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UPDATE 2-Siemens Healthineers says sales growth to return next year

(Adds detail on drop in adjusted EBIT)

AMSTERDAM, Nov 2 (Reuters) - German health technology company Siemens Healthineers said on Monday it expected sales to rise 5 to 8% in the coming year as efforts to contain the COVID-19 pandemic allow hospitals to resume routine care testing activities.

Comparable sales fell 2% in the fourth quarter of Healthineers’ fiscal year 2020, while operating profit was down 20% at 626 million euros ($728.29 million), as the care for coronavirus patients significantly limited demand for routine care tests.

The pandemic also increased the costs of the diagnostics division as factories were not used to full capacity while research expenditure on efforts to help fight the disease rose.

Analysts polled by the company on average had expected adjusted earnings before interest and taxes (EBIT) of 644 million euros for the July-September period, after a result of 783 million euros a year earlier.

Healthineeers last month announced the launch of a rapid antigen test kit in Europe to detect coronavirus infections, but warned that the industry may struggle to meet a surge in demand.

The development of the test and lower testing volumes for regular care wiped out nearly all profit at the diagnostics unit in the fourth quarter.

The coronavirus outbreak hit Healthineers’ earnings hard in the first part of 2020, keeping full year revenues at the previous year’s level of 14.5 billion euros while adjusted EBIT fell 10% to 2.23 billion euros.

But strong order growth in recent months and an expected pick up in investment activity in the U.S. are set to put the company back on a growth path next year, Healthineers said.

The outlook excludes the $16.4 billion acquisition of U.S. radiation therapy specialist Varian Medical Systems announced in August, which was the first major growth move by Healthineers since it was spun off and floated in 2018 by Siemens. ($1 = 0.8595 euros) (Reporting by Bart Meijer; Editing by Kim Coghill and Louise Heavens)

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