Earnings Call: Q1 2021

May 6, 2021

Ladies and gentlemen, thank you for standing by. I am SUGU, your Chorus Call operator. Welcome and thank you for joining the Fresenius Medical Care Earnings Call. Throughout today's recorded presentation, all participants will be in a listen only mode. The presentation will be followed by a question and the the call, followed by Suggi for operator assistance. I would now like to turn the conference over to Dominik, Head of Investor Relations. Please go ahead, sir. Call. Thank you, Suggi. As mentioned by Suggi, we would like to welcome you to our earnings call for the Q1 2021. The call. We appreciate you joining today to discuss the quarterly results. Now it is my pleasure, as always, to start out the call by mentioning our cautionary language that is in our Safe Harbor statement as well as in our presentation and in all the materials that we have distributed earlier today. For further details concerning risks the and uncertainties, please refer to these documents as well as to our SEC filings. We are aware that it is an outstandingly busy reporting day with so many companies in the sector reporting. Therefore, we try to keep the presentation short and leave time for question. The call. As always, we would like to limit the number of questions again to 2 in order to give everyone the chance to ask questions. It would be great if we could make this work again. With us today is, of course, Rees Powell, our CEO and Chairman of the Management Board. Ries will give you some more color around the COVID-nineteen situation and business development. Call. And of course, also with us is Helen Giese, our Chief Financial Officer, who will give you an update on the financials and the outlook. Call. I will now hand over to Reiss. The floor is yours. Thank you, Dominic. The call. Welcome everyone. Thank you for joining our presentation today and for your continued interest in Fresenius Medical Care. The call. I'll begin my prepared remarks on Slide 4. We delivered solid first quarter results in what continues to be a challenging environment as the COVID-nineteen pandemic persists. As we expected, organic volume growth for the quarter continued to the impacted by COVID-nineteen. The first quarter revenue and earnings were adversely impacted by exchange rate effects. The Our business development was supported by an improving payer mix driven by an increased patient base and Medicare Advantage Plans. The And we additionally benefited from an increase in the Medicare ESRD prospective payment system bundle rate. The call. Earnings development during the quarter was supported by phasing and expected lower SG and A expense. Items the Such as travel and meeting spend, as well as corporate costs related to our monitor were favorable in the Q1, the but are expected to increase in the remainder of the year. We are very encouraged by the vaccination progress. The Around 51% of our patients worldwide have received at least the first dose. We continue to make progress With around 1200 to 1400 patients being vaccinated on a daily basis. However, as we all know, COVID-nineteen infection rates remain high in several markets around the world. The We continue to make good strategic process progress in several key areas. 1st, Home dialysis experienced continued momentum in the Q1 with home hemodialysis treatments in the United States the Increasing at a mid-20s growth rate against last year. In the Q1, around 14.6% of our treatments in the U. S. The work performed in a home setting. Secondly, we recently announced an expanded products agreement with DaVita the to bring our home technology to their patients, further validating that our next stage machine is the superior reliable the full hemodialysis product on the market today. Thirdly, in value based care, the call. We are encouraged by the level of interest and engagement we are seeing from payers in the Medicare Advantage part of their business. The A good example is the recent extension of our value based arrangement with Aetna, a subsidiary of CVS, Which will include patients enrolled in Medicare Advantage. With our global sustainability program, We are committed to increasing transparency and aligning with international standards. In addition to the more than 100 key performance indicators the In our non financial report, you can now find SASB, GRI and TCFD tables the on our website for your review. As you recall, earlier this year, we launched our organizational transformation program. The call. We call it FME25 to coincide with our 25th anniversary. We see this roadmap the is a future for value creation. This program is taking an end to end view of our business, the business segments, geographical footprint and multiple cost structures are being reviewed. We are very encouraged by the opportunities that we are identifying in the comprehensive diagnostic phase of our work at this point. The call. To catalyze this process, we are partnering with a world class firm to support our transformation, which is being led by myself. We will update you on the progress of FME 25 probably in the fall. To summarize, the overall development in the Q1 was in line with our expectations for the full year and we are therefore confirming our guidance. The Helen will give you more background in her remarks to