Fresenius Medical Care AG
XMUN:FME
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Fresenius Medical Care AG
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Ladies and gentlemen, thank you for standing by. I am Sugi, your Chorus Call operator. Welcome, and thank you for joining the Fresenius Medical Care Earnings Call. [Operator Instructions] I would now like to turn the conference over to Dominik, Head of Investor Relations. Please go ahead, sir.
Thank you, Sugi. As mentioned by Sugi, we would like to welcome you to our earnings call for the first quarter 2021. We appreciate you joining today to discuss the quarterly results. Now it is my pleasure, as always, to 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 as well as to our SEC filings. We are aware that it is an outstandingly busy reporting day with so many companies in the sector reporting. Therefore, we'll try to keep the presentation short and leave time for questions. As always, we would like to limit the number of questions again to 2 in order to give everyone the chance to ask questions. It would be great if we could make this work again. With us today is, of course, Rice Powell, our CEO and Chairman of the Management Board. Rice will give you some more color around the COVID-19 situation and business development. And of course, also with us is Helen Giza, our Chief Financial Officer, who will give you an update on the financials and the outlook. I will now hand over to Rice. The floor is yours.
Thank you, Dominik. Welcome, everyone. Thank you for joining our presentation today and for your continued interest in Fresenius Medical Care. I'll begin my prepared remarks on Slide 4. We delivered solid first quarter results in what continues to be a challenging environment as the COVID-19 pandemic persists. As we expected, organic volume growth for the quarter continued to be negatively impacted by COVID-19. The first quarter revenue and earnings were adversely impacted by exchange rate effects. Our business development was supported by an improving payer mix driven by an increased patient base and Medicare Advantage plans. And we additionally benefited from an increase in the Medicare ESRD prospective payment system bundle rate. Earnings development during the quarter was supported by phasing and expected lower SG&A expense. Items such as travel and meeting spend, as well as corporate costs related to our monitor, were favorable in the first quarter, but are expected to increase in the remainder of the year. We are very encouraged by the vaccination progress. Around 51% of our patients worldwide have received at least the first dose. We continue to make progress with around 1,200 to 1,400 patients being vaccinated on a daily basis. However, as we all know, COVID-19 infection rates remain high in several markets around the world. We continue to make good strategic process -- progress in several key areas. First, home dialysis experienced continued momentum in the first quarter with home hemodialysis treatments in the United States increasing at a mid-20%s growth rate against last year. In the first quarter, around 14.6% of our treatments in the U.S. were performed in a home setting. Secondly, we recently announced an expanded products agreement with DaVita to bring our home technology to their patients, further validating that our NxStage machine is the superior reliable home hemodialysis product on the market today. Thirdly, in value-based care, we are encouraged by the level of interest and engagement we are seeing from payers in the Medicare Advantage part of their business. A good example is the recent extension of our value-based arrangement with Aetna, a subsidiary of CVS, which will include patients enrolled in Medicare Advantage. With our global sustainability program, we are committed to increasing transparency and aligning with international standards. In addition to the more than 100 key performance indicators in our nonfinancial report, you can now find SASB, GRI and TCFD tables on our website for your review. As you recall, earlier this year we launched our organizational transformation program. We call it FME25 to coincide with our 25th anniversary. We see this road map as a future for value creation. This program is taking an end-to-end view of our business. Business segments, geographical footprint and multiple cost structures are being reviewed. We are very encouraged by the opportunities that we are identifying in the comprehensive diagnostic phase of our work at this point. To catalyze this process, we are partnering with a world-class firm to support our transformation, which is being led by myself. We will update you on the progress of FME25 probably in the fall. To summarize, the overall development in the first quarter was in line with our expectations for the full year, and we are therefore confirming our guidance. Helen will give you more background in her remarks to come. Turning to Slide 5. In the first quarter of 2021, we delivered over 13 million dialysis treatments to nearly 345,000 patients. Both the number of patients and treatments are down 1% from a year ago, reflecting the impact of the COVID-19 pandemic. Moving to Slide 6. This slide highlights our key quality indicators, which show the stability of our clinical results and our patients. We continue to see consistent anemia as well as bone and mineral metabolism control, demonstrating that our patients are