Fresenius Se & Co

Thank you very much. Good morning, good afternoon, everybody. Thank you for participating to our full year and Q4 2020 results. As always, with me on the call, Michael and Sarah. Before we start, I would like drawing your attention to the cautionary language that is included in our safe harbor statement on page two of today's presentation. And with that, I will hand cross to Michael.

Thank you, Markus. A warm welcome, everybody. This is Michael. Sarah and I will be reviewing the 2023 operational and financial highlights first, then we'll talk about our ambitions going forward. We'll touch on the next phase of future Fresenius and the value that we are generating in our operations. Plenty of time for questions, of course, and then we'll take it from there. I'm very proud of our team and achievements in 2023, a year, what we call structural progression. Advancing patient care is our purpose at Fresenius. Twelve months ago, we pledged to reset the company to ensure our ability to achieve exactly that mission. This meant added focus, more simplicity and transparency, and delivery of better financial performance. In 2023, we delivered. CABI and Helios are at the core. We've simplified structures, removing unneeded and outmoded complexity. Everyone is pulling in the same direction. I'd call it actually a reset plus. And you can see the results of our efforts in the numbers. Financially, a delivery to plan, consistently quarter by quarter. We had a strong Q4 and delivered our outlook that was upgraded twice during the course of the year. The operating cash flow development was very strong in Q4, helping us to deliver faster than anticipated. All of this gives us a powerful platform to continue to build value in 2024 and beyond. We are looking to accelerate this year with ambitious expectations on revenue, earnings growth, and debt reduction. On to one of my favorite slides. Focus on Helios and Kabi is really paying off with quarter by quarter consistent robust delivery. Kabi with the 3 plus 1 strategy came out at the top end of the structural growth band. Consistent execution driven by strong market positions and the growth vectors. Helios just keeps delivering excellent finish to the year. Also here, revenue growth at the top end of the structural growth band. Terrific set of hospital and clinical assets that are at the top of their game. Really reliable. And then we prescribed some tough medicine for VAMED and it's working. The second consecutive quarter in black geared in the right direction. Slide six, you can see here on the left side what we achieved in 2023. Simplification, lower costs, focus, and stronger and more dedicated management team. Significant progress on all fronts of the future Fresenius agenda. We over-delivered on cost savings, reflecting the revived agility within the group to drive what we called from the very beginning self-help. And we continue to move forward. We have upped the cost savings target for 2024 to substantially improve our structural productivity. The deconsolidation of Fresenius Medical Care is a landmark of our future Fresenius agenda. It took us less than a year from the announcement to deconsolidation. This is high speed. Overall, more focused and faster decision-making. We established a newly highly determined and committed management, now acting as a team. The turnaround of our investment company, VAMIT, is progressing well, as we have said. Divestments of non-core assets are also well on track. We have closed Eugene, the transaction, just recently. All in all, a great 2023, an over-delivery, and a high performance within our future Fresenius agenda. 2024 will be all about keeping the gas pedal pressed. All of this results in our outlook for 2024. We expect to see consistent, strong, top-line momentum fueled by our operating companies. This is underpinned by our growth vectors at CABI, MedTech, Nutrition, and Biosimilis, and by strong market positions across CABI and Helios. Our group EBIT growth will be spurred by operating leverage, efficiencies, and cost control. We expect to accelerate in 2024 with 4% to 8% growth. And with the leveraging being a high priority, the focus is on rebuilding EPS growth momentum, unlocking value at Fresenius. Our success at Kabi and Helios are paced by product and service advancements. First, Kabi, we are progressing well with the execution of Vision 2026. Tyen, the first approved Totsilitsuma biosimilar in the European Union, became available in the first countries, a great example of health equity at work, offering more people access to affordable health care solutions, benefiting patients and health care professionals. And we continue to broaden our biosimilars portfolio. Take the partnership of MAP Science and Intus Pharmaceuticals. Intus gains the commercialization rights for etanercept in more than 150 countries worldwide. Collaborating with Intus allows us to tap into new markets and bring our cutting-edge biosimilar candidate to countless patients battling autoimmune diseases. reinforcing our dedication to leading the way in the biosimilar industry. In medtech, IVANx is rolling out its new pump. Any new product takes time to hit stride, but the signing of the largest contract for IVANx pumps so far is very positive. This is even more important since approximately 