Good afternoon, ladies and gentlemen, and welcome to the Siemens Healthineers Conference Call. As a reminder, this conference is being recorded. Before we begin, I would like to draw your attention to the safe harbor statement on page two of the Siemens Healthineers presentation. This conference call may include forward-looking statements. These statements are based on the company's current expectations and certain assumptions and are therefore subject to certain risks and uncertainties. At this time, I would like to turn the call over to your host today, Mr. Marc Koebernick, Head of Investor Relations. Please go ahead, sir.
Again, thank you, Melinda. Good afternoon, ladies and gentlemen. Welcome to our conference call. The quarterly statement and Q3 presentation were released this morning. You can find all of the documents on our IR website. Obviously, we have another special subject for you today. I'm sitting together with Bernd Montag and Jochen Schmitz, who will be taking you through our Q3 results and the announcement of the transaction. Following that, there will be a chance for you to ask your questions to Bernd and Jochen. Although this is a very special day for us, some things never change. Hence, may I just remind you to limit yourself to two questions each. Now I pass the word and the mobile phone to Bernd.
Analysts and investors, around about two and a half years ago, we made a promise. A promise to be shaping the future of healthcare. Today, we are doing a big milestone in meeting this promise towards our customers and the patients they care for, towards our investors, and ultimately, towards society. By adding Varian to the Siemens Healthineers team, we both become stronger. Stronger innovators, stronger in the fight against cancer, stronger as shapers of healthcare. Ladies and gentlemen, this is a very important day for Siemens Healthineers, as we have been doing a major step on the mission we have laid out. When we did the IPO in 2018, it was clear that this was aimed at supporting our Strategy 2025. We want to shape the future of healthcare along our five strategic thrusts.
Precision medicine, therapy of tomorrow, technology-enabled services, patient journey stewardship, and digital data and AI. In order to support our customers, we are constantly working on optimizing our product and service portfolio in these focus areas. At the same time, we try to leverage economies of scale in order to offer highly competitive products and services. Last year, we made an important move forward in the execution of our strategy with the acquisition of Corindus Vascular Robotics, paying into the bucket of therapy of tomorrow. With the envisaged acquisition of Varian, we will be significantly increasing our relevance in the care pathway of one of the most complex diseases. With Varian, we will be able to diagnose cancer earlier, develop more individual and effective therapies, and be in the position to offer more precise therapy and aftercare.
With cancer, we are addressing a disease that is one of the biggest burdens of mankind, which is key for our customers, in which our combined skills make the difference. Let me also comment briefly on Varian's strategy, which is strikingly similar to ours, yet starting from a different angle. Varian is on a convincing path to expand its product portfolio in cancer therapy significantly, coming from its long-running leading position in radiotherapy. Varian is systematically working on integrating data and AI into therapy and thus improving the quality of care. Like us, Varian are aiming at expanding their markets and entering new markets. Seen side by side, the parallels between the two strategies become even more obvious.
Both companies are aiming for the next level of growth, success, and impact by innovations in the field of therapy of tomorrow, precision medicine, and stewardship of patient journeys by broad utilization of the potential of data integration and artificial intelligence and achieving scale by entering new markets. In light of this, it is not surprising that Varian and Siemens Healthineers have for roughly 10 years been successfully co-marketing and sometimes co-developing our product portfolio. Now it is time for the next step. This step means a leap in strategy execution for both of us. For Varian, it is a leap in cancer care, achieved through the combination with Siemens Healthineers. For us, it is a leap in creating even more impact for healthcare through the combination with Varian. Let us now have a closer look at these two leaps.
With our support, Varian will make a leap to the next level in cancer care. With the integration of our imaging capabilities, Varian will be able to offer the broadest product portfolio in cancer diagnosis and therapy. Varian can tap into our vast data pool of curated images and our AI knowledge pool to leverage these in new and even more impactful digital and artificial intelligence offerings and hence will more quickly broaden the spectrum of more individualized and more precise therapies. As part of Siemens Healthineers, Varian will gain access to our significantly larger sales and service organizations, as well as our advanced R&D and production network. For us, the planned integration of Varian means achieving immediately a materially higher level of relevance and impact with our customers.
With our unique technology position and clinical understanding from prevention to in vitro and in vivo diagnostics to therapy and post-treatment offerings, we become the most holistic partner for the entire spectrum of our customers, with the most comprehensive portfolio for all major diseases. By integrating Varian into our service sales, R&D, and production networks, we reach the next level of economies of scale. With this combination, we will create value for all stakeholders. Almost all of us have had experience with cancer, either personally or with friends or relatives. People whom we love have suffered and died from this terrible disease. We all know that fear and uncertainty are the most common companions of this disease. Jointly with Varian, we are making it our task and purpose to offer technologies that make cancer more curable.
Our joint ambition is to offer the right treatment at the right point in time for every patient. This holds true for cancer as well as for all other major diseases. For our customers, this new team offers the perspective for a totally new level of cancer care, and we can act as one single partner for all major disease states. As such a holistic partner, we will be able to support our customers in optimizing their processes within cardiology, neurology, oncology, radiology, and lab medicine in diagnosis and treatment across departments along the patient pathway. For societies, we are aiming at making cancer a manageable disease. We want to achieve it so that in the future, more and more people will be able to live with the disease with a much-improved quality of life.
We want to make state-of-the-art care affordable to as many people as possible, also in countries whose healthcare systems are less advanced. For our joint more than 60,000 employees, we are creating a company that lives, feels, and breathes healthcare every single day by continuously working on new ideas and solutions. A company that thinks long-term and that acts sustainably. A company to be passionate for and a company to be proud of. For our shareholders, we become an even more unique equity story. Investors can participate in the growth opportunities that our unique portfolio and setup offer based on leadership positions in terms of technology and market share, as well as develop and conquer new markets. We see significant synergetic potential from joining forces, delivering adjusted EPS accretion already in the first 12 months after closing.
May I turn your attention now to that very market that we, Varian and Siemens Healthineers, are inspired to make that important leap in. Let me again point out, this market is of importance to everyone, and its importance is growing. One of every two males and, respectively, one of every three females will have cancer at some point in their lives. That said, only with the demographic trend of a growing world population, the total incidence of cancer will grow, and with it, the demand for cancer therapy. On top of the sheer population growth, two more factors accelerate the demand for cancer care. One is the access to cancer care. More than half of the new cases occur in the less developed world, while over 90% of patients do not have access to therapy in low-income countries.
