FMS Fresenius Medical Care AG

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

 

Pursuant to Rule 13a-16 or 15d-16 of the

Securities Exchange Act of 1934

 

For the month of November 2024

 

Commission file number: 001-32749

 

FRESENIUS MEDICAL CARE AG

(Translation of registrant's name into English)

 

Else-Kröner Strasse 1

61346 Bad Homburg

Germany

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F  x                  Form 40-F  ¨

 

 

 

On November 5, 2024, Fresenius Medical Care AG (the “Company”) issued a Press Release announcing its third quarter results for the period ending September 30, 2024. A copy of the Press Release is furnished as Exhibit 99.1 and the corresponding financial figures as Exhibit 99.2.

 

The attached Press Release contains non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles. To supplement our third quarter 2024 consolidated financial results presented in accordance with International Financial Reporting Standards, or IFRS, we have used non-GAAP financial measures, including (a) EBITDA, or operating income excluding interest, taxes, depreciation and amortization, (b) free cash flow, (c) net leverage ratio (ratio of net debt to adjusted EBITDA) and (d) results presented in constant currency and as adjusted for special items identified in the Press Release and associated tables. These non-GAAP measures are provided to enhance the user’s overall understanding of our current financial performance and our prospects for the future. In addition, because we have historically reported certain non-GAAP financial measures in our financial results, we believe the inclusion of these non-IFRS financial measures provides consistency and comparability in our financial reporting to prior periods for which these non-GAAP financial measures were previously reported. These non-GAAP financial measures should not be used as a substitute for or be considered superior to GAAP financial measures. Reconciliation of the non-GAAP financial measures to the most comparable IFRS financial measures are included in the attached Financial Statements. As the reconciliation of amounts stated in Constant Currency is inherent in the disclosure included in the Press Release, we believe that a separate reconciliation would not provide any additional benefit.

 

The Exhibits attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.

 

EXHIBITS

 

The following exhibits are being furnished with this Report:

 

Exhibit 99.1	Press release issued on November 5, 2024.
Exhibit 99.2	Complete overview of the third quarter 2024 and first nine months 2024.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

DATE: November 5, 2024

 

	Fresenius Medical Care AG
	By:	/s/ Helen Giza
	Name:	Helen Giza
	Title:	Chief Executive Officer and Chair of the Management Board

 

	By:	/s/ Martin Fischer
	Name:	Martin Fischer
	Title:	Chief Financial Officer and member of the Management Board

 

 

 

Exhibit 99.1

 

 

Press Release	Media contact
	Christine Peters
	T +49 160 60 66 770
	christine.peters@freseniusmedicalcare.com
	Contact for analysts and investors
	Dr. Dominik Heger
	T +49 6172 609-2601
	dominik.heger@freseniusmedicalcare.com
	www.freseniusmedicalcare.com

 

Fresenius Medical Care reports strong operating income margin growth in the third quarter of 2024

 

·

Organic revenue growth of +2% supported by Care Enablement and Care Delivery

 

·

Underlying U.S. dialysis treatment volume growth turns positive

 

·

Exceeding full year FME25 savings target, with additional EUR 64 million contribution in Q3

 

·

Both segments further increased operating income1 and operating income margin1

 

·

Net financial leverage ratio further improved to 2.8x

 

·

FY 2024 operating income1 growth outlook with 16-18% tightened toward the upper end of the previous range

 

Bad Homburg (November 5, 2024) – “In the third quarter, we continued the improvement of our financial performance, recording a meaningful progress in the operating income margin towards our 2025 margin targets. The Care Delivery margin extended well into the 2025 margin target band while Care Enablement maintained the significant margin progress realized in the first half year. Our clear focus on improving operational performance and continued momentum of FME25 savings realization supported our progress in the third quarter”, said Helen Giza, Chief Executive Officer of Fresenius Medical Care AG. “In Care Delivery, a very important and reassuring milestone was underlying U.S. same market treatment growth turning positive. Care Enablement recorded solid volume growth and continued positive pricing momentum outside China.” Giza added: “In light of the developments in the first nine months, we confirm our revenue growth outlook and tighten our operating income¹ growth outlook with 16-18% toward the upper end of the previous range for the full year 2024.”

 

¹  Revenue and operating income outlook, as referred to in the 2024 outlook, are both at constant currency, excluding special items as well as the business impact from closed divestitures in 2023 and the settlement agreement with the U.S. government (Tricare) in Q4 2023. For FY 2023 and 2024, special items include costs related to the FME25 program, the Humacyte remeasurements, the legal form conversion costs and effects from legacy portfolio optimization. For further details please see the reconciliation attached to the Press Release.

