Fresenius Medical Care Q4 2023 (Media) Earnings Call Transcript

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Provided by Quartr
February 20, 2024

There are 4 speakers on the call.

Operator

Good morning, and welcome to our 1st annual press conference as Fresenius Medical Care AG. I'm delighted that you are joining us live today. Welcome to all journalists in our live stream. My name is Nathalie Poignier. I'm Head of Global Communication.

Operator

This is a purely virtual event, something we've all become used to, I guess. We're quite aware of how busy you must be now during the financial reporting season, so we wanted to allow you to attend without having to travel to Bad Homburg. The entire press conference will be publicly available as a web cast and a live stream in German and English. Simply choose your language at the top of your screen. Our CEO, Helen Giese, will present the figures for the 2023 fiscal year and inform you about our planning for 2024.

Operator

As usual, you will then have the opportunity to ask questions. Your questions will be answered by Helen Giese and our CFO, Martin Fischer. Ms. Giese will answer in English. Mr.

Operator

Fischer will answer in German when the question is in German. He'll answer in English when the question is answered, has been asked in English. And we will look forward to your questions. But let me explain how it works. Feel free to send in your questions in writing.

Operator

And of course, we'd be particularly pleased if you ask your question directly by video. To do so, press the button. I would like to ask a question via video chat. You're very welcome to try this out right now because we will need a few minutes to carry out a brief technical check with you. And now Helen, over to you.

Speaker 1

Good morning and thank you for joining today's press conference covering a look back over 2023 and a look ahead to 2024 priorities for Fresenius Medical Care. I am Helen Gieser, CEO and Chair of the Management Board, and it is my pleasure to host you this morning. The primary takeaway I hope you will glean from today's presentation is this. In 2023, we delivered against our plan. We did what we said we would do.

Speaker 1

This accountability for our actions is critical to me as CEO, and it resulted in tremendous organizational progress and solid financial results in a change heavy year. I am exceedingly proud of our team for their very good work. 1 year ago, we laid out our strategic plan to turn around and transform Fresenius Medical Care. This plan included ambitious structural, operational and cultural changes. Much of the change we have undertaken would not have been possible without the implementation of our new operating model at the start of 2023.

Speaker 1

With our 2 distinct global segments, we are now operating with an end to end level of transparency and accountability that has not been in place previously. Care enablement reflects our best in class leadership in innovation and product development. Care delivery, meanwhile, is where we combine our technical expertise with our passion for patient care. With our global medical office and partnership from our global functions, this new foundation represents who we are, why we exist and who we serve. The new operating model enabled us to introduce new financial reporting with enhanced transparency.

Speaker 1

Our FME25 transformation program delivered savings ahead of scheduling, while ensuring our company becomes stronger and more resilient in the future. We have also undertaken a cultural transformation with much greater emphasis on accountability. To this extent, we made 2 important leadership changes on our management board, with Martin Fischer joining us as CFO in October and Craig Cordola, our new Head of Care Delivery, joining in January of this year. I am very excited about the new perspectives that they bring to our company and the impact they're already having. In the Q4, we finalized our change in legal form and are now operating in a simplified governance structure with strengthened rights of our free float shareholders.

Speaker 1

Specific to portfolio management, we continue to execute against our plan with several key assets divested by the end of the year and more underway. And finally, our relentless focus on improving operating performance allowed us to upgrade our outlook for the first time in our company's history. I'm very proud to say that we even exceeded our upgraded outlook. I would now like to quickly recap our operational performance in 2023. We achieved revenue growth at the top end of our outlook range, and organic growth in the year was mainly driven by favorable business development.

Speaker 1

Contributing to the earnings growth were faster than expected labor productivity improvements in care delivery as well as positive impacts from our pricing initiatives in care enablement. Regarding portfolio optimization, the divestments closed in 2023 accounted for €214,000,000 of revenue €20,000,000 of operating income. The strict commitment to our stringent financial policy resulted in significantly improved cash flow and an important decrease in our net leverage ratio. And we continue to make progress on our broader sustainability goals. Earlier this year, we submitted our commitment letter to the Science Based Targets initiative, underlying our goal to achieve climate neutrality in our operations by 2,040, in line with the Paris Agreement.

Speaker 1

To turn around our business performance, we need to reduce distraction and focus on our core and higher margin businesses. Since we laid out our portfolio optimization plan at our Capital Markets Day last April, we have been moving at speed. We have announced and closed divestments of our clinic network and production sites in Argentina, our clinic network in Hungary, and National Cardiovascular Partners, our cardiovascular clinic network in the United States. We have announced additional divestments that are subject to regulatory approval and are in the process of closing. These include our clinic network in Sub Saharan Africa, Kura Day Hospital Group in Australia and our clinic network in Turkey.

