07-05-2025
Fresenius Medical Care AG (FMS) Q1 2025 Earnings Call Highlights: Strong Revenue Growth and ...
Organic Revenue Growth: 5% with contributions from both Care Delivery and Care Enablement.
Operating Income Growth: 11% increase, consistent with the expected phasing of the full year outlook.
Net Leverage Ratio: Improved to 2.8x, below the self-imposed target range.
Care Enablement Margin: Improved to 8.3%, entering the target margin band of 8% to 12%.
Same Market Treatment Growth (U.S.): Stable, with a 0.5% plus expected growth for 2025.
Same Market Treatment Growth (International): Accelerated to 2.5%.
Lives Under Management: Increased from around 130,000 to around 148,000 by the end of March.
Special Items Impact: Negatively affected group operating income by EUR126 million.
Operating Cash Flow: Increased by 28% against last year's quarter due to improved operating working capital.
Bond Issuance: Placed 2 bond tranches with an aggregate volume of EUR1.1 billion.
Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Fresenius Medical Care AG (NYSE:FMS) reported strong organic revenue growth of 5% in Q1 2025, driven by both Care Delivery and Care Enablement segments.
The FME25 transformation program delivered EUR68 million in additional sustainable savings, contributing to the company's financial health.
Operating income grew by 11%, positioning the company well for future quarters.
The net leverage ratio improved to 2.8x, below the self-imposed target range, indicating strong financial discipline.
Care Enablement segment achieved a margin of 8.3%, entering its target margin band of 8% to 12% for the first time.
Negative Points
The severe flu season led to increased missed treatments, impacting same market treatment growth in the U.S.
Divestitures negatively impacted revenue development by 260 basis points.
Special items, including costs related to portfolio optimization and the FME25 transformation program, negatively affected group operating income by EUR126 million.
Labor and inflation costs offset some of the earnings developments in the Care Delivery segment.
The company faced a headwind from one less dialysis day in the quarter, affecting absolute volume development and utilization.
Q & A Highlights
Q: What are you seeing in April trading in the U.S., and how does this impact your confidence in the full-year guidance? A: The flu season hit hard in February and March, but we are encouraged by the underlying referrals, which are a strong leading indicator. We expect the mortality effect to show with a 6- to 8-week lag. We are confident in our positive trajectory and maintaining our 0.5% growth guidance for the year. - Helen Giza, CEO
