Fresenius Helios has started publishing daily figures on the occupancy rate for intensive care beds in its 86 German hospitals. The website of each hospital will report the number of COVID-19 patients in the hospital’s regular and intensive care wards. It will also publish figures from the Robert Koch Institute, Germany’s national health agency, on the number of new infections in the surrounding region. Helios’ goal is to increase transparency and facilitate a data-based assessment of the pandemic at the local level. Helios Germany currently has a total of 1,300 intensive care beds across the country and could add an additional 1,000 on short notice, in the event of a sharp increase in COVID-19 hospitalizations.

Fresenius Helios has started publishing daily figures on the occupancy rate for intensive care beds in its 86 German hospitals. The website of each hospital will report the number of COVID-19 patients in the hospital’s regular and intensive care wards. It will also publish figures from the Robert Koch Institute, Germany’s national health agency, on the number of new infections in the surrounding region. Helios’ goal is to increase transparency and facilitate a data-based assessment of the pandemic at the local level. Helios Germany currently has a total of 1,300 intensive care beds across the country and could add an additional 1,000 on short notice, in the event of a sharp increase in COVID-19 hospitalizations.

• Fresenius Medical Care with continued strong earnings growth in constant currency
• Fresenius Kabi showed a recovery in Europe and return to growth in China whilst headwinds weigh on North American business
• Helios Germany with sales growth in Q3 due to recovery of elective procedures; Helios Spain with significant growth based on catch-up effects
• Fresenius Vamed continues to be heavily impacted by COVID-19 related project delays, high-end technical service remained robust

If no timeframe is specified, information refers to Q3/2020; 2020 and 2019 according to IFRS 16

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 17-19 in the PDF document.

Stephan Sturm, CEO of Fresenius, said: "Fresenius remains stable and resilient, and was able to show it once again in the third quarter. Despite the ongoing and in some cases drastic restrictions caused by COVID-19, our patients could continue to rely on and benefit from our care. Fresenius is also reliable, in terms of business development: We forecasted that after a second quarter impacted by the lockdowns our sales and earnings would resume their positive trajectory – and they did just that. Despite the coronavirus, we were even able to achieve a strong increase in sales over last year’s third quarter. Our quarterly earnings of €427 million are also robust. We are well prepared for the challenges that the pandemic will pose to us over the coming months. As a result, I remain confident that we will reach our 2020 targets and continue our healthy growth in the coming years."
 

FY/20 Group guidance
Based on the Group’s solid business development in Q1-3/20, Fresenius confirms its sales and net income guidance for 2020 including estimated COVID-19 effects. Fresenius projects sales growth¹ of 3% to 6% in constant currency. Net income^2,3 is expected to develop in a range of - 4% to +1%.

Fresenius projects net debt/EBITDA⁴ to be around the top-end of the self-imposed target corridor of 3.0x to 3.5x by the end of FY/20 including estimated COVID-19 effects.

COVID-19 will continue to impact Fresenius’ operations in Q4/20. Fresenius recognizes the increasing COVID-19 case numbers, and the associated various containment measures being enacted in many of the Company’s relevant markets. Thus, the Group’s FY/20 guidance assumes no containment measures that have a significant and direct impact on the health care sector that are not appropriately compensated.

¹ FY/19 base: €35,409 million
² Net income attributable to shareholders of Fresenius SE & Co. KGaA
³ FY/19 base: €1,879 million; before special items (transaction-related expenses, revaluations of biosimilars contingent purchase price liabilities, gain related to divestitures of Care Coordination activities at FMC, expenses associated with the cost optimization program at FMC); FY/20: before special items
⁴ At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures; excluding further potential acquisitions; before special items
For a detailed overview of special items please see the reconciliation tables on pages 17-19 in the PDF document.

5% sales growth in constant currency
Group sales increased by 1% (5% in constant currency) to €8,918 million (Q3/19: €8,842 million). Organic sales growth was 3%. Acquisitions/divestitures contributed net 2% to growth. Currency translation had a negative impact on sales growth of 4%. Excluding estimated COVID-19 effects¹, Group sales growth would have been 6% to 7%, in constant currency. In Q1-3/20, Group sales increased by 3% (5% in constant currency) to €26,973 million (Q1-3/19: €26,098 million). Organic sales growth was 3%. Acquisitions/divestitures contributed net 2% to growth. Currency translation had a negative impact on sales growth of 2%. Excluding estimated COVID-19 effects¹, Group sales growth would have been 7% to 8% in constant currency.

1% net income^2,3 growth in constant currency
Group EBITDA decreased by 2% (increased by 2% in constant currency) to €1,729 million (Q3/19²: €1,763 million). In Q1-3/20, Group EBITDA increased by 2% (2% in constant currency) to €5,246 million (Q1-3/19²: €5,167 million).

Group EBIT decreased by 3% (increased by 1% in constant currency) to €1,113 million (Q3/19²: €1,153 million). The missing contribution from elective procedures, volume headwinds leading to underutilized production capacities, COVID-19 related project delays at Fresenius Vamed as well as Group-wide COVID-19 related expenses weighed on EBIT. The EBIT margin was 12.5% (Q3/19²: 13.0%). In Q1-3/20, Group EBIT decreased by 1% (0% in constant currency) to €3,361 million (Q1-3/19²: €3,401 million). The EBIT margin was 12.5% (Q1-3/19²: 13.0%). Following higher levels of investments in recent years, Fresenius sees higher levels of depreciation and amortization in 2020.

Group net interest before special items improved to -€154 million (Q3/19: -€171 million) mainly due to successful refinancing activities, lower interest rates as well as currency translation effects. Reported Group net interest improved to -€154 million (Q3/19: -€172 million). In Q1-3/20, Group net interest before special items improved to -€495 million (Q1-3/19: -€532 million) while reported Group net interest improved to -€503 million (Q1-3/19: -€535 million).

¹ For estimated COVID-19 effects in Q3/20 and Q1-3/20 please see table on page 15 in the PDF document.
² Before special items
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 17-19 in the PDF document.

The Group tax rate before special items (Q3/19: 23.1%) and the reported Group tax rate (Q3/19: 21.2%) were 22.0%. In Q1-3/20, the Group tax rate before special items (Q1-3/19: 23.1%) and the reported Group tax rate (Q1-3/19: 22.4%) were 22.7%.

Noncontrolling interests before special items and reported noncontrolling interests were €321 million (Q3/19: both €310 million), of which 97% were attributable to the noncontrolling interests in Fresenius Medical Care. In Q1-3/20, noncontrolling interests before special items and reported were €913 million (Q1-3/19 before special items: €834 million; reported €826 million).

Group net income¹ before special items decreased by 4% (increased by 1% in constant currency) to €427 million (Q3/19: €445 million). Excluding estimated COVID-19 effects², net income before special items and in constant currency would have grown 1% to 5%. Reported Group net income¹ was €427 million (Q3/19: €444 million). In Q1-3/20, Group net income¹ before special items decreased by 5% (-4% in constant currency) to €1,302 million (Q1-3/19: €1,373 million). Excluding estimated COVID-19 effects², net income before special items and in constant currency would have grown 2% to 6%. Reported Group net income¹ was €1,297 million (Q1-3/19: €1,368 million).

Earnings per share¹ before special items decreased by 4% (0% in constant currency) to €0.77 (Q3/19: €0.80). Reported earnings per share¹ were €0.77 (Q3/19: €0.80). In Q1-3/20, earnings per share¹ before special items decreased by 5% (-4% in constant currency) to €2.34 (Q1-3/19: €2.47). Reported earnings per share¹ were €2.33 (Q1-3/19: €2.46).

Continued investment in growth
Spending on property, plant and equipment was €521 million corresponding to 6% of sales (Q3/19: €586 million; 7% of sales). These investments served primarily for the modernization and expansion of dialysis clinics, production facilities as well as hospitals, and day clinics. Despite the COVID-19 pandemic, Fresenius has been largely able to continue its investment programs, although there remains some uncertainty on the timing of projects for the remainder of the year. In Q1-3/20, spending on property, plant and equipment was €1,542 million corresponding to 6% of sales (Q1-3/19: €1,592 million; 6% of sales).

