FRESENIUS MEDICAL CARE AG Analyst Presentation
Helen Giza
CEO & Chair of the Management Board
Martin Fischer
CFO
May 7, 2024
Q1 2024
IR Conference Call
Safe harbor statement: In this Safe harbor statement, "the Company" and "Fresenius Medical Care" refer to Fresenius Medical Care AG & Co. KGaA, a German partnership limited by shares, prior to its conversion of legal form, and to Fresenius Medical Care AG, a German stock corporation, after its conversion of legal form. This presentation includes certain forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Act of 1934, as amended. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy or might not even be anticipated. The Company has based these forward-looking statements on current estimates and assumptions which we believe are reasonable and which are made to the best of our knowledge. Actual results could differ materially from those included in the forward- looking statements due to various risk factors and uncertainties, including changes in business, economic or competitive conditions, changes in reimbursement, regulatory compliance issues, regulatory reforms, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, cyber security issues and the availability of financing. Given these uncertainties, readers should not put undue reliance on any forward-looking statements. These and other risks and uncertainties are discussed in detail in the Company's Annual Report on Form 20-F under the headings "Forward-Looking Statements" and "Risk Factors" and under the headings in that report referred to therein, and in the Company's other reports filed with the Securities and Exchange Commission (SEC) and the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse).
Forward-looking statements represent estimates and assumptions only as of the date that they were made. The information contained in this presentation is subject to change without notice and the company does not undertake any duty to update the forward-looking statements, and the estimates and assumptions associated with them, except to the extent required by applicable law and regulations.
If not mentioned differently the term net income refers to the net income attributable to the shareholders of Fresenius Medical Care. Amounts are in Euro if not mentioned otherwise.
Implementation of measures as presented herein may be subject to information and consultation procedures with works councils and other employee representative bodies, as per local laws and practice. Consultation procedures may lead to changes on proposed measures.
1
2
3
Execution against strategic plan
Q1 Business Update
Outlook
Q1 2024 Highlights | Clear execution of strategy, delivering progress towards 2025 target margin bands
Care Delivery
- Patient number growth as top priority
- New CD leader in office since January 1
- CD U.S. organization changes implemented on April 1
- Focus on holistic end-to-end process improvements
- Clinic utilization improving and number of constrained clinics reduced
- Value-basedcare business growing with positive operating income contribution
- Divestitures executed at pace
Care Enablement
- Visible inflection point in margins from Q4 2023
- Significant progress in transformation efforts driving sustainable FME25 savings as planned
- Continued momentum of pricing initiative
- Advancing optimization of manufacturing and supply chain footprints
- HDF launch readiness efforts underway
Investor Relations │ Analyst Presentation | Q1 2024 | Page 4 |
Q1 2024 | Key developments at Group level
- Solid revenue1 growth of 4% driven by both segments Care Delivery and Care Enablement
- Operating income1 margin improved in both segments
- Care Enablement delivered strong sequential margin improvement with significant progress towards the 2025 target margin band
- Execution of transformation continues at pace, contributing additional FME25 savings of EUR 52 million
- Portfolio optimization program progresses in Care Delivery with signed or closed divestments in all our Latin American markets, and closed divestments in Turkiye and of Cura Day Hospitals Group in Australia
- Clinical quality performance on high level
- FY 2024 outlook confirmed
1
2024
1 Reconciliation table for special items, 2023 divestitures and Fx (2024 outlook base), to reported growth rates: page 18
Investor Relations │ Analyst Presentation | Q1 2024 | Page 5 |
Key divestments announced and further under way
Portfolio optimization plan as presented
✓
✓ ✓
✓ Areas of divestments
Note: Axes are non-linear, indicative only; divestment in Hungary executed as part of FME25 program; certain divestments subject to regulatory approval 1 Majority of clinic divestments in Sub-Saharan Africa closed, remaining clinics classified as assets held for sale
Divestments of non-core and margin dilutive assets as part of ongoing portfolio optimization plan
Closed divestments
- CD and CE operations in Argentina
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CD operations in Hungary, Chile,
Sub-Saharan Africa1, Turkiye
- National Cardiovascular Partners (NCP), U.S.
