Major risk groups

The following table shows the risks from the 10 most significant risk groups that could cause deviations from the Company’s expected development, based on the aggregated risk position. The top 10 risk groups with their respective aggregated risk position range between €90 million and €270 million. The respective impact of each risk group, based on their relative share of the overall aggregated risk position, is displayed in the table as well. These risk groups and the respective material risks per risk group, the significant changes, and the risk mitigation measures are presented in detail below. Compared with the previous year, the risk groups Legal, Cybersecurity, and Human Resources are no longer represented in the top 10, while Acquisitions, Investments and Transformations, Economy and Market Conditions, and Information Technology are newly included among the top 10 risk groups.

Acquisitions, investments and transformations

The ongoing review and strategic further development of the Group portfolio remains a central component of the Fresenius Group’s corporate direction. This is accompanied by continuous activities in the areas of investments, acquisitions, divestments, and extensive transformation programs, each of which creates opportunities but also involves risks.

Significant risks continue to arise from the divestiture activities of VIACAMA (formerly Vamed). In the course of selling the international project business, bank guarantees for performance commitments relating to the divested projects were assessed in particular. In addition, potential indemnification obligations exist in the event of damages, including those related to the sale of the Austrian project business. The contractual risks from these transactions are overall classified as possible, with impacts ranging from low to severe. As part of these activities, ongoing monitoring of business developments under the new owner is carried out, along with continuous evaluation of the relevant legal framework conditions.

Additional risks arise from ongoing transformation projects within the Group, particularly with regard to the harmonization and modernization of the IT landscape. Due to the complexity and scale of these programs, delays in implementation may occur, which could result in higher project costs as well as disruptions to operational business activities. These risks are assessed as possible, with medium impacts on the Group’s assets, liabilities, financial position, and financial performance. To manage these programs, structured project management and forward‑looking budget planning are employed, along with the early involvement of relevant stakeholders and transparent communication regarding expectations, dependencies, and realistic time horizons.

Overall, the risks mentioned have contributed to an increase in the aggregated risk position of the risk group. Compared with the 2024 Opportunities and Risk Report, the risk group is newly ranked among the top 10.

Economy and market conditions

The persistently volatile global economic and geopolitical situation is also affecting the business environment of the Fresenius Group and is having an impact on the global activities of Fresenius Kabi in particular. Despite a generally strong position in the U.S. market, potential risks arise from the current tariff policies of the U.S. administration. These could affect the import of pharmaceutical products into the United States, especially with regard to active pharmaceutical ingredients and generic medicines. Considering the currently high level of uncertainty, the Group is provisionally expecting additional customs expenses for imports from key production countries such as Switzerland, India, and the EU, as well as potentially higher expenses for products originating from China.

In addition, political tensions within the United States and their impact on global trade are causing further uncertainties. Aside from tariff policies, regulatory initiatives aimed at strengthening local production, as well as efforts to limit government spending, may also have additional effects. Those initiatives could particularly lead to delays in market approvals for new products by the U.S. Food and Drug Administration (FDA). Overall, these developments are assessed as possible to likely risks with medium to major impacts on the Group’s assets, liabilities, financial position, and financial performance.

Beyond this, there are additional risks at a geopolitical level that could arise from a potential intensification of the Chinese government’s efforts toward reunification with Taiwan. Such a scenario could, among other things, lead to significant complications for production sites and distribution activities. Furthermore, an expansion of Russia’s aggression beyond Ukraine could have comparable effects on production and distribution structures in Europe. These geopolitical risks are considered unlikely, but they are assessed as having potentially major to severe impacts.

The Fresenius Group continuously monitors geopolitical developments and, where necessary, deploys dedicated task forces to analyze potential impacts at an early stage. This includes, among other things, the evaluation of supply chain configurations, production capacity utilization, and the strategic orientation of sales markets.

Overall, the developments mentioned have contributed to an increase in the aggregated risk position of the risk group. Compared with the 2024 opportunities and risk report, the risk group is newly ranked among the top 10.

Healthcare financing, innovation and competition

In the largely regulated business environment of the Fresenius Group, changes in legislation, especially regarding reimbursements, can have a drastic impact on our business success. National healthcare systems are financed very differently. Changes in reimbursement systems and pricing in particular would have a significant impact on our assets, liabilities, financial position, and financial performance. The following risks are significant components of this risk group.

In the United States and Europe, changes in the reimbursement system in particular could have a significant impact on our business due to the high proportion of sales generated by Fresenius Kabi.

Changes in legislation, reimbursement practices, and healthcare programs could influence the scope of reimbursements for services, the scope of insurance coverage, and the product business. This possible risk can have a medium to major negative impact on our business activities.

