Earnings Call Transcript - FMS Q3 2025

Operator, Operator

Ladies and gentlemen, welcome to the report on the Third Quarter 2025 Conference Call. I am Sandra, the Chorus Call operator. The conference is being recorded. The presentation will be followed by a Q&A session. At this time, it's my pleasure to hand over to Dr. Dominik Heger. Please go ahead, sir.

Dominik Heger, Moderator

Thank you, Sandra. Welcome, everyone, to our earnings call for the third quarter 2025. As always, I start out the call by mentioning our cautionary language that is in our safe harbor statement as well as in our presentation and in all the materials that we have distributed earlier today. For further details concerning risks and uncertainties, please refer to these documents and to our SEC filings. We will have roughly 1 hour for the call. In order to give everyone the chance to ask questions, we would limit the number of questions to two. Thank you for making this work. As always, let me now welcome Helen Giza, CEO and Chair of the Management Board; and Martin Fischer, our Chief Financial Officer. Helen, the floor is yours.

Helen Giza, CEO

Thank you, Dominik. I'd also like to extend a warm welcome to everyone on the call. Thank you for taking the time to join us today and your continued interest in Fresenius Medical Care. As many of you know, the U.S. is in a government shutdown since the 1st of October, and many health care policy decisions are open, like the questions of extended tax subsidies for the exchanges and whether they will expire by the end of this year or the publication of the final 2026 ESRD PPS rule. This requires us to remain flexible in planning and agile in running our business. We remain focused on what we can influence. In Q3, we made meaningful progress in advancing our FME Reignite strategy and positioning ourselves for sustained value creation. Our strong third quarter results reflect continued momentum and disciplined execution as we further accelerated top line growth while delivering a clear step-up in earnings growth and profitability. The step-up is in line with our full year planning. I will begin my prepared remarks on Slide 4. In the third quarter, we realized strong organic revenue growth of 10%, with positive contributions from all 3 operating segments. In the U.S., same market treatment growth was slightly positive. This is in line with our assumption of flat to slightly positive growth for 2025. Operating income growth increased for a third consecutive quarter and accelerated to 28%. As a result, this drove a step change in profitability with our operating income margin expanding from 9.9% to 11.7%. The improvement in profitability was supported by continued momentum in our FME25+ program, which generated a further EUR 47 million in sustainable savings in the quarter. This brings us already to EUR 174 million of savings for 2025. As part of our new FME Reignite strategy and capital allocation framework, we announced an initial share buyback of EUR 1 billion, in line with our commitment to reignite value creation for shareholders. The share buyback program officially commenced in August with a first tranche of up to EUR 600 million. Through 30th of September, 3.6 million shares had been repurchased for a total investment amount of EUR 151 million, and until October 31, we have repurchased in total 4.35 million shares for a total investment of EUR 188 million. For full year 2025, we are very well on track to achieve our outlook for the year and therefore reiterate our guidance. Next, on Slide 5. The American Society of Nephrology's Kidney Week takes place in Houston this week. Already last year, we saw a lot of interest in high-volume HDF and our 5008X machine at the ASN. I do expect a high level of interest and engagement again this year, especially as we start the 5008X rollout. And with that, a new therapy becomes available in the United States. This will set a new standard of care. We submitted around a dozen of clinical abstracts that are specifically focused on high-volume HDF. From the risk reduction resulting from HDF therapy to the implementation of HDF in clinics to AI support for clinicians during implementation. Besides the scientific side of HDF, it's also great to see how the feedback is from nephrologists that visited one of our clinics that are already run with HDF, and I want to share what they said. Being able to see the human experience of HVHDF firsthand was one of the most pivotal moments for me and given our mission and the potential of the HVHDF therapy, we would love to explore having our clinics serve as index centers for the North American rollout of this modality. This shows that we are not only excited about the broad rollout in '26, but how well prepared we are in all dimensions and how well received it might be. Next on Slide 6. With the launch of the FME Reignite strategy, we have committed to reignite growth and innovation across our organization. In care delivery, we are supporting overall volume growth by raising the bar on quality even higher, further enhancing clinical outcomes and patient safety. This is especially important to me because it directly reflects our purpose-driven patient-centric approach where the patient is at the heart of everything we do. We are already seeing encouraging progress on our quality and safety initiatives, and I would like to share some examples from the U.S. market. Treatment adherence is a key focus as patients with chronic illnesses often struggle to adhere to their care plans. This