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Dr. Carla Kriwet (51) will become the new CEO of Fresenius Medical Care, the world's leading provider of products and services for individuals with renal diseases, on January 1, 2023. The Supervisory Board of Fresenius Medical Care Management AG unanimously appointed her to succeed Rice Powell (66), who in accordance with the company’s age limit for Management Board members is stepping down when his contract ends on December 31, after 10 years heading the company. Like Rice Powell, Dr. Carla Kriwet will also be a member of the Management Board of Fresenius Management SE. Helen Giza, Chief Financial Officer of Fresenius Medical Care, will enter a new five-year contract, and in addition to her current positions as CFO and CTO will assume the position of Deputy CEO.

Dr. Carla Kriwet was most recently CEO and President of BSH Hausgeräte GmbH, a company with €15.6 billion in sales, 62,000 employees and 40 production plants around the world. From 2013 to 2020 she was with the health technology company Royal Philips N.V. in the United States, since 2017 as a member of the company’s Executive Board. At Philips she headed the Connected Care division, which includes the business areas Patient Care and Monitoring Solutions as well as Healthcare Informatics.

Previously, Dr. Carla Kriwet was a member of the Executive Board of the non-governmental organization Save the Children Germany in Berlin, and Chief Sales & Marketing Officer at the medical technology company Drägerwerk in Lübeck, Germany. Between 2003 and 2010 she held various management positions in the strategy department and in the Healthcare division of Linde AG, lastly as Head of Linde Healthcare Europe. Before that, she spent six years with the Boston Consulting Group, where, among other responsibilities, she headed consulting projects in healthcare. Dr. Carla Kriwet started her career in project management at ABB Daimler-Benz Transportation in India in 1995, after working as a volunteer for an SOS Children’s Village in Burundi and studying business at Switzerland’s University of St. Gallen, where she graduated with a doctorate degree.

Rice Powell joined Fresenius Medical Care in 1997, and as CEO of Fresenius Medical Care North America was appointed to the Management Board of Fresenius Medical Care in 2004. He has been the company’s CEO since January 1, 2013. Under his direction, Fresenius Medical Care significantly extended its global leadership, identifying emerging business areas such as value-based care and home dialysis early and then expanding successfully into them.

Rice Powell said: “After 25 years with this company, and a full decade as CEO, I look back with a lot of gratitude and pride at what we achieved during this time. Our products and services are more important than ever to our patients, and a fundamental part of their lives. As the world’s only provider of the full range of innovative therapies and products for people with renal diseases, we have outstanding prerequisites for our continued success. I want to thank all my colleagues – on the Management Board, the management team, and everyone in all our facilities worldwide – for their untiring efforts and support over the years. I’m very happy to know that our company will be in good hands in the future.”

Stephan Sturm, Chairman of the Fresenius Medical Care Management AG Supervisory Board and CEO of Fresenius, said: “I am very thankful to Rice Powell for his highly dedicated service over many years, and for his important contribution to our success. He played a key role in shaping Fresenius Medical Care, initiated future-looking developments and set in motion the necessary transformation of the company. On behalf of the entire Supervisory Board and the Management Board of Fresenius, I wish Rice all the very best for the next stage of his life, with more time for his family and hobbies. At the same time, I am very much looking forward to working with Dr. Carla Kriwet. I have come to know her as a highly skilled and bold manager with a lot of experience in the healthcare industry, clear ideas and a lot of empathy. People’s health and well-being are very close to her heart, and something she has worked for over the years in different organizations and constellations. I’m certain that working closely with Helen Giza, and together with the entire management team, she will successfully shape the transformation now underway and manage the challenges, not least those created by the pandemic, embrace with enthusiasm the numerous growth opportunities before us, and lead Fresenius Medical Care to continued success.”

Dr. Carla Kriwet said: “I am very much looking forward to taking on this new position and working together with my new colleagues. I fully identify with the vision of making the lives of the patients who have put their trust in us a little more worth living every day. And I’m convinced that bringing ever better medicine to ever more people goes hand in hand with economic success. Early in my professional development, I found my way into the healthcare business and have remained very closely connected to it ever since. Fresenius Medical Care is a globally active, leading and unique company that still has tremendous potential. I want to do my part to leverage this potential for the benefit of patients and employees, and in doing so also add shareholder value.”

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• Creation of new company combines strengths of three leading value-based care specialists
• Execution on strategic expansion along the renal care continuum significantly expands Fresenius Medical Care’s total addressable market in the U.S. from around $50 billion to around $170 billion
• Establishing independent and integrated value-based care offering in-line with FME25 plan of refining and further growing future Care Delivery segment in the U.S.  

