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Overall economic risks and risks due to the operating framework

At present, despite the COVID-19 pandemic, no trends in the global economy present a going-concern risk to the Fresenius Group. Depending on how the pandemic develops, we expect the global economy to continue to recover in the fiscal year 2022.

Moreover, Fresenius is affected only to a small extent by general economic fluctuations. We expect demand for our life-saving and life-sustaining products and services to continue to grow.

Furthermore, Fresenius is striving for balanced distribution of its business in the main global regions and between established and emerging markets. The risk situation for each business segment depends in particular on the development of their respective relevant markets. Country-specific political, legal, and financial conditions are therefore monitored and evaluated carefully, particularly in the current macroeconomic environment. This applies, for example, to countries with budget problems as a result of their debt burden, in particular with regard to our accounts receivable.

This also applies to any initiatives taken by governments with regard to potential changes to current health care programs.

And this holds true in particular for current developments related to the COVID-19 pandemic.

Risks related to the COVID-19 pandemic

The rapid spread of the COVID-19 pandemic and the measures taken to contain it have led to a significant deterioration in economic conditions worldwide, and financial markets have been significantly impacted. This development also had a negative impact on our business, financial position, and operational results in the fiscal year 2021. We anticipate further negative effects on our business, financial position and operational results in 2022. The COVID-19 pandemic may also continue to have a negative impact on our financial position, liquidity, and the recoverability of our assets, including goodwill. The pandemic poses significant risks to the health of our patients, as well as to our supply chains, our production, the sale of our products, and the provision of our services.

Negative effects on our business could be caused, for example, by a continued or increasing higher excess mortality among 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. patients, and by restrictions on the business activities of our suppliers, customers, and ourselves, including our personnel, resulting from regulatory requirements, orders, and conditions at regional, national, or international level. The unavailability of critical staff, increased costs, for example from protective measures in our dialysis clinics, hospitals, and production sites, and a significant diversion of public health funding away from our products and services to address the COVID-19 pandemic could also negatively impact our business. Additionally, inflationary cost increases may have an unfavorable effect on our business, especially if the prices for our products and services remain unchanged or do not adequately track against cost increases.

In response to the COVID-19 pandemic, various governments in regions in which we operate have launched economic support programs to address the impact of the pandemic on businesses and to support health care providers and patients. For example, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was passed in the United States to mitigate the negative financial impacts of the COVID-19 pandemic, including on the health care sector. Additional funds provided under the CARES Act, as well as other COVID-19-related assistance funds, are providing some financial support to our businesses. For example, the 2% cut in Medicare benefits was suspended several times from May 2020 to March 2022, Medicare reimbursements were paid more quickly and in advance, and grants were approved to cover costs and mitigate revenue losses related to the Covid 19 pandemic. In addition, companies in which we have less than 100% ownership received financial assistance from the U.S. Department of Health and Human Services in the fourth quarter of 2021 (Provider Relief Fund Phase 4).  

However, these measures may not fully offset losses and increased costs. And while many of these measures are only in effect for the duration of the public health emergency, it is possible that some of these temporary measures could result in long-term changes that could affect, in particular, Fresenius Medical Care’s business, financial position, and operational results in ways that cannot be quantified or predicted at this time.

Fresenius Medical Care experienced increased mortality rates among dialysis patients compared to the historical average, which could continue to have a material adverse effect on our operational result in 2022 and beyond. 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. patients typically have comorbidities, which has led and could continue to lead to an increased need for inpatient care for these patients. In addition, it appears that COVID-19 has led to an increase in individuals with acute renal failure. We expect to face continued staffing shortages as well as additional staffing costs to meet the increased demand for dialysis treatments and to provide equipment and our medical staff for emergency treatments, such as in hospitals.

The COVID-19 pandemic had a different impact on our hospitals in Germany, Spain, and Latin America, as well as on the Eugin fertility clinics.

The impact of the pandemic varied depending on the outbreak in the different regions and the respective virus variant. Helios Germany was severely affected in the first quarter of 2021 due to the pronounced third wave of COVID-19. Due to the high number of COVID-19 cases, elective treatments had to be postponed in some hospitals. As a result of the heavy COVID-19 burden, the rescue package for hospitals was extended by the German Federal Ministry of Health (“BMG”) until June 15, 2021.

The “Ordinance on the Regulation of Further Measures for the Economic Safeguarding of Hospitals” enables a full-year compensation for hospitals, for which 98% of the revenues of the year 2019 were used as a benchmark. 85% of the hospitals' revenue shortfall was eventually refinanced in 2021. However, the negative impact of the pandemic could not be fully offset in some hospitals by the rescue package and reimbursements for COVID-19 in Germany. In Spain, the third wave was milder compared to the previous ones and opened up some opportunities such as coronavirus testing for the occupational health sector.

In addition, COVID-19 pandemic measures, such as the minimum distance of 1.5 meters between hospital beds for infection control, continued in 2021 and will remain in place in 2022.

In addition, travel restrictions had a significant negative impact on the number of international (private) patients in Germany and Spain. Overall, this may continue to have a negative impact on our net assets, financial position, and results of operations. We expect the negative effects of the COVID-19 pandemic to continue in the fiscal year 2022.

Fresenius Vamed also experienced and continues to experience significant delays and additional costs due to the COVID-19 pandemic in its project business as a result of travel restrictions, interrupted supply chains, delayed project execution, and imposed construction stops.

The extent of the impacts described on all business segments of the Fresenius Group depends on the progress of the vaccination campaigns as well as the duration of the COVID-19 pandemic and the measures required to contain it. In particular, the emerging variants of the virus increase uncertainty about how the pandemic will continue to develop.

We have continued to demonstrate our particular responsibility as part of the health care system during the challenging time of the current COVID-19 pandemic. For example, our dialysis clinics and hospitals have taken extensive measures to ensure that patients receive the most seamless care possible. Fresenius Kabi has responded to the significantly increased global demand for important drugs and infusion technology to treat COVID-19 patients, particularly for sedative drugs such as propofol, analgesics, and infusion pumps. We have thus maximized the supply using all the appropriate manufacturing capacities dedicated to these important products.   

Risks in the health care sector

Risks related to changes in the health care market are of major importance to the Fresenius Group. The main risks are the financing of health care systems and the corresponding reimbursement systems, as well as the development of new products and therapies. 

