Siemens Healthineers AG (SHL) Earnings Call Transcript & Summary

Hello, and welcome to the Siemens Healthineers Shape 23 Keynote. The keynote has become a very important event for our company, for our customers and for the entire health care community. I'm pleased that you've joined us. And I'm confident you'll find this year's keynote interesting and relevant. We pioneer breakthroughs in health care for everyone, everywhere. This is the purpose, the passion and the commitment that makes all 68,000 Siemens Healthineers get up in the morning, inspires us throughout the day and sometimes keeps us awake at night. Our innovations and breakthroughs originate from countless collaborations with the leading minds in health care institutions worldwide. And we are united with them in some core beliefs. We believe that it is, and will continue to be breakthroughs in technology that will enable us to overcome the most threatening diseases together from cancer to cardiovascular to neurovascular diseases. We believe that it is and will continue to be breakthroughs in technology that will finally provide access to health care to the 3 billion people who do not have it today. And we believe that it is and will continue to be breakthroughs in technology that will make it possible to overcome the productivity and staff shortage crisis that exist in health care today. These beliefs and the opportunity to improve health care more decisively the opportunity to have impact on more patients faster carry Siemens Healthineers as the biggest start-up in health care, as I sometimes say, and where they unite in convictions behind the combination of Siemens Healthineers and value. In today's keynote, we will show you some recent breakthroughs that bring us closer to a world without fear of cancer. You'll see innovations that help shift more care services into community settings by providing centers of excellence with new capabilities to gain insights into diseases. And we'll show you new ways to overcome the workforce crisis in health care with solutions that help automate repetitive tasks and augment caregivers to address staffing shortages. I see you again at the conclusion of the keynote.

A world without fear of cancer: here in Singapore, the COVID-19 pandemic was managed relatively well, and access to care was good. But still, we were in complete lockdown for months, and our borders were closed for nearly 2 years. When borders reopened, many of our patients were showing up with later-stage disease and required hospital admissions and advanced care. This situation clearly demonstrated the crucial importance of diagnosing cancer early and having quick access to high-quality cancer care. From this learning, I believe cancer care needs to be predictive, participatory and personalized. First, we need to detect cancer early. But a successful screening program does not just end with a diagnosis, a decision whether or not to proceed with a particular treatment should be based on a prediction. Second, it is very important that we actively listen to our patients, educate them and bring them on board to the treatment journey with us and facilitate shared decisions. This way, we find ways to prolong and improve the lives of our patients without always taking the most radical one. This is what makes cancer care participatory. It also needs to be personalized. There have been great technological advancements in both imaging and radiotherapy in the last decade. Automation and digitalization people taking into account the move towards personalized and precision medicine. It requires constant reassessment, frequent diagnosis and ongoing adaptation therapy. This, in turn, requires precise highly integration right at the point of treatment, only then can we outpace cancer, and not allow cancer to outpace us, to create a world without the fear of cancer.

The earlier you identify who's at risk for developing cancer or who has early cancer significantly improves your opportunity to treat it effectively in a way that prevents the spread of the cancer, and therefore, prolongs lifespan and quality of life. What if clinical laboratories had more advanced tools that could help identify early-stage cancer before there are noticeable symptoms. Let's look at liver disease and in particular, nonalcoholic fatty liver disease, also known as NAFLD. It's one the most important emerging public health issues of today and affects a 1/4 of the world's population. It's known as a silent killer because if not caught early, patients can progress to serious liver-related events, including hepatocellular cancer and liver failure.

Well, the liver is an essential organ, just like the heart and the brain, you cannot live without the liver. Liver disease actually impacts a very large segment of the population. If you have excess fat in the liver, you not only are at higher risk of dying of liver disease, you're at higher risk dying from cancer. Liver disease, it's a silent killer. It won't let you know something is wrong until something is very seriously wrong. So that requires us to be able to find the disease when it's still clinically silent. Now if you don't have any symptoms, you're not going to come see a liver doctor right? So we need to develop pathways and paradigms where we can screen for liver disease in the primary care setting, try and figure out who might have more than trivial disease and get them to see the right doctor in the right amount of time.

