• Fresenius achieves the raised outlook for FY/23. Strong final quarter with continued good development of the Operating Companies Fresenius Kabi and Fresenius Helios and progress in the turnaround of the Investment Company Fresenius Vamed.
• Group 2024 outlook: Organic revenue growth expected between 3% and 6%; EBIT expected to grow between 4% and 8%. 
• Leverage ratio declines: expected to be within the self-defined target corridor of 3.0x to 3.5x by the end of 2024.
• Revenue of €22.3 billion in FY/23: Strong organic Group revenue growth of 6%; Group EBIT increased 2% in constant currency to €2.3 billion; excellent Group operating cash flow totaled €2.1 billion. 
• Group cost savings target for 2023 with ~40 % significantly exceeded – FY/25 structural productivity savings target raised to ~€400 million at EBIT level (before: ~€350 million).
• Group revenue increased organically by 5% in Q4; Group EBIT increased by 8% in constant currency.
• Fresenius Kabi with excellent organic revenue growth of 7% in Q4 at top-end of structural growth band and EBIT margin of 14.1% within structural band.
• Fresenius Helios with strong organic revenue growth of 5% in Q4 at top-end of structural growth band and excellent EBIT margin of 11.6 % well above structural margin band. 
• Fresenius Vamed’s transformation progressing well; ongoing operational improvement with positive EBIT second consecutive quarter.
• Deconsolidation of Fresenius Medical Care together with many structural improvements in the context of #FutureFresenius implemented in 2023; one-off, non-cash special effects reported in 2023.

If no timeframe is specified, information refers to Q4/2023.

Michael Sen, CEO of Fresenius: “We took decisive actions in fiscal year 2023 and put Fresenius back on track. #FutureFresenius is driving improvements throughout the company and creating value. We added focus, simplified the structure, and delivered better financial performance. We will build on that momentum to further grow our businesses and accelerate earnings growth driven by the Operating Companies Fresenius Kabi and Fresenius Helios. Fresenius is uniquely positioned to address the rising demand for healthcare leveraging innovations also in digitalization and AI. We are deepening our purpose of Advancing Patient Care.”

An overview of the results for Q4/2023 and the 2023 financial year – before and after special items – is available on our website.

Following the deconsolidation of Fresenius Medical Care Group financial figures have been presented in accordance with IAS 28 (at equity method) since December 1, 2023. Prior-year figures have been adjusted due to the application of IFRS 5 to the deconsolidated operations of Fresenius Medical Care.

Information on the performance indicators are available on our website at https://www.fresenius.com/alternative-performance-measures. 

Conference call and video webcast 
As part of the publication of the results for FY/23, a press conference will be held on February 21, 2024 at 10:00 a.m. CET. You are cordially invited to follow the press conference in a live online broadcast at https://www.fresenius.com/calendar. Following the conference, a recording will be available on our website.

Consolidated results for FY/23 as well as for FY/22 in-clude special items. These concern: revaluations of biosimilars contingent purchase price liabilities, expenses associated with the Fresenius cost and efficiency program, impacts related to the war in Ukraine, transaction costs for mAbxience and Ivenix, hyperinflation in Turkey, retroactive duties, costs in relation to the change of legal form of Fresenius Medical Care, the transformation of Fresenius Vamed, legacy portfolio adjustment, effects from the valuation of the investment in Fresenius Medical Care in ac-cordance with IFRS 5, and expenses PPA equity method Fresenius Medical Care. The special items shown within the reconciliation tables are reported in the Corporate/Other segment.

2024 Strategic priorities

After a year of significant structural progression in the Group and improved operating performance, Fresenius’ priorities in 2024 will focus on financial progression. This includes driving down leverage, execute on raised cost savings target and a rigorous focus on capital efficiency and returns. This bundle of measures is expected to translate into accelerated earnings growth in 2024 and beyond. 

Fresenius is uniquely positioned to benefit from the mega trends of the healthcare sector, including growing and ageing populations, and digitalization. With its leading position in the European private hospital market and at a vast number of ambulatory clinics, the company has direct access to about 26 million patients. In addition, innovative MedTech devices and an integrated end-to-end Biopharma platform enable crucial therapies for the future. These strong platforms form a highly robust, earnings-enhancing business model in attractive growth areas. 

Group business development 

Group revenue remained nearly unchanged (4% increase in constant currency) at €5,678 million (Q4/22: €5,670 million). Organic growth was 5% driven by an ongoing strong performance of our Operating Companies. Divestitures reduced revenue growth by 1%. Currency translation had a negative effect of 4% on revenue growth. In FY/23, Group revenue increased by 4% (6% in constant currency) to €22,299 million (FY/22: €21,532 million). Organic growth was 6%. Currency translation decreased revenue growth by 2%. 

In Q4/23, the revenue of the Operating Companies increased by 2% (7% in constant currency) to €5,165 million (Q4/22: €5,047 million). In FY/23, revenue of the Operating Companies increased by 4% (7% in constant currency) to €20,255 million (FY/22: €19,494 million).

 
Group EBITDA before special items increased by 6% (4% in constant currency) to €942 million (Q4/22¹: €890 million). In FY/23, Group EBITDA before special items increased by 3% (3% in constant currency) to €3,422 million (FY/22¹: €3,315 million). 

Group EBIT before special items increased by 13% (8% in constant currency) to €634 million (Q4/22¹: €559 million) mainly driven by the good earnings development at the Operating Companies and the progress of the operational turnaround at Fresenius Vamed. The EBIT margin before special items was 11.2% (Q4/22¹: 9.9%). Reported Group EBIT was €85 million (Q4/22: €337 million). In FY/23 Group EBIT before special items increased by 3% (2% in constant currency) at €2,262 million (2022¹: €2,190 million). The EBIT margin before special items was 10.1% (2022¹: 10.2%). Reported Group EBIT was €1,143 million (2022: €1,812 million). 

The Operating Companies showed an 8% increase of EBIT before special items (2% in constant currency) to €613 million (Q4/22¹: € 568 million) with an EBIT margin of 11.9% (Q4/22¹: 11.3%). In FY/23, the EBIT before special items of the Operating Companies increased by 5% (4% in constant currency) to €2,278 million (FY/22¹: €2,170 million) with an EBIT margin of 11.2% (FY/22¹: 11.1%).

Group net interest before special items increased to -€118 million (Q4/22¹: -€80 million) mainly due to financing activities in a higher interest rate environment. In FY/23, Group net interest before special items increased to -€418 million (2022¹: -€241 million). 

Group tax rate before special items was 36.4% (Q4/22¹: 23.2%). The higher tax rate in Q4/23 is mainly due to the closing of tax audit procedures as well as a valuation adjustment of a deferred tax asset in Germany. In FY/23, the Group tax rate before special items was 28.3% (2022¹: 22.4%). 

¹ Before special items

For a detailed overview of special items please see the reconciliation tables at Financial Results | FSE (fresenius.com)
Net income¹ from deconsolidated Fresenius Medical Care operations before special items remained unchanged (4% increase in constant currency) at €83 million (Q4/22²: €83 million). In FY/23 net income¹ from deconsolidated Fresenius Medical Care operations before special items decreased by 18% (-16% in constant currency) to €243 million (2022²: €295 million).

Group net income¹ before special items decreased by 11% (-17% in constant currency) to €397 million (Q4/22²: €445 million). The decrease was mainly driven by rising interest expenses and a higher tax rate. Reported Group net income¹ decreased to -€614 million (Q4/22: €255 million) and mainly results from the valuation effect of Fresenius Medical Care in accordance with IFRS 5 in the amount of €521 million (see “Deconsolidation of Fresenius Medical Care”). The effect has no cash impact. Furthermore, legacy portfolio adjustments and expenses for the cost and efficiency program, and the Vamed transformation had a negative impact on the Group net income income¹. Group net income¹ before special items excluding Medical Care decreased by 13% (-22% in constant currency) to €314 million (Q4/22²: €362 million).

In FY/23, Group net income¹ before special items decreased by 13% (-14% in constant currency) to €1,505 million (2022²: €1,729 million). The decrease was driven by rising interest costs and a higher tax rate. Reported Group net income¹ decreased to -€594 million (2022: €1,372 million) and was negative mainly due to the Fresenius Medical Care’s valuation effects according to IFRS 5 of €1,115 million (see chapter “Deconsolidation of Fresenius Medical Care” on page 11). These effects have no cash impact. Furthermore, expenses in connection with the Vamed transformation, legacy portfolio adjustments as well as expenses for the cost and efficiency program had a negative impact on the Group net income¹. Group net income¹ before special items excluding Medical Care decreased by 12% (-14% in constant currency) to €1,262 million (20222: €1,434 million).

