Corporate performance criteria

The Management Board makes strategic and operational management decisions based on our Group-wide performance indicators for growth, profitability, liquidity, capital efficiency, and capital management. The most important financial performance indicators for us are explained below and a definition is provided in the glossary of financial terms.

As part of the Fresenius Financial Framework, we have defined ambition levels (growth bands, among others EBIT margin) for the business segments. These serve as an ambition level for the internal management of our business sectors and are benchmarked against leading competitors.

The key figures for the financial performance indicators for 2025 of the Group and the business segments can be found in the Outlook section.

Growth

For Fresenius, currency-adjusted revenue growth, in particular organic revenue growth in the Group and in the business segments, is of central importance for managing revenue growth. It shows the growth of our business that comes from our own resources and not from acquisitions, divestitures, or currency translation and hyperinflation effects. Currency translation effects are for example the difference between revenue in the reporting period at the exchange rates of the reporting period, less revenues in the reporting period at the exchange rates of the comparative period. A portfolio effect takes place in the case of an acquisition or divestment. Any portfolio effect is excluded for 12 months after the end of the relevant transaction in the reporting or comparative period, after which both current and prior periods fully reflect the portfolio change.

In the Fresenius Financial Framework, organic revenue growth represents the key performance indicator for the Group’s growth and that of the business segments. With the Fresenius Financial Framework, we have defined annual organic revenue growth ranges (ambition levels) for the Operating Companies.

Profitability

At Group level, we primarily use earnings before interest and taxes (EBIT) and EBIT growth in constant currency.

As part of the new Fresenius Financial Framework, we have defined annual margin bands (ambition levels) for the business segments. These serve as an ambition level for the internal management of our business sectors and are benchmarked against leading competitors. At the Fresenius Helios Capital Markets Day in June 2024, we raised the structural EBIT margin ambition range for this business segment from 9% to 11% to 10% to 12%. In February 2025, we raised the structural EBIT margin ambition range for Fresenius Kabi from 14% to 17% to 16% to 18%. The annual EBIT margin is defined as earnings before interest and taxes divided by revenue.

To improve comparability of operating performance over several periods, the earnings figure is adjusted for special items where necessary.

Liquidity and dividend

Within the Group, cash conversion rate (CCR) was used as the main liquidity indicator in fiscal year 2024. CCR is defined as the ratio of adjusted free cash flow (cash flow before acquisitions and dividends; before interest, taxes, and special items) to operating income (EBIT) before special items. This allows us to assess our ability to generate cash and pay dividends, among other things. The ambition level for the CCR is around 1.0, considering the growth profile of the respective year.

Fresenius is committed to generating attractive and predictable dividend yields as set out in the Fresenius Financial Framework. As part of the full-year reporting in February 2025, Fresenius defined a new dividend policy. Our target is to distribute ~30–40% of core net income (net income excluding FMC, before special items). The new dividend policy reflects the capital allocation priorities in line with the #FutureFresenius strategy. It also underscores our intention to reinvest in growth, reduce leverage, maintain a solid investment-grade rating and provide attractive shareholder returns.

FINANCIAL PERFORMANCE INDICATORS

Capital efficiency

We work as profitably and efficiently as possible with the capital provided to us by shareholders and lenders.

Under the Fresenius Financial Framework, the Group’s capital efficiency is managed on the basis of return on invested capital (ROIC). This serves as an ambition level for the internal management of our Group. We aim to achieve a ROIC (including goodwill) of between 6% and 8%. An overview of the return on invested capital by business area can be found in the Group Management Report.

Capital management

We use the ratio of net debt and EBITDA as the key parameter for managing the capital structure. This measure indicates the degree to which a company is able to meet its payment obligations. Our business segments usually hold leading positions in growing and mostly non-cyclical markets. Since the majority of our customers are of high credit quality, they generate mainly stable, predictable cash flows. According to the management assessment, the Group is therefore able to use debt to finance its growth to a greater extent than companies in other industries.

