• 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.

 

• 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 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
• Application of IFRS 5: Fresenius Group financials for the first time presented excluding Fresenius Medical Care 

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.”

Fresenius Group – Business Development 

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). 

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).

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 achieved an EBIT increase of 8% (10% in constant currency) and an EBIT margin of 10.3%. 

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). 

¹ Before special items

The Group tax rate before special items was 24.1% (Q3/22¹: 22.5%). Reported Group tax rate was 37.0%. 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 (Q3/22: 23.5%).

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.

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.

Group operating cash flow increased to €648 million (Q3/22: €598 million), mainly driven by the good cash flow development at Fresenius Kabi. Free cash flow before acquisitions, dividends and lease liabilities remained broadly stable at €376 million (Q3/22: €375 million). 

As of September 30, 2023, the net debt/EBITDA ratio was 4.03x^1,3  (Dec. 31, 2022: 3.80x^1,3). This is a reduction of 15 basis points compared to Q2/23.

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.

¹ Before special items
² Net income attributable to shareholders of Fresenius SE & Co. KGaA
³ At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures, including lease liabilities, including Fresenius Medical Care dividend
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. 

Operating Company Fresenius Kabi 

In Q3, 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 largest contribution to revenues came from the Pharma (IV Drugs & Fluids) business. There, revenue 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 the regions. The Biopharma business recorded the strongest increase in revenues of 74% (99% in constant currency, organic growth: 71%) to €111 million (Q3/22: €64 million), which is mainly driven by the successful product launches in Europe and the U.S. as well as by licensing agreements.

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. Net income^1,2 increased by 3% (7% in constant currency) to €189 million (Q3/22: €184 million). Operating cash flow increased to €380 million (Q3/22: €301 million) with a margin of 18.8% (Q3/22: 14.5%), mainly driven by strong business performance and improved working capital management.  

For FY/23, Fresenius Kabi expects organic revenue³ growth in a mid-single-digit percentage range. The EBIT margin⁴ is expected to be around 14% (structural margin band: 14% to 17%).

¹ Before special items
² Net income attributable to shareholders of Fresenius SE & Co. KGaA.
³ FY/22 base: €7,850 million
⁴ FY/22 base: EBIT margin: 13.8%, before special items; FY/23 before special items
Just recently, Fresenius Kabi announced the European market launch of Tyenne®. This is the first tocilizumab biosimilar to be launched in the European Union for the treatment of a variety of inflammatory and autoimmune diseases such as rheumatoid arthritis. The growing portfolio of biosimilars for inflammatory and immune diseases and oncology is further evidence of Fresenius Kabi's successful Vision 2026 growth strategy. In this context, Fresenius Kabi and Lupagen Inc. have signed a development and supply agreement for technologies designed to bring the delivery of cell and gene therapies to the bedside. Cell and gene therapies have shown promise in the treatment of a variety of diseases, including cancer, hematological, autoimmune and rare diseases.

Operating Company Fresenius Helios

In Q3, revenue increased by 4% (5% in constant currency) to 2,953 million (Q3/22: €2,829 million). Organic growth was 5%. 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. Revenue of Helios Spain increased by 5% (5% in constant currency) to €1,088 million (Q3/22: €1,037 million), driven by ongoing high activity levels despite the usual summer effect in Spain. The clinics in Latin America also showed a good performance. Organic growth was 5%. 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%.

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%). 
The strongest increase was recorded by Helios Germany, where EBIT¹ 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. 

Net income^1,2 decreased by 4% (-4% in constant currency) to €132 million (Q3/22: €138 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.

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
Digitalization is an important topic in the healthcare sector, and Fresenius Helios is pushing ahead with it. For example, the Helios ENDO clinic in Hamburg is piloting the use of Artificial Intelligence (AI) in building automation with a so-called “digital twin”. As a pioneer in the use of AI in hospital building technology, Fresenius is thus taking an important step towards its goal of becoming climate neutral by 2040. The Spanish hospital chain Quirónsalud has also continued to develop its activities: a state-of-the-art medical center with 18 specialties was opened in Madrid during the reporting period. Such investments pay off: five Quirónsalud hospitals have been recognized by a renowned U.S. news magazine in its "World's Best Specialized Hospitals 2024" ranking.

