Siemens AG's (SIE.XE) health-care division is aiming for annual cost savings of 240 million euros ($293.9 million) a year ahead of its planned listing on the Frankfurt stock exchange, the company said Tuesday.
Siemens Healthineers, which makes medical-imaging and diagnostic devices, said it expects the savings to come into full effect by 2020.
Continue Reading Below
The division is one of Siemens' most profitable, generating revenue of EUR13.7 billion and almost 30% of group pretax profit in fiscal 2017, according to figures the company published at its capital markets day on Tuesday.
Siemens Healthineers Chief Financial Officer Jochen Schmitz said the company expects revenue growth to increase to between 4% and 6% in the medium term compared with 2.7% in 2017 as an aging global population and the rise of chronic diseases expand the global health-care market.
However, revenue and profit margins are likely to be hurt in 2018 due to foreign-exchange headwinds, he added.
Siemens didn't provide more detail about the scale of the planned listing, but it has previously been reported that the company is considering listing a slice of between 15% and 25%. Analysts estimate that Healthineers could have an enterprise value of up to $47 billion, with the float worth anywhere between $6 billion and $12 billion.
If Siemens Healthineers reaches the high end of its valuation range, the listing could be the largest European initial public offering since Glencore PLC's (GLEN.LN) $10 billion flotation in 2011 and one of the largest ever German IPOs, according to data from Dealogic.
Write to Nathan Allen at firstname.lastname@example.org
(END) Dow Jones Newswires
January 16, 2018 07:58 ET (12:58 GMT)