UPDATE 2-Healthineers expects to reap rewards of Atellica in 2019

* Forecasts 2019 sales growth of 4-5 pct

* Sees 2019 adj. margin between 17.5-18.5 pct

* Expects to ship 2,200-2,500 Atellica machines

* CFO says China will be a growth driver (Recasts, adds shares, CEO, CFO comments)

FRANKFURT, Nov 5 (Reuters) - Siemens Healthineers expects increased shipments of its new Atellica blood and urine testing machine and strong demand from China to lift its earnings next year.

Shares in the former Siemens division, which are now up 28 percent since its March stockmarket debut, rose by 3.4 percent to 37.35 euros at 0952 GMT on Monday, outperforming the European healthcare sector index.

Healthineers, which is looking to Atellica to turn around its In-Vitro diagnostics business, said it had shipped almost 1,000 by the end of September. This was at the upper end of its target range, with 35 percent of sales from new customers.

For 2019, Healthineers forecast an adjusted profit margin of 17.5 to 18.5 percent, compared with 17.2 percent in the year ended September and comparable sales growth of 4 to 5 percent.

It hopes to have placed between 3,200 and 3,500 Atellica machines by the end of this fiscal year and 7,000 in 2020. The firm said around 90 percent of its diagnostic sales come from the consumables used in the machines.

“Atellica seems to be well on track with some sizeable placement expectations put into the market and already some signals that divisional growth is starting to tick up,” said Berenberg analyst Scott Bardo who rates the stock ‘Buy’.


Strong sales of its X-ray, computed tomography and ultrasound machines helped Healthineers post comparable sales growth of 4 percent in its fourth quarter to 3.7 billion euros.

For the full-year, demand was particularly noticeable in China where sales rose by 6 percent.

Although this outperformed other regions, revenue was flat in the fourth quarter, which Chief Executive Bernd Montag put down to a tough comparison with the previous year.

“The market will remain a growth driver for us,” Chief Financial Officer Jochen Schmitz added.

Dutch rival Philips also said order growth had picked up in China after a weak second quarter.

Costs related to Healthineers’ listing weighed on its fourth-quarter operating profit, which fell 6 percent to 627 million euros in the three months to the end of September.

Adjusted for initial public offering (IPO) costs of 47 million euros, profit for the quarter came in at 674 million euros, ahead of the average forecast of 651 million euros in a Reuters poll of analysts.

Healthineers expects earnings per share to be 20 to 30 percent higher in 2019 as IPO and severance costs fall away. ($1 = 0.8778 euros) (Reporting by Caroline Copley, editing by Tassilo Hummel/Gopakumar Warrier/Alexander Smith)