Fresenius expects new record sales and earnings in the current business year. At the Annual General Meeting in Frankfurt today, Stephan Sturm, CEO of Fresenius, confirmed the 2017 targets. The company is forecasting sales growth of 15 to 17 percent, and an increase in net income of 19 to 21 percent¹, both in constant currency. After a very strong first quarter, Fresenius raised its Group earnings guidance in early May.

In his first speech as CEO to the Annual General Meeting, Sturm stressed the link between growth and the well-being of patients: “We never let ourselves become complacent, or satisfied with the tried and tested. That is true for products and services, and it’s true for the company as a whole. This is why we want to continue growing, and will. Because that is what enables us to offer even better products and therapies. And because we are contributing to high-quality medicine that remains affordable. In future, that will remain our commitment: better medicine for more people.”

Sturm also discussed the strategically important acquisitions of the U.S. generic pharmaceuticals provider Akorn and the biosimilars business of Merck KGaA, which were announced in April: “They broaden our range of high-quality yet affordable drugs, and take us into new, attractive growth areas. The acquisitions also strengthen Fresenius as a whole. With Quirónsalud, we have expanded our therapy area, and now we are expanding our product business. Both areas are decisive for our success, and we want to grow further in both of them.”

Shareholders approved with a majority of 91.04 percent the 24th consecutive dividend increase proposed by the general partner and the Supervisory Board. The dividend was raised by 13 percent to €0.62 per share.

Shareholder majorities of 99.95 percent and 91.81 percent, respectively, approved the actions of the Management and Supervisory Boards in 2016.

At the Annual General Meeting, 70.03 percent of the subscribed capital was represented.

¹ Net income attributable to shareholders of Fresenius SE & Co. KGaA; before transaction costs of ~€50 million for the acquisitions of Akorn, Inc. and Merck KGaA’s biosimilars business; before expected expenditures for the further development of Merck KGaA’s biosimilars business of ~€50 million (expected closing H2/17)
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Moody’s Investors Service (“Moody’s”) has upgraded the corporate credit rating of Fresenius Medical Care, the world’s largest provider of dialysis products and services, from Ba1 to Baa3 with a stable outlook.

In addition, Moody's has upgraded all senior unsecured ratings from Ba2 to Baa3 and confirmed all senior secured ratings of Fresenius Medical Care at Baa3.

The upgrades reflect Moody’s view about Fresenius Medical Care’s strong track record of profitable growth, the company’s defensive business profile, as well as its ability to quickly delever after debt-financed acquisitions.

Moody’s further recognizes the solid growth outlook for Fresenius Medical Care driven by continued patient growth and prospects for international expansion.

The growth targets of the company’s 2020 strategy reflect the realization of these opportunities.

Fresenius Medical Care is now rated investment grade by Standard & Poor’s, Moody’s and Fitch.

 

 

 

 

Fresenius Medical Care, the world’s largest provider of dialysis products and services, expects significant sales and earnings growth in 2017. At the Annual General Meeting in Frankfurt today, CEO Rice Powell confirmed the full-year guidance: The company is targeting on a constant currency basis 8 to 10 percent revenue growth and an increase in net income of 7 to 9 percent.

Rice Powell also confirmed Fresenius Medical Care’s long-term financial goals: Revenue of €24 billion is targeted for 2020, corresponding to an average growth rate of about 10 percent. Over the same period, an annual, high single-digit percent increase in net income is also expected.

“Fresenius Medical Care is the world’s largest dialysis company,” Rice Powell said in his speech to the shareholders. “No one sells more dialysis products than we do. No company cares for more dialysis patients than we do. With Care Coordination, we are creating and expanding business areas that are geared towards offering patients comprehensive treatment beyond the dialysis clinic. New business areas like these will provide the foundations for enhanced growth.”

A large shareholder majority of 88.29 percent approved a 20 percent increase in the dividend, from €0.80 to €0.96, the company’s 20th consecutive dividend increase.

Shareholder majorities of 99.82 and 86.51 percent, respectively, approved the actions of the Management and Supervisory Boards in 2016.

At the Annual General Meeting, 76.82 percent of the subscribed capital was represented.

The next Annual General Meeting is scheduled for May 17, 2018.