90% of patients receive IV therapy during their hospital stay. The broadening of our nutrition portfolio is going well. We are pleased with the market perception of our new plant-based nutrition offering. With this, we are addressing the growing demand for alternative nutrition driven by increasing lactose intolerance and rising importance of also sustainability. And we are bolstering the resilience of pharma, driving product innovations such as the introduction of RFID smart labels for Diprivan, We are convinced that the adoption of RFID, the technology as such, enhances patient care, improves efficiency, and streamlines workflows for pharmacists. On top of this, our colleagues are, of course, constantly looking at how to further develop our portfolio in all relevant drug classes, including, for instance, GLP-1 agonists. For patients, it's good, and it's good for Fresenius. At Helios, we continue to be a leader in the delivery of high-quality and innovative healthcare in the hospital and clinical settings. Our Spanish operations are among the best around. Our five cure and salute centers enjoy the best reputation in Spain. The healthcare sector faces a looming people shortage, with projections indicating a need for 84 million professionals globally by 2030. So we are leveraging every tool we can, digitalization, technological innovation, and AI to attract, retain, and educate skilled professionals. International employees will play a key part going forward, and we are at the forefront of what we are doing here. Besides our strong commitment to providing top-notch people to patient medical services, cutting-edge technology is the future. Kiran Salu brings innovation to patients with the first two CT scanners in Spain with photon counting technology, which, as we know, improves image quality, reduces radiation dose, and enhances diagnostic capabilities. Our consistent execution is already reflected in a couple of financial KPIs, and we will pace performance in 2024 and beyond, along with ongoing portfolio optimizations. At the operating company level, we see organic revenue growth of 6% and EBIT growth of 4%. The new core of Fresenius is a runway for value accretive growth. Our cash focus is already reflected in a significantly improved operating cash flow development. For the fiscal year, operating cash flow is up by a strong 5%. Our outlook foresees accelerated earnings growth in 2024. The whole organization is geared towards reducing debt, pacing cost reductions, accelerating earnings growth, and creating value. For now, that's it from my side, and I will hand it over to Sarah for some deeper dives on the numbers, and I'll be back in a couple of minutes.

Thank you very much, Michael. A warm welcome also from my side. 2023 was a year of significant structural progression, as Michael said. We made advances in many aspects of our future Fresenius journey in 12 short months. Kudos to my colleagues across Fresenius that made these changes happen. In February of last year, we defined our Fresenius financial framework. It is a clear and measurable set of ambitions to accelerate performance and to strengthen our focus on improving returns. Carbi and Helios both hit their targets for the full year. Their results came in within their respective framework bands, both in terms of margin and organic growth. So future Fresenius and the focus on our operating companies is paying off. Of course, there is still work to do, particular in the areas of capital efficiency and leverage. We said a year ago that 23 would be the trough, with improvements thereafter. This is clearly a key focus for 24 and beyond. For last year, the finance agenda focused on the three things outlined on the right-hand side. First, focus and transparency. We introduced the new business unit-based disclosure at CARBI and increased transparency on our growth drivers and midterm ambitions. The FMC deconsolidation provides a clearer picture on our operating core. On structural productivity, we over-delivered significantly against our increased targets. The focus on capital efficiency and returns was an important paradigm shift. We executed a number of portfolio measures, and with the introduction of the cash conversion rate, we put a clear focus on cash as an organization. Let's move to our Q423 results. Overall, we had a good finish to the year. We achieved revenues of €5.7 billion, up 5% organically. The increase is driven by an ongoing strong performance of our operating companies with a 6% organic growth rate. EBIT at €634 million was up 8%, reflecting a strong performance at Carby and Telios and the progress at Valmet. Higher interest rates led to interest expense of €418 million for 23, up by more than 70% year-over-year. For this year, we expect interest expenses in the range of €420 to €440 million. The tax rate before special items was elevated at 36.4%. This brings the full-year tax rate to 28.3%. That's higher than expected, mainly due to the missing capitalization of tax loss carried forward, for example at VAMET, and the conclusion of tax audit proceedings. For 2024, we expect a tax rate between 25% and 26%. Seeing our operating cash flow at €1.3 billion really encourages me, in particular as it was an increase against a very strong comp last year. The strong cash flow also drove the sequential