Speaker 1

We continue to work on a number of other divestments, and we'll keep you updated. In 2023, we delivered 5% revenue growth at constant currency and 4% organic growth. Organic growth in Care Delivery was driven by the expansion of our value based care book of business in the United States and higher reimbursement. Organic revenue growth in Care Enablement was driven by both higher volumes and prices. Along with the solid top line growth, the successful execution of our turnaround initiatives translated into improved earnings.

Speaker 1

Our operating income increased 15% in constant currency, and our group margin expanded 100 basis points to 8.9%. We are making important progress toward our 2025 group margin target, which is supported by our FME25 program, where we realized €346,000,000 in savings through the end of 2023, proceeds was another positive earnings driver for which we increased our outlook the second time in 2023. And we realized meaningful labor productivity improvements in Care Delivery that we originally only expected to realize in 2024. It is terrific to have achieved so much already in 2023. In Care Enablement, our successful pricing initiatives and earnings improvement were diluted by continued inflationary pressures and foreign currency transaction losses.

Speaker 1

All of the work undertaken in 2023 was designed to lay a foundation for sustainable profitable growth. Let's take a look at what I mean. We strictly adhered to our disciplined financial policy in 2023. We improved our cash flow and limited capital expenditures. With our top priority to deleverage, we applied proceeds from divestments and the TRICARE settlement to reduce our debt.

Speaker 1

We reduced our leverage ratio from 3.4 to 3.2 times. And as prescribed by our dividend policy, for 2023, the supervisory board and management board propose a dividend of €1.19 per share. Finally, we are turning a sharp eye to the returns on our capital investments with a goal to double our return on invested capital by 2025. As you can imagine, I like this slide a lot, as it confirms that we delivered against what we said we would and more. In 2023, we guided for low to single low to mid single digit revenue growth, and we finished the year at the top of our outlook range with 5% revenue growth.

Speaker 1

We upgraded our earnings outlook twice in 2023 and ultimately delivered operating income growth of 15%, exceeding our upgraded range of 12% to 14%. This approach of a realistic outlook combined with successful execution is something I intend to continue. Here, you can see our FME25 transformation has successfully delivered sustainable savings through 2023. In fact, we exceeded our planned savings for 2023. As such, we are fully on track to deliver our savings target of €650,000,000 by 2025.

Speaker 1

Looking ahead to 2024 specifically, we anticipate €100,000,000 to €150,000,000 in incremental sustainable savings from FME25 by year end. We expect also 100 to €150,000,000 of onetime costs for the execution during 2024. This leaves us with €150,000,000 to €200,000,000 in incremental sustainable savings until the end of 2025, with investments of €80,000,000 to €100,000,000 in the same year. Now let's turn our attention beyond 2023. In 2024, we are executing on the same strategy.

Speaker 1

It's about a focus of continuous improvement, consistent execution, disciplined capital allocation and continued portfolio optimization. It's about bringing strength and stability in service of those who benefit most, our patients and their families. And it's about being the best versions of ourselves. We will also continue to lead the market in innovation. As you will have seen from our press release earlier this month, we are preparing an introduction of a key innovation development in the United States with the potential to set a new standard of care for the industry.

Speaker 1

High volume hemodial filtration or high volume HDF for short is a technology that is already transforming how dialysis is done in many of our international markets and would present an important opportunity for our patients and our business in the United States, following the COVID-nineteen study publication last year. The COVID-nineteen study was a multinational research study that compared 2 types of dialysis techniques. It was a 3 year trial performed at 61 dialysis centers in 8 European countries and included 13 60 patients. The results showed a 23% reduction in all cause mortality in patients treated with high volume HDF versus those treated with high flux hemodialysis. In our own EMEA dialysis patient population, over half the treatments are already high volume HDF, and we have been using this technique for a decade.

Speaker 1

Our 5008X hemodialysis system received FDA approval this month. It is the 1st machine capable of high volume HDF to be approved in the United States. Along with our FX Coral Dialyzer, which is already registered in the United States, the 5008X combines the latest device engineering and cutting edge membrane technologies required to make high volume HDF possible. This is a very exciting opportunity for the upcoming years as we plan a broad commercial launch in 2025. In the United States, there is currently an estimated installed base of around 160,000 in center haemodialysis machines across all service providers that could be replaced to adapt this new standard of care.

