Fresenius Medical Care AG

Thank you, Valentina. I would like to welcome everyone to our earnings call for the third quarter of 2026. 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. The call is scheduled for one hour. In order to give everyone the chance to ask questions, we would limit the number of questions to two, as always. Thank you for making this work. With us today for the first time is Sherwin Kurangi, our new CEO and Chair of the Management Board, and of course, Martin Fischer, our Chief Financial Officer. As Sherwin joined Fresenius Medical Care, As Fresenius Medical Care CEO three weeks ago, Martin will lead more of the discussion today and more of the answers to your questions today. I will now hand over to Sherwin for some introductory remarks. Sherwin, the floor is yours.

Thank you, Dominik, and welcome everyone. I'm very pleased to be here and to be speaking with you for the first time as the CEO of Fresenius Medical Care. It's been just three weeks since I stepped into the role, and I am excited about the opportunity ahead. With this business, I see a collection of market-leading assets, the one that is still being shaped. The last years have laid a nice groundwork, and at the same time, I believe there is much we can refine going forward. This spans from portfolio to execution to how we look at and assess our business. As you know, I've served on the Supervisory Board since December 2023, so I'm coming into the role with some familiarity, but as you can imagine, the depth of understanding needed will take a little bit of time. We're proceeding with urgency, yet I appreciate a little bit of patience as that process, which I'm sure many of you have experienced in other investments in your portfolios or companies you've covered when facing a leadership change. You may be wondering what really excites me about the company. We are a global leader in kidney care. We have capabilities and reach that no other company in our space has access to, nor could build in short order. Yet many parts of our business are still young in their development cycle, given the structural changes of the last few years. That provides opportunity for improvement that can be step change versus a slower progression that more mature businesses face. My focus will be to expand and improve the continuity of care for our patients, which if done well, will drive long-term profitable growth. I've spent my first days getting first deep into the business and honing in on the most important value drivers. And second, looking for and assessing both areas of improvement and areas of expansion. I've heard from many stakeholders and welcome continued feedback and perspective, which will help us shape future plans. I'm also encouraging the organization to take a longer-term view in developing our plans. We must balance that long-term perspective with critical short-term wins, which will build continued confidence in our organization. Delivering on this balance is a core message to our organization internally. Sustainable success comes from laying thoughtful multi-year plans but identifying key milestones and metrics that prove the plan is taking shape along the way so that our shareholders, our supervisory board, and our people can continue to invest in our success. Looking forward, I am sure you are eager to hear more about my future vision for the company. We will be rolling out our 2027 planning in due course. With that, let me turn to our third quarter results highlights on slide six before handing over to Martin to walk through all of the details. As Dominik mentioned, I will keep my comments at a high level. Turning to our third quarter performance, Fresenius Medical Care delivered broadly stable revenue and earnings despite some headwinds. The underlying business performance continued to improve, helping to offset the anticipated reimbursement headwinds coming from Tdapa. You are all aware that the HHS released their Kidney Care National Plan two weeks ago. It is to see that many of the priorities outlined in the plan are aligned with our thinking. Specifically, innovation is critical for this sector. like the recent approval of our Multi-Filtrate Pro product, a needed advancement in the critical care segment, and of course, the U.S. rollout of HVHDF, which is a standard of care in many markets like Europe. I would say there is not a company in our space that has brought two new platforms to market in the U.S. kidney care market that quickly probably ever. Our rollout of the 5008X continues to progress and in some measures ahead of expectations. By the end of September, we had converted 348 clinics or 14% of our clinics by installing approximately 9,000 machines, which is approximately 16% of our install base. This puts us on track to convert 20% of our install base by the end of the year. In the first nine months, we have performed around 300,000 treatments reaching HVHDF, which is around 1.3% of total treatments, and that has accelerated materially through October. This will be a measure that we track closely. As we approach now more than 500 clinic conversions across the U.S., feedback has been overwhelmingly positive, with providers highlighting improvements in the patient and staff experience. as well as the system's ability to address critical workforce attraction and retention challenges. Our approach is simple. Follow the science. Continue generating high quality evidence and give as many patients as possible access to the therapy with the strongest demonstrated outcomes. Outcomes in randomized studies and and many more. I also want to take the opportunity to update you on certain FDA audits at our facilities in the past months. We take quality of our products and processes with the utmost of importance and the highest standards. The team has designed plans to strengthen our quality management system and address the findings in the audience. We are actively implementing corrective and preventative actions. For me personally, I want to ensure that the team first addresses the findings and observations at an accelerated pace, but also in parallel, improves the underlying system and processes so that we do not repeat some of these concerns down the road. Our focus is clearly to ensure the quality, safety, and reliability of the products and therapies that patients and healthcare providers rely on. To conclude this slide, I'm also happy to share that we also continue to execute our second 1 billion euro share buyback program, purchasing 3.4% of share capital as of the end of September. And with that overview, let me hand it over to Martin to walk through the third quarter in much more detail.

