| Notes to the consolidated statements of income |
3. Notes to the consolidated statements of income a) Revenue The Company has recognized the following revenue in the consolidated statements of income for the three and nine months ended September 30, 2025 and 2024: Revenue in € K | | | | | | | | | | | Revenue from | | Revenue from | | | | | | | contracts with | | insurance | | Revenue from | | | | | customers | | contracts | | lease contracts | | Total | | | | For the three months ended September 30, 2025 | Healthcare services | | 3,219,669 | | — | | — | | 3,219,669 | Healthcare products | | 1,077,194 | | — | | 20,409 | | 1,097,603 | Insurance contracts | | — | | 567,578 | | — | | 567,578 | Total | | 4,296,863 | | 567,578 | | 20,409 | | 4,884,850 |
| | | | | | | | | | | For the three months ended September 30, 2024 | | | Revenue from | | Revenue from | | | | | | | contracts with | | insurance | | Revenue from | | | | | customers | | contracts | | lease contracts | | Total | Healthcare services | | 3,292,628 | | — | | — | | 3,292,628 | Healthcare products | | 1,021,882 | | — | | 15,706 | | 1,037,588 | Insurance contracts | | — | | 429,946 | | — | | 429,946 | Total | | 4,314,510 | | 429,946 | | 15,706 | | 4,760,162 |
| | | | | | | | | | | For the nine months ended September 30, 2025 | | | Revenue from | | Revenue from | | | | | | | contracts with | | insurance | | Revenue from | | | | | customers | | contracts | | lease contracts | | Total | Healthcare services | | 9,721,334 | | — | | — | | 9,721,334 | Healthcare products | | 3,214,731 | | — | | 62,735 | | 3,277,466 | Insurance contracts | | — | | 1,559,217 | | — | | 1,559,217 | Total | | 12,936,065 | | 1,559,217 | | 62,735 | | 14,558,017 |
| | | | | | | | | | | For the nine months ended September 30, 2024 | | | Revenue from | | Revenue from | | | | | | | contracts with | | insurance | | Revenue from | | | | | customers | | contracts | | lease contracts | | Total | Healthcare services | | 9,986,979 | | — | | — | | 9,986,979 | Healthcare products | | 3,000,649 | | — | | 57,497 | | 3,058,146 | Insurance contracts | | — | | 1,205,997 | | — | | 1,205,997 | Total | | 12,987,628 | | 1,205,997 | | 57,497 | | 14,251,122 |
The following table contains a disaggregation of revenue by categories for the three and nine months ended September 30, 2025 and 2024: Disaggregation of revenue by categories in € K | | | | | | | | | | | For the three months ended | | For the nine months ended | | | September 30, | | September 30, | | | 2025 | | 2024 | | 2025 | | 2024 | Care Delivery | | 3,401,706 | | 3,470,861 | | 10,229,217 | | 10,432,522 | Thereof: U.S. | | 2,841,894 | | 2,880,791 | | 8,550,486 | | 8,542,073 | Thereof: International | | 559,812 | | 590,070 | | 1,678,731 | | 1,890,449 | Value-Based Care | | 575,517 | | 430,605 | | 1,610,703 | | 1,268,706 | Care Enablement | | 1,360,660 | | 1,359,407 | | 4,075,435 | | 4,019,836 | Inter-segment eliminations | | (453,033) | | (500,711) | | (1,357,338) | | (1,469,942) | Total | | 4,884,850 | | 4,760,162 | | 14,558,017 | | 14,251,122 |
For further information on segment revenues, including a split between revenue from internal and external customers, see note 13. b) Selling, general and administrative expense Selling, general and administrative expense recorded in the consolidated statements of income comprises both distribution costs as well as general and administrative expense. Distribution costs are generated in the selling, marketing and warehousing functions of the Company which are not attributable to production or research and development (R&D). General and administrative expense is generated in the administrative function of the Company’s business and is not attributable to selling, production or R&D. The following table discloses the distribution costs as well as general and administrative expense recorded by the Company for the three and nine months ended September 30, 2025 and 2024: Selling, general and administrative expense in € K | | | | | | | | | | | For the three months ended | | For the nine months ended | | | September 30, | | September 30, | | | 2025 | | 2024 | | 2025 | | 2024 | Distribution costs | | 186,122 | | 200,325 | | 560,867 | | 581,861 | General and administrative expense | | 519,318 | | 555,821 | | 1,687,238 | | 1,721,395 | Selling, general and administrative expense | | 705,440 | | 756,146 | | 2,248,105 | | 2,303,256 |
c) Other operating income and expense The following table contains reconciliations of the amounts included in other operating income and expense for the three and nine months ended September 30, 2025 and 2024: Other operating income in € K | | | | | | | | | | | For the three months ended | | For the nine months ended | | | September 30, | | September 30, | | | 2025 | | 2024 | | 2025 | | 2024 | Foreign exchange gains | | 36,200 | | 61,274 | | 301,410 | | 180,984 | Gains on right-of-use assets, from the sale of fixed assets, clinics and investments | | 1,097 | | 14,131 | | 7,668 | | 20,952 | Revaluation of certain investments (1) | | (178) | | 18,107 | | 7,328 | | 79,190 | Income attributable to a consent agreement on foregone profits from the sale of certain pharmaceuticals to non-associated companies | | — | | 62,369 | | — | | 62,369 | Income from strategic transactions and programs | | 2,405 | | 16,079 | | 10,342 | | 103,576 | Other | | 16,553 | | 19,106 | | 70,488 | | 85,423 | Other operating income | | 56,077 | | 191,066 | | 397,236 | | 532,494 |