Financing of health care systems and reimbursement systems

In our extensively regulated business environment, changes in the law – also with respect to reimbursement of costs – can have a major impact on our business success.

National insurance systems are financed in very different ways. For example, health care systems in Europe and in the British Commonwealth countries are generally based on one of two financing models: Systems with a mandatory employer and employee contribution and systems predominantly financed through taxes.

In the Asia-Pacific region, universal health care (UHC) is at different stages of implementation, so reimbursement mechanisms can vary significantly from country to country (and even from province to province and city to city). In Latin America, health care systems are funded by public or private payers, or a combination of both. Due to the high percentage of Group sales that the U.S. market accounts for, changes to the state reimbursement system, such as reimbursements for dialysis treatments, can be particularly significant for our business. For example, in 2021, approximately 27% of Fresenius Medical Care’s global sales were attributable to reimbursements from the U.S. federal health care benefit programs the Centers of Medicare and Medicaid Services (CMS).

Changes in legislation or reimbursement practices, such as those relating to the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS), physician and clinical laboratory fee schedules, and the billing system for ambulatory surgical clinics, could affect both the level of Medicare and Medicaid reimbursement for services and the level of insurance coverage.

A reduction in reimbursement rates, reimbursed services or changes in standards, regulations and government funding in countries in which we operate could adversely affect our revenue and profitability and have a material adverse effect on our business, financial position and operational result.

Based on the “Budget Control Act” of 2011, reimbursement by Medicare for dialysis treatment is provided under a prospective payment system (PPS), which bundles particular products and services into one reimbursement rate. Due to pressure to reduce health care costs, increases in the reimbursement rate by the U.S. government have been limited.

As part of the PPS, our dialysis clinics in the United States participate in the Quality Improvement Program (QIP). Medicare reimbursement benefits can be reduced by up to 2% based on the previous year’s benefits if clinics do not meet the quality standards of the QIP. Underlying quality measures are reviewed, extended, and amended annually by the CMS. A material failure by Fresenius Medical Care to achieve the minimum client quality standards under the QIP could materially and adversely affect our business, financial condition, and results of operations.

Through value- and risk-based agreements and risk care programs, Fresenius Medical Care assumes the risk of both medical and administrative costs for certain patients in return for fixed periodic payments or set benchmark targets from governmental and commercial insurers:

  • The CMS Comprehensive ESRD Care Model allows dialysis providers and physicians to form ESRD Seamless Care Organizations (ESCOs) that seek to deliver better health outcomes for ESRD patients with chronic kidney failure while lowering the CMS’ costs. ESCOs that achieve the program’s minimum quality requirements and generate reductions in treatment costs for the CMS above certain threshold values will receive a share of the cost savings. However, ESCOs are also obliged to share the risk of cost increases and to reimburse the CMS for some of these increases. This model ended March 31, 2021.
  • The treatment choices model for patients with chronic kidney failure (“ESRD Treatment Choices Model” – ETC model) launched on January 1, 2021. This is a mandatory model that provides financial incentives for home dialysis treatments and transplants. This model is scheduled to be in place from January 2021 to June 2026. The ETC model consists of two partial reimbursement programs: first, it includes increases in the three-year reimbursement offset for home dialysis treatments, and second, it includes a performance-based reimbursement offset for all dialysis claims. The model applies both positive and negative payment adjustments to claims submitted by physicians and dialysis facilities for dialysis patients. It applies to dialysis facilities and physicians in certain randomly selected geographic regions. About 35% of Fresenius Medical Care’s U.S. dialysis clinics are participating in the model.
  • Voluntary Medicare reimbursement models, such as Comprehensive Kidney Care Contracting (CKCC), are designed to provide financial incentives for health care providers in the area of chronic kidney disease and transplants. Health care providers can take on financial risks to varying degrees by forming a Kidney Care Entity (KCE). This entity assumes responsibility for the overall cost and quality of care for Medicare patients with stage 4 and 5 chronic kidney failure and Medicare patients with end-stage renal disease. The implementation period for the CKCC model began on October 15, 2020, on a no-risk basis, and we began participation in the first performance year of the CKCC model on January 1, 2022, at which time each participating entity starts to assume financial risk. We do not yet know whether we and our partners will be able to deliver better health outcomes while lowering CMS’ costs.
  • In addition, Fresenius Medical Care has entered into per capita sub-capitations and risk-based and value-based agreements with certain insurers to provide health care to private and Medicare Advantage patients with end-stage renal disease. These agreements provide for the establishment of a basic amount per patient per month. If we provide complete care at costs below the basic amount, we retain the difference. However, if the costs of complete care exceed the basic amount, we may be obliged to pay the difference to the insurer.

Inadequate pricing of products or an unsuitable cost estimate for the service portfolio for beneficiaries and ineffective cost management may have a material adverse effect on our financial position, net assets, and operational results.

Fresenius Medical Care mitigated the impact of the PPS and the additional above-referenced reimbursement models by two broad measures: 

  • First, Fresenius Medical Care works with medical directors and treating physicians to generate options for efficiency increases consistent with QIP and good clinical practice and negotiates cost savings on the purchasing of pharmaceuticals.
  • Second, Fresenius Medical Care introduces new initiatives in order to achieve efficiency increases and better patient outcomes by increasing care upon initiation of dialysis, increasing the percentage of patients using home dialysis, and generating additional cost reductions in its clinics.

The previous U.S. government had announced its intention to make significant changes to existing health care programs, including new remuneration models to promote earlier detection and treatment of kidney disease, as well as increasing home dialysis and transplants. Efforts to repeal or replace the “Affordable Care Act” (ACA) have not been successful and the current U.S. administration has announced its intention to continue and expand ACA. In addition, options to restructure the Medicare program in the direction of a defined-contribution, “premium support” model and to shift Medicaid funding to a block grant or per capita arrangement, with greater flexibility for the states, are also being considered.

