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At today’s Annual General Meeting in Frankfurt am Main, the shareholders of Fresenius SE & Co. KGaA approved the proposals of the General Partner and the Supervisory Board by a large majority.
Wolfgang Kirsch, Chairman of the Supervisory Board, thanked the Management Board and emphasized Fresenius’ strong performance in extremely challenging geopolitical times. “Against this backdrop, Fresenius has performed well as a leading healthcare company compared to the competition and has improved significantly in operational terms.” He added that the #FutureFresenius program is strengthening Fresenius sustainably in the interests of all stakeholders. “The new Management Board team under the leadership of Michael Sen brings experience and complementary skills, team spirit and abilities, which will allow us to achieve the ambitious corporate goals and successfully implement #FutureFresenius,” said Kirsch.
CEO Michael Sen thanked the shareholders for supporting the #FutureFresenius journey, as well as the members of the Supervisory Board and Chairman Wolfgang Kirsch for their excellent cooperation. “We have successfully completed the first phases of #FutureFresenius and regained trust. We shall now tackle the remaining phases with motivation and optimism,” he stressed.
A large majority of 99.84% of shareholders voted in favor of approving the annual financial statements. The shareholders approved the Compensation Report for the 2023 fiscal year by 93.06%. Large majorities of 96.48% and 95.90% respectively approved the actions of the Management Board and the Supervisory Board in 2023.
At the Annual General Meeting of Fresenius SE & Co. KGaA, 72.65% of the registered capital was represented.
This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those currently expected due to various risk factors and uncertainties, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, the availability of financing and unforeseen impacts of international conflicts. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.
After an excellent start to the 2024 fiscal year, DAX 40 company Fresenius is looking to the future with confidence. “Our aim for the coming years is to now establish Fresenius as an economically successful, innovative healthcare company focused on modern therapies,” said CEO Michael Sen at this year’s Annual General Meeting on Friday in Frankfurt am Main.
“2023 was a year of change and new beginnings here at Fresenius. We introduced our #FutureFresenius program to restructure our company, sharpen our focus, and continue successfully developing our company. We now want to tap into this positive momentum,” Sen stressed. The structural simplification, including the deconsolidation of Fresenius Medical Care and the exit from Vamed, as well as the focus on Fresenius Kabi and Fresenius Helios, is increasingly paying off. Both core businesses are growing profitably in highly attractive markets and were able to further increase their momentum in the first quarter of 2024.
With the presentation of the financial figures for the first quarter, Fresenius raised the Group’s outlook1 for the current fiscal year last week and now expects organic revenue growth of 4–7% and currency-adjusted EBIT growth of 6–10%.
1 The adjustment of the Group outlook reflects the fact that the forecast now excludes Fresenius Vamed, i.e. it is exclusively for the operating companies Fresenius Kabi and Fresenius Helios.
“We have regained our strength at just the right time. The healthcare industry is currently growing robustly and reliably. Indeed, it is one of the most attractive sectors,” Sen said. To this end, Fresenius is focusing its business on three platforms, which together create a market potential of up to €1 trillion: (Bio)Pharma, which includes chemical and biological drugs and clinical nutrition, MedTech, i.e. medical technology, which increasingly involves a combination of hardware and software, and Care Provision, i.e. medical care, whether in-patient or outpatient, or at home. Sen emphasized: “We are close to the patients. And this is exactly what sets us apart from purely pharma and medtech companies. And also from tech companies based in Silicon Valley.”
This proximity to the patients is also demonstrated by innovative products that enhance the medical quality and efficiency of care. Fresenius Kabi recently achieved two major milestones with the market launch of the biosimilar Tyenne for the treatment of inflammatory and autoimmune diseases in the EU and the USA. In Fresenius Helios hospitals, highly precise and tissue-friendly surgical robots assist in minimally invasive procedures. These robots are operated by a doctor by hand control and pedal. A total of 20 Da Vinci surgical robots are currently used at Helios hospitals in Germany.
