Fresenius: Q3/18 with continued strong Group earnings growth in constant currency

• Excellent performance of Fresenius Kabi across all regions and product categories 
• Fresenius Medical Care’s sales and earnings growth below the Company’s expectations
• Preparatory initiatives for expected regulatory requirements and decline in admissions impact Helios Germany; Helios Spain with steady yet dynamic growth 
• Strong momentum in both Vamed’s project and service businesses 

Group guidance for 2018 confirmed and narrowed

As announced on October 16, 2018 Fresenius confirms and narrows its Group guidance¹  for FY/18. This is mainly driven by an excellent development of Fresenius Kabi, which partially offset the lower than expected sales and earnings contributions of Fresenius Medical Care and Helios Germany. Group sales are expected to increase at the low end of the original 5% to 8%² guidance range (in constant currency). Fresenius expects net income^1,3,4  growth at the low end of the original 6% to 9% guidance range (in constant currency). Excluding expenditures for the further development of the biosimilars business, net income^1,3,5  growth is projected at the low end of the original ~10% to 13% guidance range (in constant currency). 

¹ 2018 before special items (excluding effects related to the Akorn and NxStage transactions, gains from divestitures of Care Coordination activities and increase of FCPA provision)
² FY/17 base adjusted for IFRS 15 adoption (-€486 million) and divestitures of Care Coordination activities (-€558 million) at Fresenius Medical Care
³ Net income attributable to shareholders of Fresenius SE & Co. KGaA
⁴ FY/17 base: €1,804 million; FY/18 before special items; including contributions to the campaigns in the U.S. opposing state ballot initiatives at Fresenius Medical Care; including expenditures for further development of the biosimilars business at Fresenius Kabi (€43 million after tax in FY/17 and ~€120 million after tax in FY/18)
⁵ FY/17 base: €1,847 million; FY/18 before special items; including contributions to the campaigns in the U.S. opposing state ballot initiatives at Fresenius Medical Care; excluding expenditures for further development of the biosimilars business at Fresenius Kabi (€43 million after tax in FY/17 and ~€120 million after tax in FY/18)

 

If no timeframe is specified, information refers to Q1-3/18

Q3/18:

• Sales: €8.2 billion (+3%¹, +4% in constant currency¹)
• EBIT²: €1,112 million (+0%, +0% in constant currency)
• EBIT²: (excl. biosimilars business): €1,153 million (+3%, +2% in constant currency)
• Net income^2,3: €445 million (+8%, +8% in constant currency)
• Net income^2,3: €474 million (+13%, +13% in constant currency)
  (excl. biosimilars business)

Q1-3/18:

• Sales: €24.7 billion (+1%1, +5% in constant currency¹)
• EBIT²: €3,311 million (-5%, -1% in constant currency)
• EBIT²: (excl. biosimilars business): €3,424 million (-3%, +2% in constant currency) 
• Net income^2,3: €1,367 million (+3%, +7% in constant currency)
• Net income^2,3: €1,449 million (+8%, +12% in constant currency)
  (excl. biosimilars business)

¹ Growth rates adjusted for IFRS 15 adoption and divestitures of Care Coordination activities (Q3/17 base: €7,927 million; Q1-3/17 base: €24,551 million)
² Before special items (before expenses related to the Akorn transaction, gains from divestitures of Care Coordination activities and increase of FCPA provision); growth rates: 2017 base adjusted for divestitures of Care Coordination activities
³ Net income attributable to shareholders of Fresenius SE & Co. KGaA 
For a detailed overview of special items please see the reconciliation tables on pages 19-20 in the PDF document.

Stephan Sturm, CEO of Fresenius, said: “In the third quarter, Fresenius again achieved healthy sales growth and drove earnings growth even a touch stronger. Fresenius Kabi, Fresenius Vamed and Quirónsalud delivered a truly excellent performance. At the same time, Fresenius Medical Care and our German Helios hospitals will enhance their efforts to further improve and adapt to changing market conditions. From an overall position of strength, we are in the closing stretch for yet another record year.”