In 2017, the U.S. administration announced its decision to end subsidies, known as cost-sharing reduction (CSR) payments, to health insurance companies to help pay out-of-pocket costs of low-income Americans. Some private insurers have stated that they will need much higher premiums and may withdraw from the insurance exchanges created under the Affordable Care Act if the subsidies were eliminated. It is not possible to predict the outcome of ongoing litigation on this matter. As a result, significant increases in insurance premiums and a reduction in the availability of insurance through such insurance exchanges established by the ACA could reduce the number of Fresenius Medical Care’s privately insured patients and shift such patients to Medicare and Medicaid. Because Medicare and Medicaid reimbursement rates are generally lower than the reimbursement rates paid by private insurers, a shift of privately insured patients to Medicare and Medicaid could have a material adverse impact on the results of operations of Fresenius Medical Care.

Further requirements for dialysis clinics and changes in reimbursement from government and private insurers for our entire product and service portfolio in the United States could have a material adverse effect on our business and operating results. For example, the ballot initiatives introduced at the state level could result in further regulation of clinic staffing requirements, state inspection requirements, and a cap on private insurer margins. Such additional state regulations would increase the cost of operating dialysis clinics and create additional costs. This could have a material adverse effect on our business in the affected states.

A portion of dialysis treatments in the United States is reimbursed by private insurance companies and managed care organizations, with reimbursements generally higher than the reimbursements provided by the government health care program. As a result, payments from private health insurers contribute a significant portion to Fresenius Medical Care’s profits. In 2021, approximately 40% of Fresenius Medical Care’s sales from health care services in the North American segment were attributable to private health insurance companies. If these organizations in the United States manage to push through a reduction in the reimbursements, or the share of reimbursements by private health insurers decreases, it would significantly reduce the sales revenues and operating earnings for the products and services of Fresenius Medical Care. Beginning January 1, 2021, all ESRD patients will be eligible to enroll in Medicare Advantage plans for the first time. As a result, formerly privately insured patients may opt for Medi-care Advantage plans, which generally provide lower reimbursement payments than private payers.

A portion of Fresenius Medical Care’s patients who are currently covered by private insurers may elect to transition to government-funded reimbursement programs that reimburse us at lower rates for our services if efforts to restrict or eliminate the charitable funding of patient insurance premiums are successful.

In addition, the health care insurance industry is experiencing continuing consolidation among insurers and pharmacy benefit managers, including increasing buyer power and impacts on referral streams. This may have an adverse impact on our ability to negotiate favorable coverage terms and commercially reasonable rates with such insurers. We monitor the relationships with private health insurance companies continuously and try to hedge the business through long-term contracts to maintain profitability.

Changes in reimbursement from government and private insurers for our entire product and service portfolio in the United States could have a material adverse effect on our business and operating results.

The same applies to the hospital market in Germany, where the DRG (Diagnosis-Related Groups) system is intended to increase the efficiency of hospitals while reducing health care spending. Patients are largely assigned to hospitals by the public health and pension insurers. It is therefore important for Helios Germany that the contracts between its hospitals and the insurers and health care institutions are maintained. We not only monitor legislative changes intensively, but also work together with governmental health care institutions.

As part of the Nursing Staff Strengthening Act (PpSG), nursing costs were removed from the flat rates per case (DRG) from 2020 and the costs of patient-centered care were fully reimbursed by the health insurance funds via separate nursing budgets. As early as 2021, every additional or increased bedside nursing position was fully refinanced by the payers and the inclusion criteria of the nursing budget were changed.

As negotiations with the payers on the care budgets for 2020 and 2021 have largely not yet been concluded, this poses a potential risk to Fresenius Group’s business, financial position, and result. The allocation of nursing staff to the nursing budget was adjusted to the current definitions of ”nursing specialist” and ”nursing assistant” or ”other professions” in the Nursing Staff Lower Limits Ordinance (PpUGV).

For the 2021 nursing budget, the personnel costs of the following occupational groups were fully included in the nursing budget: Nursing professionals and nursing assistants (nursing assistant, physician assistant, anesthesia technical assistant, emergency paramedic, or nursing and geriatric care assistant).

The digital or technical measures that reduce or support nursing activities were included in the nursing budget (4 es total nursing budget).

In the German market, Helios Germany sees a general trend towards outpatient treatment, which could lead to lower growth in the number of inpatient cases. In response to this trend, Helios Germany is expanding outpatient services offerings in a separate division. If Helios Germany does not succeed in sustainably adapting its business model through suitable measures, this could lead to a decline in the number of cases and have a material adverse effect on our business and results of operations.

Quirónsalud, our private chain of clinics in Spain, operates hospitals through PPP contracts (public-private partnership), among other methods. These are part of the public health system in Spain. The company has thus been given responsibility in certain areas of health care for the citizens of Spain with statutory health insurance. Quirónsalud receives compensation for its services in the form of a per capita lump sum or remuneration for the specific service rendered.

If Quirónsalud were to lose the concession to operate hospitals with PPPPPP (public-private partnership model)Public-private partnership describes a government service or private business venture that is funded and operated through a partnership of government and one or more private-sector companies. In most cases, PPP accompanies a part-privatization of governmental services. contracts or renegotiations with public or private insurance companies resulted in worse conditions for doing so, or if hospitals are not able to compensate for lower reimbursement rates by cutting costs, this could have a material adverse effect on our net assets, financial position, and results of operations.

Reductions in health care spending could also negatively affect the pricing of Fresenius Kabi products.

Changes in the law, the reimbursement method, and the health care programs could affect the scope of payments for services, as well as the scope of insurance coverage and the product business. This could have a significant adverse impact on our business operations as well as net assets, financial position, and results of operations. Generally, our aim is to counter such possible regulatory risks through enhanced performance and cost reductions. 

Development of new products and therapies

The introduction of new products and services, or the development of advanced technologies by competitors, could render one or more of our products and services less competitive or even obsolete, and thus have a significant negative impact on future sales, the prices of products, and our range of services. This includes the introduction of generic or patented drugs by competitors, which may have an impact on sales and operational results. Cooperation with medical doctors and scientists allows us to identify and support relevant technological innovations. This means we are always able to keep abreast of current developments in alternative treatment methods so that we are able to evaluate and, if necessary, adjust our corporate strategy.