Fresenius introduced a fresh and modernized brand identity at the Annual General Meeting. With its new slogan “Committed to Life”, Fresenius aims to be recognized as a leading healthcare company offering world-class therapies and improving people’s lives.
This year’s Annual General Meeting is the first in-person Fresenius shareholder meeting since 2019. Several hundred shareholders were expected to attend the Annual General Meeting at Messe Frankfurt.
This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, the availability of financing and unforeseen impacts of international conflicts. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.
#FutureFresenius is making the company fit for the future: Fresenius will focus on its Operating Companies Fresenius Kabi and Fresenius Helios, so on the three therapy platforms (Bio)Pharma, MedTech and Care Provision. They cater to system-critical areas of healthcare and are geared toward value creation and profitable growth. The two Operating Companies are to now also work together more closely. And the brand identity must reflect and support this.
Fresenius CEO Michael Sen introduced the new brand identity to the public at the Annual General Meeting in May 2024. It will now be rolled out across the Group by the end of the year.
“Fresenius is now fresher and more modern. The company logo has not been changed entirely, but rather revamped. Among others, we have updated the color palette to fit perfectly with the digital world. This brand image stands for a new Fresenius. Internally, we hope that the uniform brand identity will help us to grow even closer together as Team Fresenius. Because regardless where we work, we are all Fresenius. Externally, we want Fresenius to be recognized as a leading global healthcare company. A brand is always a promise. For us, our promise is “Committed to Life,” whereby we consistently strive to improve people’s lives.”, said Michael Sen, CEO of Fresenius.
A person is more than their illness
With Fresenius Kabi, Helios and, Quirónsalud, the company has a unique portfolio and expertise. It understands the life dimensions of illness and health better than any pure medical technology or pharmaceutical company ever could. The new brand identity aims to support exactly this: The new Fresenius. Because regardless of where employees work, they are all Fresenius! Externally, the company wants to create a consistent image and to be recognized as a leading global healthcare company. Which is why Fresenius has revamped all aspects of the brand image: the logos, colors and shapes, fonts and images. Particularly the bright, modern color palette perfectly fits into the digital world. The Kabi, Helios, and Quirónsalud logos will remain. However, they will be incorporated into the new Fresenius world visually so that it is always clear that Fresenius is ONE team.
Fresenius sees that people are more than just their illness. It sees the lives they lead – within their families, their communities, and their jobs. It accompanies people throughout their whole lives, for better or for worse. Fresenius is there when it matters. This is what the entire #TeamFresenius works toward each and every day with its 190,000 colleagues.
A brand is always a promise; for Fresenius, a promise to its customers – and especially its patients. The Fresenius promise is “Committed to Life.” The company consistently strives to improve people’s lives.
Key brand elements: more than the sum of its parts
Logo
The new Fresenius logo expresses the company’s self-image as a symbol and word mark. The geometric lines of the existing logo have been replaced with more emotional and organic forms. At the same time, its shape reminds of the “F” in Fresenius and brings the company’s brands together with a new common color scheme.
“Bond for Life”
One key design element is the “Bond for Life,” which derives from the lifelines of humans. It symbolizes the different needs that humans have during various phases in their lives. The “Bond for Life” is inspired by the lifeline in the palm of our hands and signifies people’s needs during the different phases in their lives – with all their ups and downs. These reflect the connection between all of the Fresenius businesses, which support people at every stage in their lives as best possible.
Rollout by the end of the year
Fresenius has planned the implementation of the relaunch in phases: The first phase is completed with the Annual General Meeting and introduction of the new Fresenius brand at corporate level.
Now it's the Operating Companies' turn next: Their appearances will be harmonized with the new Fresenius brand presence and drive the launch forward together. Cross-business teams are already working together here. There will also be information and guidelines on this in the coming weeks - until then, the previous design of the Operating Companies will apply.
