Fresenius Medical Care delivers continued operating income improvements in the second quarter of 2024
- Organic revenue growth of +2.3% supported by both segments Care Delivery and Care Enablement
- Operating income1 and operating income margin1 increase driven by Care Enablement
- Additional FME25 savings of
EUR 57 million achieved and on track to reach the upper end of the full year savings target range - Further divestitures closed as execution of portfolio optimization program continues
- Net financial debt and net leverage ratio further improved
- FY 2024 outlook confirmed
BAD HOMBURG,
Key figures (unaudited) |
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Q2 2024 |
Q2 2023 |
Growth |
Growth |
H1 2024 |
H1 2023 |
Growth |
Growth |
|
EUR m |
EUR m |
yoy |
yoy, cc |
EUR m |
EUR m |
yoy |
yoy, cc |
Revenue |
4,766 |
4,825 |
-1 % |
-2 % |
9,491 |
9,529 |
0 % |
0 % |
on outlook base1 |
4,743 |
4,741 |
|
0 % |
9,565 |
9,360 |
|
+2 % |
|
|
|
|
|
|
|
|
|
Operating income |
425 |
357 |
+19 % |
+21 % |
671 |
618 |
+9 % |
+10 % |
on outlook base1 |
433 |
400 |
|
+8 % |
849 |
738 |
|
+15 % |
|
|
|
|
|
|
|
|
|
Net income 2 |
187 |
140 |
+33 % |
+34 % |
258 |
227 |
+14 % |
+15 % |
on outlook base1 |
207 |
176 |
|
+18 % |
405 |
322 |
|
+26 % |
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|
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|
|
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Basic EPS (EUR) |
0.64 |
0.48 |
+33 % |
+34 % |
0.88 |
0.77 |
+14 % |
+15 % |
on outlook base1 |
0.70 |
0.60 |
|
+18 % |
1.38 |
1.10 |
|
+26 % |
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yoy = year-on-year, cc = at constant currency, EPS = earnings per share |
Focused execution against the strategic plan
In the second quarter, the FME25 transformation program continued its momentum, delivering
Moreover,
All transactions that are currently signed as part of
Revenue development impacted by execution against portfolio optimization plan
Revenue decreased by 1% to
Care Delivery revenue decreased by 3% to
In Care Delivery
In
Care Enablement revenue grew by 3% to
Within Inter-segment eliminations, revenue for products transferred between the operating segments at fair market value decreased by 1% to a deduction of
In the first half, revenue remained virtually unchanged at
Operating margin improvement driven by Care Enablement
Operating income increased by 19% to EUR 425 million in the second quarter (+21% at constant currency), resulting in a margin of 8.9% (Q2 2023: 7.4%). Operating income on outlook base1 increased by 8% to
Operating income in Care Delivery decreased by 14% to
Operating income in Care Enablement strongly increased to
Operating income for Corporate amounted to
In the first half, operating income increased by 9% up to
Net income 2 increased by 33% to EUR 187 million in the second quarter (+34% at constant currency). Net income on outlook base1 increased by 18%.
In the first half, net income2 increased by 14% to
Basic earnings per share (EPS) increased by 33% to
In the first half, EPS increased by 14% to
Lower net financial debt and further improved net leverage ratio
In the second quarter,
In the first half, operating cashflow amounted to
Free cash flow4 amounted to
Total net debt
and lease liabilities were further reduced to
Outlook
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
The company also reconfirms its targets to achieve an operating income margin of 10% to 14% by 2025. This excludes impacts from portfolio changes.
Patients, clinics and employees
As of
Media conference call
Investor conference 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 second quarter and first half of 2024. Our 6-K disclosure provides more details.
About
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
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. |
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2 Net income attributable to shareholders of |
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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". |
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4 Net cash provided by / used in operating activities, after capital expenditures, before acquisitions/divestitures, investments, and dividends |
Statement of earnings |
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Three months ended |
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in € million, except share data, unaudited |
2024 |
2023 |
Change |
Change |
|
|
|
|
|
Revenue |
4,766 |
4,825 |
-1.2 % |
-1.7 % |
Revenue (outlook base)1 |
4,743 |
4,741 |
|
0.1 % |
|
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Costs of revenue |
3,600 |
3,628 |
-0.8 % |
-1.3 % |
Selling, general and administrative expense |
771 |
775 |
-0.5 % |
-1.0 % |
Research and development expense |
46 |
57 |
-20.3 % |
-20.7 % |
Income from equity method investees |
(33) |
(48) |
-32.4 % |
-32.4 % |
Other operating income |
(228) |
(76) |
200.6 % |
201.2 % |
Other operating expense |
185 |
132 |
40.0 % |
35.3 % |
Operating income |
425 |
357 |
19.1 % |
20.5 % |
Operating income (outlook base)1 |
433 |
400 |
|
8.3 % |
|
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Interest expense, net |
85 |
81 |
5.9 % |
4.5 % |
Income before taxes |
340 |
276 |
23.0 % |
25.2 % |
Income tax expense |
99 |
81 |
22.0 % |
28.1 % |
Net income |
241 |
195 |
23.3 % |
24.0 % |
Net income attributable to noncontrolling interests |
54 |
55 |
-2.1 % |
-2.8 % |
Net income 2 |
187 |
140 |
33.2 % |
34.4 % |
Net income2 (outlook base)1 |
207 |
176 |
|
17.5 % |
|
|
|
|
|
Weighted average number of shares |
293,413,449 |
