Falko Friedrichs

Falko Friedrichs of Deutsche Bank asked about the next steps and financial impact of the new high-volume HDF machine rollout in the U.S., and for the expected full-year FX headwind at current rates.

Answer

CEO Helen Giza detailed the plan to convert 30 clinics with 600 HDF machines in H2 2025, with a limited financial impact this year but a significant ramp-up in 2026. CFO Martin Fischer estimated a potential 3-4% negative FX impact on full-year revenue and earnings if the then-current exchange rates were to persist.

Falko Friedrichs from Deutsche Bank AG asked how far the company's referral process is from its ultimate goal, questioned the scope for cost-cutting beyond 2025, and probed for any plans regarding a significant share buyback program.

Answer

CEO Helen Giza stated the goal for the referral process is to capture every possible patient and that they will continue to drive improvements until growth rates fully recover. She indicated that future efficiency opportunities and capital allocation plans, including returns to shareholders, would be detailed at the June Capital Markets Day.

Falko Friedrichs from Deutsche Bank asked if the company believes it gained market share in Q4 with its same-market treatment growth and if it expects to continue gaining share in 2025.

Answer

CEO Helen Giza responded that the company's operational improvement work is paying off, leading to better performance in accepting referrals and retaining patients, including through superior disaster management. She believes the positive results are likely a combination of market dynamics and the company's own strengthened performance, which gives her confidence for 2025.

Falko Friedrichs of Deutsche Bank AG asked about the potential risks that could reverse the encouraging same-store treatment growth trend seen in June and July. He also inquired how much of a shortfall the proposed 2.1% CMS rate increase would be relative to expected cost increases next year.

Answer

CEO Helen Giza identified a negative change in mortality trends as the primary risk to the recent volume improvement, while expressing confidence in the pull-through from operational enhancements. Regarding the CMS rate, she stated the 2.1% increase was in line with their moderate expectations for the outlook, and the company will continue to manage the spread between reimbursement and cost increases through efficiencies.

Falko Friedrichs asked for confirmation that Philips did not lose market share in medical imaging in Q1, an updated view on full-year growth in China, and more specific details on the products and components flowing between China and the U.S.

Answer

CEO Roy Jakobs confirmed that based on preliminary data, Philips gained market share in Medical Imaging in Q1, citing strong momentum in CT and MR. CFO Charlotte Hanneman reiterated that the full-year outlook for China remains a mid-to-high single-digit decline, with no change in the cautious view. She specified that the Personal Health and Diagnosis & Treatment segments have the most significant U.S.-China trade flows, making them the most impacted by tariffs.

Falko Friedrichs from Deutsche Bank questioned if the strong 9% order intake growth in Q2 was sustainable for the rest of the year and asked for clarification on the expected timing of the China stimulus impact on orders versus sales.

Answer

CFO Abhijit Bhattacharya cautioned against extrapolating the 9% quarterly growth due to the inherent lumpiness of orders, reiterating the H1 growth was 3% and the full-year outlook is for positive growth, with China's recovery as the main variable. He confirmed that any major sales contribution from the China stimulus is more likely in 2025, though some order impact could be seen in H2 2024, depending on the speed of implementation.

Inquired how close the BPS consumables business is to a normal demand pattern and whether destocking is complete. Also asked for examples of products imported into the U.S. that are subject to tariffs.

Answer

Consumables demand is now close to the real demand from customers, with destocking being largely completed. Examples of products manufactured in the U.S. include filters and single-use bags, while some reagents from recent acquisitions are examples of products that would be imported and subject to tariffs.

Falko Friedrichs of Deutsche Bank AG asked for an update on industry destocking trends, confirmation of the stability of a major mRNA contract, the customer base for polymer syringes outside of mRNA, the timeline to offset a lost polymer contract, and potential ways to minimize quarterly FX volatility.

Answer

CEO Andreas Reisse stated that destocking effects are now largely over, with positive order trends seen in the last four months. He confirmed the major mRNA contract is 'solid' and fully reflected in the guidance. He also noted it will take 2-3 years to fully compensate for a lost polymer contract with new applications. CFO Dr. Almuth Steinkuhler acknowledged the Q1 FX swing and confirmed the company is continuously reviewing options to minimize such volatility.

Inquired about the status of industry destocking, the stability of the remaining large mRNA contract, the customer base for polymer syringes beyond mRNA, the timeline to offset a lost polymer contract, and whether the FX hedging strategy could be tweaked to reduce quarterly volatility.

Answer

Executives stated that destocking is over, and the mRNA contract is solid and reflected in guidance. Polymer syringes serve various applications like cosmetics, aesthetics, and mental health, with new business development underway. It will take 2-3 years to fully compensate for the lost mRNA contract. Regarding FX, the company is continuously reviewing its hedging strategy to minimize swings but feels the current approach is the best available option.

Falko Friedrichs of Deutsche Bank requested more detail on the expected demand volatility and cautious market sentiment for 2025. He also asked about the commitment of their large mRNA customer to polymer syringes and sought information on the diversification of the polymer business outside of mRNA vaccine applications.

Answer

CEO Andreas Reisse attributed the expected volatility to the polymer/mRNA business, a lack of full-year visibility in the vials market due to short lead times, and uncertainty around potential U.S. tariffs. He confirmed their large mRNA customer remains committed. Reisse also explained that the polymer business is revitalizing its focus on non-mRNA applications like mental health drugs and large-volume subcutaneous injections, which were paused during the period of peak mRNA demand.

Requested more details on the expected 'demand volatility' in 2025, asked about the commitment of a large mRNA customer to polymer syringes, and inquired about the applications and customer diversification of the polymer business outside of mRNA vaccines.

Answer

The expected volatility stems from the polymer/mRNA business, short lead times in the vials market, and uncertainty around potential U.S. tariffs. The company is in close contact with its large mRNA customer and knows of no changes to their commitment. Outside of mRNA, the polymer business serves fields like mental health drugs, surgery applications, and large-volume subcutaneous injections, and the company is now revitalizing these areas.

Falko Friedrichs requested more specific details on the time lag for orders to convert into revenue. He also asked if Q1 adjusted EBITDA was in line with internal plans and sought more comfort on the achievability of the full-year guidance, noting the commentary seemed to shift from €100M to €95M.

Answer

CBO Matthias Evers specified that the order-to-revenue timeline can be 6-8+ months for large, integrated contracts, though it is much faster for transactional business. CFO Laetitia Rouxel confirmed that Q1 performance was in line with the internal plan to achieve the full-year qualitative guidance of mid-double-digit EBITDA growth and that the €95M figure was a reference to external consensus, not a change in guidance.