Fresenius Medical Care starts 2025 with strong organic revenue and income growth

PR Newswire

BAD HOMBURG, Germany, May 6, 2025

   -- Strong organic revenue growth1 of 5% driven by Care Enablement and Care 
      Delivery 
 
   -- Stable U.S. same market treatment development despite impact from a 
      severe flu season 
 
   -- FME25 savings of EUR 68 million contributed to earnings 
 
   -- Operating income2 grew 11% at constant currency resulting in margin 
      expansion 
 
   -- Reported operating income grew by 35% and reported net income3 by 113% 
 
   -- Net leverage ratio further improved to 2.8x and FY 2025 outlook confirmed 

BAD HOMBURG, Germany, May 6, 2025 /PRNewswire/ -- "The results of the first quarter of 2025 once again demonstrate our continuous operational and financial progress as we are executing the third and last year of our current strategic plan," said Helen Giza, Chief Executive Officer of Fresenius Medical Care. "Revenue of both segments grew organically, and the phasing of the operating income development was in-line with our expectations. Care Enablement executed strongly against its transformation plan and further expanded its operating income margin, reaching its target margin band for the first time. Care Delivery maintained prior year's margin level despite one dialysis day less and the negative impact from a severe flu season. Continuing last year's positive momentum, patient referrals further increased. We therefore expect accelerating same market treatment growth in the U.S. to above 0.5% for the full year, after a stable development in Q1. We also continue to expect operational and financial improvements in both segments during the year, translating into significant earnings and margin growth. We therefore confirm our financial outlook for the full year 2025."

Key figures Q1 2025 (unaudited)

 
                                       Q1 2025    Q1 2024   Growth      Growth 
                                         EUR m      EUR m      yoy     yoy, cc 
-----------------------------------  ---------  ---------  -------  ---------- 
Revenue                                  4,881      4,725      3 %         1 % 
-----------------------------------  ---------  ---------  -------  ---------- 
Operating income                           331        246     35 %        32 % 
excl. special items(2)                     457        403     13 %        11 % 
-----------------------------------  ---------  ---------  -------  ---------- 
Net income(3)                              151         71    113 %       109 % 
excl. special items(2)                     246        188     31 %        29 % 
-----------------------------------  ---------  ---------  -------  ---------- 
Basic EPS $(EUR.AU)$                           0.52       0.24    113 %       109 % 
excl. special items(2) (EUR)              0.84       0.64     31 %        29 % 
-----------------------------------  ---------  ---------  -------  ---------- 
yoy = year-on-year, cc = at constant currency, EPS = earnings per share 
 

Execution momentum underpins a good start to fiscal 2025

Fresenius Medical Care, the world's leading provider of products and services for individuals with renal disease, has made a good start to the third year of its strategic plan. During the first quarter, the FME25 transformation program continued its positive momentum, delivering EUR 68 million additional sustainable savings while related one-time costs, treated as special items, amounted to EUR 28 million. The Company confirms its full year target of around EUR 180 million additional annual savings, totaling to EUR 750 million by year end 2025.

Fresenius Medical Care continues the execution of its portfolio optimization plan to exit non-core and margin-dilutive assets. Announced divestments include select assets of Spectra Laboratories, our U.S. laboratory testing services business, as well as our clinic operations in Malaysia. Special items associated with portfolio optimization amounted to negative EUR 24 million in the first quarter.

All transactions that were realized as part of the Company's portfolio optimization plan in 2024 are estimated to negatively impact full year 2025 Group revenue growth by around one percent. Related cost will be treated as special items in operating income.

Strong organic revenue growth(1) in both segments

In the first quarter 2025, Group revenue increased by 3% (+1% at constant currency, +5% organic(1) ) to EUR 4,881 million. Divestitures realized as part of the portfolio optimization plan affected the revenue development by -260 basis points.

Care Delivery revenue increased by 2% (-1% at constant currency, +4% organic(1) ) to EUR 3,857 million. Divestitures realized as part of the portfolio optimization plan affected the revenue development by -370 basis points.

