Fresenius Medical Care Ag · XETR:FME

Fresenius Medical Care — Q2 2024 Earnings Presentation

44 slides from Fresenius Medical Care's earnings presentation, July 2024

  1. Slide 1: Fresenius Medical Care AG Investor Presentation Q2 2024

    Fresenius Medical Care AG Investor Presentation Q2 2024 Updated in July 2024

  2. 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

  3. Slide 3: Markets and growth drivers; Execution; Q2 2024 Business Update; Outlook

    1 Markets and growth drivers 2 Execution against strategic plan 3 Q2 2024 Business Update 4 Outlook

  4. Slide 4: We are the leading kidney care company globally

    We are the leading kidney care company globally Care Delivery | ~80% of total revenue Care Enablement | ~20% of total revenue Largest dialysis services network globally Market leader with products serving around half of the world’s dialysis patients Around 72 ~3,800 311,000 Net Promoter dialysis cen

  5. Slide 5: Underlying business fundamentals intact | Extrapolation from 2020 to 2035

    Underlying business fundamentals intact | Extrapolation from 2020 to 2035 Ageing global population Hypertension Diabetes Dialysis patients One out of four people +60% worldwide has hypertension2 +40% +100% Global population People living People on maintenance aged 65+1 with diabetes3 dialysis4 0.75

  6. Slide 6: GLP-1 medications' assumed effects on the kidney disease population

    GLP-1 medications’ assumed effects on the kidney disease population ESRD patients with significant co-morbidity Overall, GLP-1 medications are expected to burden have a balanced impact on ESRD patient volumes Expected long-term impact Cardio- Diabetes vascular  GLP-1 help control T2D with proven be

  7. Slide 7: Returning to solid patient volume development looking forward

    Returning to solid patient volume development looking forward U.S. dialysis U.S. patient volume growth treatment expected to return to pre- expectations pandemic levels by 2025+ 2024  Improving patient health and mortality trends are greatest contributors to growing flat to +0.5% patient volumes an

  8. Slide 8: 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

  9. Slide 9: Continuous monitoring of clinical performance to enhance care

    Continuous monitoring of clinical performance to enhance care 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 Global

  10. Slide 10: Our commitment to sustainability: Purpose driven. Patient-centric.

    Our commitment to sustainability: Purpose driven. Patient-centric. Progress in our strategic focus areas Enhance quality of Build the Reduce our care and access to best team to environmental health care serve patients footprint High patient satisfaction Diversity in leadership Emissions reduction 72

  11. Slide 11: Markets and growth drivers; Execution; Q2 2024 Business Update; Outlook

    1 Markets and growth drivers 2 Execution against strategic plan 3 Q2 2024 Business Update 4 Outlook

  12. Slide 12: 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, new Divested non-core growth and operational CD head and new assets and turnaround Board Member for discontinued Legal, Compl

  13. Slide 13: FME25 | On track to reach upper end of full year 2024 savings target

    FME25 | On track to reach upper end of full year 2024 savings target range Sustainable annual savings +650 p.a. +650 p.a.  Transformation program introduced in in € million +470 to +150 to 2021 and savings target extended to EUR +520 +200 650m by 2025 +100 to +346 +150  EUR 346m of sustainable sav

  14. Slide 14: Portfolio | Further divestitures closed as execution of plan continues

    Portfolio | Further divestitures closed as execution of plan continues 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 operations1 in Chile, Ecuado

  15. Slide 15: Use of cash | Disciplined financial policy strictly followed

    Use of cash | 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; ratio currently at 3.1x Deleveraging  Proceeds from divestments used for ongoing deleveraging Shareholder  Dividend of

  16. Slide 16: 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

  17. Slide 17: Markets and growth drivers; Execution; Q2 2024 Business Update; Outlook

    1 Markets and growth drivers 2 Execution against strategic plan 3 Q2 2024 Business Update 4 Outlook

  18. Slide 18: Q2 2024 | Key developments at Group level

    Q2 2024 | Key developments at Group level  Organic revenue growth of +2.3% supported by both segments Care Delivery and Care Enablement  Operating income1 and operating income margin1 increase driven by Care Enablement  Additional FME25 savings of EUR 57 million achieved and on track to reach the

