Share
Services
The information and documents contained on the following pages of this website are for information purposes only. These materials do neither constitute an offer nor an invitation to subscribe to or to purchase securities, nor any investment advice or service, and are not meant to serve as a basis for any kind of obligation, contractual or otherwise. Securities may not be offered or sold in the United States of America (“US”) absent registration under the US Securities Act of 1933, as amended, or an exemption from registration. The securities described on the following pages are not offered for sale in the US or to "US persons" (as defined in Regulation S under the US Securities Act of 1933, as amended).
THE FOLLOWING INFORMATION AND DOCUMENTS ARE NOT DIRECTED AT AND ARE NOT INTENDED FOR USE BY (I) PERSONS WHO ARE RESIDENTS OF OR LOCATED IN THE US, CANADA, JAPAN OR AUSTRALIA OR WHO ARE US PERSONS (AS DEFINED IN REGULATION S UNDER THE US SECURITIES ACT OF 1933, AS AMENDED), OR (II) PERSONS IN ANY OTHER JURISDICTION WHERE THE COMMUNICATION OR RECEIPT OF SUCH INFORMATION IS RESTRICTED IN SUCH A WAY THAT PROVIDES THAT SUCH PERSONS SHALL NOT RECEIVE IT. SUCH PERSONS, OR PERSONS ACTING FOR THE BENEFIT OF ANY SUCH PERSONS, ARE NOT PERMITTED TO VISIT THE FOLLOWING PAGES OF THE WEBSITE.
To visit the following parts of this website you must confirm that
(i) you are not a resident of the United States of America, Canada, Japan or Australia or a "US person" (as defined in Regulation S under the US Securities Act of 1933, as amended),
(ii) you are not a person to whom the communication of the information contained on the website is restricted,
(iii) you will not distribute any of the information and documents contained thereon to any such person, and
(iv) you are not acting for the benefit of any such person.
By clicking on the "Accept" button below, you will be deemed to have made this confirmation.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN.
The healthcare group Fresenius has issued its first sustainability-linked Schuldschein loan with a volume of 850 million euros. It consists of 6 tranches with maturities of 3, 5 and 7 years, each offered with fixed and variable interest rates.
The margin of the Schuldschein loan is linked to the achievement of sustainability targets from two areas that are core to Fresenius as a healthcare group: treatment quality and product safety.
Sara Hennicken, CFO of Fresenius: “Sustainability is becoming increasingly important in financing. We are taking this into account with our first sustainable Schuldschein loan. With this transaction, we are diversifying our investor base and further strengthening our liquidity.”
The high investor demand significantly exceeded the originally intended volume of 300 million euros. This made it possible to set the pricing for each tranche at the tight end of the marketing range. In total, more than 50 institutional investors from Europe and Asia participated in the transaction.
The proceeds from the Schuldschein loan will be used for general corporate purposes, including the refinancing of existing financial liabilities. Settlement is scheduled for May 30, 2023.
The transaction was arranged by DZ BANK AG, Landesbank Hessen-Thüringen Girozentrale and ING. ING has acted as Sustainability Structuring Advisor to this transaction.
This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, securities to any person in Australia, Canada, Japan, or the United States of America (the “United States”) or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The financial instruments referred to herein may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons, absent registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Subject to certain exceptions, the financial instruments referred to herein may not be offered or sold in Australia, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan. The offer and sale of the financial instruments referred to herein has not been and will not be registered under the Securities Act or under the applicable securities laws of Australia, Canada or Japan. There will be no public offer of the financial instruments in the United States.
This announcement is a general information and not a prospectus.
This announcement is directed at and/or for distribution in the United Kingdom only to (i) persons who have professional experience in matters relating to investments falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (ii) high net worth entities falling within article 49(2)(a) to (d) of the Order (all such persons are referred to herein as “relevant persons”). This announcement is directed only at relevant persons. Any person who is not a relevant person should not act or rely on this announcement or any of its contents. Any investment or investment activity to which this announcement relates is available only to relevant persons and will be engaged in only with relevant persons.
This announcement contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, the availability of financing and unforeseen impacts of international conflicts. Fresenius SE & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this announcement.
The health care group Fresenius is making good progress with its realignment. “We have worked hard in recent months. We have set fundamental things in motion. Today, Fresenius has a clear focus and a clear strategic direction,” Fresenius CEO Michael Sen said in his speech at the Company's virtual annual general meeting today. Changes cannot be expected overnight , he added. But Fresenius is making progress, he said. “Overall, we started promisingly into the new year. The figures for the first quarter confirm: We are heading in the right direction.” The task now, he said, is to continuously develop the portfolio and open new growth areas.
Fresenius is focusing on its two Operating Companies Fresenius Kabi and Fresenius Helios. They are both geared to therapies and hold leading positions in attractive growth markets. With (Bio)Pharma, MedTech and Care Provision, they cover the three central growth platforms in the therapy sector. “That makes us unique. No other company does it like this,” Sen said. Fresenius will continue this path, he added. He confirmed the outlook for 2023.
In his speech, Sen also emphasized the great importance of Fresenius to society: “We are a company that does not have to search for its purpose. We work every day to improve people's health. Advancing Patient Care – that is our mission. Fresenius occupies a key position at the heart of health care.” It was Michael Sen's first Annual General Meeting as CEO of Fresenius.
Shareholders approved with a large majority of 96.71 percent the proposal of the General Partner and the Supervisory Board to maintain the dividend at €0.92 per share.
The shareholders also approved with a large majority of 89.19 percent the Compensation Report for the 2022 business year.
With a majority of 93.01 percent, the shareholders approved an update to the compensation system for members of the Management Board. In particular, the Compensation System 2023+ provides for a new plan for long-term variable compensation that takes even greater account of promoting the long-term and sustainable development of the Company. In addition, the aspect of sustainability has been anchored even more strongly in the long-term variable compensation.
The shareholders authorized the Company with a majority of 87.64 percent to continue to hold the Annual General Meeting in virtual format in the next two years if required.
Shareholder majorities of 93.53 and 89.19 percent, respectively, approved the actions of the Management and Supervisory Boards in 2022.
At the Annual General Meeting of Fresenius SE & Co. KGaA, 72.57 percent of the subscribed capital was represented.
This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, the availability of financing and unforeseen impacts of international conflicts. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.
If no timeframe is specified, information refers to Q1/2023.
1 According to FY/23 guidance, excluding Provider Relief Fund (PRF) at Fresenius Medical Care
2 Before special items, Q1/22 restated following remeasurement Humacyte investment
3 Before special items For a detailed overview of special items please see the reconciliation tables on pages 18-23 in the PDF.
“With a simplified Group structure, improved performance, and a clear focus, Fresenius’s course is set. Productivity measures are gaining traction and we’ve started the new year with good growth momentum,” said Michael Sen, Fresenius CEO. “Our Operating Companies Fresenius Kabi and Fresenius Helios both had strong first quarter performance. The deconsolidation of Fresenius Medical Care is on track and the turnaround is also progressing. We want to accelerate this momentum. This requires contributions from all business segments.”
Deconsolidation of Fresenius Medical Care
The deconsolidation of Fresenius Medical Care is moving ahead as planned. The separation concept has been finalized and the relevant agreements are currently being drafted. The date of the Extraordinary General Meeting (EGM) of Fresenius Medical Care has been scheduled for July 14, 2023. Subject to the necessary shareholder approvals and the registration with the commercial register, the conversion is expected to become effective latest by the end of the 2023 financial year.
Moreover, starting in Q1/23, selected financials of the Fresenius Group are reported excluding Fresenius Medical Care to better reflect #FutureFresenius.
Structural productivity improvements
Under the cost and efficiency program, ~€130 million of structural cost savings at EBIT level were already achieved in Q1/23, that is around 25% of the planned savings for 2023. In the same period, one-time costs of ~€50 million incurred to achieve these savings. These are treated as special items. Thereof, Fresenius Medical Care invested €26 million and realized ~€60 million of cost savings.
FY/23 Group guidance confirmed
For 2023, Fresenius expects Group organic revenue1 to grow in a low- to mid-single-digit percentage range. Group constant currency EBIT2 is expected to remain broadly flat or decline up to a high-single-digit percentage rate.
Excluding Fresenius Medical Care constant currency EBIT3 is expected to remain broadly flat or decline up to a mid-single-digit percentage rate.
Fresenius expects the net debt/EBITDA4 ratio to be slightly above the 2023 level by the end of 2022 (December 31, 2022: 3.65x5), depending on divestment activities. The self-imposed target corridor for the leverage ratio remains unchanged at 3.0x to 3.5x.
1 FY/22 base: €40,840 million
2 FY/22 base: €3,727 million, before special items, excl. PRF; FY/23: before special items
3 FY/22 base: €2,187 million, before special items; FY/23: before special items
4 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
5 At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures; before special items; including lease liabilities
For a detailed overview of special items please see the reconciliation tables on pages 18-23 in the PDF.
Assumptions for guidance FY/23
For 2023, Fresenius assumes no further escalations of geopolitical tensions and challenges from COVID-19, and supply chain constraints continuing to ease. Fresenius expects that the general cost inflation and labor shortages will have a more significant negative effect on its business than in 2022 due to the annualization effect of cost increases occurred in H2/2022.
Fresenius will continue to closely monitor the potential further consequences of the overall heightened volatility and muted visibility, including balance sheet valuations.
For Fresenius Medical Care’s contribution to the Group’s financial figures, the assumptions for Fresenius Medical Care’s FY/23 guidance are also fully applicable to Fresenius Group’s FY/23 guidance. In 2022, Fresenius Medical Care’s EBIT was supported by €277 million of Provider Relief Funding from the U.S. government (at current currency). There is no additional governmental support assumed for 2023.
All of these assumptions are subject to considerable uncertainty.
5% revenue increase in constant currency
Group revenue increased by 5% (5% in constant currency) to €10,225 million (Q1/22: €9,720 million). Organic growth was 5%. Acquisitions/divestitures contributed net 0% to growth. In total, currency translation had no effect on revenue growth. Excluding Fresenius Medical Care, Group revenue increased by 7% (7% in constant currency) to €5,546 million (Q1/22: €5,192 million).
10 %1 EBIT2 decline in constant currency – in line with expectations
Group EBITDA before special items decreased by 5% (-6% in constant currency) to €1,585 million (Q1/222: €1,662 million). Reported Group EBITDA was €1,491 million (Q1/22: €1,595 million).
Group EBIT before special items decreased by 9% (-11%/-10%1 in constant currency) to €908 million (Q1/222: €1,000 million). The decrease was mainly driven by the expected annualization of inflationary effects such as cost increases for personnel, material, logistics, and energy. This is due to the fact that H2/2022 showed stronger cost inflation compared to H1/2022. Moreover, a very negative performance at Fresenius Vamed weighed on Group EBIT. The EBIT margin before special items was 8.9% (Q1/222: 10.3%). Reported Group EBIT was €787 million (Q1/22: €902 million). Excluding Fresenius Medical Care, Group EBIT before special items decreased by 7% (-7% in constant currency) to €554 million (Q1/222: €593 million). The EBIT margin excluding Fresenius Medical Care before special items was 10.0% (Q1/222: 11.4%).
Group net interest before special items was -€170 million (Q1/222: -€119 million) mainly due to financing activities in a higher interest rate environment. Reported Group net interest was -€170 million (Q1/22: -€118 million).
Group tax rate before special items increased to 24.9% (Q1/222: 22.7%) mainly due to an increase in the proportionate share of non-tax-deductible expenses compared to taxable income at Fresenius Medical Care as well as the non-recognition of increased tax loss carryforwards. Reported Group tax rate was 25.0% (Q1/22: 23.6%).
Noncontrolling interests before special items were -€165 million (Q1/222: -€218 million) of which 93% were attributable to the noncontrolling interests in Fresenius Medical Care. Reported noncontrolling interests were -€117 million (Q1/22: -€186 million).
1 According to FY/23 guidance, excluding Provider Relief Fund (PRF) at Fresenius Medical Care
2 Before special items
For a detailed overview of special items please see the reconciliation tables on pages 18-23 in the PDF.
Group net income1 before special items decreased by 16% (-17% in constant currency) to €389 million (Q1/222: €463 million). The decrease was driven by cost inflation and the negative earnings development at Fresenius Vamed. Moreover, rising interest costs and a higher tax rate weighed on the net income development. Reported Group net income1 before special items decreased to €346 million (Q1/22: €413 million). Excluding Fresenius Medical Care, Group net income1 before special items decreased by 14% (-16% in constant currency) to €341 million (Q1/222: €397 million).
Earnings per share1 before special items decreased by 17% (-18% in constant currency) to €0.69 (Q1/222: €0.83). Reported earnings per share1 were €0.61 (Q1/22: €0.74).
1 Net income attributable to shareholders of Fresenius SE & Co. KGaA
2 Before special items
Investments
Spending on property, plant and equipment was €353 million corresponding to 3% of revenue (Q1/22: €338 million; 3% of revenue). These investments served primarily for the modernization and expansion of dialysis clinics, production facilities as well as hospitals and day clinics. Excluding Fresenius Medical Care, spending on property, plant and equipment was €211 million corresponding to 4% of revenue (Q1/22: €176 million; 3% of revenue).
Total acquisition spending was €68 million (Q1/22: €162 million) mainly for investments in debt instruments and the purchase of dialysis clinics.at Fresenius Medical Care. Excluding Fresenius Medical Care, total acquisition spending was €18 million (Q1/22: €79 million).
