Ladies and gentlemen, welcome to the report on the Fourth Quarter and Financial Year 2025 Conference Call. I'm Moritz, the Chorus Call operator. [Operator Instructions] The conference is being recorded. The presentation will be followed by a question-and-answer session. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Dr. Dominik Heger. Please go ahead, sir.

Thank you, Moritz. Welcome, everyone, to our earnings call for the fourth quarter and the financial year 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 1 hour for the call. In order to give everyone the chance to ask questions, we would limit the number of questions to 2. Thank you for making this work as always. We will begin our full year financial results by reviewing key strategic milestones achieved in 2025, which mark the end of our midterm strategy. Next, we will analyze fourth quarter outcomes and present our outlook for 2026 and different horizons beyond. 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, and welcome, everyone. It's great to have you with us today. We appreciate your continued interest in Fresenius Medical Care. 2025 was a milestone year for Fresenius Medical Care. We delivered an outstanding step-up in profitability, having achieved the upper end of our 2025 financial outlook and closing the year with an exceptional fourth quarter performance. The progress we realized in 2025 and the momentum we have built over the past 3 years reflects the consistent focus and dedication of our employees around the world. Their commitment is the foundation to our success as we strive to lead kidney care through exceptional care and innovation, and I'm extremely appreciative of the progress we made for our patients and the exciting path we have ahead of us. Before we delve into the fourth quarter specifically, I would like to take a few minutes to reflect on the key highlights of the past year and how we are positioning Fresenius Medical Care for the next phase of value creation. Beginning on Slide 4. At our Capital Markets Day last June, we officially launched our new 2030 strategy, FME Reignite. This strategy is designed to accelerate growth and drive ambitious profitability improvements aiming for industry-leading margins. FME Reignite represents a pivotal step forward for us as we shift our focus towards accelerated innovation and growth. As part of our FME Reignite, we carved out our value-based care business, establishing our third operating segment. This strategic decision further enhances our reporting transparency and reflects the continued growth in value-based care, which generated over EUR 2 billion in revenue in 2025. We not only initiated but accelerated a EUR 1 billion share buyback program, reflecting our strengthened financial profile, further reduced net debt and commitment to regularly returning excess cash to shareholders.…

Thank you, Helen, and welcome to everyone on the call also from my side. I will begin on Slide 12. In the fourth quarter, we achieved organic revenue growth of 8%, supported by Value-Based Care and Care Delivery. At constant currency, revenue increased by 7%. Care Enablement revenue development was negatively impacted by regulatory pressure in China. Divestitures executed as part of our portfolio optimization plan, negatively impacted revenue development by 70 basis points. Adjusted operating income increased by an impressive 53% on a constant currency basis. This increase drove a clear step change in our group margin to 13.9%. Special items negatively affected operating income by EUR 111 million. This comprises costs related to FME25+ and our continued portfolio optimization as well as effects from the remeasurement of our investment in Humacyte. Turning to Slide 13. This slide highlights the remarkable 430 basis point margin improvement, driven by especially strong contributions from Care Delivery due to significant higher contributions from TDAPA regulation than we had expected and Value-Based Care contributed positively as well. Net corporate costs improved by EUR 5 million. This includes a favorable EUR 2 million development in virtual purchase power agreements -- power purchase agreements compared to the prior year period. Foreign exchange rates developed unfavorably with a negative EUR 43 million translational impact. The average U.S. dollar exchange rate in the fourth quarter was 1.16 compared to 1.17 in the third quarter. I will now walk you through the financial developments in each segment, starting with Care Delivery on Slide 14. Care Delivery realized 7% organic revenue growth and 6% revenue growth at constant currency. In the U.S., organic revenue growth of 8% was driven by positive impact from TDAPA regulations, favorable rate and mix effects and reduced implicit price concessions, demonstrating progress in our…

