sory Board resolved on a new compensation system for the
Managing Board and this has been in effect since the start of
fiscal year 2021 after approval by a large majority at the An-
nual Shareholders' Meeting on February 12, 2021. This new
compensation system will help promote the implementa-
tion of our business strategy and the sustainable growth of
2021 also saw the Company play a significant role in the success-
ful handling of the pandemic through the provision of millions
of antigen self-tests. The relevance and innovation capability
of Siemens Healthineers was reflected not least by its inclusion
in Germany's benchmark DAX index in September 2021. This
step appears further justified by the share's outstanding perfor-
mance in fiscal year 2021, with gains of nearly 50 %.
Alongside this external expansion of our offerings, the Com-
pany has also been extremely successful in driving forward
its own research and development. Thus, in November,
Siemens Healthineers announced a breakthrough in medical
imaging in the form of the first photon-counting computed
tomography scanner. The U.S. Food and Drug Administration
(FDA) has even referred to this development as the "first sig-
nificant new technology for computed tomography in nearly a
decade". With this groundbreaking innovation, which the de-
velopment team worked on for more than 15 years, the Com-
pany has set new standards in radiology. Thanks to novel and
pioneering detector technology, medical imaging has been
raised to a previously unknown level of precision, at the same
time significantly reducing radiation and the dosage of contrast
media for patients.
2021 was another exceptional year for Siemens Healthineers.
In the second year of the COVID-19 pandemic, the Company
demonstrated more than ever the important role it plays in
society, particularly with its takeover of cancer specialist Varian
Medical Systems, Inc. (hereinafter referred to as "Varian") in
April - one of the biggest acquisitions the sector has seen.
This move served to reinforce Siemens Healthineers' position
as a holistic partner to the healthcare industry. The merger of
the two teams resulted in a unique company with a unique
portfolio that comprises clinical imaging, laboratory diagnos-
tics, Al solutions, and expertise for the diagnosis and treat-
ment of cancer and other chronic diseases. The combination of
Siemens Healthineers and Varian is also a pledge to help mil-
lions of patients worldwide in their battle against cancer.
Dear Shareholders,
C.3 Report of the Supervisory Board
[German Public Auditor]
You will find further information about the Managing Board
on our website:
Dr. Roland Busch
100
Mr. Peer M. Schatz was elected as a new additional member of
the Supervisory Board with effect from March 23, 2021, until
the conclusion of the Annual Shareholders' Meeting held to
ratify the acts of the Supervisory Board for fiscal year 2025.
Supervisory Board
The following changes occurred in the composition of the Super-
visory and Managing Boards in the reporting period:
Changes in the composition of the Supervisory
Board and Managing Board
The dependent company report and the independent auditors'
audit report were submitted to the Audit Committee and the
Supervisory Board and were reviewed by them. The review led
to no objections. In accordance with the definitive result of
the pre-examination by the Audit Committee and our own re-
view, the Supervisory Board has no objections to the Managing
Board's declaration on relationships with affiliated companies.
The Supervisory Board concurs with the results of the indepen-
dent auditors' audit of the dependent company report.
For that reason, the Managing Board of Siemens Healthineers AG
prepared a report on relationships with affiliated companies
(dependent company report) for the fiscal year 2021 in accor-
dance with Section 312 of the German Stock Corporation Act,
and submitted it in good time to the Supervisory Board. The
dependent company report was audited by the independent
auditors. Since, on the basis the final results of the audit, no
objections were raised, the independent auditors issued the fol-
lowing audit opinion in accordance with Section 313 (3) of the
German Stock Corporation Act: "Based on our audit and assess-
ment, which were carried out in accordance with professional
standards, we confirm that (1.) the factual statements made in
the report are correct, (2.) the payments made by the Company
in connection with legal transactions detailed in the report
were not unreasonably high, (3.) there are no circumstances
that would require a materially different assessment of the
measures listed in the report than that of the Managing Board."
statements.
As of the end of the fiscal year, Siemens AG (directly and in-
directly) held just over 75% of the issued capital of Siemens
Healthineers AG. Siemens Healthineers AG is included as a fully
consolidated subsidiary in Siemens AG's consolidated financial
Review of the Managing Board's report on
relationships with affiliated companies
As of the date his election to the Supervisory Board took effect,
he was also elected as a member of the Innovation and Finance
Committee.
Siemens Healthineers Annual Report 2021
Additional information - Report of the Supervisory Board
Details on the compensation report can be found at → www.
siemens-healthineers.com/investor-relations/corporate-governance.
The compensation report was audited separately by the audi-
tors. Besides the statutorily required formal examination pur-
suant to section 162 (1 and 2) of the German Stock Corporation
Act the compensation report was also audited in content. The
auditors were commissioned to do so by the Supervisory Board
in its meeting on September 27, 2021.
The Supervisory Board concurs with the results of the audit.
Based on the definitive result of the Audit Committee's pre-ex-
amination and our own examination, we have no objections.
The Managing Board prepared the annual financial statements
and the consolidated financial statements. We approved the
annual financial statements and the consolidated financial
statements. In view of our approval, the annual financial state-
ments of Siemens Healthineers AG are adopted as submitted.
The Managing Board has proposed that the net income avail-
able for distribution be used to pay out a dividend of €0.85 per
share entitled to a dividend and that the amount of net income
attributable to shares of stock not entitled to receive a dividend
for the past fiscal year be carried forward. We have endorsed
this proposal.
The auditors' reports were presented to all members of the
Supervisory Board. We reviewed these reports comprehensively
at our meeting on November 24, 2021, in the presence of the
independent auditors. The independent auditors reported on
the scope, focal points and main findings of their audit, address-
ing, in particular, key audit matters and the audit procedures
implemented. No major weaknesses in the risk management
or internal control systems were reported. At the same meet-
ing, the Managing Board explained the financial statements of
Siemens Healthineers AG and the Group as well as the risk man-
agement system. Another topic addressed at this meeting was
the quality evaluation of the audit of the financial statements.
The Audit Committee performed an evaluation based on previ-
ously determined audit quality indicators. On the basis of this
evaluation, the Supervisory Board approved the proposal to be
submitted to the Annual Shareholders' Meeting regarding the
election of the independent auditors, taking into account the
Audit Committee's recommendation.
The auditors, Ernst & Young GmbH Wirtschaftsprüfungsgesell-
schaft (Stuttgart, Germany), audited the annual financial state-
ments of Siemens Healthineers AG, the consolidated financial
statements of Siemens Healthineers and the combined man-
agement report for Siemens Healthineers AG and the Group for
fiscal I year 2021 and issued an unqualified opinion. The annual
financial statements of Siemens Healthineers AG and the com-
bined management report for Siemens Healthineers AG and
the Group were prepared in accordance with the requirements
of German law. The consolidated financial statements were
prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union and with
the additional requirements of German law set out in Sec-
tion 315e (1) of the German Commercial Code ("Handelsgesetz-
buch"). The consolidated financial statements also comply with
IFRS as issued by the International Accounting Standards Board
(IASB). The auditors conducted their audit in accordance with
Section 317 of the German Commercial Code, the EU Audit
Regulation and German generally accepted standards for the
audit of financial statements promulgated by the Institut der
Wirtschaftsprüfer (IDW), as well as in supplementary compli-
ance with the International Standards on Auditing (ISA). The
aforementioned documents, as well as the Managing Board's
proposal for the appropriation of net income, were submitted
to us in advance by the Managing Board. The Audit Committee
discussed the dividend proposal in detail at its meeting on No-
vember 2, 2021. It discussed the annual financial statements,
the consolidated financial statements and the combined man-
agement report in detail at its meeting on November 24, 2021.
In this context, the Audit Committee concerned itself, in par-
ticular, with key audit matters as described in the independent
auditors' report, including the audit procedures implemented.
Audit of the annual and consolidated financial
statements discussed in detail
The Declaration of Conformity with the GCGC adopted on Sep-
tember 30, 2021, was made permanently available to share-
holders on the Company's website. It is also reproduced in
→ C.4.4 Declaration of conformity with the German Corporate
Governance Code.
We regularly monitor the application and ongoing development
of our system of corporate governance. Detailed information on
corporate governance at the Company, including the composi-
tion of the Supervisory Board, can be found in → C.4 Corporate
governance statement.
Corporate Governance
103
In securing Mr. Peer M. Schatz for the Supervisory Board, the
Company now has one of the world's most distinguished man-
agers in the diagnostics sector, with many years of in-depth
experience in the international arena. He was involved in the
establishment and growth of a number of bioscience compa-
nies, especially in the fields of precision medicine, diagnostics,
biotechnology and life science.
The Company provided various onboarding measures to sup-
port his appointment to the Supervisory Board. These covered
topics such as the Company's organizational structure, and ap-
plicable rules and statutory regulations. He also had personal
talks with the Chairman of the Supervisory Board, the Chief
Executive Officer and other key persons within the Company.
Managing Board
The Managing Board informs the Supervisory Board regularly,
comprehensively, and without delay on all issues of importance
to the Company with regard to strategy, planning, business
development, the risk situation, risk management, and com-
pliance. When filling managerial positions in the Company, the
Managing Board takes diversity into consideration and, in par-
ticular, aims for appropriate gender representation.
The Managing Board is responsible for the preparation of the
quarterly statements and the half-year financial report, the
annual financial statements of Siemens Healthineers AG, the
consolidated financial statements of the Group, and the com-
bined management report of Siemens Healthineers AG and
the Group. In addition, the Managing Board ensures that the
Company adheres to the requirements of legislation, govern-
ment regulations, and internal Company guidelines, and works
to ensure that Group companies comply with these provisions
and guidelines. The Managing Board has established a compre-
hensive compliance management system. Details are available
on the website at www.siemens-healthineers.com/company/
compliance.
As the Company's top management body, the Managing Board
is committed to serving the Company's interests and achiev-
ing sustainable growth in the Company's value. The members
of the Managing Board are jointly responsible for the entire
management of the Company and decide on the basic issues
of business policy and corporate strategy, as well as on the
Company's annual and multiyear plans.
C.4.1.1 Composition and working methods of
the Managing Board
In addition to the applicable statutory provisions, the GCGC
provides the de jure and de facto framework for managing
and monitoring the Company. The goal of the GCGC is to make
Germany's two-tier system of corporate governance transpar-
ent and comprehensible.
Siemens Healthineers AG is subject to the regulations of Ger-
man stock corporation law. It therefore has a two-tier board
structure, with a Managing Board and Supervisory Board that
are separate in terms of both functions and personnel. Both gov-
erning bodies cooperate closely in the interests of the Company.
C.4.1 Two-tier board
According to Principle 22 of the German Corporate Governance
Code (Deutscher Corporate Governance Kodex, hereinafter
"GCGC"), this combined corporate governance statement for
Siemens Healthineers AG and the Group is a key instrument of
corporate governance reporting.
Publicly listed stock corporations are required to prepare and
publish an annual statement on corporate governance, with
the parent companies having to do so on behalf of their group
companies. This statement combines the corporate governance
statement of Siemens Healthineers AG in accordance with Sec-
tion 289f of the German Commercial Code (Handelsgesetzbuch,
HGB) and the Group corporate governance statement in accor-
dance with Section 315d of the German Commercial Code.
The Corporate Governance statement is an integral part of the
combined management report. Pursuant to Section 317 (2)
sentence 6 of the German Commercial Code, the independent
auditors' review of the disclosures made within the scope of
Sections 289f and 315d of the German Commercial Code is to
be limited to ascertaining whether the disclosures were made.
C.4 Corporate governance statement
Additional information - Corporate governance statement
Siemens Healthineers Annual Report 2021
Chairman
Prof. Dr. Ralf P. Thomas
Ray Thomas
104
For the Supervisory Board
Munich, November 24, 2021
On behalf of the Supervisory Board, I wish to thank all em-
ployees of Siemens Healthineers for their extraordinary ded-
ication in the past fiscal year, which was still marked by the
pandemic. I also want to express my gratitude to the members
of the Managing Board, who were highly successful in leading
the Company through another demanding year. And I would
especially like to thank you, our shareholders, for the trust you
have placed in our Company and its management, employees
and technologies over the past fiscal year.
At the meeting of the Supervisory Board on November 3, 2021
Ms. Elisabeth Staudinger has been appointed as a new member
of the Managing Board with effect from December 1, 2021 until
November 30, 2024. The appointment of Dr. Christoph Zindel is
terminated by mutual consent, effective March 31, 2022.
With the appointment of Ms. Darleen Caron, the number of
members on the Managing Board grew from three to four.
Ms. Darleen Caron was appointed to the Managing Board and
to the position of Chief Human Resources Officer (CHRO) with
effect from February 1, 2021, until January 31, 2024. She is also
the Labor Director of Siemens Healthcare GmbH, where she is
a member of that company's Managing Board.
Siemens Healthineers Annual Report 2021
Additional information - Report of the Supervisory Board
102
100
100
717
Dr. Philipp Rösler
100
100
༤-
1/1
100
6/6
100
10/10
100
717
Dr. Andreas C. Hoffmann
1/1
100
6/6
100
717
Dr. Marion Helmes
100
4/4
100
717
Peer M. Schatz
100
100
100
100
100
1/1
100
4/4
100
717
Karl-Heinz Streibich
100
4/4
100
717
Dr. Gregory Sorensen
100
717
Dr. Nathalie von Siemens
(since March 23, 2021)
100
212
3/3
108
Siemens Healthineers Annual Report 2021
Additional information - Independent auditor's report
Group auditor's responsibilities for the assurance work
on the ESEF documents
The above-mentioned statutory provision was originally due to
expire at the end of 2020. The Federal Ministry of Justice and
Consumer Protection extended these provisions regarding vir-
tual shareholders' meetings until the end of 2021 by means of
a regulation that came into force on October 29, 2020.
Appointments to Managing Board positions should also take
into account the targets that the Supervisory Board has spec-
ified for the share of women on the Managing Board.
It is regarded as useful to have different age groups repre-
sented on the Managing Board. In accordance with the rec-
ommendation of the GCGC, the Supervisory Board has set an
age limit for members of the Managing Board. In general, an
appointment or a renewal of an appointment to the Manag-
ing Board is permitted only for persons below the age of 63.
The decisive factor in filling a specific Managing Board position
is always the Company's interest, taking into account all circum-
stances of the individual case.
The diversity concept is implemented as part of the procedure
for the Supervisory Board's appointment of the Managing
Board. In selecting candidates, the Supervisory Board is to take
account of the requirements set out in the diversity concept for
the Managing Board.
In the decision made in the reporting period on the appoint-
ment of Ms. Darleen Caron, the Supervisory Board took appro-
priate account of the diversity concept during the structured
appointment process. It is the Supervisory Board's opinion that
this decision is in the Company's best interest, as Ms. Darleen
Caron has broad experience of an international and strategic
nature along with a successful track record in the management
of all aspects of human resources in global organizations.
110
Siemens Healthineers Annual Report 2021
Additional information - Corporate governance statement
the Managing Board
With the support of the Chairman's Committee, and in consulta-
tion with the Managing Board, the Supervisory Board performs
long-term succession planning for members of the Managing
Board. To this end, the Supervisory Board and the Chairman's
Committee regularly discuss potential candidates for the Man-
aging Board. The chair of the Managing Board is involved,
unless the discussion is about his or her own succession. The
requirement profiles for future Managing Board members de-
fined by the Supervisory Board are not static, but are reviewed
at the start of every new succession-planning project, taking
into account the current responsibility-specific needs and con-
crete challenges. The Supervisory Board pursues the approved
diversity concept in this process, giving due consideration to
ensuring that the knowledge, abilities, and experience of all
members of the Managing Board are diverse and balanced. In
addition, the Supervisory Board regularly receives information
on succession planning for the level below the Managing Board
and advises the Managing Board on this matter. The appoint-
ment of incumbents of certain management functions at the
first level below the Managing Board requires the approval of
the Chairman's Committee.
C.4.3 Tasks of the Supervisory Board;
targets, profile of required skills
and expertise, and diversity
concept
The diversity concept for the Supervisory Board was adopted
by the Supervisory Board together with the targets for the
Board's own composition, including the profile of the skills
and expertise that the Supervisory Board should possess. This
framework requires the composition of the Supervisory Board
of Siemens Healthineers AG to be such as to ensure that its
members collectively are qualified to supervise and advise the
Managing Board.
Targets for female representation on
the Supervisory Board
Pursuant to the German Stock Corporation Act, the Supervisory
Board is to set a target for the share of women on the Super-
visory Board. If the share of women is less than 30% when
the target is set, the target cannot be below the level that has
already been achieved.
At Siemens Healthineers AG, a target of at least 2/9 by June 30,
2023, has been set for female representation on the Super-
visory Board.
There are already two women on the Supervisory Board:
Dr. Marion Helmes and Dr. Nathalie von Siemens. Thus, the
target for female representation had already been achieved
when the decision was taken - by a broad majority at the An-
nual Shareholders' Meeting 2021 - to enlarge the Supervisory
Board. As a consequence of the enlargement of the Supervisory
Board and the election of the new member, the Company has
temporarily fallen short of its target for female representation.
The next regular election of the majority of Supervisory Board
members is planned for the Annual Shareholders' Meeting 2023,
which is prior to the deadline for achieving the envisaged tar-
get for female representation. Consequently, the election may
result in the Company achieving its target.
Diversity concept for the Supervisory Board
Sufficient diversity is expected in the composition of the Super-
visory Boardthat the Supervisory Board is sufficiently diverse in
its composition. In addition to an appropriate gender ratio, this
also includes diversity with regard to cultural origin, religion,
and ethnic background, as well as diversity of professional back-
ground, experience, and mindset. When examining potential
candidates for appointments to Supervisory Board positions,
diversity should be given appropriate consideration early on in
the selection process.
In the process of selecting and nominating candidates for the
Supervisory Board, the Supervisory Board takes account of the
targets for its composition and the requirements laid down in
the diversity concept.
These requirements were taken into account when a new mem-
ber was elected to the Supervisory Board during the report-
ing period. In selecting Mr. Peer M. Schatz, special attention
was paid to his international professional experience and his
cross-cultural origins and education.
Profile of required skills and expertise
The composition of the Supervisory Board of Siemens
Healthineers AG should be such that it can provide the Manag-
ing Board with qualified oversight and consultation.
The candidates proposed for election to the Supervisory Board
should have the knowledge, skills, and experience that enable
them to perform the duties of a supervisory board member at
an international enterprise and strengthen the public image of
Siemens Healthineers. The character, integrity, motivation, and
professionalism of the persons proposed for election should be
given particular consideration.
Pursuant to the German Stock Corporation Act, at least one
member of the Supervisory Board should have knowledge
of accounting and at least one further member should have
knowledge of auditing financial statements. In addition, the
Supervisory Board should collectively be familiar with the sec-
tor in which Siemens Healthineers operates.
Pursuant to the GCGC, the Chair of the Audit Committee should
have specific knowledge and experience in applying account-
ing principles and internal control procedures and be familiar
with audits of financial statements. This person should also be
independent.
111
Siemens Healthineers Annual Report 2021
Additional information - Corporate governance statement
The aim is for the Supervisory Board as a whole to have all the
knowledge and experience considered essential in view of the
activities of Siemens Healthineers. This includes, for example,
competencies and experience of medical and healthcare tech-
nology (including information technology and digitalization),
transformation processes, entrepreneurship, procurement,
production and sales, finance, legal (including compliance),
and human resources. The Supervisory Board should also have
knowledge and experience of the lines of business important to
Siemens Healthineers, in particular (diagnostic) imaging, labora-
tory diagnostics, clinical therapy and cancer care. In particular,
the Supervisory Board members should also include persons
who have management experience at a large international en-
terprise as a result of performing an executive function or as a
member of a supervisory board or similar body.
Before potential new members are considered, the Supervisory
Board should conduct a review to determine which of its re-
quired skills and expertise need to be strengthened.
With its current membership, the Supervisory Board fulfills the
profile of required skills and expertise. The Supervisory Board
members have the professional and personal qualifications con-
sidered necessary. As a group, they are familiar with the sector
in which the Company operates and have the knowledge, skills,
and experience essential for Siemens Healthineers.
Collectively, the Managing Board should have many years of
experience in the areas of technology (including information
technology and digitalization), transformation processes,
entrepreneurship, research and development, procurement,
production and sales, finance, legal (including compliance),
and human resources.
•
•
• Collectively, the Managing Board should have experience of
the lines of business important to Siemens Healthineers, in
particular (diagnostic) imaging, laboratory diagnostics, clin-
ical therapy and cancer care.
Siemens Healthineers Annual Report 2021
Additional information - Corporate governance statement
The role of the Innovation and Finance Committee is particu-
larly to discuss the innovation strategy within the Company's
overall strategy, and also to prepare the Supervisory Board's
proceedings and resolutions regarding the Company's financial
situation and resources, its investments in property, plant and
equipment, and its financial measures. In addition, the Innova-
tion and Finance Committee has been authorized by the Super-
visory Board to decide on the approval of certain transactions
and measures that require Supervisory Board approval and have
a value of less than €300 million.
In fiscal year 2021, the Innovation and Finance Committee
had the following members: Prof. Ralf P. Thomas (Chairman),
Dr. Roland Busch, Dr. Norbert Gaus, Mr. Peer M. Schatz (since
March 23, 2021), Dr. Gregory Sorensen, and Mr. Karl-Heinz
Streibich.
The Related-Party Transactions Committee decides on the ap-
proval of related party transactions within the meaning of
Sections 107 and 111a through 111c of the German Stock Cor-
poration Act. The establishment of this committee creates the
conditions that allow the Supervisory Board to deal with related
party transactions independently of the related parties involved
in the transaction concerned. Within the scope specified above,
the committee's responsibility for making decisions pertaining
to related party transactions takes priority over the responsi-
bility of other committees to make decisions.
The Related-Party Transactions Committee has three mem-
bers, who are elected by the Supervisory Board. The majority
of members of the committee, including the committee chair-
woman, are individuals for whom there are no concerns about
conflicts of interest due to their relations with related parties.
In fiscal year 2021, the committee had the following members:
Dr. Marion Helmes (Chairwoman), Dr. Andreas C. Hoffmann,
and Mr. Karl-Heinz Streibich.
Self-evaluation of the work of the Supervisory Board
The Supervisory Board regularly evaluates how effectively the
Supervisory Board as a whole and its committees discharge
their duties. In fiscal year 2021, the Supervisory Board con-
ducted a questionnaire-based self-evaluation, as it did in the
previous year. The self-evaluation focused on the Supervisory
Board's supply of information, and the conduct of meetings of
the Supervisory Board and its committees.
C.4.1.3 Share transactions of the Managing
Board and Supervisory Board
Pursuant to Article 19 of Regulation (EU) No 596/2014 of the
European Parliament and of the Council of 16 April 2014 on
market abuse (Market Abuse Regulation) and repealing Direc-
tive 2003/6/EC of the European Parliament and of the Council
and Commission Directives 2003/124/EC, 2003/125/EC, and
2004/72/EC, members of the Managing Board and the Super-
visory Board are required by law to disclose all transactions
conducted on their own account relating to the shares or debt
instruments of Siemens Healthineers AG or to derivatives or
other financial instruments linked thereto, if the total value
of such transactions entered into by a board member or any
related party of that member reaches or exceeds €20,000 in
any calendar year. All transactions reported during the past
fiscal year to Siemens Healthineers AG in accordance with this
requirement have been duly published and are available on the
Company's website at: www.siemens-healthineers.com/inves-
tor-relations/corporate-governance/directors-dealings.
C.4.1.4 Shareholders' interests and
Shareholders' Meeting
As part of investor relations activities, investors are comprehen-
sively informed about developments within the Company. For
reporting purposes, Siemens Healthineers also makes extensive
use of the Internet. At → www.corporate.siemens-healthineers.
com/investor-relations/corporate-governance, we publish quar-
terly statements, half-year financial and annual reports, ad hoc
announcements, analyst presentations, and press releases, as
well as the financial calendar for the current year, which con-
tains the publication dates of significant financial communica-
tions and the date of the Annual Shareholders' Meeting.
The shareholders exercise their rights, especially their voting
rights, at the Shareholders' Meeting. The Shareholders' Meet-
ing passes resolutions on all matters for which it is responsi-
ble under law and the articles of association. Every share in
Siemens Healthineers AG grants the holder one vote. The Com-
pany supports the shareholders in the exercise of their rights at
the Shareholders' Meeting. The invitation to and attendance at
the Shareholders' Meeting comply with statutory requirements
as well as those set down in the articles of association.
Documents for and information on the Shareholders' Meeting are
available at www.siemens-healthineers.com/investor-relations.
In the person of Prof. Dr. Ralf P. Thomas, the Supervisory Board
and Audit Committee each have at least one member with
knowledge of accounting. As regards the auditing of financial
statements, the Supervisory Board and the Audit Committee
each have at least one person with the corresponding expertise
in the person of Dr. Marion Helmes.
Pursuant to Section 1 (1) and (2) of the German Act on Meas-
ures in Corporate, Cooperative, Association, Foundation, and
Residential Property Law to Combat the Effects of the COVID-19
Pandemic (hereinafter "COVID-19 Act"), the Managing Board re-
solved, with the approval of the Supervisory Board, to hold the
Annual Shareholders' Meeting on February 12, 2021, as a virtual
annual shareholders' meeting without the physical presence
of shareholders or their authorized representatives and to al-
low shareholders to exercise their voting rights using electronic
communication or by issuing voting instructions to proxies.
Siemens Healthineers Annual Report 2021
Additional information - Corporate governance statement
On September 7, 2021, the German parliament (Bundestag) re-
solved to once again extend the COVID-19 Act. As a result, the
option of holding virtual shareholders' meetings will remain in
place until August 31, 2022. This does not involve any changes
to the content of such meetings.
Therefore, the decision to convene a virtual shareholders' meet-
ing or invite shareholders to attend in person is at the discretion
of the Managing Board. The Managing Board's decision to con-
vene and conduct a shareholders' meeting remains subject to
approval by the Supervisory Board.
C.4.2 Tasks of the Managing Board;
targets, succession planning
and diversity concept
Targets for the share of women
Pursuant to the German Stock Corporation Act, the Supervisory
Board is to set targets for the share of women on the Managing
Board. The Managing Board is to set targets for the share of
women at the two levels of management below the Managing
Board. If the share of women is less than 30% when the targets
are set, the targets cannot be below the level that has already
been achieved.
At Siemens Healthineers AG, targets have been set for the Man-
aging Board to include at least one woman by June 30, 2023,
and for the first management level below the Managing Board
to include at least 25% women by June 30, 2022. There is only
one level of management below the Managing Board.
By appointing Ms. Darleen Caron to the Managing Board,
Siemens Healthineers AG achieved its self-imposed target for
the Managing Board ahead of schedule. Ms. Caron was ap-
pointed to the Managing Board and to the position of Chief
Human Resources Officer (CHRO) with effect from February 1,
2021, until January 31, 2024.
Diversity concept for the Managing Board
When assessing the proposals for appointing Managing Board
members, the Chairman's Committee is guided by the objec-
tive to ensure, as far as possible, that the Managing Board has
strong leadership skills and a diversified complementary com-
position. The aim is for the Managing Board as a whole to have
all the knowledge and experience that are considered essential
in light of the activities of Siemens Healthineers.
When selecting Managing Board members, the Supervisory
Board ensures that they are personally suited and have integ-
rity, convincing leadership qualities, international experience,
the professional qualifications for the specific business respon-
sibilities to be assumed, a proven track record, knowledge of
the Company, and the ability to adapt business models and pro-
cesses in a constantly changing world. The aspect of diversity is
an important selection criterion in filling Managing Board posi-
tions, including aspects such as age, gender, and educational
and professional background. For this reason, the Supervisory
Board takes particular account of the following criteria when
selecting members of the Managing Board:
• In addition to the required specific technical skills and man-
agement and leadership experience for the task at hand,
Managing Board members should cover a range of knowl-
edge and experience as well as of educational and profes-
sional backgrounds that is as broad as possible.
• In view of the Company's international reach, it should be
ensured that the composition of the Managing Board reflects
internationality by including different cultural backgrounds or
international experience (for example, extended professional
experience abroad that is relevant to Siemens Healthineers or
the management of foreign business activities).
109
Dr. Marion Helmes, the independent chair of the Audit Com-
mittee, meets the GCGC recommendations for the chair of that
committee as regards specific knowledge and experience in
applying accounting principles and internal control procedures,
and familiarity with audits of financial statements.
Long-term succession planning for
International profile
Business conduct guidelines
The Siemens Healthineers business conduct guidelines pro-
vide the ethical and legal framework within which the Com-
pany intends to operate and to remain on course for success.
They contain the basic principles and rules for the conduct of
all Siemens Healthineers employees within the Company and in
relation to our external partners and the general public. They set
out how Siemens Healthineers meets its ethical and legal respon-
sibilities as a company. The business conduct guidelines are avail-
able at
www.siemens-healthineers.com/company/compliance.
113
Siemens Healthineers Annual Report 2021
Additional information - Notes and forward-looking statements
C.5 Notes and forward-looking statements
This document contains statements related to our future busi-
ness and financial performance and future events or develop-
ments involving Siemens Healthineers that may constitute for-
ward-looking statements. These statements may be identified
by words such as "expect", "forecast", "anticipate", "intend",
"plan", "believe", "seek", "estimate", "will", "target" or words of
similar meaning. We may also make forward-looking statements
in other reports, in presentations, in material delivered to share-
holders and in press releases. In addition, our representatives
may from time to time make oral forward-looking statements.
Such statements are based on the current expectations and
certain assumptions of Siemens Healthineers' management,
of which many are beyond Siemens Healthineers' control. As
they relate to future events or developments, these statements
are subject to various risks, uncertainties and factors, includ-
ing but not limited to those described in the respective disclo-
sures. Should one or more of these risks, uncertainties or fac-
tors materialize, or should underlying expectations not occur
or assumptions prove incorrect, actual results, performance
or achievements of Siemens Healthineers may (negatively or
positively) vary materially from those described explicitly or
implicitly in the forward-looking statement. All forward-look-
ing statements apply only as of the date when they were made
and Siemens Healthineers neither intends nor assumes any ob-
ligation, unless required by law, to update or revise these for-
ward-looking statements in light of developments which differ
from those anticipated.
This document includes supplemental financial measures that
are or may be alternative performance measures not precisely
defined in the applicable financial reporting framework (non-
GAAP measures). These supplemental financial measures may
have limitations as analytical tools and should not be viewed in
isolation or as alternatives to measures of Siemens Healthineers'
net assets, financial position and results of operations as pre-
sented in accordance with the applicable financial reporting
framework. Other companies that report or describe similarly
titled alternative performance measures may calculate them
differently, and therefore they may not be comparable to those
included in this document.
Due to rounding, individual numbers presented throughout this
and other documents may not add up precisely to the totals
provided and percentages may not precisely reflect the absolute
figures to which they refer.
This document is an English language translation of the German
document. In case of discrepancies, the German language doc-
ument is the sole authoritative and universally valid version.
For technical reasons, there may be differences in formatting
between the accounting records appearing in this document
and those published pursuant to legal requirements.
In the event that the male form is used in this Annual Report,
the information nevertheless refers to all persons (male, female,
non-binary).
Internet:
Further corporate governance practices applied beyond legal
requirements are contained in the business conduct guidelines.
→ www.siemens-healthineers.com
→ www.siemens-healthineers.com/press-room
Investor Relations:
→ www.corporate.siemens-healthineers.com/investor-relations
114
In addition, it is the Supervisory Board's opinion that all mem-
bers of the Audit Committee have the requisite knowledge of
accounting, auditing financial statements and internal control
procedures.
Henkestr. 127
91052 Erlangen, Germany
siemens-healthineers.com
Investor Relations
Phone: +49 (9131) 84-3385
Email: ir.team@siemens-healthineers.com
Press
Email: press.team@siemens-healthineers.com
Published by Siemens Healthineers AG Order No. CC-00138-1|1-7600 Printed in Germany 12/2021 Siemens Healthineers AG, 2021
Press:
Pursuant to A.5 of the GCGC, in the case of a takeover offer,
the Managing Board should convene an extraordinary share-
holders' meeting at which shareholders discuss the takeover
offer and may decide on corporate actions. The convening of a
shareholders' meeting, even taking into account the shortened
time limits stipulated in the German Securities Acquisition and
Takeover Act, is an organizational challenge for large publicly
listed companies. It appears doubtful whether the associated ef-
fort is also justified in cases where no relevant decisions by the
shareholders' meeting are intended. Therefore, extraordinary
shareholders' meetings are convened only in appropriate cases.
Siemens Healthineers AG
Suggestions of the German Corporate
Governance Code
With regard to performing the tasks associated with such a posi-
tion at Siemens Healthineers, it must be taken into account that
Every Supervisory Board member must ensure that they have
enough time to perform their tasks. The legal limits on the num-
ber of positions, and the upper limit recommended by the GCGC
of two supervisory board positions for Managing Board mem-
bers of publicly listed companies and five supervisory board
positions for other members, must be taken into consideration.
Availability
Siemens Healthineers Annual Report 2021
Additional information - Corporate governance statement
112
In the opinion of the Supervisory Board, all its members are
currently independent of the Company and its Managing
Board. Some members of the Supervisory Board hold posi-
tions of significant responsibility in other companies with which
Siemens Healthineers maintains relationships in the ordinary
course of business. The Supervisory Board believes that none
of these relationships should be considered material.
• at least five, but usually seven, ordinary Supervisory Board
meetings are held per year, which require adequate preparation
• sufficient time must be planned for reviewing the documents
relating to the annual and consolidated financial statements
The Supervisory Board has an adequate number of indepen-
dent members. In the opinion of the Supervisory Board, there
are currently at least five Supervisory Board members who are
independent of the Company, its Managing Board, and the
majority shareholder - namely, Dr. Marion Helmes, Dr. Philipp
Rösler, Dr. Gregory Sorensen, Mr. Peer M. Schatz and Mr. Karl
Heinz Streibich.
Under the GCGC, more than half of the shareholder representa-
tives should be independent of the company and the Managing
Board. Supervisory Board members are to be considered inde-
pendent of the company and its Managing Board if they have
no personal or business relationship with the company or its
Managing Board that may cause a substantial – and not merely
temporary conflict of interest.
In accordance with the GCGC, the Supervisory Board should
include what it considers to be an appropriate number of in-
dependent members from the group of shareholder represen-
tatives, thereby taking into account the shareholder structure.
Within the meaning of this recommendation of the GCGC, a
Supervisory Board member is considered independent if he/she
is independent of the company and its Managing Board, and
independent of any controlling shareholder. The composition of
the Supervisory Board should be such that at least three inde-
pendent shareholder representatives who meet the above cri-
teria of independence are members of the Supervisory Board.
Independence
A considerable number of Supervisory Board members are en-
gaged in international activities and/or have many years of in-
ternational experience.
In light of the Company's international reach, it should be en-
sured that the Supervisory Board has a sufficient number of
members with many years' international experience.
In addition to recommendations, the GCGC also makes sug-
gestions for good and responsible corporate governance and
control. Since September 30, 2020, Siemens Healthineers AG
has fulfilled all suggestions of the GCGC with the exception of
A.5 of the GCGC.
If the company has a controlling shareholder, and the Supervi-
sory Board comprises more than six members, the GCGC rec-
ommends that at least two shareholder representatives should
be independent of the controlling shareholder. A Supervisory
Board member is considered independent of the controlling
shareholder if he/she, or a close family member, is neither a
controlling shareholder nor a member of the executive gov-
erning body of the controlling shareholder, and does not have
a personal or business relationship with the controlling share-
holder that may cause a substantial - and not merely tempo-
rary conflict of interest.
•
In assessing whether its Supervisory Board members are inde-
pendent of the Company or its Managing Board, the shareholder
representatives should take into account the aspects given in
C.7 of the GCGC.
⚫ attendance at the Annual Shareholders' Meeting is mandatory
depending on membership in one or more of the currently
four Supervisory Board committees, additional time is re-
quired for attending and adequately preparing for commit-
tee meetings; this applies especially to the Audit Committee
• additional extraordinary meetings of the Supervisory Board or
a committee may become necessary to deal with special issues.
C.4.5 Information on corporate
management practices
The Supervisory Board
The Managing Board
Against this background, the Managing Board and Supervisory
Board declare that the Company meets all recommendations
of the GCGC, without exception, at the present time and will
also do so in the future.
Also with regard to the amended requirements for membership
of the DAX family indices, an independent member of the Su-
pervisory Board has now been appointed as Chair of the Audit
Committee. Since September 28, 2021, this position has been
held by Dr. Marion Helmes. As a result, the previously declared
deviation no longer exists.
Previously, the Audit Committee had been chaired by a repre-
sentative of the majority shareholder to reflect the fact that the
Company is included in the consolidated financial statements
of the Siemens Group due to its affiliation with Siemens AG.
Munich, September 30, 2021
Siemens Healthineers AG
Age limit and length of membership
The Managing Board and Supervisory Board declare that, since
the issuance of the last Declaration of Conformity dated Sep-
tember 30, 2020, the Company has fully complied with the
recommendations of the German Corporate Governance Code
as amended on December 16, 2019 ("GCGC"), except for the
following deviation:
Declaration of Conformity by the Managing
Board and the Supervisory Board of
Siemens Healthineers AG with the German
Corporate Governance Code in accordance with
section 161 of the German Stock Corporation Act
C.4.4 Declaration of conformity
with the German Corporate
Governance Code
Observing the age limit laid down by the Supervisory Board in
the bylaws, only persons no more than 70 years of age should
usually be proposed for election as a member of the Supervi-
sory Board. The aim is for the Supervisory Board to have an
appropriate structure of experience and age.
Pursuant to C.10 sentence 2 and D.4 sentence 1 of the GCGC,
the Chairman of the Audit Committee shall be independent.
Pensions
1,029
2,513
1 The values as of September 30, 2020 were adjusted according to the new definition of
net debt.
Net debt
The line items cash and cash equivalents, and current receiv-
ables from and liabilities to the Siemens Group from financing
activities, collectively make up the Company's funds available
at short notice. Changes in these items were attributable to
income and expenditures from operations and to short-term
investment or borrowing of liquidity.
The increase of €666 million in cash and cash equivalents re-
sulted mainly from cash acquired with the acquisition of Varian.
Current receivables from the Siemens Group from financing ac-
tivities reduced by €2,677 million, mainly due to using invested
funds for the payment of the purchase price of the acquisition
of Varian. The current liabilities to the Siemens Group from fi-
nancing activities reduced by €114 million, in particular, due
to the repayment of a matured loan with a nominal value of
US$ 859 million and a partial repayment of €300 million on a
loan taken out in fiscal year 2020, related to the financing of the
acquisition of Corindus. This was offset by an additional short-
term financing of €850 million granted by the Siemens Group
for the acquisition of Varian.
908
12,809
The increases in both short-term financial debt and long-term
financial debt of €58 million and €143 million, respectively,
were due in particular to liabilities which were acquired as part
of the acquisition of Varian.
In fiscal year 2021, net debt increased by €10,416 million to
€11,901 million mainly due to finance transactions related to
the financing of the acquisition of Varian.
Net debt (including pensions)
457
314
1,484
11,901
Net debt1
Short-term financial debt and current
Long-term financial debt
167
225
maturities of long-term financial debt
Provisions for pensions and similar obligations reduced mainly
due to a favorable development of the plan assets and an in-
crease in the discount rate in countries with significant pension
commitments. This was offset by taking over corresponding
provisions in the amount of €33 million in connection with
the acquisition of Varian. In total, the line item decreased
by € 121 million. For additional information, please refer to
→ Note 21 Provisions for pensions and similar obligations in the
notes to the consolidated financial statements.