Treating these cases and managing the health of the growing populations will be key for the developing parts of our world. Access to affordable care is a challenge for all healthcare systems in the world. All of them operate under cost pressure. By 2035, around 150,000 radiation therapy specialists will be needed globally. These specialists will need technologies and solutions that enable them to deploy their skills more efficiently. Providing cancer care at an affordable cost is key for every healthcare system on this planet. The second factor that accelerates the demand for cancer care is the medical and technological advancements in treating cancer. These advancements have already increased the survival rate in the past, and they will continue to do so.
For example, the average five-year survival rate for lung cancer is expected to double from today's 22% to about 40% in about 10 years' time. With better diagnosis and more precise data, cancer can be detected earlier, and hence, there's a better chance for minimally invasive therapy options. For example, ablation has the potential to become an alternative to conventional open surgery, resulting in a better survival rate and improved quality of life for the patient during treatment. There will be solutions needed that coordinate care between the multiple disciplines like radiology, lab diagnostics, radiation oncology or surgery, pathology, and many more. This need for comprehensive and intelligent solutions will grow the market with growth rates between 6%-10%, ultimately to a potential addressable market size of over $20 billion in the future. With that growing relevance of cancer care, Varian has grown as well.
Varian has grown into a champion in its field. It has built a unique company on 70 years of leadership in medical technology. As a matter of fact, a little anecdote on the long history of both Varian and Siemens Healthineers: we, quote, incidentally stumbled over a nearly historic joint sales agreement from the year 1969. Obviously, back then, we already saw the value of working together. Back to what Varian represents now. A clear leader in its business with an impressive 8% order CAGR in the last three years and, likewise, impressive revenue growth of 11% per annum in the last three years. With this growth profile, Varian was able to expand their market leadership, resulting in a market share of above 50% in radiation therapy, factual proof of their industry leadership.
At the same time, this industry leadership results in very competitive operating margin levels of around 17% in the course of the last three years. This result also stems from the right investment. Varian has invested over $1.5 billion U.S. in innovation, both organically and inorganically, to drive its innovation leadership. In a strategic context, this innovation leadership is set to expand from providing radiation therapy to providing the cancer care operating platform of the future. On the one side, this includes leveraging the uniquely large installed base. Over 8,000 installed LINAC and over 5,000 software installations drive recurring revenues. This gives a very attractive and resilient business model, with equipment accounting for 47%, service for 35%, and software for 18% of total revenues in fiscal year 2019. The oncology systems business even has a service share of 47%.
On the other side, the inorganic part of the investment in innovation goes into adjacent high -growth and high -margin businesses. In addition, these businesses can add further recurring revenue potential with transforming oncology into a procedure-based business model. Varian talks about providing, quote-unquote, Oncology-as-a-Service . Looking at the global footprint, the revenue between regions is balanced over the globe, with 47% in the Americas and 33% in EMEA. The share in the Asia Pacific, with 19%, has a large growth potential due to the previously discussed lack of access to care in developing countries. With market shares of 55% in China and even 75% in India, Varian is well set to contribute to that emerging market potential. A potential in all markets, being in the developing world as well as in the developed world, is Varian's unmatched potential to disrupt the delivery of care with innovation.
For example, this innovation potential reaches from innovative value offerings, delivering unmatched clinical value, up to brand-new Ethos, the world's first AI-powered adaptive therapy solution, which enables adaptive treatment delivery in the typical 15-minute time slot. To summarize, this is just a glimpse of what Varian represents in the global fight against cancer. This short summary does not do justice to what Varian has built over the last 70 years. On this note, let me give you a glimpse of the future, what we can achieve together in the fight against cancer. The combination of Varian and Siemens Healthineers is nothing less than a leap in cancer care. The innovative and broad portfolio of Siemens Healthineers delivers precise data on the patient, both in vivo and in vitro. In the therapeutic arena, the recent Corindus acquisition made us a clear forerunner in precise robotic-assisted endovascular interventions.
The more precise the data and the more precisely the intervention is guided, the more effectively we can together guide cancer therapy. The integration of both leading portfolios will result in previously unseen intelligent therapy solutions. Let me be clear: this goes far beyond integration on the equipment level. We talk about comprehensive therapy offerings with cutting-edge technology, leveraging the lead in diagnosis with targeted and personalized therapies along the whole pathway of cancer treatment, powered by artificial intelligence. Together, we will create an unmatched and unique portfolio for clinical and operational excellence to advance care towards true precision oncology. This also means that state-of-the-art care will become more accessible and more affordable. We aim to build a comprehensive digital ecosystem. The applications for various aspects of care management will interlock to become one seamless gear to drive the digital transformation in oncology. Today's reality is that care is fragmented.
Clinicians are overwhelmed by increasingly large amounts of information, and patients demand more and more to be engaged in their care. In a conventional tumor board, for example, there is a lot of manual labor and coordination needed to put together all that information for sound clinical decision-making. In a comprehensive digital ecosystem, all that information will be processed with the help of artificial intelligence, making way for more effective and more efficient clinical decision-making, resulting in better clinical outcomes at lower cost. In short, we are talking about a leap in cancer care. Now let us have a look at what an all-star team this combination will form. We share the same values, particularly the passion for healthcare and the pride in innovation. The combined footprint will enable us to achieve sustainable scale synergies. The scale of two companies is impressive. Footprints of both companies in over 70 countries.
10,000 Varian employees are joining 15,000 Healthineers for a unique impact for the patient. Over four million patients per year are treated by Varian products, while Siemens Healthineers products examine 20 - 240,000 patients per hour. The combination will not only be unique for the patient but also create unique proximity to our customers. Together, we will address more clinical departments at healthcare providers, and also we will increase our joint relevance and thus strengthen our access to the C-level of healthcare providers. Our customers will directly benefit from Siemens Healthineers' unmatched global service network, reinforcing Varian's strongly growing service franchise, and both service networks will boost their digital service delivery together. Together, we are even better positioned to leverage the giant opportunities in both markets. This unmatched customer proximity provides unique revenue synergy potential. Now let's look at the innovation side.
Varian has invested $1.5 billion in innovation over the last four years. This innovation engine now joins the highest R&D intensity in the industry at Siemens Healthineers. Concretely, that means that 1,000 R&D engineers at Varian join over 9,000 R&D employees at Siemens Healthineers. A powerful number of innovators. Innovators are always close to the thought leaders in academia. The combination of the two collaboration networks will propel the joint company into the next level of collaboration, generating valuable clinical relevance for both the top healthcare providers as well as for all our customers. With a joint innovation power, shared values, a combined scale, and a unique customer proximity, we are making a giant leap in impact. With this, I hand over to Jochen.