5% sales growth in constant currency¹

Group sales increased by 1%¹ (5%¹ in constant currency) to €24,695 million (Q1-3/17: €25,191 million). Organic sales growth was 4%. Acquisitions/divestitures contributed net 1% to growth. Negative currency translation effects of 4% were mainly driven by the devaluation of the U.S. dollar and the Chinese yuan against the euro. In Q3/18, Group sales increased by 3%¹ (4%¹ in constant currency) to €8,192 million (Q3/17: €8,297 million). Organic sales growth was 4%. Acquisitions/divestitures had no net contribution to growth. Currency translation effects reduced sales by 1%.

¹ Growth rates adjusted for IFRS 15 adoption and divestitures of Care Coordination activities at Fresenius Medical Care (Q1-3/17 base: €24,551 million; Q3/17 base: €7,927 million)

Group sales by region:

7% net income^1,2,3 growth in constant currency

Group EBITDA² decreased by 4%³ (0%³ in constant currency) to €4,375 million (Q1-3/17: €4,579 million). Group EBIT² decreased by 5%³ (-1%³ in constant currency) to €3,311 million (Q1-3/17: €3,522 million). The EBIT margin² was 13.4% (Q1 3/17: 14.0%). Group EBIT² before expenses for the further development of the biosimilars business decreased by 3%³ (increased 2%³ in constant currency) to €3,424 million. In the prior-year period the compensation for treatments of U.S. war veterans (“VA agreement”) contributed €88 million as a one-time effect. Group EBIT² excluding the VA agreement and expenses for the further development of the biosimilars business increased by 4% in constant currency. 

In Q3/18, Group EBIT³ was broadly stable year-over-year³ (broadly stable³ in constant currency) at €1,112 million (Q3/17: €1,129 million), with an EBIT margin² of 13.6% (Q3/17: 13.6%). Group EBIT² excluding the prior-year VA agreement and expenses for the further development of the biosimilars business increased by 2%³ in constant currency.

Group net interest² was -€436 million (Q1-3/17: -€484 million). The decrease is mainly driven by currency effects as well as refinancing activities and the divestitures of Care Coordination activities. 

The decrease of the Group tax rate before special items to 22.0% (Q1-3/17: 28.1%) was mainly due to the U.S. tax reform and some one time effects in Q3 at Fresenius Medical Care and Fresenius Kabi. In Q3/18, the Group tax rate² was 21.4% (Q3/17: 27.4%).

Noncontrolling interest² was €876 million (Q1-3/17: €854 million), of which 95% was attributable to the noncontrolling interest in Fresenius Medical Care.

¹ Net income attributable to shareholders of Fresenius SE & Co. KGaA
² Before special items 
³ Base 2017 base adjusted for divestitures of Care Coordination activities
For a detailed overview of special items please see the reconciliation tables on pages 19-20 in the PDF document.
 

Group net income^1,2  increased by 3%³  (7%³ in constant currency) to €1,367 million (Q1 3/17: €1,329 million). Earnings per share^1,2 increased by 3%³ (7%³ in constant currency) to €2.46 (Q1-3/17: €2.40). In Q3/18, Group net income^1,2 increased by 8%³ (8%³ in constant currency) to €445 million (Q3/17: €413 million). Earnings per share^1,2 increased by 7%³ (7%³ in constant currency) to €0.80 (Q3/17: €0.75).

Group net income^1,2,4  before expenses for the further development of the biosimilars business increased by 8%³ (12%³ in constant currency) to €1,449 million (Q1-3/17: €1,339 million). Earnings per share^1,2,4 increased by 8%³ (12%³ in constant currency) to €2.61 (Q1-3/17: €2.42). In Q3/18, Group net income^1,2,4 increased by 13%³ (13%³ in constant currency) to €474 million (Q3/17: €423 million). Earnings per share^1,2,4 increased by 12%³ (12%³ in constant currency) to €0.85 (Q3/17: €0.77).

Group net income^2,5 after special items increased by 16% (by 21% in constant currency) to €1,511 million (Q1-3/17: €1,303 million), mainly due to gains related to divestitures in Care Cordination activities at Fresenius Medical Care. Earnings per share^2,5  increased by 16% (21% in constant currency) to €2.72 (Q1-3/17: €2.35). In Q3/18, Group net income^2,5 increased by 6% (4% in constant currency) to €419 million (Q3/17: €396 million). Earnings per share^2,5 increased by 6% (4% in constant currency) to €0.75 (Q3/17: €0.71).