 

 

Key figures (unaudited)

 

		Q3 2024				Q3 2023				Growth				Growth				9M 2024				9M 2023				Growth				Growth
		EUR m				EUR m				yoy				yoy, cc				EUR m				EUR m				yoy				yoy, cc
Revenue			4,760				4,936				-4	%			-2	%			14,251				14,466				-1	%			-1	%
on outlook base1			4,820				4,855								-1	%			14,385				14,215								+1	%
Operating income			463				324				+43	%			+43	%			1,133				942				+20	%			+21	%
on outlook base1			474				430								+10	%			1,323				1,167								+13	%
Net income2			213				84				+153	%			+155	%			471				311				+51	%			+53	%
on outlook base1			242				168								+44	%			646				490								+32	%
Basic EPS (EUR)			0.73				0.29				+153	%			+155	%			1.61				1.06				+51	%			+53	%
on outlook base1			0.82				0.57								+44	%			2.20				1.67								+32	%

 

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

 

Significant progress in the execution against the strategic plan

 

In the third quarter, the FME25 transformation program accelerated its momentum, delivering EUR 64 million additional sustainable savings while related one-time costs amounted to EUR 39 million. With continued momentum in the third quarter, Fresenius Medical Care delivered EUR 173 million additional sustainable savings year-to-date, well ahead of the targeted EUR 100 to 150 million by year end 2024. The company confirms its target of EUR 650 million sustainable savings by 2025.

 

Fresenius Medical Care continues the execution of its portfolio optimization plan to exit non-core and dilutive assets. During the third quarter, closed divestments included clinic operations in Curacao, Guatemala and Peru.

 

All transactions that are currently signed as part of Fresenius Medical Care’s portfolio optimization plan are estimated to negatively impact operating income by around EUR 250 million in the full year 2024 and will be treated as special items. These transactions are expected to generate cash proceeds of around EUR 650 million upon closing, thereof around EUR 500 million have been received by the end of the third quarter.

 

²  Net income attributable to shareholders of Fresenius Medical Care AG

 

 

Revenue development affected by divestments resulting from execution of the portfolio optimization

 

Revenue decreased by 4% to EUR 4,760 million in the third quarter (-2% at constant currency, +2% organic). Revenue on outlook base¹ decreased by 1% compared to prior year due to divestitures realized as part of the portfolio optimization plan, negatively affecting the revenue development.

 

Care Delivery revenue decreased by 5% to EUR 3,770 million (-4% at constant currency, +1% organic) and by 2% on outlook base¹.

 

In Care Delivery U.S., revenue decreased by 1% (0% at constant currency, 0% organic) and increased by 1% on outlook base¹. Growth in the U.S. was supported by the value-based care business and an overall increase in treatment volumes, higher reimbursement rates and a favorable payor mix shift, partially offset by increased implicit price concessions. While U.S. same market treatment growth further improved sequentially, effects from elevated mortality continued to weigh on the development. Adjusted for the exit from less profitable acute care contracts (-0.2%), underlying U.S. same market treatment growth returned to positive growth (+0.2%).

 

In Care Delivery International, revenue decreased by 22% (-21% at constant currency, +4% organic) and by 16% on outlook base¹. This negative development was driven by divestments realized as part of the portfolio optimization plan and was partially offset by organic growth. International same market treatment growth was positive at 2.9%.

 

Care Enablement revenue grew by 2% to EUR 1,359 million (+4% at constant currency, +4% organic) and by 4% on outlook base¹, driven by volume growth in all geographical regions. Pricing momentum outside of China remained positive. In China, pricing was negatively impacted by the rollout of volume-based procurement, in line with expectations.

 

Within Inter-segment eliminations, revenue for products transferred between the operating segments at fair market value remained unchanged with a deduction of EUR 369 million (+1% at constant currency).³

 

In the first nine months, revenue decreased by 1% to EUR 14,251 million (-1% at constant currency, +3% organic) and increased by 1% on outlook base¹. Care Delivery revenue decreased by 2% to EUR 11,330 million (-2% at constant currency, +3% organic), with Care Delivery U.S. growing by 1% (+1% at constant currency, +3% organic) and Care Delivery International decreasing by 16% (-14% at constant currency, +3% organic). Care Enablement revenue increased by 1% to EUR 4,020 million (+3% at constant currency, +3% organic). Inter-segment eliminations remained unchanged at a deduction of EUR 1,099 million (0% at constant currency).

 

³  The company transfers products between segments at fair market value. The associated internal revenues and expenses and all other consolidation of transactions are included within “Inter-segment eliminations”.

 

 

Strong operating income growth supported by both segments

 

Operating income increased by 43% to EUR 463 million in the third quarter (+43% at constant currency), resulting in a margin of 9.7% (Q3 2023: 6.6%). Operating income on outlook base¹ increased by 10% to EUR 474 million, resulting in a margin of 9.8% (Q3 2023: 8.9%). Divestitures realized as part of the portfolio optimization plan had a neutral effect on operating income margin in the third quarter.

 

Operating income in Care Delivery increased by 26% to EUR 419 million (+27% at constant currency), resulting in a margin of 11.1% (Q3 2023: 8.4%). Operating income on outlook base¹ increased by 5%, resulting in a margin¹ of 11.2% (Q3 2023: 10.5%). The growth was mainly driven by positive price and volume effects as well as the phasing of a consent agreement on certain pharmaceuticals. The positive development was partly offset by higher personnel expenses as anticipated, and negative contributions from the value-based care business.

