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The scale of Fresenius Medical Care’s transformation plan has become evident in a 2024 earnings release as it continues to streamline its business.
Along with certain business selloffs, assets divested last year included “230 facilities, 8,200 employees and around 33,800 dialysis patients”, the company stated in the release.
A leading dialysis specialist company, Fresenius Medical Care initiated the FME25 transformation programme in 2021 to provide sustainable future growth.
Fresenius Medical Care CEO Helen Giza said: “We successfully executed against our strategic turnaround and transformation plan, advancing our legacy portfolio optimisation and realising significant FME25 savings ahead of plan.”
The kidney specialist’s current portfolio includes dialysis machines, reverse osmosis systems, dialysers, dialysate, and prescription drugs. The devices provide dialysis services for in-centre, home, or intensive care unit (ICU) sites.
Fresenius Medical Care was a previous subsidiary of German-based global healthcare group Fresenius until it was deconsolidated in November 2023. As of December 2023, Fresenius Medical Care employed 119,845 staff, the majority of whom were at sites in Europe.
The company has struggled with profits in recent years. Higher mortality rates among Covid-19 patients with kidney disease lead to fewer patients needing dialysis which has impacted the company’s financials, as well as turbulence from labour shortages.
Fresenius Medical Care posted operating income growth of 31% to €489m ($513m) in Q4 2024. On the back of positive financial performance and higher savings realised than expected, the company raised its savings target from €650m to €750m by the end of 2025.
“We have set the course to significantly grow earnings, raising the implied operating income margin to around 11% to 12% in 2025,” Giza added.
Spectra Laboratories assets sold off
One of the Fresenius Medical Care businesses involved in divestment is kidney lab testing service Spectra Laboratories. A day before it released its earnings, the company revealed it had reached an agreement with Quest Diagnostics for the acquisition of Spectra Laboratories.
Set for an undisclosed amount, the deal is expected to close in the second half of 2025 with a transition of services by early 2026. Quest Diagnostics is one of the largest independent clinical laboratory companies in the US, with a market cap of $19.4bn.
Under a separate agreement signed by the two companies, Quest will provide laboratory services related to end-stage kidney disease (ESKD) and specialised water testing for patients and providers served by Fresenius-operated dialysis centres.