Demographic change is posing fundamental challenges to societies worldwide. Not only are people living longer, but the pace of population aging is also increasing significantly. As a result, the social and health care systems of many countries are coming under increasing pressure. As the average age of the population increases, so does the number of chronically and critically ill patients.1 This represents a major global challenge for the public health system. A longer life, however, also offers opportunities for individuals and societies. The extent to which these opportunities can be leveraged depends heavily on one factor: health.
Our purpose is to offer “Ever better medicine for ever more people”. In line with this purpose, Fresenius develops innovative, affordable, and profitable medical solutions for the megatrends of health and demographics. What drives us to achieve top performance every day is our mission: we improve people’s lives by providing high-quality and affordable health care. Consequently, Fresenius’ business decisions are guided by this mission. Our goal is to expand Fresenius’ position as a leading global provider of products, services, and therapies for critically and chronically ill people. At the same time, we want to grow profitably and use our capital efficiently.
We have set ourselves clear medium-term goals. The targets announced in February 2019 stated that based on the key financial figures for 2019, average annual organic sales growth (CAGR) for the period 2020 to 2023 is expected in the range of 4% to 7%. Net income2,3 is expected to grow organically at a CAGR in a range of 5% to 9% in the period 2020 to 2023. We had expected small and mid-sized acquisitions to additionally increase the CAGR for both sales and net income by approximately 1%-point. In February 2019, when we originally communicated our medium-term targets, no one has foreseen a global pandemic and the related knock-on effects such as increased inflationary pressure. Hence, we have to refine our expectations based on the financial results for fiscal years 2020 and 2021: we now expect to achieve a sales CAGR at the bottom to middle of the range and the bottom of the range for the net income CAGR. Furthermore, we now expect that small and mid-sized acquisitions will add less than 1% point to both CAGRs.
1 WHO 2021: “Ageing and health”
2 Net income attributable to the shareholders of Fresenius SE & Co. KGaA
3 Before special items
For Fresenius, economic success is not an end in itself, but a means that enables us to continue investing in better medicine.
We have lived up to our special responsibility as part of the health care system, even under the difficult circumstances of the current COVID-19 pandemic. With our products, services, and therapies, we have made many important contributions worldwide.
Our dialysisDialysisForm of renal replacement therapy where a semipermeable membrane – in peritoneal dialysis the peritoneum of the patient, in hemo dialysis the membrane of the dialyzer – is used to clean a patient’s blood. clinics and hospitals, for example, have taken extensive measures to ensure that patients continuously receive the best possible care. For essential drugs used for COVID-19 patients, we have committed ourselves to keeping prices stable – despite a significant increase in demand.
In our view, a significant adjustment of our strategy due to the COVID-19 pandemic is not necessary. On the contrary, our good economic development in 2021 confirms our strategy. COVID-19 will even accelerate the implementation of some strategic goals, such as the further expansion of digital services. Through various digital solutions, e.g., telemedicine services, we were able to address patients’ concerns about becoming infected in hospital and provide them with targeted advice (see also Sustainability Report1).
1 The separate Group Non-financial Report is not part of the audited Group Management Report.
This also applies to all other references in the Group Management Report.
Our strategic focus
Fresenius invests in and manages a diversified portfolio of health care businesses that create value. With our four business segments we focus on a defined number of health care areas. We continuously develop our business areas and strive to assume leading positions in the respective health care markets and segments. We have defined strategic priorities to strengthen our position as the leading global provider of products, services, and therapies for critically and chronically ill patients:
- Profit from megatrends: gearing businesses towards the megatrends health, demographic change, and digitalization in health care
- Create value: sustainable value creation by allocating capital to profitable growth areas
- Act responsibly: responsible and sustainable corporate governance as part of our corporate culture
- Foster collaboration: targeted fostering of intra-Group cooperation to leverage synergies