Thank you Sherwin, and welcome everyone. I will pick up on slide 8. In the third quarter, group revenue remained broadly stable, supported by organic growth in care delivery and partially offset by the anticipated and communicated decline in value-based care revenue, reflecting a change in the risk structure of one contract. Divestitures negatively impacted group revenue development by 30 basis points in the third quarter. Turning to earnings. Operating income, including special items, declined by 6% at constant currency, reflecting the anticipated SADAPA reimbursement. We also face increased inflationary pressures, particularly in care enablement. Despite these pressures, our continued focus on underlying profitability improvements supported an operating income margin of 11%. Special items in the third quarter amounted to a net negative 161 million euros. This includes one-time costs related to the China strategy refinement, which were a bit below the communicated €110 million. The main components here were the discontinuation of the 4008A production and sales activities and the exit of the peritoneal dialysis business. Additionally, we continue to execute well on our FME25 Plus transformation, which resulted in €74 million sustainable savings in the quarter. We invested €54 million one-time costs in the quarter, keeping us fully on track to deliver €250 million in sustainable savings for the full year. These savings are resulting from clinic consolidation in the US, manufacturing footprint initiatives, and organizational efficiencies. Let's move to slide 9. Looking at the bridge of operating income excluding special items. All three segments supported earnings growth with the strongest contributions from value-based care and care delivery. As expected, intersegment eliminations increased as sales of the 5008X care system into our own US clinics continued to grow. With the rollout progressing according to plan, we expect this trend to continue for the remainder of the year. Corporate costs increased by €28 million year-over-year. This mainly reflects our planned investments into strategic IT platforms and digital infrastructure, including the transition to SAP S4 HANA. These investments are part of our broader efforts to modernize our systems and improve operational efficiency over time. Foreign currency translation had a positive impact of 4 million euro this quarter. The average US dollar exchange rate in the third quarter was 115 compared to 117. in the third quarter of 2025. Let me now walk you through the individual segments in more detail, beginning with care delivery on slide 10. In the third quarter, care delivery revenue increased by 1% at constant currency and 2% organically. In the US, organic revenue growth of 1% was supported by favorable rate effects, including benefits from our revenue cycle management initiatives. As expected, the DARPA effects shifted from a tailwind into a headwind in the quarter. USA market treatment growth declined by 1.1% in the quarter, reflecting the carry-forward impact of legal patient referrals in the first seven months of the year. This remains in line with the revised full-year expectation for a decline of approximately 0.9%, which remains to be a headwind against our original growth assumption for the year. Encouragingly, patient inflow in the third quarter started to stabilize to a similar level as the prior year quarter. While our continued focus on clinical quality helped not only to reduce the level of mistreatment, but also to sustain mortality rates at pre-COVID levels and supported patient retention. Internationally, revenue development was positive and same market treatment growth at 1.4%. The 20 basis points improvement compared to last year was also driven by our quality initiatives, which are reducing mortality. It was additionally supported by the expansion of our home programs in selected markets. Divestitures undertaken as part of our portfolio optimization strategy had a negative impact of approximately 40 basis points on care delivery revenue growths, primarily reflecting the prior year divestment of clinics in Brazil. Turning to profitability, Care Delivery delivered a 2% increase in operating income at constant currency, while expanding its margin to 14.7% despite the anticipated Tadapra assets. The underlying operating income, excluding Tadapra effects, increased by 21% year-over-year. This strong improvement was supported by favorable rate effects, including higher Medicare reimbursement, reflecting the higher patient acuity and corresponding physician prescription patterns. We expect this outlier reimbursement benefit to be transitory. Continuous FME25 Plus savings and strong operational execution across the business helps to mitigate higher than expected labor costs and inflationary pressures. Looking ahead, we expect the DARPA headwinds to further increase in the fourth quarter as we approach the end of the TADAPA period for phosphate binders. Moving on to value-based care on slide 11. Value-based care revenue decreased by 9% in both organic and constant currency basis. As anticipated, the decline primarily reflected a change in the risk contracting structure of one of our larger contracts. which resulted in a different type of accounting treatment and lower revenue recognition. The decrease in revenue was partially offset by a favorable effect of payer premium rates. This development is in line with the communicated revenue decline of around €150 million in value-based care for the full year. Despite the decline in revenue, value-based care continued to make meaningful progress in profitability. Operating income, excluding special items, increased to positive €1 million from a €21 million loss in the prior year. Business growth contributed €17 million to the year-over-year improvement, supported by a higher savings rate and a favorable prior year comparison, when delays in CMS reporting data for the CKCC program deferred revenue recognition to the fourth quarter of 2025. Additional earnings benefits came from integration synergies delivered through FME25+. I will complete our segment overview with care enablement on slide 12. Care enablement realized solid revenue growth of 5% organically and at constant currency. Topline growth was supported by the continued momentum from the rollout of the 5008X care system in the US and favorable pricing across the globe. Care enablement earnings increased by 4%, mainly driven by sales of the 5008X and favorable pricing development and positive volume development outside China. The FME25 Plus program contributed positively. Earnings growth was achieved despite higher than expected inflationary pressures, resulting from higher oil and gas prices, as well as increased logistics costs due to the geographical tension in the Middle East. We continue to implement mitigating measures where possible. Currently, these higher costs, especially for raw materials and transportation in care enablement, add to the higher than expected inflationary pressures we see in care delivery. We therefore now assume for the group to exceed the 300 million top end that we had originally assumed in our inflation hedge fund range for the year. Next, I will look at cash flow and capital allocation on slide 13. We delivered a strong increase in operating cash flow of 8% in the third quarter, mainly driven by favorable working capital development. Pre-cash flow increased by 3% to €564 million. Total net debt and lease liabilities increased by 6% year-over-year, as expected. We are continuing to execute our second 1 billion share buyback program. As of September 30, 9.1 million shares, or 3.4%, have been repurchased for a total investment of €357 million. This represents approximately 60% of the first round of up to €600 million, which is expected to be completed by mid-December. Our net leverage ratio remains stable at 2.6 times near the lower end of our target parameter of 2.5 to 3 times and underscoring the strength of our balance sheet and disciplined approach to capital allocation. Brevin, I now hand back to you. Thanks, Martin.