 

 

Q1/2017:

• Sales: €8.4 billion (+19%, +17% in constant currency)
• EBIT: €1,216 million (+27%, +25% in constant currency)
• Net income1 : €457 million (+28%, +26% in constant currency)

^{1 Net income attributable to shareholders of Fresenius SE & Co. KGaA}

Stephan Sturm, CEO of Fresenius, said: “Fresenius made an excellent start in 2017. All four business segments developed very well in the first quarter and continue to have healthy growth prospects. That makes us all the more optimistic as we look ahead. From this position of strength, and bolstered by strategically important acquisitions, we are building an even stronger foundation for our long-term success.”

2017 Group earnings guidance raised1,2,3

Based on the Group’s strong Q1 results and ongoing bright prospects for the remainder of the year, Fresenius raises its 2017 Group earnings guidance published in February 2017. Group net income3 on a like-for-like basis, i.e. before effects of the recently announced acquisitions at Fresenius Kabi, is now expected to grow by 19% to 21% in constant currency (previously: 17% to 20%).

Including expenditures for the further development of Merck KGaA’s biosimilars business, which is expected to be acquired in the second half of 2017, Fresenius projects net income³ growth in constant currency within the previous range of 17% to 20%.
Fresenius confirms its sales guidance. Group sales are expected to increase by 15% to 17% in constant currency.

Pro forma the acquisitions of Akorn and Merck KGaA’s biosimilars business, the net debt/EBITDA4^{ratio is expected to be approximately 3.3 at the end of 2017.}

 

17% sales growth in constant currency
Group sales increased by 19% (17% in constant currency) to €8,362 million (Q1/2016: €7,015 million). Organic sales growth was 7%5. Positive currency translation effects (2%) were mainly related to the appreciation of the US-Dollar against the Euro. Divestitures had no impact on sales. Acquisitions and the €100 million agreement with the United States Departments of Veterans Affairs and Justice at Fresenius Medical Care North America (“VA agreement”) contributed 10%.

^{1 Before transaction costs of ~€50 million for the acquisitions of Akorn, Inc. and Merck KGaA’s biosimilars business2 Before expected expenditures for the further development of Merck KGaA’s biosimilars business of ~€50 million (expected closing H2/17)3 Net income attributable to shareholders of Fresenius SE & Co. KGaA4 Calculated at expected FY average exchange rates for both net debt and EBITDA; before transaction costs of ~€50 million; excluding further potential acquisitions5 Excluding effects of VA-agreement}

Group sales by region:

26% net income¹ growth in constant currency
Group EBITDA increased by 26% (23% in constant currency) to €1,560 million (Q1/2016: €1,241 million). Group EBIT increased by 27% (25% in constant currency) to €1,216 million (Q1/2016: €959 million). The EBIT margin increased to 14.5% (Q1/2016: 13.7%).

Group net interest increased to -€157 million (Q1/2016: -€152 million), mainly due to the financing of the Quirónsalud acquisition.

The Group tax rate increased to 29.1% (Q1/2016: 28.4%), mainly driven by the higher proportion of U.S. pre-tax income, primarily due to the VA-agreement.

Noncontrolling interest increased to €294 million (Q1/2016: €220 million), of which 96% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income1 increased by 28% (26% in constant currency) to €457 million (Q1/2016: €358 million). The VA-agreement increased net income1 by €18 million or 5%-points. Earnings per share¹ increased by 28% (25% in constant currency) to €0.83 (Q1/2016: €0.65).

^{1 Net income attributable to shareholders of Fresenius SE & Co. KGaA}

Continued investment in growth
Spending on property, plant and equipment was €328 million (Q1/2016: €315 million), primarily for the modernization and expansion of dialysis clinics, production facilities and hospitals. Total acquisition spending of €6,083 million (Q1/2016: €204 million) was mainly related to the acquisition of Quirónsalud.
 

Strong operating cash flow
Operating cash flow increased by 42% to €476 million (Q1/2016: €336 million), mainly driven by the excellent development at Fresenius Kabi and Fresenius Helios. The cash flow margin was 5.7% (Q1/2016: 4.8%).

Free cash flow before acquisitions and dividends increased to €148 million (Q1/2016: €2 million). Free cash flow after acquisitions and dividends was -€5,393 million
(Q1/2016: -€241 million).
 