Thanks, Martin. I will pick up with FME25+ on Slide 18. In 2025, the FME25+ transformation program further accelerated its positive momentum, delivering EUR 238 million in additional sustainable savings for 2025, ahead of the upgraded target of around EUR 220 million. Accumulated savings of the entire program reached EUR 804 million. The successful execution of FME25+ and the strengthened foundation we have established as a result has allowed us to identify additional opportunities to unlock sustainable savings that were not necessarily visible or accessible before. Also, the flat same-market treatment growth of the last years triggered the decision to further adjust the clinic footprint in the United States while balancing at the same time, the capacity for the expected future growth of 2% plus once mortality has normalized. We have again structurally assessed changes to developing and attractive growth areas across the country and decided to close the least promising clinics in the United States. This results in a footprint rationalization affecting around 100 clinics in 2026. Building on the momentum, we will further accelerate and expand FME25+. We expect costs and savings of EUR 400 million for the years '26 and 2027 for a total of EUR 1.2 billion of sustainable savings by the end of 2027. Let me now move to our outlook section on Slide 20. To frame our 2026 outlook, I will begin with our most important operational priority, the 5008X rollout in the U.S. This represents the largest transition of clinic infrastructure in Fresenius Medical Care's history. Our large-scale launch of the 5008X is now underway with the target of replacing around 20% of the installed base in our own clinics this year. Importantly, this replacement strategy will deliver substantial benefits, including reduced mortality and improved outcomes for patients, increased operational efficiencies and a…

Thank you, Helen. Starting with revenue. For Care Delivery, we carefully assume flat same market treatment growth in the United States, including a normal flu season similar to the '23-'24 season. This does not change our expectations of returning to 2%-plus as mortality normalizes and patient outflows improve. We are excited about the opportunity to reduce missed treatment and patient outflow by further enhancing the quality and patient outcomes as part of our FME Reignite strategy. Increasing penetration of high-volume HDF and antimicrobial catheter solutions, further expansion of Value-Based Care as well as benefits from ESRD patients using GLP-1 are supporting this path to 2-plus percent growth. Internationally, we are assuming solid same market treatment growth in 2026, and we assume the usual moderate reimbursement rate increases. Following a significantly greater than anticipated benefit from TDAPA regulation in 2025, we assume a headwind for the starting phase out in 2026, also on the revenue side. In Value-Based Care, we are assuming negative revenue growth of around EUR 300 million due to changes in risk contracting that result in lower revenue recognition. We do not expect this to impact earnings development. In Care Enablement, we assume a continuation of the solid organic volume growth. China remains challenging, and we are assuming moderately negative impact as we address regulatory policy changes and review our portfolio and strategy accordingly. At the group level, we are assuming a negative 30 basis point impact from portfolio optimization realized in '25 and '26. Our currency assumptions are based on euro-U.S. dollar rate of 1.18. Turning to the earnings side. We are assuming EUR 250 million to EUR 350 million of business growth, driven by favorable pricing developments and revenue cycle management initiatives. We expect incremental FME25+ savings of EUR 250 million with related onetime cost of…

Thanks, Martin. We knew 2026 will be a transition year, which does not change our aspiration to achieve industry-leading growth and margins. This aspiration remains firmly intact. The year 2026 will serve as a pivotal milestone as we continue to strategically position ourselves for sustained value creation. During our Capital Markets Day in June, we communicated that margin development in Care Delivery is expected to be more weighted towards the later part of the period, whereas Care Enablement demonstrates a steadier pattern of improvement. To enhance transparency regarding the group's future trajectory, we have added an aspiration for 2028. We see a clear path toward operating income growth, targeting a compound annual growth rate of 3% to 7% through 2028. This growth will be driven by the focused execution of our FME Reignite strategy, which includes the 5008X rollout and our quality strategy to reduce missed treatments and mortality as well as continued progress in revenue cycle management. In addition, increased sustainable savings from our FME25+ program will contribute to this earnings growth. If we exclude the noise resulting from the interim TDAPA tail and headwinds throughout this period, our implied earnings growth trajectory through 2028 would be in the low teens on a CAGR basis. This shows how strongly the underlying operational performance is unfolding. Our 2030 aspirations are fully underpinned by the strategic priorities and momentum of FME Reignite. At the time of the Capital Markets Day, we have not given explicit revenue growth aspirations to 2030 as the Value-Based Care segment has an inherent volatility from changes in risk contracting, which makes top line forecasting less predictable. Therefore, we have excluded Value-Based Care from our revenue growth aspirations. For Care Delivery, we anticipate a lower to mid-single-digit revenue growth CAGR. And for Care Enablement, we expect a mid-single-digit revenue growth CAGR. Our 2030 margin aspirations to achieve industry-leading margins in all of our operating segments remain unchanged. At the group level, we maintain our aspiration to deliver an operating income margin in the mid-teens. We maintain the same 2030 margin aspiration for both Care Delivery and Care Enablement. Recognizing that Value-Based Care is a structurally lower margin business in a relatively nascent industry, we have a low single-digit operating income margin aspiration to 2030. We are well positioned for continued value creation in the years ahead. That concludes my prepared remarks. And now I'll hand it back to Dominik to begin the Q&A session.

