Q2 2024 Fresenius Medical Care AG Earnings Call Transcript
Key Points
- Fresenius Medical Care AG (FMS) delivered organic revenue growth of 2% in the second quarter, with positive contributions from both Care Delivery and Care Enablement segments.
- The company achieved a meaningful margin improvement of 70 basis points, bringing it closer to its 2025 margin target band.
- FME25 program contributed EUR57 million in additional savings, positioning the company to hit the top end of its full-year savings target range of EUR100 million to EUR150 million.
- The company reduced its net financial debt and improved its leverage ratio within the lower end of its net leverage target corridor.
- Fresenius Medical Care AG (FMS) entered into virtual power purchase agreements for renewable energy, supporting its goal of becoming carbon-neutral by 2040.
- The company continues to face elevated mortality rates in the US, which have negatively impacted volume development.
- Revenue development was negatively impacted by the successful execution of the portfolio optimization plan, with divestitures accounting for a 170 basis point reduction in growth.
- Operating income for Care Delivery declined by 7% compared to the high prior year basis, impacted by labor and inflationary cost increases.
- The company is facing challenges with elevated bad debt reserves due to higher accounts receivable associated with a vendor change post a cyber incident.
- The proposed 2.1% reimbursement increase for services is lower than desired, given the level of inflation the industry is facing.
Thank you, Alice. Good morning, good afternoon or good evening, depending on where you are. I would like to welcome you to our earnings call for the second quarter of this year. We appreciate you joining us today.
As always, I do start out the call by mentioning our cautionary language that is in our Safe Harbor statement as well as in our presentation and in all the materials that we have distributed earlier today. For further details concerning risks and uncertainties, please refer to these documents as well as to our SEC filings. The call is scheduled for 60 minutes.
We have prepared a presentation and weâll have time for your questions after the prepared remarks. As always, we would like to limit the number of questions to two in order to give everyone the chance to ask. In case there are further questions and time left, we will gladly offer a second round.
Let me now welcome Helen Giza, our CEO and Chair of the Management Board; and Martin Fischer, our
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