Total acquisition spending was €142 million (Q3/19: €135 million). In Q1-3/20, total acquisition spending was €651 million, mainly for the acquisition of three hospitals in Colombia by Fresenius Helios (Q1-3/19: €2,292 million, mainly for the acquisition of NxStage by Fresenius Medical Care).

¹ Net income attributable to shareholders of Fresenius SE & Co. KGaA
² For estimated COVID-19 effects in Q3/20 and Q1-3/20 please see table on page 15 in the PDF document.
For a detailed overview of special items please see the reconciliation tables on pages 17-19 in the PDF document.

Good cash flow development
Group operating cash flow was €1,199 million (Q3/19: €1,483 million) with a margin of 13.4% (Q3/19: 16.8%). Free cash flow before acquisitions and dividends was €682 million (Q3/19: €907 million). Given dividend payment in Q3/20 versus Q2/19, Free cash flow after acquisitions and dividends was -€185 million (Q3/19: €732 million).

In Q1-3/20, Group operating cash flow increased to €5,159 million (Q1-3/19: €2,977 million) with a margin of 19.1% (Q1-3/19: 11.4%). The increase was largely driven by Fresenius Medical Care due to the U.S. federal relief funding and advanced payments under the Coronavirus Aid, Relief and Economic Security Act (CARES Act) as well as by the shorter payment periods of the COVID-19 governmental compensation and reimbursement scheme for Helios Germany. Free cash flow before acquisitions and dividends was €3,593 million (Q1-3/19: €1,388 million). Free cash flow after acquisitions and dividends was €2,149 million (Q1-3/19: -€1,634 million, driven by the acquisition of NxStage by Fresenius Medical Care).
 

Solid balance sheet structure
Group total assets increased by 2% (5% in constant currency) to €68,321 million (Dec. 31, 2019: €67,006 million). Current assets increased by 10% (15% in constant currency) to €16,833 million (Dec. 31, 2019: €15,264 million), mainly driven by the increase of cash and cash equivalents. Non-current assets remained nearly unchanged (2% in constant currency) at €51,488 million (Dec. 31, 2019: €51,742 million).

Total shareholders’ equity decreased by 1% (increased by 4% in constant currency) to €26,201 million (Dec. 31, 2019: €26,580 million). The equity ratio was 38.3% (Dec. 31, 2019: 39.7%).

Group debt remained nearly unchanged (increased by 1% in constant currency) at €27,171 million (Dec. 31, 2019: € 27,258 million). Group net debt decreased by 4% (-3% in constant currency) to € 24,513 million (Dec. 31, 2019: € 25,604 million), driven by the exceptional cash flow development.

As of September 30, 2020, the net debt/EBITDA ratio improved to 3.45x^1,2 (Dec. 31, 2019: 3.61x^1,2) driven by the exceptional cash flow development, despite COVID-19 effects weighing on EBITDA.
 

¹ At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures
² Before special items
For a detailed overview of special items please see the reconciliation tables on pages 17-19 in the PDF document.

Business Segments
 

Fresenius Medical Care (Financial data according to Fresenius Medical Care press release)
Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of September 30, 2020, Fresenius Medical Care was treating 349,167 patients in 4,073 dialysis clinics. Along with its core business, the company provides related medical services in the field of Care Coordination.

• Solid sales and strong earnings growth at constant currency continues in Q3
• Q3 development impacted by currency headwinds and expected lower reimbursement from calcimimetics
• Guidance for FY/20 confirmed

Sales of Fresenius Medical Care remained on prior year’s level (increased by 6% in constant currency) at €4,414 million (Q3/19: €4,419 million). Organic sales growth was 3%. Acquisitions/divestitures contributed net 3% to growth. In Q1-3/20, Fresenius Medical Care increased sales by 4% (6% in constant currency) to €13,459 million (Q1-3/19: €12,897 million). Organic sales growth was 4%.

There were no adjustments to reported EBIT in Q3/20 and Q1-3/20. Reported EBIT increased by 6% (11% in constant currency) to €632 million (Q3/19: €595 million). The reported EBIT margin was 14.3% (Q3/19: 13.5%). The increase in margin was driven by negative prior year earnings effects, an increase in commercial revenue and favorable cost management of pharmaceuticals, offsetting the lower reimbursement for calcimimetics, all in the North America region. EBIT on an adjusted basis increased by 2% (7% in constant currency) to €632 million (Q3/19: €620 million). The EBIT margin on an adjusted basis was 14.3% (Q3/19: 14.0%).

¹ Before special items
² Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
For a detailed overview of special items please see the reconciliation tables on pages 17-19 in the PDF document.

In Q1-3/20, reported EBIT increased by 11% (12% in constant currency) to €1,843 million (Q1-3/19: €1,653 million). The reported EBIT margin was 13.7% (Q1-3/19: 12.8%). EBIT on an adjusted basis increased by 9% (9% in constant currency) to €1,843 million (Q1-3/19: €1,693 million). The EBIT margin on an adjusted basis was 13.7% (Q1-3/19: 13.1%).

There were no adjustments to reported net income in Q3/20 and Q1-3/20. Reported net income¹ grew by 6% (11% in constant currency) to €354 million (Q3/19: €333 million) and increased on an adjusted basis by 7% (11% in constant currency) to €354 million (Q3/19: €332 million). In Q1-3/20, reported net income¹ grew by 15% (15% in constant currency) to €987 million (Q1-3/19: €857 million) and increased on an adjusted basis by 14% (14% in constant currency) to €987 million (Q1-3/19: €868 million).

Operating cash flow was €746 million (Q3/19: €868 million) with a margin of 16.9% (Q3/19: 19.7%). In Q1-3/20, operating cash flow was €3,649 million (Q1-3/19: €1,796 million) with a margin of 27.1% (Q1-3/19: 13.9%). The increase was largely driven by the U.S. federal relief funding and advanced payments under the CARES Act and other COVID-19 relief, as well as working capital improvements driven by cash collections.

Fresenius Medical Care continues to expect both revenue² and net income^1,3 to grow at a mid to high single digit rate in 2020. These targets are inclusive of anticipated COVID-19 effects, in constant currency and exclude special items⁴. They are based on the adjusted results 2019, including the effects of the operations of the NxStage acquisition and the IFRS 16 implementation.

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

¹ Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
² FY/19 base: €17,477 million
³ FY/19 base: €1,236 million (FY/20: before special items)
⁴ Special items are effects that are unusual in nature and have not been foreseeable or not foreseeable in size or impact at the time of giving guidance.
For a detailed overview of special items please see the reconciliation tables on pages 17-19 in the PDF document.

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, Fresenius Kabi develops products with a focus on oncology and autoimmune diseases.

• In North America decreased demand given fewer elective treatments and some supply constraints due to temporary manufacturing issues outweighed extra demand for COVID-19 related products
• China recovery accelerates with elective treatments rebounding nearly to pre-pandemic levels
• Strong EBIT growth in Europe and positive development in China only partially compensates EBIT decrease in North America
• FY/20 guidance confirmed

Sales decreased by 4% (increased by 2% in constant currency) to €1,694 million (Q3/19: €1,761 million). Organic sales growth was 2%. Negative currency translation effects of 6% were mainly related to weakness of the US dollar, the Brazilian real and the Argentinian peso. Estimated COVID-19 effects had a slight negative impact on sales growth. In Q1-3/20, sales remained on prior year’s level (increased by 3% in constant currency) at €5,161 million (Q1-3/19: €5,153 million). Organic sales growth was 3%. Negative currency translation effects of 3% were mainly related to weakness of the Brazilian real and the Argentinian peso. Estimated COVID-19 effects had a slight negative impact on sales growth in Q1-3/20.