Cash flow development
Group operating cash flow increased to €175 million (Q1/22: €101 million) driven by the governmental support on energy costs at Fresenius Helios in Germany. Significantly higher working capital at Fresenius Kabi in particular receivables and inventory weighed on cash flow. Furthermore, the earnings development at Fresenius Vamed had a negative impact. The first quarter is traditionally a softer cash flow quarter due to phasing effects with catch-up effects over the course of the year. Group operating cash flow margin was 1.7% (Q1/22: 1.0%). Free cash flow before acquisitions and dividends increased to -€177 million (Q1/22: -€255 million). Free cash flow after acquisitions and dividends increased to -€281 million (Q1/22: -€403 million).
The cash conversion rate (CCR), which is defined as the ratio of adjusted free cash flow1 to EBIT before special items, was 0.3 (LTM: 1.1). As the first quarter is traditionally a softer cash flow quarter due to phasing effects a catch-up over the course of the year is expected.
1 Cash flow before acquisitions and dividends; before interest, tax, and special items
Solid balance sheet structure
Group total assets remained nearly unchanged compared to FY/22 (1% in constant currency) at €76,553 million (Dec. 31, 2022: €76,415 million) given the expansion of business activities which, however, was offset by currency translation effects. Current assets increased by 5% (6% in constant currency) to €19,102 million (Dec. 31, 2022: €18,279 million), mainly driven by the increase of trade account receivables. Non-current assets decreased by 1% (0% in constant currency) to €57,451 million (Dec. 31, 2022: €58,136 million).
Total shareholders’ equity decreased by 0% (2% in constant currency) to €32,173 million (Dec. 31, 2022: €32,218 million). The equity ratio was 42.0% (Dec. 31, 2022: 42.2%).
Group debt increased by 0% (1% in constant currency) to €27,765 million (Dec. 31, 2022: € 27,763 million). Group net debt increased by 2% (2% in constant currency) to € 25,444 million (Dec. 31, 2022: € 25,014 million).
As of March 31, 2023, the net debt/EBITDA ratio was 3.79x2,3 (Dec. 31, 2022: 3.65x1,2) mainly driven by lower EBITDA contribution and higher net debt. Excluding Fresenius Medical Care, the net debt/EBITDA ratio was 3.96x1,2 (Dec. 31, 2022: 3.80x1,2).
In Q1/23, ROIC was 4.8% due to the lower EBIT (Q4/22: 5.1%). Excluding Fresenius Medical Care, the ROIC was 5.2% (Q4/22: 5.6%).
1 Cash flow before acquisitions and dividends; before interest, tax, and special items
2 At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures
3 Before special items
For a detailed overview of special items please see the reconciliation tables on pages 18-23 in the PDF.
Business Segments – Operating Companies
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.
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 on pages 18-23 in the PDF.
Revenue increased by 8% (8% in constant currency) to €1,991 million (Q1/22: €1,847 million) mainly driven by the strong business development of all growth vectors. Organic growth was 7%.
Revenue in MedTech increased by 11% (organic growth: 9%) to €378 million (Q1/22: €342 million) mainly driven by the good business development in Latin America.
Revenue in Nutrition increased by 4% (organic growth: 8%) to €602 million (Q1/22: €577 million) mainly driven by the good business development in Latin America and Europe.
Revenue in Biopharma increased by 207% (organic growth: 57%) to €71 million (Q1/22: €23 million) mainly driven by the good business development in Latin America.
Revenue of the Growth Vectors (MedTech, Nutrition and Biopharma) increased by 12% (organic growth: 10%) to €1,051 million (Q1/22: €942 million).
Revenue in the Pharma (IV Drugs & Fluids) business increased by 4% (organic growth: 3%) to €940 million (Q1/22: €905 million). The good business development in Europe and North America was dampened by offsetting effects in China.
EBIT1 decreased by 1% (-4% in constant currency) to €289 million (Q1/22: €293 million) due to the annualization of cost inflation effects. EBIT margin1 was 14.5% (Q1/22: 15.9%) and thus within the structural EBIT margin band. The positive sequential development is driven by the well progressing cost savings program as well as targeted pricing initiatives.
EBIT1 of the Growth Vectors (MedTech, Nutrition and Biopharma) decreased by 14% (-17% in constant currency) to €96 million (Q1/22: €112 million) due to the annualization of cost inflation effects. EBIT1 margin was 9.2% (Q1/22: 11.9%).
EBIT1 in the Pharma (IV Drugs & Fluids) business increased by 7% (4% in constant currency) to €197 million (Q1/22: €185 million) due to positive development in the North American region. EBIT1 margin was 21.0% (Q1/22: 20.4%).
Net income1,2 decreased by 5% (-7% in constant currency) to €191 million (Q1/22: €201 million).
Operating cash flow decreased to €21 million (Q1/22: €133 million) with a margin of 1.1% (Q1/22: 7.2%) mainly driven by phasing effects and working capital build-ups, in particular higher inventories.
For FY/23, Fresenius Kabi expects organic revenue3 growth in a low- to mid-single-digit percentage range. The EBIT margin4 is expected to be around one percentage point (pp) below the structural margin band of 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
For a detailed overview of special items please see the reconciliation tables on pages 18-23 in the PDF.
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 87 hospitals, around 240 outpatient centers, 22 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.
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 on pages 18-23 in the PDF.
Revenue increased by 5% (5% in constant currency) to €3,066 million (Q1/22: €2,931 million). Organic growth was 5%. Acquisitions contributed 0% to revenue growth.
Revenue of Helios Germany increased by 3% (organic growth: 3%) to €1,828 million (Q1/22: €1,783 million), mainly driven by increasing admissions and positive mix effects.
Revenue of Helios Spain increased by 7% (9% in constant currency) to €1,170 million (Q1/22: €1,089 million). Organic growth of 8% was driven by ongoing patient demand. The clinics in Latin America also showed a good performance.
Revenue of Helios Fertility increased by 16% (18% in constant currency) to €66 million (Q1/22: €57 million) as patients are returning to demand fertility treatments.
EBIT1 increased by 2% (2% in constant currency) to €311 million (Q1/22: €306 million) with an EBIT margin1 of 10.1% (Q1/22: 10.4%).
EBIT1 of Helios Germany increased despite cost inflation by 1% to €155 million (Q1/22: €154 million) with an EBIT margin1 of 8.5% (Q1/22: 8.6%).
EBIT1 of Helios Spain increased due to the strong revenue growth and despite cost inflation by 3% (4% in constant currency) to €157 million (Q1/22: €153 million). The EBIT margin1 was 13.4% (Q1/22: 14.0%).
EBIT1 of Helios Fertility was €4 million (Q1/22: €4 million) with an EBIT margin1 of 6.1% (Q1/22: 7.0%).
Net income1,2 decreased by 3% (-2% in constant currency) to €190 million (Q1/22: €195 million).
Operating cash flow increased to €108 million (Q1/22: -€136 million) mainly due to governmental support measures to mitigate higher energy costs in Germany and an improved working capital management. The operating cash flow margin was 3.5% (Q1/22: -4.6%).
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 on pages 18-23 in the PDF.
Business Segments – Investment Companies
Fresenius Medical Care
(Financial data according to Fresenius Medical Care press release)
Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of March 31, 2023, Fresenius Medical Care was treating approximately 343,000 patients in 4,060 dialysis clinics. Dialyzers and dialysis machines are among the most important product lines. In addition, Fresenius Medical Care offers dialysis-related services.
Revenue increased by 3% to €4,704 million (+2% in constant currency, organic: +2%).
EBIT decreased by 25% to €261 million (-28% in constant currency), resulting in a margin of 5.5% (Q1/22: 7.6%). EBIT excluding special items and U.S. Provider Relief Funding (PRF) decreased by 9% to €354 million (-13% in constant currency), resulting in a margin of 7.5% (Q1/22: 8.6%).
Net income2 decreased by 45% to €86 million (-47% in constant currency). Excluding special items and PRF, net income decreased by 22% to €154 million ( 24% in constant currency).
In the first quarter, Fresenius Medical Care generated €143 million of operating cash flow (Q1/22: €159 million), resulting in a margin of 3.0% (Q1/22: 3.5%). The reduction was mainly due to the decrease in net income.
1 Before special items
2 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
For a detailed overview of special items please see the reconciliation tables on pages 18-23 in the PDF.
Based on the results for the first quarter, Fresenius Medical Care confirms its financial targets for 2023. Fresenius Medical Care expects for 2023 revenue1 to grow at a low to mid-single digit percentage rate and EBIT2 to remain flat or decline by up to a high-single digit percentage rate3.
1 FY/22 base: €19,398 million
2 FY/22 base: €1,540 million
3 Revenue and EBIT, as referred to in the outlook, are both on a constant currency basis and excluding special items. Special items will be provided as separate KPI (“Revenue excluding special items”, “EBIT excluding special items”) to capture effects that are unusual in nature and have not been foreseeable or not foreseeable in size or impact at the time of giving guidance. These items are excluded to ensure comparability of the figures presented with the Company’s financial targets which have been defined excluding special items.
For FY 2022, special items included costs related to the FME25 program, the impact of the war in Ukraine, the impact of hyperinflation in Turkiye, the Humacyte investment remeasurement, and the net gain related to InterWell Health. Additionally, FY 2022 basis for Outlook 2023 and 2025 was adjusted for Provider Relief Funding.
For FY 2023, special items include costs related to the FME25 program, the Humacyte investment remeasurement, the costs associated with the legal conversion and effects from legacy portfolio optimization.
For further information, please see Fresenius Medical Care’s press release at www.freseniusmedicalcare.com.
Fresenius Vamed
Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide and is a leading post-acute care provider in Central Europe. The portfolio ranges along the entire value chain: from project development, planning, and turnkey construction, via maintenance and technical management to total operational management.
Revenue increased by 14% (13% in constant currency) to €583 million (Q1/22: €513 million). Organic growth was 13%.
Revenue in the service business increased by 8% (7% in constant currency) to €436 million (Q1/22: €405 million) due to better performance of technical services in Germany, Italy and United Kingdom. Revenue in the project business increased by 36% (36% in constant currency) to €147 million (Q1/22: €108 million). The good revenue performance is mainly attributable to higher revenue in European project business.
EBIT1 decreased to -€27 million (Q1/22: €8 million) with an EBIT margin1 of -4.6% (Q1/22: 1.6%). The weak development was related to the project business that partially did not have a contribution margin. Moreover, certain international business initiations did not materialize as planned. Significant negative one-time effects in the service business also impacted the EBIT development. To counteract the negative EBIT development, a major restructuring program was initiated.
Net income1,2 decreased to -€36 million (Q1/22: €4 million).
Order intake was €43 million (Q1/22: €263 million). As of March 31, 2023, order backlog was at €3,580 million (December 31, 2022: €3,689 million).
Operating cash flow decreased to -€68 million (Q1/22: -€45 million) with a margin of
-11.7% (Q1/22: -8.8%), due to the negative earnings and higher working capital.
For FY/2023, Fresenius Vamed expects organic revenue3 to grow in a low-to mid-single digit percentage range. The EBIT margin4 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 FY/22 base: €2,359 million
4 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 on pages 18-23 in the PDF.
Conference Call and Webcast
As part of the publication of the results for Q1/23, a conference call will be held on May 9, 2023 at 1:30 p.m. CEDT (7:30 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 www.fresenius.com/alternative-performance-measures.
This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, the availability of financing and unforeseen impacts of international conflicts. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.
If no timeframe is specified, information refers to Q1/2023.
1 According to FY/23 guidance, excluding Provider Relief Fund (PRF) at Fresenius Medical Care
2 Before special items, Q1/22 restated following remeasurement Humacyte investment
3 Before special items For a detailed overview of special items please see the reconciliation tables on pages 18-23 in the PDF.
“With a simplified Group structure, improved performance, and a clear focus, Fresenius’s course is set. Productivity measures are gaining traction and we’ve started the new year with good growth momentum,” said Michael Sen, Fresenius CEO. “Our Operating Companies Fresenius Kabi and Fresenius Helios both had strong first quarter performance. The deconsolidation of Fresenius Medical Care is on track and the turnaround is also progressing. We want to accelerate this momentum. This requires contributions from all business segments.”
Deconsolidation of Fresenius Medical Care
The deconsolidation of Fresenius Medical Care is moving ahead as planned. The separation concept has been finalized and the relevant agreements are currently being drafted. The date of the Extraordinary General Meeting (EGM) of Fresenius Medical Care has been scheduled for July 14, 2023. Subject to the necessary shareholder approvals and the registration with the commercial register, the conversion is expected to become effective latest by the end of the 2023 financial year.
Moreover, starting in Q1/23, selected financials of the Fresenius Group are reported excluding Fresenius Medical Care to better reflect #FutureFresenius.
Structural productivity improvements
Under the cost and efficiency program, ~€130 million of structural cost savings at EBIT level were already achieved in Q1/23, that is around 25% of the planned savings for 2023. In the same period, one-time costs of ~€50 million incurred to achieve these savings. These are treated as special items. Thereof, Fresenius Medical Care invested €26 million and realized ~€60 million of cost savings.
FY/23 Group guidance confirmed
For 2023, Fresenius expects Group organic revenue1 to grow in a low- to mid-single-digit percentage range. Group constant currency EBIT2 is expected to remain broadly flat or decline up to a high-single-digit percentage rate.
