Fresenius Medical Care reports strong operating income margin growth in the third quarter of 2024
Fresenius Medical Care reported strong Q3 2024 results with organic revenue growth of 2%. The company achieved operating income of EUR 463 million, up 43% year-over-year, with margin increasing to 9.7%. Key highlights include positive underlying U.S. dialysis treatment volume growth, EUR 64 million in additional FME25 savings, and improved net leverage ratio of 2.8x. The company tightened its FY 2024 operating income growth outlook to 16-18%, toward the upper end of previous guidance. Care Delivery margin extended into 2025 target band while Care Enablement maintained significant margin progress.
Fresenius Medical Care ha riportato risultati solidi per il terzo trimestre del 2024, con una crescita organica dei ricavi del 2%. L'azienda ha raggiunto un reddito operativo di 463 milioni di euro, in aumento del 43% rispetto all'anno precedente, con un margine che è salito al 9,7%. Tra i punti salienti ci sono la crescita positiva del volume di trattamenti di dialisi negli Stati Uniti, 64 milioni di euro di risparmi aggiuntivi da FME25, e un miglioramento del rapporto di leva finanziaria netto, pari a 2,8x. L'azienda ha ristretto le previsioni di crescita del reddito operativo per l'intero anno 2024 tra il 16% e il 18%, spostandosi verso l'estremità superiore delle indicazioni precedenti. Il margine di Care Delivery si estende nella fascia obiettivo del 2025, mentre Care Enablement ha mantenuto un progresso significativo del margine.
Fresenius Medical Care reportó resultados sólidos para el tercer trimestre de 2024, con un crecimiento orgánico de ingresos del 2%. La compañía logró un ingreso operativo de 463 millones de euros, un aumento del 43% interanual, con un margen que subió al 9,7%. Los aspectos destacados incluyen un crecimiento positivo en el volumen de tratamientos de diálisis en EE. UU., 64 millones de euros en ahorros adicionales de FME25 y una mejora en el ratio de apalancamiento neto de 2.8x. La compañía ajustó su perspectiva de crecimiento del ingreso operativo para el año fiscal 2024 a un 16-18%, acercándose al extremo superior de las previsiones anteriores. El margen de Care Delivery se amplía en la banda objetivo de 2025, mientras que Care Enablement ha mantenido un progreso significativo en el margen.
프레제니어스 메디컬 케어는 2024년 3분기 강력한 실적을 발표했으며, 유기적 수익 성장률은 2%에 달합니다. 회사는 4억 6300만 유로의 운영 수익을 달성했으며, 이는 전년 대비 43% 증가한 수치로, 마진은 9.7%로 증가했습니다. 주요 하이라이트로는 미국의 투석 치료량 성장, 6400만 유로의 추가 FME25 절감, 2.8배의 개선된 순 레버리지 비율이 있습니다. 회사는 2024 회계연도 운영 수익 성장 전망을 16-18%로 좁혔으며, 이는 이전 안내의 상단에 가까운 수치입니다. Care Delivery 마진은 2025년 목표 범위로 확장되었고, Care Enablement는 상당한 마진 개선을 유지하고 있습니다.
Fresenius Medical Care a annoncé de solides résultats pour le troisième trimestre de 2024, avec une croissance organique des revenus de 2%. La société a réalisé un revenu opérationnel de 463 millions d'euros, en hausse de 43% par rapport à l'année précédente, avec une marge augmentée à 9,7%. Les points forts incluent une croissance positive du volume des traitements de dialyse aux États-Unis, 64 millions d'euros d'économies supplémentaires issues de FME25, et un ratio d'endettement net amélioré de 2,8x. La société a resserré ses prévisions de croissance du revenu opérationnel pour l'exercice 2024 à 16-18%, se dirigeant vers l'extrémité supérieure des recommandations précédentes. La marge de Care Delivery s'étend dans la bande cible de 2025, tandis que Care Enablement a maintenu des progrès significatifs en matière de marge.
Fresenius Medical Care hat starke Ergebnisse für das dritte Quartal 2024 berichtet, mit einem organischen Umsatzwachstum von 2%. Das Unternehmen erzielte ein Betriebsgewinn von 463 Millionen Euro, was einem Anstieg von 43% gegenüber dem Vorjahr entspricht, wobei die Marge auf 9,7% angestiegen ist. Zu den wichtigsten Punkten gehören das positive Wachstum des Dialysebehandlungsvolumens in den USA, 64 Millionen Euro an zusätzlichen Einsparungen durch FME25 und ein verbesserter Nettoverschuldungsgrad von 2,8x. Das Unternehmen hat seinen Ausblick für das Wachstum des Betriebsgewinns für das Geschäftsjahr 2024 auf 16-18% eingeengt, wobei der obere Bereich der bisherigen Prognose angestrebt wird. Die Marge von Care Delivery erstreckt sich in die Zielspanne von 2025, während Care Enablement erhebliche Fortschritte bei der Marge verzeichnet hat.
