Fresenius Medical Care AG

Thank you, Moritz. Welcome, everyone, to our earnings call for the fourth quarter and the financial year 2025. As always, I 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. We will have one hour for the call, In order to give everyone the chance to ask questions, we would limit the number of questions to two. Thank you for making this work, as always. We will begin our full-year financial results by reviewing key strategic milestones achieved in 2025, which mark the end of our mid-term strategy. Next, we will analyze fourth quarter outcomes and present our outlook for 2025 and different horizons beyond. Let me now welcome Helen Gieser, CEO and Chair of the Management Board, and Martin Fisher, our Chief Financial Officer. Helen, the floor is yours.

Thank you, Dominic, and welcome, everyone. It's great to have you with us today. We appreciate your continued interest in Fresenius Medical Care. 2025 was a milestone year for Fresenius Medical Care. We delivered an outstanding step up in profitability, having achieved the upper end of our 2025 financial outlook and closing the year with an exceptional fourth quarter performance. The progress we realized in 2025 and the momentum we have built over the past three years reflects the consistent focus and dedication of our employees around the world. Their commitment is the foundation to our success as we strive to lead kidney care through exceptional care and innovation. And I'm extremely appreciative of the progress we made for our patients and the exciting path we have ahead of us. Before we delve into the fourth quarter specifically, I would like to take a few minutes to reflect on the key highlights of the past year and how we are positioning Fresenius Medical Care for the next phase of value creation. Beginning on slide four, At our Capital Markets Day last June, we officially launched our new 2030 strategy, FME Reignite. The strategy is designed to accelerate growth and drive ambitious profitability improvements, aiming for industry-leading margins. FME Reignite represents a pivotal step forward for us as we shift our focus toward accelerated innovation and growth. As part of our FME Reignite, we carved out our value-based care business, establishing our third operating segment. This strategic decision further enhances our reporting transparency and reflects the continued growth in value-based care, which generated over €2 billion in revenue in 2025. We not only initiated but accelerated a €1 billion share buyback program, reflecting our strengthened financial profile, further reduced net debt, and commitment to regularly returning excess cash to shareholders. In 2025, we marked an important milestone with the successful soft launch of our 5008X care system in select FME clinics in the U.S. to accelerate to the large-scale clinic conversion in 2026. As we speak, we are rolling out at speed the 5008X care system to our U.S. clinics and are setting a new standard of care in the U.S. with high-volume HDF therapy. We accelerated our FME 25 plus savings program through the end of 2025, achieving sustainable savings above our already increased target. This supported a significant step up in profitability with a group margin of 11.3% driven by all three operating segments and landing well within our target margin band for 2025. Turning to slide five. For 2025, we delivered revenue growth at the upper end of our outlook, leveraging our vertically integrated business model to overcome a difficult market environment and unanticipated headwinds from lower volumes and elevated medical benefit costs. Supported by an exceptional fourth quarter performance, the 2025 operating income growth of 27% reached the top end of our ambitious outlook for the year. Next on slide six, The beginning of 2023, we set demanding mid-term profitability targets to 2025 as we began a three-year journey to build a stronger and more resilient company while committing to significant operational improvement. I am proud to say that we have delivered on that commitment. We increased our care delivery margin to 13.1%, achieving the middle of our target band for the segment. We more than quadrupled our care enablement margin from nearly 2% to just over 8%. If you recall, at the time of setting the targets, we had just two operating segments, with value-based care still part of care delivery. This is why there was not a specific target for value-based care. However, the improved performance in that segment is reflected in the group development. While returning capital to shareholders in the form of dividends and share buyback, we are in a significantly stronger financial position as we have reduced net debt and improved our net leverage ratio from 3.4 times at the end of 2022 to 2.5 times at the end of 2025. Turning to slide seven. we also delivered on the committed key strategic initiatives. This execution supported our improved operational performance to date and, importantly, has positioned us well as we transition towards the next phase of growth and innovation. With our FME25 Plus transformation program, we committed and over-delivered, exceeding our already upgraded sustainable savings target with €804 million in realized sustainable