Fresenius share: Top in medical technology

Last Updated: 9. Februar 2024By

Medical technology is an exciting investment opportunity. Technological advancements also improve our well-being. German company Fresenius is among the top 5 in the field of medical technology. A good reason to take a closer look at the stock.

The healthcare group Fresenius offers products, therapies, and services for dialysis, hospitals, and outpatient medical care. Fresenius consists of four divisions that operate and act autonomously: FMC Fresenius Medical Care, Kabi (nutrition/infusion therapy), Helios (hospital operator), and Vamed (hospital services).

Fresenius reinvents itself. In the first 9 months, without the previously spun-off dialysis subsidiary Fresenius Medical Care (FMC), the company increased its turnover by 4.8%. All three divisions, Helios, Vamed, and Kabi, and all regions except for Asia-Pacific contributed to this growth. However, the company only recorded a small profit. This was due to special effects related to the spin-off of FMC, which was completed at the end of November.

Despite the weak profit development, the restructuring and cost-saving measures initiated by CEO Michael Sen are already showing results. The company has sold its stake in a hospital in Peru and its Helios fertility clinics Eugin (revenue in 2022: €227 million). This deal alone brought in €500 million in pre-tax profits. The company is still looking to sell its hospital business in Colombia and its digital subsidiary Curalie. The proceeds from these sales will be used to reduce the company’s high net debt. At the same time, the company planned to cut costs by €200 million in 2023.

Patience can pay off. In the future, Fresenius will focus only on its hospital chain Helios and its pharmaceutical subsidiary Kabi. FMC, in which Fresenius still holds a 32% stake, and hospital service provider Vamed are now considered only as financial investments. We estimate the company’s annual turnover in 2023 without FMC to be €28 billion and the profit to be €1.2 billion. The focus on a few high-growth and profitable business areas is well-received by the stock market. However, the company does not offer any dividends, and the stock is currently stagnating.