Fresenius Medical Care Ag · XETR:FME
Fresenius Medical Care — Fresenius Medical Care AG & Co. KGaA — IPO Roadshow (April 2023)
67 slides from Fresenius Medical Care's IPO roadshow presentation, Apr 19, 2023
Slide 1: Capital Markets Day 2023
© Copyright ▪ Fresenius Medical Care Capital Markets Day 2023 April 19, 2023 | Virtual event
Slide 2: Additional Information and Where to Find it
Additional Information and Where to Find it. Fresenius Medical Care AG &Co. KGaA ("FME") has filed a registration statement (including an information statement /prospectus) on Form F-4 (File No. 333-271081) with the United States Securities and Exchange Commission for the transaction discussed in th
Slide 3: Safe harbor statement
Safe harbor statement: 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 uncert
Slide 4: Agenda
Agenda IR Introduction Dr. Dominik Heger CEO presentation Helen Giza, CEO & Chair of Management Board Global Medical Office Franklin W. Maddux, MD Break Care Delivery Bill Valle Care Enablement Dr. Katarzyna Mazur-Hofsäß Joint Q&A session Concluding remarks Helen Giza 1 2 3 4 CEO Global Medical Offi
Slide 5: CEO presentation
1 CEO presentation Helen Giza CEO & Chair of the Management Board
Slide 6: We are the leading kidney care company globally
Capital Markets Day April 2023 Page 6 CEO Global Medical Office Care Delivery Care Enable-ment Market leader with products serving around half of the world’s dialysis patients Largest dialysis services network globally Around 345,000 dialysis patients >4,100 dialysis centers #1 value-based renal car
Slide 7: Our vision
Capital Markets Day April 2023 Page 7 Our vision Creating a future worth living. For patients. Worldwide. Every day.
Slide 8: Accelerating sustainability
1 Includes Scope 1 (direct) and Scope 2 (indirect) emissions at our production sites and Scope 2 emissions from electricity consumption resulting from treatments at our dialysis clinics; excluding mobile assets; Greenhouse gas emissions, calculated in accordance with GHG Protocol Page 8 Accelerating
Slide 9: Our commitment to diversity, equity and inclusion
2027 Women in top management positions 2030 Women across all management positions Ethnically diverse managers in the U.S. Established targets to increase representation of Capital Markets Day April 2023 Page 9 Our commitment to diversity, equity and inclusion ▪ Build an inclusive, high-trust culture
Slide 10: Underlying business fundamentals intact
1 United Nations Department of Economic and Social Affairs, Population Division (2022). World Population Prospects 2022: Summary of Results. UN DESA/POP/2022/TR/NO. 3 2 WHO Global Health Observatory (2019), adjusted for population aged >18 (population data from United Nations, Department of Economic
Slide 11: Our strategic aspiration
Our strategic aspiration Structure Capital allocation Operational efficiencies Portfolio optimization Culture FME25 Care Delivery Care Enablement Global operating model with two segments Financial reporting with enhanced transparency Simplified governance Accountability Sustainability Diversity & In
Slide 12: Proposed future simplified governance model
Supervision/Appoint-ment of the Mgt. Board Shareholders Current governance structure Proposed future governance structure Capital Markets Day April 2023 Page 12 Proposed future simplified governance model Management Board Fresenius Medical Care AG Supervisory Board Fresenius Medical Care AG CEO Glob
Slide 13: Vertical integration: playing to our strengths in new operating model
Page 13 Vertical integration | Playing to our strengths in new operating model Care Delivery Care Enablement Early access to innovation in dialysis MedTech Predictability and scale in supply chain Leverage scientific developments, data technology, connectivity Setting the standard of care Focus on v
Slide 14: New reporting framework: revenue
1 Unaudited | 2 Total revenue with external customers incl. inter-segment revenue Capital Markets Day April 2023 Page 14 New reporting framework | Revenue Former revenue split – FY 2022 13,550 revenue North America 15,593 revenue U.S. 81% International 19% 5,353 revenue2 Internal 29% External 71% Ca