come. Turning to Slide 5. The In the Q1 of 2021, we delivered over 13,000,000 dialysis treatments to nearly 345,000 patients. Both the number of patients and treatments are down 1% from a year ago, Reflecting the impact of the COVID-nineteen pandemic. Moving to Slide 6, the This slide highlights our key quality indicators which show the stability of our clinical results in our patients. The call. We continue to see consistent anemia as well as bone and mineral metabolism control, demonstrating that our patients are receiving high quality, the consistent dialysis care. Turning to Slide 7. Here we show the development the of COVID-nineteen infections worldwide compared to what we have seen in our Fresenius Medical Care patient population. The Through the beginning of January, the experience of the general population was mirrored in the cases documented for our own FMC patients. There was no mismatch between global COVID cases and those among our ESRD patients. Thanks to progress made with vaccinations, the The exposure of our patients has since decoupled from the global trend. Infection rates are considerably lower for our patients the even as they continue to rise globally. We are continuing to monitor several hotspots. Turkey the In France, in the EMEA region are of concern to us. In the entire LA region, Latin America region gives us concern, In particular, Argentina and Brazil, but there are still some hotspots in some of the other locations within that region. The call. We know that vaccinations are essential for society to move past this pandemic. And I am proud of the role that Fresenius Medical Care has played the vaccine rollout. In several countries, we've been able to directly vaccinate our patients and where requested in certain countries such as Portugal, We have been vaccinating the general public in our clinics as requested by us from the government. The At the end of March, we were successful in our efforts with the U. S. Government to directly allocate COVID-nineteen vaccines the 2 dialysis patients nationwide. In the U. S, we are in the mid-60s percentage for those patients within our vaccination control the We are aware that there are some patients and staff that are being vaccinated outside of our sphere of control, if you will. The So more to come on this, but we believe our numbers are higher than the mid-60s at this point. We'll do some more work to try to accumulate and understand those numbers as best we the in the future months to come. Turning to Slide 8. As we anticipated, the COVID-nineteen related excess mortality on a global basis continued to accumulate in the Q1 at a decreasing rate. The Globally, on a last 12 month basis, excess deaths due to COVID-nineteen were further accumulating decline of the incremental excess mortality compared to the Q4 of last year, and we expect this number to further decline continuously. Call. We are encouraged again by the vaccination progress and the lower incident rates of our patient population. We still have a way to go before we reach herd immunity And we will obviously continue to monitor the various variants that are out in the world today and looking at potential surges in the more troubled areas. The Turning to Slide 9. In the Q1, we achieved revenue of €4,200,000,000 call. Reflecting 1% growth in constant currency. Our net income declined by 6% on a constant currency basis. The call. As mentioned in the beginning, COVID-nineteen negatively impacted our top and bottom line and the headwinds from foreign currency translations the This reflects a favorable impact on earnings development from phasing and expected lower SG and A expenses, which we've stated will continue to reverse later as we go through the year. Turning to Slide 10 and organic growth. The We achieved 1% organic growth during the Q1, supported by our global footprint and solid business results the from our Healthcare Products business. Healthcare Products delivered 5% organic growth relative to a very solid Q1 in the prior year. The call. On a regional basis, organic growth was slightly down in North America. Here, we were not only challenged by the impacts of the COVID-nineteen, the but also by winter storm Yuri, which occurred in February and severely impacted Texas, Louisiana, Mississippi and Arkansas, Significant Markets for us. EMEA, Asia Pacific and Latin America contributed with positive organic growth. The And as we just discussed, foreign currency effects and COVID-nineteen adversely impacted our reported growth the quarter. Turning to Slide 11, in the Healthcare Services. The call. In the Q1, Healthcare Services delivered organic growth of 1% overall despite the significant headwinds from COVID-nineteen. The The adverse COVID-nineteen impact on organic growth in the healthcare services business amounted to around 350 basis points the quarter. Growth was driven in particular by the business in Asia Pacific, supported by strong growth in their daycare hospitals the And my contributions from some acquisitions. On top of the negative COVID-nineteen effect, exchange rates the In lower calcimimetics reimbursement, we're weighing on our development. And turning to my last slide, a word on products. The Our product business achieved 5% organic growth for the Q1 and they continue their growth story. The This