- Operating income increased 43% to EUR 463 million with margin expanding to 9.7%
- FME25 program delivered EUR 64 million additional savings in Q3
- Operating cash flow improved 30% to EUR 985 million
- Net leverage ratio improved to 2.8x, below target corridor
- U.S. same market treatment growth turned positive (+0.2%)
- Care Enablement revenue grew 2% with positive pricing momentum outside China
- Total revenue decreased 4% to EUR 4,760 million
- Care Delivery International revenue declined 22%
- Negative impact from volume-based procurement in China
- Corporate operating income declined due to negative virtual power purchase agreements effects (-EUR 24 million)
Insights
Fresenius Medical Care delivered strong Q3 2024 results with notable improvements in key metrics. Operating income surged 43% to
The company's deleveraging efforts are paying off, with the net leverage ratio improving to 2.8x, below their target range. Revenue challenges from divestitures were offset by organic growth of
Particularly encouraging is the return to positive growth in U.S. dialysis treatment volumes, a important metric for long-term sustainability. The Care Delivery segment's margin of
- Organic revenue growth of +
2% supported by Care Enablement and Care Delivery - Underlying
U.S. dialysis treatment volume growth turns positive - Exceeding full year FME25 savings target, with additional
EUR 64 million contribution in Q3 - Both segments further increased operating income1 and operating income margin1
- Net financial leverage ratio further improved to 2.8x
- FY 2024 operating income1 growth outlook with 16
-18% tightened toward the upper end of the previous range
BAD HOMBURG,
Key figures (unaudited) | ||||||||
Q3 2024 | Q3 2023 | Growth | Growth | 9M 2024 | 9M 2023 | Growth | Growth | |
EUR m | EUR m | yoy | yoy, cc | EUR m | EUR m | yoy | yoy, cc | |
Revenue | 4,760 | 4,936 | -4 % | -2 % | 14,251 | 14,466 | -1 % | -1 % |
on outlook base1 | 4,820 | 4,855 | -1 % | 14,385 | 14,215 | +1 % | ||
Operating income | 463 | 324 | +43 % | +43 % | 1,133 | 942 | +20 % | +21 % |
on outlook base1 | 474 | 430 | +10 % | 1,323 | 1,167 | +13 % | ||
Net income2 | 213 | 84 | +153 % | +155 % | 471 | 311 | +51 % | +53 % |
on outlook base1 | 242 | 168 | +44 % | 646 | 490 | +32 % | ||
Basic EPS (EUR) | 0.73 | 0.29 | +153 % | +155 % | 1.61 | 1.06 | +51 % | +53 % |
on outlook base1 | 0.82 | 0.57 | +44 % | 2.20 | 1.67 | +32 % | ||
yoy = year-on-year, cc = at constant currency, EPS = earnings per share |
Significant progress in the execution against the strategic plan
In the third quarter, the FME25 transformation program accelerated its momentum, delivering
Fresenius Medical Care continues the execution of its portfolio optimization plan to exit non-core and dilutive assets. During the third quarter, closed divestments included clinic operations in
All transactions that are currently signed as part of Fresenius Medical Care's portfolio optimization plan are estimated to negatively impact operating income by around
Revenue development affected by divestments resulting from execution of the portfolio optimization
Revenue decreased by
Care Delivery revenue decreased by
In Care Delivery
In Care Delivery International, revenue decreased by
Care Enablement revenue grew by
Within Inter-segment eliminations, revenue for products transferred between the operating segments at fair market value remained unchanged with a deduction of
In the first nine months, revenue decreased by
Strong operating income growth supported by both segments
Operating income increased by
Operating income in Care Delivery increased by
Operating income in Care Enablement significantly increased to
Operating income for Corporate amounted to
In the first nine months, operating income increased by
Net income2 strongly increased by
In the first nine months, net income2 increased by
Basic earnings per share (EPS) increased by
In the first nine months, EPS increased by
Lower net financial debt and further improved net leverage ratio
In the third quarter, Fresenius Medical Care improved operating cash flow by
In the first nine months, operating cashflow amounted to
Free cash flow4 increased by
Total net debt and lease liabilities were further reduced to
Outlook
Fresenius Medical Care confirms its outlook for fiscal 2024 and expects revenue to grow by a low- to mid-single digit percent rate compared to prior year. Due to the developments in the first nine months, the company now expects operating income to grow by 16 to 18 percent compared to prior year. Before, the company expected operating income to grow by a mid- to high-teens percent rate compared to prior year.
