FMS Fresenius Medical Care AG

 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

 

Pursuant to Rule 13a-16 or 15d-16 of the

Securities Exchange Act of 1934

 

For the month of July 2024

 

Commission file number: 001-32749

 

FRESENIUS MEDICAL CARE AG

(Translation of registrant's name into English)

 

Else-Kröner Strasse 1

61346 Bad Homburg

Germany

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F x

Form 40-F ¨

 

 

On July 30, 2024, Fresenius Medical Care AG (the “Company”) issued a Press Release announcing its second quarter results for the period ending June 30, 2024. A copy of the Press Release is furnished as Exhibit 99.1 and the corresponding financial figures as Exhibit 99.2.

 

The attached Press Release contains non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles. To supplement our second quarter 2024 consolidated financial results presented in accordance with International Financial Reporting Standards, or IFRS, we have used non-GAAP financial measures, including (a) EBITDA, or operating income excluding interest, taxes, depreciation and amortization, (b) free cash flow, (c) net leverage ratio (ratio of net debt to adjusted EBITDA) and (d) results presented in constant currency and as adjusted for special items identified in the Press Release and associated tables. These non-GAAP measures are provided to enhance the user’s overall understanding of our current financial performance and our prospects for the future. In addition, because we have historically reported certain non-GAAP financial measures in our financial results, we believe the inclusion of these non-IFRS financial measures provides consistency and comparability in our financial reporting to prior periods for which these non-GAAP financial measures were previously reported. These non-GAAP financial measures should not be used as a substitute for or be considered superior to GAAP financial measures. Reconciliation of the non-GAAP financial measures to the most comparable IFRS financial measures are included in the attached Financial Statements. As the reconciliation of amounts stated in Constant Currency is inherent in the disclosure included in the Press Release, we believe that a separate reconciliation would not provide any additional benefit.

 

The Exhibits attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.

 

 

EXHIBITS

 

The following exhibits are being furnished with this Report:

 

Exhibit 99.1	Press release issued on July 30, 2024.
Exhibit 99.2	Complete overview of the second quarter 2024 and first six months 2024.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

DATE: July 30, 2024

 

Fresenius Medical Care AG

 

	By:	/s/ Helen Giza
	Name:	Helen Giza
	Title:	Chief Executive Officer and Chair of the Management Board

 

	By:	/s/ Martin Fischer
	Name:	Martin Fischer
	Title:	Chief Financial Officer and member of the Management Board

 

 

 

Exhibit 99.1

 

 

 

Press Release

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   www.freseniusmedicalcare.com

 

Fresenius Medical Care delivers continued operating income improvements in the second quarter of 2024

 

•

Organic revenue growth of +2.3% supported by both segments Care Delivery and Care Enablement

 

•

Operating income1 and operating income margin1 increase driven by Care Enablement

 

•

Additional FME25 savings of EUR 57 million achieved and on track to reach the upper end of the full year savings target range

 

•

Further divestitures closed as execution of portfolio optimization program continues

 

•

Net financial debt and net leverage ratio further improved

 

•

FY 2024 outlook confirmed

 

Bad Homburg (July 30, 2024) – “In the second quarter, we further improved our financial performance while executing against our strategic plan and the company transformation. This quarter is another important proof point for the operational turnaround as we remain focused to deliver on our targets”, said Helen Giza, Chief Executive Officer of Fresenius Medical Care AG. “Our operating income margin progressed toward our 2025 margin target band, as Care Enablement increased its profitability. In Care Delivery, U.S. same market treatment growth improved sequentially despite continued elevated mortality. In both segments, we accelerated FME25 savings against plan and are now on track to reach the upper end of our FME25 savings target range for 2024.” Giza added: “In light of the developments in the first half year, we confirm our financial outlook for the full year 2024.”

 

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 U.S. government (Tricare) in Q4 2023. For FY 2023 and 2024, special items include costs related to the FME25 program, the Humacyte remeasurements, the legal form conversion costs and effects from legacy portfolio optimization. For further details please see the reconciliation attached to the Press Release.

