In 2024, the operating model to deliver the highest quality of patient care was further optimized by enhancing financial returns, and creating value for shareholders Fresenius Medical Care delivered 18% operating income growth on an outlook base in 2024 Ongoing progress has been achieved in key areas of sustainability: notably in patient care and environmental footprintBAD HOMBURG, Germany, March 13, 2025 /PRNewswire/ -- Fresenius Medical Care (FME), the world's leading provider of products and services fo ...

Core Insights - Fresenius SE raised nearly €1.1 billion ($1.2 billion) through a strategic sale of shares in Fresenius Medical Care AG and the issuance of exchangeable bonds linked to the dialysis firm [1] - The company sold 10.6 million shares in FMS, generating approximately €471 million, and issued €600 million in three-year zero-coupon exchangeable bonds, accounting for about 7% of FMS' outstanding shares [1][2] - Fresenius SE remains committed to being the largest shareholder, retaining at least 25% plus one share in FMS, aiming to enhance financial flexibility and strengthen core businesses [2] Stock Performance - Following the announcement, shares of FMS gained 0.7% and closed at $23.72, with a year-to-date increase of 4.7% compared to the medical instrument industry's 0.9% growth [3] - The S&P 500 has decreased by 2.1% during the same period [3] Strategic Restructuring - The stake sale aligns with Fresenius' broader restructuring efforts under CEO Michael Sen, focusing on a leaner and more profitable structure [4] - The deconsolidation of FMS in 2023 was a pivotal step in this transformation, allowing Fresenius to sharpen its operational focus [5] - Proceeds from the share sale and bond issuance will be used to reduce leverage and drive profitability into 2025, despite rising costs in the hospital sector [5] Divestment and Focus on Core Operations - FMS announced the divestment of select laboratory assets to Quest Diagnostics, reinforcing its focus on core dialysis operations [6] - This strategic divestment allows FMS to concentrate on its primary dialysis care business while benefiting from Quest's expertise in laboratory diagnostics [6][7] - The transaction is part of a broader portfolio optimization strategy aimed at divesting non-core and lower-margin assets [7] Market Position and Rankings - Fresenius Medical Care currently carries a Zacks Rank 2 (Buy) [8] - Other top-ranked stocks in the broader medical space include Masimo (MASI), Boston Scientific (BSX), and Cardinal Health (CAH) [8]

Over the past year, advancements in AI and predictive analytics have rapidly revolutionized the Medical Instruments industry, driving innovation in diagnostics, patient monitoring and personalized treatment. AI-powered algorithms are enabling medical devices to analyze vast datasets in real-time, providing accurate predictions and actionable insights for clinicians. Predictive analytics enhances device performance by identifying potential failures and optimizing maintenance schedules, ensuring reliability a ...

Core Insights - Fresenius Medical Care AG & Co. (FMS) reported fourth-quarter 2024 adjusted earnings per share (EPS) of 48 cents, exceeding the Zacks Consensus Estimate by 17.1% and showing a year-over-year improvement of 2.1% [1] - The company's revenues reached $5.43 billion (EUR 5,085 million), surpassing the Zacks Consensus Estimate by 0.7%, with a year-over-year increase of 1.9% and 1.6% at constant currency [2] Revenue Details - Revenues were impacted by divestitures as part of a portfolio optimization plan, which affected revenue development by -250 basis points [2] - U.S. market revenues improved by 1.1% and 6.8% on an organic basis, driven by value-based care business and increased treatment volumes [4] - International sales declined by 10.3% reportedly and 9.7% at constant currency, but gained 3.6% organically, supported by higher reimbursement rates [6] Segmental Performance - The Care Delivery segment's revenues decreased by 0.8% year-over-year but increased by 6.3% organically [3] - The Care Enablement segment's revenues rose by 11.3% year-over-year, driven by solid volume development across regions [6] Margin Analysis - Gross profit declined by 5.9% year-over-year, with gross margin contracting by 207 basis points to 24.9% [7] - Adjusted operating income fell by 13.2% from the prior-year quarter, with the adjusted operating margin contracting by 131 basis points to 7.5% [7] Future Guidance - For 2025, Fresenius Medical expects positive revenue growth at a low-single-digit percent rate compared to the prior year, and operating income growth in the high-teens to high-twenties percent range [8] Strategic Initiatives - The FME25 transformation program delivered EUR 221 million in additional sustainable savings for 2024, exceeding the target of EUR 200 million [10] - The company plans to raise the target for sustainable annual savings to EUR 750 million by the end of 2025, with one-time costs estimated between EUR 700 million to EUR 750 million [10] - Continued divestment of noncore and dilutive assets is expected to enhance focus on core categories and improve cash resources [11]

