Fresenius Medical Care Ag · XETR:FME
Fresenius Medical Care — Investor Day (April 2023)
66 slides from Fresenius Medical Care's investor day presentation, Apr 19, 2023
Slide 1: Capital Markets Day 2023
Fresenius Medical Care Capital Markets Day 2023 ▪ April 19, 2023 | Virtual event © Copyright
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
Global Care Medical Care Enable- CEO Office Delivery ment IR Introduction Dr. Dominik Heger Helen Giza, CEO & Chair of 1 CEO presentation Management Board Global Medical 2 Office Franklin W. Maddux, MD Break Agenda 3 Care Bill Valle Delivery Care 4 Enablement Dr. Katarzyna Mazur-Hofsäß Joint Q&A ses
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
Global Care Medical Care Enable- CEO Office Delivery ment We are the leading kidney care company globally Largest dialysis services network globally Market leader with products serving around half of the world’s dialysis patients Around 71 >4,100 345,000 Net promoter dialysis centers Global Global d
Slide 7: Our vision
Our vision Creating a future worth living. For patients. Worldwide. Every day. Capital Markets Day April 2023 Page 7
Slide 8: Accelerating sustainability | Purpose driven. Patient-centric.
Global Care Medical Care Enable- CEO Office Delivery ment Accelerating sustainability | Purpose driven. Patient-centric. 2023+ sustainability Enhance quality of Build the Reduce our targets and care and access to best team to environmental priorities set health care serve patients footprint New diff
Slide 9: Our commitment to diversity, equity and inclusion
Global Care Medical Care Enable- CEO Office Delivery ment Our commitment to diversity, equity and inclusion ▪ Build an inclusive, high-trust culture for all employees, Established targets to increase where diversity is valued deeply representation of 2027 ▪ Attract, retain and develop a world-class
Slide 10: Underlying business fundamentals intact
Global Care Medical Care Enable- CEO Office Delivery ment Underlying business fundamentals intact | New extrapolation from 2020 to 2035 Ageing Global Population Hypertension Diabetes Dialysis patients +60% One out of four people worldwide has +40% +100% hypertension2 Global population People living
Slide 11: Our strategic aspiration
Global Care Medical Care Enable- CEO Office Delivery ment Our strategic aspiration Unlock value as the leading kidney care company Global operating model Financial reporting with Structure Simplified governance with two segments enhanced transparency Capital Disciplined financial policy ROIC improve
Slide 12: Proposed future simplified governance model
Global Care Medical Care Enable- CEO Office Delivery ment Proposed future simplified governance model Current governance structure Proposed future governance structure Fresenius Outside Share- Election holders/free float SE & Co. KGaA Shareholders 100% shares Election 68% shares Supervisory Board Su
Slide 13: Vertical integration
Global Care Medical Care Enable- CEO Office Delivery ment Vertical integration | Playing to our strengths in new operating model Early access to innovation Predictability and Focus on value creation in in dialysis MedTech both businesses scale in supply chain Leverage infrastructure and global G&A C
Slide 14: New reporting framework | Revenue
Global Care Medical Care Enable- CEO Office Delivery ment New reporting framework | Revenue Former revenue split – FY 2022 New revenue split – FY 20221 North EMEA Care Delivery America U.S. 13,550 2,851 15,593 81% revenue revenue revenue International 19% Asia- Latin Care Enablement Pacific America
Slide 15: New reporting framework | Operating income and margin
Global Care Medical Care Enable- CEO Office Delivery ment New reporting framework | Operating income1 and margin Former reporting – operating income excl. New reporting – operating income excl. special items1 special items1 FY 20222 in € million in € million 3.6% 15.8% Margin in % Margin in % 29 341
Slide 16: Accelerated and extended FME25 transformation program
Global Care Medical Care Enable- CEO Office Delivery ment Accelerated and extended FME25 transformation program Expected sustainable annual savings by end of 2025 Top workstream contributions Care Delivery 7% Care Delivery U.S. growth and efficiency G&A 45% €650 m Care Enablement Manufacturing effic
Slide 17: Successful execution of FME25 to date
Global Care Medical Care Enable- CEO Office Delivery ment Successful execution of FME25 to date One-time costs until end of 2022 Top contributions until YE 2022 €650 m €270 m total Care Delivery Clinical operational efficiencies Sustainable annual savings until YE 2022 Care Delivery Care Enablement
Slide 18: Additional operational efficiencies and turnaround drivers