Excluding Fresenius Medical Care constant currency EBIT3 is expected to remain broadly flat or decline up to a mid-single-digit percentage rate.
Fresenius expects the net debt/EBITDA4 ratio to be slightly above the 2023 level by the end of 2022 (December 31, 2022: 3.65x5), depending on divestment activities. The self-imposed target corridor for the leverage ratio remains unchanged at 3.0x to 3.5x.
1 FY/22 base: €40,840 million
2 FY/22 base: €3,727 million, before special items, excl. PRF; FY/23: before special items
3 FY/22 base: €2,187 million, before special items; FY/23: before special items
4 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
5 At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures; before special items; including lease liabilities
For a detailed overview of special items please see the reconciliation tables on pages 18-23 in the PDF.
Assumptions for guidance FY/23
For 2023, Fresenius assumes no further escalations of geopolitical tensions and challenges from COVID-19, and supply chain constraints continuing to ease. Fresenius expects that the general cost inflation and labor shortages will have a more significant negative effect on its business than in 2022 due to the annualization effect of cost increases occurred in H2/2022.
Fresenius will continue to closely monitor the potential further consequences of the overall heightened volatility and muted visibility, including balance sheet valuations.
For Fresenius Medical Care’s contribution to the Group’s financial figures, the assumptions for Fresenius Medical Care’s FY/23 guidance are also fully applicable to Fresenius Group’s FY/23 guidance. In 2022, Fresenius Medical Care’s EBIT was supported by €277 million of Provider Relief Funding from the U.S. government (at current currency). There is no additional governmental support assumed for 2023.
All of these assumptions are subject to considerable uncertainty.
5% revenue increase in constant currency
Group revenue increased by 5% (5% in constant currency) to €10,225 million (Q1/22: €9,720 million). Organic growth was 5%. Acquisitions/divestitures contributed net 0% to growth. In total, currency translation had no effect on revenue growth. Excluding Fresenius Medical Care, Group revenue increased by 7% (7% in constant currency) to €5,546 million (Q1/22: €5,192 million).
10 %1 EBIT2 decline in constant currency – in line with expectations
Group EBITDA before special items decreased by 5% (-6% in constant currency) to €1,585 million (Q1/222: €1,662 million). Reported Group EBITDA was €1,491 million (Q1/22: €1,595 million).
Group EBIT before special items decreased by 9% (-11%/-10%1 in constant currency) to €908 million (Q1/222: €1,000 million). The decrease was mainly driven by the expected annualization of inflationary effects such as cost increases for personnel, material, logistics, and energy. This is due to the fact that H2/2022 showed stronger cost inflation compared to H1/2022. Moreover, a very negative performance at Fresenius Vamed weighed on Group EBIT. The EBIT margin before special items was 8.9% (Q1/222: 10.3%). Reported Group EBIT was €787 million (Q1/22: €902 million). Excluding Fresenius Medical Care, Group EBIT before special items decreased by 7% (-7% in constant currency) to €554 million (Q1/222: €593 million). The EBIT margin excluding Fresenius Medical Care before special items was 10.0% (Q1/222: 11.4%).
Group net interest before special items was -€170 million (Q1/222: -€119 million) mainly due to financing activities in a higher interest rate environment. Reported Group net interest was -€170 million (Q1/22: -€118 million).
Group tax rate before special items increased to 24.9% (Q1/222: 22.7%) mainly due to an increase in the proportionate share of non-tax-deductible expenses compared to taxable income at Fresenius Medical Care as well as the non-recognition of increased tax loss carryforwards. Reported Group tax rate was 25.0% (Q1/22: 23.6%).
Noncontrolling interests before special items were -€165 million (Q1/222: -€218 million) of which 93% were attributable to the noncontrolling interests in Fresenius Medical Care. Reported noncontrolling interests were -€117 million (Q1/22: -€186 million).
1 According to FY/23 guidance, excluding Provider Relief Fund (PRF) at Fresenius Medical Care
2 Before special items
For a detailed overview of special items please see the reconciliation tables on pages 18-23 in the PDF.
Group net income1 before special items decreased by 16% (-17% in constant currency) to €389 million (Q1/222: €463 million). The decrease was driven by cost inflation and the negative earnings development at Fresenius Vamed. Moreover, rising interest costs and a higher tax rate weighed on the net income development. Reported Group net income1 before special items decreased to €346 million (Q1/22: €413 million). Excluding Fresenius Medical Care, Group net income1 before special items decreased by 14% (-16% in constant currency) to €341 million (Q1/222: €397 million).
Earnings per share1 before special items decreased by 17% (-18% in constant currency) to €0.69 (Q1/222: €0.83). Reported earnings per share1 were €0.61 (Q1/22: €0.74).
1 Net income attributable to shareholders of Fresenius SE & Co. KGaA
2 Before special items
Investments
Spending on property, plant and equipment was €353 million corresponding to 3% of revenue (Q1/22: €338 million; 3% of revenue). These investments served primarily for the modernization and expansion of dialysis clinics, production facilities as well as hospitals and day clinics. Excluding Fresenius Medical Care, spending on property, plant and equipment was €211 million corresponding to 4% of revenue (Q1/22: €176 million; 3% of revenue).
Total acquisition spending was €68 million (Q1/22: €162 million) mainly for investments in debt instruments and the purchase of dialysis clinics.at Fresenius Medical Care. Excluding Fresenius Medical Care, total acquisition spending was €18 million (Q1/22: €79 million).
Cash flow development
Group operating cash flow increased to €175 million (Q1/22: €101 million) driven by the governmental support on energy costs at Fresenius Helios in Germany. Significantly higher working capital at Fresenius Kabi in particular receivables and inventory weighed on cash flow. Furthermore, the earnings development at Fresenius Vamed had a negative impact. The first quarter is traditionally a softer cash flow quarter due to phasing effects with catch-up effects over the course of the year. Group operating cash flow margin was 1.7% (Q1/22: 1.0%). Free cash flow before acquisitions and dividends increased to -€177 million (Q1/22: -€255 million). Free cash flow after acquisitions and dividends increased to -€281 million (Q1/22: -€403 million).
The cash conversion rate (CCR), which is defined as the ratio of adjusted free cash flow1 to EBIT before special items, was 0.3 (LTM: 1.1). As the first quarter is traditionally a softer cash flow quarter due to phasing effects a catch-up over the course of the year is expected.
1 Cash flow before acquisitions and dividends; before interest, tax, and special items
Solid balance sheet structure
Group total assets remained nearly unchanged compared to FY/22 (1% in constant currency) at €76,553 million (Dec. 31, 2022: €76,415 million) given the expansion of business activities which, however, was offset by currency translation effects. Current assets increased by 5% (6% in constant currency) to €19,102 million (Dec. 31, 2022: €18,279 million), mainly driven by the increase of trade account receivables. Non-current assets decreased by 1% (0% in constant currency) to €57,451 million (Dec. 31, 2022: €58,136 million).
Total shareholders’ equity decreased by 0% (2% in constant currency) to €32,173 million (Dec. 31, 2022: €32,218 million). The equity ratio was 42.0% (Dec. 31, 2022: 42.2%).
Group debt increased by 0% (1% in constant currency) to €27,765 million (Dec. 31, 2022: € 27,763 million). Group net debt increased by 2% (2% in constant currency) to € 25,444 million (Dec. 31, 2022: € 25,014 million).
As of March 31, 2023, the net debt/EBITDA ratio was 3.79x2,3 (Dec. 31, 2022: 3.65x1,2) mainly driven by lower EBITDA contribution and higher net debt. Excluding Fresenius Medical Care, the net debt/EBITDA ratio was 3.96x1,2 (Dec. 31, 2022: 3.80x1,2).
In Q1/23, ROIC was 4.8% due to the lower EBIT (Q4/22: 5.1%). Excluding Fresenius Medical Care, the ROIC was 5.2% (Q4/22: 5.6%).
1 Cash flow before acquisitions and dividends; before interest, tax, and special items
2 At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures
3 Before special items
For a detailed overview of special items please see the reconciliation tables on pages 18-23 in the PDF.
Business Segments – Operating Companies
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.
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 on pages 18-23 in the PDF.
Revenue increased by 8% (8% in constant currency) to €1,991 million (Q1/22: €1,847 million) mainly driven by the strong business development of all growth vectors. Organic growth was 7%.
Revenue in MedTech increased by 11% (organic growth: 9%) to €378 million (Q1/22: €342 million) mainly driven by the good business development in Latin America.
Revenue in Nutrition increased by 4% (organic growth: 8%) to €602 million (Q1/22: €577 million) mainly driven by the good business development in Latin America and Europe.
Revenue in Biopharma increased by 207% (organic growth: 57%) to €71 million (Q1/22: €23 million) mainly driven by the good business development in Latin America.
Revenue of the Growth Vectors (MedTech, Nutrition and Biopharma) increased by 12% (organic growth: 10%) to €1,051 million (Q1/22: €942 million).
Revenue in the Pharma (IV Drugs & Fluids) business increased by 4% (organic growth: 3%) to €940 million (Q1/22: €905 million). The good business development in Europe and North America was dampened by offsetting effects in China.
EBIT1 decreased by 1% (-4% in constant currency) to €289 million (Q1/22: €293 million) due to the annualization of cost inflation effects. EBIT margin1 was 14.5% (Q1/22: 15.9%) and thus within the structural EBIT margin band. The positive sequential development is driven by the well progressing cost savings program as well as targeted pricing initiatives.
EBIT1 of the Growth Vectors (MedTech, Nutrition and Biopharma) decreased by 14% (-17% in constant currency) to €96 million (Q1/22: €112 million) due to the annualization of cost inflation effects. EBIT1 margin was 9.2% (Q1/22: 11.9%).
EBIT1 in the Pharma (IV Drugs & Fluids) business increased by 7% (4% in constant currency) to €197 million (Q1/22: €185 million) due to positive development in the North American region. EBIT1 margin was 21.0% (Q1/22: 20.4%).
Net income1,2 decreased by 5% (-7% in constant currency) to €191 million (Q1/22: €201 million).
Operating cash flow decreased to €21 million (Q1/22: €133 million) with a margin of 1.1% (Q1/22: 7.2%) mainly driven by phasing effects and working capital build-ups, in particular higher inventories.
For FY/23, Fresenius Kabi expects organic revenue3 growth in a low- to mid-single-digit percentage range. The EBIT margin4 is expected to be around one percentage point (pp) below the structural margin band of 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
For a detailed overview of special items please see the reconciliation tables on pages 18-23 in the PDF.
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 87 hospitals, around 240 outpatient centers, 22 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.
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 on pages 18-23 in the PDF.
Revenue increased by 5% (5% in constant currency) to €3,066 million (Q1/22: €2,931 million). Organic growth was 5%. Acquisitions contributed 0% to revenue growth.
Revenue of Helios Germany increased by 3% (organic growth: 3%) to €1,828 million (Q1/22: €1,783 million), mainly driven by increasing admissions and positive mix effects.
Revenue of Helios Spain increased by 7% (9% in constant currency) to €1,170 million (Q1/22: €1,089 million). Organic growth of 8% was driven by ongoing patient demand. The clinics in Latin America also showed a good performance.
Revenue of Helios Fertility increased by 16% (18% in constant currency) to €66 million (Q1/22: €57 million) as patients are returning to demand fertility treatments.
EBIT1 increased by 2% (2% in constant currency) to €311 million (Q1/22: €306 million) with an EBIT margin1 of 10.1% (Q1/22: 10.4%).
EBIT1 of Helios Germany increased despite cost inflation by 1% to €155 million (Q1/22: €154 million) with an EBIT margin1 of 8.5% (Q1/22: 8.6%).
EBIT1 of Helios Spain increased due to the strong revenue growth and despite cost inflation by 3% (4% in constant currency) to €157 million (Q1/22: €153 million). The EBIT margin1 was 13.4% (Q1/22: 14.0%).
EBIT1 of Helios Fertility was €4 million (Q1/22: €4 million) with an EBIT margin1 of 6.1% (Q1/22: 7.0%).
Net income1,2 decreased by 3% (-2% in constant currency) to €190 million (Q1/22: €195 million).
Operating cash flow increased to €108 million (Q1/22: -€136 million) mainly due to governmental support measures to mitigate higher energy costs in Germany and an improved working capital management. The operating cash flow margin was 3.5% (Q1/22: -4.6%).
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 on pages 18-23 in the PDF.
Business Segments – Investment Companies
Fresenius Medical Care
(Financial data according to Fresenius Medical Care press release)
Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of March 31, 2023, Fresenius Medical Care was treating approximately 343,000 patients in 4,060 dialysis clinics. Dialyzers and dialysis machines are among the most important product lines. In addition, Fresenius Medical Care offers dialysis-related services.
Revenue increased by 3% to €4,704 million (+2% in constant currency, organic: +2%).
EBIT decreased by 25% to €261 million (-28% in constant currency), resulting in a margin of 5.5% (Q1/22: 7.6%). EBIT excluding special items and U.S. Provider Relief Funding (PRF) decreased by 9% to €354 million (-13% in constant currency), resulting in a margin of 7.5% (Q1/22: 8.6%).
Net income2 decreased by 45% to €86 million (-47% in constant currency). Excluding special items and PRF, net income decreased by 22% to €154 million ( 24% in constant currency).
In the first quarter, Fresenius Medical Care generated €143 million of operating cash flow (Q1/22: €159 million), resulting in a margin of 3.0% (Q1/22: 3.5%). The reduction was mainly due to the decrease in net income.