 

 

Key figures (unaudited)

 

		Q2 2024				Q2 2023				Growth				Growth				H1 2024				H1 2023				Growth				Growth
		EUR m				EUR m				yoy				yoy, cc				EUR m				EUR m				yoy				yoy, cc
Revenue			4,766				4,825				-1	%			-2	%			9,491				9,529				0	%			0	%
on outlook base1			4,743				4,741								0	%			9,565				9,360								+2	%
Operating income			425				357				+19	%			+21	%			671				618				+9	%			+10	%
on outlook base1			433				400								+8	%			849				738								+15	%
Net income2			187				140				+33	%			+34	%			258				227				+14	%			+15	%
on outlook base1			207				176								+18	%			405				322								+26	%
Basic EPS (EUR)			0.64				0.48				+33	%			+34	%			0.88				0.77				+14	%			+15	%
on outlook base1			0.70				0.60								+18	%			1.38				1.10								+26	%

 

yoy = year-on-year, cc = at constant currency, EPS = earnings per share

 

Focused execution against the strategic plan

 

In the second quarter, the FME25 transformation program continued its momentum, delivering EUR 57 million additional sustainable savings while related one-time costs amounted to EUR 40 million. With the progress in the second quarter, Fresenius Medical Care is on track to reach the upper end of the targeted additional sustainable savings range of EUR 100 to 150 million by year end 2024, totaling to EUR 650 million by year end 2025.

 

Moreover, Fresenius Medical Care is executing its portfolio optimization plan to exit non-core and dilutive assets. During the second quarter, the company closed the divestment of Cura Day Hospitals Group, Australia, and of its dialysis clinic networks in Chile, Ecuador, Sub-Saharan Africa and Turkiye. The divestitures of clinic operations in Curacao, Guatemala and Peru were closed in July. Special items associated with portfolio optimization amounted to negative EUR 15 million in the second quarter.

 

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 EUR 250 million in the full year 2024 and will be treated as special items. These transactions are expected to generate cash proceeds of around EUR 650 million upon closing, thereof approx. EUR 500 million have been received by the end of the second quarter.

 

2	Net income attributable to shareholders of Fresenius Medical Care AG

 

 

Revenue development impacted by execution against portfolio optimization plan

 

Revenue decreased by 1% to EUR 4,766 million in the second quarter (-2% at constant currency, +2% organic). Revenue on outlook base¹ grew by 0.1% compared to prior year. Divestitures realized during 2023 and during the second quarter 2024 negatively impacted the revenue development.

 

Care Delivery revenue decreased by 3% to EUR 3,771 million (-3% at constant currency, +2% organic) and by 1% on outlook base¹.

 

In Care Delivery U.S., revenue increased by 1% (0% at constant currency, +1% organic) and by 1% on outlook base¹. A growing value-based care business, reimbursement rate increases and a favorable payor mix had a positive impact. Effects from elevated mortality continued to weigh on U.S. same market treatment growth in a year-over-year comparison, while sequential trends remain encouraging. Adjusted for the exit from less profitable acute care contracts (-0.2%), U.S. same market treatment growth came in flat (-0.1%).

 

In Care Delivery International, revenue decreased by 18% (-18% at constant currency, +3% organic) and by 12% on outlook base¹. This negative development was strongly driven by divestments closed during the second quarter and partially offset by organic growth. International same market treatment growth was positive at 1.9%.

 

Care Enablement revenue grew by 3% to EUR 1,363 million (+3% at constant currency, +3% organic) and by 3% on outlook base¹ as positive pricing momentum continues.

 

Within Inter-segment eliminations, revenue for products transferred between the operating segments at fair market value decreased by 1% to a deduction of EUR 368 million (-2% at constant currency).³

 

In the first half, revenue remained virtually unchanged at EUR 9,491 million (0% at constant currency, +3% organic) and on outlook base¹ increased by 2%. Care Delivery revenue decreased by 1% to EUR 7,559 million (0% at constant currency, +4% organic), with Care Delivery U.S. growing by 2% (+2% at constant currency, +4% organic) and Care Delivery International decreasing by 14% (-11% at constant currency, +3% organic). Care Enablement revenue increased by 1% to EUR 2,660 million (+2% at constant currency, + 2% organic). Inter-segment eliminations decreased by 1% to a deduction of EUR 728 million (0% at constant currency).

 

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”.