receiving high-quality, consistent dialysis care. Turning to Slide 7. Here, we show the development of COVID-19 infections worldwide compared to what we have seen in our Fresenius Medical Care patient population. Through the beginning of January, the experience of the general population was mirrored in the cases documented for our own FMC patients. There was no mismatch between global COVID cases and those among our ESRD patients. Thanks to progress made with vaccinations, the exposure of our patients has since decoupled from the global trend. Infection rates are considerably lower for our patients even as they continue to rise globally. We are continuing to monitor several hotspots. Turkey and France in the EMEA region are of concern to us, and the entire L.A. region, Latin America region, gives us concern, in particular Argentina and Brazil, but there are still some hotspots in some of the other locations within that region. We know that vaccinations are essential for society to move past this pandemic, and I am proud of the role that Fresenius Medical Care has played in the vaccine rollout. In several countries, we've been able to directly vaccinate our patients, and where requested in certain countries such as Portugal, we have been vaccinating the general public in our clinics as requested by us from the government. At the end of March, we were successful in our efforts with the U.S. government to directly allocate COVID-19 vaccines to dialysis patients nationwide. In the U.S., we are in the mid-60s percentage for those patients within our vaccination control, and we are aware that there are some patients and staff that are being vaccinated outside of our sphere of control, if you will. So more to come on this, but we believe our numbers are higher than the mid-60%s at this point. We'll do some more work to try to accumulate and understand those numbers as best we can in the future months to come. Turning to Slide 8. As we anticipated, COVID-19-related excess mortality on a global basis continued to accumulate in the first quarter at a decreasing rate. Globally, on a last 12 month basis, excess deaths due to COVID-19 were further accumulating to around 12,400. As expected, we have seen in the first quarter a sequential decline of the incremental excess mortality compared to the fourth quarter of last year, and we expect this number to further decline continuously. We are encouraged again by the vaccination progress and the lower incident rates of our patient population. We still have a way to go before we reach herd immunity, and we will obviously continue to monitor the various variants that are out in the world today and looking at potential surges in the more troubled areas. Turning to Slide 9. In the first quarter, we achieved revenue of EUR 4.2 billion, reflecting 1% growth in constant currency. Our net income declined by 6% on a constant currency basis. As mentioned in the beginning, COVID-19 negatively impacted our top and bottom line, and the headwinds from foreign currency translations are obviously quite strong at this time. This reflects a favorable impact on earnings development from phasing and expected lower SG&A expenses, which we've stated will continue to reverse later as we go through the year. Turning to Slide 10 and organic growth. We achieved 1% organic growth during the first quarter, supported by our global footprint and solid business results from our Health Care Products business. Health Care Products delivered 5% organic growth relative to a very solid first quarter in the prior year. On a regional basis, organic growth was slightly down in North America. Here, we were not only challenged by the impacts of the COVID-19, but also by Winter Storm Uri, which occurred in February and severely impacted Texas, Louisiana, Mississippi and Arkansas, significant markets for us. EMEA, Asia Pacific and Latin America contributed with positive organic growth. And as we just discussed, foreign currency effects and COVID-19 adversely impacted our reported growth in the quarter. Turning to Slide 11 and Health Care Services. In the first quarter, Health Care Services delivered organic growth of 1% overall despite the significant headwinds from COVID-19. The adverse COVID-19 impact on organic growth in the Health Care Services business amounted to around 350 basis points in the quarter. Growth was driven in particular by the business in Asia Pacific, supported by strong growth in their day care hospitals and by contributions from some acquisitions. On top of the negative COVID-19 effect, exchange rates and lower calcimimetics reimbursement were weighing on our development. And turning to my last slide, a word on products. Our product business achieved 5% organic growth for the first quarter, and they continue their growth story. This growth was driven by sales of chronic machines as well as strength in home products, including both PD and home hemodialysis product sales. The Asia Pacific region had a particularly strong start to the year, delivering 11% organic growth. This was mainly driven by a recovery in the Chinese products business. Growth in the quarter was partially offset by exchange rate effects, lower sales of products for acute care treatments, acute cardiopulmonary products and in-center disposables. With that, it's my pleasure to turn it over to Helen, who will take you through the earnings development as well as our outlook for 2021. Helen?
