In This Article:
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Revenue Growth: 9% top line revenue growth in Q3.
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Operating Cash Flow: Over EUR760 million generated.
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EBIT Growth: 8% to 11% expected growth for the year.
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Kabi Revenue: 11% organic growth year-on-year.
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Kabi EBIT Margin: 15.9%, with a 470 basis points improvement.
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Helios Revenue: 8% organic growth in Q3.
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Helios EBIT Margin: 7.9% in Q3.
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EPS Growth: Increased by 7% in Q3.
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Net Debt to EBITDA: 3.24 times, within target range.
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Free Cash Flow: Increased to EUR2 billion over the last 12 months.
Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Fresenius SE & Co KGaA (FSNUF) reported strong Q3 2024 results with high single-digit top-line growth and increased margins.
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The company generated over EUR760 million in operating cash flow, significantly improving its leverage profile.
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Kabi division achieved a powerful 11% year-on-year organic revenue growth, driven by biopharma momentum and product launches.
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Helios division delivered solid performance despite seasonal challenges, with an 8% organic revenue growth in Germany.
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Fresenius SE & Co KGaA (FSNUF) upgraded its 2024 outlook, expecting 6% to 8% revenue growth and 8% to 11% EBIT growth, reflecting confidence in its business divisions.
Negative Points
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The company faces ongoing weakness in the Chinese market, with no short-term improvement expected.
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Helios Germany's performance was partly supported by energy relief funding, which will not continue in Q4.
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Interest expenses are expected to be at the upper end of the EUR420 million to EUR440 million range, posing a potential risk for EPS in 2025.
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The biopharma division anticipates lower milestone payments in Q4, which could impact financial performance.
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The company must address the loss of energy relief contributions and manage structural productivity improvements at Helios to maintain profitability.
Q & A Highlights
Q: Can you elaborate on your biosimilar launch strategy, particularly regarding the Stelara product and lessons learned from the Idacio launch? A: Michael Sen, Chairman of the Management Board, explained that the strategy for biosimilars like Tyenne involves direct contracts with PBMs and IDNs, with significant contracts already in place. The approach for Idacio was different due to market conditions, focusing on a multichannel strategy. For Stelara, they plan to leverage different sales channels to maximize impact.
Q: What was the impact of energy relief payments on German profitability, and how do you view Kabi's margin trajectory into 2025? A: Sara Hennicken, CFO, noted that the last tranche of energy relief payments provided a mid-sized double-digit benefit to German profits. For Kabi, margins have improved due to structural productivity and pricing power, but it's too early to predict 2025 margins. They expect biopharma to contribute positively next year.