Thanks, Bernd. This is really an exciting day for all of us at Siemens Healthineers. After Bernd has taken you in detail through the strategic rationale and strategic fit of this transaction, I have the pleasure to discuss the financial implications and the technical side of the transaction on the following two charts. Following that, I will take you through our Q3 results. Since Bernd finished with the synergistic characteristic of this transaction, I will pick this up and present you the financial aspect of synergy. As described by Bernd, Varian is a market leader in a fast-growing market and has outgrown this market consecutively. The 2017 to 2019 revenue CAGR of 11% is good evidence of this.
Although we are set to grow more than 5% on a standalone basis, at least in a normal environment, excluding the distortions caused by COVID-19, adding Varian to our company will enhance our growth profile from day one after closing. Currently, analyst consensus for Varian sees a 6.7% revenue CAGR for the years 2019 - 2022. As a reference for us, Siemens Healthineers, the expectations are slightly shy of 5% in the same period. More interesting for you will likely be our expectations in terms of cost and revenue synergies. We have summarized these in the right chart. For obvious reasons, the cost synergies will come through more quickly than the revenue synergies. We expect there will be cost savings, especially as Varian will benefit from our larger organization.
These are expected to be, for example, based on integration considerations in back-office sales processes, in headquarter regional functions, and obviously also in procurement, as well as savings due to the delisting of Varian. Combining the customer service organization is also expected to add to this. Here we expect most of the ramp-up to happen in the years 2021 - 2023. On the revenue side, the ramp-up is further out, but we expect the contribution to be the more important one. Bernd has given you a nice overview of the upside we expect in terms of joint innovation. This is obviously the most important element. However, we, for example, also expect synergies from cross-selling in our respective customer base. Varian will win additional customers, and so do we.
All in all, we expect to see an EBIT upside from cost and revenue synergies of more than $ 300 million by 2025, obviously at a higher revenue growth profile than before. On the following chart, I will run you through the transaction summary from the relevant financial and technical elements. We aim to acquire 100% of Varian's common shares outstanding at a price of $177.5 per share, which implies a purchase price of $16.4 billion. Varian is currently carrying a net cash position on the balance sheet. We are aiming to pay with 100% cash consideration, and the transaction is fully supported by the Varian board. I've just spoken about the mid- to longer -term synergy potential of the deal. However, also in the shorter term, we expect it to be accretive.
Already in the first 12 months after closing, we expect the transaction to be adjusted EPS accretive. This is obviously before PPA effects and related M&A costs. Beyond that time horizon, we expect the aforementioned described cost and revenue synergies to be a further important source of accretion to the top and bottom lines. For the financing of the transaction, we have the full support of our majority shareholder, Siemens AG. That means we have a fully committed bridge facility in place, which is envisioned to be replaced by the following financing structure. Firstly, new equity is to be issued by Siemens Healthineers AG, significantly increasing free float and trading liquidity. The new equity could account for up to 50% of the financing structure. Secondly, new debt, which will be issued at Siemens AG level and passed through to us at arm's length.
As I will show you in the Q3 presentation, we are currently well-positioned with a very healthy balance sheet. The leverage we expect to carry at closing, incorporating also the healthy balance sheet of Varian, should leave us in the realm of an investment-grade rating. We expect to deleverage quickly on the back of the combination of two highly cash-generative businesses. We are committed to retain our solid investment-grade-like metrics in line with our commitment from the IPO. Before I close this part of today's presentation, let me give you a brief summary of the timeline that is lying ahead of us. We have the customary closing condition, which consists of the receipt of, firstly, the approval of Varian shareholders, and secondly, the relevant regulatory approvals.
If all goes as we are currently expecting, we foresee completion and closing of the transaction in the first half of the calendar year 2021. Now let us change gears and have a look at our operational performance in Q3. As expected, Q3 was significantly impacted by COVID-19 and characterized by worldwide lockdowns and uncertainty on the economic outlook. However, towards the end of the quarter, we could also observe softened government restrictions, especially in Europe, and an increasing ability of healthcare systems to resume a more normal course of business. Nevertheless, comparable revenue this quarter declined by 6.9%, a resilient performance despite the COVID-19 pandemic. Our Diagnostics segment saw 15.9% decline of comparable revenue due to the significant reduced testing of routine care, and only limited upside from COVID-19 test volume. I come to that in a minute.
Our imaging and RadOnc therapy segments saw a less dramatic picture, declining by 3.3 and 1.8 respectively. An important stabilizing factor here was our service business, which continued to grow. The equipment book-to-bill with 0.94 was on the same level as in Q2. The overall equipment order book has only slightly decreased and still stands at about EUR 7 billion. The adjusted EBIT margin went down by 120 basis points, a rather muted margin contraction given the revenue decline. This is thanks to stringent cost management impacting discretionary spending but also variable compensation. On the back of the reduced margin and especially the decline in revenues, the adjusted basic earnings per share declined 21% year-over-year to EUR 0.30. Free cash flow was up 48% year-over-year due to a solid accounts receivable conversion, tight spending regimes, and, despite relatively high inventory levels, preparing for the seasonally strong Q4.
With regard to the full -year expectation, after withdrawing the outlook with the Q2 reporting, we have reintroduced guidance for the full fiscal year 2020. We expect broadly flattish comparable revenue growth and an adjusted EPS between EUR 1.54 - EUR 1.62. The spread of SARS, COVID-19 virus affected countries at different points in time around the world and shock-froze economic activity in many parts. It has also impacted the activity in the healthcare systems severely in the initial phase. During the initial outbreak, healthcare providers concentrated on COVID-19 patient care while restricting non-necessary tasks, for example, elective surgeries and testing to an absolute minimum. The two sets of statistic data from our business reflect this initial impact very clearly. Minimized non-COVID-19 healthcare activities for patients are reflected in a decreasing number of tests and imaging exams.
The graphs on this chart also clearly illustrate how the number of new COVID cases was inversely correlated with our testing for routine care volumes and exams taken. Especially in the example of China, the activity reduction is most pronounced. We recorded a drop in testing volumes of roughly 70% in late January, this rapidly increasing COVID-19 cases, followed by a trough in February. The drop in MRI exams was not to the same extent, but still roughly 60% in March. The strict implementation of lockdown measures in China was a factor behind the harsh development, and so was the healthcare system itself, in which basically everything happened in central hospital settings. However, the government intervention obviously quickly drove down the number of new COVID-19 cases, and consequently, the number of tests and exams bounced back almost to pre-COVID-19 numbers.
