EX-99.2 3 tm249581d2_ex99-2.htm EXHIBIT 99.2

 

Exhibit 99.2

 

 

 

Fresenius Medical Care AG

 

COMPLETE OVERVIEW OF THE FIRST QUARTER 2024

 

May 7, 2024

 

 

Investor Relations

phone: +49 6172 609 2525

email: ir@freseniusmedicalcare.com

 

Content:  
   
Statement of earnings page 2
Segment information page 3
Balance sheet page 4
Cash flow page 5
Revenue development by segment page 6
Key metrics page 7
Reconciliation results (outlook base) page 8
Outlook 2024 page 9

 

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 COVID-19, 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 AG’s reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG does not undertake any responsibility to update the forward-looking statements in this release.

 

Rounding adjustments applied to individual numbers and percentages may result in these figures differing immaterially from their absolute values. Furthermore, totals and subtotals in tables may differ slightly from unrounded figures due to rounding in accordance with commercial rounding conventions.

 

Copyright by Fresenius Medical Care AG

 

 

 

 

 

 

Statement of earnings

 

in € million, except share data, unaudited  Three months ended March 31, 
   2024   2023   Change   Change
at cc		 
Total revenue   4,725    4,704    0.4%   2.5%
Total revenue (outlook base) 1   4,822    4,619         4.4%
                     
Costs of revenue   3,551    3,555    -0.1%   1.9%
Selling, general and administrative expense   776    782    -0.8%   0.7%
Research and development expense   48    56    -14.3%   -13.9%
Income from equity method investees   (29)   (28)   4.8%   4.8%
Other operating income   (113)   (117)   -3.4%   -3.9%
Other operating expense   246    195    26.2%   30.5%
Operating income   246    261    -5.7%   -4.4%
Operating income (outlook base) 1   416    338         23.0%
                     
Interest income   (16)   (12)   29.6%   37.0%
Interest expense   104    95    9.7%   12.6%
Interest expense, net   88    83    6.8%   9.1%
Income before income taxes   158    178    -11.5%   -10.6%
Income tax expense   40    45    -11.2%   -10.8%
Net income   118    133    -11.6%   -10.6%
Net income attributable to noncontrolling interests   47    47    -0.3%   0.9%
Net income attributable to shareholders of FME AG   71    86    -17.8%   -16.9%
Net income attributable to shareholders of FME AG (outlook base) 1   198    146           
                     
Weighted average number of shares   293,413,449    293,413,449         35.3%
                     
Basic earnings per share  €0.24   €0.29    -17.8%   -16.9%
Basic earnings per ADS  €0.12   €0.15    -17.8%   -16.9%
                     
Operating income   246    261    -5.7%   -4.4%
Depreciation, amortization and impairment loss   512    438    17.0%   20.7%
EBITDA   758    699    8.5%   11.3%
                     
In percent of revenue                    
Operating income margin   5.2%   5.5%          
Operating income margin (outlook base) 1   8.6%   7.3%          
EBITDA margin   16.1%   14.9%          

 

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 on page 8.

 

Statement of earningspage 2 of 9May 7, 2024

 

 

 

 

Segment information

 

unaudited  Three months ended March 31, 
   2024   2023   Change   Change
at cc		 
Total                    
Revenue in € million   4,725    4,704    0.4%   2.5%
Revenue in € million (outlook base) 1   4,822    4,619         4.4%
Operating income in € million   246    261    -5.7%   -4.4%
Operating income in € million (outlook base) 1   416    338         23.0%
Operating income margin   5.2%   5.5%          
Operating income margin (outlook base) 1   8.6%   7.3%          
                     
Days sales outstanding (DSO) 2   76    76           
Employees (headcount)   117,128    125,231           
                     
Care Delivery segment                    
Revenue in € million   3,788    3,756    0.9%   2.7%
Revenue in € million (outlook base) 1   3,859    3,669         5.2%
Operating income in € million   189    284    -33.7%   -33.6%
Operating income in € million (outlook base) 1   357    287         24.5%
Operating income margin   5.0%   7.6%          
Operating income margin (outlook base) 1   9.3%   7.8%          
                     