Introducing enhanced liver fibrosis test, a simple blood test to assess the risk of disease progression in patients with advanced fibrosis due to NASH.

The ELF test, which was recently De Novo marketing authorized by the FDA, provides clinicians and patients with accessible noninvasive testing that accelerates the identification of patients with advanced fibrosis who might benefit the most from potentially life-saving preemptive care.

Historically, we used a liver biopsy to assess disease progression to look for the scar issue. Now liver biopsy to put it very crudely, involves sticking a 6- or 9-inch long needle into somebody's liver. One of the goals of catching the disease early is to treat the disease and prevent its progression to cirrhosis at which time the cancer risk is much higher.

Together, we are developing an AI-based predictive model using data from patient outcomes, the model would use such available clinical information like routine blood test to help a physician identify patients who are at increased risk for liver disease. Moreover, we are also exploring whether or not this model could be expanded to build AI-based predictive models for lung cancer and colon cancer as well using commonly available clinical information ordered may be by a primary care physician at the outpatient clinics or even an emergency department physician. The earlier that cancer risk is determined, the greater the likelihood of effective treatment, which often results in improvements in important patient outcomes.

Cancer is one of the most devastating things that can happen. So the earlier that we can detect tumors, the greater chance we have for increasing patient survivorship. Once we know that there is a cancer, then we actually approach how we use various modalities of treatment, whether it's a surgery, whether it's chemotherapy, immunotherapy and combining that with radiation therapy. Varian as a company has one simple goal. It's a world without a fear of cancer. We are now becoming much more an oncology company. We have a comprehensive cancer care. But when it comes to what we actually do for patients, now with Siemens Healthineers, we offer solutions from early detection and diagnosis, all the way through treatment and survivorship.

Approximately 50% of all cancer patients require radiotherapy. We know that tumor change over time. They can also move from session to session, as do the surrounding normal tissues that we're trying to spare. When changes are seen in the anatomy, the oncologist is often faced with the decision to pause treatment for several days to replan or continue with the current suboptimal plan. So one of the greatest challenges in radiation oncology is the ability to see at the time of the treatment, where the tumor is in relation to the normal organs that we're trying to spare. CT simulation images, the quality has improved over the past several years, but we've needed that improvement at the treatment unit as well.

Introducing HyperSight, our next generation of in-room imaging, larger images, better contrast, faster cone-beam CT imaging.

HyperSight, our FDA-pending integrated interim imaging will go far beyond what's possible with conventional radiotherapy systems. For the first time, there will be in-room cone-beam CT imaging system that offers Hounsfield units with accuracy expected from conventional CT simulators. The improved contrast resolution makes it possible to differentiate tissue organs that to date could not be told apart.

That's what's made the difference with this new technology that HyperSight will provide. The ability to decrease PRV margins, for example, on organs at risk with the better certainty of where those organs are. We may be able to reduce those margins, and therefore, increase the dose to the tumor targeted cells.

With the conventional technology, image acquisition took 60 seconds. With a HyperSight, we can do that on Halcyon and Ethos in 6 seconds. So we shave off 54 seconds of motion. In the past, we would want to acquire images with the breath-hold where we even tell patients don't breathe. Well, doing that over 60 seconds is really hard. Doing it in 6 seconds, we think that every patient can accommodate that.

I think there are small steps and improvements that we make in technology in the field every year. This is honestly a paradigm shift. It's not just improvement in image quality. It's the ability to adapt a treatment plan at the same time in that session with confidence and accuracy because of the improved image quality. That's the paradigm shift.

This is an epic advancement in image quality, precision and speed. HyperSight technology will be deployed on certain Varian systems, starting first with Halcyon platform and Ethos therapy, followed by our TrueBeam and Edge systems.

New technology is definitely decreasing the fear of cancer for patients and their families. We've gotten word from public, patients and families reaching out with hope the e-mails were literally entitled hope.

Precise imaging therapy at the point of therapy is a key driver for innovating the way interventions are performed. Amazing examples also come from other modalities. One of those is catheter-based, minimally invasive interventions. They also share a huge reliance spatial orientation.

