LONDON/BAD HOMBURG (dpa-AFX) - The medical group Fresenius is becoming more confident about its subsidiary Helios. The company now wants to reach the upper end of the targets set for the hospital operator in the current year and accordingly expects more profit and stronger sales growth at its subsidiary. No acquisitions are planned. This was well received on the stock market: Fresenius shares rose by more than three percent around midday.

"We are in a growth market, the market is growing both in Germany and in Spain," said CEO Michael Sen on Wednesday in a conference call at the Capital Markets Day in London. The business is reliable because it is in a regulated market and therefore stable. The company wants to gain and expand market share. No takeovers or mergers are needed for this.

The most important growth drivers in Germany are cluster formation - a network of two to five clinics - and specialization of the clinics. In addition, there would be greater integration of outpatient care and a strengthening of emergency care. In the Spanish clinic business, technology-based developments, various initiatives to increase attractiveness for doctors and selective network expansion are ensuring growth.

According to Fresenius, the entire hospital market in Germany had a volume of around 120 billion euros in 2023. "We expect the market to grow by around 3 to 4 percent annually until 2027," explained Sen. The drivers are demographic change, the ageing population and the resulting increase in chronic diseases. The latter also helps the subsidiary Kabi, the division with products for clinical nutrition, infusions and pharmaceuticals. "We also expect Helios to benefit from the hospital reform," added the company boss.

With the hospital reform, Federal Health Minister Karl Lauterbach (SPD) wants to fundamentally change the financing, organization and range of services of the approximately 1,700 hospitals in Germany. One of the main aims is for hospitals in Germany to be under less financial pressure and to specialize more in treatments. In future, hospitals are to receive 60 percent of their remuneration for providing certain services.

In Spain, Fresenius owns Quirónsalud, one of the most modern hospital and clinic chains in Europe, explained Sen. In addition to the public healthcare system, the country also has a private one. The latter accounts for 20 percent of the market and is worth around 21 billion euros. The private segment will grow by four to five percent annually until 2027. Demographic change is also playing an important role in Spain, as is the increasing acceptance of private health insurance.

For 2024, Fresenius' management now expects Helios to achieve organic sales growth in the mid-single-digit percentage range. Previously, the Group had assumed growth in the low single-digit percentage range in the worst-case scenario. In terms of operating earnings before interest and taxes (EBIT), the Group is aiming for a margin of 10 to 11 percent adjusted for currency effects. The previous range had been 9 to 11 percent.

For the coming years, the Management Board expects organic sales growth of 4 to 6 percent per year for the subsidiary. The operating margin is expected to be between 10 and 12 percent. Previously, the company had targeted organic sales growth of 3 to 5 percent per year and an operating profit margin of 9 to 11 percent.

Fresenius Helios owns around 140 hospitals and more than 400 outpatient facilities under the Helios brand in Germany and Quirónsalud in Spain and Colombia.

Sen also gave an insight into the new structure of the DAX-listed company from Bad Homburg: "The reorganization of the Group has been completed," he said. Fresenius is now concentrating on its hospital business around Germany's largest hospital company Helios and the generics manufacturer Kabi. After agreeing the sale of a majority stake in Vamed's rehabilitation business to a financial investor, the Group also recently found a buyer for the Vamed business in Austria in the form of the Austrian construction companies Porr and Strabag. The former subsidiary Fresenius Medical Care (FMC) has also been unbundled from the Group and is now only treated as a financial investment. This is not expected to change for the time being.

"At the moment, the separation is not on the agenda," said Sen with regard to the investment in FMC. The management believes that the value of this investment can still be increased. FMC has a clear roadmap for improving its performance. Patient growth at FMC is just coming back. Sen wants to capture this growth momentum. Fresenius holds just under a third of the dialysis specialist./mne/lew/stk