 

 

Operating margin improvement driven by Care Enablement

 

Operating income increased by 19% to EUR 425 million in the second quarter (+21% at constant currency), resulting in a margin of 8.9% (Q2 2023: 7.4%). Operating income on outlook base¹ increased by 8% to EUR 433 million, resulting in a margin of 9.1% (Q2 2023: 8.4%). Divestitures realized during the second quarter had a neutral effect on operating income.

 

Operating income in Care Delivery decreased by 14% to EUR 332 million (-13% at constant currency), resulting in a margin of 8.8% (Q2 2023: 9.9%). Operating income on outlook base¹ decreased by 7%, resulting in a margin¹ of 9.9% (Q2 2023: 10.6%). In-line with expectations, the development was mainly driven by higher personnel expenses and inflationary cost increases. Business growth and savings from the FME25 program contributed positively to the earnings development.

 

Operating income in Care Enablement strongly increased to EUR 68 million (Q2 2023:
EUR 2 million), resulting in a margin of 5.0% (Q2 2023: 0.1%). Operating income on outlook base¹ quadrupled compared to prior year, resulting in a margin¹ of 5.1% (Q2 2023: 1.3%). The strong increase was driven by business growth and savings from the FME25 program, compensating inflationary cost increases and a negative impact from foreign currency transaction.

 

Operating income for Corporate amounted to EUR 30 million (Q2 2023: EUR -25 million). Operating income on outlook base¹ amounted to EUR 0 million (Q2 2023: EUR -13 million).

 

In the first half, operating income increased by 9% up to EUR 671 million (10% at constant currency), resulting in a margin of 7.1% (H1 2023: 6.5%). Divestitures realized during the first half had a slightly positive impact on operating income. Operating income on outlook base¹ increased by 15% up to EUR 849 million, resulting in a margin of 8.9% (H1 2023: 7.9%). In Care Delivery, operating income declined by 22% to EUR 521 million (-22% at constant currency), resulting in a margin of 6.9% (H1 2023: 8.8%). Operating income margin on outlook base¹ improved to 9.6% (H1 2023: 9.2%). In Care Enablement, operating income strongly increased to EUR 138 million (H1 2023: EUR -23 million), resulting in a margin of 5.2% (H1 2023: -0.9%). Operating income margin on outlook base¹ improved strongly to 5.5% (H1 2023: 3.1%). Operating income for Corporate amounted to EUR 17 million (H1 2023: -15 million).

 

Net income² increased by 33% to EUR 187 million in the second quarter (+34% at constant currency). Net income on outlook base¹ increased by 18%.

 

In the first half, net income² increased by 14% to EUR 258 million (+15% at constant currency). Net income on outlook base¹ increased by 26%.

 

Basic earnings per share (EPS) increased by 33% to EUR 0.64 (+34% at constant currency). EPS on outlook base¹ increased by 18% to EUR 0.70.

 

In the first half, EPS increased by 14% to EUR 0.88 (+15% at constant currency). EPS on outlook base¹ increased by 26% to EUR 1.38 .

 

 

Lower net financial debt and further improved net leverage ratio

 

In the second quarter, Fresenius Medical Care generated EUR 442 million of operating cash flow (Q2 2023: EUR 1,007 million), resulting in a margin of 9.3% (Q2 2023: 20.9%). The operating cash flow development was negatively impacted by EUR 407 million, primarily as a result of changing vendors post the cyber incident at Change Healthcare. This negative cash impact is expected to be recovered in Q3 2024. Additionally, the phasing of federal income tax payments in the U.S. negatively impacted the development.

 

In the first half, operating cashflow amounted to EUR 570 million (H1 2023: EUR 1,150 million), resulting in a margin of 6.0% (H1 2023: 12.1%).

 

Free cash flow⁴ amounted to EUR 289 million in the second quarter (Q2 2023: EUR 852 million), resulting in a margin of 6.1% (H1 2023: 17.7%). In the first half, Fresenius Medical Care generated free cash flow of EUR 287 million (H1 2023: EUR 854 million), resulting in a margin of 3.0% (H1 2023: 9.0%).

 

Total net debt and lease liabilities were further reduced to EUR 10,658 million (Q2 2023: EUR 11,714 million). At 3.1x, the corresponding net leverage ratio (net debt/EBITDA) further decreased towards the lower end of our self-imposed target corridor.

