Fresenius Medical Care Ag · XETR:FME

Fresenius Medical Care — Q4 2022 Earnings Presentation

35 slides from Fresenius Medical Care's earnings presentation, Feb 22, 2023

  1. Slide 1: Q4 2022 Conference Call

    Q4 2022 Conference Call February 22, 2023 Helen Giza, CEO & Chair of the Management Board © Copyright

  2. Slide 2: Securities Act offering material notice

    Under the U.S. Securities Act of 1933, as amended (the “Securities Act”), this presentation may be deemed to be offering material of Fresenius Medical Care AG & Co. KGaA (“FME”). FME intends to file a registration statement on Form F-4 under the Securities Act with the U.S. Securities and Exchange C

  3. 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

  4. Slide 4: Agenda

    1 Strategy Update 2 Business Update 3 Outlook Agenda

  5. Slide 5: Unlock value as the leading kidney care company

    Creating a future worth living. For patients. Worldwide. Every day. 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 improvement focus all

  6. Slide 6: Structure | Simplified operating model

    Structure | Simplified operating model New global operating model implemented  Two globalized operating segments with end-to-end P&L responsibility Care Delivery Care Enablement Health Care Services Health Care Products  Increased transparency to drive business performance improvement Global Medic

  7. Slide 7: Structure | Proposed future simplified governance model

    Structure | Proposed future simplified governance model Current governance structure Potential, future governance structure Highly complex, with many layers of decision making Simplified and in line with international standards Shareholders Supervisory Board Fresenius Medical Care AG Management Boar

  8. Slide 8: Structure | Proposed future simplified governance model

    Structure | Proposed future simplified governance model Advantages Considerations  Simplified governance structure strengthening  Limited rating pressure expected rights of free float shareholders  Administrative steps required (incl. EGM)  Faster and fully independent decision making  One-off

  9. Slide 9: Capital allocation | Disciplined financial policy & ROIC investment focus

    Capital allocation | Disciplined financial policy & ROIC investment focus  Committed to investment grade and to manage net financial leverage in the self-imposed range of 3.0 to 3.5x Deleveraging  Potential divestitures gains from portfolio optimization to be used for deleveraging  Dividend polic

  10. Slide 10: Operational efficiencies | FME25 accelerated & extended

    Operational efficiencies | FME25 accelerated & extended FME25 framework Accelerated & extended initiative Alignment of new operating model Sustainable  2021 Transformation journey defined & first One time Further Care savings of initiatives started costs up to Enablement EUR 650m EUR 650m opportuni

  11. Slide 11: Operational efficiencies & portfolio optimization

    Operational efficiencies & portfolio optimization Unlock value as the leading kidney care company Care Delivery Care Enablement  Turnaround efforts focused on  Efficiency improvements to drive productivity and efficiency margin expansion: measures  Pricing initiatives Operational  Improve operat

  12. Slide 12: Agenda

    1 Strategy Update 2 Business Update 3 Outlook Agenda

  13. Slide 13: Q4 2022 | Continued organic growth

    Q4 2022 | Continued organic growth Key Figures Q4 2022 Q4 2021 Growth Growth € million € million in % in %cc Revenue 4,997 4,647 8 2 Operating 352 449 (22) (28) income Operating income 495 492 1 (8) excl. special items1  Q4 performance in line with expectations  Higher labor costs, staff shortages

  14. Slide 14: Q4 2022 | International regions drove organic growth

    Q4 2022 | International regions drove organic growth HEALTH CARE PRODUCTS HEALTH CARE SERVICES Revenue: 3,947 Mio Revenue: 1,050 Mio +9% | +2% cc | +3% organic +2% | +0.2% cc | +0.2% organic  Strong contribution to organic growth from EMEA  Higher sales of in-center disposables, lower sales and As

  15. Slide 15: Q4 2022 | Operating income margin development

    Q4 2022 | Operating income margin development 1.7pp (0.8pp) (1.1pp) 1.3pp 9.9% (1.9pp) 9.7% (0.9pp) (0.5pp) (0.5pp) 7.0% Q4 2021 Business Labor cost Macro- Governmental FME25 savings Q4 2022 FME25 costs Humacyte Ukraine war Q4 2022 operating growth, incl. increase >3% economic support operating inve

  16. Slide 16: Q4 2022 | Stable free cash flow generation

    Q4 2022 | Stable free cash flow generation Q4 2022 Q4 2021 € million € million Key developments: Operating cash flow 600 669  Operating cash Capital expenditures, net (202) (269) flow development driven by lower Free cash flow 398 400 net income, Free cash flow after investing activities 375 246 su

  17. Slide 17: Agenda

    1 Strategy Update 2 Business Update 3 Outlook Agenda

  18. Slide 18: FY 2023 | Assumptions Operating Income

    FY 2023 | Assumptions Operating Income 2023 expected to be a transition year towards earnings growth recovery in 2024 Assumptions Basis for Operating income outlook (EUR)  Significant headwind from inflationary cost environment of EUR 200 – 240m 1.82bn  Labor cost headwind of EUR 140 – 180m 0.28bn

  19. Slide 19: Outlook

    Outlook FY 2023 Revenue [%] Operating income [%] Low to mid-single digit growth Flat to high-single digit decline (FY2022 basis: EUR 19.4bn) (FY2022 basis: EUR 1.54bn1) Further outlook By 2025 an improved operating income margin of 10 to 14% is targeted Outlook is provided in constant currency and e

