The management boards assessment of the effect of general economic developments and those in the healthcare sector for Fresenius as well as business results and significant factors affecting operating performance
In 2023, the difficult macroeconomic environment had a negative impact on business development. This included increased uncertainties, inflation-related cost increases, staff shortages, and increased energy costs. In this difficult macroeconomic environment, the Fresenius Group was able to increase its revenue and earnings guidance over the course of the year.
For this reason, the Management Board believes that 2023 was a successful fiscal year for the Fresenius Group.
Fresenius Kabi achieved organic revenue growth of 7%. EBIT1 increased by 6% (3% in constant currency) to €1,145 million (2022: €1,080 million).
The organic revenue growth of Fresenius Helios was 5%. EBIT1 increased by 4% (4% in constant currency) to €1,232 million (2022: €1,185 million).
The organic revenue growth of Fresenius Vamed was 1%. EBIT1 decreased to -€16 million (2022: €20 million).
Following the deconsolidation of Fresenius Medical Care, this business segment is accounted for using the equity method. The profit attributable to the shareholders of Fresenius SE & Co. KGaA is recognized in a separate line in the income statement: Result from the equity method. This amounted to -€12 million in the 2023 fiscal year and reflects the result since deconsolidation as of November 30, 2023. Net income from deconsolidated activities of Fresenius Medical Care in accordance with IFRS 5 (net income attributable to shareholders of Fresenius SE & Co. KGaA) amounted to € -947 million and reflects Fresenius Medical Care's share of net income until November 30, 2023. This included the effect from the valuation adjustments in accordance with IFRS 5 as part of the deconsolidation in the amount of -€1,115 million.
1 Before special items
Comparison of the actual business results with the forecasts
The overall macroeconomic environment in 2023 was characterized by increased uncertainties, inflation-related cost increases, staff shortages, and higher energy costs. Despite this difficult macroeconomic environment, the Fresenius Group was able to increase its Group revenue and earnings1 guidance over the course of the year.
The overview below shows how the outlook for the Group and the business segments developed in 2023.
Due to the deconsolidation of Fresenius Medical Care AG (FMC) in the course of the fiscal year, the comparison is made with the forecast for the Group excluding FMC.
Revenue increased organically by 6% in fiscal year 2023 and was thus at the upper end of the guidance adjusted in August 2023 (guidance for 2023: mid-single-digit percentage growth). The increase is driven by an ongoing strong performance of our Operating Companies.
EBIT1 increased by 2% in constant currency and was therefore at the upper end of the guidance adjusted in October 2023 (guidance for 2023: broadly flat). The increase was driven by a strong performance at Fresenius Kabi and Fresenius Helios.
We invested €1,136 million in property, plant and equipment (2022: €1,182 million). At 5.1% of Group revenue, the investments in property, plant and equipment are below the prior-year level of 5.5%, but in line with the expectation (expectation for 2023: around 5%).
The cash conversion rate (CCR) was 1.0 and is therefore in line with expectations (expectation for 2023: below 1).
The net financial debt / EBITDA ratio was 3.76x2 (December 31, 2022: 3.80x2) and thus in line with expectations. We had projected that the leverage ratio would be below 4.0x2 by the end of 2023. This is still above our self-imposed target corridor of 3.0x to 3.5x.
Group ROIC was 5.2%1 (2022: 5.6%1) and thus in line with expectations. We had projected a figure of around 5% for fiscal year 2023. The decrease in ROIC was mainly due to a higher tax rate.
The non-financial performance targets of the Fresenius Group cover the key sustainability topics of medical quality/patient satisfaction and employees and are anchored in the remuneration of the Management Board. The following actual figures for the 2023 fiscal year were determined as part of the assessment of target achievement for the short-term variable remuneration of the Management Board (STI) of Fresenius SE & Co. KGaA:
In the area of medical quality/patient satisfaction, Fresenius Kabi achieved an Audit & Inspection Score of 1.9 (target value: no more than 2.3), Fresenius Helios Germany achieved an Inpatient Quality Indicator (G-IQI) Score of 88.7 % (target value: at least 88.0%), Fresenius Helios Spain an Inpatient Quality Indicator (E-IGI) Score of 76.7% (target value: at least 55.0 %) and Fresenius Vamed a patient satisfaction rating of 1.56 (target value: at least 1.65). As a result, all divisions met their respective targets for the 2023 financial year.
In the area of employees, the Employee Engagement Index (EEI) of the Fresenius Group (including Fresenius Medical Care) was 4.24 in the 2023 financial year (target value: 4.33).
1 Before special items
2 Both net debt and EBITDA calculated at LTM average exchange rates; pro forma closed acquisitions / divestitures; before special items; including leasing liabilities; including Fresenius Medical Care dividend
Achieved group targets 2023
Download(XLS, 37 KB)| Guidance 2023, published February 2023 | Guidance adjustment / update, published August 2023 | Guidance adjustment / update, published October 2023 | Achieved in 2023 | |
|---|---|---|---|---|
| Group1 | ||||
| Revenue(growth, organic) | Low-to-mid-single-digit percentage growth | Mid-single-digit percentage growth | Confirmed | 6% |
| EBIT incl. FMC2(growth, in constant currency) | Broadly flat tohigh-single-digit decline | With adoption of IFRS 5 outlook is provided ex FMC3 | ||
| EBIT ex FMC(growth, in constant currency) | Broadly flat tomid-single-digit decline | Confirmed | Broadly flat | 2% |
| Operating Companies | ||||
| Fresenius Kabi1 | ||||
| Revenue(growth, organic) | Low-to-mid-single-digit percentage growth | Mid-single-digit percentage growth4 | Confirmed | 7% |
| EBIT margin | Around 1 percentage point below the structuralmargin bandof 14-17% | Around 14% (structural margin band of 14-17%)4 | Confirmed | 14.3% |
| Fresenius Helios1 | ||||
| Revenue(growth, organic) | Mid-single-digit percentage growth | Confirmed | Confirmed | 5% |
| EBIT margin | Within the structural margin band of 9-11% | Confirmed | Confirmed | 10.0% |
| Investment Companies | ||||
| Fresenius Medical Care1,2 | ||||
| Revenue(growth, in constant currency) | Low-to-mid-single-digit percentage growth | With adoption of IFRS 5 outlook is provided ex FMC3 | n / a | |
| EBIT(growth, in constant currency) | Flat to high-single-digit percentage decline | With adoption of IFRS 5 outlook is provided ex FMC3 | n / a | |
| Fresenius Vamed1 | ||||
| Revenue(growth, organic) | Low-to-mid-single-digit percentage growth | Confirmed | Confirmed | 1% |
| EBIT | Clearly below the structural margin bandof 4-6% | Confirmed | Confirmed | -0.7% |
| 1 Before special items |
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| 2 In 2022, Fresenius Medical Cares operating result was positively impacted by financial support from the U.S. government in the amount of €277 million (not adjusted for currency effects). For 2023, however, the company does not expect any further funding. In order to ensure the comparability of the earnings outlook for 2023, the previous year's basis is adjusted accordingly. | ||||
| 3 The development of FMC will be reflected in the group income statement below EBIT. | ||||
| 4 The outlook for Fresenius Kabi was raised on May 25, 2023 at the Capital Markets Day. | ||||
Contact
Fresenius SE & Co. KGaA
Investor Relations
+49 (0) 6172 608-2485
ir-fre@fresenius.com