Thank you, Rice. Hi, everyone. I hope you're all staying safe and well. I'll pick up on Slide 14. For the first quarter, total group operating income amounted to EUR 474 million, which is a decline by 8% at constant currency. The chart on the left illustrates the contribution from each region as well as the corresponding regional margins. Our first quarter net income declined by 6% on a constant currency basis, including the negative net COVID-19 effect of EUR 79 million. Excluding this impact, net income growth would have been in the high single-digit range. Contributing to the decline in profitability were higher personnel expenses and a significant adverse effect from exchange rates. Both effects impacted all regions. In North America, in the first quarter of last year there was a positive impact from the divestiture of some Care Coordination assets as well as from the partial reversal of a revenue recognition adjustment in North America. Both effects increased our base for comparison. On the positive side, we saw an improved payer mix due to growth in Medicare Advantage. This was driven by 2 effects. First, we made a sizable step-up due to the 21st Century Cures Act coming into effect on the 1st of January. This allows patients that have already been diagnosed to enroll in Medicare Advantage for the first time. The second effect is the continued growth in Medicare Advantage insured number of patients since the January step-up. In line with our expectations, the total Medicare Advantage book of business has grown to a high 20s percentage range. In addition, we benefit from the Medicare ESRD PPS bundle rate increase of 1.6% since the beginning of the year, and that supports our cost inflation. Year-over-year, we realized positive effects from lower SG&A spend as expected, for example, travel and meeting spend. It may be hard for us all to remember, but we were still traveling for much of the first quarter in 2020 before it all came to a halt in March of last year. We expect increased spending in this category to resume later in the year as travel becomes viable again. As anticipated, our corporate costs were lower in the first quarter than the run rate might suggest. This includes costs relating to our monitorship, which are expected to increase later in the year based on the current activity plan. Our guided range remains at EUR 480 million to EUR 500 million for 2021, therefore the favorability will reverse during the year. It's also important to keep in mind the peculiarities of the 2020 base we are comparing to. In the first quarter of 2020, we already had around EUR 40 million in COVID-19-related impact on net income such as PPE costs, higher wages for workers in isolation clinics, childcare stipends and valuation effects. It wasn't until the second quarter of 2020 that we received CARES Act funding to cover those costs, including the costs that we incurred in the first quarter, and for the valuations to recover. Therefore, we will compare against an artificially inflated high base next quarter. Before I move on to our cash development, I want to point out 2 areas where we have further simplified our reporting this quarter. As our value-based capabilities and arrangements are so embedded in our services business, we will no longer report Care Coordination separately. We run the business in an integrated way today, and therefore it did not make sense to keep this separate reporting approach. Second, we are no longer breaking out nondialysis products. Historically, this was an additional line under the EMEA region. But as we now sell those products in other regions, we did not want to add even more line items and further increasing complexity for relatively small amounts. I'll move on to Slide 15. During the first quarter, we generated operating cash flows of EUR 208 million and a resulting margin of 4.9%. In addition to the lower earnings that we already outlined, the decrease in net cash was driven by seasonality in invoicing, a delay in Medicare payments due to a systems issue on the government's end and patient conversion to Medicare Advantage plans, which have a longer payment period than Medicare. Our net leverage ratio for the first quarter of 2.9x is slightly below our target range of 3x to 3.5x. That ratio increases to 3.1x when U.S. federal funding relief and advanced payments are excluded. As a reminder, these advanced payments will recoup starting April 1 through early 2022. The weightings presented at the bottom right have all been reconfirmed this year and support our solid financial position. Turning to Slide 16. The first quarter development and our full year assumptions continue