Sales in North America decreased by 10% (organic growth: -5%) to €558 million (Q3/19: €619 million). The decrease was driven by fewer elective treatments and supply constraints for certain products due to temporary manufacturing issues, which outweighed extra demand for COVID-19 related products. In Q1-3/20, sales in North America increased by 1% (organic growth: 1%) to €1,827 million (Q1-3/19: €1,815 million). Sales in Europe increased by 3% (organic growth: 5%) to €581 million (Q3/19: €564 million). In Q1-3/20, sales in Europe increased by 4% (organic growth: 5%) to €1,778 million (Q1-3/19: €1,709 million). Sales in Asia-Pacific decreased by 2% (organic growth: increased by 1%) to €399 million (Q3/19: €406 million). While China saw a solid recovery based on increasing elective procedures, other Asian markets are lagging behind. In Q1-3/20, sales in Asia-Pacific decreased by 5% (organic growth: -3%) to €1,069 million (Q1-3/19: €1,121 million).

Sales in Latin America/Africa decreased by 9% (organic growth increased by 17%) to €156 million (Q3/19: €172 million). In Q1-3/20, sales in Latin America/Africa decreased by 4% (organic growth increased by 17%) to €487 million (Q1-3/19: €508 million).

EBIT before special items decreased by 9% (-4% in constant currency) to €278 million (Q3/19¹: €307 million) with an EBIT margin of 16.4% (Q3/19¹:17.4%). The decline is driven by headwinds leading to some underutilized production capacities in the US, coupled with selective supply constraints due to temporary manufacturing issues, incremental COVID-19 related expenses as well as a negative effect related to a write down of a receivable. Estimated COVID-19 effects, primarily lower share based remuneration costs given the capital markets situation, but also lower corporate costs due to travel restrictions and phasing of projects, had a moderate positive impact on EBIT growth. In Q1-3/20, EBIT before special items decreased by 7% (-5% in constant currency) to €859 million (Q1-3/19¹: €920 million) with an EBIT margin of 16.6% (Q1-3/19¹: 17.9%). Estimated COVID-19 effects had a slight positive impact on EBIT growth in Q1-3/20.

Net income^1,2 decreased by 7% (-1% in constant currency) to €189 million (Q3/19: €203 million). In Q1-3/20, net income^1,2 decreased by 5% (-3% in constant currency) to €582 million (Q1-3/19: €614 million).

Operating cash flow decreased to €225 million (Q3/19: €377 million) with a margin of 13.3% (Q3/19: 21.4%). After an excellent operating cash flow in Q2/20 that was marked by early cash receipts and tax payment holidays, Fresenius Kabi saw the respective reversal in Q3/20. In Q1-3/20, operating cash flow increased by 13% to €836 million (Q1-3/19: €737 million) with a margin of 16.2% (Q1-3/19: 14.3%).

Fresenius Kabi confirms its outlook including estimated COVID-19 effects and projects organic sales³ growth of 2% to 5% and an EBIT⁴ development of -6% to -3% in constant currency.

¹ Before special items
² Net income attributable to shareholders of Fresenius SE & Co. KGaA
³ FY/19 base: €6,919 million
⁴ FY/19 base: €1,205 million, before special items, FY/20: before special items
For a detailed overview of special items please see the reconciliation tables on pages 17-19 in 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 86 hospitals, ~125 outpatient centers and 6 prevention centers. Quirónsalud operates 46 hospitals, 70 outpatient centers and around 300 occupational risk prevention centers. In addition, the company is active in Latin America with 7 hospitals and as a provider of medical diagnostics.

• Recovery of elective procedures in Germany and Spain
• Helios Spain with significant growth based on catch-up effects; momentum accelerated by dynamic growth of outpatient treatments
• FY/20 guidance confirmed

Sales increased by 8% (8% in constant currency) to €2,400 million (Q3/19: €2,230 million). Organic growth was 6%. Acquisitions contributed 2% to sales growth. COVID-19 effects had an insignificant effect on organic sales growth. In Q1-3/20, Fresenius Helios increased sales by 4% (5% in constant currency) to €7,181 million (Q1-3/19: €6,890 million). Organic growth was 3%. Acquisitions contributed 2% to sales growth. COVID-19 effects had a moderate negative impact on organic sales growth in Q1-3/20. Fresenius sees a gradual recovery of elective procedures in Germany and Spain since May.

Sales of Helios Germany increased by 4% (organic growth: 4%) to €1,529 million (Q3/19: €1,474 million). In Q1-3/20, Sales of Helios Germany increased by 5% (organic growth: 5%) to €4,703 million (Q1-3/19: €4,465 million). Due to the law to ease the financial burden on hospitals, COVID-19 effects had only a slight negative impact on organic sales growth in both, Q3/20 and in Q1-3/20.

Sales of Helios Spain increased by 15% (17% in constant currency) to €870 million (Q3/19: €757 million). Organic growth of 10% was driven by a strong recovery of elective procedures and additionally fueled by increased outpatient treatments. Thus COVID-19 effects had a slight positive impact on organic sales growth. The hospital acquisitions in Colombia contributed 7% to sales growth. In Q1-3/20, sales of Helios Spain increased by 2% (3% in constant currency) to €2,476 million (Q1-3/19: €2,425 million). Organic growth was -2%. Acquisitions contributed 5% to sales growth. COVID-19 effects had a significant negative impact on organic sales growth in Q1-3/20.

EBIT of Fresenius Helios increased by 20% (20% in constant currency) to €225 million (Q3/19: €187 million) with an EBIT margin of 9.4% (Q3/19: 8.4%). COVID-19 effects had a significant positive effect on EBIT growth. In Q1-3/20, EBIT of Fresenius Helios decreased by 5% (-5% in constant currency) to €697 million (Q1-3/19: €731 million) with an EBIT margin of 9.7% (Q1-3/19: 10.6%). COVID-19 effects had a significant negative impact on EBIT growth in Q1-3/20.

EBIT of Helios Germany increased by 2% to €133 million (Q3/19: €131 million) with an EBIT margin of 8.7% (Q3/19: 8.9%). In Q1-3/20, EBIT of Helios Germany increased by 3% to €445 million (Q1-3/19: €434 million) with an EBIT margin of 9.5% (Q1-3/19: 9.7%). Due to the law to ease the financial burden on hospitals, COVID-19 effects had only a slight negative impact on EBIT growth in both Q3/20 and Q1-3/20.

EBIT of Helios Spain increased by 61% (63% in constant currency) to €95 million (Q3/19: €59 million) with an EBIT margin of 10.9% (Q3/19: 7.8%). The growth is driven by a recovery of elective procedures following the government-ordered postponement of planned surgical procedures in Q2, where medically justifiable. Thus, COVID-19 effects had a very significant positive effect on EBIT growth in Q3/20. In Q1-3/20, EBIT of Helios Spain decreased by 15% (-15% in constant currency) to €261 million (Q1-3/19: €307 million) with an EBIT margin of 10.5% (Q1-3/19: 12.7%). COVID-19 effects had a significant negative impact on EBIT growth in Q1-3/20 with missing or delayed elective procedures and higher expenses amidst the comprehensive efforts to combat the pandemic.

Net income¹ increased by 27% to €142 million (Q3/19: €112 million). In Q1-3/20, net income¹ decreased by 6% to €441 million (Q1-3/19: €467 million).

Operating cash flow increased to €275 million (Q3/19: €196 million) with a margin of 11.5% (Q3/19: 8.8%), driven by phasing of payments under the German law to ease the financial burden on hospitals. In Q1-3/20, operating cash flow increased to €715 million (Q1-3/19: €507 million) with a margin of 10.0% (Q1-3/19: 7.4%).

Fresenius Helios confirms its outlook including estimated COVID-19 effects and expects organic sales² growth of 1% to 4% and EBIT³ broadly stable over FY/19 in constant currency.

¹ Net income attributable to shareholders of Fresenius SE & Co. KGaA
² FY/19 base: €9,234 million
³ FY/19 base: €1,025 million

Fresenius Vamed
Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide and is a leading 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.