Thank you, Helen. Thank you, Martin. Before I hand over for the Q&A, I would like to remind everyone to limit your questions to 2, please. And with that, I hand it over to Moritz to open the Q&A session, please.

[Operator Instructions] And the first question comes from Hassan from Barclays.

Firstly, if you could please talk about some of the key drivers of the acceleration of EBIT growth from flat at the midpoint of guidance this year to propel you to the midpoint of the '25 to '28 -- 2028 range of 5%? And how much of this is reliant, if at all, on an acceleration in same market treatment growth? And then secondly, on Care Enablement, could you quantify the drag from China tender modifications and delays in the quarter? And how you're thinking about this persisting throughout 2026?

Thanks, Hassan. I think I'll take both of those and make sure I've got your first question covered. So we'll maybe tag teammate if you need more here. Obviously, what you can see is that we have a flat 2026 versus the midterm growth CAGR of 3 to 7. Obviously, you can hear from the talk outline that we have -- in fact, 2026 is a year of investment both in HDF and in systems platforms. And of course, we're calling out quite explicitly, deliberately the impact from the regulatory pieces of TDAPA and ACA. I think the way to think about it is as you look at the headwinds and tailwinds slide that we know was quite detailed this year deliberately that you can kind of see the levers of the pluses and minuses and the range that is there. Obviously, there's a lot of underlying operational work that we're focused on. So once you kind of get past the TDAPA and binders piece, the business growth on rate and mix and kind of the business growth and revenue cycle improvements start to come through. As always, we have the ongoing -- sorry, headwinds of labor and inflation. So kind of -- I think you kind of got the building pieces -- building blocks there. And of course, the accelerated FME25 just adds to all of that. We -- in Care Enablement, that margin improvement is kind of constant over time, both from the top line levers that they're pulling as well as the FME25 levers that they're pulling there. In terms of the kind of the same market treatment growth and what impact, obviously, we're calling it flat. We know where we've been. We kind of obviously have been coming out of December, missed treatments from weather and…

The next question comes from Veronika from Citi.

Two questions for me, please. And apologies they're both focused on the headwinds, I guess, but just trying to understand the moving parts. Helen, thank you for the phosphate binder comment. I just want to confirm that the number there is EUR 220 million and what your expectation is for '26 and '27, as that sort of unwinds? And then related to that, this catheter -- the antimicrobial catheter benefit, I think I caught you saying something along the lines of it should be neutral year-on-year, if you can elaborate on that. I'm very sorry, I'm missing that sort of link how it flows from '25 to '26. And then my second question is just your thoughts on the ACA subsidy headwinds as we move to '27 and '28. Obviously, your closest competitor has outlined figures for that? Should we use those as a baseline? Or are you expecting the shape of the headwind to look differently either?

