Fresenius Medical Care AG(FMS)2025-02-25 14:50Financial 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].