¹ Net income attributable to shareholders of Fresenius SE & Co. KGaA
² Before special items
Earnings per share¹  before special items decreased by 11% (-17% in constant currency) to €0.70 (Q4/22²: €0.79). Reported earnings per share1 were -€1.09 (Q4/22: €0.45). In FY/23, earnings per share¹ before special items decreased by 13% (-15% in constant currency) to €2.67 (FY/22²: €3.08). Reported earnings per share¹ were -€1.05 (FY/22: €2.44). 

Group operating cash flow increased by 4% to €1,272 million (Q4/22: €1,225 million) mainly driven by the strong cash flow development across the Group. Group operating cash flow margin was 22.4% (Q4/22: 21.6%). Free cash flow before acquisitions, dividends and lease liabilities increased to €888 million (Q4/22: €822 million). Free cash flow after acquisitions, dividends and lease liabilities increased to €814 million (Q4/22: €742 million). 

In FY/23, Group operating cash flow increased by 5% to €2,131 million (FY/22: €2,031 million) with a margin of 9.6% (2022: 9.4%). Free cash flow before acquisitions, dividends and lease liabilities increased to €1,024 million 
(FY/22: €942 million). Free cash flow after acquisitions, dividends and lease liabilities improved to €115 million (FY/22: -€317 million). 

Fresenius Kabi’s operating cash flow increased by 46% to €434 million (Q4/22: €298 million) with a margin of 21.7% (Q4/22: 14.6%) mainly driven mainly driven by an improved working capital management. In FY/23, operating cash flow increased by 21% to €1,015 million (2022: €841 million) with a margin of 12.7% (FY/22: 10.7%). 

Fresenius Helios’ operating cash flow decreased by 9% to €867 million (Q4/22: €956 million) mainly due to phasing effects of receivables in Spain and the very strong cash flow in the prior year. The operating cash flow margin was 27.2% (Q4/22: 31.5%). In FY/23, operating cash flow decreased by 9% to €1.244 million (FY/22: €1.367 million) with a margin of 10.1% (FY/22: 11.7%).

Fresenius Vamed’s operating cash flow increased to €36 million (Q4/22: €12 million) with a margin of 6.1% (Q4/22: 1.7%) due to positive phasing effects. In FY/23, operating cash flow improved to €20 million (2022: -€44 million) with a margin of 0.8% (2022: -1.9%).

¹ Net income attributable to shareholders of Fresenius SE & Co. KGaA
² Before special items
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 FY/23 (2022: 0.9). This positive development is due to the increased cash flow focus across the Group including inventory management, working capital management and cash collection. 

Group debt increased by 8% (8% in constant currency) to €15,830 million 
(Dec. 31, 2022²: € 14,708 million). Group net debt remained broadly flat at € 13,268 million (Dec. 31, 2022²: € 13,307 million). In constant currency, Group net debt decreased by 1%.

As of December 31, 2023, the net debt/EBITDA ratio was 3.76x^3,4  (Dec. 31, 2022: 3.80x^2,3,4). This is a strong 27 bps reduction compared to Q3/23 (4,03x^3,4) and is mainly driven by the good cash flow development in Q4/23. 

Fresenius expects the net debt/EBITDA⁵ 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. 

This assumption does not include further potential divestment activities, however, includes the fact that due to legal restrictions as a result of the use of government compensation and reimbursement payments for increased energy costs provided for in the Hospital Financing Act, however, Fresenius will not propose to the 2024 Annual General Meeting to distribute a dividend for the 2023 fiscal year. Irrespective of the legally required suspension of dividend payments for the 2023 fiscal year, Fresenius will maintain its progressive dividend policy in the future and continues to aim to increase the dividend in line with growth in earnings per share (in constant currency, before special items), or at least maintain the dividend at the previous year's level.

¹ Cash flow before acquisitions and dividends; before interest, tax, and special items
² Proforma deconsolidation Fresenius Medical Care
³ At average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures, including lease liabilities, including Fresenius Medical Care dividend
⁴ Before special items
⁵ At 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
ROIC was 5.2% in FY/23 (FY/22: 5.6%) mainly due to the higher tax rate. The Operating Companies showed a ROIC of 5.6%. 

Structural productivity targets significantly exceeded – 2025 target raised 

The groupwide cost savings program progressed well ahead of plan. Within the program, Fresenius realized ~€280 million of structural cost savings at EBIT level in FY/23. With that, the originally anticipated saving of ~€200 million for FY/23 was significantly exceeded. In the same period, one-time costs of ~€220 million were incurred to achieve these savings. 

Due to the excellent progress of the measures implemented across the entire Group, Fresenius raises its target for the second time. Fresenius now expects to achieve annual sustainable cost savings of ~€400 million at EBIT level by 2025 (before: ~€350 million). To reach this new 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 compared to 2023.  

The targeted programs involve all business segments and the Corporate Center. Key elements include measures to optimize procurement, processes, sales and administrative costs, as well as fostering digitalization.

Operating Company Fresenius Kabi 

Revenue decreased by 2% (increased 9 % in constant currency) to €1,996 million (Q4/22: €2,036 million) mainly driven by negative currency translation effects relating to the US dollar and the hyperinflation in Argentina. Organic growth was 7% . This strong performance was mainly driven by the strong business development of all Growth Vectors. In FY/23, revenue increased by 2% (9% in constant currency) to €8,009 million (2022: €7,850 million). Organic growth was 7%¹. 

¹ To show the underlying business development, the organic growth definition was adjusted to fully exclude the significant inflation accounting effects in Argentina. According to the previous methodology, organic growth for Fresenius Kabi would have been Q1: 7%, Q2: 8%, Q3:7%, Q4: 14% and FY/23: 9%
Revenue of the Growth Vectors (MedTech, Nutrition and Biopharma) decreased by 3% to €997 million (Q4/22: €1,026 million) driven by negative currency exchange effects (increased 14% in constant currency). Organic growth was outstanding at 11%. In Nutrition, organic growth of 6% was driven by the good development in the US and Latin America whereas China was impacted by indirect effects of the government’s countrywide anti-corruption campaign. Biopharma showed very strong organic growth of 66% driven by successful product launches in Europe and the US, as well as licensing agreements. MedTech had excellent organic growth of 8% driven by a broad-based positive development across most regions and many product groups. In FY/23, the revenue of the Growth Vectors increased by 4% (14% in constant currency; organic growth: 10%) to €4,177 million (FY/22: €4,005 million).

Revenue in the Pharma (IV Drugs & Fluids) business decreased by 1% (increased 3% in constant currency; organic growth: 3%) and amounted to €1,000 million (Q4/22: €1,010 million). The solid organic growth was mainly driven by a positive development across many regions. In FY/23, revenue in the Pharma business remained broadly stable (increased 3% in constant currency; organic growth: 3%) and amounted to €3,832 million (2022: €3,845 million). 

EBIT¹ of Fresenius Kabi increased by 19% (6% in constant currency) to €282 million (Q4/22: €236 million) due to the good revenue development and the well-progressing cost saving initiatives. EBIT margin1 was 14.1% (Q4/22: 11.6%) and thus within the structural EBIT margin band. In FY/23, EBIT1 increased by 6% (constant currency: 3%) to €1,145 million (FY/22: €1,080 million). EBIT margin1 was 14.3% (FY/22: 13.8%).

EBIT¹ of the Growth Vectors increased by 69% (constant currency: 12%) to €102 million (Q4/22: €60 million) due to the excellent revenue development and the very well-progressing cost saving initiatives. EBIT1 margin was 10.2% (Q4/22: 5.9%). In FY/23, EBIT1 of the Growth Vectors increased by 15% (constant currency: 6%) to €390 million (FY/22: €339 million) with a margin1 of 9.3% (FY/22: 8.5%).

EBIT¹ in the Pharma business remained nearly stable (increased 2% in constant currency) to €189 million (Q4/22: €190 million) due to the very well-progressing cost saving initiatives. EBIT¹ margin was 18.9% (Q4/22: 18.8%). In FY/23, EBIT¹ in the Pharma business increased by 3% (constant currency: 6%) to €792 million (FY/22: €769 million) with a margin  of 20.7% (FY/22: 20.0%).