Speaker 1

Financially, we expect 2024 to deliver top and bottom line growth above that of our strong 2023 performance. We expect revenue to continue to grow in the low to mid single digit percent rate and operating income to grow in the mid to high teens percent rate compared to prior year. We are also reconfirming our group margin target of 10% to 14% by 2025. When I look back at everything we accomplished in 2023, I am very optimistic about what we will be able to achieve this year and beyond. Though 2023 was a year of significant With a mix of great humility and pride, I am pleased to report that our patients have continued to reward Fresenius Medical Care as the number one kidney care company worldwide.

Speaker 1

We are committed to meeting our patients where they are, both physically and emotionally. And as such, we provide home hemodialysis treatment offerings and continued strong clinic based care. Those suffering from chronic kidney disease count on us in the most fundamental of ways. We are honored by that trust and treated with the expertise, dignity and compassion it deserves. As we live out our mission to create a future worth living for patients worldwide every day.

Speaker 1

With that, I thank you for your time. And Maarten, our CFO and I are happy to take any questions you might have. Thank you.

Speaker 2

Helen, Liebendank.

Operator

Helen, thank you. And now it's time for your questions. Let me briefly recap how it works. On your screen, you can see a blue button directly below the video window. When you click on this button, you will be greeted by our technical team.

Operator

We will make sure your audio and video feed is okay. After that, you'll be connected to the meeting. For this to work, you will need to enable your camera and microphone in your browser when prompted. When your turn to ask your question, please state your name and who you work for. And please also state the language you have chosen because this will ensure smooth simultaneous interpreting.

Operator

And if there is any technical problem, please do not despair. We could also connect you through a phone dial in spontaneously for your question. So let's get started. And here comes the first question. It was sent in writing.

Operator

Patricia

Speaker 2

Weisz, could

Operator

you please elaborate on why group profits or decline of minus 26 percent, which meant a stronger decline than the reported operating income at minus 9

Speaker 3

percent.

Operator

Is your plan further divestments of assets? What are your plans with respect to your continued portfolio optimization?

Speaker 1

Thank you for the question, Patricia. I'll take that one. Yes, on a reported basis, our income did decline, but I think it's important to kind of keep that in context. Clearly, last year, on a reported basis, we were in receipt of significant government relief. And then this year, as we are doing the divestments, those charges that we are taking on the disposal of those are going behind below the line.

Speaker 1

So I think it's important to keep the reported numbers in perspective, but the adjusted numbers, which are the basis for how we think about the operational performance of the company, are clear here. Obviously, at the same time, we have FME25 and the onetime costs associated with that to generate these savings. And to a smaller extent, an impact from the legal form change that we had. As I mentioned in my earlier comments, we do expect to do continued divestments through the year. The timing of those can sometimes be a little challenging to predict by quarter, but we will keep you updated as we enter into new agreements for further divestments.

Speaker 2

Thank you.

Operator

The next question is a video chat request by Bloomberg. Good morning.

Speaker 3

Good morning. I signed up for English, so I'll ask in English. If you could just comment a little bit about when it comes to these divestments, I guess kind of 2 questions. One is, can you remind me sort of of your geographical footprint globally and where you think these divestments as of where they have come from so far, where they may come from in the year to come and where that leaves you when it comes to your geographical breakdown of sales globally?

Speaker 1

Yes. Hi, Tim. I'll take that question. So as we took a hard look at our portfolio at the beginning of last year, we kind of divided them into 2 categories. Those assets that we didn't feel were core to us in the future.

Speaker 1

And some of those are very nice assets, and some of them were had some profit associated with them. National Cardiovascular Partners, for example, and the CURA Day Hospitals both fall into that category, 1 in Australia, 1 in the U. S, where nice assets, but they we just didn't feel they were core to our capabilities, and we weren't the right owner or the best owner of those assets. Then and that one and the U. S.

Speaker 1

One was probably the largest one that we had done last year. Then there's this piece of international service markets, where the dynamic or the reimbursement or the structural change has evolved over time. And we have identified those that were loss making and we didn't feel we could turn around as targeted for divestment. So that's where you would have seen the Hungary, the Turkey, Argentina, for example. So that it is it's quite widespread, but they're very specific markets in that regard.