¹ Before special items 
² Net income attributable to shareholders of Fresenius SE & Co. KGaA
³ 2017 base adjusted for divestitures of Care Coordination activities
⁴ Before expenses for the further development of the biosimilars business
⁵ After special items
For a detailed overview of special items please see the reconciliation tables on pages 19-20 in the PDF document.
 

Continued investment in growth 

Spending on property, plant and equipment was €1,370 million (Q1-3/17: €1,137 million), primarily for the modernization and expansion of dialysis clinics, production facilities as well as hospitals and day clinics. This corresponds to 5.5% of sales.

Total acquisition spending was €876 million (Q1-3/17: €6,662 million). The prior-year period included the acquisition of Quirónsalud.

Cash flow development

Group operating cash flow decreased by 15% to €2,405 million (Q1-3/17: €2,821 million) with a margin of 9.7% (Q1-3/2017: 11.2%). The decrease is mainly due to two effects at Fresenius Medical Care in North America: Receipt of a ~€200 million payment under the VA agreement in the prior-year period as well as increased accounts receivable related to the addition of calcimimetics into the Medicare ESRD payment bundle. In addition, negative currency translation effects weighed on the cash flow development in Q1-3/18. Operating cash flow in Q3/18 increased by 1% to €1,149 million (Q3/17: €1,138 million), with a margin of 14.0% (Q3/17: 13.7%). 

Given the effects described above and growing investments, free cash flow before acquisitions and dividends decreased to €1,049 million (Q1-3/17: €1,705 million). Free cash flow after acquisitions and dividends was €1,172 million (Q1-3/17: -€5,233 million).

Solid balance sheet structure

The Group’s total assets increased by 5% (4% in constant currency) to €55,723 million (Dec. 31, 2017: €53,133 million). Current assets grew by 16% (16% in constant currency) to €14,593 million (Dec. 31, 2017: €12,604 million). Non-current assets increased by 1% (broadly stable in constant currency) to €41,130 million (Dec. 31, 2017: € 40,529 million).

Total shareholders’ equity increased by 10% (9% in constant currency) to €23,998 million (Dec. 31, 2017: €21,720 million). The equity ratio increased to 43.1% (Dec. 31, 2017: 40.9%). 

Group debt was broadly stable unchanged (decreased by 1% in constant currency) at €18,961 million (Dec. 31, 2017: € 19,042 million). Group net debt decreased by 5% (-6% in constant currency) to € 16,505 million (Dec. 31, 2017: € 17,406 million) mainly due to the proceeds from divestitures of Care Coordination activities. 

As of September 30, 2018, the net debt/EBITDA ratio was 2.75^1,2  (December 31, 2017: 2.84^1,2). Excluding the proceeds from divestitures of Care Coordination activities the net debt/EBITDA ratio was 2.96^1,2. At year-end 2018, Fresenius now expects the FY/18 net debt/EBITDA^1,2 ratio to be on a comparable level to year-end 2017.

¹ At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures, excluding Akorn and NxStage transactions 
² Before special items 

Increased number of employees 

As of September 30, 2018, the number of employees was 277,318 (Dec. 31, 2017: 273,249).

Business Segments

Fresenius Medical Care 

Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of September 30, 2018, Fresenius Medical Care was treating 329,085 patients in 3,872 dialysis clinics. Along with its core business, the company provides related medical services in the field of Care Coordination.

• 3% comparable¹ sales growth in constant currency in Q3
• -2% adjusted^4,6 net income decrease in constant currency in Q3
• Outlook for FY/18 adjusted

Sales decreased by 8% (-2% in constant currency) to €12,247 million (Q1-3/17: €13,355 million). Organic sales growth was 3%. Currency translation effects reduced sales by 7%. The adoption of IFRS 15 reduced sales by 3%. Q1-3/17 base additionally adjusted for divestitures of Care Coordination activities, sales decreased by 4% (increased by 3% in constant currency). 