  19. Slide 19: Q2 2024 | Revenue development driven by solid organic growth

    Q2 2024 | Revenue development driven by solid organic growth Revenue | outlook base1 Operating income | outlook base1 in € million Margin in % 7.4% 8.4% 9.1% 8.9% +0.1% outlook base1 4,825 4,741 4,743 4,766 +8.3% in € million -84 +2.3% 23 outlook base1 3 433 425 organic 43 400 357 -11 Q2 2023 Divest

  20. Slide 20: Q2 2024 | Operating margin improvement driven by Care Enablement

    Q2 2024 | Operating margin improvement driven by Care Enablement Margin in % 8.4% 9.1% In € million 13 433 3 52 425 43 400 -4 -11 357 -28 Q2 2023 Special Q2 2023 Care Care Inter- Corporate Q2 2024 Fx Special items Q2 2024 operating items & 2023 operating Delivery Enablement segment operating operati

  21. Slide 21: Q2 2024 | Care Delivery with organic growth despite flat U.S. volumes

    Q2 2024 | Care Delivery with organic growth despite flat U.S. volumes Revenue | outlook base1 Operating income | outlook base1 in € million in € million Margin in % outlook base1 10.6% 9.9% -1.1% -7.0% outlook base1 3,786 3,743 400 18 -81 372 +1.7% 35 organic 3,082 3,124 Business FME25 Labor / growt

  22. Slide 22: Q2 2024 | Care Enablement delivers on margin expansion

    Q2 2024 | Care Enablement delivers on margin expansion Revenue | outlook base1 Operating income | outlook base1 in € million in € million Margin in % +3.3% 1.3% 5.1% outlook base1 outlook base1 1,322 1,365 +308% +3.2% organic -14 69 33 33 17 Q2 2023 Q2 2024 Q2 2023 Business FME25 Inflation Q2 2024 o

  23. Slide 23: Q2 2024 | Lower net financial debt and further improved net leverage ratio

    Q2 2024 | Lower net financial debt and further improved net leverage ratio in € million Q2 2024 Q2 2023 H1 2024 H1 2023 Key developments in Q2 2024 Operating cash flow 442 1,007 570 1,150  Operating cash flow decreased by 56%, negatively impacted by  Capital expenditures, net -153 -155 -283 -296 o

  24. Slide 24: Solid funding profile

    Solid funding profile Diversified financing mix1 Prudent financial policy Commercial Paper 2% Schuldschein Loans 2% Sufficient liquidity reserve Other2 4%  Undrawn ESG-linked RCF of €2.0bn  Committed bilateral credit lines of ~€670m, supplemented by further Lease Liabilities 35% uncommitted facili

  25. Slide 25: Markets and growth drivers; Execution; Q2 2024 Business Update; Outlook

    1 Markets and growth drivers 2 Execution against strategic plan 3 Q2 2024 Business Update 4 Outlook

  26. Slide 26: Outlook | FY 2024 assumptions

    Outlook | FY 2024 assumptions H1 Update 0.5 125– 2.0% U.S. same market treatment growth1 flat to 0.5% -0.2% Business growth2 197 400-500  Earnings tailwinds Incremental sustainable FME25 savings 100-150 109  150-200 102 Higher labor costs, mainly in CD  100-150 72 Cost inflation in both CE and CD

  27. Slide 27: FY 2024 | Outlook confirmed

    FY 2024 | Outlook confirmed FY 2024 Outlook Mid-term Outlook Low- to mid-single digit Revenue percent growth (outlook base)1 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)1 FY 2023 basis: EUR 1.54bn Revenue

  28. Slide 28: Target picture 2025+

    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 market physicians and payors across the renal care with leading digital portfolio in r

  29. Slide 29: Appendix

    Appendix

  30. Slide 30: H1 2024 | Revenue development driven by both segments

    H1 2024 | Revenue development driven by both segments Revenue | outlook base1 Operating income | outlook base1 in € million Margin in % 6.5% 7.9% 8.9% 7.1% +2.2% outlook base1 9,529 9,360 9,565 9,491 in € million +15.1% -169 +3.4% 74 outlook base1 849 organic 120 738 11 671 618 167 H1 2023 Divest- H