growth was driven by sales of chronic machines as well as strength in home products, including both PD and home hemodialysis product sales. The The Asia Pacific region had a particularly strong start to the year, delivering 11% organic growth. This was mainly driven by a recovery in the Chinese products business. Growth in the quarter was partially offset by exchange rate effects, lower sales of products for acute care treatments, Acute Cardiopulmonary Products and Incentre Disposables. With that, it's my pleasure to turn it over to Helen, who will take you through the earnings development As well as our outlook for 2021. Helen? Thank you, Reese. Hi, everyone. I hope you're all staying safe and well. The call. I'll pick up on Slide 14. For the Q1, total group operating income amounted to €474,000,000 the call, which is a decline by 8% at constant currency. The chart on the left illustrates the contribution from each region as well as Funding Regional Margins. Our first quarter net income declined by 6% on a constant currency basis, call. Including the negative net COVID-nineteen effect of €79,000,000 Excluding this impact, the fiscal year. Net income growth would have been in the high single digit range. Contributing to the decline in profitability were higher personnel call. In North America, in the Q1 of last year, there was a positive impact from the divestiture of some care coordination the litigation assets as well as from the partial reversal of a revenue recognition adjustment in North America. The Both effects increased our base for comparison. On the positive side, we saw an improved payer mix due to growth in Medicare Advantage. Call. This was driven by 2 effects. First, we made a sizable step up due to the 21st Century Cures Act coming into effect on the 1st January. The This allows patients that have already been diagnosed to enroll in Medicare Advantage for the first time. The second effect is the continued growth in Medicare Advantage insured number of patients since the January step up. In line with our expectations, the total Medicare Advantage book of business has grown to a high 20s percentage range. In addition, we benefit from the Medicare ESRD bundle rate increase of 1.6 the the web. For example, travel and meeting spend. It may be hard for us all to remember, but we were still traveling for much of the Q1 in 2020 the call. Before it all came to a halt in March of last year, we expect increased spending in this category to resume later in the year the call as travel becomes viable again. As anticipated, our corporate costs were lower in the first quarter than the run rate might suggest. This includes costs relating to our monitorship, which are expected to increase later in the year based on the current activity plan. Our guided range remains at €480,000,000 to €500,000,000 for 2021. Therefore, the favorability will revert during the year. The call. It's also important to keep in mind the peculiarities of the 2020 base we are comparing to. The call. In the Q1 of 2020, we already had around €40,000,000 in COVID-nineteen related impacts on net income, the call. Such as PPE costs, higher wages for workers in isolation clinics, childcare stipends and valuation effects. Call. It wasn't until the Q2 of 2020 that we received CARES Act funding to cover those costs, including the costs that we incurred in the Q1 the financials and for the valuations to recover. Therefore, we will compare against an artificially inflated high base next quarter. The call. Before I move on to our cash developments, I want to point out 2 areas where we have further simplified our reporting this quarter. The call. As our value based capabilities and arrangements are so embedded in our services business, we will no longer report care coordination separately. Lee. We run the business in an integrated way today and therefore it did not make sense to keep this separate reporting approach. The 2nd, we are no longer breaking out non dialysis products. Historically, this was an additional line under the EMEA region. But as we now sell those products in other regions. We did not want to add even more line items and further increasing complexity for relatively small amounts. The I'll move on to Slide 15. During the Q1, we generated operating cash flows of €208,000,000 the call. And the resulting margin of 4.9%. In addition to the lower earnings that we already outlined, the decrease in net the call. Was driven by seasonality in invoicing, a delay in Medicare payments due to a systems issue on the government's end the and patient conversion to Medicare Advantage plans, which have a longer payment period than Medicare. The call. Our net leverage ratio for the Q1 of 2.9x is slightly below our target range of 3x to 3.5x. The call. That ratio increases to 3.1 times when U. S. Federal funding relief and advance payments are excluded. Call. As a reminder, these advance payments will recoup starting April 1 through early 2022. The call. The ratings presented at the bottom right have all been reconfirmed this year and support our solid financial position. The conference call. Turning to Slide 16. The Q1 development and our full year assumptions continue to hold. The Therefore, we are confirming our 2021 targets as outlined in February. For 2021, we expect low to mid single