The German healthcare giant Fresenius has brought the year 2024 to a close meeting market expectations with strong financial results. The company revealed key performance metrics, signaling not only stability but also growth for various segments of its business.
For its subsidiary Kabi, Fresenius has set ambitious targets moving forward. After suspending dividend payments the previous year due to regulatory circumstances, Fresenius plans to reward shareholders with record payouts. During the fourth quarter, the company increased its revenue from €5.2 billion to €5.5 billion, aligning well with analyst forecasts. The adjusted EBIT (Earnings Before Interest and Taxes) rose from €608 million to €646 million, surpassing predictions of €634 million by analysts.
Overall, Fresenius increased its adjusted revenue for the year from €20.3 billion to €21.5 billion, matching analyst projections. After accounting for various factors, the company netted €1.46 billion, excluding its dialysis subsidiary, Fresenius Medical Care.
Fresenius is committed to enhancing its operational efficiency and aims to reduce its debt quicker than previously anticipated. The management team led by CEO Michael Sen has set a margin target for Fresenius Kabi between 16% and 18%, marking an increase from the earlier guidance of 14% to 17%.
According to company reports, shareholders will receive €1.00 per share, following the previously mentioned hiatus on dividends due to regulatory issues. This marks the first dividend payout since 2022, when the company distributed €0.92 per share. Fresenius has also revised its dividend policy, indicating future payouts of 30% to 40% of profits from continuing operations.
Stock prices of Fresenius have seen considerable growth, reaching their highest level since November 2021, as the company's performance continues to exceed expectations. The shares, which have risen about 17% this year, outperform the benchmark DAX index.
UBS analyst Graham Doyle commented on the results, stating, "Fresenius is doing what it needs to do." He emphasized the solid outcomes from the fourth quarter and expressed relief over the outlook being "good enough." Similarly, JPMorgan analyst David Adlington highlighted the improved margin guidance for Kabi and noted growing confidence among investors about Fresenius's dividend payments.
For the upcoming year, Fresenius predicts an organic revenue growth of 4% to 6% alongside EBIT growth of 3% to 7%. The company's organic revenue grew organically by 8% to €21.5 billion for 2024, with EBIT adjusted for special items increasing by 10% to €2.5 billion, meeting earlier predictions.
Although the Helios division suffered from decreased state energy assistance, leading to a 5% decline in Q4 EBIT, Helios Spain demonstrated resilience with a 15% EBIT increase. Fresenius plans to implement efficiency programs within Helios Germany, expected to add approximately €100 million to the EBIT this year.
Fresenius remains steadfast on its growth strategies, focusing on revitalizing its operational structure and continuing to build on organic growth. CEO Sen has reaffirmed the company's strategy of investing back to support existing portfolios and enhancing innovation.
Despite the setbacks faced by its dialyses subsidiary, Fresenius Medical Care, which has reportedly been growing profitably, the company sees great potential value and plans to maintain its investment.
With financial analysts remaining optimistic, it is clear the results from 2024 position Fresenius well for continued success. The path forward, as laid out by management, appears promising, encapsulating challenges and growth opportunities within the healthcare sector.
Overall, Fresenius's performance highlights its adaptability and commitment to delivering value to shareholders, setting the stage for what could be another promising year.