Fresenius Medical Care AG (FMS) Q3 2024 Earnings Call Highlights: Strong Margin Growth and ...

GuruFocus.com11-06

Organic Revenue Growth: 2% growth supported by both Care Delivery and Care Enablement. Operating Income Margin: Increased to 9.8%, approaching the 2025 target margin band of 10% to 14%. FME25 Savings:...

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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nFresenius Medical Care AG (FMS) Q3 2024 Earnings Call Highlights: Strong Margin Growth and ...\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-06 15:07 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/fresenius-medical-care-ag-fms-070726753.html><strong>GuruFocus.com</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Organic Revenue Growth: 2% growth supported by both Care Delivery and Care Enablement.\nOperating Income Margin: Increased to 9.8%, approaching the 2025 target margin band of 10% to 14%.\nFME25 Savings:...</p>\n\n<a href=\"https://finance.yahoo.com/news/fresenius-medical-care-ag-fms-070726753.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"FMS","symbol_name":"费森尤斯医疗","start_time":0,"source_url":"https://finance.yahoo.com/news/fresenius-medical-care-ag-fms-070726753.html","article_id":"2481644387","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/MBuxYWC_viZMNjLbFKP6Ug--~B/aD01MDA7dz01MDA7YXBwaWQ9eXRhY2h5b24-/https://media.zenfs.com/en/us.finance.gurufocus/de722c860c424ff409567d1e7f8500d7"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2481644387","pubTimestamp":1730876846,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Organic Revenue Growth: 2% growth supported by both Care Delivery and Care Enablement.Operating Income Margin: Increased to 9.8%, approaching the 2025 target margin band of 10% to 14%.FME25 Savings: EUR64 million in additional savings, totaling EUR173 million by the end of Q3.Net Leverage Ratio: Improved to 2.8, below the target corridor of 3 to 3.5 times net debt to EBITDA.Care Delivery Revenue: 2% decline due to a negative 330 basis points impact from divestitures.Care Enablement Organic Revenue Growth: 4% growth driven by solid volume development.Operating Cash Flow: Increased due to recovery from the Change Healthcare cyber incident.2024 Operating Income Growth Outlook: Heightened to 16% to 18% for the full year.GuruFocus has detected 6 Warning Signs with FMS.Fresenius Medical Care AG  achieved organic revenue growth of 2% in the third quarter, supported by both Care Delivery and Care Enablement segments.Q: On the medium-term margin guidance, should we assume that the decision not ","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"FMS":"费森尤斯医疗","AG":"First Majestic Silver Corporation"},"translate_title":"费森尤斯医疗保健股份公司(FMS)2024年第三季度收益看涨期权亮点：强劲的利润率增长和……","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AG":1,"FMS":1},"content_text":"Organic Revenue Growth: 2% growth supported by both Care Delivery and Care Enablement.\nOperating Income Margin: Increased to 9.8%, approaching the 2025 target margin band of 10% to 14%.\nFME25 Savings: EUR64 million in additional savings, totaling EUR173 million by the end of Q3.\nNet Leverage Ratio: Improved to 2.8, below the target corridor of 3 to 3.5 times net debt to EBITDA.\nCare Delivery Revenue: 2% decline due to a negative 330 basis points impact from divestitures.\nCare Enablement Organic Revenue Growth: 4% growth driven by solid volume development.\nOperating Cash Flow: Increased due to recovery from the Change Healthcare cyber incident.\n2024 Operating Income Growth Outlook: Heightened to 16% to 18% for the full year.\n\n\nWarning! GuruFocus has detected 6 Warning Signs with FMS.\n\nRelease Date: November 05, 2024\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.\n Positive Points \n\nFresenius Medical Care AG (NYSE:FMS) achieved organic revenue growth of 2% in the third quarter, supported by both Care Delivery and Care Enablement segments.\nThe company recorded a significant improvement in operating income margins, with Care Delivery reaching a margin of 11.2%, well within the 2025 target margin band.\nFME25 program contributed EUR64 million in additional savings, with expectations to achieve around EUR200 million in savings for 2024, ahead of the targeted EUR100 million to EUR150 million.\nThe company successfully reduced its net financial debt and improved its net leverage ratio to 2.8, below the target corridor of 3 to 3.5 times net debt to EBITDA.\nFresenius Medical Care AG (NYSE:FMS) demonstrated strong disaster preparedness, minimizing the impact of hurricanes on treatment volumes to just 5 basis points.\n\n Negative Points \n\nDespite positive volume development, the US market remains muted due to elevated mortality rates, impacting overall growth.\nThe value-based care business experienced unfavorable financial developments, resulting in a negative contribution to operating income of EUR20 million to EUR40 million for the year.\nThe implementation of volume-based procurement in China negatively impacted pricing development, aligning with expectations but still posing a challenge.\nThe CMS announced a 2.7% reimbursement increase for 2025, which is below the company's expectations given inflationary pressures.\nThe company faces ongoing volatility in the value-based care industry, with lumpy and at times unpredictable financial returns.\n\n Q & A Highlights \nQ: On the medium-term margin guidance, should we assume that the decision not to narrow the range indicates a path to the upper half of the 10% to 14% range? Also, what are the levers for margin progression in the Care Enablement business? A: Helen Giza, CEO, explained that there are still many moving parts, such as volume and mortality, which will be clearer by February. For Care Enablement, progress is being made, and the focus is on back-end loaded initiatives like manufacturing footprint optimization, with continuous progress expected through 2025.\nQ: What is the expected impact from hurricanes in Q4, and what benefit can we expect from FMC stepping in to supply PD machines? A: Helen Giza noted that the Q4 hurricane impact is still being quantified but is expected to be similar or slightly lower. Increased demand for PD products is being managed, and more details will be provided in future business development growth numbers.\nQ: Can you provide any color on the excess mortality side and its impact on the outlook? Also, are there any additional clinic closures planned? A: Helen Giza stated that excess mortality remains elevated, impacting growth expectations. Clinic closures are evaluated on a case-by-case basis, with some new centers opening where there is growth potential, but no large-scale closure program is planned.\nQ: Could you quantify the headwind from elevated mortality in the quarter, and how does it affect your confidence in US volume growth? A: Elevated mortality had a 60 basis point impact in H1, and similar levels are expected for the rest of the year. Improvement in new patient inflow and operational processes is contributing to positive volume trends, with expectations for continued improvement.\nQ: How do you view the inclusion of oral drugs in the bundle next year, and what is the potential impact? A: Helen Giza mentioned that the inclusion of oral drugs in the bundle is still being analyzed, with a neutral to positive impact expected. The final rule is awaited, and preparations are being made for either outcome.\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.This article first appeared on \nGuruFocus.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.2","shortVersion":"4.29.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2481644387"}