-92
Provisions for pensions and similar
obligations
Financing management
• €0.7 billion maturing in fiscal year 2022,
• US$ 1.2 billion maturing in fiscal year 2023,
-498
Please refer to Note 16 Financial debt in the notes to the
consolidated financial statements for further information
on financial debt. For more information on financial risk
management responsibilities and objectives, please refer to
→ Note 26 Financial risk management in the notes to the consol-
idated financial statements.
In fiscal year 2021, the bridge facility in an amount of €12.5 bil-
lion provided by the Siemens Group for the acquisition of Varian
in fiscal year 2020, was fully canceled.
As in the previous year, the Siemens Group granted two credit
facilities to Siemens Healthineers. As of September 30, 2021,
a multicurrency revolving credit facility existed in an amount
up to €1.1 billion (September 30, 2020: €1.1 billion). It serves
as financing of net working capital and as short-term loan facil-
ity. Additionally, a multicurrency revolving credit facility in an
amount up to €1.0 billion (September 30, 2020: € 1.0 billion)
was granted. Both credit facilities are available until January 31,
2023 and were utilized as of September 30, 2021 in the amount
of €311 million (September 30, 2020: € 166 million).
In addition, local bank facilities are in place to cover funding
needs of some Siemens Healthineers entities which have no
access to direct funding within Siemens Healthineers.
As of September 30, 2021, Siemens Healthineers continued to
participate in the cash pooling of the Siemens Group, which
included the short-term investment of excess liquidity and the
borrowing of short-term funds within the Siemens Group. Ex-
cluded thereof are currently the entities that were acquired as
part of the acquisition of Varian. Siemens Healthineers intends
to set up its own cash pooling in the medium term in order to
(partially) replace the participation in the cash pooling of the
Siemens Group.
In addition to the loans listed above, as of September 30, 2020,
there was one other loan in the amount of US$ 0.9 billion ma-
turing and repaid in fiscal year 2021. In fiscal year 2019, the
U.S. dollar-denominated loans maturing in fiscal years 2021,
2023 and 2027 were transferred from a U.S. entity to German
entities. The resulting foreign currency risks were hedged by for-
ward exchange contracts. As a result, the loans were effectively
converted into synthetic euro-denominated loans and actual
interest expenses decreased due to positive forward elements
of the forward exchange contracts. In total, the actual current
volume-weighted average interest rate of the transferred loans
decreased to approximately 0.1%. The loan maturing in fiscal
year 2046 carried a contractual interest rate of 3.4%. The loans
maturing in fiscal year 2022 are with variable interest rates.
• US$ 0.7 billion maturing in fiscal year 2023,
• €0.9 billion maturing in fiscal year 2022,
In addition, there were further loans with the Siemens Group
with various maturities and in various currencies, in particular:
In fiscal year 2021, the Siemens Group provided loans with var-
ious maturities with regard to the financing of the acquisition
of Varian:
Business development
16
With the exception of the loan of US$ 1.0 billion the loans have
a fixed interest rate. The resulting foreign currency risks were
hedged by forward exchange contracts and by foreign ex-
change swaps. As a result, the loans with fixed interest rates
were effectively converted into synthetic euro-denominated
loans and actual interest expenses decreased due to positive
forward elements of the forward exchange contracts and for-
eign exchange swaps. Only the nominal volume of the loan
with a variable interest rate was hedged. In total, the actual
current volume-weighted average interest rate of the loans
amounts to approximately 0.3%.
• US$ 1.5 billion maturing in fiscal year 2041.
• US$ 1.2 billion maturing in fiscal year 2028,
US$1.7 billion maturing in fiscal year 2031, and
US$ 1.7 billion maturing in fiscal year 2026,
US$ 1.5 billion maturing in fiscal year 2024,
US$ 1.0 billion maturing in fiscal year 2024,
•
•
•
Siemens Healthineers Annual Report 2021
Combined management report
activities
822
Market value of forwards for hedging of
1 Excluding market value of forwards for hedging of foreign currency liabilities from
financing activities.
Apart from the acquisition of Varian, the remaining segments
recorded an increase in trade and other receivables and in in-
ventories of €481 million and €242 million, respectively, as a
result of increased business activity and expected growth. The
corresponding increase in trade payables of €412 million and
contract liabilities of €254 million had an offsetting effect.
Operating net working capital increased by €720 million
to €3,270 million, in particular due to the acquisition of
Varian which resulted in an increase of €592 million. For fur-
ther information regarding the acquisition, please refer to
→ Note 3 Acquisitions in the notes to the consolidated financial
statements.
2,550
3,270
Operating net working capital
-3
Receivables from and payables to the
Siemens Group from operating activities
2,304
-1,356
-1,784
-2,883
Contract liabilities
14,736
30,846
Remaining non-current assets
818
295
460
Other assets
1,159
3,179
-1,921
Trade payables
Inventories
Contract assets
Remaining current liabilities
The increase in remaining non-current assets by €16,109 million
to €30,846 million resulted largely from a rise of €8,475 mil-
lion in goodwill, €6,299 million in other intangible assets and
€938 million in property, plant and equipment. The increase in-
cluded positive effects from currency translation in an amount
of €763 million.
foreign currency liabilities from financing
These developments were caused most notably by the acquisi-
tion of Varian. Independently of the transaction, property, plant
and equipment in particular was up by €403 million, mainly
because of investments in capacity expansions at various sites.
Net debt (including pensions)
2,982
11,708
financing activities
Liabilities to the Siemens Group from
2,040
1,926
financing activities
Current liabilities to the Siemens Group from
-3,271
-594
from financing activities
Current receivables from the Siemens Group
-1,322
2021
Sept 30,
Further, the positive market value of forwards for hedging of
foreign currency liabilities from financing activities increased
by €406 million, mainly due to the changes in the value of de-
rivatives in order to hedge the foreign currency risks of loans
denominated in U.S. dollars. For further information regard-
ing derivatives, please refer to → Note 25 Financial instruments
and hedging activities in the notes to the consolidated financial
statements.
The significant increase in liabilities to the Siemens Group from
financing activities of €8,725 million was mainly due to the
financing of the acquisition of Varian. For this purpose, the
Siemens Group provided loans with various maturities totaling
US$ 10.0 billion.
-656
2020
Cash and cash equivalents
(in millions of €)
Siemens Healthineers has changed the definition of net debt.
Effective with fiscal year 2021, the market value of forward
contracts for hedging of foreign currency liabilities from financ-
ing activities has been included in the key figure. This provides
more relevant information with regard to the economic char-
acter of net debt, particularly in light of the increase in U.S.
dollar-denominated debt in connection with financing the
Varian acquisition.
Siemens Healthineers Annual Report 2021
Combined management report - Business development
15
Sept 30,
18
2021
(in millions of €)
A.3.3.2 Cash flows
Please refer to Note 23 Equity in the notes to the consoli-
dated financial statements for further information regarding
equity.
In fiscal year 2021, an increased number of treasury shares
was repurchased to fulfill share-based payment programs
based on shares of Siemens Healthineers AG. Thus, the
treasury shares increased by €203 million to €240 mil-
lion. The increase was attributable to the growing trans-
formation of the share-based payment programs from
Siemens AG shares to Siemens Healthineers AG shares since
the IPO in fiscal year 2018, and to the price development of
Siemens Healthineers AG shares.
Other components of equity increased by €656 million, mainly
due to currency translation differences.
Retained earnings increased by €977 million, mainly due to net
income for fiscal year 2021 of €1,746 million. This was partly
offset by dividend payments of €856 million.
Equity rose by €3,828 million to €16,339 million, mainly as
a result of issuing new shares of Siemens Healthineers AG in
March 2021 for financing the acquisition of Varian. Issued cap-
ital increased by €53 million and capital reserve by €2,275 mil-
lion, including effects from transaction costs and taxes.
13
12,511
16,339
Fiscal year
2021
Total equity
Non-controlling interests
12,498
16,321
Siemens Healthineers AG
Total equity attributable to shareholders of
-1,276
-741
-36
-240
Treasury shares
-85
Other components of equity
2,568
Net income
1,746
Change in operating net working capital
18
Further cash outflows resulted from dividends paid to share-
holders of Siemens Healthineers AG amounting to €856 million
(2020: €798 million).
Cash flows from other transactions/financing with the Siemens
Group changed by €12,814 million to a positive figure of
€ 10,961 million. This includes inflows from borrowings in the
amount of US$ 10,0 billion and an additional financing in the
amount of €850 million, provided by the Siemens Group in
fiscal year 2021 to finance the acquisition of Varian. This was
partly offset by cash outflows from the repayment of matured
loans described above in the amount of €730 million (nominal
value: US$ 859 million) and €300 million.
In fiscal year 2021, cash inflows of €2.3 billion resulted from
issuance of new shares in March 2021.
Cash inflows from financing activities were strongly influ-
enced by the financing of the acquisition of Varian, changing
by €12,087 million to €11,839 million.
Financing activities
Cash outflows from investing activities increased by € 12,228 mil-
lion to €14,140 million. This was essentially based on the payout
for the acquisition of Varian. Cash outflows also increased by
€117 million due to additions to intangible assets and property,
plant and equipment. The increase was mainly a result of invest-
ments for capacity expansions.
Investing activities
The increase in other reconciling items to cash flows from op-
erating activities, in particular, includes an increased change in
other assets and liabilities of €492 million. This mainly results
from the fact that, in contrast to the previous year, non-cash
expenses for performance-related income components were
significantly higher than the payouts.
The change in operating net working capital had a negative
impact on cash flows from operating activities of €97 million
which was €52 million less compared to the previous year.
The growth in business volume led to increases of all items
of the operating net working capital, largely offsetting each
other. This also includes a €310 million decrease in the use of
funds for inventories compared to the previous year. The high
build-up of inventories in the prior year resulted mainly from
ensuring the delivery capability of all segments at the onset of
the COVID-19 pandemic.
Cash flows from operating activities grew by €1,005 million
to €2,933 million, in particular, due to a positive development
of net income combined with improved cash conversion from
operating activities and the first-time inclusion of Varian.
Operating activities
654
1,928
-1,912
-249
-14,140
11,839
Cash flows from financing activities
Cash flows from investing activities
2,933
Cash flows from operating activities
1,285
operating activities
Other reconciling items to cash flows from
2020
1,423
-149
-97
-300
Retained earnings
1,075
13,476
15,818
Deferred tax liabilities
Provisions
(in millions of €)
Remaining non-current liabilities
Remaining current liabilities increased by €1,168 million to
€3,104 million. Therein, other current liabilities increased by
€818 million mainly due to deferrals related to increased per-
formance-related remuneration components and the acquisi-
tion of Varian.
1 Excluding market value of forwards for hedging of foreign currency liabilities from
financing activities.
1,936
3,104
1
Remaining current liabilities
Remaining current liabilities to
the Siemens Group
1,198
2,016
Other current liabilities
374
468
Current income tax liabilities
270
356
Current provisions
93
263
Other current financial liabilities'
2020
Other financial liabilities 1
Other liabilities
(in millions of €)
Remaining non-current liabilities
2021
Capital reserve
1,128
2020
2021
Sept 30,
Siemens Healthineers Annual Report 2021
Combined management report - Business development
Issued capital
(in millions of €)
Total equity
17
Remaining non-current liabilities grew by €1,717 million to
€2,686 million. Therein, in particular, deferred tax liabilities in-
creased by €1,612 million, mainly as a result of the acquisition of
Varian. For further information regarding deferred tax liabilities
from the acquisition, please refer to Note 3 Acquisitions in the
notes to the consolidated financial statements.
1 Excluding market value of forwards for hedging of foreign currency liabilities from
financing activities.
969
2,686
345
435
10
19
144
150
470
2,082
2020
Sept 30,
643
3,740
419
Higher expenses for performance-related remuneration com-
ponents as well as expenses for a one-time special payment to
employees in the amount of around €56 million increased all
functional costs. The expenses for the one-time special pay-
ment are allocated to central items. Currency effects also had a
negative impact on adjusted EBIT margin. The prior-year figure
included negative effects from the COVID-19 pandemic, while
significantly lower expenses for performance-related remuner-
ation components as well as income related to the U.S. CARES
Act had an offsetting effect.
Supported by the positive revenue development and the first-
time earnings contribution from Varian, adjusted EBIT increased
by 40% from the prior-year period. This results in an adjusted
EBIT margin of 17.4% for the fiscal year 2021 compared to
15.5% in the prior year. The increase is mainly due to the strong
margin development in Diagnostics, which was driven by high
demand for rapid COVID-19 antigen tests.
Siemens Healthineers
1 Prior-year figures adjusted in line with updated definition of adjusted EBIT.
18.9%
14.8%
17.0%
1.9%
13.3%
21.1%
21.1%
Advanced Therapies
Imaging
Diagnostics
Varian
15.5%
17.4%
Adjusted EBIT margin
Therein:
308
Research and development expenses increased by €204 million,
or around 15%. This includes € 130 million from the new Varian
reporting segment. Even excluding Varian and adjusted for cur-
rency translation, these expenses rose significantly compared
to prior-year-level. This increase is due, among other factors,
to higher expenses for further development of the Corindus
business.
Selling and general administrative expenses increased by
€539 million, or around 24%. This includes €236 million from
the new Varian reporting segment. Even excluding Varian and
adjusted for currency translation, these expenses rose very sig-
nificantly compared to prior-year-level.
13
Segments
1.57
20201
2021
Fiscal Year
Amortization, depreciation and other effects
from IFRS 3 purchase price allocation
adjustments
Basic earnings per share
(in €)
As a result of the factors described above, net income increased
by € 323 million to €1,746 million. Consequently, adjusted basic
earnings per share rose by 26% to €2.03.
254
Income tax expenses increased by €127 million to € 658 million.
The effective income tax rate was at 27.4% in fiscal year 2021,
compared to 27.2% in prior year. For further information, please
refer to Note 5 Income taxes in the notes to the consolidated
financial statements.
The position amortization, depreciation and other effects
from IFRS 3 purchase price allocation adjustments increased
to €381 million due to the acquisition of Varian. Transaction,
integration, retention and carve-out costs of € 123 million were
incurred mainly due to the Varian acquisition. In the prior year,
they included costs mainly from the acquisition of Corindus.
The reconciliation from adjusted EBIT to net income is shown
in the following table:
Reconciliation to consolidated financial
statements
In Advanced Therapies, the adjusted EBIT margin of 14.8% was
below the prior-year level of 18.9%. It was mainly affected by
higher expenses for performance-related remuneration com-
ponents, negative currency effects and expenses for further
development of the Corindus business. Excluding these fac-
tors, the adjusted EBIT margin was above the prior-year level.
Adjusted EBIT declined to €254 million.
The adjusted EBIT margin of Varian was at the upper end of the
expected range and a very high 17.0% based on a generated ad-
justed EBIT of €221 million in the period from April 15 through
September 30, 2021. A one-time effect from risk provisions and
the closing of the transaction at the middle of the month had
a positive impact.
In Diagnostics, the adjusted EBIT margin of 13.3% was clearly
above the prior-year level of 1.9%, mainly benefiting from ad-
ditional revenue from rapid COVID-19 antigen tests. The margin
was additionally supported by a recovery in the business with
routine-care testing and by positive currency effects. This was
partly offset by higher expenses for performance-related remu-
neration components. Adjusted EBIT increased to €721 million.
The prior year was adversely affected in particular by lower
testing volumes for routine care and higher costs due to the
COVID-19 pandemic.
The adjusted EBIT margin of Imaging was 21.1 % at prior-year
level. Positive impacts from revenue growth were mainly off-
set by higher expenses for performance-related remuneration
components and negative currency effects. Adjusted EBIT in-
creased to €2,076 million.
Siemens Healthineers Annual Report 2021
Combined management report - Business development
Financial income, net declined from the prior-year period by
€ 142 million to negative € 169 million, mainly due to expenses
in connection with the acquisition of Varian. This included neg-
ative effects in connection with the settlement of the deal con-
tingent forward amounting to €89 million. The prior-year period
included an interest income related to international tax.
1.41
Advanced Therapies
74
12
-
On a comparable basis, revenue increased by 19% compared to
the prior year, which was impacted by the COVID-19 pandemic
in all segments. Excluding rapid COVID-19 antigen tests, compa-
rable revenue growth was at 12%. All segments contributed to
the growth. The Diagnostics segment posted sharp growth, par-
ticularly driven by the high demand for rapid antigen tests. On
a nominal basis, revenue increased by 24% to € 17,997 million,
including revenue contribution from the new Varian segment.
Currency translation effects had a negative impact of around
4 percentage points on revenue growth. This development was
more than offset by portfolio effects – mainly related to the
Varian acquisition - of around 9 percentage points. The equip-
ment book-to-bill ratio was at 1.15 in fiscal year 2021 and hence
above the prior-year figure of 1.06.
Siemens Healthineers
1 Year-over-year on a comparable basis, excluding currency translation and portfolio effects
as well as effects in line with revaluation of contract liabilities from IFRS 3 purchase price
allocations.
19%
24%
14,460
17,997
Siemens Healthineers
16%
24%
1,893
2,354
Therein: China
12%
20%
Siemens Healthineers Annual Report 2021
Combined management report
Business development
Segments
Adjusted revenue in Imaging rose by 11% on a comparable ba-
sis. All imaging modalities contributed to this growth. Computed
Tomography in particular reported significant growth, because
its systems are also used for examinations of COVID-19 patients.
From a geographic perspective, comparable revenue growth
was sharp in EMEA, significant in Asia, Australia and very strong
in the Americas. On a nominal basis, revenue rose by 8% to
€9,821 million.
Adjusted revenue in Diagnostics rose by 42% on a comparable
basis. Excluding rapid COVID-19 antigen tests, comparable rev-
enue growth was 15%. All regions contributed to the growth,
in particular EMEA with a sharp increase driven by high demand
for rapid antigen tests. A significant increase was realized also
in the core business as testing volumes for routine care nor-
malized. Asia, Australia and Americas recorded significant
growth. On a nominal basis, adjusted revenue rose by 38% to
€5,418 million. This includes revenue of around €1,080 million
from rapid COVID-19 antigen tests, which were distributed pri-
marily in Europe.
721
1,916
2,076
2,248
3,142
20201
2021
Fiscal Year
221
Varian
(Adjusted EBIT in millions of €, margin in %)
Adjusted EBIT
Therein:
A.3.2.2 Adjusted EBIT
In Asia, Australia, revenue increased by 12% on a comparable
basis. All segments contributed significant growth. Varian gen-
erated adjusted revenue of € 365 million in Asia, Australia. China
posted comparable revenue growth of 16%, driven particularly
by Imaging and Diagnostics. Advanced Therapies contributed
significant growth.
The 9% increase of comparable revenue in the Americas was
driven by significant growth in the Diagnostics segment. Imaging
and Advanced Therapies contributed with a very strong and a
strong growth, respectively. Varian generated adjusted revenue
of €588 million in the Americas. Revenue in the United States
increased by 7% on a comparable basis, with Diagnostics post-
ing significant growth and Imaging and Advanced Therapies
reporting strong growth.
In EMEA, comparable revenue rose by 38%. This increase was
driven by all segments, with Imaging and particularly Diagnostics
recording sharp growth. Varian generated adjusted revenue of
€347 million in EMEA. Germany reported comparable revenue
growth of 95%, primarily due to the high demand for rapid
COVID-19 antigen tests in the Diagnostics segment. Imaging
and Advanced Therapies also contributed with strong and very
strong growth, respectively.
Regions
Adjusted revenues of Advanced Therapies increased by 9% - on
a comparable basis. From a geographic perspective, comparable
revenue growth was significant in Asia, Australia, very strong in
EMEA, and strong in the Americas. On a nominal basis, revenue
rose by 5% to €1,716 million.
After successful completion of the acquisition, the Varian seg-
ment achieved adjusted revenue of € 1,300 million in the period
from April 15 through September 30, 2021, around half of it in
the region Americas.
Imaging
Diagnostics
0.35
0.17
Transaction, integration, retention and
A.3.3 Net assets and financial position
Siemens Healthineers Annual Report 2021
Combined management report - Business development
1 Prior-year figures adjusted in line with updated definition of adjusted earnings per share.
2 Calculated based on the income tax rate of the respective reporting period.
14
1 Prior-year figures adjusted in line with updated definition of adjusted EBIT.
1,423
1,746
Net income
-532
-658
Income tax expenses
1,954
2,404
Income before income taxes
-27
-169
Financial income, net
A.3.3.1 Net assets and capital structure
Net assets and capital structure are described by the following
line items, which can be reconciled to the consolidated state-
ments of financial position, as shown in the table:
Remaining current assets
(in millions of €)
Remaining current assets
Sept 30,
2021
(in millions of €)
116
114
Siemens Group
Remaining current receivables from the
338
1,982
489
49
56
Current income tax assets
141
Other current financial assets 1
2020
2021
Sept 30,
Other current assets
2,573
-267
-569
(in millions of €)
1.61
2.03
Adjusted basic earnings per share
-0.07
-0.17
Tax effects 2
0.01
Adjusted EBIT
0.11
Transaction-related costs within financial
0.06
0.06
-0.00
Gains and losses from divestments
Severance charges
0.03
0.11
carve-out costs
income
4,022
Fiscal Year
20201
EBIT
Total adjustments
-65
-68
Severance charges
3
Gains and losses from divestments
-34
2021
-123
Transaction, integration, retention and
-168
-381
adjustments
from IFRS 3 purchase price allocation
Amortization, depreciation and other effects
2,248
3,142
carve-out costs
Trade and other receivables
4,815
7%
Siemens Healthineers Annual Report 2021
09
60
Upgrades and innovations in clinical procedures are among the
major factors determining growth in the Advanced Therapies
market. Minimally invasive procedures as well as the growing
complexity of procedures that require sophisticated technolog-
ical devices and advanced imaging are key market drivers. In
particular, technological innovations in imaging, robotics, med-
ical devices and IT mean that minimally invasive procedures are
leading to lower risks of complications, faster recovery times,
less post-operative pain, shorter hospital stays and lower costs.
The global Advanced Therapies market can be described as
consolidated, with three top players: Siemens Healthineers,
Philips Healthcare and GE Healthcare.
The Varian market segment is characterized by diverse trends.
Long-term global demand for radiation oncology based on an
increase in cancer diagnosis, demand for multi-modal precision
care pathways in cancer therapy and the need for value-based
care. The overall demand for radiation therapy will be driven
by a projected increase in new cancer incidences from about
19 million (in 2020) to 30 million annually by 2040. Faster
growth of new incidences in low- and middle-income coun-
tries, which lack adequate infrastructure and human capital to
address this growing cancer burden, is accelerating demand
for radiation therapy as a cost-effective, high-quality cancer
care modality. Technological advancements with optimized
and automated clinical tools to improve accuracy in radio-
therapy and radiosurgery continue to drive global demand for
new devices with digital solutions and applications to treat a
broader range of cases, reduce treatment time, and increase
patient throughput. The shortage of trained clinical personnel
in emerging markets, combined with a focus on operational
efficiencies and cost reduction in developed markets, are dri-
ving demand for more automated products and services that
can be integrated into clinical workflows to make treatments
more rapid and cost-effective. The radiotherapy and radiosur-
gery markets are highly consolidated and served mainly by
Siemens Healthineers, Elekta AB and Accuray Inc.
Diagnostics is a market with attractive growth driven by con-
stantly rising demand for diagnostic tests. To offset increasing
test demand and rising healthcare costs, providers continue to
consolidate their operations to cut laboratory costs, while also
industrializing their testing processes in order to improve effi-
ciency through automation and digitalization. Increased digita-
lization will further enhance laboratory productivity and enable
better integration of diagnostic test results into clinical deci-
sion-making. Immunochemistry continues to be the largest and
one of the fastest growing segments of the Diagnostics market.
Whether in acute or non-acute situations, point-of-care tests
offer advantages that have gained in significance through the
COVID-19 pandemic. Diagnostics is a fragmented market, with a
variety of global, regional and specialized providers competing
with each other across market segments Siemens Healthineers
is a major player in this market, along with Roche and Abbott
Diagnostics.
There are two fundamental trends in the Imaging market: the
shift towards precision medicine and increased utilization of
imaging devices in screening, therapy and intervention. Both
are driving the demand for a broader application of imaging
procedures and digitalization, and therefore increasing demand
for imaging technology. Furthermore, developments in Al, big
data and deep machine learning continue to frame the future
of population health management. Highly intelligent imaging
systems will remain critical to care management and delivery. A
moderate level of consolidation is one of the key characteristics
of the global Imaging market, in which Siemens Healthineers,
GE Healthcare and Philips Healthcare are the top three players.
Segment markets
The business environment is influenced not only by the regu-
latory framework, which healthcare companies and providers
must comply with in order to sell their products and deliver
health services. Non-tariff barriers to trade such as forced
localization, licensing requirements and, in particular, protec-
tionism - have been topics of increased importance in recent
years. Trade barriers are becoming more widespread, affecting
all our segments' markets and creating additional financial bur-
dens on vendors. The trade dispute between the United States
and China resulted in cost increases as new tariffs came into
effect in both countries in 2019, impacting the flow of prod-
ucts between these countries. Ongoing differences between
the two countries will continue to pose challenges for trade.
Political developments
Business principles
Siemens Healthineers Annual Report 2021
Combined management report
2020
1 Excluding market value of forwards for hedging of foreign currency liabilities from
financing activities.
Operating net working capital
Remaining current assets¹
3,270
2,550
Combined management report - Financial performance system
A.2 Financial performance system
Key performance indicators
Comparable revenue growth
Comparable revenue growth is our key performance indicator
(hereinafter “KPI”) for managing and monitoring the adjusted
revenue growth of our segments and of Siemens Healthineers.
It shows the development of adjusted revenue, net of currency
translation effects, which are beyond our control, and portfolio
effects, which involve business activities that are either new to
our business or no longer a part of it. When a new reporting
segment is created following an acquisition, we manage it on
the basis of total adjusted revenue up to the point at which it
is possible for the first time to calculate the segment's compa-
rable revenue growth for the full fiscal year.
> amortization, depreciation and other effects from
IFRS 3 purchase price allocation adjustments
• expenses for mergers, acquisitions, disposals and other port-
folio-related measures, in particular
As of fiscal year 2021, the following adjustments are made in
line with the definition of adjusted EBIT margin:
At the company level, performance is measured using adjusted
basic earnings per share (EPS).
Adjusted basic earnings per share
Adjusted EBIT margin is defined as the adjusted EBIT of the par-
ticular segment divided by its adjusted total revenue.
The adjustments (including revenue) relate to income and ex-
penses that do not reflect operating performance and therefore
adversely affect the comparability of financial results between
periods.
centrally carried pension service and administration expenses.
822
•
> transaction, integration, retention and carve-out costs
> gains and losses from divestments
> amortization, depreciation and other effects from
IFRS 3 purchase price allocation adjustments
• expenses for mergers, acquisitions, disposals and other port-
folio-related measures, in particular
As of fiscal year 2021, EBIT is adjusted for the following items:
We use adjusted EBIT (earnings before interest and taxes) mar-
gin as the KPI for managing the operating performance of our
segments. Adjusted EBIT is defined as income before income
taxes, interest income and expenses, and other financial in-
come, net, adjusted for non-operating items.
Adjusted EBIT margin
At the segment level, revenue is defined as total revenue and
corresponds to the sum of external and intersegment revenue.
Total adjusted revenue of the segments, which is key to calcu-
lating comparable revenue growth, is additionally adjusted for
effects in line with the revaluation of contract liabilities from
IFRS 3 purchase price allocations.
For Siemens Healthineers, revenue is defined as consolidated
revenue reported in the company's consolidated statements
of income. Adjusted revenue, which is key to calculating com-
parable revenue growth, is adjusted for effects in line with the
revaluation of contract liabilities from IFRS 3 purchase price
allocations.
• severance charges, and
> transaction, integration, retention and carve-out costs
> gains and losses from divestments, and
Remaining non-current assets¹
Net debt (including pensions)
Operating net working capital
Property, plant and equipment
3,712
2,774
Investments accounted for using
Sept 30,
the equity method
33
37
Other financial assets¹
436
261
(in millions of €)
2021
2020
Deferred tax assets
481
1,912
8,211
Other intangible assets
9,038
-12,809
Remaining current liabilities'
-3,104
Remaining non-current liabilities1
-2,686
643
14,736
-2,513
-1,936
-969
The growth in remaining current assets by €179 million to
€822 million and therein, in particular, the increase in other
current assets is also largely due to the acquisition of Varian.
Remaining non-current assets
30,846
Total equity
12,511
1 A change in the definition of net debt (described in paragraph net debt (including pensions))
led to a shift of amounts from remaining current and non-current assets and liabilities to
net debt. The changes are indicated in footnotes. The prior-year amounts have been
adjusted accordingly.
(in millions of €)
Goodwill
Sept 30,
2021
2020
17,512
16,339
• severance charges.
The analogous adjustment of basic EPS and EBIT ensures con-
sistency between the KPIs "adjusted EBIT margin" and "adjusted
basic EPS". The adjustments are made after tax. Accordingly,
this includes the adjustment of material valuation effects on
deferred taxes, which arise from changes in tax law and are
associated with the above adjustment items.
Tax effects on the adjustments are determined based on the
income tax rate for the reporting period. Determination of ad-
justed basic EPS is based on the average weighted number of
outstanding shares in the reporting period.
%-Change
Fiscal Year
2021
(in millions of €)
Europe, Common-
wealth of Independent
States, Africa, Middle
East (EMEA)
Revenue by region (location of customer)
1 Siemens Healthineers: revenue according to IFRS, segments: total adjusted revenue.
2 Year-over-year on a comparable basis, excluding currency translation and portfolio effects
as well as effects in line with revaluation of contract liabilities from IFRS 3 purchase price
allocations.
9%
5%
1,628
1,716
1,300
42%
38%
3,924
5,418
11%
8%
9,090
2020
Act.
Comp.¹
6,775
11%
4,909
5,466
United States
Therein:
9%
13%
5,691
9,821
6,407
95%
100%
874
1,745
Therein: Germany
38%
43%
4,747
Americas
19%
24%
14,460
The recovery in the Advanced Therapies markets was made
possible through a combination of a resumption in elective sur-
gical procedures and the gradual return of patients. The post-
ponement of tenders to fiscal year 2021 and the execution of
postponed projects also contributed to this development.
In the Varian segment, growth in all modalities was driven pri-
Imarily by new and replacement business. In markets such as
the U.S. and Western Europe, product innovations led to higher
customer investment. Other markets were driven by a need to
expand access to oncology equipment and services to under-
served population groups and regions.
For the Diagnostics segment, the markets for point-of-care tests
and for lab tests increased. On the one hand, the backlog of pur-
chasing decisions and capital expenditure by laboratories and
hospitals from the previous year dissipated while, on the other,
demand for certain diagnostic reagents, particularly tests for
routine care, increased. The markets for combating the COVID-19
pandemic posted sharp growth. Depending on the diagnostic
objective, a range of COVID-19 PCR, antigen, and antibody tests
is available for both the laboratory and the point-of-care envi-
ronment. The extraordinary growth of the molecular diagnostics
field, in which a PCR test is used to identify the SARS-CoV-2 virus
at an early stage, continued unabated. The laboratory diagnos-
tics market, which plays a role in analyzing antibody and antigen
statuses, also expanded. The POC market saw a sudden increase,
especially in the field of rapid antigen tests for home use.
systems and the beginning of normalization in all other modal-
ities. Among the major modalities, there was a sharp market
growth in magnetic resonance systems.
Our prediction in the 2020 Annual Report, namely that the mar-
ket for the product businesses of the Imaging segment would
recover, proved accurate. The sharp market growth was mainly
due to large COVID-driven demand for computer tomography
While the long-term market trends A.1.2 Business environment
generally remained intact, the COVID-19 pandemic did rein-
force some of these trends and, for example, raised the already
increasing cost pressure on health systems and customers to
unprecedented levels. Especially in countries with severe
COVID-19 outbreaks such as the U.S., India, and Brazil, a signif-
icant impact on healthcare economics was apparent in the form
of additional cost increases combined with simultaneous, rev-
enue losses for hospitals. Staff shortages became more acute,
leading to significant care disruptions at many hospitals and
overburdening healthcare systems. The pandemic served to
drive efforts toward innovation and digital transformation in
healthcare.
Nearly two years after the first case of COVID-19 was identified,
the virus continues to impact health systems and economies
worldwide. Nevertheless, large parts of the global economy
were already experiencing upturns in fiscal year 2021, largely
thanks to the strength of the major economies U.S. and China.
Compared to our assumptions in the 2020 annual report and the
average growth levels from pre-pandemic years, it emerged that
our markets in the Imaging and Advanced Therapies segments
had, in fact, recovered, with the Diagnostics market recording
sharp growth. Competition among the leading healthcare com-
panies remained at elevated high levels.
Supported by growth of our installed base in the previous year
(not including Varian), the product-related service business saw
strong growth in this fiscal year.
Globally, China is one of the biggest medtech markets and a
major incremental growth driver. In the course of the last fiscal
year, China's healthcare market recovered almost fully from ef-
fects related to the coronavirus pandemic. Even if the Imaging
segment recorded somewhat slower growth than in the previ-
ous year, the market as a whole grew very strongly. This was
mainly due to the sharp recovery of the market for magnetic
resonance systems and sharp growth in the computed to-
mography market. While the past fiscal year again saw public
COVID-related investment in so-called fever clinics with a focus
on computed tomography, capital was also invested in primary
care in some Chinese provinces as part of a public funding ini-
tiative. Elective surgical procedures resumed to some degree,
following postponements and cancelations during the prior
fiscal year; as a result, the Advanced Therapies market is now
firmly on the road to recovery. Diagnostic tests were widely
applied to identify SARS-CoV-2 both in labs via PCR and antigen
In general, our addressable global markets recorded sharp
growth figures in fiscal year 2021. The addressable global
Imaging equipment market grew to around €20 billion in fiscal
year 2021. The addressable equipment market for the Advanced
Therapies segment (based on angiography systems, mobile
C-arms, and robotic-assisted platforms) was around €3 billion.
The global Diagnostics equipment market including reagents
posted a rise of some €42 billion (including molecular diagnos-
tics but excluding POC rapid antigen tests). The addressable
global market for radiotherapy (based on linear accelerators,
proton therapy machines, interventional oncology solutions,
software, and product-related services) of our new Varian seg-
ment amounted to around €11 billion in fiscal year 2021.
A.3 Business development
Siemens Healthineers Annual Report 2021
Combined management report - Business development
10
10
-
-
We aim to provide an attractive return to our shareholders.
Therefore, we intend to pay an annual dividend in the amount
of 50% to 60% of the net income of the respective prior fiscal
year. To this end, net income the calculation basis for the
dividend may be adjusted for selected exceptional non-cash
items.
Dividend
A.3.1 Market development
Asia, Australia
11
Business development
17,997
Comp.²
Act.
2020
2021
%-Change
Fiscal Year
Advanced Therapies
Siemens Healthineers Annual Report 2021
Combined management report
Varian
A.3.2.1 Revenue by segment and region
A.3.2 Results of operations
quarters of fiscal year 2021 because market data for the full
fiscal year were not available as of the publication of the an-
nual report. Given the unpredictability of further COVID-19
pandemic developments and related volatilities on healthcare
markets, customary and historic market development patterns
are only partially suitable for forecasting purposes this year.
The market development expectations are based on Siemens
Healthineers' market model that builds on external sources
(among others from IQVIA Ltd., OMDIA, KLAS, IMV, The Lancet
Oncology, and Signify Research), market information from Med-
Tech industry associations (among others COCIR, NEMA, JIRA
and MedTech Europe) and Siemens Healthineers' management
estimates. In the case of Varian, the forecasts include data from
regulatory authorities (among others from ASTRO, ESTRO, the
Global Task Force on Radiotherapy for Cancer Control (GTFRCC),
which is part of the Union for International Cancer Control
(UICC) and the International Atomic Energy Agency (IAEA). All
statements on market developments refer to the first three
In the U.S., business began to return to normal as progress was
made in the vaccination campaign. Markets for Imaging and
Advanced Therapies bounced back strongly in all modalities as
pent-up demand began to be processed by the customers. The
number of patients in the U.S. requiring inpatient treatment for
a COVID-19-related illness increased nearly fourfold compared
with a year ago, and this circumstance was reflected in the sales
markets of the modalities driven by the pandemic. In Diagnostics
segment, the rise in COVID-19 cases significantly boosted U.S.
market growth as it fueled demand for antigen tests, molecular
PCR tests, as well as for antibody tests (point-of-care tests and
lab tests). In the POC market, demand for products for use in out-
patient care settings recovered as vaccination rates increased,
restrictions were eased, and inventories restocked. The U.S.
market for Advanced Therapies has begun to change. On the
one hand, it has been possible to augment equipment utilization
levels while, on the other, elective inpatient surgical procedures
have been shifted to outpatient settings because reimbursement
rates increased.
In the region EMEA, public investment programs as well as a
rise in COVID-19-related demand helped drive a market rise in
several countries. The private market also began to recover.
Overall, this led to strong to very strong market growth for
Imaging and Advanced Therapies in fiscal year 2021. Sharp mar-
ket growth for Diagnostics in EMEA was driven by test programs
for SARS-CoV-2 introduced by several EMEA governments. High
vaccination rates increasingly led to a return of point-of-care
testing in outpatient care settings.
In Japan, the second largest market of the Asia, Australia re-
gion, approval of the supplementary COVID-19 budget pro-
duced significant to sharp growth in virtually all the markets
for the Imaging segment. Improved system utilization and the
resumption of elective surgical procedures led to a significant
market increase for Advanced Therapies. While COVID-19 had
but a limited impact on the POC market, the Diagnostics market
overall posted strong growth.
testing. Tests to determine the body's immune response were
also used in China. Demand for tests for routine care rose once
again. Demand for POC laboratory diagnostic products for use
in outpatient care settings still remained weak in China. Ulti-
mately, the overall market for Diagnostics equipment rose at
a sharp rate.
(in millions of €)1
Siemens Healthineers
Therein:
Imaging
Diagnostics
• US$ 1.7 billion maturing in fiscal year 2027, and
• US$ 1.0 billion maturing in fiscal year 2046.
163
28
13.3%
42%
21.1%
Increase of around 100
basis points compared
to the prior year
More than 35%
Increase of around 100
basis points compared
to the prior year
More than 25%
More than 8%, above
the previous year
Increase of around 100
basis points compared
to the prior year
At least in the mid-teens
At least 7%
Increase of around 100
basis points compared
to the prior year
Mid- to high-single-digit
At least 5%, clearly
above the previous year
Diagnostics Comparable revenue
growth
Adjusted EBIT margin
Comparable revenue
growth
11%
More than 9%
Segments
Imaging
€2.03
Between €1.95
and €2.05
Between €1.90
and €2.05
Between €1.63
and €1.82
Between €1.58
and €1.72
Adjusted EBIT margin
More than 5%, clearly
above the prior-year
level
More than 7%
More than 10%, clearly
above the prior-year
level
20
14.8%
At mid-teens
9%
17.0%
Between 15% and 17%
More than 7%, above
the prior-year level
Continued positive
development compared
to the industry overall
Between 12% and 14%
More than 7%, above
the prior-year level
Continued positive
development compared
to the industry overall
At least 6%
Adjusted basic
earnings per share
At approximately the
prior-year level, contin-
ued positive develop-
ment compared to the
industry overall
Adjusted EBIT margin
Adjusted EBIT margin
Comparable revenue
growth
Adjusted revenue
(April 15 to
September 30, 2021)
Advanced
Therapies
Varian
€1.3bn
Between €1.3 billion
and €1.4 billion
Between €1.2 billion
and €1.4 billion
level
More than 10%, clearly
above the prior-year
At least 5%, strongly
above the prior-year
level
20
19%
Quarterly Statement Q3
Between 17% and 19%
The segments' additions to intangible assets and property,
plant and equipment focused especially on the following:
Siemens Healthineers' investments were aimed mainly at en-
hancing competitiveness and innovation capability. The main
capital expenditures were for additions to intangible assets,
including capitalized development expenses, as well as for re-
placements and enhancements of property, plant and equip-
ment in the ordinary course of business.