digit revenue growth the And a decline in net income of high teens to mid-20s. While we are very encouraged by the vaccination progress among our patient base, COVID-nineteen infection rates remain high in several markets around the world and there are still hotspots and unknowns around the new variants. The call. We expect excess mortality to continue to accumulate throughout the Q2 of 2021 before normalization of the mortality the call. Thank you, sir. Thank you, sir. Our first question comes from the line of the call. Since our last update, due to COVID-nineteen, the U. S. Government has taken some actions that largely offset each other. The first being the extension of Medicare sequestration through the remainder of the year. While certainly positive, the call. The impact is reduced, especially when you take into account the number of patients that have moved into Medicare Advantage plans the That lowers the number of patients covered by Medicare in our mix. The second measure is the delay of the voluntary CKCC models the call. As the government did not have sufficient time to prepare for the planned April 1 start and is now delayed to January 1, 2022. The call. The profits budgeted for this voluntary model will now not be realized this year. We continue to assume that no major public relief will become the call. We will continue to actively monitor the financial effects of COVID-nineteen on our business, including balance sheet implications. Call. And as I spoke about earlier, we also expect the lower SG and A spend and corporate costs in Q1 to reverse for the remainder of 2021 the call and be in line with our outlook for the full year. While there are a lot of moving parts, with all of this the That concludes our prepared remarks, And I will now turn back over to Dominik to prepare to begin the Q and A. Thank you. Thank you, Helen. Thank you, Rhys, for the presentation. The I do hand it back to Suggi to open the Q and A. Suggi, please go ahead. Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. In the interest of time, please limit yourself to 2 questions only. The call. The first question is from the line of Tom Jones, Berenberg. Your question please. Good morning. Sorry, good afternoon, I suppose. Good morning to you. Thank you for taking my questions. I'll keep the The first was just one for Helen maybe. I wondered if you could give us a ballpark idea of what you thought the excess COVID related costs were in Q1, the uncompensated costs. So I'm not talking about the operating leverage effects, but just the pure the additional costs for PPE in childcare, etcetera, etcetera. And then the second question, which is the Probably more one for Rees. Just looking at the absolute patient numbers across the business at the end of Q1 versus the end of Q4, the decline In terms of overall patient numbers was less than 1%. So it won't take much of a swing, I guess, in excess mortality to get you back to quarter on quarter the patient growth across the entirety of the business. Is it reasonable to expect that metric the positive in Q2 or is that something we should really not be thinking about until Q3? The Helen, you want to go ahead? Yes. Call. Yes, happy to, Rhys. Hi, Tom. Hope you're well. Hi, Helen. So the direct costs themselves, if you mentioned the PPE and the ongoing the supporting costs there. It's roughly around $30,000,000 of that $79,000,000 on the net income level. So that's, I think, a direct comparable of €30,000,000 I should say, in terms of the direct cost impact. Okay. That's helpful. Obviously, as you know, there's the yes, there's the revenue impact and the downstream impact as well that we incur, but the kind of the direct cost This is roughly around $30,000,000 Perfect. And then on the patient growth? Yes. Hey, Tom. Hope you're doing well. I would say I'd be thrilled for it to be in Q2. I think it's probably going to be in Q3, but if we see some good movement in Q2 Q2 is going to happen. We'll communicate that. But I think it may be latter very end of Q2, end of Q3. So we'll kind of split it that way, I guess, I would say. The Perfect. And then maybe just a quick follow-up, if I can be cheeky. If we look at H2, a number of other commentators the The industry have talked about potentially lower than normal mortality through the back half of the year assuming COVID goes away. The Is that something you would go so far as to comment on or would you prefer to reserve judgment on that at the moment? Call. I think it would be great to comment on it, but my better judgment tells me let's let it sit and then we'll keep you updated. Don't know that I want to be as bullish the the call. The next question is from the line of Veronika Duboyowa from Goldman Sachs. Your question the Hi, good morning, Helen and Reese, and good afternoon, Dominic. Thank you for taking my questions. I will also keep it to 2. My first one is Sort of a follow on to Tom's, just trying to understand the shape of the excess mortality, those 3,000 patients that you saw. I hate to ask for month by month numbers, but I'm going to. And maybe if you have a comment on sort of how April has shaped up given the significant amount of progress you've made on vaccinations. That would be really helpful to understand that shape of the distribution of the 3,000 excess deaths. And