1 Before special items
2 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
For a detailed overview of special items please see the reconciliation tables on pages 18-23 in the PDF.
Based on the results for the first quarter, Fresenius Medical Care confirms its financial targets for 2023. Fresenius Medical Care expects for 2023 revenue1 to grow at a low to mid-single digit percentage rate and EBIT2 to remain flat or decline by up to a high-single digit percentage rate3.
1 FY/22 base: €19,398 million
2 FY/22 base: €1,540 million
3 Revenue and EBIT, as referred to in the outlook, are both on a constant currency basis and excluding special items. Special items will be provided as separate KPI (“Revenue excluding special items”, “EBIT excluding special items”) to capture effects that are unusual in nature and have not been foreseeable or not foreseeable in size or impact at the time of giving guidance. These items are excluded to ensure comparability of the figures presented with the Company’s financial targets which have been defined excluding special items.
For FY 2022, special items included costs related to the FME25 program, the impact of the war in Ukraine, the impact of hyperinflation in Turkiye, the Humacyte investment remeasurement, and the net gain related to InterWell Health. Additionally, FY 2022 basis for Outlook 2023 and 2025 was adjusted for Provider Relief Funding.
For FY 2023, special items include costs related to the FME25 program, the Humacyte investment remeasurement, the costs associated with the legal conversion and effects from legacy portfolio optimization.
For further information, please see Fresenius Medical Care’s press release at www.freseniusmedicalcare.com.
Fresenius Vamed
Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide and is a leading post-acute care provider in Central Europe. The portfolio ranges along the entire value chain: from project development, planning, and turnkey construction, via maintenance and technical management to total operational management.
Revenue increased by 14% (13% in constant currency) to €583 million (Q1/22: €513 million). Organic growth was 13%.
Revenue in the service business increased by 8% (7% in constant currency) to €436 million (Q1/22: €405 million) due to better performance of technical services in Germany, Italy and United Kingdom. Revenue in the project business increased by 36% (36% in constant currency) to €147 million (Q1/22: €108 million). The good revenue performance is mainly attributable to higher revenue in European project business.
EBIT1 decreased to -€27 million (Q1/22: €8 million) with an EBIT margin1 of -4.6% (Q1/22: 1.6%). The weak development was related to the project business that partially did not have a contribution margin. Moreover, certain international business initiations did not materialize as planned. Significant negative one-time effects in the service business also impacted the EBIT development. To counteract the negative EBIT development, a major restructuring program was initiated.
Net income1,2 decreased to -€36 million (Q1/22: €4 million).
Order intake was €43 million (Q1/22: €263 million). As of March 31, 2023, order backlog was at €3,580 million (December 31, 2022: €3,689 million).
Operating cash flow decreased to -€68 million (Q1/22: -€45 million) with a margin of
-11.7% (Q1/22: -8.8%), due to the negative earnings and higher working capital.
For FY/2023, Fresenius Vamed expects organic revenue3 to grow in a low-to mid-single digit percentage range. The EBIT margin4 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 FY/22 base: €2,359 million
4 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 on pages 18-23 in the PDF.
Conference Call and Webcast
As part of the publication of the results for Q1/2023, a conference call will be held on May 9, 2023 at 1:30 p.m. CEDT (7:30 a.m. EDT). You are cordially invited to follow the conference call in a live broadcast over the Internet at https://www.fresenius.com/calendar. Following the press conference, a replay will be available on our website.
For additional information on the performance indicators used please refer to our website www.fresenius.com/alternative-performance-measures.
This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, the availability of financing and unforeseen impacts of international conflicts. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.
Consolidated Financial Statements and Management Report (IFRS)
If no timeframe is specified, information refers to Q4/2022.
1 Before special items, Q1/22 restated following remeasurement Humacyte investment
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA
3 Excluding Ivenix and mAbxience acquisitions
For a detailed overview of special items please see the reconciliation tables on pages 22-25.
Fresenius is moving ahead on its pathway to #FutureFresenius. Through the planned deconsolidation of Fresenius Medical Care, the company will simplify its governance and group structure. The company will have a clear focus on therapy to advance patient care across the three platforms (Bio)Pharma, MedTech and Care Provision. Programs are in place to enhance profitability and for active portfolio management. Fresenius will increase the pace of annual structural productivity improvement to approximately 1 billion euros by 2025.
Intention to deconsolidate Fresenius Medical Care
The company plans to deconsolidate Fresenius Medical Care by changing Fresenius Medical Care’s legal form to a German Stock Corporation (“Aktiengesellschaft”). Subject to the necessary shareholder approvals and the registration with the commercial register, the conversion is expected to become effective by the end of the 2023 financial year at the latest. To this end, an Extraordinary General Meeting of Fresenius Medical Care is expected to be held in July to decide on the proposal to change the company into the legal form of an Aktiengesellschaft (“AG”). Following the planned change in its legal form, Fresenius Medical Care will no longer be part of the fully consolidated subsidiaries of Fresenius. Fresenius’ will continue to hold a 32 percent stake in the share capital of Fresenius Medical Care.
“After careful consideration and very constructive discussions with the Group’s key stakeholders, we are confident that the planned deconsolidation of Fresenius Medical Care is the best way forward to benefit both companies.” said Wolfgang Kirsch, Chairman of the Supervisory Board of Fresenius SE. “By converting Fresenius Medical Care to the legal form of an AG, both companies gain flexibility and can better advance their strategic priorities, positioning themselves in the best possible way for the future. Michael Sen and his management team, who have developed this new corporate structure, will lead Fresenius back to operational strength and sustainable growth. I am convinced that the new structure will enable Helen Giza as CEO to realize the full potential of Fresenius Medical Care, in which we continue to hold a significant stake.”
“This is an inflection point for Fresenius”, said Fresenius SE CEO Michael Sen. “I am pleased that our anchor shareholder, the Else Kröner-Fresenius Foundation, has expressed their support for our plans and I would like to thank them for their trust. The new structure will greatly benefit both companies: Fresenius Medical Care needs an operational turnaround, to improve its performance and focus on its core business. Fresenius needs to simplify its complex corporate structures and commit to its Operating Companies and to maximizing value from its investments.”
“Simplifying our governance structure is an important step towards more optionality for a successful future of Fresenius Medical Care”, said Helen Giza, CEO of Fresenius Medical Care. “The new legal form will give us the flexibility and autonomy to focus all our efforts to unlock value as the leading kidney care company.”
Focus on Operating Companies Fresenius Kabi and Fresenius Helios
The Operating Companies Fresenius Kabi and Fresenius Helios are at the center of the Group’s ambitions under #FutureFresenius. They are both geared for significant value creation and catering to system-critical areas of healthcare. Building on a resilient global generics business, Fresenius Kabi will expand along the growth vectors Nutrition, Biopharma and MedTech. Helios Germany and Quirónsalud are already the leading private hospital providers in Germany and Spain, caring for more than 24 million patients every year. Fresenius Helios intends to leverage its market position to actively shape industry trends across digitalization and integrated care.
For the Investment Companies Fresenius Medical Care and Fresenius Vamed, there will be a strong focus on active financial value management. Across the Group, refining the company’s operating model and advancing its ESG agenda and roadmap for the best of patients will be central elements of the further journey towards #FutureFresenius.
~€1bn annual structural productivity improvement by 2025
Structural productivity improvements are moving forward. The new target is to achieve annual structural cost savings of around €1 billion at EBIT level by 2025. In order to reach this goal, Fresenius is running targeted programs across all business segments and the Corporate Center, with the oversight and steering of the Group. Key elements include measures to optimize procurement, processes, sales and administrative costs, as well as divesting from non-core assets.
Thanks to its cost and efficiency program, the company has already realized €152 million in savings after taxes and non-controlling interests in fiscal year 2022, offset by €260 million in one-time costs. In line with previous practice, these expenses are classified as special items.
Fresenius Medical Care has increased the savings target for its FME25 transformation program from €500 million to €650 million by 2025 and now expects to invest up to €650 million in the same period1. By the end of 2022, Fresenius Medical Care delivered €131 million (on EBIT level) of sustainable savings under the FME25 program, exceeding the original target of €40 to 70 million for the same period.
1 Costs related to the FME25 program will be treated as a special item
New, more rigorous Fresenius Financial Framework
To enable and accelerate performance, the Management Board set up a new, more rigorous Fresenius Financial Framework. The framework sets ambitious EBIT margin bands for the segments. They serve as a benchmark when reviewing businesses, measuring performance and planning for the future.
At group level, Fresenius will measure its future performance based on return on invested capital (ROIC), a leverage target band and the cash conversion rate (CCR), among others.
New progressive dividend policy – Stable dividend proposed
With the new Fresenius Financial Framework, Fresenius aims to generate attractive and predictable dividend yields. In line with its new progressive dividend policy, the Company aims to increase the dividend in line with constant currency earnings per share1 growth but at least maintain the dividend at the prior-year’s level. Therefore, the Management Board of Fresenius will propose to the Supervisory Board a stable dividend at the prior year level of €0.92 per share for FY/22 (FY/21: €0.92).
1 Before Special items
FY/23 Group guidance
For 2023, Fresenius expects Group organic revenue1 to grow in a low- to mid-single-digit percentage range. Group constant currency EBIT2 is expected to remain broadly flat or decline up to a high-single-digit percentage rate.
Excluding Fresenius Medical Care constant currency EBIT3 is expected to remain broadly flat or decline up to a mid-single-digit percentage rate.
Fresenius expects the net debt/EBITDA4 ratio to be slightly above the 2022 level by the end of 2023 (December 31, 2022: 3.65x5), depending on divestment activities. The self-imposed target corridor for the leverage ratio remains unchanged at 3.0x to 3.5x.
1 FY/22 base: €40,840 million
2 FY/22 base: €3,727 million, before special items, excl. PRF; FY/23: before special items
3 FY/22 base: €2,187 million, before special items; FY/23: before special items
4 At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures; excluding further potential acquisitions; before special items; including lease liabilities
5 At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures; before special items; including lease liabilities
For a detailed overview of special items please see the reconciliation tables on pages 22-25.
Assumptions for guidance FY/23
For 2023, Fresenius assumes no further escalations of geopolitical tensions and challenges from COVID-19, and supply chain constraints continuing to ease.
Fresenius expects that the general cost inflation and labor shortages will have a more significant negative effect on its business than in 2022. This is due to the fact that H2/2022 showed stronger headwinds compared to H1/2022. Thus, Fresenius expects a marked annualization effect.
Fresenius will continue to closely monitor the potential further consequences of the overall heightened volatility and muted visibility, including balance sheet valuations.
For Fresenius Medical Care’s contribution to the Group’s financial figures, the assumptions for Fresenius Medical Care’s FY/23 guidance are also fully applicable to Fresenius Group’s FY/23 guidance. In 2022, Fresenius Medical Care’s EBIT was supported by €277 million of Provider Relief Funding from the U.S. government (at current currency). There is no additional governmental support assumed for 2023.
All of these assumptions are subject to considerable uncertainty.
4% revenue increase in constant currency
Group revenue increased by 7% (4% in constant currency) to €10,643 million (Q4/21: €9,966 million). Organic growth was 3%. Acquisitions/divestitures contributed net 1% to growth. Currency translation increased revenue growth by 3%. Excluding estimated COVID-19 effects1, Group revenue growth would have been 4% to 5% in constant currency (Q4/21: 5% to 6%).
In FY/22, Group revenue increased by 9% (4% in constant currency) to €40,840 million (FY/21: €37,520 million). Organic growth was 3%. Acquisitions/divestitures contributed net 1% to growth. Currency translation increased revenue growth by 5%. Excluding estimated COVID-19 effects1, Group revenue growth would have been 4% to 5% in constant currency (FY/21: 5% to 6%).
16% net income2,3,4 decline in constant currency
Group EBITDA before special items decreased by 2% (-7% in constant currency) to €1,802 million (Q4/212: €1,846 million). Reported Group EBITDA was €1,513 million (Q4/21: €1,868 million).
In FY/22, Group EBITDA before special items decreased by 1% (-6% in constant currency) at €6,808 million (FY/212: €6,854 million). Reported Group EBITDA was €6,294 million (FY/21: €6,825 million).
Group EBIT before special items decreased by 10% (-14% in constant currency) to €1,052 million (Q4/212: €1,166 million). The decrease was mainly driven by ongoing inflation leading to cost increases including personnel costs, material prices, logistics, and energy costs as well as negative one-offs at Fresenius Vamed and Fresenius Kabi. The EBIT margin before special items was 9.9% (Q4/212: 11.7%). Reported Group EBIT was €687 million (Q4/21: €1,123 million).
In FY/22, Group EBIT before special items decreased by 6% (-11% in constant currency) to €4,004 million (FY/212: €4,252 million). The EBIT margin before special items was 9.8% (FY/212: 11.3%). Reported Group EBIT was €3,321 million (FY/21: €4,158 million).
1 For estimated COVID-19 effects please see table on page 20.
2 Before special items
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
4 Excluding Ivenix and mAbxience acquisitions
For a detailed overview of special items please see the reconciliation tables on pages 22-25.
Group net interest before special items was -€157 million (Q4/211: -€120 million) mainly due to financing activities, rising interest rates and currency translation effects. Reported Group net interest was -€132 million (Q4/21: -€122 million). In FY/22, Group net interest before special items was -€533 million (FY/211: -€504 million). Reported Group net interest was -€507 million (FY/21: -€506 million).
