Good morning, everyone, and, for those dialing in from different time zones, good whatever time it is, wherever you are, welcome to our Capital Markets Day. I'm Dominik Heger, and today I'm in charge of investor relations, and at least for today I'm also your tour guide through this exciting and hopefully also reigniting day. Before we dive deep into the topics, let me say it is actually a real pleasure to see you all here in the room in person. It's our first physical Capital Markets Day in eight years. To all of you joining virtually, thank you for following on screen. You will unfortunately miss the opportunity to see our product show outside the ballroom and miss our deep dive sessions in the afternoon.
However, I hope all of you will find this day as positively exciting as we have planned it to be. Otherwise, I'm not in charge of investor relations afterwards. Before we get started and a lawyer hits me, let me quickly refer to our safe harbor statement, which you can see on screen. Our cautionary language that is in our safe harbor statement, you will find in our presentations and in all the materials that we have already distributed today. For further details concerning risks and uncertainties, please refer to these documents. Let's take a quick look at today's agenda. After our press release this morning, you will already have a quite good idea on what we will be talking about today. We start with our FME Reignite session, an energizing start to the day.
With a name like that, you can expect the temperature and the excitement to rise. In this session, you will hear about the new strategy and the future of this company from our CEO and Chair of the Management Board, Helen Giza. You will hear about the underlying trends from our Global Chief Medical Officer, Dr. Frank Maddux. Our CFO, Martin Fischer, will walk you through the financial heartbeat of Fresenius Medical Care. After the presentations, we will bring back on stage all three of the presenters for a joint Q&A session. For logistical reasons, only the guests here in the room can ask questions. Pressing star one does not work this time. I'm sorry. If you have not already visited our showcase, our Care Enablement showcase outside the ballroom, you will have another opportunity to do that during the lunch break and even before the evening reception.
After lunch, we will move on to the deep dive breakout session. Unfortunately, the deep dive breakout sessions are not suitable for a webcast. However, we will make those presentations available after the event on our website. We have three breakout sessions: Care Delivery with the CEO of Care Delivery, Craig Cordola; Care Enablement with the CEO of Care Enablement, Dr. Katarzyna Mazur-Hofsaess; and Joe Turk, who has won the award for the longest title in this company, who is the Global Head of Home Critical Care Therapies and Head of U.S. Commercial Operations. Wow. We have artificial intelligence at Fresenius Medical Care, which will be presented by Dr. Frank Maddux and Dr. Len Usvyat, our Head of Renal Research Institute. These sessions are designed to allow for really ample Q&A time and opportunity to discuss in a smaller group setting. Use this opportunity, please.
At 5:00 P.M., we will all meet back here inside the ballroom for the closing of today's official program. After a short break, just enough time to check your emails, those of you who have registered for the evening reception are warmly invited to join us. Now I come to the flight attendant part. First, to the physical emergencies. In case of emergency, please follow the clearly marked exit signs and the instructions from our staff. Restrooms are located on both floors. Life vests are not under your seat, but we do not expect rain despite it is London. Second, to the digital emergencies. The Wi-Fi password was provided with your name badge. You can find the login details at the bottom left of your badge. You will also find a QR code on your name badge. Simply scan it to access all the presentations later.
Now, please put all your devices in silent mode. Fasten your seat belts for the takeoff. Thank you.
Dialysis is life-saving. If it wasn't for dialysis, my daughter wouldn't be here.
At Fresenius Medical Care, care isn't just what we offer. It's who we are. It's in our name. It's the commitment of providing exceptional care every day, not just to treat, but to understand. As the world's leading kidney care company, we're focused on helping those with kidney disease live the best quality of life possible. Of the 4.2 million people on dialysis worldwide, nearly half use our products. Our best-in-class operations have led the way in dialysis care and technology for decades, and our legacy of innovation continues, meeting the evolving needs of our nearly 300,000 patients. We take pride in a holistic approach to kidney care, from researching new therapies and technologies to the manufacturing of products, to the largest global dialysis clinic network, to value-based care, to meeting patients' needs wherever they are.
By offering high-volume HDF in the U.S., we once again have the opportunity to set a new standard of care. By expanding transformative home therapies, we put choice, flexibility, and true independence firmly in patients' hands. It's what to expect from the leader in kidney care. Care includes managing sustainability successfully by creating lasting economical, ecological, and social value for a better tomorrow. It's our people that make the difference and shape our culture. From bedside to breakthrough innovation, it's the commitment and expertise of our people that create value and drive our leadership position. Our team is dedicated and united by a single goal: improving patients' lives.
You can get better. You will get better. You listen to your doctors. You listen to the people in clinic. Never give up. Never think it's over. Keep pushing and pushing and pushing every day.
At Fresenius Medical Care, it's our dedicated care that keeps us focused on our vision of creating a future worth living for patients worldwide every day.
Pandemic, excess mortality, labor shortages, culminating in the company's low point in the summer of 2022. Transformation, turnaround. This is what you've heard me talking about over the last three years. Today marks the start of a new chapter for Fresenius Medical Care. Welcome, everyone. It is wonderful to see so many of you with us in London. A very good morning to those of you joining online. Thank you for being part of today's event. We have clear ambitions for sustainable, profitable growth with a stronger base and real momentum behind us. We are excited to share what is next, where we are heading, how we will get there, and how we will create value for our patients, our customers, and you, our shareholders. Today's FME is stronger, more resilient, more proactive, and with a very clear strategy about where it is heading.
The last five years have been tough, externally and internally. When I took over as CEO at the end of 2022, I set a new three-year plan with short-term strategic priorities, and we have remained laser-focused in executing against them. Today, I will spend time talking about growth and innovation and continuing to set the standard of care for our industry. This is not new territory for us. Advancing kidney care is our DNA. Since Fresenius Medical Care's founding almost 30 years ago, the clear vision was to strengthen our position as the dialysis med tech leader by continuing to reimagine therapy options through innovation. To implement the innovation and to set the standard of care, we forward-integrated by moving into the dialysis care business. This was the starting point of our vertical integration journey.
Throughout this time, whether by leading, partnering, or acquiring, we have continuously elevated the standard of care for patients with kidney disease. From championing single-use dialyzers as the standard in the U.S. to launching the 5008 machine platform and creating the leading value-based care organization in the renal space, we have consistently driven and led advancement in our industry. This relentless focus on advancing kidney care has shaped who we are today, and this is what to expect from the market leader in kidney care. We are the leading kidney care company. Globally, we offer a range of products and services for patients with kidney disease. Our reach extends to around 150 countries with our products and around 25 core markets with our services business.
I am very proud of the fact that our teams across functions and across the world are united by a singular, enduring purpose: creating a future worth living for patients worldwide every day. All our businesses are distinguished by market-leading positions and industry-defining assets. In care delivery, we not only treat around 300,000 patients. We do so with quality that is consistently recognized as best in class. 78% of our patients strongly recommend our service. This is an outstandingly high number. In value-based care, we manage the largest renal value-based care network, and we successfully run all 10 of the top 10 highest-scoring entities in the U.S. government's CKCC program. Care enablement boasts enviable market share with around half of all dialysis patients in the world using Fresenius Medical Care products and about 90% of all U.S. incentive machines coming from Fresenius Medical Care.
These are not just positions of scale. They are positions of strength. With the reorganization into global operating segments with end-to-end responsibility, they give us the competitive edge, the resilience which we have reshaped in the last three years, and the relevance to continue winning in the markets that matter most. All of the hard work of the last three years to bring the company back on track, our focus core portfolio and leading positions have strengthened our ability to accelerate profitable growth and increase cash generation. You have seen how much progress in performance we have made just last year. Today is not the first time we have set bold ambitions. At our last Capital Markets Day in 2023, we outlined a comprehensive and necessary turnaround and transformation plan.
As we approach the end of the third and final year of that strategic plan, I am incredibly proud to say that we are delivering on our commitments for nine quarters in a row. We executed significant structural, operational, and cultural changes, translating into accelerated operating income growth and cash flow generation. This strategic focus and execution have made us a stronger, more focused, and more resilient company. Today, we are well-positioned to drive and capture sustainable, profitable growth. It is one thing to implement change. It's another to execute change that also translates into meaningful, tangible financial progress and increasing value creation. What you see on this slide is exactly that. We have delivered consistent margin improvements supported by accelerated sustainable savings in our FME25 program, as well as improved operational performance resulting from our turnaround measures.
Alongside this, we strictly adhered to our capital allocation priorities, both improving our operating leverage while increasing dividend payments to our shareholders. The strength of our recent performance underscores the critical importance of the change in the operating model in 2023. It enabled the transparency and accountability required to deliver results. It is this track record of delivered results and accelerating momentum that gives us the confidence to raise our ambitions for the future. While our execution has been key, it is reinforced by attractive underlying fundamentals that position the industry and our company for sustained growth. I would now like to invite Dr. Frank Maddux to the stage to give you a scientific view on how we think about the underlying CKD and ESRD patient trends and why we are so encouraged about the growth opportunity ahead for our different businesses.
Thanks, Helen. Good morning, everyone. Let us begin by reaffirming the strength of the underlying drivers of our businesses. The fundamentals of the kidney care industry remain resilient, irrespective of changes in the macroeconomic environment. The continued rise in age, chronic conditions like hypertension and diabetes globally, evolving recognition of the public health crisis that chronic kidney disease is, and the global demand for life-sustaining kidney replacement therapies all support long-term growth. We remain focused on high-quality care delivery, strong clinical innovation, and operational excellence in this field. It's at the core of Fresenius Medical Care to evolve the standards of care which promote better access, better delivery, and better outcomes in kidney care. Chronic kidney disease is incredibly common, affecting up to 15% of the U.S. population, yet remains vastly underdiagnosed throughout the world. End-stage kidney disease and early-stage CKD are often silent.
Many patients don't get referred until the disease is quite advanced. This gap represents both a clinical imperative and an opportunity to identify patients earlier, slow progression through more proactive care, and help people progress to more advanced stages of kidney failure with better health, fewer comorbid conditions, helping people live better, more productive lives with this life-threatening condition. When we consider growth, it's essential to look at patient population flows, which is at the heart of how we model our population trends. Patient inflows and patient outflows equally have impact on our overall population of treated patients. We have opportunities on both ends, identifying and managing at-risk patients before they require dialysis, supporting long-term survival and transitions of care for those already receiving kidney replacement therapy. Better and earlier detection, retention, and outcomes mean sustainable volume over time.
