EU MedTech & Services: EU MedTech conference discussions support medium-term growth, with execution and product launches central to the outlook

Overview

This report summarizes management discussions with Convatec, Fresenius SE, Siemens Healthineers and Sonova at Morgan Stanley's healthcare conference. The central conclusion is that each company retains credible medium-term growth levers, but the routes differ: Convatec emphasizes launches and self-help, Fresenius combines biosimilars with Nutrition and MedTech, Siemens Healthineers relies on imaging innovation and cost mitigation, and Sonova focuses on market recovery, differentiated products and regional execution.

Core views

Morgan Stanley's conference takeaways present a broadly constructive operating picture across four European healthcare companies while retaining an In-Line industry view. Convatec's 2026 outlook remains supported by product launches, execution and further margin expansion; Fresenius sees competitive strength in Tyenne plus additional Kabi growth levers; Siemens Healthineers reports no deterioration in US hospital capital spending and expects innovation to sustain pricing; and Sonova remains confident in fiscal 2026/27 and the medium term because of market recovery, product-led share gains, improved retail execution and expansion in Asia. For Convatec, Infusion Care remains the main medium-term revenue driver. Management's expectation of double-digit annual growth is supported by 12–24 months of demand visibility. Diabetes is expected to grow at a high-single-digit rate as insulin-pump penetration rises from only about 7% of the global population that could benefit. Parkinson's infusion products are also expected to produce double-digit growth because Convatec is the exclusive infusion-set supplier for all three newly introduced therapies. The patch contract validates the technology but is not central to the medium-term target. Wound Care is expected to become Convatec's second-largest medium-term growth contributor. Growth is expected to accelerate to mid-to-high single digits in 2027 and high single digits from 2028 as ConvaFoam, ConvaFibre and ConvaVac launch. Niox is expected to begin contributing in 2028 and could become the company's largest product; its combination of antimicrobial activity and enhanced blood flow has supported a significant UK pricing premium that management hopes to replicate in the US. InnovaMatrix, by contrast, is expected to fall below 1% of group sales in 2027 and cease being a headline growth driver, although management expects an end-2026 randomized controlled trial to demonstrate improved healing outcomes and believes animal-tissue technology provides a structural cost advantage over human tissue. Convatec also expects Ostomy and Continence growth to improve from mid-single digits in 2026 to mid-to-high single digits in 2027 as Esteem Body, Cure Aqua and GC Air Set launch in 2026 and Natura Body follows in 2027. Because patient inertia makes category share changes slow, acquiring newly diagnosed or newly treated patients is important for building recurring revenue. On US competitive bidding, official CMS rules are expected in the fourth quarter of 2026, with implementation no earlier than January 2028. Management believes market consolidation to 6–10 suppliers and Convatec's leadership position could offset part of the indicated 1–2% revenue impact; pricing based on the 75th percentile of submitted bids may provide another buffer. Despite inflation exceeding the prior base case, Convatec still considers the roughly 400-basis-point second-half EBIT-margin step-up achievable because of stronger revenue, especially in Infusion Care, and because no single raw material exceeds 5% of cost of goods sold. The company is only about 60% through its manufacturing-efficiency program and continues to guide to a mid-20s EBIT margin by 2027, after which more operating leverage may be reinvested in growth. For Fresenius, the report focuses first on Tyenne's growth durability. The biosimilar has generated approximately €750 million of cumulative sales since launch, representing about a 160% compound annual growth rate. Sales are roughly two-thirds European and one-third US, with estimated shares of about 44% in EU5, 30% in the US and more than 60% in the UK. Around two-thirds of global sales are subcutaneous, and approximately 80% of contracted payer access has preferred status. Management argues Tyenne has not reached peak sales because biosimilars commonly require three to four years to mature. Recent prescription weakness is attributed to capacity constraints rather than demand: IQVIA captures only around 50–60% of the market, volumes lost after the Optum/UnitedHealth contract moved away from exclusivity shifted to the originator rather than another biosimilar, and the annualized Optum sales effect is less than $1 million. Fresenius has committed €300 million of capital expenditure over the coming years and is undertaking technology transfers to increase biosimilar capacity. Its mAbxience production base comprises two plants in Argentina and one in Spain, with further capacity expected. Beyond Tyenne, pembrolizumab is performing well in Latin America, denosumab/Bomyntra is ramping quickly, rituximab should add sales after launch, and Otulfi is supported by CivicaScript and VA agreements, with more customer wins expected. Fresenius reiterates an ambition to double Biopharma revenue by 2030, implying approximately 15% annual growth, and targets a 20% biosimilars margin by that year. The margin case rests on revenue growth and better fixed-cost absorption: the operation reached