A.3.3.3 Additions to intangible assets and
property, plant and equipment
1,371
2,259
Free cash flow
-557
-674
plant and equipment
Additions to intangible assets and property,
1,928
2,933
Cash flows from operating activities
2020
2021
Fiscal year
(in millions of €)
Siemens Healthineers reports free cash flow as a supplemental
liquidity measure:
Siemens Healthineers Annual Report 2021
Combined management report - Business development
Free cash flow
For further information related to the financial risks described
above, especially derivative financial instruments and hedg-
ing activities, financial risk management, provisions for
pensions and similar obligations and income taxes, please
see Note 25 Financial instruments and hedging activities,
→ Note 26 Financial risk management, → Note 21 Provisions for
pensions and similar obligations and → Note 5 Income taxes in the
notes to the consolidated financial statements.
Imaging: Additions mainly included supply chain automation,
acquisition of special tooling, machinery and capacity increase
and expansions.
Diagnostics: In fiscal year 2021, additions to intangible assets
were primarily attributable to product developments within the
Atellica Solution and Central Lab product lines. Additions to
property, plant and equipment mainly related to investments
in production facilities in China and the United States.
Varian: In fiscal year 2021, additions mainly comprised invest-
ments related to capacity increase and expansions.
Advanced Therapies: In fiscal year 2021, investments were
mostly associated with new machinery and tools for the new
Artis Icono product family and Corindus.
Half Year Financial Report
Between 14% and 17%
Quarterly Statement Q1
Between 8% and 12%
Comparable revenue
Siemens
Healthineers growth
Results
Development of outlook FY 2021
The Managing Board and the Supervisory Board propose to
the Shareholders' Meeting to distribute a dividend of €0.85
per share entitled to the dividend. This amount is above the
prior-year level of €0.80 and in total represents approximately
€954 million in expected payments. Based on the net income
of €1,746 million for fiscal year 2021, the dividend payout per-
centage is at 55%.
Net income increased by 23% to €1,746 million, mainly due to
higher EBIT. A decrease in financial income, net, mainly result-
ing from expenses in connection with the acquisition of Varian,
had a partly offsetting effect. The higher net income resulted
in an increase of 26% in adjusted basic earnings per share to
€2.03. Hence, the adjusted basis earnings per share were in
the upper half of our expected target corridor between €1.95
and €2.05 in the outlook Q3 2021. Therefore, we fulfilled our
outlook.
Therapies also met the expectation in the outlook Q3 2021 with
an adjusted EBIT margin of 14.8%.
With 21.1%, the adjusted EBIT margin of Imaging was at the
prior-year level and hence below our expectation in the out-
look Q3 2021. This was due to higher negative currency effects,
a less favorable business mix as well as higher material and
logistics costs than expected in the third quarter. Diagnostics
achieved an adjusted EBIT margin of 13.3%, clearly above the
prior year, and hence fulfilled the expectation in the outlook
Q3 2021. With 17.0%, the adjusted EBIT margin of Varian was
at the upper end of the expected target corridor. Advanced
FY 2021
On a comparable basis, adjusted revenue increased by 11% in
the Imaging segment, by 42% in the Diagnostics segment and
by 9% in the Advanced Therapies segment. Hence, we met our
expectations with respect to comparable revenue growth in
the outlook Q3 2021. Adjusted revenue of the Varian segment
amounted to €1,300 million, so we were also able to achieve a
result within the expected target corridor here.
Siemens Healthineers Annual Report 2021
Combined management report - Business development
19
In the outlook updated after the third quarter of the fiscal
year 2021 (hereinafter "Q3 2021"), we expected comparable
revenue growth between 17% and 19% compared to fiscal
year 2020 and adjusted basic earnings per share (adjusted
for expenses for portfolio-related measures, and severance
charges, net of tax) to be between € 1.95 and €2.05 (compa-
rable prior-year figure: €1.61). The outlook was based on the
assumption that pandemic-related demand would not persist
to the same extent in the fourth quarter and beyond fiscal
year 2021. In addition, it was assumed that current and poten-
tial future measures to bring the COVID-19 pandemic under
control would not negatively impact the demand for our prod-
ucts and services. The outlook was based on exchange rate
assumptions at that point in time and on the higher weighted
average number of outstanding shares for the fiscal year 2021
due to the second capital increase amounting to 1.1 billion. It
was assumed that there would be no material change in the
valuation of share-based compensation programs that are tied
to shares of Siemens AG. The outlook also excluded charges
related to legal and regulatory matters.
The outlook provided in the Annual Report 2020 was updated
after the first quarter, at half-year, and after the third quarter
(see table below). This was due in particular to a steady in-
crease in revenue expectations for rapid COVID-19 antigen tests
in the Diagnostics segment (from at least € 100 million in the
Annual Report 2020 to approximately €1 billion in the quar-
terly statement for the third quarter), continued high demand
in Computed Tomography and X-Ray Products of the Imaging
segment, whose systems are also used in examinations of
COVID-19 patients, the completion of the Varian acquisition in
April 2021, and increased expectations of demand in other core
business areas of the segments.
• For the Diagnostics segment: mid- to high-single-digit com-
parable revenue growth and recovery of the adjusted EBIT
margin to more than 5%, clearly above the prior-year level.
• For the Advanced Therapies segment: comparable revenue
growth of at least 5%, strongly above the prior-year level, as
well as continued positive development of the adjusted EBIT
margin compared to the industry overall, thus coming in at
approximately the prior-year level.
• For the Imaging segment: comparable revenue growth of at
least 5%, clearly above the previous year, as well as an in-
crease in adjusted EBIT margin of around 100 basis points
compared to the prior year.
• For Siemens Healthineers: comparable revenue growth be-
tween 5% and 8% and adjusted basic earnings per share be-
tween € 1.58 and € 1.72.
With respect to our outlook provided in the Annual Report
2020, we expected for fiscal year 2021:
A.3.4 Overall assessment of the
economic position
Siemens Healthineers had contractual obligations as of Septem-
ber 30, 2021, to purchase property, plant and equipment to-
taling € 184 million (September 30, 2020: € 107 million). These
are mainly future payments related to real estate investments
and will be financed mainly through the cash pooling of the
Siemens Group.
For fiscal year 2021, Siemens Healthineers' comparable revenue
growth was 19% and therefore at the upper end of the range
we expected in the outlook Q3 2021.
Siemens Healthineers Annual Report 2021
Combined management report Nonfinancial matters
Annual Report 2020
Between 5% and 8%
A.4 Nonfinancial matters
We observe a continuous global increase of cybersecurity threats
and higher levels of sophistication in cybercrime, particularly in
the healthcare industry during the COVID-19 pandemic. With our
business in healthcare, the products, solutions, and services of
Siemens Healthineers are therefore exposed to a particularly
high cyber risk. As an example, ransomware attacks against
healthcare providers lead to major negative impacts on the
provision of healthcare services and continue to be a significant
risk to healthcare providers, threatening both patient treatment
and security of sensitive patient data. There are increasingly,
large volumes of information, including patient data, being gen-
erated that need to be securely processed and stored by the
healthcare organizations involved. In the event of cyber-attacks,
the security of the data and the privacy of the patients treated
with the help of our products and solutions could be at risk.
Attacks experienced against Siemens Healthineers, however,
have not changed significantly in number and criticality. We
place a strong focus on cybersecurity to protect our customers,
their patients, and ourselves from cyberattacks. Therefore, we
have established a global cybersecurity organization engaging
all relevant areas of our company and integrates cybersecurity
resources, expertise, and competence in a central team. It is
set up as an enabler and responsible for cybersecurity strategy,
governance, and assurance. In December 2020, as a result of
our strategy and the effectiveness of our measures, we received
ISO 27001 and 27701 certifications covering our global gover-
nance and assurance. In addition to our established technical
and organizational controls, we continuously strengthen the
awareness of our employees so they can detect attacks at an
early stage and react to them in an improved manner. This is
particularly important during the COVID-19 pandemic, due to
the high number of employees working remotely on an ongoing
basis. Because cybersecurity is a shared responsibility across
all involved parties and various stakeholders, we are also con-
tinually developing our ability to preventively protect our cus-
tomers from cyber-attacks as well as responsively support them
when they occur. Furthermore, we enable business continuity
through our cyber resilience. Therefore, we continue to focus
on expanding, adapting and improving established security
controls across the organization and the supply chain. We have
committed ourselves to our security and privacy by design and
default approach, for both products and internal operations.
Our exchanges and collaborations with healthcare providers,
industry, partners, regulators and security researchers in line
with the Charter of Trust principles for a secure digital world
have been expanded, with customer advisory boards, develop-
ment of internal standards and exchanges of threat intelligence.
Cybersecurity
A.6.2.2 Operational risks
exporting from low-cost countries to price-sensitive markets
and optimizing our product portfolio.
The worldwide markets for our products, solutions and ser-
vices are highly competitive in terms of pricing, product and
service quality, product development and introduction time,
customer service and financing terms. Market demand is also
subject to change, partly due to rapid and significant changes
resulting from the introduction of innovative and disruptive
technologies. New competition in the form of medical tech-
nology companies in the low-price segment or niche markets,
as well as independent service organizations, or global players
that want to expand their business with new portfolio elements
or introduce new business models, might lead to increased
pressure on prices or a loss of market share. There is also the
risk that, against the backdrop of rapid technological progress,
new companies previously from outside the industry, such as
IT companies, will penetrate our markets. We counter this risk
by constantly monitoring existing competitors, known potential
competitors, and barriers to market entry, as well as by adapting
our strategies and measures accordingly. In addition, we main-
tain an exchange of information within industrial associations.
If healthcare markets, especially in emerging countries, are
unable to achieve the growth we anticipate, then the demand
for our products, solutions and services could slow down. If
we do not meet the changed market requirements we could
lose market share to our competitors as well as experience an
unexpected price erosion. In some sectors in which we operate,
consolidation on the customer side is increasing. If our cus-
tomers combine through mergers and acquisitions, join group
purchasing organizations or otherwise collectively enter our
markets, it could result in a lower sales volumes and higher
price pressure. We address these risks with various measures.
These include, among other examples, benchmarking, strate-
gic initiatives, sales push initiatives, and the implementation
of productivity measures and projects to achieve target costs,
for instance by adjustment of operational structures, outsourc-
ing, mergers and establishment of joint ventures, as well as by
Competitive environment
competitive position in bidding processes. Moreover, the United
States and China are important markets, and the trade conflict
between the two countries burdens our relevant business. This
also brings, in addition to punitive tariffs, the risk of threats
to free market access. Additional governmental influences and
regulations in key geographies, such as China's five-year plans,
could negatively affect our development in such countries and
result in a loss of market share. Further risks stem from geo-
political tensions (such as in Iran, Syria, Russia, North Korea,
Afghanistan and Ukraine) and the conflicts which may poten-
tially arise. To counter these risks and identify critical cases,
we constantly monitor economic, political and geopolitical
developments and their indicators. Based on this we adapt our
processes and business model to possible changes arising from
protectionism, ensure compliance with all legal requirements
and educate the organization about these changes. We also use
opportunities to engage in discussions with local authorities.
Siemens Healthineers' global setup, with operations in almost all
relevant economies, together with the variety of our products
and services, can contribute to offsetting of the impact of an
unfavorable development in a single market.
Report on material risks and opportunities
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Combined management report
Siemens Healthineers Annual Report 2021
25
Economic, political and geopolitical developments
We operate production, development and service facilities in a
number of different countries and market our products, solu-
tions and services worldwide. Global or regional economic and
geopolitical instability as well as continuing uncertainties and
challenging conditions in regional markets may have a negative
impact on our business. Future developments globally depend
on a number of political and economic factors that we cannot
fully anticipate. There is a risk that an unstable political, regula-
tory and economic environment in certain countries might po-
tentially result in significant adverse business impacts including
non-sustainable business development, diverted management
attention or less competitive strength. If global macroeconomic
growth stalls and we cannot successfully adapt our production
and cost structure to subsequent changes in the markets we op-
erate in, it cannot be ruled out that we will experience adverse
effects. In addition, the prices for our products, solutions and
services may decline as a result of unfavorable market condi-
tions to a greater extent than we currently anticipate. Moreover,
there is an increase in governmental protectionism in recent
years, for example in the form of import and export controls,
tariffs and other trade barriers. Protectionist trade policies and
changes in the political and regulatory environment in our
markets could expose us to penalties and sanctions and could
negatively affect our business in national markets. Furthermore,
the imposition of import customs duties, increased regulatory
burdens, and non-refundable taxes on foreign value added
could result in a reduction of our profit, if passing these costs
along to customers is not feasible. Other protectionist meas-
ures such as the imposition of localization requirements or local
ownership and shareholder regulations could adversely affect
our business volume and market share as well as worsen our
cooperation with customers. Furthermore, acquisitions could
cause an increased and unsustainable workload for employees
as well as a lack of employee engagement and well-being, which
could result in higher staff turnover rates and instability. An
acquisition could also lead to the loss of customers, suppliers,
partners, licensors or contacts to other stakeholders. In addition,
unforeseen acquisition, administrative, tax and other expendi-
tures may incur in connection with these transactions, including
costs related to integration of acquired businesses. Should the
business performance of the acquired company be below our
expectations on a lasting basis, this could lead to impairment
losses, in particular on goodwill and intangible assets which
could adversely affect our net assets and results of operations.
We counter these risks by carefully selecting the companies to
be acquired and by conducting a thorough due diligence. We
also create detailed integration plans, set up integration projects
and strive to implement them in a way that countermeasures
can be initiated in a timely manner. Moreover, we support the
integration of corporate cultures and change management by
providing clarity about organizational structures to employees
and developing and executing clear communication plans. In
addition, we strive to achieve and maintain employee loyalty
through adequate incentive and compensation programs as
well as access to additional local benefits and the company
infrastructure.
Our business strategy includes amongst others the acquisition of
companies and business activities that expand or complement
our existing business such as the acquisition of Varian Medical
Systems, Inc. Successful growth through acquisitions is depen-
dent upon our ability to identify suitable acquisition targets,
conduct appropriate due diligence, negotiate transactions at
favorable terms and ultimately complete such transactions as
well as integrate the acquired companies successfully. Mergers
and acquisitions (M&A) are generally associated with risks due
to the difficulties that may arise when integrating people, oper-
ations, technologies and products. Non-compliance with closing
conditions or denial of necessary regulatory approvals could
adversely affect the strategic planning and result in additional
costs. Our assessments and assumptions regarding acquisition
targets may not prove to be correct and actual developments
may differ significantly from our expectations. This could mean
that the expected synergies such as cost savings may not be fully
realized. Acquired companies may also have unexpected or pre-
viously unidentified liabilities or pending regulatory litigation.
This could result in additional costs and negative effects on our
business. There is no guarantee that any of the acquired com-
panies can be integrated successfully and within the planned
time frame. It is possible that the intended combination of com-
panies, processes and employees will be more complex than
expected. If we cannot successfully integrate newly acquired
companies into our existing operations, for example in terms
of regulatory compliance, information technology and finance,
additional expenses, delays and difficulties could arise. The same
applies for the integration of corporate cultures. If we do not
succeed in integrating these and retaining employees, we risk
losing employees in key roles. This could have a negative impact
on our know-how and our ability to innovate as well as on our
Transactional Risks (M&A)
A.6.2.1 Strategic risks
Hereafter we describe risks that could have a material adverse
effect on our business situation, net assets, financial position
(including effects on assets, liabilities and cash flows), results
of operations and reputation. The order in which the risks are
presented in each of the four categories reflects the currently
estimated exposure for Siemens Healthineers associated with
these risks and thus provides an indication of the risks' current
importance to us. Additional risks not known to us or that we
currently consider immaterial may also negatively impact our
business objectives and operations. Unless otherwise stated,
the risks described below relate to all of our segments.
A.6.2 Risks
In order to allow for a meaningful discussion at the Company
level, individual risks and opportunities of similar cause-and-
effect nature are aggregated into risk and opportunity themes.
This aggregation naturally results in a mixture of risks, including
those with a primarily qualitative assessment and those with a
primarily quantitative risk assessment. Accordingly, we do not
adopt a purely quantitative assessment of risk themes.
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26
Siemens Healthineers Annual Report 2021
Report on material risks and opportunities
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COVID-19 Pandemic
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We are exposed to fluctuations in exchange rates, especially
between the U.S. dollar (and other currencies whose move-
ments are positively correlated with the U.S. dollar) and the
euro. Depending on our hedging activities, devaluation of the
U.S. dollar against the euro may result in material adverse ef-
fects on our profit. Other currencies of significance from the
viewpoint of foreign currency effects include the Chinese yuan,
Japanese yen, Korean won and British pound. A strengthening
of the euro could change our competitive position. In addition,
increasing exchange rate fluctuations may result in a significant
earnings and cash flow volatility risk. We are also exposed to
risks resulting from fluctuations in interest rates. In order to op-
timize the allocation of financial resources across our segments
and entities, as well as to achieve our objectives, we identify,
analyze and manage the associated financial market risks. We
seek to manage and control these risks primarily through our
regular operating and financing activities and use derivative
financial instruments when deemed appropriate.
Market price risks
Our treasury and financing activities could face negative devel-
opments related to financial markets, such as limited availability
of funds and hedging instruments, a change in assessment of
our solvency, particularly from rating agencies, impacts arising
from more restrictive regulation of the financial sector, central
bank policy or financial instruments, termination of financing
from Siemens AG or other Siemens Group entities or a deteri-
oration in the financial situation of our main financial partner,
Siemens AG. Widening credit spreads due to uncertainty and
risk aversion in the financial markets might lead to adverse
changes in the fair values of our financial assets and liabilities,
particularly our derivative financial instruments.
Liquidity and financing risk
Siemens Healthineers has global operations in a number of
countries and is thus subject to multiple national tax regimes.
At most Siemens Healthineers entities, the tax authorities in the
respective jurisdictions carry out regular tax audits. Tax risks
can arise from legal interpretations by tax authorities that di-
verge from ours, and from changes in legal provisions as well
as case law and their implementation, especially in cross-border
transactions involving various jurisdictions. This can result in
additional tax expenses and additional tax payments, double
taxation and the imposition of penalties and interest payments,
which would have a negative impact on the company's profit
and cash flow. In addition there might be tax increases in cer-
tain countries, especially in the U.S., which could negatively
affect our financial position and results of operations. Tax-
related risks are identified, regularly monitored and assessed
by the tax department, and necessary measures are taken.
Tax risks
Siemens Healthineers provides post-employment benefits for
the majority of its employees, partly resulting in provisions
for pensions. An increase of provisions for pensions due to an
adverse development of plan assets or the defined benefit ob-
ligation is considered a significant risk. The funded status can
be affected by changes in actuarial assumptions, primarily the
discount rate, as well as by movements in financial markets.
In order to comply with local pension regulations in selected
foreign countries, we may face increasing cash outflows to re-
duce an underfunding of our pension plans in these countries.
Regular asset liability studies are performed for major pension
plans to implement an investment strategy to mitigate liability
risks and reduce funded status volatility.
Risks from pension obligations
A.6.2.3 Financial risks
Combined management report
reliable and competent suppliers to ensure consistent supplies
and minimize disruptions to our supply chain. When develop-
ing new products, we address these risks at an early stage of
the product life cycle. Besides that, we conduct supplier health
screenings and audits to proactively establish relevant meas-
ures. In addition, we retain certain safety stocks and qualify sec-
ond-source suppliers for essential components. We also manage
procurement and pricing through measures such as long-term
contracts and hedging as well as bundling of demands across
units within our company and the Siemens Group. Moreover,
we actively monitor price developments to be able to react early
to market changes.
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Combined management report
Siemens Healthineers Annual Report 2021
27
We purchase parts, components, services and materials from
third parties, contract manufacturers and service providers all
over the world. Therefore, we may be exposed to the risk of
delays and interruptions in the supply chain as a consequence
of global economic and geopolitical dynamics, extreme events
(including pandemics), cyber incidents or suppliers' financial
difficulties, particularly if we are unable to establish alternative
sources of supply or means of transportation in a timely man-
ner or at all. In addition, we rely upon the supplies of certain
raw materials. Worldwide demand, availability and pricing of
these raw materials have been volatile recently, and we expect
that they will continue to fluctuate in the future. Changes in
customer demand and market fluctuations for critical parts and
components such as semiconductors might lead to difficulties
in meeting our quality requirements while also purchasing
in sufficient quantities at competitive market prices. Delays,
restrictions, shortages or unavailability of supplies could lead
to unanticipated price increases and could constrain our pro-
duction of affected products which could in turn reduce our
profit margins or otherwise adversely affect our performance.
If we are not able to offset increased prices for certain materi-
als and components, reduce reliance on them, or find suitable
alternatives, this could result in additional costs and affect our
customer relationships. Some of the components included in
our products are obtained from a limited group of suppliers or
from a sole-source supplier. We are also dependent on our own
production and distribution sites. If a supplier's operations are
disrupted, we lose a critical supplier, or if one of them no longer
meets performance or quality specifications, we may be re-
quired to obtain and qualify one or more replacement suppliers.
Such an event may then also require us to redesign or modify
our products to incorporate new parts and/or further require
us to obtain clearance, qualification, certification or other ap-
plicable regulatory approvals of these products. Events such as
these could significantly increase costs for the affected product
and cause material delays in delivery of our products, which
could have an adverse effect on our financial positions and re-
sults of operations. To counter these risks, we work closely with
Supply Chain Management (SCM)
or potential product, labor safety, regulatory or environmental
risks. The correction of errors could lead to unforeseen costs,
at the same time result in guarantee or warranty claims, and,
moreover, adversely impact our reputation. Our patents and
other intellectual property rights may not prevent competitors
from independently developing or selling products and services
that resemble or replicate our own. If we are unable to protect
or effectively enforce our intellectual property rights against
the competition, we might lose our technical leadership posi-
tion and market share which could result in negative financial
impact, loss of reputation or customers. To counter these risks,
we continuously initiate and implement measures for quality
improvement, project risk management and claim prevention
that contribute to the mitigation of existing risks. In addition,
we closely monitor market developments in order to identify
and react on new demands early on. We constantly apply for
new patents and actively manage our intellectual property port-
folio to safeguard our leading technological position.
We develop, produce and sell a comprehensive portfolio of
products, solutions and services (including accessories and
software products) to a wide range of healthcare providers.
With many of our products, solutions and services we are an
industry-wide technology leader. Our operating results depend
to a significant extent on our technological leadership, as well
as our ability to anticipate changes in our markets and to adapt
us the costs of producing our products to those changes. Our
products, solutions, services and their enhancements often
have long development and government approval cycles. As a
result, this requires us to maintain early and accurate anticipa-
tion of relevant changes in the marketplace, in technology and
in customer demands. Introducing new products and technol-
ogies requires a significant commitment to R&D, which in turn
requires expenditure of considerable financial resources that
may not always result in success. Our results of operations could
be negatively impacted if we invest in technologies that do not
operate as expected or cannot be integrated as planned, or that
do not find the expected market acceptance. The same applies
if our products, solutions or services are not introduced to the
market at the targeted margins in a timely manner particularly
compared to our competitors, or even become obsolete. Fur-
thermore, errors in the design of our products or operational
disruptions in our value chain could result in quality problems
Product development and introduction
Since the beginning of calendar year 2020 we have been af-
fected by impact from the COVID-19 pandemic. The highly
volatile situation and its consequences, as well as the varying
regulations around the world, may expose us to the risk of
various negative impacts on our company. Some of the po-
tential key impacts include harm to our employees' health and
safety, and the closure of offices and production facilities due
to COVID-19 cases. Moreover vaccination and testing standards
being established in some countries might result for example
in the loss of employees. We could experience negative busi-
ness impacts in the form of disruptions of our supply chain,
delays in our time to market for certain products or product
lifecycles, or changes in installation and service capacities.
Other potential key impacts include revenue shortfalls for
example due to investment shifts, shifts in public funding or
financial difficulties of customers. Investment shifts could par-
ticularly affect demand for medical imaging equipment insofar
as they are not used in the treatment of COVID-19 patients.
Furthermore, unforeseen expenses could adversely impact
our financial position. In order to ensure business operations
and reduce impacts of the pandemic on our business, we initi-
ated a broad spectrum of situational measures. These include
among others protecting our workforce (through for example
COVID-19 testing, remote working and vaccinations), regular
crisis management team meetings led by the managing board
and dedicated task forces, coordinating local response plans,
and ensuring close coordination with suppliers. We continue to
observe the situation, including changes in pandemic-related
restrictions, on an ongoing basis in order to quickly identify
new developments, evaluate potential impacts, assess risks and
make adjustments where necessary.
Report on material risks and opportunities
Siemens Healthineers Annual Report 2021
Report on material risks and opportunities
Combined management report
24
In fiscal year 2022, for purposes of management control, we
will use comparable revenue growth along with adjusted EBIT
margin (for the segments) and adjusted basic earnings per
share (for Siemens Healthineers).
A.5.2 Expected business development
Siemens Healthineers Annual Report 2021
Combined management report Report on expected developments
22
22
These market development expectations are based on Siemens
Healthineers' market model that builds on external sources
(among others from IQVIA Ltd., KLAS, IMV, The Lancet Oncology,
OMDIA and Signify Research), market information from Med-
Tech industry associations (among others COCIR, NEMA, JIRA
and MedTech Europe) and Siemens Healthineers' management
estimates. In the case of Varian, the forecasts include data from
regulatory authorities (among others from ASTRO, ESTRO, the
Global Task Force on Radiotherapy for Cancer Control (GTFRCC),
which is part of the Union for International Cancer Control
(UICC) and the International Atomic Energy Agency (IAEA)).
In addition to the addressable product markets of Imaging and
Advanced Therapies described above, the product-related ser-
vice market offers sustainable growth potential. Thanks to sta-
ble growth of the installed base, we expect positive growth in
this area.
The expectation for the Advanced Therapies segment is that
the slight market recovery already seen in fiscal year 2021 will
continue on a broad basis in fiscal 2022. The number of rou-
tine and elective procedures should gradually normalize with
a further reduction in COVID-19 impact.
Vaccination rates in the population and further COVID-19 impli-
cations such as further waves and testing guidelines are key
factors for determining expected growth in the market for our
Diagnostics segment. We expect demand for tests for acute
infection with SARS-CoV-2 to fall sharply. If rapid antigen tests
are not considered, we expect growth in the point-of-care mar-
ket to flatten at a moderate level. We expect the market for rou-
tine care in laboratory diagnostics to recover to pre-COVID-19
levels with moderate growth. Even though markets in molecular
diagnostics are expected to decline sharply, they still remain at a
high level. Overall, this does mean, however, that the diagnos-
tics market will contract over the next fiscal year.
For the Imaging market, it is expected that a normalization
of growth to pre-COVID-19 levels will take place in fiscal
year 2022. Following high demand for computer tomographs
in the past fiscal year, we expect the market to decline moder-
ately in the next fiscal year, however with market volumes in
fiscal year 2022 expected to exceed pre-COVID-19 levels. For
the other modalities, market growth is expected to continue to
a lower level than in fiscal year 2021. Some increase will also
be generated by digital growth areas such as Al-based clinical
decision-making and telehealth.
Development in the Imaging segment will be based primarily
on recent and planned launches of new products and platforms
along with sales of imaging products and services from our
existing portfolio. In fiscal year 2022, we expect comparable
revenue growth between 5% and 8% in the Imaging segment
and an adjusted EBIT margin between 22% and 23%.
We continue to evaluate the impact of the COVID-19 pandemic
on our addressed markets. This includes following debates on
potential approaches to reforming national health systems. Ini-
tiatives aimed at increasing resilience include the optimization
of pandemic prevention and a drive to increase investment in
national health systems and innovation. The positive effect
on relevant market segments within the medtech landscape
(e.g. SARS-CoV-2 tests, equipment and supplies needed to fight
COVID-19) and certain technologies (e.g. telehealth) might con-
tinue in the next fiscal years. Estimations on when the overall
market size and growth might return to pre-COVID-19 levels,
are complicated by variations across market segments and
geographies. Healthcare budget restraints, potential shifts in
budget allocations and increased price sensitivity may have
different effects on individual markets in each business area.
A.5.1 Expected market development
A.5 Report on expected developments
Report on expected developments
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Combined management report
Siemens Healthineers Annual Report 2021
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24
Siemens Healthineers is exempted from submitting the non-
financial group declaration pursuant to Section 315b (2) of the
German Commercial Code (hereinafter "HGB") and refers to the
combined nonfinancial group declaration, which is integrated
in the combined management report in the annual report of
Siemens Group for fiscal year 2021. Siemens Group's annual re-
port will be published on the Internet at → www.siemens.com/
investor/en/publications_calendar.php.
The COVID-19 pandemic continues to be characterized by vol-
atility and rapid swings, and will remain so as long as further
waves, challenges in global vaccine availability, inconsistent
vaccination rates, and corresponding government measures
remain. Given this unpredictability, the customary and historic
development patterns of Siemens Healthineers' markets may
only be partially suitable for forecasting purposes. At the mo-
ment, therefore, reliably estimating the impact of COVID-19 on
our addressed markets and, thus, the expected developments
of these markets, is challenging. Nevertheless, we expect that
the underlying trends described in A.1.2 Business environment
are and will remain intact.
Our growth expectations for the Diagnostics Segment are based
on new products and an improvement in diagnostic techniques
as well as an anticipated increased demand from emerging mar-
kets and an anticipated rise in awareness regarding preventive
health checks (wellness testing). The outlook is based on the
assumption that we generate around €200 million in revenue
with our COVID-19 rapid antigen test. In fiscal year 2022, we
expect mid-teens negative comparable revenue growth in the
Diagnostics segment and an adjusted EBIT margin in the high-
single digits. Excluding revenue from rapid COVID-19 antigen
tests, we expect comparable revenue growth between 2% and
4% and an adjusted EBIT margin in the mid- to high-single digits.
The Varian market is expected to continue along the path to re-
covery throughout fiscal year 2022. Assuming the effects of the
pandemic continue to subside, we expect investments that were
temporarily postponed to resume, resulting in a higher growth
rate. In addition, an increase in patient volumes is to be ex-
pected, as it can be assumed that an increase in cancer diagno-
ses will result from a resumption of routine cancer screenings.
As market leader in radiotherapy, Varian is in a good position to
accelerate the deployment of cutting-edge technology in key
markets such as the U.S., China and Europe.
Basic principles of risk management
Development in the Varian segment will be determined by
sales of comprehensive multi-modality cancer care technolo-
gies, services, and digital solutions and applications. Contin-
ued portfolio expansion will support our growth expectations.
Total adjusted revenue will be used to manage the segment
in fiscal year 2022, because the acquisition closed in April of
2021 and therefore we do not have a full-year basis of compar-
ison for using comparable revenue growth in the coming fiscal
year. In fiscal year 2022, we expect adjusted revenue between
€2.9 billion and €3.1 billion in the Varian segment and an ad-
justed EBIT margin between 15% and 17%.
Risk management at Siemens Healthineers builds on a compre-
hensive, interactive and management-oriented Enterprise Risk
Management (ERM) approach. This approach is integrated into
the organization and addresses both risks and opportunities. It
is based on the globally accepted COSO (Committee of Spon-
soring Organizations of the Treadway Commission) framework
"Enterprise Risk Management - Integrating with Strategy and
Performance" (2017) as well as the ISO (International Organiza-
tion for Standardization) Standard 31000 (2018), and is adapted
to Siemens Healthineers' requirements.
We make use of a coordinated set of risk management and con-
trol systems. These should support us in the early recognition
of developments that could jeopardize the continuity of our
business. The most important of these systems include our
company-wide procedures for strategic planning and manage-
ment reporting. Strategic planning is intended to support us
in assessing potential risks well in advance of major business
decisions. Management reporting is intended to enable us to
monitor such risks more closely as our business progresses.
Our internal auditors regularly review the adequacy and ef-
fectiveness of our risk management. Accordingly, if deficits
are detected, it is possible to adopt appropriate measures to
eliminate them. This coordination of processes and procedures
is intended to help ensure that the Managing Board and the
Supervisory Board are fully informed about significant risks in
a timely manner.
(Enterprise Risk Management Process)
Company-wide risk management
process and organization
For us, diligent handling of risks and opportunities is part of
responsible corporate governance and supports our pursuit
of sustainable growth and thereby increased company value.
Hence it is essential to manage risks and opportunities appro-
priately. Our risk management is therefore an integral part of
the planning and implementation of our business strategies.
The risk management policy is set by the Managing Board. In
accordance with our organizational and accountability struc-
ture, each of the respective managements of businesses, re-
gions and functions is obliged to implement a comprehensive
risk management system. This is tailored to their specific area
and its responsibilities, while at the same time being consistent
with the overall policy.
A.6.1 Risk management
A.6 Report on material risks and opportunities
Report on material risks and opportunities
Our ERM process aims for early identification and evaluation of,
and response to, risks and opportunities that could materially
affect the achievement of our strategic, operational, financial
and compliance objectives. The time horizon covered by ERM
is typically three years. Our ERM is based on a net approach,
addressing risks and opportunities that remain after the existing
control measures have been taken. If risks have already been
considered in plans, budgets, forecasts or the financial state-
ments (for example as a provision or risk contingency), they
are be incorporated, along with their financial impact, in the
entity's business objectives. As a consequence, only additional
risks arising from the same subject (for example deviations from
business objectives, different impact perspectives) should be
considered for the ERM. In order to provide a comprehensive
view of our business activities, risks and opportunities are
identified in a structured procedure. This combines elements
of both top-down and bottom-up approaches. While reporting
generally follows a quarterly cycle, this regular reporting process
is complemented by an ad hoc reporting process that aims to
escalate critical issues in a timely manner. Relevant risks and op-
portunities are prioritized in terms of impact and likelihood, con-
sidering different perspectives, including business objectives,
reputation and regulatory matters. The bottom-up identifica-
tion and prioritization process is supplemented by workshops
with the respective managements of the Siemens Healthineers
businesses and regional levels. This top-down element ensures
that potential new risks and opportunities are discussed at the
management level and are included in the subsequent reporting
process, if found to be relevant. Reported risks and opportu-
nities are analyzed for their potential cumulative effects and
are aggregated within and for each of the organizational levels
mentioned above.
Combined management report
-
Siemens Healthineers Annual Report 2021
23
The actual development for Siemens Healthineers and the seg-
ments may vary, positively or negatively, from our outlook due
to the opportunities and risks described in the following chap-
ter or if our expectations and assumptions do not materialize.
The expected adjusted basic earnings per share is based on
the expected income tax-rate for fiscal year 2022 and on the
number of outstanding shares at the end of fiscal year 2021.
The outlook is based on several assumptions including the ex-
pectation that current and potential future measures to keep the
COVID-19 pandemic under control will not negatively impact the
demand for our products and services. The outlook is based also
on current exchange rate assumptions and excludes portfolio
activities. The outlook further excludes charges related to legal,
tax, and regulatory matters and frameworks.
We are exposed to exchange rate effects, particularly involving
the U.S. dollar and the currencies of emerging markets such
as the Chinese yuan. We expect volatility in global currency
markets to continue in fiscal year 2022. Siemens Healthineers
is still a net exporter from the euro zone into the rest of the
world, which means that in terms of absolute values a weak
euro is generally favorable for our business and a strong euro
is in principle unfavorable. We use derivative financial instru-
ments to hedge currency risks in our business. We expect this
measure to help us limit effects on income related to exchange
rate fluctuations in fiscal year 2022.
For fiscal year 2022, we expect comparable revenue growth to
be in the range of 0% to 2% compared to fiscal year 2021. Ex-
cluding revenue from rapid COVID-19 antigen tests, we expect
comparable revenue growth between 5% and 7%. We expect ad-
justed basic earnings per share to be between €2.08 and €2.20.
A.5.3 Overall assessment of the
expected development
-
Our growth expectations for the Advanced Therapies segment
are based on a sustainable development of the business en-
vironment in all addressed clinical areas and the megatrend
of minimally invasive interventions. In fiscal year 2022, we
expect comparable revenue growth between 5% and 8% in
the Advanced Therapies segment and an adjusted EBIT margin
between 14% and 17%.
Responsibilities are assigned for all relevant risks and opportu-
nities. The hierarchical level of responsibility depends on the
significance of the risk or opportunity. In a first step, assuming
responsibility involves choosing one of our general response
strategies. The general response strategies with respect to risks
are to avoid, transfer, reduce, retain or watch the relevant risk.
The general response strategy for opportunities is to pursue the
opportunity concerned. In a second step, responsibilities involve
developing, initiating and monitoring appropriate response
measures according to the chosen response strategy, within an
appropriate time frame. To allow for effective risk management,
these response measures must be specifically tailored to rele-
vant circumstances. Accordingly, we have developed a variety
of response measures.
0
0
31,767
Property, plant and equipment
Financial assets
2021
Other operating income/expenses, net
-27
-27
-27
Financial income/expenses, net
19,209
-123
2020
1
1
Gross profit
Non-current assets
-15
-15
Cost of sales
16
16
Sept 30,
1,952
General administrative expenses
1,516
516
1,891
Therein: income from investments
Active difference resulting from offsetting
Total assets
(in millions of €)
1,394
259
Unappropriated net income
Profit carried forward
45
9
Prepaid expenses
1,135
1,353
-327
-450
Net income
Income taxes
3
Cash and cash equivalents
1,463
1,803
Income from business activity
1,583
2,182
Receivables and other assets
1,535
2,005
Current assets
2020
As a globally operating and diversified medical technology com-
pany, we are exposed to various increasingly complex product
and country-related regulations, laws and policies that influence
our business activities and processes. A failure to comply with
current regulations or changed and new regulatory require-
ments could result in governmental fines and other sanctions,
the temporary or permanent shutdown of production facilities,
third-party claims, import restrictions and negative publicity.
