- Leading European medical technology providers had expected noticeable earnings in 2025 and 2026 due to higher sales. However, US tariffs are now dashing hopes of profits and melting away the financial buffer created by consistent cost optimization
- Niche providers and companies with a regionalized production footprint have an advantage
Until a few weeks ago, the boards and management teams of leading European medical technology companies were optimistic about 2025 and 2026. Nine out of ten executives were planning for earnings growth in both years, resulting from higher sales volumes. According to the "MedTech Executives Flash Report" study by the internationally operating management consultancy Horváth, 86 percent expected an increase of more than 5 percent for 2025, and 79 percent expected growth of this magnitude for 2026.
"The US tariffs are now hindering suppliers' business plans, even though about one-third of European medtech companies have set up production sites in North America," says Philipp Temmel, head of the study and partner at Horváth. For the remaining companies, regionalizing the supply chain or the adapting the 'production footprint' according to the 'local for local' principle is now also at the top of the agenda or is currently being implemented.
Niche players have an advantage
According to Horváth expert Temmel, some companies benefit from the fact that "there are only a few suppliers of specialty products worldwide. In the short to medium term, it will be impossible to develop and produce these products from scratch in North America. US customers therefore have no choice but to pay the price premiums," says the head of the study. However, manufacturers are still hit hard by postponed purchases and investments by customers, as well as the increased costs of materials and parts due to customs surcharges. Additionally, in the current climate of uncertainty, buyers tend to purchase average-quality products rather than high-end ones.
Financial buffer from cost optimization is melting - investments in future topics at risk
Cost optimization remains at the top of the management agenda for the companies surveyed in the Horváth study. "The financial room for maneuver that was created by consistently reducing costs and increasing efficiency was actually intended for necessary transformations and innovations. However, it is likely to be needed to secure liquidity, given the drastic downward revision of sales plans," says industry expert Philipp Temmel. Nevertheless, the field of action "Automation & AI implementation" ranks second behind cost optimization in the industry's top management priorities for 2025, followed by "Optimization of organizational structures". "This triad will shape 2025, with strategic topics taking a lower priority," says Temmel. "In the area of digitalization and AI, companies must pay even more attention to investing in technologies that demonstrably contribute to value creation through use cases."
"A 'lost year' in the worst-case scenario"
What advice does the management consultancy Horváth offer medical technology manufacturers in the current situation? Industry expert Temmel says: "In the worst-case scenario, the current year will turn out to be a 'lost year' in terms of growth. However, the situation is so dynamic that companies shouldn’t be deterred. They should continue their digitization and relocalization programs regardless of the customs developments - and focus on their assets, such as excellent products and technological innovations."
About the study
For the "MedTech Executives Flash Report" study, the business prospects and strategic priorities of market-leading European medical technology manufacturers and life sciences companies with a medical technology division were examined through personal, in-depth interviews with their board and management members. The sample is representative of this sector of the industry. The evaluation took place in April 2025.
