ESRS S-Company-specific Innovation[S-Company-specific]

Our impacts, risks, and opportunities [SBM-3] Material impacts, risks, and opportunities and their interaction with strategy and business model

For Fresenius, innovation is the key to improved treatment options, more efficient workflows and high-quality healthcare solutions for the benefit of patients. To this end, we adapt our products and services to the needs of patients and market conditions. Insights arise from changes in market conditions or the conducting of clinical studies. Experts from various fields of medical research and practice use our database to develop new solutions to challenges in the healthcare sector. At the same time, innovation in our business area and along our entire value chain entails various impacts, as well as financial risks, and opportunities.

Innovation enables new and needs-oriented treatments and therefore has a positive impact on our patients and customers as well as employees in our own healthcare facilities and in the downstream value chain. The further development of our services and products and their adaptation to changing market conditions or needs can also help to increase customer satisfaction in the short-term and to maintain it in the long-term. This strengthens people’s trust in our products and services, which can contribute to better treatment results. However, our dependence on external factors, such as the cost structure within the reimbursement regulations in the healthcare system, can also have negative impacts: If the costs of innovative treatment options are not covered, addressable patients are denied access to them. In a volatile and highly regulated market environment, cost and reimbursement structures can also result in medium-term financial risks for us.

Research and clinical studies are essential to assess the effectiveness and safety of drugs, medical products and therapies. This allows any side effects to be detected at an early stage, and by participating in such studies, patients are given the opportunity to benefit from innovative treatment methods that are not (yet) available in everyday clinical practice.

As it is not possible to say with certainty whether the future demand for our products and services will be sufficient to cover the costs of research and development, innovation also carries a medium-term risk of financial losses. Particularly in the area of research or clinical studies, it is vital to comply with regulatory requirements and applicable laws. Unethical behavior can be subject to sanctions, lead to a loss of reputation, and thus result in financial losses in the medium-term.

Furthermore, product and service innovations can also have a potential negative impact on employees in the value chain. Job profiles and requirements change and new demands on old structures cannot always be met through further education and training. We consider this risk to be low for our employees in the short-term. In the value chain, job profiles change in the long-term and provide the possibility to adapt accordingly. Further, we see the opportunity for established job profiles to become more flexible and digitalized, which may increase their attractiveness. In the medium-term, flexible personnel structures offer the opportunity to attract committed people to the company. With their talents, they can help the company to progress and generate financial benefits.

Last but not least, innovation can also contribute to the responsible use of resources, e.g. if we reduce packaging . In the medium-term, we can not only improve our own sustainability performance, but also have a potential positive impact on our downstream value chain.

Our approach [MDR-P] Policies adopted to manage sustainability matters

Focus areas and quality requirements for innovation

We pursue an integrated approach to innovation: It takes place along our value chain on key topics and contributes to the following:

• Improved access to healthcare (see topical standard S4 Consumer and end-users, section Access to products and services)
• Improving treatment options and patient experience through research, telemedicine, and artificial intelligence (AI) (see company-specific standard Digital transformation)

In both areas, we are striving for innovations in our existing products and care services as well as in the development of new therapeutic approaches.

We take into account the interests of our stakeholders and select approaches tailored to market situations and our business segments – from independent strategies for research and development (R & D) to active innovation management. We also involve external partners, if applicable, such as research institutions and start-up companies. We also want to meet increasing requirements, particularly driven by regulation, with regard to transparency in the care of critically ill patients, like increased information demand, among other elements. For this target group, effective therapies in combination with intelligent applications and medical engineering devices, among other things, will continue to be in greater demand in the future – and require suitable product innovations. Last but not least, Fresenius is also working on innovative solutions in registration studies and clinical research projects to create opportunities to improve the quality of treatments for acute and chronically ill patients in particular. Further information on stakeholder engagement as well as our value chain is provided in topical standard ESRS 2.