to hold. Therefore, we are confirming our 2021 targets as outlined in February. For 2021, we expect low to mid-single-digit revenue growth and a decline in net income of high teens to mid-20s. While we are very encouraged by the vaccination progress among our patient base, COVID-19 infection rates remain high in several markets around the world, and there are still hotspots and unknowns around the new variants. We expect excess mortality to continue to accumulate throughout the second quarter of 2021 before normalization of the mortality pattern starts. We are also assuming COVID-19-related costs in our dialysis service business, such as the provision of PPE and higher compensation for employees, to remain at a high level. Since our last update, due to COVID-19, the U.S. government has taken some actions that largely offset each other, the first being the extension of Medicare sequestration through the remainder of the year. While certainly positive, the impact is reduced, especially when you take into account the number of patients that have moved into Medicare Advantage plans. That lowers the number of patients covered by Medicare in our mix. The second measure is the delay of the voluntary CKCC models, as the government did not have sufficient time to prepare for the planned April 1 start and is now delayed to January 1, 2022. The profits budgeted for this voluntary model will now not be realized this year. We continue to assume that no major public relief will become available. We will continue to actively monitor the financial effects of COVID-19 on our business, including balance sheet implications. And as I spoke about earlier, we also expect a lower SG&A spend and corporate costs in Q1 to reverse for the remainder of 2021 and be in line with our outlook for the full year. While there are a lot of moving parts, with all of this taken into consideration we are where we plan to be relative to our guidance. That concludes our prepared remarks, and I will now turn back over to Dominik to prepare -- to begin the Q&A. Thank you.
Thank you, Helen, thank you, Rice, for the presentation. I do hand it back to Sugi to open the Q&A. Sugi, please go ahead.
[Operator Instructions] The first question is from the line of Tom Jones, Berenberg.
I'll keep it to two. The first was just one for Helen maybe. I wondered if you could give us a ballpark idea of what you thought the excess COVID-related costs were in Q1, the uncompensated costs. So I'm not talking about the operating leverage effects, but just the pure additional costs for PPE and childcare, et cetera, et cetera. And then the second question, which is probably more for Rice, just looking at the absolute patient numbers across the business at the end of Q1 versus the end of Q4, the decline in terms of overall patient numbers was less than 1%. So it won't take much of a swing, I guess, in excess mortality to get you back to quarter-on-quarter patient growth across the entirety of the business. Is it reasonable to expect that metric to turn positive in Q2? Or is that something we should really not be thinking about until Q3?
Thank you. Helen, do you want to go ahead?
Yes, happy to, Rice. Tom, hope you're well. So the direct costs themselves, as you mentioned being the PPE and the ongoing supporting costs there is roughly around EUR 30 million of that EUR 79 million on a net income level. So that's, I think, a direct comparable EUR 30 million, I should say, in terms of the direct cost impact. Yes, obviously, as you know, the -- yes, there's the revenue impact and the downstream impact as well that we incur. But the kind of the direct cost is roughly around EUR 30 million.
Perfect. And then on the patient growth?
Yes. Tom, I hope you're doing well. I would say I'd be thrilled for it to be in Q2. I think it's probably going to be in Q3. But if we see some good movement in -- Q2 is going to happen, we'll communicate that. But I think it may be -- very end of Q2 into Q3. So we'll kind of split it that way, I guess, I would say.
Okay, perfect. And then maybe just a quick follow-up, if I can be cheeky. If we look at H2, a number of other commentators in the industry have talked about potentially lower-than-normal mortality through the back half of the year, assuming COVID goes away. Is that something you would go so far as to comment on? Or would you prefer to reserve judgment on that at the moment?
I think it would be great to comment on it, but my better judgment tells me let's let it sit, and then we'll keep you updated. I don't know that I want to be as bullish as that at the moment.
The next question is from the line of Veronika Dubajova from Goldman Sachs.