We aspire to be in the ideal growth zone of high inflow and low outflow. During the COVID-19 pandemic, we saw the inverse of this with lower inflows and greater outflows. This trend is steadily reversing. To better understand this growth potential, we have a population impact model of patient flows through the United States kidney care continuum. This includes inflow from newly diagnosed patients, internal movement across CKD stages, initiation of dialysis, and outflow through mortality or life-saving transplantation. This approach helps us target where intervention can be most impactful and model multiple intervention impacts to long-term growth sensitivities. Our modeling has been validated with several external authorities, and we've had independent assessments with different methodologies. We feel confident that the modeling is a plausible depiction of the environment the field operates within. Let's dive a little deeper.
Patient inflow is shaped by broader health trends: aging, diabetes, hypertension, and limited chronic kidney disease awareness. It's influenced by the almost malignant cardiovascular disease that yields a major dropout of patients to death between CKD stages three and five. Modest improvements in identification, referral rates, and survival in this group could dramatically expand the addressable late-stage patient population we treat. Small improvement in the survival of total CKD stage three population patients would have the potential to double the at-risk for end-stage kidney disease population. Earlier engagement and effective care are in the best interest of a historically underserved patient population. Success in doing so will yield opportunities to expand the late-stage at-risk population for developing a need for all kidney replacement therapies. Let's look at outflow for a minute. We see ongoing improvements in survival, but mortality remains elevated and higher than any of us would desire.
While transplant rates have plateaued and are stable, the need for improved care models and innovations like home dialysis and personalized kidney care are crucial to reestablishing a downward trend in annualized mortality for our patients receiving kidney replacement therapies. These innovations will help reduce attrition from premature death, improve long-term outcomes, as well as benefit the quality of life for these patients. For example, hemodiafiltration can reduce mortality and increase patient volumes. HDF will increase treatment volumes even more due to lower mistreatments from fewer hospitalizations in addition to the lower mortality. Several current interventions will help drive these population dynamics beyond aging. Cardiovascular disease, obesity, and health inequities all contribute to disease progression and treatment gaps. Modeling these interactions simultaneously allows us to better forecast end-stage kidney disease prevalence and plan care delivery capacity and care enablement volumes accordingly. Let's look a little deeper.
Obesity is the leading contributor to both type 2 diabetes and CKD. U.S. trends suggest significant increases in obesity prevalence, which have led to an epidemic of obesity-related illness. The last two decades have seen explosive growth in obesity and concomitant disease. It's related closely to the previously mentioned malignant cardiovascular disease that our patients face. Turning this tide will yield a healthier population and patients with progressive kidney disease that are in better physical health to face the challenges of life-threatening kidney disease and their kidney replacement therapy. GLP-1 receptor agonists, originally for diabetes and most recently approved for weight loss, are now showing kidney protective effects. While they may slow chronic kidney disease progression by a few months, the rise in obesity and diabetes still outweighs this benefit.
Their more profound effect in our population is on improved cardiovascular health and the opportunity to have healthier patients progress, albeit a bit slower. It's important to understand that pharmacologic advances will shift but not eliminate the future burden of kidney failure. These medications are not a cure for these diseases but can yield a much healthier person living with these diseases by virtue of improving their cardiovascular health. SGLT2 inhibitors have similarly shown benefits in slowing CKD progression by a number of months, and their use in earlier stages will again yield a healthier advancing population. For both GLP-1 receptor agonists and SGLT2 inhibitors, the discontinuation rates of these drugs remain exceedingly high. The CONVINCE trial demonstrated an all-cause survival benefit with high-volume hemodiafiltration.
This modality, though not yet adopted in the U.S., represents an opportunity to improve mortality outcomes for dialysis patients, their quality of life, and reduce complications from their disease. Its broad adoption will reshape survival curves and, by extension, the population of end-stage kidney disease landscape that we see. One example would be lower hospitalization rates, which in turn would reduce the number of mistreatments in our dialysis clinics and support overall treatment volume growth. Again, with even modest improvements in cardiovascular mortality, especially in the CKD population, this will translate to more patients living long enough to reach end-stage kidney disease. When these patients do reach end-stage disease, they are likely to do so with improved cardiovascular health. Our models suggest this could drive significant growth in the dialysis populations even as therapies slow progression. In other words, slowing one disease may accelerate the burden of another.
Ultimately, we believe the end-stage kidney disease population will grow due to compounding trends: aging, better survival, and delayed but inevitable progression. Worldwide growth will exceed growth in mature markets. We forecast that patient volumes will grow by 4%-5% to 2035. In the U.S. specifically, we forecast positive 2% plus for patient volumes. On top of this, we anticipate even further acceleration in treatment growth driven by increased penetration of high-volume HDF treatments and continued expansion of value-based care that supports fewer missed treatments. Our care models, technologies, and partnerships are positioned to meet this future demand, and we view this as both a responsibility we have to the field of kidney care and a business opportunity to promote profitable growth in kidney care. Our company will continue to do well by doing good for patients with CKD and end-stage kidney disease.
As we look ahead, it's clear that early detection and delivering evidence-based kidney disease care at scale will remain essential, and our role in shaping its future is significant. We're prepared to lead with innovation, scale, and a clear focus on improving lives. With that, I'll now hand it back to Helen to continue our presentation. Thank you.
At Fresenius Medical Care, we are driven by our vision to create a future worth living for patients worldwide every day. Every day around the world, our team delivers with purpose for all our stakeholders: our patients, our customers, our employees, and our shareholders. Our new strategy, FME Reignite, sets the ambition to lead kidney care through exceptional patient care and innovation. It is built on three strategic priorities: reignite the core, reignite growth and innovation, and reignite our culture. We will reignite the core. That means doing what we do best even better. It is about driving scalable, high-quality care by further standardizing and improving processes in all our operations to boost efficiency and margins. It is about making focused investments to improve speed and agility. Reigniting growth and innovation is about bringing bold ideas to life that enhance clinical outcomes with a focus on patient safety.
From setting the standard of care with high-volume HDF to new global product platforms, we will leverage our leading product positioning to further expand market share and drive profitable growth. Reigniting our culture is about our people, who are the foundation of everything we do. We will focus on the development of our people. We'll build a workplace where every employee can thrive, making us the employer of choice in healthcare for world-class talent with a passion to make an impact. Our refreshed core values of we care, we connect, we commit support delivering on our vision. This all reignites value creation, where our ambition is to deliver both industry-leading outcomes and margins with above-market growth. FME Reignite is the exciting next chapter of our great company, leading kidney care through exceptional patient care and innovation.
I am excited to unveil our new strategy, FME Reignite, an evolutionary, not revolutionary, new strategy with a clear ambition. We lead kidney care through exceptional patient care and innovation. We are ready to unlock our full potential and reignite FME. The word reignite embodies how we will accelerate the realization of the potential of this iconic company. We will reignite kidney care. We will shape and define the future of kidney care. We will lead kidney care through exceptional patient care and innovation. We are transitioning from a phase of turnaround and transformation into a time of accelerated innovation and growth. This will drive profitability, generate more cash flow, and build room for accelerated shareholder value creation and returns. Our strategy will come to life through three strategic elements. One, reignite the core by strengthening our core operations to improve performance.
Two, reignite growth and innovation with a focus on profitable growth and bringing new innovative solutions to the market. Three, reignite our culture to develop together and strengthen our culture. These three strategic elements will not only enable us to lead kidney care into the future, but more importantly, also reignite value creation. Let us dive deeper into each strategic element. Reignite the core is about being operationally excellent in all we do, centered on our focused assets. It is about driving scalable, high-quality care. It means we must further standardize and improve processes in all our operations to boost efficiency and margins. It is about making focused investments to improve speed, agility, and efficiency. This also includes building on the great momentum of our highly successful FME25 program to deliver an additional EUR 300 million of total sustainable savings through 2027.
Martin will provide additional color on our extended FME25 Plus program later. To reignite growth and innovation, we will further enhance clinical outcomes and patient safety. We will increase R&D efficiency by building a global product platform that allows for a focused enhancement of treatment pathways and quality. We will launch high-volume HDF in the U.S. and set again a new standard of care in this large and important market. This will positively support the business development in all our operating segments. We will leverage our leading product positioning to further expand market share and drive volume growth. We will continue to grow our clinic network purposefully internationally. We will continue to drive an AI-powered transformation, enhancing clinical outcomes, improving operational efficiency, and delivering more personalized, data-driven care across the continuum of kidney disease.
We are leveraging our vertically integrated business model and use of machine data, global footprint, and unparalleled clinical and advanced analytics expertise to reignite growth and innovation. For those of you here in London, I'm excited for you to get greater insight into the medical and care side of our AI approach and capabilities during a deep dive session with Frank this afternoon. Reignite our culture. One of the things I am most proud of here is our patient centricity supported by our powerful purpose. We are people taking care of people, and we have to and definitely want to continue to develop together and further strengthen our culture. A strong culture is essential to driving lasting impact. It is what embeds sustainability into the way we operate, innovate, and lead. We have a goal to become the employer of choice in healthcare.
We must attract, retain, and engage the best talent with a passion to make an impact. To truly develop together and strengthen our culture, our culture must reflect our highest aspirations, not just in words, but in action. In parallel with defining our new strategy, we have worked to ensure our human capital strategy and culture are aligned to where we need to go and what we need to get done. As such, we have revised our core values to better capture who we are along with our culture ambition. We have set three aspirational core values. We care deeply for our patients, our people, and for creating a healthier, more sustainable future for all. We connect with employees, patients, customers, and communities to set the standard in renal care. We commit to delivering industry-leading outcomes, meeting the highest standards, and growing our business.
In reigniting FME, we have a distinct advantage: the ability to fully leverage vertical integration, to accelerate innovation, to improve quality outcomes, to drive growth while reducing costs, and to set the standard of care for the dialysis industry. You might have noticed an important difference in our business segmentation with the introduction of a third segment: value-based care. We have carved out value-based care, which was previously a part of care delivery in the U.S., as a new operating segment. This change is not only a part of the basis for the execution against our reignite strategy. It also reflects our commitment to drive further financial reporting transparency, providing greater insight into our performance and the relevant drivers in each of the reporting segments. The benefits of vertical integration put us in a unique position, which is the basis of our strategy.
The rollout of high-volume HDF technology in the U.S. is a powerful example of where we will benefit from this unique operating model. Across our three operating segments, we have a clear ambition to deliver industry-leading outcomes and industry-leading margins with above-market growth. I will walk you through what this means for each of our segments. First, starting with care delivery in its new, simpler form. The turnaround of our core business in care delivery is already in full swing. What comes next is accelerating the progress and unlocking the full potential. Driving sustainable financial performance means ensuring productivity and operational excellence through standardizing core processes, particularly in our clinics, maximizing performance from the integration of complementary assets, and at the same time, maintaining the momentum of continuous workforce and productivity enhancements.