This could lead to unforeseen expenses and adversely impact
our financial position as well as our time to market for certain
products or product life cycles. Further, our business may be
affected by new laws and regulations, in particular by those
that may govern innovative products and business activities,
including services and solutions, such as the use of Artificial
Intelligence. For these new subject areas the regulatory require-
ments are often not yet defined, or they may undergo future
changes whose effects cannot yet be estimated. Regulatory
authorities including the Food and Drug Administration (FDA)
and the Nuclear Regulatory Commission (NRC) in the United
States, the National Medical Product Administration (NMPA) in
China and regulations including the Medical Device Regulation
(MDR) and In-Vitro Diagnostics Regulation (IVDR) in Europe are
especially relevant for the commercialization of our products
and services. However, there are numerous other regulatory
schemes in practically all jurisdictions worldwide to which we
are subject. Risks could also arise from effects of regulations in
the area of Environment, Health, and Safety (EHS) including the
Restriction of Hazardous Substances (RoHS) and Registration,
Evaluation, Authorization and Restriction of Chemicals (REACH)
and other Sustainability Regulations. We need to comply with
and safeguard requirements that will ensure product safety. To
counter the risks mentioned above, we monitor the political and
regulatory landscape in all our key markets to anticipate poten-
tial problem areas with the objective of quickly adjusting our
business activities and processes to changed conditions. Fur-
thermore, we issue internal regulations and guidance, conduct
continuous training and communication as well as synchronized
implementation actions. In addition, internal and external au-
dits of compliance with laws and regulations are performed.
Revenue
Assessment of the overall opportunity situation
The order in which they are presented reflects the currently
estimated exposure for Siemens Healthineers associated with
these opportunities. The described opportunities are not neces-
sarily the only ones we encounter. In addition, our assessment
of opportunities is subject to change, as Siemens Healthineers,
our markets and technologies are constantly developing. It is
also possible that opportunities we foresee today will never
materialize.
Our comprehensive and structured approach to our internal dig-
ital transformation and related investments could potentially
support our growth, improve our cost position and increase our
attractiveness as employer. The leverage of our digital skills,
infrastructure, tools and data could enable us to achieve a
significant increase in our economic performance across the
entire value chain of the company. Further investments into
efficiency measures, and the use of new technologies such as
machine learning, digital twins and Artificial Intelligence, could
potentially drive additional improvements in our processes and
cost structures. Increased harmonization, collaboration and
transparency throughout the entire organization could create
synergies, lead to a faster decision-making process and reduce
redundant efforts. Localizing certain value-chain activities, such
as procurement, production, logistics, maintenance and service,
for example in emerging markets, could enable us to reduce
costs and strengthen our global competitive position, in particu-
lar compared to competitors based in countries with more favor-
able cost structures. In supply chain management and product
lifecycle management, opportunities for improvement could
arise from further implementing an integrated digital tool land-
scape. The improvements could also include further efficiency
gains from using standardized platform elements across multi-
ple applications. Utilizing these synergies could further increase
our flexibility and speed in adjusting our innovative solution
portfolio to the needs of the market while optimizing product
lifecycle costs and reducing internal complexity.
Efficiency gains
Innovation, digital offerings and new business models are core
for our company in shaping the future of the healthcare indus-
try. We invest significantly in research and development in order
to develop innovative products, solutions and services for our
customers, including in the area of digitalization. In doing so,
we aim to safeguard our competitiveness at the same time. Our
goal is to enable healthcare providers to create added value by
expanding precision medicine, transforming care delivery and
improving patient experience by leveraging digital technolo-
gies. We expect to be able to meet future demands arising from
fundamental trends. These trends include demographic change
and global population growth as well as the increasing burden
of chronic diseases. We continuously strive to grow and expand
our business in established markets, open up new markets for
existing portfolio elements and strengthen our installed base in
order to gain a higher market share and improved profitability.
In addition, we aim to further develop our product portfolio
and also grow into adjacent fields, especially in high-growth
customer segments. This is achieved through various meas-
ures, such as targeted product development (for example entry
level systems), the expansion of our consulting competencies to
strengthen our position as a trusted partner, the assessment of
new market entry strategies as well as M&A activities. We also
tackle opportunities to contribute the know-how and technol-
ogy of our company and its employees in adjacent areas for the
benefit of patients and healthcare providers and thus generate
additional business growth. Moreover, we see the opportunity
to generate additional sales volume and profit from new and
innovative digital products, services and solutions, including
cybersecurity for our customers, preventive maintenance and
data analytics. Furthermore, additional business opportuni-
ties could also arise from long-term value partnerships with
healthcare providers, supporting our customers in setting up
centers of excellence and jointly co-creating on solutions. Fur-
ther business opportunities could also arise from the devel-
opments around the COVID-19 pandemic such as systems and
test related to the diagnosis and treatment of COVID-19 as
well as increased investments in healthcare including technol-
ogy-enabled healthcare solutions. In addition, the provision of
funds by aid organizations such as the World Health Organiza-
tion (WHO) or the EU and as well as the provision of national
funds or subsidies could further increase. This would expand
investment and spending in private hospitals, for example in
the Middle East and Africa, Asia and Europe. This in turn could
generate additional growth in these markets, especially for
standard and basic products and services. In our Diagnostics
segment, further collaboration with third parties could create
opportunities for increased revenue and margins on existing
system platforms through creation of an even broader range of
assays in addition to our own development assays and a faster
availability for our customers.
Growth fields
Below we describe our significant opportunities. Unless indi-
cated otherwise, the opportunities described below relate to
all of our segments.
A.6.3 Opportunities
Report on material risks and opportunities
-
Combined management report
Siemens Healthineers Annual Report 2021
30
29
The order in which the risks are presented in each of the four
categories above - strategic, operational, financial and compli-
ance risks - reflects the currently estimated exposure. The most
significant risks we are currently exposed to are Cybersecurity,
Legal and regulatory environment and Risks from pension obli-
gations. Compared to prior year and as already described in the
half-year financial report Cybersecurity is the most significant
risk. We consider all other risks mentioned above not as high
as the three most significant risks. At present, no risks have
been identified that either individually or in combination could
endanger our ability to continue as a going concern.
A.6.2.5 Assessment of the overall risk situation
In addition, a significant portion of our business involves gov-
ernments and companies with public shareholders. We are also
involved in various projects funded by government agencies
and intergovernmental and supranational organizations. Both
may pose risks from a compliance perspective. Furthermore,
we may face compliance risks in connection with recently ac-
quired companies that are still in the integration process. All
of these risks could result in violations of the law with severe
consequences and can have a negative impact on our business,
net assets, financial position, and results of operations. They
could also result in criminal or administrative fines, claims for
damages, the exclusion of direct or indirect participation in
certain types of transactions and public tenders, and reputa-
tional damage. Consequently, we are constantly countering
these risks with targeted measures. The foundation for our
governance framework is provided by our globally applicable
directives. In addition to measures such as general compliance
training, our Antitrust Compliance Program, requirements of
our Business Conduct Guidelines and Data Protection Program,
Siemens Healthineers has established a global compliance or-
ganization. This organization conducts, among other things,
audits to identify compliance risks at an early stage. Moreover,
by providing whistleblower hotlines and establishing internal
and external points of contact, we enable the timely report-
ing of potential deficiencies or violations to us, authorities or
other stakeholders as appropriate. With regard to its business
partners, Siemens Healthineers has established a global busi-
ness partner management system. This includes, among other
measures, a careful selection process, a structured onboarding
process as well as training, monitoring and a close exchange
during our visits to the customer's site as well as regular audits
with consistent implementation and monitoring of measures
taken. To meet the legal and internal requirements for data
protection, we have implemented an information security and
data protection management system whose mechanisms meet
the high requirements of the ISO 27001 extended by 27701
standards, under which we are certified.
In connection with our global business activities, we must en-
sure compliance with antitrust and competition law, anti-cor-
ruption legislation, data protection regulations and other laws.
We have established compliance and risk management systems
to ensure compliance with requirements. Nevertheless, there is
no guarantee that these systems will enable us to avoid all risks
in every jurisdiction. There are risks, for example, regarding
data privacy violations in the processing of personal data of our
employees, customers, our customers' patients, or other busi-
ness partners. Moreover, in our business environment, there
are risks regarding antitrust or corruption law violations and
other violations of law. Consequences of violations of the law
could under certain circumstances also affect us if they relate
to violations by our indirect sales channels or business partners.
Compliance with laws
Legal and Regulatory Environment
A.6.2.4 Compliance risks
-
Combined management report
Siemens Healthineers Annual Report 2021
Report on material risks and opportunities
0
29
Siemens Healthineers Annual Report 2021
Report on material risks and opportunities
Combined management report
-
(in millions of €)
Fiscal year
A.7.2 Net assets and financial position
A.7.1 Results of operations
- Siemens Healthineers AG
Siemens Healthineers Annual Report 2021
Combined management report
32
As of September 30, 2021, Siemens Healthineers AG had 51
employees.
A dividend payout in the amount of around €954 million is being
proposed for fiscal year 2021. This equals a dividend
per share
of €0.85. The shares from the capital increase implemented in
March are entitled to a dividend as from October 1, 2020.
The acquisition was instead financed with seven loans with
maturities of up to 20 years in a total amount of US$ 10 bil-
lion, which were hedged against changes in the exchange rate
using forward foreign exchange transactions and currency
swaps. In addition, a loan of €850 million was raised from the
Siemens Group. For details please see A.3.3.1 Net assets and
capital structure. Part of the acquisition of Varian was also fi-
nanced through a capital increase in March 2021. These trans-
actions led to expenses for fees and services from banks and
affiliated companies and for advisory services. Varian was not
acquired directly by Siemens Healthineers AG but by its subsid-
iary Siemens Healthineers Holding I GmbH, which received the
funds required for the acquisition in the form of additional capi-
tal payments from Siemens Healthineers AG. Through a number
of transactions to optimize the corporate structure, some of
the Varian companies were transferred within the Group. These
transactions did not have any impact on net income. In addi-
tion, Siemens Healthineers AG assumed a loan of US$ 1,689 bil-
lion from Siemens Healthineers Beteiligungen GmbH & Co. KG
by way of an assumption of debt with discharging effect with an
anticipated waiver of recourse; it also withdrew the associated
forward foreign exchange transactions. The COVID-19 pandemic
mainly had an indirect impact on Siemens Healthineers AG
by affecting the business activities of its direct and indirect
subsidiaries. Please refer to A.3.1 Market development and
→ A.3.2 Results of operations.
Fiscal year 2021 was particularly notable for the acquisition
of Varian, changes in financing, and the COVID-19 pandemic.
For information about Varian and its acquisition, see chapter
A.3.1 General Disclosures in the notes to the annual financial
statements of Siemens Healthineers AG for the year ended
September 30, 2021 and A.1.1 Business description. The
bridge facility agreed in this context in the previous year was
not drawn down and was canceled in full as of March 2021.
Siemens Healthineers AG is the parent company of Siemens
Healthineers, acts as a management holding company,
and provides central administration services. Its results
are significantly influenced by directly or indirectly owned
subsidiaries. As a result, the business development of
Siemens Healthineers AG is generally subject to the same
risks and opportunities as the Group. Due to the interrela-
tions between Siemens Healthineers AG and its subsidiaries,
the outlook of the Company also reflects our expectations for
Siemens Healthineers AG. For this reason, the above comments
for Siemens Healthineers also apply to Siemens Healthineers AG.
In addition, Siemens Healthineers AG is exposed to the risk of
impairment of equity investments in subsidiaries. The impair-
ment test for investments in subsidiaries is generally based on
a discounted cash flow model. The results of the test are in-
fluenced by the development and success of the subsidiaries
and their investments. Consequently, adverse effects on sub-
sidiaries or indirect investments may lead to an impairment of
the investment in subsidiaries in Siemens Healthineers AG's
annual financial statements. Impairments would reduce the
net income that can be distributed to owners. As investments
in subsidiaries represent nearly 100% of total assets, this risk
is of great importance for Siemens Healthineers AG. Income
from investments significantly influences the net income of
Siemens Healthineers AG.
The annual financial statements of Siemens Healthineers AG
were prepared in accordance with the provisions of the German
Commercial Code ("Handelsgesetzbuch").
A.7 Siemens Healthineers AG
Siemens Healthineers Annual Report 2021
Combined management report - Siemens Healthineers AG
31
Our internal audit function addresses our financial reporting
integrity, the effectiveness of the control system and the risk
management system, and adherence to our compliance policies.
In addition, the Audit Committee is integrated into our control
system. In particular, it oversees the accounting, the accounting
process and the effectiveness of the internal control system, the
risk management system and the internal audit system. Further-
more, we have set up a disclosure committee which is responsi-
ble for reviewing certain financial and nonfinancial information
prior to publication.
Qualification of employees involved in the accounting process
is ensured through appropriate selection processes and regu-
lar training. As a fundamental principle, based on materiality
considerations, the four eyes principle applies and specific pro-
cedures must be adhered to for data authorization. Additional
control mechanisms include target-performance comparisons
and analyses of the composition of and changes in individual
line items, both in the closing data submitted by reporting
units and in the consolidated financial statements. In line with
our information security requirements, accounting-related IT
systems include defined access rules protecting them from
unauthorized access. An internal certification process is exe-
cuted on a quarterly basis. Management at different levels of
our organization confirms the accuracy of the financial data
that has been reported to Siemens Healthineers headquarters
and reports on the effectiveness of the related control systems.
The base data used in preparing our financial statements con-
sists of the closing data reported by Siemens Healthineers AG
and its subsidiaries. Governance and monitoring activities relat-
ing to accounting activities, are usually bundled on a regional
level. In particular cases, such as valuations relating to post-
employment benefits, we engage external experts, for example
actuaries. The reported closing data is used to prepare the finan-
cial statements in the consolidation system. The steps necessary
to prepare the financial statements are subject to both manual
and automated controls.
Our consolidated financial statements are prepared on the basis
of a centrally provided conceptual framework which primarily
consists of uniform financial reporting guidelines and a chart
of accounts. They are issued centrally by the Siemens Group
and complemented by additional Siemens Healthineers guide-
lines for business-specific financial reporting topics. Siemens
Healthineers AG and other entities within Siemens Healthineers
are required to prepare financial statements in accordance
with the German Commercial Code; the conceptual frame-
work is complemented by mandatory regulations specific to
the German Commercial Code. The need for adjustments in the
conceptual framework due to regulatory changes is analyzed
on an ongoing basis. Accounting departments are informed
regularly about current topics and deadlines from an account-
ing and closing process perspective.
At the end of each fiscal year, our management performs an
evaluation of the effectiveness of the design and operating ef-
fectiveness of the implemented control system. We have a stan-
dardized procedure under which necessary controls are defined,
documented in accordance with uniform standards, and tested
regularly for their effectiveness. Nevertheless, there are inher-
ent limitations on the effectiveness of any control system, and
no system, including one determined to be effective, can pre-
vent or detect all misstatements. After the acquisition of Varian,
we have commenced to integrate the former Varian entities into
our accounting-related internal control and risk management
system. Further integration efforts for the accounting-related
internal control system will continue in fiscal 2022.
Our ERM approach is based on the COSO framework "Enter-
prise Risk Management - Integrating with Strategy and Perfor-
mance" (2017) and ISO Standard 31000 (2018), and is adapted
to Siemens Healthineers' requirements. These frameworks
connect the ERM process with the financial reporting process
and the internal control system. They consider a company's
strategy, the efficiency and effectiveness of its business oper-
ations, the reliability of its financial reporting and compliance
with relevant laws and regulations to be equally important. Our
accounting-related internal control system (control system) is
based on the internationally recognized "Internal Control - Inte-
grated Framework" (2013) also developed by COSO. The two
systems are complementary.
The overarching objective of our accounting-related internal
control and risk management system is to ensure that financial
reporting is conducted in a proper manner, such that the con-
solidated financial statements and the combined management
report of Siemens Healthineers are prepared in accordance with
all relevant regulations.
of the accounting-related
internal control and risk
management system
A.6.4 Significant characteristics
2021
0
Liabilities to affiliated companies and other liabilities almost
exclusively included liabilities to affiliated companies.
20,837
The appointment and removal of members of the Managing
Board is subject to the provisions of Sections 84 and 85 of the
German Stock Corporation Act. In accordance with Article 5 (1)
of the articles of association, the Managing Board comprises sev-
eral members. Their exact number is determined by the Super-
visory Board. The Managing Board of Siemens Healthineers AG
currently comprises the CEO and three other members. Manag-
ing Board members may be appointed for a maximum period of
five years. They may be reappointed or have their term of office
extended for one or more terms of up to a maximum of five
years each. Pursuant to Section 119 (1) No. 6 and Section 179
of the German Stock Corporation Act, any amendment to the
articles of association is subject to a resolution of the Share-
holders' Meeting. The authority to adopt nonsubstantive edito-
rial amendments to the articles of association was transferred
to the Supervisory Board under Article 9 (4) of those articles.
In addition, by resolutions of the Shareholders' Meeting, the
Supervisory Board has been authorized to amend Article 4 of
the articles of association accordingly as the authorized capital
and contingent capital are utilized, and also after the expiration
of the applicable authorization or utilization period in each case.
of the articles of association
applicable to the appointment
and removal of members of the
Managing Board and governing
the amendment to the articles
of association
A.8.3 Legislation and provisions
suggestions of a family partnership established by the family's
members or of one of this partnership's governing bodies.
The von Siemens-Vermögensverwaltung GmbH (VSV) has, on a
sustained basis, powers of attorney allowing it to exercise the
voting rights for 581,373 shares (as of September 30, 2021) on
behalf of members of the Siemens family. These shares are part
of the total number of shares held by the family's members.
The powers of attorney are based on an agreement between
the VSV and, among others, members of the Siemens family.
The shares are voted together by VSV, taking into account the
Furthermore, in connection with Article 19 (11) of Regulation
(EU) No. 596/2014 (Market Abuse Regulation) and on the basis
of internal requirements, members of the Managing Board and
Supervisory Board of Siemens Healthineers AG are subject to
certain trading prohibitions with regard to the purchase and
sale of Siemens Healthineers AG shares in temporal connection
with the publication of quarterly financial results.
Share programs are in place under which certain employees
are or will be granted Siemens Healthineers AG shares. These
share programs were continued in fiscal year 2021. Such shares
are not subject to any block on sale, except as provided under
local law.
At the Shareholders' Meeting, each share grants one vote and
reflects the shareholder's stake in Siemens Healthineers AG's net
income. An exception to this rule applies to treasury shares held
by Siemens Healthineers AG, which do not entitle it to any rights
pursuant to Section 71b of the German Stock Corporation Act.
In accordance with Section 136 of the German Stock Corpora-
tion Act, the voting rights of these shares are excluded by law.
A.8.2 Restrictions on voting rights or
transfer of shares
As of September 30, 2021, Siemens Healthineers AG's issued
capital totaled €1,128,000,000. The issued capital is divided
into 1,128,000,000 ordinary registered shares with no-par
value ("auf den Namen lautende Stückaktien"), each of which
is notionally equal to €1 in value. The shares are fully paid in.
All shares confer the same rights and obligations. Details of
the shareholders' rights and obligations are governed by the
provisions of the German Stock Corporation Act, in particular
Sections 12, 53a et seq., 118 et seq. and 186.
A.8.1 Composition of issued capital
Resolutions of the Shareholders' Meeting are adopted by a sim-
ple majority vote, unless a larger majority is required by law or
by the articles of association. In accordance with Section 179 (2)
of the German Stock Corporation Act, amendments to the arti-
cles of association require a majority of at least three-quarters
of the issued capital represented at the Shareholders' Meeting
at the time of the vote, unless another capital majority is pre-
scribed by the articles of association.
315a German Commercial Code)
Combined management report - Takeover-relevant information and explanatory report
Siemens Healthineers Annual Report 2021
35
"We declare that, in the legal transactions and other measures
in fiscal year 2021 outlined in the report on relationships with
affiliated companies, based on the circumstances which we
were aware of at the point in time when the legal transactions
were entered into, or the measures were taken or refrained
from, the company received adequate consideration in each
legal transaction and did not suffer any disadvantage by taking
or refraining from taking the measures."
The Managing Board of Siemens Healthineers AG has submitted
to the Supervisory Board the report required by Section 312
of the German Stock Corporation Act for fiscal year 2021 and
issued the following concluding declaration:
A.7.5 Report on relationships with
affiliated companies
The corporate governance statement pursuant to Sections 289f
and 315d of the German Commercial Code ("Handelsgesetzbuch")
is an integral part of the combined management report and is
presented in C.4 Corporate governance statement.
For information on special covenants that may result in existing
loans being called due prematurely, see A.8 Takeover-relevant
information and explanatory report.
The availability of short-term cash to Siemens Healthineers AG
is primarily ensured by cash pooling.
The cash generated from operating activities was mainly attribut-
able to the payment of the profit transfer by Siemens Healthcare
GmbH for the previous year and the profit transferred during the
current year from Siemens Healthineers Beteiligungen GmbH
& Co. KG; income tax payments had an offsetting effect. The
year-on-year decline was caused primarily by higher income
taxes paid. The significant cash outflow from investing activ-
ities in fiscal year 2021 resulted mainly from the additional
capital payments to Siemens Healthineers Holding | GmbH for
the acquisition of Varian. The additional capital payment to
Siemens Healthineers Beteiligungen GmbH & Co. KG, which had
been resolved and requested in fiscal year 2019, was settled
in the previous year. The cash generated by financing activi-
ties consisted mainly of loans raised to finance the acquisition
of Varian in an amount of €9.2 billion and the net inflows of
€2.3 billion from the capital increase, less the year-on-year in-
crease of €58 million in the dividend paid, the repayment of a
loan of €0.8 billion, a significant rise in payments to buy back
treasury shares, and a sharp rise in interest paid.
The income from investments, including the profit transfer
received from Siemens Healthcare GmbH, is presented under
operating activities in the table above, because that classifica-
tion better reflects the activity of Siemens Healthineers AG as
a management holding company than would a presentation
under investing activities.
A.8 Takeover-relevant information and
explanatory report (pursuant to Sections 289a and
36
A.8.4 Powers of the Managing Board
to issue and repurchase shares
Based on a resolution of Siemens Healthineers AG's Annual
Shareholders' Meeting on February 12, 2021, the Managing
Board was authorized, subject to the Supervisory Board's con-
sent, to increase Siemens Healthineers AG's issued capital on one
or more occasions until February 11, 2026, by up to €537.5 mil-
lion by issuing up to 537,500,000 new ordinary registered
shares with no-par value in return for cash and/or contributions
in kind. As of September 30, 2021, Siemens Healthineers AG has
made use of the aforementioned authorization in the amount
of € 53 million. Consequently, as of September 30, 2021, sub-
ject to the Supervisory Board's consent, the Managing Board
was authorized to increase Siemens Healthineers AG's issued
capital by up to €484.5 million on one or more occasions until
February 11, 2026, by issuing up to 484,500,000 new ordinary
registered shares with no-par value in return for cash and/or
contributions in kind (Authorized Capital 2021).
33,961
38
The primary purpose of the buybacks is the issuance of shares
to Siemens Healthineers employees and certain board mem-
bers of the Siemens Healthineers Group, particularly under
share programs. To the extent that the repurchased shares
are not required for that purpose, they may be used for other
purposes permitted by law. In each case, the shares were re-
purchased via the stock exchange. As of September 30, 2021,
Siemens Healthineers AG held 5,328,965 treasury shares.
Four share buybacks were carried out on the basis of the authori-
zation granted by the extraordinary Shareholders' Meeting on
February 19, 2018. In September 2020, the Managing Board
of Siemens Healthineers AG approved a share buyback lasting
until February 5, 2021, with a volume of up to € 160 million
and a maximum of 6,400,000 ordinary shares. The buyback
commenced on October 7, 2020. Under this share buyback,
which ended on February 5, 2021, Siemens Healthineers AG
repurchased 4,067,889 of its own shares. The total consider-
ation paid for these shares amounted to € 159 million (exclud-
ing incidental transaction charges).
Utilizing the authorization granted by the Annual Sharehold-
ers' Meeting on February 12, 2021, the Managing Board of
Siemens Healthineers AG approved, in June 2021, a share buy-
back lasting until January 28, 2022, with a volume of up to
€170 million and a maximum of 6,000,000 ordinary shares.
The buyback commenced on June 28, 2021. Under this share
buyback, Siemens Healthineers AG had repurchased 1,914,810
of its own shares for a total consideration of € 105 million
(excluding incidental transaction charges) by the end of the
fiscal year on September 30, 2021.
Furthermore, the Supervisory Board is authorized to use shares
acquired on the basis of this authorization to meet obligations
or rights to acquire Siemens Healthineers AG shares that were
or will be agreed upon with members of the Managing Board
under the rules governing Managing Board compensation.
• used to service or secure obligations or rights to acquire
Siemens Healthineers AG shares arising particularly from and
in connection with convertible bonds/warrant bonds issued by
Siemens Healthineers AG or any of its affiliates (exclusion of
preemptive rights limited to 10% of the issued capital under
a mutatis mutandis application of Section 186 (3) sentence 4
of the German Stock Corporation Act).
sold, subject to the approval of the Supervisory Board, in
return for payment in cash if the price at which a Siemens
Healthineers AG share is sold is not significantly lower than
the market price of Siemens Healthineers AG shares (exclusion
of preemptive rights limited to 10% of the issued capital under
a mutatis mutandis application of Section 186 (3) sentence 4
of the German Stock Corporation Act) or
•
⚫ offered and transferred, subject to the approval of the Super-
visory Board, to third parties in return for contributions in kind,
especially in connection with business combinations or for the
direct or indirect acquisition of companies, businesses, parts of
companies, investments or other assets or claims to the acquisi-
tion of assets, including claims against Siemens Healthineers AG
or its affiliates,
• used in connection with share-based payment programs and/or
employee share programs of Siemens Healthineers AG or any
of its affiliates and issued to individuals currently or formerly
employed by Siemens Healthineers AG or any of its affiliates, as
well as to board members of any of Siemens Healthineers AG's
affiliates,
⚫ cancelled without an additional resolution by the Shareholders'
Meeting being required for such cancellation or its implemen-
tation,
In addition to selling them on the stock exchange or through a
public sales offer to all shareholders, the Managing Board was
also authorized by resolution of the Annual Shareholders' Meet-
ing on February 12, 2021, to use the Siemens Healthineers AG
shares repurchased on the basis of this authorization for any
permissible purpose. In particular, these shares may be
Board, either by acquisition in the stock market or through a
public share repurchase offer.
Siemens Healthineers Annual Report 2021
Combined management report - Takeover-relevant information and explanatory report
37
Siemens Healthineers AG cannot repurchase its own shares
unless authorized to do so by a resolution of the Shareholders'
Meeting or under the limited circumstances explicitly set forth
in the German Stock Corporation Act. On February 12, 2021, the
Annual Shareholders' Meeting resolved to rescind the authoriza-
tion of February 19, 2018, for the repurchase and use of treasury
shares and to re-authorize the Managing Board to repurchase
Siemens Healthineers AG shares until February 11, 2026, for any
permissible purpose, up to a limit of 10% of its issued capital
as of the date of the resolution or as of the date on which the
authorization is exercised, if the latter value is lower. The aggre-
gate of Siemens Healthineers AG shares repurchased under this
authorization and any other of Siemens Healthineers AG shares
previously acquired and still held in treasury by it or attributable
to it pursuant to Sections 71d and 71e of the German Stock
Corporation Act may at no time exceed 10% of the issued capital
then in existence. Any repurchase of Siemens Healthineers AG
shares is to be accomplished at the discretion of the Managing
With the approval of the Supervisory Board, the Managing
Board of Siemens Healthineers AG resolved on March 24, 2021,
to increase the issued capital of Siemens Healthineers AG by
€53,000,000 (from €1,075,000,000 to €1,128,000,000)
through partial utilization of Siemens Healthineers AG's Au-
thorized Capital 2021 and to exclude shareholders' preemptive
rights. The 53,000,000 new ordinary registered shares with no-
par value were placed with institutional investors in an acceler-
ated bookbuilding offering and have been entitled to dividends
since October 1, 2020. This capital increase took effect upon
entry in the Commercial Register on March 25, 2021.
• The issue price of the new shares/bonds is not significantly
lower than the stock market price of Siemens Healthineers AG
shares already listed or the theoretical market price of the
bonds computed in accordance with generally accepted actu-
arial methods (exclusion of preemptive rights limited to 10%
of the issued capital in accordance with or under correspond-
ing application of Section 186 (3) sentence 4 of the German
Stock Corporation Act).
The exclusion is required in order to compensate holders of
conversion or option bonds for the effects of dilution.
• The exclusion is necessary for fractional amounts resulting
from the subscription ratio.
• The exclusion is required in order to grant new shares to
members of the Managing Board of Siemens Healthineers AG,
members of the representative body of an affiliate of Siemens
Healthineers AG or employees of Siemens Healthineers AG
and its affiliates under share-based payment programs or
other share-based programs. To the extent permitted by
law, the new shares may also be issued in such a manner
that the contribution to be paid on such shares is covered
by that part of the annual net income which the Managing
Board and the Supervisory Board could allocate to other
retained earnings under Section 58 (2) of the German Stock
Corporation Act. To the extent that members of the Man-
aging Board of Siemens Healthineers AG are to be granted
shares, the decision to do so lies with the Supervisory Board
of Siemens Healthineers AG.
The new shares under the Authorized Capital 2021 and the
bonds under the aforementioned authorization are to be is-
sued in return for contributions in cash and/or in kind. They
are normally to be offered to shareholders for subscription.
Subject to the approval of the Supervisory Board, the Managing
Board is authorized to exclude shareholders' preemptive rights
in the event of contributions in kind. In the event of capital
increases in return for contributions in cash, the Managing
Board is authorized, subject to the approval of the Supervisory
Board, to exclude the shareholders' preemptive rights in the
following cases:
The Managing Board is authorized to issue bearer or registered
bonds in an aggregate principal amount of up to € 6.0 billion
with conversion or option rights attached, or a combination of
these instruments, entitling the holders/creditors to subscribe
for up to 107,500,000 new ordinary registered shares with no-
par value of Siemens Healthineers AG. As of September 30,
2021, Siemens Healthineers AG had not made use of its option
to issue bonds under this authorization.
On February 12, 2021, Siemens Healthineers AG's Annual
Shareholders' Meeting resolved to create contingent capi-
tal. Siemens Healthineers AG's issued capital was condition-
ally increased by up to €107.5 million by issuance of up to
107,500,000 new ordinary registered shares with no-par value
(Contingent Capital 2021). A capital increase utilizing Contin-
gent Capital 2021 may be implemented only to grant shares in
cases where, by February 11, 2026, holders and/or creditors
of convertible bonds or of option warrants from option bonds
issued by Siemens Healthineers AG or an affiliate exercise their
conversion/option rights, or perform their conversion/option
obligations, or if shares are delivered, and only if other forms
of performance are not used.
1,188
-1,000
1,834
-14,009
9,613
Siemens Healthineers Annual Report 2021
Combined management report - Takeover-relevant information and explanatory report
Cash flows from:
Operating activities
Investing activities
Financing activities
As part of the transaction to optimize its corporate structure
following the acquisition of Varian, Siemens Healthineers AG ac-
quired shares in an affiliated company of Siemens Healthineers
Holding | GmbH by way of an exchange transaction. In the
next step, the Company contributed the shares acquired to
Siemens Healthineers Beteiligungen GmbH & Co. KG; this step
also fulfilled an obligation to make a contribution of €3,000 mil-
lion, which has existed since September 2020. For this reason,
financial assets declined by €3,000 million.
Siemens Healthineers AG made euro- and US dollar-denominated
additional capital payments available to Siemens Healthineers
Holding I GmbH for the acquisition of Varian. This increased the
investment carrying amount by € 13,984 million.
The increase in financial assets by €12,557 million was primar-
ily attributable to the following transactions:
20,837
33,961
91
Non-current assets
Deferred income
Total liabilities and equity
4,752
15,181
Liabilities
195
153
22
27
Pensions and similar commitments
Other provisions
Provisions
15,868
18,509
Shareholders' Equity
Income taxes included only current income taxes from corpo-
ration tax and trade tax because the excess of deferred tax
assets was not recognized due to the exercise of the option
under Section 274 (1) sentence 2 of the German Commercial
Code. The fact that income tax expense rose slightly faster than
income from business activity was mainly due to a reduction
of €28 million in creditable withholding tax from subsidiaries
compared to the prior year.
The improvement in net financial income by €436 million was
primarily attributable to higher income from equity investments.
The profit transfer from Siemens Healthcare GmbH increased
by €420 million, to €1,879 million. Equity investment income
in connection with Siemens Healthineers Beteiligungen GmbH
& Co. KG was up €50 million to €126 million. This was offset
mainly by a €23 million increase in expenses from fees for the
bridge facility and interest expenses of €8 million for the loans
to finance the acquisition of Varian including the positive effect
from the forward components of the foreign currency deriva-
tives and negative interest of €5 million from investing the cash
inflow from the capital increase in September 2020.
The €96 million rise in administrative expenses was driven
mainly by consulting costs incurred as part of the acquisition
and integration of Varian and by higher personnel expenses for
variable and share-based compensation. The reasons for the
increase in variable compensation is the significant increase
in target achievement compared with the previous year. The
expense for share-based compensation was significantly in-
fluenced by the 47% rise in the price of Siemens Healthineers
shares.
952
Revenue and cost of sales resulted only from providing manage-
ment services for affiliates in Germany and abroad.
The assumption of the loan plus the interest liability from
Siemens Healthineers Beteiligungen GmbH & Co. KG on the
transfer date and the withdrawal of the associated forward for-
eign exchange transactions led to an increase in the investment
carrying amount totalling €1,509 million.
33
Liabilities to affiliated companies and
other liabilities
Siemens Healthineers Annual Report 2021
Combined management report
(in millions of €)
Siemens Healthineers AG
-
2020
Fiscal year
2021
A.7.3 Cash flows and liquidity
Siemens Healthineers Annual Report 2021
Combined management report
A.7.4 Corporate Governance statement
In addition to liabilities from cash pooling, liabilities with a re-
maining maturity of up to one year amounted to €1,097 mil-
lion.
Liabilities to affiliated companies from promised and requested
allocations to equity declined by €2,960 million. Other liabil-
ities to affiliated companies, which largely result from a val-
ue-added tax group with several subsidiaries, rose by €46 mil-
lion to €126 million.
Liabilities from cash pooling increased by €3,447 million to
€3,642 million, because the cash used in investing activities
more than offset the cash generated by financing activities and
operating activities. Cash pooling liabilities carried an average
interest rate of 0.23% in fiscal year 2021. In the months in which
cash pooling resulted in an excess of assets over liabilities, aver-
age negative interest rates of -0.83% were incurred.
Information on currency hedging of all U.S. dollar-denominated
loans can be found in Note 21 Derivative financial instruments
and hedging activities in the notes to the annual financial state-
ments of Siemens Healthineers AG for the year ended Septem-
ber 30, 2021. For further information about the bridge facility
and the loans denominated in U.S. dollars, see → A.3.3.1 Net
assets and capital structure.
As a result of the assumption of liabilities described above, loan
liabilities increased by US$ 1,689 million. One of the loans as-
sumed in fiscal year 2019 matured in fiscal year 2021; this led
to a reduction in liabilities by US$ 0.9 billion (€0.8 billion). The
nominal amounts of the two remaining U.S. dollar-denomi-
nated loans assumed by way of assumption of liabilities and all
associated interest payments have been hedged with forward
exchange contracts. The contractual interest rates for these
fixed-rate loans were 2.2% for the US$ 0.7 billion loan due in
2023 and 2.5% for the US$ 1.7 billion loan due in 2027.
34
The increase of €599 million in receivables and other assets
resulted primarily from the profit transfer receivable from
Siemens Healthcare GmbH, which rose to €1,879 million,
€420 million higher than in the prior year. As a result of the
withdrawal of the forward foreign exchange transactions from
Siemens Healthineers Beteiligungen GmbH & Co. KG, whose
counterparty is Siemens AG, and the recognition on a pro-rata
basis of the forward component of other forward foreign ex-
change transactions entered into with Siemens AG, receivables
from affiliated companies increased by € 135 million. More-
over, receivables from the tax authorities from a value-added
tax group increased by €43 million to €118 million.
Siemens Healthineers AG
To finance the acquisition of Varian, Siemens Healthineers AG
raised seven loans from the Siemens Group with maturities of
up to 20 years in a total amount of US$ 10 billion and a loan
of €850 million with a maturity of September 30, 2022. The
loan of US$ 1 billion, which matures in 2024 and the loan of
€850 million have floating interest rates, while the other loans
have fixed interest rates of between 0.58% and 3.03%. For the
nominal amounts of the loans denominated in foreign currency
as well as for the interest payments for the fixed-rate loans
denominated in foreign currency the exchange rate risk has
been fully hedged.
In addition, Siemens Healthineers AG promised Siemens
Healthineers Holding | GmbH an additional capital payment of
€65 million to fulfill its obligations under the letter of support
terminated in fiscal year 2021, which the subsidiary had re-
quested.
Current assets
Prepaid expenses and deferred income
-
Shareholders' equity
The €2,641 million increase in equity is the result of offset-
ting developments. Due to the capital increase in March 2021,
subscribed capital rose by €53 million and capital reserves by
€2,284 million. The dividend distributed for fiscal year 2020
decreased unappropriated net income by €856 million. This
negative effect was more than offset by net income for the
year, resulting in an increase in unappropriated net income of
€497 million overall. The capital reserves under Section 272 (2)
number 4 of the German Commercial Code that remained from
the prior year were used again in fiscal year 2021 to acquire
treasury shares, of which 5,328,965 were held as of Septem-
ber 30, 2021 (September 30, 2020: 898,249). For informa-
tion about the acquisition of treasury shares pursuant to Sec-
tion 160 (1) number 2 of the German Stock Corporation Act
("Aktiengesetz"), please see Note 11 Equity in the notes to the
annual financial statements of Siemens Healthineers AG for the
year ended September 30, 2021. As of September 30, 2021,
before allowing for amounts subject to dividend payout re-
strictions, € 135 million of the capital reserves (September 30,
2020: €338 million) were available for distribution. The equity
ratio declined from 76% to 55%, mainly because of the signifi-
cant increase in loan liabilities, which was offset by the capital
increase.
Liabilities
The €35 million decline in prepaid expenses was primarily at-
tributable to the amortization of the prepaid one-time fees of
€24 million for the bridge facility as well as the amortization
of discounts on loan liabilities assumed in fiscal year 2019. De-
ferred income arose as a result of the assumption of the loan of
US$ 1,689 million, whose fair value at the transfer date exceeded
its settlement amount.
-1,546
-11,045
6,952
-8,880
14,460
5,580
19
4
-2,817
-2,279
17,997
47
-1,342
29, 30
Net income
Fiscal year
2021
Note
42
22
Diluted earnings per share
Basic earnings per share
Shareholders of Siemens Healthineers AG
Non-controlling interests
Thereof attributable to:
Income before income taxes
Income tax expenses
-40
Other financial income, net
2020
-28
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
3
The costs of an acquisition are measured at the fair value of
the assets given and the liabilities incurred or assumed at the
acquisition date. Identifiable assets acquired and liabilities as-
sumed (including contingent liabilities) in a business combina-
tion are measured initially at their fair values at the acquisition
date, irrespective of the extent of any non-controlling interests.
Non-controlling interests are measured at the proportional fair
value of assets acquired and liabilities assumed (partial goodwill
method). The accounting for business combinations requires
significant accounting estimates and judgments, for example
when estimating the fair values of identifiable assets acquired
and liabilities assumed, in assessing whether an intangible asset
is identifiable and should therefore be recognized separately
from goodwill, and in estimating the expected useful lives.
Interest expenses
The non-controlling interests participate in comprehensive in-
come. Transactions resulting in changes in the proportion of
equity held by non-controlling interests that do not result in
the loss of control by the Group are accounted for as equity
47
transactions not affecting profit or loss. At the date control is
lost, the entity concerned is deconsolidated and any remain-
ing equity interests of the Group are remeasured to fair value
through profit or loss.