For the U.S. and Canada, the picture is somewhat similar, although the drop was not as extreme as in China, with testing volumes and MRI exams both down by approximately 40%. The difference in the China picture is also that we see a recovery of the activity from the initial shock, despite the fact that the pandemic is still in an acute state. This is probably also a reason for the slower recovery and continued uncertainty, which weighs temporarily on CapEx decision-making. Still, we are now back to approximately 90% of pre-COVID-19 levels. This brings me to my next slide, where we look into the development of the different regions in Q3 and beyond. When we look at our three regions, we can see a very diverse development depending on the state of the COVID-19 pandemic and the response of the countries to the crisis.
Throughout the quarter, we could observe the crisis has created high uncertainty for our customers in certain areas, with postponed investment decisions and temporarily lower testing and exam volumes. We can see that countries like China and Germany that made good progress on fighting COVID-19 early on are turning back to growth, while the U.S., which is still in a very acute phase, has been significantly adversely impacted. Having said that, as shown already in the previous slide, testing and exam volumes have recovered close to a pre-COVID-19 level, which gives us comfort that the worst could be behind us. If we look a bit more detailed into the regions, we can see that in the Americas, the pandemic is still acute and that the uncertainty about future developments materially affected investment decisions by healthcare providers holding back equipment order intake in Q3.
On the revenue side, we also see the decline in diagnostics on the back of lower testing for routine care and lower equipment revenues, while service revenues remained flat, once again reflecting the resilient nature of our recurring service revenue. In EMEA, we noticed overall improving market conditions already in Q3, although varying between countries. Overall equipment and service revenues held up well, posting slight revenue growth while diagnostics had a steep revenue decline. Equipment order momentum was encouraging in Q3, supporting our view of improving market conditions. Asia and Australia showed strong differences among the countries, with equipment revenue growth declining compared to Q2, while service revenues turned positive, reaching almost pre-COVID-19 levels. We saw diagnostic reagent revenues showing signs of recovery.
In China, where lockdown measures were diligently implemented, we already see positive signs of recovery with a strong sequential improvement of order intake compared to Q2. Let us now have a look at the top line. Revenue growth in Q3 has been materially impacted by COVID-19 with a 6.9% comparable revenue decline. Imaging and advanced therapies showed an overall resilient performance on the back of the strong order backlogs and a largely stable service business. DX, on the other hand, has seen the full impact from lower reagent revenues due to reduced testing for routine care volumes. Regionally, we saw the biggest drop in America. EMEA and APAC have seen varying performance between countries from declines in the teens and flattish development in China.
Now, as always, some additional color on the order development. Total orders declined by 15.5% comparable in Q3, with all three segments impacted by COVID-19, with postponed installations affecting imaging and advanced therapies. Diagnostics has seen headwinds from lower testing for routine care volumes. In terms of equipment orders for imaging and advanced therapies, we achieved an equipment book-to-bill ratio of 0.94 on the same level as in Q2, with equipment order intake declining around 20% in Q2 due to the aforementioned challenging circumstances in some of our key markets. While it's positive to see that our book-to-bill ratio remains close to one, it's fair to highlight that there are two sides of the same coin. On the one side, the ratio still being close to one shows that our business is not facing a sharp decline and reflects our overall resilience.
On the other side, the ratio below one is also a precursor for the following quarters, that business in equipment may remain slower. As we highlighted before, we expect this to be true and orders to improve over the course of the year on the back of the normalization of activity at our customers'. In terms of regional development, the picture is very diverse. EMEA posted positive order intake growth again. APAC is very diverse, but in China we have already seen a nice rebound. America was the most challenging with a very significant order intake decline. With - 120 basis points, group margin held up rather well, supported by imaging and advanced therapies due to stringent cost management and positive mix effects in imaging. Foreign exchange also posted a slight headwind to the year-over-year margin development. Stringent cost management means less discretionary spend, like travel and marketing spend, for example.
The adjusted basic earnings per share in Q3 declined by 21% year-over-year due to the decline in revenues and reduced margins. The relatively high tax rate, which compared to a relatively low one in the prior -year quarter, contributed negatively. Just as a reminder, fiscal year guidance on tax remains unchanged with the 27%-30%. Let's have a quick look at the financing line. Financial expenses net went down year-over-year due to lower interest expenses resulting from the debt restructuring program last year. Our tax rate of 33% this quarter was temporarily higher due to an unfortunate geographical mix, especially compared to our previous year's very low tax rate of 24%, which was benefited by a positive one-time effect. The Q3 2019 tax rate was unusually lower due to the positive one-time effect from the debt restructuring program.
This adds up to an adjusted earnings per share of EUR 0.30. Let us now have a look at the segment performance. Looking at the segments, we see that imaging and advanced therapies posted only slight revenue declines despite the COVID-19 pandemic, which shows the resilience of the respective business model. However, in diagnostics, we can see that COVID-19 heavily impacted the performance due to lower testing for routine care activities, which is just a reminder driven by the crisis in the healthcare system due to the pandemic. In a crisis of a different nature, the revenues in diagnostics would be obviously much more resilient. Imaging saw a muted comparable revenue decline of 3.3% with varying performance across the modalities and countries. The Computed Tomography business stood out with good growth this quarter from our efforts to support the diagnosis of COVID-19, the CT, and the corresponding demand.
The other modalities posted revenue declines. Regionally, we saw EMEA and China hold up well, yet America was severely impacted by the pandemic, posting negative growth. On the margin side, we saw a healthy 210 basis points margin improvement despite the impact from COVID-19 due to the aforementioned stringent cost management, the lower discretionary spend, and performance-related remuneration driving down our SG&A expenses, but also a positive product mix with strong performance in our high-margin CT business. These effects overcompensated for the negative conversion impact from declining revenue. To diagnostics. As expected, diagnostics was the segment in Q3 where the pandemic impacted the P&L most directly. Here, we have seen support from reduced costs, which was, however, not sufficient to make a more visible impact in light of the dramatic volume decline.
Plummeting testing for routine care activities due to COVID-19 throughout the quarter had a severe impact in all regions, which was only slightly compensated by COVID-19-related revenues. Consequently, diagnostics posted declining revenues of 15.9%, driven by declining reagent sales, which represent 90% of our DX business. As the reagent sales usually carry the gross margin in that business, a drop in reagent sales also means a drop through to the bottom line to a very large degree. Consequently, the declining reagent sales drove margins down in Q3 to a negative territory with a negative margin of 3.6%. In addition, foreign exchange was unfavorable, with more than 100 basis points in the current quarter. Let me make one thing clear at this point. The contribution of serology testing volumes is still very low, and this is not a function of the ramp-up.
