Hugo Solvet

Hugo Solvet asked about Fresenius Medical Care's expectations for U.S. volumes in early 2026, given a competitor's negative outlook, and how much U.S. dialysis volume recovery is a prerequisite for achieving mid-single-digit growth CAGR in Care Enablement. He also inquired about the lag between costs and benefits in the FME25+ efficiency program for FY 2026, noting a front-loading of one-off costs.

Answer

CEO Helen Giza stated that Q1 is always tough for volumes due to weather and flu, and the company needs to see more data. She emphasized that efforts like the 5008X rollout and patient safety initiatives will improve mortality and reduce mistreatments over time, contributing to 2%+ same-market treatment growth. CFO Martin Fischer explained that FME25+ costs are front-loaded in 2026, particularly for Care Delivery's clinic footprint optimization and real estate efficiencies, with higher savings contributions expected in 2027.

Hugo Solvet asked if Fresenius Medical Care expects similar slow/negative U.S. volume trends as a competitor in Q1. He also inquired about the prerequisite U.S. dialysis volume recovery for achieving mid-single-digit CAGR in Care Enablement and how intertwined Care Enablement growth is with U.S. volume recovery. Additionally, he questioned why FME25+ has more one-off costs than benefits in FY2026, asking about the lag.

Answer

CEO Helen Giza stated that Q1 volumes are difficult to predict due to weather and flu, requiring more data. She highlighted that 5008X and patient safety initiatives are expected to improve mortality and reduce mistreatments over time, contributing to future growth. CFO Martin Fischer explained that FME25+ is front-loading costs in 2026 (EUR 350 million one-time costs vs. EUR 250 million savings) to achieve higher savings in 2027 and lower one-time costs later. He noted that Care Delivery's clinic footprint optimization and real estate efficiencies are front-loaded on costs.

Hugo Solvet of BNP Paribas inquired about Fresenius Medical Care's confidence in achieving U.S. volume growth in 2026 and the margin outlook for the Care Enablement segment in the second half of 2025.

Answer

CEO Helen Giza expressed confidence in 2026 U.S. volume growth, citing encouraging referral trends and inflows, contingent on mortality normalization. For Care Enablement, she confirmed the existing margin band and expects H2 to be stronger than H1, driven by typical seasonality and strong execution.

Hugo Solvet of BNP Paribas asked about the potential impact of U.S. tariffs, whether the company saw any benefit from a competitor's recent cyber-attack, and for clarification on a 40 bps impact on U.S. volumes.

Answer

CEO Helen Giza stated that the impact from tariffs in 2025 is expected to be limited due to a resilient U.S. manufacturing footprint. She confirmed seeing some additional patient referrals in Q2 following a competitor's cyber-attack and clarified the 40 bps was a negative impact from missed treatments due to flu, which was offset by strong underlying referral inflows.

Hugo Solvet from BNP Paribas asked how critical the 5008x HDF platform is to driving patient volumes back to 2% or higher, especially if growth remains muted, and inquired about the timeline for this impact.

Answer

CEO Helen Giza described the 5008x HDF platform as a very exciting opportunity and a key innovation for the industry. She highlighted the potential to significantly lower the 17% mortality rate in the U.S. towards the 12% seen in Europe, where HDF is standard. Citing a study showing a 23% improvement in all-cause mortality, she suggested this could lead to substantial volume growth over time as the platform is rolled out, noting it will be a key topic at the June Capital Markets Day.

Hugo Solvet of BNP Paribas asked for details on the revenue and earnings contribution from value-based care in Q2 and the outlook for H2. He also inquired about the latest developments on the PPS rate for next year and whether the new volume growth guidance implies a specific exit rate for 2024.

Answer

CFO Martin Fischer confirmed a positive revenue and margin contribution from value-based care in H1, driven by the CKCC program, and expects this to continue. CEO Helen Giza addressed the PPS rate, noting the proposed 2.1% net increase is within their planning assumptions, though they are commenting on the draft rule. Regarding the volume exit rate, she indicated that while June and July trends are encouraging, it's too early to predict the precise phasing for the rest of the year.

Hugo Solvet asked about the drivers for strong demand in Diagnosis & Treatment (D&T) and Connected Care in the U.S., specifically inquiring about the magnitude and sustainability of patient volume pickups. He also asked if the Q1 2025 margin decline could serve as a good proxy for the expected Q1 2026 slight margin decline.

Answer

CEO Roy Jakobs identified key drivers for U.S. demand as significant infrastructure investment in healthcare systems, strengthening monitoring and cybersecurity (benefiting informatics), and the financial health of stronger, consolidating health systems. He highlighted Philips' platform play for interventional, cardiac, and monitoring infrastructure, noting strong and sustained patient volumes and expanding procedures, particularly in cardiology, which SpectraWave acquisition bolsters. CFO Charlotte Hanneman confirmed that the Q1 2025 margin decline is a roughly accurate proxy for the expected Q1 2026 slight margin decline.

Hugo Solvet inquired about the drivers for Diagnosis & Treatment (D&T) and Connected Care demand in the U.S., specifically the magnitude and sustainability of patient volume pickups, which were not highlighted in the Q3 slide deck. He also asked if the Q1 2025 margin decline could serve as a good proxy for the expected slight margin decline in Q1 2026.

