Ladies and gentlemen, welcome to the report on the Third Quarter 2025 Conference Call. I am Sandra, the Chorus Call operator. [Operator Instructions] The conference is being recorded. The presentation will be followed by a Q&A session. [Operator Instructions] At this time, it's my pleasure to hand over to Dr. Dominik Heger. Please go ahead, sir.

Thank you, Sandra. Welcome, everyone, to our earnings call for the third quarter 2025. As always, I 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 and to our SEC filings. We will have roughly 1 hour for the call. In order to give everyone the chance to ask questions, we would limit the number of questions to two. Thank you for making this work. As always, let me now welcome Helen Giza, CEO and Chair of the Management Board; and Martin Fischer, our Chief Financial Officer. Helen, the floor is yours.

Thank you, Dominik. I'd also like to extend a warm welcome to everyone on the call. Thank you for taking the time to join us today and your continued interest in Fresenius Medical Care. As many of you know, the U.S. is in government shutdown since the 1st of October, and many health care policy decisions are open, like the questions of extended tax subsidies for the exchanges and whether they will expire by the end of this year or the publication of final 2026 ESRD PPS rule. This requires us to remain flexible in planning and agile in running our business. We remain focused on what we can influence. In Q3, we made meaningful progress in advancing our FME Reignite strategy and positioning ourselves for sustained value creation. Our strong third quarter results reflect continued momentum and disciplined execution as we further accelerated top line growth while delivering a clear step-up in earnings growth and profitability. The step-up is in line with our full year planning. I will begin my prepared remarks on Slide 4. In the third quarter, we realized strong organic revenue growth of 10%, with positive contributions from all 3 operating segments. In the U.S., same market treatment growth was slightly positive. This is in line with our assumption of flat to slightly positive growth for 2025. Operating income growth increased for a third consecutive quarter and accelerated to 28%. As a result, this drove a step change in profitability with our operating income margin expanding from 9.9% to 11.7%. The improvement in profitability was supported by continued momentum in our FME25+ program, which generated a further EUR 47 million in sustainable savings in the quarter. This brings us already to EUR 174 million of savings for 2025. As part of our new FME Reignite strategy…

Thank you, Helen, and welcome to everyone on the call also from my side. I will pick up on Slide 9. In the third quarter, we achieved organic revenue growth of 10%, with all 3 segments contributing to this strong performance. At constant currency, revenue increased by 8%. We continue to divest assets as part of our portfolio optimization plan. Divestitures negatively impacted revenue development by 60 basis points. Operating income, excluding special items, increased by 28% on a constant currency basis. This significant increase led to a clear step change in the group margin to 11.7%, well into the implied range of 11% to 12% for 2025. Special items negatively affected operating income by around EUR 100 million. This comprises costs relating to FME25+ and our continued portfolio optimization as well as effects from the remeasurement of our investment in Humacyte. Next, on Slide 10. This slide breaks down the significant 180 basis points margin improvement. All 3 segments contributed to the positive margin development with an especially strong contribution from Care Delivery. Net Corporate costs developed favorably by EUR 19 million. This was primarily driven by virtual power purchase agreements with around EUR 20 million and Corporate costs broadly stable otherwise. Foreign exchange rates developed unfavorably with a negative EUR 24 million translational impact. The average U.S. dollar exchange rate in quarter 3 was 1.17 compared to 1.13 in the second quarter. I will now walk you through the financial developments in each segment, starting with Care Delivery on Page 11. Care Delivery realized organic revenue growth of 6%, supported by both Care Delivery U.S. and International. In the U.S., organic growth of 6% was driven by favorable rate and payer mix development. Positive contributions from phosphate binders as well as reduced implicit price concessions, which demonstrate our…