Operating risks

Our operational business around the world is exposed to a number of risks and extensive government regulation, which include, among others: 

  • The quality, safety, and efficacy of medical and pharmaceutical products, supplies, and therapies;
  • The operation and licensing of hospitals, other health care facilities, manufacturing facilities, and laboratories;
  • The planning, construction, equipping, and management of pharmaceutical and medical-technological production facilities;
  • The planning, construction, equipping and management of health care facilities;
  • Permits from public authorities and monitoring of clinical and non-clinical research and development activities;
  • Product approvals and regulatory approvals for new products and product modifications;
  • Audits and reviews by enforcement authorities of compliance with applicable pharmaceutical legislation;
  • Compliance with due diligence obligations, warranty obligations, and product liability regulations;
  • The accurate reporting of and billing for reimbursements by government and private insurers;
  • Discounting reimbursable pharmaceutical and medical device products and reporting drug prices to government agencies;
  • The labeling and designation of pharmaceutical products and their marketing;
  • Attracting qualified personnel;
  • Compensation of medical personnel and financial arrangements with physicians and establishments that arrange patient referrals;
  • Access to collection, publication, use, and security of health-related information and other protected data;
  • Limitation of our ability to make acquisitions or certain investments and the conditions for transactions of this nature.

If Fresenius fails to comply with laws or regulations, this may give rise to a number of consequences, including monetary penalties, increased compliance costs, exclusion from governmental reimbursement programs, or a complete or partial curtailment of our authorization to conduct business, any of which could have a material adverse effect on our business reputation, net assets, financial condition, or results of operations. Significant risks of operations for the Fresenius Group are described in the following sections.

Production, products, and services

Compliance with product specifications and manufacturing regulations is ensured by our quality management systems, which are structured in accordance with the internationally recognized quality standards ISO 9001 and ISO 13485 and take into account relevant international and national regulations. We implement them by means of internal standards such as quality and work procedure manuals. Regular internal and external audits are carried out at the Group’s production sites, distribution companies, and dialysis clinics to check compliance. This covers all requirements and regulations, from management and administration to production and clinical services, right through to patient satisfaction.

Our production facilities comply with the Good Manufacturing Practice (GMP) requirements of the markets they supply. Our facilities are audited by local public health authorities such as the U.S. Food and Drug Administration (FDAFDA (U.S. Food & Drug Administration)Official authority for food observation and drug registration in the United States.) or the European Medicines Agency (EMA) and other authorities. If an authority identifies any deficiencies, Fresenius will immediately take comprehensive and appropriate rectifying measures.

Non-compliance with the requirements of these authorities in our production facilities or at our suppliers could lead to regulatory actions, such as warning letters, product recalls, production interruptions, monetary sanctions, or delays in new product approvals. Any of these regulatory actions could adversely affect our business reputation and our ability to generate sales and result in significant expenses.

Global safety officers react promptly as soon as Fresenius becomes aware of a quality-related issue. They initiate and coordinate necessary actions on a global level, such as product recalls. With its early warning system, Fresenius evaluates any quality-related information from various risk areas to identify risks at an early stage and take corrective and preventive actions. For this purpose, Fresenius Kabi uses databases in which complaints and side effects are logged, internal and external audits, and key performance indicators used for internal control purposes and the optimization of quality processes. In this way, safety profiles of the products can be created and evaluated worldwide. Product recalls, for example, are initiated as a risk-minimizing measure in cooperation with the responsible regulatory authority; at the same time, the cause of the recall is analyzed thoroughly. Corrective action may be taken to avoid the circumstances that led to the recall occurring again in the future.

In addition, changes made to requirements and regulations by regulatory authorities, such as those affecting our production processes, can lead to lower production volumes during any transitional period or jeopardize production.

Production could also be adversely affected by events such as natural disasters, infrastructure disruptions, regulatory rulings, supply disruptions, such as of raw materials, or technical failures. To minimize these risks, stocks are built up, for example to bridge any gaps in the event of short-term problems.

Potential risks arising from the start-up of new production sites or the introduction of new technologies are countered through careful planning, regular analysis, and continual progress reviews.

Providing medical services in our hospitals, rehabilitation clinics, and dialysis clinics is generally subject to inherent risks. For example, disruptions to processes, also due to causes such as natural disasters or technical failures, involve risks for patients and the clinic. In addition, there are operational risks, for example regarding hygiene. We counteract these risks with strict operating procedures, continual personnel training, and patient-oriented work procedures. At Fresenius Helios, for example, a structured hygiene management system is in place to ensure that infections within the hospital are avoided and their spread prevented as quickly as possible. Furthermore, we are constantly striving to improve the standard of patient treatment through our quality management systems.

Performance risks associated with Fresenius Vamed’s project business are countered through professional project management and control and with a proven system tailored to each business activity for identifying, evaluating, and minimizing these risks. This system consists of organizational measures, such as standards for pricing in risks when preparing quotations. Risks are assessed even before accepting orders and are subsequently updated during regular project controlling. To avert the risk of default, the system also includes financial measures, such as checking creditworthiness and, as a rule, safeguarding through prepayments, letters of credit, and secured credits.

Further information about our quality management processes can be found in the separate Group Non-financial Report in the seciton Patient and product safety.


In the procurement sector, potential risks arise mainly from price increases or the lack of availability of raw materials and goods, as we saw in the wake of the COVID-19 pandemic in the 2021 fiscal year. We counter these risks by appropriately selecting and working together with our suppliers, through long-term framework agreements in certain purchasing segments, and by bundling volumes within the Group.

We counter the risk of poor-quality purchased raw materials, semi-finished products, and components mainly by requiring our suppliers to meet strict quality standards. This includes a structured qualification process, which comprises audits, document and advance sample inspections, as well as regular quality controls of deliveries. We only purchase high-quality products with proven safety and suitability from qualified suppliers that conform to our specifications and standards.

Evaluating our risks and our management measures, we also take into account new regulatory requirements and legal conditions, such as the Act on Corporate Due Diligence Obligations in Supply Chains, which will be effective in Germany in 2023.

Further information about our supply chains and our approach to the protection of human rights can be found in the separate Group Non-financial Report in the section Human Rights.


We face numerous competitors in both our health care services business and dialysis products business, some of which may possess substantial financial, marketing or research and development resources. Competition from new and existing competitors and especially new competitive developments and innovations in technology, pharmaceuticals and care delivery models could materially adversely affect the future pricing and sale of our products and services.