In parallel, we work on translating more of the opportunity to improve our realized dialysis rates through managing payer and service mix, improved average reimbursement, and improving revenue cycle management. These complementary measures will strengthen revenue and drive cost efficiencies, leading to sustainable margin enhancement. This slide is a reminder of the core assets that are part of our now-focused care delivery portfolio, following the establishment of value-based care as its own reporting segment. It is also the outcome of the work we have done so far on our portfolio since our last CMD in 2023. Alongside our strong network of dialysis centers, care delivery and ancillary businesses, Azura, Renal Pharma, and Fresenius Rx currently drive significant value for our business. Azura plays a pivotal role by providing timely dialysis access procedures, which improve patient outcomes and reduce hospitalizations.
Renal Pharma and Fresenius Rx support patient health by providing access to innovative, clinically beneficial pharmaceutical therapies. We addressed our core U.S. clinic footprint, closure of net 72 clinics from the end of 2022 through 2023 as part of our FME25 program. Since then, we have been focused on optimizing our network, selectively opening clinics in markets with clear growth potential while exiting locations with lower profitability. In the last two and a half years, as part of our portfolio optimization, we have also taken significant steps to reshape our overall care delivery portfolio, focusing on core assets with attractive growth profiles. In addition to exiting non-core assets such as National Cardiovascular Partners in the United States and Cura Day Hospitals in Australia, we have now exited around a dozen dialysis service markets, including our Latin American presence.
Today, our care delivery international portfolio includes around 25 core markets, primarily in EMEA and Asia-Pacific. We have completed a majority of planned divestments to date. From this basis today, we start from a strengthened portfolio as we reignite our core. How does this now play into our reignite strategy? Looking forward, as we reignite our core, we are focused on having the right assets in the right markets. We will continue to hone our portfolio to strengthen our positioning for future profitable growth. This will remain a constant focus as the environment we are operating in is constantly changing. You would not expect less from us than to continuously, diligently, and smartly adjust our portfolio accordingly. With FME25 +, we will further optimize our core U.S. clinic network to ensure we are best positioned to capture growth in attractive, evolving markets while improving utilization.
As you can appreciate, optimizing a large clinic network is a complex undertaking. Rebounding from post-COVID growth, balancing utilization, growing home dialysis, preparing for the positive impacts of HDF growth while taking into account regional patient shifts means we have to be very thoughtful of short and medium-term decisions in respect to our clinic footprint and capacity. In our international markets, we will also further optimize our footprint to prioritize profitable growth in attractive markets. The announced divestment of select assets of Spectral Laboratories in the U.S. will support the unlock of cost savings. Our care delivery strategy is not just about operational improvement, but it also prioritizes reigniting growth and driving innovation. Earlier, you heard Frank talk about the potential to unlock volume growth by both increasing patient inflow as well as decreasing patient outflow and reducing mistreatments.
While we are proud of our consistently high industry quality ratings, we see a clear opportunity to do even more for our patients. We are furthering our targeted quality and patient safety initiatives. We are bringing innovation to the U.S. market with the launch of HDF to support reduced mortality and improved outcomes for patients. Craig will speak to this in more detail in his deep dive session this afternoon. We know that home therapy offers significant advantages, from improved patient outcomes to meaningful cost savings for both our businesses and the entire healthcare system. Although great growth to date has plateaued coming out of the pandemic, we see a clear opportunity to grow our home therapies program. We can also reduce outflows by delivering exceptional patient experience. This includes seamless patient access and a streamlined admissions process, strengthening patient treatment adherence and retaining patients overall.
These complementary approaches will contribute to extended patient survival, reduced patient outflows, and therewith above-market volume growth. Executing against the presented strategy in care delivery will also reignite our financial trajectory. The decision to carve out value-based care from care delivery provides greater transparency in how the core care delivery business performs and accelerates over time. Starting from an 11.4% margin at the end of 2024, we aspire to achieve an industry-leading mid-teens margin profile by 2030. Realizing this ambitious aspiration and offsetting ongoing normal headwinds from labor and inflationary pressures will require disciplined execution of all elements of the strategy. This includes, as already outlined, a focus on increasing patient inflow and reducing patient outflow, while at the same time improving the realized dialysis rate.
Sustaining momentum in our FME25+ program through 2027 and benefiting from sustainable savings thereafter, as well as further supporting productivity and efficiency efforts continuously through 2030, will be an important driver on the way to this margin aspiration. At the same time, we will further advance our portfolio optimization plan, with the plan to be largely complete by 2027. Before I walk through how our strategy translates to our value-based care segment, it is important to understand the current industry backdrop and our favorable positioning here. Value-based care has been a source of innovation in patient care. It is driving real results for patients through different delivery models, where we take on risk and then seek to lower the cost of care by improving the quality of treatment and patient well-being. This will ensure optimal starts and reduced hospitalization days as well.
In the U.S., the renal value-based care market is a nascent but rapidly growing industry, having realized a 25% growth in ESRD patient numbers since 2019. Value-based care kidney care emerged as a critical opportunity for payers. As a result, the kidney services industry attracted over $2 billion in industry investment with an inflow of new entrants. The U.S. government, through CMS's Center for Medicare and Medicaid Innovation, has also been piloting large-scale value-based care programs that we have been a leading participant in. However, as with many emerging industries, not all entrants have been equipped with the capabilities or models needed for long-term success. Today, we are looking at a period of more stability as growth expectations are normalizing and the industry is focusing on scaling proven models and phasing out unviable ones.
This is where our leadership position in the space sets us up to capitalize on future, more profitable growth opportunities. Our value-based care company, Interwell Health, is the leading player in renal value-based care with three sources of differentiation. This includes connectivity to our U.S. clinic network, the largest network of nephrologists with over 2,200 today, up 38% from 2022, and a unique nephrology-specific electronic health record technology. At the end of 2024, we managed $7 billion in medical costs, with roughly half in the U.S. government's CKCC program, and the remainder split between subcap and shared risk arrangements with private payers. We managed over 130,000 patient lives, comprising 58% CKD patients and 42% ESRD dialysis patients. Revenue in 2024 was EUR 1.8 billion. Medicare Advantage has a disproportionate percentage of revenue relative to its share of medical costs under management.
This is the result of the revenue recognition requirements of subcapitation arrangements. In addition to its scale, our value-based care segment stands out for its high quality and meaningful clinical results for patients, two and a half times optimal start rates compared to national U.S. averages. The vast majority of our kidney care entities in the U.S. government's KCC program qualify as high performers, and 80% of gross savings in the overall KCC programs were delivered by our entities. These are not only impressive KPIs for our value-based care business, but benefit also care delivery in the U.S. Despite much focus on the current U.S. government healthcare spending under the new administration, these types of models are here to stay. We are excited to see that the models have been extended, and we are working with CMMI to ensure we are supporting the goals of improved outcomes while reducing costs.
Our vertically integrated business model creates an advantage in the success of both the value-based care segment and our overall company. Value-based care also directly improves outcomes and survival for dialysis patients, a key growth driver for care delivery. With its large nephrology network, it can also be an important driver for the upcoming HDF adoption due to the potential health benefits from that therapy. At the same time, care delivery gives our value-based care segment access to patients and clinics to accelerate growth, drive best practices, and support with resources. By initiating a new reporting segment, we are further refining our operating model, taking into account that value-based care has a very different financial profile and is, by the nature of the business, managed in a different way than each of the other two operating segments.
Additionally, we are increasing financial reporting transparency and creating greater insight into the drivers of this growing business, but also enable you to better see the development in the care delivery business. As part of our strategy, we will reignite value-based care as well in order to strengthen and reignite our core business. We are creating mutual value for value-based care and care delivery through key quality and outcome initiatives, including increasing optimal patient starts, coordinated transitions, and enhancing quality and patient safety initiatives. We also have a significant opportunity to reignite growth and innovation with a focus on driving profitable growth. This includes a focus on enhanced patient engagement to impact behavior and drive down medical loss ratios. Having learned a lot in recent years, we will further optimize our go-to-market and contracting strategies, and we will accelerate growth through operational and technology levers.
In alignment with care delivery, we will advance the adoption of beneficial therapies and innovations such as HDF and home therapies, and we will leverage the tremendous data and analytics we have access to in order to improve the quality and coordination of care. While the value-based kidney care market is still a relatively nascent industry with a volatile return profile, we are well positioned to drive improved financial returns given our leading position in both scale and achieving quality outcomes. In 2024, we had a EUR 28 million operating income loss in value-based care, translating into a negative 1.6% margin last year. In 2025, we anticipate a slightly negative to break-even operating income contribution. By 2030, we aspire to achieve low single-digit margins. We are shifting our contracting mix toward more profitable segments.
We will be further reducing medical costs by enhancing patient engagement, and we will be driving greater cost efficiencies and synergies between the operating segments. We expect these margin drivers will offset headwinds from pricing pressure by payers and continued elevated Medicare Advantage claims. This brings us to care enablement, where our strategy is founded on how commercial excellence, operational efficiency, and innovation will drive robust above-market growth and continued margin expansion. The 4%-5% growth in dialysis patients worldwide, along with our leading market presence, positions us well to capture above-the-market growth in care enablement. We will further expand our already market-leading positions in profitable markets, enhancing customer experience to strengthen relationships and continuing to drive excellence in pricing and contracting as the market leader. At the same time, we are continuing to drive operational excellence.
This is based on the new global setting that enables the next level of restructuring of our manufacturing footprint and supply chain within FME25+ . It is also based on strengthening direct procurement and harmonizing our quality systems, all while keeping patient-centric innovation at the core of our product development. We have a highly attractive industry-leading renal medtech portfolio with a diverse international footprint. As a point of reference, our U.S. business is around one-third of total Care Enablement revenues. Globally, in each region, in-center represents the majority of revenues, with our in-center mix split broadly: 25% machines and 75% consumables. We benefit from commanding global market positions in Care Enablement. Not only do we have 40% market share for in-center HD products, our position is significantly ahead of the next largest competitor, reinforcing the strength and scale of our leadership.
In some markets, we have market share north of 80%. In home products, which includes PD and HHD, as well as in critical care, we have meaningful number two market positions. This reflects the depth of our capabilities, the quality and reliability of our products, and the trust that we have earned over time. It also positions us to drive continued pricing and contracting excellence. Leadership today also means staying ahead tomorrow. We are reshaping the future of kidney care through innovation. It is how we differentiate and lead. Katarzyna will give you more insights later in her deep dive session. For our future strategy, we are shifting from a focus on machines and consumables to a focus on a more integrated offering with a full package of products and service offerings.