As a writer of a put option on non-controlling interests, Siemens
Healthineers assesses whether the prerequisites for the trans-
fer of present ownership interests are fulfilled at the balance
sheet date. If Siemens Healthineers is not the beneficial owner
of the shares underlying the put option, the exercise of the put
option will be assumed at each balance sheet date and treated
as a transaction between shareholders with the corresponding
recognition of a purchase liability at the respective exercise
price. The non-controlling interests participate in profits and
losses during the reporting period.
Foreign currency translation
Assets and liabilities of foreign subsidiaries, where the func-
tional currency is other than the euro, are translated using the
spot exchange rate at the end of the reporting period, while
income and expenses are translated using monthly average ex-
change rates. Differences arising from such translations are rec-
ognized within equity and reclassified to profit or loss when the
gain or loss on disposal of the foreign operation is recognized.
The items within the consolidated statements of cash flows are
translated at monthly average exchange rates, whereas cash
and cash equivalents are translated at the spot exchange rate
at the end of the reporting period.
Foreign currency transactions
Transactions in a currency other than the functional currency
of an entity are recorded, on initial recognition, in that func-
tional currency, by applying the spot exchange rate at the date
of the transaction. At the end of each reporting period, foreign
currency-denominated monetary items are translated applying
the spot exchange rate prevailing at that date. Gains and losses
arising from these foreign currency revaluations are recognized
in profit or loss. Foreign currency-denominated non-monetary
items are subsequently translated using the historical spot
exchange rate.
Revenue recognition
Siemens Healthineers recognizes revenue when, or as, control
over distinct goods or services is transferred to the customer.
This requires, among others, that a contract with enforceable
rights and obligations exists, the customer is committed to
its contractual obligations, and collectability of consideration
is probable, taking the customer's creditworthiness into ac-
count. Revenue is the transaction price Siemens Healthineers
expects to be entitled to. Variable consideration is included in
the transaction price if it is highly probable that no significant
reversal of revenue will occur once associated uncertainties
are resolved. Accounting estimates are involved in determin-
ing the amount of variable consideration, which is calculated
by using either the expected value or the most likely amount
depending on which is expected to better predict the amount
of variable consideration. Consideration is adjusted for the
time value of money if the period between the transfer of
goods or services and the receipt of payment exceeds twelve
months and there is a significant financing benefit to either
the customer or Siemens Healthineers. If a contract contains
more than one distinct good or service, the transaction price
is allocated to each performance obligation based on relative
stand-alone selling prices. If stand-alone selling prices are not
directly observable, Siemens Healthineers reasonably estimates
them, primarily by using historical reference values. Revenue
is recognized for each performance obligation either at a point
in time or over time.
Revenue from the sale of goods: Revenue is recognized at a
point in time when control of the goods (especially equipment,
reagents and consumables) passes to the customer, usually
upon delivery of the goods. Payment terms typically do not
exceed 90 days after customer acceptance.
Revenue from services: Revenue is recognized over time on a
straight-line basis or, if the performance pattern is other than
straight-line, as services are provided. Service contracts can
also include extended warranties, which cover periods beyond
the statutory or customary warranty period and for which rev-
enue is recognized straight-line over the extended warranty
period. Customer payments are typically received on a monthly
or quarterly basis over the contract term.
Revenue from construction-type contracts: Revenue is recog-
nized over time under the percentage-of-completion method,
based on the percentage of costs incurred to date compared to
total estimated costs. An expected loss on the contract is recog-
nized as an expense immediately. Within contracts, customer
payments are agreed on the basis of quantified performance
indicators or the achievement of specific events or milestones,
usually due no later than 90 days after invoicing. The percent-
age-of-completion method places considerable importance
on accurate estimates of the extent of progress towards com-
pletion and may involve estimates on the scope of deliveries
and services required to fulfill the contractually defined obliga-
tions. Estimates include total estimated costs, total estimated
revenues, and contract risks including technical, political and
regulatory risks. Under the percentage-of-completion method,
changes in estimates may lead to an increase or decrease of
revenue for the period. In addition, it is necessary to assess
whether the most likely scenario for a contract is its continu-
ation or its termination. For this assessment, all relevant facts
and circumstances relating to the contract are considered on
an individual basis.
Contract assets, contract liabilities, receivables: When either
party to a contract with a customer has performed its con-
tractual obligations, Siemens Healthineers presents a contract
asset or a contract liability depending on the relationship be-
tween Siemens Healthineers' performance and the customer's
payment. Contract assets primarily relate to the sale of goods
for which transfer of control to the customer occurs before
48
16, 25
-76
-83
16, 21, 25
53
33
5
1,982
2,573
5
Interest income
With regard to treasury and financing, these agreements par-
ticularly include the following:
Other operating expenses
statements of income
Consolidated
B.1
Page 42
financial statements
Consolidated
B.
40
40
We are not aware, nor were we notified during the last fiscal
year, of any shareholder holding (directly or indirectly) inter-
ests in Siemens Healthineers AG's issued capital that entitle it
to 10% or more of the voting rights, except for Siemens AG,
headquartered in Berlin and Munich, Germany, which directly
and indirectly held 850,000,000 shares (equaling 75.4% of
all shares), carrying 850,000,000 voting rights. There are
no shares with special rights conferring powers of control.
Shares granted by Siemens Healthineers AG or its subsidiaries
to employees under their employee share programs and/or
as share-based compensation are transferred directly to the
employees. The beneficiary employees may directly exercise
their shareholder rights resulting from the shares in the same
way as any other shareholder, in accordance with applicable
laws and the articles of association.
A.8.6 Other takeover-relevant
information
Siemens AG has entered into trademark and name-use licens-
ing agreements with Siemens Healthineers AG and some of
its subsidiaries. Under such agreements, Siemens AG grants
the licensee the right to use, in particular, the designations
"Siemens" and "Siemens Healthineers" as a product brand,
corporate brand and part of the company name, business
designation and domain name, among other purposes. The
agreements will automatically expire after a transitional pe-
riod if Siemens Healthineers AG ceases to be a company over
which Siemens AG has direct or indirect management power by
contract or otherwise, or through ownership of voting rights
entitling Siemens AG to (directly or indirectly) appoint the ma-
jority of the members of the managing body.
Several lease and rental agreements and real estate-related
service agreements exist between Siemens Healthineers as the
lessee and the Siemens Group as the lessor. In the event that
Siemens AG no longer (directly or indirectly) holds a majority of
the voting rights in Siemens Healthineers AG, or loses the right
to appoint the majority of the members of the Managing Board
or to exercise comparable control rights, several legal conse-
quences may occur, including the obligation to vacate premises,
termination of lease, or a physical separation in cases where
premises are shared between entities of the Siemens Group and
entities of Siemens Healthineers.
Siemens Healthineers AG or some of its subsidiaries also have
various service agreements, some of which are long-term, with
companies of the Siemens Group. Services covered by such
agreements include, but are not limited to, IT, human resources,
procurement, consultation and business support services, ac-
counting, and tax-related services. In the event of any change
of control in Siemens Healthineers AG or a subsidiary that is a
service recipient – i.e., in the event that Siemens AG no longer
(directly or indirectly) holds a majority of the voting rights in
Siemens Healthineers AG or the subsidiary, or loses the right to
appoint the majority of the members of the Managing Board or
to exercise comparable control rights - the service provider may
terminate the relevant agreement so far as the provided services
are affected, for example if rendering such services has become
impossible for legal, technical or organizational reasons.
Siemens Healthineers Annual Report 2021
Combined management report — Takeover-relevant information and explanatory report
Further agreements
39
Siemens Healthcare GmbH and Siemens AG have an agreement
under which Siemens AG provides certain cash management ser-
vices to Siemens Healthcare GmbH, and, via Siemens Healthcare
GmbH, also to Siemens Healthineers. Among such services are
the provision of payment infrastructure, including the use of
the Siemens Group's bank accounts for incoming and outgoing
external payment transactions, provision of internal accounts
with credit lines (the latter only under separate agreements),
participation in the Siemens Group's cash pools, and settle-
ment of intra-group transactions between the Siemens Group
on the one hand and Siemens Healthineers on the other hand.
The agreement may be terminated by Siemens AG in the event
that Siemens AG ceases to control Siemens Healthineers AG,
where control is defined as the majority ownership of shares
and/or voting rights. Furthermore, Siemens Healthcare GmbH
has an agreement with a subsidiary of Siemens AG under which
Siemens Healthineers may use a central treasury IT application
for its finance management. The agreement may be terminated
by the subsidiary of Siemens AG in the event of an actual or im-
minent loss of control by Siemens AG over Siemens Healthcare
GmbH, where control is defined as the direct or indirect majority
ownership of shares and/or voting rights.
Framework agreements based on the International Swaps and
Derivatives Association Inc. (ISDA) documentation (master hedg-
ing agreements) entered into between Siemens Healthineers AG
or numerous subsidiaries of Siemens Healthineers AG on the
one hand and Siemens AG or one of its U.S. subsidiaries on the
other hand grant Siemens AG and its subsidiary a right of ter-
mination if Siemens AG either ceases to (directly or indirectly)
hold the majority of the shares or voting rights in the relevant
counterparty and/or if the relevant counterparty ceases to be a
fully consolidated subsidiary of Siemens AG. Such agreements
also grant a right of termination if Siemens Healthineers AG or
its relevant subsidiary, as the counterparty, is consolidated by,
merges into or transfers substantially all of its assets to a third
party. However, the latter right of termination applies only if the
resulting company's creditworthiness is materially weaker than
the relevant counterparty's creditworthiness immediately prior
to such an event or the resulting company does not simultane-
ously assume the relevant counterparty's obligations under the
master hedging agreements.
Siemens AG (directly or indirectly) holds a majority of shares
or voting rights.
In 2016, a U.S. subsidiary of Siemens Healthineers AG, as bor-
rower, entered into a bilateral framework loan agreement in the
amount of US$ 6.0 billion, with a subsidiary of Siemens AG, as
lender. Three individual loan agreements totaling US$ 3.4 bil-
lion have been drawn upon under this framework. After
assumption of the relevant liabilities, Siemens Healthineers AG
owes the repayments under these three loan agreements.
Each agreement provides the lender with a right of termina-
tion in the event that the borrower ceases to be an affiliate
of Siemens AG. An affiliate is defined as a company in which
Siemens AG (directly or indirectly) holds a majority of shares
or voting rights. Furthermore, Siemens Healthcare GmbH, as
borrower, maintains a multicurrency revolving credit facility
with Siemens AG, as lender, in the amount of €1.1 billion to
serve as working capital and as a short-term loan facility, as
well as a multicurrency revolving loan facility in the amount
of € 1.0 billion which provides funding for backup purposes.
The agreement covering the aforementioned two facilities
provides Siemens AG with a right of termination in the event
that the borrower ceases to be an affiliate of Siemens AG. An
affiliate is defined as a company in which Siemens AG (directly
or indirectly) holds a majority of shares or voting rights. A
loan agreement exists between Siemens AG, as lender, and
Siemens Healthcare GmbH, as borrower, to finance the acqui-
sition of Corindus Vascular Robotics, Inc., which took place
in fiscal year 2020. Under this agreement, an amount of
€700 million falls due for repayment on September 30, 2022.
The loan agreement provides the lender with a right of termi-
nation in the event that the borrower ceases to be an affiliate
of Siemens AG. An affiliate is defined as a company in which
Siemens AG (directly or indirectly) holds a majority of shares
or voting rights. Under seven loan agreements in connection
with the acquisition of Varian Medical Systems, Inc., Siemens
Finance B.V., as lender, granted Siemens Healthineers AG, as
borrower, loans totaling US$ 10 billion with differing maturities
(the longest being March 2041) in fiscal year 2021 to finance
the purchase price as well as other costs and expenses. Under a
further loan agreement for the same purpose, Siemens Finance
B.V., as lender, granted Siemens Healthineers AG, as borrower,
a loan of €850 million, maturing on September 30, 2022. The
loan agreements provide the lender with a right of termina-
tion in the event that the borrower ceases to be an affiliate
of Siemens AG. An affiliate is defined as a company in which
Treasury and financing agreements
Various agreements between the Siemens Group and Siemens
Healthineers are in place. The majority of these agreements
contain change-of-control provisions.
A.8.5 Significant agreements which
take effect, alter or terminate
upon a change of control of
Siemens Healthineers AG
following a takeover bid
Siemens Healthineers Annual Report 2021
Combined management report - Takeover-relevant information and explanatory report
-120
Business combinations
Page 43
B.2
Consolidated statements
of comprehensive
income
Other operating income
Selling and general administrative expenses
Research and development expenses
Gross profit
Cost of sales
Revenue
(in millions of €, earnings per share in €)
B.1 Consolidated statements
of income
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Consolidated statements of income
41
41
financial statements
B.6 Notes to consolidated
Income from investments accounted for using the equity method, net
Earnings before interest and taxes
Page 47
statements of
Consolidated
B.5
Page 46
cash flows
statements of
Consolidated
Page 45
B.4
financial position
statements of
Consolidated
B.3
Page 44
changes in equity
The consolidated financial statements include the accounts of
Siemens Healthineers AG and the subsidiaries over which con-
trol is exercised. Siemens Healthineers AG controls an investee
if it has direct or indirect power over the investee, exposure
or rights to variable returns from its involvement with the in-
vestee, and the ability to use its power over the investee to
affect the amount of the investor's returns.
-5
The COVID-19 pandemic and associated significant uncer-
tainties have been considered, where relevant, in accounting
estimates and judgments. In fiscal year 2021, the COVID-19
pandemic did not lead to material adjustments to the carry-
ing amounts of recognized assets and liabilities. For further
information on impacts from the COVID-19 pandemic, see dis-
closures in the respective notes to the consolidated financial
statements and in the group management report.
(in millions of €)
B.4 Consolidated statements
of cash flows
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Consolidated statements of cash flows
12,511
25,094
42,162
13
-36
12,498
16,321
18
16,339
23
-240
-741
-85
-1,276
-300
Fiscal year
2021
13,476
1,075
1,128
12,584
25,823
5,294
15,758
2,982
11,708
16, 25, 31
345
435
22
10
19
15,818
2020
Net income
1,746
-13
-182
Cash flows from operating activities
Interest received
Dividends received
Income taxes paid
Additions to equipment leased to others in operating leases
Change in other assets and liabilities
Contract liabilities
Receivables from and payables to the Siemens Group from operating activities
Trade payables
Trade and other receivables
Inventories
Contract assets
Change in operating net working capital
117
142
-10
1,423
Adjustments to reconcile net income to cash flows from operating activities:
Amortization, depreciation and impairments
1,039
815
Income tax expenses
25
Interest income/expenses, net
Other non-cash income/expenses, net
658
532
49
23
-2
Income related to investing activities
-22
144
19
25
167
225
16,25
25,094
42,162
14,827
31,338
295
460
15
419
481
5
1,921
352
14, 25
37
33
2,774
3,712
13
1,912
8,211
13
9,038
17,512
12
44
Total liabilities and equity
928
1,356
25
263
470
2,082
5
1,029
908
21
314
457
22
16,25
7,289
10,065
1,198
2,016
20
374
468
93
16, 25, 31
1,932
2,046
18
2,883
150
1,784
356
270
5
-814
Basis of consolidation
45
19
Total equity
-332
68
Healthi- controlling
Non-
Siemens
Treasury
shares
Cost of
hedging
Cash flow
hedges
Currency other com-
Retained translation prehensive
earnings differences income
Issued Capital
capital reserve
(in millions of €)
holders of
through
at fair value
to share-
Total
equity at-
tributable
Total
measured
equity in-
Reserve of
Other components of equity
of changes in equity
B.5 Consolidated statements
Consolidated financial statements - Consolidated statements of changes in equity
Siemens Healthineers Annual Report 2021
45
656
1,322
920
656
-264
666
struments
reserve
reserve
at cost
-16
-798
-798
Dividends
-598
-1
-597
114
61
-767
-5
income, net of taxes
Other comprehensive
1,423
12
1,411
9,782
neers AG
interests
equity
Balance as of
October 1, 2019
Net income
1,000
10,801
-31
-1,859
1,411
-33
-24
3
-24
9,769
13
-95
-538
34
11,839
5
12
Disposal of investments, intangible assets and property, plant and equipment
-1,354
-13,467
Acquisitions of businesses, net of cash acquired
-6
-12
Purchase of investments and financial assets for investment purposes
-557
-674
Additions to intangible assets and property, plant and equipment
1,928
2,933
Cash flows from investing activities
26
5
4
-512
-808
-301
-301
-40
451
130
325
-2
318
1
2
52
-14,140
-1,912
Purchase of treasury shares
-1,853
10,961
-105
-127
-16
-17
-798
-856
Cash and cash equivalents at end of period
Cash and cash equivalents at beginning of period
Change in cash and cash equivalents
Effect of changes in exchange rates on cash and cash equivalents
Cash flows from financing activities
Other transactions/financing with the Siemens Group
Interest paid to the Siemens Group
Dividends paid to non-controlling interests
Dividends paid to shareholders of Siemens Healthineers AG
-255
Issuance of new shares
2,309
-67
2,709
Re-issuance of treasury shares (and other transactions with owners)
2
-249
Repayment of long-term debt (including current maturities of long-term debt)
-121
Change in short-term financial debt and other financing activities
Interest paid
-17
20
-23
-18
-138
Non-controlling interests
Share-based payment
Treasury shares
12
1,727
1,411
6
1.57
1.41
6
1.57
1.40
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Consolidated statements of comprehensive income
B.2 Consolidated statements
of comprehensive income
(in millions of €)
18
Net income
Note
2021
2020
1,746
1,423
2
Remeasurements of defined benefit plans
21
154
-5
Therein: Income tax effects
-37
3
Equity instruments measured at fair value through other comprehensive income
Therein: Income tax effects
Fiscal year
1,423
1,746
-532
September 30, 2020
Balance as of
-19
2,704
52
115
52
62
-24
2,704
52
-24
Other changes in equity
2,629
75
Issuance of new shares
-1
-658
5
1,954
2,404
45
45
25
Purchase of treasury
-64
-64
-64
Reissuance of treasury
shares
2
shares
1,075 13,476
4
Other comprehensive income that will not be reclassified to profit or loss
814
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Consolidated statements of financial position
B.3 Consolidated statements
of financial position
(in millions of €)
Note
Sept 30, 2021
Sept 30, 2020
Cash and cash equivalents
Trade and other receivables
Other current financial assets
25
1,322
656
2,423
7,25
2,568
8,25
169
142
Current receivables from the Siemens Group
16, 25, 31
711
Inventories
3,392
Contract assets
9
818
Total equity attributable to shareholders of Siemens Healthineers AG
1,159
3,740
11
23
825
158
-5
Currency translation differences
Cash flow hedges
Therein: Income tax effects
Cost/Income from hedging
Other comprehensive income that may be reclassified subsequently to profit or loss
Other comprehensive income, net of taxes
Comprehensive income
Thereof attributable to:
Non-controlling interests
Shareholders of Siemens Healthineers AG
43
33
724
-768
25
2,446
-598
700
-593
542
-40
-1
1
-28
25
-22
17
61
-154
114
-1,276
Therein: Income tax effects
-33
489
11
Other current assets
49
56
5
Current income tax assets
2,304
3,179
10
could reasonably have made accounting estimates differently
in the same accounting period. Siemens Healthineers cautions
that future events often vary from forecasts and that estimates
routinely require adjustments. Estimates and assumptions are
reviewed on an ongoing basis. Changes in estimates and as-
sumptions are recognized in the period in which the changes
occur and in future periods impacted by the changes.
In certain cases, accounting estimates and judgments are nec-
essary. These involve complex and subjective assessments and
the use of assumptions, some of which may be for matters that
are inherently uncertain and susceptible to change. Accounting
estimates and judgments could change from period to period
and could have a material impact on net assets, financial posi-
tion and results of operations. In addition, Siemens Healthineers
Accounting estimates and judgments
The below-mentioned accounting policies, unless stated other-
wise, have been applied consistently for all presented periods.
338
Note 2 Accounting policies
Siemens Healthineers AG itself prepares consolidated financial
statements for the smallest group of consolidated companies
to which it belongs. Pursuant to Section 290 (1) of the German
Commercial Code, it is also included in the consolidated financial
statements of its parent company, Siemens AG (registered
offices in Munich and Berlin, Munich Local Court HRB 6684 and
Berlin Charlottenburg Local Court HRB 12300, Germany), as the
largest group of consolidated companies.
The consolidated financial statements as of September 30,
2021, present the operations of Siemens Healthineers AG, reg-
istered in Munich, Germany (Munich Local Court, commercial
register number HRB 237558, Germany), and its subsidiaries
(hereinafter, collectively, "Group" or "Siemens Healthineers”).
Siemens Healthineers is a global provider of healthcare solu-
tions and services, with activities in numerous countries around
the world. The consolidated financial statements have been
prepared in accordance with International Financial Reporting
Standards (IFRS), as adopted by the European Union (EU), as
well as with the additional requirements set forth in Section
315e (1) of the German Commercial Code ("Handelsgesetz-
buch"). The consolidated financial statements are in accordance
with IFRS as issued by the International Accounting Standards
Board (IASB). On November 23, 2021, the Managing Board of
Siemens Healthineers AG authorized the consolidated financial
statements for issue.
Note 1 Basis of presentation
financial statements
B.6 Notes to consolidated
Consolidated financial statements - Notes to consolidated financial statements
Siemens Healthineers Annual Report 2021
46
46
16,339
18
16,321
-240
89
Siemens Healthineers prepared and published the consolidated
financial statements in euros (€). Due to rounding, numbers
may not add up precisely to the totals provided.
Total current assets
10,824
10,268
Capital reserve
Retained earnings
-862
Other components of equity
Issued capital
Total liabilities
Total non-current liabilities
Liabilities to the Siemens Group
Other liabilities
Other financial liabilities
Provisions
Deferred tax liabilities
Provisions for pensions and similar obligations
Long-term financial debt
Total current liabilities
Other current liabilities
Current income tax liabilities
Other intangible assets
Property, plant and equipment
Investments accounted for using the equity method
Other financial assets
Deferred tax assets
Other assets
-3
Total non-current assets
Short-term financial debt and current maturities of long-term financial debt
Trade payables
Other current financial liabilities
Current liabilities to the Siemens Group
Contract liabilities
Current provisions
Total assets
-29
Goodwill
-300
696
-28
-154
4
720
154
income, net of taxes
Other comprehensive
1,746
18
1,727
12,511
13
12,498
-36
117
37
37
117
-36
-142
13
12,511
4
Balance as of
1,075
13,476
Net income
-1,276
1,727
-862
-33
October 1, 2020
700
12,498
-856
1,128
September 30, 2021
Dividends
Balance as of
15,818
66
68
2,328
2,328
66
68
114
-48
Other changes in equity
2,275
53
Issuance of new shares
62
shares
Reissuance of treasury
-266
-266
-266
shares
Share-based payment
Purchase of treasury
60
-874
60
60
-856
7
-17
Impairment testing of goodwill at the level of the segments
resulted in no need for impairment. The allocation of goodwill to
the segments as well as the key assumptions for the calculation
of the segments' fair value less costs of disposal were as follows:
Imaging
Balance at fiscal year-end
(in millions of €)
9,038
Balance at beginning of fiscal year
Balance at fiscal year-end
8,590
9,038
Carrying amount
-1,247
-1,257
Diagnostics
17,512
Varian
2021
Total goodwill
7.5%
1.7%
1.7%
5,827
6,525
2020
69
2020
2021
2020
2021
Sept 30,
Sept 30,
Sept 30,
After-tax discount rate
Terminal value growth rate
Goodwill
Advanced Therapies
-10
Currency translation differences and other
-1,316
Note 12 Goodwill
As of September 30, 2021, miscellaneous tax receivables mainly
consisted of sales tax receivables amounting to €317 million
(September 30, 2020: €217 million).
338
489
Total other current assets
27
26
Other
85
135
Prepaid expenses
226
328
Miscellaneous tax receivables
7.0%
(in millions of €)
Fiscal year
2021
2020
-1,247
Balance at beginning of fiscal year
Accumulated impairment losses
10,285
18,769
Balance at fiscal year-end
951
Currency translation differences
8,027
Acquisitions and purchase
-573
458
9,906
10,285
Balance at beginning of fiscal year
Cost
accounting adjustments
1,667
Equipment leased to others
1.7%
1,655
amount at
beginning of
fiscal year 2020
Gross carrying
6,033
128
459
264
567
1,866
874
1,340
5,005
2,331
862
1,812
amount at
beginning of
fiscal year 2021
1,103
Gross carrying
2,327
Land and buildings
2020
58
5,788
Total property, plant and equipment
94
Right-of-use assets for other property, plant and equipment
368
4,549
Right-of-use assets for land and buildings
1,784
1,088
861
Advances to suppliers and construction in progress
Office and other equipment
Technical machinery and equipment
1,220
374
1,624
Total other intangible assets
Acquired technology including patents, licenses and similar rights
on a ten-year detailed planning period with an average growth
rate of revenue (excluding portfolio effects) of 9%.
Revenue figures in the five-year detailed planning period for
the Imaging, Diagnostics and Advanced Therapies segments
included average revenue growth rates (excluding portfolio
effects) of 1% to 7% (2020: 6% to 9%). The steady state of
Varian will be achieved at a later date in line with the expected
disproportionate growth due to the expected increase in new
cancer cases and the planned realization date of synergy effects
from the acquisition. Therefore, the Varian segment was based
9,038
17,512
6.5%
6.5%
1.7%
Siemens Healthineers performed sensitivity analyses based on
a 10% reduction in after-tax future cash flows, a one percent-
age-point increase in after-tax discount rates, or a one percent-
age-point decrease in the terminal value growth rate. These
indicated that no goodwill impairment loss would need to be
recognized.
1.7%
1,629
7.8%
1.7%
7,692
6.5%
6.5%
1.7%
1,587
Customer relationships and trademarks
57
Consolidated financial statements - Notes to consolidated financial statements
Internally generated technology
(in millions of €)
Total property, plant and equipment
Right-of-use assets for other property, plant and equipment
Right-of-use assets for land and buildings
Advances to suppliers and construction in progress
Equipment leased to others
Siemens Healthineers Annual Report 2021
Office and other equipment
Land and buildings
Total other intangible assets
Customer relationships and trademarks
Acquired technology including patents, licenses and similar rights
Internally generated technology
(in millions of €)
Note 13 Other intangible assets and
property, plant and equipment
Technical machinery and equipment
2021
319
Sept 30,
Acquisition of Varian
Note 3 Acquisitions
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
53
The IASB has issued standards and amendments to standards
whose application is not yet mandatory and which in part are
not endorsed by the EU. Siemens Healthineers currently as-
sumes that the application of these standards and amendments
will not have a material impact on the presentation of the con-
solidated financial statements.
Recent accounting pronouncements,
not yet adopted
Certain prior-year information has been reclassified to conform
to the current presentation.
Prior-year information
The above-described change in presentation of the consoli-
dated statements of cash flows did not result in a change of
the underlying allocation of cash flows in the cash flows from
operating activities, the cash flows from investing activities or
the cash flows from financing activities.
Consolidated statements of cash flows: Siemens Healthineers
added a new line to the presentation of the consolidated state-
ments of cash flows to show repayments of lease liabilities,
which are recognized under the right-of-use model, in the new
line item repayment of long-term debt (including current ma-
turities of long-term debt). This provides more relevant infor-
mation with regard to the cash flow effects of leases, which
are recognized under the right-of-use model. Previously, the
repayments of lease liabilities were included in the line item
change in short-term financial debt and other financing activi-
ties. The prior-year amounts have been reclassified accordingly
for reasons of better comparability. Therefore, € 121 million
were reclassified from the line item change in short-term fi-
nancial debt and other financing activities into the line item
repayment of long-term debt (including current maturities of
long-term debt).
Consolidated statements of financial position: Due to the in-
crease in treasury shares, Siemens Healthineers decided in fiscal
year 2021 to add an additional line to the presentation of the
consolidated statements of financial position to show treasury
shares separately, as this provides more relevant information
with regard to the composition of equity. Treasury shares were
included so far in the line item other components of equity. The
prior-year amounts have been reclassified accordingly for rea-
sons of better comparability, which resulted in a reclassification
of €36 million from the line item other components of equity
into the line item treasury shares.
Change in presentation
The fair value of equity instruments for equity-settled plans
and of liabilities for cash-settled plans is measured at the
grant date and recognized as an expense over the vesting
period. For cash-settled plans, the fair value is reassessed
each quarter. The fair value is based on the market price of
Siemens Healthineers AG shares or Siemens AG shares consid-
ering the present value of dividends to which the beneficiaries
are not entitled during the vesting period as well as market and
non-vesting conditions, if applicable. Therefore, the fair value
is based on market parameters, assumptions and estimates.
Changes in any of these could necessitate material adjustments
to the carrying amount of the liabilities.
Share-based payment awards may be settled in shares of
Siemens Healthineers AG or Siemens AG, depending on which
shares are the basis, or in cash. Share-based payment awards
based on Siemens Healthineers AG shares are classified pre-
dominately as equity-settled. Share-based payment awards
based on Siemens AG shares are classified as cash-settled to
fulfill the specific requirements for share-based payment trans-
actions among group entities, as Siemens Healthineers AG is
controlled by Siemens AG.
Share-based payment
Cash flow hedges: The effective portion of changes in the fair
value of derivatives designated as hedging instruments in cash
flow hedges is recognized in other comprehensive income.
Amounts accumulated in the cash flow hedge reserve are re-
classified into net income in the same periods in which the
hedged item affects net income. If the hedged item is an ex-
pected business combination, the effective portion of changes
in the fair value of the hedging instrument is considered when
determining the transaction price upon closing of the acquisi-
tion. Any ineffective portion is recognized immediately in profit
or loss. The application of hedge accounting for expected busi-
ness combinations assumes that the closing of the acquisition is
estimated to be highly probable. This assessment may require
significant judgment. Should the closing no longer be consid-
ered highly probable, hedge accounting must be discontinued
prospectively. If the closing is no longer expected to occur, the
amount accumulated in the cash flow hedge reserve must be
recognized immediately in profit or loss. For certain time-peri-
od-related cash flow hedges, Siemens Healthineers designates
only the change in the fair value of the spot element of for-
ward exchange contracts as a hedging instrument. Changes in
the fair value of the forward element are recognized in other
comprehensive income and accumulated separately in a cost of
hedging reserve. The value of the forward element at the time
of designation is amortized into profit or loss on a straight-line
basis over the hedging period.
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
62
52
On April 15, 2021, Siemens Healthineers completed the acqui-
sition of all shares in Varian Medical Systems, Inc. (hereinafter
"Varian"). Varian is a world leader in the field of cancer care,
with innovative solutions especially in radiation oncology and
related digital solutions and applications. Varian thus offers a
complement to Siemens Healthineers' leading businesses in
medical imaging, laboratory diagnostics and interventional
procedures. Since closing of the acquisition, Varian's business
constitutes a separate segment within Siemens Healthineers.
The purchase price paid in cash amounted to US$ 16.4 billion
(€ 13.9 billion as of the acquisition date). Siemens Healthineers
redeemed financial liabilities of Varian amounting to
US$50.1 million (€41.8 million as of the acquisition date), sep-
arately from the transaction. The preliminary purchase price
allocation as of the acquisition date resulted in the following
assets and liabilities:
(in millions of €)
Cash and cash equivalents
Trade and other receivables
17,273
Total assets
192
Miscellaneous assets
525
Property, plant and equipment
6,285
Other intangible assets
8,027
Cash and cash equivalents: Cash and cash equivalents are meas-
ured at cost. Siemens Healthineers considers all highly liquid
investments with a maturity of three months or less from the
date of acquisition to be cash equivalents. Short-term depos-
its and overdraft facilities granted in connection with the cash
pooling arrangements with the Siemens Group are not included
in cash and cash equivalents. Changes in these items are pre-
sented as financing activities in the consolidated statements
of cash flows.
Goodwill
Other current assets
764
Inventories
141
Contract assets
95
Other current financial assets
579
552
114
Financial liabilities measured at amortized cost: Siemens
Healthineers measures financial liabilities, except for deriva-
tives, contingent consideration recognized in a business com-
bination and written put options on non-controlling interests,
at amortized cost using the effective interest method.
Financial assets are considered defaulted if the obligor is unwill-
ing or unable to pay its credit obligations. A range of internally
defined events can trigger a default rating, including the open-
ing of bankruptcy proceedings or a default rating by an external
rating agency. Financial assets are written off as uncollectible
when it appears unlikely that they will be recovered. Generally,
this applies after the statutory limitation period has expired,
when bankruptcy proceedings have been closed, or when the
receivable is no longer pursued due to its insignificance.
Valuation allowances are set up for expected credit losses, repre-
senting a forward-looking estimate of future credit losses and
involving significant judgment. Expected credit losses are calcu-
lated based on the gross carrying amount of the financial asset
less collateral, multiplied by a factor reflecting the probability
of default and the loss in the event of default. Probabilities of
default and losses in the event of default are derived mainly
from rating grades determined by Siemens Financial Services.
Valuation allowances for receivables from Siemens Group are
measured according to the general three-stage impairment ap-
proach. For trade receivables, lease receivables and contract
assets, Siemens Healthineers uses the simplified impairment
model to measure valuation allowances at an amount equal to
the lifetime expected credit losses.
Siemens Healthineers reviews other intangible assets and
property, plant and equipment for impairment whenever an
indication (triggering event) arises that the carrying amount of
an asset may not be recoverable. In addition, intangible assets
not yet available for use are subject to an annual impairment
test. If the recoverable amount of an individual asset cannot be
determined, the impairment test is performed at the level of
the cash-generating unit. A cash-generating unit is the small-
est identifiable group of assets that includes the asset to be
tested for impairment and that generates cash inflows, which
are largely independent of the cash inflows from other assets
or groups of assets. When determining the relevant cash-gener-
ating unit, various factors need to be considered, including how
management monitors operations or makes decisions about
continuing or disposing of assets and operations. Therefore,
the identification of the relevant cash-generating unit involves
judgment. In addition, impairment testing of other intangible
assets and property, plant and equipment involves the use of
accounting estimates in determining the assets' or cash-gen-
erating units' recoverable amount, which can have a material
impact on the respective values and ultimately the amount of
any impairment.
Impairment of other intangible assets and
property, plant and equipment
generally 5 years
generally 7 to 8 years
5 to 10 years
generally 10 years
20 to 50 years
Office and other equipment
Equipment leased to others
Technical machinery
and equipment
Other buildings
Factory and office buildings
Leases
Property, plant and equipment are valued at acquisition or pro-
duction costs less accumulated depreciation and impairment
losses. Depreciation is recognized on a straight-line basis. The
following useful lives are assumed:
Siemens Healthineers amortizes purchased intangible assets
with finite useful life on a straight-line basis over their respec-
tive estimated useful life. The estimated useful life of patents,
licenses and similar rights generally ranges from three to five
years. In addition, there are intangible assets acquired in busi-
ness combinations, especially customer relationships, trade-
marks, technologies, as well as order backlog. For customer
relationships and trademarks, the useful life ranges from five
to 30 years; for technologies, from seven to 22 years and for
order backlog up to 10 years.
Other intangible assets
economic trends. At Siemens Healthineers, the recoverable
amount is generally determined based on the fair value less
costs of disposal. For the purpose of estimating a segment's
fair value less costs of disposal, cash flows are projected for the
next five years (in exceptional cases up to ten years) based on
past experience, actual operating results and management's
best estimate about future developments as well as on market
assumptions. Cash flows after the detailed planning period are
extrapolated using individual growth rates. The determined fair
value of a segment is assigned to level 3 of the fair value hierar-
chy. Key assumptions on which the determinations of fair val-
ues less costs of disposal are based include estimated terminal
value growth rates and discount rates. Both assumptions are
determined individually for each segment. The discount rates
correspond to the segment's weighted average cost of capi-
tal and are calculated based on a risk-free interest rate and a
market risk premium. In addition, the discount rates reflect the
current market assessment of the risks specific to each seg-
ment by taking into account specific peer group information
on beta factors, leverage and cost of debt. The parameters for
calculating the discount rates are based on external sources of
information. The peer groups undergo an annual review and
are adjusted, if necessary. Terminal value growth rates consider
external macroeconomic data and industry-specific trends. The
accounting estimates, including the methodology applied, can
have a material impact on the respective values and ultimately
the amount of any goodwill impairment. Additionally, the out-
come of goodwill impairment tests may depend on the alloca-
tion of goodwill to the segments.
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
49
The segment's recoverable amount is based on discounted
cash flow calculations and involves the use of accounting esti-
mates. The amount is influenced by, for example, the market
launch of new goods and services, the successful integration
of acquisitions, volatility of capital markets, interest rate de-
velopments, exchange rate fluctuations and the outlook on
Goodwill is tested for impairment annually as well as whenever
an indication (triggering event) arises that the carrying amount
may not be recoverable. Siemens Healthineers performs the an-
nual impairment test in the quarter ending September 30. For
the purpose of impairment testing, the segment's recoverable
amount is to be determined as the higher of the segment's fair
value less costs of disposal and its value in use. If either of these
values exceeds the carrying amount, it is not necessary to de-
termine both values. If the carrying amount of the segment to
which the goodwill is allocated exceeds its recoverable amount,
an impairment loss on goodwill allocated to this segment is
recognized. Impairment losses on goodwill are not reversed
in future periods.
Goodwill is carried at cost less accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired in
a business combination is allocated to the cash-generating
unit or the group of cash-generating units that is expected to
benefit from the synergies of the business combination and
represents the lowest level at which goodwill is monitored for
internal management purposes. At Siemens Healthineers, the
goodwill impairment test is performed at the level of the seg-
ments (please also see → Note 29 Segment information). The
allocation of goodwill requires judgment.
Goodwill
Property, plant and equipment
Trade payables
A contract is or contains a lease if the contract conveys the right
to control the use of an identified asset for an agreed period
of time in exchange for consideration. For further information
on leases, please refer to → Note 7 Trade and other receivables,
→ Note 13 Other intangible assets and property, plant and equipment,
→ Note 16 Financial debt, → Note 24 Other financial obligations and
→ Note 26 Financial risk management.
Siemens Healthineers as lessee applies the right-of-use model,
means right-of-use assets and lease liabilities are recognized,
which normally correspond to the discounted lease payments
at initial measurement. The right-of-use model is not applied
for leases with a term of twelve months or less or for low-value
assets. In these cases, the lease payments are instead expensed
Financial assets measured at amortized cost: Loans, receivables
and other debt instruments held in a hold-to-collect business
model with contractual cash flows that represent solely pay-
ments of principal and interest are measured at amortized cost.
Interest income is calculated using the effective interest method.
Financial assets measured at fair value through other compre-
hensive income: Siemens Healthineers irrevocably elected to
present changes in the fair value of its investment in Medical
Systems S.p.A. in other comprehensive income to avoid earn-
ings volatility. Accordingly, unrealized gains and losses as well
as gains and losses on the subsequent sale of the investment
are recognized in other comprehensive income.
Financial assets and liabilities measured at fair value through
profit or loss: Debt instruments are measured at fair value
through profit or loss if the business model they are held in
is neither a hold-to-collect nor a hold-and-sell business model
or if their contractual cash flows do not represent solely pay-
ments of principal and interest. For some debt instruments,
the assessment of the contractual cash flows may involve
judgment. Equity instruments are measured at fair value
through profit or loss unless the option to measure them at
fair value through other comprehensive income was elected.