  20. Slide 20: Your questions are welcome

    Your questions are welcome. Q4 2022 © Copyright

  21. Slide 21: Appendix

    “” FRESENIUS Y MEDICAL CARE Appendix

  22. Slide 22: Q4 2022 | Profit and Loss

    Q4 2022 | Profit and Loss Q4 2022 Q4 2021 Growth Growth € million € million in % in %cc Revenue 4,997 4,647 8 2 Operating income 352 449 (22) (28) Operating income margin in % 7.0 9.7 Operating income excl. special items 495 492 1 (8) Operating income margin in % excl. special items 9.9 10.6 Net int

  23. Slide 23: FY 2022 | Profit and Loss

    FY 2022 | Profit and Loss FY 2022 FY 2021 Growth Growth € million € million in % in %cc Revenue 19,398 17,619 10 2 Operating income 1,512 1,852 (18) (25) Operating income margin in % 7.8 10.5 Operating income excl. special items 1,817 1,915 (5) (13) Operating income margin in % excl. special items 9

  24. Slide 24: Q4 2022 | Health Care Services

    Q4 2022 | Health Care Services Q4 2022 Q4 2021 Growth Growth Organic Same market € million € million in % in %cc growth treatment in % growth Revenue in % Health Care Services 3,947 3,621 9 2 3 (1) North America 3,216 2,872 12 0 0 (2) EMEA 373 359 4 6 6 1 Asia-Pacific 251 248 1 4 5 2 Latin America 1

  25. Slide 25: Q4 2022 | Health Care Products

    Q4 2022 | Health Care Products Q4 2022 Q4 2021 Growth Growth Organic growth € million € million in % in %cc in % Revenue Health Care Products 1,050 1,026 2 0 0 North America 313 284 10 (2) (2) EMEA 357 373 (4) (1) (1) Asia-Pacific 312 304 3 2 2 Latin America 62 60 4 8 8 cc = at constant currency Nor

  26. Slide 26: FY 2022 | Health Care Services

    FY 2022 | Health Care Services FY 2022 FY 2021 Growth Growth Organic Same market € million € million in % in %cc growth treatment in % growth Revenue in % Health Care Services 15,418 13,876 11 2 1 (1) North America 12,400 11,020 13 0 (1) (2) EMEA 1,456 1,379 6 6 6 0 Asia-Pacific 981 942 4 4 3 2 Lati

  27. Slide 27: FY 2022 | Health Care Products

    FY 2022 | Health Care Products FY 2022 FY 2021 Growth Growth Organic growth € million € million in % in %cc in % Revenue Health Care Products 3,980 3,743 6 2 2 North America 1,150 1,068 8 (4) (4) EMEA 1,395 1,386 1 3 3 Asia-Pacific 1,171 1,068 10 4 4 Latin America 244 204 20 14 14 cc = at constant c

  28. Slide 28: Debt

    Debt Reconciliation of non-IFRS financial measures to most directly comparable IFRS financial measures Q4 2022 FY 2021 FY 2020 € million € million € million Debt Short-term debt from unrelated parties 665 1,178 63 + Short-term debt from related parties 4 78 17 + Current portion of long-term debt 694

  29. Slide 29: EBITDA

    EBITDA Reconciliation of annualized adjusted EBITDA and net leverage ratio to the most directly comparable IFRS financial measures LTM Q4 2022 FY 2021 FY 2020 € million € million € million Net income 895 1,219 1,435 + Income tax expense 325 353 501 − Interest income (68) (73) (42) + Interest expense

  30. Slide 30: 2022 base for 2023 targets, reconciliation adjustments

    2022 base for 2023 targets, reconciliation adjustments FY 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2022 € million € million € million € million € million 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

  31. Slide 31: 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.  Long-term value creation based on accretive acquisitions and organic growth 8.6%  2018 positive impact 7.8% 8.0% adj. 8.0% adj. from Sound divestiture 7.1% 6.6%adj.  2019 negative impact from NxStage acquisit

  32. Slide 32: 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 Q1 Q2 Q3 Q4 Full year FY 2022 FY 2021 FY 2020 2022 77 78 79 79 313 €:USD Period end 1.067 1.133 1.227 2021 77 78 79 79 313 Average 1.053 1.183 1.142 2020 77 78 79 79 313 2019 76 78 79 80 313 €:C

  33. Slide 33: Patients, treatments, clinics

    Patients, treatments, clinics as of December 31, 2022 as of December 31, 2021 Patients Treatments Clinics Patients Treatments Clinics North America 208,310 31,788,799 2,683 209,291 32,334,280 2,695 Growth in % 0 (2) 0 0 (2) 2 EMEA 66,063 9,941,735 795 65,599 9,885,319 821 Growth in % 1 1 (3) (1) (3)

  34. Slide 34: Conferences & Management

    Financial calendar Date Event Reporting May 9, 2023 Report on 1st quarter 2023: Earnings Release and Conference Call & AGM May 16, 2023 Annual General Meeting February 28, 2023 Morgan Stanley - European MedTech & Services Conference, London March 13, 2023 Oppenheimer – Annual Healthcare Conference,

  35. Slide 35: Contacts

    Contacts FME Investor Relations Dr. Dominik Heger Robert Adolph Else-Kröner-Str. 1 Head of Investor Relations, Vice President 61352 Bad Homburg v. d. H. Strategic Development & Investor Relations Germany Communications | EVP Ticker: FME or FMS (NYSE/ADR) +49(0) 6172-609-2601 +49(0) 6172-609-2477 dom

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