Fresenius Se & Co

Good afternoon, and welcome to the conference call of Fresenius Investor Relations, which is starting now. May I hand over to Markus Georgi, Head of Investor Relations. Please go ahead.

Thank you, Sandra. Good morning, good afternoon, depending on your time zone. Thanks, everybody, for joining us today. It's my pleasure to welcome all of you to our second quarter 2024 earnings call. With me on the call, Michael and Sarah. Before we start, I would like to draw your attention to the cautionary language that is included in our safe harbor statement on page two of today's presentation. And without any further ado, I hand it over to you, Michael. The floor is yours.

Marcus, thank you. A warm welcome, everyone. Sarah and I are going to review the business and financial highlights for Q2 and first half. Plenty of time for questions, of course. Team Fresenius turned in another excellent quarter. It's been a very exciting and rewarding 2024 so far, I guess, for all of us, with continued progress on future Fresenius, particularly on simplifying and focusing everything we do. We have effectively created a future Fresenius, a simpler, stronger company in less than two years, deepening on our core, Kabi and Helios. We see acceleration on all counts, our focus, our improved execution and clear ambitions are evident once again in the results for the second quarter 2024. Revenue up in the high single digits, double digit increases in EBIT, incremental margin expansion on the back of our strong trajectory, cost savings delivered ahead of plan, leverage ratio moving quickly into the right direction and this is having a dynamic effect on EPS growth. In May, and we felt this is the right moment, we introduced our new brand identity. A brand offers a promise and bears responsibility, in our case, a promise to our customers and especially to patients. Our promise is committed to life. This raises up our ambitions and our goals. With our focus on helping people through medical challenges, we improve and advance their lives. We are more ambitious and more optimistic about our mission. It fits with everything we do. Today, Kabi and Helios are right there in the front lines of healthcare. Kabi delivering solutions in generic pharmaceuticals, nutrition, medtech, and biopharma. Helios at the side of the patient in our hospitals and clinics. By doing good, providing a quarter of the world's blood blacks, stepping up to solve a chemotherapy shortage in the U.S., bringing AI into clinical settings, helping to manage critical shortages in healthcare staffing, and by the same token, improving clinical outcomes. Presenius is reaffirming our core values. You see great examples on this slide. All of them are reflecting our relevance. Truly, we are committed to life. Let's touch on the highlights of a very strong Q2. Really delivering on every metric. Strong step up from what was a solid or good Q1. Sequentially we improved. I did hint at that at the capital market day of Helios. Progress in biopharma continues with product introductions leading to positive EBIT in the quarter, also supported again by milestone payments at MapScience. We also saw very good cash flow progression which allowed us to deleverage quicker. Debt reduction has been a priority and we've made significant progress here. Already in our self-defined leverage corridor this quarter, more deleveraging can be expected in the second half of 2024. You may have read S&P just recently revised our credit outlook from negative to stable. Well, for those of you who have been following the company for years, that we are back on our leverage target corridor after more than seven years. is a testament that we are delivering on our promises, i.e. the new management team all together with all of our teams are delivering. And we're moving fast in terms of our cost and productivity improvements. This all has led to excellent earnings per share delivery. And 2024 is shaping up really well. So we are now optimistic and really working very hard all together to get to the upper half of our EBIT guidance range. Digging deeper into our operating companies, both delivered an excellent performance in Q2. At Kabi, revenues were up by a powerful 11% year-over-year in organic terms, which is clearly above the top end of the structural growth band. Revenues from Kabi's growth businesses, nutrition, medtech, and biopharma, were up even more strongly at 19% in Q2. So it is the growth vectors this time driving the financial performance of Kabi. For EBIT, Kabi significantly expanded its margin year over year, reaching 15.9% of revenues. Here, too, it was the growth vectors which are shining through, now being in the structural EBIT margin band of 14 to 70%. And it's important to also view and maybe judge the business on an EBITDA basis. CABI margins were on an EBITDA basis north of 22%. So congrats to Team Fresenius to this great achievement. Helios also delivered an excellent Q2. Revenues came in at the top end of the growth band. The EBIT margin is in the middle of the now more ambitious structural range. Great first half of 2024. Let's take a closer look at CABI, where our growth vectors are driving real operating performance. Biopharma is an important cornerstone of future Fresenius, and momentum is accelerating. The launches of Tyene in Europe and in the U.S. have been well executed as planned. In the EU, our team has made significant progress in terms of market access and payer coverage, We closed multiple significant tender wins, and our market share gains reflect exactly that. The U.S. launch is progressing well, with excellent feedback from payers, providers, and healthcare professionals. Tyen is the first biosimilar in the market, and we expect continued positive uptake. We are aiming to ensure that U.S. patients have access to lower-cost alternative treatment options. In the U.S., Tyen is now available in subcutaneous formulation, which increases its reach into the treatment of chronic autoimmune diseases and allows for self-administration. And we are further growing our BioPharma platform. Just recently, the EMA and FDA have accepted for review our applications for the biosimilar candidate, Polia and Exgeva, which is Denusomal. Great progress also in