Speaker 1

And you'll see more of that continuing as we go through 2024. As far as the geographical footprint is concerned, we were operating in about 50 countries for services and around 150 countries for product. So the products footprint stays pretty consistent, and we are tightening up the for the most part, the service footprint. And it's it might feel sporadic, but it's actually really focused on the market performance and our ability to feel that we can make a change there versus exiting.

Operator

Got you. Thank you.

Speaker 2

Thank you.

Operator

We've got one more question from Karl Heinz Korb line. Schweinfurter Tarkblad is his newspaper and his question was about the number of the produced dialysis devices. How did it develop?

Speaker 1

I want to make sure I'm understanding that question appropriately. As I mentioned, as we think about our in center dialysis machines, we have in the United States about 1 160,000 installed base. So I think that gives you some sense of the size of that. And of course, the United States is by far our biggest market for services. In terms of as we think about products and services, clearly, we remain the market leader in those markets.

Speaker 1

So outside of that, I don't think I have to hand any other unit information, but we could certainly follow-up with you on that.

Speaker 2

Next is a video question. And I'll switch to German. Next, we have a video question by Mr. Brunner of Platou Borse. Yes, good morning and thank you for taking my question.

Speaker 2

I have 3 to be precise. First has to do with the operating margin. And my question is whether for 2024, you can already reach the lower end of your range. You gave 10% to 14% for the That was my first question. 2nd question, return on invested capital, your target about that.

Speaker 2

You plan to double it. What is the basis you're basing this on? And can you give us any target figure? And question number 3, which admittedly might be a bit more complex, challenge from Ozempic, if the interpreter got it correctly, That's a drug that apparently also helps make renal failure less likely in the future? How much of a risk do you see in that?

Speaker 2

Analysts have given a number of 10% less for dialysis product manufacturers. Thank you.

Speaker 1

Thank you. Happy to take those questions. With regarding the operating margin range, you're absolutely right. We have given a range of 10% to 14% by 2025. And as you can probably tell, 2020 3 is a level setting year, puts us on a good path for that and the continued momentum in 2024.

Speaker 1

We haven't given margin guidance per se for 2024, but we have given revenue and operating income guidance, which to the fact that you can see that it's accelerating in 2024 versus 2023, I think, also gives you confidence that we are moving along to that margin target and that it's not a complete hockey stick by 2025. I'll quickly answer the ROIC question. Yes, we clearly need that in focus. We need to double it. It's starting from quite a low base of 2.8% in 2023.

Speaker 1

So we clearly have kind of a lot of plans to kind of keep that in focus to get it to double at around that 6% and cover the cost of capital. Your Ozempic question is a big question, and we know a topic of the world on Ozempic and GLP-1s. As we saw the news from the flow trial ending back last October, we obviously had a significant impact to our stock price in a single day, where the market had perceived there to be winners and losers of GLP-1s. And on that particular day, it was clearly felt that the dialysis industry And as we have as the world at large, I think, has put more color to the expectations from GLP, the dialysis industry did as well. Clearly, we have a lot of insight into like the design of the trial and kind of assumptions around what it could mean.

Speaker 1

We've pressure tested all those assumptions and all same that we expect this to be a neutral impact. And I think it's helpful to give a little bit more color as to why we think it's a neutral impact. Clearly, we're excited about the development in the health care space of this class of drugs for patients. While we are treating end state renal disease, those patients that are at the end of life stage for kidney disease, there is a large pool of patients that sit in the chronic kidney disease space. And more patients in that space pass away from a cardiovascular event than they do for anything else.

Speaker 1

So the fact that these GLP-1s give cardiovascular protection, we're actually quite excited about. And we feel that that will give us potential to get more patients coming into end state renal disease because they have the cardiovascular protection. On the flip side, we do see that this class of drugs is likely to delay the onset to end state renal disease. When you take both of those things into account and you consider that it's probably a decade before we get to see that impact, we feel that that is kind of expected to be neutral and those effects cancel out each other. It doesn't stop there.

Speaker 1

I think it's a little bit more difficult. We know right now that these drugs have pricing challenges and access challenges. We do expect that to normalize over time. We also know that, we've had SGLT2s on the market for 10 years and the uptake in our patient population for that class of drug is only around 8%. So I think with the side effect profile, we will have to wait and see how that impacts these patients who have 10 to 12 other comorbidities.

Speaker 1

And then I think finally, we know our patients are not always the best at taking the prescriptions they're already prescribed. So I think we're going to have to see over time whether they will keep take if they are prescribed this new class of drug, whether they will keep taking it and that for the rest of their lives actually to get the adherence that, that would need. So all in all, I mean, there's a lot of moving parts as you can appreciate, we have many assumptions. We will wait for the trial data to be published. But overall, we and the industry is seeing this as a neutral benefit.