Answer

Roy Jakobs (CEO) identified key U.S. drivers as significant investment in healthcare infrastructure, driving demand for Philips' platforms, particularly in monitoring and cybersecurity. He noted strong momentum in North America Connected Care, expected to continue, fueled by the strengthening financial health and consolidation of larger healthcare systems. This plays into Philips' platform strategy, providing core infrastructure for interventional, cardiac, and monitoring, especially as staff shortages necessitate systems that support personnel. Patient volumes and cardiology procedures are strong and expanding, further bolstered by acquisitions like SpectraWave. Charlotte Hanneman (CFO) confirmed that the decline seen in Q1 2025 is roughly a good proxy for the expected Q1 2026 margin decline.

Hugo Solvet from BNP Paribas asked for clarification on China trends, specifically if restocking is occurring in Q3, and questioned the company's confidence in achieving "mid to high teens" margins beyond 2025, noting the recent reference to "mid teens."

Answer

CEO Roy Jakobs clarified that the goal in China is to keep stock levels aligned with sell-out, not to restock, and that while consumer demand is strengthening, the outlook remains cautious. Regarding long-term margins, he stated that the focus will be on driving growth and favorable mix, on top of continued productivity, to expand margins. He affirmed that the company sees ample opportunity for expansion, taking inflation and tariffs into account, with more detail to come at the CMD.

Hugo Solvet of BNP Paribas asked for clarification on China trends, questioning if the end of destocking implies restocking, and sought management's confidence level in achieving margins above the mid-teens beyond 2025.

Answer

CEO Roy Jakobs clarified that the end of destocking in China means inventory levels are now appropriately balanced with sell-out, with no immediate need for restocking. He reiterated a cautious but improving outlook for China. Regarding long-term margins, he expressed confidence in continued expansion driven by growth, mix, and productivity, while noting that factors like inflation and tariffs will influence the ultimate level, which will be detailed further at the Capital Markets Day.

Hugo Solvet asked about Philips' exposure to Chinese restrictions on rare earth minerals, the drivers of long-term margin expansion beyond operating leverage, and the specific modalities and countries driving the mentioned improvement in European hospital CapEx.

Answer

CEO Roy Jakobs stated that Philips currently sees no impact from rare earth export controls. CFO Charlotte Hanneman outlined that long-term margin expansion will be driven by ongoing mitigation efforts, a EUR 2.5 billion productivity program, and the value from new innovations. Roy Jakobs added that the strategy to grow higher-margin businesses and improve profitability in areas like Sleep & Respiratory Care (SRC) also contributes to margin expansion.

Hugo Solvet asked for a reminder of Philips' manufacturing footprint concerning potential tariffs, particularly in North America, and inquired if the new cash/share dividend option is a transitional step toward a full cash dividend.

Answer

CEO Roy Jakobs clarified that Philips has no direct manufacturing in Mexico or Canada but operates a global, regionalizing footprint. CFO Charlotte Hanneman described the dividend option as a significant step forward, signaling progress in deleveraging while balancing the upcoming $1.1 billion cash payment for settlements, framing it as the 'next big step on our journey.'

Hugo Solvet from BNP Paribas Exane questioned if the China stimulus could cause customers to delay orders, asked for quantification of the margin improvement in Sleep & Respiratory Care (SRC), and inquired about the company's strategic commitment to the Personal Health business.

Answer

CEO Roy Jakobs stated he does not expect customers to delay orders while waiting for the stimulus, as underlying demand is the primary driver. Regarding SRC, he confirmed its return to profitability in Q1 strengthened further in Q2, driven by sales momentum and productivity measures, but declined to provide specific figures. He affirmed a full commitment to the Personal Health business, citing its attractive cash and profit profile, market-leading positions, and strategic importance in the shift of care to the home.

Hugo Solvet inquired about the evolution of NIH-related accounts in Q2, customer feedback from the academic and life science sectors following a recent Congress vote, and the potential for a future budget flush.

Answer

CEO Thierry Bernard reported that direct sales to government agencies like the NIH and CDC remain strong and unaffected by budget discussions. However, he acknowledged a sluggish environment for capital sales in the broader research and academic market. He stated it is too early to assess the impact of the Congress vote but that the company is budgeting for a decreased NIH budget in 2026, though perhaps less severe than feared.

Hugo Solvet asked for the expected sales contribution from NeuMoDx in 2025 and for more detail on the levers for margin progression beyond 2025, including the gross margin trajectory.

Answer

CEO Thierry Bernard clarified that NeuMoDx sales should cease by H2 2025, with expected full-year revenue between $8 million and $10 million. CFO Roland Sackers detailed that future margin expansion will be driven by IT infrastructure upgrades, increased digitalization of sales, and significant underlying gross margin improvement from product mix, QIAstat-Dx volume growth, and higher margins on instruments like QIAcuity.

Asked about potential headwinds for the Hearing division's core margin progression and for clarification on the timing and nature of the increase in points of sale.

Answer

The Hearing core margin of 19.9% includes a one-off pension provision reversal of approximately 2 percentage points. The underlying performance is strong, supported by Nexia and synergies, in line with the 18-20% full-year guidance. The expansion of points of sale has been a gradual build-up, primarily within the independent channel, though Nexia is also performing well with key accounts.

Asked if the one-year cycle for the Nexia launch indicates shorter product life cycles going forward, the potential timeframe to reach the 20% core Hearing EBITA margin if not achieved in 2024, and for details on the quarterly phasing of the DKK 400 million savings in 2024.

Answer

The company expects to return to its traditional ~2-year product life cycle after the faster Nexia launch. They are still striving for the 20% core Hearing margin in 2024 and will not comment on alternative timeframes or the quarterly phasing of the DKK 400 million in savings.