In Care Delivery U.S., revenue increased by 6% (+3% at constant currency, +4% organic(1) ) to EUR 3,302 million. A growing value-based care business, reimbursement rate increases, and a favorable payor mix as well as exchange rate effects had a positive impact, compensating a decrease in dialysis days. A severe flu season in the U.S. drove elevated missed treatments. U.S. same market treatment growth came in flat year-on-year.

In Care Delivery International, revenue declined by 19% (-19% at constant currency, +5% organic(1) ) to EUR 555 million. The effect of closed or sold operations, mainly related to Legacy Portfolio Optimization, as well as a decrease in dialysis days were partially offset by organic growth(1) . Same market treatment growth accelerated to 2.5%.

Care Enablement revenue grew by 5% (+5% at constant currency, +5% organic(1) ) to EUR 1,367 million, mainly driven by volume growth in all our geographical regions and continued positive pricing momentum. Volume-based procurement in China developed in line with expectations and was supportive of volume growth, yet a headwind to price development.

Within Inter-segment eliminations(4) , revenue for products transferred between the operating segments at fair market value came in 5% below prior year at negative EUR 343 million (-7% at constant currency).

Significant operating income growth

Operating income significantly increased by 35% (+32% at constant currency) to EUR 331 million, resulting in a margin of 6.8% (Q1 2024: 5.2%). Operating income excluding special items increased by 13% (+11% at constant currency) to EUR 457 million, resulting in a margin(2) of 9.4% (Q1 2024: 8.5%).

Operating income in Care Delivery increased by 71% (+64% at constant currency), resulting in a margin of 8.4% (Q1 2024: 5.0%). Operating income excluding special items increased by 4% (flat at constant currency), resulting in a margin(2) of 9.3% (Q1 2024: 9.2%). Compared to previous year, operating income development was driven by the impact from phosphate binders, positive price effects and savings associated with the FME25 program. The development was negatively impacted by higher personnel expenses, that developed in line with expectations, less positive contribution from the value-based care business, a negative impact from treatment volumes as well as inflationary cost increases.

Operating income in Care Enablement increased by 34% (+33% at constant currency), resulting in a margin of 6.9% (Q1 2024: 5.4%). Operating income excluding special items increased by 50% (+49% at constant currency), resulting in a margin(2) of 8.3% (Q1 2024: 5.9%). The improvement compared to the previous year's quarter was mainly driven by savings from the FME25 program and globally positive volume and pricing developments. These positive effects were partially offset by inflationary cost increases that developed in line with expectations.

Operating income for Corporate amounted to EUR -81 million (Q1 2024: EUR -14 million). Humacyte remeasurements, that are treated as special items in the Corporate line, amounted to EUR -67 million and virtual power purchase agreements contributed EUR 3 million. Operating income excluding special items amounted to EUR -12 million (Q1 2024: EUR -18 million).

Net income(3) more than doubled (+113%) to EUR 151 million (+109% at constant currency). Net income excluding special items increased by 31% (+29% at constant currency) to EUR 246 million.

Basic earnings per share (EPS) more than doubled (+113%) to EUR 0.52 (+109% at constant currency). EPS excluding special items increased by 31% (+29% at constant currency) to EUR 0.84.

Continued strong cash flow development and further improved net leverage ratio

In the first quarter, Fresenius Medical Care improved operating cash flow by 28% to EUR 163 million (Q1 2024: EUR 127 million), resulting in a margin of 3.3% (Q1 2024: 2.7%). The operating cash flow development was driven by the seasonality of invoicing, in line with expectations.

Free cash flow(5) increased to EUR 21 million in the first quarter (Q1 2024: EUR -2 million).

Total net debt and lease liabilities were further reduced to EUR 9,753 million (Q4 2024: EUR 9,803 million). The net leverage ratio (net debt/EBITDA) slightly improved from 2.9x in Q4 2024 to 2.8x in Q1 2025.

Patients, clinics and employees

As of March 31, 2025, Fresenius Medical Care treated 299,358 patients in 3,674 dialysis clinics worldwide and had 112,035 employees (headcount) globally, compared to 111,513 employees as of December 31, 2024.

Outlook 2025 confirmed

Fresenius Medical Care confirms its outlook for fiscal 2025 and expects revenue growth to be positive to a low-single digit percent rate compared to prior year. The Company expects operating income excluding special items to grow by a high-teens to high-twenties percent rate compared to prior year.

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