Days sales outstanding (DSO) 2   71    71           
                     
Care Enablement segment                    
Revenue in € million   1,297    1,311    -1.0%   1.5%
Revenue in € million (outlook base) 1   1,330    1,303         2.1%
Operating income in € million   70    (24)   n.a.    n.a. 
Operating income in € million (outlook base) 1   80    65         22.7%
Operating income margin   5.4%   -1.9%          
Operating income margin (outlook base) 1   6.0%   5.0%          
                     
Days sales outstanding (DSO) 2   92    92           
                     
Inter-segment eliminations 3                    
Revenue in € million   (360)   (363)   -0.3%   1.4%
Revenue in € million (outlook base) 1   (367)   (353)        3.9%
Operating income in € million   1    (9)   n.a.    n.a. 
Operating income in € million (outlook base) 1   (2)   (9)        -73.5%
                     
Corporate                    
Operating income in € million   (14)   10    n.a.    n.a. 
Operating income in € million (outlook base) 1   (19)   (5)        271.9%

 

1Outlook 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 on page 8. 

2Includes receivables related to assets held for sale.

3The 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”.

 

cc = constant currency. Changes in revenue, operating income and net income attributable to shareholders of FME AG include the impact of changes in foreign currency exchange rates. We calculate and present these financial measures using both IFRS Accounting Standards and at constant exchange rates to show changes in these metrics and other items without giving effect to period-to-period currency fluctuations. Under IFRS Accounting Standards, amounts received in local (non-euro) currency are translated into euro at the average exchange rate for the period presented. Once we translate the local currency for the constant currency, we then calculate the change, as a percentage, of the current period using the prior period exchange rates versus the prior period. The single quarter results are calculated as the variance between the current year-to-date results less the preceding quarter’s year-to-date which makes the single quarter subject to further foreign exchange fluctuation. This resulting percentage is a non-IFRS measure referring to a change as a percentage at constant currency. These currency-adjusted financial measures are identifiable by the designated term "Constant Currency".

 

Segment informationpage 3 of 9May 7, 2024

 

 

 

 

Balance sheet

 

in € million, except for net leverage ratio, unaudited  March 31,   December 31, 
   2024   2023 
Assets          
Cash and cash equivalents   1,148    1,403 
Trade accounts and other receivables from unrelated parties   4,000    3,471 
Inventories   2,216    2,179 
Other current assets   1,919    1,648 
Goodwill and intangible assets   16,036    16,012 
Right-of-use assets   3,634    3,671 
Other non-current assets   5,383    5,546 
Total assets   34,336    33,930 
           
Liabilities and equity          
Accounts payable to unrelated parties   725    762 
Other current liabilities   5,479    5,350 
Non-current liabilities   13,000    12,991 
Total equity   15,132    14,827 
Total liabilities and equity   34,336    33,930 
           
Equity/assets ratio   44%   44%
           
Debt and lease liabilities          
Short-term debt from unrelated parties   109    457 
Current portion of long-term debt   796    487 
Current portion of lease liabilities from unrelated parties   592    593 
Current portion of lease liabilities from related parties   25    24 
Long-term debt, less current portion   7,017    6,960 
Lease liabilities from unrelated parties, less current portion   3,386    3,419 
Lease liabilities from related parties, less current portion   106    110 
Debt and lease liabilities included within liabilities directly associated with assets held for sale   162    137 
Total debt and lease liabilities   12,193    12,187 
Minus: Cash and cash equivalents1   (1,192)   (1,427)
Total net debt and lease liabilities   11,001    10,760 
           
Reconciliation of annualized adjusted EBITDA and net leverage ratio to the most directly comparable IFRS Accounting Standards financial measures          
Net income   717    732 
Income tax expense   296    301 
Interest income   (92)   (88)
Interest expense   434    424 
Depreciation and amortization   1,588    1,613 
Adjustments2   502    409 
Annualized adjusted EBITDA   3,445    3,391 
           
Net leverage ratio   3.2    3.2 

 

1      Includes cash and cash equivalents included within assets held for sale.

2     Acquisitions and divestitures made for the last twelve months with a purchase price above a €50 M threshold as defined in the Syndicated Credit Facility (2024: -€14 M; 2023: -€35 M), non-cash charges, primarily related to pension expense (2024: €56 M; 2023: €56 M), impairment loss (2024: €238 M; 2023: €139 M) and special items, including costs related to the FME25 Program (2024: €108 M; 2023: €106 M), Legal Form Conversion Costs (2024: €30 M; 2023: €30 M), Legacy Portfolio Optimization (2024: €95 M; 2023: €128 M) and Humacyte Remeasurements (2024: -€11 M; 2023: -€15 M).