¹ Before special items

Operating Company Fresenius Helios

Revenue increased by 5% (5% in constant currency) to €3,188 million (Q4/23: €3,031 million) Organic growth was 5%. In FY/23, revenue increased by 5% (5% in constant currency) to €12,320 million (FY/22: €11,716 million). Organic growth was 5%. 

Revenue of Helios Germany increased by 5% (organic growth: 5%) to €1,828 million (Q4/22: €1,749 million), mainly driven by solid admissions numbers. In FY/23, revenue of Helios Germany increased by 4% (organic growth: 4%) to €7,279 million (FY/22: €7,021 million). 

Revenue of Helios Spain increased despite the already strong prior year quarter by 6% (5% in constant currency) to €1,289 million (Q4/22: €1,214 million) driven by ongoing strong activity levels. The clinics in Latin America also showed a good performance. Organic growth was 5%. In FY/23, revenue of Helios Spain increased by 7% (8% in constant currency, organic growth: 8%) to €4,770 million (FY/22: €4,441 million).

Revenue of Helios Fertility increased by 8% (17% in constant currency) to €71 million (Q4/22: €66 million) driven by favorable price and mix effects as well as the positive development of activity levels, especially in the US. Organic growth was 22%. In FY/23, revenue of Helios Fertility increased by 8% (14% in constant currency) to €269 million (FY/22: €250 million). 

EBIT¹ of Fresenius Helios increased by 5% (5% in constant currency) to €371 million (Q4/22: €354 million) with an EBIT margin¹ of 11.6% (Q4/22: 11.7%). In FY/23, EBIT¹ increased by 4% (increased 4% in constant currency) to €1,232 million (2022: €1,185 million) with an EBIT margin¹ of 10.0% (2022: 10.1%).

EBIT¹ of Helios Germany decreased by 6% to €164 million (Q4/22: €174 million) with an EBIT margin¹ of 9.0% (Q4/22: 9.9%) in particular due to the high prior-year basis. The prior-year quarter was not affected by any major negative inflation effects, which, however, had a significant negative impact on Q4/23. This could not be fully compensated despite the good revenue development as well as the progressing cost savings program and the Government compensation for higher energy costs. In FY/23, EBIT¹ of Helios Germany increased by 1% to €630 million (2022: €623 million) with an EBIT margin¹ at 8.7% (2022: 8.9%).

EBIT¹ of Helios Spain increased by 9% due to the strong revenue development as well as the progressing cost savings program (8% in constant currency) to €188 million (Q4/22: €172 million). The EBIT margin¹ was 14.6% (Q4/22: 14.2%). In FY/23, EBIT¹ of Helios Spain increased by 4% (5% in constant currency) to €580 million (2022: €556 million). The EBIT margin¹ was 12.2% (2022: 12.5%).

EBIT¹ of Helios Fertility was €10 million (Q4/22: €6 million) with an EBIT margin¹ of 14.1% (Q4/22: 9.1%). In FY/23, EBIT¹ of Helios Fertility was €26 million (2FY/22: €21 million) with an EBIT margin¹ of 9.7% (FY/22: 8.4%). 

¹ Before special items

Deconsolidation of Fresenius Medical Care successfully completed 

Fresenius successfully completed the deconsolidation of Fresenius Medical Care. This was a historic step and a landmark on the way forward to #FutureFresenius. The complexity of the Group structure was significantly reduced, and the governance structure were simplified, enabling more targeted, faster, and agile decisions at both, Fresenius and Fresenius Medical Care. Fresenius remains the largest shareholder of Fresenius Medical Care with an unchanged 32% stake.

The change in legal form took effect on November 30, 2023. Fresenius Medical Care now operates as Fresenius Medical Care AG. As a result of the deconsolidation, the investment in Fresenius Medical Care is now classified in accordance with IAS 28 (at equity method). 

As part of the subsequent IFRS 5 remeasurements as of September 30, 2023 and November 30, 2023, a non-cash special item of €1,115 million attributable to the shareholders of Fresenius SE & Co. KGaA was recognized in the consolidated financial statements of Fresenius as of December 31, 2023. 

Going forward, the proportionate share of 32% of Fresenius Medical Care will be 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. 

IAS 28 requires a full purchase price allocation (PPA) from the date on which the investment in Fresenius Medical Care was recognized as an associated company. The accounting for the PPA will be treated as special item. 

For reasons of simplification and comparability, Fresenius will present net income with and without the equity result in the future.

Transformation Fresenius Vamed progressing well

Further good progress was made in Q4/23 with the far-reaching restructuring program toincrease Fresenius Vamed’s profitability which was initiated during 2023. After €10 million in Q3/23, Fresenius Vamed has for the second consecutive quarter shown a positive EBIT¹ with €21 million in Q4/23 (FY/23: -€16 million). The EBIT margin1 in Q4/23 was 3.5% and -0.7% in 2023 (2022¹: 0.8%).

Revenue from continued business was €589 million in Q4/23. Organic growth of the continued business declined by 5 % mainly due to some contract timing issues as well as more rigorous vetting in the Project Business. In 2023, revenue from continued businesses was €2,201 million.

¹ Before special items

Total revenue of Fresenius Vamed amounted to €595 million (Q4 2022: €712 million) and declined by 16% (-17% in constant currency). The decline is primarily related to discontinued businesses as part of the transformation and the associated adjustments and postponements in the Project business. In 2023, total revenue of Fresenius Vamed remained flat at €2,356 million (2022: €2,359 million). 

The ongoing transformation resulted in negative special items of €113 million in Q4/23 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. In 2023, a total of negative special items of €554 million were incurred. 

The positive development is expected to continue in 2024. Fresenius Vamed reiterates its targets and expects to reach the structural EBIT margin band of 4% to 6% by 2025 as set out in the #FutureFresenius Financial Framework.

Group and segment outlook for 2024¹

Fresenius expects general cost inflation to continue at a slightly lower level in the 2024 financial year and the current geopolitical tensions to persist. Fresenius also expects interest rates to remain at a similar level to 2023. Irrespective of this, the Management Board considers the business outlook for the Group to be positive and expects a successful financial year 2024.

For 2024, Group organic revenue is expected to grow between 3% to 6%. Group constant currency EBIT² is expected to grow in the rage of 4% to 8%.

Fresenius Kabi expects organic revenue growth in a mid-single-digit percentage range in 2024. The EBIT margin² is expected to be 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 margin² is expected to be within the structural margin band of 9% to 11%. Fresenius Vamed expects organic revenue to grow (Continued Business) in a mid-single-digit percentage range in 2024. The EBIT margin2 is expected to be 1 to 2 below the structural margin band of 4% to 6%.

¹ For the prior-year basis please see table “Basis for Guidance for 2024”
² Before special items

The Fresenius Group achieved a sound climate-rating from the non-profit organization CDP of B. Further, our joint efforts as healthcare Group in increasing ESG reporting transparency and coordinated climate-related protection measures resulted in an improved water-ranking of B-. CDP is one of the most renowned climate and environmental rankings in the capital market. Investors use the annual results to evaluate climate protection activities and climate-related risks and opportunities of the companies assessed. As a healthcare Group, we have a special responsibility both to ensure the quality of our products and services, and protecting health and environment.

The Fresenius Group achieved a sound climate-rating from the non-profit organization CDP of B. Further, our joint efforts as a healthcare Group in increasing ESG reporting transparency and coordinated climate-related protection measures resulted in an improved water-ranking of B-. CDP is one of the most renowned climate and environmental rankings in the capital market. Investors use the annual results to evaluate climate protection activities and climate-related risks and opportunities of the companies assessed. As a healthcare Group, we have a special responsibility both to ensure the quality of our products and services, and to protecting health and the environment.

• Fresenius drives forward the vision of Health Equity with signature.
• The company offers broad access to healthcare and affordable versions of high-quality medicines: Every year around 24 million patients seek medical treatment at Europe’s largest hospital chain. Fresenius Kabi markets affordable and high-quality medicines worldwide. 

"Fresenius has been committed to improving the health of people worldwide for over 100 years. It is our firm belief that equal opportunity in healthcare is a moral obligation and economically beneficial for society. That is why we signed the world's most important cross-sector commitment to health equity to advance a common vision of health equity," said Michael Sen, Chief Executive Officer of Fresenius. 