Other operating expense in € K | | | | | | | | | | | For the three months ended | | For the nine months ended | | | September 30, | | September 30, | | | 2025 | | 2024 | | 2025 | | 2024 | Foreign exchange losses | | 47,958 | | 74,248 | | 338,678 | | 209,471 | Losses on right-of-use assets, from the sale of fixed assets, clinics and investments | | 5,200 | | 5,881 | | 8,162 | | 8,951 | Revaluation of certain investments (1) | | 5,027 | | — | | 70,173 | | — | Expenses from strategic transactions and programs | | 53,225 | | 3,897 | | 94,084 | | 266,327 | Other | | 13,864 | | 35,483 | | 65,747 | | 66,512 | Other operating expense | | 125,274 | | 119,509 | | 576,844 | | 551,261 |
(1) | Primarily driven by the remeasurement of the Company’s investment in Humacyte, Inc. for the three and nine months ended September 30, 2025 and by both the remeasurement of the Company’s investment in Humacyte, Inc. and the remeasurement of receivables related to a royalty stream that the Company is entitled to base on sales made by Humacyte, Inc. in the U.S. for the three and nine months ended September 30, 2024. |
Included within the “income from strategic transactions and programs” line item in other operating income are the gains from divestitures of certain businesses in connection with strategic programs such as Legacy Portfolio Optimization, defined below. For the three and nine months ended September 30, 2025, the amounts primarily relate to the recovery of receivables associated with the divestiture of the Company’s service business in Ecuador and a gain from the sale of the Company’s service business in Malaysia. The amount presented for the three months ended September 30, 2024 primarily relates to the revaluation of certain assets held for sale and the divestiture of certain clinics as part of Legacy Portfolio Optimization. The amount presented for the nine months ended September 30, 2024 primarily relates to the divestiture of the Cura Day Hospitals Group in Australia as part of Legacy Portfolio Optimization. Included within the “expenses from strategic transactions and programs” line item in other operating expense are the divestitures (including proposed divestitures as of each reporting date and associated impairment losses) of certain businesses in connection with strategic programs such as Legacy Portfolio Optimization, defined below, and the FME25+ Program, as defined below. For further information on the proposed divestitures and associated impairment losses, see note 2. Consistent with the Company’s policy to present impairment losses within other operating expense, such costs related to cost of revenues, selling, general and administrative expense or R&D expenses are included within other operating expense. “Expenses from strategic transactions and programs” primarily consist of: | ● | strategic divestiture program expenses identified during the review of the Company’s business portfolio, mainly due to exiting unsustainable markets and divesting non-core businesses, as well as the cessation of certain R&D programs to enable more focused capital allocation towards areas in the Company’s core business that are expected to have higher profitable growth (Legacy Portfolio Optimization). For the three and nine months ended September 30, 2025, the amounts primarily include the proposed divestitures identified in note 2 and related severance payments, impairment losses resulting from the measurement of assets held for sale (related to the Company’s businesses in Brazil, Kazakhstan and Malaysia), impairment losses primarily related to right-of-use assets and losses from the sale of the Company’s service businesses in Brazil. For the three and nine months ended September 30, 2024, the amounts include the proposed divestitures in Brazil and Colombia in connection with its Legacy Portfolio Optimization program, impairment losses resulting from the measurement of assets held for sale (related to the Company’s businesses in Brazil, Colombia, Ecuador, Guatemala, Turkiye and Peru) and the divestitures of the Company’s service businesses in Chile, Curacao, Ecuador, Sub-Saharan Africa, Peru, Turkiye and the Cura Day Hospitals Group in Australia in connection of with its Legacy Portfolio Optimization. For the three and nine months ended September 30, 2025, the Company recorded a loss related to reclassification adjustments of foreign currency translation in the amount of €45,083 and €46,088, respectively, of which €45,083 is related to the Legacy Portfolio Optimization program. For the three and nine months ended September 30, 2024, the Company recorded a gain of €14 and a loss of €96,962, respectively, related to reclassification adjustments of foreign currency translation as a result of the Legacy Portfolio Optimization program. Reclassification adjustments of foreign currency translation that do not relate to strategic programs are included in the “other” line item in the table above; |
| ● | certain impairment losses in connection with the transformation of the Company’s operating structure and steps to achieve cost savings (FME25 Program), which was expanded by two years, the overall savings target increased and was renamed to the FME25+ Program (FME25+ Program); and |