 

Balance sheetpage 4 of 9May 7, 2024

 

 

 

 

Cash flow statement

 

in € million, unaudited  Three months ended March 31, 
   2024   2023 
Operating activities          
Net income   118    133 
Depreciation, amortization and impairment loss   512    438 
Change in trade accounts and other receivables from unrelated parties   (669)   (406)
Change in inventories   (41)   (88)
Change in other working capital and non-cash items   207    66 
Net cash provided by (used in) operating activities   127    143 
In percent of revenue   2.7%   3.0%
           
Investing activities          
Purchases of property, plant and equipment and capitalized development costs       (134 )       (142 )
Proceeds from sale of property, plant and equipment   5    1 
Capital expenditures, net   (129)   (141)
           
Free cash flow   (2)   2 
In percent of revenue   0.0%   0.0%
           
Acquisitions and investments, net of cash acquired, and purchases of intangible assets       0          (4 )
Investments in debt securities   0    (45)
Proceeds from divestitures   40    12 
Proceeds from sale of debt securities   21    15 
Free cash flow after investing activities   59    (20)

 

Cash flowpage 5 of 9May 7, 2024

 

 

 

 

 

Revenue development by segment

 

                       Same market 
               Change   Organic   treatment 
in € million, unaudited  2024   2023   Change   at cc   growth   growth 1 
Three months ended March 31,                              
Total revenue   4,725    4,704    0.4%   2.5%   4.8%     
Care Delivery segment   3,788    3,756    0.9%   2.7%   5.9%   0.0%
Thereof: U.S.   3,102    3,003    3.3%   4.5%   6.2%   -0.7%
Thereof: International   686    753    -8.8%   -4.4%   4.4%   1.4%
                               
Care Enablement segment   1,297    1,311    -1.0%   1.5%   1.6%     
                               
Inter-segment eliminations   (360)   (363)   -0.3%   1.4%          

 

1 Same market treatment growth = organic growth less price effects          

 

Health care services and health care products revenue by segment

 

   2024  2023 
      Care  Inter-        Care  Inter-    
in € million, unaudited  Care Delivery segment  Enablement segment  segment eliminations  Total  Care Delivery segment  Enablement segment  segment eliminations  Total 
Three months ended March 31,                                 
Health care services revenue   3,748   —   —   3,748   3,713   —   —   3,713 
Health care products revenue   40   937   —   977   43   948   —   991 
Inter-segment revenue   —   360   (360)  —   —   363   (363)  — 
Revenue   3,788   1,297   (360)  4,725   3,756   1,311   (363)  4,704 

 

Revenue development by segmentpage 6 of 9May 7, 2024

 

 

 

 

Key metrics Care Delivery segment

 

unaudited  Three months ended March 31, 2024 
      Growth
in %		   Net change in      Growth
in %		      Growth
in %		 
   Clinics   yoy   clinics 1   Patients   yoy   Treatments   yoy 
Total   3,862    -5%   (63)   324,884    -5%   12,277,650    -4%
Thereof: U.S.   2,617    -1%   2    205,610    0%   7,630,349    -1%
Thereof: International   1,245    -13%   (65)   119,274    -13%   4,647,301    -9%

 

1 Net change in clinics (acquired, de novo, combined, closed and sold) in comparison to December 31, 2023.

 

yoy = year-on-year

 

Key metricspage 7 of 9May 7, 2024

 

 

 

 

Reconciliation of non-IFRS financial measures to the most directly comparable IFRS Accounting Standards financial measures for comparability with the Company´s outlook (outlook base)

 