¹ Adjusted for IFRS 15 implementation; base adjusted for divested Care Coordination activities
² Excluding VA agreement Q3: 3%; Q1-3: 4%
³ Excluding gains from divestitures of Care Coordination activities, increase of FCPA provision, ballot initiatives, divested Care Coordination activities in Q3/2017; including Natural disaster costs and VA agreement
⁴ Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
⁵ Consistent with guidance, i.e. excluding gains from divestitures of Care Coordination activities, increase of FCPA provision, ballot initiatives, , divested Care Coordination activities; including Natural disaster costs, the effect of the U.S. Tax Reform and including VA agreement
⁶ Consistent with guidance, i.e. excluding gains from divestitures of Care Coordination activities, the effect of the U.S. Tax Reform, VA agreement, FCPA provision, ballot initiatives, divested Care Coordination activities, Natural disaster costs

In Q3/18, sales decreased by 6% (-6% in constant currency) to €4,058 million (Q3/17: €4,336 million). Organic sales growth was 3%. The adoption of IFRS 15 reduced sales by 3%. Q3/17 base additionally adjusted for divestitures of Care Coordination activities, sales in Q3/18 increased by 2% (increased by 3% in constant currency).

Health Care services sales (dialysis services and care coordination) decreased by 4%¹ (increased by 3%¹  in constant currency) to €9,852 million (Q1-3/17: €10,950 million). With €2,395 million (Q1-3/17: €2,405 million), Health Care product sales were on prior-year’s level (increased by 5% in constant currency).  

In North America, sales decreased by 5%¹ (increased by 1%¹ in constant currency) to €8,589 million (Q1-3/17: €9,715 million). Health Care services sales decreased by 6%¹ (increased by 1%¹ in constant currency) to €7,978 million (Q1-3/17: €9,086 million). Excluding the 2017 effect from the VA Agreement (€96 million), Health Care services sales increased by 2%¹ in constant currency. Health Care product sales decreased by 3% (increased by 4% in constant currency) to €610 million (Q1-3/17: €629 million). 

Sales outside North America increased by 1% (7% in constant currency) to €3,648 million (Q1-3/17: €3,628 million). 

Health Care services sales increased by 1% (9% in constant currency) to €1,873 million (Q1-3/17: €1,864 million). Health Care product sales increased by 1% (5% in constant currency) to €1,774 million (Q1-3/17: €1,764 million). 

Fresenius Medical Care’s EBIT increased by 32% (39% in constant currency) to €2,425 million (Q1-3/17: €1,843 million), driven by the divestitures of Care Coordination activities. The EBIT margin increased to 19.8% (Q1-3/17: 13.8%). EBIT on a comparable basis decreased by 2% in constant currency and EBIT margin was 13.9% (Q1-3/17: 14.3%). 

In Q3/18, EBIT decreased by 13% (-20% in constant currency) to €527 million (Q3/17: €609 million). The EBIT margin decreased to 13.0% (Q3/17: 14.0%). EBIT on a comparable basis increased by 5% (increased by 4% in constant currency) and EBIT margin increased to 15.1% (Q3/17: 14.8%). 

¹ Growth rate adjusted for IFRS 15 implementation and divested Care Coordination activities 
 
Net income¹ increased by 76% (86% in constant currency) to €1,557 million (Q1-3/17: €886 million). Adjusted net income¹ growth was 4% in constant currency. Net income¹ growth on a comparable basis was 16% in constant currency. 

In Q3/18, net income¹ decreased by 8% (-17% in constant currency) to €285 million (Q3/17: €309 million). Adjusted net income¹ growth was -2% in constant currency. Net income¹ growth on a comparable basis was 19% in constant currency.

Operating cash flow was €1,220 million (Q1-3/17: €1,664 million). The cash flow margin was 10.0% (Q1-3/17: 12.5%). The decrease is mainly due to two effects in North America: Receipt of a ~€200 million payment under the VA agreement in the prior-year period as well as increased accounts receivable related to the addition of calcimimetics into the Medicare ESRD payment bundle. In Q3/18, operating cash flow was €609 million (Q3/17: €612 million), mainly driven by higher tax payments and discretionary contributions to pension plan assets in the U.S., almost fully offset by decreases in accounts receivable. The cash flow margin was 15.0% (Q3/17: 14.1%).

Fresenius Medical Care revised its outlook for FY/18 as the business development in Q3/18 was below the company’s expectations. Fresenius Medical Care now expects sales growth of 2% to 3%²  in constant currency (previously: 5% to 7%²). On a comparable basis³, Fresenius Medical Care now expects FY/18 net income¹ to increase by 11% to 12%³ in constant currency (previously: 13% to 15%³). On an adjusted basis⁴, Fresenius Medical Care now expects FY/18 net income¹ to increase by 2% to 3%⁴ in constant currency (previously: 7% to 9%⁴).