Fresenius Medical Care, the world's leading provider of products and services for individuals with kidney diseases, announced today it has entered into a binding agreement to create an independent new company that combines Fresenius Health Partners, the value-based care division of Fresenius Medical Care North America, with InterWell Health, the leading physician organization driving innovation in the kidney care space in the U.S., and Cricket Health, a U.S. provider of value-based kidney care with a leading patient engagement and data platform. 

The merger brings together Fresenius Health Partners’ expertise in kidney care value-based contracting and performance, InterWell Health’s clinical care models and strong network of 1,600 nephrologists and Cricket Health’s tech-enabled care model that utilizes its proprietary informatics, StageSmart™️ and patient engagement platforms to create an innovative, stand-alone entity poised to transform kidney care.

Rice Powell, CEO of Fresenius Medical Care, said: “This effort is an important next step in executing Fresenius Medical Care’s growth strategy 2025 to further expand along the renal care continuum and to refine and grow our future operating model in Care Delivery in the U.S. as part of the FME25 transformation. In bringing together the expertise and competence of three leading partners we will be broadening our offer and adding significant value to patients with chronic kidney disease all over the U.S.” 

Bill Valle, CEO of Fresenius Medical Care North America and of the future Care Delivery segment for Fresenius Medical Care, said: “With leading capabilities, scale, and reach, the new company will be well positioned to transform kidney care and health equity in the U.S. This includes reducing hospital admissions and readmissions, slowing disease progression, increasing transplant referrals and rates, accelerating the transition to home dialysis, and improving clinical outcomes and quality of life for patients with lower overall costs for payors.” 

The new company, which will be fully consolidated by Fresenius Medical Care as the majority owner and operate under the InterWell Health brand, is valued at $2.4 billion. The merger will create an independent entity that expands into the $120 billion CKD stage 3 to 5 market. The new company targets to engage and manage the care of more than 270,000 people with kidney disease by 2025 and to manage around $11 billion medical cost in the same year. Bringing together the experience, data, technology, algorithms and network in a unique way, will drive growth and increase leverage of the combined assets resulting in continuously improving operating profit margins on medical cost under management and enhance return on invest capital in this asset-light business. 

The closing of the transaction is subject to regulatory review. Depending on the progress of such review, the company currently anticipates the transaction could close in the second half of 2022. Any book gains arising at closing of the transaction are not expected to be material on Fresenius Medical Care’s earnings and will be treated as a special item. Fresenius Medical Care expects that this part of the execution on its growth strategy 2025 will support the achievement of its financial 2025 targets.

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• Business development significantly impacted by COVID-19 in 2021, effects are expected to continue into 2022
• Decline in excess mortality in the fourth quarter 
• 25th consecutive dividend increase to 1.35 EUR proposed
• Implementation of strategic priorities on track 

Rice Powell, Chief Executive Officer of Fresenius Medical Care, said: “Throughout 2021, COVID-19 has significantly impacted our patients’ and employees’ lives as well as Fresenius Medical Care as a company. Although excess mortality among our patients in the fourth quarter has moderated, the accumulated impact of COVID-19 weighed heavier on our earnings development than we had anticipated in the beginning of 2021. Given these challenging headwinds, we are proud that we have continuously been there for our patients and, on the back of this, were able to deliver on our 2021 guidance. Despite the ongoing impact of the pandemic and an increasingly inflationary cost environment, we target to return to earnings growth this year. At the same time, we will continue to execute on the key priorities of our Strategy 2025, advancing on our transformational FME25 program as well as progressing on our Sustainability agenda.”
 

¹ 2021: costs related to the FME25 program; 2020: impairment of goodwill and trade names in the Latin America Segment
² Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA


Implementing strategic priorities

Based on its Strategy 2025, Fresenius Medical Care aims to capture further growth potential along the Renal Care Continuum and beyond – by leveraging its core competencies and offering sustainable solutions with innovative products and services of the highest quality and at reliable costs. To this end, the company is continuing to steadily drive forward its strategic priorities.
Fresenius Medical Care aims to build sustainable partnerships with payors worldwide to support the transition from a fee-for-service to a pay-for-performance system. In Value-based Care models, the Company contributes to creating medical value while ensuring that care remains affordable.

Fresenius Medical Care´s longstanding experience in Value-based Care and the largest database of CKD (Chronic Kidney Disease) patients in the industry enables the use of proprietary predictive models to slow kidney disease progression and reduce hospital admissions. In 2022, the Company expects to grow the number of its ESRD (End-Stage Renal Disease) and CKD patients receiving care in Value-based Care arrangements from more than 20,0000 patients at the end of 2021 to around 80,000. The significant increase compared to the previous year will be mainly driven by the start on 1 January 2022 of the Comprehensive Kidney Care Contracting options (CKCC) of the Centers for Medicare and Medicaid Services (CMS) in the U.S. Across all Value-based Care arrangements, Fresenius Medical Care expects to be managing risk for more than USD 6 billion in medical expenses in 2022.

