Siemens Healthineers is banking on Varian to help it grow.

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Siemens Healthineers’ stock surged on Wednesday as the German health conglomerate stated its newly acquired Varian business would grow faster than its other divisions over the next three years, boosting the company’s income.

Revenue at Varian, the $16.4 billion cancer treatment specialist it bought earlier this year, is expected to increase between 9% and 12% annually, with an operating return on sales of well over 20% by 2025, according to Healthineers.

From a previous aim of 300 million euros, the business increased its synergy ambitions from the Varian acquisition to more than 350 million euros ($396 million) by 2025.At 0822 GMT, Healthineers shares were up 4.8 percent, outperforming the German blue-chip index.

It forecasts yearly comparable revenue growth of 6% -8 percent for the group between 2023 and 2025, up from the 5% -7 percent predicted for fiscal year 2022, excluding COVID-19 testing. Between 2023 and 2025, earnings per share would increase by 12 percent to 15 percent annually, according to the company, which also stated that its payout policy of 50 percent to 60 percent of net income would remain intact.

“With fiscal year 2022 we started the next chapter of strategy 2025,” Chief Executive Bernd Montag told the company’s Capital Markets Day. Healthineers will use its market position in imaging and robotics to focus more on cancer, cardiovascular, and neurovascular illnesses.

Story by : Norvisi Mawunyegah