Fresenius Medical Care AG & Co. KGaA (NYSE:FMS) Q1 2024 Earnings Call Transcript May 7, 2024

Fresenius Medical Care AG & Co. KGaA beats earnings expectations. Reported EPS is $0.36, expectations were $0.26. Fresenius Medical Care AG & Co. KGaA isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Dominik Heger: Thank you, Alice. Good afternoon or good morning, depending on where you are. I would like to welcome you to our Earnings Call for the First Quarter of this year. We appreciate you joining us today. I will, as always, start out the call by mentioning our cautionary language that is in our Safe Harbor statement as well as in our presentation and in all the materials that we have distributed earlier today. For further details concerning risks and uncertainties, please refer to these documents as well as to our SEC filings. As we have only 60 minutes for the call, we have prepared a short presentation to leave time for questions. As always, we would like to limit the number of questions to two in order to give everyone the chance to ask.

Should there be further questions and time left, we are more than happy to do a second round. With us today is Helen Giza, our CEO and Chair of the Management Board; and Martin Fischer, our CFO. Helen will start with an update on the major developments and Martin will provide a review of the financial performance in the first quarter. Then we are happy to take your questions. With that, Helen, the floor is yours.

Helen Giza: Thank you, Dominik. Welcome everyone. Thank you for joining our presentation today and for your continued interest in Fresenius Medical Care. I will begin my prepared remarks on Slide 4. I'm pleased to report that we continue to make tangible progress on both our transformation and our turnaround efforts. We are meaningfully advancing toward our 2025 group margin target band. The progress is visible in both of our operating segments. Care Delivery, the first quarter was marked by important leadership changes and organizational improvements. As you know, Craig Cordola, our new Head of Care Delivery, officially started on the 1st of January. A key priority for his first 100 days was to implement a new organizational structure and leadership team for his business and focus on holistic end-to-end process improvements.

With the streamlined Care Delivery organizational changes now in place since the 1st of April, I'm very encouraged by the focus, professionalism, and speed of implementation that Craig and his new leadership team are bringing to the business and their priorities centered around driving patient growth are very clear. In the U.S., a major focus for the Care Delivery team is on improving clinic utilization, optimizing processes, as well as unconstraining clinics, and optimizing the clinic footprint, especially in growth markets. We were able to decrease the number of constrained clinics by about one-third by the end of the first quarter. We have very good visibility on the capacity constrained markets and specific clinics, and the challenges are not uniform.

For example, in several constrained markets, staffing shortages remain a factor. Therefore, hiring and reducing turnover remains a priority. By the end of the first quarter, our open positions for nurses and technicians across the U.S. were reduced by around 500 to approximately 3,500, which is now very close to a normalized level of 2,000 to 3,000 open positions. This will position us better to take on more patients in the coming quarters. In other markets, for example, we are seeing strong demand and do not have sufficient capacity to capture all the patients. For growth markets, it is not just about more hires, but we also need to consider how to make more dialysis chairs available if the expansion drives profitable growth. Expanding our strategic growth areas within Care Delivery remains a priority.

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