We are developing digital ecosystems, which will enable us to continue leading the industry in innovation through connected products. This is about providing a complete integrated offering to our customers. We do not only want to hold on to our already impressive market share, but also continue to improve our share of captive consumables, providing connected healthcare through our technology offerings, all at a premium price. Moving from regional product offerings to full global platforms will also drive R&D efficiency, innovation, and cost savings. With the launch of the 5008X in the US, for the first time, we have a true global platform to innovate from. We can meet the patient in any care setting with a differentiated product that leads innovation in kidney care, whether they are in-center, in the home, or in a critical care setting.
Our product innovation in care enablement is unparalleled, and we will continue to set a new standard of care with our integrated product offering across the world. We have made remarkable progress in improving our care enablement margin from just 2% at the end of 2022 to 6% in 2024 and already over 8% in the first quarter of this year. We always knew that the scale and timelines would be longer in care enablement, but we have demonstrated strong execution and delivery against our strategic plan, and we are well poised to further accelerate. I always said that we were not done with 8%-12%, but wanted to deliver medtech-like margins. However, we needed to demonstrate first that improving our care enablement margin from 2-8% was achievable. We have proven we can transform this business, and we are in a great position to accelerate profitable growth.
By 2030, our aspiration is to realize mid-teens operating income margins. We will leverage our innovative product offerings to achieve further pricing excellence and market share expansion. I will speak more about the opportunity the rollout of HDF in the U.S. will bring to Care Enablement. There is a pipeline of R&D development and innovation that we have in place for further global platform innovation. In parallel with FME25+ through 2027, we will continue to optimize our manufacturing footprint and procurement, and we will further restructure international commercial operations. At the same time, we are embedding a DNA of driving continuous operational and process efficiencies through 2030 to overcome headwinds from inflation and FX transaction impacts. One of the key elements of the Reignite strategy is how our operating segments complement each other to enhance value creation.
As you might have guessed, I'm incredibly excited about the launch of HDF in the U.S. It unlocks the power of vertical integration and is a critical enabler of our growth through innovation. It is probably the biggest driver of value in our industry in decades. For patients, we will set a new standard of kidney care in the U.S. through a truly differentiated therapy. We have seen in the real world the potential to reduce hospitalization days, leaving patients feeling better and tolerating their treatments with greater ease. Most significantly, the COVID study showed the potential of steady reductions in all-cause mortality at 23%. Our clinics will have a first-mover advantage, attracting new patients who want to receive this innovative therapy. Labor efficiencies will improve thanks to faster setup and takedown times. Supply costs will be reduced.
No saline is needed, and this could also positively impact drug usage. It will also allow our caregivers to be trained more easily and spend more time with patients with fewer alarms or interruptions. As a result, we anticipate an increase in the number of treatments in our clinics and improving operating leverage. This is also very meaningful for Care Enablement, with the opportunity to replace the large installed machine base and gain captive consumables market share, which is expected to translate into strong performance and growth. At the end of May, we received additional FDA approval for the 5008X interface we plan to bring to market. We now have all approvals in place to launch the machine in the most efficient way. We will maximize the value that our innovation has created through premium pricing structures and targeted market share gains in the consumable market.
For the midterm, we are exploring ways to reimagine reimbursement for HDF treatments with a 5008X, given its differentiated impact for patients and clinics alike. Through the successful execution of the 5008X rollout in the U.S., we will further solidify FME as the market and innovation leader and enhance profitable growth across all three of our segments. This is what you should expect from the market leader in kidney care. As we prepare for the launch of HDF, we are taking a comprehensive approach to engage key stakeholders, from patients to physicians, service provider peers to payers. We believe this is a key selling point, which is driving strong and lasting adoption. As the clear market leader with 90% market share for in-center machines in the U.S., we are uniquely positioned to drive adoption of this new standard of care.
As you can appreciate, we will not be disclosing specific pricing or contracting strategies for competitive reasons. Rest assured, our approach is designed to support both broad adoption and long-term value creation. There are 145,000 of our 2008 machines currently installed in the U.S., out of a total of 160,000 in-center machines. As our 2008 technology is more than 40 years old, our external consumable capture is only 66% today. By 2030, our aspiration is to achieve 100% consumables market share for the 5008X. On the right-hand side of this slide, we show our annual production capacity. We ramp up from up to 1,000 machines this year, up to 15,000 next year, and then 20,000 from there on.
Our goal is to strike the right balance between accelerating our initial rollout and sustaining ongoing commercial momentum and manufacturing capacity utilization, while minimizing disruption in our clinics and being mindful about the cost base of our installed machines. Through 2030, we will look to upgrade the machines in our own clinics, as well as sell the 5008X to other providers in the U.S. While the internal versus external split is not detailed here, we do give an indication of the planned internal penetration on the next slide. Here, we have outlined the phasing of our 5008X rollout within our own clinics. We plan to have our in-center machine base fully modernized with the 5008X by the end of 2030.
This will be done on a clinic-by-clinic basis, upgrading all machines in a clinic at once so that there is only one standard protocol for patients and employees in each center going forward. The phasing reflects both our enthusiasm for getting the machines in our clinics, balanced by minimizing disruption, and the need to ensure proper training of clinic staff and education of nephrologists along the way, as well as the resulting impact on CapEx. We want our patients to realize the benefits of HDF treatments as soon as possible, and it will not take until 2030 to start to see this impact. We will go as fast as practically possible and financially viable while ensuring safety and patient care. The COVID study showed benefits emerging after just three months of the switch to high-volume HDF treatments.
After two and a half years of high-volume HDF therapy, the study showed 4.4% fewer deaths, reflecting the 23% lower risk of mortality. This brings us to how our strategy reignites value creation. As I described earlier, we have a clear ambition to deliver industry-leading outcomes and industry-leading margins across our three segments. Our aspiration to achieve mid-teens margins for care delivery and care enablement, along with a positive margin profile for value-based care, drives our group aspiration of mid-teens margins by 2030. This is a meaningful step up from the 9.3% margin in 2024. I have laid out the strategy on how we plan to get there, and this will enable us to reignite value creation. We are a highly cash-generative business, and through 2030, we expect to further increase our operating cash flow to at least EUR 2.5 billion annually.
As we promised, in alignment with our Reignite strategy, we are also introducing a new capital allocation framework. It is designed to reignite value creation by driving enhanced shareholder returns. To reignite the core, we will invest in our core business to drive sustainable, profitable growth. We will further optimize our capital structure to support our financial foundation in a volatile macroeconomic environment, and we will set a new leverage target. Importantly, with the progress already made, we are now in a significantly stronger position to deliver enhanced returns for our shareholders. We have listened to your feedback and the different capital allocation preferences you all expressed, which we have reflected in a balanced new capital allocation framework. We will provide consistent dividends in line with our new dividend policy that targets a 30%-40% payout ratio.
We will also start this year with an initial share buyback program of EUR 1 billion, with obvious opportunities for further regular buybacks. This step underscores our belief that shareholders should meaningfully benefit in the success we are building for the long term. I will now invite Martin to the stage to provide more details on the capital allocation framework and the financial aspects for our strategy. Thank you.
Thank you, Helen, for introducing our new strategy and capital allocation framework, and a warm welcome from my side to everybody as well. Before I share further details, let me briefly look back on the developments of our financial profile since 2022. I'm very proud to say we have delivered impressive improvements since 2022. This is a track record that we intend to continue. We have significantly improved our transparency, and based on this, our focus on measures that create shareholder value. With the implementation of our new operating model based on the two global segments and global G&A functions, in January 2023, we introduced our current financial segment reporting, providing improved external transparency. The introduced external reporting was based on a strongly enhanced data availability internally. With that, it provided management board and business leaders with better information for decision-making as well.
As presented by Helen, we have strongly increased our profitability since then. We lifted our FME25 savings target twice. In total, we increased it by 50% to now EUR 750 million. Total runtime costs are very tightly managed. We have continuously improved operating income margins toward our 2025 target bands. In the last years, our capital allocation priorities have been governed by a disciplined financial policy that was strictly followed through. This included a stringent CapEx management to support free cash flow generation. Free cash flow proceeds from our divestitures of around EUR 750 million and the Tricare settlement of around EUR 190 million were consistently used to de-level our balance sheet from 3.4x to 2.8x net debt to EBITDA in Q1 2025. Between 2022 and 2024, dividends grew on average 13%, and the dividend paid in May this year was the highest in our company's history so far.
All along, we have always been committed to a solid investment grade rating and a sound financing strategy. We have strengthened our investment grade ratings, and also the rating outlooks were upgraded to stable in 2024. Finally, we are well established in the bond market, as recently demonstrated in our successful bond issuance and tender in April of this year. Looking forward, we aspire industry-leading margins that further enhance our financial profile. A couple of minutes ago, Helen shared our 2030 margin aspirations. These aspirations are based on assumptions that apply to all our businesses. We expect average global patient numbers to grow at a CAGR of 4%-5% until 2030, and U.S. patient numbers to grow at 2% plus percent annually. Like in past years, we do only blend with moderate reimbursement grade increases, as well as continued U.S. payer mix improvements.
We blend with moderate labor cost increases and cost inflation as well, in line with our 2024 expectations. We also do assume a normalized labor situation, which is comparable to what we see today. Our modeling assumes broadly stable currency exchanges going forward as well. Beyond what we can know today, we also assume no further escalating geopolitical conflicts, no further tariffs, and trade barriers. These assumptions also exclude major disruptions, like material changes in the regulatory environment or the reimbursement systems. To further enhance our reporting transparency, we decided to break out value-based care from the Care Delivery segment. We will share a comprehensive table of our new segment data, including revenue, operating income, special items, as well as growth rates in reported at constant currency and organic for full year 2023 and 2024 after the Capital Markets Day on our websites with you.
I will share some financial highlights on the two segments here. As you already heard, the new Care Delivery segment will consist of all current Care Delivery assets, except for Value-Based Care as a business. The key operating drivers for Care Delivery in 2024, you already know from our reporting. Our aspirational margins target of mid-teens percent, as just laid out by Helen, are formulated for operating income, excluding special items as a percentage of revenue. The new Value-Based Care segment recorded strong organic revenue growth in 2024 of 37%. This was mainly driven by membership growth, benchmark growth under contract, and additionally signed contracts with payouts. Operating income improved strongly in 2024, lowering the negative contribution significantly. The development was mainly driven by higher CKCC savings and lower operating expenses due to scaled operations.