Slide 15: New reporting framework: operating income and margin
1,327 1,540 319 341 North America EMEA Asia-Pacific 29 Latin America -476 Corporate FY 2022 operating income 9.8% 11.2% 15.8% 3.6% 7.9% 1 Operating income excluding special items and excluding EUR 277 million of Provider Relief Funding received from the U.S. government to compensate for certain COVI
Slide 16: Accelerated and extended FME25 transformation program
Note: €650m savings targets announced in February 2023 Capital Markets Day April 2023 Page 16 Accelerated and extended FME25 transformation program Expected sustainable annual savings by end of 2025 7% 48% 45% Care Delivery Care Enablement G&A €650 m CEO Global Medical Office Care Delivery Care Enab
Slide 17: Successful execution of FME25 to date
Page 17 Successful execution of FME25 to date Sustainable annual savings until YE 2022 Note: Savings split unaudited 15% 24% 61% Care Delivery Care Enablement G&A Capital Markets Day April 2023 One-time costs until end of 2022 €270 m €650 m total €131 m CEO Global Medical Office Care Delivery Care E
Slide 18: Additional operational efficiencies and turnaround drivers
Capital Markets Day April 2023 Page 18 Additional operational efficiencies and turnaround drivers Care Delivery Care Enablement Operational efficiencies & turnaround drivers CEO Global Medical Office Care Delivery Care Enable-ment ▪ Increased operating leverage from U.S. volume recovery ▪ Favorable
Slide 19: Strategic growth drivers: value-based care and home dialysis
Note: CKD = chronic kidney disease; ESRD = end-stage renal disease Capital Markets Day April 2023 Page 19 Strategic growth drivers | Value-based care and home dialysis CEO Global Medical Office Care Delivery Care Enable-ment ▪ Accelerating shift to home dialysis – Higher patient satisfaction and qua
Slide 20: 2025 operating income margin outlook
1 Unaudited; FY 2022 operating income excluding special items and excluding EUR 277 million of Provider Relief Funding received from the U.S. government to compensate for certain COVID-19-related costs 2 FY 2025 outlook excluding special items and in constant currency. 2022 operating income margin1
Slide 21: Sustainable FME25 annual savings of €650m by 2025
Sustainable FME25 annual savings of €650 m by 2025 Outlook is provided in constant currency and exclusive of special items. Special items will be provided as separate KPI (“Revenue excluding special items”, “Operating income excluding special items”) to capture effects that are unusual in nature and
Slide 22: Portfolio optimization: evaluating our assets to unlock value
Assess Grow Growth Potential Strategic value to FME Divest Capital Markets Day April 2023 Page 22 Portfolio optimization | Evaluating our assets to unlock value CEO Global Medical Office Care Delivery Care Enable-ment 500 - 1,000 0 - 15 15 - 100 100 - 500 Circle size represents gross sales in € mill
Slide 23: Disciplined financial policy and ROIC focus
Deleveraging Focused investments Shareholder return Capital allocation | Disciplined financial policy and ROIC focus ▪ Committed to investment grade rating and to manage net financial leverage within self-imposed range of 3.0 to 3.5x ▪ Potential divestiture proceeds from portfolio optimization to be
Slide 24: Sound funding profile
1 As of December 31, 2022 | 2 Based on utilization of major financing instruments, excl. Commercial Paper and A/R Facility | 3 Calculations based on total financial debt, excluding leases and purchase money obligations. Capital Markets Day April 2023 Page 24 Sound funding profile CEO Global Medical
Slide 25: Target picture 2025+
Capital Markets Day April 2023 Page 25 Target picture 2025+ Care Delivery Service provider of choice for patients, physicians and payors across the renal care continuum Market leading in therapies, digitalization, value-based care, home dialysis & being operationally excellent Care Enablement Profit
Slide 26: Global Medical Office
2 Global Medical Office Franklin W. Maddux, MD CEO Global Medical Office Care Delivery Care Enable-ment
Slide 27: Utilizing global data to the benefit of patients