For further information, please see Fresenius Medical Care’s Investor News at www.freseniusmedicalcare.com.  

¹ Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
² 2017 base: €16,739 million (adjusted for IFRS 15 adoption (-€486 million) and divestitures of Care Coordination activities (-€558 million))
³ 2017 base: €1,242 million, excluding H2/17 net income of divestited Care Coordination activities (-€38 million); 2018 including benefits of the U.S. tax reform but excluding gains from divestitures of Care Coordination activities, contributions to the campaigns in the U.S. opposing state ballot initiatives at Fresenius Medical Care and FCPA provision
⁴ 2017 base: €1,162 million, excluding H2/17 net income of divested Care Coordination activities (-€38 million), the effect of the U.S. tax reform, natural disaster costs, FCPA provision and effects of the agreement with the U.S. Departments of Veterans Affairs and Justice (VA agreement); 2018 excluding benefits of the U.S. tax reform, gains from divestitures of Care Coordination activities, contributions to the campaigns in the U.S. opposing state ballot initiatives and FCPA provision 
 

Fresenius Kabi

Fresenius Kabi offers intravenously administered generic drugs, clinical nutrition and infusion therapies for seriously and chronically ill patients in the hospital and outpatient environments. The company is also a leading supplier of medical devices and transfusion technology products. In the biosimilars business, we are developing products with a focus on oncology and autoimmune diseases.

• 8% organic sales growth and 14% EBIT¹ growth in constant currency (excl. biosimilars expenses) in Q3
• Sales outlook confirmed and strengthened: top end of 4% to 7% organic sales growth expected
• EBIT outlook raised: 1% to 3%⁵  EBIT growth in constant currency expected (~9% to 11%⁶ excl. biosimilars expenses) 

Sales increased by 2% (increased by 7% in constant currency) to €4,857 million (Q1-3/17: €4,764 million). Organic sales growth was 7%. Strong negative currency translation effects (-5%) were mainly related to the devaluation of the U.S. dollar, the Brazilian real and the Argentinian peso against the euro. In Q3/18, sales increased by 6% (8% in constant currency) to €1,650 million (Q3/17: €1,562 million). Organic sales growth was 8%.

Sales in Europe grew by 1% (organic growth: 3%) to €1,658 million (Q1-3/17: €1,635 million). In Q3/18, sales were unchanged (organic growth: 1%) at €538 million. 

¹ Before special items 
² Before expenses for the further development of the biosimilars business: Q3/18: 14%; Q1-3/18: 11%
³ Net income attributable to shareholders of Fresenius SE & Co. KGaA
⁴ Before expenses for the further development of the biosimilars business: Q3/18: 31%; Q1-3/18: 22% 
⁵ FY/17 base: €1,177 million; before special items, including expenditures for the further development of the biosimilars business (€60 million in FY/17 and ~€160 million in FY/18)
⁶ FY/17 base: €1,237 million; before special items, excluding expenditures for the further development of the biosimilars business (€60 million in FY/17 and ~€160 million in FY/18)
For a detailed overview of special items please see the reconciliation tables on pages 19-20 in the PDF document.
 

Sales in North America increased by 1% (organic growth: 8%) to €1,760 million (Q1-3/17: €1,736 million). In Q3/18, sales increased by 13% (organic growth: 12%) to €620 million (Q3/17: €549 million). 

Sales in Asia-Pacific increased by 8% (organic growth: 12%) to €964 million (Q1-3/17: €894 million). In Q3/18, sales increased by 8% (organic growth: 9%) to €337 million (Q3/17: €312 million). Sales in Latin America/Africa decreased by 5% (organic growth: 11%) to €475 million (Q1-3/17: €499 million). In Q3/18, sales decreased by 5% (organic growth increased by 13%) to €155 million (Q3/17: €163 million).

EBIT¹ decreased by 6% (increased by 1% in constant currency) to €854 million (Q1-3/17: €905 million) with an EBIT margin¹ of 17.6% (Q1-3/17: 19.0%). In Q3/18, EBIT¹ increased by 5% (5% in constant currency) to €297 million (Q3/17: €283 million) with an EBIT margin¹ of 18.0% (Q3/17: 18.1%).

