Fresenius Se & Co

Good afternoon and welcome to the conference call of Fresenius Investor Relations, which is now starting. May I hand you over to Nick Stone, Head of Investor Relations.

Thank you, Andrew. Hello, everyone. Good afternoon and good morning, wherever you may be. Welcome to our Q1 2025 earnings call and webcast. Presentation was emailed to our distribution list earlier today. and is available on Fresenius.com. On slide two of the presentation, you'll find the usual safe harbor statement. Unless stated otherwise, we'll comment on our performance using constant exchange rates, or CR. Today, as usual, I'm joined by Michael and Sarah, who will take you through the details of another strong performance. We estimate that the call will last approximately one hour, with the presentation taking around 35 to 40 minutes, with the remaining time for your questions. Obviously, to give everyone the chance to participate, please limit your questions to one to two in the first instance, and we can always come back for an additional round if needed. And with that, I'm delighted to hand the call over to Michael.

Thank you, Nick. A warm welcome, everyone. I'm delighted to report a strong start to 2025, another quarter of excellent momentum across our businesses, and we reconfirm our full-year guidance. As always, Sarah and I will review our operational and financial highlights on our individual businesses within CABI and Helios. Well, before turning to our results, the Federal Republic of Germany is starting to have a new chapter, a new important political chapter, and I congratulate our new Chancellor Friedrich Maaz on his election, and we look forward to working with him and his cabinet Germany needs strong leadership and a clear growth agenda to improve its competitiveness in a challenging global economic environment. The coalition agreement contains some promising proposals, and it is encouraging to see that the healthcare industry is recognized as a strategically important and leading industry in Germany. I'd also like to acknowledge the impact of recent global events, trade uncertainty, German fiscal policy change, and more. Fresenius is now well positioned to handle these challenges. This is the result of us charting and delivering on future Fresenius. We've simplified our business structure and increased our ability to adapt enabling us to respond swiftly to a dynamic macro environment. We have created options with competitive operations and a strengthened balance sheet. We now have increased strategic flexibility. And the fundamentals that underpin our business, aging global population, higher prevalence of chronic diseases, increasing healthcare spend and demand for healthcare workers remains intact. Presenius is a system-critical global provider to patients, healthcare practitioners, and hospitals. Our mission remains to save and improve human lives. We are committed to life. Now let's turn to the Q1 financial results, where you can see our focus is delivering results. As always, after our prepared remarks, we will have plenty of time for your questions. The next phase of Future Fresenius Rejuvenate has started strongly. We delivered excellent results across the company this quarter, and we expect this momentum to continue with new products, more approvals, further efficiency gains, and subsequently earnings growth. There are lots of highlights, but let me particularly mention our double-digit EPS growth. This reflects all our efforts of having turned around our company, i.e., our businesses delivering growth and earnings expansion, as well as our disciplined focus on capital employment and optimizing our portfolio. So as we reduce debt, you see this directly affecting core EPS performance up 12% in the first quarter. This will be a source of value enhancement through the rejuvenate phase. Kabi and Helios both delivered strong top-line growth. Kabi's performance was driven by the increasing contribution from our growth vectors, particularly BioPharma, which is moving closer, as I've mentioned before, to Kabi's structural EBIT margin range of 16% to 18%. Overall, Kabi's EBIT margin increased to 16.8%. Helios also had an encouraging start to the year. The performance program at Helios Germany is in early innings, but we see gradually gaining traction. It's about a deepening of productivity and process efficiencies. This improves our ability to treat more patients and with better outcomes, better patient experiences, while retaining the highest quality in clinical care. As announced at our full year results, we've tightened our leverage target corridor to between 2.5 to 3.0 net depth over EBTA. It continues to be a focus, and it's great we ended the first quarter after a strong year-end finish within the improved range. Over the past several years, we've been working very hard to make Fresenius better from a structural perspective by selling non-core assets, exiting vomit, and deconsolidating Fresenius Medical Care. In Q1, we took the strategic decision to significantly reduce our stake in FMC. And we used the proceeds to enhance returns, lower debt even further, and create value. Again, it's about moving rapidly to strengthen balance sheet flexibility and improve profitable growth and shareholder return. I started my remarks by talking about recent global events. And the biggest area impacting the sector are the potential ramifications from the recent trade and tariffs policies. As you know, this could affect future economic activity this year and beyond. However, we believe we can navigate through this current operating environment. On a relative basis, we don't see the same challenges as some of our peers. We have a broad, diverse and resilient business with a global footprint. As it stands, we're able to absorb incremental pressure through the profile and the strength of our businesses. Today, we reconfirm our full year 2025 guidance on the back of 7% organic top line growth and 4% EBIT growth at constant currency. Now let's dive deeper into our core businesses within CABI and Helios, both of which delivered very strong performance in the quarter. Starting with CABI, revenues increased by 6% year-on-year in organic terms, fueled yet again by the growth vectors, nutrition, medtech, and biopharma. Pharma showed its strength despite a tough prior year comparison as a resilient business resulting in attractive earnings traction our focus and strategy is obviously paying off. In Pharma, we have successfully transferred the ownership of our Brazil production site in Annapolis. Hence, we are continuing to reduce complexity and streamline our production network further. In the US, we have secured a significant long-term award with a major GPO reflecting the competitiveness of our offering in terms of both value and quality. In nutrition, we strengthened our local capabilities and footprint in China, which we continue to view as a highly attractive long-term market. In MedTech, the ramp-up of