Fresenius increases objectives for Helios's hospital sector.
Fresenius, a healthcare conglomerate with over 40 hospitals and 400 ambulatory facilities, considers its daughter company Helios a top private healthcare provider. The expectations for this year are even higher than initially anticipated.
Helios, a division of Fresenius, has ambitious plans for growth and profitability. The organization aims to achieve mid-single-digit percentage revenue increase annually and an operational profit margin (EBIT margin) of 10-11%, which was recently announced at a capital markets day in London. Previously, a low to mid-single-digit percentage revenue growth and a margin of 9-11% were aimed for. So, the new goals represent a raised ambition for revenue growth at 4-6% (previously: 3-5%) and an EBIT margin of 10-12% (previously: 9-11%). As per Fresenius, the operational results of Helios should surpass the revenue increase.
Fresenius' CEO, Michael Sen, has been at the forefront of the company's restructuring since he took over in late 2022. The leadership team has undergone significant changes, and certain side businesses have been sold. The company's biggest efforts have primarily been directed towards pharma division Kabi and Helios. In May, Sen declared that the strategic portfolio realignment, involving the exit from the money-losing service division Vamed, had been successful. Fresenius now plans to focus solely on Kabi and Helios. "We are a more straightforward and stronger organization," said Sen, "And the strategy of focusing on our operating companies is already delivering results."
Fresenius perceives Helios as Europe's top private healthcare provider, with approximately 140 hospitals and over 400 ambulatory centers under the brands Helios in Germany and Quironsalud in Spain and Colombia. An initial progress in the 2024 business year plus a heightened integration of ambulatory services and a spotlight on emergency care will be advantageous to Helios. In Germany, a consolidation of Helios' clinics into specialized clusters of 2-5 hospitals is set to occur. Sen anticipates that more patients and specialists will be attracted to these facilities as a result of this, while also benefiting from digital applications and artificial intelligence.
Helios focuses on organic growth and has no plans to undertake significant hospital acquisitions. According to Sen, they do not require acquisitions to grow. "Quironsalud and Helios Germany have reached a considerable size and are now represented everywhere, making it about organizing these building blocks perfectly," he said.
Fresenius has expressed no interest in a sale of the 32% stake they possess in dialysis specialist Fresenius Medical Care (FMC), which was previously a challenging issue. Despite the change in FMC's legal structure and their removal from Fresenius' consolidation, investors have been questioning the value of this shareholding. "We believe that this investment can still be optimized," Sen said, in response to concerns raised at Fresenius' annual general meeting.
The patient traffic at FMC in the US is beginning to recover from the pandemic. Sen expects a significant improvement and then a comparison with rival DaVita. "We want FMC to perform better than DaVita as an investor," he noted.