Fresenius has signed the World Economic Forum's Zero Health Gaps Pledge ahead of this year's World Economic Forum in Davos. This commitment to promoting equal opportunities in healthcare is part of the Global Health Equity Network (GHEN), which brings together key players from the public and private sectors to advance a shared vision of equitable healthcare in line with the UN Sustainable Development Goals (SDGs). To date, more than 80 companies have signed the world's first voluntary commitment of this kind. By signing the pledge, Fresenius commits to acting responsibly and working together for equal opportunities in healthcare.

"With our innovations and strong partnerships, we have been enabling the delivery of high-quality, cost-effective therapies to millions of people for many years. However, fair healthcare can only be achieved as part of a consistent climate and sustainability approach. We shall strive to continuously implement this holistic approach," said Management Board member Dr. Michael Moser, who is among others responsible for Sustainability.  

Improving people's health and advancing patient care is Fresenius' corporate purpose and therefore also an important part of the company's ESG strategy. Every year around 24 million patients seek medical treatment at a Helios hospital. Fresenius markets low-cost biosimilars in around 40 countries. 

The voluntary commitment is a response to the persistent and increasing global inequalities in health between and within countries: according to the World Economic Forum's pledge, the gap in life expectancy between Japan and Lesotho is 30 years. In the USA, the gap in life expectancy between black and white men is five years on average. The global climate crisis and health crises such as the Covid-19 pandemic have exacerbated these inequalities and the potential consequences of inaction. 

The global, cross-sector pledge includes ten commitments to advance the shared vision of health equity. In this vision, all people have a fair and equitable opportunity to fulfill their human potential in all aspects of health and well-being.

Click here to read the full Zero Health Gaps Pledge with its ten key commitments and here to learn more about the Global Health Equity Network.
 

Fresenius has signed the World Economic Forum's Zero Health Gaps Pledge ahead of this year's World Economic Forum in Davos. This commitment to promoting equal opportunities in healthcare is part of the Global Health Equity Network (GHEN) to advance a shared vision of equitable healthcare in line with the UN Sustainable Development Goals (SDGs).

Improving people's health and advancing patient care is Fresenius' corporate purpose and therefore also an important part of the company's ESG strategy.

The full press release is available in the "Media" section of the website.
 

• Fresenius makes use of the governmental compensation and reimbursement payments of up to €300 million (from the current perspective) provided for in the relief package for compensating additional costs caused by the increase in energy prices and implements the associated restrictions.
• Fresenius subsequently suspends dividend for fiscal year 2023; Fresenius Management Board members and management bodies of other companies covered by the statutory bans cannot be granted bonuses or other variable compensation components for fiscal year 2023.
• With the combination of the cash inflow of compensation and reimbursement payments and the dividend suspension, Fresenius reduces its leverage ratio (net debt/EBITDA) by around 20 to 25 basis points.
• Increasing the value of the company is clear priority on the way to #FutureFresenius.

Today, the Fresenius Management Board has decided to make use of the compensation and reimbursement payments for German hospitals in the amount of up to €300 million (from the current perspective) provided for by the "Energy Relief Package" (“Entlastungspaket Energiehilfen“) under the Hospital Financing Act (“Krankenhausfinanzierungsgesetz”) to cover increased energy costs. Today's decision of the Management Board is subject to the approval of the Supervisory Board of Fresenius Management SE, which is expected to decide on this matter on December 6, 2023. Fresenius' use of the compensation and reimbursement payments is subject to far-reaching conditions.

Fresenius therefore implements the related restrictions of the legislator. Fresenius Management Board will propose to the Annual General Meeting 2024 of Fresenius SE & Co. KGaA not to distribute a dividend for the fiscal year 2023. In addition, the Management Board members of Fresenius Management SE and management bodies of other companies covered by the statutory bans cannot be granted bonuses or other variable compensation components in the fiscal year 2023.

The decision is in line with the central objective of the #FutureFresenius strategy: the sustainable development and value enhancement of the company. The cash inflow of compensation and reimbursement payments as well as the dividend suspension will reduce the company's debt and consequently improve the leverage ratio by around 20 to 25 basis points. The reduction in debt will have a positive effect on net interest expense and ultimately on earnings per share. Furthermore, the compensation and reimbursement payments of up to €300 million (from the current perspective) will largely offset the additional costs of Helios Germany in 2023 caused directly or indirectly by the increase in energy prices.

"#FutureFresenius is our guideline for making and implementing strategically important decisions. Against this background, this is the right step for our company. We are strengthening our company’s intrinsic value. The lower level of debt affords us greater flexibility to make even better use of our market opportunities. We act with foresight and keep an eye on the sustainable development of the company and thus the future of patient care," said Fresenius CEO Michael Sen.

Fresenius is of the opinion that the statutory bans provided for in the "Energy Relief Package" („Entlastungspaket Energiehilfen“) are unconstitutional and that Fresenius' fundamental rights have been violated in view of the significant interference in the hospital financing system associated with this. Fresenius is therefore examining whether and in what form legal action should be taken.

In addition to operating performance improvement of the core business, the successfully progressing cost and efficiency program, the simplification of the Group structure through the deconsolidation of Fresenius Medical Care as well as the divestments of non-core businesses within the business segments, the compensation and reimbursement payments and the suspension of the dividend support the long-term strengthening of the Company.

Notwithstanding the legally required suspension of dividend payments for the fiscal year 2023, Fresenius maintains its dividend policy for the future. In line with its progressive dividend policy, Fresenius continues to aim to increase the dividend in line with growth in earnings per share (in constant currency, before special items), or at least maintain the dividend at the previous year's level.

• Fresenius makes use of the governmental compensation and reimbursement payments of up to €300 million (from the current perspective) provided for in the relief package for compensating additional costs caused by the increase in energy prices and implements the associated restrictions.
• Fresenius subsequently suspends dividend for fiscal year 2023; Fresenius Management Board members and management bodies of other companies covered by the statutory bans cannot be granted bonuses or other variable compensation components for fiscal year 2023.
• With the combination of the cash inflow of compensation and reimbursement payments and the dividend suspension, Fresenius reduces its leverage ratio (net debt/EBITDA) by around 20 to 25 basis points.
• Increasing the value of the company is clear priority on the way to #FutureFresenius.

Today, the Fresenius Management Board has decided to make use of the compensation and reimbursement payments for German hospitals in the amount of up to €300 million (from the current perspective) provided for by the "Energy Relief Package" (“Entlastungspaket Energiehilfen“) under the Hospital Financing Act (“Krankenhausfinanzierungsgesetz”) to cover increased energy costs. Today's decision of the Management Board is subject to the approval of the Supervisory Board of Fresenius Management SE, which is expected to decide on this matter on December 6, 2023. Fresenius' use of the compensation and reimbursement payments is subject to far-reaching conditions. 

Fresenius therefore implements the related restrictions of the legislator. Fresenius Management Board will propose to the Annual General Meeting 2024 of Fresenius SE & Co. KGaA not to distribute a dividend for the fiscal year 2023. In addition, the Management Board members of Fresenius Management SE and management bodies of other companies covered by the statutory bans cannot be granted bonuses or other variable compensation components in the fiscal year 2023.

The decision is in line with the central objective of the #FutureFresenius strategy: the sustainable development and value enhancement of the company. The cash inflow of compensation and reimbursement payments as well as the dividend suspension will reduce the company's debt and consequently improve the leverage ratio by around 20 to 25 basis points. The reduction in debt will have a positive effect on net interest expense and ultimately on earnings per share. Furthermore, the compensation and reimbursement payments of up to €300 million (from the current perspective) will largely offset the additional costs of Helios Germany in 2023 caused directly or indirectly by the increase in energy prices.

"#FutureFresenius is our guideline for making and implementing strategically important decisions. Against this background, this is the right step for our company. We are strengthening our company’s intrinsic value. The lower level of debt affords us greater flexibility to make even better use of our market opportunities. We act with foresight and keep an eye on the sustainable development of the company and thus the future of patient care," said Fresenius CEO Michael Sen. 

Fresenius is of the opinion that the statutory bans provided for in the "Energy Relief Package" („Entlastungspaket Energiehilfen“) are unconstitutional and that Fresenius' fundamental rights have been violated in view of the significant interference in the hospital financing system associated with this. Fresenius is therefore examining whether and in what form legal action should be taken.

In addition to operating performance improvement of the core business, the successfully progressing cost and efficiency program, the simplification of the Group structure through the deconsolidation of Fresenius Medical Care as well as the divestments of non-core businesses within the business segments, the compensation and reimbursement payments and the suspension of the dividend support the long-term strengthening of the Company. 