Global Care Medical Care Enable- CEO Office Delivery ment Additional operational efficiencies and turnaround drivers Care Delivery Care Enablement Operational ▪ Increased operating leverage ▪ Pricing, contracting and direct efficiencies from U.S. volume recovery procurement ▪ Favorable U.S. rate / m
Slide 19: Strategic growth drivers | Value-based care and home dialysis
Global Care Medical Care Enable- CEO Office Delivery ment Strategic growth drivers | Value-based care and home dialysis Market leader Market leader transforming further U.S. value- expanding based care U.S. home industry dialysis ▪ Premier value-based care capabilities addressing growing ▪ Accelerat
Slide 20: Path to margin improvement
Global Care Medical Care Enable- CEO Office Delivery ment Path to margin improvement 2022 operating 2025 operating income margin1 income margin2 Group 7.9% 10 % to 14% 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 & i
Slide 21: 2025 margin growth assumptions
Global Care Medical Care Enable- CEO Office Delivery ment 2025 margin growth assumptions Sustainable FME25 annual savings of €650 m by 2025 Improved operating Moderate reimbursement rate increase until 2025 income margin of 10% to 14% Moderate patient volume growth until 2025 by 2025 Stabilizing lab
Slide 22: Portfolio optimization | Evaluating our assets to unlock value
Global Care Medical Care Enable- CEO Office Delivery ment Portfolio optimization | Evaluating our assets to unlock value Circle size represents gross sales in € million Strategic value to FME CE In-Center CE Critical Care Dialysis Services > 4,000 International CE Home (HHD & PD) 500 - 1,000 1,000 -
Slide 23: Capital allocation | Disciplined financial policy and ROIC focus
Global Care Medical Care Enable- CEO Office Delivery ment 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 Deleveraging ▪ Potential divestiture proceeds from portfolio
Slide 24: Sound funding profile
Global Care Medical Care Enable- CEO Office Delivery ment Sound funding profile Diversified financing mix1 Well-balanced maturity profile1,2 in € million Average maturity3: 4.7 years Schuldschein Loans 2% Average interest3: 2.2% A/R Facility 1% 1,897 Other 2% 1,547 Commercial Paper 4% Lease Liabilit
Slide 25: Target picture 2025+
Global Care Medical Care Enable- CEO Office Delivery ment Target picture 2025+ Partner of choice, setting the standard in kidney care with industry-leading returns Care Delivery Care Enablement Service provider of choice for patients, Profitably shape the global dialysis physicians and payors across
Slide 26: Global Medical Office
Global Care Medical Care Enable- CEO Office Delivery ment 2 Global Medical Office Franklin W. Maddux, MD
Slide 27: Utilizing global data to the benefit of patients
Global Care Medical Care Enable- Global Medical Office | Utilizing global data to the CEO Office Delivery ment benefit of patients >2 m 600 m 2.0 bn Patients HD treatments Labs Largest kidney care dataset in the world 50 countries across 6 continents >21 m 2.0 bn >29 m Co-morbidities In-center Home
Slide 28: Global Medical Office | Clinical experts paired to business leadership
Global Care Medical Care Enable- CEO Office Delivery ment 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
Slide 29: Treating a complex, diverse and varied patient population
Global Care Medical Care Enable- CEO Office Delivery ment Treating a complex, diverse and varied patient population Significant co-morbidity burden However, not all patients are alike ▪ Varied socioeconomic circumstances ▪ Diverse racial and ethnic make-up Hypertension Diabetes ▪ Diverse underlying
Slide 30: Continuous monitoring of clinical performance to enhance care
Global Care Medical Care Enable- CEO Office Delivery ment Continuous monitoring of clinical performance to enhance care Index components Demographic indicators Dialysis effectiveness Strategy Measures how sufficiently the body is cleansed of waste substances ▪ Consistent global approach to Vascular
Slide 31: Clinical quality summary post-pandemic
Global Care Medical Care Enable- CEO Office Delivery ment Clinical quality summary post-pandemic Main observations Annualized mortality is recovering and is closely tied to Global 2022 data short-term return to growth Central venous catheter use for vascular access remains higher than pre pandemic l
Slide 32: Improving mortality trend across patient population
Global Care Medical Care Enable- CEO Office Delivery ment 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 4.0% 3.0% 2.0% U.S. 1.0% EMEA 0.0% -1.0% Q1 Q2 Q3 Q4 Q1
Slide 33: New drugs improving CKD and ESRD patient health
Global Care Medical Care Enable- CEO Office Delivery ment New drugs improving CKD and ESRD patient health Notable examples Overall, new drugs are expected to have a positive Long-term impact will be impact on persons with kidney Designed to slow the Cell-based limited by risks inherent to the diseas
Slide 34: Looking forward | Solid patient volume development
