Fresenius SE: Good Q2 results. KABI does more with less (EBIT guidance upgrade)
Fresenius SE: (BUY, Fair Value Fair Value EUR83 (+19%))Good Q2 results. KABI does more with less (EBIT guidance upgrade)
Fresenius reported good set of numbers in Q2 with revenues up 5%CC to EUR8.4bn, in-line with consensus. After a strong Q1, KABI continues to show strong growth at +6%CC despite IV sales that are slowing down (+1% organic). However, KABI is doing more with less as the division’s EBIT is up 100bp (ex biosim) to 20.3%, driven by the US with margin up 140bp (above 40%). We would expect this trend to continue in H2 (continued IV drugs roll-out and shortages). Adjustment for HES in FY2018 triggers a +400bp upgrade in KABI’s CC EBIT growth guidance (-2%+1% vs -3%-6% previously). While Helios Germany shows some expected weakeness in Q2, it is offset by strong quarter at Quironsalud. In all Group’s guidance are maintained (revenues 5-8% revnues growth at CC and Net Income growth 6-9% at CC).
Fresenius is a health care group providing products and services for dialysis, hospitals and outpatient medical care. Co. operates four business segments: Fresenius Medical Care; Fresenius Kabi; Fresenius Helios; and Fresenius Vamed. Fresenius Medical Care provides dialysis care and dialysis products for patients with chronic kidney failure. Fresenius Kabi is engaged in the provision of generic drugs, infusion therapies, clinical nutrition products, related medical devices and transfusion technology. Fresenius Vamed manages projects and provides services for hospitals and other health care facilities. Fresenius Helios is a private hospital operator which only operates in Germany.
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