Notwithstanding the legally required suspension of dividend payments for the fiscal year 2023, Fresenius maintains its dividend policy for the future. In line with its progressive dividend policy, Fresenius continues to aim to increase the dividend in line with growth in earnings per share (in constant currency, before special items), or at least maintain the dividend at the previous year's level.

• Deconsolidation is a landmark in the implementation of the #FutureFresenius program and a historic day for both companies
• Reducing complexity is a prerequisite for greater flexibility as well as more efficient and faster decision-making and the basis for long-lasting economic success
• Fresenius remains the largest shareholder of Fresenius Medical Care with an unchanged 32 percent of the share capital

Fresenius has successfully completed the deconsolidation of Fresenius Medical Care: The change in legal form was entered in the commercial register on November 30, 2023, and thereby took effect after the Senate of the Bamberg Higher Regional Court had granted Fresenius Medical Care's applications for approval in full. 

"The deconsolidation of Fresenius Medical Care is a landmark in the implementation of our #FutureFresenius strategy and a historic day for both companies. We are reducing complexity and creating the conditions for greater flexibility and more efficient and faster decision-making. Fresenius Medical Care will gain a greater degree of freedom as a result of the deconsolidation. This also means greater responsibility. Both companies can now concentrate on what they do best: working for the well-being of patients in their respective segments," said Michael Sen, CEO of Fresenius. "We are redirecting the company's focus with #FutureFresenius and creating the basis for long-lasting economic success. The solid business performance in recent quarters shows that this is the right path for us."

The shareholders of Fresenius Medical Care had already approved the change in legal form from a partnership limited by shares (KGaA) to a stock corporation (AG) by a majority of more than 99% at an Extraordinary General Meeting held on July 14, 2023. Following the change in legal form, Fresenius Medical Care is no longer part of the consolidated subsidiaries of Fresenius. Fresenius continues to hold 32 percent of Fresenius Medical Care's share capital and therefore remains the company's largest shareholder. With the deconsolidation, Fresenius Medical Care's accounting treatment will change from IFRS 5 to equity method accounting.

Fresenius Medical Care was formed in 1996 from the merger of Fresenius' dialysis division with the U.S. dialysis provider National Medical Care (NMC). The combination of Fresenius' product business and NMC's service business has made the company the world's leading and uniquely vertically integrated dialysis provider. Since then, Fresenius Medical Care has increased considerably in size and value as a result of organic growth and acquisitions: Revenue and the number of patients have increased sevenfold, while the number of employees has increased fivefold.

• Deconsolidation is a landmark in the implementation of the #FutureFresenius program and a historic day for both companies
• Reducing complexity is a prerequisite for greater flexibility as well as more efficient and faster decision-making and the basis for long-lasting economic success
• Fresenius remains the largest shareholder of Fresenius Medical Care with an unchanged 32 percent of the share capital

 

Fresenius has successfully completed the deconsolidation of Fresenius Medical Care: The change in legal form was entered in the commercial register on November 30, 2023, and thereby took effect after the Senate of the Bamberg Higher Regional Court had granted Fresenius Medical Care's applications for approval in full.

"The deconsolidation of Fresenius Medical Care is a landmark in the implementation of our #FutureFresenius strategy and a historic day for both companies. We are reducing complexity and creating the conditions for greater flexibility and more efficient and faster decision-making. Fresenius Medical Care will gain a greater degree of freedom as a result of the deconsolidation. This also means greater responsibility. Both companies can now concentrate on what they do best: working for the well-being of patients in their respective segments," said Michael Sen, CEO of Fresenius. "We are redirecting the company's focus with #FutureFresenius and creating the basis for long-lasting economic success. The solid business performance in recent quarters shows that this is the right path for us."

The shareholders of Fresenius Medical Care had already approved the change in legal form from a partnership limited by shares (KGaA) to a stock corporation (AG) by a majority of more than 99% at an Extraordinary General Meeting held on July 14, 2023. Following the change in legal form, Fresenius Medical Care is no longer part of the consolidated subsidiaries of Fresenius. Fresenius continues to hold 32 percent of Fresenius Medical Care's share capital and therefore remains the company's largest shareholder. With the deconsolidation, Fresenius Medical Care's accounting treatment will change from IFRS 5 to equity method accounting.

Fresenius Medical Care was formed in 1996 from the merger of Fresenius' dialysis division with the U.S. dialysis provider National Medical Care (NMC). The combination of Fresenius' product business and NMC's service business has made the company the world's leading and uniquely vertically integrated dialysis provider. Since then, Fresenius Medical Care has increased considerably in size and value as a result of organic growth and acquisitions: Revenue and the number of patients have increased sevenfold, while the number of employees has increased fivefold.

 

• Application of IFRS 5: Fresenius Group financials for the first time presented excluding Fresenius Medical Care 
• Excellent Group revenue growth of 6% in constant currency to €5.5 billion driven by Operating Companies and Fresenius Vamed
• Group EBIT increased 10% in constant currency reflecting strong performance of Operating Companies; Fresenius Vamed with operational improvement 
• Fresenius Kabi with strong organic revenue growth of 7% at top-end of structural growth band; EBIT margin remains within structural band at 14.3%
• Fresenius Helios with strong organic revenue growth of 5% at top-end of structural growth band despite usual summer effect in Spain 
• Fresenius Vamed’s transformation progressing 
• Deconsolidation of Fresenius Medical Care effective by December 2023
• Divestments advancing: exit of hospital operations in Peru 
• FY/23 structural productivity savings target of ~€200 million excluding Fresenius Medical Care already achieved in first nine months
• Group revenue outlook confirmed, Group EBIT outlook improved

If no timeframe is specified, information refers to Q3/2023.

The financial figures are presented in accordance with IFRS 5 excluding Fresenius Medical Care. However, this does not apply to net income and earnings per share. In the balance sheet and the cash flow statement, Fresenius Medical Care is presented separately. 
 

 ¹ Before special items
 ² Net income attributable to shareholders of Fresenius SE & Co. KGaA  
 

Michael Sen, CEO of Fresenius: “Fresenius had a great 3rd Quarter 2023. We made progress on every part of our #FutureFresenius program, including simplification of our corporate structure, and achieved cost savings well ahead of our targets for the full year 2023. At the same time, we are moving ahead with the divestment of non-core businesses. The focus on our two Operating Companies, Kabi and Helios, is paying off, with strong revenue and earnings development. Both businesses again announced important innovations, new products and strong partnerships to improve patient outcomes. And this gets a lot of recognition even beyond the industry. Given our strong performance throughout the first three quarters of the year, we are improving our operating earnings outlook for 2023 and expect constant currency Group EBIT to remain broadly flat year on year. This momentum will allow us to continue to build trust, deliver consistent performance, and stay focused on our purpose: Advancing Patient Care.”

 

New presentation of financial information
As a result of the approval of the change of legal form by the Extraordinary General Meeting on July 14, 2023, Fresenius Medical Care is for the first time in Q3/23 presented as a single item in the financial statements of the Fresenius Group. Fresenius Medical Care is now classified in accordance with IFRS 5 as "Operations to be deconsolidated” and presented in a single line item in Fresenius’s balance sheet, the P&L and the cash flow statement.
IFRS 5 requires the valuation of Fresenius Medical Care at Fair Value. As of September 30, 2023, the market capitalization of about €12 billion was below the consolidated shareholders‘ equity of Fresenius Medical Care of about €14 billion. This results in a valuation effect of €2 billion, of which ~€0.6 billion are attributable to the shareholders of Fresenius SE & Co. KGaA. This effect is reported as a special item without any cash impact.

Simplification advancing: Deconsolidation of Fresenius Medical Care
The deconsolidation process of Fresenius Medical Care is on track. The competent Higher Regional Court in Bamberg has fully approved the application for release that Fresenius Medical Care had filed with regard to the legal actions brought against the change of the legal form into a stock corporation. Accordingly, the change of the legal form can be registered with the commercial register. Fresenius expects the deconsolidation to become effective by December 2023. From then on, Fresenius Medical Care AG & Co. KGaA will operate as Fresenius Medical Care AG.

Sharpening of focus: Exit from hospital market in Peru
Fresenius sells its 70 percent stake in IDCQ CRP, a co-holding entity of the hospital Clínica Ricardo Palma in Lima, Peru. The stake is acquired by entities of the Verme family which already hold a stake in the hospital, together with other local investors. This exit from the hospital market in Peru is a further step to strengthening #FutureFresenius and is in line with the company's intention to divest certain assets announced earlier this year. Subject to antitrust review, the all-cash transaction is expected to close in the first quarter of 2024.