frequently involves helping our patients to understand the importance of sticking to their treatment plan and working with them to remove barriers. Since the beginning of this year, controllable missed treatments have decreased due to improved alignment amongst physicians, patients, and clinicians. Many ESRD patients begin dialysis with a central venous catheter, which while necessary, poses a high infection risk. Although our long-term goal is to transition patients to permanent access, bloodstream infection prevention remains even more critical during this period. Antimicrobial interventions reduce infection rates by 70% compared to conventional care. In August, we launched a program to further increase antimicrobial catheter treatments to eligible patients. Adoption to date has been strong with 84% of eligible catheter patients now receiving bloodstream infection protection, and we are on track to achieve even greater utilization. Protection against the flu is especially critical for our vulnerable patient population. And because flu strains change yearly, annual vaccination is necessary to maintain protection. Our U.S. clinic network has launched its annual vaccination campaign and vaccination rates are 34% higher than where they were at this point in 2024. We already have more than 72% of our patients vaccinated. And like in previous years, we expect to come to 85% before the end of the year. These are just a few examples of reducing hospitalization and costs for the health care system and at the same time, increasing the number of treatments, while improving patient outcomes and reducing mortality over time. I'm extremely proud of the work we are doing and the results we are already achieving. It gives me great confidence and excitement for the path ahead. Turning to Slide 7. This quarter, we saw strong execution across all 3 of our operating segments. I will take you through some of the key highlights by segment. In care delivery, in line with our expectations, U.S. same-market treatment growth was slightly positive with 0.1%. This reflected the carryover effect from elevated mortality, which was driven by the severe flu season earlier in the year and positively offset by improving admissions as well as slight improvements in missed treatments. In our international markets, same market treatment growth increased to 1.2%. Third quarter care delivery performance benefited from favorable rate and mix development in the U.S. as well as accelerated contributions from phosphate binders in our pharma business. We further executed on our portfolio optimization plan, closing clinic divestitures in Brazil, Malaysia, and some other smaller markets. One highlight from me in care delivery, which I'm sure it comes as no surprise, is the availability of high-volume HDF treatments in select U.S. Clinics. We are progressing every day and are very encouraged by the initial feedback we have heard from our patients that have been receiving HDF treatments. The work we are doing is paying off, and I'm very proud of the team's focus and execution while never wavering on the highest quality of patient care. These patients report feeling significantly better with increased energy levels and improved sleep quality and reduced post-treatment recovery time. Clinic staff have highlighted the benefits of quieter, less stressful workflows, thanks to the enhanced automation of the machine, which supports more efficient and patient-focused care. The excitement is palpable. While we are not expecting this to be a major driver of operational performance this year, our learnings are rapid from the early rollout of select clinics, which is providing valuable insights allowing us to further enhance and refine the clinic training and conversion process. This will set us up for a seamless large-scale launch in 2026, which will be the start of the broad transition of our clinic network. Turning to Value-Based Care. As expected, we continue to face a degree of earnings fluctuations. We are also facing delays to 2026 by CMS in providing reporting data for the CKCC program, which adds to these fluctuations as these cannot be planned. In Value-Based Care, we realized a higher number of member months due to continued contracting growth as well as a growing network of providers, and we are further enhancing our care models through increased use of artificial intelligence. As part of our Reignite Strategy, we took an important step forward by increasing and strengthening our ownership stake in our Value-Based Care asset Interwell Health. This reinforces our leadership position in renal Value-Based Care, which is supported by the vertical integration benefits for our business model offers. With this step, we are better able to leverage the full scale and size that Fresenius Medical Care as a total company offers. This and the underlying progress we are already making in Value-Based Care is positioning this business for long term, more profitable growth. Care Enablement delivered another strong quarter, supported by volume growth and positive pricing momentum overall. We continued to capture sustainable savings as part of FME25+, driven by disciplined execution of the next level of footprint optimization across both manufacturing and supply chain. And as a result, our Care Enablement margin further progressed compared to the prior year despite being increasingly challenged by transactional exchange rate impact. I will now hand over to Martin to take you through the financial performance in more detail.

