Medical technology: FMC lowers outlook – China restructuring weighs on

The medical technology group's operating result is developing better than expected. But the new CEO remains cautious and adjusts the forecast.

FMC: The dialysis specialist is repositioning itself in China. Photo: Fresenius

Frankfurt. Dialysis provider Fresenius Medical Care (FMC) has dampened its expectations for the year as a whole after a significant decline in profits in the third quarter. The adjusted operating result is expected to stagnate or shrink by a mid-single-digit percentage in 2026, the company announced on Tuesday.

Until now, FMC had also considered growth of this magnitude to be possible. The new CEO Shervin Korangy, who took over the position just three weeks ago, said that they now expect development in the lower half of the previous forecast range.

In the last quarter of the year, consolidated earnings fell by 42 percent to 160 million euros. The adjusted operating result fell by five percent to 545 million euros, although analysts had feared a steeper decline to an average of 518 million euros.

Sales rose slightly by one percent to 4.94 billion euros. The balance sheet was burdened primarily by one-off costs of 108 million euros for the realignment of the China business. There, FMC is discontinuing local production of an older dialysis system and withdrawing from peritoneal dialysis.

The numbers were received mixed on the financial market. The adjusted operating profit exceeded expectations by five percent, wrote analysts at the investment bank Jefferies. At the same time, however, they pointed to the continued decline in treatment numbers in the important US market. The FMC shares listed in the leading index Dax lost a good two percent in early trading.

US business is also developing difficult

The numbers underline the difficult situation in which the world's largest dialysis provider finds itself. Korangy surprisingly moved to the top in mid-October after the supervisory board replaced the previous boss, Helen Giza, after almost four years. The control committee said at the time that Giza lacked a convincing growth strategy and new ideas.

The American Korangy, who previously headed the ophthalmology specialist BVI Medical, is now expected to return FMC to its growth path. “There are unique opportunities to fundamentally improve performance,” said Korangy and at the same time qualified: “We are cautious in assessing our current business development.”

US business remains one of the largest construction sites. There, FMC continues to struggle with declining patient numbers. In the third quarter, the number of treatments in the USA fell organically by 1.1 percent, after a decline of 0.9 percent in the previous quarter.

In addition to clinic closures as part of the US government's ongoing austerity program, the company also had negative effects from government reimbursement regulations in the USA. However, the board is hopeful about the introduction of a new dialysis machine in the United States, which is intended to ensure fewer hospital stays and higher survival rates for patients. So far, around 16 percent of the machines in US hospitals have been replaced.

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