Research Update: Fresenius SE Outlook Revised To Stable From Negative On Solid Operating Performance And Good Deleveraging Prospects

We anticipate Fresenius SE will improve its operating performance over the next 12-24 months, largely owing to strong organic growth in the Kabi and Helios operating segments, an acceleration of its cost savings program, and the partial divestment of Vamed in 2024. In our view, Fresenius will continue expanding Kabi's increasing segments in biopharma, medical technology, and nutrition, while enjoying the stability in earnings from Helios and realizing structural cost savings. In our base-case scenario for 2024 and 2025, we expect the company will maintain leverage comfortably at 3x-4x, while free operating cash flow (FOCF) will be €1.3 billion-€1.6 billion on average. We therefore revised our outlook on Fresenius to stable from negative and affirmed our 'BBB/A-2' long-term and short-term

...- We anticipate Fresenius SE will improve its operating performance over the next 12-24 months, largely owing to strong organic growth in the Kabi and Helios operating segments, an acceleration of its cost savings program, and the partial divestment of Vamed in 2024. - In our view, Fresenius will continue expanding Kabi's increasing segments in biopharma, medical technology, and nutrition, while enjoying the stability in earnings from Helios and realizing structural cost savings. In our base-case scenario for 2024 and 2025, we expect the company will maintain leverage comfortably at 3x-4x, while free operating cash flow (FOCF) will be 1.3 billion-1.6 billion on average. - We therefore revised our outlook on Fresenius to stable from negative and affirmed our '###/A-2' long-term and short-term issuer credit ratings on the company. - The stable outlook reflects Fresenius' focus on its two main operating segments with a leaner business structure that will support solid operational performance...

Research Update