Martin Fischer, CFO

Thank you, Helen, and welcome to everyone on the call also from my side. I will pick up on Slide 9. In the third quarter, we achieved organic revenue growth of 10%, with all 3 segments contributing to this strong performance. At constant currency, revenue increased by 8%. We continue to divest assets as part of our portfolio optimization plan. Divestitures negatively impacted revenue development by 60 basis points. Operating income, excluding special items, increased by 28% on a constant currency basis. This significant increase led to a clear step change in the group margin to 11.7%, well into the implied range of 11% to 12% for 2025. Special items negatively affected operating income by around EUR 100 million. This comprises costs relating to FME25+ and our continued portfolio optimization as well as effects from the remeasurement of our investment in Humacyte. Next, on Slide 10. This slide breaks down the significant 180 basis points margin improvement. All 3 segments contributed to the positive margin development with an especially strong contribution from Care Delivery. Net Corporate costs developed favorably by EUR 19 million. This was primarily driven by virtual power purchase agreements with around EUR 20 million and Corporate costs broadly stable otherwise. Foreign exchange rates developed unfavorably with a negative EUR 24 million translational impact. The average U.S. dollar exchange rate in quarter 3 was 1.17 compared to 1.13 in the second quarter. I will now walk you through the financial developments in each segment, starting with Care Delivery on Page 11. Care Delivery realized organic revenue growth of 6%, supported by both Care Delivery U.S. and International. In the U.S., organic growth of 6% was driven by favorable rate and payer mix development. Positive contributions from phosphate binders as well as reduced implicit price concessions demonstrate our progress on active revenue cycle management. Internationally, we realized strong organic growth of 4%, including 1.2% same market treatment growth. The continued execution of our portfolio optimization plan negatively impacted Care Delivery revenue development by 120 basis points. Care Delivery significantly improved profitability in the third quarter with a margin of 14.5%, it is at the upper end of our 2025 target margin band. While we still saw muted same market treatment growth, the business growth was supported by positive rate and mix effects and additional higher contributions by phosphate binders in our pharma business. These factors compensated for the missing income from the consent agreement on pharmaceuticals, which we had in the third quarter of last year. The phasing is different this year, and we do expect this to come in the fourth quarter, but at a lower level. Higher sustainable savings through FME25+ helped to partially compensate for higher labor costs, including elevated medical benefit costs. The unfavorable development of exchange rates also had a sizable negative impact on operating income. Let us move to Slide 12 to review the development in Value-Based Care. Value-Based Care further accelerated revenue growth, realizing 42% organic growth. This significant increase was driven by a high number of member months, mainly due to continued contracting growth. The higher growth in Value-Based Care is also driven by gross revenue recognition instead of net revenue recognition of a major contract. This change does not result in additional earnings growth. Operating income in Value-Based Care amounted to a loss of EUR 21 million compared to a loss of EUR 37 million in the prior year. This reflects the quarterly earnings fluctuations that are inherent to this business model. As mentioned by Helen, we are also facing delays to 2026 by CMS in providing reporting data for the CKCC program, leading to a delayed revenue recognition. Due to this shift, we assume a slightly more negative operating income contribution from the Value-Based Care segment. I will provide an overview of the financial performance in our Care Enablement segment on Slide 13. The Care Enablement realized strong revenue and organic growth of 5%. Revenue development was driven by solid volume growth and continued positive price momentum. Care Enablement achieved a 38% increase in operating income, leading to a margin increase of 200 basis points to 7.6%, in line with our expected phasing for the year. Business growth was, as mentioned, driven by volumes and pricing, which was partially offset by higher-than-expected and increasing currency transaction losses. Further sustainable savings from the FME25+ program compensated for the expected inflationary cost increases. Moving to Slide 14. Due to the cash flow disruptions from the Change Healthcare cyber incident in 2024, it is more useful to assess cash flow development on a 9-month basis. We have realized strong cash flow development through the first 9 months of the year, with operating cash flow increasing 8% year-to-date. In the third quarter, operating cash flow declined compared to an inflated prior year base that benefited from around EUR 400 million in catch-up reimbursement following the Change Healthcare cyber incident. The negative year-over-year effect was partially offset by favorable working capital developments in this quarter. Our disciplined use of cash reflects the priorities set out in our new capital allocation framework, which is designed to reignite value creation. We reduced our net debt and lease liabilities compared to the prior year period. As highlighted by Helen, our share buyback program is well underway. By the end of September, we repurchased 3.6 million shares or 1.2% of our share capital with an investment volume of EUR 151 million. In addition, we invested EUR 312 million in the third quarter to strengthen the ownership in our Value-Based Care asset Interwell Health. This is reflected in financing cash flow. In parallel, we ended the quarter with a further strengthened net leverage ratio of 2.6x, well within our target range of 2.5 to 3x. I will now hand back to Helen to review our outlook.