Veronika, I'm more than happy to talk about the headwinds. So we have called out regulatory effects of EUR 150 million to EUR 200 million. And that includes the headwinds from both binders as well as ACA. We have also quantified ACA before at around EUR 50 million. We also said we're going to see how it plays out. So we have only quantified 2026. We have not given a further outlook. And we'll see how that plays out in the next weeks and then we might update our assessment in that. Also in that EUR 150 million to EUR 200 million is the year-over-year decline that we see for binders. To your point, yes, we had about EUR 220 million of positive contribution in 2025. And we have also called out before that we see about EUR 50 million staying in our clinics and another EUR 50 million staying out of our pharmacy business. So there is a headwind or a total positive contribution that stays in '26 for EUR 100 million, leading to a reduction of -- bigger than EUR 100 million from '25 to '26. And those 2 effects combined are the EUR 150 million to EUR 200 million that we have there. To the catheter lock solution, yes, you heard correctly, there's no year-over-year effect. We do not have an effect because it is still under a limited half for the first half. I hope that clarifies the question.

Veronika, I'm glad you're not the only one to pronounce that. The capital piece is half, half 2 '25 versus half 1 '26 impact. So just to put a finer point on that. That's why the impact is because of the short TDAPA period on one of the solutions. We got a benefit in half 2, mostly towards back end of the year and we're expecting a benefit in half 1 before that TDAPA period expires. So that's why year-over-year, it is neutral, but it will add one key phasing for sure.

The next question comes from Oliver from ODDO BHF.

The first one is on patient volumes. So can you comment on the impact of higher insurance requirements on your patient volume development? And second question is also on your outlook for the patient volume growth. So you mentioned that missed treatments have stayed at an elevated level, but that's also not really new. Right now, we see flu season is very mild. It's not over yet, but I would say there's a high probability that it's not as goo as it was last year. And later this year, there should also come some of this annualization effect from the higher insurance requirements and as well as slightly improving mortality due to the HVHDF introductions. So if I put all together, it looks for me that the patient volume development must be better than it was in '25. So is it really only, let's say, a conservative stance? Or have I missed anything in this Q&A?

So look, I deliberately used the word careful in terms of our assumption. We're assuming a normal flu season. We saw it go up. We've seen it come back down. I think we can -- looking at what we've seen today, we're saying a normal flu season, not like last year. I think we also know that when you go pick up the headlines this week to see the weather. So we do have elevated missed treatments, whether that be weather, illness, flu. Obviously, as you know we've been pretty consistent on the data lag that we see in 6 to 8 weeks. So by the time we get through Q1, we'll have a better sense. As we get through Q1, we're also going to have a better read on what open enrollment look like and how the ACA kind of choices actually develop. Open enrollment, why you could say it was the end of the year and you should start to see it in first quarter. Actually, it's not until they enroll and pay the first month premium, do you even know what they talked. So that's going to give us a lag as well. So I think we're watching that closely. Obviously, you'll see the headlines on what the overall enrollment looked like. And obviously, if it didn't drop as much as we expected, then we'll be able to reconcile that accordingly. And then, as you say, with HDF, we're full steam ahead, converting clinics, converting patients. And while it's too early to see results, we should get the benefits kicking in there. And in fairness, along with the overall underlying improvements that we're working on in -- on mortality, including the catheter lock solutions and just kind of the patient outflows. But we felt with where we are, the right thing to do was to call this flat for 2026. We know we're talking small numbers on small numbers and the small number piece were plus 0.1 or minus 0.1. We know that doesn't make a difference on the kind of on this EBIT range. So we feel like that is the right place to call it for 2026, and we'll update accordingly.

Okay. Can you also comment on the higher insurance requirements, please?

Maybe I'm not understanding the higher insurance requirements question. Are you talking about those people that maybe didn't enroll in ACA and then had to go to a different insurance policy?

Yes. Or let's say, I'm speaking about the active improving -- actively steered improving patient mix, choosing your patients more selectively.

Okay. I think our -- sorry, thank you. There's a lot happening on insurance and enrollment. So thank you for clarifying that. So yes. Look, I think on mix, we're feeling good about our patient mix. I think the only piece that we're watching is -- and that's why it maybe does come back to the ACA comment is how did open enrollment really end up? And did that change -- did we change anything when -- once we see that kind of first month payment come through, but nothing else. I think that nothing else there.