The final harmonization and completed new brand architecture should be jointly defined and introduced by the end of the year.
June 11, 2024
Miami, USA
June 11 & 12, 2024
Quarterly Financial Report Q1 2024 (IFRS)
Following the announcement of the sale of Vamed’s rehabilitation business, the global healthcare group Fresenius has initiated a structured exit from its Investment Company Vamed. An Austrian consortium of construction companies Porr and Strabag has agreed to acquire Vamed’s activities in its Austrian home market for a total purchase price of 90 million Euros. The transaction includes Vamed’s entities responsible for the technical management of the Vienna General Hospital (AKH Wien), the Austrian project business that is part of Vamed’s Health Tech Engineering segment and shares in several spas throughout Austria. The planned transaction is subject to regulatory approvals and customary conditions.
Vamed’s High-End Services (HES) business unit, which provides services for Fresenius Helios and other hospitals, will be transferred to Fresenius. HES generates around half of its revenue through its provision of services to Helios hospitals. It offers facility and medical technology management for a total of more than 840 hospitals. HES is a stable business with good growth prospects and accounts for around 30% of Vamed's revenue. The profitability of HES is in the mid-single-digit percentage range.
The Health Tech Engineering segment, which is responsible for the international project business and accounts for around 15% of Vamed's revenue, will gradually be scaled back in an orderly manner. The process should largely be completed by 2026. Until then, the business will be reported as a special item outside Fresenius' core business. Current project contracts will be fulfilled.
The divestments lead to non-cash special items of around € 0.6 billion. Due to the exit from the project business, a high triple-digit-million Euro amount of special items are expected, which are spread over the next few years and mostly cash effective.
As of Q2 2024, Vamed will no longer be a reporting segment of Fresenius. In addition to reducing complexity, this step is expected to improve the Group's profitability by more than 50 basis points. It will also reduce net debt and increase the Group's return on invested capital (ROIC). Last but not least, the transparency and quality of earnings will be significantly enhanced.
“We have found a holistic and viable solution for the Vamed businesses, creating good prospects for the future. It is the best outcome for patients, for Vamed, and for Fresenius. With the exit from Vamed, our strategic portfolio restructuring has been completed as planned. Fresenius is already a simpler, stronger, and more innovative company due to the consistent implementation of #FutureFresenius. We now have even more opportunities to provide world-class therapies and improve people’s health,” said Fresenius CEO Michael Sen.
Dr. Michael Moser, the member of the Fresenius Management Board among others responsible for the Vamed business, added: “We are pleased that Vamed’s High-End Services business is joining Fresenius. We have found a very good solution for both the rehabilitation business with PAI and the Austrian project business with the Austrian owners Porr and Strabag. This enables us to create long-term growth opportunities. We are now looking for fair solutions for the employees affected by the gradual ramp-down of our project business outside of Austria.”
After exiting Vamed, Fresenius will consist of the two Operating Companies Fresenius Kabi and Fresenius Helios (each with 100% ownership share) and the Investment Company Fresenius Medical Care (32% ownership share).
This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, the availability of financing and unforeseen impacts of international conflicts.
Fresenius does not undertake any responsibility to update the forward-looking statements in this release.
1 Organic growth rate adjusted for the accounting effects related to Argentina hyperinflation.
2 Organic growth rate adjusted for the divestment of the fertility services group Eugin and the hospital stake in Peru.
If no timeframe is specified, information refers to Q1/2024.
An overview of the results for Q1/2024 - before and after special items – is available on our website.
Following the deconsolidation of Fresenius Medical Care, Group financial figures are presented in accordance with IAS 28 (at equity method) since December 1, 2023. The proportionate share of 32% of Fresenius Medical Care is presented as a separate line in Fresenius Group’s P&L and balance sheet. Dividends received from Fresenius Medical Care will also be reported as a separate line as part of the cash flow statement. Moreover, IAS 28 requires a full purchase price allocation (PPA). The accounting for the PPA is treated as special item. For reasons of simplification and comparability, Fresenius presents net income with and without Fresenius Medical Care`s equity result.