breakeven in 2024, improved in 2025 and expanded margins further in 2026. Other Fresenius growth levers broaden the case beyond biosimilars. Nutrition targets 4–7% organic growth and includes new products such as Pedismof and NutriChef, plus an entry into China's food-for-special-medical-purposes market using the Wuxi line. Nutrition is highly accretive to Kabi's structural 17–19% margin range, and a Nutrition Day near the end of 2026 is intended to provide more detail. MedTech grew about 11% in the second quarter, led by Ivenix, with more than 24,000 pumps placed. Because backlog installations aided the latest result, management expects growth to normalize toward the structural 8–10% objective. For Helios Germany, the financing framework is viewed as constructive: a 3.42% net base wage increase, a further 1.14% increase in the 2026 state base value and approximately 0.29% compensation for wage-agreement differences imply an expected 2027 DRG inflator of about 4.8%. Fresenius also retains flexibility over its FME stake after a 45-day lock-up and has refinanced its 2026 requirements and part of 2027. Siemens Healthineers reports no meaningful weakening in US hospital capital spending or broader customer engagement. In Imaging, revenue pushed into the fourth quarter while third-quarter book-to-bill was strong; averaging the weaker second and stronger third quarters produces an approximately 1.1 times transactional book-to-bill ratio, which management considers sufficient to sustain growth. The US move toward ambulatory care is supportive of helium-free MRI because it avoids conventional helium infrastructure and reduces total ownership cost. In photon-counting CT, high-end systems account for 25% of industry CT volumes while photon-counting systems represent 30% of Siemens Healthineers' CT order book, indicating share gains driven by higher precision, better image quality and lower radiation doses. GE HealthCare's entry is viewed as helpful for broader technology adoption. China represents about 10% of Siemens Healthineers group sales, including 11% of Imaging, 9% of Precision Therapy and 7% of Diagnostics. The latest centralized-procurement framework considers quality and innovation as well as price, favoring Siemens Healthineers' high-end positioning, although low-end equipment faces pricing pressure from stronger competition. Recent Chinese approval of photon-counting CT is expected to support the fourth quarter. United Imaging is regarded as a credible and innovative competitor in China but has a smaller presence outside the country. Siemens Healthineers' input-cost outlook is unchanged from fiscal third-quarter guidance despite exposure to chips and materials such as tungsten. The company targets about €400 million of cumulative mitigation savings, with less than €200 million expected in fiscal 2027 and more than €200 million in fiscal 2028. The Diagnostics carve-out remains an 18–24-month process. Shareholder meetings for Siemens Healthineers and SIEG are scheduled for February, followed by implementation from April through June; the separation is expected to create approximately €50 million of recurring annual standalone costs, while annualized interest expense after completion and refinancing is expected at €380–420 million. The new Varian system will launch at ASTRO, with orders building during 2027, and management expects pricing power while continuing to sell TrueBeam. For Sonova, management estimates first-half hearing-aid market volume growth of approximately 3.5% and value growth of about 4%, with strength in the US excluding Managed Care, Europe and Asia. It expects continued recovery and argues that well-marketed innovation can expand category demand rather than merely redistribute existing customers. With global hearing-aid penetration at only about 11%, the gap between people who could benefit and those receiving treatment provides substantial medium- to long-term headroom. Coordinated direct-to-consumer advertising by manufacturers is also expected to increase consumer awareness and store traffic. Sonova's EON receiver-in-canal product launched in the US on August 24 and shortly afterward in Europe. Early demand is broadly in line with expectations, although the launch is still at an early stage. Sonova considers the product competitive because of its smaller form factor, longer battery life, improved connectivity and wind blocking. Virto R revenue has annualized above CHF130 million and contributed approximately 100 basis points of in-the-ear share gain outside Asia over the last 12 months. Black devices constitute roughly 30–40% of orders, suggesting that the consumer-electronics-style design is attracting users. Management believes Virto R is both taking share and expanding the pool of new hearing-aid users rather than cannibalizing receiver-in-canal products. Sonova also intends to expand beyond receiver-in-canal devices through custom in-the-ear and instant-fit formats. Its regional organization should allow wholesale and retail teams to coordinate launches more effectively across owned and third-party channels. Retail acquisitions are aimed at achieving local scale in markets where Sonova remains subscale; activity has returned to prior levels, and management remains interested in larger transactions while stressing valuation and purchase-price discipline. China retail expansion is not a priority. In Asia, the first phase of building local capabilities and improving execution is already producing stronger, profitable growth. A second phase will develop products and access models specifically for Asian consumers over the next one to two years.