As shared with our 2025 outlook, we do expect value-based care revenue to grow to around EUR 1.9 billion in 2025, and our operating income to further improve to a slightly negative or break-even level this year. We will report in this new segmentation starting with quarter two results. Sustainable savings remain an important component of driving operating income growth. Beyond the EUR 180 million we expect for this year to reach the 2025 target of EUR 750 million of total savings, we will use the strong momentum and generate additional EUR 300 million sustainable savings until the end of 2027. This will further increase the number of total sustained savings to above EUR 1 billion. Related runtime costs for FME25+ are expected to be around EUR 300 million and will be recorded as special items.
We continue to strive for the industry benchmark of EUR 1 savings for EUR 1 runtime cost, and disciplined cost management clearly remains our focus. Planned savings to be realized between 2026 and 2027 will come in largely balanced between Care Delivery, Care Enablement, and the G&A areas. Our value-based care segment also has savings included, which are accounted for in the G&A section. Let's look into more detail for the additional EUR 300 million savings contribution. Care Delivery will be contributing about 40% of the additional savings from the program extension. This emphasis on savings underscores both our determination as well as the momentum and initiatives at hand to further improve profitability. We do plan to optimize our supply chain and clinic footprint, as well as realize the necessary efficiencies in our real estate operations. Care Enablement is planned to contribute 25% of the savings.
Key drivers will be the continued optimization of manufacturing and supply chain, as well as the restructuring of international commercial operations. Global G&A functions will contribute the remaining 35% of FME25+ savings. Here, we will see the benefits of further expansion of our global business services, process optimization across all three reporting segments, as well as further optimization of the procurement function. Across all areas, the application of innovative technology will play a key role to achieve the targeted efficiencies. This, of course, does also include the application of artificial intelligence. Operating cash flow between 13%-15% of revenue translates into an annual available cash amount of north of EUR 2.5 billion in the years until 2030. In alignment with our Reignite strategy, we have developed a new capital allocation framework with a clear focus on shareholder value generation.
Clearly, to reignite our core, we invest in our business to support sustainable, profitable growth. We have earmarked annual capital expenditures between EUR 800 million and EUR 1 billion for the years 2025 to 2030. In parallel, we further optimize our capital structure. A strong balance sheet and financial flexibility are important to us. So is an investment to the investment grade rating, and those are key aspects of our financial policy. Reflecting the volatile macro environment, we decided to have a lower self-imposed target rate for our net financial leverage going forward. To reignite shareholder value creation, we plan for attractive returns of excess capital to our shareholders by complementing our updated dividend policy with an initial share buyback program. We are excited to introduce an additional way of returning value to our shareholders besides dividends.
I'm going to further elaborate on each of those frameworks' components on the next slides. Our new capital allocation framework starts with driving profitable growth by investing in our core. Our plan until 2030 is to annually invest CapEx of EUR 800 million-EUR 1 billion, which translates to a share of revenue of 4%-5%. This is a very clear commitment to grow our core business, where we see sustainable, profitable growth opportunities. In anticipation of the upcoming 5008X rollout, we had slightly reduced our CapEx for purchases of the 2008 machine in our own clinics. Despite the planned slight increase compared to the past three years, this future CapEx level is well in line with historical levels. We want to continue capturing attractive new opportunities based on innovation and equally keep our focus on investments to enhance the quality of care levels and our patients' care experience.
At the same time, we will continuously upgrade technology. Until 2030, care delivery is expected to account for around 55% of CAPEX, while care enablement is expected to account for around 45% of the planned capital expenditures. Planned CAPEX for our new segment, value-based care, accounts for a rather lower share. Importantly, this CAPEX plan foresees clear priority shifts from old to new products with the 5008X rollout in the United States and investing in R&D to develop the next generation of machine platform. We are tightly managing the overall spend. This investment approach is a deliberate reprioritization for us. CAPEX requirements linked to the 5008X rollout, of course, are included in the future target band. Like in the past two years, we foresee no major growth M&A. We consider selective clinic acquisitions as well as joint venture entries or adjustments as part of our ongoing business.
Optimizing our capital structure is an important component of our new capital allocation framework. As the graph shows, at the peak of the pandemic, which was the low point of our financial performance, our leverage ratio increased to 3.4x . Improving operating income and proceeds from divestitures drove the successful deleveraging to below our former target range. We are now targeting a lower net financial leverage of 2.5x-3x net debt to EBITDA until 2030. In the first quarter of this year, we were already in the middle of that updated range. This new self-imposed target band is reflecting our value creation-focused capital allocation framework going forward. We are committed to a strong balance sheet and a sustainable investment grade rating. The target band provides us with the necessary flexibility for funding growth opportunities while returning excess capital to our shareholders.
In the current market environment, we do regard the leverage at this level to be a good balance between optimizing our financing costs and meeting our financing requirements. The lower target band also takes into consideration the elevated volatility of the current macro environment that we operate in. The chosen target band of 0.5 allows financial flexibility to absorb potential impacts of uncertainties that are not foreseeable today. Talking about the financing side, we are building on a sound and proven financing strategy. In line with our business profile, targeting both Euro as well as U.S. dollar bond markets is a cornerstone of our financing strategy. In early April, we took advantage of favorable market conditions and our improved credit rating outlook.
We successfully placed two Euro bond tranches with an aggregate volume of EUR 1.1 billion, and we used some of the funds for an early buyback of approximately EUR 300 million of bonds maturing in 2026. We will continue to use attractive market environments in an opportunistic way to early refinancing upcoming maturities. The high oversubscription of our most recent Euro bond transaction proves our strong bond market access. The result of our sound and proven financing approach is a well-balanced maturity profile and a clear strategy to address the upcoming maturities in 2026. Returning cash to our shareholders is an important component of reigniting our value creation. As part of the new capital allocation framework, attractive dividends are an integral part of this. Going forward, we target a stable and predictable dividend development, resulting in a 30%-40% dividend payout ratio in relation to adjusted net income.
Fresenius Medical Care has a long-term track record of attractive dividend growth and payouts, with the most recent 2024 dividend marking the so far highest dividend paid in the company's history. Today, we are very excited to announce a new regular share buyback program that allocates excess cash to our shareholders, complementing our new dividend policy. This contributes and reignites value creation for our shareholders. They will participate in the strengths and future value creation of our business. The initial share buyback program foresees EUR 1 billion of share buybacks. As part of the program, we do intend to acquire own shares on the stock exchange and subsequently cancel them. We plan to execute the program in multiple tranches in line with the new capital allocation framework and supported by continued strong cash generation.
We plan to start in the second half of 2025 and complete the initial program within two years. A precondition to executing the full program is a renewal of the 10% authorization for share buybacks at the AGM in 2026. Going forward, our new capital allocation framework provides further opportunity for regular share buybacks. I would like to summarize my presentation on the following highlights. We further enhance our reporting transparency by introducing value-based care as a new segment starting in the second quarter of this year. We plan to further increase our profitability by advancing operating income margins for each segment to industry-leading levels by 2030. A key contributor will be savings from the FME25+ program. We are committed to a solid investment grade rating and sound financing strategy. Our future capital allocation framework has a clear focus on value creation for shareholders.
This includes investing in our business for sustainable, profitable growth. At the same time, we are returning excess capital to shareholders in the form of attractive dividends and regular share buybacks. In parallel, we maintain an optimized, strong balance sheet and capital structure. Our new capital allocation framework is a proof of our confidence in FME's future value creation. It is also a proof of how reigniting FME will pay off for our investors. With this, I hand back to you, Helen.
Thank you, Martin. As you have seen today, we are incredibly energized by what is ahead and our ambitious strategy to accelerate growth and returns. We are turning a page. This is a new chapter for FME and one we are not only confident in, but also incredibly excited about.
By leveraging the strength of our vertically integrated business model and market-leading positions in an industry with accelerating underlying trends, by bringing industry-setting innovation to the market, and by continuing to execute with clear focus against our strategy, we are reigniting FME. We will reignite the core, reignite growth and innovation, and reignite our culture. This is our path forward designed to achieve our 2030 aspiration of reaching industry-leading mid-teen margins and reigniting value creation with enhancing returns for our shareholders. We do all of this with a clear vision to create a future worth living for patients worldwide every day. Thank you.
Wow. At least I'm reignited despite the room being so cold. Thank you, Helen, Frank, Martin, for your presentations. I know there were a lot of insights, and we already cut out 60 slides. There's a lot of details and strategy in there. We will now go into the Q&A section. We will ask you to ask one question only first so that everyone who wants to ask a question can actually ask a question. There is also the opportunity if you want to make a positive statement, you can do that too. Do not be shy. That's possible. Do not be afraid. For those on the line, I'm sorry you can't ask questions.
I would ask you to cover my poor ability to remember names by saying for the people online, company and name when you ask a question, and I will come down and who wants to kick us off? Oh, wow. That's good. Good. I will start here. Who is closest?
Thank you, Dominik. It's Graham from UBS. My first one for Frank around volumes and maybe go with GLP-1 first as a dynamic. Just how much data do you have already in-house from patients who would have been on GLP-1 as your patients and their reaction in terms of the CV benefits in the ESRD stage? It'd be good to get a sense as to what sort of data you have there.
Yeah. In the ESRD space, we have in the United States about 12,000 patients on GLP-1s. These are almost all diabetic patients that have quite high BMIs. To date, those patients, even those patients, have exceedingly high discontinuation rates. We see the discontinuation rates at one and two years being well over three quarters of the patients. We are looking regularly each quarter at clinical parameters in this population versus the other. Other than some relatively mild reductions in blood pressure, there aren't any other really visible changes right now.
Okay. Good. Lisa.
Hi, Lisa Clive from Bernstein. Thank you for the very helpful guidance on where you are hoping to get the margins over the next few years. I just want to focus on care delivery. You're some ways off from industry-leading margins in that segment today. Could you just provide us with some building blocks for how you get there? Is it around reduction in bad debt, which is clearly fairly creative? Clinic optimization, whether that's in the U.S. or abroad, and/or does it involve continued exits from some subscale international markets, which you've clearly been focused on? Just be helpful to get a bit more context there. Thank you.
Thank you for your question. Let me take that. As we outlined on the margin bridge, yes, we did not quantify it, there is number one, the topic of increasing the number of patients, which speaks to what Frank was relating to, and also with our work that we do on the patient inflow as well as reducing the patient outflow. There is also the topics on rate, which includes some of what you refer to, which is the rate as well as the yield, so to say, of the rate, which also speaks to some of the work on the revenue cycle. There are other topics which we highlighted with efficiencies and productivity on the process work that we do, but also optimizing our clinic network.
Please also do not forget that we outlined assumptions around this where we do need to overcome labor and also inflation, which we quantified with the 2024 reference of net in 2024 of around 3% as well. Those are the major building blocks that will drive this.
Good. There you go.