• Significant negative COVID-19 impact continued through Q3
•  Projects and project order intake continued to be marked by delays, cancellations and global supply chain restraints due to COVID-19
•  Lower capacities in the post-acute-care business due to health authority induced capacity restrictions and postponements of elective surgeries; less demand for rehabilitation treatments; high-end technical service remained robust
•  FY/20 EBIT guidance revised

Sales of Fresenius Vamed decreased by 8% (-8% in constant currency) to €517 million (Q3/19: €562 million). Organic sales growth was -10%. Acquisitions contributed 2% to growth. Estimated COVID-19 effects had a significant negative impact on growth in Q3/20. In Q1-3/20, Fresenius Vamed increased sales by 1% (1% in constant currency) to €1,491 million (Q1-3/19: €1,469 million). Organic sales growth was -1%. Acquisitions contributed 2% to growth. Estimated COVID-19 effects had a significant negative impact on sales growth in Q1-3/20.

Sales in the service business increased by 8% to €377 million (Q3/19: €349 million).

Sales in the project business decreased by 34% to €140 million (Q3/19: €213 million), driven by postponements and cancellations of projects. In Q1-3/20, sales in the service business grew by 4% to €1,063 million (Q1-3/19: €1,025 million). Sales in the project business decreased by 4% to €428 million (Q1-3/19: €444 million).

EBIT decreased by 133% (-133% in constant currency) to -€11 million (Q3/19: €33 million) with an EBIT margin of -2.1% (Q3/19: 5.9%). Estimated COVID-19 effects had a very significant negative impact on EBIT. Capacities in the post-acute care clinics were left empty given a generally lower intake of elective surgery patients from acute-care hospitals as well as authority-instigated restrictions or even closures of individual facilities. In the project business, project delays triggered incremental expenses. In Q1-3/20, EBIT decreased by 115% (-115% in constant currency) to -€10 million (Q1-3/19: €67 million) with an EBIT margin of -0.7% (Q1-3/19: 4.6%). Estimated COVID-19 effects had a very significant negative impact on EBIT in Q1-3/20.

Net income¹ decreased to -€15 million (Q3/19: €21 million). In Q1-3/20, net income¹ decreased to -€23 million (Q1-3/19: €39 million).

Order intake was €188 million in Q3/20 (Q3/19: €240 million) and €362 million in Q1-3/20 (Q1-3/19: €738 million). As of September 30, 2020, order backlog was at €2,786 million (December 31, 2019: €2,865 million). Order intake and order backlog were marked by COVID-19 related cancellations and project delays.

Operating cash flow decreased to -€4 million (Q3/19: €33 million) with a margin of -0.8% (Q3/19: 5.9%), driven by delayed payments in the project business, partially offset by minor compensation payments from governmental authorities related to the post-acute care business. In Q1-3/20, operating cash flow increased to €4 million (Q1-3/19: -€17 million) with a margin of 0.3% (Q1-3/19: -1.2%).

Fresenius Vamed confirms its sales outlook for FY/20 and expects an organic sales² decline of ~10%. Ongoing significant negative Covid-19 effects are expected to weigh on EBIT in Q4/20. While Fresenius Vamed continues to project a positive EBIT³ amount for FY/20, the constant currency decline versus FY/19 is now expected to exceed the former outlook of ~50%. Both sales and EBIT outlook include estimated COVID-19 effects.

¹ Net income attributable to shareholders of VAMED AG
² FY/19 base: €2,206 million
³ FY/19 base: €134 million

Conference Call
As part of the publication of the results for Q3/2020, a conference call will be held on October 29, 2020 at 1:30 p.m. CET (8:30 a.m. EDT). All investors are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com/investors. Following the call, a replay will be available on our website.

For additional information on the performance indicators used please refer to our website www.fresenius.com/alternative-performance-measures.

Contact

Head of Corporate Communications
T +49 (0) 6172 608-96008
pr-fre@fresenius.com

Documents

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• Operations maintained despite COVID-19, impact on patients minimized
• Q3 development impacted by currency headwinds and expected lower reimbursement for calcimimetics
• Financial targets for FY 2020 confirmed inclusive of anticipated COVID-19 effects

“The global COVID-19 pandemic has posed further challenges to us in the third quarter; and it will be a sizable challenge to be managed also in the months to come”, said Rice Powell, Chief Executive Officer of Fresenius Medical Care. “It is at times like these that the value of our strong network, of our vertically integrated, resilient business model and of the commitment of our entire Fresenius Medical Care team becomes evident – and proves to be decisive for fostering the wellbeing of our patients as well as creating value for our shareholders. On the back of our strong earnings development in the first nine months, we confirm our outlook for the financial year 2020. Thanks to the lessons learned from the first phase of the pandemic and our highly committed team, I am very confident that our company will successfully cope with COVID-19.”

2020 targets confirmed: mid to high single digit growth rates
Fresenius Medical Care continues to expect both revenue and net income¹ to grow at a mid to high single digit rate in 2020. These targets are inclusive of anticipated COVID-19 effects, in constant currency and exclude special items³. They are based on the adjusted results 2019, including the effects of the operations of the NxStage acquisition and the IFRS 16 implementation.

¹ Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
² For a reconciliation of adjusted figures, please refer to the table at the end of the press release
³ Special items are effects that are unusual in nature and have not been foreseeable or not foreseeable in size or impact at the time of giving guidance. 

COVID-19 continues to affect dialysis business
As in previous months – and thanks to the comprehensive protective measures initiated at the beginning of the pandemic – Fresenius Medical Care was able to minimize the impact on patients and to maintain operations in its more than 4,000 dialysis centers worldwide without significant interruptions.

However, the COVID-19 pandemic continued to affect people with advanced kidney disease and the resulting severity of illness generated an increase in hospitalization and mortality rate. The resulting increase in missed treatments and, in addition, delayed referrals of patients with late stage chronic kidney disease, slowed down the organic growth in the third quarter to 3%. In the first nine months the COVID-19 related net effect on operating income was neutral.

Patients, Clinics and Employees
As of September 30, 2020, Fresenius Medical Care treated 349,167 patients in 4,073 dialysis clinics worldwide. At the end of the third quarter, the Company had 126,463 employees (full-time equivalents) worldwide, compared to 120,734 employees as of September 30, 2019.

Solid net income growth despite headwinds from exchange rates
Despite a sizable headwind from exchange rates, revenue was stable and amounted to EUR 4,414 million (+6% at constant currency). Organic growth of 3% was realized including the expected negative impacts from lower reimbursement for calcimimetics and COVID-19 related slower growth in the number of treatments. 

Health Care Services revenue remained stable despite the negative effects from exchange rates and amounted to EUR 3,499 million (+6% at constant currency). On a constant currency basis, growth was driven by negative prior year revenue effects (“prior year revenue effects”⁴) , contributions from acquisitions and was achieved despite the lower reimbursement for calcimimetics as well as COVID-19 related slower growth of the number of treatments. 

⁴ Prior year revenue effects: revenue recognition adjustment for accounts receivable in legal dispute (- EUR 84 million), reduction in patient attribution and a decreasing savings rate for ESCOs (- EUR 46 million)

Health Care Products revenue was negatively impacted by exchange rates as well and decreased by 1% to EUR 915 million (+4% at constant currency). On a constant currency basis, growth was driven by higher sales of products for acute care treatments, machines for chronic treatment and peritoneal dialysis products.

In the first nine months of 2020 revenue increased by 4% to EUR 13,459 million (+6% at constant currency), with organic growth of 4%. Health Care Services revenue grew by 4% to EUR 10,708 million (+6% at constant currency). Health Care Products revenue rose by 5% to EUR 2,751 million (+7% at constant currency).

Operating income increased by 6% to EUR 632 million (+11% at constant currency), resulting in a margin of 14.3% (Q3 2019: 13.5%). The margin increase was driven by negative prior year earnings effects (“prior year earnings effects”⁵) , an increase in commercial revenue and favorable cost management of pharmaceuticals, offsetting the lower reimbursement for calcimimetics, all in the North America region.

Operating income for the first nine months increased by 11% to EUR 1,843 million (+12% at constant currency), resulting in a margin of 13.7% (9M 2019: 12.8%).