 

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. The company expects 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 U.S. government (Tricare) in Q4 2023. The 2023 basis for the revenue outlook is EUR 19,049 million and for the operating income outlook is EUR 1,540 million.

 

The company also reconfirms its targets to achieve an operating income margin of 10% to 14% by 2025. This excludes impacts from portfolio changes.

 

Patients, clinics and employees

 

As of June 30, 2024, Fresenius Medical Care treated 311,037 patients in 3,757 dialysis clinics worldwide and had 113,639 employees (headcount) globally, compared to 117,128 employees as of March 31, 2024.

 

4

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

 

 

Media conference call

 

Fresenius Medical Care will host a media conference call to discuss the results of the second quarter and first half of 2024 earnings today, July 30, 2024, at 09:30 a.m. CEST / 3:30 a.m. EDT. The media conference call is for journalists who can register vial the following link: Registration. Details on the media conference call are also available on the Fresenius Medical Care website in the “Media” section: media call. Attendees who would like to follow the presentation parallel to the conference call, you can register here for the webcast. The webcast will only be broadcasted in “listen only” mode.

 

Investor conference call

 

Fresenius Medical Care will host a conference call to discuss the results of the second quarter and first half of 2024 today, July 30, 2024, at 2:00 p.m. CEST / 8:00 a.m. EDT. 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 second quarter and first half 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 3,757 dialysis clinics, Fresenius Medical Care provides dialysis treatments for approx. 311,000 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 U.S. Securities and Exchange Commission. Fresenius Medical Care does not undertake any responsibility to update the forward-looking statements in this release.

 

 

 

 

 

 

 

 

 

Exhibit 99.2

 

 

 

Fresenius Medical Care AG

 

COMPLETE OVERVIEW OF THE SECOND QUARTER AND FIRST HALF YEAR 2024

 

July 30, 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.

 

  

 

 

Statement of earnings

 

		Three months ended June 30,																Six months ended June 30,
in € million, except share data, unaudited		2024				2023				Change				Change at cc				2024				2023				Change				Change at cc
Total revenue			4,766				4,825				-1.2	%			-1.7	%			9,491				9,529				-0.4	%			0.4	%
Total revenue (outlook base) 1			4,743				4,741								0.1	%			9,565				9,360								2.2	%
Costs of revenue			3,600				3,628				-0.8	%			-1.3	%			7,151				7,183				-0.4	%			0.3	%
Selling, general and administrative expense			771				775				-0.5	%			-1.0	%			1,547				1,557				-0.7	%			-0.2	%
Research and development expense			46				57				-20.3	%			-20.7	%			93				113				-17.3	%			-17.3	%
Income from equity method investees			(33	)			(48	)			-32.4	%			-32.4	%			(61	)			(76	)			-18.9	%			-18.9	%
Other operating income			(228	)			(76	)			200.6	%			201.2	%			(341	)			(193	)			76.6	%			76.5	%
Other operating expense			185				132				40.0	%			35.3	%			431				327				31.8	%			32.4	%
Operating income			425				357				19.1	%			20.5	%			671				618				8.6	%			10.0	%
Operating income (outlook base) 1			433				400								8.3	%			849				738								15.1	%
Interest income			(18	)			(24	)			-26.5	%			-26.0	%			(33	)			(36	)			-7.7	%			-5.0	%
Interest expense			103				105				-1.5	%			-2.6	%			207				199				3.8	%			4.7	%
Interest expense, net			85				81				5.9	%			4.5	%			174				163				6.4	%			6.8	%
Income before income taxes			340				276				23.0	%			25.2	%			497				455				9.4	%			11.1	%
Income tax expense			99				81				22.0	%			28.1	%			139				126				10.2	%			14.3	%
Net income			241				195				23.3	%			24.0	%			358				329				9.1	%			9.9	%
Net income attributable to noncontrolling interests			54				55				-2.1	%			-2.8	%			100				102				-1.3	%			-1.1	%
Net income attributable to shareholders of FME AG			187				140				33.2	%			34.4	%			258				227				13.8	%			14.9	%
Net income attributable to shareholders of FME AG (outlook base) 1			207				176								17.5	%			405				322								25.6	%
Weighted average number of shares			293,413,449				293,413,449												293,413,449				293,413,449
Basic earnings per share		€	0.64			€	0.48				33.2	%			34.4	%		€	0.88			€	0.77				13.8	%			14.9	%
Basic earnings per ADS		€	0.32			€	0.24				33.2	%			34.4	%		€	0.44			€	0.39				13.8	%			14.9	%
Operating income			425				357				19.1	%			20.5	%			671				618				8.6	%			10.0	%
Depreciation, amortization and impairment loss			387				434				-10.9	%			-12.9	%			899				872				3.1	%			4.0	%
EBITDA			812				791				2.7	%			2.2	%			1,570				1,490				5.4	%			6.5	%
In percent of revenue
Operating income margin			8.9	%			7.4	%											7.1	%			6.5	%
Operating income margin (outlook base) 1			9.1	%			8.4	%											8.9	%			7.9	%
EBITDA margin			17.0	%			16.4	%											16.5	%			15.6	%