Solid balance sheet structure
The Group’s total assets increased by 17% (17% in constant currency) to €54,418 million (Dec. 31, 2016: €46,697 million), mainly due to the acquisition of Quirónsalud. Current assets grew by 11% (12% in constant currency) to €13,077 million (Dec. 31, 2016: €11,744 million). Non-current assets increased by 18% (19% in constant currency) to €41,341 million (Dec. 31, 2016: €?34,953 million).

Total shareholders’ equity grew by 5% (6% in constant currency) to €21,921 million (Dec. 31, 2016: €20,849 million). The equity ratio was 40.3% (Dec. 31, 2016: 44.6%).

Group debt increased by 37% (37% in constant currency) to €20,210 million (Dec. 31, 2016: €?14,780 million), mainly driven by the acquisition financing of Quirónsalud. As of March 31, 2017, the net debt/EBITDA ratio was 2.98^1,3 (Dec. 31, 2016: 2.33^1,3/3.09^1,2,3).

^{1 Net debt and EBITDA at LTM average exchange rates2 Pro forma Quirónsalud3 Pro forma acquisitions}

 

Increased number of employees
As of March 31, 2017, the number of employees increased by 13% to 263,957 (Dec. 31, 2016: 232,873).


Business segments

Fresenius Medical Care
Fresenius Medical Care is the world's largest provider of products and services for individuals with chronic kidney failure. As of March 31, 2017, Fresenius Medical Care was treating 310,473 patients in 3,654 dialysis clinics. Along with its core business, the company seeks to expand the range of medical services in the field of care coordination. 

• 12% sales growth in constant currency (10% excluding the VA-agreement)
• 41% net income growth¹ in constant currency (14% excluding the VA-agreement)
• 2017 outlook confirmed

¹ Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
Sales increased by 16% (12% in constant currency) to €4,548 million (Q1/2016: €3,916 million). Organic sales growth was 8%. Acquisitions/divestitures and the VA agreement contributed 4% in total.

Health Care services sales (dialysis services and care coordination) increased by 18% (14% in constant currency) to €3,769 million (Q1/2016: €3,199 million). Product sales increased by 8% (6% in constant currency) to €779 million (Q1/2016: €718 million).

In North America, sales increased by 18% (14% excluding the VA-agreement) to €3,375 million (Q1/2016: €2,862 million). Health Care services sales grew by 19% to €3,165 million (Q1/2016: €2,670 million). Product sales increased by 9% to €210 million (Q1/2016: €192 million).

Sales outside North America increased by 11% (8% in constant currency) to €1,169 million (Q1/2016: €1,051 million). Health Care services sales increased by 14% (10% in constant currency) to €604 million (Q1/2016: €528 million). Product sales increased by 8% (6% in constant currency) to €564 million (Q1/2016: €523 million).

EBIT increased by 31% (28% in constant currency) to €651 million (Q1/2016: €497 million). The EBIT margin was 14.3% (Q1/2016: 12.7%). Excluding the VA-agreement (€99 million) EBIT increased by 11% (8% in constant currency).

Net income¹ increased by 45% (41% in constant currency) to €308 million (Q1/2016: €213 million). Excluding the VA-agreement (€59 million) net income¹ increased by 17% (14% in constant currency).

Operating cash flow increased by 4% to €170 million (Q1/2016: €163 million). The cash flow margin was 3.7% (Q1/2016: 4.2%). The VA-agreement partially offset the impact of seasonality in invoicing at Fresenius Medical Care in North America. Fresenius Medical Care expects that this timing effect will have no meaningful impact on the full year 2017.

Fresenius Medical Care confirms its outlook for 2017. The company expects sales to grow by 8% to 10%² in constant currency. Net income^1,2 is expected to increase by 7% to 9% in constant currency.

¹ Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA² Excluding effects of VA-agreementFor further information, please see Fresenius Medical Care’s press release at www.freseniusmedicalcare.com.


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.

• 7% organic sales growth; positive contributions from all regions
• 2% constant currency EBIT growth despite very strong PY quarter
• 2017 outlook raised: 6% to 8%^2,3, EBIT growth in constant currency expected

Sales increased by 9% (organic growth: 7%) to €1,604 million (Q1/2016: €1,470 million). Positive currency translation effects (2%) were mainly related to the appreciation of the US-Dollar against the Euro. Acquisitions/divestitures had no impact on sales.