To further enhance the quality of life for its patients and increase their choice of available treatment options, Fresenius Medical Care remains committed to further expanding its home dialysis offerings. In 2021, the Company provided around 15% of its dialysis treatments in the U.S. in a home setting and has thus already achieved its target originally set for 2022.
Based on its strategic business planning, Fresenius Medical Care has set a new aspirational target for the expansion of home dialysis: By 2025, the Company aims to perform 25% of all treatments in the U.S. at a patient’s home.

Fresenius Medical Care’s commitment to Sustainability is not only incorporated in its vision and mission but also reflected in its strategy. To shape operations, integrate sustainability principles into business activities and assume even greater accountability, the Company is consistently advancing its global sustainability activities. In 2021, Fresenius Medical Care reached further important milestones in focus areas such as patients and employees, environmental protection, combating bribery and corruption, and respect for human rights. More than ever, Fresenius Medical Care continues to actively drive progress of its Sustainability agenda. 

As part of the FME25 program, Fresenius Medical Care is transforming its operating model into a simplified structure with two global operating segments – Care Enablement and Care Delivery, thus providing the basis for the acceleration of innovation for our patients and future sustainable profitable growth.

Helen Giza, Chief Financial Officer and Chief Transformation Officer of Fresenius Medical Care, said: “We continue to move at pace on the overall implementation and execution of our transformation program, focusing on unlocking shareholder value, creating the basis for future sustainable profitable growth and shaping the organization to the new operating model. An important step in that direction was the recent naming of the next level of leaders in the new organization.” 

The Company is committed to implementing necessary changes in a socially responsible way, and to following applicable consultation procedures with works councils and other workplace representative bodies in good faith.

Fresenius Medical Care expects to implement its new global operating model around 2023 and the savings initiative to be largely completed by 2024. With the transformation of the operating model, the annual cost base shall be reduced by EUR 500 million by the end of 2025. One-time costs of FME25 are expected to amount to approximately EUR 450-500 million. In 2021, costs incurred for FME25 amounted to EUR 63 million in the program. 

For 2022, the Company expects FME25-related one-time costs of approximately EUR 175 to 245 million and has included EUR 40 to 70 million of sustainable EBIT savings in its outlook.

Decrease in COVID-19-related excess mortality

Despite the global spread of the Omicron variant, which resulted in a significant increase in infection rates in many countries, COVID-19-related excess mortality among Fresenius Medical Care’s patients decreased in the fourth quarter of 2021 and amounted to around 1,800 (Q1 2021: ~3,200; Q2 2021: ~1,900; Q3 2021: ~2,900³). Thus, excess mortality accumulated to approximately 9,800 patients in FY 2021 and approximately 20,100 since the start of the pandemic.

The overall estimated adverse effect of accumulated COVID-19-related excess mortality on organic growth in the Health Care Services business amounted to around 290 basis points in the fourth quarter and 280 basis points in the full year 2021.

As of year-end 2021, approximately 81% (U.S.: ~80%) of Fresenius Medical Care’s patients had been at least partially vaccinated; 58% (U.S.: ~57%) of all fully vaccinated patients had already received a booster vaccination. 

³ Historical excess mortality updated for late entries

Revenue and earnings development affected by COVID-19

Revenue in the fourth quarter increased by 6% to EUR 4,647 million (+3% at constant currency, +2% organic).

Health Care Services revenue increased by 6% to EUR 3,621 million (+3% at constant currency, +2% organic). This was mainly driven by a positive exchange rate effect as well as organic growth, which was achieved despite the adverse impact of COVID-19 and a lower reimbursement for calcimimetics.

Health Care Products revenue increased by 3% to EUR 1,026 million (+1% at constant currency, +1% organic), mainly driven by a positive exchange rate effect as well as higher sales of machines for chronic treatment, home hemodialysis products and in-center disposables, partially offset by lower sales of products for acute care treatments.

In the full year, revenue declined by 1% to EUR 17,619 million (+2% at constant currency, +1% organic). Health Care Services revenue decreased by 2% to EUR 13,876 million (+2% at constant currency, +1% organic), mainly due to a negative exchange rate effect, partially offset by organic growth, which was achieved despite COVID-19 and a lower reimbursement for calcimimetics, as well as higher contributions from acquisitions. Health Care Products revenue remained stable and amounted to EUR 3,743 million (+2% at constant currency, +2% organic). Higher sales of machines for chronic treatment, home hemodialysis products and renal pharmaceuticals were offset by a negative exchange rate effect and lower sales of products for acute care treatments.

Operating income decreased by 3% to EUR 449 million in the fourth quarter (-7% at constant currency), resulting in a margin of 9.7% (Q4 2020: 10.5%). Operating income excluding special items, i.e. the impairment of goodwill and trade names in the Latin America Segment in 2020 and costs incurred for FME25 in 2021, declined by 25% to EUR 492 million (-28% at constant currency), resulting in a margin of 10.6% (Q4 2020: 14.9%). The decline was mainly due to a remeasurement effect on the fair value of investments, higher labor costs, the adverse COVID-19-related net effects and inflationary materials cost increases. These effects were only slightly mitigated by an improved U.S. payor mix, in particular due to an increased number of patients with Medicare Advantage coverage.

