Fresenius and his problem with the structure

wWhat is really going on with the Dax Fresenius group? Since Stephan Sturm started as CEO in July 2016, the stock has fared worse than almost everyone else in the Dax: while the main index has risen a whopping 50%, Fresenius shares have lost 50% in value. This week the devastating development was also the subject of general meetings: Fresenius and its subsidiary FMC were invited to the shareholders’ meetings.

For more than a year there has been public discussion about the group structure in Bad Homburg, which previously only took place in the markets. Sturm first addressed the structural issue at a press conference in February 2021 and a year later presented an interim report on the status: Conglomerate plays or should play.

Is the debate really necessary?

Capital market insiders see the driving force in the chairman of the supervisory board, Wolfgang Kirsch, who managed DZ-Bank until 2018. The discussion “doesn’t go out of style. The pressure comes from Kirsch, “says an insider who knows both the group and Sturm. The company has heard different things about Sturm’s role. It is noted here that the CEO himself initiated the structural debate. In fact, Kirsch would have preferred it. if Sturm hadn’t made corporate structure a public matter so early. However, the head of the oversight committee is fully behind the strategy. Top manager Sturm commented on his approach in an interview with FAZ this week: “You can object if it was necessary to enter this debate. “However, the subject had been repeatedly brought to him by investors. So” he got into a discussion that was already underway. “

Where this discussion ultimately leads is not as clear as before. Do you sell divisions or not? If so, which one? Whole or in parts? Directly or on the stock exchange? These questions have been around ever since. CEO Sturm remains fundamentally rather vague – it’s an open-ended consideration, he likes to say. And he points out that they are taking a long-term approach and that the group structure has “provided great service over the years”. And “that what can be viewed rather skeptically by equity investors is viewed extremely positively by patients, customers, regulators and lenders.” In other words, conglomerates like Fresenius are generally not well received by investors, but others are.

Never miss a growth opportunity

For management, on the other hand, it is about one thing: not to miss any growth opportunities, especially not for lack of financial solidity. It is a question, as it is lyrically described in the company headquarters, of raising the “calf” into an even bigger, stronger and healthier “bull”. “If all goes well, gladly with a partner who brings the right concentrated feed and maybe even the right bigger pasture on which the calf can develop beautifully.” So no “sales mandate” would be issued, they say, it’s always about growing and strengthening.

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