 

Operating income in Care Enablement significantly increased to EUR 61 million (Q3 2023: EUR -1 million), resulting in a margin of 4.5% (Q3 2023: -0.1%). Operating income on outlook base¹ almost quadrupled compared to prior year, resulting in a margin¹ of 5.6% (Q3 2023: 1.5%). The strong increase was driven by savings from the FME25 program as well as positive volume and price effects, compensating inflationary cost increases, negative impacts from the rollout of volume-based procurement in China, as well as a negative impact from foreign currency transaction.

 

Operating income for Corporate amounted to EUR -13 million (Q3 2023: EUR -8 million). The decline was mainly driven by negative valuation effects of virtual power purchase agreements (EUR -24 million). Operating income on outlook base¹ amounted to EUR -26 million (Q3 2023: EUR 1 million).

 

In the first nine months, operating income increased by 20% up to EUR 1,133 million (+21% at constant currency), resulting in a margin of 8.0% (9M 2023: 6.5%). Divestitures realized during the first nine months had a slightly positive impact on operating income margin. Operating income on outlook base¹ increased by 13% to EUR 1,323 million, resulting in a margin of 9.2% (9M 2023: 8.2%). In Care Delivery, operating income declined by 6% to EUR 937 million (-6% at constant currency), resulting in a margin of 8.3% (9M 2023: 8.6%). Operating income margin on outlook base¹ improved to 10.1% (9M 2023: 9.7%). In Care Enablement, operating income significantly increased to EUR 196 million (9M 2023: EUR -24 million), resulting in a margin of 4.9% (9M 2023: -0.6%). Operating income margin on outlook base¹ improved to 5.5% (9M 2023: 2.6%). Operating income for Corporate amounted to EUR 9 million (9M 2023: -23 million).

 

Net income² strongly increased by 153% to EUR 213 million in the third quarter (+155% at constant currency). Net income on outlook base¹ increased by 44%.

 

In the first nine months, net income² increased by 51% to EUR 471 million (+53% at constant currency). Net income on outlook base¹ increased by 32%.

 

Basic earnings per share (EPS) increased by 153% to EUR 0.73 (+155% at constant currency). EPS on outlook base¹ increased by 44% to EUR 0.82.

 

 

In the first nine months, EPS increased by 51% to EUR 1.61 (+53% at constant currency). EPS on outlook base¹ increased by 32% to EUR 2.20.

 

Lower net financial debt and further improved net leverage ratio

 

In the third quarter, Fresenius Medical Care improved operating cash flow by 30% to EUR 985 million (Q3 2023: EUR 760 million), resulting in a margin of 20.7% (Q3 2023: 15.4%). Operating cash flow increased mainly due to the recovery of the cash impact following the cyber incident at Change Healthcare.

 

In the first nine months, operating cashflow amounted to EUR 1,554 million (9M 2023: EUR 1,910 million), resulting in a margin of 10.9% (9M 2023: 13.2%). The decline was driven by a negative impact from the phasing of dividend payments received from equity method investments and of income tax payments for current and prior year periods.

 

Free cash flow⁴ increased by 30% to EUR 815 million in the third quarter (Q3 2023: EUR 626 million), resulting in a margin of 17.1% (Q3 2023: 12.7%). In the first nine months, Fresenius Medical Care generated free cash flow of EUR 1,102 million (9M 2023: EUR 1,480 million), resulting in a margin of 7.7% (9M 2023: 10.2%).

 

Total net debt and lease liabilities were further reduced to EUR 9,831 million (Q3 2023: EUR 11,432 million). At 2.8x, the corresponding net leverage ratio (net debt/EBITDA) decreased below the lower end of our self-imposed target corridor.

 

Outlook

 

Fresenius Medical Care confirms its outlook for fiscal 2024 and expects revenue to grow by a low- to mid-single digit percent rate compared to prior year. Due to the developments in the first nine months, the company now expects operating income to grow by 16 to 18 percent compared to prior year. Before, the company expected operating income to grow by a mid- to high-teens percent rate compared to prior year.

 

The expected growth rates for 2024 are at constant currency, excluding special items as well as the business impacts from closed divestitures in 2023 and the settlement agreement with the U.S. government (Tricare) in Q4 2023. The 2023 basis for the revenue outlook is EUR 19,049 million and for the operating income outlook is EUR 1,540 million.

 

The company also reconfirms its targets to achieve an operating income margin of 10% to 14% by 2025. This excludes impacts from portfolio changes.

 

⁴  Net cash provided by / used in operating activities, after capital expenditures, before acquisitions/divestitures, investments, and dividends

 

 

Patients, clinics and employees

 

As of September 30, 2024, Fresenius Medical Care treated 308,216 patients in 3,732 dialysis clinics worldwide and had 113,079 employees (headcount) globally, compared to 113,639 employees as of June 30, 2024.

 

Investor conference call

 

Fresenius Medical Care will host a conference call to discuss the results of the third quarter today, November 5, 2024, at 2:00 p.m. CET / 8:00 a.m. ET. Details are available on the Fresenius Medical Care website in the “Investors” section. A replay will be available shortly after the call.