reduction of our leverage ratio by more than 25 basis points in Q4, ending the year at 3.76 times net debt EBITDA. But let's take a closer look at the segment in Q4. Kikabi's revenues grew 7% organically to €2 billion, that is, yet again, at the top end of the structural growth band. growth was fueled by a healthy combination of volume and price effects, which is very encouraging. To provide a better view of the underlying business performance, we fully eliminated the accelerated hyperinflation accounting effects from Argentina in our organic growth rate. The three growth sectors drove SCAVI's top line with a strong 11% organic growth rate. MedTech was up 8% with a broad-based positive development across all regions and product groups, and a good price and volume mix. Nutrition recorded organic growth at 6%, driven by positive developments in the U.S. and Europe. China continued to be negatively affected by the indirect effects of the government's ongoing sector-wide anti-corruption campaign. Biopharma had another very strong quarter, with growth of 66%, mainly driven by the Toxelizumab launch in Europe, as well as licensing agreements. Also, Pharma had a good, solid growth rate of 3%, with positive momentum across many regions, including the U.S. Product supply in the U.S. significantly improved in Q4, with a meaningful reduction of back orders. With an EBIT of €282 million and a margin of 14.1%, we saw an excellent year-over-year improvement, driven by operational leverage from good revenue growth and ongoing progress on the cost and efficiency measures. The growth vectors showed a remarkable margin improvement of 430 basis points to 10.2%, mainly driven by biopharma. On to Helios. Helios had a strong finish to the year. Revenues at Helios grew 5% organically to 3.2 billion euros. a nice confirmation of the very consistent performance all year, at or above the upper end of its structural growth band. In Spain, growth of 5% was driven by strong activity levels on the hospital side, impressive, especially given a tough prior year comp. In Germany, solid activity levels also supported revenue growth at 5%. At 371 million euros, Helios EBIT margin stood at an impressive 11.6%, above the structural margin band. Helios Spain delivered an excellent quarter with an EBIT margin of 14.6%, driven by operating leverage effects, a good case mix, and some claim settlements. The sale of Eugene was successfully completed end of January this year. In Q4, Eugen had a positive contribution with strong EBIT margin expansion, driven by an increase in activity levels, in particular in the U.S. Overall, EBIT grew by 5%, supported by the strong top-line various cost savings initiatives, as well as government relief funds for energy-related cost increases in Germany. Let's turn to Varmad. We moved fast in 2023 to fix the challenges. And you see, stabilization and a positive trend driven by the service business. Of course, there's more to do. Revenues declined organically by 5%, mainly due to some contract timing issues, as well as more rigorous vetting in the project business. The service business, which represents around 80% of sales, grew by a robust 4%. driven by half facility operations. EBIT was again positive at €21 million, making it the second consecutive quarter with a positive EBIT and an acceleration over Q3. The positive development is primarily driven by the service business. The ongoing transformation resulted in special items of €113 million in Q4, composed of restructuring costs, as well as discontinued business activities and project review. Based on the current status of the turnaround, BarMed reiterates its ambition to be within the structural EBIT margin band of 4 to 6 percent by 2025 at the latest. We've discussed the accounting effects of FMC's deconsolidation throughout the year, and now we are there. FMC is accounted for using the equity method. But before moving to the equity method, the relevant accounting standards required the valuation of FMC at fair value and other technical adjustments in Q4. This led to a one-time non-cash charge of 521 million euros, booked as a special item. With the start of the equity method, we had to perform purchase price allocation for FMC's assets and liabilities. The subsequent accounting of the PPA effects are non-cash relevant. and will be treated as special item. Going forward, the equity result of FMC will be presented as a separate line below EBIT in Fresenius P&L. I'm particularly pleased with the cash flow development in Q4. Operating cash flow increased by 4% year-on-year to €1.3 billion despite Q4 of last year being an exceptional quarter already. The strong cash flow was driven by the good development at Carby and Helios, in particular by working capital improvements at Carby. At Carby, we focused on driving down our inventory as well as improved receivable collection. It is great to see that our initiatives are gaining traction. CapEx was tightly managed for the full year at a 5% level. Free cash flow generation for Q4 was strong. The full free cash flow improved nicely year over year. At the beginning, I recapped on our priorities for last year. This year is about execution and accelerating performance. From a CFO's perspective, that breaks down into three priorities. First, extending our cost and efficiency