then my second question is looking back at the U. S. Business, Helen, the Thank you for the simplified disclosure, but I must say it's made understanding revenue per treatment movement a lot more difficult. So if I can just ask for a quantification the question of what happened to revenue per treatment year on year in the Q1. I know you've alluded to sort of obviously good progress, but if we can actually precisely get a number for where that revenue treatment stood and how you're thinking about the sustainability of that number into the remainder of the year? Thank you. The call. Hey, Brian, it's Reese. I'm just looking at my notes here. So on the the CS mortality. I don't have it month to month. I'd have to get it for you, quite honestly, the And I'm willing to do that. I just don't have it. As I sit here and look at all my notes, that's something we didn't have. I guess what I I don't know where April is today. My assumption, which is always dangerous for me to assume anything, but my assumption would be it probably should be the A little better based off what we saw, but let's see where that goes. I if any other Clarity I can give you. I just don't have those actual numbers on a month to month basis to be able to give them to your fingertips. The And I'll jump in on the RPT. Obviously, we have stayed away from speaking to the RPT the And I know that causes some frustration, but I think maybe what I would just reconfirm here are the pluses and minuses that are going into that revenue development. The call. As you know, we've got the positives from Medicare Advantage increasing. We've got the bundle rate increase. We've got stable commercial mix. The call. On the negative side and the significant negative that we always flagged in half 1 was the calcimimetic piece. And then don't forget, we've got the impact in this quarter of the prior year revenue WACC adjustments as well. So I think you can tease out the pieces the fact that you're familiar with that, Veronika. And Helen, do you feel comfortable with this revenue per treatment? I guess one of the questions that's come up on your competitors' call was just film mix element. And to the extent it's COVID driven, is there a risk as you guys think about it that revenue treatment softens as we move through the remainder of the year? Or do you kind of looking out at this point in time feel this is a pretty sustainable the Adjusting for noise around calcimimetics, you feel this is a pretty sustainable level. Yes, I think we've been consistent in how we spoke about commercial mix. And we are saying that the COVID effect is across our entire book of business and is not discriminating in one book of business or the other. So for us, we're seeing very stable commercial mix and that's unchanged. So yes, I think your comments and observations are right. We have the noise on calcimimetics, but we feel really good about how The rate and the mix is developing. That's really helpful, Lisa. And I'll follow-up with Dominic on the monthly numbers. That's fine. Thanks, guys. You bet. Thanks, Veronica. The next question is from the line of Lisa Klaive Bernstein. Your question please. The Hi. Rick and Helen, I was surprised not to see an update to guidance given the profit boost from the extension of the sequestration suspension. You mentioned the offset was the 9 month delay to the CKCC program. Can you give us more color on your plans for the structure and size of that program. The implication is that you're expecting an annual EBIT contribution of something like $60,000,000 from this program. So is my math the And then second, in the absence of any specific details on RPT or the size of Care Coordination standalone. Can I make a plea for some sort of quarterly details, so that we can monitor progress? I guess RPP doesn't really make Because some of your customers are including are giving you a bundled rate, including both dialysis and integrated care. So RPT is actually the Slightly artificial, but could you give us numbers like the number of patients in an integrated care program on a quarterly the I'm just thinking of other things that could potentially be helpful for us to monitor. And then very last question, Medicare expansion to the 60 to 60 4 population. What proportion of your private patients are in this age bracket? And the the Hey, Lisa. You want to go ahead, Helen, on sequestration in CKCC and the RPT question? The call. Yes. As I mentioned on the call, we broadly expect the sequestration, the extension of the CKCC delay to mostly offset each other. I think you're a little high in your the numbers of the kind of the CKCC net income impact in 2021. But I think we're probably closer to the Maybe more of a $40,000,000 not the number that you quoted due to the lower patient numbers and MA that you mentioned. Chris, do you want to take the other? Yes. And at least I would the Say, there was a time when we did talk about patients that we gave numbers on the number of patients in integrated care models. So I think we could the Think about doing that again, if that's helpful for you. I appreciate you understand. RPT really is kind of sliding by the wayside given how much value based care we're doing, those sort of things. So I think Helen and I can think about that. Can you just repeat your third question? I