As long as the clinical use of these tests remains unclear, we expect demand to remain muted and to stay far below our production capacity potential for these kinds of tests. Now to Advanced Therapy. In Advanced Therapy, we saw a slight comparable revenue decline in Q3 of 1.8%, despite the severe headwinds from COVID-19 impacting equipment installation. As a reminder, AT is heavily exposed, as there are no parts of the portfolio directly benefiting from higher demand of the pandemic like CT and imaging. This quarter we continued to benefit from our strong order backlog. On the margin side, we saw a slight decline of 70 basis points year-over-year, excluding the margin headwind from the Corindus integration, the adjusted EBIT margin increased significantly year-over-year. Remember, we guided for a 300 basis point margin dilution due to Corindus.
The performance was supported by stringent cost management as well as a slightly positive currency effect and also nice contributions from our new platform, icono. With that, I move on to the next topic, which always has been important but may get a bit more interest in a crisis: our financial framework sheet, starting with cash. Our pre-tax free cash flow in the first nine months increased by 35% year-over-year to more than EUR 1 billion. This translates into a conversion rate from EBIT into cash of 0.75. We were able to achieve this nice level despite increased inventory levels, preparing for the seasonally higher volumes in Q4. Despite the crisis, we did not see customer default above and beyond normal levels in this quarter. Our leverage as of June 30th was 2.1 x net debt over 12 months' rolling EBITDA, well within the solid investment -grade territory.
The increase versus prior year Q3 was mainly driven by the two acquisitions, Corindus and ECG Management Consultants, and by the raised dividend payout versus the prior year. Furthermore, we also had an effect from IFRS 16 on our debt, which increased our net debt by roughly EUR 400 million in fiscal year 2020. Within our debt, there's roughly EUR 5 billion of loan volume with a balanced maturity profile, with loans maturing between 2021 and 2046. As I mentioned earlier, with our strong financial framework, we have the flexibility to be an active player with bold and more transformational acquisitions like today's announcement and still remain in the realm of an investment-grade rating. Let me now move to our outlook for the rest of the year. As you may remember, we withdrew our outlook with the Q2 reporting in light of COVID-19 uncertainty.
While the pandemic is far from over, we have gained more insight into the resilience of the healthcare system. This has given us ground to articulate guidance for the full fiscal year. It still underlies higher uncertainty, obviously, and as you can read in the text on the right side of the chart, it is based on certain assumptions for our operating environment. On the left hand, we have again depicted a scribble showing you the quarterly growth dynamics of equipment, service, and reagents for the group. It shows our expectations of an overall improvement in growth from the depressed levels in Q3.
The overall improvement comes from an expected improvement in the business environment for our diagnostic business in Q4, especially with regard to testing for routine care, a continued stable performance of service, and a mix of a challenging environment and protection from the order book in terms of equipment revenues. For the full year, we now expect comparable growth to be broadly flat. For adjusted EPS, this means a reduction compared to 2019 levels. We expect to come in somewhere in the range between EUR 1.54 and EUR 1.62 per share, which to my understanding is very much in line with the current consensus expectation. Before I hand over to Bernd for some final conclusions, a few general remarks from my side. We are still in the middle of the pandemic in major parts of the world and in key markets for us, such as the U.S.
There is no sign of relaxation or slowdown in terms of the number of new infections. However, we have seen signs of normalization in some regions, such as Europe or China. Still, this remains a vulnerable state, as the focused lockdowns in China show. On the other hand, countries are more and more learning how to optimally manage a world with the virus, which makes me optimistic that a potential wave of new infection in the northern winter will not be as much of a shock for the healthcare systems as we had it in March to May. What also makes me optimistic is the recovery in testing and scanning volumes, even in markets like the U.S., where the pandemic is still in an acute phase. It means that healthcare systems can learn to adapt to manage the crisis. It also means that elective procedures should increasingly come back.
It proves the resilience of our business model. This also confirms our view with regard to the longer term. Our fundamental growth drivers remain intact, while we are, of course, prepared to continue to outgrow the equipment market also in the recovery phase. Now, back to Bernd for some important final remarks.
Okay. Thank you, Jochen. The resilience Q3 performance is the result of an outstanding effort of our team. These have been extremely challenging times and months for us. I'm more than proud of the incredible effort the team has made. What has Healthineers achieved? We always stood by our customers. We have seen no supply chain interruption. In record time, we have provided a significant capacity increase for pandemic-relevant products. Multiple SARS-CoV-2 tests have been developed rapidly. We have changed the way we work in unparalleled speed. Before we open up for Q&A, let me just briefly wrap up. We posted results showing resilience in challenging times. Resilience while facing a global crisis with historic dimensions that impacts healthcare systems around the globe and each and every one of us. The past weeks confirmed our view that trough is behind us.
We have seen testing and exam volumes recovering. This encouraging development made us confident that the situation is improving, and this is also reflected in our new guidance for fiscal year 2020. Last but not least, we will be coming out of this crisis even stronger with the acquisition of Varian. Together, we are building a combined company that is key to healthcare on a global scale, no matter whether it is treating COVID-19 or cancer patients. To conclude, despite facing a global crisis, we have shown that our business is resilient, our products play a vital role in fighting the global crisis, and with today's announcements, we are set to build an even stronger company to shape the future of healthcare. Well, with that, I would like to open up for Q&A.
[inaudible]
Thank you, gentlemen. We will start today's question -and-answer session, where we would like to ask you to limit yourself to two questions. If you would wish to ask a question, please press the star or access key, followed by the digit one on your telephone keypad. Again, ladies and gentlemen, please press star one on your telephone keypad. Our first question will come from Patrick Wood, Bank of America.
Perfect. Thank you very much for taking my questions. Of course, I have two, please. The first would be on the sales synergies. I know you gave them at an EBIT level, but grossing them up to a rough idea of where they might be at sales, it looks like a relatively large number. Is that because you really see a lot of opportunity, not just in synergies on the Varian side, but also on the imaging side? Maybe a little bit more color on the practicalities of how you think you can deliver the sales synergies would be helpful for one. On the second side, looking at the business overall and the rationale, you put quite a large focus on software and data management and that side of things.
Obviously, in the past, you guys have talked about being strong engineers and that side of things. Do you see an engineering component within Siemens Healthineers as part of the rationale of the tie-up with Varian that you could do something with there on that side of things? Thanks.
Okay. Thanks, Patrick. I hope I got the second question right. Number one, sales synergies. Basically, one component is sales synergies coming from new innovative topics we develop together. Which is, on the one hand, better integrated imaging and therapy delivery. On the other hand, the digital solutions that we are going to develop. There is one topic : to innovate in a way the separate companies couldn't before. The other topic is more the classic way of, quote, unquote, cross-selling, plus new and broader partnership solutions we can enter simply by addressing customers more holistically. Can you rephrase question number two? Maybe you rephrase it again.