Information on the performance indicators are available on our website at https://www.fresenius.com/alternative-performance-measures.
Consolidated results for Q1/24 as well as for Q1/24 include special items. These concern: revaluations of biosimilars contingent purchase price liabilities, expenses associated with the Fresenius cost and efficiency program, transaction costs for mAbxience and Ivenix, costs in relation to the change of legal form of Fresenius Medical Care, the transformation of Fresenius Vamed, legacy portfolio adjustments, special items at Fresenius Medical Care, and impact of PPA equity method Fresenius Medical Care. The special items shown within the reconciliation tables are reported in the Corporate/Other segment.
Growth rates of Fresenius Kabi and Fresenius Helios are adjusted. Adjustsments relate to the divestment of the fertility services group Eugin and the hospital stake in Peru at Fresenius Helios and Helios Spain as well as to hyperinflation in Argentina at Fresenius Kabi. Accordingly, growth rates of the Fresenius Group are also adjusted.
Conference call and Audio webcast
As part of the publication of the results for Q1/24, a conference call will be held on May 8, 2024 at 1:30 p.m. CET (7:30 a.m. EST). All investors are cordially invited to follow the conference call in a live audio webcast at https://www.fresenius.com/investors. Following the call, a replay will be available on our website.
Michael Sen, CEO of Fresenius: “Fresenius has made an excellent start into the year and our focus on Fresenius Kabi and Fresenius Helios is paying off. We are confident to maintain our growth momentum and raise our outlook for the full year. With the exit from Vamed, our strategic portfolio restructuring is completed as planned. Fresenius is already a simpler, stronger, and more innovative company due to the consistent implementation of #FutureFresenius. We now have even more opportunities to offer world-class therapies and improve people’s health.”
#FutureFresenius: Exit from Investment Company Vamed concludes strategic portfolio measures
The exit from the Investment Company Vamed completes the strategic portfolio restructuring as part of #FutureFresenius. The exit is carried out in three parts: 1) The already announced sale of 67 % of Vamed’s rehabilitation business to the private equity company PAI. Closing of this transaction is expected in the second half of 2024 2) Vamed’s operations in Austria to be sold to an Austrian consortium of the construction companies Porr and Strabag for a total purchase price of €90 million. 3) The Health Tech Engineering (HTE) segment, which is responsible for the international project business and accounts for around 15% of Vamed's revenue, will gradually be scaled back in an orderly manner. The process should largely be completed by 2026. Until then, the business will be reported as a special item outside Fresenius' core business. Current project contracts will be fulfilled.
Vamed’s High-End-Services (HES) which offers services for Fresenius Helios and other hospitals, will be transferred to Fresenius. HES is a stable business with good growth prospects and accounts for around 30% of Vamed's revenues. The profitability of HES is in the mid-single-digit percentage range.
The divestments of the rehabilitation business and the operations in Austria lead to non-cash special items of around €0.6 billion.
Due to the exit from the project business, a high triple-digit-million euro amount of special items are expected, which are spread over the next few years and mostly cash-effective.
As of Q2 2024, Vamed will no longer be a reporting segment of Fresenius. In addition to reducing complexity, this step is expected to improve the Group's profitability by more than 50 basis points. It will also reduce net debt and increase the Group's return on invested capital (ROIC). Last but not least, the transparency and quality of earnings will be significantly enhanced.
After exiting from Vamed, Fresenius will consist of the two Operating Companies Fresenius Kabi and Fresenius Helios (each with 100% ownership share) and the Investment Company Fresenius Medical Care (32% ownership share).
Cost savings program fully on track
The groupwide cost savings program progressed is fully on track. Under the program, Fresenius realized ~€25 million incremental structural cost savings at EBIT level in Q1/24. In the same period, one-time costs of ~€15 million incurred to achieve these savings.