EBIT¹ before expenses for the further development of the biosimilars business increased by 5% (11% in constant currency) to €967 million (Q1-3/17: €919 million) with an EBIT margin¹ of 19.9% (Q1-3/17: 19.3%). In Q3/18, EBIT¹ before expenses for the further development of the biosimilars business increased by 14% (14% in constant currency) to €338 million (Q3/17: €297 million) with an EBIT margin¹ of 20.5% (Q3/17: 19.0%).

Net income^1,2  increased by 2% (9% in constant currency) to €554 million (Q1-3/17: €544 million). In Q3/18, net income^1,2 increased by 21% (21% in constant currency) to €199 million (Q3/17: €165 million).

Operating cash flow increased by 28% to €820 million (Q1-3/17: €640 million). The cash flow margin grew to 16.9% (Q1-3/17: 13.4%). In Q3/18, operating cash flow increased by 49% to €366 million (Q3/17: €245 million) with a cash flow margin of 22.2% (Q3/2017: 15.7%) mainly driven by a strong operational performance and working capital improvements. 

¹ Before special items
² Net income attributable to shareholders of Fresenius SE & Co. KGaA 
For a detailed overview of special items please see the reconciliation tables on pages 19-20 of the PDF document.
 
Based on the strong development in Q3/18 Fresenius Kabi confirms and strengthens its organic sales growth guidance of 4% to 7% and now expects to reach the top end of this range. 

Fresenius Kabi has increased its FY/18 EBIT outlook and now expects 1% to 3%¹ growth in constant currency (previously: -2% to +1%¹). The increase is driven by a strong development across all product lines and regions with North America standing out. FY/18 EBIT excluding expenditures for the further development of the biosimilars business is now expected to grow by ~9% to 11%² in constant currency (previously: ~6% to 9%²).

¹ 2017 base: €1,177 million; before special items, including expenditures for the further development of the biosimilars business (€60 million in FY/17 and ~€160 million in FY/18)
² 2017 base: €1,237 million; before special items, excluding expenditures for the further development     of the biosimilars business (€60 million in FY/17 and ~€160 million in FY/18) 
For a detailed overview of special items please see the reconciliation tables on pages 19-20 of the PDF document.
 

Fresenius Helios

Fresenius Helios is Europe's leading private hospital operator. The company comprises Helios Germany and Helios Spain (Quirónsalud). Helios Germany operates 87 hospitals, 89 outpatient centers and treats approximately 5.2 million patients annually. Quirónsalud operates 46 hospitals, 56 outpatient centers and around 300 occupational risk prevention centers, and treats approximately 11.6 million patients annually.

• 2% organic sales growth in Q3
• Preparatory initiatives for expected regulatory requirements and decline in admissions impact financial performance of Helios Germany 
• Helios Spain with steady yet dynamic growth
• 2018 sales outlook confirmed and narrowed, EBIT outlook adjusted: 0% to 2% (previously: 5% to 8%) 

As of July 1, 2018 Fresenius Helios transferred its German post-acute care business to Fresenius Vamed and adjusted its outlook accordingly. For a like-for-like comparison, we also provide sales and EBIT growth rates adjusted for the effects of this transaction. 

Fresenius Helios increased sales by 5% (7%¹) to €6,762 million (Q1-3/17: €6,422 million). Organic sales growth was 3%. In Q3/18, sales decreased by 4% (increased by 2%¹; organic growth: 2%) to €2,088 million (Q3/17: €2,166 million).

Sales of Helios Germany decreased by 1% (grew 2%¹; organic growth: 2%) to €4,531 million (Q1-3/17: €4,562 million). In Q3/18, sales decreased by 7% (0%¹; organic growth: 0%) to €1,410 million (Q3/17: €1,524 million). Sales are impacted by a decline in admissions, inter alia due to a trend towards outpatient treatments. To counter this trend, Helios Germany is expanding outpatient services offerings in a separate division. Helios Spain increased sales by 20% (organic growth: 5%) to €2,231 million (Q1-3/17: €1,860 million), mainly due to the additional month of consolidation compared to the prior-year period (Quirónsalud is consolidated since February 1, 2017). In Q3/18 Helios Spain increased sales by 6% (organic growth: 5%) to €678 million (Q3/17: €642 million). 

¹ Adjusted for German post-acute care business transferred to Fresenius Vamed
² Net income attributable to shareholders of Fresenius SE & Co. KGaA

Fresenius Helios grew EBIT by 1% (3%¹) to €775 million (Q1-3/17: €769 million) with a margin of 11.5% (Q1-3/17: 12.0%). In Q3/18, EBIT decreased by 12% (-6%¹) to €204 million (Q3/17: €232 million) with a margin of 9.8% (Q3/17: 10.7%).

