Fresenius’ updated guidance generated a lot of confusion as the text deviated somewhat from the presentation and needed some careful reading. The most interesting piece of information was the mental separation of FMC from the group in the guidance. In today’s call, management tried to dispel the idea of separating FMC from Fresenius.
Due to FMC’s quite weakish performance, Fresenius suffered at the profitability level but came in a notch better than expected. Consensus was not meet.
Companies: Fresenius SE & Co. KGaA
Once again, the close connection between Fresenius and its ‘subsidiary’ FMC can be easily detected. As a separation should not be expected any time soon, management might have to be reminded of its tasks as the US headquarters seems to live not only in a different time zone. Despite management’s confirmation, FMC’s contribution to cost savings will be welcomed, but not a necessary prerequisite. The leash looks to be too long in our view.
Fresenius reported an expected set of figures, despite a
Despite being mixed, Fresenius’ Q1 report looks a bit uninspiring, which is not bad as the world creaks under the weight of the virus. But not very things is running perfectly. Kabi’s issues seem to have worsened, which legitimises the CEO change ex-post. Unfortunately, management was not too good at providing many details about the cost-cutting programme.
Figures were a notch above our expectations and slightly above street expectations (top line: +1%; adjusted EBITDA: +2%).
As we had already speculated at a recent target price change (on 05/02/2021), the announced departure of Dr Krick, Fresenius’ dinosaur, could trigger some changes. The first ‘victim’ may be the head of Kabi and we clearly expect more to come. In essence, this could signal to the capital markets that there is something already set in motion. This might change sentiment towards Fresenius as we still see the share is clearly undervalued.
We had been really surprised by the announcement of a cost-cutting programme, which is expected to give Fresenius a nice profitability push by the end of 2023. This is earlier than FMC’s. However, we do not really believe in a coincidence as Fresenius’ management should be the master of the ceremonies but, interestingly, it could be able to achieve this.
The Q4 figures have beaten our cautious expectations as we had taken some provisions into account. Updated consensus was unavailable.
Fresenius’ broad portfolio stabilised the top-line and earnings but the picture has been mixed not just among the divisions. Interestingly this has also proved true on an intra-divisional basis in that the trends have followed the pandemic. The Q3 figures showed some relief, especially in Helios Spain.
The reported figures were a notch weaker than expected, but broadly met consensus.
Fresenius’ business model has shown to be quite resilient, but some businesses did better than others, which looks quite normal to us. However, Helios’ Spanish business seems to have a bit of a cold as its profitability has substantially deteriorated. This could be a communication issue, but we do not fully understand the reason.
Reported figures were a notch better than expected, but consensus was beaten (+3% to 5%). Adjusted for potential pandemic-related effects, FY guidance was lowered.
Despite the unquantified pandemic related costs, Fresenius was able to protect earnings (not margin). This was a bit unexpected as we had factored in some higher extra costs, especially in the clinics’ business and at Kabi. The latter also did better. All in all, the reported figures were stronger than expected.
We appreciate management’s qualitative approach to clarify potential impacts unless figures are available.
Fresenius’ figures were characterised by the mixed developments at FMC and Kabi. The latter division started to face a stronger impact from intensifying competition in North America. This had been expected, but kicked in more strongly than expected. Helios’ performance was in line. All in all, the figures were above our expectations, whereas consensus was broadly met.
We have envisaged for quite a while that Kabi will have to leave its IV drug Shangri La. This has now happened. Should one worry about this? The Q3 figures show that other segments could cushion the effects of greater competition in this segment to a certain extent. What looks more interesting is what is going on in the clinic business where some clouds are gathering over the sun (Helios). Or is it just a penumbral solar eclipse?
Fresenius’ Q2 figures benefited from good organic growth across all divisions, but profitability development showed a mixed picture. Kabi was a (still) positive surprise, Helios moderated as expected and FMC was hit by various expected as well as unexpected issues. Vamed became a small but shining star. Reported figures were more or less in line with our expectations and consensus was also broadly met. The higher top-line guidance is quite nice, but profitability is barely expected to follow.
Fresenius reported a strong set of figures, which confirmed our view. Consensus was beaten. Kabi continued to generate profitable growth and Helios signalled some positive developments in Germany and strong organic sales growth in Spain.
Fresenius’s Q4 figures were pretty much in-line with our expectations adjusted for our too low assumption on FMC, as Helios came in stronger than expected, but Kabi a notch weaker. Consensus was also broadly met.
US pharma giant Pfizer announced that the issues at its sterile injectables plan in Kansas could be solved by the end of 2019 as constant supply could not be maintained after a warning letter from the FDA in 2017.
Fresenius could not re-switch the light of strong growth. The full Q3 figures did nothing to change our past view on the company’s strong growth, but was good enough to light a candle. The increased detail was helpful in gaining a better understanding of the potential Q4 outcome, which we expect to be fairly positive.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Fresenius SE & Co. KGaA.