Fresenius expects to achieve annual sustainable cost savings of ~€400 million at EBIT level by 2025. So far, Fresenius reached ~€305 million of cumulative structural cost savings. To reach this target, one-time costs between ~€80 and €100 million are anticipated between 2024 and 2025.
For 2024, total cost savings of ~€330 to €350 million are expected. This corresponds to incremental cost savings of ~€50 to €70 million in 2024 compared to 2023.
The programs continue to target all business segments and the Corporate Center. Key elements include measures to optimize sales and administrative costs, fostering digitalization as well as improve procurement processes.
Group sales and earnings development
Group revenue increased by 4% (6% in constant currency) to €5,704 million (Q1/23: €5,546 million). Organic growth was 6%1 driven by an ongoing strong performance of our Operating Companies. Currency translation had a negative effect of 2% on revenue growth.
In Q1/24, revenue of the Operating Companies increased by 5% (7% in constant currency) to €5,216 million (Q1/23: €5,039 million).
Group EBITDA before special items increased by 13% (13% in constant currency) to €924 million (Q1/232: €828 million).
Group EBIT before special items increased by 15% (15% in constant currency) to €633 million (Q1/232: €554 million) mainly driven by the good earnings development at the Operating Companies and the continued progress of the groupwide cost savings program. The EBIT margin before special items was 11.1% (Q1/231: 10.0%). Reported Group EBIT was €559 million (Q1/23: €526 million).
The Operating Companies showed an 9% increase of EBIT before special items (9% in constant currency) to €631 million (Q1/232: €581 million) with an EBIT margin of 12.1% (Q1/232: 11.5%).
1 Organic growth rate adjusted for the divestment of the fertility services group Eugin, the hospital stake in Peru, and accounting effects related to Argentina hyperinflation.
2 Before special items
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
Group net interest before special items increased to -€115 million (Q1/231: -€87 million) mainly due to financing activities in a higher interest rate environment.
Group tax rate before special items was 24.5% (Q1/231: 24.4%).
Net income1 from deconsolidated Fresenius Medical Care operations before special items increased by 25% (33% in constant currency) to €60 million (Q1/232: €48 million).
Group net income2 before special items increased by 10% (11% in constant currency) to €429 million (Q1/232: €389 million). The increase was driven by the operating strength which outpaces higher interest.
Group net income1 before special items excluding Medical Care increased by 8% (8% in constant currency) to €369 million (Q1/232: €341 million).
Reported Group net income2 decreased to €278 million (Q1/232: €346 million).
Negative effects from the Purchase Price Allocation (PPA) and other negative special items at Fresenius Medical Care as well as the Vamed transformation had a negative impact on the Group net income income1.
Earnings per share2 before special items increased by 10% (11% in constant currency) to €0.76 (Q1/232: €0.69). Reported earnings per share2 were €0.49 (Q1/23: €0.61).
1 Before special items
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA
For a detailed overview of special items please see the reconciliation tables at Financial Results.
Group Cash flow development
Group operating cash flow was €2 million (Q1/23: €32 million). The first quarter is usually the softest in the course of the year. In Q1/24 the soft operating cash flow was mainly driven by temporarily higher working capital, in particular due to nursing budget related receivables built ups at Helios Germany. Group operating cash flow margin was 0.0% (Q1/23: 0.6%). Free cash flow before acquisitions, dividends and lease liabilities decreased to -€194 million (Q1/23: -€180 million). Free cash flow after acquisitions, dividends and lease liabilities improved to -€103 million (Q1/23: -€258 million).
Fresenius Kabi’s operating cash flow increased to €157 million (Q1/23: €21 million) with a margin of 7.7% (Q1/23: 1.1%) mainly driven by an improved working capital management.