 

Please refer to our statement of earnings included at the end of this news and to the attachments as separate PDF files for a complete overview of the results of the third quarter and first nine months of 2024. Our 6-K disclosure provides more details.

 

About Fresenius Medical Care:

 

Fresenius Medical Care is the world's leading provider of products and services for individuals with renal diseases of which around 4.1 million patients worldwide regularly undergo dialysis treatment. Through its network of 3,732 dialysis clinics, Fresenius Medical Care provides dialysis treatments for approx. 308,000 patients around the globe. Fresenius Medical Care is also the leading provider of dialysis products such as dialysis machines or dialyzers. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME) and on the New York Stock Exchange (FMS).

 

For more information visit the company’s website at www.freseniusmedicalcare.com.

 

Disclaimer:

 

This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to various factors, including, but not limited to, changes in business, economic and competitive conditions, legal changes, regulatory approvals, impacts related to the COVID-19 pandemic results of clinical studies, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care’s reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care does not undertake any responsibility to update the forward-looking statements in this release.

 

 

 

 

 

 

 

 

 

Exhibit 99.2

 

 

 

Fresenius Medical Care AG

 

COMPLETE OVERVIEW OF THE THIRD QUARTER AND FIRST NINE MONTHS 2024

 

November 5, 2024

 

Investor Relations

 

phone: +49 6172 609 2525

 

email: ir@freseniusmedicalcare.com

 

Content:

 

Statement of earnings	page 2
Segment information	page 3
Balance sheet	page 4
Cash flow	page 5
Revenue development by segment	page 6
Key metrics	page 7
Reconciliation results (outlook base)	page 8
Outlook 2024	page 9

 

Disclaimer

 

This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to various factors, including, but not limited to, changes in business, economic and competitive conditions, legal changes, regulatory approvals, impacts related to COVID-19, results of clinical studies, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG’s reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG does not undertake any responsibility to update the forward-looking statements in this release.

 

Rounding adjustments applied to individual numbers and percentages may result in these figures differing immaterially from their absolute values. Furthermore, totals and subtotals in tables may differ slightly from unrounded figures due to rounding in accordance with commercial rounding conventions.

 

Copyright by Fresenius Medical Care AG

 

 

 

 

Statement of earnings

 

		Three months ended September 30,																Nine months ended September 30,
in € million, except share data, unaudited		2024				2023				Change				Change at cc				2024				2023				Change				Change at cc
Total revenue			4,760				4,936				-3.6	%			-2.4	%			14,251				14,466				-1.5	%			-0.6	%
Total revenue (outlook base) 1			4,820				4,855								-0.7	%			14,385				14,215								1.2	%
Costs of revenue			3,614				3,707				-2.5	%			-1.3	%			10,765				10,890				-1.2	%			-0.2	%
Selling, general and administrative expense			756				794				-4.7	%			-3.7	%			2,303				2,351				-2.0	%			-1.4	%
Research and development expense			40				53				-24.5	%			-24.2	%			133				166				-19.6	%			-19.5	%
Income from equity method investees			(41	)			(23	)			82.2	%			82.2	%			(103	)			(98	)			4.4	%			4.4	%
Other operating income			(191	)			(65	)			195.7	%			197.5	%			(532	)			(258	)			106.5	%			106.8	%
Other operating expense			119				146				-17.7	%			-13.2	%			552				473				16.6	%			18.4	%
Operating income			463				324				42.7	%			42.8	%			1,133				942				20.4	%			21.3	%
Operating income (outlook base) 1			474				430								10.3	%			1,323				1,167								13.3	%
Interest income			(17	)			(25	)			-32.6	%			-29.2	%			(50	)			(61	)			-17.9	%			-14.9	%
Interest expense			99				114				-13.0	%			-12.1	%			306				313				-2.3	%			-1.4	%
Interest expense, net			82				89				-7.4	%			-7.2	%			256				252				1.5	%			1.9	%
Income before income taxes			381				235				61.6	%			61.7	%			877				690				27.2	%			28.4	%
Income tax expense			117				88				31.8	%			29.0	%			255				214				19.1	%			20.4	%
Net income			264				147				79.5	%			81.3	%			622				476				30.9	%			32.0	%
Net income attributable to noncontrolling interests			51				63				-18.7	%			-17.6	%			151				165				-7.9	%			-7.4	%
Net income attributable to shareholders of FME AG			213				84				152.5	%			154.9	%			471				311				51.4	%			52.8	%
Net income attributable to shareholders of FME AG (outlook base) 1			242				168								43.8	%			646				490								31.8	%
Weighted average number of shares			293,413,449				293,413,449												293,413,449				293,413,449
Basic earnings per share		€	0.73			€	0.29				152.5	%			154.9	%		€	1.61			€	1.06				51.4	%			52.8	%
Basic earnings per ADS		€	0.36			€	0.14				152.5	%			154.9	%		€	0.80			€	0.53				51.4	%			52.8	%
Operating income			463				324				42.7	%			42.8	%			1,133				942				20.4	%			21.3	%
Depreciation, amortization and impairment loss			365				454				-19.4	%			-18.0	%			1,266				1,326				-4.6	%			-3.6	%
EBITDA			828				778				6.5	%			7.3	%			2,399				2,268				5.8	%			6.8	%
In percent of revenue
Operating income margin			9.7	%			6.6	%											8.0	%			6.5	%
Operating income margin (outlook base) 1			9.8	%			8.9	%											9.2	%			8.2	%
EBITDA margin			17.4	%			15.8	%											16.8	%			15.7	%

 

¹ Outlook base as referred to the 2024 outlook, presented at constant currency, excluding special items, business impacts from closed divestitures in 2023 and the Tricare settlement in Q4 2023. For a reconciliation, please refer to the table on page 8.