Fresenius Medical Care AG (NYSE:FMS) Q4 2024 Earnings Conference Call February 25, 2025 8:00 AM ET Company Participants Dominik Heger - Head, IR Helen Giza - CEO and Chair Martin Fischer - CFO Conference Call Participants Hassan Al-Wakeel - Barclays Giang Nguyen - Citigroup Lisa Clive - Bernstein Victoria Lambert - Berenberg Oliver Metzger - ODDO BHF Bank Graham Doyle - UBS David Adlington - JPMorgan Robert Davies - Morgan Stanley Marianne Bulot - Bank of America James Vane - Jefferies Hugo Solvet - BNP Par ...

Financial Performance - For the year ended December 31, 2024, revenue was €19,336 million, a decrease of 0.6% compared to €19,454 million in 2023[527]. - Net cash provided by operating activities was €2,386 million in 2024, down from €2,629 million in 2023, resulting in a decrease in net cash provided by operating activities as a percentage of revenue from 13.5% to 12.3%[527][528]. - Free cash flow for 2024 was €1,701 million, representing 8.8% of revenue, compared to €1,960 million or 10.1% of revenue in 2023[527][528]. - Total assets decreased by 1% to €33.6 billion as of December 31, 2024, from €33.9 billion in 2023, with a 4% positive impact from foreign currency translation[549]. - The equity ratio increased to 47% at December 31, 2024, compared to 44% at December 31, 2023, driven by a decrease in debt and an increase in shareholders' equity[550]. - Return on Invested Capital (ROIC) rose to 3.5% at December 31, 2024, up from 2.8% at December 31, 2023, primarily due to increased operating income[550]. - Revenue growth for 2022 was reported at 2.1%, with a target for 2023 set between 0.3% and 5.5%, and a CAGR of 17% expected for 2024[634]. - Net income growth for 2022 was (36.6)%, with a target for 2023 set between (25.9)% and (19.3)%, and a projected growth of 9.4% for 2024[634]. - Return on invested capital (ROIC) for 2022 was 3.3%, with a target for 2023 set between 2.8% and 0%, and a projected ROIC of 3.5% for 2024[634]. Cash Flow and Capital Expenditures - As of December 31, 2024, cash and cash equivalents totaled €1,180 million, down from €1,403 million at the end of 2023[524]. - The company anticipates capital expenditures of approximately €0.9 billion in 2025, focusing on organic growth and new production facilities[538]. - Net cash used in financing activities was €2,569 million in 2024, compared to €1,859 million in 2023, primarily for debt repayment and dividend payments[540]. - Total dividend payments in 2024 were €349 million, an increase from €329 million in 2023, with a dividend of €1.19 per share paid in 2024[542]. - The available borrowing capacity under unutilized credit facilities was approximately €3.5 billion as of December 31, 2024[523]. Research and Development - Research and development efforts focus on enhancing patient care through personalized and precision medicine, particularly in dialysis technology[562]. - The Adaptive Ultrafiltration Controller (aUFC) has received FDA's 21st Century Breakthrough Device designation, aimed at improving fluid management during dialysis[564]. - Anemia InSights, a predictive tool for anemia management, aims to improve hemoglobin levels and reduce ESA utilization, with results published in a leading journal[564]. - The company strengthened global research partnerships, enhancing innovation in kidney care through collaborations with prestigious institutions[566]. - RRI has developed an AI-driven intradialytic hypotension prediction model, enhancing patient safety during dialysis, with findings published in Nephrology Dialysis Transplantation[568]. - The company aims to submit a mobile application for arteriovenous fistula (AVF) aneurysm classification as a medical device to the FDA by 2025, improving vascular health management[568]. - R&D expenditure in 2024 was €183 million, a decrease from €232 million in 2023, representing 4% of healthcare product revenue[588]. - The total number of patents held by the company as of December 31, 2024, was 9,529, down from 9,537 in 2023[588]. Management and Governance - The Supervisory Board members are elected until the end of the ordinary General Meeting resolving on the discharge of the members for the fourth fiscal year after the commencement of their term[596]. - The Chair of the Supervisory Board has a tie-breaking vote in case of any deadlock, and resolutions are ordinarily passed by a simple majority of the votes cast[599]. - The current Chair of the Supervisory Board, Mr. Michael Sen, has been in position since October 1, 2022, and also serves as the CEO of Fresenius SE[603]. - Ms. Sara Hennicken has been the Chief Financial Officer since September 1, 2022, and has extensive experience in investment banking, including 14 years at Deutsche Bank[604]. - Mr. Shervin J. Korangy has a background in healthcare and