 

Transformation Fresenius Vamed
In Q3/23, further progress in the transformation of Fresenius Vamed was achieved. The company is undergoing a comprehensive strategic assessment of its business activities and initiated a far-reaching restructuring program to increase the company’s profitability. With a positive EBIT of €10 million in Q3/23 (Q2/23: -€20 million), Fresenius Vamed is ahead of its originally expected target for Q3/23. The encouraging development was especially driven by the High-End Services (HES) and Health Facility Operations (HFO) businesses. For Q4/23, a further solid development is expected.
In Q3/23, negative special items mainly related to closing down activities, asset re-evaluations and restructuring costs resulted in write-downs and provisions of €109 million. The negative special items were predominantly booked as non-cash items. In Q1-3/23, negative special items of €441 million were incurred.

By 2025, Fresenius Vamed is expected to reach the structural EBIT margin band of 4% to 6% set out in the #FutureFresenius Financial Framework.

Structural productivity improvements significantly ahead of plan
The groupwide cost savings program progresses significantly ahead of plan. Under the program, Fresenius realized ~€200 million of structural cost savings at EBIT level in Q1-3/23. With that, all savings originally expected for 2023 are already realized. In the same period, one-time costs of around €90 million incurred to achieve these savings. This is well below what the Company initially accounted for and testament that our one-time costs are tightly managed.

On Group level including Fresenius Medical Care, the savings in Q1-3/23 amount to ~€430 million. In the same period, one-time costs of ~€190 million incurred to achieve these savings.

FY/23 Group earnings outlook improved
Based on the consistent performance of the Operating Companies through the year, Fresenius improves the 2023 earnings outlook and now expects constant currency Group EBIT¹ to remain broadly flat compared to FY/2022 (previous: EBIT¹ expected to remain broadly flat to decline up to a mid-single-digit percentage rate). Group organic revenue² continues to be expected to grow in a mid-single-digit percentage range.

Fresenius expects the net debt/EBITDA³ ratio excluding Fresenius Medical Care to be below 4.0x by the end of 2023, therefore further improving from 4.03x⁴ as of September 30, 2023 (December 31, 2022: 3.80x⁴). This assumption does not include potential divestment activities. The self-imposed target corridor for the leverage ratio remains unchanged at 3.0x to 3.5x.

Assumptions for guidance FY/23
For the remaining of 2023, Fresenius assumes no further escalations of geopolitical tensions. Fresenius expects moreover that the increased cost inflation will have a corresponding impact on its business. The company will continue to closely monitor the potential further consequences of the ongoing challenging macroeconomic environment, including balance sheet valuations. All of these assumptions are subject to considerable uncertainty.

¹ FY/22 base: €2,190 million, before special items; FY/23: before special items
² FY/22 base: €21,532 million
³ At LTM 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
⁴ At LTM average exchange rates for both net debt and EBITDA; pro forma closed 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 starting page 24 of the PDF.

 

6% revenue increase in constant currency
Group revenue increased by 2% (6% in constant currency) to €5,518 million (Q3/22: €5,386 million). Organic growth was 6%. Acquisitions/divestitures contributed net 0% to growth. In total, currency translation had a negative effect of 4% on revenue growth. The Operating Companies increased revenue by 1% (5% in constant currency).

In Q1-3/23, Group revenue increased by 5% (7% in constant currency) to €16,621 million (Q1-3/22: €15,862 million). Organic growth was 6%. Acquisitions/divestitures contributed net 1% to growth. Currency translation decreased revenue growth by 2%. The Operating Companies increased revenue by 4% (7% in constant currency) in Q1-3/23.

10% EBIT¹ increase in constant currency
Group EBITDA before special items increased by 9% (11% in constant currency) to €821 million (Q3/22¹: €755 million). Reported Group EBITDA was €661 million (Q3/22: €691 million). In Q1-3/23, Group EBITDA before special items increased by 2% (3% in constant currency) to €2,480 million (Q1-3/22¹: €2,425 million). Reported Group EBITDA was €1,923, million (Q1-3/22: €2,296 million).

Group EBIT before special items increased by 8% (10% in constant currency) to €519 million (Q3/22¹: €480 million) mainly driven by the good earnings development at the Operating Companies. The EBIT margin before special items was 9.4% (Q3/22¹: 8.9%). Reported Group EBIT was €346 million (Q3/22: €416 million). The Operating Companies showed an EBIT increase of 8% (10% in constant currency) and an EBIT margin of 10.3%.

In Q1-3/23 Group EBIT before special items remained nearly unchanged (0% in constant currency) at €1,628 million (Q1-3/22¹: €1,631 million). The EBIT margin before special items was 9.8% (Q1-3/22¹: 10.3%). Reported Group EBIT was €1,058 million (Q1-3/22: €1,475 million).

Group net interest before special items increased to -€109 million (Q3/22¹: -€67 million) mainly due to financing activities in a higher interest rate environment. Reported Group net interest was -€100 million (Q3/22: -€67 million).
In Q1-3/23, Group net interest before special items increased to -€300 million (Q1-3/22¹: -€161 million). Reported Group net interest was -€291 million (Q1-3/22: -€160 million).

Group tax rate before special items was 24.1% (Q3/22¹: 22.5%). Reported Group tax rate was 37.0% (Q3/22: 23.5%). The higher tax rate in Q3/23 is mainly due to the negative net income at Fresenius Vamed for which deferred tax assets could not be recognized. In Q1-3/23, Group tax rate before special items was 25.2% (Q1-3/22¹: 22.2%). Reported Group tax rate was 40.7%. The higher tax rate is also mainly due to the negative net income at Fresenius Vamed for which deferred tax assets could not be recognized (Q1-3/22: 23.0%).

Noncontrolling interests before special items were -€22 million (Q3/22¹: -€24 million). Reported noncontrolling interests were €6 million (Q3/22: -€21 million). In Q1-3/23, Noncontrolling interests before special items were -€46 million (Q1-3/22¹: -€72 million). Reported noncontrolling interests were €59 million (Q1-3/22: -€68 million).

Net income² from operations to be deconsolidated decreased by 27% (-24% in constant currency) to €55 million (Q3/22²: €75 million). In Q1-3/23 net income¹ from operations to be deconsolidated before special items decreased by 25% (-24% in constant currency) to €160 million (Q3/22²: €212 million).

Group net income² before special items decreased by 7% (-5% in constant currency) to €344 million (Q3/22¹: €371 million). The decrease was driven by rising interest costs and a higher tax rate as well as lower net income from operations to be deconsolidated (Fresenius Medical Care). Reported Group net income² decreased to -€406 million (Q3/22: €321 million). The negative net income is due to the Fresenius Medical Care valuation effect according to IFRS 5 of €594 million. This effect has no cash impact. In Q1-3/23, Group net income² before special items decreased by 14% (-13% in constant currency) to €1,108 million (Q1-3/22¹: €1,284 million). Reported Group net income² decreased to €20 million (Q1-3/22: €1,117 million). The decrease is due to the Fresenius Medical Care valuation effect according to IFRS 5 of €594 million. This effect has no cash impact.

Earnings per share² before special items decreased by 8% (-6% in constant currency) to €0.61 (Q3/22¹: €0.66). Reported earnings per share² were -€0.72 (Q3/22: €0.57). The negative net income is due to the Fresenius Medical Care valuation effect according to IFRS 5 of €594 million. This effect is without any cash impact. In Q1-3/23, earnings per share² before special items decreased by 14% (-14% in constant currency) to €1.97 (Q1-3/22¹: €2.29). Reported earnings per share² were €0.04 (Q1-3/22: €1.99). The decrease is due to the Fresenius Medical Care valuation effect according to IFRS 5 of €594 million. This effect is without any cash impact.

Investments
Spending on property, plant and equipment was €274 million corresponding to 5% of revenue (Q3/22: €255 million; 5% of revenue). These investments served primarily for the modernization and expansion of production facilities as well as hospitals.

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 starting page 24 of the PDF.

 

In Q1-3/23, spending on property, plant and equipment was €725 million corresponding to 4% of revenue (Q1-3/22: €678 million; 4% of revenue).

Total acquisition spending was €179 million (Q3/22: €516 million) mainly for milestone payments in the biosimilars business at Fresenius Kabi.
In Q1-3/23, total acquisition spending was €197 million (Q1-3/22: €819 million).

