Fresenius Medical Care Ag · XETR:FME
Fresenius Medical Care — Q4 2023 Earnings Presentation
37 slides from Fresenius Medical Care's earnings presentation, Feb 20, 2024
Slide 1: Q4 & FY 2023 IR Conference Call
Analyst Presentation Helen Giza CEO & Chair of the Management Board Martin Fischer CFO February 20, 2024 Q4 & FY 2023 IR Conference Call
Slide 2: Safe harbor statement
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 conve
Slide 3: Execution against strategic plan, Q4 Business Update, Outlook
1 Execution against strategic plan 2 Q4 Business Update 3 Outlook
Slide 4: 2023 | Delivering on commitment in a year of fundamental transformation
2023 | Delivering on commitment in a year of fundamental transformation Successful Leadership Portfolio operational changes optimization turnaround Delivered organic New CFO and Divested non-core growth and operational CD head on board assets and turnaround discontinued unpromising R&D projects 2023
Slide 5: 2023 | Key developments at Group level
2023 | Key developments at Group level ▪ Solid revenue growth at constant currency at top end of outlook ▪ Organic growth mainly driven by favorable business development ▪ Stable U.S. same market treatments1 at center of assumed range ▪ Operating income (outlook base) exceeding top end of raised out
Slide 6: Clinical performance on high level | Further increased NPS of 72
Clinical performance on high level | Further increased NPS of 72 Quality index components Dialysis effectiveness Measures how sufficiently the body is cleansed of waste substances Vascular access Quality index Measures the share of patients who do not receive dialysis via a dialysis catheter but Glo
Slide 7: 2023 | Delivered growth against raised outlook
2023 | Delivered growth against raised outlook Revenue | outlook base1 Operating income | outlook base1 in € million Margin in % 7.8% 7.9% 8.9% 7.0% +5.5% cc +15.5%cc in € million 19,398 19,454 305 1,741 +3.9% organic 1,512 1,540 1,369 -277 -372 FY 2022 FY 2023 FY 2022 FY 2023 Operating Income (outl
Slide 8: 2023 | Upgraded financial outlook exceeded
2023 | Upgraded financial outlook exceeded FY 2023 Updated Outlook FY 2023 Actuals at constant currency Low- to mid-single digit Revenue percent growth +5% FY 2022 basis: EUR 19.4bn FY 2023: EUR 20,464m Between 12 and 14 Operating income (outlook base) percent growth +15% FY 2022 basis: EUR 1.54bn F
Slide 9: 2023 | Key divestments announced and further under way
2023 | Key divestments announced and further under way Portfolio optimization plan as presented Divestments of non-core and margin dilutive assets as part of ongoing portfolio optimization plan Closed divestments o CD and CE operations in Argentina o CD operations in Hungary o National Cardiovascula
Slide 10: 2023 | Disciplined financial policy strictly followed
2023 | Disciplined financial policy strictly followed ▪ Committed to investment grade rating and to manage net financial leverage within self-imposed range of 3.0x to 3.5x. Reduced ratio from 3.4x to 3.2x. Deleveraging ▪ Proceeds from divestments and received Tricare settlement payment used for ongo
Slide 11: Strategic growth drivers | Value-based care and home dialysis
Strategic growth drivers | Value-based care and home dialysis Market leader transforming U.S. value-based care Market leader further expanding U.S. home dialysis industry ▪ Premier value-based care capabilities addressing growing population of CKD ▪ Accelerating shift to home dialysis and ESRD patie
Slide 12: Innovation | High-Volume Hemodiafiltration now approved by FDA
Innovation | High-Volume Hemodiafiltration now approved by FDA CONVINCE Study With 100% adoption of HVHDF, mortality can be reduced by A pragmatic, multinational, randomized, controlled trial approximately (based on 2019 rates): ▪ US HD population: 3.7 deaths per 100 py Comparison of High-Volume Hem
Slide 13: Execution against strategic plan Q4 Business Update Outlook