 

 

 

Segment information

 

		Three months ended September 30,																Nine months ended September 30,
unaudited		2024				2023				Change				Change at cc				2024				2023				Change				Change at cc
Total
Revenue in € million			4,760				4,936				-3.6	%			-2.4	%			14,251				14,466				-1.5	%			-0.6	%
Revenue in € million (outlook base) 1			4,820				4,855								-0.7	%			14,385				14,215								1.2	%
Operating income in € million			463				324				42.7	%			42.8	%			1,133				942				20.4	%			21.3	%
Operating income in € million (outlook base) 1			474				430								10.3	%			1,323				1,167								13.3	%
Operating income margin			9.7	%			6.6	%											8.0	%			6.5	%
Operating income margin (outlook base) 1			9.8	%			8.9	%											9.2	%			8.2	%
Days sales outstanding (DSO) 2																			65				69
Employees (headcount)																			113,079				123,106
Care Delivery segment
Revenue in € million			3,770				3,974				-5.1	%			-4.2	%			11,330				11,602				-2.3	%			-1.7	%
Revenue in € million (outlook base) 1			3,806				3,892								-2.2	%			11,408				11,347								0.5	%
Operating income in € million			419				332				26.3	%			26.6	%			937				1,001				-6.4	%			-5.9	%
Operating income in € million (outlook base) 1			427				408								4.6	%			1,153				1,095								5.3	%
Operating income margin			11.1	%			8.4	%											8.3	%			8.6	%
Operating income margin (outlook base) 1			11.2	%			10.5	%											10.1	%			9.7	%
Days sales outstanding (DSO) 2																			57				60
Care Enablement segment
Revenue in € million			1,359				1,330				2.2	%			4.2	%			4,020				3,965				1.4	%			2.9	%
Revenue in € million (outlook base) 1			1,386				1,330								4.2	%			4,081				3,954								3.2	%
Operating income in € million			61				(1	)			n.a.				n.a.				196				(24	)			n.a.				n.a.
Operating income in € million (outlook base) 1			78				20								284.2	%			224				103								118.9	%
Operating income margin			4.5	%			-0.1	%											4.9	%			-0.6	%
Operating income margin (outlook base) 1			5.6	%			1.5	%											5.5	%			2.6	%
Days sales outstanding (DSO) 2																			94				99
Inter-segment eliminations 3
Revenue in € million			(369	)			(368	)			0.4	%			1.3	%			(1,099	)			(1,101	)			-0.3	%			0.2	%
Revenue in € million (outlook base) 1			(372	)			(367	)							1.8	%			(1,104	)			(1,086	)							1.7	%
Operating income in € million			(4	)			1				n.a.				n.a.				(9	)			(12	)			-26.3	%			-36.5	%
Operating income in € million (outlook base) 1			(5	)			1								n.a.				(16	)			(12	)							32.9	%
Corporate
Operating income in € million			(13	)			(8	)			66.6	%			84.4	%			9				(23	)			n.a.				n.a.
Operating income in € million (outlook base) 1			(26	)			1								n.a.				(38	)			(19	)							108.6	%

 

1

Outlook base as referred to the 2024 outlook, presented at constant currency, excluding special items, business impacts from closed divestitures in 2023 and the Tricare settlement in Q4 2023. For a reconciliation, please refer to the table on page 8.

 

2

Includes receivables related to assets held for sale.

 

3

The Company transfers products between segments at fair market value. The associated internal revenues and expenses and all other consolidation of transactions are included within “Inter-segment eliminations”.

 

cc = constant currency. Changes in revenue, operating income and net income attributable to shareholders of FME AG include the impact of changes in foreign currency exchange rates. We calculate and present these financial measures using both IFRS Accounting Standards and at constant exchange rates to show changes in these metrics and other items without giving effect to period-to-period currency fluctuations. Under IFRS Accounting Standards, amounts received in local (non-euro) currency are translated into euro at the average exchange rate for the period presented. Once we translate the local currency for the constant currency, we then calculate the change, as a percentage, of the current period using the prior period exchange rates versus the prior period. The single quarter results are calculated as the variance between the current year-to-date results less the preceding quarter’s year-to-date which makes the single quarter subject to further foreign exchange fluctuation. This resulting percentage is a non-IFRS measure referring to a change as a percentage at constant currency. These currency-adjusted financial measures are identifiable by the designated term "Constant Currency".