IVAN-X, our smart infusion pump is progressing as planned, and we are balancing rollout speed and the industrialization of our product manufacturing. We have signed a multi-year contract this quarter with another major U.S. health institution, and we will continue the expansion and rollout throughout 2025. Moreover, we received FDA clearance for our new adaptive nomogram software. We expect to distribute this to more than 160 U.S. plasma collection centers by the end of 2025. In biopharma, the positive momentum continues with excellent organic top line growth and profitability improvements, demonstrating very strong incremental margin expansion, which contributes significantly to the overall CARBI margin expansion. The recent launch of our Ustekinumab biosimilar, or TULFI, in the US and EU, along with FDA approval for Denuzumab biosimilar, highlights the strength and the breadth of our portfolio. We now have eight biosimilars approved and seven launched into the market. On a very positive note, the Centers for Medicare and Medicaid Services, CMS, issued a permanent product-specific billing code for Atulfi, the HCPCS code. This designation is an important milestone for broadening access and use, supporting quality patient care while concurrently reducing costs. Not at least the CHMP issued a positive opinion on our MAP science denouement. So a great performance in Q1, enhancing patient access to innovative, affordable treatments, for both acute and chronic conditions. We continue to build momentum with advancing the expansion of our growth vectors. Staying with Biopharma, let me highlight the tie-in ramp up, progressing rapidly and in line with expectations, showing dynamic month-by-month growth. We have launched now in more than 20 countries. Our market share in Europe is supported by incremental tender wins. For example, we have achieved an impressive 100% tender win rate in France and are currently winning key regional tenders in the UK. In Germany, essentially all SIG funds are contracted, and in Spain, more than 80 accounts are now using Tyen. In the US, Tyen has launched strongly with consistent and dynamic sequential market share growth, now at 8%. strategic approach, enhanced market access, and payer coverage efforts continue to drive this substantial gains. We now cover around 70% of the IV and 100% of the SC market with our contracts. In the second half, we will continue to advance the tech transfer to MapScience and expect the further improvement in market share as payer-client agreements translate into script and patient administration. Now let's move to our care provision platform, Helios, which delivered good results and an encouraging start into the year. In Germany, we believe the coalition agreement will be positive for us. For Helios, it emphasizes a key part of our strategy, the clustering and specialization of hospitals. We are already well advanced in that regard and are in a good position to benefit from that development. While details remain to be defined, it is also a very encouraging sign that the Special Infrastructure Fund will enable investments and support the transformation in the healthcare sector, especially for hospitals as critical infrastructure. This and efforts to reduce bureaucracy are clear positives. Our uncompromising quality focus crystallized yet again with an impressive number for medical outcomes. Helios outperformed the German national average in more than 90% of our medical targets. Moving to Spain, Chiron Salutes outpatient care has again been recognized externally with 13 of our hospitals ranked among the world's best hospitals in 2025. So congratulations to the team. This is an impressive achievement. It really reinforces our commitment to highest quality in clinical care. In addition, we're also making significant advancements in digitizing our network. The Kiran Salute Clinics now offer thorough and comprehensive digital patient journey, now having 7.5 million patients registered. and all of them are benefiting from our digital hospital and this very patient platform, which we call Cassiopeia. Let's discuss the dominant topic for the sector, tariffs. From an exposure perspective, Fresenius has a diversified portfolio with around 90% of group revenues not exposed to US tariffs. This is underpinned by the exceptionally strong European hospital businesses which contribute around 60% of group revenue. In the U.S., we previously launched our More in America manufacturing and supply initiatives. This means that we currently produce around 70% of the medicines we sell in the U.S. domestically, including sourcing a significant proportion of high-value active pharmaceutical ingredients. Our strong local presence includes 4,000 dedicated employees and nearly 1 billion invested in U.S. manufacturing and logistics over the past couple of years. Overall, we believe this strategic position is a significant differentiator relative to our competitors, many of whom manufacture their pharmaceutical products outside the U.S. A central element of our global manufacturing strategy is a long-term perspective maintaining a strong and resilient supply chain for essential medicines and other products. As a system critical supplier for patient care in the U.S. and globally, we follow a local for local manufacturing strategy for pharmaceuticals, our largest product segment. Significant further investments in the U.S. are planned over the next five years, and we aim to increase the number of employees to further strengthen our footprint in this strategically very important market. We've kicked off the rejuvenate phase with a strong momentum. I'm excited about how Team Fresenius is moving forward together. This phase marks the pivotal evolution for our company. Right at the start of Future for Zenith, we defined our core businesses, and you see this focus is now delivering quarter after quarter. In Rejuvenate, we want to upgrade this very core. We call it upgrading our core, and in short, it means we keep doing what we're doing, but we will do it even better. This is about patient care. This is about customer service and better enterprise processes and operations. This is how we already create value day by day. So essentially, this is about consistency. As we continue to mature as an organization, our strategic intent will move to scaling our three platforms, specialized biopharma, targeted medtech, and holistic care provision platform. These platforms hold tremendous potential for future growth and innovation. By upgrading our core and scaling our platforms, we are laying the groundwork to elevate our long-term performance. Presenius is poised to become a more innovative and relevant healthcare company. Our focus is clear, play to our strengths and deliver meaningful healthcare solutions. Our journey isn't about sustaining momentum, it's about accelerating and positioning Fresenius as a leader in innovation and relevance in our very industry. With that, I will hand it over to Sarah.