Fresenius Medical Care AG

Ladies and gentlemen, thank you for standing by. My name is Emma, your chorus call operator. Welcome and thank you for joining the Fresenius Medical Care Earnings Call on the first fourth quarter and full year 2020 results. Throughout today's recorded presentation, all participants are in a listen-only mode. The presentation will be followed by a question and answer session. If you'd like to ask a question, you may press star followed by one on your touchtone telephone. Please press the star key followed by zero for operator assistance. And I would now like to turn the conference over to Dominic, Head of Investor Relations. Please go ahead, sir.

Thank you, Emma. As mentioned by Emma, we would like to welcome you to the Fresenus Medicare earnings call for the fourth quarter and full year 2020. We appreciate you joining today to discuss more details following our early indications call at the beginning of the month. Now it is my pleasure, as always, to 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 marketing material 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. I do assume that there are numerous questions this time. Therefore, we have reserved 90 minutes for that call, but would like to limit the number of questions again to two in order to give everyone the chance to ask questions. Should there be further questions and time left, we can go a second round. It would be great if we could make this work again. With us today is, of course, Reece Powell, our CEO and Chairman of the Management Board. Reece will give you some more color around the strategy and business development. He will be joined by Frank Maddox, our Global Chief Medical Officer, who will provide a medical update with a focus on COVID-19. And of course, also with us is Helen Gieser, our Chief Financial Officer, who will give you a detailed update on the financials as well as our targets for 2021 and 2025. I will now hand over to Rhys. The floor is yours.

Thank you, Dominic. Hello, everyone. Thank you for joining our presentation and for your continued interest in Fresenius Medical Care. I'll begin my remarks on slide four. At Fresenius Medical Care, we have a common purpose, which is creating a future worth living for patients worldwide every day. And this purpose that unites our team was never more evident than throughout 2020. In the face of unprecedented COVID-19 pandemic, we delivered life-sustaining dialysis treatments to nearly 347,000 patients at over 4,000 clinics worldwide. The number of treatments we provided increased by 3% to slightly over 53 million treatments. And we did all of this with uncompromising focus on our quality of care. Before we go any further, it's important for me to take a moment to once again say thank you to our employees around the world for their tireless efforts and relentless focus on patient care during these extraordinary times. This is a remarkable achievement. I would also like to acknowledge our patients that sadly passed away and acknowledge everyone that's grieving from the loss of a loved one during this terrible pandemic. Our thoughts are with you during this very painful time. Moving to slide five. This pandemic has not changed the fact that the number of patients facing advanced kidney disease and requiring dialysis on a global basis is projected to grow after the effects of the pandemic is annualized out. There are several factors contributing to this. One, people around the world are simply living longer. By 2030, the number of people over age 65 is expected to increase significantly to around 1 billion people globally. Two, hypertension. Already, one out of every four adults around the world suffers from high blood pressure. And lastly, diabetes. By 2030, the number of patients with diabetes is anticipated to grow to more than half a billion. Considering these trends, we continue to project that over 6 million patients will need regular dialysis by 2030. We recognize our responsibility to this patient population and believe that we are well-positioned to continue to address this growing need. This leads to our strategy on slide six. At our capital market stay last October, we introduced our 2025 strategy. Now more than ever, we feel that this is the appropriate strategy as it prioritizes patients' needs and quality of care. aligns with key drivers and developments for our industry and positions our business to deliver sustainable growth over the medium term and beyond. The first leg and core of our strategy focuses on the renal care continuum. We know that the patient population with advanced renal disease around the world continues to grow. We also know that these patients will encounter different phases of care and modalities for treatment. It is our goal to be able to provide holistic care for our patients throughout their complete treatment path or what we are calling the renal care continuum. Building on our global vertically integrated business model, the renal care continuum brings together both dialysis products and services and features four main components. New renal care models where we will apply digital technologies such as artificial intelligence and the capability to analyze huge amounts of data. This also captures our push toward increasing home dialysis treatments. In value-based care, we already lead the way in transitioning from the historic fee-for-service payment model to pay-for-performance models in order to provide superior care while ensuring it remains affordable. Our Humana contract is a perfect example of how we are already moving forward in this regard. With chronic kidney disease and transplantation, we are expanding beyond dialysis to the treatment of CKD and also looking to play an active role in the area of kidney transplantation. With renal care innovations, we aim to be at the forefront of any industry disruption by developing our own renal care innovations as well as investing in startups and early stage companies in our space. Critical care solutions is the second leg of our strategy. Here, we seek to further extend our critical care portfolio to other extracorporeal intensive care therapy areas, such as treatment of heart, lung, and multi-organ failure. Finally, complementary assets makes up the third and final leg of our strategy. Our goal here is to continue to expand our network of complementary assets through partnerships. investments, and acquisitions. These assets will help us, for example, to coordinate patients efficiently and thereby add value in two dimensions, in terms of creating medical value and in managing patient-related costs. I want to reiterate that COVID-19 has not altered our strategic view, but we are committed to executing on this strategy in delivering on our 2025 targets. When we announced our strategic plan for 2025, we had not included COVID-19 as a negative effect. However, as the effects from the pandemic accelerated at the end of 2020, its impact became significantly more pronounced. We strive to compensate for the anticipated negative COVID-19 effects on our 2025 targets by transforming our global operating model and reducing our cost base sustainably. while we execute on our 2025 strategy. We will touch on this more in the presentation. Turning to slide seven. We are proud of the positive impact our life-sustaining products and services have on the patients we treat. As a large global organization, we also recognize our responsibility for the broader impact we have on the environment and on society throughout the world. I am pleased to report that despite the challenging environment we faced in 2020, we have made real progress on our sustainability journey. Last year, we launched our Global Sustainability Program to step up and drive the integration of sustainability into our business practices worldwide over the course of the next three years, from 2020 to 2022. The program, which is under my direct responsibility, establishes common goals, responsibilities, and key performance indicators. During 2020, we introduced ESG targets for management compensation that are directly linked to the progress of our global sustainability program, further underscoring the program's importance. In the last year, we defined global standards for how we measure our patients' feedback, We approved a new policy around human and labor rights, and we wrote out a global code of conduct for our suppliers. We believe that we need good data to understand our impact and decide on global goals in the future. This is why we implemented several new global KPIs for sustainable development going forward We will measure progress with performance indicators for topics such as quality of products and care, as well as responsible business practices. The feedback we receive from our stakeholders and their interest in our sustainability activities are also very important to us. We want to be transparent about what we strive to achieve and how we are progressing. This is why we will report on our progress and align with international standards. such as those of the Sustainability Accounting Standards Board and the recommendations of Task Force on Climate-Related Financial Disclosure. In our upcoming non-financial report, we have included more than 100 KPIs that will speak to this commitment. With that, it's my pleasure to now hand over to Frank for his medical update.