 

 

 

Balance sheet

 

		September 30,				December 31,
in € million, except for net leverage ratio, unaudited		2024				2023
Assets
Cash and cash equivalents			1,371				1,403
Trade accounts and other receivables from unrelated parties			3,244				3,471
Inventories			2,100				2,179
Other current assets			1,376				1,648
Goodwill and intangible assets			15,535				16,012
Right-of-use assets			3,462				3,671
Other non-current assets			5,423				5,546
Total assets			32,511				33,930
Liabilities and equity
Accounts payable to unrelated parties			772				762
Other current liabilities			5,117				5,350
Non-current liabilities			11,831				12,991
Total equity			14,791				14,827
Total liabilities and equity			32,511				33,930
Equity/assets ratio			45	%			44	%
Debt and lease liabilities
Short-term debt from unrelated parties			104				457
Current portion of long-term debt			943				487
Current portion of lease liabilities from unrelated parties			574				593
Current portion of lease liabilities from related parties			25				24
Long-term debt, less current portion			6,234				6,960
Lease liabilities from unrelated parties, less current portion			3,230				3,419
Lease liabilities from related parties, less current portion			94				110
Debt and lease liabilities included within liabilities directly associated with assets held for sale			14				137
Total debt and lease liabilities			11,218				12,187
Minus: Cash and cash equivalents1			(1,387	)			(1,427	)
Total net debt and lease liabilities			9,831				10,760
Reconciliation of annualized adjusted EBITDA and net leverage ratio to the most directly comparable IFRS Accounting Standards financial measure
Net income			879				732
Income tax expense			342				301
Interest income			(77	)			(88	)
Interest expense			417				424
Depreciation and amortization			1,546				1,613
Adjustments2			344				409
Annualized adjusted EBITDA			3,451				3,391
Net leverage ratio			2.8				3.2

 

1

Includes cash and cash equivalents included within assets held for sale.

 

2

Acquisitions and divestitures made for the last twelve months with a purchase price above a €50 M threshold as defined in the Syndicated Credit Facility (2024: -€32 M; 2023: -€35 M), non-cash charges, primarily related to pension expense (2024: €58 M; 2023: €56 M), impairment loss (2024: €145 M; 2023: €139 M) and special items, including costs related to the FME25 Program (2024: €127 M; 2023: €106 M), Legal Form Conversion Costs (2024: €22 M; 2023: €30 M), Legacy Portfolio Optimization (2024: €101 M; 2023: €128 M) and Humacyte Remeasurements (2024: -€77 M; 2023: -€15 M).

 

 

 

Cash flow statement

 

		Three months ended September 30,								Nine months ended September 30,
in € million, unaudited		2024				2023				2024				2023
Operating activities
Net income			264				147				622				476
Depreciation, amortization and impairment loss			365				454				1,266				1,326
Change in trade accounts and other receivables from unrelated parties			464				(85	)			(229	)			(165	)
Change in inventories			68				55				12				(56	)
Change in other working capital and non-cash items			(176	)			189				(117	)			329
Net cash provided by (used in) operating activities			985				760				1,554				1,910
In percent of revenue			20.7	%			15.4	%			10.9	%			13.2	%
Investing activities
Purchases of property, plant and equipment and capitalized development costs			(165	)			(137	)			(459	)			(434	)
Proceeds from sale of property, plant and equipment			(5	)			3				7				4
Capital expenditures, net			(170	)			(134	)			(452	)			(430	)
Free cash flow			815				626				1,102				1,480
In percent of revenue			17.1	%			12.7	%			7.7	%			10.2	%
Acquisitions and investments, net of cash acquired, and purchases of intangible assets			(12	)			(6	)			(18	)			(21	)
Investments in debt securities			(64	)			(36	)			(65	)			(98	)
Proceeds from divestitures, net of cash disposed			1				0				502				25
Proceeds from sale of debt securities			25				25				67				76
Free cash flow after investing activities			765				609				1,588				1,462

 

 

 

Revenue development by segment

 

																						Same market
														Change				Organic				treatment
in € million, unaudited		2024				2023				Change				at cc				growth				growth 1
Three months ended September 30,
Total revenue			4,760				4,936				-3.6	%			-2.4	%			1.9	%
Care Delivery segment			3,770				3,974				-5.1	%			-4.2	%			1.0	%			1.0	%
Thereof: U.S.			3,180				3,221				-1.3	%			-0.3	%			0.4	%			0.0	%
Thereof: International			590				753				-21.6	%			-20.9	%			4.4	%			2.9	%
Care Enablement segment			1,359				1,330				2.2	%			4.2	%			4.2	%
Inter-segment eliminations			(369	)			(368	)			0.4	%			1.3	%
Nine months ended September 30,
Total revenue			14,251				14,466				-1.5	%			-0.6	%			2.9	%
Care Delivery segment			11,330				11,602				-2.3	%			-1.7	%			2.7	%			0.4	%
Thereof: U.S.			9,439				9,344				1.0	%			1.4	%			2.6	%			-0.3	%
Thereof: International			1,891				2,258				-16.3	%			-14.3	%			3.4	%			2.0	%
Care Enablement segment			4,020				3,965				1.4	%			2.9	%			3.0	%
Inter-segment eliminations			(1,099	)			(1,101	)			-0.3	%			0.2	%