Sales in Europe increased by 6% (organic growth: 7%) to €544 million (Q1/2016: €512 million). Currency translation effects reduced sales by 1%.

Sales in North America increased by 7% (organic growth: 4%) to €619 million (Q1/2016: €576 million).

Sales in Asia-Pacific increased by 10% (organic growth: 10%) to €280 million (Q1/2016: €254 million).

Sales in Latin America/Africa increased by 26% to €161 million (Q1/2016: €128 million). Organic sales growth was 14%, mainly due to inflation-driven price increases.

EBIT increased by 3% (2% in constant currency) to €313 million (Q1/2016: €303 million). The EBIT margin was 19.5% (Q1/2016: 20.6%).

Net income¹ increased by 10% (9% in constant currency) to €191 million (Q1/2016: €173 million).

Operating cash flow increased by 51% to €192 million (Q1/2016: €127 million) driven by strong operating results and improved net working capital. The margin increased to 12.0% (Q1/2016: 8.6%).

Fresenius Kabi raises its outlook for 2017 and now expects EBIT growth in constant currency of 6% to 8%^2,3, (previously 5% to 7%). The company confirms its guidance of 5% to 7% organic sales growth.

^{1 Net income attributable to shareholders of Fresenius SE & Co. KGaA2 Before transaction costs of ~€50 million for the acquisitions of Akorn, Inc. and Merck KGaA’s biosimilars business3} Before expected expenditures for the further development of Merck KGaA’s biosimilars business of ~€50 million (expected closing H2/17)

Fresenius Helios

Fresenius Helios is Europe's leading private hospital operator. The company comprises HELIOS Kliniken in Germany and Quirónsalud in Spain. HELIOS Kliniken operates 112 hospitals, thereof 88 acute care clinics and 24 post-acute care clinics, and treats more than 5.2 million patients annually. Quirónsalud operates 44 hospitals, 43 outpatient centers and around 300 occupational risk prevention centers, and treats approximately 9.7 million patiens per year.

• 5% organic sales growth
• 60% EBIT increase (14% excluding Quirónsalud)
• 2017 outlook confirmed

Sales increased by 41% (organic growth: 5%) to €2,018 million (Q1/2016: €1,435 million). Acquisitions, mainly Quirónsalud, increased sales by 36%. Quirónsalud is consolidated since February 1, 2017. Sales of Quirónsalud were €490 million in February and March 2017.

Sales of HELIOS Kliniken² increased by 6% (organic growth: 5%) to €1,528 million.

EBIT grew by 60% to €255 million (Q1/2016: €159 million). The EBIT margin increased to 12.6% (Q1/2016: 11.1%).

EBIT of HELIOS Kliniken² increased by 14% to €181 million with a margin of 11.8% (Q1/2016: 11.1%). EBIT of Quirónsalud was €74 million with a margin of 15.1%.

Net income¹ increased by 46% to €181 million (Q1/2016: €124 million).

¹ Net income attributable to shareholders of Fresenius SE & Co. KGaA² HELIOS Kliniken Germany, excluding Quirónsalud
Operating cash flow increased by 179% to €184 million (Q1/2016: €66 million) driven by the first time consolidation of Quirónsalud and good operating results. The margin increased to 9.1% (Q1/2016: 4.6%).

Fresenius Helios confirms its outlook for 2017 and projects organic sales growth of 3% to 5%¹ and sales of ~€8.6 billion (thereof Quirónsalud: ~€2.5 billion²). EBIT is expected to increase to €1,020 to €1,070 million (thereof Quirónsalud: €300 to 320 million²).

¹ HELIOS Kliniken Germany, excluding Quirónsalud² Quirónsalud consolidated for 11 months

 

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

• 2% organic sales growth driven by service business
• Project business with strong order intake of €220 million
• 2017 outlook confirmed

Sales increased by 2% (organic growth: 2%) to €223 million (Q1/2016: €218 million). Sales in the project business decreased by 9% to €77 million (Q1/2016: €85 million). Sales in the service business grew by 10% to €146 million (Q1/2016: €133 million).

EBIT decreased by 14% to €6 million (Q1/2016: €7 million). The EBIT margin decreased to 2.7% (Q1/2016: 3.2%).

Net income¹ decreased by 20% to €4 million (Q1/2016: €5 million).