 

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.

 

 

 

 

Segment information

 

		Three months ended June 30,																Six months ended June 30,
unaudited		2024				2023				Change				Change at cc				2024				2023				Change				Change at cc
Total
Revenue in € million			4,766				4,825				-1.2	%			-1.7	%			9,491				9,529				-0.4	%			0.4	%
Revenue in € million (outlook base) 1			4,743				4,741								0.1	%			9,565				9,360								2.2	%
Operating income in € million			425				357				19.1	%			20.5	%			671				618				8.6	%			10.0	%
Operating income in € million (outlook base) 1			433				400								8.3	%			849				738								15.1	%
Operating income margin			8.9	%			7.4	%											7.1	%			6.5	%
Operating income margin (outlook base) 1			9.1	%			8.4	%											8.9	%			7.9	%
Days sales outstanding (DSO) 2																			76				68
Employees (headcount)																			113,639				124,295
Care Delivery segment
Revenue in € million			3,771				3,873				-2.6	%			-3.3	%			7,559				7,628				-0.9	%			-0.3	%
Revenue in € million (outlook base) 1			3,743				3,786								-1.1	%			7,602				7,455								2.0	%
Operating income in € million			332				384				-13.5	%			-12.6	%			521				669				-22.1	%			-21.5	%
Operating income in € million (outlook base) 1			372				400								-7.0	%			729				687								6.2	%
Operating income margin			8.8	%			9.9	%											6.9	%			8.8	%
Operating income margin (outlook base) 1			9.9	%			10.6	%											9.6	%			9.2	%
Days sales outstanding (DSO) 2																			72				61
Care Enablement segment
Revenue in € million			1,363				1,325				2.9	%			3.1	%			2,660				2,635				1.0	%			2.3	%
Revenue in € million (outlook base) 1			1,365				1,322								3.3	%			2,695				2,625								2.7	%
Operating income in € million			68				2				4309.3	%			4277.6	%			138				(23	)			n.a.				n.a.
Operating income in € million (outlook base) 1			69				17								308.2	%			149				82								81.4	%
Operating income margin			5.0	%			0.1	%											5.2	%			-0.9	%
Operating income margin (outlook base) 1			5.1	%			1.3	%											5.5	%			3.1	%
Days sales outstanding (DSO) 2																			94				97
Inter-segment eliminations 3
Revenue in € million			(368	)			(373	)			-1.0	%			-2.0	%			(728	)			(734	)			-0.7	%			-0.3	%
Revenue in € million (outlook base) 1			(365	)			(367	)							-0.6	%			(732	)			(720	)							1.6	%
Operating income in € million			(5	)			(4	)			36.9	%			32.6	%			(5	)			(13	)			-65.9	%			-76.7	%
Operating income in € million (outlook base) 1			(8	)			(4	)							111.2	%			(10	)			(13	)							-18.9	%
Corporate
Operating income in € million			30				(25	)			n.a.				n.a.				17				(15	)			n.a.				n.a.
Operating income in € million (outlook base) 1			0				(13	)							n.a.				(19	)			(18	)							4.1	%

 

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. 

² Includes receivables related to assets held for sale.

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”.

 

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".