was too busy writing. I didn't get it all down just right. I know it's an age bracket, but just Would you repeat it please for me? Yes. Just thinking through the potential for Medicare to expand to the 60 to 64 population, what proportion of your private patients the are in this age bracket roughly. And also, are these mainly EGHP plans? Are they exchange plans? I'm just trying to get fence for the potential leakage if that expansion does happen. Okay, I got you. To be honest, I don't know that I can tell you what that percent is today. Let me take a different approach from everything that we're doing, everybody I'm talking to in DC. The I don't think it's likely we're going to see a movement. Right now, I think the Biden administration, he's got bigger fish to fry, things he wants to do. The The progressives don't like it, but it seems like to me that the other side of the party does not want to go there. So at this point, I think it's less likely. That doesn't excuse me, not trying to give you a range, but I honestly don't know today, but we can follow-up with that. The And who's our next question coming from, Dominic? The next question is from the line of Oliver Metzger, Commerzbank. Your question please. The call. Hi. Thanks a lot for taking my questions. The first one is on patient mortality. The A little bit in the direction as Roenka has asked. So, yes, we saw a peak of infection rates in January, so mortality the Do you have the infection rate the Over the last 6 weeks among your patients, whether this was different to the overall the infection rates in the respective countries. So that's question number 1. The second one, I'm a little bit surprised the Of your wording, so I've served a more prominent reporting of the the Yes, or the bundle rates compared to previous years. We had a similar increase in the rate in the last years. Now this year we have Medicare Advantage, that's for sure. But is there any reason why you mentioned this rate increase even more prominent than in previous years? The call. Hey, Oliver. How are you? It's Reese. I'll take both of those. So We did see the decline in January. As I say, I don't actually have a February number in front of me because we look at it on a quarterly basis. So I'll have to the Come back and get that at some point. Infections over the last 6 weeks, we've certainly had some. I can tell you the last the The data I saw was in early April. The way we pull the data together and analyze it, I don't have that as through the last the 6 weeks specifically and we're bridging over a month or 2. So we'd have to do some work on that. But I think generally We're going to continue to report on a quarterly basis, but obviously we think we're headed in the right direction at this point hoping that we can continue to the See vaccinations grow and that the variants kind of stay out of our hair, if you will. I think, I wouldn't overly read anything into my Comment about the SRD bundle rate. I'm happy to get an increase whenever we get it, but just in the things that we believe were important to note the that are working to our advantage, if you will. And the quarter was obviously what we're seeing with Medicare Advantage, but hey, we're not going to walk away the And I talk about the fact that government saw fit to give us 1.6% increase, we'll take it and we'll mention it. It's always important, Oliver, that you don't shoot Get horse in the mouth, if you will. Okay. Great. Thank you. You bet. The next question is from the line of Michael Jungling, Morgan Stanley. Your question please. Great. Thank you and Good evening, everyone. Good morning. I have two questions. Firstly, on the independent dialysis clinics, can you comment on what you're observing with respect the to their own financial strength and whether COVID-nineteen has weakened them, resulting in sort of excess closures of these independent clinics and whether those could fuel your like for like store growth over the coming months quarters. And then secondly, on Medicare Advantage, can you comment on what is happening to the rate relative To what we saw, what you incurred last year, our insurance companies now pushing back harder as they have to accept more patients and therefore the Trying to pressure you on price or perhaps focus you a lot more on saving costs for the year for the patient. Thank you. The call. Hey, Michael, it's Rhys. I'll take number 1 and Helen, if you wouldn't mind, you could jump in on number 2. The What I would say at this point, Michael, we are certainly aware in the independent market, some folks that are struggling. The call. There is a number of ways that that can play itself out, could be outright acquisitions, could be that you just the Try to help them figure out where they're going to go in terms of do they want to keep that clinic, do they want to sell, do they want to join, do they want to merge. The So we're open to all of those sorts of things which get at exactly what you're asking me is, is that a way to get some of your growth back? Certainly it would be, the I have to say I'm not hearing from my guys in North America that this is a weekly occurrence that they're hearing about this At this point, we would certainly be open to that and we know what's happening in some cases and would expect it's probably going to