EBIT of Helios Germany decreased by 11% (-8%¹) to €488 million (Q1-3/17: €549 million) with a margin of 10.8% (Q1-3/17: 12.0%). In Q3/18, EBIT decreased by 25% (-17%¹) to €143 million (Q3/17: €190 million) with a margin of 10.1% (Q3/17: 12.5%). Given a  significant fixed cost base, top line performance impacs EBIT over-proportionately. Additionally, EBIT development of Helios Germany is negatively affected by catalogue effects, preparatory initiatives for expected regulatory requirements (i.e. clustering) as well as a lack of privatization opportunities in the German market. 

EBIT of Helios Spain increased by 30% to €286 million (Q1-3/17: €220 million), mainly due to the strong operating performance and the additional month of consolidation compared to the prior-year period, with a margin of 12.8% (Q1-3/17: 11.8%). In Q3/18, from a moderate base, EBIT increased by 40% to €59 million (Q3/17: €42 million) with a margin of 8.7% (Q3/17: 6.5%).

Net income² of Fresenius Helios decreased by 2% to €516 million (Q1-3/17: €526 million). In Q3/18, net income² decreased by 16% to €128 million (Q3/17: €153 million).

Operating cash flow was €387 million (Q1-3/17: €560 million) with a margin of 5.7% (Q1-3/17: 8.7%). 
Fresenius Helios confirmed and narrowed its FY/18 organic sales growth outlook, and now projects growth at the low end of the original 3% to 6% range. Based on the Q3/18 business development in Germany, Fresenius Helios adjusts its FY/18 EBIT outlook and now expects 0% to 2% growth (previously: 5% to 8%). 

¹ Adjusted for German post-acute care business transferred to Fresenius Vamed
² Net income attributable to shareholders of Fresenius SE & Co. KGaA

Fresenius Vamed

Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide and is a post-acute care provider in Central Europe. The portfolio ranges along the entire value chain: from project development, planning, and turnkey construction, via maintenance and technical management, to total operational management.

• Excellent organic sales growth of 30% in Q3/18
• Both service and project businesses contributed to strong growth in Q3/18
• FY/18 outlook confirmed

As of July 1, 2018 Fresenius Helios transferred the post-acute care business to Fresenius Vamed. Fresenius Vamed adjusted its outlook accordingly. For a like-for-like comparison, we also provide sales and EBIT growth rates adjusted for the effects of this transaction. 

Sales increased by 32% (17%¹; 33% in constant currency) to €991 million (Q1-3/17: €748 million). Organic sales growth was 14% with a strong momentum in both the project and service businesses as well as increased sales from services for Fresenius Helios. Sales of the project business increased by 17% to €352 million (Q1-3/17: €301 million). Sales in the service business grew by 43% (17%¹) to €639 million (Q1-3/17: €447 million). In Q3/18, sales increased by 110% (32%¹; organic growth: 24%) to €315 million (Q3/17: €150 million).

EBIT increased by 53% (6%¹) to €49 million (Q1-3/17: €32 million) with a margin of 4.9% (Q1-3/17: 4.3%). In Q3/18, EBIT increased by 107% (7%¹) to €31 million (Q3/17: €15 million) with a margin of 6.5% (Q3/17: 5.6%).

Net income² increased by 57% to €33 million (Q1-3/17: €21 million). In Q3/18, net income² increased by 120% to €22 million (Q1-3/17: €10 million).

Order intake decreased by 19% to €567 million (Q1-3/17: €697 million). As of September 30, 2018, order backlog was €2,315 million (December 31, 2017: €2,147 million).

Fresenius Vamed has confirmed its outlook for 2018 and expects organic sales growth in the range of 5% to 10% and EBIT growth of 32% to 37%.

¹ Without German post-acute care business transferred from Fresenius Helios
² Net income attributable to shareholders of VAMED AG

Conference Call 

As part of the publication of the results for the third quarter / first nine month of 2018, a conference call will be held on October 30, 2018 at 2 p.m. CET (9 a.m. EDT). All investors are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com/media-calendar. Following the call, a replay will be available on our website.

For additional information on the performance indicators used please refer to our website.