The next question comes from Hugo from BNP.

I have 2. First on U.S. volumes. Helen, if I can push you a bit further. One of your competitors mentioned that they expect a very slow start into the year in negative territory. So just the question is like whether or not you expect to see the same trends at play? And as a result, and assuming that you would also agree with the statement of getting back to 2% volume growth by 2029, how much of U.S. dialysis volume recovery is a prerequisite to achieve the mid-single-digit growth CAGR in Care Enablement? So I guess, how much of the Care Enablement growth is intertwined with the volume recovery in the U.S.? And second, on FME2025. Historically, you guys had a balanced recognition of both benefits and costs from the efficiency program in FY '26. It seems that you have a bit more of one-off costs that you recognize. So just curious about where exactly the lag between the cost and the benefits comes from.

Thanks, Hugo. I'll take the volume question, and Martin can give a bit more color on the benefits and costs. We touched on some of it. Look, I -- Q1 is always a tough quarter to know where your volumes are going to be, both with the weather and the flu-related effect. So look, I know where we ended up and you see where we ended up in Q4. I think we just got to wait to see the data to know how Q1 is going to play out. I'm not going to comment on a quarterly phasing here. We kind of really need to kind of see what that first quarter is going to look like with this -- with some of the messiness that we're seeing, particularly on weather. Look, I -- and I'll say market treatment growth, I think all the efforts that we are doing, and I think particularly the excitement around 5008X and all of our patient safety and patient quality initiatives that all go toward reducing hospitalization, improving mortality, reducing missed treatments, all of that will continue to give benefit over time. So I'm not time stamping it, but clearly, we have improvement built into our 3-year and 5-year outlook. Martin, you want to do FME25?

More than happy to cover the FME25. So you're right, we are front-loading 2026 a bit. And also, we have then in '27 a higher savings contribution. And as you would expect, at the end of the program, a lower onetime cost because we want to have savings effectiveness in 2027 as well. On the '26 front-loading, you see that a lot of the measures are tilted of the remaining EUR 400 million also towards Care Delivery with 40% contribution. And there, the clinic footprint optimization that Helen referred to as well as efficiencies that we drive in real estate are more front-loaded on the onetime cost and then they will contribute subsequently to the savings. I hope that gives a bit more color.

The next question comes from Graham from UBS.

It's just on the Q4 point around what was obviously a really strong beat, particularly in Care Delivery. I'm just trying to work out the phosphate binder and then this TDAPA catheter contribution. It just looks to me like that was pretty much all of the growth, I suppose, effectively year-over-year. Is that TDAPA payment, does that -- is that like more than half of the EUR 90-odd million that you categorized for the full year '25? And then just a follow-on. When we think about whatever about '26, when we think about '27, it looks to me that there's still like a further EUR 250-maybe million to come out from TDAPA plus phosphate binders into '27. Is that overstating it? Or how do you think about that in terms of your ability to grow then in '27?

Yes. So Graham, let me tackle the TDAPA contribution and because I outlined in quarter 4 that, yes, there was a contribution from the catheter lock solution of about EUR 70 million in the quarter, and that was due to the much higher than anticipated adoption and prescription that we saw for one of those 2 dilutions that was under TDAPA and the other one is not. So that was something that drove some of the higher contribution, so to say. We outlined that, that solution will be year-over-year, not a head or a tailwind because we expect that it's a similar contribution for 2026. In wholesale in '25, we had EUR 90 million and it was Q3 and Q4 and then in Q1 and Q2 '26. So it will be a non-year-over-year effect, yes. To the earlier point, I think I was very clear on binders where we ended the year with EUR 220 million, and I outlined how that is. So I'm not going to repeat and dig into that again. But I think with the EUR 150 million to EUR 200 million regulatory headwinds, we have provided also a very clear building block.

Yes, Graham. And maybe I'll just pick up on your -- go ahead.

I was going to say just the relevance for '27, like it just feels like this TDAPA piece was a bit of a -- obviously, a great positive surprise. But just when we think about modeling it going forward, what's going to happen in '27?