Fresenius Helios’ operating cash flow decreased to -€117 million (Q1/23: €108 million) and was impacted by higher working capital in particular driven by temporary nursing budget related receivables built-ups at Helios Germany. The operating cash flow margin was -3.7% (Q1/23: 3.5%).
Fresenius Vamed’s operating cash flow improved to -€10 million (Q1/23: -€68 million) with a margin of -1.8% (Q1/23: -11.7%).
The cash conversion rate (CCR), which is defined as the ratio of adjusted free cash flow1 to EBIT before special items was 1.0 in Q1/24 (LTM) (Q1/23: 0.9 LTM). This positive development is due to the increased cash flow focus across the Group.
1 Cash flow before acquisitions and dividends; before interest, tax, and special items
Group leverage
Group debt decreased by 8% (8% in constant currency) to €14,504 million (Dec. 31, 2023: € 15,830 million) mainly related to the repayment of debt. Group net debt increased by 2% (2% in constant currency) to € 13,485 million (Dec. 31, 2023: € 13,268 million) which is mainly related to the cash flow development at Fresenius Helios, particularly driven by temporary receivables built ups related to the nursing budget at Helios in Germany.
As of March 31, 2024, the net debt/EBITDA ratio was 3.75x1,2 (Dec. 31, 2023: 3.76x1,2), a further reduction compared to Q4/23 and mainly driven by the good EBITDA development. Compared to Q1/23 (3.96x1,2) this is a 21 bps reduction.
Fresenius expects the net debt/EBITDA3 ratio to be within the self-imposed corridor of 3.0 to 3.5x by the end of 2024. This is expected to be driven by reducing net debt and by the operational performance at the Operating Companies.
ROIC increased to 5.5% in Q1/24 (Q1/23: 5.2%) mainly due to the EBIT improvement. The Operating Companies improved ROIC to 5.8% (Q1/23: 5.5%).
1 At average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures, including lease liabilities, including Fresenius Medical Care dividend
2 Before special items
3 At expected average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures; excluding further potential acquisitions/divestitures; before special items; including lease liabilities, including Fresenius Medical Care dividend
For a detailed overview of special items please see the reconciliation tables at Financial Results.
Operating Company Fresenius Kabi
Revenue increased by 9% in constant currency (3% reported) to €2,051 million (Q1/23: €1,991 million). The reported revenue growth is mainly driven by negative currency translation effects related to the US dollar and the hyperinflation in Argentina. Organic growth was 9%1. This strong performance was driven in particular by the Biopharma business as well as by Nutrition.
Revenue of the Growth Vectors (MedTech, Nutrition and Biopharma) increased by 4% (14% in constant currency) to €1,089 million (Q1/23: €1,051 million). Organic growth was outstanding at 13%. In Nutrition, organic growth of 8% benefited from the good development in the US and was driven by many other international markets. Whereas China continued to be impacted by indirect effects of the government’s countrywide anti-corruption campaign and direct effects of the soft economy. Biopharma showed excellent organic growth of 117% driven by successful product launches in Europe and the US, as well as licensing agreements. MedTech showed organic growth of 1% given the high prior-year level.
1 Organic growth rate adjusted for accounting effects related to Argentina hyperinflation.
2 Before special items
Growth rates adjusted for Argentina hyperinflation.
Revenue in the Pharma (IV Drugs & Fluids) business increased by 2% (4% in constant currency; organic growth: 5%) and amounted to €962 million (Q1/23: €940 million). The solid organic growth was mainly driven by the positive development across many regions including the US.
EBIT1 of Fresenius Kabi increased by 7% (8% in constant currency) to €310 million (Q1/23: €289 million) mainly due to the good revenue development, the EBIT break-even result of the Biopharma business, and ongoing progress of the cost saving initiatives. EBIT margin1 was 15.1% (Q1/23: 14.5%) and thus within the structural EBIT margin band.
EBIT1 of the Growth Vectors increased by 29% (constant currency: 17%) to €124 million (Q1/23: €96 million) due to the EBIT break-even result of the Biopharma business and the good revenue development. EBIT1 margin was 11.4% (Q1/23: 9.2%).