In interventional Oncology, we target specific tumors or even just parts of tumors. To do this, we need image-guided navigation that integrates morphological, functional and molecular information. This is crucial for us to be able to perform highly targeted procedures. In liver embolization, we inject microspheres into the arterial feeder vessels of the tumor to reduce its blood supply and expose it to a cytotoxic drug, precisely calibrated, compressible microspheres allow us to better predict how they pass through a catheter into the feeding vessels. This gives us a high level of treatment control. Precision imaging is critical to clearly identify the size and location of all tumor nodules and they're feeding vessels. Only then we can ensure that we completely block the blood flow. Moreover, we can directly verify the results by assessing the parenchymal blood volume. We want embolization to be effective with minimal risk of side effects.

Introducing ARTIS icono ceiling, redefining precision in embolization, combining mechanical flexibility, positioning accuracy and smart workflow guidance to redefine precision for interventional radiology.

In addition to the new imaging chain, which sets the standard for the future, the precision of the system is impressive. Not only can embolization greatly slow down the progression of tumor diseases, it can also allow to cure the patient. Without [indiscernible] and Varian portfolio of therapeutic devices, Siemens Healthineers is an excellent partner to support us in delivering precision therapies. I believe techniques such as embolization, targeted drug delivery and thermal ablation will have a huge impact on cancer therapy in the near future.

I think if you look at how we tackled cancer years ago and today it's drastically different, we see patients receiving multiple courses of therapy, living with their cancer for much longer. The outcomes are much better. The complications are much lower. So we are very optimistic.

Meet patients where they are.

Throughout the history of our great nation, we faced a series of significant health challenges, and while many of these challenges caused great harm and misery, they also forced us to acknowledge root issues and evolve so that we can better respond to the next challenge. Even the tragedy of 9/11, led to improvements in our emergency response systems. And COVID-19 is no exception. For the past 2 years, the COVID-19 pandemic has stress-tested health care systems worldwide. We learned that we had to do things in a fundamentally different way to prevent our health care system from collapsing. We moved health care out of the hospital and brought it in to people's homes with rapid antigen testing and into their communities with vaccinations to keep them healthy and avoid hospitalization. Consequently, equal thought must be given to reconfiguring care delivery and low acuity settings by shifting routine care from the hospital to the community and in high acuity settings by enabling hospitals to better address complex cases. The health care provider of the future is not a hospital. It's a health system that allows people to take care of their health where they're at and at affordable cost. When I grew up, I grew up about 45 minutes from the nearest hospital, about 2 hours away from a hospital that could provide advanced and tertiary care for my asthma. Well, now with telehealth, we can provide that same care. Those same visits in someone's living room. I think it's important that we increase access through technology and through innovation so that more people can get the care that they need. But we must also enable hospitals to better address complex cases. instead of every hospital striving to be an expert in everything, hospitals in the future will need to work within network systems and develop specialized units with integrated multidisciplinary teams, executing expert care pathways. This concentration and focus will allow us all to better understand diseases, their detection and treatment and how to prevent them. We first saw this concept with the development of Ebola treatment centers, and then with COVID wards in many hospitals. Yet the paradigm applies to everything from cancer, to cardiac disease, to high-risk pregnancies. This two-pronged approach shifting routine care to community settings and enabling health care systems to better address complex cases or what I truly hope will be our long-term legacy from the past 2 years. If we can successfully embrace this opportunity for change, an opportunity to fundamentally shift and improve upon our past models of care delivery that have failed so many. Then we can turn some of the tragedy in the past 2 years into something positive for our long-term future.