Guidelines on ethical behavior also encompass animal welfare, where applicable. Fresenius Kabi’s research and development activities focus on biosimilars, clinical nutrition, and generic drugs that are already well established in the markets and therefore require no or very limited animal studies. These are carried out if required by national and international laws or regulations. Animal testing is only carried out in accordance with the relevant animal welfare laws. The business segment works with professional non-clinical contract research organizations (CROs) or academic institutions that are accredited to the standards of the Association for Assessment and Accreditation of Laboratory Animal Care International (AAALAC) or a similar standard and follow the 3Rs principle (Reduce, Replace, Refine) with regard to the use of laboratory animals. In addition, non-clinical CROs are audited by the Fresenius Kabi Quality Assurance Department and requalified every three to five years, depending on risk.

In the defined focus areas, based on the defined markets in which we are active, and further explained in the standard ESRS 2 General disclosures and the Group Management Report, Fresenius complies with internal quality requirements as well as external regulations and legal requirements for all new or improved products and services. In the field of medical technology, for example, European directives such as the EU Medical Device Regulation (MDR) apply. For the development and use of AI applications, we follow the EU Regulation on Artificial Intelligence (Regulation (EU) 2024 / 1689; in short: AI Act), which came into force in August 2024. For digital developments, we also observe the requirements of the European Union’s General Data Protection Regulation (EU GDPR). We use comprehensive cybersecurity concepts to counter potential risks, such as hacker attacks on sensitive data and systems. Further information can be found in topical standard S4 Consumers and end-users, section Privacy and in the company-specific standard Cybersecurity.

Group-wide management of innovation

Innovation is defined as a key topic of the overarching Group strategy. During implementation, the respective business area strategy is specified by the business segments with the support of functions at Group headquarters. This strategy is used to determine the areas in which innovation can be meaningfully carried out in the long-term in order to make the best possible use of potential for improved healthcare services and products. On the Management Board, the CEO is responsible for the Group’s overall strategy. Operational implementation takes place within the business segments and their units. It is anchored in the local organizations and managed by the respective management functions. Responsibility for innovation and R & D is regulated, e.g. via a business allocation plan.

An expert from the Group function reports to the Chief Executive Officer on a daily basis and is also in contact with the entire Management Board through various internal committees. The managers of the Corporate Development function and the specialist managers of the business segments exchange information as required and on an ad hoc basis. As part of the Management Board meetings, the Management Board is informed monthly of relevant developments from the companies.

The Chief Medical Officer, newly appointed on August 1, 2024 as part of the Corporate Development Group function, is responsible for the strategic framework within which innovation takes place globally. The role of Chief Medical Officer is intended to position Fresenius as a leading healthcare company among medical and scientific decision makers. He will also advise the Management Board and companies of the Fresenius Group on medical aspects as well as conceive and implement his own projects.

Interdisciplinary committees take responsibility for Group-wide innovation projects. The Innovation Council, for example, develops and steers a joint innovation roadmap on the topic of Connected Hospitals. Representatives of the operating companies, and Group Technology & Innovation work on integrating new digital possibilities into medical treatment concepts, further optimizing patient care in the process. Information on the Supervisory Board and related procedures for material sustainability aspects are explained in standard ESRS 2 General disclosures.

In 2024, the Innovation Council evaluated specific innovation and digitalization projects across all segments for the first time and provided financial support to a small extent. Projects are included in the sustainability reporting when they reach an appropriate level of maturity, which is assessed on the basis of the following aspects:

• applicability in operational business,
• supporting sales and earnings targets, and
• contribution to a material aspect of sustainability, provided that the requirements of the ESRS are met as a material activity.

The projects funded in 2024 are at an early stage and are therefore not yet classified as Group sustainability measures to be presented individually. Further reporting on the priorities in innovation of the operating companies in general is provided in the Group management report and in the following sections of this topical standard.