In the full year, operating income decreased by 20% to EUR 1,852 million (-17% at constant currency), resulting in a margin of 10.5% (FY 2020: 12.9%). Operating income excluding special items declined by 23% to EUR 1,915 million (-21% at constant currency), resulting in a margin of 10.9% (FY 2020: 14.0%). This was mainly due to adverse COVID-19-related net effects, inflationary materials cost increases, higher labor costs, and the remeasurement effect on the fair value of investments. These effects were slightly mitigated by an improved U.S. payor mix, in particular due to an increased number of patients with Medicare Advantage coverage.

Net income² increased by 29% to EUR 229 million in the fourth quarter (+23% at constant currency). Excluding special items, net income declined by 29% to EUR 263 million (-32% at constant currency), mainly due to the mentioned negative effects on operating income.

In the full year, net income decreased by 17% to EUR 969 million (-14% at constant currency). Net income excluding special items declined by 25% to EUR 1,018 million (-23% at constant currency).

Basic earnings per share (EPS) increased by 29% to EUR 0.78 (+23% at constant currency) in the fourth quarter. EPS excluding special items declined by 29% to EUR 0.90 (-32% at constant currency).

In the full year, EPS decreased by 16% to EUR 3.31 (-14% at constant currency). EPS excluding special items declined by 25% to EUR 3.48 (-23% at constant currency).

Cash flow development

In the fourth quarter, Fresenius Medical Care generated EUR 669 million of operating cash flow (Q4 2020: EUR 584 million), resulting in a margin of 14.4% (Q4 2020: 13.3%). The increase was mainly due to improved working capital including contributions from FME25 and U.S. federal relief funding, partially offset by continued recoupment of the U.S. government’s payments received in 2020 under the CARES Act and lower tax payments related to COVID-19 reliefs in the prior year. In the full year, operating cash flow amounted to EUR 2,489 million (FY 2020: EUR 4,233 million), resulting in a margin of 14.1% (FY 2020: 23.7%). The decline was mainly due to the U.S. government’s advanced payments received in 2020, the partial recoupment of these payments in 2021 as well as other COVID-19 relief, including lower tax payments in North America segment in the previous year.

Fresenius Medical Care generated EUR 400 million of free cash flow⁴ (Q4 2020: EUR 283 million) in the fourth quarter, resulting in a margin of 8.6% (Q4 2020: 6.4%). In the full year, free cash flow amounted to EUR 1,660 million (FY 2020: EUR 3,197 million), resulting in a margin of 9.4% (FY 2020: 17.9%).

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

Regional developments

In North America, revenue increased by 6% to EUR 3,156 million in the fourth quarter (+1% at constant currency, 0% organic). A positive exchange rate effect was largely offset by the adverse COVID-19 impact on both the Health Care Services and Health Care Products businesses along with associated downstream effects. In the full year, revenue decreased by 3% to EUR 12,088 million (stable at constant currency, 0% organic).

Operating income in North America decreased by 25% to EUR 402 million in the fourth quarter (-29% at constant currency), resulting in a margin of 12.7% (Q4 2020: 17.9%). The decline was mainly due to a remeasurement effect on the fair value of investments, higher personnel expense, the adverse net impact of COVID-19 and costs related to FME25. This was only partially offset by an improved U.S. payor mix, in particular due to an increased number of patients with Medicare Advantage coverage. In the full year, operating income declined by 22% to EUR 1,644 million (-20% at constant currency), resulting in a margin of 13.6% (FY 2020: 17.0%).

Revenue in the EMEA region increased by 2% to EUR 732 million in the fourth quarter (+2% at constant currency, +2% organic), mainly driven by organic growth in the Health Care Services business, which was achieved despite the negative impact of COVID-19. In the full year, revenue remained stable and amounted to EUR 2,765 million (+1% at constant currency, +1% organic).
Operating income in EMEA decreased by 42% to EUR 77 million in the fourth quarter (-42% at constant currency), resulting in a margin of 10.6% (Q4 2020: 18.7%). The decline was mainly due to a favorable impact from equity method investees in the previous year, inflationary cost increases, adverse COVID-19-related effects and costs related to FME25. In the full year, operating income decreased by 25% to EUR 309 million (-25% at constant currency), resulting in a margin of 11.2% (FY 2020: 14.9%).

In Asia-Pacific, revenue increased by 7% to EUR 552 million in the fourth quarter (+5% at constant currency, +4% organic). This was mainly driven by organic growth in both the Health Care Services and Health Care Products business as well as a positive exchange rate effect. In the full year, revenue grew by 6% to EUR 2,010 million (+7% at constant currency, +7% organic), thus exceeding EUR 2 billion for the first time.