Of course. The slides seem to focus on the connection between the two businesses on a software and data management side. You guys have, in the past, talked about wanting to acquire businesses where you can apply your engineering expertise. Is there an opportunity within Varian for you to apply what you know from the engineering side within imaging into the Radiation Oncology business?
Yeah. Engineering. We have a very strong software and digital arm. How many software developers do we have? About 5,000 maybe. I do advertising. There is a video on LinkedIn, which I really recently did, about how we use AI and so on. There are also, in anticipation, some radiation therapy examples in there. Where you see how you, for example, can use AI or how we currently already use AI for segmenting the organs of a patient so that automatically the right therapy plan can be done. Also how we use AI to predict the outcome of certain therapy paradigms. Varian works on very similar topics. Addressing the delivery of the therapy and the planning of the therapy together by using both our strengths in AI, and data management is one of the key topics.
We are also very impressed by what Varian has done with the step, for example, of the CTSI acquisition, where they went into the Oncology-as-a-Service delivery model, and so on. I see a lot of strength in the combination of all the innovative ideas. We are currently Let's say there has always been a little bit of a barrier. Now by combining the two, I see lots of potential for making this a seamless offering.
And maybe one—
T hank you for taking my questions.
Yeah. Maybe one comment on this. I think obviously, Varian, as part of Siemens Healthineers, can also leverage the full potential of whatever you wanted to rephrase, hardware engineering capabilities.
Yeah.
This is not modeled to be significant.
Yes. Of course, there's also a scale topic. Simply because, when it comes to components, and so on, and our production footprint, purchasing and so on, there is also a cost side. Because it is a difference here whether you have such a network for type one systems or for a broad variety. There are patient tables, and so on, where there are economies of scale, yeah.
Understood. Thank you for taking my questions.
No, thank you, Patrick.
Next, we'll go to Scott Bardo, Berenberg.
Yeah. Thanks very much for taking my questions, and congratulations on the deal announcement today. Two questions, please. First question really relates to why radiotherapy? Siemens Healthineers, I think, or Siemens before, was involved in radiotherapy, but you exited the business, not quite going to your aspirations. Why is it different this time, and why are you confident now that this is the right market to be in? Second question, please, would be why Varian? I think that there is a European radiotherapy company that is perhaps a little bit closer to home, a little bit cheaper, arguably, and maybe a little bit more advanced with image-guided radiotherapy. What was it about Varian, in particular, that appealed versus its competitor? Thank you.
Okay. Thank you, Scott. Why radiotherapy? First of all, I think I would rephrase the question, why cancer? Because Varian has impressively developed into a cancer care company and goes beyond radiotherapy. Yes, we have been in radiotherapy, and we exited, not because we didn't like the market but because we got outperformed by someone, and that is Varian, to be honest. That is not only, I think , a misunderstanding just because of equipment, but also because of a super strong combination of the equipment, the software solutions that you need, the treatment planning system, the oncology information system, and an incredibly detailed understanding of the business and the workflow of radiation oncology. That is where they go now, in oncology as a whole. That is also why we are super convinced of Varian and chose that path.
I also believe that when it comes to fit, it's not so much a question of geography, but it is a question of mindset and cultural fit. We have worked with Varian for years. I have the highest respect for Dow Wilson, Chris Toth, and Kolleen Kennedy, whom we work with. The fit of a purpose-driven company, of a company that values innovation, which is based on the heritage of strong founders, a 70-year-old history. It is a very good fit also on the cultural side. That was my answer.
Very good.
Scott.
Yeah, thank you very much. Maybe then I can quickly sneak in a quick follow-up. Jochen, you mentioned maintaining an investment-grade rating. Can you remind us or give us some bandwidth of what leverage that implies for the company?
I mean, this is a good question, yeah. You get different answers to this, yeah, depending on whom you talk to, yeah. It's because there are variables in there. First of all, the rating KPI is different between the two major rating agencies. Secondly, it's also a question of what kind of credit you get from them, how quickly you can, let's say, how profitable you are, how resilient you are, how quickly you can, so to say, delever, and things like this, yeah. Therefore, I would say it is definitely between the three or four net debt to EBITDA ratios, easily at the upper end. Yeah.
Very good.
It's really an iteration with a lot of variables.
Thanks, guys. Congratulations again.
Thanks.
Thanks.
We'll next go to Veronika Dubajova, Goldman Sachs.
Good afternoon and congratulations. Thanks for taking my questions. I have one technical and one bigger picture, please. Technical, Jochen, can you just comment on what your assumptions are for the cost of the debt that you'll end up with in the end and the tax rate of the combined entity, what it is, or it should be good to understand how you're thinking about that? My bigger picture question: I just want to circle back on the revenue synergy commentary. One, because I know that the two companies have collaborated before and have done cross-selling before. I just was hoping, Bernd, you could clarify your comment a bit on the two buckets of sales synergies, better innovation and a more holistic customer approach. Is the innovation the more important part of the revenue synergies that you see?
Presumably in that case, it's accruing primarily to the Varian business. Is in your mind the more holistic customer approach the bigger opportunity, in which case it would help both of the businesses? Just if you can give us a little bit of a sense for how you're thinking about that. Thank you.
Veronika, before I start, I understood the cost of the debt capital was a question. The second one was, I couldn't hear you in this. What was the second part of your question?
The tax rate for the combined entity, given the two different rates between you and Varian.
Okay, good. First of all, on the cost of debt, I mean, here we also have a lot of variables still open. I mean, we have not decided yet in which currency we will raise the cash, or ultimately we would need it in US dollars to pay for the purchase price. On the other hand, we need to see where we get the better terms for us, yeah. Overall, this will have an impact, yeah. We have not defined the maturity levels fully. We have certain assumptions built. I would still expect, and this gives you maybe a certain glimpse, that we do this debt take -out via Siemens. Siemens has a strong A-plus rating, yeah.
We receive it then, or they hand the debt in the same structure over to us with a slight uptick in basis points due to the fact that our rating might be slightly below Siemens, yeah. The fees are really, really minor. Therefore, I expect to have a very, very attractive balance of interest rate and maturity profile and currency profile. On the tax rate, I think this is a more tricky thing. As you know, Varian is a public listed company. We've done due diligence, yeah, but it was on a limited basis, as this is customary in this kind of a deal. I think it's a bit too early to talk about this. I would expect, generally speaking, it will not be above the current levels of Siemens Healthineers, yeah.