Product innovations

In the healthcare products market segment, we are continuously working on expanding our product portfolio. Fresenius Kabi is therefore dedicated to the further development of, for example, biopharmaceuticals, clinical nutrition, and MedTech, as well as IV (intravenous) generics. Innovation is defined as new substances, devices, software, packaging, or services to be introduced on the market, further development of product formulations or reformulation of existing substances for a new market, and further development of new product formulations (e.g. the product Fresubin PLANT-BASED Drink), as well as the registration and launch of established products in new countries. Fresenius Kabi consistently applies for patents for innovative products and processes. The business segment currently holds 1,081 active and published patent families and pursues or holds them in a number of countries in line with sales activities.

We also include ecological criteria in our approaches to product innovation. For example, we use life cycle assessments for our clinical nutrition products and IV Fluids in order to understand their environmental impact and continuously improve them on this basis.

We provide a additional description of product innovations in the Group Management Report 2024.

Treatment concepts, health services research, and clinical studies

Innovative treatment concepts are key to our daily work in our clinics. The combination of clinical studies and knowledge gained through daily routines provides information on how established treatment schemes can be changed. These options are discussed with experts both from the medical departments and from care. Comprehensive clinical studies also form the basis for evaluating the effectiveness and safety of innovative solutions. In our acute care hospital, the main focus is on cardiovascular diseases and oncology as well as health services research.

We conduct clinical trials at many sites, for example, to determine how effective and safe experimental medicines are and whether medical products are suitable for approval in accordance with internationally applicable ethical and scientific standards. In addition, clinical data is collected, analyzed, and published to improve patient care, optimize care processes, participate in the development of new tools to improve diagnosis, contribute to the advancement of science and knowledge and evaluate new and already-approved technologies and treatments in everyday care. Based on a clear commitment to evidence-based medicine, the business segments encourage their employees to engage in scientific and technological research activities. The aim is for them to grow personally and use their insights to improve the well-being of patients.

At Fresenius Helios in Spain, for example, hospitals that form part of the public health network in Madrid (Hospital Universitario Infanta Elena (HUIE), Hospital Universitario

Rey Juan Carlos (HURJC), Hospital Universitario Fundación Jiménez Díaz (HUFJD), and Hospital Universitario General de Villalba (HUGV) are managed through the Instituto de Investigación Sanitaria Fundación Jiménez Díaz (IIS-FJD).

For the other Fresenius Helios hospitals in Spain, research is managed by the Corporate Research and Innovation department with the support of the Research Support Units located in the different hospitals and regions. The department promotes and supports research activities in the hospitals of the Fresenius Helios network in Spain and in the Research Support Units, while establishing the necessary guidelines to ensure that research activities are carried out in accordance with the highest standards and in compliance with all legal and regulatory requirements and best practices in the sector.

The team works with other private and public sector bodies to draft, sign, and subsequently manage agreements and contracts for the promotion and development of research and innovation. The functions of the Corporate Research and Innovation department include, for example:

• Promotion and support of research activities in Helios Spain network hospitals
• Preparation and subsequent execution of the Helios Spain Group’s Strategic Research and Innovation Plan
• Standardization and optimization of processes and procedures related to research and innovation
• Development of activities to promote research at Helios Spain

As a promoter of research at Fresenius Helios in Spain, the team also carries out various activities in the scientific field and develops training courses on clinical research.

In the business segment Fresenius Helios, the focus in terms of innovation is on clinical studies. The Helios Health Institute (HHI) has set up a specialized unit for preparation and monitoring. The HHI is responsible for the central study audit for our hospitals in Germany and ensures that all regulatory requirements applicable to research activities, including contractual or data protection requirements, are met as part of the study review. With the final legal, regulatory, and data protection assessment, a recommendation for the medical research project is made to the applicant and the management of Helios clinic.

The Helios Group regulation on research funding specifies the framework conditions within which Helios specifically promotes research projects that are conducted by its own employees and expected to have a high level of benefit for patients. The directive was revised in the reporting year and will enter into force in 2025.

Departments or clinics have special certifications, e.g. as certified organ cancer centers or as oncology centers of the German Cancer Society. Certification is based, for example, on the quality of treatments or sufficient participation of patients in clinical trials. If an external sponsor selects a Helios clinic for a study, audits are conducted in accordance with the sponsor’s respective guidelines.