Hi, good morning. Veronika Dubajova from Citi. I'm going to just follow up on Lisa's question around care delivery and margin progression. Just to challenge you, if we do not see a volume recovery to the 2%+ that you are targeting, what would the margin path look like? Maybe just a follow-up of that shape improvement into the mid-teens. Martin, is this fairly consistent year in, year out, or is this more front-end or back-end loaded? Thank you.
Yeah. Let me frame it first. If you have a starting point of our 2025 guidance that we have and the implied margin of 11%-12%, this is a 300-400 basis points improvement for us as a group. With that and overcoming the headwinds that I referred to, we are focusing on the three segments building blocks that we outlined. You can assume when it comes to the phasing for care enablement and value-based care, a more straight-line-ish kind of development until 2030.
Due to the nature of the work that we do with Care Delivery, I would say it's a little bit more a back-end loaded improvement that we drive there because some of the measures that we outlined, like the benefit from high-volume HDF introduction or also some of the rate and other topics, when they materialize in combination with the labor cost inflation, do take a time until they do improve profitability overall.
Veronika, maybe I would just add specific to the volume piece on the 2%+ . Obviously, you saw the underlying fundamentals from Frank and that we do see we know where we've been and where we're going here. Part of that volume uplift in terms of treatments will also come from HDF. As we've always said, it's not volume that makes or breaks that margin. I think some of the other building blocks that we've outlined, like the rate, the mix, kind of the pricing, moderate pricing reimbursement, as well as FME25 contribution to CD are as important building blocks. Obviously, I think from an operating leverage, we see that 2% being key, but it's not the make or break of this margin progression through 2030.
Nice. You're good. You go ahead.
Yep. Next question. Here we go.
Thank you. Hi, Hugo Solvet from BNP Paribas. Just a quick one on HDF. Could you please share the number of patients or the share of patients that could benefit from this instrument? How do you prioritize FME clinics versus competitors' clinics, the latter, I guess, being important in trying to claw back the consumables revenues and in terms of going to that 100% of consumables share? Could you talk to maybe the IP or the commercial strategy that underpins that?
Yeah, thanks, Hugo. Our current assumption is that 75% of our patients will be on HDF. As you saw from my presentation, the first mover advantage will be in our clinics, and we are modeling which clinics to go to first, and we want to do it clinic by clinic. We also feel this is incredibly important for patients and for the industry that all providers participate in the new treatment therapy. Obviously, we will not go into the dynamics of that, the competitive set right now, but as you can imagine, with the improved outcomes that we are seeing on this therapy and all the benefits, there is significant interest from other providers other than ourselves in the United States. Obviously, with the consumables, I have to smile when I say we only have 66% share because most companies would love to have 66% share.
The point here is we now, with a captive machine and captive consumables, can take that 66% to 100%, which obviously benefits Care Enablement across all providers, including us. Did I get all aspects of your question? Yeah. Good. Thank you.
Okay. Hi. It's Oliver Metzger from ODDO BHF. A question on value-based care. Historically, the value-based care programs have shown also some disappointments when it comes to the remuneration of your services. How do you think about or guarantee that the savings you generate is also sufficiently rewarded by the payers?
Yeah, thanks, Oliver. Look, we have a lot of experience in value-based care, about a decade now, right, with all the different schemes that we have participated in. What we are seeing, we've learned a lot, particularly as we've kind of stood up into the last couple of years of these insights into contracting and what the contracting rate needs to look like to take on this risk and how we can drive the cost down to improve the loss ratios. What we are seeing is that payers and healthcare systems can't do this alone. These patients are too complex and too expensive, actually, for them to not manage. For us, we see, and they're increasingly wanting to offload that risk. For us, what we see are these three benefits, right, where we have dedicated caregivers that can manage these patients, the largest nephrologist network in the country.
We obviously have our dialysis network that can be levered. As you saw from the presentation, our own unique Acumen EHR system. We feel our ability to manage care in this space is greater than most. There are three models, if you will, in the U.S. There are the ones that, like us, large dialysis providers that participate in value-based care. There was the upspring of private equity and value-based care companies. Some of those are no longer. You have the kind of accountable care organizations or the larger systems, if you will. For us, it is a critical component of our vertical integration. Hopefully, you saw that coming through, not just as value-based care benefit from Care Delivery and our ability to manage the patients, but also from access to technology and vice versa.
If we improve optimal starts and we have healthier, better managed patients being covered through value-based care, that benefit also comes into Care Delivery. We have kind of an optimal start patient who might have had their health managed better by all the reasons that Frank outlined rather than somebody just crashing into dialysis. It is definitely nascent. I also want to say, I mean, it is lumpy, right? It is challenging to manage and forecast a lumpy business, we know. I think we have learned a lot. We know where we can access the patient and where we can manage the care, and we know what to do to manage down costs. I think the other piece of this is it does feel more stable. We are seeing the rates increasing. We are seeing the partnerships with the managed care payers.
That is why we have the confidence to kind of project what we have and also give more visibility into it on a go-forward basis. Obviously, it can be a big revenue business with a low margin, but we also feel that we can participate. I think not participating in this space is not an option for us. Strategically, it fits with the kind of the core assets that we have and the vertical integration. Irrespective of that profitability, I think we are still the biggest. We still have the best outcomes, and we are still the least profitable of all the plans out there, but we see a clear plan to turn that around.
Hi, Victoria Lambert from Berenberg. FMC has the only FDA-approved HDF system in the U.S. Who are the main competitors outside the U.S., and how long do you think you'll remain alone in the market in the U.S.?
I think as we look at the HVHDF rollout, the opportunity to, given the very high market share that we have, gives us not only a chance to bring our 5008X machine to the market, to recognize that there are no other machines that can provide this therapy in the United States today. Likewise, there's no other machine that can meet what the U.S. standards are for maintaining single daily disinfection of the machine as opposed to disinfection after each of the treatments that occurs. We feel that the machine is both an efficient and effective way to do that. I can't speak to how the other companies may be approaching this particular area, but we think this is a distinct advantage for us that will give us the chance to maintain this remarkable market share.
Hi, it's Hassan Al-Wakeel from Barclays. On your HDF rollout, thanks for the phasing detail. Is the incremental CapEx from the EUR 700 million that you've seen over the last few years to the EUR 800 million-EUR 1 billion mainly a function of HDF and a reasonable estimate? I appreciate you see a benefit after three months of use at high convective volumes, but when do you expect this to move the needle on U.S. same-store growth? Versus that 2% market growth that you're talking about in 2030, where do you see your growth? Thank you.
Let me take the CapEx question first. Regarding CapEx, the band that we provided from EUR 800 million-EUR 1 billion is broader than HDF. It does include the HDF rollout, for sure. It also covers the time until 2030 where we talk about own conversion, but also the investments into the Care Enablement production ramp-up that we see as well. For Care Delivery, it's mainly a function of buying new machines and buying 5008X instead of 2008T as well. That's why I outlined that for the last two years, we have slowed down a bit on the replacement. Last one, perhaps, on the CapEx. This does also include what we talked about, investment into innovation for the next product platform, investment into innovation for the patient experience, but also the treatment that we want to provide as well.
This is a comprehensive CapEx blend that covers all our businesses.
Yeah, Hassan, I'll take the second part of your question in terms of when we will expect to see timing. Clearly, any patient that is on HDF, we can expect to start that clock ticking after the three months and within that two-and-a-half-year period, see the full benefit. Obviously, as we've outlined today, we've been talking a lot about the CONVINCE study and the mortality benefits, but I think you also see this reduced hospitalization and the patient feeling better. Patient retention also plays into that. We will see this ramp up over time. As I mentioned, it's a complex balance right now of, as you can imagine, I'm impatient and I want to go as fast as possible, but at the same time, balancing disruption and what we already have installed and getting all of our clinic staff trained.
I think you'll see this ramp up over time. Some of the benefits will come soon, but the 2%+ patient growth, HDF, we see on top of that. Obviously, as we are rolling this out, we'll report accordingly over the course of the next quarters and years.
Thank you. Robert Davies from Morgan Stanley. My question was on the savings targets that you put out with the additional EUR 300 million. I think you made some comments on the expected margin trajectory across the three divisions, the Care Delivery business to be more, I guess, back-end loaded, whereas the other two are more straight line. Can you just walk us through the building blocks for that bridge, I guess, out to your mid-teens margins if you have effectively a front-loaded savings target for 2026, 2027? Thank you.
Yes. As we outlined before, there are multiple building blocks, and the FME25+ program is one element that addresses the first two years, so to say, of that journey for all our segments. For Care Delivery specifically, we are focusing on supply chain optimization as well as further optimization of our clinic footprint and efficiencies that we want to drive also in the real estate program. Now, overall, for Care Delivery, as we outlined, a building block is also the growth in patient numbers, which is focused on the management of the inflow, as we outlined, as well as the outflow. The inflow, I think Frank gave a lot of, let's say, fundamental data when it comes to CKD and ESRD and the transition, as well as the role that certain medication plays.
Also on the outflow, you see high-volume HDF, but also the focus on patient care and quality being there. It is about driving other efficiencies. When Helen talked about driving that process efficiency and deploying technology, that is another element in it. We are focusing also here not only on process, but also on improving our yield for the rates, both on the rate as well as on the revenue cycle management side, which is also a process management initiative to improve our yield. When you look at those together with the continued rollout of 20% of installed base conversion for the high-volume HDF and then the picking up benefit from the HDF treatments, both on the treatment yield and the reduced mortality, that leads a bit to the back-end loadedness, so to say, on the volume side.
Because also here, if we increase utilization of our clinics, you will see an overproportional contribution as well from that side.
Falko was longer. Thank you.
Thank you. It's Falko Friedrichs from Deutsche Bank. Thanks for the comprehensive update. How should we think about sales growth for your company over the medium term until 2030? I think that was one of the few missing parts in your financial guidance. Thank you.
Yeah, sure. There are two elements here. We did not provide you a revenue guidance. We did provide you with a view on how we see the fundamentals develop. We gave you that view on both key segments. We gave you that view on Care Delivery as well as Care Enablement when we talked about the 4%-5% growth per annum on the patient number and also the 2%+ in the United States, plus the increase in treatment yield, which is the fundamental drivers to sales growth next to the reimbursement. On the assumptions, we laid out that only moderate reimbursement increases are part of our assumptions, as well as a mix improvement is also part of the assumptions that we took.
On the care enablement piece, we did talk about continued innovation, leveraging the strengths of the market share that we have to gain further share, and also pricing, making sure that we get reimbursed for our innovation power as well. Lastly, on the value-based care topic, it is a function of us looking into margin improvements while at the same time managing the right contracts that we want to acquire, which will also drive to a certain extent growth.