savings to date. We executed our portfolio optimization program at pace, focusing our international clinic footprint to 25 core markets across 34 countries, considerably down from 49 in 2023. A key pillar of our strategic plan announced in 2023 was to unlock value as the leading kidney care company. The launch of our 5008X machine in the U.S. and leadership in renal value-based care are powerful examples of how we are delivering on that ambition while raising the standard of care for patients. Next on slide eight, cash generation is an inherent strength of our business model. In 2025, we generated 2.7 billion euro in operating cash flow. clearly demonstrating this capability. This strong cash performance supported by disciplined capital allocation provided the flexibility to invest in our core business for profitable growth while returning excess capital to shareholders. Through our accelerated share buyback program, we repurchased shares for a total amount of 586 million euro in 2025, completing the first tranche of our initial 1 billion euro program. which supported our EPS growth. In January of this year, we initiated the next tranche with around 414 million euro, further accelerating the share buyback program. For the 2025 financial year, we plan to propose a dividend of 1 euro 49, representing a 3% increase to 2024 and corresponding to a payout of 33% of adjusted net income. well aligned with our target payout ratio of 30% to 40%. Let us now look at our fourth quarter performance specifically, beginning on slide 10. To cap off a strong 2025, we delivered a truly exceptional fourth quarter financial performance. We realized strong organic revenue growth of 8% and earnings growth of 53%. resulting in a margin of 13.9%, a remarkable 430 basis point increase over the prior year. This was supported by our FME25 Plus savings program with 63 million euro in additional sustainable savings in the fourth quarter alone. We recorded exceptional EPS growth of 68% driven by our accelerated share buyback program. And in parallel, we further improved our net leverage ratio to the low end of our target corridor. Let's review some fourth quarter highlights from each of the operating segments on slide 11. Beginning with care delivery, in the U.S., same market treatment growth was broadly flat, as volumes remained under pressure from the follow-on effects of the flu-related elevated mortality in the first half of the year and a high level of mistreatment in December. Our care delivery international markets delivered solid 1.7% same market treatment growth. Underlying performance in care delivery was positively supported by favorable U.S. rate and payer mix development. In addition to the underlying trends, Care delivery performance was boosted by around 40 million higher than expected benefit from phosphate binders that fall into the Tdapa regulation, bringing it to around 220 million euro contribution in 2025. We shared in our third quarter earnings call our quality initiative on bloodstream infection prevention by using different types of catheter-related bloodstream infection interventions In the fourth quarter, we made significantly faster progress on the initiative than assumed. Both interventions require a physician prescription, and one of those solutions prescribed by physicians falls under the SADAPA regulation until the middle of 2026. It has contributed around €90 million in 2025, and it will be a year-over-year neutral effect for 2026. This has helped us in 2025 to offset around 80 million higher medical benefit costs in the year that we had not anticipated at the beginning of the year. Of course, the higher than expected ADAPA contribution in 2025 raises the outlook base for 2026 even higher, and I will address the impact in the outlook section. As I highlighted earlier, we started with the launch of our 5008X machine in select clinics in preparation for the large-scale expansion of access to high-volume hemodifiltration in 2026. Turning to value-based care, we realized positive operating income in the quarter driven by favorable savings rates, which was partially offset by an unfavorable effect from CKCC programs. This development brings our 2025 value-based care performance to break even, a notable achievement from a historically loss-making position. In the fourth quarter, we realized an increase in member months from further contracting growth, as well as the continued growth of our provider network. The fourth quarter in care enablement saw continued positive pricing contributions. However, in China, we faced negative impacts from volume-based procurement as well as other regulatory policies, resulting in stricter tender requirements and delayed tenders. This weighed on our revenue and earnings development in the quarter and is also expected to impact 2026. We continue to capture sustainable savings as part of FME25+, driven by disciplined execution of the next level of footprint optimization across both manufacturing and supply chain. And also in care enablement, preparation for the large-scale launch of the 5008X and shipment of new consumables continue to advance as planned. I'll now hand over to Martin to walk you through the fourth quarter financials in more detail.