1 Execution against strategic plan 2 Q4 Business Update 3 Outlook
Slide 14: Q4 2023 | Key developments at Group level
Q4 2023 | Key developments at Group level ▪ Solid organic revenue growth driven by both operating segments ▪ Broadly stable U.S. same market treatment growth ▪ Operating income (outlook base) increased due to strong FME25 savings, the Tricare settlement and pricing in Care Enablement 4 ▪ Realization
Slide 15: Q4 2023 | Group organic growth momentum continues
Q4 2023 | Group organic growth momentum continues Revenue | outlook base1 Operating income | outlook base1 in € million Margin in % 7.0% 9.8% 11.1% 8.6% +7.4% cc +18.4%cc 4,997 4,988 in € million +3.3% organic 555 143 489 428 -6 352 -127 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Operating Income (outlook base
Slide 16: Q4 2023 | Operating margin improvement driven by Tricare settlement
Q4 2023 | Operating margin improvement driven by Tricare settlement Margin in % 9.8% 11.1% In € million 13 555 62 -3 -6 137 489 428 -127 352 Q4 2022 Special items Q4 2022 Care Care Inter- Corporate Q4 2023 Special Q4 2023 operating & PRF operating Delivery Enablement segment operating items operatin
Slide 17: Q4 2023 | Care Delivery earnings driven by savings and Tricare settlement
Q4 2023 | Care Delivery earnings driven by savings and Tricare settlement Revenue | outlook base1 Operating income | outlook base1 in € million Margin in % 11.4% 12.8% 14.4% 13.0% in € million +16.1% cc +7.5% cc 572 60 510 19 -40 515 3,993 3,976 +2.4% organic 456 -57 -20 103 -6 Currency Business FME
Slide 18: Q4 2023 | Care Enablement earnings driven by savings and pricing
Q4 2023 | Care Enablement earnings driven by savings and pricing Revenue | outlook base1 Operating income | outlook base1 Margin in % in € million -4.5% -0.2% 0.7% -3.1% n.a. +5.3% cc in € million 1,392 +5.6% 1,380 organic 10 -21 27 -3 10 -3 Currency Business FME25 Inflation -52 -42 translation grow
Slide 19: 2023 | Cash flow used to deleverage
2023 | Cash flow used to deleverage in € million Q4 2023 Q4 2022 FY 2023 FY 2022 Key developments in FY 2023 Operating cash flow 719 600 2,629 2,167 ▪ Capital expenditures, net (239) (202) (669) (687) ▪ Operating cash flow improved by 21% mainly due positive working capital Free cash flow 480 398 1,
Slide 20: Execution against strategic plan Q4 Business Update Outlook
1 Execution against strategic plan 2 Q4 Business Update 3 Outlook
Slide 21: FME25 | Savings fully on plan
FME25 | Savings fully on plan Sustainable annual savings +650 p.a. ▪ Transformation program introduced in € million +470 to +150 to in 2021 and savings target extended +520 +200 to EUR 650m by 2025 +100 to +346 +150 ▪ EUR 346m of sustainable savings +215 delivered by year end 2023, while +131 relate
Slide 22: Outlook | FY 2024 assumptions
Outlook | FY 2024 assumptions Adjustments to outlook base 2023 2024 outlook assumptions Revenue ▪ Earnings tailwinds from 19,454 19,049 ▪ U.S. same market treatment growth of 0.5 to 2% -191 -214 ▪ Business growth of EUR 400-500m ▪ Incremental sustainable FME25 savings of EUR 100-150m with related on
Slide 23: Outlook | FY 2024 and beyond
Outlook | FY 2024 and beyond FY 2024 Outlook Mid-term Outlook Low- to mid-single digit Revenue percent growth (outlook base) FY 2023 basis: EUR 19.0bn Group operating income margin 10% to 14% by 2025 Mid- to high-teens Operating income percent growth (outlook base) FY 2023 basis: EUR 1.54bn Revenue
Slide 24: Appendix / Questions and Answers
Appendix Questions and Answers
Slide 25: Appendix
Appendix
Slide 26: Q4 2023 | Profit and Loss
Q4 2023 | Profit and Loss Q4 2023 Q4 2022 Growth Growth € million € million in % in % cc Revenue 4,988 4,997 0 7 Operating income 428 352 22 27 Operating income margin in % 8.6 7.0 Operating income excl. special items & PRF 555 489 14 18 Operating income margin in % excl. special items & PRF 11.1 9.
