Healthineers’ global supply network to cushion trade tariff hit
BERLIN (Reuters) – Siemens Healthineers (SHLG.DE) plans to cushion the impact of trade tensions between the United States and China by changing its supply routes to ship goods from its European factories, its chief financial officer said on Monday.
The United States imposed tariffs on $34 billion of Chinese imports, including medical imaging equipment, in early July and U.S. President Donald Trump has threatened to impose tariffs on an additional $500 billion of imports.
Speaking to journalists following the medical equipment maker’s third-quarter results, Jochen Schmitz said Healthineers’ global supply-chain network meant it could ship deliveries that previously went to the United States from China from its factories in Europe instead.
“This won’t happen without leaving some trace on our results because we have to change logistic chains … depending on how the situation develops,” he said.
However, he said he expected the tariffs to have a low single digit million euro impact on Healthineers’ results this year, which could rise to a double-digit million euro impact next year.
“When it stays in this range it won’t be a catastrophe but of course the topic is very, very regrettable because it significantly impairs global trade,” he said.
Healthineers has manufacturing sites in more than 10 countries, including Germany, the United States, Britain, China, India and South Korea among others.
As of the end of last year, Healthineers had 23 manufacturing and R&D sites in the Americas, 17 in Europe, Middle East and Africa and 11 the Asia pacific region, according to its IPO prospectus.
The U.S. accounted for 34 percent of Siemens Healthineers sales in its fiscal year ended Sept 30, 2017 and China accounted for 12 percent, according to the prospectus.
Healthineers’ profit for its fiscal third quarter was hit by currency moves and the cost of rolling out a new diagnostics machine, disappointing investors in the world’s largest maker of medical imaging equipment.
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