We currently have 1 research reports from 1
Interim results to 30 September were marked by a return to pre-pandemic sales levels for the core business, with revenues rising 81% to £5.7m, which included c.£1.2m of COVID-related revenues. An adjusted EBITDA loss of £2.4m reflected the incremental costs of gearing up to supply the DHSC with COVID-19 antigen tests, which did not materialise. With the contract with DHSC now having expired, focus turns to other commercial opportunities. The core Health & Nutrition EBITDA of £1.15m covered the c
Companies: Omega Diagnostics Group PLC
ECO’s overweight exposure to China continues to have a bearing on the short term outlook, with volatile pork prices impacting on demand and forward visibility. Whilst prices have rebounded strongly off their lows, stability is needed to restore the market to equilibrium. Trading in the rest of the world remains more positive and in line with expectations. After downgrading at the AGM in September, we push through further China-related downgrades, the net impact is -37% at the EPS level this year
Companies: ECO Animal Health Group plc
Interims results reflect the high level of Group corporate activity, but also a better performance on cash preservation with the Group incurring lower expenditure. In H1, focus was on evolving the business with a NASDAQ listing and the collective £23.8m (net) refinancing; in H2 attention turns back to the clinical pipeline. We await important topline efficacy Part A data from the Phase I/II of MRx-4DP0004 in asthma - a moment that may validate the live biotherapeutic approach in asthma. We also
Companies: 4d Pharma PLC
A positive AGM update from CVS this morning shows an excellent start to FY22, reporting strong 12.4% LFL sales growth. This reflects both the secular tailwind from a growing UK pet population and the continuing focus on optimal patient care/working-up of cases. The company does not comment on the CMA enquiry relating to a recent small acquisition. This is to be expected given the restriction terms under CMA guidelines. The transaction itself is not material in terms of scale. Importantly, the pr
Companies: CVS Group plc
NetScientific (NSCI), the international life sciences and sustainability technology investment and commercialisation group, has arranged an investment of $1m (ca. £0.75 million) into EpiBone Inc, a Life sciences portfolio company. EpiBone is an innovative regenerative medicine company developing a pioneering technology offering a transformational approach to personalised bone graft development for skeletal repair. NSCI's latest investment in EpiBone comprises $734k from its own balance sheet and
Companies: NetScientific plc
H1 EBITDA declined by 45% YoY, albeit this was slightly better than we had anticipated after the pre-close update in August. The beat was cost related (efficiencies/savings). There was a significant gross margin drag though and, while transitory in nature and diminishing in H2, this means further savings need to be realised to hit full year forecasts. This is our view and we retain a good level of confidence in next year’s forecasts. Having de-rated, valuation looks very undemanding now on just
Companies: Venture Life Group Plc
Companies: RWS Holdings plc
ADM Energy* 1.7p £2.7m (ADME.L)
Fundraise and Issue of Equity to Raise £475,000 at 1.5p and Business Update by the natural resources investing company. Conditional Issue of 6,666,667 warrants with an exercise price of 3p each for a period of two years from Admission. Subscriptions by five Directors amounting to £175,000 at the placing price. Additional conversion by debt holders, consultants and service providers equating to £228,500 at the placing price. The funds will be used
Companies: SHED AGL ADME AAU KIBO MKA ORPH SEE SGI
Shield Therapeutics is a UK-based company actively and directly marketing its approved product, Accrufer, in the US. In Europe, it is branded as Ferracru and marketed by partner Norgine. Accrufer is an effective oral product to treat iron deficiency (anaemia). Accrufer is positioned against ineffec
Companies: Shield Therapeutics Plc
Bivictrix 26.5p £17.5m (BVX.L)
BiVictriX Therapeutics, an emerging biotechnology company applying a novel approach to develop next generation cancer therapies using insights derived from frontline clinical experience announced a collaboration to manufacture BiVictriX's antibody-drug conjugates with Abzena Limited, a partner research organisation for integrated discovery to cGMP manufacturing solutions for biologics. The collaboration will allow BiVictriX to cost-effectively manuf
Companies: CHRT CSSG CCS CYAN FIH MIRI YGEN
On track to meet FYApr22E profit forecasts, as investment in chronic condition management solutions accelerates
The digital clinical decision support company has announced its unaudited interim results for the half year ending 31 October 2021. Revenue for the six-month period has held well at £1,618,439 (2020: £1,716,424). Profit before tax is £21,427 (2020: £150,556) and profit after tax £137,352 (2020: £224,825). DXS finished the period with cash on hand of £543,000.
DXS commented that result
Companies: DXS International Plc
Novo Nordisk reported strong Q3 results, with growth again driven by the GLP-1 diabetes portfolio and launch euphoria for Wegovy (obesity drug). Interestingly, management upgraded its 2021 guidance for the third straight quarter. While the group continues to make sound progress in the diabetes market, with its ever-increasing global market share, lack of immediate growth catalysts beyond the largely mature diabetes market is a key impediment. Hence, our recommendation remains cautious.
Companies: Novo Nordisk (NOVO-B:CPH)Novo Nordisk A/S Class B (NOVO.B:CSE)
Shield Therapeutics (STX) successfully launched its key asset, Accrufer (oral ferric maltol for iron deficiency), in the US market on 1 July, in line with previous guidance. The US commercialisation of Accrufer is key to unlocking value (the US iron market is a huge market at ~10 million patients per year and is the key value driver) and FDA approval in 2019 led to the broadest possible label, which encompasses iron deficiency from any cause. The H121 results reported total revenue of £0.5m enti
Companies: Medica Group Plc
Petershill Partners (PHLL.L), has joined the Main Market (Premium), a leading investment group providing bespoke capital and strategic solutions to some of the world's best performing alternative asset management firms. Petershill Partners today comprises minority investments in 19 high-quality Partner-firms, previously held in private funds managed by Goldman Sachs Asset Management (GSAM). The Partner-firms have US$187 bn of aggregated assets under management. The Offer would comprise (
Companies: ABDP EKF HMI JSE SML