Helen Giza, CEO

Thank you, Martin. I will finish my prepared remarks on Slide 16. The strong growth in our Value-Based Care segment due to the type of revenue recognition of one contract results in stronger-than-expected revenue growth in this segment. Therefore, we expect to be at the very top end of our low single-digit percent revenue growth range for 2025. As explained, this growth in Value-Based Care driven purely by contract type related revenue recognition does not drive additional operating income growth. Looking at operating income growth for the group. We have shown continued progress through the first 9 months with an expected acceleration in the third quarter. This brings us to 18% operating income growth in the first 9 months. We are not only in our target range of high teens to high 20s percent operating income growth already, but also demonstrate with 11.7% a new and improved level of profitability despite a challenging environment and very low same-market treatment growth in the U.S. When I look at the big picture for 2025, we are confident in our continued improvement of our underlying business. With 9 months under our belt, we would like to update you on our latest thinking for the operating income development for the year. The positive momentum in FME25+ will deliver around EUR 40 million more, delivering around EUR 220 million full year, helping us to directly offset the increasing medical benefit costs. The acceleration in the third quarter of our pharma business contributions from phosphate binders is now estimated to be around EUR 80 million higher than the assumed EUR 100 million. This is helping to offset the full year headwind from lower volumes in the U.S. and the increased foreign exchange transaction headwinds. As always, the fourth quarter is our strongest quarter. We do expect further acceleration in earnings growth and margin expansion. With all that I just outlined above and our 18% operating income growth in the first 9 months, we are not only already above the bottom end of the range, but we are confident in confirming our full operating income guidance range for 2025. As we approach year-end, I know many of you will want further insight into our outlook and assumptions for 2026. To manage expectations here, we are currently in our planning process for 2026. And I'm sure you can all appreciate that there are several moving pieces. In addition to the normal headwinds and tailwinds we navigate any given year, we also need to see how mix evolves for phosphate binders and to what extent price erosion will impact our pharma business. What happens to extended ACA tax subsidies, the final CMS pricing for '26 as well as the potential impact of new tariffs and pharmaceuticals pricing. We acknowledge the key KPI is next year's same market treatment growth. Our Q4 volume data will clarify trends in mortality, referrals, and overall volume, shaping next year's outlook. Just like every year, we will share our 2026 outlook along with our full year results in February. With that, I'll hand this back to Dominik to start the Q&A.

Dominik Heger, Moderator

Thank you, Helen. Thank you, Martin, for the presentation and the updates. Before I hand over to the Q&A, I would like to remind everyone to limit the questions to 2. If we have time over, we can go another round. With that, I hand it over to Sandra to open the Q&A, please.

Operator, Operator

Our first question comes from Oliver Metzger from ODDO BHF.

Oliver Metzger, Analyst

First, regarding your margin guidance, your slides indicate that Care Delivery is already at the high end of your expectations. Do you anticipate a stronger progression in Q4 from Care Enablement, or do you expect a rise in Value-Based Care due to payment timing? Second, on treatment adherence, it's clear you're not meeting your goals in this area. Considering COVID was 5 to 6 years ago, you've noted that patients from that period have lower adherence compared to those recruited later. Do you believe this normalization will happen over time as patients pass away due to natural mortality, or are there other factors contributing to the elevated levels?

Helen Giza, CEO

Regarding your first question about guidance, we expect continuous improvement across all segments, particularly with strong support from Care Delivery. In relation to your second question, I will elaborate on the different aspects involved. You mentioned treatment adherence and its connection to mortality rates. Our mortality levels remain high, but we are focusing on controllable factors such as reducing missed treatments. Ensuring our patients receive their treatments is crucial, as it not only increases treatment volume but also contributes positively to outcomes, including mortality. As highlighted in my opening slides, we are also addressing catheter rates, which should further aid in improving mortality, aligning with our overall strategy that emphasizes patient quality and safety. Regarding the reasons for patient fatalities, we cannot identify anything significantly different. There was a time during COVID when we could attribute excess mortality to that specific issue, but now we consider it all as general mortality. The trends and data indicate that the situation continues to be elevated without any new or different contributing factors.

Oliver Metzger, Analyst

I was referring towards the patients who were already on dialysis during COVID that they have a higher average number of missed treatments compared to the patients who came to dialysis afterwards.