Thank you, Martin. I will finish my prepared remarks on Slide 16. The strong growth in our Value-Based Care segment due to the type of revenue recognition of one contract results in stronger-than-expected revenue growth in this segment. Therefore, we expect to be at the very top end of our low single-digit percent revenue growth range for 2025. As explained, this growth in Value-Based Care driven purely by contract type related revenue recognition does not drive additional operating income growth. Looking at operating income growth for the group. We have shown continued progress through the first 9 months with an expected acceleration in the third quarter. This brings us to 18% operating income growth in the first 9 months. We are not only in our target range of high teens to high 20s percent operating income growth already, but also demonstrate with 11.7% a new and improved level of profitability despite a challenging environment and very low same-market treatment growth in the U.S. When I look at the big picture for 2025, we are confident in our continued improvement of our underlying business. With 9 months under our belt, we would like to update you on our latest thinking for the operating income development for the year. The positive momentum in FME25+ will deliver around EUR 40 million more, delivering around EUR 220 million full year, helping us to directly offset the increasing medical benefit costs. The acceleration in the third quarter of our pharma business contributions from phosphate binders is now estimated to be around EUR 80 million higher than the assumed EUR 100 million. This is helping to offset the full year headwind from lower volumes in the U.S. and the increased foreign exchange transaction headwinds. As always, the fourth quarter is our strongest quarter. We do expect…

Thank you, Helen. Thank you, Martin, for the presentation and the updates. Before I hand over to the Q&A, I would like to remind everyone to limit the questions to 2. If we have time over, we can go another round. With that, I hand it over to Sandra to open the Q&A, please.

[Operator Instructions] Our first question comes from Oliver Metzger from ODDO BHF.

First is on your guidance on the margin guidance. So in your slides, you showed that the Care Delivery already stands at the top end of your expectations. And having said this, do you see the stronger progression in Q4 coming over relatively spoken from Care Enablement? Or do you expect due to the timing of payments, a step-up in Value-Based Care. Second question is on the treatment adherence. So technically, beneath mortality, it's definitely one of the areas where you're not where you want to be. Do you see -- because COVID is already 5 to 6 years or 5 years ago. And you see that you commented that the patients who were -- patients during COVID have a lower adherence than the patients who you recruited afterwards. So do you still this normalization in form of over time patients just passing away due to the normal mortality? Or do you see that there's still some other reasons why this level is elevated?

Look, on your first question regarding guidance, we do expect to see continuous improvement in all segments, but we also see strong support from Care Delivery. On your second question, I'll make sure I unpack all those pieces in there. In terms of -- I think you started with treatment adherence and also kind of wrapped up in their reasons for mortality. There's no question, our mortality levels are still elevated. But where we're focusing on things that we can control are seeing an improvement in missed treatment. Obviously, those areas that we can control, if we can make sure our patients continue to get their treatments, that obviously helps with treatment volume and we are seeing those improvements in referrals. So obviously, we work hard on those missed treatments because that has a double effect on improving the number of treatments, but also ultimately, if the patients keep getting their treatments should help with mortality as well. And as you saw from one of my opening slides, we're also working on our catheter rates kind of coming down as well. So all of that should help mortality just tied up with our general strategy of the focus on patient quality and patient safety. In terms of your comment on the passing away, maybe reason code. I don't know that we can tease out that if anything different. I mean there was a time in COVID that you could kind of get the COVID piece. And if you remember, we used to report that as excess mortality. Now we just pass it all as the general mortality, and there's nothing in those trends or that data that is telling us it's anything new or different. It's just that it continues to stay -- it continues to be elevated.

I was referring towards the patients who were already on dialysis during COVID that they have a higher average number of missed treatments compared to the patients who came to dialysis afterwards.

Yes, that would have been the case because they were already kind of vulnerable and those that were with us during COVID would have had more missed treatments than that we see in maybe new patients coming in. Sorry, I misunderstood that direct question on COVID.

The next question comes from Veronika from Citibank.

And hopefully, you can hear me okay. I have 2, please. One, I just want to go back, Helen, to your comment on phosphate binders, apologies. There's a lot of numbers, and I probably misunderstood it, but I just want to confirm that you are now expecting EUR 180 million of benefit from phosphate binders this year versus the EUR 100 million that was assumed in the guidance previously? And I guess just to play a little bit of devil's advocate. If I strip that EUR 180 million out of the Care Delivery margin trajectory, obviously I don't know exactly how much you booked in the 3 quarters of the year versus the full year, but it doesn't seem like there is a huge amount of margin improvement underlying in the business. Tell me if I'm doing that math wrong, I did it very quickly on the slide, but I just kind of would love to understand what you're seeing margin-wise, if you strip out the phosphate binders. And then my second question is just looking to 2026, and Medicare Advantage trends in particular, we are seeing some early signs of reduced enrollment. I'm curious how you're thinking about mix as we head into next year from a Medicare Advantage perspective. And to what extent we should be thinking about this maybe no longer being a tailwind to the business into next year?

