Trump says Iran war "close to over" amid hopes for more negotiations
Investing.com -- European medical technology companies face limited exposure to Middle East risks, with sales exposure ranging from 1% to 3% across the sector, energy costs accounting for 1% to 3% of cost of goods sold, and freight costs running 1% to 3% of sales, according to an RBC Capital Markets in a note dated Tuesday.
Alcon AG, Carl Zeiss Meditec AG, Coloplast A/S, ConvaTec Group PLC, Demant A/S, GN Store Nord A/S, Koninklijke Philips N.V., Siemens Healthineers AG, Smith & Nephew PLC, Sonova Holding AG and Amplifon S.p.A. were among the companies assessed in the report by analysts Jack Reynolds-Clark, Natalia Webster and Charles Weston.
RBC noted that while oil forms a component of many raw materials used by covered companies, "the cost of oil is generally a small component of the overall cost, given the multiple layers of processing, reducing the impact of oil prices on COGS."
Energy costs are largely hedged across the group. Coloplast reported energy costs of approximately 2% of COGS, described as mostly hedged for 2025/26. GN’s freight exposure, estimated at low-single-digit percentage of sales, is significantly hedged. ConvaTec’s energy costs are estimated at 2% to 3% of COGS.
Siemens Healthineers reported Middle East revenue exposure below 5% of sales, with a smaller portion from the most impacted countries, and disclosed a potential annualised adjusted EBIT impact of approximately 2 to 4 percentage points from cost inflation before mitigations if supply chain headwinds persist, though the sales mix was not disclosed.
Among individual companies, Smith & Nephew reported roughly 1.5% exposure across Middle East revenue, energy costs and freight.
Sonova’s Middle East exposure exceeds 1% of sales, including Israel, with energy costs estimated at 1% to 3% of COGS.
Carl Zeiss Meditec showed the highest Middle East revenue exposure in the group at 2% to 3% of sales, with energy costs at approximately 3% of COGS.
RBC maintained Outperform ratings on Alcon, ConvaTec and Siemens Healthineers. The bank said it expects focus on Siemens Healthineers to shift to its "attractive fundamentals following clarity around sell-down timing."
Alcon’s Middle East revenue exposure is estimated at 1% to 2% of sales, with freight at 1% to 3% of sales.
RBC said it remains cautious on Smith & Nephew, Philips, Coloplast, Carl Zeiss Meditec, Demant, GN and Amplifon, while expressing a preference for Sonova on a 12-month basis. Demant’s Middle East exposure sits at approximately 1% of sales, with energy costs estimated at approximately 1% of COGS.
The brokerage also flagged that imaging companies face helium supply constraints, though consumption after initial MRI delivery typically falls on the customer.