measures. Second, driving down leverage. Third, keeping a rigorous focus on capital efficiency and returns. Our cost and efficiency program is a clear value driver. With permanent cost savings of €282 million generated last year, we are significantly ahead of our original target of €200 million for 2023, up 40%. This is a real achievement. We looked at everything from footprint optimization, procurement, supplier relations, manufacturing, energy consumption or digitalization. CARBI provided the lion's share of these savings. To give you some specific examples, at CARBI, we took a deep dive at our supply chain and logistics processes to optimize and drive out cost. At Helios, we looked at our patient journey and opportunities to not only increase patient satisfaction, but also enable cost savings via a higher degree of digitalization. Now, we want to go even further. We are raising our cost savings targets. By the end of 2025, we aim to cut our cost base by around €400 million, an increase of €50 million versus our old target. One-time costs are expected to be in the range of €80 million to €100 million between 2024 and 2025. For this year, we are aiming at cost savings of around €330 million to €350 million, That means we expect incremental 50 to 70 million euro this year. Debt reduction and a better leverage profile have been a key part of our strategy since the beginning. In the second half of 23, we have made excellent progress and delevered more than 40 basis points, in part driven by the usual seasonality, but also due to a very stringent capital allocation and good focus on cash generation. We are going to pick up pace in 24. Clear target is to be within our target leverage corridor of three to three and a half times by the end of this year. Operational performance and structural productivity improvements will drive EBITDA. The strong focus on cash and a very disciplined capital allocation with a priority on deleveraging will drive down debt. Especially in the current interest rate environment, Interest expense and thus debt levels are a clear focus, in particular if looking at EPS growth. Proceeds from portfolio measures like the sale of Eugene will go towards this debt reduction. The energy cost-related government relief funding mean we cannot pay a dividend for 2023. This is positive for our debt position. Equally important to say, however, we have paid a dividend for 30 years and we remain firmly committed to our progressive dividend policy of Fresenius Financial Framework. Return on invested capital as a driver of value creation is a key performance indicator for me, albeit a very sticky one. We've spoke about this before, but it bears repeating as we look forward to 2024 and beyond. If we get operational and structural productivity right and reduce debt as outlined, These are also key levers to drive ROIC up. The FMC deconsolidation helped reform our capital base, and we will continue to manage our asset base with our targeted and very efficient capital allocation and smart portfolio prioritizations. So let's move to 2024. Given the portfolio changes in 23, we have provided here like-for-like numbers as a starting point for 24. There are more details in the backup materials. Looking ahead, it is again about focus and execution. Carby and Helios are at the center of what we're going to accomplish, so I'll start with performance targets for both of them. Starting with Carby, we expect mid-single-digit percentage organic revenue growth. This will mainly be driven by broad progress across the growth vectors. At the margin level, it is about driving margin expansion through even better operating performance. We expect CABI to deliver an EBIT margin of around 15%, an increase over 23%, and within its structural EBIT margin band of 14% to 17%. At Helios, we expect solid volume development in Spain and Germany, that will enable low to mid-single-digit percentage organic revenue growth. The EBIT margin is expected to be within its structural margin band of 9% to 11%. At our investment company, Varmad, the steps we have taken to transform the business are gaining traction. We expect mid-single-digit percentage organic revenue growth and an EBIT margin, which is 1% to 2% points below the structural EBIT margin band of 4% to 6%. Moving to Fresenius, our targets reflect the progress of the operating companies. At the same time, we are conscious that challenges are still part of the global picture. Inflationary and interest rate pressure has lessened, but with a still uncertain European economy, elections in the US, and government programs in China, we have to account for some uncertainty. With all this in mind, for the group, we expect a 3% to 6% organic revenue growth in 2024. On the EBIT level, targets are driven by segment guidance and reflect some of the global uncertainty. In addition, it reflects some funding for investments on group level for innovation programs. Overall, we expect EBIT growth to accelerate and to be in the range of 4% to 8%. That is calculated on an EBIT basis in 2023 of €2.2 billion. Twenty-three was a solid year. Twenty-four will build on that success as we revitalize Fresenius. That means accelerating our operating platforms, realizing additional cost savings, bringing debt down, and advancing our portfolio. With that, handing back to Michael.