I will also keep it to two. My first one is just sort of a follow-on to Tom. Just trying to understand the shape of the excess mortality, those 3,000 patients that you saw. I hate to ask for month-by-month numbers, but I'm going to. And maybe if you have a comment on sort of how April has shaped up given that a significant amount of progress you've made on vaccinations. That would be really helpful to understand that shape of the distribution of the 3,000 excess deaths. And then my second question is looking back at the U.S. business. And Helen, thanks for the simplified disclosure, but I must say it's made understanding revenue per treatment movement a lot more difficult. So if I can just ask for a quantification of what happened to revenue per treatment year-on-year in the first quarter. I know you've alluded to sort of, obviously, good progress, but if we can actually precisely get a number for where that revenue per treatment stood and how you're thinking about the sustainability of that number into the remainder of the year.
Veronika, it's Rice. I'm just looking at my notes here. So on the excess mortality, I don't have it month-to-month. I'd have to get it for you, quite honestly. And I'm willing to do that. I just don't have it as I sit here and look at all my notes, that's something we didn't have. I guess what I -- I don't know where April is today. My assumption, which is always dangerous for me to assume anything, but my assumption would be it probably should be a little better based off what we saw. But let's see where that goes. I -- any other clarity I can give you? I just don't have those actual numbers on a month-to-month basis to be able to give them to you at fingertips.
And I'll jump in on the RPT. Obviously, we have stayed away from speaking to the RPT and I know that causes some frustration. But I think maybe what I would just reconfirm here are the pluses and minuses that are going into that revenue development. As you know, we've got the positives from Medicare Advantage increasing. We've got the bundle rate increase, we've got stable commercial mix. On the negative side, and the significant negative that we always flagged in half 1 was the calcimimetics piece. And then don't forget we've got the impact in this quarter of the prior year revenue [ rec ] adjustments as well. So I think you can tease out the pieces that you are familiar with there, Veronika.
And Helen, do you feel comfortable with this revenue per treatment? I guess one of the questions that's come up on your competitor's call was just that commercial mix element. And to the extent it's COVID driven, is there a risk, as you guys think about it, that revenue per treatment softens as we move through the remainder of the year? Or do you kind of, looking out at this point in time, feel this is a pretty sustainable -- adjusting for noise around calcimimetics, you feel this is a pretty sustainable level?
Yes. I think we've been consistent in how we've spoke about commercial mix. And we are saying that the COVID effect is across our entire book of business and it's not discriminating in one book of business or the other. So for us, we're seeing very stable commercial mix, and that's unchanged. So yes, I think your comments and observations are right. We have the noise on calcimimetics, but we feel really good about how the rate and the mix is developing.
That's really helpful, Rice. And I'll follow up with Dominik on the monthly numbers. That's fine.
You bet. Thanks, Veronika.
The next question is from the line of Lisa Clive, Bernstein.
Rice and Helen, I was surprised not to see an update to guidance given the profit boost from the extension of the sequestration suspension. You mentioned the offset was the 9 months delay to the CKCC program. Can you give us more color on your plans for the structure and size of that program? The implication is that you're expecting an annual EBIT contribution of something like $60 million from this program. So is my math right here? And then second, in the absence of any specific details on RPT or the size of Care Coordination stand-alone, can I make a plea for some sort of quarterly details so that we can monitor progress? I guess RPT doesn't really make sense anymore because some of your customers are included -- are giving you a bundled rate, including both dialysis and integrated care. So RPT is actually slightly artificial. But could you give us numbers like the number of patients in an integrated care program on a quarterly basis? I'm just thinking of other things that could potentially be helpful for us to monitor. And then very last question. Medicare expansion to the 60 to 64 population, what proportion of your private patients are in this age bracket? And if you could give any color on whether they're coming through exchanges or whether they're actually mainly insured. I'm just trying to understand the potential implications if that expansion does happen.
Lisa, you want to go ahead, Helen, on sequestration on CKCC and the RPT question?
Yes. No, as I mentioned on the call, we broadly expect the sequestration extension and the CKCC delay to mostly offset each other. I think you're a little high in your numbers of the kind of the CKCC net income impact in 2021. But I think we're probably closer to maybe more of a $40 million, not the number that you quoted, due to the lower patient numbers in MA that you mentioned? Rice, do you want to take the other?