Analysis framework

Morgan Stanley organizes the report company by company, translating conference discussions into operating drivers, growth paths and execution milestones. It compares management commentary with product adoption, market penetration, capacity, order activity, reimbursement formulas, cost savings and margin targets, while distinguishing structural drivers from temporary effects such as backlog installations or supply constraints.

Methodology notes

• Event-Driven and Behavioral FinanceEvent-driven analysis

  Conference-driven management readout

  The report uses management sessions at the healthcare conference to update investors on demand, launches, regulation, strategic transactions and execution milestones.

• Corporate Fundamentals and FinanceOperating and Financial Leverage Analysis

  Revenue growth, fixed-cost absorption and margin progression

  Convatec's efficiency program and Fresenius's biosimilars scale-up are assessed through the extent to which revenue growth and productivity improve margins and offset inflation or reimbursement pressure.

• Industry AnalysisSupply-demand framework

  Demand visibility, production capacity and market penetration

  The report connects demand indicators with available supply, including Convatec's customer visibility, Fresenius's biosimilar capacity constraints, Siemens Healthineers' book-to-bill and Sonova's low hearing-aid penetration.

• Industry AnalysisVolume-price decomposition

  Volume and value growth decomposition

  Sonova's market recovery is evaluated separately through approximately 3.5% volume growth and 4% value growth, helping distinguish unit demand from price and product-mix effects.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• ConvaTec Group PLC (CTEC.L)

  Covered conference participant whose growth outlook is linked to Infusion Care, Wound Care launches, portfolio renewal and margin self-help.

  Strengths

  Long customer-demand visibility, low pump penetration, exclusive supply positions in Parkinson's therapies, a broad launch pipeline and remaining manufacturing-efficiency potential.

  Weaknesses

  InnovaMatrix is expected to fall below 1% of group sales in 2027, and established Ostomy and Continence markets change share slowly.

  Comparison

  Management believes Convatec's leadership could gain volume as competitive bidding consolidates the supplier market to 6–10 participants.

  Risks

  Competitive-bidding reimbursement, above-base-case inflation and dependence on launch execution.

• Fresenius SE

  Covered conference participant with growth drivers across biosimilars, Nutrition, MedTech and Helios.

  Strengths

  Tyenne's strong regional shares and preferred payer access, a widening biosimilar portfolio, planned capacity investment and accretive Nutrition growth.

  Weaknesses

  Current Tyenne supply constraints and temporary Ivenix backlog benefits limit the usefulness of recent prescription and growth rates.

  Comparison

  Tyenne volumes lost through the Optum change moved to the originator rather than another biosimilar, suggesting broader supply constraints among competitors.

  Risks

  Capacity additions and technology transfers must be delivered for the long-term Biopharma revenue and margin ambitions.

• Siemens Healthineers AG (SHLG.DE)

  Covered conference participant benefiting from stable US capital spending, imaging innovation and cost mitigation.

  Strengths

  Healthy customer engagement, an approximately 1.1x Imaging book-to-bill, high-end China positioning, photon-counting CT share gains and expected Varian pricing power.

  Weaknesses

  China's low-end market faces pricing pressure, while separation creates recurring standalone costs and higher financing requirements.

  Comparison

  United Imaging is a credible competitor in China but has a smaller international presence; GE HealthCare's photon-counting CT entry may broaden market acceptance.

  Risks

  Chip and raw-material inflation, China competition and execution of the Diagnostics carve-out and parent separation.

• Sonova Holding AG (SOON.S)

  Covered conference participant whose outlook rests on market recovery, product-led share gains, coordinated retail execution and Asian expansion.

  Strengths

  Low global hearing-aid penetration, encouraging early EON demand, Virto R share gains, regional coordination and profitable early progress in Asia.