 

 

 

Balance sheet

 

		June 30,				December 31,
in € million, except for net leverage ratio, unaudited		2024				2023
Assets
Cash and cash equivalents			1,090				1,403
Trade accounts and other receivables from unrelated parties			4,025				3,471
Inventories			2,227				2,179
Other current assets			1,348				1,648
Goodwill and intangible assets			16,162				16,012
Right-of-use assets			3,612				3,671
Other non-current assets			5,432				5,546
Total assets			33,896				33,930
Liabilities and equity
Accounts payable to unrelated parties			784				762
Other current liabilities			5,152				5,350
Non-current liabilities			12,773				12,991
Total equity			15,187				14,827
Total liabilities and equity			33,896				33,930
Equity/assets ratio			45	%			44	%
Debt and lease liabilities
Short-term debt from unrelated parties			322				457
Current portion of long-term debt			481				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			6,854				6,960
Lease liabilities from unrelated parties, less current portion			3,378				3,419
Lease liabilities from related parties, less current portion			101				110
Debt and lease liabilities included within liabilities directly associated with assets held for sale			17				137
Total debt and lease liabilities			11,770				12,187
Minus: Cash and cash equivalents1			(1,112	)			(1,427	)
Total net debt and lease liabilities			10,658				10,760
Reconciliation of annualized adjusted EBITDA and net leverage ratio to the most directly comparable IFRS Accounting Standards financial measures
Net income			762				732
Income tax expense			314				301
Interest income			(85	)			(88	)
Interest expense			432				424
Depreciation and amortization			1,566				1,613
Adjustments2			423				409
Annualized adjusted EBITDA			3,412				3,391
Net leverage ratio			3.1				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: -€49 M; 2023: -€35 M), non-cash charges, primarily related to pension expense (2024: €57 M; 2023: €56 M), impairment loss (2024: €213 M; 2023: €139 M) and special items, including costs related to the FME25 Program (2024: €128 M; 2023: €106 M), Legal Form Conversion Costs (2024: €27 M; 2023: €30 M), Legacy Portfolio Optimization (2024: €108 M; 2023: €128 M) and Humacyte Remeasurements (2024: -€61 M; 2023: -€15 M).

 

 

 

 

 

Cash flow statement

 

		Three months ended June 30,								Six months ended June 30,
in € million, unaudited		2024				2023				2024				2023
Operating activities
Net income			241				195				358				329
Depreciation, amortization and impairment loss			387				434				899				872
Change in trade accounts and other receivables from unrelated parties			(23	)			326				(692	)			(80	)
Change in inventories			(15	)			(22	)			(56	)			(111	)
Change in other working capital and non-cash items			(148	)			74				61				140
Net cash provided by (used in) operating activities			442				1,007				570				1,150
In percent of revenue			9.3	%			20.9	%			6.0	%			12.1	%
Investing activities
Purchases of property, plant and equipment and capitalized development costs			(159	)			(155	)			(293	)			(298	)
Proceeds from sale of property, plant and equipment			6				0				10				2
Capital expenditures, net			(153	)			(155	)			(283	)			(296	)
Free cash flow			289				852				287				854
In percent of revenue			6.1	%			17.7	%			3.0	%			9.0	%
Acquisitions and investments, net of cash acquired, and purchases of intangible assets			(6	)			(10	)			(6	)			(14	)
Investments in debt securities			0				(17	)			0				(63	)
Proceeds from divestitures			461				13				501				25
Proceeds from sale of debt securities			21				36				42				51
Free cash flow after investing activities			765				874				824				853

 

 

 

 

Revenue development by segment

 

																						Same market
														Change				Organic				treatment
in € million, unaudited		2024				2023				Change				at cc				growth				growth 1
Three months ended June 30,
Total revenue			4,766				4,825				-1.2	%			-1.7	%			2.3	%
Care Delivery segment			3,771				3,873				-2.6	%			-3.3	%			1.7	%			0.4	%
Thereof: U.S.			3,157				3,120				1.2	%			0.1	%			1.4	%			-0.3	%
Thereof: International			614				753				-18.4	%			-17.8	%			3.2	%			1.9	%
Care Enablement segment			1,363				1,325				2.9	%			3.1	%			3.2	%
Inter-segment eliminations			(368	)			(373	)			-1.0	%			-2.0	%
Six months ended June 30,
Total revenue			9,491				9,529				-0.4	%			0.4	%			3.4	%
Care Delivery segment			7,559				7,628				-0.9	%			-0.3	%			3.6	%			0.1	%
Thereof: U.S.			6,259				6,123				2.2	%			2.3	%			3.8	%			-0.5	%
Thereof: International			1,300				1,505				-13.6	%			-11.1	%			2.7	%			1.3	%
Care Enablement segment			2,660				2,635				1.0	%			2.3	%			2.4	%
Inter-segment eliminations			(728	)			(734	)			-0.7	%			-0.3	%