We counter these risks by monitoring possible changes to reimbursement systems at an early stage and then reacting promptly to counteract potential negative implications.

In addition, the introduction of new products and services or the development of superior technologies by competitors may make our products and services less competitive or, in an unlikely case, even obsolete, and thus have an adverse effect on their sales, the prices of the products, and the scope of the services.

In order to ensure our long-term competitiveness and counteract potential competition and innovation risks, the Fresenius Group works closely with medical professionals and scientists. Important technological and pharmaceutical innovations are leveraged and further developed at an early stage through this cooperation, also by adapting the corporate strategy if necessary. In addition, the competitiveness of the Fresenius Group is ensured through continuous analysis of the market environment and the legal framework. Market developments are closely monitored, in particular concerning the products of competitors. The interaction between the various technical, medical and academic institutions within the Fresenius Group also ensures competitiveness. Risks in this context are classified as possible with low to major impacts.

In the hospital market in Germany, the current system of purely volume-dependent remuneration via case rates is to be converted into a mixed remuneration system as part of the hospital structural reform. The plan is to limit remuneration based on case rates to 40%. In the future, an average of 60% of remuneration is to be distributed independently of performance via retention rates (including the care budget).

The amount of retention funding is to be linked to service groups that are allocated to individual hospitals by the federal states and which require compliance with defined criteria. Among other things, this is intended to ensure that complicated treatments may only be carried out in hospitals that have the appropriate personnel and technical equipment. Depending on the service group and therefore relevance, hospitals will receive financial resources. The exact financial impact of the reform on the Fresenius Helios clinics cannot be quantified at present, as key details, particularly regarding the planned allocation of service groups, are not yet known. This uncertainty has been evaluated as unlikely with a medium potential impact.

The requirements of the hospital structural reform confirm the necessity for initiatives to form cluster and centers of excellence that have been underway at Fresenius Helios for years. In this context, especially the focus on more outpatient care and more flexibility as well as specialization is to be viewed as particularly positive.

In China, increasing competition through the expansion of tender procedures and the associated reduction in drug prices represent potential risks. A further expansion of tenders at national level, known as “National Volume-based Procurement” (NVBP), and of tenders at provincial level, known as “Provincial Volume-based Procurement” (PVBP), is evaluated as likely and may lead to a low impact. We are countering these risks with cost-saving initiatives and efficiency gains in the sales organization and in production. We are also closely monitoring individual developments at national and provincial level.

Adjustments to the product scope of the tender procedures, as well as their consideration in financial planning, have contributed to a reduction in the aggregated risk position of the risk group compared with the previous year.

Sales, customers and product strategy

In the long term, the Fresenius Group aims to expand its position as one of the leading international providers of healthcare products and services. In recent years, we have expanded our company along our value chain, thereby increasing the global availability of our products and services.

While Fresenius Kabi offers a wide range of different products worldwide, many of these products are sold exclusively through a limited number of buyers, especially in the United States, which creates a special dependency on these customers. There is therefore a risk that these buyers will exploit their market position to force pricing adjustments. This results in possible risks which could have a medium to major impact on the assets, liabilities, financial position, and financial performance of the Fresenius Group. In order to avoid over-relying on individual customers as far as possible, Fresenius Kabi continuously monitors customer structure, diversifies its product range, and negotiates purchase agreements in advance and for long-term periods.

For Helios Germany, the complex billing structures associated with patient treatments give rise to possible risks with a medium impact on achieving planned volumes and revenues. Deviations may arise in particular from excessively high fixed‑cost deductions, from changes in the underlying reimbursement catalogue structures, or from effects related to the distinction between outpatient and inpatient reimbursement. In addition, changes in patient behavior and increasing competitive intensity may also lead to deviations from the planning.

To prevent potential deviations in revenue development, Helios Germany continuously monitors changes in billing‑relevant regulations and assesses their impact on the reimbursement system. Fresenius Helios also continuously optimizes cost structures to safeguard financial flexibility and leverage efficiency potential. Furthermore, the treatment offering is regularly reviewed and purposefully developed to meet patient needs as effectively as possible and to maintain the competitiveness of the clinics.

In order to remain profitable in the healthcare market, Fresenius Kabi has recently launched a number of new products and continues to plan to launch new products. For such new product launches, however, there is still a risk that market entry will be delayed or that products will not be absorbed by the market in the forecast sales volumes after launch. Such possible delays in market entry and sales shortfalls for new products can have a low to medium negative impact on assets, liabilities, financial position, and financial performance.