continue, but we'll see where that plays out. The call. Hey, Michael. This is Helen. On your second question, on the Medicare Advantage the pricing. Most agreements are locked in from a pricing and rate perspective beyond 2022. So that's not much of a current discussion. And I'm sure as you can appreciate, we are also kind of increasing our significant and more the value based care contracting in this book of business as well, as we mentioned with the Aetna CVS agreement. The call. So we're kind of feeling good with where that's all progressing. Thank you. The next question is from the line of Falko Friedrichs, Deutsche Bank. Your question please. The Thank you very much. Two questions, please. Firstly, on FME25, the When do you plan to provide the details for this program to us? Riese, I think you mentioned in the fall, Would that mean with Q2 results or rather later than that? And then secondly, could you provide an update on home dialysis and the progress you were able to make here in Q1 and just in general how the training is really working out for home dialysis in this pandemic environment. The call. Hey, Falco. Nice to see you or nice to hear from you. The FME25, I would not put a lot of stake in Q2, the Which I think when we talked about back half of the year, everybody kind of gravitated to, well, is that going to be July when you do your Q2? The call. I sincerely mean the fall and that leaves us some room as to when we do that. We are neck deep in work and analysis and the and the things that we're doing and we don't want to rush sitting down and giving you a sense of how we're going to go forward and where it's going to go. This the It's a big task when you think about relooking at your entire operating model and how you want to go forward. So I would stick with the fall. I Can't say July is fall, so that's not going to happen. But I look at the fall and September and beyond that. So if we are ready the Sooner, we're certainly going to be willing to do that, but in fact when I think about the work we've yet to do and decisions we need to make and things we need to consider and start to Consider the implementation on, I think probably follows where I will leave our next communication opportunity. Home dialysis, thank you for asking, the is continuing to do well. We had again, we were up about 20 basis points sequential quarters in terms of the number of treatments at home. We continue to see home hemodialysis the In the mid-twenty percent growth and PD is still growing in the single digits. So we are feeling good about where we are. The training seems to be working. I think the infrastructure and the assets that we put together are working well. We continue to learn and to make changes as We need to be as effective at training as we can. I think a good bellwether, if you will, Falko, On what we're doing here is also the fact that DaVita has come to us and we've included the NxStage product line the In our latest agreement that we've signed with DaVita, they have traditionally done a lot of PD at home, but not much the And the fact they've come to us on HHD, we feel good about that. So I think we're making good progress. We just keep working at it. Okay. Thank you. You're very welcome, Falko. The next question is from the line of Veronika Dubajova from Goldman Sachs. Your question please. Hi guys. Thank you for squeezing me for a follow-up. I just was Going to ask about the SG and A savings in the Q1 that you called out, Helen, in your prepared remarks. Can you quantify them? And I guess, What's your expectation about how they get phased in through the rest of the year? Yes. Thanks, Veronika. We obviously have the Some tough comps for Q1 and Q2 as it relates to kind of how we got hit with the COVID valuation effects last year. So I would roughly say of the SG and A decrease That we saw quarter over quarter, probably breaking it into 2 thirds related to last year, 1 third where the call. I'm seeing just lower spend levels in the quarter and that will be phasing that we kind of had some delay with the sponsorship the visits, for example, due to travel. So we start to see that spend catch up in the back half. The So that's about last 3 quarters, not in half already. So yes, that's how I would break it down, like a 2 thirds, 1 third split of prior year effect and then onethree that will come back over the course of 2021. Okay. And that's when you look versus Q1 of last year? Yes, exactly. That's great. And then, yes, of course, what we'll have in Q2 is the true up of all those the Not just the COVID expenses, but we saw this big fluctuation in the valuations as well in Q1 and Q2. The So that's also distorting some of the SG and A base from a valuation perspective. Yes, understood. Thanks. The conference call. There are no further questions at this time. I hand back to Dominik for closing comments. The call today. So thank you very much for joining the call today. I know it was a tiresome day for all of you. Nevertheless, thanks for joining. And With that, we wish you a good rest of the week and hope to hear you at the latest with the next quarterly results. Take care. The call. Thanks, everyone. Be safe. Be well. Thank you. Bye bye. The conference. Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for joining and have a pleasant day. Goodbye.