 

¹ Same market treatment growth = organic growth less price effects

 

Health care services and health care products revenue by segment

 

		2024																2023
		Care				Care				Inter-								Care				Care				Inter-
		Delivery				Enablement				segment								Delivery				Enablement				segment
in € million, unaudited		segment				segment				eliminations				Total				segment				segment				eliminations				Total
Three months ended June 30,
Health care services revenue			3,722				—				—				3,722				3,829				—				—				3,829
Health care products revenue			49				995				—				1,044				44				952				—				996
Inter-segment revenue			—				368				(368	)			—				—				373				(373	)			—
Revenue			3,771				1,363				(368	)			4,766				3,873				1,325				(373	)			4,825
Six months ended June 30,
Health care services revenue			7,470				—				—				7,470				7,541				—				—				7,541
Health care products revenue			89				1,932				—				2,021				87				1,901				—				1,988
Inter-segment revenue			—				728				(728	)			—				—				734				(734	)			—
Revenue			7,559				2,660				(728	)			9,491				7,628				2,635				(734	)			9,529

 

 

 

 

Key metrics Care Delivery segment

 

		Six months ended June 30, 2024
						Growth												Growth								Growth
						in %				Net change								in %								in %
unaudited		Clinics				yoy				in clinics 1				Patients				yoy				Treatments				yoy
Total			3,757				-7	%			(168	)			311,037				-10	%			24,119,809				-7	%
Thereof: U.S.			2,628				0	%			13				206,306				0	%			15,412,884				-1	%
Thereof: International			1,129				-20	%			(181	)			104,731				-24	%			8,706,925				-15	%

 

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

 

yoy = year-on-year

 

 

 

 