Operating income decreased by 12% to EUR 94 million in the fourth quarter (-12% at constant currency), resulting in a margin of 17.0% (Q4 2020: 20.6%). The decline was mainly due to inflationary cost increases and adverse COVID-19-related effects. In the full year, operating income grew by 2% to EUR 350 million (+3% at constant currency), resulting in a margin of 17.4% (FY 2020: 18.1%).

Despite a significant headwind from exchange rates and the adverse impact of COVID-19, Latin America revenue increased by 10% to EUR 195 million in the fourth quarter (+17% at constant currency, +20% organic). This was mainly driven by strong organic growth in both the Healthcare Services and Healthcare Products business. In the full year, revenue grew by 3% to EUR 703 million (+16% at constant currency, +15% organic).

Due to the impairment of goodwill and trade names in the Latin America Segment that impacted earnings in the previous year, operating income for the region improved by 99% to EUR -2 million in the fourth quarter (+99% at constant currency), resulting in a margin of -0.8% (Q4 2020: -105.0%). In the full year, operating income increased to EUR 12 million, resulting in a margin of 1.7%.

Patients, clinics and employees

As of December 31, 2021, Fresenius Medical Care treated 345,425 patients in 4,171 dialysis clinics worldwide. At the end of 2021, the Company had 122,909 employees (full-time equivalents) worldwide, compared to 125,364 employees as of December 31, 2020.
 
25th consecutive dividend increase to be proposed

Consistent with Fresenius Medical Care’s commitment to drive shareholder returns while striving for dividend continuity, the Company proposes a dividend of EUR 1.35 per share to the Annual General Meeting in May 2022. This proposal would result in the 25th consecutive dividend increase. The Company believes that the fundamental drivers of its business and growth remain unchanged, despite the unprecedented but temporary effects of the COVID-19 pandemic.

Outlook

Fresenius Medical Care expects revenue and net income to grow at low to mid-single digit percentage rates in FY 2022.⁵ 
These targets are based on the following assumptions:

• COVID-19
  • accumulated excess mortality to impact operating income by EUR 100 million compared to the level of 2021
  • staff shortages are anticipated not to cause significant disruptions in production, distribution and dialysis operations
• Macro-economic inflation and supply chain costs to impact operating income by EUR 50 million
• Labor costs for 2022 are expected to be around EUR 100 million in excess of the 3% base wage inflation assumption
• Any potential further government support is assumed to be applied to manage the unprecedented labor market situation if costs exceed the above labor costs assumption. 
• FME25 savings are expected to contribute EUR 40 to 70 million to operating income 
• Remeasurement effects on the fair value of investments are expected to be volatile but neutral on a full year basis

Based on current projections, Fresenius Medical Care confirms its mid-term targets that are based on the Company’s mid-term strategy. Until 2025 the Company expects compounded annual average increases in the mid-single-digit percentage range for revenue and in the high-single-digit percentage range for net income.⁶ Fresenius Medical Care expects FME25 savings to mitigate the ongoing negative effects of COVID-19.

⁵ These targets are based on the 2021 results excluding the costs related to FME25 of EUR 49 million (for Net Income). They are based on the outlined assumptions, in constant currency and exclude special items. Special items include further costs related to FME25 and other effects that are unusual in nature and have not been foreseeable or not foreseeable in size or impact at the time of giving guidance.

⁶ These targets are in constant currency and exclude special items.

Press conference

Fresenius Medical Care will hold a virtual press conference to discuss the results of the fourth quarter and full year 2021 on February 22, 2022 at 10:00 a.m. CET / 4:00 a.m. ET. The press conference will be webcasted on the Company’s website www.freseniusmedicalcare.com in the “Media” section. A replay will be available shortly after the conference.

Conference call

Fresenius Medical Care will host a conference call to discuss the results of the fourth quarter and full year 2021 on February 22, 2022 at 3:30 p.m. CET / 9:30 a.m. ET. Details will be available on the Fresenius Medical Care website www.freseniusmedicalcare.com in the “Investors” section. A replay will be available shortly after the call.

Please refer to our statement of earnings included at the end of this news and to the attachments as separate PDF files for a complete overview of the results of the fourth quarter and full year 2021. Our 20-F disclosure provides more details.

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Fresenius Medical Care, the world's leading provider of products and services for individuals with renal diseases, commits to become climate neutral by 2040. This applies both to direct and indirect CO2 emissions (Scope 1 and 2) – also in view of the expected future business growth. The company is also continuously assessing its emissions across the entire value chain (Scope 3) to identify further possible targets for reducing emissions. The climate target is in line with the Paris Agreement’s goal to limit global temperature increase to 1.5 °C.