 

¹ Same market treatment growth = organic growth less price effects

 

Health care services and health care products revenue by segment

 

		2024																2023
						Care				Inter-												Care				Inter-
		Care Delivery				Enablement				segment								Care Delivery				Enablement				segment
in € million, unaudited		segment				segment				eliminations				Total				segment				segment				eliminations				Total
Three months ended September 30,
Health care services revenue			3,723				—				—				3,723				3,927				—				—				3,927
Health care products revenue			47				990				—				1,037				47				962				—				1,009
Inter-segment revenue			—				369				(369	)			—				—				368				(368	)			—
Revenue			3,770				1,359				(369	)			4,760				3,974				1,330				(368	)			4,936
Nine months ended September 30,
Health care services revenue			11,193				—				—				11,193				11,469				—				—				11,469
Health care products revenue			137				2,921				—				3,058				133				2,864				—				2,997
Inter-segment revenue			—				1,099				(1,099	)			—				—				1,101				(1,101	)			—
Revenue			11,330				4,020				(1,099	)			14,251				11,602				3,965				(1,101	)			14,466

 

 

 

Key metrics Care Delivery segment

 

		Nine months ended September 30, 2024
						Growth												Growth								Growth
						in %				Net change								in %								in %
unaudited		Clinics				yoy				in clinics 1				Patients				yoy				Treatments				yoy
Total			3,732				-7	%			(193	)			308,216				-10	%			35,950,704				-7	%
Thereof: U.S.			2,629				0	%			14				205,942				0	%			23,299,461				0	%
Thereof: International			1,103				-21	%			(207	)			102,274				-25	%			12,651,243				-18	%

 

¹ Net change in clinics (acquired, de novo, combined, closed and sold) in comparison to December 31, 2023.

 

yoy = year-on-year

 

 

 

Reconciliation of non-IFRS financial measures to the most directly comparable IFRS Accounting Standards financial measures for comparability with the Company´s outlook (outlook base)

 