Thank you, Helen, and welcome to everyone on the call, also from my side. I will begin on slide 12. In the fourth quarter, we achieved organic revenue growth of 8%, supported by value-based care and care delivery. At constant currency, revenue increased by 7%. Care enablement revenue development was negatively impacted by regulatory pressure in China. Divestitures executed as part of our portfolio optimization plan negatively impacted revenue development by 70 basis points. Adjusted operating income increased by an impressive 53 percent on a constant currency basis. This increase drove a clear step change in our group margin to 13.9 percent. Special items negatively affected operating income by 111 million euros. This comprises costs related to FME25 Plus and our continued portfolio optimization, as well as effects from the re-measurement of our investment in Humasight. Turning to slide 13. This slide highlights the remarkable 430 basis point margin improvement driven by especially strong contributions from care delivery due to significant higher contributions from the DARPA regulation than we had expected. And value-based care contributed positively as well. Net corporate costs improved by 5 million euros. This includes a favorable 2 million euro development in virtual purchase power agreements compared to the prior year period. Foreign exchange rates developed unfavorably with a negative 43 million euro translational impact. The average US dollar exchange rate in the fourth quarter was 116 compared to 117 in the third quarter. I will now walk you through the financial developments in each segment starting with care delivery on slide 14. Care delivery realized 7% organic revenue growth and 6% revenue growth at constant currency. In the U.S., organic revenue growth of 8% was driven by positive impacts from the DAFA regulations, favorable rate and mix effects, and reduced implicit price concessions, demonstrating progress in our revenue cycle management initiatives. Care Delivery International delivered 3% organic growth. Divestitures negatively impacted care delivery revenue growth approximately by 120 basis points overall. Care delivery achieved 45% earnings growth and 440 basis points margin improvement to 16.4%. Business growth benefited from higher than anticipated contributions from phosphate binders. The significantly higher prescription and adoption rate of one of the antimicrobial catheter solutions that falls under the DAPA regulation also contributed around €70 million in the quarter. helping us to offset the not anticipated around 80 million euro higher medical benefit costs in the fiscal year. Business growth also supported by positive rate and mix effects in the underlying clinic business, as well as the facing of a consent agreement on certain pharmaceuticals. Increased labor costs, which included significantly elevated medical benefit costs, were partially offset by FME 25 plus savings. Turning to value-based care on slide 15. Value-based care again accelerated revenue growth, achieving 42% organic growth. This significant increase was driven by further growth in the number of member months largely attributable to further contract expansion. Value-based care realized positive €29 million in operating income, driven by improved savings rate, FME 25-plus savings, and partially offset by an unfavorable effect from CKCC programs. For the full year, value-based care was positive €3 million compared to a loss of €28 million in 2024, marking the first year of break-even earnings development for our value-based care business. I will next turn to care enablement on slide 16. Revenue for the segment decreased by 3%. Lower volumes driven by negative impacts from value-based procurement and other regulatory policies in China were partially offset by overall continued positive pricing momentum. Care enablement earnings declined by 6%, primarily due to unfavorable business development in China and currency transaction effects. This was partially offset by positive pricing. Further sustainable savings from the FME25 Plus program, primarily driven by improvements in supply chain manufacturing, compensated for the expected inflationary cost increases. Next, I will look at cash flow development on slide 17. In the fourth quarter, operating cash flow strongly increased versus the prior year, mainly driven by higher net income, improvement in cash collection, and prior year facing of income tax payments. Our disciplined use of cash fully aligned with the priorities set out in our capital allocation framework. In the quarter, we purchased existing production sites in Germany that had previously been leased for a total of €181 million. We reduced our net debt and lease liabilities compared to the prior period by 6%. We accelerated our share buyback program, repurchasing over 14 million shares for a total amount of €585 million, representing 4.8% of share capital in 2025. Since the end of the quarter, we have repurchased an additional 4.2 million shares for €163 million. We ended the quarter with a further strengthened net leverage ratio of 2.5 times, improving to the lower end of our target band. we reconfirm our target band of 2.5 times to 3 times. I will now hand back to Helen.