Fresenius Med. Care: A lot of questions to be answered in H2

BUY, Fair Value EUR53.5 (+13%)

News published on July Wednesday 31, 2013
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While Q2 organic growth came in as a positive with 5% in Q2 versus 4% in Q1 driven by both services and products, questions during the conference call were mainly focused on three elements : The Center for Medicare Services (CMS) proposal on dialysis reimbursement cuts, cost efficiency programme at FMC and the ability of the company to reach guidance. For the latter, we are giving FMC the benefit of the doubt to produce a substantially better H2 in order to reach the low end of the guidance (USD2,300bn in EBIT and USD1.1bn in net income). On the profitability side, November’s investor day should provide more clarity. Finally, management remained cautious over addressing the CMS proposal but mentioned that it has never seen such a coordinated effort from dialysis stakeholders.

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