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Dienstag, 20.02.2024 07:30 von PR Newswire | Aufrufe: 70

Fresenius Medical Care delivers on commitments in a year of fundamental transformation

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PR Newswire

BAD HOMBURG, Germany, Feb. 20, 2024

Revenue growth of 5% in 2023 driven by favorable business development
Operating income¹ growth of 15% exceeding top end of outlook range, due to business growth, FME25 savings ahead of plan and contributions from the Tricare settlement
Successful execution on turnaround plan resulting in significant labor productivity improvements in Care Delivery and positive pricing in Care Enablement
Several key divestments announced as part of the ongoing Portfolio Optimization Program
Strong cash flow performance and net financial leverage ratio reduced
Dividend of €1.19 per share proposed
For 2024 continued revenue growth and accelerated operating income growth projected

BAD HOMBURG, Germany, Feb. 20, 2024 /PRNewswire/ -- Helen Giza, Chief Executive Officer of Fresenius Medical Care, said: "In 2023, we delivered on our commitments while we fundamentally transformed Fresenius Medical Care. Exceeding our upgraded financial outlook for the full year was the very successful finish to an extraordinary year. We implemented the new global operating model, progressed on our operational turnaround ambitions, changed our legal form and advanced on the Portfolio Optimization Program through key divestments. Thanks to the commitment of our 120,000 employees, the high quality of care for our patients remains front and center in everything we do. Based on the turnaround progress achieved last year, we have a strong foundation to build on to make 2024 a year of accelerated profitable growth while progressing towards our ambitious mid-term margin target."

Key figures (IFRS)

Q4 2023

Q4 2022

Growth

ARIVA.DE Börsen-Geflüster

Kurse

Fresenius Medical Care AG ADR

19,60 €

0,00%

Fresenius Medical Care AG ADR Realtime-Chart

FY 2023

FY 2022

Growth

EUR m

yoy

yoy, cc

EUR m

yoy

yoy, cc

Revenue

4,988

4,997

0 %

+7 %

19,454

19,398

0 %

+5 %

Operating
income

4c28

352

+22 %

+27 %

1,369

1,512

-9 %

-7 %

excl. special
items and PRF¹

555

489

+14 %

+18 %

1,741

1,540

+13 %

+15 %

Net income²

188

139

+35 %

+41 %

499

673

-26 %

-24 %

excl. special
items and PRF¹

259

248

+4 %

+8 %

756

729

+4 %

+6 %

Basic EPS
(EUR)

0.64

0.47

+35 %

+41 %

1.70

2.30

-26 %

-24 %

excl. special
items, and PRF¹

0.88

0.85

+4 %

+8 %

2.58

2.49

+4 %

+6 %

yoy = year-on-year, cc = at constant currency, EPS = earnings per share

Successful execution against the strategic plan

Fresenius Medical Care, the world's leading provider of products and services for individuals with renal diseases, successfully finished a year of significant transformation.

Structure: During fiscal year 2023, Fresenius Medical Care continuously advanced its structural change. After implementing the new operating model along with the corresponding new financial reporting at the start of the year, it ended with the successful completion of its change of legal form into a German stock corporation. Through this change, a simplified corporate governance structure gives the Company more flexibility and autonomy and strengthens the role of the free float shareholders.

Operational efficiency: In 2023, the company successfully executed on its operational efficiency improvement and turnaround plans. The FME25 transformation program reached annual sustainable savings of EUR 346 million, ahead of our initial plan for the year (EUR 250 to 300 million). Related one-time costs were EUR 153 million in 2023, adding up to EUR 420 million since the start of the program in 2021. The program continues well on track to achieving the targeted EUR 650 million of sustainable annual savings by year end 2025. The significant improvement in labor productivity in Care Delivery a year earlier than targeted, as well as the successful pricing initiatives in Care Enablement additionally supported the underlying positive earnings development.

Portfolio Optimization: Fresenius Medical Care announced several key divestments as part of the strategy to execute on its portfolio optimization program to exit non-core and dilutive assets. The divestments of National Cardiovascular Partners in the U.S. (closed), our operations in Argentina (closed) and Cura Day Hospitals Group in Australia (signed) generate EUR 0.5 billion in total proceeds, of which EUR 135 million were received in 2023. The three assets include 127 facilities, more than 4,500 employees, more than 10,000 dialysis patients. Divestments closed in 2023 accounted for EUR 214 million of revenue and EUR 20 million of operating income.

Capital Allocation: During 2023, Fresenius Medical Care strictly followed its disciplined financial policy. A significant increase of +32% in Free Cash Flow, mainly due to favorable contributions from working capital and the Tricare settlement was used to reduce its net financial debt by 11% to EUR 10.8 billion. The corresponding net leverage ratio (net debt/EBITDA) decreased to 3.2x at the end of 2023, compared to 3.4x at the end of 2022. The Company adheres to its dividend policy of developing dividends in line with the development of net income excluding special items. Consequently, the dividend proposal for fiscal year 2023 of EUR 1.19 per share corresponds to an increase by 6% compared to prior year's dividend.

Sustainability: Fresenius Medical Care continued to make progress towards its Sustainability goals. Underscoring the Company's focus on high quality care, the patients' overall satisfaction with our services measured by the Net Promoter Score of 72 was at an even higher level than in previous years. With its recent submission of the commitment letter to the Science Based Targets Initiative (SBTi), the Company underlines its goal to achieve climate neutrality in its operations by 2040 in line with the Paris Agreement.

Revenue development driven by solid organic growth

In the fourth quarter 2023, revenue remained flat with EUR 4,988 million (+7% at constant currency, +3% organic).

Care Delivery revenue remained flat with EUR 3,976 million in the fourth quarter 2023 (+8% at constant currency, +2% organic).

In Care Delivery U.S., revenue increased by 2% (+7% at constant currency, +1% organic). The increase was mainly driven by value-based care business growth, reimbursement rate increases, a favorable payor mix, an increase in dialysis days as well as the impact from the Tricare settlement in the amount of €191 million, partially offset by negative exchange rate effects. The annualization effect of COVID-19-related excess mortality in the late-stage CKD (Chronic Kidney Disease) and ESRD (End-Stage Renal Disease) population continues to weigh on same market treatment growth (-0.6%). Adjusted for the exit from less profitable acute care contracts same market treatment growth was flat.

In Care Delivery International, revenue declined by 11% (+10% at constant currency,
+7% organic) as a negative exchange rate effect could only be partially offset by organic growth. Despite the annualization effect of COVID-19-related excess mortality, same market treatment growth was positive at 1.9%.

Care Enablement revenue declined slightly by 1% to EUR 1,380 million in the fourth quarter 2023 (+5% at constant currency, +6% organic). The negative exchange rate effects were partly offset by higher product sales as well as higher average sales prices.

Within Inter-segment eliminations³, revenue for products transferred between the operating segments at fair market value declined by 5% to EUR -368 million in the fourth quarter 2023 (+2% at constant currency).

In full year 2023, revenue was stable at EUR 19,454 million (+5% at constant currency, +4% organic). Care Delivery revenue was stable at EUR 15,578 million (+5% at constant currency, +3% organic). In Care Delivery U.S., revenue increased by 1% (+3% at constant currency, +3% organic). Adjusted for the exit from less profitable acute care contracts, U.S. same market treatment growth was at +0.2%. Revenue in Care Delivery International declined by 4% (+12% at constant currency, +7% organic). Care Enablement revenue was stable at EUR 5,345 million (+5% at constant currency, +4% organic). Inter-segment eliminations³ declined by 5% and amounted to EUR -1,469 million (stable at constant currency).

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