Derivatives are measured at fair value through profit or loss
unless they are designated as hedging instruments. Financial
liabilities measured at fair value through profit or loss include
contingent consideration recognized in a business combination.
Siemens Healthineers does not use the option to designate fi-
nancial assets or financial liabilities at fair value through profit
or loss at initial recognition (fair value option).
Initially, financial instruments are generally recognized at their
fair value. Receivables from finance leases are measured at an
amount equal to the net investment in the lease. Regular-way
purchases or sales of financial assets are recognized on the
trade date. Subsequently, financial instruments are measured
according to the category to which they are assigned: finan-
cial assets and liabilities measured at fair value through profit
or loss, financial assets measured at fair value through other
comprehensive income and financial assets and liabilities meas-
ured at amortized cost.
Financial instruments
Termination benefits are provided when Siemens Healthineers
makes an offer to enable an employee to resign from its em-
ployment voluntarily before his or her normal retirement date
or decides to terminate the employment. Termination benefits
in accordance with IAS 19, Employee Benefits, are recognized
as liabilities and expenses when the offer of those benefits can
no longer be withdrawn.
Termination benefits
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
51
Siemens Healthineers as lessor rents equipment to its custom-
ers. If substantially all risks and rewards incidental to the own-
ership of the rented equipment are transferred to the customer,
the lease is classified as a finance lease, otherwise as an oper-
ating lease. Under finance leases, revenue is recognized at the
time the equipment is made available for use by the customer.
At the same time, a receivable from finance leases is recog-
nized at an amount equal to the net investment in the lease.
In the following periods, interest income is realized using the
effective interest method, reflecting a constant periodic rate of
return of the net investment. Under operating leases, the rented
equipment is recognized as property, plant and equipment and
is depreciated on a straight-line basis over its useful life. Income
from operating leases is recognized on a straight-line basis over
the lease term.
Entitlements resulting from plans based on investment returns
of underlying assets are generally measured at the fair value
of the underlying assets as of the reporting date. If the per-
formance of the underlying assets is lower than a guaranteed
return, the DBO is measured by projecting forward the contri-
butions at the guaranteed fixed return and discounting back
to a present value.
For funded plans, Siemens Healthineers offsets the fair value
of the plan assets with the defined benefit obligation. The net
amount is presented, after adjustments for any effects relating
to asset ceiling.
Siemens Healthineers measures entitlements from defined
benefit plans by applying the projected unit credit method.
Thereby, the obligation from defined benefit plans reflects an
actuarially calculated present value of the future benefit entitle-
ment for services already rendered (defined benefit obligation,
DBO). Actuarial valuations rely on key assumptions including
discount rates, expected compensation increases and pension
progression and mortality rates. Discount rates are determined
by reference to yields on high-quality corporate bonds of ap-
propriate duration and currency at the end of the reporting
period. High-quality corporate bonds have an issuing volume
of more than 100 million units (in the respective currency) and
an AA rating (or equivalent) by at least one of the three rating
agencies Moody's Investors Service, S & P Global Ratings or
Fitch Ratings. In such case that yields are not available, dis-
count rates are based on government bond yields. For signifi-
cant plans, individual spot rates from a full yield curve approach
are applied in general. Due to changing market, economic and
social conditions, the underlying actuarial assumptions may
differ from actual developments.
Defined benefit plans
Significant accounting estimates are required to determine
provisions related to onerous contracts with customers, war-
ranty costs and asset retirement obligations, as well as those
related to legal and regulatory proceedings and governmental
investigations (hereinafter, collectively, "legal proceedings").
Siemens Healthineers recognizes a provision for onerous con-
tracts with customers when the estimated unavoidable costs of
outstanding goods and services exceed the expected outstand-
ing revenue. Legal proceedings often involve complex legal is-
sues and are subject to substantial uncertainties. Accordingly,
considerable judgment is required to determine whether it is
probable that there is a present obligation event at the end
of the reporting period as a result of a past, whether a future
outflow of resources is probable and whether the amount of
the obligation can be estimated reliably. Internal and external
counsels are generally part of the determination process for
legal proceedings. Due to new developments, it may be neces-
sary to recognize a provision for an ongoing legal proceeding
or to adjust the amount of a previously recognized provision.
Upon resolution of a legal proceeding, Siemens Healthineers
may incur charges in excess of the provision recognized for the
matter concerned. Legal proceedings may have a material ef-
fect on net assets, financial position and results of operations.
A provision is recognized if all of the following conditions are
met: (1) it is probable that Siemens Healthineers has a present
legal or constructive obligation as a result of a past event, (2) it
is probable that an outflow of resources with economic bene-
fits will be required to settle the obligation, and (3) a reliable
estimate of the amount of the obligation can be made. If the
effect is material, provisions are recognized at present value by
discounting the expected future cash flows at a pretax interest
rate that corresponds to the risk-free market interest rate.
Provisions
over the lease term. Extension options are included in the lease
term if their exercise is reasonably certain. The accounting pol-
icy choice for the non-separation of lease components and
non-lease components is used, with the exemption for vehicle
leases, and all components are accounted for as lease compo-
nents. Right-of-use assets are measured at acquisition costs
less accumulated depreciation and impairment losses, and are
depreciated under the straight-line method over the shorter of
the lease term or the useful life of the underlying asset. Lease
liabilities are measured at the present value of the lease pay-
ments payable over the lease term, generally discounted using
the incremental borrowing rate. Subsequently, they are meas-
ured using the effective interest method. Lease liabilities are
remeasured in case of lease modifications (due to renegotia-
tions) or index-changes triggering price-adjustments, and as a
result of required reassessments of existing contract conditions.
The remeasurement of the lease liabilities leads to a respective
adjustment of the right-of-use assets.
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
50
Current and past service cost, settlement gains and losses for
pensions and similar obligations and administration costs unre-
lated to the management of plan assets are allocated to func-
tional costs. Thereby, past service cost and settlement gains
and losses are recognized immediately in net income. Current
service cost and interest income and expenses are determined
based on the assumptions used for the calculation of the de-
fined benefit obligation as of the reporting date of the previous
fiscal year, and recognized in profit or loss. Net interest is thus
calculated by multiplying the discount rate for the respective
fiscal year by the net defined benefit asset or liability from de-
fined benefit plans as of the reporting date of the previous fiscal
year. As of the reporting date, remeasurements are recognized
in other comprehensive income. These comprise actuarial gains
and losses as well as the difference between the return on plan
assets and the interest income on plan assets, which is included
in net interest.
231
Other current financial liabilities
80
59
5
Income tax effects recognized in other
comprehensive income or directly in equity
Total income taxes included in the
consolidated statements of comprehensive
income or directly recognized in equity
8
-17
Other non-current assets and liabilities
27.2%
27.4%
Effective tax rate
Deferred taxes on tax loss carryforwards
Deferred taxes on tax credits
300
Provisions for pensions and similar obligations
532
658
consolidated statements of income
-757
-2,329
Intangible assets
Income tax expenses recognized in the
206
271
178
244
52
-39
87
Changes recognized in the consolidated
statements of income
87
-51
Balance at beginning of fiscal year
2020
2021
Fiscal year
156
(in millions of €)
In fiscal year 2021, income tax expenses differed from the ex-
pected income tax expenses based on the combined German
tax rate of 29.6% (2020: 29.2%) as follows:
In fiscal year 2021, the calculation of taxes in Germany was
based on a combined tax rate of 29.6% (2020: 29.2%), consist-
ing of the corporate tax rate of 15.0% (2020: 15.0%), the soli-
darity surcharge thereon of 5.5% (2020: 5.5%) and an average
trade tax rate of 13.8% (2020: 13.4%). For foreign subsidiaries,
taxes were calculated based on local tax law and applicable tax
rates in the individual countries.
In fiscal year 2021, the current taxes included income of €36 mil-
lion (2020: expenses of €9 million) for adjustments of taxes
from prior fiscal years. The deferred taxes also included income
of €36 million (2020: expenses of €45 million) from the origi-
nation and reversal of temporary differences. This position was
impacted by an income of €71 million (2020: €0) mainly from
the subsequent accounting of the Varian purchase price allo-
cation. The effective tax rate was positively influenced by tax
rate differences in various countries. This effect was partially
compensated by BEAT (Base Erosion and Anti-Abuse Tax) and
GILTI (Global Intangible Low-Taxed Income) in the USA.
591
653
-51
-1,601
Total deferred tax assets and liabilities, net
36
Deferred tax assets and liabilities, net, developed as follows:
Inventories are valued at the lower of acquisition or production
costs and net realizable value. Acquisition or production costs
are generally determined on the basis of an average value or
the first-in, first-out method. The determination of the net re-
alizable value includes assumptions with respect to quantity
risks, risks of technical obsolescence and price risks.
Current assets and liabilities
-87
For information on financing and capital increases correspond-
ing to the acquisition of Varian, refer to → Note 16 Financial
debt, Note 23 Equity and Note 25 Financial instruments and
hedging activities.
The purchase price allocation of Varian is still preliminary, in
particular, the allocation of intangible assets including goodwill
to currency areas is not yet finalized. Adjustments may lead to
changes, such as, in intangible assets including goodwill and
in deferred tax liabilities.
The acquired business contributed revenue of €1,241 mil-
lion and a net loss of €50 million, including earnings effects
from the purchase price allocation and integration costs to
Siemens Healthineers for the period from the acquisition date to
September 30, 2021. Therein, pre-tax earnings effects from the
purchase price allocation and integration costs of € 380 million
are included. If Varian had been included in the consolidated
financial statements since October 1, 2020, revenue and net
income, including earnings effects from the purchase price allo-
cation and integration costs, would have been € 19,332 million
and €1,614 million, respectively, in fiscal year 2021.
The fair value of trade and other receivables amounted to
€579 million. This comprised of the gross contractual amount
of € 603 million, of which €24 million were expected to be un-
collectable at the date of acquisition. The fair value of loans
receivable and bonds amounted to €20 million. This comprised
of the gross contractual amount of €227 million, of which
€207 million were assessed as probably uncollectible at the ac-
quisition date (please also see → Note 25 Financial instruments
and hedging activities).
The goodwill was allocated to the Varian and Imaging segments
in accordance with the expected synergies from the acquisition.
The Imaging segment accounted for €532 million.
expected to generate cost synergies in the administrative field
and in procurement activities.
6
Non-controlling interests
1,566
284
3,413
The majority of the purchase price was allocated to goodwill
and intangible assets. These intangible assets mainly relate to
technologies for oncology solutions, customer relationships,
and the acquired order backlog. Goodwill relates to inseparable
intangible assets such as synergy effects and employee know-
how. Synergies from the acquisition are mainly expected from
broader regional coverage of the sales network, cross-selling
opportunities into our existing customer base and from ex-
panded integrated service offerings (e.g. "Oncology-as-a-
Service" program) and value partnerships, and joint product
innovation. In addition, the merger of the two businesses is
Total liabilities
Deferred tax liabilities
86
Long-term financial debt
273
Other current liabilities
181
Current income tax liabilities
713
Contract liabilities
Miscellaneous liabilities
39
Note 4 Other operating income
54
Deferred tax
Thereof:
493
745
Current tax
-243
-1,897
Deferred taxes on temporary differences
2020
In fiscal year 2021, an amount of €11 million (2020: €34 million)
was reported in other operating income in the United States in
connection with the CARES Act to mitigate the financial impact
of the COVID-19 pandemic.
2021
2020
2021
(in millions of €)
Fiscal year
Sept 30,
Deferred tax assets and liabilities (-) related to the following
items:
Income taxes broke down as follows:
Note 5 Income taxes
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
(in millions of €)
(in millions of €)
Inventories
Earnings per share
Sept 30,
Note 7 Trade and other receivables
(in millions of €)
Receivables from employees
2021
2020
61
27
Derivatives
29
84
Other
79
31
(in millions of €)
Sept 30,
2021
Total other current financial assets
169
142
Note 8 Other current financial assets
1.40
1.57
1.41
1,411
Between 3 and 4 years
44
32
Between 4 and 5 years
36
28
Weighted average shares outstanding during
fiscal year (basic)
Effect of dilutive share-based payment
Weighted average shares outstanding during
fiscal year (diluted)
2020
1,103,600 1,004,070
More than 5 years
75
60
Total
319
258
Basic earnings per share
Diluted earnings per share
1.57
1,099,690 1,001,859
3,910
2,211
Oct 1,
2019
Receivables from the sale of goods
and services
3,687
Work in progress
1,082
609
-50
-42
Net investment in finance leases
270
215
Finished goods and products held for resale
Advances to suppliers
258
1,428
25
31
Total inventories
3,179
2,304
56
In fiscal year 2021, cost of sales included inventories recog-
nized as expenses in the amount of €10,927 million (2020:
€8,698 million). Write-offs of inventories increased by €90 mil-
lion (2020: €11 million) compared to the prior year.
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Note 11 Other current assets
1,099
1,727
Future minimum lease payments
Unearned finance income
644
Receivables from finance leases
Total trade and other receivables
53
2,520
48
3,740
2,568
2,744
35
2,779
Note 9 Contract assets
Receivables from finance leases particularly related to the leas-
ing of imaging equipment in the Imaging segment. The corre-
sponding long-term portion is reported in the line item other
financial assets and amounted to €212 million as of the report-
ing date (September 30, 2020: €162 million).
In the following table, the undiscounted future minimum lease
payments are reconciled to the net investment in finance
leases:
566
As of the reporting date, contract assets amounted to €1,159 mil-
lion (September 30, 2020: €818 million; October 1, 2019:
€839 million). Thereof, contract assets amounting to €221 mil-
lion (September 30, 2020: €132 million) had a remaining term of
more than twelve months. The change in contract assets in fiscal
year 2021 primarily related to the Varian acquisition, leading to
an increase of €266 million.
Sept 30,
Sept 30,
(in millions of €)
2021
2020
(in millions of €)
2021
2020
Raw materials and supplies
Note 10 Inventories
37
47
Between 2 and 3 years
2021
2020
Deductible temporary differences
118
131
Tax loss carryforwards
305
Total items (gross amounts) for which no
deferred tax assets have been recognized
901
Sept 30,
436
Expected income tax expenses
Nondeductible expenses
Tax-free income
Taxes for prior years
Fiscal year
2021
2020
713
571
(in millions of €)
106
(in millions of €)
-59
deferred tax assets will be recovered. Estimates are updated
on a regular basis and resulting adjustments are made in the
respective period. Deferred tax assets and liabilities are offset
if they relate to income taxes levied by the same tax authority
and there is a legal right to set off current tax assets against
liabilities.
Deferred tax assets and liabilities for temporary differences
between the accounting book value and the tax base for as-
sets and liabilities, as well as deferred tax assets for tax loss
carryforwards, are measured at the tax rates that are expected
to apply in the period when the asset is realized or the liability
is settled using the liability method. Deferred tax assets are
recognized if sufficient taxable profit is projected for the peri-
ods in which the underlying temporary difference is reversed.
The projection includes, in particular, future results from op-
erating activities, reversals of taxable temporary differences
and substantiated tax planning opportunities. At each report-
ing date, Siemens Healthineers reassesses the recoverability of
deferred tax assets based on the projected taxable profit. As
future business developments are uncertain and partly beyond
Siemens Healthineers' control, assumptions are necessary to
estimate future taxable profit as well as the period in which
Recognition and measurement of tax positions are determined
by respective local tax laws and applicable tax authorities' reg-
ulations. These can be complex and may be interpreted differ-
ently by taxpayers and local tax authorities. Thus, subsequent
current tax payments or refunds for prior years are possible.
These uncertainties are taken into account based on manage-
ment's considerations.
Income taxes
Expenditures on research activities and collaborations are
recognized immediately as expenses. Expenditures on devel-
opment activities are expensed and capitalized only when
the recognition criteria in IAS 38, Intangible Assets, are met.
To assess the fulfillment of these criteria, assumptions about
technical development risks and market developments, among
others, must be made. Capitalized development expenses are
measured at cost less accumulated amortization and impair-
ment losses, with an amortization period of generally five to
25 years.
Research and development expenses
In general, operating expenses by types are assigned to func-
tional areas according to their profit and cost centers. Amorti-
zation, depreciation and impairment of intangible assets and
property, plant and equipment are included in functional costs
depending on the use of the assets.
Functional costs
Siemens Healthineers has an unconditional right to consider-
ation. Contract liabilities result mainly from customer advances
on services and from prepayments for goods not yet shipped.
Contract assets and contract liabilities are presented net at the
contract level and as current because they arise in the course of
the regular operating cycle. Receivables are recognized when
the right to consideration becomes unconditional. Valuation
allowances for credit risks are set up for contract assets and
receivables according to the accounting policy for financial as-
sets measured at amortized cost.
Deferred tax assets (gross amounts) have not been recognized
with respect to the following items:
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
-1,566
-49
-51
9
-1,601
-51
Other
Balance at fiscal year-end
-20
Additions from acquisitions directly
recognized in equity
Basic earnings per share are computed by dividing net income at-
tributable to the shareholders of Siemens Healthineers AG by the
weighted average number of shares of Siemens Healthineers AG
outstanding during fiscal year. Diluted earnings per share are
calculated by assuming conversion or exercise of all potentially
dilutive share-based payment plans.
69
-46
(in millions of €, number of shares in thousands,
earnings per share in €)
Net income
Portion attributable to non-controlling
interests
2021
2020
Sept 30,
1,746
1,423
(in millions of €)
Fiscal year
2021
Within 1 year
62
58
-18
-12
Between 1 and 2 years
55
42
Net income attributable to shareholders of
Siemens Healthineers AG
2020
-46
The future minimum lease payments to be received were due
as follows:
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
2
24
Change in realizability of deferred tax assets
and tax credits
-14
-5
Change in tax rates
-13
-19
Note 6 Earnings per share
Foreign tax rate differential
-62
Other
−1
Total income tax expenses
658
532
55
€26 million of the tax loss carryforwards not recognized as
of September 30, 2021 will expire in the periods up to 2026
(September 30, 2020: €138 million expiring by 2028). As of
September 30, 2021, no deferred tax liabilities were recognized
for temporary differences in connection with shares in sub-
sidiaries amounting to €4,045 million (September 30, 2020:
€3,412 million), as Siemens Healthineers can control their re-
versal and it is probable that these differences will not dissolve
in the foreseeable future. As of September 30, 2021, deferred
tax liabilities of €26 million (September 30, 2020: €21 million)
were recognized for planned dividend payments.
Uncertainties in the interpretation of a tax regulation in the
context of an enacted foreign tax reform in former years may
result in future tax payments of a mid double-digit million
amount. Due to the low probability of such an occurrence, no
current income tax liability was still recognized.
-88
782
comprehensive income
Changes recognized in other
2021
2020
Balance at beginning of fiscal year
3,798
3,847
2,813
2,858
8
13
993
1,002
Current service cost
80
73
80
73
Interest expenses
41
52
41
52
33
43
-33
-43
1
-6
2020
-2
2021
2021
The increase in the line item wage and salary obligations and
other liabilities to employees was due mainly to higher obliga-
tions for performance-based compensation and the acquisition
of Varian. Employee-related accruals primarily included accruals
for vacation and overtime entitlements as well as share-based
payment. As of the reporting date, miscellaneous tax liabilities
mainly comprised sales tax liabilities of € 195 million (Septem-
ber 30, 2020: € 157 million).
Note 21 Provisions for pensions and
similar obligations
Siemens Healthineers provides post-employment benefit plans
for almost all of its German employees and the majority of its
foreign employees. These plans are accounted for either as de-
fined benefit plans or defined contribution plans.
Defined benefit plans
The defined benefit plans cover around 53,000 participants.
These are divided into 34,000 active employees for whom
current service cost is recognized, 9,000 active and former
employees with vested benefits for whom no more current
service cost is recognized, and 11,000 retirees and surviving
dependents who receive benefits. The defined benefit plans
are to a certain extent affected by longevity, inflation and
compensation increases and take into account country-specific
differences. Major plans are funded with assets in external
segregated benefit trusts. In accordance with local laws, these
plans are managed in the interest of the beneficiaries through
trust agreements with the respective benefit trusts. The de-
fined benefit plans open to new entrants are predominantly
based on contributions made by Siemens Healthineers. The
majority of the provisions for pensions derives from defined
benefit plans in the following four countries:
Germany
In Germany, Siemens Healthineers provides pension benefits
through the Siemens Healthineers BSAV ("Beitragsorientierte
Siemens Altersversorgung"), frozen legacy plans and deferred
compensation plans. The majority of active employees par-
ticipates in the Siemens Healthineers BSAV. The benefits pro-
vided under this plan are predominantly based on notional
contributions by the company and the investment returns on
the corresponding assets of this plan, whereby a minimum re-
turn is guaranteed by the company. The frozen plans expose
Siemens Healthineers to investment risk, interest rate risk and
longevity risk. The effect of compensation increases is substan-
tially eliminated. The pension plans are funded via a contrac-
tual trust arrangement (CTA). No legal or regulatory minimum
funding requirements apply in Germany.
United States
In the United States, defined benefit plans are sponsored by
Siemens Healthineers, which have been frozen to new entrants
and future benefit accruals, except for interest credits on cash
balance accounts. The plans' assets are held in trusts. The trust-
ees of the trusts are responsible for the administration of the
assets. They take directions from an investment committee
to which Siemens Healthineers has delegated supervision of
the investment of plan assets. The plans are subject to fund-
ing requirements under the Employee Retirement Income
Security Act of 1974 (ERISA) as amended. There is a regulatory
requirement to maintain a minimum funding level of 80% in
the defined benefit plans in order to avoid benefit restrictions.
Annual contributions are calculated by independent actuar-
ies. Siemens Healthineers may, at its discretion, contribute in
excess of this regulatory requirement.
United Kingdom
In the United Kingdom, Siemens Healthineers provides pension
benefits through the Siemens Healthineers Benefit Scheme for
which an inflation adjustment of the majority of accrued de-
fined benefits is mandatory until the start of retirement. The
required funding is determined by a so-called funding valuation
carried out every third year according to legal requirements.
64
64
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Switzerland
Following the Swiss Law of Occupational Benefits ("Beruf-
liches Vorsorgegesetz", BVG), each employer must grant
post-employment benefits to qualifying employees. Accord-
ingly, Siemens Healthineers sponsors cash balance plans in
Switzerland. These plans are administered by external founda-
tions. The boards of the main foundations are composed of an
equal number of employer and employee representatives of the
plan sponsors. The boards of the foundations are responsible for
the investment policy and the management of plan assets as
well as for any changes in the plan rules and the determination
of contributions to finance the benefits. Siemens Healthineers is
required to make total contributions at least as high as the sum
of the employee contributions set out in the plan rules. In case
of an underfunded plan, Siemens Healthineers together with the
employees may be required to pay supplementary contributions
according to a defined framework of recovery measures.
Defined benefit
obligation (I)
Fair value
Fiscal year
of plan assets (II)
Fiscal year
Effects
of asset ceiling (III)
Fiscal year
Net defined benefit
balance (I-II+III)
Fiscal year
(in millions of €)
2021
2020
2020
-4
235
3
67
169
53
1
-6
-191
9
Employer contributions
82
77
-82
-77
Plan participants' contributions
9
9
9
9
Benefits paid
-172
-153
-157
-138
-15
-15
Settlement payments
Business combinations, disposals and other
307
-22
consolidated statements of comprehensive
income
Remeasurements recognized in the
-6
-2
Interest income
Other¹
Defined benefit cost recognized in the
consolidated statements of income
122
119
30
39
92
81
18
Return on plan assets (excluding amounts
1,198
included in net interest income and
Actuarial gains (-) and losses
169
53
-22
67
Effects of asset ceiling
-169
-53
-22
67
1
-6
1
net interest expenses)
2,016
135
206
9
Other
30
66
96
Sept 30,
Balance at end
2021
2020
of fiscal year 2021
268
65
173
506
(in millions of €)
Short-term financial debt and current
maturities of long-term financial debt
225
167
Long-term financial debt
457
314
Current liabilities to the Siemens Group from
financing activities
1,926
2,040
Liabilities to the Siemens Group from
3
financing activities
3
Currency translation
differences
Additions
Usage
Warranties
Order-
related
losses and
risks
Other
Total
211
80
123
414
24
56
64
144
197
2
39
238
-139
-4
-30
-172
Reversals
-35
-16
-28
-78
3
11,708
2,982
Market value of forwards for hedging of
63
85
Therein:
Non-current
25
46
79
150
The majority of provisions is expected to result in cash outflows
during the next one to 15 years. Provisions for warranties related
to goods sold. Provisions for order-related losses and risks were
primarily recognized for contracts in which the unavoidable
costs of meeting the obligations under the contracts exceeded
expected outstanding revenue. Other provisions included var-
ious types of provisions, such as for legal proceedings or asset
retirement obligations related to certain items of property, plant
and equipment. The line item other mainly related to additions
due to acquisitions.
In the ordinary course of business, Siemens Healthineers is in-
volved in legal proceedings in various jurisdictions. At present,
the Group does not expect any matters from these legal proceed-
ings to have material effects on net assets, financial position and
results of operations.
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Note 20 Other current liabilities
(in millions of €)
Wage and salary obligations and
other liabilities to employees
Employee-related accruals
Miscellaneous tax liabilities
Other
Total other current liabilities
Sept 30,
2021
2020
1,169
561
353
302
288
200
0.9
1 The values as of September 30, 2020 were adjusted according to the new definition of
net debt.
3.5
Net debt (including pensions)/EBITDA
foreign currency liabilities from
financing activities
-498
-92
Current receivables from the Siemens Group
from financing activities
-594
Cash and cash equivalents
-1,322
Net debt¹
11,901
Provisions for pensions and similar obligations
908
4
Net debt (including pensions)
-3,271
-656
1,484
1,029
2,513
Income before income taxes
2,404
1,954
Interest income, interest expenses and other
financial income, net
169
Amortization, depreciation and impairments
1,039
27
815
EBITDA
3,612
2,796
12,809
272
35
4
1,590
1,359
Fixed income securities
Effect on defined benefit obligation due to a change
of half a percentage-point
Thereof:
Sept 30, 2021
Sept 30, 2020
Government bonds
222
184
(in millions of €)
Increase
Decrease
Increase
Decrease
Corporate bonds
1,369
1,175
Alternative investments
278
200
Discount rate
-242
271
-227
266
554
Compensation increase
598
2021
3.0
2.6
British pound
1.9
1.7
Switzerland
1.5
1.4
Swiss franc
0.4
0.2
Pension progression
Germany
1.5
1.5
United Kingdom
3.0
2.6
66
99
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Sensitivity analysis
A change of half a percentage-point in the above-mentioned
assumptions would affect the defined benefit obligation as
follows:
Disaggregation of plan assets
(in millions of €)
Equity securities
Sept 30,
2020
16
-15
11
Future cash flows
As of the reporting date, the expected employer contribu-
tions to defined benefit plans for fiscal year 2022 amounted
to €82 million (2021: €73 million). Over the next ten fis-
cal years, average annual benefit payments of € 190 mil-
lion were expected (September 30, 2020: €181 million). The
weighted average duration of the defined benefit obligation
for Siemens Healthineers' defined benefit plans was 13 years
(September 30, 2020: 13 years).
Defined contribution plans
The amount recognized as an expense for defined contribu-
tion plans amounted to € 487 million in fiscal year 2021 (2020:
€449 million). Therein, contributions to state plans of €332 mil-
lion (2020: €287 million) were included.
Note 22 Other liabilities
2020
Sept 30,
(in millions of €)
2021
Deferred compensation liabilities
303
211
Employee-related accruals
120
121
Other
12
13
Total other liabilities
435
345
Deferred compensation liabilities related to a deferred compen-
sation plan in the United States. Please refer to → Note 15 Other
assets for the corresponding deferred compensation assets.
Employee-related accruals primarily included accruals for
anniversary expenses and expenses for partial retirement in
Germany.
Note 23 Equity
Resolutions of the Shareholders' Meeting 2021
The Authorized Capital 2018 was canceled by resolution at the
Shareholders' Meeting on February 12, 2021. With this resolu-
tion, the Managing Board was simultaneously authorized by
the Shareholders' Meeting to increase the capital stock, with
the approval of the Supervisory Board, on one or more occa-
sions, in one total sum or in installments, during the period
until February 11, 2026 by up to €537.5 million by issuing up to
537,500,000 new ordinary registered shares with no par value
against contributions in cash and/or in kind (Authorized Capital
2021). Furthermore, the Managing Board was authorized to
exclude the subscription rights of the shareholders with the
approval of the Supervisory Board.
The Conditional Capital 2018 and the authorization to issue
convertible bonds or warrants under warrant bonds as of Feb-
ruary 19, 2018 were canceled by resolution at the Shareholders'
Meeting on February 12, 2021. Simultaneously, the share
capital was conditionally increased by up to €107.5 million
(107,500,000 shares, Conditional Capital 2021) and the authori-
zation of the Managing Board to issue convertible bonds and/or
warrant bonds was renewed. The Conditional Capital 2021
serves to grant shares to holders or creditors of bonds issued
by Siemens Healthineers AG or one of its affiliated companies
until February 11, 2026. Furthermore, the Managing Board was
authorized to exclude the subscription rights of the sharehold-
ers with the approval of the Supervisory Board.
By resolution of the Shareholder's Meeting on February 12,
2021, the authorization of February 19, 2018 to acquire and
use treasury shares was canceled. Simultaneously, the Man-
aging Board was authorized to acquire treasury shares until
February 11, 2026 in an aggregate amount of up to 10% of the
capital stock existing at the time the resolution is adopted or,
if this amount is lower, of the capital stock existing at the time
the authorization is exercised.
68
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
440
67
In fiscal year 2021, pooled funds were reclassified from the
category fixed income securities to the category derivatives to
represent the nature of assets involved more accurately. The
prior-year amounts have been reclassified accordingly for rea-
sons of better comparability, which resulted in a reclassification
of € 115 million from the line item fixed income securities into
the line item derivatives.
-10
Multi-strategy funds
413
345
Derivatives
189
180
Pension progression
158
-144
158
-135
Insurance contracts
United Kingdom
121
Cash and cash equivalents
Other
62
91
9
4
Total plan assets
3,259
2,813
The effect on the defined benefit obligation of a 10% reduction
in mortality rates for all beneficiaries would be an increase of
€110 million as of September 30, 2021 (September 30, 2020:
€109 million).
Sensitivity determinations applied the same methodology as
applied for the determination of the post-employment benefit
obligation. Sensitivities reflect changes in the defined benefit
obligation solely for the assumption changed.
Asset liability management strategies
A decline in the pension plans' funded status due to an adverse
development of plan assets or the defined benefit obligation
is considered as a significant risk. The funded status can be
affected by changes in actuarial assumptions, primarily the
discount rate, as well as movements in financial markets. Ac-
cordingly, Siemens Healthineers implemented an investment
strategy aligned with the defined benefit obligation (liabili-
ty-driven investment approach). The management of the risks
is based on a defined risk measure (Value at Risk, VaR), which
considers both plan assets and the defined benefit obligation.
The above-mentioned risks and the asset development are mon-
itored on an ongoing basis and, if necessary, the investment
strategy is adjusted accordingly. Independent asset managers
are selected based on quantitative and qualitative analyses,
which include their performance and risk preference. Derivatives
are used to reduce risks as part of risk management.
Almost all equity securities had quoted prices in an active
market. The fair value of fixed income securities was based
on prices provided by price service agencies. The fixed income
securities were mainly traded on an active market and almost
all were rated as investment grade. Alternative investments
mostly included investments in hedge funds and real estate
investments. Multi-strategy funds comprised mainly absolute
return funds and diversified growth funds that invest in vari-
ous asset classes within a single fund, with the aim to stabilize
investment returns and reduce volatility. Derivatives predom-
inantly consisted of financial instruments for hedging interest
rate risk. Insurance contracts included mainly reinsurance con-
tracts for benefits due to members.
79
(in millions of €)
Balance at beginning
of fiscal year 2021
Therein:
Non-current
2.4
U.S. dollar
2,007
1,318
1,216
715
791
986
1,050
948
937
38
113
465
369
516
408
8
8
-43
-32
318
112
306
104
12
7
278
261
2,033
171
Net defined benefit assets 2
Thereof:
Currency translation differences
38
-95
39
-85
-1
-11
Other reconciliation items
182
-235
246
-137
-63
-99
Balance at fiscal year-end
4,081
3,798
3,259
2,813
831
993
Thereof:
Germany
United States
United Kingdom
Switzerland
Other countries
Provisions for pensions and similar obligations
147
1
108
-22
67
Switzerland
projection from the U.S.
Social Security Adminis-
tration's Long Range De-
mographic Assumptions
SAPS S2 Standard mortal-
ity tables for Self-Adminis-
tered Pension Schemes
with allowance for future
mortality improvements
BVG 2020 G
1 The mortality tables applied to material plans are shown.
2020
Siemens-specific tables
(Siemens Bio 2017/2020)
mainly derived from data
of the German Siemens
population and to a lesser
extent from data of the
Federal Statistical Office in
Germany by applying
formulas in accordance
with recognized actuarial
standards
Pri-2012 generational
projection from the U.S.
Social Security Adminis-
tration's Long Range De-
mographic Assumptions
SAPS S2 Standard mortal-
ity tables for Self-Adminis-
tered Pension Schemes
with allowance for future
mortality improvements
BVG 2015 G
Actuarial assumptions
The weighted-average discount rate was as follows:
Compensation increase and pension progression for countries,
in which these assumptions have a significant effect, are shown
in the following table. If applicable, inflation effects were con-
sidered.
Sept 30,
(in %)
2021
2020
Discount rate
1.7
1.5
(in %)
Sept 30,
2021
2020
Euro
1.0
0.9
Compensation increase
Total actuarial gains (-) and losses
-2
12
Experience gains and losses
114
1 Included past service cost, settlement gains and losses as well as liability management costs for funded plans.
2 Presented in the line item other assets.
65
908
1,029
77
36
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
In fiscal year 2021, the line item business combinations, dispos-
als and other included effects from the acquisition of Varian.
These included the defined benefit obligation of €303 million,
the fair value of plan assets of €271 million and asset ceiling
effects of €0 million.
Net interest expenses related to provisions for pensions and
similar obligations amounted to €10 million in fiscal year 2021
(2020: €10 million). The defined benefit obligation was attrib-
utable to active employees 47% (2020: 45%), to active and for-
mer employees with vested benefits for whom no more current
service cost is recognized 14% (2020: 14%), and to retirees and
surviving dependents 39% (2020: 41 %).
The actuarial gains (-) and losses included in the remeas-
urements resulted from:
(in millions of €)
2.7
Mortality tables applied¹ were:
Sept 30,
2021
Siemens-specific tables
(Siemens Bio 2017/2021)
mainly derived from data
of the German Siemens
population and to a lesser
extent from data of the
Federal Statistical Office
in Germany by applying
formulas in accordance
with recognized actuarial
standards
United States Pri-2012 generational
Fiscal year
United
Kingdom
2021
2020
Changes in demographic assumptions
-8
-3
Changes in financial assumptions
-26
72
Germany
Note 19 Provisions
As of September 30, 2021, contract liabilities amounted to
€2,883 million (September 30, 2020: €1,784 million; Octo-
ber 1, 2019: €1,741 million). Included therein were contract
liabilities of €582 million (September 30, 2020: €451 million)
with a remaining term of more than twelve months. In fiscal
year 2021, an amount of €1,197 million (2020: €1,059 million)
included in contract liabilities at the beginning of the period
was recognized as revenue. The change in contract liabilities
in fiscal year 2021 primarily related to the Varian acquisition,
leading to an increase of €845 million.
Note 18 Contract liabilities
Other²
2021
Loans from banks
109
-19
42
2
-42
92
Lease liabilities
458
-165
112
9
246
660
Current and non-current liabilities to the Siemens Group from
financing activities 3
4,936
8,310
307
Total financial debt
5,503
8,127
154
318
8
13,562
fiscal year
212
Fair value
changes
tions
• US$ 1.7 billion maturing in fiscal year 2031
(contractual interest rate: 2.3%),
• US$ 1.5 billion maturing in fiscal year 2041
(contractual interest rate: 3.0%), and
US$ 1.0 billion maturing in fiscal year 2024
(variable interest rate).
The resulting foreign currency risks were hedged by forward
exchange contracts and by foreign exchange swaps. As a result,
the loans with fixed interest rates were effectively converted
into synthetic euro-denominated loans and actual interest ex-
penses decreased due to positive forward elements of the for-
ward exchange contracts and foreign exchange swaps. Only
the nominal volume of the loan with a variable interest rate was
hedged. In total, the actual current volume-weighted average
interest rate of the loans amounts to approximately 0.3%.
In addition, there were further loans with the Siemens Group
with various maturities and in various currencies. In the overall
view across all loans, they were mainly denominated in U.S.dol-
lars. As of September 30, 2021, the structure of further material
loans was as follows:
• US$ 0.7 billion maturing in fiscal year 2023
(contractual interest rate: 2.2%),
• US$ 1.7 billion maturing in fiscal year 2027
(contractual interest rate: 2.5%), and
US$ 1.0 billion maturing in fiscal year 2046
(contractual interest rate: 3.4%).
In addition to the loans listed above, as of September 30, 2020,
there was one other loan in the amount of US$ 0.9 billion ma-
turing and repaid in fiscal year 2021 (contractual interest rate:
1.9%). In fiscal year 2019, the loans maturing in fiscal years
2021, 2023 and 2027 were transferred from a U.S. entity to
German entities. The resulting foreign currency risks were
hedged by forward exchange contracts. As a result, the loans
were effectively converted into synthetic euro-denominated
loans and actual interest expenses decreased due to positive
forward elements of the forward exchange contracts. In total,
the actual current volume-weighted average interest rate of the
transferred loans decreased to approximately 0.1%.
For further information about the hedging activities, please
refer to Note 25 Financial instruments and hedging activities.
In fiscal year 2020, the Siemens AG provided an additional vari-
able interest loan in connection with the acquisition of Corindus
Vascular Robotics, Inc. (hereinafter "Corindus"), amounting to
€ 1.0 billion that was partly repaid in fiscal year 2021. The out-
standing part of the loan in the amount of €0.7 billion matures
in fiscal year 2022.
In fiscal year 2021, interest expenses from financing arrange-
ments with the Siemens Group amounted to €52 million (2020:
€44 million).
61
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
The following tables show the sources of changes in total finan-
cial debt and total liabilities from financing activities:
Non-cash changes
Effects from
Balance at
beginning
of
fiscal year
(in millions of €)
2021
Cash flows
from
financing
activities1
changes
Balance at
Acquisi-
in foreign
exchange
end of
rates
14,315
Market value of forwards for hedging of foreign currency liabilities
from financing activities
-92
end of
Acquisi-
exchange
tions
rates
Fair value
changes
fiscal year
Other 3
2020
109
19
142
-20
-142
109
470
-152
15
-23
148
458
54
742
17
-273
-53
82
Balance at
in foreign
changes
Effects from
-40
-410
44
-498
Current receivables from the Siemens Group from
financing activities
Total liabilities from financing activities
-3,271
2,141
2,719
10,806
154
-42
276
-410
• US$ 1.2 billion maturing in fiscal year 2028
(contractual interest rate: 1.9%),
256
13,223
1 Reported in the following line items of the consolidated statements of cash flows: Repayment of long-term debt (including current maturities of long-term debt), change in short-term financial debt
and other financing activities and other transactions/financing with Siemens Group.