⁵ Prior year earnings effects: revenue recognition adjustment for accounts receivable in legal dispute (- EUR 84 million), reduction in patient attribution and a decreasing savings rate for ESCOs (- EUR 46 million) as well as a remeasurement effect of the fair value of the Humacyte investment (EUR 76 million).

Net income¹ grew by 6% to EUR 354 million (+11% at constant currency), driven by the earnings effects described above and lower refinancing cost in light of favorable market conditions. Basic earnings per share (EPS) rose by 9% to EUR 1.21 (+14% at constant currency), supported by the Company’s completed share buyback program decreasing the average weighted number of shares outstanding. 

In the first nine months of 2020, net income increased by 15% to EUR 987 million (+15% at constant currency). EPS rose by 19% to EUR 3.35 (+19% at constant currency).

Exceptional cash-flow development in the first nine months
Fresenius Medical Care generated EUR 746 million of operating cash flow (Q3 2019: EUR 868 million), resulting in a margin of 16.9% (Q3 2019: 19.7%). For the first nine months of 2020, operating cash flow increased to EUR 3,649 million (9M 2019: EUR 1,796 million). This increase was mainly due to U.S. federal relief funding and advanced payments under the CARES Act, other COVID-19 relief, as well as working capital improvements driven by cash collections. 

Free cash flow (net cash used in operating activities, after capital expenditures, before acquisitions, investments and dividends) amounted to EUR 507 million (Q3 2019: EUR 584 million), resulting in a margin of 11.5% (Q3 2019: 13.2%). In the first nine months of 2020, the Company generated a free cash flow of EUR 2,913 million (9M 2019: EUR 1,019 million).

Regional developments
In North America, despite a sizable negative exchange rate effect, revenue remained stable and amounted to EUR 3,069 million (+5% at constant currency, +2% organic). On a constant currency basis, growth drivers were the prior year revenue effects4, an improved commercial mix and contributions from acquisitions. This was partially offset by expected headwinds from lower reimbursement for calcimimetics as well as a COVID-19 related slower growth of the number of treatments. For the first nine months, North America revenue increased by 5% to EUR 9,495 million (+5% at constant currency, +3% organic).

Despite significant headwinds from exchange rates, operating income increased by 8% to EUR 514 million (+13% at constant currency), resulting in a margin of 16.8% (Q3 2019: 15.5%). The margin increase was mainly due to the prior year earnings effects5, an increase in commercial revenue and favorable cost management of pharmaceuticals, offsetting the lower reimbursement for calcimimetics. For the first nine months, operating income rose by 24% to EUR 1,587 million (+24% at constant currency), resulting in a margin of 16.7% (9M 2019: 14.2%).

Despite a negative effect from exchange rates, revenue in EMEA remained stable and amounted to EUR 682 million (+3% at constant currency, +1% organic). Growth on a constant currency basis was supported by contributions from acquisitions and growth in same market treatments. For the first nine months, EMEA revenue increased by 3% to EUR 2,048 million (+5% at constant currency, +4% organic).

Operating income for the EMEA region also remained stable and amounted to EUR 99 million (+0% at constant currency), resulting in a margin of 14.6% (Q3 2019: 14.6%). At constant currency, operating income development was negatively influenced by unfavorable impact from foreign currency transaction effects. For the first nine months, operating income decreased by 17% to EUR 278 million (-16% at constant currency), resulting in a margin of 13.6% (9M 2019: 16.8%). The decrease was mainly due to the reduction of a contingent consideration liability related to Xenios in the prior year and an impairment of a license held by the joint venture with Vifor based on an unfavorable clinical trial. 

In Asia-Pacific, revenue development was affected by exchange rates and increased by 2% to EUR 484 million (+6% at constant currency, +6 organic), mainly driven by growth in same market treatments, contributions from acquisitions, higher sales of in-center disposables and products for acute care treatments, as well as organic growth in the Care Coordination business. This was partially offset by missing contributions from closed or sold clinics. For the first nine months, revenue grew by 1% to EUR 1,377 million (+2% at constant currency, +2% organic).

Operating income grew by 7% to EUR 97 million (+9% at constant currency), resulting in a margin of 20.0% (Q3 2019: 19.0%). The increase in margin was supported by a favorable impact from cost management initiatives and business growth. For the first nine months, operating income decreased by 7% to EUR 237 million (-7% at constant currency) resulting in a margin of 17.2% (9M 2019: 18.7%).

Including a very significant headwind from exchange rates, Latin America revenue decreased by 7% to EUR 170 million (+22% at constant currency, +17% organic). For the first nine months, revenue decreased by 2% to EUR 508 million (+23% at constant currency, +17% organic).

Operating income increased by 6% to EUR 11 million (+28% at constant currency), resulting in a margin of 6.6% (Q3 2019: 5.8%). For the first nine months, operating income grew by 4% to EUR 29 million (+18% at constant currency), resulting in a margin of 5.7% (9M 2019: 5.4%).

Conference call
Fresenius Medical Care will host a conference call to discuss the results of the third quarter and first nine months of 2020 on October 29, 2020 at 3:30 p.m. CET / 10:30 a.m. ET. Details will be available on the company’s website www.freseniusmedicalcare.com in the “Investors” section. A replay will be available shortly after the call.

Please refer to our statement of earnings included in the separate PDF-files for a complete overview of the results for the third quarter and first nine months of 2020. Our 6-K disclosure provides more details.

Contact

Head of Corporate Communications
T +49 (0) 6172 608-96008
pr-fre@fresenius.com

Documents

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• Fresenius Medical Care with continued strong earnings growth in constant currency
• Fresenius Kabi showed a recovery in Europe and return to growth in China whilst headwinds weigh on North American business
• Helios Germany with sales growth in Q3 due to recovery of elective procedures; Helios Spain with significant growth based on catch-up effects
• Fresenius Vamed continues to be heavily impacted by COVID-19 related project delays, high-end technical service remained robust

If no timeframe is specified, information refers to Q3/2020; 2020 and 2019 according to IFRS 16

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 17-19 in the PDF document.

Stephan Sturm, CEO of Fresenius, said: "Fresenius remains stable and resilient, and was able to show it once again in the third quarter. Despite the ongoing and in some cases drastic restrictions caused by COVID-19, our patients could continue to rely on and benefit from our care. Fresenius is also reliable, in terms of business development: We forecasted that after a second quarter impacted by the lockdowns our sales and earnings would resume their positive trajectory – and they did just that. Despite the coronavirus, we were even able to achieve a strong increase in sales over last year’s third quarter. Our quarterly earnings of €427 million are also robust. We are well prepared for the challenges that the pandemic will pose to us over the coming months. As a result, I remain confident that we will reach our 2020 targets and continue our healthy growth in the coming years."
 

FY/20 Group guidance
Based on the Group’s solid business development in Q1-3/20, Fresenius confirms its sales and net income guidance for 2020 including estimated COVID-19 effects. Fresenius projects sales growth¹ of 3% to 6% in constant currency. Net income^2,3 is expected to develop in a range of - 4% to +1%.

Fresenius projects net debt/EBITDA⁴ to be around the top-end of the self-imposed target corridor of 3.0x to 3.5x by the end of FY/20 including estimated COVID-19 effects.

COVID-19 will continue to impact Fresenius’ operations in Q4/20. Fresenius recognizes the increasing COVID-19 case numbers, and the associated various containment measures being enacted in many of the Company’s relevant markets. Thus, the Group’s FY/20 guidance assumes no containment measures that have a significant and direct impact on the health care sector that are not appropriately compensated.

¹ FY/19 base: €35,409 million
² Net income attributable to shareholders of Fresenius SE & Co. KGaA
³ FY/19 base: €1,879 million; before special items (transaction-related expenses, revaluations of biosimilars contingent purchase price liabilities, gain related to divestitures of Care Coordination activities at FMC, expenses associated with the cost optimization program at FMC); FY/20: before special items
⁴ At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures; excluding further potential acquisitions; before special items
For a detailed overview of special items please see the reconciliation tables on pages 17-19 in the PDF document.