The expected growth rates for 2024 are at constant currency, excluding special items as well as the business impacts from closed divestitures in 2023 and the settlement agreement with the
The company also reconfirms its targets to achieve an operating income margin of
Patients, clinics and employees
As of September 30, 2024, Fresenius Medical Care treated 308,216 patients in 3,732 dialysis clinics worldwide and had 113,079 employees (headcount) globally, compared to 113,639 employees as of June 30, 2024.
Investor conference call
Fresenius Medical Care will host a conference call to discuss the results of the third quarter today, November 5, 2024, at 2:00 p.m. CET / 8:00 a.m. ET. Details are available on the Fresenius Medical Care website in the "Investors" section. A replay will be available shortly after the call.
Please refer to our statement of earnings included at the end of this news and to the attachments as separate PDF files for a complete overview of the results of the third quarter and first nine months of 2024. Our 6-K disclosure provides more details.
About Fresenius Medical Care:
Fresenius Medical Care is the world's leading provider of products and services for individuals with renal diseases of which around 4.1 million patients worldwide regularly undergo dialysis treatment. Through its network of 3,732 dialysis clinics, Fresenius Medical Care provides dialysis treatments for approx. 308,000 patients around the globe. Fresenius Medical Care is also the leading provider of dialysis products such as dialysis machines or dialyzers. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME) and on the New York Stock Exchange (FMS).
For more information visit the company's website at www.freseniusmedicalcare.com.
Disclaimer:
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to various factors, including, but not limited to, changes in business, economic and competitive conditions, legal changes, regulatory approvals, impacts related to the COVID-19 pandemic results of clinical studies, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care's reports filed with the
____________________ |
1 Revenue and operating income outlook, as referred to in the 2024 outlook, are both at constant currency, excluding special items as well as the business impact from closed divestitures in 2023 and the settlement agreement with the |
2 Net income attributable to shareholders of Fresenius Medical Care AG |
3 The company transfers products between segments at fair market value. The associated internal revenues and expenses and all other consolidation of transactions are included within "Inter-segment eliminations". |
4 Net cash provided by / used in operating activities, after capital expenditures, before acquisitions/divestitures, investments, and dividends |
Statement of earnings | ||||
Three months ended September 30, | ||||
in € million, except share data, unaudited | 2024 | 2023 | Change | Change |
Revenue | 4,760 | 4,936 | -3.6 % | -2.4 % |
Revenue (outlook base)1 | 4,820 | 4,855 | -0.7 % | |
Costs of revenue | 3,614 | 3,707 | -2.5 % | -1.3 % |
Selling, general and administrative expense | 756 | 794 | -4.7 % | -3.7 % |
Research and development expense | 40 | 53 | -24.5 % | -24.2 % |
Income from equity method investees | (41) | (23) | 82.2 % | 82.2 % |
Other operating income | (191) | (65) | 195.7 % | 197.5 % |
Other operating expense | 119 | 146 | -17.7 % | -13.2 % |
Operating income | 463 | 324 | 42.7 % | 42.8 % |
Operating income (outlook base)1 | 474 | 430 | 10.3 % | |
Interest expense, net | 82 | 89 | -7.4 % | -7.2 % |
Income before taxes | 381 | 235 | 61.6 % | 61.7 % |
Income tax expense | 117 | 88 | 31.8 % | 29.0 % |
Net income | 264 | 147 | 79.5 % | 81.3 % |
Net income attributable to noncontrolling interests | 51 | 63 | -18.7 % | -17.6 % |
Net income2 | 213 | 84 | 152.5 % | 154.9 % |
Net income2 (outlook base)1 | 242 | 168 | 43.8 % | |
Weighted average number of shares | 293,413,449 | 293,413,449 | ||
Basic earnings per share | 152.5 % | 154.9 % | ||
Basic earnings per share (outlook base)1 | 43.8 % | |||
In percent of revenue | ||||
Operating income margin | 9.7 % | 6.6 % | ||
Operating income margin (outlook base)1 | 9.8 % | 8.9 % | ||
1 Outlook base as referred to the 2024 outlook, presented at constant currency, excluding special items, business impacts from closed divestitures in 2023 and the Tricare settlement in Q4 2023. For a reconciliation, please refer to the table at the end of the press release. | ||||
2 Attributable to shareholders of FME AG. | ||||