Growing competition, among other things induced by the recovery of some notable competitors, in particular in the U.S. market for generic IV drugs after halts to production, may continue to materially affect the pricing and sale of our products and services. In addition, the introduction of generic or patented drugs by competitors may have an impact on the sales and operational results of our products.

Generally, the health care sector is characterized by pricing pressure (including from tenders), competition, and efforts to contain costs. These factors could result in lower sales and adversely affect our business, financial position, and operational results.

In the United States, almost all Fresenius Kabi injectable pharmaceutical products are sold to customers through arrangements with group purchasing organizations (GPOs) and distributors. The GPOs also have purchasing agreements with other manufacturers, and the bidding process for products is highly competitive. In the fourth quarter 2021, one of the largest GPOs in the United States issued a request-for-proposal for bids for a significant portion of their pharmaceutical contracts. These new contracts are expected to be effective in mid-2022.

If Fresenius Kabi is not successful in maintaining its existing contracts or if new contracts are concluded on less favorable terms, this could have an adverse effect on our operational results.

Similar developments with regard to price pressure in the tender business and increasing competition and price reductions are affecting our business in all major markets in Asia. In China, two Fresenius Kabi products were successful in winning National Volume based Procurement (NVBP) negotiations. As a result, there will be a significant decline in prices. Further expansion of NVBP and Provincial Volume based Procurement (PVBP) is expected with one or two rounds annually over the next three years. Based on the directive from the Chinese State Council, drug price reduction will continue to be one of the major measures to further contain health care costs in a market in which volumes are steadily growing. This development could have a negative impact on our sales, financial position, and operational results if Fresenius Kabi is not successful in offsetting these price reductions, for example through cost savings and efficiency gains in production.

To ensure our permanent competitiveness, we work closely together with physicians and scientists. Important technological and pharmaceutical innovations are intended to be quickly identified and further developed, if necessary also by adapting our business strategy. Moreover, we secure our competitiveness by ongoing analyzes of our market environment as well as the regulatory framework. The market activity, especially our competitors’ products and newly launched dialysis-related products are thoroughly monitored. The cooperation between the various technical, medical and academic institutions within our company also ensures our competitiveness, which is finally further enhanced by our consequent conduction of programs devoted to cost saving and efficiency increase.

Referrals from doctors

Our hospitals, rehabilitation clinics, and dialysis clinics are dependent on patients selecting them for their medical treatment. To a large extent, patients rely on the recommendation of their attending physician. Physicians make their recommendations based on various factors, including the quality of the medical treatment and the competence of the hospital staff, as well as the distance to the hospital and the availability of appointments for treatment. If we are unable to meet these criteria, physicians may recommend fewer or no patients at all to our clinics. In addition, Fresenius Helios could receive fewer referrals from doctors’ practices because they increasingly perceive Fresenius Helios’ outpatient services as competition or because they no longer take rehabilitation clinics with a certain medical focus into account when making their choice. These factors could result in lower sales and adversely affect our business, financial position, and operational results.

Payment defaults

As a rule, we assess the creditworthiness of new customers in order to limit the risk of late payment and defaults by customers. We also conduct follow-up assessments and review credit lines on an ongoing basis. We monitor receivables outstanding from existing customers, and assess the risk of default. This particularly applies to countries with budgetary problems and countries exposed to political risks. In 2021, we again worked on the status of our receivables, by taking measures such as factoring.


Fresenius addresses potential shortages of qualified personnel through appropriate employer branding measures, as well as recruitment, upskilling, and retention of qualified staff.

In order to increase the awareness and attractiveness of the Fresenius Group, our employer branding relies on a mix of marketing to universities, in-house events (such as the Fresenius Career Day “Meet the Board” involving our top management), and digital employer branding (such as by expanding our career website and our presence on social media channels).

To ensure a sustainable supply of qualified staff, we offer, for example, targeted programs for young academic talent with subsequent retention programs, as well as comprehensive apprenticeships for students who just graduated high school.

With more than 6,305 apprentices and dual students, Fresenius is one of the biggest training companies in Germany. Fresenius offers 42 apprenticeships and 29 study programs throughout Germany. The number of our apprenticeships and study program offerings was further expanded nationwide in 2021.

We provide information about our apprenticeship and study program offerings on our career website, as well as at our respective training locations through various marketing activities and vocational orientation offers (such as the career guidance app Aivy, vocational information days, and the Night of Apprenticeship). In June 2021, a virtual training fair was held for the second time, which is integrated into the careers website. We offer this fair format on a regular basis since 2020.

Furthermore, we offer young academic talent the opportunity to gain initial practical experience and to establish contacts within our company in the context of internships and working student positions before or during their studies or in the context of their final papers.

Depending on the customer and market structure, our business segments place very different demands on concepts and measures for personnel development. We strengthen employee loyalty to our company by offering our employees attractive development opportunities and fringe benefits and variable compensation and working-time models. In addition, we promote international and interdisciplinary cooperation.

By using target-group-specific measures, Fresenius addresses the overall shortage of specialized hospital personnel. We thereby aim to recruit qualified and dedicated personnel, thus ensuring our high standard of treatment quality.

Greater employee absenteeism and longer recruiting cycles as an effect from the COVID-19 pandemic further contribute to the experienced shortages in personnel. Additionally, evolving guidelines and requirements regarding vaccine mandates for our employees may have an impact on our ability to attract and retain qualified clinical personnel.

Since January 1, 2019, the German hospital market has also been subject to the Ordinance on the Minimum Requirements for Nursing Personnel in Hospitals (PpUGV). This ordinance stipulates minimum staffing levels for nursing personnel in certain areas of the hospital. Further statutory regulations on minimum personnel levels in additional hospital departments with beds may further intensify competition for qualified nursing staff.

Helios Germany is therefore working intensively on additional measures to make it particularly attractive as an employer for nursing staff. These include the compatibility of family and career (e.g., through childcare facilities at hospital sites or the option of part-time work), attractive further and advanced training opportunities, occupational health management, and career opportunities.

At present, the Spanish hospital market is also experiencing a shortage of qualified nursing staff. As a result of the COVID-19 pandemic and the associated additional need for nursing staff, public hospitals have hired more nurses at more attractive terms than before. Quirónsalud is undertaking various measures such as online campaigns and other employer branding measures to attract new employees. In addition, long-term security in the workplace and attractive working conditions, for example, should help to retain existing employees.

