Fresenius Medical Care AG

Thank you, Sandra. I would like to welcome everyone to our earnings call for the first quarter 2025. I know that this is a very tough day with many companies in the sector reporting today. Nevertheless, thank you for joining us today. As always, I would like 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 materials that we have distributed earlier today. For further details concerning risks and uncertainties, please refer to these documents and to our SEC filings. As always, we will have 60 minutes for the call. To give everyone the chance to ask questions, we would like to limit the number of questions to two, like in the past, and it would be great if we could make it work again, as always. Let me now welcome Helen Gieser, CEO and Chair of the Management Board, and Martin Fischer, our Chief Financial Officer. Helen.

Thank you, Dominic. I'd like to extend a warm welcome to everyone on the call. Thank you for your continued interest in Fresenius Medical Care. I'm pleased to report that we're off to a great start in 2025. Our first quarter performance further underscores the strength in the execution of our current strategic plan. With the start of the third and final year of our plan, I'm thrilled with our team's energy and focus maintaining momentum, and delivering continued operational and financial progress. I will begin my prepared remarks on slide four. In the first quarter, we delivered strong organic revenue growth of 5%, with positive contributions from both care delivery and care enablement. Despite a severe flu season increasing mistreatments, we realized stable same market treatment growth in the United States. This was possible due to continuously improving underlying referral trends, which was supported by the tremendous operational improvements made within care delivery. Our FME25 transformation program continued its momentum, delivering 68 million euro in additional sustainable savings of our targeted 180 million euro for the year. We achieved 11% operating income growth, consistent with the expected phasing of our full-year outlook, positioning us well for even greater growth in the quarters to come. Thanks to robust cash flow development and our strict financial discipline, our net leverage ratio improved to 2.8 times, which is well below our self-imposed target range. While tariffs have certainly been a prominent topic this year to date, recent changes in tariffs did not have an impact in the first quarter. Also, for the financial year 2025, we currently expect only a very limited impact from both US and any global retaliatory tariffs. Overall, the first quarter developed well in line with our expectations, and we are therefore confirming our full year outlook. Turning to slide five, Here, I would like to highlight recent developments in each of our operating segments, beginning with care delivery. In the US, the stable or very slightly positive volume development reflected a 40 basis point impact from mistreatment driven by the severe flu season. We experienced peak flu impact in February and March. Prior to that, we realized relatively strong volume development in January. At the same time, we are encouraged by the accelerating number of referrals, which have helped to offset the impact from flu-related mistreatments. Throughout the quarter, we saw improving trends in patient referrals and the results of our operational improvements continuing from the second half of last year. This includes our efforts to streamline our admissions process and reduce patient cancellations. Therefore, we continue to expect same market treatment growth of 0.5% plus for the U.S. in 2025. While we have not given a specific phasing, we would expect a similar trajectory as last year, with Q1 as the low point and stronger performance following throughout the year. While our same market treatment growth adjusts for the number of dialysis days, having one fewer dialysis day in the quarter creates a headwind for absolute volume development and utilization. In our international markets, we saw strong same-market treatment growth accelerate to 2.5%. This is an encouraging indicator for these markets, as well as an outlook for the U.S. recovery. Our value-based care business contributed to overall revenue growth. We saw lives under management increase from around 130,000 at the end of 2024 to around 148,000 at the end of March. Despite headwinds from one less dialysis day and the severe flu season, we maintained our operating income development at a stable level. Our 2025 outlook anticipated a lower contribution from the first quarter in care delivery, so all in line with expectations. Our care delivery earnings were supported by favorable rate and mix development, as well as a positive impact from phosphate binders. Within care delivery, we are continuing to prepare for the rollout of high-volume hemodifiltration, or HDF for short. In the U.S., our first U.S. pilot program has grown from a few patients to 11 currently treated on our new 5008X machine. We are well positioned to expand that further as we approach the official launch at the end of the year. Turning to care enablement, after a strong Q4 last year, care enablement delivered a strong first quarter with solid volume growth in all regions and continued positive pricing momentum. We realized additional sustainable savings as part of our FME25 transformation program driven by further optimization of our manufacturing and supply chain footprint. I'm pleased to report that our care enablement margin further improved to 8.3%. For the first time, it entered its target margin band of 8 to 12%. While there is more work to be done, if you remember where we came from, this is a tremendous achievement and positions this segment for further growth and margin expansion beyond 2025. Not only from a care delivery perspective, but also from a care enablement perspective, we are actively preparing to bring transformational innovation to the U.S. market with the rollout of the 5008X. We are well on track for the launch at the end of the year, and we look forward to sharing more detail at our CMD on June 17th. I'll now hand over to Martin to take you through the first quarter financial performance in more detail.