2 Including interest accruals and payments.
3 Excluding separately disclosed lease liabilities.
(in millions of €)
Loans from banks
Lease liabilities
Balance at
beginning
of
fiscal year
20201
Cash flows
from
financing
activities²
Non-cash changes
-594
-45
• US$ 1.7 billion maturing in fiscal year 2026
(contractual interest rate: 1.4%),
US$ 1.2 billion maturing in fiscal year 2023
(contractual interest rate: 0.6%),
56
Deferred compensation assets related to a deferred compensation
plan in the United States. Please refer to → Note 22 Other liabilities
for the corresponding deferred compensation liabilities.
Between 1 and 2 years
65
56
Between 2 and 3 years
53
47
Between 3 and 4 years
42
37
Note 16 Financial debt
Between 4 and 5 years
30
27
More than 5 years
Total
23
27
275
250
(in millions of €)
Sept 30,
2021
2020
Short-term financial debt and current
maturities of long-term financial debt
Thereof:
225
167
61
Loans from banks
Within 1 year
2021
338
Deferred compensation assets
2020
2021
(in millions of €)
Sept 30,
Note 15 Other assets
Future minimum lease payments to be received under operating
leases were due as follows:
The line item equipment leased to others comprised predom-
inately diagnostic instruments that were leased out under
operating leases in the Diagnostics segment.
Siemens Healthineers as lessor
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
59
-525
2,774
-3,259
6,033
-241
93
46
28
13
Total other assets
460
295
Other
Sept 30,
(in millions of €)
2020
In fiscal year 2021, income from operating leases in the amount
of €248 million (2020: €216 million) was realized. Included
therein were variable lease payments in the amount of € 126 mil-
lion (2020: €109 million). Before Siemens Healthineers con-
cludes contracts with the customer for the sale of reagents and
consumables by providing a diagnostic instrument, the order
volumes forecasted by the customer are analyzed and verified.
Based on realistic sales volumes, individual prices for reagents
are calculated, including a price offset for the diagnostic instru-
ment. The average term of customer contracts covers the useful
life of the diagnostic instruments.
The total cash outflows from leases amounted to €213 million
in fiscal year 2021 (2020: €190 million).
Lease liabilities
(in millions of €)
Sept 30,
2021
2020
Receivables from finance leases
212
162
Derivatives
493
92
Equity instruments and fund shares
146
75
Other
78
23
Total other financial assets
928
352
The increase of the line item derivatives resulted from cur-
rency hedging transactions mainly in connection with financ-
ing the acquisition of Varian. For further details, please refer to
→ Note 16 Financial debt and to Note 25 Financial instruments
and hedging activities.
As of September 30, 2021, financing arrangements of Siemens
Healthineers with Siemens AG consisted of a multicurrency re-
volving credit facility of up to €1.1 billion (September 30, 2020:
€1.1 billion), which serves to finance net working capital and
as a short-term loan facility, as well as a multicurrency revolv-
ing credit facility of up to €1.0 billion (September 30, 2020:
€ 1.0 billion) as a financing reserve. As of the reporting date,
an amount of €311 million (September 30, 2020: € 166 million)
was drawn from these facilities.
60
60
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
In fiscal year 2020, the Siemens Group provided a bridge fa-
cility to finance the purchase price and additional costs in
connection with the acquisition of Varian (please also see
→ Note 3 Acquisitions), which was canceled in full in fiscal
year 2021. As of September 30, 2020, this financing commit-
ment amounted to €12.5 billion. The bridge facility was not uti-
lized by Siemens Healthineers. Unused available commitment
from the bridge facility was subject to a commitment fee. This
fee and other fees were recognized in other financial income and
amounted to €28 million in fiscal year 2021 (2020: €5 million).
In fiscal year 2021, the Siemens Group committed itself to
provide Siemens Healthineers an additional financing of up
to €1.1 billion in connection with the acquisition of Varian.
Thereof, €850 million were utilized as a variable interest loan,
maturing in fiscal year 2022. The rest of the financing commit-
ment was canceled.
In fiscal year 2021, the Siemens Group provided loans denomi-
nated in U.S. dollars with various maturities in connection with
the acquisition of Varian. As of September 30, 2021, the loan
structure was as follows:
5,503
14,315
Total financial debt
Note 14 Other financial assets
73
60
152
107
Current liabilities to the Siemens Group
from financing activities
1,926
2,040
24
27
2,150
2,207
Therein: Lease liabilities
Total current financial debt
Long-term financial debt
Thereof:
• US$ 1.5 billion maturing in fiscal year 2024
(contractual interest rate: 0.8%),
Loans from banks
314
Lease liabilities
19
49
438
265
Liabilities to the Siemens Group
from financing activities
11,708
Therein: Lease liabilities
Total non-current financial debt
47
12,164
2,982
59
3,297
457
Prepaid expenses
128
57
1,656
-18
71
62
180
21
-411
8,211
-2,673
10,884
-847
201
6,285
240
-175
4,041
-1,430
5,471
-786
3,792
134
-110
2,952
-471
3,424
-45
22
-688
2,493
967
16
8
-207
922
-1,088
2,010
-206
1
301
14
34
-136
371
-912
1,283
-58
31
132
59
17
-61
351
-679
1,030
-11
57
28
66
-50
90
-126
1,218
-107
Current receivables from the Siemens Group from
financing activities
Total liabilities from financing activities
14
-92
-683
4,179
-2,599
-1,954
11
-3,271
157
-317
14
61
2,141
1 Including effects from the modified retrospective adoption of IFRS 16, Leases.
2 Reported in the following line items of the consolidated statements of cash flows: Repayment of long-term debt (including current maturities of long-term debt), change in short-term financial debt
and other financing activities and other transactions/financing with Siemens Group.
3 Including interest accruals and payments.
4 Excluding separately disclosed lease liabilities.
62
62
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Note 17 Additional capital
management disclosures
Siemens Healthineers generates consistent liquid funds from
recurring revenue, supporting a strong cash position. Capital
management aims to maintain ready access to international
capital markets, and thereby to financing through various debt
instruments, as well as to sustain the ability to repay and service
financial debt over time. For this purpose, Siemens Healthineers
actively manages net debt (including pensions) and the ratio
of net debt (including pensions) to EBITDA. This ratio indicates
the approximate number of years needed to cover net debt
(including pensions) with continuing income, without taking
into account interest, taxes, depreciation and amortization. Net
debt (including pensions) and the ratio of net debt (including
pensions) to EBITDA are managed with a long-term outlook and
with the intention that Siemens Healthineers would qualify for
at least a stable investment grade rating.
Siemens Healthineers has changed the definition of net debt.
Effective with fiscal year 2021, the market value of forward
contracts for hedging of foreign currency liabilities from fi-
nancing activities has been included in the key figure. This pro-
vides more relevant information with regard to the economic
character of net debt, particularly in light of the increase in
U.S. dollar-denominated debt in connection with financing the
Varian acquisition.
Market value of forwards for hedging of foreign currency liabilities
from financing activities
-328
157
645
-772
1,990
-16
179
16
fiscal year 2021
fiscal year 2021
Amortization,
depreciation and
impairments in
4,936
Carrying
amount at end of
Accumulated
amortization,
depreciation and
impairments
Gross carrying
amount at end of
fiscal year 2021
Retirements
46
Additions Reclassifications
differences
Currency
translation
Additions
Consolidated financial statements - Notes to consolidated financial statements
Siemens Healthineers Annual Report 2021
60
5,503
Current and non-current liabilities to the Siemens Group from
financing activities 4
4,390
777
-285
Total financial debt
4,969
through
business
combinations
-18
260
-2
-50
254
-620
874
-10
35
25
-38
-40
694
-645
1,340
-3
137
35
1
-51
281
438
-248
139
-135
37
299
-41
245
-72
-46
Additions Reclassifications
2
22
-5
-105
361
-98
459
-12
110
14
-21
264
264
-219
127
-16
-185
832
-1,033
1,866
-149
25
302
-96
-93
287
-816
1,103
-49
86
combinations
differences
through
business
Retirements
-628
3,712
-3,652
7,364
-358
1,052
526
110
-55
108
-80
188
-32
74
16
2
-119
576
-204
780
-32
196
145
12
417
417
Gross carrying
amount at end of
fiscal year 2020
Accumulated
amortization,
depreciation and
Amortization,
impairments
translation
Currency
Additions
-290
1,912
-3,093
5,005
-16
-138
297
-2,034
2,331
-53
-159
461
862
-1
1
-99
1,154
-657
1,812
-15
-1
fiscal year 2020
impairments in
depreciation and
Carrying
amount at end of
fiscal year 2020
-401
Siemens Healthineers as lessee
Liquidity risk
As of the reporting date, there were no material loan commit-
ments and financial guarantee contracts.
42
AC
81
81
6,650
13
160
78
210
7,111
Short-term and current maturities of long-term
financial debt as well as long-term financial debt4
AC
109
Trade payables
42
AC
Lease liabilities5
n.a.
Current and non-current liabilities to
the Siemens Group4
AC
4,942
Other current and non-current financial liabilities
Derivatives included in hedge accounting
Derivatives not included in hedge accounting
n.a.
FVtPL
Contingent considerations from business
FVtPL
combinations
Liabilities from written put options on
non-controlling interests
n.a.
1,356
33
21
154
Measured at fair value
Measured at
amortized cost
Not in scope of
Level 1
Level 2
Level 3
IFRS 9
Total
AC
656
656
AC
2,520
2,520
n.a.
210
AC
11
9
13
21
25
129
Other
Total financial assets
Equity instruments measured at fair value
through other comprehensive income
Other
FVtPL
FVtPL
n.a.
210
3,392
3,392
FVTOCI
In scope of IFRS 9
17
109
1,356
22
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
The changes in the carrying amount of the financial assets and
liabilities measured at fair value based on unobservable inputs
(level 3) were as follows:
Deal contingent forward
Fiscal year
Equity instruments
Fiscal year
Debt instruments
measured at fair value
through profit or loss
Contingent consideration
Liabilities from written
put options on non-
controlling interests
Fiscal year
Fiscal year
Fiscal year
(in millions of €)
2021
72
2020
2020
2021
2020
2021
2020
2021
2020
Balance at beginning of
fiscal year
25
53
51
7
27
2021
• Liabilities from written put options on non-controlling in-
terests were measured at fair value, which is based on the
present value of the exercise price of the options (level 3).
The exercise price is generally derived from the proportionate
enterprise value. The liabilities resulted mainly from written
put options in connection with interests in ECG Management
Consultants (hereinafter "ECG"). The enterprise value of ECG
is calculated by an independent appraiser in accordance with
a contractually agreed methodology and serves as a basis for
the exercise price per share, which is determined at least once
a year. The most significant unobservable input used to deter-
mine the fair value is financial information from the five-year
business plan, which is mainly subject to expected business
and market developments. In addition, weighted revenue and
earnings multiples are considered. Changes resulting from
the revaluation of liabilities from written put options were
recognized in retained earnings.
• The fair values of contingent consideration were derived from
probability-weighted future payments, which mainly depend
on the achievement of technical and commercial milestones as
well as on the achievement of revenue targets during the earn-
out period (level 3). If the estimated revenues or probabilities
of completing certain milestones increase or decrease during
the respective earn-out period, the fair value of the contingent
consideration would increase or decrease, respectively.
volatility. The discount rates applied take into account respec-
tive risk-adjusted capital costs. The fair value measurement
of fund shares was based on their net asset values (level 2).
• Debt instruments measured at fair value through profit or loss
consisted mainly of bonds and loans related to the financing
of proton therapy centers in the Varian segment. In this con-
text, Siemens Healthineers, along with other debt investors,
provided funds to various entities that are used for the devel-
opment, construction and operation of proton therapy cen-
ters, primarily in the United States. The repayment is either
directly or indirectly linked to the commercial success of the
centers. The fair values of the bonds are based on comparable
bond issues, broker and dealer quotations for the same or
similar investments in active markets, and other observable
inputs such as yields, credit risks, default rates, and volatili-
ties (level 2). The fair values of the loans are primarily based
on parameters such as the individual creditworthiness of
the debtor and the risk characteristics and operating perfor-
mance of the financed project (level 3). Where appropriate, a
probability weighted expected return model is used, utilizing
management's assumptions of different outcomes such as
the sale, refinancing or closure of the therapy center. Credit
ratings are taken into account when adjusting the fair values
for credit risks. Consequently, a better rating will generally
result in an increased fair value of the loan receivable. As
of September 30, 2021, the carrying amounts of financings
provided by Siemens Healthineers and measured at fair value
through profit or loss were €22 million, while the total un-
discounted amount, including accrued interest, amounted
to € 160 million. In addition, the carrying amounts of trade
receivables and contract assets related to the proton therapy
centers amounted to €10 million. The carrying amounts rep-
resent the maximum exposure to loss.
458
458
4,942
5
17
7
31
31
AC
45
45
6,452
21
7
489
6,969
Total financial liabilities
Except for publicly listed investments for which a quoted
price in an active market exists (level 1), the fair values of
venture capital investments were generally determined on
the basis of prices from most recently executed financing
rounds (level 3). The fair values of other equity instruments
were generally derived from a discounted cash flow valu-
ation (level 3). Expected cash flows are thereby subject to
future market and business developments as well as price
•
• The determination of the fair values of derivatives depended
on the specific type of instrument. The fair values of forward
exchange contracts were based on forward exchange rates
(level 2). Options were generally valued based on quoted
market prices or based on option pricing models (level 2).
In connection with the acquisition of Varian (please also see
→ Note 3 Acquisitions), Siemens Healthineers entered into a
deal contingent forward with a nominal amount of €7,500 mil-
lion, which was linked to the actual closing of the acquisition.
As of September 30, 2020, the fair value of this deal contin-
gent forward was generally based on observable market data
such as forward exchange rates, interest curves and volatil-
ities. In addition, the value of the contingency element was
taken into account, which depended on expectations about
the occurrence and the timing of the closing (level 3). Upon
closing of the acquisition, the deal contingent forward was
settled and hedge accounting was discontinued. The effective
portion of changes in the fair value of the deal contingent
forward of €-90 million was reclassified from the cash flow
hedge reserve and considered when determining the costs of
the acquisition. The ineffective portion of €-89 million was
recognized in other financial income, net.
• The carrying amounts of other non-current financial liabilities
measured at amortized cost approximated their fair value,
which is determined by discounting the expected future cash
flows using market interest rates.
• The carrying amounts of the items cash and cash equivalents,
short-term and current maturities of long-term financial debt,
trade payables, current liabilities to the Siemens Group and
other current financial assets and other current financial li-
abilities measured at amortized cost approximated their fair
value due to the short-term maturities of these instruments.
• Trade receivables, receivables from finance leases, current
receivables from the Siemens Group and other non-current
financial assets measured at amortized cost were evaluated
taking into account various parameters, such as interest rates,
country-specific risks and the individual creditworthiness of
the debtors. Based on this evaluation, valuation allowances for
these items were recognized. The carrying amounts of the items
net of valuation allowances approximated their fair values.
• The carrying amount of liabilities to the Siemens Group from
U.S. dollar denominated long-term loans was €11,552 million
as of September 30, 2021 (September 30, 2020: €2,923 mil-
lion). The fair value of these liabilities, which is based on
prices provided by price service agencies (level 2), amounted
to €11,768 million as of September 30, 2021 (September 30,
2020: €3,173 million). The carrying amounts of the remaining
liabilities to the Siemens Group approximated their fair value
because the relevant interest rates approximated market in-
terest rates.
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
7
71
* Excluding separately disclosed lease liabilities.
3 Reported in the line items trade and other receivables as well as other financial assets.
2 Excluding separately disclosed receivables from finance leases.
FVTOCI = Financial Assets at Fair Value through Other Comprehensive Income;
n.a. not applicable.
FVtPL = Financial Assets/Liabilities at Fair Value through Profit or Loss;
1 AC Financial Assets/Liabilities at Amortized Cost;
5 Reported in the line items short-term financial debt and current maturities of long-term financial debt, long-term financial debt, current liabilities to the Siemens Group and liabilities to
the Siemens Group.
financial assets
and liabilities
(IFRS 9)1
Category of
Current receivables from the Siemens Group
Other current and non-current financial assets²
Derivatives included in hedge accounting
Derivatives not included in hedge accounting
Equity instruments and fund shares measured
at fair value through profit or loss
Total
1,322
1,322
AC
3,687
3,687
n.a.
265
265
AC
711
711
n.a.
FVtPL
FVtPL
IFRS 9
40
FVTOCI
502
20
502
20
4
83
127
47
47
1
42
43
AC
146
10
Level 3
Level 2
Level 1
78
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Capital increases
In March 2021, the Managing Board of Siemens Healthineers AG,
with the approval of the Supervisory Board, resolved on a capital
increase against cash contributions through partial utilization of
the Authorized Capital 2021. The 53,000,000 new shares were
placed with institutional investors under exclusion of subscrip-
tion rights of already existing shareholders, at a placement price
of €44.10 per share, by way of an accelerated book-building
process, and carry dividend rights as from October 1, 2020.
In September 2020, the Managing Board of Siemens
Healthineers AG, with the approval of the Supervisory Board,
authorized a capital increase against cash contributions
through partial utilization of the Authorized Capital 2018. The
75,000,000 new shares were issued under exclusion of sub-
scription rights of already existing shareholders at a placement
price of €36.40 per share and carry dividend rights as from
October 1, 2019.
Further disclosures
Issued capital: As of September 30, 2021, the issued capital of
Siemens Healthineers AG was divided into 1,128,000,000 (Sep-
tember 30, 2020: 1,075,000,000) ordinary registered shares
with no par value and a notional value of € 1.00 per share. The
shares are fully paid in. Each share has one vote and accounts
for the shareholder's proportionate share in the net income. All
shares confer the same rights and obligations.
Authorized capital: As of September 30, 2021, authorized capital
of Siemens Healthineers AG was €484.5 million (September 30,
2020: €425 million), issuable on one or more occasions, in one
total sum or in installments, until February 11, 2026, by issuing
up to 484,500,000 (September 30, 2020: 425,000,000) new
ordinary registered shares with no par value in return for contri-
butions in cash and/or in kind. In addition, as of September 30,
2021, the conditional capital of Siemens Healthineers AG was
€107.5 million or 107,500,000 shares (September 30, 2020:
€ 100 million or 100,000,000 shares). It can be used for servic-
ing convertible bonds and/or warrant bonds.
Capital reserve: In fiscal years 2021 and 2020, changes in
the capital reserve resulted mainly from the capital increases
against cash contributions described above. Furthermore, in fis-
cal year 2021, effects from transaction costs related to a capital
increase of €23 million (2020: €26 million) were recognized.
Treasury shares: In fiscal year 2021, Siemens Healthineers re-
purchased 5,982,699 (2020: 1,550,474) shares and transferred
1,551,983 (2020: 1,303,383) treasury shares. As of the report-
ing date, the Group held 5,328,965 (September 30, 2020:
898,249) treasury shares.
Dividends: Dividends paid per share were €0.80 in fiscal
year 2021. The amount was calculated based on the Group's net
income generated during the period from October 1, 2019, until
September 30, 2020. For fiscal year 2021, the Managing Board
and the Supervisory Board propose to distribute a dividend of
€0.85 per share entitled to the dividend, in total representing
approximately €954 million in expected payments. Payment
of the proposed dividend is contingent upon approval at the
Shareholders' Meeting on February 15, 2022.
Note 24 Other financial obligations
As of September 30, 2021, extension options existed for leases
with undiscounted lease payments in the amount of €513 mil-
lion (September 30, 2020: €393 million), whose exercise was
assessed not reasonably certain.
As of the reporting date, contractual commitments for pur-
chases of property, plant and equipment amounted to
€184 million (September 30, 2020: € 107 million).
69
69
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Not in scope of
Measured at
amortized cost
Measured at fair value
In scope of IFRS 9
Category of
financial assets
and liabilities
(IFRS 9)1
AC
Current receivables from the Siemens Group
Other current and non-current financial assets²
Derivatives included in hedge accounting
Derivatives not included in hedge accounting
Equity instruments and fund shares measured
at fair value through profit or loss
Equity instruments measured at fair value
through other comprehensive income
146
Receivables from finance leases³
Cash and cash equivalents
(in millions of €)
Carrying amounts as of September 30, 2021
The following tables show the carrying amounts and meas-
urement details of each category of financial assets and liabilities:
Financial instruments
Note 25 Financial instruments and
hedging activities
Trade receivables 2
5,866
40
528
656
656
13,569
45
14
27
72
72
AC
124
15,710
124
59
27
728
16,525
Total financial liabilities
1 AC = Financial Assets/Liabilities at Amortized Cost;
Receivables from finance leases³
Trade receivables 2
Cash and cash equivalents
(in millions of €)
Carrying amounts as of September 30, 2020
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
1,921
0
5 Reported in the line items short-term financial debt and current maturities of long-term financial debt, long-term financial debt, current liabilities to the Siemens Group and liabilities to
the Siemens Group.
* Excluding separately disclosed lease liabilities.
3 Reported in the line items trade and other receivables as well as other financial assets.
² Excluding separately disclosed receivables from finance leases.
FVTOCI = Financial Assets at Fair Value through Other Comprehensive Income;
n.a. = not applicable.
FVtPL = Financial Assets/Liabilities at Fair Value through Profit or Loss;
70
31
97
☐
172
265
6,871
Debt instruments measured at fair value
through profit or loss
FVtPL
Other
Total financial assets
Short-term and current maturities of long-term
financial debt as well as long-term financial debt4
AC
97
Trade payables
AC
1,921
Lease liabilities 5
n.a.
Current and non-current liabilities to
AC
45
14
Other
non-controlling interests
n.a.
Liabilities from written put options on
combinations
27
FVtPL
FVtPL
n.a.
Derivatives included in hedge accounting
Derivatives not included in hedge accounting
Other current and non-current financial liabilities
13,569
the Siemens Group 4
Contingent considerations from business
17
5
recognized in profit or loss
37
89
117
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Note 26 Financial risk management
Siemens Healthineers is managed centrally by the Managing
Board. The Managing Board is responsible for the operating
business and manages and controls financial risks in accor-
dance with its risk management policy. The Siemens Group
acts as a service provider with respect to certain financial risk
management activities.
Market risks
Increasing market fluctuations may result in significant earn-
ings and cash flow volatility risks. The worldwide operating
business as well as the investing and financing activities are
affected particularly by changes in exchange rates and interest
rates. In order to optimize the allocation of financial resources
across its segments and entities as well as to achieve its aims,
Siemens Healthineers identifies, analyzes and manages the rel-
evant market risks. Siemens Healthineers seeks to manage and
control market risks primarily through its regular operating and
financing activities and uses derivatives when it is appropriate.
Management of market risks is a priority for the Managing
Board. The chief financial officer has specific responsibility for
this part of the overall risk management system. This respon-
sibility is delegated to corporate treasury. For practical busi-
ness purposes, Siemens Healthineers has entered into service
agreements with the Siemens Group to receive support in the
management of market risks.
To quantify market risks, Siemens Healthineers uses the Value
at Risk (VaR) approach. The VaR figures are calculated based
on historical volatilities and correlations of various risk factors,
a ten-day holding period and a 99.5% confidence level. Actual
impacts on the consolidated statements of income or consoli-
dated statements of comprehensive income according to IFRS
may differ substantially from calculated VaR figures, which are
the output of a model with a purely financial perspective. Al-
though VaR is an important tool for measuring market risks,
the assumptions on which the model is based give rise to some
limitations including the following:
• A ten-day holding period assumes that it is possible to dispose
of the underlying positions within this period. This may not
apply during continuing periods of illiquid markets.
• A 99.5% confidence level means that there is a 0.5% statisti-
cal probability that losses exceed the calculated VaR.
• The use of historical data as a basis for estimating the statis-
tical behavior of the relevant markets and finally determining
the possible range of the future outcomes based on this sta-
tistical behavior may not always cover all possible scenarios,
especially those of an exceptional nature.
Any market-sensitive instruments, including equity and inter-
est-bearing investments, that Siemens Healthineers' pension
plans hold are not included in the following quantitative and
qualitative disclosures.
-40
Exchange rate risk
Each entity whose business leads to future cash flows denom-
inated in a currency other than its functional currency is ex-
posed to risks from changes in exchange rates. In the ordinary
course of business, entities are particularly exposed to ex-
change rate fluctuations between the U.S. dollar and the euro.
Siemens Healthineers defines exchange rate risk as the sum
of the net amount of foreign-currency-denominated monetary
items, firm commitments and planned sales and purchases in
a foreign currency. The exchange rate risk is determined based
on the respective functional currencies of the exposed entities.
The exchange rate risk from cash inflows in foreign currency is
partly balanced by purchasing goods, commodities and services
in the respective currencies as well as by production activities and
other contributions along the value chain in the local markets.
Entities are bound by an exchange rate risk management sys-
tem established within the Group. Each entity is responsible
for recording, assessing and monitoring its transaction-related
exchange rate risk. The mandatory guideline for the treatment
of exchange rate risks within Siemens Healthineers describes
the procedure for identifying and determining the single net
foreign currency positions. It commits the entities to hedge at
least 75% but no more than 100% of their foreign-currency-
denominated monetary items, firm commitments and cash
flows from planned sales and purchases for the following
three months. The majority of Siemens Healthineers' hedging
transactions is carried out with the corporate treasury of the
Siemens Group as the counterparty. During an interim phase,
the entities acquired as part of the acquisition of Varian are only
hedging their foreign-currency-denominated monetary items.
Entities are prohibited from borrowing or investing in foreign
currencies on a speculative basis. New financing from the
Siemens Group or investments by operating entities are carried
out preferably in their functional currency. In case an entity is
financed in a non-functional currency, the respective foreign
currency risk must be hedged 100%. Exchange rate risks in con-
nection with the acquisition or sale of businesses are hedged
on an individual basis.
As of September 30, 2021, the VaR relating to exchange rate
risks was €17 million (September 30, 2020: €50 million). This
VaR was calculated taking into consideration items of the con-
solidated statement of financial position, foreign-currency-
denominated firm commitments, foreign-currency-denomi-
nated cash flows from forecast transactions for the following
twelve months and effects from hedging transactions.
76
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Translation risk
Many entities are located outside the euro zone. Because the fi-
nancial reporting currency of Siemens Healthineers is the euro,
the financial statements of these entities are translated into
euros for preparation of the consolidated financial statements.
To take account of effects of foreign currency translation in risk
management, the general assumption is that investments in
foreign entities are permanent and that reinvestment is con-
tinuous. Effects from exchange rate fluctuations on the trans-
lation of net asset amounts into euros are reflected in the line
item other components of equity.
Interest rate risk
Interest rate risk is the risk that the fair value of a financial instru-
ment or its future cash flows will fluctuate because of changes
in interest rates. This risk arises whenever interest terms of
financial assets and liabilities change. Siemens Healthineers'
exposure to the risk of fluctuations in future cash flows resulting
from changes in interest rates relates mainly to short-term bank
loans as well as money market borrowings and investments
at Siemens Group. Long-term liabilities to the Siemens Group
primarily have fixed interest rates to reduce the risk of fluctu-
ations in cash flows resulting from changes in interest rates.
Moreover, the interest rate risks of fluctuations in the fair val-
ues of long-term liabilities are currently not actively managed
as no material effects on net income are expected to occur.
Accordingly, Siemens Healthineers did not use any interest rate
derivatives in fiscal years 2021 and 2020.
As of September 30, 2021, the VaR relating to interest rates was
€ 148 million (September 30, 2020: €47 million). The increase
was mainly driven by the borrowing of the loans in connection
with financing the Varian acquisition and higher interest rate
volatilities in the United States and in the euro zone.
Liquidity risks relate to Siemens Healthineers' ability to meet
its financial obligations. As of September 30, 2021, Siemens
Healthineers' reserve of cash and cash equivalents amounted
to €1,322 million (September 30, 2020: €656 million).
Transaction risk
1
-22
17
-3
Balance at end of fiscal year
75
Cash flow hedges reserve
Cost of hedging reserve
Fiscal year
Fiscal year
2021
2020
2021
2020
37
-24
117
3
99
-127
96
0
0
114
-67
-125
1
In the periods presented, Siemens Healthineers was financed
largely by the Siemens Group and invested excess liquidity us-
ing the Siemens Group's cash pooling and cash management
systems. Excluded thereof are currently the entities that were
acquired as part of the acquisition of Varian. For details about
financing arrangements with the Siemens Group, please refer
3
-273
-1
-4
-1
4
221
211
Income tax effects
to Note 16 Financial debt.
Fiscal year
77
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Credit risk
Credit risk is defined as an unexpected loss from financial instru-
ments if a counterparty is unable to pay its obligations in due
time or if the value of collateral declines. The effective moni-
toring and controlling of credit risk through credit evaluations
and ratings is a core competence of Siemens Healthineers' risk
management system. Accordingly, binding credit policy guide-
lines were implemented. In principle, each entity is responsible
for managing credit risk in its own operating activities.
Ratings and individually defined credit limits are based mainly
on generally accepted rating methodologies, with input con-
sisting of information obtained from customers, external rating
agencies, data service providers and credit default experiences.
Ratings consider appropriate forward-looking information sig-
nificant to the specific financial instrument, such as expected
changes in the obligor's financial position, as well as broader
forward-looking information, such as expected macroeconomic,
industry-related and competitive developments. In addition,
ratings also consider a country-specific risk component de-
rived from external country ratings. Ratings and credit limits
are carefully considered in determining the conditions under
which direct or indirect financing will be offered to customers
by Siemens Healthineers.
Siemens Healthineers applies various systems and processes
to analyze and monitor credit risk. A central IT application is
available that provides rating and default information. Together
with data from operating entities, this information is used as
a basis for individual bad debt allowances. In addition to this
automated process, qualitative information is considered to
particularly incorporate latest developments. The entities ac-
quired as part of the acquisition of Varian will be integrated in
the systems and processes in fiscal year 2022.
There were no significant concentrations of customer credit
risk as of September 30, 2021 and 2020. The maximum expo-
sure to credit risk for financial assets, without taking account
of any collateral, is represented by their carrying amount. As of
September 30, 2021, collateral and other credit enhancements
held for financial assets measured at amortized cost amounted
to €45 million (September 30, 2020: €59 million), mainly in the
form of letters of credit and guarantees.
As of September 30, 2021, the gross carrying amount of re-
ceivables from the sale of goods and services in the segments
Imaging, Diagnostics and Advanced Therapies amounted to
€3,080 million (September 30, 2020: €2,612 million). Based
on rating information from Siemens Financial Services, 42%
(September 30, 2020: 38%) were rated with an investment
grade rating and 58% (September 30, 2020: 62%) with a
non-investment grade rating. Receivables from finance leases
with a gross carrying amount of €270 million (September 30,
2020: €216 million) and contract assets with a gross carrying
amount of €899 million (September 30, 2020: €825 million)
generally share similar risk characteristics. As of the reporting
date, there were no material loan commitments and financial
guarantee contracts.
The following ageing analysis provides information about the
credit risk exposure of trade receivables and contract assets in
the Varian segment:
Sept 30, 2021
Average
allowance
Gross
carrying
Valuation
(in millions of €)
Up to 180 days
The risk implied from the values shown in the table above
reflects the one-sided scenario of cash outflows only. Trade
payables and other financial liabilities, including lease liabil-
ities, originate mainly from the financing of assets used in
Siemens Healthineers' ongoing operations, such as property,
plant, equipment and investments in working capital. These
assets are considered in Siemens Healthineers' overall liquidity
risk management. Thus, Siemens Healthineers mitigates liquid-
ity risk through the implementation of effective working capi-
tal management and cash management. To monitor existing
financial assets and liabilities and to enable effective control of
emerging risks, Siemens Healthineers uses a comprehensive risk
reporting system, which covers its worldwide business entities.
rate
0.7%
767
5
7.0%
97
7
27.6%
142
39
1,006
51
181 to 365 days
Gains and losses
More than 365 days
Total
allowance
1 Excluding separately disclosed lease liabilities.
2
59
(in millions of €)
Non-derivative
financial liabilities
Thereof:
2022
2023
2024
to
2026
2027
and
thereafter
4,479
2,128
4,522
7,707
Loans from banks
Lease liabilities
74
19
179
134
223
177
Trade payables
7,529
4,295
1,959
2,106
1
14
The following table reflects the contractually fixed payoffs for
repayments and interest. The disclosed expected undiscounted
net cash outflows from derivative financial liabilities were de-
termined based on each particular settlement date of an instru-
ment and on the earliest date on which Siemens Healthineers
could be required to pay. In addition, the majority of the financ-
ing agreements with the Siemens Group include change of
control clauses that may result in early maturity (please also
see A.8.5 Significant agreements which take effect, alter or
terminate upon a change of control of Siemens Healthineers AG
following a takeover bid). Cash outflows for financial liabilities
without fixed amount are based on the conditions existing as
of September 30, 2021.
205
liabilities
Other financial
1
3
2
1,915
Payables and other
liabilities to the
Siemens Group1
Derivative financial
liabilities
Amounts reclassified into initial costs of assets
amount
(hedging of financial debt denominated in foreign currency)
7
72
31
Fiscal year
2021
2020
Financial assets measured at amortized cost
Financial liabilities measured at amortized cost
Financial assets and financial liabilities
-2
-273
-15
172
Other changes mainly included additions in connection with
the acquisition of Varian.
The following table shows the net gains or losses on financial
instruments:
(in millions of €)
Valuation allowances for expected credit losses
Impairments for expected credit losses were generally recorded
in the line item selling and general administrative expenses in
the consolidated statements of income. Valuation allowances
on current and non-current receivables, included in the line
items trade and other receivables, other current financial assets
and other financial assets, represent lifetime expected credit
losses and changed as follows:
27
measured at fair value through profit or loss
Equity instruments measured at fair value
through other comprehensive income
34
(in millions of €)
Fiscal year
2021
2020
5
Valuation allowances at beginning of
fiscal year
101
96
Change in valuation allowances recorded in
the consolidated statements of income
Write-offs charged against allowances
Currency translation differences
Other
-20
22
21
27
31
42
53
130
18
Amounts reclassified into interest expenses
-89
1
2
Gains and losses
recognized in equity
-115
25
1
Additions
11
4
Disposals and settlements
179
-14
Currency translation
25
24
39
54
1
-4
-16
3
41
-20
☐
Balance at end of fiscal year
Other
differences
-44
58
2
5
25
74
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
The fair values of derivatives designated as hedging instru-
ments were as follows:
(in millions of €)
Sept 30, 2021
Assets 1
Sept 30, 2020
Liabilities²
Assets¹
Liabilities²
Forward exchange
contracts/foreign
exchange swaps
Deal contingent
forward
502
45
129
Total
502
45
25
Amounts reclassified into cost of sales (hedging of forecast purchases)
-7
Amounts reclassified into revenue (hedging of forecast sales)
Amounts reclassified into other financial income
Changes in the fair value of hedging instruments
Balance at beginning of fiscal year
In addition, in fiscal year 2020, Siemens Healthineers entered
into a deal contingent forward with a nominal amount of
€7,500 million to hedge exchange risks arising from a part of
the purchase price obligation for the from that point of view
planned acquisition of Varian. The hedging rate of the deal con-
tingent forward, which was linked to the closing date of the
transaction, ultimately amounted to 1.1684 US$/€. Because the
acquisition of Varian was considered to be highly probable, the
deal contingent forward was designated as a hedging instru-
ment in a cash flow hedge. The existence of an economic rela-
tionship between the hedging instrument and the hedged item
was reassessed regularly on a qualitative and quantitative basis.
The effectiveness of the hedging relationship was determined
by using the dollar offset method. In applying this method, the
changes in the value of the deal contingent forward were com-
pared to the changes in the value of a hypothetical derivative
that represented the hedged item. In fiscal year 2021, hedge
ineffectiveness resulted mainly from the contingency element
included in the hedging instrument.
(in millions of €)
risks resulting from a part of the purchase price obligation in
U.S. dollars for the acquisition of Varian, which was considered
highly probable.
Furthermore, in fiscal year 2021, cash-pooling receivables
amounting to US$ 7.7 billion were temporarily designated as
hedging instruments in a cash flow hedge to hedge exchange
5
5
1 Reported in the line items other current financial assets and other financial assets.
2 Reported in the line items other current financial liabilities and other financial liabilities.
154
In fiscal year 2021, the changes in fair value of the hedging in-
struments used for measuring hedge ineffectiveness amounted
to €214 million (2020: €-152 million) for forward exchange
contracts/foreign exchange swaps and €-204 million (2020:
€25 million) for the deal contingent forward. The changes in
value of the hedged items amounted to €–214 million (2020:
€152 million) and €115 million (2020: €-25 million), respec-
tively. There was an impact on profit or loss resulting from in-
effectiveness amounting to €-89 million (2020: €0 million).
As of the reporting date, forward exchange contracts and for-
ward exchange swaps with a nominal amount of €12,272 mil-
lion (September 30, 2020: €3,102 million) were used to hedge
exchange risks arising from U.S. dollar-denominated loans. The
weighted average hedging rate was 1.3244 US$/€ (Septem-
ber 30, 2020: 1.2548 US$/€). For these hedges, only the changes
in the value of the spot element of the forward exchange con-
tracts and the forward exchange swaps were designated as
hedging instruments.
The cash flow hedge reserve and the cost of hedging reserve
related to the hedging of exchange rate risks and reconcile as
follows:
2,333
Net gains or losses on financial assets measured at amortized
cost consisted of foreign currency revaluation gains and losses,
changes in valuation allowances and gains and losses on
derecognition. Net gains or losses on financial liabilities meas-
ured at amortized cost included foreign currency revaluation
gains and losses. Net gains or losses on financial assets and
liabilities measured at fair value through profit or loss resulted
from the remeasurement of equity instruments as well as from
changes in the fair value of derivatives, which were not desig-
nated as hedging instruments. Net gains or losses on equity
instruments measured at fair value through other comprehen-
sive income included remeasurement gains and losses.
Total
In fiscal year 2021, interest expenses on financial liabilities
not measured at fair value through profit or loss amounted
to €194 million (2020: €128 million). Foreign currency re-
valuation differences recognized in profit or loss on financial
assets and liabilities not measured at fair value amounted to
€-273 million (2020: €161 million).
Valuation allowances at fiscal year-end
101
In connection with the acquisition of Varian, Siemens Healthineers
purchased a credit-impaired loan that was originally granted for
the financing of a former proton therapy center. As of Sep-
tember 30, 2021, the gross carrying amount of this loan was
€0 million, while the undiscounted contractual amount was
€77 million. There have been no significant changes in lifetime
expected credit losses since initial recognition.
129
73
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Current receivables from the Siemens Group were classified in
stage 1 of the general impairment approach, which means the
valuation allowances were measured at an amount equal to the
twelve-month expected credit loss. As of September 30, 2021,
current receivables from the Siemens Group with gross carrying
amounts of €711 million (September 30, 2020: €3,392 million)
carried an investment grade rating. In fiscal years 2021 and
2020, no material valuation allowances were recognized.
Offsetting
Siemens Healthineers entered into master netting agreements
and similar agreements for derivatives. As of September 30,
2021, the gross amounts of such derivatives amounted to
€506 million (September 30, 2020: € 154 million) for deriva-
tives with positive fair values and €47 million (September 30,
2020: €10 million) for derivatives with negative fair values.