Yes. Thanks, Veronica. I think I can tackle both of those. Sorry, I may have stumbled, as I was saying, the phosphate binders number. There was EUR 80 million and EUR 100 million adding up to EUR 180 million. So my apologies if everyone didn't catch that on the call, you're right. We are now seeing that full year number to be EUR 180 million versus the original guide of EUR 100 million through Q2. We are seeing favorability in our pharma business, and Q3 was particularly strong with that uptake. The FKC side of the house or the piece that we see in the clinics is developing in line with expectations, but we are seeing more favorable pharma and are now expecting that trend to continue that we saw in Q3 into Q4. Obviously, that's something that we are kind of trying to get our arms around for 2026 as well as we think about utilization and pricing for the binders while it's still under the TDAPA period, but it is in line kind of with what we saw in Q3. Look, I would say on your broader question and why I thought it was important to bucket the moving parts, yes. I mean, I can pick the favorability from binders. I can pick the favorability from FME25, but it shouldn't be lost that we are -- while we do have this softer volume, we are having to overcome the lost margin from our original assumptions on volume as well as the underlying transactional exchange that we are seeing. So -- and the medical costs that are driving the labor cost higher in terms of increased utilization of our employee benefit claims as well as the volume of claims. So as you can appreciate, we're juggling a big business…

The next question comes from Hassan from Barclays.

A couple from me, please. Firstly, on EBIT guidance range remains pretty wide as we move into Q4. What is driving the risks here to your mind? And why is the bottom end of the range, not more likely? And what was the phosphate binder benefit in the third quarter, please? Secondly, on treatment growth, can you talk a bit about admissions and missed treatments as you moved through the year? And how you see Q4 growth given the flu impact was obviously quite meaningful in the first half at 60 basis points. I appreciate that you don't have the Q4 detail, but how do you consider the moving parts as you move into 2026 and the confidence around the 2% plus treatment growth that you've previously talked about?

Thanks, Hassan. I'll tackle some of that and maybe, Martin, you can take the phosphate binder Q3 question. But let me unpack what I can and then pass you over to Martin. Yes, look, the EBIT guidance, we always knew that the EBIT range is wide because of the implied margin range that's there as well. As you heard from my commentary, and you can see in the numbers, we're already at the bottom end and we've left the range wide open, which I think you all know me by now. That tells you that I do think that there are opportunities for that top end to also be in play. As you can appreciate, a slightly bigger number on FME25, slightly less impact from exchange, those numbers can move the needle kind of around that range. So you know I don't shoot for the bottom end. We are still excited about the underlying growth, the momentum we're seeing, and that's why I've left the range wide open. On treatment growth, you know I've been trying to put a lot more color on inflows and outflows rather than orienting around the net number because there's a lot happening there. Over the course of the year, we have seen improving admissions. If I look at it versus Q3 this year versus Q3 last year, they are improving and 9 months over 9 months is improving. Mortality is down, but still elevated. And missed treatment, we are chipping away at and making improvements. I think the commentary you've seen from the industry is they have been higher, but we are really excited about the work that we've been investing in, taking hold. So that missed treatment number is improving as well, along with all the patient safety and patient quality work we're…

Hassan. Let's take the phosphate binder. As Helen outlined, we did see a pickup in the third quarter against the second quarter in our pharma business, whereas the clinic business assumptions are coming in broadly as expected. For the third quarter, the total effect of phosphate binders was a mid-double-digit million amount and to underpin the EUR 180 million that Helen mentioned, we are also assuming a similar dynamic on the pharma side in the fourth quarter, a similar amount in the fourth quarter as well.

Next question comes from Hugo from BNP.

