Germany’s Fresenius raises 2024 forecast after Q3 beat, shares rise

By Tristan Veyet and Rafal Wojciech Nowak

(Reuters) – Germany’s Fresenius raised its full-year outlook on Wednesday after beating third-quarter expectations, citing strong performances at its Kabi and Helios divisions and deleveraging efforts paying off, sending shares up.

The healthcare group said it expects organic revenue growth of 6%-8%, from a previously anticipated 4%-7%.

It also raised its forecast of constant currency earnings before interests and taxes (EBIT) before special items growth to 8%-11% from 6-10%.

Fresenius’s shares shot up, rising 6.2% at 0757 GMT.

Fresenius reported third-quarter revenue of 5.30 billion euros ($5.69 billion) and EBIT before special items of 522 million euros, beating a company-provided consensus by 1.7% and 3.4% respectively.

“The group’s deleveraging efforts are ahead of our expectations,” Berenberg writes in a note, adding the company also benefited from higher contributions from associated income, notably Fresenius Medical Care’s.

Dialysis specialist Fresenius Medical Care slightly raised the lower end of its 2024 operating profit forecast range on Tuesday after posting quarterly earnings above expectations, helped by cost savings and as its U.S. business recovers.

Fresenius’ net debt decreased by around 11% compared to 2023’s end, with a net debt to EBITDA ratio of 3.24.

Both Kabi and Helios continue to deliver consistent and sustained financial performance,” CEO Michael Sen said in a statement.

Since taking the helm in October 2022, Sen has been revamping the organization to reduce expenditures and liabilities following a drop in profits at its previous dialysis unit, Fresenius Medical Care.

This restructuring initiative has prioritized Fresenius Kabi, a producer of generic hospital medications, and Helios, which operates a network of hospitals in Germany and Spain.

The German firm added it already accomplished in the first nine months of the year its cost savings objective of around 400 million euros on an EBIT level, originally planned for 2025.

($1 = 0.9315 euros)

(Reporting by Tristan Veyet and Rafal W. Nowak in Gdansk; Editing by Varun H K and Bernadette Baum)