Thereof, €4 million (September 30, 2020: €5 million) were
subject to a master netting agreement but were not offset in
the consolidated statements of financial position because the
offsetting requirements were not met.
Hedging activities
As part of Siemens Healthineers' risk management approach
(please also see → Note 26 Financial risk management), deriva-
tives were used to reduce the risks resulting primarily from fluc-
tuations in exchange rates. In particular, Siemens Healthineers
entered into forward exchange contracts and foreign exchange
swaps in order to reduce the risk of variability of future cash
flows resulting from forecast sales and purchases, acquisi-
tions, firm commitments and loans denominated in foreign
currencies.
In fiscal years 2021 and 2020, Siemens Healthineers did not
hold any material derivatives relating to interest rate risk or
commodity price risk.
The change in valuation allowances recorded in the consolidated
statements of income related to an increase in the valuation al-
lowances on receivables from the sale of goods and services in
fiscal year 2021 by €22 million (2020: increase by €27 million).
Other changes mainly included additions in connection with the
acquisition of Varian.
7,500
2,240
Cash flow hedges
9,389
2,333
1,889
12,101
2,240
12,101
year
Sept 30, 2020
Within 1 More than
Sept 30, 2021
Within More than
1 year
1 year
(in millions of €)
Forward exchange
contracts/foreign
exchange swaps
Deal contingent
forward
Siemens Healthineers applied hedge accounting for certain
significant forecast transactions, firm commitments and loans
denominated in foreign currencies. The main characteristics of
the forward exchange contracts and forward exchange swaps
designated as hedging instruments generally matched the un-
derlying hedged items (e.g. nominal amount, maturity).
1 year
The nominal amounts of the hedging instruments by maturity
were as follows:
Managing Board and Supervisory Board
of Siemens AG
2020
2021
Fiscal year
(in millions of €)
Audit services
Fees related to professional services rendered by the principal
accountant EY were:
Note 32 Principal accountant fees
and services
As of September 30, 2021 and 2020, Siemens Healthineers has
been controlled by its ultimate parent company Siemens AG.
Therefore, the members of the Managing Board and the Super-
visory Board of Siemens AG were regarded as key manage-
ment. Information about Siemens AG's Managing Board and
Supervisory Board is included in the remuneration report of
the Siemens Group.
9.8
Other attestation services
Total principal accountant fees
and associates pursuant to
Section 313 (2) of the German
Commercial Code
In fiscal year 2021, 37% (2020: 42%) of the total fees related to
Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, Germany.
Audit services related primarily to services provided by EY for au-
diting Siemens Healthineers' consolidated financial statements,
for auditing financial statements of Siemens Healthineers AG
and its subsidiaries, for reviews of interim financial statements
being integrated into the audit and for project-accompanying IT
audits. Other attestation services included mainly other attesta-
tion services required by law, contractually agreed or requested
on a voluntary basis.
0.8
0.3
10.6
6.8
Note 33 Corporate Governance
The Managing Board and the Supervisory Board of Siemens
Healthineers AG provided the declaration required by Section
161 of the German Stock Corporation Act ("Aktiengesetz") as of
September 30, 2021. The declaration is available on the Group's
website at www.siemens-healthineers.com/investor-relations/
corporate-governance.
86
98
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Note 34 List of subsidiaries, joint ventures
6.6
In fiscal years 2021 and 2020, no other major transactions took
place between Siemens Healthineers and the members of the
Managing Board and Supervisory Board. Some Managing Board
and Supervisory Board members hold, or in the past year have
held, positions of significant responsibility with other entities.
Siemens Healthineers has relationships with many of these en-
tities in the ordinary course of business.
The Siemens Group issued guarantees for or on behalf of Siemens
Healthineers in connection with the operating activities of
the Group. As of September 30, 2021, the guarantees issued
by Siemens AG and other Siemens Group entities amounted to
€17 million (September 30, 2020: €19 million) and € 167 million
(September 30, 2020: €236 million), respectively. The decline is
mainly due to the fact that guarantees from the Siemens Group
were successively replaced by own guarantees.
Compensation attributable to members of the Supervisory
Board comprised a base compensation and additional compen-
sation for committee work, and amounted (including meeting
fees) to €1.3 million in fiscal year 2021 (2020: €1.2 million).
3,683
5,028
Receivables from and liabilities to the Siemens Group resulted
mainly from financing activities:
Sept 30, 2021
• Siemens Healthineers was included in the cash pooling
and cash management of the Siemens Group. Thereby,
Siemens Healthineers invested excess liquidity in the short
term and was granted overdraft facilities for financing its
operating activities.
• Receivables from Siemens AG decreased mainly due to the
use of short-term invested liquid funds for the acquisition
of Varian.
• The liabilities to Siemens AG decreased in particular due to
the partial repayment in an amount of €300 million of the
loan, which was related to the financing of the acquisition of
Corindus in fiscal year 2020.
• The liabilities to other Siemens Group entities increased
mainly due to additional loans of US$ 10.0 billion in total for
the acquisition of Varian. Further, a financing commitment
of €1.1 billion was provided. Thereof, €850 million were uti-
lized. The remaining volume was canceled. The repayment
of a matured loan in the amount of US$ 0.9 billion had an
offsetting effect.
As of March 31, 2021, the bridge facility, provided by other
Siemens Group entities for the acquisition of Varian in fiscal
year 2020, was fully canceled.
In fiscal year 2021, interest expenses from financing arrange-
ments with Siemens AG amounted to € 16 million (2020:
€21 million) and from financing arrangements with other
Siemens Group entities to €36 million (2020: €22 million).
These included positive effects from the hedging of exchange
rate risks of the U.S. dollar-denominated loans related to the
financing of the acquisition of Varian and from a restructuring
of financial liabilities to the Siemens Group in fiscal year 2019.
Further, in fiscal year 2021, expenses were incurred related
to the bridge facility in a total amount of €28 million (2020:
€5 million). With the closing of the acquisition of Varian, the
deal contingent forward entered into with the Siemens AG in
fiscal year 2020 was settled, leading to expenses of €89 million
in other financial income, net.
In fiscal year 2021, interest income from financing arrange-
ments with Siemens AG amounted to €-14 million (2020:
€2 million) and from financing arrangements with other
Siemens Group entities to €11 million (2020: €3 million).
For further information regarding the financing arrangements
with the Siemens Group, please refer to → Note 16 Financial debt.
Other material relationships
with the Siemens Group
Hedging
The majority of Siemens Healthineers' hedging activities was
carried out with the corporate treasury of the Siemens Group as
counterparty. As of September 30, 2021, related other current
and other non-current financial assets amounted to €506 mil-
lion (September 30, 2020: € 154 million). In addition, other cur-
rent and other non-current financial liabilities from hedging
activities with the Siemens Group amounted to €47 million
(September 30, 2020: €10 million).
For further details, please refer to → Note 16 Financial debt and
to Note 25 Financial instruments and hedging activities.
Guarantees and letters of support
In addition, the Siemens AG provided letters of support to
banks and insurance companies, for example in connection
with securing guarantee credit lines and overdraft facilities of
the Group. As of September 30, 2021, the obligations secured
by letters of support amounted to €552 million (September 30,
2020: €452 million).
85
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Share-based payment plans
Siemens Healthineers' employees continued to participate
in existing share-based payment plans of the Siemens Group
based on Siemens AG shares. For further details, please refer
to → Note 27 Share-based payment. Siemens AG delivered the
respective shares on behalf of Siemens Healthineers and was
reimbursed by Siemens Healthineers.
Joint ventures and associates
In fiscal year 2021, Siemens Healthineers purchased goods and
services from its joint ventures and associates in an amount of
€72 million (2020: €70 million).
Related individuals
Managing Board and Supervisory Board
of the Group
In fiscal year 2021, the members of the Managing Board received
cash compensation of €7.9 million (2020: €3.3 million). The fair
value at grant date of share-based payment granted in fiscal
year 2021 amounted to €5.4 million (2020: €3.0 million) for
242,642 stock awards. Contributions to the Siemens Healthineers
BSAV pension plan and other expenses related to pensions plans
amounted to €1.5 million (2020: €1.1 million). Thus, compensa-
tion and benefits granted in fiscal year 2021 in total amounted to
€14.8 million (2020: €7.4 million). In fiscal year 2021, expenses
related to share-based payment amounted to €3.6 million
(2020: €2.4 million).
As of September 30, 2021, the defined benefit obligation for
pension commitments to former members of the Managing
Board and its surviving dependents amounted to €0.7 million.
Information regarding the individual compensation of the
members of the Managing Board and Supervisory Board of
Siemens Healthineers AG is disclosed in the remuneration
report.
Equity interest
in %
1008
Sept 30, 2021
100
Siemens Healthcare AB, Solna/Sweden
100
Siemens Healthineers Beteiligungen
1005
Verwaltungs-GmbH, Röttenbach
Siemens Healthcare AG, Zurich/Switzerland
Siemens Healthcare AS, Oslo/Norway
100
100
Siemens Healthineers Holding I GmbH, Munich
100
Siemens Healthcare d.o.o. Beograd,
100
Siemens Healthineers Holding II GmbH, Munich
1005
Belgrade/Serbia
Siemens Healthineers Innovation GmbH & Co. KG,
1008
Siemens Healthcare d.o.o., Ljubljana/Slovenia
100
Röttenbach
Siemens Healthcare d. o.o., Zagreb/Croatia
100
Siemens Healthineers Innovation
1005
12,480
13,640
Siemens Healthcare Diagnostics GmbH,
Siemens Healthcare A/S, Ballerup/Denmark
Equity interest
Siemens Healthineers Beteiligungen GmbH & Co. KG,
Röttenbach
1007
in %
Subsidiaries
Germany (22 companies)
Acuson GmbH, Erlangen
BEFUND24 GmbH, Erlangen
CTSI (Mauritius) Ltd., Ebene/Mauritius
100
1005
FAST TRACK DIAGNOSTICS LUXEMBOURG S.à r.I.,
Esch-sur-Alzette/Luxembourg
100
85
FTD Europe Ltd, Sliema/Malta
100
Dade Behring Grundstücks GmbH, Kemnath
94
NEO New Oncology GmbH, Cologne
1007
ITH icoserve technology for healthcare GmbH,
Innsbruck/Austria
69
Siemens Healthcare Diagnostics Products GmbH,
1007
PETNET Solutions SAS, Lisses/France
Marburg
Siemens Healthcare (Private) Limited,
100
100
Siemens Healthcare GmbH, Munich
Lahore/Pakistan
672
3,392
-118
Total
13,724
Thereof:
Germany
2,212
1,880
Foreign countries
27,224
11,844
Therein:
United States
15,313
7,920
Free cash flow
Free cash flow comprises the cash flows from operating activi-
ties and additions to intangible assets and property, plant and
equipment included in cash flows from investing activities. As
with the segments' adjusted EBIT, the segments' free cash flow
excludes payments related to income taxes, corporate items
and certain other payments.
Total
Fiscal year
(in millions of €)
2021
2020
Total segments' free cash flow
3,185
Tax-related cash flow
-808
1,858
-512
Corporate items and other
25
Total reconciliation to
29,436
consolidated financial statements
1,260
Asia, Australia
100
Receivables from the Siemens Group from
non-operating activities
708
3,387
Current income tax assets and
Location of non-current
deferred tax assets
Liability-based adjustments
537
7,971
468
assets
5,167
Sept 30,
Total reconciliation to
(in millions of €)
2021
2020
consolidated financial statements
Siemens Healthineers' total assets
12,522 10,936
42,162 25,094
Europe, C.I.S., Africa, Middle East (EMEA)
11,407
4,193
Americas
15,708
8,270
2,321
711
-925
2,259
380
499
497
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Between Siemens Healthineers and the Siemens Group existed
supply and service agreements:
• In fiscal year 2021, Siemens Healthineers obtained support
services from the Siemens Group for central corporate ser-
vices such as tax, legal, IT, corporate communications, human
resources, accounting, financial services and treasury with a
total value of €304 million (2020: €334 million). For certain
services, there were fixed payment obligations over a non-can-
celable contract term. As of September 30, 2021, the resulting
commitment amounted to €79 million (September 30, 2020:
€46 million).
• Siemens Healthineers has entered into leasing transactions
with the Siemens Group, mainly for real estate. As of Septem-
ber 30, 2021, total lease liabilities amounted to €71 million
(September 30, 2020: €86 million).
Receivables from and liabilities
to the Siemens Group
Current liabilities and
liabilities to
the Siemens Group
Current receivables from
the Siemens Group
Sept 30,
Sept 30,
(in millions of €)
2021
2020
2021
2020
Siemens AG
1
2,720
1,160
1,346
Other Siemens Group
entities
711
305
Siemens Healthineers' free cash flow
Total
236
-487
1,371
Amortization, depreciation and impairments
Amortization, depreciation and impairments include depreci-
ation and impairments of property, plant and equipment as
well as amortization and impairments of intangible assets (sim-
ilarly to segments' adjusted EBIT excluding intangible assets
acquired in business combinations), each net of reversals of
impairment losses.
Note 31 Related party transactions
Siemens Healthineers maintained business relations with the
Siemens Group and with joint ventures and associates of both the
Siemens Group and Siemens Healthineers. The Siemens Group is
a related party, as Siemens AG controls Siemens Healthineers AG.
Transactions with the Siemens Group
84
84
Sales of goods
and services
and other income
Purchases of goods
and services
and other expenses
Fiscal year
Fiscal year
(in millions of €)
2021
2020
2021
2020
Siemens AG
10
5
263
266
Other Siemens Group
entities
296
375
231
Verwaltungs-GmbH, Röttenbach
100
Siemens Medical Solutions Health Services GmbH,
Grünwald
Amadora/Portugal
Siemens Healthineers Holding III B.V.,
100
Varian Medical Systems UK Limited,
Crawley, West Sussex/United Kingdom
100
The Hague/Netherlands
Varinak Bulgaria EOOD, Sofia/Bulgaria
Siemens Healthineers Holding IV B.V.,
100
Varinak Europe SRL (Romania),
100
100
100
The Hague/Netherlands
Siemens Healthineers Nederland B.V.,
100
VMS Kenya, Ltd, Nairobi/Kenya
100
The Hague/Netherlands
Siemens Medicina d.o.o.,
100
Americas (46 companies)
Sarajevo/Bosnia and Herzegovina
Acuson, LLC, Wilmington, DE/United States
1005
Steiermärkische Medizinarchiv GesmbH,
Pantelimon/Romania
SIEMENS HEALTHCARE, UNIPESSOAL, LDA,
Crawley, West Sussex/United Kingdom
100
Ebene/Mauritius
Siemens Healthcare S.r.I., Milan/Italy
100
Varian Medical Systems Nederland B.V.,
100
Siemens Healthcare s.r.o., Bratislava/Slovakia
100
Houten/Netherlands
Siemens Healthcare Saglik Anonim Sirketi,
Istanbul/Turkey
945
Varian Medical Systems Nederland Finance B.V.,
Houten/Netherlands
100
Siemens Healthcare SARL, Casablanca/Morocco
Siemens Healthcare SAS, Saint-Denis/France
Siemens Healthcare Sp. z o.o., Warsaw/Poland
100
Varian Medical Systems Poland Sp. z o.o.,
100
100
Warsaw/Poland
100
Varian Medical Systems Scandinavia AS,
100
SIEMENS HEALTHCARE, S. L. U., Getafe/Spain
100
Herlev/Denmark
Siemens Healthcare, s.r.o., Prague/Czech Republic
100
Varian Medical Systems UK Holdings Limited,
52
Corindus, Inc., Wilmington, DE/United States
100
Graz/Austria
Varian Medical Systems Belgium NV,
100
Machelen/Belgium
Varian Medical Systems Finland OY, Helsinki/Finland
100
100
ㅎㅎㅎ
J. Restrepo Equiphos S.A.S, Bogotá/Colombia
100
Mansfield Insurance Company,
100
Burlington, VT/United States
Monarch Capital, Limited,
100
Varian Medical Systems France SARL,
Le Plessis-Robinson/France
1 Control due to a majority of voting rights.
2 Control due to rights to appoint, reassign or remove members of the key management
personnel.
3 Control due to contractual arrangements to determine the direction of the relevant
activities.
4 No significant influence due to contractual arrangements or legal circumstances.
5 Not consolidated due to immateriality.
Grand Cayman/Cayman Islands
6 Not accounted for using the equity method due to immateriality.
7 Exemption pursuant to Section 264b of the German Commercial Code.
8 Exemption pursuant to Section 264 (3) of the German Commercial Code.
9 A consolidated affiliated company of Siemens Healthineers AG is a shareholder with
unlimited liability of this company.
10 Values according to the latest available local GAAP financial statements; the underlying
fiscal year differs from the Siemens Healthineers fiscal year.
88
Wilmington, DE/United States
100
100
Executive Consulting Group, LLC,
D3 Oncology Inc., Wilmington, DE/United States
100
V.O.S.S. Varinak Onkoloji Sistemleri Satis Ve Servis
100
Anonim Sirketi, Istanbul/Turkey
Dade Behring Hong Kong Holdings Corporation,
Tortola/British Virgin Islands
100
Varian Medical Systems (RUS) Limited Liability
03
Company, Moscow/Russian Federation
Dedicated2lmaging LLC, Wilmington,
DE/United States
80
80
Varian Medical Systems Africa (Pty) Ltd.,
100
ECG Acquisition, Inc., Wilmington, DE/United States
100
Midrand/South Africa
ECG TopCo Holdings, LLC, Wilmington,
73
Varian Medical Systems Algeria Spa.,
DE/United States
491
Hydra/Algeria
EPOCAL INC., Toronto/Canada
Varian Medical Systems Arabia Commercial Limited,
Riyadh/Saudi Arabia
75
100
Siemens Healthcare S.R.L., Bucharest/Romania
100
Varian Medical Systems Mauritius Ltd.,
Siemens Healthcare FZ LLC,
100
100
Zeleni Real Estate GmbH & Co. KG, Kemnath
1008
Dubai/United Arab Emirates
SIEMENS HEALTHCARE INDUSTRIAL AND
100
Europe, C.I.S., Africa,
COMMERCIAL SINGLE MEMBER SOCIETE ANONYME,
Middle East (EMEA) (without Germany)
(81 companies)
Chalandri/Greece
Siemens Healthcare Kft., Budapest/Hungary
Acuson Denmark S/A, Ballerup/Denmark
1005
Siemens Healthcare L.L.C.,
100
492
Acuson France SAS, Saint-Denis/France
1005
Dubai/United Arab Emirates
Acuson Italy S.r.I., Milan/Italy
1005
Acuson RUS Limited Liability Company,
SIEMENS HEALTHCARE LIMITED LIABILITY COMPANY,
Kiev/Ukraine
100
1005
100
Moscow/Russian Federation
Zeleni Holding GmbH, Kemnath
1007
100
Siemens Healthcare Diagnostics Ltd,
100
Frimley, Surrey/United Kingdom
Siemens Real Estate GmbH & Co. KG, Kemnath
948
Siemens Healthcare Diagnostics Manufacturing
100
Siemens Real Estate Management GmbH, Kemnath
1005
Limited, Swords, County Dublin/Ireland
Varian Medical Systems Deutschland GmbH & Co. KG,
Darmstadt
1008
Siemens Healthcare Diagnostics Manufacturing Ltd,
Frimley, Surrey/United Kingdom
100
Varian Medical Systems Haan GmbH, Haan
1007
Varian Medical Systems München GmbH, Munich
10079
Siemens Healthcare Diagnostics Products Ltd,
Frimley, Surrey/United Kingdom
100
Varian Medical Systems Particle
100 8,9
Therapy GmbH & Co. KG, Troisdorf
Siemens Healthcare Employee Share Ownership Trust,
Midrand/South Africa
03
VMS Deutschland Holdings GmbH, Darmstadt
Siemens Healthcare EOOD, Sofia/Bulgaria
Vienna/Austria
Siemens Healthcare Limited Liability Company,
Acuson Slovakia s.r.o., Bratislava/Slovakia
Varian Medical Systems Hungary Kft.,
100
100
Budapest/Hungary
100
Varian Medical Systems Iberica SL,
100
Siemens Healthcare Medical Solutions Limited,
100
Alcobendas/Spain
Swords, County Dublin/Ireland
Varian Medical Systems Imaging Laboratory G.m.b.H.,
100
Siemens Healthcare NV, Beersel/Belgium
100
Dättwil/Switzerland
Siemens Healthcare Oy, Espoo/Finland
100
Varian Medical Systems International AG,
Steinhausen/Switzerland
100
Siemens Healthcare Proprietary Limited,
90
Halfway House/South Africa
Varian Medical Systems Italy SpA, Segrate/Italy
100
Siemens Healthcare S.A.E., Cairo/Egypt
100
51
100
Siemens Healthcare Limited, Riyadh/Saudi Arabia
Siemens Healthcare Logistics LLC, Cairo/Egypt
Siemens HealthCare Ltd., Rosh HaAyin/Israel
Varian Medical Systems Gesellschaft mbH,
Brunn am Gebirge/Austria
1005
Moscow/Russian Federation
Acuson United Kingdom Ltd.,
1005
Siemens Healthcare Limited Liability Partnership,
Almaty/Kazakhstan
100
Frimley, Surrey/United Kingdom
1 Control due to a majority of voting rights.
2 Control due to rights to appoint, reassign or remove members of the key management
personnel.
3 Control due to contractual arrangements to determine the direction of the relevant
activities.
4 No significant influence due to contractual arrangements or legal circumstances.
5 Not consolidated due to immateriality.
6 Not accounted for using the equity method due to immateriality.
7 Exemption pursuant to Section 264b of the German Commercial Code.
8 Exemption pursuant to Section 264 (3) of the German Commercial Code.
9 A consolidated affiliated company of Siemens Healthineers AG is a shareholder with
unlimited liability of this company.
10 Values according to the latest available local GAAP financial statements; the underlying
fiscal year differs from the Siemens Healthineers fiscal year.
87
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Equity interest
Equity interest
Sept 30, 2021
in %
Sept 30, 2021
in %
Siemens Healthcare Limited,
100
Frimley, Surrey/United Kingdom
100
1,402
531
1,716
Valuation model
784.924
€32 million
Share price less present value of
expected dividends
Members of senior management
and other eligible employees
21.36%
Members of senior management
and other eligible employees
n. a.
€43.50
1.84%
-0.27%
€43.50
n. a.
€8 million
n. a.
Under the base share program, employees of participating enti-
ties can invest a fixed amount of their compensation in shares,
which is then matched by Siemens Healthineers. The shares
are purchased at market price at a predetermined date in the
second quarter of each fiscal year and grant the right to receive
matching shares under the same conditions applying to the
share matching plan described above.
Jubilee Share program
For their 25th and 40th service anniversaries, eligible employees
in Germany receive jubilee shares in form of Siemens AG shares.
The Jubilee Share program is classified as cash-settled share-
based payment. As of September 30, 2021, 530,075 entitlements
to jubilee shares were outstanding for Siemens Healthineers'
employees (September 30, 2020: 513,320).
Note 28 Personnel expenses and
employees
(in millions of €)
Fiscal year
2021
2020
Wages and salaries
5,140
4,221
Statutory social welfare contributions and
expenses for optional support
Base share program
354,9551
1.88%
-0.27%
€42.59
-119,251 -79,790
-1,604 -7,167
-757 -4,657
Outstanding at
fiscal year-end
863,492
518,155
6 121,618
Share matching plan
Under the share matching plan, members of senior manage-
ment can invest a part of their variable compensation in shares
(investment shares). The shares are purchased at the market
price at a predetermined date in the second quarter of each fis-
cal year. For every three investment shares held over the vesting
period of about three years, plan participants have the right to
receive one share without payment of consideration (matching
share), provided the plan participant is continually employed by
the Siemens Group, including Siemens Healthineers, until the
end of the vesting period.
Monthly investment plan
Under the monthly investment plan, employees other than
members of senior management can monthly invest a part of
their compensation in shares over a period of twelve months.
The shares are purchased at market price at a predetermined
date once a month. If the Managing Board decides that shares
acquired under the monthly investment plan are transferred
to the share matching plan, plan participants have the right
to receive matching shares under the same conditions ap-
plying to the share matching plan described above but with
a vesting period of about two years. The Managing Board of
Siemens Healthineers AG decided to transfer the shares ac-
quired under the 2020 tranche to the share matching plan in
February 2021.
80
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Tranche 2020
Plan design I
development of the total shareholder return in
comparison to competitors (TSR)
0-200%
About 4 years
Members of the Managing Board, eligible members of
senior management and other eligible employees
Equity-settled share-based payment
Plan design II
n. a.
n. a.
About 1 to about 4 years
Members of senior management
and other eligible employees
Members of the
Managing Board
21.28%
686
613
Expenses relating to post-employment benefits
Total personnel expenses
241
Total adjusted revenue¹
Fiscal year
(in millions of €)
2021
2020
2021
2020
2021
2020
9,533
8,813
288
277
9,821
9,090
Diagnostics
5,417
3,924
5,418
3,924
Varian
1,300
1,300
Advanced Therapies
1,713
1,625
3
3
Intersegment revenue
Fiscal year
-36,365 -19,941
-15,202 -7,059
Fiscal year
Note 29 Segment information
238
6,067
5,072
Wages and salaries in fiscal year 2021 included severance
charges of €68 million (2020: €65 million) and expenses in
the amount of €56 million for a special one-time payment to
employees related to fiscal year 2021.
Employees were engaged in the following functions (averages):
81
Fiscal year
(in thousands)
2021
2020
Manufacturing and services
36
30
Sales
13
12
Research and development
12
10
Administration and general services
5
3
Total employees
66
54
The increase in the number of employees in fiscal year 2021
resulted mainly from the acquisition of Varian.
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Adjusted external revenue¹
1,716
Settled
Vested and fulfilled
-81
-2,148
Adjustment in
quantity¹
-45,838
Other
524
137
Non-vested at
fiscal year-end
4,553,975 3,390,682
89,953
-12,793
325,330
79
64
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Siemens Healthineers' stock awards
Tranche 2021
Plan design II
Plan design I
TSR target
ESG target
n. a.
Performance condition
Target attainment
1 Adjustments resulting from changes in the estimate of the target attainment of the
ESG target.
-79,970 -130,553 -36,790
-1,813 -18,802
Settled
Forfeited
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Note 27 Share-based payment
As of September 30, 2021, the carrying amount of liabilities
from share-based payment amounted to €46 million (Septem-
ber 30, 2020: €72 million). In fiscal year 2021, expenses for
share-based payment amounted to €92 million (2020: €88 mil-
lion). These included €70 million related to equity-settled
share-based payment awards (2020: €50 million).
Share-based payment awards granted in fiscal year 2021, in-
cluding the Siemens Healthineers' stock awards and the Share
Matching program, were based on Siemens Healthineers AG
shares. In addition, employees continued to participate in exist-
ing share-based payment plans of the Siemens Group based on
Siemens AG shares. These plans included Siemens' stock awards,
the Share Matching program based on Siemens AG shares and
the Jubilee Share program.
Stock awards
Siemens Healthineers grants stock awards to members of the
Managing Board, members of senior management and other
eligible employees. These entitle beneficiaries after expiry of
the restriction period to receive Siemens Healthineers AG shares
without payment of consideration (Siemens Healthineers' stock
awards). In fiscal year 2018, Siemens Healthineers granted stock
awards based on Siemens AG shares (Siemens' stock awards)
for the last time.
Changes in stock awards held by members of the Managing
Board, members of senior management and other eligible em-
ployees were as follows:
Siemens' stock awards
With regard to the total target amount of share-based payment,
the target attainment of the Siemens' stock awards is bound to
the share price performance of Siemens AG relative to the share
price performance of competitors during the restriction period
of about four years. The target attainment for the performance
criteria ranges from 0% to 200%. If the target attainment ex-
ceeds 100%, an additional cash payment is made correspond-
ing to the outperformance. Siemens' stock awards are classified
as cash-settled share-based payment.
Siemens Healthineers' stock awards
In fiscal year 2021, Siemens Healthineers granted Siemens
Healthineers' stock awards to members of the Managing Board,
members of senior management and other eligible employees.
The major portion of the Siemens Healthineers' stock awards
granted to members of senior management and other eligible
employees continues to depend solely on fulfillment of the em-
ployee's respective service condition (plan design II). In addition,
Siemens Healthineers granted stock awards to members of the
Managing Board and eligible members of senior management
and other eligible employees that are tied to performance cri-
teria (plan design I). 80% of the target amount are linked to the
development of the total shareholder return as compared to two
equally weighted external indices during the restriction period
(TSR target). The remaining 20% of the target amount are linked
to an internal sustainability target considering environmental,
social and governance targets (ESG target). In fiscal year 2020,
Siemens Healthineers' stock awards granted under plan design
I were completely linked to the development of the total share-
holder return in comparison to that of established competitors
during the vesting period. The following table summarizes the
information for the Siemens Healthineers' stock awards of the
2021 and 2020 tranches.
Siemens Healthineers AG
shares
Siemens AG shares
Fiscal year
2021
2020
Fiscal year
2021
2020
fiscal year
Granted
Non-vested at
beginning of
3,390,682 2,400,158 325,330 534,148
1,479,501 1,139,879
Vested and fulfilled
-189,111
-198,643 -193,877
Restriction period
Beneficiaries
Classification
Number of granted stock awards
Fair Value at the grant date
Determination of the fair value
1.98%
-0.51%
2.13%
-0.49%
n.a.
n.a.
n.a.
n.a.
1 Based on a target attainment of 200%.
2 Expected volatility and assumptions concerning share price correlations were determined by reference to historical volatilities and historical correlations, respectively.
€37.55
n. a.
n. a.
Share Matching program and its
underlying plans
Under the Share Matching program, Siemens Healthineers
offers plans which entitle beneficiaries to receive Siemens
Healthineers AG shares. Up to fiscal year 2018, beneficiaries
were entitled to receive Siemens AG shares. The plans under
the Share Matching program based on Siemens Healthineers AG
shares are classified as equity-settled share-based payment, plans
under the Share Matching program based on Siemens AG shares
as cash-settled share-based payment. The weighted average fair
value of the Siemens Healthineers' matching shares granted in
fiscal year 2021 was €34.82 per share (2020: €33.81 per share).
It was derived from the share price less the present value of ex-
pected dividends and taking into account non-vesting conditions.
The development of outstanding matching shares from plans of
the Share Matching program described below was as follows:
Siemens Healthineers AG
Siemens AG shares
2020
shares
Fiscal year
2021
2020
Fiscal year
2021
Outstanding at
beginning of
fiscal year
Granted
518,155 134,462
396,904 410,693
121,618 213,232
Risk-free interest rate
Forfeited
Expected dividend yield
€37.55
0-200%
About 4 years
Members of the Managing Board, eligible members of
senior management and other eligible employees
Equity-settled share-based payment
458,4331
€10 million
Valuation model
n. a.
About 1 to about 4 years
Members of senior management
and other eligible employees
Inputs to the valuation model for
the following beneficiaries
Members of
the Managing
Board
Members of senior
management
and other eligible
employees
27.04%
Share price less present value of
expected dividends
Members of
the Managing
Board
n.a.
Members of senior
management
and other eligible
employees
n.a.
1,021,068
€36 million
Share price less present value of
expected dividends
Members of senior management
and other eligible employees
n. a.
Expected weighted volatility of
Siemens Healthineers AG share²
26.97%
Share price per
€40.37
€37.55
€40.37
Siemens Healthineers AG share
1,628
Total segments
17,964
-169
-27
Corporate items
-108
-22
Corporate treasury, Siemens Healthineers
Real Estate 1 eliminations and other items
Total reconciliation to
-10
-10
consolidated financial statements
-868
-343
Siemens Healthineers' income
Financial income, net
before income taxes
1,954
Siemens Healthineers Real Estate manages Siemens Healthineers' entire real estate busi-
ness portfolio, operates the properties and is responsible for building projects and for the
purchase and sale of real estate.
The line item corporate items includes corporate costs, such as
costs of Group management and corporate projects as well as
business activities and special topics that were not allocated
directly to the segments. This also includes the costs of a special
one-time payment announced on September 30, 2021, resolved
at Group level, to employees, because the related expenses of
€56 million were not caused by the segments and were there-
fore not included in the measurement of their performance.
83
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Assets
Siemens Healthineers has determined to use segments' assets,
defined as net capital employed, as a measure to assess the
segments' capital intensity. Segments' assets are based on total
assets presented in the consolidated statements of financial
position (i.e. including intangible assets acquired in business
combinations), which are allocated to the segments, primarily
excluding receivables from the Siemens Group from financing
activities and tax-related assets, because the corresponding
income and expenses are also excluded from the segments'
adjusted EBIT. Moreover, the remaining assets are reduced by
non-interest-bearing liabilities (e.g. trade payables, contract
liabilities and other current liabilities) other than tax-related
liabilities.
Note 30 Information about geographies
The following tables disclose revenue by location of the cus-
tomer and entity, and the location of non-current assets.
Non-current assets consisted of property, plant and equipment,
goodwill and other intangible assets.
(in millions of €)
Revenue by customer
location
Revenue by entity
location
2,404
-65
-68
Severance charges
• expenses for mergers, acquisitions, disposals and other port-
folio-related measures, in particular
> amortization, depreciation and other effects from IFRS 3
purchase price allocation adjustments,
> transaction, integration, retention and carve-out costs,
> gains and losses from divestments,
• severance charges and
•
centrally carried pension service and administration expenses.
Income tax expenses are excluded from the segments' adjusted
EBIT because income taxes are subject to legal structures,
which typically do not correspond to the segment's structure.
Financial income, net, comprises other financing income, net,
and any interest income or expenses. Financing income, net,
is excluded from the segments' adjusted EBIT because deci-
sion-making regarding financing is typically made at the Group
level. Expenses for mergers, acquisitions, disposals and other
portfolio-related measures and severance charges are not
part of adjusted EBIT because they do not affect the operating
performance of the segments. Decisions on essential pension
items are made centrally. Accordingly, the segments' adjusted
EBIT includes amounts related primarily to service cost of pen-
sion plans, while other regularly recurring pension related ex-
penses ("centrally carried pension service and administration
expenses") are excluded. Certain items that are not indicative
of the segments' performance are also excluded from adjusted
EBIT, such as items that have a corporate or central character or
refer to more than one reportable segment, to corporate treas-
ury or to Siemens Healthineers Real Estate. Costs for support
functions are predominantly allocated to the segments.
The reconciliation of total segments' adjusted EBIT to Siemens
Healthineers' income before income taxes is given in the table
below:
(in millions of €)
Total segments' adjusted EBIT
Fiscal year
2021
2020
3,272
2,298
Centrally carried pension service and
administration expenses
-12
-17
Amortization, depreciation and other effects
from IFRS 3 purchase price allocation
adjustments
-381
-168
Transaction, integration, retention and
carve-out costs
-123
-34
Gains and losses from divestments
3
Fiscal year
Fiscal year
2021
2020
1,745
874
2,274
1,418
29,640
14,158
Foreign countries
16,252
13,586
15,723
13,042
4,551
5,770
Therein:
Therein:
United States
5,466
4,909
5,770
4,937
Assets corporate treasury
1,408
739
China
2,354
1,893
2,151
Germany
Adjusted EBIT margin is used to manage the operating perfor-
mance of our segments. Adjusted EBIT margin is defined as the
adjusted EBIT of the particular segment concerned, divided by
its total adjusted revenue. Adjusted EBIT is the underlying earn-
ings indicator and is defined as income before income taxes,
interest income and expenses and other financial income, net,
adjusted for the following items since fiscal year 2021:
2020
Asset-based adjustments
2021
2020
Europe, C.I.S., Africa,
Middle East (EMEA)
6,775
4,747
6,935
5,094
Americas
6,407
5,691
6,610
5,665
Asia, Australia
4,815
4,022
4,452
3,701
Total
17,997
14,460
17,997
14,460
Sept 30,
Thereof:
(in millions of €)
Total segments' assets
2021
Adjusted EBIT
815
1,039
Revenue includes revenue from contracts with customers and
revenue from leasing activities. In fiscal year 2021, income from
leases amounted to €369 million (2020: €323 million). In fiscal
year 2021, revenue from rapid COVID-19 antigen tests in the
Diagnostics segment amounted to €1,080 million.
For each of the segments, revenue results mainly from perfor-
mance obligations satisfied at a point in time, especially in the
case of the sale of goods, including reagents and consumables
in the Diagnostics segment. However, the performance obli-
gations related to maintenance contracts for equipment sold
are generally satisfied over time with revenue recognized on a
straight-line basis.
As of the reporting date, the aggregate amount of transaction
prices allocated to performance obligations that were unsatis-
fied or partially unsatisfied (order backlog) amounted to €27 bil-
lion (September 30, 2020: €19 billion). Thereof, €9 billion (Sep-
tember 30, 2020: €6 billion) are expected to be recognized as
revenue in the next twelve months.
Intersegment revenue is based on market prices.
82
32
Siemens Healthineers Annual Report 2021
Consolidated financial statements - Notes to consolidated financial statements
Adjusted EBIT²
Assets³
Free cash flow
Additions to other intangible
assets and property, plant and
equipment
Amortization, depreciation
and impairments
Fiscal year
Sept 30,
Fiscal year
Fiscal year
Fiscal year
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
At the segment level, revenue is defined as total revenue and
corresponds to the sum of external and intersegment revenue.
Total adjusted revenue of the segments is additionally adjusted
for effects in line with revaluation of contract liabilities from
IFRS 3, Business Combinations, purchase price allocations.
2,076
Adjusted revenue
Measurement and reconciliations
14,362
292
280
18,256
14,642
Reconciliation to consolidated financial statements 4
33
98
-292
-280
-259
-182
Siemens Healthineers
17,997
14,460
17,997
14,460
1 Siemens Healthineers: IFRS revenue.
2 Siemens Healthineers: Income before income taxes. Adjusted EBIT fiscal year 2020 on segment level adjusted in line with updated definition of adjusted EBIT.
3 On segment level: net capital employed.
*Including effects in line with revaluation of contract liabilities from IFRS 3 purchase price allocations.
Reportable segments
Since the closing of the acquisition of Varian on April 15, 2021
Siemens Healthineers has the following four reportable seg-
ments, which are differentiated according to the nature of
goods and services:
•
Imaging offers imaging products, services and solutions. The
most important products within this segment are equipment
for magnetic resonance, computed tomography, X-ray systems,
molecular imaging and ultrasound.
• Diagnostics offers in-vitro diagnostic products and services
that are offered to healthcare providers in laboratory, molecu-
lar and point-of-care diagnostics.
• Varian provides innovative, multi-modality cancer care tech-
nologies as well as solutions, and services to oncology depart-
ments in hospitals and clinics globally.
• Advanced Therapies is a supplier of highly integrated products,
solutions and services across multiple clinical fields, which
are provided to therapy departments of healthcare providers.
Accounting policies for segment information are generally the
same as those summarized in Note 2 Accounting policies. Any
exceptions or supplements are outlined below or become appar-
ent in the reconciliations.
Assets Siemens Healthineers Real Estate
1,916
7,045
3,272
2,298
29,640
14,158
3,185
1,858
7,535
1,179
579
464
-868
-343
12,522
10,936
-925
-487
300
460
351
2,404
1,954
42,162
25,094
2,259
1,371
8,065
1,479
18
7,698
19
17
2,191
1,810
174
309
178
166
721
74
5,164
5,179
702
-216
524
541
353
279
221
14,788
45
6,820
29
254
308
1,991
1,934
247
265
328
Imaging