Capital Markets Day April 2023 Page 27 Global Medical Office | Utilizing global data to the benefit of patients CEO Global Medical Office Care Delivery Care Enable-ment 2.0 bn Labs >29 m Home medications 600 m HD treatments >2 m Patients 2.0 bn In-center medications >21 m Co-morbidities Largest kidn
Slide 28: Clinical experts paired to business leadership
Global Medical Office | Clinical experts paired to business leadership Care Delivery Distinct Clinical Affairs team supporting health services delivery Care Enablement Distinct Medical Affairs team supporting research, strategy, education and regulatory for each product segment Global Medical Office
Slide 29: Treating a complex, diverse and varied patient population
Cardio-vascular U.S. patients ▪ Nearly 2/3 diabetic ▪ ~85% with hypertension International patients ▪ 1/3 diabetic ▪ <20% with hypertension Page 29 Treating a complex, diverse and varied patient population Significant co-morbidity burden However, not all patients are alike ▪ Varied socioeconomic cir
Slide 30: Continuous monitoring of clinical performance to enhance care
▪ Consistent global approach to pursuit equity and standardization of care across diverse patient populations ▪ Use of enhanced analytics covering demographics (patient age) and medical history (diabetes prevalence) Strategy Page 30 Continuous monitoring of clinical performance to enhance care Index
Slide 31: Clinical quality summary post-pandemic
Global 2022 data Page 31 Clinical quality summary post-pandemic Main observations Annualized mortality is recovering and is closely tied to short-term return to growth Central venous catheter use for vascular access remains higher than pre pandemic levels: looking to achieve a 4-5% reduction in cath
Slide 32: Improving mortality trend across patient population
*Preliminary March data as of April 5, 2023 Page 32 Improving mortality trend across patient population Trailing 12-month mortality rate returning to pre-pandemic levels which will contribute to growth in the population of people treated -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 33: New drugs improving CKD and ESRD patient health
GLP-1 agonists Cell-based therapies SGLT2 inhibitors Resulting in ▪ More CKD patients surviving to progress toward ESRD ▪ Fewer patients that may crash into dialysis ▪ Healthier ESRD patients that will dialyze longer ▪ Impact will be driven by speed of uptake, side effects and comorbid conditions ▪
Slide 34: Looking forward: solid patient volume development
Capital Markets Day April 2023 Page 34 Looking forward | Solid patient volume development ▪ Improving patient health and mortality trends are greatest contributors to growing patient volumes and this improves the outlook the quickest ▪ Our continuous analysis of the total CKD population does not ind
Slide 35: we FRESENIUS
= we FRESENIUS vy MEDICAL CARE
Slide 36: Care Delivery
3 Care Delivery Bill Valle CEO Global Medical Office Care Delivery Care Enable-ment
Slide 37: Care Delivery at a glance
Capital Markets Day April 2023 Page 37 Care Delivery | At a glance Around 345,000 Dialysis patients >4,100 Dialysis centers 71 Net promoter score $6 bn Medical cost under management in U.S. value-based care in 2022 52 m+ Dialysis treatments per year 81% Global quality index score 78% Of patients who
Slide 38: Care Delivery business overview
Patients Dialysis services Value-base care Vascular access Other2 Fresenius Rx Renal Pharma Capital Markets Day April 2023 Page 38 Care Delivery business overview CEO Global Medical Office Care Delivery Care Enable-ment 81% 19% U.S. International Comprehensive offering around renal care 2 *Other inc
Slide 39: Setting new standard for kidney care across the renal care continuum
Trans-plantation Slowing progres-sion and increa-sing preemptive transplantations Transplant candi-dates benefit from "Referral Ready" waitlist manage-ment program In-Center and Home Dialysis Renal Lab Testing Renal Pharmaceuticals Access Placement and Maintenance Renal Clinical Pharmacy CKD managem
Slide 40: Market leader in expanding home dialysis in U.S.