Fresenius Kabi develops and manufactures pharmaceutical products for various customers, which are then marketed under their brands. In connection with these contract development and manufacturing agreements, there is a risk that new or renegotiated contracts could result in less favorable terms. This applies both to price and volume agreements as well as to contractual conditions that may be influenced over time by changing market dynamics or regulatory adjustments. Such risks are assessed as unlikely to possible, with a low to medium impact on the assets, liabilities, financial position, and financial performance of the Fresenius Group.

To mitigate these risks, Fresenius Kabi enters contract negotiations at an early stage, aims for agreements with the longest possible duration, and advocates for balanced and economically advantageous contractual clauses. This is intended to create planning reliability and limit potential negative effects on future revenue and earnings development.

Overall, the aggregated risk position of the risk group has decreased slightly.

Compliance

The business activities of the Fresenius Group are subject to comprehensive governmental regulations and controls in almost all countries. In addition, Fresenius must comply with other generally applicable legal provisions that differ from country to country. In particular, this results in risks associated with potential antitrust violations, which are classified as unlikely to possible with low to medium impacts for the Fresenius Group.

Other possible risks with a potentially severe impact are also regularly examined as part of compliance investigations – including for example as part of the divestiture activities at VIACAMA (formerly Fresenius Vamed).

For the Fresenius Group, risk-oriented compliance management systems are implemented in every business segment. These systems take into account the markets in which the respective business segments operate and are tailored to the specific requirements of the business segment. With our compliance programs, we set binding guidelines for our employees. We assume that we have taken sufficient precautions to ensure that national and international rules are observed and complied with. Nevertheless, even with a comprehensive compliance program, misconduct by individual employees or contractual partners that could cause damage to the Company cannot be completely ruled out. In total, the aggregated risk position for the risk group has slightly decreased compared to the previous year.

Financials

The financing of business activities can give rise to interest rate risks, which can affect the value of assets belonging to the Fresenius Group, particularly company value.

Global business operations also give rise to a variety of foreign currency risks, which can negatively impact revenue streams as well as balance sheet positions. In view of the strong U.S. business, the relationship between the U.S. Dollar and the Euro is of significant importance. Foreign currency and interest rate risks are possible to likely and could each cause a low to medium effect on the aggregated risk position for the risk group.

To limit these risks, we use derivative financial instruments, among other things. The Fresenius Group restricts itself to marketable, over-the-counter instruments and uses them exclusively to hedge underlying transactions, not for trading or speculative purposes. As a globally active company, the Fresenius Group also has production capacities in all major foreign currency areas.

As a listed company, the Fresenius Group is obliged to publish regular (quarterly) financial reports in accordance with current IFRS regulations. Therefore, there is a potential risk that Fresenius does not comply with current IFRS regulations and / or that our reports do not represent true and fair financial reporting due to accounting errors. In addition, the Fresenius Group is exposed to risks due to non-financial reporting regulations. To continue to comply with the requirements for our financial reporting, we monitor changes in accounting very closely and continue to ensure the high quality of our financial statements through harmonized accounting standards. Risks in connection with our financial reporting remain primarily unchanged with an unlikely probability and major impact.

Compared with the previous year, risks of unplanned impairments related to the structured exit from the project business of VIACAMA (formerly Fresenius Vamed), have decreased, resulting in an overall reduction of the aggregated risk position of the risk group.

Further information on financial risks can be found in the note 35, Financial instruments, to the consolidated financial statements.

Quality

The quality of products, services, and therapies of the Fresenius Group is a prerequisite for optimal medical care. For the well-being of patients and the protection of our employees, we therefore apply the highest quality and safety standards to all processes. Nevertheless, violations of production regulations and quality deficits in our production may occur under certain circumstances, e.g. due to a ban on critical pharmaceutical ingredients or deficiencies in the research and development process.

Non-compliance with the requirements of the regulatory authorities at our production facilities or at our suppliers could result in regulatory measures, including warning letters, product recalls, production interruptions, fines or delays in the approval of new products. Any of these measures could damage our reputation, impair our ability to generate sales and result in additional costs. These circumstances give rise to risks that are assessed as unlikely to possible, with potentially medium to severe impacts.

We ensure compliance with product specifications and production regulations through our quality management systems. These are structured in accordance with the internationally recognized quality standards ISO 9001 and ISO 13485, among others, and take into account relevant international and national regulations. We implement them with the help of internal guidelines such as quality manuals and process instructions and regularly check compliance through internal and external audits at production sites and in sales units. This includes all requirements and regulations from management and administration to product manufacturing, clinical services and patient satisfaction. Our production sites fulfill the Good Manufacturing Practice requirements of their respective markets. They are inspected by local health authorities such as the U.S. Food and Drug Administration or the European Medicines Agency (EMA). If an authority identifies deficiencies, the Fresenius Group immediately takes comprehensive and appropriate corrective action.