5% sales growth in constant currency
Group sales increased by 1% (5% in constant currency) to €8,918 million (Q3/19: €8,842 million). Organic sales growth was 3%. Acquisitions/divestitures contributed net 2% to growth. Currency translation had a negative impact on sales growth of 4%. Excluding estimated COVID-19 effects¹ ,Group sales growth would have been 6% to 7%, in constant currency. In Q1-3/20, Group sales increased by 3% (5% in constant currency) to €26,973 million (Q1-3/19: €26,098 million). Organic sales growth was 3%. Acquisitions/divestitures contributed net 2% to growth. Currency translation had a negative impact on sales growth of 2%. Excluding estimated COVID-19 effects¹, Group sales growth would have been 7% to 8% in constant currency.

1% net income^2,3 growth in constant currency
Group EBITDA decreased by 2% (increased by 2% in constant currency) to €1,729 million (Q3/19²: €1,763 million). In Q1-3/20, Group EBITDA increased by 2% (2% in constant currency) to €5,246 million (Q1-3/19²: €5,167 million).

Group EBIT decreased by 3% (increased by 1% in constant currency) to €1,113 million (Q3/19²: €1,153 million). The missing contribution from elective procedures, volume headwinds leading to underutilized production capacities, COVID-19 related project delays at Fresenius Vamed as well as Group-wide COVID-19 related expenses weighed on EBIT. The EBIT margin was 12.5% (Q3/19²: 13.0%). In Q1-3/20, Group EBIT decreased by 1% (0% in constant currency) to €3,361 million (Q1-3/19²: €3,401 million). The EBIT margin was 12.5% (Q1-3/19²: 13.0%). Following higher levels of investments in recent years, Fresenius sees higher levels of depreciation and amortization in 2020.

Group net interest before special items improved to -€154 million (Q3/19: -€171 million) mainly due to successful refinancing activities, lower interest rates as well as currency translation effects. Reported Group net interest improved to -€154 million (Q3/19: -€172 million). In Q1-3/20, Group net interest before special items improved to -€495 million (Q1-3/19: -€532 million) while reported Group net interest improved to -€503 million (Q1-3/19: -€535 million).

¹ For estimated COVID-19 effects in Q3/20 and Q1-3/20 please see table on page 15 in the PDF document.
² Before special items
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 17-19 in the PDF document.

The Group tax rate before special items (Q3/19: 23.1%) and the reported Group tax rate (Q3/19: 21.2%) were 22.0%. In Q1-3/20, the Group tax rate before special items (Q1-3/19: 23.1%) and the reported Group tax rate (Q1-3/19: 22.4%) were 22.7%.

Noncontrolling interests before special items and reported noncontrolling interests were €321 million (Q3/19: both €310 million), of which 97% were attributable to the noncontrolling interests in Fresenius Medical Care. In Q1-3/20, noncontrolling interests before special items and reported were €913 million (Q1-3/19 before special items: €834 million; reported €826 million).

Group net income¹ before special items decreased by 4% (increased by 1% in constant currency) to €427 million (Q3/19: €445 million). Excluding estimated COVID-19 effects², net income before special items and in constant currency would have grown 1% to 5%. Reported Group net income¹ was €427 million (Q3/19: €444 million). In Q1-3/20, Group net income¹ before special items decreased by 5% (-4% in constant currency) to €1,302 million (Q1-3/19: €1,373 million). Excluding estimated COVID-19 effects², net income before special items and in constant currency would have grown 2% to 6%. Reported Group net income¹ was €1,297 million (Q1-3/19: €1,368 million).

Earnings per share¹ before special items decreased by 4% (0% in constant currency) to €0.77 (Q3/19: €0.80). Reported earnings per share¹ were €0.77 (Q3/19: €0.80). In Q1-3/20, earnings per share¹ before special items decreased by 5% (-4% in constant currency) to €2.34 (Q1-3/19: €2.47). Reported earnings per share¹ were €2.33 (Q1-3/19: €2.46).

Continued investment in growth
Spending on property, plant and equipment was €521 million corresponding to 6% of sales (Q3/19: €586 million; 7% of sales). These investments served primarily for the modernization and expansion of dialysis clinics, production facilities as well as hospitals, and day clinics. Despite the COVID-19 pandemic, Fresenius has been largely able to continue its investment programs, although there remains some uncertainty on the timing of projects for the remainder of the year. In Q1-3/20, spending on property, plant and equipment was €1,542 million corresponding to 6% of sales (Q1-3/19: €1,592 million; 6% of sales).

Total acquisition spending was €142 million (Q3/19: €135 million). In Q1-3/20, total acquisition spending was €651 million, mainly for the acquisition of three hospitals in Colombia by Fresenius Helios (Q1-3/19: €2,292 million, mainly for the acquisition of NxStage by Fresenius Medical Care).

¹ Net income attributable to shareholders of Fresenius SE & Co. KGaA
² For estimated COVID-19 effects in Q3/20 and Q1-3/20 please see table on page 15 in the PDF document.
For a detailed overview of special items please see the reconciliation tables on pages 17-19 in the PDF document.

Good cash flow development
Group operating cash flow was €1,199 million (Q3/19: €1,483 million) with a margin of 13.4% (Q3/19: 16.8%). Free cash flow before acquisitions and dividends was €682 million (Q3/19: €907 million). Given dividend payment in Q3/20 versus Q2/19, Free cash flow after acquisitions and dividends was -€185 million (Q3/19: €732 million).

In Q1-3/20, Group operating cash flow increased to €5,159 million (Q1-3/19: €2,977 million) with a margin of 19.1% (Q1-3/19: 11.4%). The increase was largely driven by Fresenius Medical Care due to the U.S. federal relief funding and advanced payments under the Coronavirus Aid, Relief and Economic Security Act (CARES Act) as well as by the shorter payment periods of the COVID-19 governmental compensation and reimbursement scheme for Helios Germany. Free cash flow before acquisitions and dividends was €3,593 million (Q1-3/19: €1,388 million). Free cash flow after acquisitions and dividends was €2,149 million (Q1-3/19: -€1,634 million, driven by the acquisition of NxStage by Fresenius Medical Care).
 

Solid balance sheet structure
Group total assets increased by 2% (5% in constant currency) to €68,321 million (Dec. 31, 2019: €67,006 million). Current assets increased by 10% (15% in constant currency) to €16,833 million (Dec. 31, 2019: €15,264 million), mainly driven by the increase of cash and cash equivalents. Non-current assets remained nearly unchanged (2% in constant currency) at €51,488 million (Dec. 31, 2019: €51,742 million).

Total shareholders’ equity decreased by 1% (increased by 4% in constant currency) to €26,201 million (Dec. 31, 2019: €26,580 million). The equity ratio was 38.3% (Dec. 31, 2019: 39.7%).

Group debt remained nearly unchanged (increased by 1% in constant currency) at €27,171 million (Dec. 31, 2019: € 27,258 million). Group net debt decreased by 4% (-3% in constant currency) to € 24,513 million (Dec. 31, 2019: € 25,604 million), driven by the exceptional cash flow development.

As of September 30, 2020, the net debt/EBITDA ratio improved to 3.45x^1,2 (Dec. 31, 2019: 3.61x^1,2) driven by the exceptional cash flow development, despite COVID-19 effects weighing on EBITDA.
 

¹ At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures
² Before special items
For a detailed overview of special items please see the reconciliation tables on pages 17-19 in the PDF document.

Business Segments
Fresenius Medical Care (Financial data according to Fresenius Medical Care press release)
Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of September 30, 2020, Fresenius Medical Care was treating 349,167 patients in 4,073 dialysis clinics. Along with its core business, the company provides related medical services in the field of Care Coordination.

