Fresenius Upgrades Earnings Targets for 2021

Fresenius, a leading German health-care company, has announced an upgrade to its earnings targets for the entirety of 2021. The company has cited a strong performance in the first three quarters of the year as the reason for this upward revision.

Revised Expectations

Previously, Fresenius estimated that earnings before interest and taxes (EBIT) would experience a mid-single-digit decline to remain broadly flat compared to last year's figures. However, the company now expects EBIT to remain broadly flat throughout the year, surpassing their initial projections.

Additionally, Fresenius continues to anticipate revenue growth in a mid-single-digit percentage range. They have also maintained their goal of achieving an operating income margin of 10% to 14% by 2025.

Q3 Performance

In the third quarter, Fresenius reported a revenue of €5.52 billion, an increase from €5.39 billion during the same period last year. However, EBIT dropped to €346 million from €416 million, and the company experienced an after-tax loss of €406 million, a significant decrease from the €321 million profit in the previous year. This loss can be attributed to the valuation effect of Fresenius Medical Care, amounting to €594 million.

Looking ahead, Fresenius is on track with its deconsolidation process of Fresenius Medical Care, which is expected to be effective by December 2021. This move represents a significant development as Fresenius Medical Care will now be presented as a separate item in the financial statements of the Fresenius Group.

Performance of Fresenius Medical Care

During the third quarter, Fresenius Medical Care reported a decrease in revenue from €5.1 billion to €4.94 billion compared to the same period last year. Operating income also saw a decline of 28% at a constant currency, amounting to €324 million. Furthermore, net profit slumped to €84 million from €230 million.