For a moment, Michael Sen, CEO of Fresenius, and CFO Sara Hennicken disagree. Of course, losses are annoying, says the manager. The group actually made a loss in 2023, almost 600 million euros. In 2022 there was still a profit of 1.4 billion euros. Hennicken can explain how this came about. In 2023, special expenses amounting to two billion euros were incurred. A good half of these are non-cash impairments of the share in the dialysis subsidiary Fresenius Medical Care (FMC). One of the projects last year was the financial unbundling of the parent and subsidiary companies. The proportion was set too high in the books.
Sen is not upset about the loss, he says. Because such numbers represent the past. Sen prefers to look to the future. And the market in which the group operates with its hospitals, medicines and medical technology is worth billions – 800 billion to one trillion euros worldwide. In 2024, growth should accelerate and sales should increase organically, i.e. without acquisitions, by three to six percent. In 2023, group sales were 22.3 billion euros.
It is Sen’s first annual financial press conference for a financial year for which he was completely responsible. He has been CEO since the beginning of October 2022. He took over a company in a dilapidated state. As soon as he took office, he hit what Sen called the reset button and launched the “Future Fresenius” program. Sen doesn’t hesitate for long, that’s what he’s known for; it was the same during his time at Siemens and Eon. Structures that had been discussed at Fresenius for years were broken down and simplified. “We reorganized Fresenius in a very short space of time,” Sen said on Wednesday. Some journalists wrote “in record time”. He liked that, that’s how he seems.
“We have more ideas than resources.”
“After a few disappointing years, 2023 was a step in the right direction,” says Florian Oberhofer, fund manager at Union Investment. Fresenius achieved the stated goals and “delivered” particularly in terms of cost savings. In 2024 it will now be about achieving the goals we have set, making operational progress and reducing debt, writes Oberhofer to the SZ.
“We have cleaned up in the last twelve months,” says CFO Hennicken. This includes the new structure. The operating companies of Fresenius are the Helios and Fresenius Kabi clinic groups; The company produces, among other things, medicines, liquid nutrition and blood bags. Fresenius Medical Care and Vamed, a company that operates rehabilitation clinics and plans building management and clinics, are financial investments.
The dialysis subsidiary Fresenius Medical Care (FMC) was a limited partnership on shares for a long time and as such had to be fully consolidated by the parent company; all losses had a full impact on the result. At the end of 2023, FMC was converted into a stock corporation in which Fresenius holds 32 percent. FMC was only included in the consolidated results for 2023 at 32 percent. In doing so, Fresenius has shed a legacy, as Fresenius had to issue profit warnings several times because of FMC. The Eugin group, which specializes in childbearing and which Fresenius acquired under then-CEO Stephan Sturm at the end of 2020, sold Sen to a consortium led by the financial investor KKR. The separation was completed in January, so Eugin is still included in the figures for 2023.
In 2023, Fresenius received aid of almost 300 million euros from the relief package provided for in the Hospital Financing Act. The use is subject to conditions. As the group announced in December, there will be no dividend for the 2023 financial year and the board of directors will not receive any bonuses. The loss of the dividend for 2023 also helps reduce debt. Sen’s financial strength is not yet where it would like to be, for example, to finance acquisitions. “We have more ideas than resources,” says the CEO.