Likewise, individual Helios clinics are inspected according to the respective selection procedures for gaining a license as a specialized center of the state authorities.

In Spain, an updated certification is required for all researchers and teams to conduct a clinical trial. To select a clinic for a study, the sponsor initially audits the infrastructure to ensure compliance with the specific requirements to conduct the clinical trial. As in the case of Helios clinics, if a sponsor selects a Helios Spain clinic, audits are also conducted in accordance with their respective guidelines. Additionally, Helios Spain has developed the prime investigators program, a procedure to select investigators of excellence in the clinical trial environment. The program includes a list of top investigators with accredited experiences in clinical trials which is shared with project sponsors to provide visibility to our investigators.

Monitoring is ensured by audits as well as inspections by state, higher, and regulatory authorities. In case of complaints, appropriate corrective actions are initiated by the respective clinic and reported to the inspecting authority. In 2024, no external inspections and audits took place at HHI.

Throughout the Group clinical studies are always carried out in accordance with strict legal requirements and international guidelines and frameworks. This includes, among others, the guidelines from the International Council of Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH), Good Clinical Practice (GCP), requirements of relevant pharmaceutical regulatory authorities such as the U.S. Food and Drug Administration (FDA), the European Medicines Agency (EMA), as well as the Declaration of Helsinki, and the EUGDPR (see topical standard S4 Consumers and end-users, section Privacy). The primary goal is the protection of patients and ensuring the high quality of the data obtained.

Our actions [MDR-A] Actions and resources in relation to material sustainability matters

In the reporting year 2024, Fresenius did not adopt any central guidelines for measures relating to funds for innovation. Important projects were implemented to further develop the key aspect of innovation at Group and business segment level. Explanations on our geographies or related stakeholder groups are generally provided in standard ESRS 2 General disclosures.

Innovation at Group level

At Group level, a working group was set up in the reporting year to implement the new EU regulation on artificial intelligence. Compliance with the obligations arising for manufacturers and users of AI applications and / or AI models from the new AI Act requires the introduction of a governance framework that ensures risk assessment and a constant overview of all AI applications in use. Accordingly, in fiscal year 2024, the working group has already agreed on basic principles for the responsible use of AI in line with Fresenius values and drafted a corresponding AI Standard Operating Procedure (SOP). The regulated processes are designed to support the use of AI applications in accordance with the respective legal obligations. An essential component of these processes is a standardized risk assessment that forms the basis for deciding on the procurement or development of new AI assets. A complete AI inventory provides a comprehensive list of all AI applications currently in use at Fresenius and helps us to ensure compliance, leverage potential synergies within the Group, and maintain an overview of all AI use.

Innovation in the business segments

In 2024, Fresenius provided new impetus in cell and gene therapy through its Fresenius Kabi business segment. Fresenius Kabi entered into an agreement with Cellular Origins, a TTP company, to develop integration strategies for cell therapy technologies into the Cellular Origins’ Constellation^™ automation platform. With this collaboration, the companies are combining their expertise in the digital and physical integration of cell therapy processing technologies. Initially, they are focusing on the Cue® cell processing system for the automated processing of small volumes. With this project, Fresenius Kabi is taking another important step in promoting innovation within the Group.

In the reporting year, Fresenius Helios in Germany took important steps to promote innovation. These include the development of a patient portal by 2026 and the selection and replacement of the hospital information system by 2030 and 2035 respectively. Other important measures include the digitalization of supporting medical decision-making, such as: the tendering of projects under the Hospital Future Act (German: Krankenhauszukunftsgesetzes, KH ZG), including the use of artificial intelligence (AI) in imaging (time horizon: 2026), the introduction of digital pathology (time horizon: 2025) and the pilot project of a clinical decision support tool (time horizon: 2025). In addition, a business unit for the development of medical device software (MDSW) and phase 0 of the decision support in the central emergency room (CER) were set up during the reporting year. For additional information, please refer to the company-specific standard Digital transformation.