Helen Giza, CEO

Yes, that would have been the case because they were already kind of vulnerable and those that were with us during COVID would have had more missed treatments than that we see in maybe new patients coming in. Sorry, I misunderstood that direct question on COVID.

Operator, Operator

The next question comes from Veronika from Citibank.

Veronika Dubajova, Analyst

And hopefully, you can hear me okay. I have 2, please. One, I just want to go back, Helen, to your comment on phosphate binders, apologies. There's a lot of numbers, and I probably misunderstood it, but I just want to confirm that you are now expecting EUR 180 million of benefit from phosphate binders this year versus the EUR 100 million that was assumed in the guidance previously? And I guess just to play a bit of devil's advocate. If I strip that EUR 180 million out of the Care Delivery margin trajectory, obviously I don't know exactly how much you booked in the 3 quarters of the year versus the full year, but it doesn't seem like there is a huge amount of margin improvement underlying in the business. Tell me if I'm doing that math wrong, I did it very quickly on the slide, but I just kind of would love to understand what you're seeing margin-wise, if you strip out the phosphate binders. And then my second question is just looking to 2026, and Medicare Advantage trends in particular, we are seeing some early signs of reduced enrollment. I'm curious how you're thinking about mix as we head into next year from a Medicare Advantage perspective. And to what extent we should be thinking about this maybe no longer being a tailwind to the business into next year?

Helen Giza, CEO

Thank you, Veronica. I can address both of those points. I apologize for any confusion regarding the phosphate binders figure, which totals EUR 180 million, combining EUR 80 million and EUR 100 million. We are now expecting this full-year number to be EUR 180 million, an increase from our original guidance of EUR 100 million through Q2. We are experiencing positive trends in our pharma business, with Q3 showing particularly strong performance. The clinical side is progressing as expected, but we anticipate continued growth in pharma into Q4, reflecting the trends we observed in Q3. We are also considering these trends as we plan for 2026, especially regarding utilization and pricing for the binders during the TDAPA period. Addressing your larger question about the various factors at play, while there are some positive aspects from the binders and FME25, it’s important to remember that we are also dealing with lower volumes that are impacting margins based on our initial volume assumptions. Additionally, rising medical costs and increased employee benefit claims are further complicating our financial balance. Regarding your Medicare Advantage inquiry, we’ve noticed that some major payers are scaling back on MA plan coverage. However, through Q3 and into Q4, we have not observed any change in our MA business mix; in fact, it has been growing consistently. While major payers might be consolidating plans, overall enrollment numbers remain steady. We expect that any local consolidations by payers will not significantly impact our MA business. Finally, we are closely monitoring the ACA exchange and potential developments as we approach year-end. This includes observing where patients will fall during the current open enrollment period, which began recently. Overall, we remain optimistic about the stability of our MA business.

Operator, Operator

The next question comes from Hassan from Barclays.

Hassan Al-Wakeel, Analyst

A couple from me, please. Firstly, on EBIT guidance range remains pretty wide as we move into Q4. What is driving the risks here to your mind? And why is the bottom end of the range, not more likely? And what was the phosphate binder benefit in the third quarter, please? Secondly, on treatment growth, can you talk a bit about admissions and missed treatments as you moved through the year? And how you see Q4 growth given the flu impact was obviously quite meaningful in the first half at 60 basis points. I appreciate that you don't have the Q4 detail, but how do you consider the moving parts as you move into 2026 and the confidence around the 2% plus treatment growth that you've previously talked about?