Thank you, Helen. And welcome to everyone on the call also from my side. I'll pick up on slide seven. In the first quarter, we achieved solid organic revenue growth of 5% with contributions from both segments. At constant currency, revenue increased by 1%. The muted revenue development reflects the successful execution of our portfolio optimization plan. Divestitures negatively impacted our revenue development by 260 basis points. As a reminder, We decided not to adjust our numbers in the fiscal year 2024 and 2025 for the divestitures that were closed in those years. We decided to absorb the revenue and operating income effects of having sold the business in our guidance range for the respective year. Operating income, excluding special items, increased by 11% on a constant currency basis, primarily driven by growth in our care enablement segment. This reflects the expected phasing for our 2025 outlook. Special items negatively affected group operating income by €126 million. This mainly includes costs relating to portfolio optimization and our FME25 transformation program, as well as negative effects from the re-measurement of our investment in Humasight. Next, on slide 8. This slide highlights the drivers of our year-over-year margin development. We realized a 90 basis point margin increase, largely driven by growth in our care enablement segment. This offset the slightly negative care delivery contribution, which reflected the impact of a severe flu season and one less dialysis day. I will review the drivers when we look at the segment in detail. Favorable contributions from corporate included the positive valuation effect of virtual power purchase agreements amounting to €3 million in the first quarter. It is worth noting that foreign exchange translation had a beneficial effect on our business in the first quarter and contributed to the growth with €11 million. Moving on to slide 9. Care delivery showed strong organic revenue growth of 4%, driven by both Care Delivery US and Care Delivery International. In the U.S., our growing value-based care business supported revenue development along with favorable rates and pale mixed developments. This compensated for the muted same-market treatment growth, reflecting higher levels of mistreatment driven by the flu season. As mentioned by Alan, we also realized solid international revenue growth supported by accelerated same-market treatment growth of 2.5% in those markets. The revenue development was negatively impacted by one less dialysis Additionally, our portfolio optimization plan negatively impacted care delivery revenue development by 370 basis points. We expect the headwind from our portfolio optimization to reduce over the course of the year. Despite the headwinds faced in this first quarter, care delivery maintained its operating income contribution at a stable level, even slightly expanding its margin to 9.3%. Earnings were supported by favorable rate and mix developments, as well as the positive impact from phosphate vitals. Care delivery earnings also benefited from FME25 savings. These earnings developments were offset by labor and inflation cost in the quarter, which developed in line with our expectations. Let us have a closer look at the development in care enablement on slide 10. In the first quarter, Care enablement continued to show strong revenue growth, supported by 5% organic growth. This development is mainly attributable to solid volume growth in all regions and continued positive pricing momentum globally. In line with our expectations, volume-based procurement in China was again supportive of volume growth, but a headwind to pricing. The segment showed a significant 49% increase in operating income, resulting in a margin increase of 240 basis points. With an 8.3% margin, care enablement also reached its target margin band. This reflected continued execution of our FME25 transformation program, as well as improved volume and price effects, which more than offset anticipated deflationary pressures. Moving to slide 11. In the first quarter, the relatively low operating cash flow was driven by seasonality and invoicing in line with our expectations. We realized a strong increase of 28% against last year's quarter due to improved operating working capital. Consistent with our current strategic priorities, we further reduced both our total debt and lease liabilities and total next debt and lease liabilities compared to the prior year period. As a result of our continued strict financial discipline, our net leverage ratio improved to 2.8 times. We remain comfortable being below our self-imposed target corridor of 3 to 3.5 times. Following the quarter end early April, we took advantage of the favorable market conditions and our improved credit rating outlook to successfully place two bond branches with an aggregate volume of 1.1 billion euros. We used some of the funds to buy back approximately €300 million of bonds maturing in 2026. We are planning to provide an update on our future capital allocation plans at our upcoming Capital Markets Day in June. I will now hand back to Helen to review our outlook.