Now we have the bigger picture question. Revenue synergy. There are multiple buckets. One bucket is developing and co-innovating things that were not possible before. It is a better and more intelligent combination of imaging and therapy delivery. There is, I mean, always wide speculation of all kinds of combination devices and so on and so on. In the end, it is about having the toolkit available to do so. It can be from having CT scanners, which automatically generate a treatment plan to better onboard imaging. When Dow and I started discussing this deal, I basically almost, I'm not even joking, almost seriously said, Hey, Dow, if the size ratios were different. Or the opposite. You should buy us, because we have exactly what you need for your vision. All the capabilities in terms of making treatment delivery more precise.
This is one topic: co-innovating on the equipment side and bringing things together on the one hand by making things talk to each other better. Second topic is the digital solutions that go across a new software offering. Come the more, and these are the longer-term topics, but they are, in the long run from an NPV point of view, the more important ones. In the shorter term, there is more of a cross-selling topic. I mean, we both have high market shares. From that point of view, it is also clear that you cannot create miracles by this. There are still opportunities. There are sometimes our sales network is simply, let's say, deeper. We don't need intermediaries as often as Varian does, simply because of our scale.
One of the key topics is that, and that's why we speak as one step, two leaps, and the second leap is the leap in impact. With Varian, in addition, partnerships like the one we talk about, like the MUSC partnership, of long-term, so-called value partnerships will be even more relevant. Now we can even address the entire cancer care work a large institution is doing. I hope that gives some light. These other revenue synergies they were speaking of earlier. The bigger ones will be the ones that are about co-innovating and creating categories of products and digital solutions that basically are not there yet because no company could build them.
There's maybe one additional aspect. It is on the service side, and we are the broader company. Our service network is just broader, so we are more direct, as Bernd said, in more countries in the world, and we also do not use service providers in most of the countries, but we do it on our own, and that is also part of the synergy assessment that we could take over the service, which is currently with partners. It's not an easy topic, but yeah.
That's great. Can I just quickly follow up, Jochen, on your answer on the tax rate? Any chance that the tax rate can come down? You said it wouldn't be higher than Siemens, which obviously would seem apparent given the Varian tax rate. Just curious if you can use Varian to bring down your own tax rate.
I guess so, yeah—
Okay
...be prudent to give good guidance on this now. We need to—
Okay
...more due diligence on this. I would not feel confident doing this now.
Understood. Thank you both very much.
Thank you.
We will now go to Lisa Clive Bernstein.
Hi there. Two questions. If we just look at the longer-term outlook for Varian, what might keep you awake at night with this new division? What do you think could be the biggest disruptor to radiotherapy over the long term? Just a question on the timing of the transaction. Given what's going on with COVID-19 and the focus of a lot of Varian's business on emerging markets, what is the potential for there to be a bit of a downward impact on low- and mid-income countries' healthcare spending and prioritizing cancer care?
I can get started. I start with the second part of the question. I think if you look at the revenue distribution by region of Varian, you see that their share in developing markets is lower than ours. It's around, many of you say, or in Asia-Pacific as a precursor for it; it's around 20% at very high market share. That means they are also the strongest company also in emerging markets. Our strong belief is that cancer is, and will also become, unfortunately, a more and more dominating disease also in developing countries an therefore will generate a lot of growth potential also for Varian in those regions. Bernd? The structure.
Yeah, maybe a step back. When you look at cancer care, there's one statement that physicians often make: cancer care is a team sport. It is almost never just the one category of treatments that I showed. Typically, people speak about four ways of how cancer can be treated. The radiation therapy, chemotherapy, surgery, and interventional oncology. It is almost always a combination. Radiation therapy will always play a role. It has a long way to go. In addition, this is about cancer care in total, in which Varian also goes. The software solutions go beyond radiation therapy even. There's still a lot of innovation potential in radiation therapy itself in the core. Radiation therapy even has the potential to disrupt other fields itself. Radiation therapy has promising first applications for treating arrhythmia.
It can go in other directions. Now, from that point of view, I'm very confident that this is the right path and that radiation therapy is here to stay. It's not even here to stay, but it's here to grow and to get further innovated. We also have the platform to go beyond and to steer the team that cancer care is about.
Great. Thanks. Just one follow-up on the transaction technicals. Why did you not structure this as a cash and share deal instead of doing it all cash and then financing the shares on the back end?
It's a good question. We feel comfortable with that structure. I think this was also, I think, a good building block for getting the deal done. Because it creates a lot of certainty also on the seller side. Therefore, I think these were the two main reasons for it, so.
Okay, thank you.
We'll next go to David Adlington, J.P. Morgan.
Hey, guys. Thanks for the questions. Two, really please, just on the why now? question, there's obviously some reimbursement uncertainty in the U.S. It would be good just to get your views in terms of how you see that reimbursement changes in the U.S. sort of playing out for the market. Secondly, a technical one again. Just wondered if there were any break fees associated with the transaction. Thanks.
Okay, David, thank you so for the question. The why now? we have been working with Varian for a very long time. We looked into a closer way of collaborating for more than three years. Even prior to the IPO. The why now is simply because now I think it is also the moment where it's really in the interest of both companies to join forces. Regarding the reimbursement discussion, I think this is probably the topic Dow spends 10%-20% of his time on in all his analyst calls, like we are discussing PAMA in diagnostics and so on. Cancer is here. Well, it's not here to stay, but cancer care is here to stay. It's a global topic. Every reimbursement pressure also has the side effect of triggering the need for more innovative solutions, for higher productivity, and so on.
I'm convinced that here Varian is very well-positioned to turn the existing, let's say, productivity pressure in the system into an opportunity.
With regard to break fees and reverse break fees, I can tell you we had a lot of discussion amongst the two of us about deal certainty. Deal certainty is important, obviously, for the seller as well as for the buyer. Therefore, there are certain break fees and certain reverse break fees built into the contract to make sure that all the contracts entail, so to say, the spirit under which the negotiations took place. Secondly, if you look at regulatory things, the environment, for example, and antitrust, this is a very complementary portfolio. Therefore, we feel very protected against a significant antitrust obligation.
Maybe as a comment, since in the end, the details will not be a secret, I assume. On the deal, certainly, we definitely valued and appreciated that this is an iconic company that has created a still very strong position. We also wanted to make sure when we looked at when we talked about the reverse break deal that it's clear that this is a period of special uncertainty when it comes to COVID. We wanted to also be sure that this is not seen as an opportunistic move where we say, Hey, let's look. We gave a little bit of a bonus for that. Because we are 100% committed to this being the right deal for us. We also wanted to give the Varian team that clarity.
Thanks. Are you able to quantify those fees at all by any chance?
I'm not sure. We had an acoustical problem.
Could you repeat your comment, David?
Are you able to quantify the amount?