our MedTech business. I told you they're going to come back. Solid 9% top-line growth in Q2. A highlight in Q2 is the completion of the clinical study for software for improved plasma collection. And we won a multi-year tender for Agilia pumps in Italy. Overall, significant growth for our MedTech business, which has further scope for further gains and we are looking forward to their trajectory. The nutrition business once again delivered a steady performance. In Q2, we launched our third product in the food for special medical purposes segment in China, helping patients with an impaired ability to digest or metabolize food due to surgical or cancer treatment. And we continue to strengthen the resilience of our pharma business. We started commercial production for infusion solutions, in our U.S. plant in Wilson in North Carolina. This really state-of-the-art facility will serve the U.S. market going forward with a full portfolio of PVC-free infusion solution products, further expanding our broad portfolio offering of essential products for U.S. patients. And this is also important for our Ivonex business because there we now have the solutions and a large volume pump to cater this interesting market, the U.S. So there's progress on all fronts. Tyen, FSMP, and improved plasma collection. These are all great examples of bringing more therapeutic solutions to more people in need. So we are indeed committed to life. Let's spend a minute more on pharma business. In the U.S., Kabi has the market-leading portfolio of generic injectables with a strong pipeline of IV generics in vials, syringes, and ready-to-administer bags. We intend to launch more than 10 new injectables each year between 2022 and 2025. We are prioritizing launches where CABI can be among the first to market and where we can contribute to deliver high-quality, affordable drugs. In the EU, CABI is the IV fluids market leader beyond any doubt with a broad product offering. Reliability is a key competitive edge. And Fresenius Kabi has invested significantly into its European manufacturing capacity and network. Pharma is a powerful base, as we call it, for Fresenius, with terrific customer relations and reputation, a source of continued success and solid cash flows. Over to our biopharma business. We're moving quickly here, and it deserves a few comments. As you can see, we have a relevant business with an attractive pipeline. We launched already a handful of products at CAVI and MapScience. Others like Denusomab and Estakinumab are in the starting blocks. For Denusomab, EMA and FDA have accepted our biosimilar candidates applications for review. It is an attractive opportunity for CAVI with an originator addressable market in 2023 in osteoporosis and oncology of roughly 6 billion euros. For ustekinomab, we have just announced last week together with our licensed partner Formicon that the CHMP of the EMA issued a positive opinion for the marketing authorization of our biosimilar candidate to Stelara. Ustekinomab has an originator sales globally of 11 billion euros. Looking at the MAPScience pipeline, they are already in the market with Beva, Bevatizumab, in the EU and US with Rituximab in Argentina. In October last year, MAPScience announced a deal with Amnil for the US commercialization of Denusumab. Many other attractive molecules in the pipeline with a focus on oncology, autoimmune, and infectious disease. So, in a nutshell, an attractive biosimilar product portfolio with strong potential, so watch this space over the coming quarters. Over to Helios. Many of you met Helios management in June. Let me touch on the highlights. Our care provision platform is market leading in Europe. It is a system critical, patient centric business. Stable and reliable in terms of revenue streams. and costs are rigorously managed, meaning Helios is also stable and reliable in terms of earnings quality and cash flows. We understand how to operate in a regulated market by being part of the solution and constantly improving patient outcomes. Helios serves 26 million patients, creating a strong base for Fresenius to enter the next level of healthcare. Digital tools. connected devices and AI will ultimately allow us to connect across patients and providers and create digital platforms for better care. So in essence, we are very well positioned for capital efficient earnings growth. At the CMD, you will recall the team moved up its ambitions. Onto Helios highlights. We are seeing steady top line growth at Helios Germany, the cluster and specialization strategy is progressing as we laid out at the CMD, along with good progress with our outpatient and emergency care program. At the same time, there is focus on cost. Energy savings targets are being delivered and now exceeded, and the implementation of more measures has been initiated. At Kiran Salu, we had another strong, I'd say very strong operational and financial performance. We make newest front-end technologies most rapidly accessible to patients in our clinical centers. As an example, the complex technology to apply magnetic resonance guided focused ultrasound, also called HIFU, to treat deep brain regions for movement disorders like Parkinson's disease or essential tremor. Even though not curing the disease as such itself, it can be a huge step forward in controlling the patient's symptoms, and increasing the quality of life without invasive interventions. The recognition of Fundación Jiménez Díaz in Madrid as one of the 25 leading healthcare centers in Spain is yet another testimony for the high level of technological innovation skills of our medical staff and the unique range of services. Back to our group performance, as we have said, 2024 is the year of financial progression. I am especially pleased by our bottom line development, proving the ability of our group to drive revenue and then benefit from operating leverage. We solved fundamental legacy issues. After years with rising debt levels, increasing interest expenses, and declining earnings, we have revitalized this great company. and are back to solid positive earnings trajectory with our sharpened focus on creating and driving value. For now, that's it from my side. I will hand it now over to Sarah, and I'll come back to you guys later.