						Special items																												Results								Special items																				Sum of				Results
										Legal Form				Legacy												Results 2024				Currency				2024												Legal Form				Legacy												special items				2023				Change
		Results				FME25				Conversion				Portfolio				Humacyte				Sum of				excl. special				translation				(outlook				Results				FME25				Conversion				Portfolio				Humacyte								and				(outlook				at cc (outlook
in € million, except share data, unaudited		2024				Program				Costs				Optimization1				Remeasurements				special items				items				effects				base)				2023				Program				Costs				Optimization1				Remeasurements				Divestitures2				divestitures				base)				base)
Three months ended September 30,
Total revenue			4,760				—				—				—				—				—				4,760				60				4,820				4,936				—				—				—				—				(81	)			(81	)			4,855				-0.7	%
Care Delivery segment			3,770				—				—				—				—				—				3,770				36				3,806				3,974				—				—				—				—				(82	)			(82	)			3,892				-2.2	%
Thereof: U.S.			3,180				—				—				—				—				—				3,180				31				3,211				3,221				—				—				—				—				(35	)			(35	)			3,186				0.8	%
Thereof: International			590				—				—				—				—				—				590				5				595				753				—				—				—				—				(47	)			(47	)			706				-15.6	%
Care Enablement segment			1,359				—				—				—				—				—				1,359				27				1,386				1,330				—				—				—				—				0				0				1,330				4.2	%
Inter-segment eliminations			(369	)			—				—				—				—				—				(369	)			(3	)			(372	)			(368	)			—				—				—				—				1				1				(367	)			1.8	%
EBITDA			828				37				2				(6	)			(18	)			15				843				9				852				778				38				6				0				(1	)			(1	)			42				820				3.8	%
Total operating income			463				39				2				(17	)			(18	)			6				469				5				474				324				49				6				53				(1	)			(1	)			106				430				10.3	%
Care Delivery segment			419				18				—				(15	)			—				3				422				5				427				332				25				—				53				—				(2	)			76				408				4.6	%
Care Enablement segment			61				21				0				(1	)			(6	)			14				75				3				78				(1	)			23				—				0				—				(2	)			21				20				284.2	%
Inter-segment eliminations			(4	)			—				—				(1	)			—				(1	)			(5	)			0				(5	)			1				—				—				—				—				—				—				1				n.a.
Corporate			(13	)			0				2				—				(12	)			(10	)			(23	)			(3	)			(26	)			(8	)			1				6				—				(1	)			3				9				1				n.a.
Interest expense, net			82				—				—				—				—				—				82				0				82				89				—				—				—				—				2				2				91				-9.5	%
Income tax expense			117				11				1				(25	)			(5	)			(18	)			99				0				99				88				18				2				4				0				(1	)			23				111				-11.1	%
Net income attributable to noncontrolling interests			51				—				—				—				—				—				51				0				51				63				—				—				(1	)			—				(2	)			(3	)			60				-13.8	%
Net income3			213				28				1				8				(13	)			24				237				5				242				84				31				4				50				(1	)			0				84				168				43.8	%
Basic earnings per share		€	0.73			€	0.10			€	0.00			€	0.03			€	(0.05	)		€	0.08			€	0.81			€	0.01			€	0.82			€	0.29			€	0.10			€	0.01			€	0.17			€	0.00			€	0.00			€	0.28			€	0.57				43.8	%
Nine months ended September 30,
Total revenue			14,251				—				—				—				—				—				14,251				134				14,385				14,466				—				—				—				—				(251	)			(251	)			14,215				1.2	%
Care Delivery segment			11,330				—				—				—				—				—				11,330				78				11,408				11,602				—				—				—				—				(255	)			(255	)			11,347				0.5	%
Thereof: U.S.			9,439				—				—				—				—				—				9,439				35				9,474				9,344				—				—				—				—				(115	)			(115	)			9,229				2.6	%
Thereof: International			1,891				—				—				—				—				—				1,891				43				1,934				2,258				—				—				—				—				(140	)			(140	)			2,118				-8.7	%
Care Enablement segment			4,020				—				—				—				—				—				4,020				61				4,081				3,965				—				—				—				—				(11	)			(11	)			3,954				3.2	%
Inter-segment eliminations			(1,099	)			—				—				—				—				—				(1,099	)			(5	)			(1,104	)			(1,101	)			—				—				—				—				15				15				(1,086	)			1.7	%
EBITDA			2,399				96				5				44				(79	)			66				2,465				24				2,489				2,268				74				13				71				(16	)			(19	)			123				2,391				4.1	%
Total operating income			1,133				107				5				141				(79	)			174				1,307				16				1,323				942				100				13				147				(16	)			(19	)			225				1,167				13.3	%
Care Delivery segment			937				45				—				160				—				205				1,142				11				1,153				1,001				50				—				64				—				(20	)			94				1,095				5.3	%
Care Enablement segment			196				62				0				(12	)			(28	)			22				218				6				224				(24	)			51				—				83				—				(7	)			127				103				118.9	%
Inter-segment eliminations			(9	)			—				—				(7	)			—				(7	)			(16	)			0				(16	)			(12	)			—				—				—				—				—				—				(12	)			32.9	%
Corporate			9				0				5				0				(51	)			(46	)			(37	)			(1	)			(38	)			(23	)			(1	)			13				—				(16	)			8				4				(19	)			108.6	%
Interest expense, net			256				—				—				—				—				—				256				1				257				252				—				—				—				—				3				3				255				0.5	%
Income tax expense			255				30				1				(3	)			(20	)			8				263				4				267				214				29				4				29				(4	)			(6	)			52				266				0.6	%
Net income attributable to noncontrolling interests			151				—				—				—				—				—				151				2				153				165				—				—				0				—				(9	)			(9	)			156				-2.2	%
Net income3			471				77				4				144				(59	)			166				637				9				646				311				71				9				118				(12	)			(7	)			179				490				31.8	%
Basic earnings per share		€	1.61			€	0.26			€	0.01			€	0.49			€	(0.20	)		€	0.56			€	2.17			€	0.03			€	2.20			€	1.06			€	0.24			€	0.03			€	0.40			€	(0.04	)		€	(0.02	)		€	0.61			€	1.67				31.8	%

 

¹ 2024: mainly comprise the impairment of goodwill and intangible assets and tangible assets resulting from the measurement of assets held for sale as well as gains and losses from divestitures; 2023: mainly comprise the derecognition of capitalized development costs and the impairment of intangible assets (licenses and distribution rights) as well as termination costs (including certain contractual obligation expenses) related to a dialysis cycler development program which was discontinued in the first quarter of 2023 and other impacts related to agreed-upon divestitures in 2023.

² Business impacts from closed divestitures in 2023.

³ Attributable to shareholders of FME AG.

 

 

 

Outlook 2024

 

		Outlook 2024
	Results 2023	(at Constant Currency)
Revenue1	€19,049 M	Low to mid-single digit percentage rate growth
Operating income1	€1,540 M	16 - 18% growth
		Before: Mid to high-teens percentage rate growth

 

¹ Outlook 2024 is based on the assumptions outlined in the earnings release for the fourth quarter and full year of 2023 and excludes special items. Special items include the costs related to the FME25 Program, the Legal Form Conversion Costs, the impacts from Legacy Portfolio Optimization, the Humacyte Remeasurements and other effects that are unusual in nature and have not been foreseeable or not foreseeable in size or impact at the time of providing the outlook. The growth rates are based on the results 2023 excluding the costs related to the FME25 Program (€153 M for operating income), the Legal Form Conversion Costs (€30 M for operating income), the impacts from Legacy Portfolio Optimization (€204 M for operating income) and the Humacyte Remeasurements (-€15 M for operating income). Additionally, the results 2023 were adjusted for the Tricare settlement (-€191 M for revenue and -€181 M for operating income) and for the business impacts from closed divestitures in 2023 (-€214 M for revenue and -€20 M for operating income).

 

 

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