The hospital of the future is not a hospital. It's a health system, a system that puts the patient at the center. A system designed to keep people healthy, not only treat them when they're sick, an integrated system that delivers care where people are at home in the community, a system where success means that hospital beds are empty, not full. Right now, most care is still taking place in hospitals. But the health system of the future is on its way. It's already starting to improve outcomes, reduce costs and bring the patient experience to a whole new level. At Siemens Healthineers, we'd like to partner with you on redesigning care delivery to bring it closer to communities, closer to patients. We can support you with our strategic transformation services and with our technology. Technology that places less demands on your infrastructure and technology that places less demands on the people using it, technology like this, the new Atellica VTLi. For the first time, high sensitivity troponin testing can be done in the community with a lab-like performance in as little as 8 minutes. Why does this matter? Take a patient experiencing chest pain. They call an ambulance, they brought to the ER, and then they get tested with high sensitivity troponin to determine if the patient actually having a heart attack. It turns out only less than 20% really are. In the U.K. today, ambulances and ERs are facing major crisis. Too much demand and not enough capacity to meet that demand. We're talking about ambulances taking sometimes hours to get to the patient and hours to offload the patient in the ER. Now what if we could triage chest pain patients in the community and determine right there and then if they need to go to the ER at all. What a difference it would make for the patients, for the ambulances, for the ER. Atellica VTLi is going to help make this happen. The hospital of the future is a health system. It is an integrated network with a large footprint in the community. And strong centers of excellence helping to overcome the most threatening diseases from cardiovascular, to neurovascular, to cancer.

Well, at Semmelweis University we continuously challenge the status quo. Research is one of the cornerstones of the university beside education and patient care, and for research we need cutting-edge technology. About a year ago, we installed our new Naeotom Alpha scanner photon-counting CT which was first in the region. Already, the first images were amazing, crystal clear. Now we are actually able to acquire ECG-gated images with 0.2 millimeter resolution, and this actually is a truly a game changer. The news scanner really made a big impact since now we can actually can even the most challenging cases, we had a big headache if we had a patient with 15 stents, or we had a headache if we had patients with 2,000 Agatston score, but with the new Naeotom Alpha, you can just scan these patients. So previously, we were happy if we could just rule out in-stent restenosis, yes or no. But with the new scanner actually, we can quantify in-stent restenosis. We will be able to tailor the medical therapy based on the severity of the disease, based on the composition of the patients. So this is the technology, which we redefined cardiac imaging in the next couple of years. It's not only cardiology, but also basically everything else. We use this scanner in oncological imaging, in ear, nose, and throat imaging. And it's amazing to have the extra dimension of information, which is provided by the spectral data, which is always there. So we can actually quantify dye content in tumors and in tumor [Indiscernible] ablation. So we have instant feedback, and we can provide more precise quantitative data in every patient. I think that's the future that we will be able to use imaging to provide better care for our patients.

Clinicians and researchers are passionate to push the boundaries of clinical care. Their insights to help us overcome the most threatening diseases from cancer to cardiovascular to neurovascular diseases. Our mission at Siemens Healthineers is to provide these clinical pioneers with cutting-edge imaging technology. Technology that enables them to gain new insights into diseases, provide earlier diagnosis and allows them to make precise treatment decisions for better patient outcomes.

MRI is so important that in 2001, it has been introduced in the official diagnostic criteria of multiple sclerosis. One of the biggest unmet need in our research is all the lesions that we see on conventional MRI, they look all like, but actually, they are in a different stage of their evolution. I hope that with a more powerful MRI system, we will be able to address these questions.

Today, we are very proud to introduce our most powerful 3D MRI ever, designed to enable care providers in their continuous ambition to make the difference for patient care.

Introducing MAGNETOM Free.Max our strongest 3T MRI ever designed to provide deeper insights into the human body.

With MAGNETOM Free.Max, with its unique [indiscernible] gradients, we believe it will provide unprecedented performance that will empower new clinical insights in the fields of neuroscience, cancer diagnosis and micro structural imaging.

The research that we are currently doing with the diffusion MRI has shown that for accurately measure the microscopic image using diffusion, we need a gradient amplitude of at least 150 millitesla per meter. So I'm looking forward to the new scanner because we will have advantages both in diagnosis of the neurological diseases and prognosis. And in addition, we will have also more accurate instruments, tools to monitor response to current treatments and experimental treatments.

By pioneering breakthroughs in health care, we are supporting care providers to make the difference for patients and to truly impact patients' lives.

When Gabi was 11 years old, she started to have some difficulties. Sometimes, she would be walking to a place and suddenly find herself someplace else, and didn't really know how she had gotten there.

Something didn't seem right. I was actually away and Amy called me 1:30 in the morning. And told me the Gabi just had a seizure. Most epilepsy is caused by a lesion on the brain. But without having the right imaging, you can't even consider surgery. And they sent us to 16 different doctors.