EBIT1 in the Pharma business increased 4% (constant currency: 6%) to €206 million (Q1/23: €197 million) due to the very well-progressing cost saving initiatives and the good revenue development. EBIT1 margin was 21.4% (Q1/23: 21.0%).
1 Before special items
Growth rates adjusted for Argentina hyperinflation.
For a detailed overview of special items please see the reconciliation tables at Financial Results.
Operating Company Fresenius Helios
Revenue increased by 6% (5% in constant currency) to €3,184 million (Q1/23: €3,066 million). Organic growth was 5%.
Revenue of Helios Germany increased by 4% (in constant currency: 4%) to €1,903 million (Q1/23: €1,828 million), mainly driven by solid admissions numbers and favourable price effects. Organic growth was 4%.
Revenue of Helios Spain increased by 10% (8% in constant currency) to €1,281 million (Q1/23: €1,170 million) driven by ongoing strong activity levels and positive price effects. Organic growth was 7%1. The clinics in Latin America also showed a good performance.
EBIT2 of Fresenius Helios increased by 14% (14% in constant currency) to €353 million (Q1/23: €311 million) with an EBIT margin2 of 11.1% (Q1/23: 10.1%).
EBIT of Helios Germany increased by 32% to €205 million (Q1/23: €155 million) with an EBIT margin of 10.8% (Q1/23: 8.5%) in particular driven by the phasing of the Government relief funding for higher energy costs as well as the good revenue development and the progressing cost savings program.
1 Before special items
Growth rates adjusted for the divestment of the fertility services group Eugin and the hospital stake in Peru
For a detailed overview of special items please see the reconciliation tables at Financial Results.
EBIT1 of Helios Spain decreased by 6% (7% in constant currency) to €149 million (Q1/23: €157 million). EBIT1 was impacted by the phasing due to the calendar variation related to the Easter week and related lower activities and mix effects as well as a high prior-year level. Despite the Easter effect, the EBIT margin1 was 11.6% (Q1/23: 13.4%).
As part of the portfolio optimization, the sale of the fertility services group Eugin was completed on January 31, 2024. The divestment of the majority stake in the hospital Clínica Ricardo Palma hospital in Lima, Peru, was completed on April 23, 2024. The sale marks Fresenius’ exit from the Peruvian hospital market.
Fresenius Vamed
Further progress was made in Q1/24 with the far-reaching restructuring program to increase Fresenius Vamed’s profitability which was initiated in 2023.
Revenue from continued business was €514 million in Q1/24. Organic growth of the continued business increased 1% driven by the positive development of the Services business offsetting the negative effects of the Project business. Total revenue of Fresenius Vamed was €561 million (Q1/23: €583 million) and declined by 4% (-4% in constant currency).
EBIT1 was at €2 million in Q1/24 (Q1/231: -€27 million), thus showing a significant year-over-year improvement and making it the third consecutive quarter of positive EBIT. The EBIT margin1 in Q1/24 was 0.4% (Q1/231: -4.6%).
The ongoing transformation resulted in negative special items of €47 million in Q1/24 mainly related to cessation of activities, asset re-evaluations and restructuring costs resulting in write-downs and provisions. The negative special items were predominantly booked as non-cash items.
1 Before special items
Growth rates adjusted for the divestment of the fertility services group Eugin and the hospital stake in Peru
Group and segment outlook for 20241
Fresenius raises its outlook for FY/24 based on the excellent first quarter and improved prospects for the ramainder of the year.
For 2024, Group organic revenue growth2 is now expected to grow between 4% to 7% (previous: 3% to 6%). Group constant currency EBIT3,4 is expected to grow in the rage of 6% to 10% (previous: 4% to 8%).