Capital Markets Day April 2023 Page 40 Market leader in expanding home dialysis in U.S. CEO Global Medical Office Care Delivery Care Enable-ment Accelerating shift to home dialysis Aspirational home target ▪ Higher patient satisfaction and quality of life ▪ Payors (government, Medicare Advantage and
Slide 41: Key levers for margin improvement: rate growth
U.S. patient service revenue – FY 2022 Capital Markets Day April 2023 Page 41 Key levers for margin improvement | Rate growth 36% 54% 5%5% Medicare program Commercial & Medicare Advantage Medicaid & other government sources Hospitals CEO Global Medical Office Care Delivery Care Enable-ment CMS marke
Slide 42: Key levers for margin improvement: volume growth
Capital Markets Day April 2023 Page 42 Key levers for margin improvement | Volume growth Volume outlook ▪ Continuously outperformed the market in volume development ▪ Assume moderate growth through 2025 ▪ Expect to return to normalized growth by the end of 2025 CEO Global Medical Office Care Deliver
Slide 43: Key levers for margin improvement: cost improvement
Drivers of reduction 1 Excluded PRF | 2 Other includes depreciation, admin, physician compensation, fixed overhead, and miscellaneous expenses Capital Markets Day April 2023 Page 43 Key levers for margin improvement | Cost improvement CEO Global Medical Office Care Delivery Care Enable-ment 47% 23%
Slide 44: Key levers for margin improvement: Care Delivery International
Capital Markets Day April 2023 Page 44 Key levers for margin improvement | Care Delivery International Leveraging capabilities across markets ▪ New operating model brings focus and simplification ▪ Symmetrical organizational structure to U.S. ▪ Leveraging existing operational best practices ▪ Operat
Slide 45: Transforming U.S. value-based care industry with InterWell Health
Unique partnership joining FME and … High-performing nephrology network of 1,600+ value-focused physicians Innovative technology, analytics, and patient engagement platform Leading provider of electronic health record & patient management software designed for nephrology Market leading positioning C
Slide 46: Path to margin improvement
2022 operating income margin1 2025 operating income margin2 Care Delivery 9.5% 10 % to 14 % FME25 140 bps U.S. volume recovery 0 to 100 bps U.S. rate / mix development 100 to 175 bps Labor & inflation -175 to -50 bps Dilution from value-based care growth -50 to 0 bps International growth & operation
Slide 47: Portfolio optimization: Care Delivery International
Exit markets with significant structural challenges Capital Markets Day April 2023 Page 47 Portfolio optimization | Care Delivery International CEO Global Medical Office Care Delivery Care Enable-ment CDI Today 2022 CDI Future 2025 Footprint reduction -25% to -60% 19-36 countries 49 countries Subsca
Slide 48: Target 2025+ Care Delivery
Target 2025+ | Care Delivery CEO Global Medical Office Care Delivery Care Enable-ment Capital Markets Day April 2023 Page 48 Provider, partner, & employer of choice for all stakeholders in our ecosystem ▪ Expanding to CKD ▪ Increased full risk contracting ▪ Full breadth of services supporting patien
Slide 49: Care Enablement
4 Care Enablement Dr. Katarzyna Mazur-Hofsäß CEO Global Medical Office Care Delivery Care Enable-ment
Slide 50: Care Enablement at a glance
Capital Markets Day April 2023 Page 50 Care Enablement | At a glance Around 168 m Dialyzers produced Products available in 153 countries 42 production sites #1 dialyzers #1 machines #1 in HHD Worldwide of all dialysis patients ~50% use our products ~40% market share of in-center dialysis products Cl
Slide 51: The evolution of our organization
The evolution of our organization CEO Global Medical Office Care Delivery Care Enable-ment Regional product management with separate R&D and manufacturing Former structure | Product business New structure | Care Enablement R&D NA product business EMEA product business APAC product business LatAm pro
Slide 52: Care Enablement overview
Capital Markets Day April 2023 Page 52 Care Enablement overview 71% 29% External Internal Ecosystem of Care Enablement products and services Note: *Other includes NCP, Spectra, Frenova, Acumen, Physician Services, and Cura Revenue breakdown – €5.4 bn total in 20221 By customer Water systems Digital
Slide 53: Global leader in dialyzers and membrane technology