Yes. So look, on the -- on both actually, expectation is that TDAPA period ends in 2026, and there will be a payment that then goes into the bundle. So we don't know what that bundle payment will be in 2027 yet or actually even halfway through 2026 for the catheter lock solution. So obviously, we know that some of that's going to stay in the business. And on our pharma business, it doesn't go to 0. What we're going to have to see is go through 2026, so we have an assumption is how the pricing -- how the generic -- sorry, how the branded pricing erodes as the kind of the move towards these products going into bundle develops. So we're not breaking this out year-by-year. It's why we've given the 3-year CAGR. And you also heard me speak to the low teens CAGR we get past all of this binder piece. So I think there's obviously positive benefit in '25 and '26. It starts to erode in '26, and we have to see how much it erodes that doesn't stay in the bundle in '27. But on the back of that, we've got all the other initiatives taking hold, particularly in Care Delivery, where we start to see a significant benefit from the back-end load of HDF and all the other initiatives. So look, I think what we were trying to do, we've been very explicit on trying to size the TDAPA piece because we recognize -- agree, it's great, always wonderful to have that benefit. But we also recognize how high a base it is giving in 2025. And our goal here is to maintain that high base in '26, regardless of the tail off of these issues -- I shouldn't call it issues, the TDAPA regulations. And we're investing in the future. So we've got this front-end loading for the training costs for HDF and we're investing in systems platforms that will also drive efficiencies in the future.

And our last question comes from James from Jefferies.

Two, if I can, please. And just first one, just a clarification. Can you confirm you said Corporate costs were EUR 200 million to EUR 220 million and intercompany were EUR 100 million for this year. I understand you're prioritizing your own clinics in Care Enablement, so we should see higher eliminations. But why such a large increase in Corporate costs? And is this a permanent step-up as part of your '28 growth outlook? And then I'll come back for a follow-up.

So on the intercompany profit elimination, yes, you're right. We called it out EUR 100 million, and it has to do with the prioritization of the rollout of high volume HDF and that is something on the Corporate line that is being eliminated. So confirming that. On the Corporate cost, the EUR 200 million to EUR 220 million. I did call out that we have in the Corporate line, the IT platform investments that we included in the investment line that drives a year-over-year increase. That's why the assumption is higher. And in addition, you know that we have that FX impacts that we normally have from the gross charge out of the Corporate line and the global functions, and that is also contributing a low double-digit million in the increase year-over-year. So those 2 effects are explaining the year-over-year.

That's great. And then my follow-up question is, if you could just talk a little bit more about the number of missed treatments in the U.S. At least like the treatment numbers, I think they were lower by 150,000, which I know includes some divestments. And you talked about weather and flu, I think, in some of the comments earlier, but just wondering if you could comment on the perspective, this actually might be a structural headwind because we do understand if patients are entering dialysis, they're increasingly older perhaps kind of post COVID. Maybe they've got more co-morbidities, so they require more hospitalizations and they're missing treatments. And if so, like how can this trend reverse, which does seem to be key to unlocking the same market treatment growth if the funnel is slowing?

Yes. Look, we don't believe it's a structural issue. We do see elevated missed treatments, and we also see specific targeted initiatives that we are targeting that can help bring that down, whether that be the improving mortality, the hospitalization days, the kind of the things that we've talked about. We do have kind of -- and if anybody has picked this up, but we do have 1 treatment day less in 2025 compared to 2024. That's just a function of how the end of year Christmas holidays and New Year in particular fell. So that's obviously playing into the '25 number. But we feel good about the work that we have ahead of us, and we have line of sight into all these initiatives that will help improve the outflows and kind of confident in that, that will turn to 2% plus same market treatment growth. And we'll start to see that progress as we obviously continue with HDF as well. Thank you for the question.

Thank you. Good. We do have no further questions in the call. So thank you for your patience. Thank you for your interest. Thank you for your good questions. And we'll see all of you or many of you on the road, I hope, in the next 2 months.

Yes. Thanks, everyone.

Thank you.

Great dialogue. Thank you. Bye-bye.

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