And they had put her on a bunch of different medications, but she wasn't getting better. We were told that essentially, there's no hope. There's nothing that's going to help her. Every night, I was afraid that she was going to die. And every morning I would get up and feel like, okay, I can hear her moving. So I know we got through another night and she's okay.

In case of drug-resistant focal epilepsy, the only way to cure the patients is to remove surgically the lesions responsible for the seizures. If we find a lesion, it will increase the likelihood of being seizure-free after the surgery. So it is a real predictive value of the prognosis for the surgical outcome.

The doctor said, there's a study where they're using a 7 Tesla MRI machine because the magnet is so much more powerful. It is picking up things on imaging that could never see. A week later, I got a phone call, and I answered it and the person says "Amy, I have really good news." They found the spot. They found the spot of cortical dysplasia in Gabi's brain. She said this changes everything. We can treat this.

Today, we are very proud to introduce the next generation of our ultra-high field 7 Tesla MRI.

Introducing MAGNETOM Terra X, our next-generation 7T MRI that is designed to make the difference for the most challenging clinical questions.

Introducing the new innovative Ultra IQ technology. Magnetom Terra X is designed for new insights in the fields of neurological and musculoskeletal imaging.

Surgery has given me a lot of freedom. The things that I can do now that I'm living. Sleepovers, go to camp, going to Machu Picchu, driving obviously, which I'm working on now.

That 7 Tesla MRI has given our daughter, her life back.

Care for those who care for others: I think we take health care for granted. We think that we go to the hospital, we will be seen. We think that if we need surgery, we will -- that will be -- we'll be able to have that, that can happen when we want it to happen. If we need to go see a specialist, we can get in to see them in a timely way. And that's not the case, and it will continue to get worse unless we can fix the workforce shortage. So the workforce is everything. We need physicians to care for the patients, we need nurses to care for the patients. And the patients that are ending up in our hospitals are the sickest of the sick. Our health care professionals more than ever before feel like they can't provide the care they need or want to because of a lack of resources. So how to address this workforce issue? The good news is that we already know many of the answers. The first piece is creating a workplace with a stronger sense of purpose. The people who work in health care do it for one reason. Their desire to help others. We must help them by creating a workplace in which they feel appreciated, one that rewards and recognizes their hard work, commitment to excellence and their empathy for others. Let's bring joy back to the workplace by establishing and fostering a culture of mutual respect and appreciation. Then it's about thinking differently. Cultivate new pipelines to attract top talents, including nurses, tech, social workers, physicians and the like. The third component is improving working conditions, making jobs in health care more attractive and rewarding, less stress, less uncertainty, less friction, more flexible work options, the possibility of working remotely, fewer workarounds, standard processes that make sense and involving our workforce and the decisions that directly how they do their work. Finally, we must modernize the workplace, enabling people to focus on the most important activities, automating all the hundreds of routine repetitive tasks that exist, deploying tools that augment clinical decision-making in creating new models of care delivery. It's not a matter of whether we should. It's a matter of how quickly we can make these changes. We're not facing the end of work, but we are facing the end of work as we know it.

We wanted to increase capacity to manage high sample volumes with more reliable turnaround times. We had task-specific automation in place, but realized as we add more instruments to increase throughput, we would need to increase manpower to handle the additional instruments. So we started thinking about introducing multidisciplinary automation to free up the hands and minds of our technicians, allowing them to focus on higher value tasks. We implemented 1-touch integrated chemistry and immunoassay testing with 15 Atellica solution analyzers connected to active automation in the core lab, along with Atellica Solution in 8 satellite labs. Atellica data manager and Atellica process manager software with the backbone for turbocharging operational performance, quality control and results management. Throughout this network, automated systems and advanced software have eliminated manual dependency for sample-based checks and workflow-based checks to examine health of instruments. This has not only standardized and accelerated sample handling, but also brought consistency and objectivity by using data-driven routes to our review process. Built-in algorithms have reduced aliquots from 4,000 [Indiscernible] To under 250. This has further released additional capacity to handle more volumes and reduce insufficient sample quantity rejects. We are now able to provide better patient care while maximizing our revenue potential. We all aspire to make a difference. There is an age old saying, health is wealth. What better than diagnostics as a lever to improve outcomes for health.