A quick one on FME25, which you upside. Can you maybe point to the reasons for that? Is that production move to Mexico that's finally kicking in or any other things? And second, on the rollout of HVHDF, can you maybe share the number of clinics? Sorry if I missed that. And compared to your plan presented at the Capital Markets Day, given the early learnings that you have from the rollout. Does it change anything in your plan from 2026 in terms of how fast you think you will be able to deploy that instrument?

Martin, do you want to take the FME25 question, I'll pick up with HDF?

Yes. Sure. So as you saw in the third quarter, we had strong momentum and we are already after 9 months almost at the full year original guide that we had for FME25+. And that momentum is continuing. And as Helen outlined, we are pushing to further accelerate our efforts. That is true for Care Enablement, where this also helps us to offset some of the inflation and FX transaction headwinds that we have, but it's also true for the global functions as well as for Care Delivery. So we are making good progress, and we are leveraging that momentum, hence, the upgrade of around EUR 40 million that Helen articulated.

Thanks, Martin. And then Hugo, on HDF, as you can all appreciate, we are in the early rollout, and we are adding it to a very small number of clinics, and we're adding them as we go. In fact, we added 2 more just last week that continues to gain momentum, and we are progressing every day with our kind of installations, training, learnings, getting patients, not just on the new machine, but maybe more importantly on the HDF machine. So that will continue through the rest of the year. And yes, we're fully on track with what we shared for 2026 at our Capital Markets Day. So exciting times for us.

Next question comes from Graham from UBS.

Just in terms of thinking about Care Delivery and sort of the moving parts for next year, I know it just directionally, but just phosphate binders presumably just lapping it becomes a bit tougher and it's been such a big driver of growth this year. Is it not reasonable to think that volume -- like U.S. volume growth becomes more important? And just if I look at the first 9 months of this year, 2024 and 2023, there's not a huge difference. And obviously, next year, we've got the head-to-head of like HDF coming through, but then equally maybe some new drugs for IgA nephropathy. So when you look at it, just like how confident are you that you can generate volume growth, which in turn generates operating leverage rather than phosphate binders and cost savings driving Care Delivery margins, just as we shift away from the cost piece driving growth and more so the actual top line?

Yes. Thanks, Graham. Great question. So obviously, as we're trying to help you guys think about phosphate binders. You can obviously see where we are seeing the benefit is in our pharma business. So that's less of an FKC topic, more of just the pharma volume, which we do supply those projects both within our own clinics, but also to outside customers. So that -- while we're still in this period through 2026 will become a topic of what is the volume, what is the utilization of those drugs and what is the pricing. So obviously, we have to see how that plays out. And obviously, on your question on volume, while we've got these low volumes and numbers, you can obviously see that the impact on EBIT in itself is not the number that makes or breaks any given year. And as you know, in running this business, it is all about kind of the balance and think about those moving parts for next year, the balance of underlying volume kind of the reimbursement, our operating leverage and utilization in our clinics. So we're kind of taking a hard look at that. And then the efficiencies that we drive and obviously managing labor. So as we all appreciate, volume is always helpful to drive that operating leverage. And I think the other thing here is that there are parts of our country in places that we operate that we are seeing growth, and we are really pleased with that progress. So we're kind of constantly amongst our 2,600 network of clinics, looking at where we're seeing growth, where there's opportunity to further grow and expand. And obviously, in other areas, look to see if we need to sort of consolidate or exit some clinics. So we are preparing all those scenarios, but obviously, under the assumption that volume is returning, and the work that we are doing, which shouldn't be underestimated on the outflow side that if we can reduce hospitalizations and we can reduce missed treatments that obviously adds to the volume on the patients we already have. So as you say, when you add in the benefit from HDF and for those that are on GLPs, we like that mortality benefit they get to. I think that overall kind of is giving us some confidence that where we can see outside elevated mortality, the things we can control, we're starting to see some improvement on. So I think it's a combination of all the things that we do and what will make us operationally excellent on balancing the volume, the price, the mix, the operating leverage, the clinic footprint and the cost structure. So it's -- I think we understand all those moving parts and more than ever seeing the benefits of the work we've been doing this past couple of years on the turnaround and transformation.