Group tax rate before special items was 24.4% (Q4/21 : 23.2%) mainly due to an increase in the proportionate share of non-tax-deductible expenses compared to taxable income as well as tax law changes at Fresenius Medical Care. Reported Group tax rate was 27.4% (Q4/21: 24.2%). In FY/22, Group tax rate before special items was 23.7% (FY/211: 22.6%) while the reported Group tax rate was 24.8% (FY/2021: 22.8%).
Noncontrolling interests before special items were -€232 million (Q4/211: -€282 million) of which 97% were attributable to the noncontrolling interests in Fresenius Medical Care. Reported noncontrolling interests were -€148 million (Q4/21: -€260 million). In FY/22, Noncontrolling interests before special items were -€918 million (FY/211: -€1,033 million) of which 91% were attributable to the noncontrolling interests in Fresenius Medical Care. Reported noncontrolling interests were -€745 million (FY/21: -1,001 million).
Group net income2 before special items decreased by 15% (-19%/-16% in constant currency) to €445 million (Q4/211: €521 million). The decrease was driven by the challenging macroeconomic environment with increased uncertainties, general cost inflation, staff shortage, disruptions in supply chains, and increased energy costs. Moreover, rising interest costs and negative one-off items at Fresenius Vamed and Fresenius Kabi as well as a higher tax rate weighed on the net income development. Excluding estimated COVID-19 effects4, Group net income2 before special items was -19% to -15% in constant currency (Q4/21: 3% to 7%). Reported Group net income2 decreased to €255 million (Q4/21: €499 million).
In FY/22, Group net income2 before special items decreased by 7% (-12%/-10%3 in constant currency) to €1,729 million (FY/211: €1,867 million). Excluding estimated COVID-19 effects4, Group net income2 before special items was -16% to -12% in constant currency (FY/21: 6% to 10%). Reported Group net income2 decreased to €1,372 million (FY/21: €1,818 million).
1 Before special items
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA
3 Excluding Ivenix and mAbxience acquisitions
4 For estimated COVID-19 effects please see table on page 20
For a detailed overview of special items please see the reconciliation tables on pages 22-25.
Earnings per share1 before special items decreased by 16% (-20% in constant currency) to €0.79 (Q4/21 : €0.94). Reported earnings per share1 were €0.45 (Q4/21: €0.90). In FY/22, earnings per share1 before special items decreased by 8% (-13% in constant currency) to €3.08 (FY/212: €3.35). Reported earnings per share1 were €2.44 (FY/21: €3.26).
1 Net income attributable to shareholders of Fresenius SE & Co. KGaA
2 Before special items
For a detailed overview of special items please see the reconciliation tables on pages 22-25.
Investments
Spending on property, plant and equipment was €713 million corresponding to 7% of revenue (Q4/21: €690 million; 7% of revenue). These investments served primarily for the modernization and expansion of dialysis clinics, production facilities as well as hospitals and day clinics. In FY/22, spending on property, plant and equipment was €1,886 million corresponding to 5% of revenue (FY/21: €2,032 million; 5% of revenue).
Total acquisition spending was €43 million (Q4/21: €278 million) mainly for dialysis clinics at Fresenius Medical Care. In FY/22, total acquisition spending was €1,579 million (FY/21: €1,085 million).
Cash flow development
Group operating cash flow increased to €1,824 million (Q4/21: €1,749 million) with a margin of 17.1% (Q4/21: 17.5%). The strong development was driven by better cash collections and improved working capital management. Free cash flow before acquisitions and dividends increased to €1,219 million (Q4/21: €1,075 million). Free cash flow after acquisitions and dividends increased to €1,107 million (Q4/21: €841 million).
In FY/22, Group operating cash flow decreased to €4,198 million (FY/21: €5,078 million) with a margin of 10.3% (FY/21: 13.5%). The decrease was mainly due to lower net income and higher inventories. Free cash flow before acquisitions and dividends decreased to €2,421 million (FY/21: €3,061 million). Free cash flow after acquisitions and dividends decreased to €701 million (FY/21: €1,193 million).
Solid balance sheet structure
Group total assets increased by 6% (4% in constant currency) to €76,415 million (Dec. 31, 2021: €71,962 million) given currency translation effects, acquisitions and the expansion of business activities. Current assets increased by 5% (4% in constant currency) to €18,279 million (Dec. 31, 2021: €17,461 million), mainly driven by the increase of inventories and other current assets. Non-current assets increased by 7% (4% in constant currency) to €58,136 million (Dec. 31, 2021: €54,501 million).
Total shareholders’ equity increased by 10% (7% in constant currency) to €32,218 million (Dec. 31, 2021: €29,288 million). The equity ratio was 42.2% (Dec. 31, 2021: 40.7%).
Group debt increased by 2% (1% in constant currency) at €27,763 million (Dec. 31, 2021: € 27,155 million). Group net debt increased by 3% (1% in constant currency) to € 25,014 million (Dec. 31, 2021: € 24,391 million).
As of December 31, 2022, the net debt/EBITDA ratio was 3.65x1,2 (Dec. 31, 2021: 3.51x1,2) mainly driven by lower EBITDA contribution as well as acquisition spending. The net debt/EBITDA as of December 31, 2022 excluding the closed acquisition of Ivenix and the completed acquisition of a majority stake in mAbxience was 3.581,2.
1 At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures
2 Before special items
For a detailed overview of special items please see the reconciliation tables on pages 22-25.
Business Segments
Fresenius Medical Care
(Financial data according to Fresenius Medical Care press release)
Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of December 31, 2022, Fresenius Medical Care was treating approximately 345,000 patients in 4,116 dialysis clinics. Along with its core business, the Renal Care Continuum, the company focuses on expanding in complementary areas and in the field of critical care. ,
Revenue increased by 8% (2% in constant currency) to €4,997million (Q4/21: €4,647 million). Organic growth was 2%. Currency translation increased revenue growth by 6%. In FY/22, revenue increased by 10% (2% in constant currency) to €19,398 million (FY/21: €17,619 million). Organic growth was 2%. Currency translation increased revenue growth by 8%.
EBIT decreased by 22% (-28% in constant currency) to €352 million (Q4/21: €449 million) resulting in a margin of 7.0% (Q4/21: 9.7%). EBIT before special items increased by 1% (-8% in constant currency) to €495 million (Q4/21: €492 million), resulting in a margin1 of 9.9% (Q4/21: 10.6%). At constant currency, the decline was mainly due to supply chain and labor cost increases across all regions, the impact of U.S. Provider Relief funding from the U.S. government (PRF) received in the previous year’s quarter to compensate for certain COVID-19-related costs, and higher legal costs. This was partially offset by an unfavorable impact from the remeasurement of investments in the previous year and savings related to the FME25 program.
1 Before special items
2 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
3 For further information, please see Fresenius Medical Care’s press release at www.freseniusmedicalcare.com.
For a detailed overview of special items please see the reconciliation tables on pages 22-25.
In FY/22, EBIT decreased by 18% (-25% in constant currency) to €1,512 million
(FY/21: €1,852 million) resulting in a margin of 7.8% (FY/21: 10.5%). At constant currency, the development was supported by €246 million (FY 2021: €63 million) of PRF to compensate for certain COVID-19-related costs. EBIT before special items decreased by 5% (-13% in constant currency) to €1,817 million (FY/21: €1,915 million), resulting in a margin of 9.4% (FY/21: 10.9 %).
Net income2 decreased by 39% (-47% in constant currency) to €139 million (Q4/21: €228 million). Net income2 before special items decreased by 4% (-14% in constant currency) to €253 million (Q4/21: €263 million). Besides the above-mentioned effects on operating income, the constant currency decline was mainly due to an increase in the proportionate share of non-tax-deductible expenses compared to taxable income as well as tax law changes.
In FY/22, net income2 decreased by 31% (-37% in constant currency) to €673 million (FY/21: €969 million). Net income2 before special items decreased by 10%
(-17% in constant currency) to €913 million (FY/21: €1,018 million).
Operating cash flow was €600 million (Q4/21: €669 million) with a margin of 12.0% (Q4/21: 14.4%). The decrease was mainly due to lower net income. In FY/22, operating cash flow was €2,167 million (FY/21: €2,489 million) with a margin of 11.2%
(FY/21: 14.1%).
For FY/23, Fresenius Medical Care expects revenue3 to grow at a low to mid-single digit percentage rate. In 2022, EBIT was supported by €277 million of PRF (at current currency). There is no additional governmental support assumed for 2023. To provide a comparable basis for the 2023 earnings outlook, the 2022 basis4 is adjusted accordingly. On this basis, EBIT is expected to remain flat or decline by up to a high single-digit percentage rate in 2023. In 2025, Fresenius Medical Care targets to achieve an improved operating income margin of 10-14%. Revenue and operating income, as referred to in the outlook, are both on a constant currency basis and excluding special items.
For further information, please see Fresenius Medical Care’s press release at www.freseniusmedicalcare.com.
1 Before special items
2 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
3 FY/22 base: €19,398 million
4 FY/22 base: €1,540 million
Fresenius Kabi
Fresenius Kabi offers intravenously administered generic drugs, clinical nutrition and infusion therapies for seriously and chronically ill patients in the hospital and outpatient environments. The company is also a leading supplier of medical devices and transfusion technology products. In the biosimilars business, Fresenius Kabi develops products with a focus on oncology and autoimmune diseases.
Revenue increased by 12% (8% in constant currency) to €2,036 million (Q4/21: €1,823 million). Organic growth was 7%. In FY/22, revenue increased by 9% (4% in constant currency) to €7,850 million (FY/21: €7,193 million). Organic growth was 3%. Positive currency translation effects of 4% in Q4/22 and 5% in FY/22 were mainly related to the U.S. dollar.
Revenue in North America increased by 14% (organic growth: 3%) to €669 million (Q4/21: €589 million). The significant revenue growth was mainly driven by positive currency translation effects and a solid development of the regular business. In FY/22, revenue in North America increased by 12% (organic growth: 0%) to €2,522 million (FY/21: €2,258 million).
Revenue in Europe increased by 9% (organic growth: 6%) to €724 million (Q4/21: €664 million) driven by a broad-based positive development, in particular at biopharmaceuticals. In FY/22, revenue in Europe increased by 6% (organic growth: 5%) to €2,691 million (FY/21: €2,544 million).
1 Before special items
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA
3 Excluding Ivenix and mAbxience acquisitions
For a detailed overview of special items please see the reconciliation tables on pages 22-25.
Revenue in Asia-Pacific decreased by 2% (organic growth: -2%) to €389 million (Q4/21: €395 million). Organic growth was affected by COVID lockdowns and associated lower patient demand as well as price pressure from the NVBP (National Volume-Based Procurement) tenders in China. In FY/22, revenue in Asia-Pacific increased by 4% (organic growth: -2%) to €1,714 million (FY/21: €1,643 million).
Revenue in Latin America/Africa increased by 45% (organic growth: 41%) to €254 million (Q4/21: €175 million), due to a positive business development in both regions. In addition, the revenue development was positively impacted by hyperinflation in Brazil and Mexico. In FY/22, revenue in Latin America/Africa increased by 23% (organic growth: 18%) to €923 million (FY/21: €748 million).
Revenue in the Biopharmaceuticals business was €72 million. In FY/22, revenue in the Biopharmaceuticals business was €188 million (FY/21: €62 million).
EBIT1 decreased by 15% (-19%/-13% in constant currency) to €236 million (Q4/21: €279 million). EBIT development was impacted by non-cash one-time write offs, primarily related to a capitalized in-process R&D project in North America. Moreover, ongoing macroeconomic headwinds including inflationary cost increases, staff shortages and disrupted supply chains impacted the EBIT performance. In China COVID lockdowns and associated lower patient demand as well as price declines in connection with NVBP tenders weighed on profitability.
EBIT margin1 was 11.6% (Q4/21: 15.3%). Excluding the acquisitions of Ivenix and the majority stake in mAbxience, the constant currency EBIT margin1 was at 12.7%2 in Q4/22. In FY/22, EBIT1 decreased by 6% (-14%/-10%2 in constant currency) to €1,080 million (FY/21: €1,153 million) with an EBIT margin1 of 13.8%/14.4%2 (FY/21: 16.0%).
Net income1,3 increased by 16% (10% in constant currency) to €206 million (Q4/21: €178 million). In FY/22, net income1,3 remained stable (declined by -7% in constant currency) at €780 million (FY/21: €778 million).
1 Before special items
2 Excluding Ivenix and mAbxience acquisitions
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
For a detailed overview of special items please see the reconciliation tables on pages 22-25.
Operating cash flow decreased to €298 million (Q4/21: €335 million) with a margin of 14.6% (Q4/21: 18.4%) mainly driven by lower net income and higher inventories. In FY/22, operating cash flow decreased to €841 million (FY/21: €1,203 million) with a margin of 10.7% (FY/21: 16.7%).
For FY/23, Fresenius Kabi expects organic revenue1 growth in a low- to mid-single-digit percentage range. The EBIT margin2 is expected to be around one percentage point (pp) below the structural margin band of 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 on pages 22-25.
Fresenius Helios
Fresenius Helios is Europe's leading private hospital operator. The company comprises Helios Germany, Helios Spain and Helios Fertility. Helios Germany operates 87 hospitals, around 240 outpatient centers, 21 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.