Further information about our measures for recruiting, developing, and retaining qualified personnel can be found in our separate Group Non-financial Report in the section Employees.

Financial risks

Currency and interest rate risks

The global focus of our operations exposes us to a variety of currency risks. In addition, the financing of the business can expose us to certain interest rate risks. We use derivative financial instruments, among other things, to minimize these risks. However, we limit ourselves to non-exchange-traded, marketable instruments, used exclusively to hedge our underlying transactions and not for trading or speculative purposes. Transactions are carried out within the limits approved by the Board of Management, which are set depending on the counterparty's rating. Further information about how the currency risk and interest rate risk are managed can be found in the Notes on page 359 onward.

Our foreign exchange risk management is based on a policy approved by the Management Board that defines the targets, organization, and handling of the risk management processes. In particular, the policy assigns responsibilities for the determination of currency risks, the execution of hedging transactions, and the regular risk management reporting. These responsibilities are coordinated with the decision-making structures in the residual business processes of the Group. Decisions on the use of derivative financial instruments in interest rate management are made in close consultation with the Management Board. Transactions using derivatives are carried out by the Group Treasury of the Fresenius Group – apart from a few exceptions in order to adhere to foreign currency regulations. These transactions are subject to stringent internal controls. This policy ensures that the Management Board is fully informed of all significant risks and current hedging activities.

The Fresenius Group is protected, to a large extent, against currency risks and interest rate risks. As of December 31, 2021, approximately 78% of the Fresenius Group’s debt was protected against increases in interest rates either by fixed-rate financing arrangements or by interest rate hedges; accordingly, around 22% is subject to an interest rate risk. A sensitivity analysis shows that a rise of 0.5 percentage points in the reference interest rates relevant for Fresenius would have an impact of approximately 0.8% on Group net income. As a global company, Fresenius is exposed to translation effects. The exchange rate of the U.S. dollar to the euro is of particular importance because of our extensive operations in the United States. Currency translation risks are not hedged. A sensitivity analysis shows that a one percent change in the exchange rate of the U.S. dollar to the euro would have an annualized effect of around €130 million on Group sales, around €20 million on EBITEBIT (Earnings before Interest and Taxes)EBIT does include depreciation and write-ups on property, plant and equipment. EBIT is calculated by subtracting cost of sales, selling, general and administrative expenses, and research and development expenses from sales., and around €6 million on Group net income.

As a globally active company, we have production facilities in all the main currency areas. In the service businesses, our revenue and cost base largely coincide. The Fresenius Group uses a Cash-Flow-at-Risk (CFaR) model in order to estimate and quantify such transaction risks from foreign currencies. The foreign currency cash flows that are reasonably expected to occur within the following 12 months, less any hedges, form the basis for the analysis of the currency risk. As of December 31, 2021, the Fresenius Group cash flowCash flowFinancial key figure that shows the net balance of incoming and outgoing payments during a reporting period. at risk was €44 million, i.e., with a probability of 95%, a potential loss in relation to the forecast foreign exchange cash flows of the next 12 months will not be higher than €44 million.

Further information about financial risks can be found in the Notes on page 359 onward.

Recoverability of assets

Financial risks that could arise from acquisitions and investments in property, plant and equipment, and in intangible assets are assessed through careful and in-depth reviews assisted by external consulting firms. The intangible assets, including goodwill, product rights, trade names, and management contracts, contribute a considerable part to the total assets of the Fresenius Group.

Currency devaluations, adverse changes in general interest rates and deteriorating economic conditions, including inflationary price developments in various markets combined with deteriorating country credit ratings, increase the risk of goodwill impairment, which may lead to a partial or complete write-down of the goodwill or brand name of the affected cash-generating unit or negatively impact our investments and external partnerships.

Goodwill and other intangible assets with an indefinite useful life carried in the Group’s consolidated balance sheet are tested for impairment each year. Further information can be found in the Notes on page 291 onward.

Taxes and duties

As a global corporation, Fresenius is subject to numerous tax laws and regulations. Risks arising therefrom are identified and evaluated on an ongoing basis. The Fresenius Group’s companies are subject to regular tax audits. Any changes in tax regulations or adjustments resulting from tax audits and additional duties, import levies, and trade barriers could lead to higher taxes and duties.

Similarly, tax and trade law reforms, in particular the OECD initiatives for the reallocation of taxation rights and the introduction of a global minimum tax, as well as a potential U.S. tax reform, may increase our tax and duty burden.

Debt and liquidity

As of December 31, 2021, the Fresenius Group’s financial liabilities including leases under IFRS 16 were €27,155 million. The debt could, among other things, limit the Company’s ability to pay dividends, arrange refinancing of financial liabilities, or implement the corporate strategy. If Fresenius’ credit rating or the conditions on the relevant financial markets deteriorate significantly, financing risks could arise for Fresenius. We reduce these risks through early refinancing as well as a high proportion of mid- and long-term funding with a balanced maturity profile.

Some of our financing agreements that were concluded before the year 2017 contain covenants requiring us to comply with certain financial ratios. These covenants are currently suspended due to the investment grade rating of the Fresenius Group. A deterioration of the rating may therefore also lead to the currently suspended covenants in some financing agreements becoming active again. Non-compliance with these covenants could then result in a default and acceleration of the debt under the respective agreements. We counteract this risk by taking the performance indicators relevant for our investment grade rating into account in our Group planning and continuously monitoring their development. This enables us to take countermeasures at an early stage.

Additional information about conditions and maturities can be found on page 323 of the Notes and in the Group Management Report.

Inflation risks

As an international company, Fresenius is exposed to varying inflation rates and price developments. We also operate in high-inflation countries such as Argentina and Lebanon. Due to inflation in Argentina and Lebanon, our subsidiaries there apply IAS 29, Financial Reporting in Hyperinflationary Economies.

Inflation-related cost increases could have an adverse effect on our business, particularly if prices for our products and services remain unchanged or cannot be adjusted sufficiently to reflect increased costs.