To reduce its impact on the climate, the company has established a plan for the years ahead: By 2030, Fresenius Medical Care aims to reduce its direct and indirect CO2 emissions (Scope 1 and 2) by half as compared to reported emission levels in 2020. An important tool in achieving this will be the transition to renewable electricity. 2025 will be an important milestone, by which Fresenius Medical Care’s entire electricity consumption in the United States and Canada, and 80 percent of its electricity use in the European Union, shall be covered by renewable sources. The focus will be on virtual Power Purchase Agreements (vPPA), which also promote the expansion of renewable energies.

In going toward climate neutrality, Fresenius Medical Care will continually examine possibilities for investing in energy efficiency, the self-generation of electricity and the adaption of new technologies while also taking into account the entire life cycle of products. Also, the purchase of Energy Attribute Certificates (EACs) for renewable power will serve as a transitional measure and for the remaining emissions that cannot otherwise be reduced or covered.

In addition, the company will examine the extent to which greenhouse gas emissions are considered as a criterion for acquisitions, investments as well as Management Board compensation.

Rice Powell, CEO of Fresenius Medical Care, said: “We are at the beginning of our journey toward climate neutrality. In the coming years, we will continuously examine additional ways to reduce emission levels and further expand our plans. Climate change is one of the greatest challenges of our time, and progress in protecting the climate can only be achieved through the cooperation of governments, industry and society. We want to play our part.”

Carbon management is part of Fresenius Medical Care’s sustainability agenda and is closely linked to the company’s strategy for profitable and sustainable growth and long-term success. All business units share in the responsibility for reaching the company’s climate goals. A global, interdisciplinary team including areas such as Sustainability, Environmental Management, Procurement, Manufacturing, Services Business, Quality and Finance will work steadily on the company’s transition toward net-zero emissions.

Fresenius Medical Care North America announced today partnerships with more than 1,000 nephrology providers in the U.S. as part of the new Kidney Care Choices (KCC) models. These partnerships comprise 20 of the 55 approved Kidney Contracting Entities (KCEs) recently announced by the Centers for Medicare and Medicaid Services (CMS). The company will help manage care for more than 50,000 individuals by providing specialized education and support services to slow the progression of kidney disease, increase preemptive transplants, and increase the prevalence of a planned start to life-sustaining treatment. 

In this year's ranking, the non-profit organization CDP has confirmed Fresenius Medical Care' classification. The company was again listed in the second highest categories B in the area climate and B- in the area water. Fresenius Medical Care is thus once again one of the leading companies in the health care sector. Companies in categories A and B are characterized by transparency, coordinated climate protection measures and the implementation of corresponding best-practice approaches. CDP is one of the most renowned climate and environmental rankings in the capital market. More than 590 investors use the annual results to evaluate climate protection activities and climate-related risks and opportunities of the companies assessed.

Fresenius Medical Care, the world's leading provider of products and services for individuals with renal diseases, today announced changes to the Management Board effective on January 1, 2022. They follow a unanimous decision by the Supervisory Board of Fresenius Medical Care Management AG to adapt the composition of the Management Board to the company’s new operating model, which is being launched in 2023.

The new, globally operating Care Delivery segment, in which the company is combining its global healthcare services business, will be led by William Valle (61), currently CEO of Fresenius Medical Care North America. Dr. Katarzyna Mazur-Hofsäß (58), currently CEO of the Europe, Middle East and Africa (EMEA) region, will take over responsibility for the new, globally operating Care Enablement segment, in which Fresenius Medical Care is consolidating its previously decentralized healthcare products business under a global MedTech umbrella. 

Rice Powell (66) will continue to serve as Fresenius Medical Care’s CEO, and the Global Medical Office will continue to be led by Franklin W. Maddux, MD (64). Chief Financial Officer Helen Giza (53) will be taking on the additional role of Chief Transformation Officer.

Harry de Wit (59), CEO for Asia-Pacific, Kent Wanzek (62), CEO for Global Manufacturing, Quality and Supply (GMQS), and Dr. Olaf Schermeier (49), CEO for Global Research and Development, will move from the Fresenius Medical Care Management Board to the Fresenius Medical Care Executive Committee. 

During the transition phase, Harry de Wit will continue leading the business in the Asia-Pacific region and take on additional responsibility for EMEA. Kent Wanzek will continue to have responsibility for GMQS, with a focus on the full transition of its activities into the new Care Enablement organization. Dr. Olaf Schermeier will take over the leadership of the Critical Care business and Fresenius Medical Care Ventures, two of the company’s most important growth areas within the Care Enablement segment. All three will be reporting to Dr. Katarzyna Mazur-Hofsäß. In 2022, the current country organizations will be mapped, and will subsequently be transitioned to the new operating model.