Fresenius Kabi now expects organic revenue growth in a mid-to high-single-digit percentage range in 2024 (previous: mid-single-digit percentage range). The EBIT margin4 is now expected to be in a range of 15% to 16% (previously: around 15%) (structural margin band: 14% to 17%).
Fresenius Helios expects organic revenue to grow in a low to mid-single digit percentage range in 2024. The EBIT margin4 is expected to be within the structural margin band of 9% to 11%.
The adjustment of the Group outlook also reflects the fact that the forecast is now given without Fresenius Vamed, i.e. exclusively for the Operating Companies Fresenius Kabi and Fresenius Helios. Following the announcement of the planned divestment of Fresenius Vamed's rehabilitation business, Fresenius has initiated its structured exit from its Investment Company Fresenius Vamed.
1 For the prior-year basis please see table “Basis for Guidance for 2024”
2 2023 base: €20,307 million
3 2023 base: €2,266 million
4 Before special items
Basis for Guidance for 2024
This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, the availability of financing and unforeseen impacts of international conflicts. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.
Following the announcement of the sale of Vamed’s rehabilitation business, the global healthcare group Fresenius has initiated a structured exit from its Investment Company Vamed. An Austrian consortium of construction companies Porr and Strabag has agreed to acquire Vamed’s activities in its Austrian home market for a total purchase price of 90 million Euros. The transaction includes Vamed’s entities responsible for the technical management of the Vienna General Hospital (AKH Wien), the Austrian project business that is part of Vamed’s Health Tech Engineering segment and shares in several spas throughout Austria. The planned transaction is subject to regulatory approvals and customary conditions.
Vamed’s High-End Services (HES) business unit, which provides services for Fresenius Helios and other hospitals, will be transferred to Fresenius. HES generates around half of its revenue through its provision of services to Helios hospitals. It offers facility and medical technology management for a total of more than 840 hospitals. HES is a stable business with good growth prospects and accounts for around 30% of Vamed's revenue. The profitability of HES is in the mid-single-digit percentage range.
The Health Tech Engineering segment, which is responsible for the international project business and accounts for around 15% of Vamed's revenue, will gradually be scaled back in an orderly manner. The process should largely be completed by 2026. Until then, the business will be reported as a special item outside Fresenius' core business. Current project contracts will be fulfilled.
The divestments lead to non-cash special items of around € 0.6 billion. Due to the exit from the project business, higher three-digit-million special items are expected, which are spread over the next few years and mostly cash relevant.
As of Q2 2024, Vamed will no longer be a reporting segment of Fresenius. In addition to reducing complexity, this step will improve the Group's profitability by more than 50 basis points. It will also reduce net debt and increase the Group's return on invested capital (ROIC). Last but not least, the transparency and quality of earnings will be significantly enhanced.
“We have found a holistic and viable solution for the Vamed businesses, creating good prospects for the future. It is the best outcome for patients, for Vamed, and for Fresenius. With the exit from Vamed, our strategic portfolio restructuring has been completed as planned. Fresenius is already a simpler, stronger, and more innovative company due to the consistent implementation of #FutureFresenius. We now have even more opportunities to provide world-class therapies and improve people’s health,” said Fresenius CEO Michael Sen.
Dr. Michael Moser, the member of the Fresenius Management Board among others responsible for the Vamed business, added: “We are pleased that Vamed’s High-End Services business is joining Fresenius. We have found a very good solution for both the rehabilitation business with PAI and the Austrian project business with the Austrian owners Porr and Strabag. This enables us to create long-term growth opportunities. We are now looking for fair solutions for the employees affected by the gradual ramp-down of our project business outside of Austria.”
After exiting Vamed, Fresenius will consist of the two Operating Companies Fresenius Kabi and Fresenius Helios (each with 100% ownership share) and the Investment Company Fresenius Medical Care (32% ownership share).
This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, the availability of financing and unforeseen impacts of international conflicts.
Fresenius does not undertake any responsibility to update the forward-looking statements in this release.