Risks associated with research and development and product approval

The development of new products and therapies always carries the risk that the ultimate goal might not be achieved, or it might take longer than planned. This is particularly true for our biosimilar products from Fresenius Kabi. The development of biosimilar products entails additional risks, such as significant development costs and the still-developing regulatory and approval processes. Regulatory approval of new products requires comprehensive, cost-intensive preclinical and clinical studies. Furthermore, there is a risk that regulatory authorities either do not grant, or delay, product approval, or withdraw an existing approval.

In addition, adverse effects of our products that may be discovered after regulatory approval or registration may lead to a partial or complete withdrawal from the market, due either to legal or regulatory actions or our voluntary decision to stop marketing a product.

For example, following feedback from the European Medicines Agency (EMA), risk mitigation measures for HES products from Fresenius Kabi (controlled dispensing of hydroxyethyl starch (HES) medicines to accredited hospitals, training and letters to health care professionals and warnings on packaging) were initiated in 2019. Based on the results of a study examining the routine use of HES in accredited clinics, the effectiveness of the interventions will be evaluated.

Follow-up studies as well as similar measures could also be taken by authorities in non-EU countries. For example, two regulatory studies are currently underway to evaluate the long-term safety and efficacy of our HES products in surgical and trauma patients. As soon as the results of these studies are available, they will be evaluated by the European authorities.

The Fresenius Group spreads its risk widely by conducting development activities in various product segments. We also counteract risks from research and development projects by regularly analyzing and assessing development trends and examining the progress of research projects. Furthermore, we strictly comply with the legal regulations for clinical and chemical-pharmaceutical research and development.

With IV drugs, it is also crucial that new products are continually brought to the market in a timely manner. Therefore, we monitor the development of new products on the basis of detailed project plans and focus on achieving specific milestones. In this way, we can take countermeasures if defined targets are called into question.

Both Fresenius Medical Care and Fresenius Kabi are exposed to typical patent-related risks. These include insufficient protection by patents of the technologies and products we develop, which could enable competitors to copy our products without having to bear comparable development costs.

Risks from acquisitions

The acquisition and integration of companies carries risks that can adversely affect the net assets, financial position, and results of operations of Fresenius. Acquisition processes often include closing conditions, including but not limited to antitrust clearance, fulfillment of assurances and warranties, and adherence to laws and regulations. Non-compliance with such closing conditions by either party to an acquisition could lead to litigation between the parties or with others and thus claims against Fresenius.

Following an acquisition, the acquired company’s structure must be integrated while clarifying legal questions and contractual obligations. Marketing, patient services, and logistics must also be unified. During the integration phase, there is the risk that key managers will leave the company and that both the course of ongoing business processes and relationships with customers and employees will be harmed. In addition, change-of-control clauses may be claimed. The integration process may prove more difficult or require more time and resources than expected. Risks can arise from the operations of the newly acquired company that Fresenius regarded as insignificant or was unaware of. An acquisition may also prove to be less beneficial than initially expected. Future acquisitions may be a strain on the finances and management of our business. Moreover, as a consequence of an acquisition, Fresenius may become directly or indirectly liable towards third parties, or claims against third parties may turn out to be non-assertable.

We counter risks from acquisitions by means of structured, detailed due diligence prior to deciding to go ahead with the acquisition and by means of detailed integration plans, as well as with a dedicated integration and project management process afterward so that countermeasures can be initiated in good time if there are deviations from the expected development.

Information technology and Cybersecurity risks

Technological innovations promise new therapeutic approaches in the treatment of diseases, not least because information technology (IT) applications and digital components offer the potential to relieve medical staff and make health care more efficient. Fresenius is also using digital product solutions to enter new markets. At the same time, we are taking into account the risks associated with digitalization.

The Company's processes are growing ever more complex as a result of the Fresenius Group’s steady growth and increasing internationalization. Correspondingly, the dependence on information and communication technologies and on the IT systems used to structure procedures and – increasingly – harmonize them internationally, is intensifying. A failure of these IT systems could temporarily lead to an interruption of other parts of our business and thus cause serious damage.

Due to the increased integration of IT systems, the integration of digital components and applications into medical technology products and services and the use of technologies, such as cloud computing, within our business processes, there is the possibility that cyber incidents may compromise the confidentiality, integrity, or availability of our information assets and systems. Risks to information security, cyber security, and the stability of IT systems also increase if we fail to keep our information assets and systems at the cutting edge of technology and security.

The disclosure of sensitive data or non-compliance with data protection laws, regulations, and standards could damage our competitive position, our reputation, and the entire company. In addition, Fresenius or one of the Group companies could be subject to a significant fine in the event of a data protection breach. To comply with all legal requirements, we have implemented comprehensive data protection management systems, which provide the appropriate technical and organizational measures and controls for the protection of personal data.

In 2017, the Management Board of Fresenius Management SE adopted the Cybersecurity Approach, Roadmap and Execution (CARE). Since 2018, CARE has served as a cybersecurity program that bundles cybersecurity initiatives and strengthens our resilience to protect and defend against cyber attacks. In 2020, the Management Board of Fresenius Management SE enacted a Group-wide Cybersecurity Policy. This policy defines the objectives as well as the organizational and operational structure for the management of cybersecurity in the Fresenius Group, integrated into CARE.

To sustainably protect the Group’s added value, we have introduced tailored frameworks for our cybersecurity risk domains that define the security architectures, concepts and requirements. Further information about our cybersecurity strategy, organization, and measures is set out in our separate Sustainability Report.

In addition, the Group Cybersecurity Office (GCSO) conducts a business-oriented assessment of strategic cybersecurity risks along the value chain in collaboration with the business units. The Group’s cyber risks are related to the business activities of the respective business sectors: In the product business, they are closely linked to the disruption of production or logistics processes and the theft of intellectual property; in our health care facilities, they relate to patients and their health care information and operated medical devices.

The results of these semi-annual cyber risk assessments are presented to the Cybersecurity Board, which includes all cybersecurity officers from the business units. On this basis, the GCSO continuously derives risk-based measures to further mitigate cyber risks and enables the Group-wide exchange of knowledge and best practices. While our primary goal is to prevent the materialization of cyber risks, we have established monitoring mechanisms to detect and address cyber threats at an early stage in order to limit the impact of security incidents on business operations.