    Special items               Special items             
in € million, except share data, unaudited  Results
2024		  FME25
Program		  Legal
Form
Conversion
Costs		  Legacy
Portfolio
Optimization1		  Humacyte
Remeasurements		  Sum of
special
items		  Results
2024
excl.
special
items		  Currency
translation
effects		  Results
2024
(outlook
base)		  Results
2023		  FME25
Program		  Legal
Form
Conversion
Costs		  Legacy
Portfolio
Optimization1		  Humacyte
Remeasurements		  Divestitures2  Sum of
special
items
and
divestitures		  Results
2023
(outlook
base)		  Change
at cc
(outlook
base)		 
Three months ended March 31,                                                                             
Total revenue   4,725   —   —   —   —   —   4,725   97   4,822   4,704   —   —   —   —   (85)  (85)  4,619   4.4%
Care Delivery segment   3,788   —   —   —   —   —   3,788   71   3,859   3,756   —   —   —   —   (87)  (87)  3,669   5.2%
Thereof: U.S.   3,102   —   —   —   —   —   3,102   37   3,139   3,003   —   —   —   —   (41)  (41)  2,962   6.0%
Thereof: International   686   —   —   —   —   —   686   34   720   753   —   —   —   —   (46)  (46)  707   1.7%
Care Enablement segment   1,297   —   —   —   —   —   1,297   33   1,330   1,311   —   —   —   —   (8)  (8)  1,303   2.1%
Inter-segment eliminations   (360)  —   —   —   —   —   (360)  (7)  (367)  (363)  —   —   —   —   10   10   (353)  3.9%
                                                                          
EBITDA   758   26   1   27   (15)  39   797   19   816   699   22   2   60   (19)  (16)  49   748   9.1%
                                                                          
Total operating income   246   28   1   143   (15)  157   403   13   416   261   26   2   84   (19)  (16)  77   338   23.0%
Care Delivery segment   189   12   —   147   —   159   348   9   357   284   17   —   1   —   (15)  3   287   24.5%
Care Enablement segment   70   16   —   0   (10)  6   76   4   80   (24)  10   —   83   —   (4)  89   65   22.7%
Inter-segment eliminations   1   —   —   (4)  —   (4)  (3)  1   (2)  (9)  —   —   —   —   —   —   (9)  -73.5%
Corporate   (14)  0   1   0   (5)  (4)  (18)  (1)  (19)  10   (1)  2   —   (19)  3   (15)  (5)  271.9%
                                                                          
Interest expense, net   88   —   —   —   —   —   88   2   90   83   —   —   —   —   0   0   83   8.8%
                                                                          
Income tax expense   40   8   0   36   (4)  40   80   0   80   45   6   1   23   (5)  (5)  20   65   22.9%
                                                                          
Net income attributable to noncontrolling interests   47   —   —   —   —   —   47   1   48   47   —   —   —   —   (3)  (3)  44   9.2%
                                                                          
Net income3   71   20   1   107   (11)  117   188   10   198   86   20   1   61   (14)  (8)  60   146   35.3%
                                                                          
Basic earnings per share  €0.24  €0.07  €0.00  €0.37  €(0.04) €0.40  €0.64  €0.03  €0.67  €0.29  €0.07  €0.00  €0.21  €(0.04) €(0.03) €0.21  €0.50   35.3%

 

1 2024: mainly comprise the impairment of intangible and tangible assets resulting from the measurement of assets held for sale (primarily Brazil, Colombia, Ecuador, Turkiye) as well as losses from divestitures (driven by the divestment of Chile renal dialysis operations); 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.

 

2 Business impacts from closed divestitures in 2023.

 

3 Attributable to shareholders of FME AG.

 

Reconciliation results (outlook base)page 8 of 9May 7, 2024

 

 

 

 

Outlook 2024

 

         Outlook 2024
     Results 2023   (at Constant Currency)
Revenue1    €19,049 M   Low to mid-single digit percentage rate growth
Operating income1    €1,540 M   Mid to high-teens percentage rate growth

 

1 Outlook 2024 is based on the assumptions outlined in the earnings release for the fourth quarter and full year of 2023 and excludes special items. Special items include the costs related to the FME25 Program, the Legal Form Conversion Costs, the impacts from Legacy Portfolio Optimization, the Humacyte Remeasurements and other effects that are unusual in nature and have not been foreseeable or not foreseeable in size or impact at the time of providing the outlook. The growth rates are based on the results 2023 excluding the costs related to the FME25 Program (€ 153 M for operating income), the Legal Form Conversion Costs (€30 M for operating income), the impacts from Legacy Portfolio Optimization (€204 M for operating income) and the Humacyte Remeasurements (-€15 M for operating income). Additionally, the results 2023 were adjusted for the Tricare settlement (-€191 M for revenue and -€181 M for operating income) and for the business impacts from closed divestitures in 2023 (-€214 M for revenue and -€20 M for operating income).

 

Outlook 2024page 9 of 9May 7, 2024