Global Care Medical Care Enable- CEO Office Delivery ment Looking forward | Solid patient volume development U.S. dialysis U.S. patient volume treatment growth expected to expectations return to pre- pandemic levels by 2025+ 2023 ▪ Improving patient health and mortality trends are greatest -1% to +1
Slide 35: Care Delivery
Global Care Medical Care Enable- CEO Office Delivery ment 3 Care Delivery Bill Valle
Slide 36: Care Delivery | At a glance
Global Care Medical Care Enable- CEO Office Delivery ment Care Delivery | At a glance Largest dialysis network worldwide Around >4,100 71 $6 bn 345,000 Dialysis Net promoter Medical cost under Dialysis patients centers score management in U.S. value-based care in 2022 52 m+ 81% 78% 51% Dialysis trea
Slide 37: Care Delivery business overview
Global Care Medical Care Enable- CEO Office Delivery ment Care Delivery business overview Comprehensive Revenue breakdown – €15.6 bn total in 20221 offering around Dialysis By region services renal care Renal Value- International Pharma base care 19% Patients Fresenius Vascular Rx access Other2 81%
Slide 38: Care Delivery is setting new standard for kidney care
Global Care Medical Care Enable- CEO Office Delivery ment Care Delivery is setting new standard for kidney care serving U.S. patients across the Renal Care Continuum CKD ESRD management Trans- management plantation Slowing progres- Access Renal Lab In-Center and Renal Renal Clinical Transplant candi
Slide 39: Market leader in expanding home dialysis in U.S.
Global Care Medical Care Enable- CEO Office Delivery ment Market leader in expanding home dialysis in U.S. Accelerating shift to home dialysis Aspirational home target ▪ Higher patient satisfaction and quality of life ▪ Payors (government, Medicare Advantage and commercial) favor home dialysis ▪ Sup
Slide 40: Key levers for margin improvement | Rate growth
Global Care Medical Care Enable- CEO Office Delivery ment Key levers for margin improvement | Rate growth U.S. patient service revenue – FY 2022 CMS market basket adjustment Medicaid & other government Hospitals sources Continued conversion to Medicare Advantage 5% 5% Medicare program 36% Built-in e
Slide 41: Key levers for margin improvement | Volume growth
Global Care Medical Care Enable- CEO Office Delivery ment Key levers for margin improvement | Volume growth Key contributors to volume growth are Volume outlook stabilizing & returning to pre-pandemic levels Mortality Rates Monthly Turnover ▪ Continuously outperformed the market in volume Decreased
Slide 42: Key levers for margin improvement | Cost improvement
Global Care Medical Care Enable- CEO Office Delivery ment Key levers for margin improvement | Cost improvement Care Delivery – U.S. dialysis | Drivers of reduction Cost components Labor Improve Accelerated Accelerate Increase retention & savings on home utilization turnover of labor rate growth and
Slide 43: Leveraging capabilities across markets
Global Care Medical Care Enable- CEO Office Delivery ment 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
Slide 44: Transforming U.S. value-based care industry with InterWell Health
Global Care Medical Care Enable- CEO Office Delivery ment Transforming U.S. value-based care industry with InterWell Health Unique partnership Market leading Clinical Excellence out- joining FME and … positioning performing the market1 High-performing $6 bn in medical costs under 150% increased opti
Slide 45: Path to margin improvement
Global Care Medical Care Enable- CEO Office Delivery ment Path to margin improvement 2022 operating 2025 operating income margin1 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 bp
Slide 46: Portfolio optimization | Care Delivery International
Global Care Medical Care Enable- CEO Office Delivery ment Portfolio optimization | Care Delivery International Exit markets with significant CDI Today CDI Future structural challenges 2022 2025 Footprint Subscale and unprofitable reduction 49 -25% to -60% 19-36 countries countries Regulatory and geo
Slide 47: Target 2025+ | Care Delivery
Global Care Medical Care Enable- CEO Office Delivery ment Target 2025+ | Care Delivery Best-in-class clinical outcomes ▪ Full breadth of services Provider, supporting patients across the renal care continuum partner, & Market leader in U.S. employer of value-based care choice for all ▪ Expanding to
Slide 48: Care Enablement
Global Care Medical Care Enable- CEO Office Delivery ment 4 Care Enablement Dr. Katarzyna Mazur-Hofsäß
Slide 49: Care Enablement | At a glance
Global Care Medical Care Enable- CEO Office Delivery ment Care Enablement | At a glance Market leading renal medtech company Machines ~40% Around Clear market leader produced in 2022 market share of 168 m in the production of hemodialysis machines ~49,000 in-center dialysis Dialyzers products produc