Yes. And Lisa, I would say there was a time when we did talk about patients, that we gave numbers on the number of patients in integrated care models. So I think we could think about doing that again, if that's helpful for you. I appreciate you understand RPT really is kind of sliding by the wayside given how much value-based care we're doing and those sort of things. So I think Helen and I can think about that. Can you just repeat your third question? I was too busy writing. I didn't get it all down just right. I know it was an age bracket, but just would you repeat it, please, for me?
Yes. Just thinking through the potential for Medicare to expand to the 60 to 64 population, what proportion of your private patients are in this age bracket roughly? And also, are these mainly EGHP plans? Are they exchange plans? I'm just trying to get a sense for the potential leakage if that expansion does happen?
Okay. I got you. To be honest, I don't know that I could tell you what that percent is today. Let me take a different approach. From everything that we're doing and everybody I'm talking to in D.C., I don't think it's likely we're going to see a movement. Right now, I think the Biden administration, he's got bigger fish to fry, things he wants to do. The progressives don't like it, but it seems like to me that the other side of the party does not want to go there. So at this point, I think it's less likely -- that doesn't excuse me not trying to give you a range, but I honestly don't know today, but we can follow up with that. And who's our next question coming from, Dominik?
The next question is from the line of Oliver Metzger, Commerzbank.
The first one is on patient mortality. A little bit in the direction as Veronika has asked. So as we saw a peak of infection rates in January, so mortality will peak in Q2. Do you have the infection rate over the last 6 weeks among your patients, vis-a-vis was different to the overall infection rates in the respective countries? So that's question number one. The second one, I'm a little bit surprised because of your wording. So I've observed a more prominent reporting of the ESRD bundle rates compared to previous years. We had a similar increase in the rate in the last years. Now this year, we have Medicare Advantage, that's for sure. But is there any reason why you mentioned this rate increase even more prominent than in previous years?
Oliver, it's Rice. I'll take both of those. So we did see the decline in January. As I say, I don't actually have a February number in front of me, because we look at it on a basis. So I'll have to come back and get that at some point. Infections over the last 6 weeks, we've certainly had some. I can tell you the last data I saw was in early April. The way we pull the data together and analyze it, I don't have that as through the last 6 weeks specifically, and we're bridging over a month or 2. So we'd have to do some work on that. But I think generally we're going to continue to report on a quarterly basis. But obviously we think we're headed in the right direction at this point, hoping that we can continue to see vaccinations grow and that the variants kind of stay out of our hair, if you will. I think I wouldn't overly read anything into my comment about the ESRD bundle rate. I'm happy to get an increase whenever we get it, but just in the things that we believe were important to note that are working to our advantage, if you will, in the quarter was obviously what we're seeing with Medicare Advantage. But hey, we're not going to walk away and not talk about the fact that government saw fit to give us 1.6% increase, we'll take it and we'll mention it. It's always important, Oliver, that you don't shoot the gift horse in the mouth, if you will.
The next question is from the line of Michael Jungling, Morgan Stanley.
Great. I have 2 questions. Firstly, on the independent dialysis clinics, can you comment on what you're observing with respect to their own financial strength where the COVID-19 has weakened them resulting in sort of excess closures of these independent clinics and whether those could fuel your like-for-like store growth over the coming months and quarters? And then secondly, on Medicare Advantage, can you comment on what is happening to the rate relative to what we saw -- what you incurred last year? Are insurance companies now pushing back harder as they have to accept more patients, and therefore trying to press you on price or perhaps focus you a lot more on saving costs for the year for the patient?
Michael, it's Rice. I'll take number one. And Helen, if you wouldn't mind, you could jump in on number two. What I would say at this point, Michael, we are certainly aware in the independent [ market ] some folks that are struggling. There's a number of ways that that can play itself out. It could be outright acquisitions. It could be that you just try to help them figure out where they're going to go in terms of do they want to keep that clinic, do they want to sell, do they want to join, do they want to merge. So we're open to all of those sorts of things, which get at exactly what you're asking me is, is that a way to get some of your growth back? Certainly, it would be. But I have to say I'm not hearing from my guys in North America that this is a weekly occurrence that they're hearing about this at this point. But we would certainly be open to that. And we know it's happening in some cases and would expect it's probably going to continue, but we'll see where that plays out.