We are guided in this process by internationally recognized standards for information security such as the ISO/IEC 27000 series, ISO/IEC 62443, KRITIS, or the NIST Cybersecurity Framework. The central IT infrastructure, as well as critical infrastructures in the medical sector, among other things, have ISO/IEC 27001 certification.

We will continue to invest in cybersecurity and expand our capabilities to make us more resilient to the threat posed by cyberattacks on our systems and digital products and services.

Compliance and legal risks

Compliance Risks

Fresenius is subject to comprehensive government regulation and control in nearly all countries. In addition, Fresenius must comply with general rules of law, which differ from country to country. There could be far-reaching legal repercussions or reputation damage should Fresenius fail to comply with these laws or regulations.

We must comply in particular with rules and regulations that monitor the safety and effectiveness of our medical products and services. Corruption is a core risk area across all business segments. Antitrust law, data protection, money laundering, sanctions, and the upholding of human rights are further significant risk areas. It is therefore of particular importance to us that our compliance programs and guidelines are strictly adhered to. Through compliance, we aim to meet our own expectations and those of our partners, and to orient our business activities to generally accepted standards and local laws and regulations.

At Fresenius, risk-oriented compliance management systems are implemented in each business segment. These systems take into account the markets in which the respective business segment operates and are tailored to the specific requirements of the business segment. Furthermore, we at Fresenius assess compliance risks using a standardized methodology.

Each business segment has appointed a Chief Compliance Officer to oversee the development, implementation, and monitoring of the compliance management system of the relevant business segment and to check progress made in this regard. In line with their organizational and business structure, the business segments have established compliance responsibilities at the respective organizational levels. The Corporate Compliance department of Fresenius SE & Co. KGaA supports the compliance officers in each business segment with standardized tools, processes, and methods, and reports to the Chief Compliance Officer of Fresenius SE & Co. KGaA.

Our compliance programs set binding rules of conduct for our employees. We believe that we have taken adequate measures to ensure that national and international rules are observed and complied with. Nevertheless, even when a comprehensive compliance program is in place, individual cases of misconduct by individual employees or contractual partners cannot be ruled out, which could cause damage to the Company.

Further information about our compliance management systems can be found in the Group Non-financial Report.

Data protection

Fresenius’ business activities are also subject to data protection regulatory requirements. This includes compliance with the General Data Protection Regulation (GDPR) as well as compliance with other country-specific data protection regulations. Breaches of these regulations or of the GDPR can result in substantial fines, damage to reputation, and loss of trust.

The core element of data protection is the secure and lawful processing of personal data in accordance with these regulatory requirements. In addition to patient data, this also includes the personal data of employees as well as that of contractual partners and other persons.

Risk areas include compliance with data protection principles, information obligations, data subjects’ rights, risk analysis regulations, and the documentation of data processing activities, as well as ensuring secure data processing, including the establishment of an appropriate level of data protection in (inter)national data transfers.

To comply with legal requirements, Fresenius has implemented comprehensive data protection management systems, which provide the appropriate technical and organizational measures and controls for the protection of personal data. Fresenius SE & Co. KGaA and all business segments maintain data protection organizations in accordance with their organizational and business structures. This includes independent data protection officers reporting to the respective company’s management. The dependence on data protection and IT security/cybersecurity resulting from increasing internationalization is also taken into account by the data protection organizations by ensuring collaboration with the respective departments is as close as possible.

The business segments have implemented processes and standards based on their organizational and business structures that also provide internal guidelines for processing personal data in a secure and appropriate manner. In addition, the individual data protection management systems also include appropriate control measures in order to adequately check compliance with regulatory and internal requirements.

Further information about our data protection organizations and data protection management systems can be found in the Sustainability Report.

Legal risks

Risks arising in connection with litigation or official proceedings are continuously identified, assessed, and – above a relevant set materiality threshold, where applicable – reported within the Group. Companies in the health care industry are regularly exposed to claims or actions for breach of their duties of due care, product liability, breach of warranty obligations, patent infringements, treatment errors, and other claims. This can result in high claims for damages and substantial costs for legal defense, regardless of whether a claim is actually justified. This applies in particular to disputes and proceedings in the United States, where legal defense costs and claims for damages can be exceptionally high. If legal matters or official proceedings are decided against Fresenius, it may also no longer be possible to insure risks of this kind in the future, or it may no longer be possible to insure such risks under appropriate conditions.

The Fresenius Group is involved in several legal matters and official proceedings arising from the ordinary course of its business. However, although the outcome cannot always be reliably predicted, we do not currently expect any significant adverse effect on our net assets, financial position, and results of operations arising from the legal matters and proceedings currently pending.

Such legal matters and administrative proceedings that may have a significant negative impact on the net assets, financial position, and results of operations of Fresenius are set out on pages 340 to 342 in the Notes.

Other risks

Our international orientation also gives rise to the following risks, which could have an adverse effect on our business and thus on our financial position and operational results:

  • Political, social, or economic instability, especially in developing and emerging countries;
  • Civil unrest, war, or the outbreak of diseases, such as pandemics, e.g. the coronavirus pandemic;
  • Environmental risks;
  • Natural disasters, terrorist attacks, and other unforeseen events;
  • Different labor law conditions and difficulties in meeting the global demand for qualified personnel;
  • Different and less stable regulations protecting intellectual property;
  • Delays in the transport and delivery of our products.

More detailed information about environmental management at Fresenius and about assistance in the event of natural disasters and other crises can be found in the Sustainability Report.


In its risk management, Fresenius uses the option to transfer certain risks to external insurers. Fresenius Versicherungsvermittlungs-GmbH is the Fresenius Group’s insurance department, which is organized as a captive insurance broker, and ensures appropriate insurance cover for large parts of the Group. Other sub-groups ensure adequate insurance coverage through their own departments. The aim is to protect the Company’s employees and assets against possible hazards within the risk management process by procuring insurance coverage that is appropriate to the risks. To this end, we purchase adequate coverage, taking into account the cost-benefit ratio. For example, Fresenius has all-risk insurance against property damage and loss of earnings due to, for example, fire, storms, water, earthquakes, and other natural hazards, product liability insurance, insurance for volunteers and patients in clinical trials, hospital liability insurance, environmental liability insurance and environmental damage insurance, and directors’ and officers’ insurance.