Yeah. The details on the merger agreement will be available once the merger agreement is filed. It's not a secret yet. It's basically, let's say, look at it as normal market conditions for such a transaction, including a what I would call COVID bonus to really make sure that the Varian board is comfortable with this to do such a transaction in this special time.
Okay. All right, thanks very much.
We'll next go to Alex Gibson, Morgan Stanley.
Great. Thanks for taking the question, and congrats on the deal and getting back into RadOnc. I have two, one on the deal and one on the cost synergies. How much of the guided cost synergies are related to sales force and service team consolidation or synergies that you can drive there? Is that an area of upside in the forecast period to 2025 or would those be longer-term cost synergies? That's my first question.
S hould I start? On the cost synergy side, as I said during my speech, I envision them reaching a run rate at the end of 2023. Therefore, I believe they are more on the earlier side of this time frame, generally speaking. As you know, you see the scribble on that page. The larger portion of synergies or the profit consequences of synergies comes from revenue synergies. Because this is not a consolidation game. It's a combination of two companies to further advance cancer care in this regard.
It's important. Because when it comes to cost synergies, they are topics that are more what we call back office related. When it comes to frontline sales and service, this is not where we see the synergies. In the end, what you need in addressing a growing or one of these bigger customers is you need people who are super good at addressing a department level, at addressing a specialty, be it radiology, be it oncology, or be it cardiology. You need people who address the C-level and the customer in its entirety. What it brings is that now we can orchestrate the teamwork better. We will not make the mistake of trying to have cardiology experts trying to sell radiation oncology.
On the other hand, when you look at back-office functions and so on, we definitely see scale synergies when it comes to the backbone we have. Looking from spare parts delivery to whatever is accounting for cash collection. There are, of course, a lot of synergies. Coming to the core topics of what makes a company like Varian strong: a wonderful sales team, product specialists, and passionate service guys. R&D people knowing exactly what this market is about. This is not where we see the synergy. That is why, yes, we have cost synergies and scale synergies, but the bigger portion is on the revenue side.
That's very helpful. On the second question. Yes, sorry. The second question that I had was actually more on the Q3 result. You mentioned you were encouraged by the order intake. Do you believe the order intake and the organic imaging growth have troughed at these levels? What are you looking out for to indicate budgets are not being cut by hospitals? Then just an add-on on that, I didn't catch it. sorry about that. What was the order intake comparable growth for the quarter?
What we said was - 15.5%, and we were encouraged on order development in Europe. That's what I was going to say, not overall, because the U.S. was still, particularly the U.S., very weak in certain areas. In Asia, we're also relatively weak. China was strong, Europe was strong. These are the regions where the pandemic is today, I would say, best under control. That's where I would say the optimism comes from. What we also said is that if you look at the machine data we presented, we see even in areas like the U.S., that the elective procedures are coming significantly back and that obviously the healthcare systems are able to adapt to the specific situation of the pandemic, which should then lead relatively directly within diagnostics into higher revenues. That is almost a one-to-one correlation, a positive correlation.
This also brings back, in particular in the U.S. market, in the private system, also the revenue streams into play. For those elective procedures, which would then also lead over time back to, I would say, more certainty for investment decisions. That was the story.
Moderator, we can take two more questions from the next two questioners, so they can ask one question each.
Certainly, we'll go to Wasi Rizvi, RBC Capital Markets. Wasi, your line is open. Please go ahead.
Oh, hi. Yeah, thanks for taking my questions. You've outlined a broad ambition that sounds like you want to make Varian, the Siemens brand , the cancer care company. I guess it's a bit early, given you don't complete the transaction until next year. To complete that vision, does this become an area where you focus your bolts on M&A over the next two years as well to kind of complete it, to make it the cancer care company? How does it tie into your imaging and AP product development, whether that's putting MR into linear accelerators or the products you have in interventional oncology? The second one was a very short procedural one on the transaction. Do you expect to have to file for CFIUS on this, and should that be straightforward?
Your cancer care question. Cancer is an extremely important, unique, and focused area for our customers. We will be a unique company when it comes to fighting cancer. We are also a unique company in total with the overall portfolio from addressing all major diseases, whether they're cardiovascular or neurological disorders. Maybe as a repetition, we have chosen the tagline One Step, Two Leaps for the transaction. One leap is it enables Varian, or it enables us together to be unique in dealing with cancer. That's leap number one. Leap number two is that we, in our entirety, become even more relevant and more impactful as an organization. All major chronic diseases, whether they're cancer, cardiovascular, or neurological disorders, we can address with the portfolio we have.
You can look at us as having two super strong diagnosis-related businesses or segments, imaging and lab diagnostics. There is the advanced therapy, which is more focused around cardiovascular and neural issues. There is now Varian with the focus on oncology. When you look at our investment priorities, I go back to what we said at the IPO. There are the five areas, the five trends we are focusing on. Varian is a perfect match in this. Corindus was also a very good match and is primarily not an oncology company, but it is more targeted to cardiac and neural.
With regard to your CFIUS question, we have not finalized our assessments fully if we need to file for CFIUS or if we do not need to file for CFIUS, or if we want to voluntarily file for CFIUS to be on the safe side. As I said beforehand, one of the overarching themes of the transaction was deal certainty. You can be rest assured that we will look into this, and we looked into this very carefully, and we feel well-prepared for this.
Hey, go ahead
Got it. Thank you.
Okay. Go ahead with one last question. Okay? Was it a follow-up, or what was it?
Yeah. It was a follow-up. The first question was more about whether you see lots of areas where Varian could bolt on. You could do lots of bolt-on acquisitions for Varian, or you think , actually, as an asset, it's pretty complete for what your vision is for cancer.
Yeah. Okay. My answer was more to make clear that we are a super strong cancer care company now, but we are not only a cancer care company; we are a holistic healthcare company. I want to be very clear about this one. When it comes to bolt-on acquisitions for, let's say, Varian, I think when you look at the Varian M&A strategy in the last years, that makes perfect sense. Building up an interventional oncology portfolio step by step. I'm a big believer in the Corindus Vascular Robotics transaction. There's with Noona, there's the step to building the bridge to the patient, the topic of patient-reported outcomes , managing survivors, and so on. A lot of very meaningful bolt-on steps, which Varian took, and I don't see a reason why that shouldn't go on.
Okay. Thank you.
Cheers. Okay, that brings our call to an end. Thanks for listening and dialing in so numerously. I believe at least some of you should have received an additional invitation for tomorrow morning. I'd like to see you back then as well. Thank you. Bye.
That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. A recording of this conference call will be available on the investor relations section of the Siemens Healthineers website. The website address is www.corporate.siemens-healthineers.com/investor-relations. Thank you and have a good day.