Revenue increased by 5% (5% in constant currency) to €3,031 million (Q4/21: €2,882 million). Organic growth was 5%. Acquisitions at Helios Spain and Helios Fertility contributed 1% to revenue growth. Divestments reduced revenue by 1%. In FY/22, revenue increased by 8% (7% in constant currency) to €11,716 million (FY/21: €10,891 million). Organic growth was 6%. Acquisitions contributed 2% to revenue growth. Divestments reduced revenue by 1%.
Revenue of Helios Germany was flat (organic growth: 0%) to €1,749 million (Q4/21: €1,745 million), mainly driven by increasing admissions and a return to a pre-COVID patient structure by year-end. In FY/22, revenue of Helios Germany increased by 4% (organic growth: 4%) to €7,021 million (FY/21: €6,733 million.
Revenue of Helios Spain increased by 12% (12% in constant currency) to €1,214 million (Q4/21: €1,084 million). Organic growth of 12% was driven by very strong and consistent patient demand. The clinics in Latin America also showed a good performance. In FY/22, revenue of Helios Spain increased by 10% (10% in constant currency) to €4,441 million (FY/21: €4,021 million). Organic growth was 9%.
Revenue of the Helios Fertility were €66 million (Q4/21: €51 million). In FY/22, revenue of the Helios Fertility were €250 million (FY/21: €133 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 on pages 22-25.
EBIT1 increased by 4% (5% in constant currency) at €354 million (Q4/21: €339 million) with an EBIT margin1 of 11.7% (Q4/21: 11.8%). In FY/22, EBIT1 increased by 5% (5% in constant currency) to €1,185 million (FY/21: 1,127 million) with an EBIT margin1 of 10.1% (FY/21: 10.3%).
EBIT1 of Helios Germany increased by 2% to €174 million (Q4/21: €171 million) with an EBIT margin1 of 9.9% (Q4/21: 9.8%). The increase of costs from the use of external staff mainly due to flu-related staff absenteeism continued to weigh on profitability. Inflationary cost effects had also a negative impact. In FY/22, EBIT1 of Helios Germany increased by 2% to €623 million (FY/21: €613 million) with an EBIT margin1 of 8.9% (FY/21: 9.1%).
EBIT1 of Helios Spain increased due to the strong revenue growth and despite cost inflation by 6% (7% in constant currency) to €172 million (Q4/21: €162 million). The EBIT margin1 was 14.2% (Q4/21: 14.9%). In FY/22, EBIT1 of Helios Spain increased by 8% (8% in constant currency) to €556 million (FY/21: €514 million). The EBIT margin1 was 12.5% (FY/21: 12.8%).
EBIT1 of Helios Fertility was €6 million (Q4/21: €5 million) with an EBIT margin1 of 9.1% (Q4/21: 9.8%). Lower volumes by delayed treatments driven by macroeconomic environment. In FY/22, EBIT1 of Helios Fertility was €21 million (FY/21: €19 million) with an EBIT margin1 of 8.4% (FY/21: 14.3%).
Net income1,2 increased by 4% (4% in constant currency) to €236 million (Q4/21: €227 million). In FY/22, net income1,2 increased by 5% (5% in constant currency) to €766 million (FY/21: €728 million).
Operating cash flow increased to €956 million (Q4/21: €609 million) with a margin of 31.5% (Q4/21: 21.1%) mainly due to an improved receivables management. In FY/22, operating cash flow increased to €1,367 million (FY/21: €1,204 million) with a margin of 11.7% (FY/21: 11,1%)
For FY/23, Fresenius Helios expects organic revenue growth in a mid-single-digit percentage range. The EBIT margin 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 on pages 22-25.
Fresenius Vamed
Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide and is a leading post-acute care provider in Central Europe. The portfolio ranges along the entire value chain: from project development, planning, and turnkey construction, via maintenance and technical management to total operational management.
Revenue decreased by 5% (-5% in constant currency) to €712 million (Q4/21: €748 million). Organic growth was -5%. In FY/22, revenue increased by 3% (2% in constant currency) to €2,359 million (FY/21: €2,297 million). Organic growth was 2%.
Revenue in the service business increased by 7% (7% in constant currency) to €445 million (Q4/21: €415 million) due to increasing rehabilitation treatments given fewer capacity restrictions. Revenue in the project business decreased by 20% (-20% in constant currency) to €267 million (Q4/21: €333 million. The weak revenue performance is mainly attributable to the continuing difficult macroeconomic environment. In FY/22, revenue in the service business increased by 7% (6% in constant currency) to €1,685 million (FY/21: €1,580 million). Revenue in the project business decreased by 6% (-6% in constant currency) to €674 million (FY/21: €717 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 on pages 22-25.
EBIT1 decreased by 114% to -€9 million (Q4/21: €66 million) with an EBIT margin1 of -1.3% (Q4/21: 8.8%). Main driver for the weak development is the macroeconomic backdrop which led to a lower than expected revenue development in the project business and to significant negative one-time effects in the form of impairments due to a reassessment and revaluation of claims and legal proceedings as well as certain business initiations that did not materialize as planned. In FY/22, EBIT1 decreased by 80% to €20 million (FY/21: €101 million) with an EBIT margin1 of 0.8% (FY/21: 4.4%).
Net income1,2 decreased by 129% to -€14 million (Q4/21: €49 million). In FY/22, Net income1,2 decreased by 99% to €1 million (FY/21: €67 million).
Order intake was €572 million (Q4/21: €319 million). In FY/22 order intake was €1,241 million (FY/21: €1,290 million). As of December 31, 2022, order backlog was at €3,689 million (December 31, 2021: €3,473 million).
Operating cash flow decreased to €12 million (Q4/21: €128 million) with a margin of 1.7% (Q4/21: 17.1%), due to higher receivables and payed traded acoounts payable. In FY/22, operating cash flow decreased to -€44 million (FY/21: €151 million) with a margin of -1.9% (FY/21: 6.6%).
For FY/2023, Fresenius Vamed expects organic revenue to grow in a low-to mid-single digit percentage range. The EBIT margin 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 FY/22 base: €2,359 million
4 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 on pages 22-25.
For additional information on the performance indicators used please refer to our website https://www.fresenius.com/alternative-performance-measures.
This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, the availability of financing and unforeseen impacts of international conflicts. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.
1 Before special items, Q1/22 restated following remeasurement Humacyte investment
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA
3 Excluding Ivenix and mAbxience acquisitions
For a detailed overview of special items please see the reconciliation tables on pages 22-25 in the PDF.
Fresenius is moving ahead with a simplified structure, sharper focus and acceleration of performance. Through the planned deconsolidation of Fresenius Medical Care, the company will simplify its governance and group structure. The company will have a clear focus on therapy to advance patient care across the three platforms (Bio)Pharma, MedTech and Care Provision. Programs are in place to enhance profitability and for active portfolio management. Fresenius will increase the pace of annual structural productivity improvement to approximately 1 billion euros by 2025.
Intention to deconsolidate Fresenius Medical Care
The company plans to deconsolidate Fresenius Medical Care by changing Fresenius Medical Care’s legal form to a German Stock Corporation (“Aktiengesellschaft”). Subject to the necessary shareholder approvals and the registration with the commercial register, the conversion is expected to become effective by the end of the 2023 financial year at the latest. To this end, an Extraordinary General Meeting of Fresenius Medical Care is expected to be held in July to decide on the proposal to change the company into the legal form of an Aktiengesellschaft (“AG”). Following the planned change in its legal form, Fresenius Medical Care will no longer be part of the fully consolidated subsidiaries of Fresenius. Fresenius’ will continue to hold a 32 percent stake in the share capital of Fresenius Medical Care.
“After careful consideration and very constructive discussions with the Group’s key stakeholders, we are confident that the planned deconsolidation of Fresenius Medical Care is the best way forward to benefit both companies.” said Wolfgang Kirsch, Chairman of the Supervisory Board of Fresenius SE. “By converting Fresenius Medical Care to the legal form of an AG, both companies gain flexibility and can better advance their strategic priorities, positioning themselves in the best possible way for the future. Michael Sen and his management team, who have developed this new corporate structure, will lead Fresenius back to operational strength and sustainable growth. I am convinced that the new structure will enable Helen Giza as CEO to realize the full potential of Fresenius Medical Care, in which we continue to hold a significant stake.”
“This is an inflection point for Fresenius”, said Fresenius SE CEO Michael Sen. “I am pleased that our anchor shareholder, the Else Kröner-Fresenius Foundation, has expressed their support for our plans and I would like to thank them for their trust. The new structure will greatly benefit both companies: Fresenius Medical Care needs an operational turnaround, to improve its performance and focus on its core business. Fresenius needs to simplify its complex corporate structures and commit to its Operating Companies and to maximizing value from its investments.”
“Simplifying our governance structure is an important step towards more optionality for a successful future of Fresenius Medical Care”, said Helen Giza, CEO of Fresenius Medical Care. “The new legal form will give us the flexibility and autonomy to focus all our efforts to unlock value as the leading kidney care company.”
Focus on Operating Companies Fresenius Kabi and Fresenius Helios
The Operating Companies Fresenius Kabi and Fresenius Helios are at the center of the Group’s ambitions under #FutureFresenius. They are both geared for significant value creation and catering to system-critical areas of healthcare. Building on a resilient global generics business, Fresenius Kabi will expand along the growth vectors Nutrition, Biopharma and MedTech. Helios Germany and Quirónsalud are already the leading private hospital providers in Germany and Spain, caring for more than 24 million patients every year. Fresenius Helios intends to leverage its market position to actively shape industry trends across digitalization and integrated care.
For the Investment Companies Fresenius Medical Care and Fresenius Vamed, there will be a strong focus on active financial value management. Across the Group, refining the company’s operating model and advancing its ESG agenda and roadmap for the best of patients will be central elements of the further journey towards #FutureFresenius.
~€1bn annual structural productivity improvement by 2025
Structural productivity improvements are moving forward. The new target is to achieve annual structural cost savings of around €1 billion at EBIT level by 2025. In order to reach this goal, Fresenius is running targeted programs across all business segments and the Corporate Center, with the oversight and steering of the Group. Key elements include measures to optimize procurement, processes, sales and administrative costs, as well as divesting from non-core assets.
Thanks to its cost and efficiency program, the company has already realized €152 million in savings after taxes and non-controlling interests in fiscal year 2022, offset by €260 million in one-time costs. In line with previous practice, these expenses are classified as special items.
Fresenius Medical Care has increased the savings target for its FME25 transformation program from €500 million to €650 million by 2025 and now expects to invest up to €650 million in the same period1. By the end of 2022, Fresenius Medical Care delivered €131 million (on EBIT level) of sustainable savings under the FME25 program, exceeding the original target of €40 to 70 million for the same period.
1 Costs related to the FME25 program will be treated as a special item
New, more rigorous Fresenius Financial Framework
To enable and accelerate performance, the Management Board set up a new, more rigorous Fresenius Financial Framework. The framework sets ambitious EBIT margin bands for the segments. They serve as a benchmark when reviewing businesses, measuring performance and planning for the future.
At group level, Fresenius will measure its future performance based on return on invested capital (ROIC), a leverage target band and the cash conversion rate (CCR), among others.
New progressive dividend policy – Stable dividend proposed
With the new Fresenius Financial Framework, Fresenius aims to generate attractive and predictable dividend yields. In line with its new progressive dividend policy, the Company aims to increase the dividend in line with constant currency earnings per share1 growth but at least maintain the dividend at the prior-year’s level. Therefore, the Management Board of Fresenius will propose to the Supervisory Board a stable dividend at the prior year level of €0.92 per share for FY/22 (FY/21: €0.92).
1 Before Special items
FY/23 Group guidance
For 2023, Fresenius expects Group organic revenue1 to grow in a low- to mid-single-digit percentage range. Group constant currency EBIT2 is expected to remain broadly flat or decline up to a high-single-digit percentage rate.
Excluding Fresenius Medical Care constant currency EBIT3 is expected to remain broadly flat or decline up to a mid-single-digit percentage rate.
Fresenius expects the net debt/EBITDA4 ratio to be slightly above the 2022 level by the end of 2023 (December 31, 2022: 3.65x5), depending on 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 2023, Fresenius assumes no further escalations of geopolitical tensions and challenges from COVID-19, and supply chain constraints continuing to ease. Fresenius expects that the general cost inflation and labor shortages will have a more significant negative effect on its business than in 2022. This is due to the fact that H2/2022 showed stronger headwinds compared to H1/2022. Thus, Fresenius expects a marked annualization effect.
Fresenius will continue to closely monitor the potential further consequences of the overall heightened volatility and muted visibility, including balance sheet valuations.
For Fresenius Medical Care’s contribution to the Group’s financial figures, the assumptions for Fresenius Medical Care’s FY/23 guidance are also fully applicable to Fresenius Group’s FY/23 guidance. In 2022, Fresenius Medical Care’s EBIT was supported by €277 million of Provider Relief Funding from the U.S. government (at current currency). There is no additional governmental support assumed for 2023.
All of these assumptions are subject to considerable uncertainty.
1 FY/22 base: €40,840 million
2 FY/22 base: €3,727 million, before special items, excl. PRF; FY/23: before special items
3 FY/22 base: €2,187 million, before special items; FY/23: before special items
4 At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures;
excluding further potential acquisitions; before special items; including lease liabilities
5 At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures;
before special items; including lease liabilities
For a detailed overview of special items please see the reconciliation tables on pages 22-25 in the PDF.