Cash flow development
Group operating cash flow increased to €648 million (Q3/22: €598 million) mainly driven by the good cash flow development at Fresenius Kabi. Group operating cash flow margin was 11.7% (Q3/22: 11.1%). Operating cash flow from operations to be deconsolidated increased to €760 million (Q3/22: €658 million). Free cash flow before acquisitions, dividends and lease liabilities remained broadly stable at €376 million (Q3/22: €375 million). Free cash flow after acquisitions, dividends and lease liabilities increased to €121 million (Q3/22: -€155 million). Free cash flow after acquisitions, dividends and lease liabilities from operations to be deconsolidated increased to €358 million (Q3/22: €301 million).

In Q1-3/23, Group operating cash flow increased to €859 million (Q1-3/22: €806 million) with a margin of 5.2% (Q1-3/22: 5.1%). Operating cash flow from operations to be deconsolidated increased to €1,910 million (Q1-3/22: €1,568 million). Free cash flow before acquisitions, dividends and lease liabilities increased to €136 million (Q1-3/22: €120 million). Free cash flow after acquisitions, dividends and lease liabilities improved to -€699 million (Q1-3/22: -€1,059 million). Free cash flow after acquisitions, dividends and lease liabilities from operations to be deconsolidated increased to €396 million (Q1-3/22: -€63 million).

The cash conversion rate (CCR), which is defined as the ratio of adjusted free cash flow¹ to EBIT before special items, was 0.9 (LTM) in Q1-3/23.

¹ Cash flow before acquisitions and dividends; before interest, tax, and special items

 

Solid balance sheet structure
Total assets including Fresenius Medical Care decreased by 1% (-1% in constant currency) to €75,328 million (Dec. 31, 2022: €76,400 million).

Assets related to Fresenius Medical Care to be deconsolidated under IFRS 5 were at €33,520 million (Dec. 31, 2022: n.a.). Liabilities related to Fresenius Medical Care to be deconsolidated under IFRS 5 €20,111 million (Dec. 31, 2022: n.a.).

Total shareholders’ equity including Fresenius Medical Care decreased by 6% (-6% in constant currency) to €30,282 million (Dec. 31, 2022: €32,218 million). The equity ratio was 40.2% (Dec. 31, 2022: 42.2%).

Group debt¹ increased by 3% (3% in constant currency) to €15,116 million (Dec. 31, 2022: € 14,708 million). Group net debt¹ increased by 5% (5% in constant currency) to € 14,021 million (Dec. 31, 2022: € 13,307 million).

As of September 30, 2023, the net debt/EBITDA ratio was 4.03x^2,3 (Dec. 31, 2022: 3.80x^2,3). This is a 15 bps reduction compared to Q2/23.

In Q3/23, ROIC was 5.0% (Q4/22: 5.6%).

¹ Value as of December 31, 2022 adjusted (excluding Fresenius Medical Care)
² At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures, including lease liabilities, including Fresenius Medical Care dividend
³ Before special items

 

Business Segments

Operating Company Fresenius Kabi
Fresenius Kabi specializes in products for the therapy and care of critically and chronically ill patients. The portfolio includes biopharmaceuticals, clinical nutrition, MedTech products, intravenously administered generic drugs (generic IV drugs), and IV fluids. 

• Growth Vectors combined contributing strong 12% organic revenue growth
• Pharma business with robust development
• EBIT margin¹ strong above 14% driven by operating improvements and cost savings significantly ahead of plan

Revenue decreased by 2% to €2,021 million (Q3/22: €2,071 million) driven by negative currency exchange effects (increased 7 % in constant currency). Organic growth was 7%. The good performance was mainly driven by the strong business development of all growth vectors.

In Q1-3/23, revenue increased by 3% (8% in constant currency) to €6,013 million (Q1-3/22: €5,814 million). Organic growth was 7%.

Revenue of the Growth Vectors (MedTech, Nutrition and Biopharma) decreased by 1% to €1,067 million (Q3/22: €1,075million) driven by negative currency exchange effects (increased 11% in constant currency, organic growth: 12%). In Q1-3/23, revenue of the Growth Vectors increased by 7% (14% in constant currency; organic growth: 11%) to €3,180 million (Q1-3/22: €2,978 million).

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 starting page 24 of the PDF.

 

Revenue in MedTech remained broadly stable due to negative currency exchange effects (increased 7% in constant currency) and amounted to €369 million (Q3/22: €368 million). Organic growth was 8% and driven by a broad-based positive development across most regions and many product groups. In Q1-3/23, revenue in MedTech increased by 5% (8% in constant currency; organic growth: 9%) to €1,113 million (Q1-3/22: €1,055 million).

Revenue in Nutrition decreased by 9% (increased 5% in constant currency, organic growth: 9%) to €587 million (Q3/22: €644 million). Organic growth was driven by the good business development in the U.S. and Latin America. In Q1-3/23, revenue in Nutrition remained broadly stable (increased 9% in constant currency; organic growth: 10%) at €1,803 million (Q1-3/22: €1,808 million).

Revenue in Biopharma increased by 74% (99% in constant currency; organic growth: 71%) to €111 million (Q3/22: €64 million) mainly driven by the successful product launches in Europe and the U.S. as well as by licensing agreements. In Q1-3/23, revenue in Biopharma increased by 129% (154% in constant currency; organic growth: 59%) to €264 million (Q1-3/22: €116 million).

Revenue in the Pharma (IV Drugs & Fluids) business decreased by 5% (0% in constant currency; organic growth: 1%) and amounted to €941 million (Q3/22: €995 million). Organic growth was mainly driven by a robust development across many regions. In Q1-3/23, revenue in the Pharma business remained broadly stable (increased 2% in constant currency; organic growth: 3%) and amounted to €2,833 million (Q1-3/22: €2,836 million).

EBIT¹ of Fresenius Kabi increased by 3% (6% in constant currency) to €289 million (Q3/22: €280 million) due to the good operating performance and the well-progressing cost saving initiatives. EBIT margin¹ was 14.3% (Q3/22: 13.5%) and thus within the structural EBIT margin band.
In Q1-3/23, EBIT¹ increased by 2% (constant currency: 2%) to €863 million (Q1-3/22: €844 million) EBIT margin¹ was 14.4% (Q1-3/22: 14.5%).

EBIT¹ of the Growth Vectors increased by 21% (constant currency: 25%) to €104 million (Q3/22: €86 million) due to the strong revenue development and the well-progressing cost saving initiatives. EBIT¹ margin was 9.8% (Q3/22: 8.0%).
In Q1-3/23, EBIT¹ of the Growth Vectors increased by 3% (constant currency: 4%) to €288 million (Q1-3/22: €279 million) with a margin1 of 9.1% (Q1-3/22: 9.4%).

EBIT¹ in the Pharma business increased by 2% (constant currency: 9%) to €200 million (Q3/22: €197 million) due to the well-progressing cost saving initiatives. EBIT1 margin was 21.3% (Q3/22: 19.8%). In Q1-3/23, EBIT1 in the Pharma business increased by 4% (constant currency: 7%) to €603 million (Q1-3/22: €579 million) with a margin1 of 21.3% (Q1-3/22: 20.4%).

Net income^1,2 increased by 3% (constant currency: 7%) to €189 million (Q3/22: €184 million). In Q1-3/23, net income^1,2 decreased by 3% (constant currency: -3%) to €559 million (Q1-3/22: €574 million).

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 starting page 24 of the PDF.

Operating cash flow increased to €380 million (Q3/22: €301 million) with a margin of 18.8% (Q3/22: 14.5%) mainly driven by the business performance and an improved working capital management. In Q1-3/23, operating cash flow increased to €581 million (Q1-3/22: €543 million) with a margin of 9.7% (Q1-3/22: 9.3%).

For FY/23, Fresenius Kabi expects organic revenue¹ growth in a mid-single-digit percentage range. The EBIT margin² is expected to be around 14% (structural margin band: 14% to 17%).

¹ FY/22 base: €7,850 million
² FY/22 base: EBIT margin: 13.8%, before special items; FY/23 before special items
For a detailed overview of special items please see the reconciliation tables starting page 24 of the PDF.