Using its early‑warning system, the Group evaluates quality‑relevant information from various risk areas in order to identify risks at an early stage and initiate preventive or risk‑mitigating measures. For this purpose, Fresenius Kabi relies, for example, on globally appointed safety officers, databases in which complaints and adverse events are recorded, internal and external audits, as well as key performance indicators that support internal management and optimization of quality processes. In this way, safety profiles of the products can be created and assessed worldwide.

As a risk‑mitigating measure, product recalls are initiated in cooperation with the competent regulatory authority, and the cause of the recall is thoroughly analyzed. Where necessary, corrective actions are implemented to prevent the circumstances that led to the recall from occurring again in the future.

Low risks can also arise from the highly complex transfer of technologies from external partners to our own production environment. The corresponding likelihood has been estimated as possible.

The aggregated risk position for the risk group has slightly decreased in comparison to the previous year.

Information technology

The reliable availability and functionality of critical information Technology (IT) systems is of central importance to the Fresenius Group. This applies to the hospital business and production operations as well as to nearly all supporting functions such as sales, supply chain, and administrative processes. If these systems fail or are disrupted, significant restrictions to operational activities may occur.

Possible causes of such disruptions range from technical factors – such as power outages, system or data errors, and maintenance‑related interruptions – to organizational factors, including insufficient technical, financial, or personnel resources, human error, or inadequate training. In addition, external influences such as fire, water damage, or natural events can lead to longer‑term disruptions in IT availability.

For the hospital landscape in Germany, an additional structural risk arises from the need to update and gradually replace various hospital information systems (HIS) that are widely used in the clinics. Due to the discontinuation of existing systems or the reduction of long‑term vendor support, there is a risk that Helios Germany may not be able to implement alternative HIS solutions in all facilities in a timely manner. This potential risk is assessed as possible, with low to medium impacts on the assets, liabilities, financial position, and financial performance of the Fresenius Group. Projects to introduce suitable replacement systems, as well as discussions with the respective system providers regarding transition and support arrangements, have already been initiated.

In addition, new technologies – especially the use of generative artificial intelligence (AI) – create not only opportunities, but also new risk potentials. The misuse or unauthorized use of AI systems, including within products or services, may lead to significant reputational or financial consequences. To manage these developments, Group‑wide AI governance processes, a defined AI strategy, and centralized oversight and steering of all AI projects have been established. These risks are assessed as possible, with low to medium impacts.

Overall, the developments mentioned have contributed to an increase in the aggregated risk position of the risk group. Compared with the 2024 Opportunities and Risk Report, the risk group is newly ranked among the top 10.

Supply chain

In the supply chain, potential risks arise mainly from price increases, dependencies on individual suppliers, or the lack of availability of raw materials and goods due to interrupted supply chains. In particular, dependence on individual suppliers for certain products or services can have a possible to likely low to medium negative impact on our assets, liabilities, financial position, and financial performance if the contractual relationship is terminated. We counter these risks by appropriately selecting and working together with our suppliers, through long-term framework agreements in certain purchasing segments, and by bundling volumes within the Group.

The aggregated risk position for the supply chain risk group has increased slightly compared to the previous year.

Production and services

Risks that may arise in connection with the manufacturing of our vital products, in the provision of services to our patients or in the project business have a significant impact on the Fresenius Group.

This primarily concerns risks directly related to our production, such as potential manufacturing downtime, delays in the commissioning of new production capacities or restrictions on existing production capacities following interruptions. To minimize the risks of such failures as far as possible, we are continuously working to improve our business continuity management and thus reduce potential damage to our production and value chain. These risks are evaluated with an unlikely to possible likelihood of occurrence and a potentially medium to severe impact.

Delays in delivery can also have a negative impact on our assets, liabilities, financial position, and financial performance. In addition to direct financial risks, such as loss of sales or contractual penalties, persistent delivery delays and shortages entail a high reputational risk and can lead to disadvantages in future tenders. We evaluate those risks as possible with a medium potential impact. In order to mitigate the occurrence of supply shortages, we are already investing in the development of additional production capacities and are continuously monitoring our delivery routes so that we can react to any delays in good time.

As part of the divestiture activities of VIACAMA (previously Fresenius Vamed), the sale of the international project business was executed as planned. With the successful completion of these activities, the previously existing project risks associated with this business area no longer apply. Related aspects are no longer applicable to the Fresenius Group. This has significantly contributed to the declining development of the aggregated risk position for the risk group.