4% revenue increase in constant currency
Group revenue increased by 7% (4% in constant currency) to €10,643 million (Q4/21: €9,966 million). Organic growth was 3%. Acquisitions/divestitures contributed net 1% to growth. Currency translation increased revenue growth by 3%. Excluding estimated COVID-19 effects1, Group revenue growth would have been 4% to 5% in constant currency (Q4/21: 5% to 6%).
In FY/22, Group revenue increased by 9% (4% in constant currency) to €40,840 million (FY/21: €37,520 million). Organic growth was 3%. Acquisitions/divestitures contributed net 1% to growth. Currency translation increased revenue growth by 5%. Excluding estimated COVID-19 effects1, Group revenue growth would have been 4% to 5% in constant currency (FY/21: 5% to 6%).
16% net income2,3,4 decline in constant currency
Group EBITDA before special items decreased by 2% (-7% in constant currency) to €1,802 million (Q4/212: €1,846 million). Reported Group EBITDA was €1,513 million (Q4/21: €1,868 million).
In FY/22, Group EBITDA before special items decreased by 1% (-6% in constant currency) at €6,808 million (FY/212: €6,854 million). Reported Group EBITDA was €6,294 million (FY/21: €6,825 million).
Group EBIT before special items decreased by 10% (-14% in constant currency) to €1,052 million (Q4/212: €1,166 million). The decrease was mainly driven by ongoing inflation leading to cost increases including personnel costs, material prices, logistics, and energy costs as well as negative one-offs at Fresenius Vamed and Fresenius Kabi. The EBIT margin before special items was 9.9% (Q4/212: 11.7%). Reported Group EBIT was €687 million (Q4/21: €1,123 million).
In FY/22, Group EBIT before special items decreased by 6% (-11% in constant currency) to €4,004 million (FY/212: €4,252 million). The EBIT margin before special items was 9.8% (FY/212: 11.3%). Reported Group EBIT was €3,321 million (FY/21: €4,158 million).
1 For estimated COVID-19 effects please see table on page 20 in the PDF.
2 Before special items
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
4 Excluding Ivenix and mAbxience acquisitions
For a detailed overview of special items please see the reconciliation tables on pages 22-25 in the PDF.
Group net interest before special items was -€157 million (Q4/211: -€120 million) mainly due to financing activities, rising interest rates and currency translation effects. Reported Group net interest was -€132 million (Q4/21: -€122 million). In FY/22, Group net interest before special items was -€533 million (FY/211: -€504 million). Reported Group net interest was -€507 million (FY/21: -€506 million).
Group tax rate before special items was 24.4% (Q4/21 : 23.2%) mainly due to an increase in the proportionate share of non-tax-deductible expenses compared to taxable income as well as tax law changes at Fresenius Medical Care. Reported Group tax rate was 27.4% (Q4/21: 24.2%). In FY/22, Group tax rate before special items was 23.7% (FY/211: 22.6%) while the reported Group tax rate was 24.8% (FY/2021: 22.8%).
Noncontrolling interests before special items were -€232 million (Q4/211: -€282 million) of which 97% were attributable to the noncontrolling interests in Fresenius Medical Care. Reported noncontrolling interests were -€148 million (Q4/21: -€260 million). In FY/22, Noncontrolling interests before special items were -€918 million (FY/211: -€1,033 million) of which 91% were attributable to the noncontrolling interests in Fresenius Medical Care. Reported noncontrolling interests were -€745 million (FY/21: -1,001 million).
Group net income2 before special items decreased by 15% (-19%/-16% in constant currency) to €445 million (Q4/211: €521 million). The decrease was driven by the challenging macroeconomic environment with increased uncertainties, general cost inflation, staff shortage, disruptions in supply chains, and increased energy costs. Moreover, rising interest costs and negative one-off items at Fresenius Vamed and Fresenius Kabi as well as a higher tax rate weighed on the net income development. Excluding estimated COVID-19 effects4, Group net income2 before special items was -19% to -15% in constant currency (Q4/21: 3% to 7%). Reported Group net income2 decreased to €255 million (Q4/21: €499 million).
In FY/22, Group net income2 before special items decreased by 7% (-12%/-10%3 in constant currency) to €1,729 million (FY/211: €1,867 million). Excluding estimated COVID-19 effects4, Group net income2 before special items was -16% to -12% in constant currency (FY/21: 6% to 10%). Reported Group net income2 decreased to €1,372 million (FY/21: €1,818 million).
1 Before special items
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA
3 Excluding Ivenix and mAbxience acquisitions
4 For estimated COVID-19 effects please see table on page 20
For a detailed overview of special items please see the reconciliation tables on pages 22-25 in the PDF.
Earnings per share1 before special items decreased by 16% (-20% in constant currency) to €0.79 (Q4/21 : €0.94). Reported earnings per share1 were €0.45 (Q4/21: €0.90). In FY/22, earnings per share1 before special items decreased by 8% (-13% in constant currency) to €3.08 (FY/212: €3.35). Reported earnings per share1 were €2.44 (FY/21: €3.26).
1 Net income attributable to shareholders of Fresenius SE & Co. KGaA
2 Before special items
For a detailed overview of special items please see the reconciliation tables on pages 22-25.
Investments
Spending on property, plant and equipment was €713 million corresponding to 7% of revenue (Q4/21: €690 million; 7% of revenue). These investments served primarily for the modernization and expansion of dialysis clinics, production facilities as well as hospitals and day clinics. In FY/22, spending on property, plant and equipment was €1,886 million corresponding to 5% of revenue (FY/21: €2,032 million; 5% of revenue).
Total acquisition spending was €43 million (Q4/21: €278 million) mainly for dialysis clinics at Fresenius Medical Care. In FY/22, total acquisition spending was €1,579 million (FY/21: €1,085 million).
Cash flow development
Group operating cash flow increased to €1,824 million (Q4/21: €1,749 million) with a margin of 17.1% (Q4/21: 17.5%). The strong development was driven by better cash collections and improved working capital management. Free cash flow before acquisitions and dividends increased to €1,219 million (Q4/21: €1,075 million). Free cash flow after acquisitions and dividends increased to €1,107 million (Q4/21: €841 million).
In FY/22, Group operating cash flow decreased to €4,198 million (FY/21: €5,078 million) with a margin of 10.3% (FY/21: 13.5%). The decrease was mainly due to lower net income and higher inventories. Free cash flow before acquisitions and dividends decreased to €2,421 million (FY/21: €3,061 million). Free cash flow after acquisitions and dividends decreased to €701 million (FY/21: €1,193 million).
Solid balance sheet structure
Group total assets increased by 6% (4% in constant currency) to €76,415 million (Dec. 31, 2021: €71,962 million) given currency translation effects, acquisitions and the expansion of business activities. Current assets increased by 5% (4% in constant currency) to €18,279 million (Dec. 31, 2021: €17,461 million), mainly driven by the increase of inventories and other current assets. Non-current assets increased by 7% (4% in constant currency) to €58,136 million (Dec. 31, 2021: €54,501 million).
Total shareholders’ equity increased by 10% (7% in constant currency) to €32,218 million (Dec. 31, 2021: €29,288 million). The equity ratio was 42.2% (Dec. 31, 2021: 40.7%).
Group debt increased by 2% (1% in constant currency) at €27,763 million (Dec. 31, 2021: € 27,155 million). Group net debt increased by 3% (1% in constant currency) to € 25,014 million (Dec. 31, 2021: € 24,391 million).
As of December 31, 2022, the net debt/EBITDA ratio was 3.65x1,2 (Dec. 31, 2021: 3.51x1,2) mainly driven by lower EBITDA contribution as well as acquisition spending. The net debt/EBITDA as of December 31, 2022 excluding the closed acquisition of Ivenix and the completed acquisition of a majority stake in mAbxience was 3.581,2.
Number of employees
As of December 31, 2022, the Fresenius Group had 316,920 employees worldwide (September 30, 2022: 319,691).
1 At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures
2 Before special items
For a detailed overview of special items please see the reconciliation tables on pages 22-25 in the PDF.
Business Segments
Fresenius Medical Care (Financial data according to Fresenius Medical Care press release)
Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of December 31, 2022, Fresenius Medical Care was treating approximately 345,000 patients in 4,116 dialysis clinics. Along with its core business, the Renal Care Continuum, the company focuses on expanding in complementary areas and in the field of critical care. ,
Revenue increased by 8% (2% in constant currency) to €4,997million (Q4/21: €4,647 million). Organic growth was 2%. Currency translation increased revenue growth by 6%. In FY/22, revenue increased by 10% (2% in constant currency) to €19,398 million (FY/21: €17,619 million). Organic growth was 2%. Currency translation increased revenue growth by 8%.
EBIT decreased by 22% (-28% in constant currency) to €352 million (Q4/21: €449 million) resulting in a margin of 7.0% (Q4/21: 9.7%). EBIT before special items increased by 1% (-8% in constant currency) to €495 million (Q4/21: €492 million), resulting in a margin1 of 9.9% (Q4/21: 10.6%). At constant currency, the decline was mainly due to supply chain and labor cost increases across all regions, the impact of U.S. Provider Relief funding from the U.S. government (PRF) received in the previous year’s quarter to compensate for certain COVID-19-related costs, and higher legal costs. This was partially offset by an unfavorable impact from the remeasurement of investments in the previous year and savings related to the FME25 program.
1 Before special items
2 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
3 For further information, please see Fresenius Medical Care’s press release at www.freseniusmedicalcare.com.
For a detailed overview of special items please see the reconciliation tables on pages 22-25 in the PDF.
In FY/22, EBIT decreased by 18% (-25% in constant currency) to €1,512 million (FY/21: €1,852 million) resulting in a margin of 7.8% (FY/21: 10.5%). At constant currency, the development was supported by €246 million (FY 2021: €63 million) of PRF to compensate for certain COVID-19-related costs. EBIT before special items decreased by 5% (-13% in constant currency) to €1,817 million (FY/21: €1,915 million), resulting in a margin of 9.4% (FY/21: 10.9 %).
Net income2 decreased by 39% (-47% in constant currency) to €139 million (Q4/21: €228 million). Net income2 before special items decreased by 4% (-14% in constant currency) to €253 million (Q4/21: €263 million). Besides the above-mentioned effects on operating income, the constant currency decline was mainly due to an increase in the proportionate share of non-tax-deductible expenses compared to taxable income as well as tax law changes.
In FY/22, net income2 decreased by 31% (-37% in constant currency) to €673 million (FY/21: €969 million). Net income2 before special items decreased by 10% (-17% in constant currency) to €913 million (FY/21: €1,018 million).
Operating cash flow was €600 million (Q4/21: €669 million) with a margin of 12.0% (Q4/21: 14.4%). The decrease was mainly due to lower net income. In FY/22, operating cash flow was €2,167 million (FY/21: €2,489 million) with a margin of 11.2% (FY/21: 14.1%).
For FY/23, Fresenius Medical Care expects revenue3 to grow at a low to mid-single digit percentage rate. In 2022, EBIT was supported by €277 million of PRF (at current currency). There is no additional governmental support assumed for 2023. To provide a comparable basis for the 2023 earnings outlook, the 2022 basis4 is adjusted accordingly. On this basis, EBIT is expected to remain flat or decline by up to a high single-digit percentage rate in 2023. In 2025, Fresenius Medical Care targets to achieve an improved operating income margin of 10-14%. Revenue and operating income, as referred to in the outlook, are both on a constant currency basis and excluding special items.
For further information, please see Fresenius Medical Care’s press release at www.freseniusmedicalcare.com.
1 Before special items
2 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
3 FY/22 base: €19,398 million
4 FY/22 base: €1,540 million
Fresenius Kabi
Fresenius Kabi offers intravenously administered generic drugs, clinical nutrition and infusion therapies for seriously and chronically ill patients in the hospital and outpatient environments. The company is also a leading supplier of medical devices and transfusion technology products. In the biosimilars business, Fresenius Kabi develops products with a focus on oncology and autoimmune diseases.
Revenue increased by 12% (8% in constant currency) to €2,036 million (Q4/21: €1,823 million). Organic growth was 7%. In FY/22, revenue increased by 9% (4% in constant currency) to €7,850 million (FY/21: €7,193 million). Organic growth was 3%. Positive currency translation effects of 4% in Q4/22 and 5% in FY/22 were mainly related to the U.S. dollar.
Revenue in North America increased by 14% (organic growth: 3%) to €669 million (Q4/21: €589 million). The significant revenue growth was mainly driven by positive currency translation effects and a solid development of the regular business. In FY/22, revenue in North America increased by 12% (organic growth: 0%) to €2,522 million (FY/21: €2,258 million).
Revenue in Europe increased by 9% (organic growth: 6%) to €724 million (Q4/21: €664 million) driven by a broad-based positive development, in particular at biopharmaceuticals. In FY/22, revenue in Europe increased by 6% (organic growth: 5%) to €2,691 million (FY/21: €2,544 million).
1 Before special items
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA
3 Excluding Ivenix and mAbxience acquisitions
For a detailed overview of special items please see the reconciliation tables on pages 22-25 in the PDF.
Revenue in Asia-Pacific decreased by 2% (organic growth: -2%) to €389 million (Q4/21: €395 million). Organic growth was affected by COVID lockdowns and associated lower patient demand as well as price pressure from the NVBP (National Volume-Based Procurement) tenders in China. In FY/22, revenue in Asia-Pacific increased by 4% (organic growth: -2%) to €1,714 million (FY/21: €1,643 million).