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.

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.

Transformation Fresenius Vamed

In Q3/23, further progress was made in the transformation of Fresenius Vamed. The company has started 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.

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.

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

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Fresenius has successfully placed a €500 million bond with a 7-year maturity and an annual coupon of 5.125%.

The transaction follows the successful debut issuance of Fresenius in the Swiss bond market with a CHF275 million bond with a 5-year maturity and an annual coupon of 2.96%. 

The proceeds of both transactions will be used for general corporate purposes, including the refinancing of existing financial liabilities. The bonds were drawn under the Fresenius Debt Issuance Program and issued by Fresenius SE & Co. KGaA. 

For the €500 million bond, Fresenius has applied to the Luxembourg Stock Exchange to admit the bond to trading on its regulated market. The envisaged settlement date is October 5, 2023. For the CHF275 million bond, application will be made for the listing of the bond on the SIX Swiss Exchange. The envisaged settlement date is October 18, 2023.

Fresenius is a regular issuer in the Euro bond market, as well as in the Schuldschein market. With its inaugural CHF bond, the company seeks to further diversify its funding sources, as well as to broaden its investor universe. Access to different bond markets and a diversification of financing instruments are important components of Fresenius’ financing strategy. 

Fresenius remains committed to its investment grade rating and its self-imposed leverage corridor of 3.0 to 3.5x net debt/EBITDA. Deleveraging and a strong balance sheet focus combined with clear capital allocation priorities are key aspects to deliver on #FutureFresenius. 
 

Fresenius makes available €500.000 for immediate release to the German Red Cross (Deutsches Rotes Kreuz e.V.) as assistance for disaster relief efforts to people affected by the recent earthquake in Morocco and the flooding in Libya. This cash donation will support direct disaster relief efforts on site. In addition, Fresenius remains committed to providing assistance with much needed medical products from its own product portfolio in crisis situations. 

Fresenius makes available €500.000 for immediate release to the German Red Cross (Deutsches Rotes Kreuz e.V.) as assistance for disaster relief efforts to people affected by the recent earthquake in Morocco and the flooding in Libya. This cash donation will support direct disaster relief efforts on site. In addition, Fresenius remains committed to providing assistance with much needed medical products from its own product portfolio in crisis situations. 

• Robert Möller appointed to the Fresenius Management Board; at the same time, Möller will assume responsibility for hospital group as CEO of Helios Health GmbH
• Dr. Francesco De Meo leaves the company
• Management Board team continues to drive forward transformation on the way to #FutureFresenius

The Supervisory Board of Fresenius Management SE has appointed Robert Möller (56) to the Management Board with immediate effect. At the same time, he will take over as Chairman of the Management Board of Helios Health GmbH. He succeeds Dr. Francesco de Meo (59), who will leave the company.

Robert Möller has been CEO of Helios Kliniken GmbH since 2022. He joined Helios in 2014, where he held the position of Clinic Managing Director at Helios Hanseklinikum Stralsund until 2017. After a short time away, he returned to Helios in 2019 and took over the management of various regions. Möller studied human medicine at the University of Hamburg and practiced as a specialist for internal medicine. After various medical positions and a part-time master's degree in health care management, he switched to hospital management while continuing to work as a physician.

"Robert Möller, a physician and proven hospital manager from within the company will now move up to the Management Board. His experience is an excellent addition to the management team. With the further development of the hospital business, he will make an important contribution on the successfully chosen path to #FutureFresenius," said Wolfgang Kirsch, Chairman of the Supervisory Board of Fresenius.

"Today, Fresenius is a company with a clear focus and clear responsibilities. We will continue to work together to execute our #FutureFresenius strategy and are well positioned to deliver. Robert Möller addresses the future of healthcare like almost no one else – with a clear focus on digitalization, sustainability and quality. At Helios, he will build on and drive the momentum we have generated so far with #FutureFresenius," said Fresenius CEO Michael Sen.

Helios is Europe's leading private healthcare provider, with approximately 126,000 employees. Together with Quirónsalud in Spain and Latin America and the Eugin Group with a global network of reproductive clinics, Helios Group in Germany is part of the holding Helios Health. With more than 24 million patients per year, the company generated total sales of around 11.7 billion euros in 2022.