Fresenius Medical Care AG & Co. KGaA Q4 FY2025 earnings call

2025 was a milestone year with the launch of new 2030 strategy FME Reignite, carving out Value-Based Care as a third operating segment. Accelerated a EUR 1 billion share buyback program, with EUR 586 million repurchased in 2025. Successfully soft launched 5008X CAREsystem in U.S. clinics, with large-scale expansion planned for 2026. Accelerated FME25+ savings program, achieving sustainable savings above target, supporting profitability. Delivered revenue growth at upper end of outlook, with operating income growth of 27% in 2025. Fourth quarter had strong organic revenue growth of 8% and earnings growth of 53%, margin of 13.9%. Care Delivery in U.S. had flat same-market treatment growth due to flu-related and December missed treatments, while international markets had 1.7% growth. Value-Based Care had positive operating income in Q4 with favorable savings rates offset by CKCC programs. Care Enablement faced negative impacts from China regulatory policies

In 2025, Fresenius Medical Care delivered strong financial results. Care Delivery had a Care Delivery margin of 13.1%, achieving the middle of the target band. Care Enablement margin more than quadrupled from nearly 2% to just over 8%. Value-Based Care generated over EUR 2 billion in revenue in 2025 and had positive operating income in the fourth quarter, bringing 2025 performance to breakeven from a historically loss-making position. Fourth quarter organic revenue growth was 8%, with Care Delivery and Value-Based Care contributing, while Care Enablement was negatively impacted by regulatory pressure in China. Adjusted operating income increased by 53% on a constant currency basis, driving group margin to 13.9%

2026 outlook includes 5008X rollout in U.S., with target of replacing 20% of installed base, facing OpEx headwind from rollout costs. Expect broadly flat revenue growth in 2026, with operating income range of mid-single-digit percent change. Margin range of 10.5% to 12% at group level. For 2026, assume negative revenue growth in Value-Based Care due to risk contracting changes, solid organic volume growth in Care Enablement with China challenges. Earnings assumptions include business growth, FME25+ savings, inflationary pressure, regulatory impacts, strategic investments, and portfolio optimization. Expect stronger first half of 2026 before TDAPA benefits phase out in second half

Regulatory risks such as phasing out of phosphate binder, TDAPA contributions, and expiry of ACA tax subsidies. China regulatory policies and tender delays impacting Care Enablement. Operational risks related to 5008X rollout challenges, including training and transition of patients. Labor and inflationary pressures affecting costs. Missed treatments due to weather, illness, flu, impacting patient volumes

Q: Talk about key drivers of EBIT growth acceleration and Care Enablement China drag.

A: EBIT growth driven by business growth, FME25+ savings, and revenue cycle improvements. Care Enablement China drag due to regulatory policies and tender delays, impacting 10% of revenue.

Q: Comment on U.S. volumes and FME25 benefits lag.

A: Assumptions on normal flu season, monitoring open enrollment and weather. FME25 benefits front-loaded in 2026 with higher onetime costs and subsequent savings.

Q: Clarify Corporate costs and intercompany eliminations.

A: Corporate costs increase due to IT platform investments and FX impacts. Intercompany eliminations from 5008X rollout prioritization.

Q: Missed treatments structural headwind.

A: Not structural, initiatives to improve mortality and missed treatments to drive same-market treatment growth