Revenue in Latin America/Africa increased by 45% (organic growth: 41%) to €254 million (Q4/21: €175 million), due to a positive business development in both regions. In addition, the revenue development was positively impacted by hyperinflation in Brazil and Mexico. In FY/22, revenue in Latin America/Africa increased by 23% (organic growth: 18%) to €923 million (FY/21: €748 million).
Revenue in the Biopharmaceuticals business was €72 million. In FY/22, revenue in the Biopharmaceuticals business was €188 million (FY/21: €62 million).
EBIT1 decreased by 15% (-19%/-13% in constant currency) to €236 million (Q4/21: €279 million). EBIT development was impacted by non-cash one-time write offs, primarily related to a capitalized in-process R&D project in North America. Moreover, ongoing macroeconomic headwinds including inflationary cost increases, staff shortages and disrupted supply chains impacted the EBIT performance. In China COVID lockdowns and associated lower patient demand as well as price declines in connection with NVBP tenders weighed on profitability.
EBIT margin1 was 11.6% (Q4/21: 15.3%). Excluding the acquisitions of Ivenix and the majority stake in mAbxience, the constant currency EBIT margin1 was at 12.7%2 in Q4/22. In FY/22, EBIT1 decreased by 6% (-14%/-10%2 in constant currency) to €1,080 million (FY/21: €1,153 million) with an EBIT margin1 of 13.8%/14.4%2 (FY/21: 16.0%).
Net income1,3 increased by 16% (10% in constant currency) to €206 million (Q4/21: €178 million). In FY/22, net income1,3 remained stable (declined by -7% in constant currency) at €780 million (FY/21: €778 million).
1 Before special items
2 Excluding Ivenix and mAbxience acquisitions
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
For a detailed overview of special items please see the reconciliation tables on pages 22-25 in the PDF.
Operating cash flow decreased to €298 million (Q4/21: €335 million) with a margin of 14.6% (Q4/21: 18.4%) mainly driven by lower net income and higher inventories. In FY/22, operating cash flow decreased to €841 million (FY/21: €1,203 million) with a margin of 10.7% (FY/21: 16.7%).
For FY/23, Fresenius Kabi expects organic revenue1 growth in a low- to mid-single-digit percentage range. The EBIT margin2 is expected to be around one percentage point (pp) below the structural margin band of 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 on pages 22-25 in the PDF.
Fresenius Helios
Fresenius Helios is Europe's leading private hospital operator. The company comprises Helios Germany, Helios Spain and Helios Fertility. Helios Germany operates 87 hospitals, around 240 outpatient centers, 21 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.
Revenue increased by 5% (5% in constant currency) to €3,031 million (Q4/21: €2,882 million). Organic growth was 5%. Acquisitions at Helios Spain and Helios Fertility contributed 1% to revenue growth. Divestments reduced revenue by 1%. In FY/22, revenue increased by 8% (7% in constant currency) to €11,716 million (FY/21: €10,891 million). Organic growth was 6%. Acquisitions contributed 2% to revenue growth. Divestments reduced revenue by 1%.
Revenue of Helios Germany was flat (organic growth: 0%) to €1,749 million (Q4/21: €1,745 million), mainly driven by increasing admissions and a return to a pre-COVID patient structure by year-end. In FY/22, revenue of Helios Germany increased by 4% (organic growth: 4%) to €7,021 million (FY/21: €6,733 million.
Revenue of Helios Spain increased by 12% (12% in constant currency) to €1,214 million (Q4/21: €1,084 million). Organic growth of 12% was driven by very strong and consistent patient demand. The clinics in Latin America also showed a good performance. In FY/22, revenue of Helios Spain increased by 10% (10% in constant currency) to €4,441 million (FY/21: €4,021 million). Organic growth was 9%.
Revenue of the Helios Fertility were €66 million (Q4/21: €51 million). In FY/22, revenue of the Helios Fertility were €250 million (FY/21: €133 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 on pages 22-25 in the PDF.
EBIT1 increased by 4% (5% in constant currency) at €354 million (Q4/21: €339 million) with an EBIT margin1 of 11.7% (Q4/21: 11.8%). In FY/22, EBIT1 increased by 5% (5% in constant currency) to €1,185 million (FY/21: 1,127 million) with an EBIT margin1 of 10.1% (FY/21: 10.3%).
EBIT1 of Helios Germany increased by 2% to €174 million (Q4/21: €171 million) with an EBIT margin1 of 9.9% (Q4/21: 9.8%). The increase of costs from the use of external staff mainly due to flu-related staff absenteeism continued to weigh on profitability. Inflationary cost effects had also a negative impact. In FY/22, EBIT1 of Helios Germany increased by 2% to €623 million (FY/21: €613 million) with an EBIT margin1 of 8.9% (FY/21: 9.1%).
EBIT1 of Helios Spain increased due to the strong revenue growth and despite cost inflation by 6% (7% in constant currency) to €172 million (Q4/21: €162 million). The EBIT margin1 was 14.2% (Q4/21: 14.9%). In FY/22, EBIT1 of Helios Spain increased by 8% (8% in constant currency) to €556 million (FY/21: €514 million). The EBIT margin1 was 12.5% (FY/21: 12.8%).
EBIT1 of Helios Fertility was €6 million (Q4/21: €5 million) with an EBIT margin1 of 9.1% (Q4/21: 9.8%). Lower volumes by delayed treatments driven by macroeconomic environment. In FY/22, EBIT1 of Helios Fertility was €21 million (FY/21: €19 million) with an EBIT margin1 of 8.4% (FY/21: 14.3%).
Net income1,2 increased by 4% (4% in constant currency) to €236 million (Q4/21: €227 million). In FY/22, net income1,2 increased by 5% (5% in constant currency) to €766 million (FY/21: €728 million).
Operating cash flow increased to €956 million (Q4/21: €609 million) with a margin of 31.5% (Q4/21: 21.1%) mainly due to an improved receivables management. In FY/22, operating cash flow increased to €1,367 million (FY/21: €1,204 million) with a margin of 11.7% (FY/21: 11,1%)
For FY/23, Fresenius Helios expects organic revenue growth in a mid-single-digit percentage range. The EBIT margin 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 on pages 22-25 in the PDF.
Fresenius Vamed
Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide and is a leading post-acute care provider in Central Europe. The portfolio ranges along the entire value chain: from project development, planning, and turnkey construction, via maintenance and technical management to total operational management.
Revenue decreased by 5% (-5% in constant currency) to €712 million (Q4/21: €748 million). Organic growth was -5%. In FY/22, revenue increased by 3% (2% in constant currency) to €2,359 million (FY/21: €2,297 million). Organic growth was 2%.
Revenue in the service business increased by 7% (7% in constant currency) to €445 million (Q4/21: €415 million) due to increasing rehabilitation treatments given fewer capacity restrictions. Revenue in the project business decreased by 20% (-20% in constant currency) to €267 million (Q4/21: €333 million. The weak revenue performance is mainly attributable to the continuing difficult macroeconomic environment. In FY/22, revenue in the service business increased by 7% (6% in constant currency) to €1,685 million (FY/21: €1,580 million). Revenue in the project business decreased by 6% (-6% in constant currency) to €674 million (FY/21: €717 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 on pages 22-25 in the PDF.
EBIT1 decreased by 114% to -€9 million (Q4/21: €66 million) with an EBIT margin1 of -1.3% (Q4/21: 8.8%). Main driver for the weak development is the macroeconomic backdrop which led to a lower than expected revenue development in the project business and to significant negative one-time effects in the form of impairments due to a reassessment and revaluation of claims and legal proceedings as well as certain business initiations that did not materialize as planned. In FY/22, EBIT1 decreased by 80% to €20 million (FY/21: €101 million) with an EBIT margin1 of 0.8% (FY/21: 4.4%).
Net income1,2 decreased by 129% to -€14 million (Q4/21: €49 million). In FY/22, Net income1,2 decreased by 99% to €1 million (FY/21: €67 million).
Order intake was €572 million (Q4/21: €319 million). In FY/22 order intake was €1,241 million (FY/21: €1,290 million). As of December 31, 2022, order backlog was at €3,689 million (December 31, 2021: €3,473 million).
Operating cash flow decreased to €12 million (Q4/21: €128 million) with a margin of 1.7% (Q4/21: 17.1%), due to higher receivables and payed traded acoounts payable. In FY/22, operating cash flow decreased to -€44 million (FY/21: €151 million) with a margin of -1.9% (FY/21: 6.6%).
For FY/2023, Fresenius Vamed expects organic revenue to grow in a low-to mid-single digit percentage range. The EBIT margin 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 FY/22 base: €2,359 million
4 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 on pages 22-25 in the PDF.
Press Conference
As part of the publication of the results for FY 2022, a press conference will be held on February 22, 2023 at 10 a.m. CET. You are cordially invited to follow the press conference in a live broadcast over the Internet at https://www.fresenius.com/calendar.
Following the press conference, 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.
This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, the availability of financing and unforeseen impacts of international conflicts. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.
The healthcare group Fresenius strengthens its Management Board team. The Supervisory Board of Fresenius Management SE has appointed Pierluigi Antonelli (56) as Chief Executive Officer of Fresenius Kabi with effect from 1 March 2023. He succeeds Michael Sen, who had held this position on an interim basis after being appointed Chairman of the Management Board of Fresenius on 1 October 2022. The current scope of the Human Resources, Risk Management and Legal departments will be broadened to also cover Environmental, Social and Governance (ESG) going forward. Sebastian Biedenkopf (58) will leave the company by mutual agreement once his contract expires at the end of the year. He will support his successor Michael Moser (46), who will join Fresenius on 1 August 2023 at the latest, until the end of his contract to ensure a seamless handover.
“With Pierluigi Antonelli and Michael Moser, two internationally experienced top managers are joining our company. I am very pleased that they are joining the team and taking over responsibility as we are shaping #FutureFresenius in the coming years,” said Wolfgang Kirsch, Chairman of the Supervisory Board of Fresenius. “I would like to thank Sebastian Biedenkopf for his great commitment over the past years. In his role, he has made strong contributions to maintain Fresenius’ stability during challenging times. We wish him all the best in his future endeavours, both professionally and personally.”
Pierluigi Antonelli joins Fresenius with extensive operational expertise in the pharmaceutical industry with a focus on product development and launches across key international markets, business development and strategy crafting as well as implementation. In his previous role since 2019, he was the CEO of Angelini Pharma, a subsidiary of the Italian Angelini Group specializing in brain health and consumer health. Prior to that, he held senior leadership positions at Novartis Oncology, Sandoz, Merck & Co. and Bristol Myers Squibb in the United States and across Europe, and beyond.
Michael Moser served as deputy CEO and CFO at Enerjisa, the leading energy company in Turkey, since 2019. Previously, since 2008, he held various leadership positions at energy provider E.ON, one of the major investors in Energjisa. During his time at E.ON, Moser was, among other things, a board member with responsibility for legal, compliance, M&A and portfolio optimization at the listed company Eneva in Brazil and later also responsible for the spin-off and IPO of the German energy company Uniper. With a degree in law and business administration, he started his career at Baker & McKenzie with a focus on M&A and corporate law. In recent years, he has worked in various countries including the United States, China, Brazil, France, the United Kingdom and Switzerland.
“The trajectory of Fresenius Kabi has been set with ‘Vision 2026’ towards profitable growth,” said Fresenius CEO Michael Sen. “Thanks to his many years of experience in the pharmaceutical sector, Pierluigi Antonelli has the expertise to further support Fresenius Kabi on this journey. Michael Moser is not only a proven expert in the areas of compliance and risk management, but also brings extensive experience in portfolio management and navigating periods of transformation as well as in the energy industry managing sustainability issues.”
“I would like to thank the Supervisory Board of Fresenius Management SE for the trust they have placed in me,” said Pierluigi Antonelli. “Fresenius Kabi operates at the heart of Fresenius with a clear direction laid out with ‘Vision 2026’, which we will further shape together. I can hardly imagine a more exciting opportunity than leading this company into the future. Fresenius Kabi is already a market leader across multiple markets, offering healthcare products and solutions for chronically ill patients and competing in dynamic growth areas with biosimilars and MedTech. I will focus on working with the team to further strengthen the company's position and drive profitable growth across the focus segments.”
“Fresenius is a great company, which, with its employees around the world, will decisively shape the future of medical technology and health,” said Michael Moser. “What always fascinates and motivates me, across all my professional activities, is people. Fresenius cares about people's health in a special way. I am very much looking forward to contributing to Fresenius’ journey with my experience in change and growth processes, and in working together with the entire workforce to drive transformation processes.”
This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, the availability of financing and unforeseen impacts of international conflicts. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.
The Fresenius Group expresses its deepest sympathies and condolences to the families and individuals affected by the earthquakes in Türkiye and Syria.
As first reaction after the catastrophic event, the company fully focused on connecting with its patients in the region. People dependent on our lifesaving products and services were transferred in case of destruction of local infrastructure. As further immediate step, Fresenius Medical Care established contact with its employees on site and intensively looks into options to support its local staff and their families.
Our disaster response teams are in full action and are being supported by units from other parts of the country. As global healthcare company, Fresenius is committed to support with urgently needed medical supply and works with humanitarian aid organizations to deliver donations of its most critical care products and services.
We remain fully committed to our patients, local staff, and partners on site.
Michael Sen, CEO of Fresenius