293,413,449 |
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|
|
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|
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Basic earnings per share |
€0.64 |
€0.48 |
33.2 % |
34.4 % |
Basic earnings per share (outlook base)1 |
€0.70 |
€0.60 |
|
17.5 % |
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In percent of revenue |
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|
|
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Operating income margin |
8.9 % |
7.4 % |
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Operating income margin (outlook base)1 |
9.1 % |
8.4 % |
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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 at the end of the press release. |
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2 Attributable to shareholders of |
Statement of earnings |
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|
Six months ended |
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in € million, except share data, unaudited |
2024 |
2023 |
Change |
Change |
Revenue |
9,491 |
9,529 |
-0.4 % |
0.4 % |
Revenue (outlook base)1 |
9,565 |
9,360 |
|
2.2 % |
|
|
|
|
|
Costs of revenue |
7,151 |
7,183 |
-0.4 % |
0.3 % |
Selling, general and administrative expense |
1,547 |
1,557 |
-0.7 % |
-0.2 % |
Research and development expense |
93 |
113 |
-17.3 % |
-17.3 % |
Income from equity method investees |
(61) |
(76) |
-18.9 % |
-18.9 % |
Other operating income |
(341) |
(193) |
76.6 % |
76.5 % |
Other operating expense |
431 |
327 |
31.8 % |
32.4 % |
Operating income |
671 |
618 |
8.6 % |
10.0 % |
Operating income (outlook base)1 |
849 |
738 |
|
15.1 % |
|
|
|
|
|
Interest expense, net |
174 |
163 |
6.4 % |
6.8 % |
Income before taxes |
497 |
455 |
9.4 % |
11.1 % |
Income tax expense |
139 |
126 |
10.2 % |
14.3 % |
Net income |
358 |
329 |
9.1 % |
9.9 % |
Net income attributable to noncontrolling interests |
100 |
102 |
-1.3 % |
-1.1 % |
Net income 2 |
258 |
227 |
13.8 % |
14.9 % |
Net income2 (outlook base)1 |
405 |
322 |
|
25.6 % |
Weighted average number of shares |
293,413,449 |
293,413,449 |
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|
|
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|
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Basic earnings per share |
€0.88 |
€0.77 |
13.8 % |
14.9 % |
Basic earnings per share (outlook base)1 |
€1.38 |
€1.10 |
|
25.6 % |
In percent of revenue |
|
|
|
|
Operating income margin |
7.1 % |
6.5 % |
|
|
Operating income margin (outlook base)1 |
8.9 % |
7.9 % |
|
|
|
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 at the end of the press release. |
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2 Attributable to shareholders of |
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) |
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Three months ended |
Six months ended |
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in € million, unaudited |
2024 |
2023 |
2024 |
2023 |
|
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Operating performance (outlook base) |
|
|
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These items are excluded to ensure comparability of the figures presented with the Company's financial targets which have been defined excluding special items and at constant currency. |
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|
|
|
|
|
|
|
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Revenue |
4,766 |
4,825 |
9,491 |
9,529 |
Divestitures1 |
— |
(84) |
— |
(169) |
Revenue excl. 2023 divestitures |
4,766 |
4,741 |
9,491 |
9,360 |
Currency translation effects |
(23) |
— |
74 |
— |
Revenue (outlook base) |
4,743 |
4,741 |
9,565 |
9,360 |
|
|
|
|
|
Operating income |
425 |
357 |
671 |
618 |
FME25 Program |
40 |
25 |
67 |
51 |
Legal Form Conversion Costs |
2 |
5 |
3 |
7 |
Legacy Portfolio Optimization2 |
15 |
10 |
158 |
94 |
Humacyte Remeasurements |
(46) |
4 |
(61) |
(15) |
Sum of special items |
11 |
44 |
167 |
137 |
Divestitures1 |
— |
(1) |
— |
(17) |
Sum of special items and 2023 divestitures |
11 |
43 |
167 |
120 |
Operating income excl. special items and 2023 divestitures |
436 |
400 |
838 |
738 |
Currency translation effects |
(3) |
— |
11 |
— |
Operating income (outlook base) |
433 |
400 |
849 |
738 |
|
|
|
|
|
Net income 3 |
187 |
140 |
258 |
227 |
FME25 Program |
29 |
20 |
49 |
40 |
Legal Form Conversion Costs |
1 |
4 |
2 |
5 |
Legacy Portfolio Optimization2 |
29 |
8 |
136 |
68 |
Humacyte Remeasurements |
(34) |
3 |
(45) |
(11) |
Sum of special items |
25 |
35 |
142 |
102 |
Divestitures1 |
— |
1 |
— |
(7) |
Sum of special items and 2023 divestitures |
25 |
36 |
142 |
95 |
Net income3 excl. special items and 2023 divestitures |
212 |
176 |
400 |
322 |
Currency translation effects |
(5) |
— |
5 |
— |
Net income3 (outlook base) |
207 |
176 |
405 |
322 |
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1 Business impacts from closed divestitures in 2023. |
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2 2024: mainly comprise the impairment of intangible and tangible assets resulting from the measurement of assets held for sale as well as 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. |
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3 Attributable to shareholders of |
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Media contact
T +49 160 60 66 770
christine.peters@freseniusmedicalcare.com
Contact for analysts and investors
Dr.
T +49 6172 609-2601
dominik.heger@freseniusmedicalcare.com
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