Slide 50: The evolution of our organization
Global Care Medical Care Enable- CEO Office Delivery ment The evolution of our organization Former structure | Product business New structure | Care Enablement Regional product management with separate R&D and manufacturing In-Center Home Critical Care NA product business R&D Commercial operations E
Slide 51: Care Enablement overview
Global Care Medical Care Enable- CEO Office Delivery ment Care Enablement overview Revenue breakdown – Ecosystem of Care Enablement products and services €5.4 bn total in 20221 By customer Digital services Dialysis products Training Internal and educatio 29% n Home dialysis Technical service Water 7
Slide 52: Global leader in dialyzers and membrane technology
Global Care Medical Care Enable- CEO Office Delivery ment Global leader in dialyzers and membrane technology Dialyzer portfolio covering all clinical needs Hemocompatibility in Albumin (67k Da) To retain High Flux dialysis and HDF Myoglobin (17k Da) To remove B2M (12k Da) High Flux dialysis Inulin (
Slide 53: Global leader in in-center machine technology
Global Care Medical Care Enable- CEO Office Delivery ment Global leader in in-center machine technology | Portfolio adapted to specific regional needs Europe Asia U.S. Global Machine Portfolio Pre- Value Basic mium Latin America Africa Australia 6008 5008S 2008T 4008S 4008A (US only) classix Capital
Slide 54: Global leader in HHD
Global Care Medical Care Enable- Global leader in HHD | CEO Office Delivery ment Improving economics of PD and upgrading technology US EMEA & Canada & Australia Liberty NxStage Silencia sleep•safe NxStage 5008S harmony LATAM, Africa & Asia Silencia sleep•safe 5008S harmony 75 countries Capital Marke
Slide 55: Global leader in technology for acute dialysis
Global Care Medical Care Enable- CEO Office Delivery ment Global leader in technology for acute dialysis Xenios Growth in Europe portfolio and China Growth in US Growth with MultiFiltrate PRO US Portfolio Expansion: MultiFiltrate PRO and sterile Solution Growth with MultiFiltrate PRO Capitalizing on
Slide 56: Leading digital portfolio in renal therapies
Global Care Medical Care Enable- CEO Office Delivery ment 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
Slide 57: Leading digital portfolio in renal therapies
Global Care Medical Care Enable- CEO Office Delivery ment Leading digital portfolio in renal therapies Home In-Center Critical Care >11k HHD >7M HHD Patients >700 Nx2me Managed Treatments active Renal Clinic App Installatio Management ns Nx2me Remote Patient Monitoring Home Therapy Data UDL Manageme
Slide 58: Digital renal platform driving future value creation
Global Care Medical Care Enable- CEO Office Delivery ment Digital renal platform driving future value creation Patients & Care Partners Healthcare Providers Shareholders ▪ Improve end-end patient experience via ▪ Automate operational tasks ▪ Accelerate top line growth by leveraging digital tools and
Slide 59: Care Enablement margin drivers
Global Care Medical Care Enable- CEO Office Delivery ment Care Enablement margin drivers ▪ Inefficiency in parts of manufacturing footprint ▪ Portfolio proliferation Drivers of margin diluting scale effects improvement ▪ Loss making PD business in the U.S. ▪ FME25 initiatives ▪ Inflation ▪ Pricing,
Slide 60: Care Enablement | Path to margin improvement
Global Care Medical Care Enable- CEO Office Delivery ment Care Enablement | Path to margin improvement 2022 operating 2025 operating income margin1 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 i
Slide 61: Portfolio optimization | Care Enablement
Global Care Medical Care Enable- CEO Office Delivery ment Portfolio optimization | Care Enablement Thorough assessment of portfolio assets, accelerated decision process R&D programs Ventures portfolio Rationalized Considering options refocused on future critically assessed portfolio of cyclers, for
Slide 62: Target 2025+ | Care Enablement
Global Care Medical Care Enable- CEO Office Delivery ment Target 2025+ | Care Enablement Boost operating performance ▪ Manufacturing footprint optimization Profitably ▪ Portfolio rationalization shape global ▪ Action plan based on assessment of future viability for PD in the U.S. dialysis ▪ Streamli
Slide 63: Q & A Your questions are welcome!
Q&A Your questions are welcome!
Slide 64: Concluding remarks
ad > FRESENIUS Vv MEDICAL CARE Concluding
Slide 65: In summary | Our strategic aspiration
Global Care Medical Care Enable- CEO Office Delivery ment In summary | Our strategic aspiration Unlock value as the leading kidney care company Global operating model Financial reporting with Structure Simplified governance with two segments enhanced transparency Capital Disciplined financial policy
Slide 66: Thank you for joining!
Thank you for joining! Fresenius Medical Care Capital Markets Day 2023