• Solid sales and strong earnings growth at constant currency continues in Q3
• Q3 development impacted by currency headwinds and expected lower reimbursement from calcimimetics
• Guidance for FY/20 confirmed

Sales of Fresenius Medical Care remained on prior year’s level (increased by 6% in constant currency) at €4,414 million (Q3/19: €4,419 million). Organic sales growth was 3%. Acquisitions/divestitures contributed net 3% to growth. In Q1-3/20, Fresenius Medical Care increased sales by 4% (6% in constant currency) to €13,459 million (Q1-3/19: €12,897 million). Organic sales growth was 4%.

There were no adjustments to reported EBIT in Q3/20 and Q1-3/20. Reported EBIT increased by 6% (11% in constant currency) to €632 million (Q3/19: €595 million). The reported EBIT margin was 14.3% (Q3/19: 13.5%). The increase in margin was driven by negative prior year earnings effects, an increase in commercial revenue and favorable cost management of pharmaceuticals, offsetting the lower reimbursement for calcimimetics, all in the North America region. EBIT on an adjusted basis increased by 2% (7% in constant currency) to €632 million (Q3/19: €620 million). The EBIT margin on an adjusted basis was 14.3% (Q3/19: 14.0%).

¹ Before special items
² Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
For a detailed overview of special items please see the reconciliation tables on pages 17-19 in the PDF document.

In Q1-3/20, reported EBIT increased by 11% (12% in constant currency) to €1,843 million (Q1-3/19: €1,653 million). The reported EBIT margin was 13.7% (Q1-3/19: 12.8%). EBIT on an adjusted basis increased by 9% (9% in constant currency) to €1,843 million (Q1-3/19: €1,693 million). The EBIT margin on an adjusted basis was 13.7% (Q1-3/19: 13.1%).

There were no adjustements to reported net income in Q3/20 and Q1-3/20. Reported net income¹ grew by 6% (11% in constant currency) to €354 million (Q3/19: 333 million) and increased on an adjusted basis by 7% (11% in constant currency) to €354 million (Q3/19: €332 million). In Q1-3/20, reported net income¹ grew by 15% (15% in constant currency) to €987 million (Q1-3/19: 857 million) and increased on an adjusted basis by 14% (14% in constant currency) to €987 million (Q1-3/19: €868 million).

Operating cash flow was €746 million (Q3/19: €868 million) with a margin of 16.9% (Q3/19: 19.7%). In Q1-3/20, operating cash flow was €3,649 million (Q1-3/19: €1,796 million) with a margin of 27.1% (Q1-3/19: 13.9%). The increase was largely driven by the U.S. federal relief funding and advanced payments under the CARES Act and other COVID-19 relief, as well as working capital improvements driven by cash collections.

Fresenius Medical Care continues to expect both revenue² and net income¹ to grow at a mid to high single digit rate in 2020. These targets are inclusive of anticipated COVID-19 effects, in constant currency and exclude special items⁴. They are based on the adjusted results 2019, including the effects of the operations of the NxStage acquisition and the IFRS 16 implementation.

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

¹ Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
² FY/19 base: €17,477 million
³ FY/19 base: €1,236 million (FY/20: before special items)
⁴ Special items are effects that are unusual in nature and have not been foreseeable or not foreseeable in size or impact at the time of giving guidance.
For a detailed overview of special items please see the reconciliation tables on pages 17-19 in the PDF document.

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, Fresenius Kabi develops products with a focus on oncology and autoimmune diseases.

• In North America decreased demand given fewer elective treatments and some supply constraints due to temporary manufacturing issues outweighed extra demand for COVID-19 related products
• China recovery accelerates with elective treatments rebounding nearly to pre-pandemic levels
• Strong EBIT growth in Europe and positive development in China only partially compensates EBIT decrease in North America
• FY/20 guidance confirmed

Sales decreased by 4% (increased by 2% in constant currency) to €1,694 million (Q3/19: €1,761 million). Organic sales growth was 2%. Negative currency translation effects of 6% were mainly related to weakness of the US dollar, the Brazilian real and the Argentinian peso. Estimated COVID-19 effects had a slight negative impact on sales growth. In Q1-3/20, sales remained on prior year’s level (increased by 3% in constant currency) at €5,161 million (Q1-3/19: €5,153 million). Organic sales growth was 3%. Negative currency translation effects of 3% were mainly related to weakness of the Brazilian real and the Argentinian peso. Estimated COVID-19 effects had a slight negative impact on sales growth in Q1-3/20.

Sales in North America decreased by 10% (organic growth: -5%) to €558 million (Q3/19: €619 million). The decrease was driven by fewer elective treatments and supply constraints for certain products due to temporary manufacturing issues, which outweighed extra demand for COVID-19 related products. In Q1-3/20, sales in North America increased by 1% (organic growth: 1%) to €1,827 million (Q1-3/19: €1,815 million). Sales in Europe increased by 3% (organic growth: 5%) to €581 million (Q3/19: €564 million). In Q1-3/20, sales in Europe increased by 4% (organic growth: 5%) to €1,778 million (Q1-3/19: €1,709 million). Sales in Asia-Pacific decreased by 2% (organic growth: increased by 1%) to €399 million (Q3/19: €406 million). While China saw a solid recovery based on increasing elective procedures, other Asian markets are lagging behind. In Q1-3/20, sales in Asia-Pacific decreased by 5% (organic growth: -3%) to €1,069 million (Q1-3/19: €1,121 million).

Sales in Latin America/Africa decreased by 9% (organic growth increased by 17%) to €156 million (Q3/19: €172 million). In Q1-3/20, sales in Latin America/Africa decreased by 4% (organic growth increased by 17%) to €487 million (Q1-3/19: €508 million).

EBIT before special items decreased by 9% (-4% in constant currency) to €278 million (Q3/19¹: €307 million) with an EBIT margin of 16.4% (Q3/191:17.4%). The decline is driven by headwinds leading to some underutilized production capacities in the US, coupled with selective supply constraints due to temporary manufacturing issues, incremental COVID-19 related expenses as well as a negative effect related to a write down of a receivable. Estimated COVID-19 effects, primarily lower share based remuneration costs given the capital markets situation, but also lower corporate costs due to travel restrictions and phasing of projects, had a moderate positive impact on EBIT growth. In Q1-3/20, EBIT before special items decreased by 7% (-5% in constant currency) to €859 million (Q1-3/19¹: €920 million) with an EBIT margin of 16.6% (Q1-3/19¹: 17.9%). Estimated COVID-19 effects had a slight positive impact on EBIT growth in Q1-3/20.

Net income^1,2 decreased by 7% (-1% in constant currency) to €189 million (Q3/19: €203 million). In Q1-3/20, net income^1,2 decreased by 5% (-3% in constant currency) to €582 million (Q1-3/19: €614 million).

Operating cash flow decreased to €225 million (Q3/19: €377 million) with a margin of 13.3% (Q3/19: 21.4%). After an excellent operating cash flow in Q2/20 that was marked by early cash receipts and tax payment holidays, Fresenius Kabi saw the respective reversal in Q3/20. In Q1-3/20, operating cash flow increased by 13% to €836 million (Q1-3/19: €737 million) with a margin of 16.2% (Q1-3/19: 14.3%).

Fresenius Kabi confirms its outlook including estimated COVID-19 effects and projects organic sales³ growth of 2% to 5% and an EBIT⁴ development of -6% to -3% in constant currency.

¹ Before special items
² Net income attributable to shareholders of Fresenius SE & Co. KGaA
³ FY/19 base: €6,919 million
⁴ FY/19 base: €1,205 million, before special items, FY/20: before special items
For a detailed overview of special items please see the reconciliation tables on pages 17-19 in 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 86 hospitals, ~125 outpatient centers and 6 prevention centers. Quirónsalud operates 46 hospitals, 70 outpatient centers and around 300 occupational risk prevention centers. In addition, the company is active in Latin America with 7 hospitals and as a provider of medical diagnostics.