  31. Slide 31: H1 2024 | Operating margin improvement driven by both segments

    H1 2024 | Operating margin improvement driven by both segments Margin in % 7.9% 8.9% In € million 67 3 849 42 -1 11 120 738 671 618 167 H1 2023 Special H1 2023 Care Care Inter- Corporate H1 2024 Fx Special items H1 2024 operating items & 2023 operating Delivery Enablement segment operating operating

  32. Slide 32: H1 2024 | Care Delivery delivers solid organic revenue growth and margin expansion

    H1 2024 | Care Delivery delivers solid organic revenue growth and operating income margin expansion Revenue | outlook base1 Operating income | outlook base1 in € million in € million Margin in % 9.2% outlook base1 9.6% +2.0% +6.2% outlook base1 151 7,455 7,602 36 729 +3.6% 687 organic -145 6,043 6,2

  33. Slide 33: H1 2024 | Care Enablement significantly grows operating income and margin

    H1 2024 | Care Enablement significantly grows operating income and margin Revenue | outlook base1 Operating income | outlook base1 in € million in € million Margin in % +2.7% 3.1% 5.5% outlook base1 +81.4% 2,625 2,695 outlook base1 +2.4% organic 149 34 -29 82 62 H1 2023 H1 2024 H1 2023 Business FME2

  34. Slide 34: Path to margin improvement

    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 & inflation -175 to -50 bps Dilution from value-based care gr

  35. Slide 35: Q2 2024 | Profit and Loss

    Q2 2024 | Profit and Loss Q2 2024 Q2 2023 Growth Growth € million € million in % in % cc Revenue 4,766 4,825 -1 -2 Revenue (outlook base)1 4,743 4,741 0 Operating income 425 357 19 21 Operating income margin in % 8.9 7.4 Operating income (outlook base)1 433 400 8 Operating income margin (outlook bas

  36. Slide 36: H1 2024 | Profit and Loss

    H1 2024 | Profit and Loss H1 2024 H1 2023 Growth Growth € million € million in % in % cc Revenue 9,491 9,529 0 0 Revenue (outlook base)1 9,565 9,360 2 Operating income 671 618 9 10 Operating income margin in % 7.1 6.5 Operating income (outlook base)1 849 738 15 Operating income margin (outlook base)

  37. Slide 37: 2023 base for 2024 targets, reconciliation adjustments

    2023 base for 2024 targets, reconciliation adjustments Reconciliation of non-IFRS financial measures to the most directly comparable IFRS financial measures for comparison with outlook Inter-segment Group Care Delivery Care Enablement Corporate eliminations Growth Growth Growth € million Q2 2024 Q2

  38. Slide 38: 2023 base for 2024 targets, reconciliation adjustments

    2023 base for 2024 targets, reconciliation adjustments Reconciliation of non-IFRS financial measures to the most directly comparable IFRS financial measures for comparison with outlook Inter-segment Group Care Delivery Care Enablement Corporate eliminations Growth Growth Growth € million H1 2024 H1

  39. Slide 39: Debt

    Debt Q2 2024 FY 2023 FY 2022 € million € million € million Debt Short-term debt from unrelated parties 322 457 644 + Short-term debt from related parties - - 4 + Current portion of long-term debt 481 487 694 + Current portion of lease liabilities from unrelated parties 592 593 650 + Current portion

  40. Slide 40: 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. 3.6% adj. 4.5% adj. 4.9% rep. 3.5% rep. 3.3% rep. 2.8% rep. 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q2 2024  For the years

  41. Slide 41: Patients, treatments, clinics

    Patients, treatments, clinics as of June 30, 2024 as of June 30, 2023 Patients Treatments Clinics Patients Treatments Clinics United States 206,306 15,412,884 2,628 206,692 15,525,016 2,634 Growth in % 0 -1 0 International 104,731 8,706,925 1,129 137,394 10,287,972 1,416 Growth in % -24 -15 -20 Tota

  42. Slide 42: 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

  43. Slide 43: Conferences Roadshows

    IR event calendar Date Event Reporting November 5, 2024 Report on 3rd quarter 2024: Earnings Release and Conference Call (Quiet Period Oct 22 – Nov 4,2024) February 25, 2025 Report on 4th quarter / Full Year 2024: Earnings Release and Conference Call (Quiet Period Jan 28 – Feb 02, 2025) September 3,

  44. Slide 44: 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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