  Weaknesses

  EON remains early in its launch, and the Asian consumer-specific product and access strategy still requires another one to two years of execution.

  Comparison

  Sonova considers EON highly competitive with other recent receiver-in-canal launches and argues Virto R is expanding the category rather than cannibalizing RIC.

  Risks

  Launch conversion, retail-acquisition discipline and execution of the second phase of Asian expansion.

Key data

• Convatec insulin-pump penetrationc.7%Share of patients globally who could benefit from pumps and currently use them
• Convatec H2 EBIT-margin step-upc.400bpsIncrease implied by 2026 guidance
• Convatec medium-term EBIT-margin targetMid-20s by 2027Supported by manufacturing, G&A and commercial-efficiency measures
• Convatec competitive-bidding exposure1–2% revenue impactManagement believes market position and pricing methodology de-risk the lower end
• Tyenne cumulative salesc.€750mGenerated since launch, representing approximately 160% CAGR
• Tyenne market sharesc.44% EU5; c.30% US; >60% UKManagement's regional market-share figures
• Fresenius Biopharma ambitionDouble revenue by 2030; c.15% CAGRSupported by Tyenne, new biosimilars and additional capacity
• Fresenius biosimilars margin target20% by 2030Expected from growth and improved fixed-cost absorption
• Fresenius biosimilars investment€300mCapital expenditure committed over the coming years
• Expected 2027 German DRG inflatorc.4.8%Derived from wage, base-value and compensation components
• Siemens Healthineers Imaging book-to-billc.1.1xAverage of the second and third quarters in transactional business
• Siemens Healthineers cost mitigationc.€400m cumulativeLess than €200m expected in FY27 and more than €200m in FY28
• Photon-counting CT order contribution30% of SHL CT order bookCompared with high-end systems representing 25% of CT market volumes
• Diagnostics carve-out timeline18–24 monthsManagement's expected completion period
• Sonova market growthc.3.5% volume; c.4% valueManagement's first-half estimate
• Global hearing-aid penetrationc.11%Basis for Sonova's medium- to long-term structural-growth view
• Virto R annualized revenueAbove CHF130mAssociated with approximately 100bps of ITE share gain outside Asia over 12 months

Impact & implications

The discussions indicate that growth across EU MedTech is increasingly tied to company-specific innovation and execution rather than a single industry-wide catalyst. Convatec's outcome depends on launch adoption and self-help, Fresenius's on capacity and portfolio scaling, Siemens Healthineers' on premium imaging, cost mitigation and separation execution, and Sonova's on converting low penetration and new-product interest into sustained category and share growth. Morgan Stanley nevertheless keeps the overall industry view In-Line rather than expressing a report-wide bullish or bearish stock call.

Risks

• Convatec faces reimbursement uncertainty from US competitive bidding, with an indicated 1–2% revenue impact range and official CMS rules still pending.
• Convatec reports inflation above its previous base-case assumptions, although management expects current guidance to absorb it.
• Fresenius attributes recent Tyenne prescription weakness to production-capacity constraints, making capacity expansion important to future growth.
• Siemens Healthineers faces low-end pricing pressure in China and inflation exposure in chips and raw materials such as tungsten.
• The Siemens Healthineers separation is expected to add approximately €50 million of annual recurring standalone costs.
• Sonova's EON launch remains in an early phase, while the second stage of its Asian strategy still requires one to two years of execution.

What to watch

• CMS's official competitive-bidding rules expected in the fourth quarter of 2026 and any change to Convatec's 1–2% revenue-impact assessment.
• The InnovaMatrix randomized controlled trial expected to read out at the end of 2026.
• Convatec's delivery of the approximately 400-basis-point second-half EBIT-margin step-up and progress toward a mid-20s margin in 2027.
• Fresenius's Nutrition Day near the end of 2026 and the pace of additional biosimilar capacity coming online.
• Whether Fresenius's MedTech growth normalizes toward its structural 8–10% ambition after backlog installations.
• Siemens Healthineers' fourth-quarter Imaging performance, China photon-counting CT contribution and cumulative cost savings.
• The Diagnostics carve-out over 18–24 months and the February-to-June timetable for the Siemens Healthineers parent separation.
• Order development for the new Varian platform during 2027 after its ASTRO launch.
• EON launch progression, Virto R category growth and Sonova's second-phase Asian rollout over the next one to two years.