Stephan Sturm, Chairman of the Supervisory Board of Fresenius Medical Care Management AG, said: “The Supervisory Board fully supports the upcoming reorganization as it will strengthen Fresenius Medical Care and lay the foundations for the company’s continued, successful development. Our special thanks and respect go to Harry de Wit, Kent Wanzek and Olaf Schermeier. They have made valuable contributions on the Management Board over the years, and now stand ready to assume responsibility in new roles. On behalf of the Supervisory Board, I wish the entire management team and our employees every success, as we build new and robust organizational structures that will stand the test of time.”

Rice Powell, CEO of Fresenius Medical Care, said: “2022 will be a significant year of transition as we move toward our new operating model as a leaner, and at the same time stronger, basis for executing our growth strategy. I look forward to the continued cooperation with our leadership team and all Fresenius Medical Care colleagues. It is a lot of work to make this work, but I’m sure that with the new operating model and the resulting changes we are setting the course for a successful future for Fresenius Medical Care – for the benefit of all the company’s stakeholders.”

Fresenius Medical Care, the world's leading provider of products and services for individuals with renal diseases, is launching a new dialyzer for hemodialysis, the FX CorAL^®. Focal points of the new dialyzer’s development were clinical performance and hemocompatibility. The FX CorAL is already available in Switzerland and will be gradually introduced in Germany, France, Italy and the United Arab Emirates. Other countries in the company’s Europe, Middle East and Africa region will follow.

Dialysis patients often suffer from chronic inflammation caused by the accumulation of toxic substances and the regular contact of their blood with external substances. These inflammations reduce patients’ quality of life and contribute to the onset of cardiovascular diseases. The core of the new FX CorAL is its new Helixone^® hydro membrane, which forms a special gel-like layer of water on the surface of the inner membrane that reduces protein adsorption while the blood is being cleaned. This is to achieve a lower induction of the immune response in the patient while maintaining high selective permeability for the removal of toxins and excess water.

Dr. Olaf Schermeier, Fresenius Medical Care’s Chief Executive Officer for Global Research & Development, said: “The well-being of our patients is at the heart of everything we do at Fresenius Medical Care. Combining clinical performance with hemocompatibility is a central element of our patient centered dialysis: It was with precisely this goal that we developed the new FX CorAL.”

Dr. Katarzyna Mazur-Hofsäß, Chief Executive Officer for Fresenius Medical Care’s Europe, Middle East and Africa region, said: “We at Fresenius Medical Care are proud that every day we help to improve the lives of people with chronic kidney disease. We work continuously to further improve treatment quality for our patients. The launch of the new FX CorAL dialyzer in the EMEA region is another important step in this direction.”

The FX CorAL is the newest dialyzer in Fresenius Medical Care’s FX class of dialyzers, which use polysulfone, a special plastic with exceptional filtering and hemocompatibility characteristics. The special structure of the dialyzer’s fibers ensures that the dialysis fluid washes evenly around each fiber, improving clearance. A lateral blood inlet port prevents the bloodline from kinking during use, enabling a more homogenous blood flow and making treatment safer. In addition, all FX-class dialyzers are steam-sterilized and, owing to their light material, environmentally friendly. After receiving the CE-mark, the FX CorAL was introduced in Fresenius Medical Care’s NephroCare clinics and has already been used in more than 3 million treatments.

In hemodialysis, the dialyzer acts as an artificial kidney and takes over vital functions of the natural organ. Blood flows through as many as 20,000 extremely fine fibers, known as capillaries, which are clustered in a plastic tube approximately 30 centimeters (12 inches) long. Metabolic toxins and excess water are filtered from the blood through these capillaries, and then flushed out of the body with dialysis fluid. Blood cells and vital proteins, however, remain in the blood. This treatment is usually administered three times a week and lasts three to six hours per treatment.

About 43 percent of all dialyzers sold worldwide come from Fresenius Medical Care’s development and production sites.

Fresenius Medical Care, the world’s leading provider of products and services for people with chronic kidney failure, has been recognized for the 12th time as a sustainability leader, with inclusion in the Dow Jones Sustainability Index. The DJSI Europe is composed of the top 20 percent of the largest 600 European companies listed in the S&P Global BMI, based on the international investment company S&P Global’s analysis of their economic, environmental and social performance. Fresenius Medical Care achieved improvements in most categories and was awarded maximum scores for partnerships toward sustainable healthcare, environmental reporting and social reporting. The company’s scores also rose significantly in the areas of risk management and customer relationship management.