Hemocompatibility in High Flux dialysis and HDF Low Flux dialysis Capital Markets Day April 2023 Page 53 Global leader in dialyzers and membrane technology Dialyzer portfolio covering all clinical needs Creatinine (113 Da) Urea (60 Da) Phosphate (96 Da) B12 (1350 Da) Inulin (4k to 6k Da) B2M High Fl
Slide 54: Global leader in in-center machine technology
Page 54 Global leader in in-center machine technology | Portfolio adapted to specific regional needs Europe Latin America Africa Australia Asia U.S. Global Machine Portfolio Pre-mium Value Basic 6008 4008S classix 5008S 2008T 4008A (US only) CEO Global Medical Office Care Delivery Care Enable-ment C
Slide 55: Global leader in HHD
Page 55 Global leader in HHD | Improving economics of PD and upgrading technology US Liberty NxStage EMEA & Canada & Australia Silencia sleep•safe NxStage 5008S harmony LATAM, Africa & Asia Silencia sleep•safe 5008S harmony 75 countries CEO Global Medical Office Care Delivery Care Enable-ment Capita
Slide 56: Global leader in technology for acute dialysis
Page 56 Global leader in technology for acute dialysis High margins Strong global footprint ~27% Market Share Xenios portfolio CEO Global Medical Office Care Delivery Care Enable-ment Capitalizing on global opportunities Capital Markets Day April 2023 Growth in US US Portfolio Expansion: MultiFiltra
Slide 57: Leading digital portfolio in renal therapies
Leading digital portfolio in renal therapies Home In-Center Critical Care Connecting patients & providers Supporting patients & caregivers in diseases management Connecting FME with patients Connecting dialysis unit with Clinical Information System Managing and optimizing therapy Automating processe
Slide 58: Leading digital portfolio in renal therapies
Page 58 Leading digital portfolio in renal therapies Remote Patient Monitoring Nx2me eProcure App Nx2me App Health Tracker App >2M PD Treatments >7M HHD Treatments Cloud Driven Home Therapy Management Therapy Software CDX Edge Computing PD Modeling & Dosing Fluid Management Central Station App HD Th
Slide 59: Digital renal platform driving future value creation
Page 59 Digital renal platform driving future value creation ▪ Automate operational tasks ▪ Enhanced clinical decision making ▪ Help reinvent care models: data enabled personalized treatment Healthcare Providers ▪ Accelerate top line growth by leveraging digital platform ▪ Grow high margin digital P
Slide 60: Care Enablement margin drivers
Page 60 Care Enablement margin drivers Areas to address Drivers of margin improvement Capital Markets Day April 2023 CEO Global Medical Office Care Delivery Care Enable-ment EBIT margin ▪ Inefficiency in parts of manufacturing footprint ▪ Portfolio proliferation diluting scale effects ▪ Loss making
Slide 61: Care Enablement: path to margin improvement
2022 operating income margin1 2025 operating income margin2 Care Enablement 1.9% 8% to 12% FME25 600 bps Inflation -650 to - 550 bps Pricing, contracting, direct procurement 300 to 400 bps Growth in international markets 250 to 300 bps Additional identified improvements (G&A, PD logistics, other ope
Slide 62: Portfolio optimization: Care Enablement
Capital Markets Day April 2023 Page 62 Portfolio optimization | Care Enablement Thorough assessment of portfolio assets, accelerated decision process CEO Global Medical Office Care Delivery Care Enable-ment R&D programs refocused on future platforms Ventures portfolio critically assessed for strateg
Slide 63: Target 2025+ Care Enablement
Capital Markets Day April 2023 Page 63 Target 2025+ | Care Enablement Profitably shape global dialysis market CEO Global Medical Office Care Delivery Care Enable-ment ▪ Manufacturing footprint optimization ▪ Portfolio rationalization ▪ Action plan based on assessment of future viability for PD in th
Slide 64: Q&A
Q&A Your questions are welcome!
Slide 65: Concluding remarks
SS” FRESENIUS y MEDICAL CARE Concluding
Slide 66: In summary: our strategic aspiration
In summary | Our strategic aspiration Structure Capital allocation Operational efficiencies Portfolio optimization Culture FME25 Care Delivery Care Enablement Global operating model with two segments Financial reporting with enhanced transparency Simplified governance Accountability Sustainability D
Slide 67: Thank you for joining!
Thank you for joining! Fresenius Medical Care Capital Markets Day 2023
Fresenius Medical Care AG & Co. KGaA — IPO Roadshow (April 2023) on 6ix