Speaker 2

Thank you. And he's gone. Okay. Thank you. I have another question now of DPA, Tanja Fede, and she says, Dear Helen Giese, can you give us 1 or 2 examples regarding the productivity improvements, please?

Speaker 1

Yes, happy to. Look, the productivity improvements with FME 25 as well as our efficiency improvements are wide sweeping across the organization. I think if I'd start with the biggest one and the biggest benefit that we saw in 2023, That's our labor productivity that we saw in the United States. Coming off COVID and coming off significant labor shortages, we really turned our attention to fixing the labor problems that we had, which in turn were impacting our ability to take on new patients. So significant amount of improvement of how we schedule labor, how we hire labor, how we retain labor.

Speaker 1

So kind of using that as an example. We also where we had unprofitable clinics or underperforming or not at capacity clinics, we've also closed just over 70 clinics in the United States this year as well. I think as I look at other efficiencies, they're across care enablement in terms of our supply chain, our manufacturing network and across our G and A functions where we are adopting a different model than what we had at the past with globalizing our functions, making sure that we are creating centers of excellence and leveraging shared services where possible. Behind these detailed plans, why I have the confidence behind these numbers and excited about the performance we've accelerated, a very significant detailed plans that we track on a daily, weekly, monthly basis. So the program is alive and well.

Speaker 1

Everyone's committed to it, and I think the results speak for themselves.

Speaker 2

Thank

Operator

you, GLP 1 is something that many are interested in. So we've requested from Michael Telgadel from the Handelsblatt paper. What's your assessment of the advance of GLP piece on the development of FMCFME?

Speaker 1

Yes. Look, I kind of tried to put a big framework around this question, thinking I was going to get this several times today. As I just said, I think the overall effect here is will be neutral for us. Today, we have about 5% of our patients on a GLP-one, so kind of a small amount. And while that is increasing at a very, very small rate, which looks similar to what we've seen with this SGLT2 class of drugs, which has also been on the market for a decade, and we see about 8% pickup in that.

Speaker 1

So I think it's I think both of those speak to quite a low adoption. And I think it's also going to take, as I mentioned earlier, about a decade for us to see the full impact of this. I think SGLT2s do have an indication for ESRD patients, and we see this 8% number. SGLT2s where they don't have it prescribed for ESRD patients or an indication for ESRD patients, as expected, it's a smaller number. But I think the sizing of how we're thinking about this is holding.

Speaker 1

And of course, as new data comes available, we'll share the impact of that. Thank you, Sean.

Operator

Thank you. Do you have any other questions? Do send them in and do send them by video chat as well. Ask them by video chat. The next question was a 6% increase of your dividend is quite a strong statement and contrasts with the decision of your majority shareholder, Fresenius SC, not to pay a dividend.

Operator

Could you please elaborate on this dividend decision and why it was taken? Yes. Happy to take that question. As Helen Giesepp pointed out, 2023 was a year where we were very successful in delivering on our promises. And we were also successful in terms of our performance and our earnings that were increased and strengthened on a value based approach.

Operator

We deleveraged as well more than €1,000,000,000 was our net deleveraging from €3,400,000,000 to €3,200,000,000 as a ratio. And the TRICA proceeds and the investment was used for deleveraging proceeds from the divestment status. And we're confident that this will keep us successful as a policy. And based on that, it's a clear commitment to a very positive progress on deleveraging that we're expecting. The €119,000,000 dividend proposed is in line with the dividend policy and is in line with the 6% adjusted income, which it's based on when it comes to the year on year numbers.

Operator

Thank you. One more question came in, and it was about the margin goals for Care Delivery and Care Enablement for 2020 4, where for 2025 you're not replicating them, but you also confirmed the margin goal for the group. Were there any detailed adjustments in that area?

Speaker 1

No. I think as I explained earlier, we have a margin target for 25%, and we heard the Capital Markets Day outline that for Care Delivery and Care Enablement. We don't guide for Care Delivery and Care Enablement margin during the year. I think what we've put out there is the expectation by 2025 and the building blocks to get there. So we don't update those every year and every quarter.

Speaker 1

But what I would say is those building blocks that we track are clearly the ones that we're making progress on, and those are the ones that we're laser focused on to make sure that we stay there. I think that the bright light here is Care Delivery in 2023 was already at the bottom end of its margin band. So that is quite encouraging. Care enablement, we know, is starting from quite a low base, and the improvements there will be significant. But because of the nature of a products business or a care enablement business, that does take longer because of the investments and things like manufacturing transfers and product registrations and so on that needs to happen.