In the reporting year, Fresenius Helios in Spain developed the Strategic Investigation Plan 2024–2028, which defines the company’s future plan of action in the area of clinical research. As in previous years, the business segment continued to make progress in measures to promote research activities. For example, the project launched in 2023 to optimize the clinical study management tool was further advanced in order to link the various platforms currently in use. The aim is to be able to use and manage information and research results more efficiently.

Furthermore, in 2024, Fresenius Helios in Spain completed the development of a digital tool and dashboard that automatically collects and processes publications. A new service has also been introduced to support researchers: The Helios Spain library now offers a specialized service for accessing scientific articles and documentation.

The business segment has also participated in the EHDEN (European Health Data Evidence Network) project, funded by the European Commission, whose aim is to codify general clinical practice for the Observational Medical Outcomes Partnership (OMOP) system. The project aims to provide researchers with access to standardized clinical data that will allow them to identify patients suitable for research studies and clinical trials. In addition, it is seeking to improve the ability to compare clinical evidence between different hospitals. The network will allow researchers to perform independent searches and extract relevant information for their studies. In addition, a federated data network has been created within the framework of this project that will allow the interoperability of clinical data between hospitals, facilitating collaborative research and the analysis of large volumes of information.

In addition to internal projects to promote innovation, Helios Spain is involved in various EU-funded projects. The business segment continues to promote clinical research through initiatives such as the annual research conference and awards ceremony.

Moreover, in Spain and Germany during 2024, a new initiative has been created with the aim of channeling and improving the management of new innovation initiatives, in the fields of both healthcare and research. To this end, a transparent repository of innovation proposals with a traceability register has been created. The proposals registered in this repository are evaluated by a committee of experts who assess their viability and prioritize them according to their interest.

The research and investigation section of the company website has been updated – both in terms of formats and new content – to make it easier to navigate the site and access relevant information.

The described projects are not part of a larger action plan that requires significant operating and / or capital expenditures (CapEx, OpEx).

Our goals and ambitions [MDR-T] Tracking effectiveness of policies and actions through targets

In our daily dealings with patients and healthcare professionals, we are confronted with questions that arise from the use of products and devices or therapies. This feedback is incorporated into our work on innovations and can thus contribute to solving challenges in the healthcare sector. We therefore strive to maintain and continuously improve these communication channels for feedback.

Moreover, successful clinical studies are the basis of our products and services because they guarantee safety and effectiveness. They simultaneously drive development and implementation of innovative technologies and treatment concepts. Our goal is to keep adding value for customers and patients in the long-term. One of the ways we measure the success of innovative solutions is whether they prevail over the existing standard of care.

Fresenius focuses its activities on expanding its competencies and developing new business areas to offer solutions. The area of digital solutions is no exception. Our aim is to develop innovative therapies and solutions for integrated healthcare services, since many of our stakeholders, especially our patients and our employees, are directly affected by the changes resulting from the advance of digitalization (see also the company-specific standard Digital transformation). Our R & D activities are closely linked to digitalization and are an integral part of our growth strategy. However, we do not conduct fundamental research.

Metrics [MDR-M] Metrics in relation to material sustainability matters

Number of studies and product approvals

In 2024, a total of 1,436 studies were conducted or reviewed in Spain, the majority of which had the goal of improving therapies for patients. The focus was on oncology, hematology, and neurology.

In pharmaceutical products, we were also able to launch various new products on the market or introduced improvements in application and additional dosage forms. Further information can be found in the Fresenius Kabi Research and Development section of the Group Management Report.

At Fresenius Helios in Spain, the research and innovation team monitors the number of clinical studies using a central platform. The amount of funding for clinical research activities results from the projects financed by the EU.

Product approval processes in the pharmaceutical industry are clearly defined by regulatory provisions. Management and controls are documented in respective company’s internal global SOPs. We abstain from describing the methodology of a regulatory process in detail.