Michael, this is Helen. On your second question on the Medicare Advantage pricing, most agreements are locked in from a pricing and rate perspective beyond 2022. So that's not much of a current discussion. And I'm sure as you can appreciate, we are also kind of increasing [ our ] significance in more value-based care contracting in this book of business as well, as we mentioned with the Aetna-CVS agreement. So we're kind of feeling good with where that's all progressing.
The next question is from the line of Falko Friedrichs, Deutsche Bank.
Two questions, please. Firstly, on FME25, when do you plan to provide the details for this program to us? Rice, I think you mentioned in the fall. Would that mean with Q2 results or rather later than that? And then secondly, could you provide an update on home dialysis and the progress you were able to make here in Q1 and just in general, how the training is really working out for home dialysis in this pandemic environment?
Falko, nice to see you or nice to hear from you. FME25, I would not put a lot of stake in Q2, which I think when we talked about back half of the year, everybody kind of gravitated to, "Well, is that going to be July, when you do your Q2?" I sincerely mean the fall, and that leaves us some room as to when we do that. We are neck-deep in work and analysis and the things that we're doing, and we don't want to rush sitting down and giving you a sense of how we're going to go forward and where it's going to go. This is -- it's a big task when you think about relooking at your entire operating model and how you want to go forward. So I would stick with the fall. I can't say July's fall, so that's not going to happen. But I look at the fall in September and beyond that. So if we are ready sooner, we're certainly going to be willing to do that. But in fact, when I think about the work we've yet to do and decisions we need to make and things we need to consider and start to consider the implementation on, I think, probably fall is where I will leave our next communication opportunity. Home dialysis, thank you for asking, is continuing to do well. We had -- again, we were up about 20 basis points sequential quarters in terms of the number of treatments at home. We continue to see home hemodialysis in the mid-20% growth. And PD is still growing in the single digits. So we are feeling good about where we are. The training seems to be working. I think the infrastructure and the assets that we put together are working well. We continue to learn and to make changes as we need to, to be as effective at training as we can. I think a good bellwether, if you will, Falko, on what we're doing here is also the fact that DaVita has come to us, and we've included the NxStage product line in our latest agreement that we've signed with DaVita. They have traditionally done a lot of PD at home, but not much HHD, and the fact they've come to us on HHD, we feel good about that. So I think we're making good progress. We just keep working at it.
The next question is from the line of Veronika Dubajova from Goldman Sachs.
I just was going to ask about the SG&A savings in the first quarter that you called out, Helen, in your prepared remarks. Can you quantify them? And I guess, what's your expectation about how they get phased in through the rest of the year?
Yes. Thanks, Veronika. We obviously have some tough comps for Q1 and Q2 as it relates to kind of how we got hit with the COVID valuation effects last year. So I would roughly say, of the SG&A decrease that we saw quarter-over-quarter, probably breaking it into 2/3 related to last year, 1/3 where I'm seeing just lower spend levels in the quarter. And that will be phasing, that we kind of had some delay with the monitorship visits, for example, due to travel. So we've started to see that spend catch up in the back half [ over that last ] 3 quarters and -- and half already. So yes, that's how I would break it down, like a 2/3, 1/3 split of prior year effects and then 1/3 that would come back over the course of 2021.
Okay. And that's when you look versus Q1 of last year?
Yes, exactly. Exactly. And then yes, of course, what we'll have in Q2 is the true-up of all those -- not just the COVID expenses, but we saw this big fluctuation in the valuations as well in Q1 and Q2. So that's also distorting some of the SG&A base from a valuation perspective.
There are no further questions at this time. I hand back to Dominik for closing comments.
So thank you very much for joining the call today. I know it was a tiresome day for all of you. Nevertheless, thanks for joining. And with that, we wish you good rest of the week and hope to hear you at the latest with the next quarterly results. Take care.
Thanks, everyone. Be safe. Be well.
Thank you. Bye-bye.
Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephones. Thank you for joining, and have a pleasant day. Goodbye.