Fresenius SE: Solid Q3, Kabi should reassure, FY guidance confirmed
BUY, Fair Value EUR112 (+20%)
Fresenius SE released Q3 figures which were roughly in line with expectations with sales growing at 9% CER at 9M to EUR15.0bn. With a soft Q2 (1% organic growth), Kabi should reassure investors by posting a c.7% organic growth in Q3 driven by a rebound in the US (7% organic growth versus 6% in H1). Helios’ organic growth was slightly lower than estimated at 4% in 9M versus 5% in H1 but profitability remains excellent (+120bps vs. last year at 11.5%) and allows Helios to target the high end of EBIT guidance. At the group level, the EBIT margin was 50bps lower than expectations due to FMC as well as the Fenwal integration costs. However, this was mitigated by lower interest expenses and helped Fresenius SE to post an EPS of EUR1.52 for the quarter. FY guidance is confirmed with sales growth between 7-10% at CER (9M : 9%) and net income growth between 11-14% (9M : 12%). Buy maintained.
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