One of the challenges within health care is really how do we take care of the caregivers who are really taking care of the patients that are here. The digital transformation of health care is really going to change the way that clinicians take care of their patients going forward. Imaging is an increasingly important and central part of today's health care. The quality of imaging has improved remarkably recent years, but it's still a very complex process with a complicated chain of steps to coordinate, acquire, diagnose and communicate clinical findings. The imaging value chain is a complex series of processes that are occurring and what we're trying to do at Siemens Healthineers is leverage digitalization, digital tools and automation of those tools to make that complexity a lot more simpler. This means actively working to improve and integrate the various steps of the entire process to increase efficiency and enhance the value of imaging. Some of these improvements include streamlining the planning of an imaging scan. Working with built-in AI during and after image acquisition and creating smoother and more actionable communication of clinical findings. Siemens Healthineers, we offer a range of products and solutions that support the transition not just to an imaging value chain, but to a truly smart imaging value chain. Solutions like remote scanning allows skilled technologists to remotely monitor and multiple imaging scanners across different locations. This helps address issues of staff shortages and low usage of systems while driving efficiency, improving quality and enhancing greater accessibility to care, all of which ensure both and staff satisfaction. Over the past 20 years, Siemens Healthineers has been automating many aspects across the imaging value chain, and we continue to innovate in this space. What the AI does really well is the ability to do repetitive tasks over and over again. Fully automated technologies now make it possible to augment reading and reporting workflows with multi-organ multimodality decision support. These reduce the burden of basic repetitive tests and enhance diagnosis with information to drive improved value in the resulting output for the smart imaging value chain, the diagnostic report or business card of the radiology department.

I am here at Kantonsspital Baden city in Switzerland. In today's [Indiscernible] market, we want to be competitive in attracting the best people, and we want them to stay long term. We know that the state-of-the-art working environment, including efficient operations is key to recruiting and retaining the highly sought-after professionals we need. Take a look, and you will see plenty of natural light, open spaces, optimize layouts and the calm soothing environment, that's good for both patients and staff. The concept of feeling architecture is that if a patient feels they're taken care of, has no anxiety and is happy in her or his environment, this will also contribute to the health outcome. And this is a concept that we think is really important, especially in radiology, in a high-tech environment, if the patient is happy and well taken care of, it's also easier for the staff. So let's say, happy patient, happy stuff. We also wanted to ensure that we had state-of-the-art technology, the most efficient workflows and value-adding artificial intelligence. When [indiscernible], we have involved the entire team, and they all have brought in their ideas. And I think it's really important to work an environment that allows you to take part in the development and the decision-making. We wanted our people to go above and beyond, while, of course, also promoting their well-being. We knew we could not do all of this alone. We wanted to have a strategic partner by our site who could help us tackle these challenges and stay on top for the long run. That's why we turn to Siemens Healthineers and ended into an 8-year value partnership. This value partnership will truly enable us to offer our staff, as well as, of course, our patients, the etiology of the future.

Our partnership with Kantonsspital Baden city exemplifies how we care for those who care for others. This is what each successful value partnership delivers enterprise-wide value. Today, Siemens Healthineers is actively engaged in more than 145 value partnerships around the world, and this number continues to grow.

Hello again. I hope you found these last 40 minutes informative and inspiring. Perhaps you also noticed a pattern in all 3 chapters. At Siemens Healthineers, we bring together 3 capabilities: patient twinning, which means creating the best possible twin like models; precision therapy, which means individualized, super targeted treatment and digitalization; and AI to augment and connect the tool. In every day, our teams at Siemens Healthineers put these 3 unique competencies to work for you, enabling you to operate more sustainably in helping you to organize care better. This brings us to the end of the Siemens Healthineers Shape 23 Key Note. If you'd like more information on what you've just heard, a product demonstration, a one-on-one discussion, the chance to listen to experts talks and much more, please visit our Virtual Shape 23 experience. Thank you for watching.