finance, having served as a senior executive at Novartis AG and as a Managing Director at the Blackstone Group[605]. - Dr. Marcus Kuhnert was the CFO of Merck KGaA until June 30, 2023, and has significant experience in procurement and IT management[606]. - Mr. Gregory Sorensen, M.D., has been a member of the Supervisory Board since May 20, 2021, and has a strong background in medical solutions and technology[607]. - Ms. Pascale Witz has held executive positions at Sanofi S.A. and GE Healthcare, bringing extensive experience in the life sciences sector[608]. - The Supervisory Board includes employee representatives who are elected based on specific eligibility criteria, ensuring diverse representation[598]. - The company emphasizes compliance with the German Corporate Governance Code in its election processes for Supervisory Board members[597]. Compensation and Incentives - The overall target achievement for the short-term variable compensation component was between 99.20% and 127.92% for the fiscal year[631]. - The Management Board's long-term incentive plan performance period for allocations made in 2022 ended at the end of the fiscal year, with target achievements based on revenue growth and net income growth calculated using a compound annual growth rate (CAGR)[632]. - The Company maintained a Compensation Committee responsible for preparing decisions regarding the compensation of Management Board members, despite being exempt from certain NYSE and SEC rules[623]. - The 2024 Annual General Meeting approved the Compensation Report for 2023 with approximately 98.39% of votes cast in favor[626]. - The new Compensation System 2024+ was approved with around 87.58% of votes, focusing on sustainable and long-term business development[640]. - The new performance targets include a capital markets target based on Relative TSR compared to competitors, specifically the STOXX® Europe 600 Health Care and S&P 500 Health Care indices[648]. - A non-financial sustainability-related performance target has been introduced, focusing on reducing market-based CO2e emissions as part of the corporate strategy[649]. - The Management Board members are required to invest 150% of their annual base salary in company shares, with the Chairperson required to invest 200%[647]. - The pension allowance for Management Board members has been set at 40% of the respective base salary, transitioning from defined benefit commitments to cash allowances[646]. - Performance-based variable compensation components have been adjusted to include a higher proportion of variable compensation linked to financial performance and sustainability[644]. - The total compensation for Management Board members includes fixed components, one-year variable compensation, and multi-year variable compensation[674]. - The Management Board's compensation is 71% performance-based, promoting sustainable and long-term corporate development[657]. - The Supervisory Board conducts both horizontal and vertical comparisons to ensure the appropriateness of the compensation system[660][662]. - There were no instances in the Fiscal Year that warranted the use of malus or clawback provisions for variable compensation[670]. - The pension allowance for Management Board members is set at 40% of their base salary for their own pension provision[674]. Operational Performance - Days Sales Outstanding (DSO) decreased from 67 days in 2023 to 63 days in 2024, indicating improved collection efficiency[531][533]. - The company plans to limit acquisition and investment spending while focusing on organic growth opportunities in the coming year[538]. - Home dialysis usage increased to over 14,500 U.S.-based patients in 2024, up from over 13,500 in 2023, driven by the launch of the GuideMe software[572]. - The NxStage VersiHD cycler was launched in Europe in March 2024, expanding the company's market presence[573]. - Approximately 27,000 therapy prescription programs have been delivered remotely since the launch of the Liberty Select Cycler in the U.S.[574]. - The company received FDA clearance for the 5008X Hemodialysis System in February 2024, with plans for a commercial launch starting in 2026[576]. - The introduction of PuraSafe, a remote monitoring system for dialysis water pre-treatment, was made in select markets in 2024[578]. - The multiFiltratePRO platform added a hemoperfusion mode in 2024, enhancing its capabilities for continuous renal replacement therapy[580]. - The Care Enablement segment achieved an operating income target of €218 million for 100% achievement, with actual operating income reported at €267 million, resulting in a target achievement of 150.00%[686]. - The sustainability target achievement was 110.00%, with patient satisfaction achieving 120.00% and employee satisfaction achieving 100.00%[699].