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• Globalization of operating model to leverage expertise, capture growth opportunities and accelerate value creation
• Business operations to be structured in two global operating segments: Care Enablement and Care Delivery
• Reduction of annual cost base of EUR 500 million by 2025 with anticipated one-time investments of around EUR 450-500 million
• First year of net savings expected in 2023 

Fresenius Medical Care continues to execute on its growth strategy 2025 launched in October 2020. The world's leading provider of products and services for individuals with renal diseases today announced the next phase of its transformation program FME25 – the transformation of its operating model – to provide the base for future sustainable growth. With a significantly simplified future structure of two global operating segments – Care Enablement and Care Delivery – Fresenius Medical Care orients its operating model along the relevant future value drivers. With greater cost efficiency and a superior ability to capture additional growth opportunities, the aim of the new, leaner structure is also to mitigate the ongoing negative effects of COVID-19 as well as the challenging macroeconomic environment with inflationary trends. Fresenius Medical Care expects to complete the roll-out of its new global operating model around 2023 and the savings initiative largely completed by 2024. 

Rice Powell, CEO of Fresenius Medical Care, said: “FME25 is about taking our value creation to the next level. Over the past months, we have worked with dedication on our plans for a fundamental transformation of our Company. In this process, I have seen great commitment to making Fresenius Medical Care more agile, leverage expertise, accelerate innovation and further optimize capital allocation. Helen Giza, our CFO, will also assume the role of Chief Transformation Officer and lead the global efforts on FME25. While FME25 will change the way we operate in the future, our new global operating model is deeply grounded in our longstanding vision to improve the quality of outcomes for our patients. I am convinced that we will be able to live up to this joint purpose even better in our new structure and at the same time further strengthen our long-term profitable growth.”

Globalization of Operating Segments and support functions
The new simplified operating model is the continuation of the plan to globalize and simplify as a part of the implementation of the 2025 growth strategy. It is designed to further leverage the advantages of the Company’s vertical integration, to better capture identified growth opportunities, leverage expertise to accelerate value creation, enhance capital allocation, increase transparency both internally and externally, reduce administrative burden as it relates to cost and speed, and to advance a culture of agility, innovation and accountability. 
In the new model the Company will manage its business in two global operating segments, adopting a more centralized approach:

In Care Enablement, Fresenius Medical Care is consolidating its previously decentralized healthcare products business including research and development, manufacturing, supply chain and commercial operations as well as supporting functions, such as regulatory and quality management under a global MedTech umbrella. The products business will be organized along the three treatment modalities that the Company is serving: In-center, Home and Critical Care. This structure has the benefit of reduced organizational complexity and in turn increased accountability and agility in decision making and bringing innovative products to market. Pro-forma, Care Enablement represents around 20% of the Company´s financial year 2020 revenues. 

Fresenius Medical Care’s global healthcare services business will be combined in the Care Delivery segment. In doing so, Fresenius Medical Care aims to leverage its scale, capabilities, technologies and best practices globally and its world-leading expertise in the field of value-based care to address new patient groups in the U.S. and in other geographies. The new globalized structure enables a strategic review of all services markets and an enhancement of the cost structure to deliver on the Company´s sustainable profitable growth aspirations. Pro-forma, Care Delivery represents around 80% of the Company´s financial year 2020 revenues.

The Global Medical Office continues to leverage the vertically integrated approach to achieve the best clinical outcomes for our patients, their families and the payor community by evaluating coordinated data from clinical science research and medical practice on a global basis to improve treatment outcomes.

The new global operating model will enable the further consolidation of General and Administrative functions. A three pillars model of business partnering, centers of excellence and global shared services will be applied. This will allow for reduction of organizational complexity and streamlining processes while driving efficiency via digitalization and standardization. While the globalization of Finance, IT and Procurement is already underway, the Company will apply the same model to Human Resources, Legal and Compliance, which are currently regionalized. 

Sustainable cost reduction by EUR 500 million
Based on the implementation of the new global operating model, Fresenius Medical Care assumes to reduce its annual cost base by EUR 500 million by the end of 2025. 

Helen Giza, CFO and CTO of Fresenius Medical Care, said: “We are excited about the identified value creation opportunity for the Company. Due to the extensive work and progress over the last months, we already have clear line of sight into EUR 400-450 million with further initiatives under review.” 

Around 50% of these savings are expected to be realized by 2023. By the end of 2023 around 80% of the anticipated one-time investments in FME25, amounting to approximately EUR 450-500 million, are expected to be made. The investments will be treated as a special item. The Company thus expects to reach positive net savings by the end of 2023.

Fresenius Medical Care anticipates reducing up to 5,000 full-time equivalents worldwide as part of the FME25 program. The Company is committed to implementing necessary changes in a socially responsible way, and to following applicable consultation procedures with works councils and other workplace representative bodies in good faith. 

Conference call
Fresenius Medical Care will host a two hours conference call to discuss the results of the third quarter and first nine months of 2021 on November 2, 2021 at 3:30 p.m. CET / 10:30 a.m. EDT. Please note that this will be an extended call, as the Company will additionally provide an update on the FME25 transformation program. Details will be available on the Fresenius Medical Care website www.freseniusmedicalcare.com in the “Investors” section. A replay will be available shortly after the call.