| ● | certain costs associated with the change of the legal form of the Company from a partnership limited by shares (Kommanditgesellschaft auf Aktien – KGaA) into an AG (the Conversion) in 2023, primarily related to the requisite relabeling of its products, transaction costs (such as costs for external advisors and conducting an extraordinary general meeting) and costs related to the establishment of dedicated administrative functions required to manage certain services which have historically been administered at the Fresenius SE group level and paid by the Company through corporate charges (Legal Form Conversion Costs). |
Expenses from strategic transactions and programs comprised the following for the three and nine months ended September 30, 2025 and 2024: Expenses from strategic transactions and programs in € K | | | | | | | | | | | For the three months ended | | For the nine months ended | | | September 30, | | September 30, | | | 2025 | | 2024 | | 2025 | | 2024 | Impairment of intangible and tangible assets(1) | | 211 | | 897 | | 12,679 | | 3,361 | Legacy Portfolio Optimization | | (150) | | — | | 11,997 | | — | FME25+ Program | | 361 | | 897 | | 682 | | 3,361 | Impairment resulting from the measurement of assets held for sale | | (75) | | (2,340) | | 8,789 | | 117,837 | Legacy Portfolio Optimization | | (75) | | (2,340) | | 8,789 | | 117,837 | Loss from the sale of business | | 43,444 | | 2,808 | | 43,444 | | 111,855 | Legacy Portfolio Optimization | | 43,444 | | 2,808 | | 43,444 | | 111,855 | Other(2) | | 9,645 | | 2,532 | | 29,172 | | 33,274 | Legacy Portfolio Optimization | | 9,429 | | 577 | | 27,494 | | 28,050 | Legal Form Conversion Costs | | 216 | | 1,955 | | 1,678 | | 5,224 | Expenses from strategic transactions and programs | | 53,225 | | 3,897 | | 94,084 | | 266,327 |
| (1) | For the three and nine months ended September 30, 2025, the amounts primarily relate to cost of revenues and selling, general and administrative expense. For the three and nine months ended September 30, 2024, the amounts relate primarily to cost of revenues and R&D expense. |
| (2) | For the three and nine months ended September 30, 2025 and 2024, the amounts primarily relate to selling, general and administrative expense. |
For more information on the disposal groups classified as held for sale, see note 2. d) Earnings per share The following table contains reconciliations of the numerators and denominators of the basic and diluted earnings per share computations for the three and nine months ended September 30, 2025 and 2024: Reconciliation of basic and diluted earnings per share in € K, except share and per share data | | | | | | | | | | | For the three months ended | | For the nine months ended | | | September 30, | | September 30, | | | 2025 | | 2024 | | 2025 | | 2024 | Numerator: | | | | | | | | | Net income attributable to shareholders of FME AG | | 274,797 | | 213,027 | | 651,289 | | 471,014 | | | | | | | | | | Denominators: | | | | | | | | | Weighted average number of shares outstanding | | 292,101,583 | | 293,413,449 | | 292,971,355 | | 293,413,449 | Potentially dilutive shares (see note 10) | | — | | — | | — | | — | | | | | | | | | | Basic earnings per share | | 0.94 | | 0.73 | | 2.22 | | 1.61 | Diluted earnings per share | | 0.94 | | 0.73 | | 2.22 | | 1.61 |
Share buy-back program On the basis of the authorization granted by the Company’s Annual General Meeting on May 20, 2021, to conduct a share buy-back program, the Company launched its €1,000,000 share buy-back program (excluding ancillary transaction costs) in two tranches to be completed within two years by August 10, 2027. Under the first tranche, shares shall be acquired up to a maximum of €600,000 including any true-ups over a period ending latest April 30, 2026. The first tranche was initiated on August 11, 2025. As of September 30, 2025, the Company holds 3,564,523 treasury shares. These shares will be used predominantly to reduce the registered share capital of the Company by cancellation of the acquired shares and, to a significantly lesser extent, may be used for allocations under incentive-based compensation plans. The remaining liability related to the shares yet to be repurchased of €448,881 under the first tranche are recorded as financial liabilities within the Company’s consolidated balance sheets. The following tabular disclosure provides the number of shares acquired in the context of the share buy-back program: Treasury Stock | | | | | | | | | | | | | | | Total number of | | | | | | | | | shares purchased | | Maximum value of | | | | | | | and retired | | shares that may yet | | | | | | | as part of publicly | | be purchased under | | | Total number of | | Average price per | | announced plans or | | the plans or | Period | | shares purchased | | share | | programs | | programs | | | | | in € | | | | in € THOUS | | | | | | | | | | August 2025 | | 2,084,733 | | 42.68 | | 2,084,733 | | 511,021 | September 2025 | | 1,479,790 | | 42.45 | | 1,479,790 | | 448,210 | Total repurchased treasury stock (1) | | 3,564,523 | | 42.58 | | 3,564,523 | | 448,210 |
(1) | The difference between the maximum value of shares that may yet be purchased under the Company’s share buy-back program and the liability for such shares as of September 30, 2025 results from the timing of payments made for share repurchases on a weekly basis. The difference is recorded in the Consolidated statements of equity within Additional paid-in capital. |
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