Statement of earnings | ||||
Nine months ended September 30, | ||||
in € million, except share data, unaudited | 2024 | 2023 | Change | Change |
Revenue | 14,251 | 14,466 | -1.5 % | -0.6 % |
Revenue (outlook base)1 | 14,385 | 14,215 | 1.2 % | |
Costs of revenue | 10,765 | 10,890 | -1.2 % | -0.2 % |
Selling, general and administrative expense | 2,303 | 2,351 | -2.0 % | -1.4 % |
Research and development expense | 133 | 166 | -19.6 % | -19.5 % |
Income from equity method investees | (103) | (98) | 4.4 % | 4.4 % |
Other operating income | (532) | (258) | 106.5 % | 106.8 % |
Other operating expense | 552 | 473 | 16.6 % | 18.4 % |
Operating income | 1,133 | 942 | 20.4 % | 21.3 % |
Operating income (outlook base)1 | 1,323 | 1,167 | 13.3 % | |
Interest expense, net | 256 | 252 | 1.5 % | 1.9 % |
Income before taxes | 877 | 690 | 27.2 % | 28.4 % |
Income tax expense | 255 | 214 | 19.1 % | 20.4 % |
Net income | 622 | 476 | 30.9 % | 32.0 % |
Net income attributable to noncontrolling interests | 151 | 165 | -7.9 % | -7.4 % |
Net income2 | 471 | 311 | 51.4 % | 52.8 % |
Net income2 (outlook base)1 | 646 | 490 | 31.8 % | |
Weighted average number of shares | 293,413,449 | 293,413,449 | ||
Basic earnings per share | 51.4 % | 52.8 % | ||
Basic earnings per share (outlook base)1 | 31.8 % | |||
In percent of revenue | ||||
Operating income margin | 8.0 % | 6.5 % | ||
Operating income margin (outlook base)1 | 9.2 % | 8.2 % | ||
1 Outlook base as referred to the 2024 outlook, presented at constant currency, excluding special items, business impacts from closed divestitures in 2023 and the Tricare settlement in Q4 2023. For a reconciliation, please refer to the table at the end of the press release. | ||||
2 Attributable to shareholders of FME AG. | ||||
Reconciliation of non-IFRS financial measures to the most directly comparable IFRS Accounting | ||||
Three months ended | Nine months ended | |||
in € million, unaudited | 2024 | 2023 | 2024 | 2023 |
Operating performance (outlook base) | ||||
These items are excluded to ensure comparability of the figures | ||||
Revenue | 4,760 | 4,936 | 14,251 | 14,466 |
Divestitures1 | — | (81) | — | (251) |
Revenue excl. 2023 divestitures | 4,760 | 4,855 | 14,251 | 14,215 |
Currency translation effects | 60 | — | 134 | — |
Revenue (outlook base) | 4,820 | 4,855 | 14,385 | 14,215 |
Operating income | 463 | 324 | 1,133 | 942 |
FME25 Program | 39 | 49 | 107 | 100 |
Legal Form Conversion Costs | 2 | 6 | 5 | 13 |
Legacy Portfolio Optimization2 | (17) | 53 | 141 | 147 |
Humacyte Remeasurements | (18) | (1) | (79) | (16) |
Sum of special items | 6 | 107 | 174 | 244 |
Divestitures1 | — | (1) | — | (19) |
Sum of special items and 2023 divestitures | 6 | 106 | 174 | 225 |
Operating income excl. special items and 2023 divestitures | 469 | 430 | 1,307 | 1,167 |
Currency translation effects | 5 | — | 16 | — |
Operating income (outlook base) | 474 | 430 | 1,323 | 1,167 |
Net income3 | 213 | 84 | 471 | 311 |
FME25 Program | 28 | 31 | 77 | 71 |
Legal Form Conversion Costs | 1 | 4 | 4 | 9 |
Legacy Portfolio Optimization2 | 8 | 50 | 144 | 118 |
Humacyte Remeasurements | (13) | (1) | (59) | (12) |
Sum of special items | 24 | 84 | 166 | 186 |
Divestitures1 | — | 0 | — | (7) |
Sum of special items and 2023 divestitures | 24 | 84 | 166 | 179 |
Net income3 excl. special items and 2023 divestitures | 237 | 168 | 637 | 490 |
Currency translation effects | 5 | — | 9 | — |
Net income3 (outlook base) | 242 | 168 | 646 | 490 |
1 Business impacts from closed divestitures in 2023. | ||||
2 2024: mainly comprise the impairment of goodwill and intangible assets and tangible assets resulting from the measurement of assets held for sale as well as gains and losses from divestitures; 2023: mainly comprise the derecognition of capitalized development costs and the impairment of intangible assets (licenses and distribution rights) as well as termination costs (including certain contractual obligation expenses) related to a dialysis cycler development program which was discontinued in the first quarter of 2023 and other impacts related to agreed-upon divestitures in 2023. | ||||
3 Attributable to shareholders of FME AG. | ||||
Media contact
Christine Peters
T +49 160 60 66 770
christine.peters@freseniusmedicalcare.com
Contact for analysts and investors
Dr. Dominik Heger
T +49 6172 609-2601
dominik.heger@freseniusmedicalcare.com
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SOURCE Fresenius Medical Care Holdings, Inc.
FAQ
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