Due to the improved earnings situation and debt reduction in the 2024 fiscal year, the Management Board revised the self-defined target range for the leverage ratio to 2.5× to 3.0× (previously: 3.0× to 3.5×) as part of the full-year reporting in February 2025.

Non-financial performance targets

In fiscal year 2024, sustainability was included as a non-financial performance target in the Management Board compensation system (Short-Term Incentive; STI). The KPIs cover the key sustainability topics of medical quality / patient satisfaction and employees. An additional ESG component is included in the long-term compensation of the Management Board, as explained in the Compensation Report.

The topic of employees is evaluated with the key figure of the Employee Engagement Index (EEI) for the Fresenius Group. The indicator measures how positively employees identify with their employer, how committed they feel, and how engaged they are at work. The index is the weighted average of engagement scores derived from a business segment’s entities included in the survey. The EEI is measured within the range of 1 (strongly disagree) to 6 (strongly agree).

For the 2025 fiscal year, Fresenius is targeting an EEI of 4.33 (corresponds to 100% target achievement).

The Medical Quality topic is made up of equally weighted key performance indicators defined at business segment level. The key figures are based on their respective materiality for the business model.

• Fresenius Kabi: Audit & Inspection Score
• Fresenius Helios: Inpatient Quality Indicator

The Audit & Inspection Score at Fresenius Kabi is based on the number of critical and serious non-conformances from regulatory GMP inspections and the number of serious non-conformances from TÜV ISO 9001 audits in relation to the total number of inspections and audits performed. The score shows how many deviations were identified on average during the inspections and audits considered (scale >0).

For the 2025 fiscal year, Fresenius Kabi is targeting an Audit & Inspection Score of no more than 2.3 (100% target achievement).

The Inpatient Quality Indicator at Fresenius Helios comprises the measurement of a set of standardized German inpatient quality indicators (G-IQI / E-IQI). These are based on routinely collected hospital billing data from hospital information systems. The number of indicators achieved compared to the total number of indicators is calculated to measure the overall success rate. There is individual target setting and measurement of target achievement in the two Helios segments Helios Germany and Helios Spain. Subsequently, target achievement is consolidated at Helios company level with equal weighting (50% each) for Executive Board compensation. The Inpatient Quality Indicator is measured on a scale of 0% to 100%.

For the 2025 fiscal year, Helios Germany is targeting an Inpatient Quality Indicator (G-IQI) score of at least 88% (100% target achievement); an Inpatient Quality Indicator (E-IQI) score of at least 75% (100% target achievement) is targeted for Helios Spain. The differences in the values between the two countries are a result of the adaptation of quality measurement to the German standard in Spain, which was then gradually rolled out in the clinics.

Further information can be found in the Compensation Report starting on page 43.

NON-FINANCIAL PERFORMANCE INDICATORS

Investment and acquisition process

Our investments and acquisitions are carried out based on a detailed coordination and evaluation process. As a first step, the Management Board sets the Group’s investment targets and the budget based on investment proposals. In the next step, the respective business segments, the relevant corporate functions and internal committees determine the proposed projects and measures, taking into account the overall strategy, the total investment budget, and the required and potential return on investment. We evaluate investment projects based on commonly used methods, such as internal rate of return (IRR) and net present value (NPV). Within the framework of the due diligence process, opportunities and risks associated with the potential acquisition target are analyzed and assessed. To this end, we review the business model, the key financial figures, potential synergies and tax issues, and the resulting company valuation. In addition, we comprehensively analyze the market and competitive environment, the regulatory framework, and the legal aspects. The audit also covers various issues relating to compliance, production, research and development, quality, information technology, human resources, and the environment. Based on investment volume, a project is submitted for approval to the executive committees or respective managements of the business segments, to the Group Management Board of Fresenius Management SE, and / or, if applicable, also additionally for the consent of its Supervisory Board.

You can find more details on our key performance indicators in our interactive tool on our website at www.fresenius.com/interactive-tool.

Development of financial performance indicators, 5 years

Development of non-financial performance indicators, 5 years