Fresenius’ new boss wants to act after the profit notice

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Michele Sen
Fresenius’ new head Michael Sen. © Daniel Karmann / dpa / Archive image

Shortly after joining the healthcare group, Michael Sen had to get back on his business goals. Once again, the FMC dialysis branch weighs on the parent company Fresenius. Now all business should be tested.

Bad Homburg – The new Fresenius boss Michael Sen wants to intervene within a few months of the second profit warning of the Dax group. All activities would be strained, the manager announced on Monday. “We evaluate all negotiations, from top to bottom and at high speed.” This will result in greater determination. Meanwhile, costs are expected to decrease to cope with a challenging environment. Look at the entire portfolio and examine the “opportunities and challenges” in all markets. In the third quarter, the Bad Homburg-based company managed to increase sales, but profits fell significantly.

The health and clinical team must focus on issues that are “under our control, also called self-help,” said Sen, who has headed Fresenius since the beginning of October. Productivity must increase and the company must become more cost-driven. He did not indicate concrete measures. The key is attention to profitability.

Due to business difficulties in North America, the Fresenius Medical Care (FMC) dialysis group and parent company Fresenius had to lower their business goals for this year on Sunday evening. FMC is struggling with a shortage of nurses in the United States, supply chain problems, and rising wages and material costs. All other areas, in particular the service provider Vamed, also suffered from the difficult economic environment. FMC and subsequently Fresenius only had to correct their targets at the end of July.

Sen now expects the currency’s adjusted net profit to decline by about 10% this year, following a low-to-medium percentage decrease to a previously targeted single-digit figure. FMC also expects a decline in FX Adjusted Net Income and No Special Effects by up to 25 percent, after a high of minus 20 percent so far.

In the third quarter, Fresenius’ sales grew 12% to € 10.46 billion, as announced by the group on Sunday. Profit before special items fell by 15% to 371 million euros. At FMC, sales grew 15% to € 5.1 billion, while profits fell 16% to € 230 million.

Fresenius, Germany’s largest private clinic operator, is in permanent crisis. The group is suffering the consequences of the pandemic, in which many dialysis patients are dying. In FMC, Carla Kriwet has also been at the helm since October. She pointed out that she has begun developing a turnaround plan, “which will also include a culture of performance and clear accountability”.

More recently, Fresenius had confirmed that he had been in contact with US hedge fund Elliott, which could reportedly push for a split in the group’s complex structure. Investors have repeatedly criticized Fresenius’ positioning with the dialysis, liquid medicines, clinics and services divisions. Fresenius shares have lost two thirds of their value over the past five years.

Former Fresenius boss Stephan Sturm had already considered IPOs for Helios Clinical Division and Vamed Services Division and was willing to sell FMC’s nearly one-third stake. But no such measures have been taken. dpa

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