Speaker 1

So we feel really confident of the path we're on, care delivery being at the bottom end, FME25 accelerating. And obviously, we're starting to see inflation and things like that normalizing. So that's why I feel very confident today in our outlook reconfirming that margin band and obviously showing the progress we will make in 2024.

Speaker 2

I've got 2 more questions that came in. One on home dialysis. How are you making progress in home dialysis? If I recall correctly, Home Care had been defined as a growth segment. But unless I'm mistaking, that business is rather stagnating.

Speaker 2

What's your comment on that?

Speaker 1

Home Home continues to be one of our key strategic drivers. We see a lot of benefit of the Home offering. First of all, it tends to lend itself to better outcomes, which is better for the patient, better for health costs. It also tends to lend itself to a younger, healthier patient. And when medically justified, we can actually get an additional dialysis treatment in the home setting.

Speaker 1

It also reduces the pressure on a clinic infrastructure for labor, where in a home setting, as you know, labor is the family member or caregiver. So I'd say this is one that really stagnated during COVID because the same people that we needed to train our patients were the people that were training, or needing to be working in the clinic where there were labor shortages. So we're still sitting at around 16% of U. S. Treatments being in the home.

Speaker 1

We do have an aspirational target of 25% by 2027. And I think very clear that focus as we come out of COVID and start to kind of stabilize the operation and return to growth, we will, I think, start to see that number move. But it remains a key strategic priority for us for all the reasons I outlined.

Speaker 2

And here's the, for now final question, but of course, feel free to keep sending in questions. Question, the transformation program, FME 25, has been repeatedly mentioned in your speech today. Is that sufficient to make FME reach the Aspire for long term sustainable growth? What was the benefit of that program? And what comes after FME 25?

Speaker 1

Great question. Of course, the transformation was much needed, not just about the financial savings that it delivers, which are significant. But I think the cornerstone of the FME25 transformation program is the reorientation of our business into 2 segments. The fact that for the very first time in this company, we can now see end to end our projects business and our service business really helped us kind of hone in on where the around it was GBP 500,000,000 that we took up to GBP 650,000,000 and we're already at GBP 346,000,000 through 2023. The program itself is somewhat contained with initiatives through 2025, And we are on track, as I said, and I'm very confident with that.

Speaker 1

Now does it stop there? Of course not. I think as you also heard from my speech this morning, I am trying, we are working on instilling a culture and a mindset of continuous improvements. We know that there will always be headwinds that we have to overcome, and we need to get ourselves stronger, leaner, more resilient to overcome those headwinds and if you will, create our own tailwinds. So FME 25 is not done.

Speaker 1

We have programmed to deliver in 2024 and 2025, but we don't stop there. We need a change in mindset, and we need to continue to drive operational efficiency and bottom line performance. So excited and thrilled with what we are doing, but we have to continue to do it.

Speaker 2

Thank you, Soren. Thank you. Wonderful. And that was indeed the last question. So that means we have reached the end of today's press conference.

Speaker 2

Thank you very much for taking an interest. And if you, dear representatives of the media, have any further questions, our press officers and the press office as such will be available at any point in time. Thank you to you, Helen and Martin, and thank you all. Goodbye.

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Key Takeaways

  • In 2023, Fresenius Medical Care delivered against its plan with 5% revenue growth at constant currency and a 15% increase in operating income, expanding its group margin to 8.9% and exceeding its upgraded outlook.
  • The introduction of a new operating model—split into Care Enablement and Care Delivery—and the FME25 transformation program generated €346 million in savings ahead of schedule, supporting transparency and accountability with a target of €650 million by 2025.
  • Portfolio optimization accelerated divestments of non-core assets accounting for €214 million in revenue, using proceeds to reduce net leverage from 3.4x to 3.2x and sharpen focus on core, higher-margin businesses.
  • For 2024, FMC guides low–mid single-digit revenue growth and mid–high teens operating income growth, reconfirms its 10–14% group margin target by 2025, and plans an additional €100–150 million of sustainable savings.
  • A key innovation milestone was achieved with FDA clearance of the 5008X hemodialysis system for high-volume HDF, paving the way for a broad commercial launch in 2025 to set a new standard of care in the US.
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Earnings Conference Call
Fresenius Medical Care Q4 2023 (Media)
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