Slide 27: FY 2023 | Profit and Loss
FY 2023 | Profit and Loss FY 2023 FY 2022 Growth Growth € million € million in % in % cc Revenue 19,454 19,398 0 5 Operating income 1,369 1,512 -9 -7 Operating income margin in % 7.0 7.8 Operating income excl. special items & PRF 1,741 1,540 13 15 Operating income margin in % excl. special items & P
Slide 28: 2022 base for 2023 targets, reconciliation adjustments
2022 base for 2023 targets, reconciliation adjustments € million FY 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Revenue 19,398 4,548 4,757 5,096 4,997 Operating income 1,540 390 284 377 489 Reconciliation of non-IFRS financial measures to the most directly comparable IFRS financial measures for comparison
Slide 29: 2022 base for 2023 targets, reconciliation adjustments
2022 base for 2023 targets, reconciliation adjustments € million FY 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Revenue 19,398 4,548 4,757 5,096 4,997 Operating income 1,540 390 284 377 489 Reconciliation of non-IFRS financial measures to the most directly comparable IFRS financial measures for comparison
Slide 30: Debt
Debt Reconciliation of non-IFRS financial measures to most directly comparable IFRS financial measures FY 2023 FY 2022 FY 2021 € million € million € million Debt Short-term debt from unrelated parties 457 644 1,178 + Short-term debt from related parties - 4 78 + Current portion of long-term debt 487
Slide 31: EBITDA
EBITDA Reconciliation of adjusted EBITDA and net leverage ratio to the most directly comparable IFRS financial measures FY 2023 FY 2022 FY 2021 € million € million € million Net income 732 895 1,219 + Income tax expense 301 325 353 − Interest income -88 -68 -73 + Interest expense 424 360 353 + Depre
Slide 32: Return on Invested Capital (ROIC) continued to be impacted by lower earnings
Return on Invested Capital (ROIC) continued to be impacted by lower earnings 12.4% rep. 8.6% 7.8% 8.0% adj. 8.0% adj. 7.1% 6.6%adj. 6.1% rep. 5.1% adj. 5.8% rep. 3.9% adj. 4.9% rep. 3.6% adj. 3.3% rep. 2.8% rep. 2015 2016 2017 2018 2019 2020 2021 2022 2023 ▪ For the years 2015-17 ROIC as reported wi
Slide 33: Exchange rates, U.S. dialysis days per quarter, definitions
Exchange rates, U.S. dialysis days per quarter, definitions Exchange rates U.S. dialysis days per quarter FY 2023 FY 2022 FY 2021 Q1 Q2 Q3 Q4 Full year €:USD Period end 1.105 1.067 1.133 2023 77 78 79 78 312 Average 1.081 1.053 1.183 2022 77 78 79 79 313 2021 77 78 79 79 313 €:CNY Period end 7.851 7
Slide 34: Patients, treatments, clinics
Patients, treatments, clinics as of December 31, 2023 as of December 31, 2022 Patients Treatments Clinics Patients Treatments Clinics United States 205,308 31,210,375 2,615 206,033 31,361,555 2,671 Growth in % 0 0 -2 0 -2 0 International 127,240 20,444,165 1,310 138,654 20,948,576 1,445 Growth in %
Slide 35: Segment information for FY 2021, 2022 and 2023
Segment information for FY 2021, 2022 and 2023 Growth Organic Growth Organic € million; % change year-over-year FY 2023 Growth FY 2022 Growth FY 2021 at cc growth at cc growth Total Revenue 19,454 0 5 4 19,398 10 2 2 17,619 Operating income 1,369 -9 -7 1,512 -18 -25 1,852 Operating income margin in
Slide 36: Financial calendar, Conferences and Roadshows
Financial calendar Date Event February 20, 2024 Report on 4th quarter 2023: Earnings Release and Conference Call Reporting May 7, 2024 Report on 1st quarter 2024: Earnings Release and Conference Call AGM & May 16, 2024 Annual General Meeting 2024, Frankfurt July 30, 2024 Report on 2nd quarter 2024:
Slide 37: Contacts
Contacts Fresenius Medical Care AG Investor Relations Else-Kröner-Str. 1 61352 Bad Homburg v. d. H. Germany Dr. Dominik Heger Ilia Kuerten Alicia Cahill Head of Investor Relations Vice President Senior Director ir@freseniusmedicalcare.com and Investor Relations Investor Relations Head of Investor
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