Maybe just a quick one on the HDF benefit. Should we -- just based on what we saw in CONVINCE should we see kind of a benefit in the actual headline U.S. treatment number next year? Or should we think about it maybe more like a phasing into the first half of, say, '27?

Look, I think the expectation is once patients are on it, the CONVINCE trial did show that after 3 months, we got benefit. So as we ramp up for those patients that are on it, we should start to see improvement. Now obviously, as it ramps up, we -- I would say, maybe this time next year, we can start to say, hey, this is what benefit we're getting from those patients on HDF, but we're going to need to kind of get that data behind us. Obviously, '26 being the ramp-up year, you won't feel or see the full effect. But we are -- as you can appreciate, this is an opportunity for us to track patient 0, if you will, and really start to kind of see the data of those patients that are on HDF and what their performance is on that -- on this treatment. So '26 maybe -- not maybe while we're excited, obviously, it is ramping up over the years. So we will tease out the relevant KPIs as we go through next year and report on what seems to be kind of the right insights for you guys.

The next question comes from David from JPMorgan.

Firstly, maybe your key competitor, DaVita quantified the impact on EBIT next year, well, actually the next 3 years, if the subsidies aren't extended. I'm just wondered if you were willing to do the same. And then secondly, just a bit of a specific one. But volumes in Q3, were they impacted negatively by a sales day mix? And does that become a tailwind in the fourth quarter?

Yes. Thanks, David. Let me tackle that first -- the second one first. Spain market treatment growth for us normalizes days. So our 0.1% is like-for-like. Where it would be impacted on mixed days is on the overall treatment numbers. So our same market treatment growth is pure. So just want to dispel any conclusion that the market might have picked up on that one. David, on 2026, as you can appreciate, we're still in, as I've mentioned, still in planning, I'm not prepared to put any number out there while we're still working through that and even reviewing it. We haven't reviewed it with our -- finalized it with our management Board at a known Supervisory Board at this point. So I think you understand the levers, you understand our usual headwinds and tailwinds, you understand some of the moving parts that we're watching. I think that's all I can say at this point, and you'd be surprised if I said anything different because you know me, but thank you for asking.

So the next question comes from Anna from Bank of America.

Maybe as a follow-up to one of Graham's questions on the impact of the HVHDF rollout for next year. Do you think that could start to positively impact U.S. same market treatment growth from a referral standpoint as soon as next year? Just any color on how you're thinking about that. And then as well on the Care Delivery growth of the 5.6%, those 3 components, the favorable rate mix, phosphate binders and implicit price concessions decreasing, I think you've broken out the phosphate binders pretty clearly, but any other numbers you could give us around those other 2 components and how you expect those to trend into Q4 would be super helpful.

Yes. Thanks, Anna. Let me take the HDF question, and Martin can maybe unpack the CD question that you have. Look, on your referrals number, yes, I would suggest and think that, that is, my pen just fell apart that would help us positively. I deliberately read the quote from one of our nephrologists and we've had a number of nephrologists kind of coming through our clinics to see this. So yes, we have seen significant interest and positive feedback and we are being -- as you can appreciate, quite deliberate in where we are launching HDF first. So that is, yes, really exciting. And as you kind of -- on the back of Graham's question, that mortality improvement and the kind of the increased treatment improvement, we should see as soon as we get patients moving on this, and that should ramp up over '26. So really exciting to see that, and I can't wait to hear how [ AFN ] goes this week, but the team that's there. Martin, do you want to take the CD piece?

Sure. And for the implicit price concessions as well as for the rate mix assumptions that we have for CD. You saw this being a positive in quarter 3. This is the work we do in revenue cycle management paying off and us increasing our revenue yield. So we are collecting more for the amounts that we invoice. This is an ongoing effort, and we are seeing the first benefits and we do expect this to also be a positive in the coming quarters for us as well. And that does also impact then on the, let's say, underlying performance improvement and will be a positive [indiscernible].

So we do not have any further questions. I would like to thank you all for listening and for asking questions and being interested and hope to see many of you on the road in the next couple of weeks. Thank you.

Thanks all.

Thank you.

Take care. Bye-bye.

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