Fresenius Medical Care AG & Co. KGaA (NYSE:FMS) used its fourth-quarter and full-year 2025 earnings call to highlight what CEO Helen Giza described as a “milestone year,” marked by a sharp improvement in profitability, accelerating savings from its FME25+ program, and progress on strategic initiatives that will shape results in 2026 and beyond.
2025 performance and strategic milestones
Management said 2025 capped the company’s midterm strategy period with a group operating income margin of 11.3% and operating income growth of 27%, reaching the upper end of its outlook. Giza attributed performance to sustained execution and to the company’s ability to navigate a challenging environment that included lower volumes and higher-than-anticipated medical benefit costs.
Fresenius Medical Care also cited portfolio optimization progress, narrowing its international clinic footprint to 25 core markets across 34 countries, down from 49 markets in 2023. It reported EUR 804 million in realized sustainable savings to date under the FME25+ transformation program.
Fourth-quarter results: strong revenue growth and margin expansion
For the fourth quarter, the company reported 8% organic revenue growth and 53% adjusted operating income growth on a constant-currency basis, resulting in a group margin of 13.9%, up 430 basis points year over year. CFO Martin Fischer said foreign exchange had a negative EUR 43 million translational impact during the quarter.
Special items reduced operating income by EUR 111 million, reflecting costs related to FME25+ and portfolio optimization as well as effects from the remeasurement of the company’s investment in Humacyte.
Giza said the quarter included EUR 63 million of additional sustainable savings from FME25+ and “exceptional” EPS growth of 68%, which she said was supported by the accelerated share buyback program. The company ended the year with net leverage of 2.5x, at the low end of its 2.5x to 3x target corridor.
Segment trends: TDAPA tailwinds, Value Based Care turns profitable, China pressure
Care Delivery posted 7% organic revenue growth in the quarter and achieved 45% earnings growth, with margin improving 440 basis points to 16.4%. In the U.S., management said same-market treatment growth was broadly flat, pressured by follow-on effects from elevated flu-related mortality in the first half of the year and a high level of mistreatments in December. International markets delivered 1.7% same-market treatment growth.
Performance in Care Delivery benefited from favorable U.S. rate and payer mix, reduced implicit price concessions tied to revenue cycle management initiatives, and a larger-than-expected contribution from products under the TDAPA regulation. Giza said phosphate binders under TDAPA contributed about EUR 220 million in 2025, including roughly EUR 40 million above expectations. The company also described faster-than-assumed progress on catheter-related bloodstream infection prevention interventions; one physician-prescribed antimicrobial catheter solution under TDAPA contributed around EUR 90 million in 2025 and was about EUR 70 million in the fourth quarter, Fischer said.
Value Based Care delivered 42% organic revenue growth in the quarter and EUR 29 million of operating income, driven by improved savings rates and FME25+ savings, partially offset by an unfavorable effect from CKCC programs. For the full year, Value Based Care generated EUR 3 million of operating income, improving from a EUR 28 million loss in 2024, which management characterized as a break-even milestone for a historically loss-making business.
Care Enablement revenue declined 3% in the quarter and earnings fell 6%. Fischer said China-related regulatory pressure, including volume-based procurement and other policies, weighed on revenue and earnings, while pricing momentum and FME25+ savings partially offset the impact. In the Q&A, management said China accounts for about 7% to 10% of Care Enablement revenue and cited about a EUR 50 million EBIT impact in 2025, with an expectation of a lower impact in 2026.
Capital allocation and cash flow
The company reported EUR 2.7 billion of operating cash flow for 2025. In the fourth quarter, Fischer said operating cash flow increased year over year due to higher net income, improved cash collection, and prior-year phasing of income tax payments. During the quarter, the company also purchased previously leased production sites in Germany for EUR 181 million.
For the 2025 financial year, management said it plans to propose a dividend of EUR 1.49, a 3% increase from 2024, representing a payout of 33% of adjusted net income and aligned with a target payout ratio of 30% to 40%.
2026 outlook: transition year with TDAPA phase-out and 5008X rollout costs
Management framed 2026 as a transition year with a “very high base” following 2025’s profitability step-up and with temporary TDAPA benefits beginning to phase out. The company guided for broadly flat revenue growth at the group level, citing expected growth in Care Delivery and Care Enablement but a roughly EUR 300 million revenue reduction in Value Based Care due to changes in risk contracting and lower revenue recognition. Fischer said the company does not expect that Value Based Care revenue change to affect earnings.
For earnings, the company expects operating income to remain on a consistent level, with an upside/downside range of a mid-single-digit percentage change, and guided to a group operating income margin range of 10.5% to 12%.
The company detailed major 2026 assumptions discussed on the call, including:
- Business growth contribution of EUR 250 million to EUR 350 million, supported by pricing and revenue cycle management initiatives
- Incremental FME25+ savings of EUR 250 million, with related one-time costs of EUR 350 million
- Inflationary pressure of EUR 200 million to EUR 300 million, including a typical 3% net labor cost increase
- Regulatory impacts of EUR 150 million to EUR 200 million, including TDAPA-related headwinds and the expiry of extended tax subsidies for ACA contracts (with ACA quantified at around EUR 50 million for 2026)
- Strategic investments of EUR 100 million to EUR 150 million, including 5008X rollout costs and IT platform investments such as the transition to SAP S/4HANA
Giza emphasized that the U.S. rollout of the 5008X CAREsystem represents the largest clinic infrastructure transition in the company’s history. The company targets replacing about 20% of the installed base in its own U.S. clinics in 2026. Management said the first year will bring an operating expense headwind from rollout-related costs, including training more than 7,200 nurses and technicians and transitioning about 36,000 patients across 28 states.
Looking further out, the company added an aspiration for 2028, targeting operating income growth with a 3% to 7% compound annual growth rate through 2028, while reiterating its 2030 aspiration for a mid-teens operating income margin at the group level.
About Fresenius Medical Care AG & Co. KGaA (NYSE:FMS)
Fresenius Medical Care AG & Co KGaA is the world’s largest integrated provider of products and services for individuals with renal diseases. The company’s primary business activities encompass the operation of dialysis clinics and the manufacture and distribution of dialysis equipment, dialysis machines, dialyzers, consumables and related therapies. Through its global network of clinics, Fresenius Medical Care delivers comprehensive kidney care, including hemodialysis and peritoneal dialysis treatments, patient education and support services.
In its products segment, the company designs and produces dialysis machines, water treatment systems and disposables such as high‐flux dialyzers and bloodlines.