Helen Giza, CEO

Thanks, Hassan. I'll address some of your points, and then perhaps Martin can handle the phosphate binder question for Q3. To break it down, we anticipated a wide EBIT range due to the margin implications. As you can see from my comments and the numbers, we're already at the lower end of that range, but it's still open-ended, which indicates that I believe there are chances for reaching the higher end as well. A slightly higher figure on FME25 or reduced exchange impacts could shift our performance within that range. We are genuinely excited about the underlying growth and the momentum we're seeing, which is why I haven't narrowed the range. Regarding treatment growth, I’ve focused more on inflows and outflows instead of just the net number since there's a lot happening. Over the year, we're noticing improved admissions compared to Q3 last year, as well as from the past nine months. Mortality rates are down, although they remain high, and we are making progress on missed treatments. The industry has commented that those rates have been elevated, but we believe the investments we've made are starting to show results, and that missed treatments are improving alongside our efforts in patient safety and quality. On the flu front, this year did see a severe season early on, and you accurately remembered the 60 basis points impact. We’ll need to monitor how the flu season unfolds in Q4. I’m encouraged by the high vaccination rates, despite some negative narratives in the U.S., and I feel our patients are taking care of themselves, and we are supporting them. The outcome will vary year-over-year based on flu severity. If we experience another harsh season next year, I remain confident in our 2% target once mortality rates stabilize. Currently, we are in a slightly positive position. The improvements in the funnel and our work on outflows are beneficial, and once mortality normalizes, I see no reason we cannot return to that 2% growth. We'll provide more insight on this when we finalize our outlook for 2026. Also, as we’re in the early phases of HDF, we expect that as it gains traction throughout 2026, it will also aid with mortality and missed treatments. I hope I addressed all the main points raised, and Martin, would you like to discuss the phosphate binder for Q3?

Martin Fischer, CFO

Hassan. Let's take the phosphate binder. As Helen outlined, we did see a pickup in the third quarter against the second quarter in our pharma business, whereas the clinic business assumptions are coming in broadly as expected. For the third quarter, the total effect of phosphate binders was a mid-double-digit million amount and to underpin the EUR 180 million that Helen mentioned, we are also assuming a similar dynamic on the pharma side in the fourth quarter, a similar amount in the fourth quarter as well.

Operator, Operator

Next question comes from Hugo from BNP.

Hugo Solvet, Analyst

A quick one on FME25, which you upside. Can you maybe point to the reasons for that? Is that production move to Mexico that's finally kicking in or any other things? And second, on the rollout of HVHDF, can you maybe share the number of clinics? Sorry if I missed that. And compared to your plan presented at the Capital Markets Day, given the early learnings that you have from the rollout. Does it change anything in your plan from 2026 in terms of how fast you think you will be able to deploy that instrument?

Helen Giza, CEO

Martin, do you want to take the FME25 question, I'll pick up with HDF? Yes. Sure. So as you saw in the third quarter, we had strong momentum and we are already after 9 months almost at the full year original guide that we had for FME25+. And that momentum is continuing. And as Helen outlined, we are pushing to further accelerate our efforts. That is true for Care Enablement, where this also helps us to offset some of the inflation and FX transaction headwinds that we have, but it's also true for the global functions as well as for Care Delivery. So we are making good progress, and we are leveraging that momentum, hence, the upgrade of around EUR 40 million that Helen articulated. Thanks, Martin. And then Hugo, on HDF, as you can all appreciate, we are in the early rollout, and we are adding it to a very small number of clinics, and we're adding them as we go. In fact, we added 2 more just last week that continues to gain momentum, and we are progressing every day with our kind of installations, training, learnings, getting patients, not just on the new machine, but maybe more importantly on the HDF machine. So that will continue through the rest of the year. And yes, we're fully on track with what we shared for 2026 at our Capital Markets Day. So exciting times for us.

Operator, Operator

Next question comes from Graham from UBS.

Graham Doyle, Analyst

In considering the future of Care Delivery and its various components for next year, it's evident that phosphate binders, which have significantly contributed to growth this year, will be facing tougher comparisons. This raises the question of whether U.S. volume growth will become more critical. Analyzing the first nine months of this year compared to 2023, there isn't a substantial difference. With head-to-head competition from HDF on the horizon and potentially new drugs for IgA nephropathy, I am curious about your confidence in achieving volume growth. This would ideally lead to operating leverage, as we move away from relying on phosphate binders and cost reductions to enhance Care Delivery margins, focusing more on actual revenue growth.

Helen Giza, CEO

Thanks, Graham. That's a great question. As we discuss phosphate binders, the benefits are primarily seen in our pharmaceutical business, which is somewhat separate from FKC. We supply these projects both in our clinics and to external customers. As we look ahead to 2026, we'll need to focus on the volume, utilization, and pricing of these drugs. The current low volumes have a limited impact on EBIT and don’t significantly affect our overall performance for the year. Running this business requires balancing various factors, including underlying volume, reimbursement, operating leverage, and clinic utilization. We’re closely analyzing these elements, along with efficiencies and labor management. While higher volume is beneficial for operating leverage, we're also pleased to note growth in certain regions of our network of 2,600 clinics. We're continuously assessing where we can expand and where we might need to consolidate or exit clinics. We are preparing for various scenarios, anticipating a return of volume, and working to reduce hospitalizations and missed treatments, which will positively impact the patient volume we already serve. Additionally, the benefits from HDF and GLPs contribute positively to mortality outcomes, reinforcing our confidence. Ultimately, we aim to improve operational excellence by effectively managing volume, pricing, mix, operating leverage, clinic footprint, and cost structure. We understand these moving parts and are witnessing the benefits of our turnaround and transformation efforts over the past couple of years.

