We have positive momentum in operating performance: Fresenius Medical Care CEO

Let’s look at the first quarter because you call it an inflection point. What do you mean by that? Yeah, we started the year with really strong momentum. We delivered 23% earnings growth and 35% EBSEPS, excuse me, on an adjusted basis. So that really was a strong start. We are making progress in both segments. We have a products business and a services business. And our products business especially had an inflection point in the quarter delivering 6% margin. The we’ve made progress on both margin bands for both businesses as well as continued momentum on our transformation program delivering 52,000,000 in the quarter as well as significant progress on our portfolio optimization. So a lot of activity, but really positive momentum where we start to see this step change now in our operating performance. You’re also saying that pricing is very strong. How long can that go on? Because clearly there must be a level which you can’t then like keep on increasing prices. Yes, of course historically we hadn’t taken obviously in low inflation times. We hadn’t been very aggressive in taking price increases. Obviously with the cost inflation that we experience over the last, you know kind of 1218 months, we have obviously had to revisit our pricing policies where we are able to open contracts or retender for businesses. We are now taking price and that delivered about 100 million last year and we see that continuing now through through 2024. You’re absolutely right. I think there’s an element of you have to get your renewed contracts right and then of course those contracts are multi year and then you kind of get into that that rhythm of taking price where you can and obviously making sure that you’re covering your inflationary increases. Let’s talk about the US It’s obviously the biggest and most important market for you have seen high mortality during covert. What is happening there now and is that market growing again? Yeah, there’s no question Kovat was brutal in our business. You know, throughout the Kovac period we lost 26,000 patients. On top of that, obviously we were experiencing the big labor meltdown that happened, you know during 2022. So we’ve gradually kind of feel like we’re coming out of COVID and recovering. Our growth outlook for this year is between 0.5% and 2%. We’re obviously flat in Q1, but we expect that that growth to kind of come back now and return to a, you know, that 2 to 3% growth rate that we’d seen historically prior to COVID. Let me ask you about the key value drivers of the business. Is that, of course, is that different across jurisdictions or is that the same? Yeah. Look, I think you know, there’s no question, the US Dialysis business is by far the biggest business, about 2/3 of the business. And obviously, a lot of that is, is on the reimbursement, whether that be, you know, the US government reimbursement and the commercial payers. It’s very that it’s different then in terms of reimbursement across the different markets in international. And then the products business tends to be direct contracting with third parties or with government tenders. So I feel like there’s businesses within the businesses depending on that regional split. But since 2023, we’ve now stood up this business as two global segments. So we can really hone in now on the projects business, the service business, market by market and look at that profitability. It’s a transparency and, you know, kind of a management action that we’ve never had before.