 

Operating Company Fresenius Helios
Fresenius Helios is Europe’s leading private health care provider. The company comprises Helios Germany, Helios Spain and Helios Fertility. Helios Germany operates 86 hospitals, around 240 outpatient centers, 27 occupational health centers and 6 prevention centers. Helios Spain operates 50 hospitals, around 100 outpatient centers and around 300 occupational risk prevention centers. In addition, the company is active in Latin America with 8 hospitals and as a provider of medical diagnostics. Helios Fertility offers a wide spectrum of state-of-the-art services in the field of fertility treatments.

• Strong organic revenue growth driven by healthy activity levels in Germany and Spain
• Despite usual summer effect in Spain, solid 8% EBIT¹ margin supported by ongoing cost saving initiatives and Government relief funds in Germany
• Helios Fertility with strong improvement

Revenue increased by 4% (5% in constant currency) to 2,953 million (Q3/22: €2,829 million). Organic growth was 5%. Acquisitions contributed 0% to revenue growth.
In Q1-3/23, revenue increased by 5% (6% in constant currency) to €9,132 million (Q1-3/22: €8,685 million). Organic growth was 6%. Acquisitions contributed 0% to revenue growth.

Revenue of Helios Germany increased by 4% (organic growth: 4%) to €1,800 million (Q3/22: €1,731 million), mainly driven by increasing admissions and positive price mix effects. In Q1-3/23, revenue of Helios Germany increased by 3% (organic growth: 3%) to €5,451 million (Q1-3/22: €5,272 million).

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 starting page 24 of the PDF.

 

Revenue of Helios Spain increased by 5% (5% in constant currency) to €1,088 million (Q3/22: €1,037 million) driven by ongoing good activity levels despite the usual summer effect in Spain. The clinics in Latin America also showed a good performance. Organic growth was 5%. In Q1-3/23, revenue of Helios Spain increased by 8% (9% in constant currency) to €3,481 million (Q1-3/21: €3,227 million).

Revenue of Helios Fertility increased by 3% (11% in constant currency) to €64 million (Q3/22: €62 million) driven by positive mix effects. Organic growth was 10%. In Q1-3/23, revenue of Helios Fertility increased by 8% (13% in constant currency) to €198 million (Q1-3/22: €184 million).

EBIT¹ of Fresenius Helios increased by 8% (8% in constant currency) to €239 million (Q3/22: €222 million) with an EBIT margin¹ of 8.1% (Q3/22: 7.8%).
In Q1-3/23, EBIT¹ increased by 4% (4% in constant currency) to €861 million (Q1-3/22: €831 million) with an EBIT margin¹ of 9.4% (Q1-3/22: 9.6%).

EBIT¹ of Helios Germany increased by 11% to €157 million (Q3/22: €141 million) with an EBIT margin¹ of 8.7% (Q3/22: 8.1%). The EBIT development was supported by the well progressing cost savings program and the Government compensation for higher energy costs. In Q1-3/23, EBIT1 of Helios Germany increased by 4% to €466 million (Q1-3/22: €449 million) with an unchanged EBIT margin1 at 8.5%.

EBIT¹ of Helios Spain decreased by 2% due to the usual summer effect (-2% in constant currency) to €81 million (Q3/22: €83 million). The EBIT margin¹ was 7.4% (Q3/22: 8.0%). In Q1-3/23, EBIT¹ of Helios Spain increased by 2% (3% in constant currency) to €392 million (Q1-3/22: €384 million). The EBIT margin¹ was 11.3% (Q1-3/22: 11.9%).

¹ Before special items
For a detailed overview of special items please see the reconciliation tables starting page 24 of the PDF.

 

EBIT¹ of Helios Fertility was €5 million (Q3/22: €4 million) with an EBIT margin¹ of 7.8% (Q3/22: 6.5%). In Q1-3/23, EBIT¹ of Helios Fertility was €16 million (Q1-3/22: €15 million) with an EBIT margin¹ of 8.1% (Q1-3/22: 8.2%).

Net income^1,2 decreased by 4% (-4% in constant currency) to €132 million (Q3/22: €138 million).
In Q1-3/23, net income^1,2 decreased by 5% (-4% in constant currency) to €505 million (Q1-3/22: €530 million).

Operating cash flow decreased to €208 million (Q3/22: €353 million) mainly due to phasing effects of receivables in Spain and the very good cashflow in the prior year. The operating cash flow margin was 7.0% (Q3/22: 12.5%).
In Q1-3/23, operating cash flow decreased to €377 million (Q1-3/22: €411 million) with a margin of 4.1% (Q1-3/22: 4.7%).

For FY/23, Fresenius Helios expects organic revenue³ growth in a mid-single-digit percentage range. The EBIT margin⁴ is expected to be within the structural margin band of 9% to 11%.

¹ Before special items
² Net income attributable to shareholders of Fresenius SE & Co. KGaA
³ FY/22 base: €11,716 million
⁴ FY/22 base: EBIT margin: 10.1%, before special items, FY/23 before special items
For a detailed overview of special items please see the reconciliation tables starting page 24 of the PDF.

 

Investment Company Fresenius Vamed
Fresenius Vamed internationally manages projects and provides services for hospitals and other health care facilities and is a leading post-acute care provider in Central Europe. The portfolio ranges along the entire value chain: from project development, design planning, medical and hospital engineering as well as construction, via maintenance and technical management to total operational management and high-end services.

• Fresenius Vamed’s transformation with good progress
• Revenue growth driven by Service and Project business
• EBIT¹ back to positive driven by the positive development at the Service business

Revenue increased by 13% (13% in constant currency) to €647 million (Q3/22: €572 million). Organic growth was 13%.
In Q1-3/23, revenue increased by 7% (7% in constant currency) to €1,761 million (Q1-3/22: €1,647 million). Organic growth was 6%.

Revenue in the service business increased by 9% (9% in constant currency) to €456 million (Q3/22: €418 million) due to the positive development of High-End Services (HES) and Health Facility Operations (HFO) business.
In Q1-3/23, revenue in the service business increased by 8% (7% in constant currency) to €1,335 million (Q1-3/22: €1,240 million).

¹ Before special items
² Net income attributable to shareholders of VAMED AG
For a detailed overview of special items please see the reconciliation tables starting page 24 of the PDF.

 

Revenue in the project business increased by 24% (24% in constant currency) to €191 million (Q3/22: €154 million). In Q1-3/23, revenue in the project business increased by 5% (5% in constant currency) to €426 million (Q1-3/22: €407 million).

EBIT¹ reflected the first results of the restructuring measures and was with €10 million back to positive (Q3/22: €10 million) driven by the good revenue development of the High-End Services and Health Facility Operations businesses. The EBIT margin¹ was 1.5% (Q3/22: 1.7%). In Q1-3/23, EBIT¹ decreased to -€37 million (Q1-3/22: €29 million) with an EBIT margin¹ of -2.1% (Q1-3/22: 1.8%).

Net income^1,2 decreased to -€7 million (Q3/22: €5 million).
In Q1-3/23, net income^1,2 decreased to -€74 million (Q1-3/22: €15 million).

Order intake was €40 million (Q3/22: €153 million). As of September 30, 2023, order backlog was at €2,908 million³ (December 31, 2022: €3,689 million).

Operating cash flow increased to €50 million (Q3/22: -€18 million) with a margin of 7.7% (Q3/22: -3.1%) due to positive phasing effects. In Q1-3/23, operating cash flow improved to -€16 million (Q1-3/22: -€56 million) with a margin of -0.9% (Q1-3/22: -3.4%).

In Q3/23, further progress in the transformation of Fresenius Vamed was achieved. With a positive EBIT of €10 million in Q3/23, Fresenius Vamed is ahead of its originally expected target for Q3/23. For Q4/23, a further solid development is expected. For FY/2023, Fresenius Vamed confirms the outlook and expects organic revenue⁴ to grow in a low-to mid-single digit percentage range. The EBIT margin⁵ is expected to be clearly below the structural margin band of 4% to 6%.

¹ Before special items
² Net income attributable to shareholders of VAMED AG
³ Thereof conditionally agreed order backlog of €839 million
⁴ FY/22 base: €2,359 million
⁵ FY/22 base: EBIT margin: 0.8%, before special items; FY/23 before special items
For a detailed overview of special items please see the reconciliation tables starting page 24 of the PDF.

 

Conference Call and Webcast
As part of the publication of the results for Q3/23, a conference call will be held on November 2, 2023 at 1:30 p.m. CET (8:30 a.m. EDT). All investors are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com/investors. Following the call, a replay will be available on our website.

For additional information on the performance indicators used please refer to our website https://www.fresenius.com/alternative-performance-measures.