Fresenius (FRE) 43rd Annual J.P. Morgan Healthcare Conference summary

Strategic transformation and portfolio focus

• Undertook a comprehensive transformation, simplifying the organization, focusing on core businesses, and divesting non-core assets, including deconsolidating Fresenius Medical Care and exiting several businesses.

• Shifted to a patient-centric model, aligning business platforms around disease patterns and critical points in the patient journey, with strong positions in pharma, IV generics, clinical nutrition, and medical technology.

• Launched a new brand and claim, “committed to life,” reflecting a renewed mission to deliver affordable, accessible, and innovative healthcare products and services.

• Focused on organic growth, innovation, and operational efficiency, with capital allocation prioritizing reinvestment in core businesses and a progressive dividend policy.

• Maintains a significant stake in Fresenius Medical Care as an investor, expecting value creation but not operational involvement.

Financial performance and operational improvements

• Achieved significant financial improvements: organic revenue growth of 8%, EBIT margin of 11.5%, and leverage reduced to 3.24%, with further improvement expected.

• Implemented a financial framework with clear growth and margin targets, benchmarking against best-in-class competitors and focusing on cash flow generation.

• Overdelivered on cost savings and structural productivity, driving operational efficiency and cash flow, with a focus on returns and shareholder value.

• Plans to revisit the leverage target, likely lowering the corridor below 3, and to resume a progressive dividend policy after a temporary pause.

• Financial framework targets EBIT margin of 14-17% for Kabi and 10-12% for Helios, with leverage ratio of 3.0–3.5x.

Growth platforms and innovation

• Three main growth vectors identified: clinical nutrition, medical technology, and biopharma, with biopharma transitioning from an investment case to a profitable business in 2025.

• Tyenne, a biosimilar for Actemra, is a key driver, first to market in Europe and the U.S., with strong payer coverage and 21% market share in EU5 by Oct 2024; additional biosimilars (Ustekinumab/OTULFI and Denosumab) launching in 2025.

• mAbxience, the CDMO business, is expected to contribute recurring milestone payments and growth in 2025 and beyond.

• 30+ studies in parenteral and enteral nutrition and 10+ biosimilar assets in pipeline.

• Innovation and new product launches are expected to drive the majority of revenue growth in 2025, supported by a rejuvenated management team.