Graham Doyle, Analyst

Maybe just a quick one on the HDF benefit. Based on what we saw in CONVINCE, should we expect to see some benefit in the actual headline U.S. treatment number next year? Or should we consider it more as a gradual increase into the first half of, say, 2027?

Helen Giza, CEO

I believe the expectation is that once patients start the treatment, the CONVINCE trial demonstrated benefits after three months. As we continue to enroll patients, we should begin to see improvements. By this time next year, we might be able to assess the benefits we’re observing from patients on HDF, but we need to gather more data first. Considering that 2026 is the ramp-up year, we won't experience the full impact right away. However, this presents an opportunity for us to monitor early patients and analyze their performance with this treatment. While we're excited about the progress in 2026, we recognize it will take time to fully realize the benefits. We will identify the key performance indicators over the next year and provide you with the right insights.

Operator, Operator

The next question comes from David from JPMorgan.

David Adlington, Analyst

Firstly, maybe your key competitor, DaVita quantified the impact on EBIT next year, well, actually the next 3 years, if the subsidies aren't extended. I'm just wondered if you were willing to do the same. And then secondly, just a bit of a specific one. But volumes in Q3, were they impacted negatively by a sales day mix? And does that become a tailwind in the fourth quarter?

Helen Giza, CEO

Thank you, David. I’ll address your second question first. The growth in the Spain market is stabilizing for us, so our 0.1% is consistent year-over-year. The mixed days affect overall treatment numbers, but the same market treatment growth is straightforward. I want to clarify any potential misunderstandings from the market regarding this. Regarding 2026, as you know, we are still in the planning stages, and I’m not ready to share any specific numbers while we’re still evaluating them. We have not yet finalized our review with our management Board or Supervisory Board. You are aware of the factors we are considering, including our typical challenges and advantages, as well as the various elements we are monitoring. That’s about all I can share at this moment, and I believe you would expect nothing less from me, so thank you for your inquiry.

Operator, Operator

So the next question comes from Anna from Bank of America.

Anna Ractliffe, Analyst

Maybe as a follow-up to one of Graham's questions on the impact of the HVHDF rollout for next year. Do you think that could start to positively impact U.S. same market treatment growth from a referral standpoint as soon as next year? Just any color on how you're thinking about that. And then as well on the Care Delivery growth of the 5.6%, those 3 components, the favorable rate mix, phosphate binders, and implicit price concessions decreasing, I think you've broken out the phosphate binders pretty clearly, but any other numbers you could give us around those other 2 components and how you expect those to trend into Q4 would be super helpful.

Helen Giza, CEO

Thank you, Anna. I will address the HDF question, and Martin can provide insights on the CD question. Regarding your referrals number, I believe it will positively impact us. I intentionally referenced a quote from one of our nephrologists, and several nephrologists have been visiting our clinics to observe this. We have seen significant interest and received positive feedback, and we are being very strategic about where we launch HDF first, which is exciting. As for Graham's question, we anticipate that the improvement in mortality and treatment should become evident as we start transitioning patients to this approach, and we expect to see that increase throughout 2026. I'm looking forward to hearing how AFN goes this week, but let's turn it over to Martin for the CD aspect.

Martin Fischer, CFO

Sure. And for the implicit price concessions as well as for the rate mix assumptions that we have for CD. You saw this being a positive in quarter 3. This is the work we do in revenue cycle management paying off and us increasing our revenue yield. So we are collecting more for the amounts that we invoice. This is an ongoing effort, and we are seeing the first benefits, and we do expect this to also be a positive in the coming quarters for us as well. And that does also impact then on the, let's say, underlying performance improvement and will be a positive factor.

Dominik Heger, Moderator

So we do not have any further questions. I would like to thank you all for listening and for asking questions and being interested and hope to see many of you on the road in the next couple of weeks. Thank you.

Helen Giza, CEO

Thanks all.

Martin Fischer, CFO

Thank you.

Helen Giza, CEO

Take care. Bye-bye.

Operator, Operator

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.