- Cura Day Hospitals Group, Australia
Announced divestments
-
CD operations in Brazil, Colombia,
Curacao, Ecuador, Guatemala, Peru
Investor Relations │ Analyst Presentation | Q1 2024 | Page 6 |
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2
3
Execution against strategic plan
Q1 Business Update
Outlook
Q1 2024 | Continued revenue growth with 130bps margin improvement
Revenue | outlook base1
in € million
+4.4% | ||||||
4,704 | outlook base1 | 4,822 | 4,725 | |||
4,619 | ||||||
-85 | +4.8% | -97 | ||||
organic | ||||||
Q1 2023 | Divest- | Q1 2023 | Q1 2024 | Fx | Q1 2024 | |
itures | outlook | outlook | ||||
base1 | base1 |
Revenue growth1
- in Care Delivery mainly driven by growing value-based care business and positive price development
- in Care Enablement mainly driven by higher average sales price
1 Reconciliation table for special items, 2023 divestitures and Fx (2024 outlook base), to reported growth rates: page 18
Operating income | outlook base1
Margin in %
5.5% | 7.3% | 8.6% | 5.2% |
in € million | +23.0% | ||
outlook base1 | |||
416 |
77 | 338 | -13 | ||||
261 | 246 | |||||
-157 | ||||||
Q1 2023 | Special | Q1 2023 | Q1 2024 | Fx | Special | Q1 2024 |
items & | outlook | outlook | items | |||
2023 | base1 | base1 | ||||
divestitures | ||||||
- Business performance supported by higher prices, higher contributions from the value-based care business and FME25 savings
- Special items include legacy portfolio optimization and FME25-related costs
Investor Relations │ Analyst Presentation | Q1 2024 | Page 8 |
Q1 2024 | Operating margin improvement driven by both segments
Margin in % | 7.3% | 8.6% |
In € million
15 | 7 | 416 | ||||||||
70 | ||||||||||
-14 | -13 | |||||||||
77 | 338 | |||||||||
261 | 246 | |||||||||
-157 | ||||||||||
Q1 2023 | Special | Q1 2023 | Care | Care | Inter- | Corporate | Q1 2024 | Fx | Special items | Q1 2024 |
operating | items & 2023 | operating | Delivery | Enablement | segment | operating | operating | |||
income | divestitures | income | income | income | ||||||
outlook base1 | outlook base1 |
1 Reconciliation table for special items, 2023 divestitures and Fx (2024 outlook base): page 18
Investor Relations │ Analyst Presentation | Q1 2024 | Page 9 |
Q1 2024 | Care Delivery delivers solid revenue and operating income growth year-over-year
Revenue | outlook base1
in € million
+5.2% | |||
outlook base1 | 3,859 | ||
3,669 | |||
+5.9% | |||
organic |
2,9623,139
U.S.
International
707 | 720 | ||
Q1 2023 | Q1 2024 | ||
outlook base1 | outlook base1 |
- U.S. growth1 of +6.0% mainly driven by expanding value-based care business as well as favorable reimbursement rate and payor mix development
- International growth1 of +1.7% mainly driven by organic growth and an increase in dialysis days
Operating income | outlook base1
in € million Margin in %
7.8% | outlook base1 | 9.3% |
+24.5% | ||
19 | 357 | |
287 | -69 | |
120 | ||
Business | FME25 | Labor / |
growth | savings | inflation |
Q1 2023 | Q1 2024 | |
outlook base1 | outlook base1 |
- Earnings growth driven by positive price effects, higher contributions from the value-based care business and FME25 savings
- Increased labor and inflationary cost negatively impacted earnings development, in line with expectations
In Q1 2024, revenue was EUR 3,788 million, operating income was EUR 189 million. In Q1 2023, revenue was EUR 3,756 million, operating income was EUR 284 million. 1 Reconciliation table for special items, 2023 divestitures and Fx (2024 outlook base), to reported growth rates: page 18
Investor Relations │ Analyst Presentation | Q1 2024 | Page 10 |
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FMC - Fresenius Medical Care AG & Co. KGaA published this content on 06 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 May 2024 16:35:50 UTC.