Core Insights - Fresenius Medical Care has successfully met the upper end of its 2024 profit growth target, raising its FME25 savings target from EUR 650 million to EUR 750 million, demonstrating effective execution of its strategic turnaround plan [1][4][5] - The company reported a positive operating income margin trend towards its 2025 targets, with both business segments contributing positively [1][6] - The Care Delivery segment achieved positive underlying U.S. same market treatment growth for the second consecutive quarter, while Care Enablement experienced accelerated volume growth [1][6] Financial Performance - In Q4 2024, revenue increased by 2% to EUR 5,085 million, while full-year revenue decreased by 1% to EUR 19,336 million [9][15] - Operating income for Q4 2024 decreased by 39% to EUR 259 million, but increased by 2% for the full year to EUR 1,392 million [16][20] - Net income in Q4 2024 decreased by 64% to EUR 67 million, while full-year net income increased by 8% to EUR 538 million [21][22] Operational Efficiency - The FME25 transformation program delivered EUR 221 million in sustainable savings for 2024, exceeding the target of EUR 200 million, with total accumulated savings reaching EUR 567 million [5][6] - The company plans to incur one-time costs of EUR 700 million to EUR 750 million for the FME25 program [5] Portfolio Optimization - Fresenius Medical Care continued its portfolio optimization by exiting non-core assets, impacting revenue by EUR 306 million and operating income by EUR 288 million in 2024 [7][15] - The divestitures included 230 facilities and approximately 33,800 dialysis patients, with the proceeds used to improve the leverage ratio [7][8] Capital Allocation - Free cash flow increased by 25% to EUR 599 million in Q4 2024, while full-year free cash flow decreased by 13% to EUR 1,701 million [25][24] - The net financial debt was reduced by 9% to EUR 9.8 billion, with a net leverage ratio improvement from 3.2x to 2.9x [8][25] Outlook - For 2025, Fresenius Medical Care expects revenue growth to be positive to a low-single digit percentage rate, with operating income growth projected at a high-teens to high-twenties percentage rate [27]

Core Insights - Quest Diagnostics will acquire select assets from Fresenius Medical Care's Spectra Laboratories, enhancing its portfolio in dialysis-related laboratory testing services [1][3] - The acquisition aims to improve operational efficiencies for Fresenius Medical Care and provide better services for patients at dialysis clinics [3][5] - The deal is expected to close in the second half of 2025, with a full transition of services anticipated by early 2026 [4] Company Overview - Fresenius Medical Care is the leading provider of products and services for individuals with renal diseases, serving approximately 4.1 million patients globally [7] - The company operates 3,732 dialysis clinics, providing treatments for around 308,000 patients worldwide [7] - Quest Diagnostics serves one in three adult Americans and half of the physicians and hospitals in the U.S., focusing on diagnostic insights to improve health outcomes [9] Industry Context - Chronic kidney disease affects about 35.5 million people in the U.S., representing 14% of the population, making it one of the most prevalent chronic diseases [6] - More than 800,000 individuals in the U.S. receive dialysis, which requires regular lab testing and water quality testing [6]

Core Insights - The article discusses the investment positions held by the author in specific companies, indicating a long position in FSNUY and FMS [1] Group 1 - The author expresses personal opinions on the investment landscape without receiving compensation from the companies mentioned [1] - The article emphasizes the importance of conducting due diligence and research before making investment decisions [2] - It highlights the risks associated with short-term trading and options trading, suggesting they may not be suitable for all investors [2] Group 2 - The article clarifies that past performance does not guarantee future results, and no specific investment recommendations are provided [3] - It notes that the views expressed may not reflect those of Seeking Alpha as a whole, indicating a diversity of opinions among analysts [3] - The article mentions that analysts may not be licensed or certified, which could impact the reliability of the information presented [3]

Core Viewpoint - Fresenius (FMS) has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in a company's earnings picture, which is crucial for near-term stock price movements [2][4]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in stock price movements [4]. Business Improvement Indicators - The rising earnings estimates for Fresenius indicate an improvement in the company's underlying business, suggesting that investors should respond positively by pushing the stock price higher [5][10]. - The Zacks Consensus Estimate for Fresenius is projected at $1.55 per share for the fiscal year ending December 2024, reflecting an 11.5% year-over-year increase [8]. Zacks Rank System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Only the top 5% of Zacks-covered stocks receive a 'Strong Buy' rating, indicating superior earnings estimate revisions [9][10]. Recent Performance of Fresenius - Over the past three months, the Zacks Consensus Estimate for Fresenius has increased by 5.8%, highlighting a positive trend in earnings estimates [8].