I think the 5008 machine was launched 20 years ago in Europe already. I wonder why it took so long to get it to the U.S. with the incremental improvement over the years. It also took 15 years to start the convinced study. We have the data since two years. Would it happen again at that speed that we ignited FMC, or would it happen faster?
Yeah. 5008 series machines launched quite a few years ago, and HDF began in its various forms of modalities likewise quite a few years ago. The machine that is prepared for the United States has multiple special features that in the breakout session this afternoon, you'll hear quite a bit about from Katarzyna and Joe. It recognizes that there were many features to that series of machine that were built specifically for operating in the United States. That's one reason why it's taken this long to get there. The regulatory framework is slightly different in the United States. This will be the first machine that produces online fluids for intravenous substitution fluids in the United States that will remove saline bags from the work that we do in this. I think the complexity of these machines while bringing it in is one.
Now, on the other side, the tipping of the balance on the clinical evidence really came when the European Union decided to fund the CONVINCE trial. I can recall the development of that trial was leveraged on the ability to generate patient-reported outcome measures. That's why they approved it in the way that they did. That trial did not report out till 2023. Being a large multinational, multi-provider, multi-location and background, most of the other randomized control trials were much smaller, not nearly as long, and not nearly as, I hate to say, convincing, but in fact, convincing as this data. This truly was a sentinel trial.
I'll take your second part of the question. Would I love to have HDF in the U.S. sooner? Absolutely. We didn't, but we have it now, and we're going to do our very best with it, and we're super excited about it. Don't forget, this med tech organization didn't exist like it exists now less than three years ago. This is the beauty of the operating model and how we've aligned around our verticals. We have a clear R&D strategy that is fueling the innovation, that is fueling the global launch. It shouldn't have been lost on you this morning when I said the 5008X platform is the first time we actually have one machine all on a global platform. Out in the lobby, you can already see the 6008, which is available in parts of Europe.
Going forward, that is our operating and behaving like a med tech company. We will continue to innovate the global platform and roll that out. I mean, we all know the U.S. regulatory framework is complex. It does take longer. I think also with our mindset of any new machine, it's the extent that any new machine should be innovated to provide better outcomes and reduce cost, that all markets in the world should benefit from that innovation. That is the go-forward approach.
Thanks. David Adlington from JPMorgan. Maybe just on HVHDF again. I think you were hinting at potential for higher reimbursement, potentially in the U.S. I just wondered what the payers will need to see for that. I think outside the U.S., you've only got higher reimbursement in a couple of markets. What gives you the confidence you will get higher reimbursement?
Yeah, I use the words reimagining reimbursement. Look, for the past 40 years, I mean, we've just been in an environment where it is trying to get paid for an increasing cost base and hope that the reimbursement covers that. This is the first time in 40 years that we really have a significant improvement in outcomes. And obviously, we've invested in this machine, and you can see for yourself the benefits that this innovation presents, not just for patients, but also for the dialysis providers in terms of efficiency. The current roadmap that we have does not assume any change in reimbursement outside the moderate reimbursement increases. The business case for HDF still works and is still strong with that assumption. That is not where I'd like the outcome to be.
I think there are many, many levers where we can look at the kind of benefit of this therapy. I'll take commercial mix as a good example of that. You all know kind of the mechanisms of our business and where commercial mix sits. Today, on average, patients are only staying on commercial insurance for around 23-24 months. As you know, in the current MSP setup, that's up to 33 months. With what we are seeing from patients and how they are feeling coming off HDF, as well as the mortality improvement, we could start to see that mix improving in time. The MSP period of 33 months hasn't been changed in decades also. I think for us, talking about the outcomes and that 23% on average improvement does translate to about 18 months extra life.
I think the conversations that we are having with government and payers is showing those outcomes. For me, it's like kind of looking, okay, add-on payment for the machine, looking at changing the PPS rate, maybe changing, kind of tackling the MSP period. I think all opportunities that we know do not get solved overnight. They do not get solved tomorrow, but certainly over these next couple of years, that is kind of the approach that we will be taking. We clearly want to get rewarded for our innovation. Obviously, bringing something of this magnitude for the mortality improvements is significant. I think all of that together is the path that we're on. You saw the approach that we're taking to the launch. Obviously, our kind of contracting and government affairs piece is a part of that as well.
My goal is to truly get reimbursed for the outcomes that we are providing, as well as obviously benefiting from the lower costs.
Good. I guess people who haven't asked a question first. Here you go.
Thank you very much. Again, we're from Invesco. Talked a lot on the in-clinic sort of dialysis at the moment. But in terms of the in-home dialysis, I mean, does this any chance this technology has any spillover to improve that side of things? And second part would be, could you just remind us on any sort of margin differential between in-home and in-center, please? Thank you.
Yeah, I can take the first part of that question. As we think about using these two physical principles of diffusion and convection for treating somebody with a hemodialytic kidney replacement therapy, the opportunity exists to look at developing a home machine that would have the capabilities of doing HDF. Today, that does not exist in the marketplace. We think first the introduction for our in-center patients, which is the predominant number of dialysis patients, is the right way to go. There is certainly opportunity for home patients to benefit.
We're incredibly committed to home as part of our strategy. We see the benefits that our patients get from that. I think all the financial benefits from a home setting we have spoke about at length over the years in terms of it tends to lend itself to a younger, healthier commercial patient with medical justification. They can get four treatments. We're kind of diffusing the cost of care out of clinic to a home care setting and a caregiver. All of those benefits for home are still there. We do not disclose our margin by vertical, but what we do know is our home business is more profitable. Our aspiration, you heard us talk this morning, while home is an incredible part of our strategy, we've kind of stagnated at that low 16% place of home.
I say stagnated more because the same labor that we needed to train in the home was the same labor we were desperately trying to get in our clinics in a post-COVID environment. I am incredibly excited about our continued aspiration of increasing our penetration in the home space. I think the question that you are asking is one that we are tackling internally on how can we make, even in a home setting, this therapy kind of also fit in that a patient can still continue to select where they want their care, either in-center or at home.
Swen Kurten, you said being a follow-up on the home dialysis situation. I remember your former target was about 25% in 2027 as a penetration rate. Is it still valid? What's your current assumption on the 2030 number?
Yeah, we always said the 25% by 2027 was an aspiration. Clearly, we're not there yet. It is still our aspiration to get there, and we still believe we can, just a longer runway that will gradually increase over time.
Hi, it's James Vane- Tempest from Jefferies. Thanks for taking my question. Just to follow up on the MSP question, does your guidance include an assumption for an increasing number of months on insurance? I'm just trying to clarify in terms of thinking about GLP-1s and SGLTs potentially slowing the funnel, and then if patients are potentially then living longer, thinking about if more of them move then on to Medicare, how we should think about what the improving mix assumptions are in your guidance. Thank you.
Yeah, to be crystal clear, we're not assuming a change in the MSP period in this. That is more of our thinking around reimagining reimbursement for HDF, where the MSP period of 33 months has roughly been about half of the time that a patient is on dialysis. If you think about a patient being on dialysis six to seven years, that MSP period is covering roughly half of that. If you fast forward and see an environment where patients are living longer on dialysis, whether that be HDF or even because of the cardiovascular treatment from GLPs, that life expectancy gets longer. I think the question that we want to tackle is, does that then give us an opportunity to push the MSP period in a different direction? None of that is included, kind of just moderate reimbursement increases and slightly improving mix. Anything else?
Nope. No.
That's good. Next question.
We'll start from the beginning. Please keep the order.
I'll explain patiently. It's much easier when we have a line on the screen.
Thanks. It's Graham from UBS again. Just on the HDF side in terms of care enablement, if you're rolling it out in the U.S. and there isn't enhanced reimbursement for consumables or per treatment, is it still economic to do that? And as economic as it would be on the old device, in which case, is there any reason why another company would not just purchase this as they naturally upgrade their installed base? Presumably, you don't have to have an enhanced reimbursement on a per treatment basis to sell this.
That's right. That was the point I was making. Our business case stands for itself with all the benefits that we've outlined without any significant change in reimbursement. The efficiencies, the cost structure, and extra patient volume alone makes it viable, incredibly viable. Veronika.
Being patient pays off. I'm going to sort of phrase Graham's question slightly differently. Obviously, the HVHDF technology has been in Europe for a long time. From the data that I can see, penetration is still fairly low at sort of 30%-35%. I know there are some exceptions where you have premium reimbursement, but in general, the adoption hasn't been anywhere as dramatic as you're targeting in your own clinics and I think hoping to see in the market. Maybe if you can talk through why that's the case and why you think the U.S. will be different if we do not get premium reimbursement, why should the adoption be so much higher?
Yeah, I'll be happy to take that. Veronica, the way we look at it is the uptake in many countries was driven by their payment system. Those payment systems occasionally required premium reimbursement. Some payment systems capped the number of the proportion. Where we do not have any caps in our network, we have places like the Czech Republic that has 98% HVHDF. We have a number of countries that have extraordinarily high levels. We see the results in the outcomes in those populations of patients, predominantly in Europe.
The puts and takes on a variety of issues related to the new machinery offer the opportunity for us to deliver this therapy in the United States, where reimbursement is unique to its own health system in a way that we can deliver that therapy without having a mandate that you must have that reimbursement to be able to offer it. We think that the building blocks of diffusion and convection offer a good case for additional reimbursement, but it's not a required case in the models that we've done based on the outcomes that patients have. That's both in a non-value-based care environment and in a value-based care environment.
Hi, Lisa Clive from Bernstein again. I was just going to follow up on James Vane's question, which I think it was a slightly different question around in your assumptions, because you talk about improving mix, you mentioned that most private patients, even though the MSP is 33 months, are only there for 23-24 months. It's helpful to understand that there is that gap. How much of the improvement in mix is around increasing that? Could you just give us a bit more granularity on this? Obviously, a lot of patients, when they go on to in-center dialysis, have to quit their job. They end up on COBRA. COBRA only really covers them for 18 months. It becomes incredibly expensive to keep that private insurance going. Hence, you lose those months. Could you just talk about the dynamics and how that potentially changes?
Obviously, home dialysis is a feature, but it seems like HDF may be a new angle on this possibility for more private patients or keeping private patients private for longer. Thanks.
Let me take that on the assumption side. When we talk about mix improvements, and we were consistent over the last couple of years that we were also always very moderate because we do not want to make ourselves too overdependent on the measures that we drive to achieve our financial performance. We are not bullish on this. We are consistent with past approaches. Having said that, for the high-volume HDF benefit to kick in after three months and then with the continued rollout of 20% conversion, we see that hitting the overall population. It is not like it is hitting one proportion more. It is impacting the population as it is with the mix as we see it. There will be a benefit for the respective populations in commercial, in Medicare Advantage also on a prolongation of life.
