Fresenius Medical Care Restructures and Aims for Growth

The German medical and dialysis specialist Fresenius Medical Care (FMC) looks confidently ahead to the fiscal year 2024 and signals profitable developments to shareholders. The strategy report indicates a year of accelerated growth, during which the company aims to target its ambitious margin goals. This was announced by FMC CEO Helen Giza during the presentation of the annual balance sheet. Despite the challenging goals, the stock had to suffer a setback, ending the trading day in the MDax with a loss of 3.6 percent at a value of 38.03 euros. Analysts, such as Harald Hof of AlsterResearch, attribute the initially positive results to special effects and criticize an alleged discrepancy between initial expectations and actual market perception. Among the defining factors for FMC's development are the aftereffects of the pandemic, increased costs, and a mortality phenomenon that has been intensified by Corona. In addition, staffing shortages in nursing put the company to a stress test. In response, FMC initiated a restructuring process with clinic closures, job cuts, and sales being pushed through. Organizational realignment and the globalization of various functions accompanied the transformation – FMC is always careful to continuously optimize processes and productivity. Last year, the outlook, which according to Giza had been revised upwards multiple times, was exceeded, which is reflected in a nearly stable revenue of 19.45 billion euros and in an operating result that increased by 15 percent. FMC also made changes in ownership in the USA, Argentina, and Australia, and reduced its global workforce by 8,000 employees. A comprehensive cost reduction program continues to be implemented with the goal of saving 650 million euros annually by 2025. For 2024, FMC is aiming for savings of 100 to 150 million euros. Despite the challenges, the group's executive board sees the company on a solid course. Another objective remains an operating margin of 10 to 14 percent for the next year. In response to a question about potential impacts of new diabetes treatments, Giza reacted calmly – significant effects are only to be expected in a decade. In the context of the spin-off from the parent company Fresenius and the application of the new legal form as a stock corporation, separate financial reporting for both companies will occur in 2023. Fresenius will present its results promptly.