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																				Results																Special items																				Sum of
in € million,											Legal				Legacy								Sum				2024								Results												Legal				Legacy												special				Results				Change
except											Form				Portfolio				Humacyte				of				excl.				Currency				2024												Form				Portfolio				Humacyte								items				2023				at cc
share data,			Results				FME25				Conversion				Optimiza-				Remeasure-				special				special				translation				(outlook				Results				FME25				Conversion				Optimiza-				Remeasure-								and				(outlook				(outlook
unaudited			2024				Program				Costs				tion1				ments				items				items				effects				base)				2023				Program				Costs				tion1				ments				Divestitures2				divestitures				base)				base)
Three months ended June 30,
Total revenue			4,766				—				—				—				—				—				4,766				(23	)			4,743				4,825				—				—				—				—				(84	)			(84	)			4,741				0.1	%
Care Delivery segment			3,771				—				—				—				—				—				3,771				(28	)			3,743				3,873				—				—				—				—				(87	)			(87	)			3,786				-1.1	%
Thereof: U.S.			3,157				—				—				—				—				—				3,157				(33	)			3,124				3,120				—				—				—				—				(38	)			(38	)			3,082				1.4	%
Thereof: International			614				—				—				—				—				—				614				5				619				753				—				—				—				—				(49	)			(49	)			704				-12.1	%
Care Enablement segment			1,363				—				—				—				—				—				1,363				2				1,365				1,325				—				—				—				—				(3	)			(3	)			1,322				3.3	%
Inter-segment eliminations			(368	)			—				—				—				—				—				(368	)			3				(365	)			(373	)			—				—				—				—				6				6				(367	)			-0.6	%
EBITDA			812				34				2				23				(46	)			13				825				(4	)			821				791				14				5				11				4				(2	)			32				823				-0.3	%
Total operating income			425				40				2				15				(46	)			11				436				(3	)			433				357				25				5				10				4				(1	)			43				400				8.3	%
Care Delivery segment			332				16				—				28				—				44				376				(4	)			372				384				8				—				10				—				(2	)			16				400				-7.0	%
Care Enablement segment			68				24				0				(11	)			(12	)			1				69				0				69				2				17				—				0				—				(2	)			15				17				308.2	%
Inter-segment eliminations			(5	)			—				—				(3	)			—				(3	)			(8	)			0				(8	)			(4	)			—				—				—				—				—				—				(4	)			111.2	%
Corporate			30				0				2				1				(34	)			(31	)			(1	)			1				0				(25	)			0				5				—				4				3				12				(13	)			n.a.
Interest expense, net			85				—				—				—				—				—				85				(1	)			84				81				—				—				—				—				1				1				82				3.2	%
Income tax expense			99				11				1				(14	)			(12	)			(14	)			85				4				89				81				5				1				2				1				0				9				90				-1.1	%
Net income attributable to noncontrolling interests			54				—				—				—				—				—				54				(1	)			53				55				—				—				0				—				(3	)			(3	)			52				1.5	%
Net income3			187				29				1				29				(34	)			25				212				(5	)			207				140				20				4				8				3				1				36				176				17.5	%
Basic earnings per share		€	0.64			€	0.10			€	0.00			€	0.10			€	(0.12	)		€	0.08			€	0.72			€	(0.02	)		€	0.70			€	0.48			€	0.07			€	0.01			€	0.02			€	0.01			€	0.01			€	0.12			€	0.60				17.5	%
Six months ended June 30,
Total revenue			9,491				—				—				—				—				—				9,491				74				9,565				9,529				—				—				—				—				(169	)			(169	)			9,360				2.2	%
Care Delivery segment			7,559				—				—				—				—				—				7,559				43				7,602				7,628				—				—				—				—				(173	)			(173	)			7,455				2.0	%
Thereof: U.S.			6,259				—				—				—				—				—				6,259				4				6,263				6,123				—				—				—				—				(80	)			(80	)			6,043				3.6	%
Thereof: International			1,300				—				—				—				—				—				1,300				39				1,339				1,505				—				—				—				—				(93	)			(93	)			1,412				-5.2	%
Care Enablement segment			2,660				—				—				—				—				—				2,660				35				2,695				2,635				—				—				—				—				(10	)			(10	)			2,625				2.7	%
Inter-segment eliminations			(728	)			—				—				—				—				—				(728	)			(4	)			(732	)			(734	)			—				—				—				—				14				14				(720	)			1.6	%
EBITDA			1,570				60				3				50				(61	)			52				1,622				15				1,637				1,490				36				7				71				(15	)			(18	)			81				1,571				4.2	%
Total operating income			671				67				3				158				(61	)			167				838				11				849				618				51				7				94				(15	)			(17	)			120				738				15.1	%
Care Delivery segment			521				27				—				175				—				202				723				6				729				669				24				—				11				—				(17	)			18				687				6.2	%
Care Enablement segment			138				40				0				(11	)			(22	)			7				145				4				149				(23	)			28				—				83				—				(6	)			105				82				81.4	%
Inter-segment eliminations			(5	)			—				—				(6	)			—				(6	)			(11	)			1				(10	)			(13	)			—				—				—				—				—				—				(13	)			-18.9	%
Corporate			17				0				3				0				(39	)			(36	)			(19	)			0				(19	)			(15	)			(1	)			7				—				(15	)			6				(3	)			(18	)			4.1	%
Interest expense, net			174				—				—				—				—				—				174				0				174				163				—				—				—				—				1				1				164				6.0	%
Income tax expense			139				18				1				22				(16	)			25				164				5				169				126				11				2				25				(4	)			(5	)			29				155				9.0	%
Net income attributable to noncontrolling interests			100				—				—				—				—				—				100				1				101				102				—				—				1				—				(6	)			(5	)			97				5.0	%
Net income3			258				49				2				136				(45	)			142				400				5				405				227				40				5				68				(11	)			(7	)			95				322				25.6	%
Basic earnings per share		€	0.88			€	0.16			€	0.01			€	0.46			€	(0.15	)		€	0.48			€	1.36			€	0.02			€	1.38			€	0.77			€	0.14			€	0.02			€	0.23			€	(0.04	)		€	(0.02	)		€	0.33			€	1.10				25.6	%

 

¹ 2024: mainly comprise the impairment of intangible and tangible assets resulting from the measurement of assets held for sale as well as 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.

² Business impacts from closed divestitures in 2023.

³ Attributable to shareholders of FME AG.

 

 

 

 

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).

 

 

 

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