When we talk about the mix in the underlying assumptions, we talk about payer mix improvement that we also saw with Medicare Advantage and others to continue on the underlying trend in a non-aggressive way. I hope that gives a bit of color.
Lisa, the only other thing I'd add is that we've seen in our real-world evidence that the benefit of high-volume post-dilution HDF on the incident, the brand new patient to dialysis, is even stronger than it was in the CONVINCE trial. That actually lends itself towards being able to start patients with HDF, get up to high convection volumes, see the benefit within those three months, and actually have much better outcomes in the incident population, which is a substantial opportunity.
Okay, here's Oliver again from ODDO. Another question on value-based care. You described market share of 11% stage four, 12% at ESRD. How should we think about the value you can generate within the different stages? Is it fair to assume that 80% of the value which comes from value-based care is coming from ESRD? Or should we conceptually think more about the evolvement of patients who are in stage four now and entering ESRD earlier?
I'll start with that. This continuum of chronic kidney disease care from mid-stage CKD all the way through end-stage kidney disease and kidney replacement therapies is really quite a critical feature of where you get quality outcomes on all three parts of that. As patients progress with kidney disease, their physiology requires that they have more problems that need medical attention. Their costs increase as they're progressing through the various stages. If they can be kept alive and you can, in fact, prepare them well for the ultimate progression to either kidney replacement therapy through a dialytic mode or through a kidney transplant or something like that, their outcomes are fundamentally better.
This optimal start concept where a patient starts in a non-emergent setting with a permanent vascular access or peritoneal dialysis without the need for an intravascular access is a huge area where Interwell has succeeded remarkably. I think as you saw in Helen's presentation, they're two and a half times the national average in optimal starts with patients. If you also recognize that 40%-50% of our patients crash into dialysis today without adequate care in the last year of dialysis, this offers a huge opportunity to lower those costs in the late-stage kidney disease area and transition patients much more successfully.
Yeah, and we think our sweet spot is in that late-stage CKD, ESRD. Also, what we know is taking on risk for ESRD only is not an option for either the government or the payers. As we look about, you kind of looked at the bridge of how we improve profitability in the words of smart contracting or improve contracting, that is where we also will be laser-focused and hone in. When you are talking to the managed care organizations who are entering into the value-based care arrangements, they want kind of the likes of us to take on more of that risk because, of course, it is the cost. We are also trying to find that sweet spot where we can effectively manage the CKD patients at the right stage and intervene there to get a healthier patient ultimately coming into ESRD.
Of course, there's no question that ESRD is our sweet spot and that we know how to manage those patients. I think that's the piece in terms of the good contracting and making sure that we are putting our arms around a patient population that we can manage. As Frank said, it is still hard to imagine in 2025 that half of our patients are finding out they have end-stage renal disease when they crash into an OR. I think obviously the more that we can participate in those patients earlier and have them optimal start and have a healthier patient coming in because we're managing the care, that's better for everybody. Obviously, as we've talked about, the value of the vertical integration into the care delivering business. That integrated care is very key.
I think we can also see how we can participate even more, even in our ESRD patient population and that patient engagement.
You specifically asked on the assumption for VPC. You saw the improvement on the three levels that we laid out. You also saw the track record of reducing the negativity last year where we generated savings. You see ESRD and CKD. We know which contract works and what we need to do. In the last year, we learned that as well. When we talk about reducing medical cost, it is about also making sure that we increase the penetration as we laid out in those. It is more of applying the learnings over the last year to that population for VPC only next to the benefits for CD that were outlined.
Yeah, and in the same way, when we look at our clinic business, when you look at the contracting strategy there, we're looking at it here. As you heard me say this morning, we produced 80% of the gross savings out of the KCC program. We also look KCE by KCE. And we dared to exit some of those unprofitable. In the same way, we talk about exiting unprofitable contracts elsewhere. We also exited some of the non-performing unprofitable KCEs. So we're taking the same approach that we do on the rest of our contracting strategy on CD to value-based care to make sure that we are participating in the right place and driving profitable growth. I think this is a nascent industry. It's a new business. It's been building. So we've also been kind of setting this up. And I think the quality metrics are outstanding.
We do have the best asset in this space. Now I think we've got a kind of a scale that we've built up that we can also leverage now in terms of operational efficiencies too.
Thank you. It's Falko Friedrichs from Deutsche Bank again. When you reported Q1 a few months ago, you told us that you would expect the U.S. same market treatment growth to improve again meaningfully in the second quarter. Now that the quarter has concluded, I'm not expecting you to give us.
Oh, good.
Can you at least confirm that you have seen more meaningful improvements again in the second quarter? Looking ahead into the next year, is this 2%+ growth rate already potentially achievable in 2026? Or would you say it probably takes a little bit longer to get back there?
You know what I'm going to say about Q2. I appreciate the attempt at a question to get us, give us that insight. Obviously, we'll report out on that in early August. You know we also have a lag on the data. I think our early read of the data looks very similar to Q1. Obviously, we'll quantify that once we have the extra data points and the catch-up in the data. We still obviously have that guide out there of 0.5%+ for 2025. As you saw from Frank this morning, as he unpacked all of those underlying fundamentals of the business, all looking strong. That is what gives us the confidence of the 2%+ that obviously will increase over time here too.
Our population impact modeling recognizes that post-pandemic, we were headed on a very steady trajectory pre-pandemic. You had the pandemic occur and you had a dip that occurred. We are coming out of that dip at this point. You do not hit the full potential of getting back on the growth trajectory that is expected instantly. We see the trends working in the correct direction in both late-stage CKD and in patients that we have opportunities to treat.
Holger Blum, Patinex Management. You mentioned innovation as a key focus area going forward. You probably mentioned HDF 50x or so. I.
51 now.
I remember the word pipeline just mentioned once. Maybe you can explain a bit more what else you got in the pipeline in the medical device space, but maybe also in the pharma space, whether there's anything there from the joint venture to expect that could have an impact on your P&L going forward.
I'm going to do a shameless plug for the deep dive session for Care Enablement this afternoon because I think that's where they will show you some exciting deeper dives into that pipeline and the R&D and what they're thinking about. You can tell our excitement about 5008, but there is more, I promise. Do you want to take pharma?
Sure. There are a number of drugs in the field that have significant interest. The interest of big pharma has changed over the last few years with regard to this space. I think there are a number of classes of drugs that have significant potential to really help patients with kidney failure. IL-6 inhibitors, the drugs that are used in transplant medicine, are continuing to evolve, as well are the opportunities for us to look at how we use both the data and some of the new drugs to optimize combinations of drugs. We have distinct interest in how we might actually look scientifically at both the GLP-1s and the SGLT2 inhibitors in the end-stage kidney disease population where they're typically not used very much because we think that cardiovascular benefit might translate over into the population. That's going to require a fair amount of scientific study still.
Hi, Hassan again from Barclays. You've talked about share gains in consumables, extra volumes in the clinic from HDF. What about the prospect of share gains in the clinic, at least in the short to medium term, given what will likely be a longer competitor upgrade cycle versus yours assuming no changes in reimbursement?
Yeah, look, I think it's fair to say that our improvements in care delivery are not only HDF and the other things that we've talked about. As we talk about the real focus on driving growth, you will have seen a lot of that was on patient retention and keeping, once we got the patient in, that focus on patient quality and admissions and kind of the adherence to treatment longer. I think that's also a piece of that volume. Yes, we do see opportunity to have increased treatments as the combination of once we've got the patient inflow, it's another part of reducing the patient outflow.
Questions. I'll start here and then I'll get my steps done today.
Here we go.
Hi, David Adlington again from JPMorgan. Just so we're on the right page, just in terms of revenue guidance, I know you're not giving revenue guidance, but perhaps you could try and quantify the headwinds you're potentially seeing from some exits from other markets or value-based care, anything like that, to quantify the impact that could have in terms of headwind. Thanks.
The other divestitures.
Yeah. What we do quantify is the headwind that we have in divestitures and what that does for 2025. Other than that, we have not given any specific guidance on headwinds that come out for the revenue side of our segments. On the contrary, we have been clear that we want to grow value-based care business based on membership growth. It is one of the topics that we also proactively addressed. We have also given you a bit the assumptions around the underlying factors that drive patient growth. With patient growth, also the treatment grows with the increased yield. I think that is, from our perspective, more underlying growth drivers and not so much headwinds that are coming there.
The 4%-5% globally and the 2% plus that we have in the U.S. is valid and applicable for both segments if you wish as an underlying revenue driver.
Our last question.
Last question.
Thank you, Dominik. It's Jason Jefferies. Again, just another clarification question actually on guidance. So FME25+ goes to 2027, and you've given 2030 margin guidance. Can you just confirm you don't need another savings program to reach the 2030 margin target that you've given? The second half of that period is going to be driven by the business model. Any new savings would be incremental to that guidance.
Yes.
Yes.
Yes.
Yes.
Yes.
Great. Thank you.
On the overall scheme, it's 100-150 basis points that FME25 only contributes to the 300-400 basis points overall.
Okay. Good. I think you got enough heat now. Thank you all for your really great questions. I know we might not have answered all because I was not fast enough. You will have, as mentioned, enough time in the deep dive breakout sessions to ask more questions in detail. We will do a one and a half hour break now, which should enable all of you to either visit our board bistro outside, visit the Care Enablement product showcase also with our 5008X, which was somehow mentioned during the day so far. Please use that opportunity. We have brought in knowledgeable colleagues who show these new machines. You can also use the time to buy Fresenius Medical Care shares, cheap today, or upgrade your rating if you wish to.
One other important announcement from the pilot today is that your connecting flights, also called deep dive breakout sessions, will take off sharp at 2:00 P.M. on the mezzanine level, which is one floor down. When you exit, there are elevators to the right. You can go one floor down. Or if you walk a little bit further, there are staircases to walk down. To find your assigned sessions, just flip over your name badge. There is a small icon on the back pointing you in the right direction. On the mezzanine level, we have put up some very clear signs to help you find your way to the group and room indicated, that also on the leaflet you got this morning at the registration. To everyone who joined us via webcast, thank you for tuning in today. We hope you enjoyed the Reignite sessions.
All presentations, as well as the historical financials for everyone who wants to make a new model now, will be made available on the website after the event. Thank you for bearing with me. Now enjoy your lunch, enjoy the showcase. Do not forget, boarding for the next flight is 2:00 P.M. downstairs.
Thank you.
Thank you.