Status: 02.11.2021 1:28 p.m.
The effects of the corona pandemic hit the dialysis subsidiary of Fresenius harder than expected. The company is now realigning itself – this also has consequences for the employees.
The spread of the highly contagious Delta variant of the coronavirus hits the dialysis company Fresenius Medical Care hard. Because a disproportionately large number of dialysis patients are still dying from the consequences of Covid-19 infection. “This resulted in a significantly stronger Covid-19 effect on our business than we had forecast at the beginning of the year,” said FMC boss Rice Powell today when presenting the quarterly balance sheet. One expects a drop in earnings of around 25 percent this year.
In order to be able to save more costs in the future, the subsidiary of the DAX group Fresenius is now to be rebuilt. This realignment was announced a few months ago in order to make the company, which is also listed in the DAX, more agile. Part of the restructuring is, among other things, the reduction of around 5,000 of the more than 125,000 jobs worldwide.
Business is being reallocated
In the future, FMC will no longer divide its business according to regions, but into two global segments. The previously decentralized product business, which accounts for around 20 percent of sales, will be bundled in one of the two new segments. The Care Delivery segment will bring together the much larger health services business, which accounts for around 80 percent of Group sales.
FMC expects the annual cost base to be reduced by 500 million euros by 2025. However, savings are not expected until 2023, as investments in the millions will be necessary beforehand. In addition to better cost efficiency, FMC boss Powell also expects new growth opportunities from the restructuring.
Investors react positively
The plans were well received on the stock exchange: The shares of Fresenius Medical Care gained around three percent in the afternoon, the shares of the parent company Fresenius by 2.8 percent. In 2021, FMC expects sales and net income to be at the lower end of the forecast range. FMC had actually expected business to normalize in the second half of the year.
The parent company Fresenius will be slowed down significantly by the development of its dialysis subsidiary this year. The parent company hopes to be able to offset the losses through other divisions. In the third quarter, Fresenius was able to increase its sales by a total of five percent to 9.3 billion euros. The group result increased by two percent to 435 million euros, partly due to the good business development of the drug division Kabi.