• Recovery of elective procedures in Germany and Spain
• Helios Spain with significant growth based on catch-up effects; momentum accelerated by dynamic growth of outpatient treatments
• FY/20 guidance confirmed

Sales increased by 8% (8% in constant currency) to €2,400 million (Q3/19: €2,230 million). Organic growth was 6%. Acquisitions contributed 2% to sales growth. COVID-19 effects had an insignificant effect on organic sales growth. In Q1-3/20, Fresenius Helios increased sales by 4% (5% in constant currency) to €7,181 million (Q1-3/19: €6,890 million). Organic growth was 3%. Acquisitions contributed 2% to sales growth. COVID-19 effects had a moderate negative impact on organic sales growth in Q1-3/20. Fresenius sees a gradual recovery of elective procedures in Germany and Spain since May.

Sales of Helios Germany increased by 4% (organic growth: 4%) to €1,529 million (Q3/19: €1,474 million). In Q1-3/20, Sales of Helios Germany increased by 5% (organic growth: 5%) to €4,703 million (Q1-3/19: €4,465 million). Due to the law to ease the financial burden on hospitals, COVID-19 effects had only a slight negative impact on organic sales growth in both, Q3/20 and in Q1-3/20.

Sales of Helios Spain increased by 15% (17% in constant currency) to €870 million (Q3/19: €757 million). Organic growth of 10% was driven by a strong recovery of elective procedures and additionally fueled by increased outpatient treatments. Thus COVID-19 effects had a slight positive impact on organic sales growth. The hospital acquisitions in Colombia contributed 7% to sales growth. In Q1-3/20, sales of Helios Spain increased by 2% (3% in constant currency) to €2,476 million (Q1-3/19: €2,425 million). Organic growth was -2%. Acquisitions contributed 5% to sales growth. COVID-19 effects had a significant negative impact on organic sales growth in Q1-3/20.

EBIT of Fresenius Helios increased by 20% (20% in constant currency) to €225 million (Q3/19: €187 million) with an EBIT margin of 9.4% (Q3/19: 8.4%). COVID-19 effects had a significant positive effect on EBIT growth. In Q1-3/20, EBIT of Fresenius Helios decreased by 5% (-5% in constant currency) to €697 million (Q1-3/19: €731 million) with an EBIT margin of 9.7% (Q1-3/19: 10.6%). COVID-19 effects had a significant negative impact on EBIT growth in Q1-3/20.

EBIT of Helios Germany increased by 2% to €133 million (Q3/19: €131 million) with an EBIT margin of 8.7% (Q3/19: 8.9%). In Q1-3/20, EBIT of Helios Germany increased by 3% to €445 million (Q1-3/19: €434 million) with an EBIT margin of 9.5% (Q1-3/19: 9.7%). Due to the law to ease the financial burden on hospitals, COVID-19 effects had only a slight negative impact on EBIT growth in both Q3/20 and Q1-3/20.

EBIT of Helios Spain increased by 61% (63% in constant currency) to €95 million (Q3/19: €59 million) with an EBIT margin of 10.9% (Q3/19: 7.8%). The growth is driven by a recovery of elective procedures following the government-ordered postponement of planned surgical procedures in Q2, where medically justifiable. Thus, COVID-19 effects had a very significant positive effect on EBIT growth in Q3/20. In Q1-3/20, EBIT of Helios Spain decreased by 15% (-15% in constant currency) to €261 million (Q1-3/19: €307 million) with an EBIT margin of 10.5% (Q1-3/19: 12.7%). COVID-19 effects had a significant negative impact on EBIT growth in Q1-3/20 with missing or delayed elective procedures and higher expenses amidst the comprehensive efforts to combat the pandemic.

Net income¹ increased by 27% to €142 million (Q3/19: €112 million). In Q1-3/20, net income¹ decreased by 6% to €441 million (Q1-3/19: €467 million).

Operating cash flow increased to €275 million (Q3/19: €196 million) with a margin of 11.5% (Q3/19: 8.8%), driven by phasing of payments under the German law to ease the financial burden on hospitals. In Q1-3/20, operating cash flow increased to €715 million (Q1-3/19: €507 million) with a margin of 10.0% (Q1-3/19: 7.4%).

Fresenius Helios confirms its outlook including estimated COVID-19 effects and expects organic sales² growth of 1% to 4% and EBIT³ broadly stable over FY/19 in constant currency.

¹ Net income attributable to shareholders of Fresenius SE & Co. KGaA
² FY/19 base: €9,234 million
³ FY/19 base: €1,025 million

Fresenius Vamed
Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide and is a leading 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.

• Significant negative COVID-19 impact continued through Q3
•  Projects and project order intake continued to be marked by delays, cancellations and global supply chain restraints due to COVID-19
•  Lower capacities in the post-acute-care business due to health authority induced capacity restrictions and postponements of elective surgeries; less demand for rehabilitation treatments; high-end technical service remained robust
•  FY/20 EBIT guidance revised

Sales of Fresenius Vamed decreased by 8% (-8% in constant currency) to €517 million (Q3/19: €562 million). Organic sales growth was -10%. Acquisitions contributed 2% to growth. Estimated COVID-19 effects had a significant negative impact on growth in Q3/20. In Q1-3/20, Fresenius Vamed increased sales by 1% (1% in constant currency) to €1,491 million (Q1-3/19: €1,469 million). Organic sales growth was -1%. Acquisitions contributed 2% to growth. Estimated COVID-19 effects had a significant negative impact on sales growth in Q1-3/20.

Sales in the service business increased by 8% to €377 million (Q3/19: €349 million).

Sales in the project business decreased by 34% to €140 million (Q3/19: €213 million), driven by postponements and cancellations of projects. In Q1-3/20, sales in the service business grew by 4% to €1,063 million (Q1-3/19: €1,025 million). Sales in the project business decreased by 4% to €428 million (Q1-3/19: €444 million).

EBIT decreased by 133% (-133% in constant currency) to -€11 million (Q3/19: €33 million) with an EBIT margin of -2.1% (Q3/19: 5.9%). Estimated COVID-19 effects had a very significant negative impact on EBIT. Capacities in the post-acute care clinics were left empty given a generally lower intake of elective surgery patients from acute-care hospitals as well as authority-instigated restrictions or even closures of individual facilities. In the project business, project delays triggered incremental expenses. In Q1-3/20, EBIT decreased by 115% (-115% in constant currency) to -€10 million (Q1-3/19: €67 million) with an EBIT margin of -0.7% (Q1-3/19: 4.6%). Estimated COVID-19 effects had a very significant negative impact on EBIT in Q1-3/20.

Net income¹ decreased to -€15 million (Q3/19: €21 million). In Q1-3/20, net income¹ decreased to -€23 million (Q1-3/19: €39 million).

Order intake was €188 million in Q3/20 (Q3/19: €240 million) and €362 million in Q1-3/20 (Q1-3/19: €738 million). As of September 30, 2020, order backlog was at €2,786 million (December 31, 2019: €2,865 million). Order intake and order backlog were marked by COVID-19 related cancellations and project delays.

Operating cash flow decreased to -€4 million (Q3/19: €33 million) with a margin of -0.8% (Q3/19: 5.9%), driven by delayed payments in the project business, partially offset by minor compensation payments from governmental authorities related to the post-acute care business. In Q1-3/20, operating cash flow increased to €4 million (Q1-3/19: -€17 million) with a margin of 0.3% (Q1-3/19: -1.2%).

Fresenius Vamed confirms its sales outlook for FY/20 and expects an organic sales² decline of ~10%. Ongoing significant negative Covid-19 effects are expected to weigh on EBIT in Q4/20. While Fresenius Vamed continues to project a positive EBIT³ amount for FY/20, the constant currency decline versus FY/19 is now expected to exceed the former outlook of ~50%. Both sales and EBIT outlook include estimated COVID-19 effects.


Increased number of employees
As of September 30, 2020, the number of employees was 309,114 (December 31, 2019: 294,134).
 

¹ Net income attributable to shareholders of VAMED AG
² FY/19 base: €2,206 million
³ FY/19 base: €134 million

Conference Call
As part of the publication of the results for Q3/2020, a conference call will be held on October 29, 2020 at 1:30 p.m. CET (8:30 a.m. EDT). You 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 www.fresenius.com/alternative-performance-measures.