Order intake reached a strong €220 million, could not quite match the previous year’s excellent level (Q1/2016: €237 million). As of March 31, 2017, order backlog grew to a record €2,104 million (December 31, 2016: €1,961 million).

Fresenius Vamed confirms its outlook for 2017 and expects both organic sales growth and EBIT growth in the range of 5% to 10%.

¹ Net income attributable to shareholders of VAMED AG

 

Conference Call
As part of the publication of the results for the first quarter of 2017, a conference call will be held on May 3, 2017 at 2 p.m. CEDT (8 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 https://www.fresenius.com/alternative-performance-measures.

Q1/2017:

• Sales: €8.4 billion (+19%, +17% in constant currency)
• EBIT: €1,216 million (+27%, +25% in constant currency)
• Net income¹: €457 million (+28%, +26% in constant currency)

¹ Net income attributable to shareholders of Fresenius SE & Co. KGaA

 

Stephan Sturm, CEO of Fresenius, said: “Fresenius made an excellent start in 2017. All four business segments developed very well in the first quarter and continue to have healthy growth prospects. That makes us all the more optimistic as we look ahead. From this position of strength, and bolstered by strategically important acquisitions, we are building an even stronger foundation for our long-term success.”

 

 

 

2017 Group earnings guidance raised^1,2,3

Based on the Group’s strong Q1 results and ongoing bright prospects for the remainder of the year, Fresenius raises its 2017 Group earnings guidance published in February 2017. Group net income³ on a like-for-like basis, i.e. before effects of the recently announced acquisitions at Fresenius Kabi, is now expected to grow by 19% to 21% in constant currency (previously: 17% to 20%).

Including expenditures for the further development of Merck KGaA’s biosimilars business, which is expected to be acquired in the second half of 2017, Fresenius projects net income³ growth in constant currency within the previous range of 17% to 20%¹.

Fresenius confirms its sales guidance. Group sales are expected to increase by 15% to 17% in constant currency.

Pro forma the acquisitions of Akorn and Merck KGaA’s biosimilars business, the net debt/EBITDA⁴ ratio is expected to be approximately 3.3 at the end of 2017.

17% sales growth in constant currency

Group sales increased by 19% (17% in constant currency) to €8,362 million (Q1/2016: €7,015 million). Organic sales growth was 7%⁵ . Positive currency translation effects (2%) were mainly related to the appreciation of the US-Dollar against the Euro. Divestitures had no impact on sales. Acquisitions and the €100 million agreement with the United States Departments of Veterans Affairs and Justice at Fresenius Medical Care North America (“VA agreement”) contributed 10%.

¹Before transaction costs of ~€50 million for the acquisitions of Akorn, Inc. and Merck KGaA’s biosimilars business
²Before expected expenditures for the further development of Merck KGaA’s biosimilars business of ~€50 million (expected closing H2/17)
³Net income attributable to shareholders of Fresenius SE & Co. KGaA
⁴Calculated at expected FY average exchange rates for both net debt and EBITDA; before transaction costs of ~€50 million; excluding further potential acquisitions
⁵Excluding effects of VA-agreement

Group sales by region:

¹ Including effects of VA-agreement


26% net income¹ growth in constant currency

Group EBITDA increased by 26% (23% in constant currency) to €1,560 million (Q1/2016: €1,241 million). Group EBIT increased by 27% (25% in constant currency) to €1,216 million (Q1/2016: €959 million). The EBIT margin increased to 14.5% (Q1/2016: 13.7%).

Group net interest increased to -€157 million (Q1/2016: -€152 million), mainly due to the financing of the Quirónsalud acquisition.

The Group tax rate increased to 29.1% (Q1/2016: 28.4%), mainly driven by the higher proportion of U.S. pre-tax income, primarily due to the VA-agreement.

Noncontrolling interest increased to €294 million (Q1/2016: €220 million), of which 96% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income¹ increased by 28% (26% in constant currency) to €457 million (Q1/2016: €358 million). The VA-agreement increased net income¹ by €18 million or 5%-points. Earnings per share¹ increased by 28% (25% in constant currency) to €0.83 (Q1/2016: €0.65).

¹ Net income attributable to shareholders of Fresenius SE & Co. KGaA

Continued investment in growth

Spending on property, plant and equipment was €328 million (Q1/2016: €315 million), primarily for the modernization and expansion of dialysis clinics, production facilities and hospitals. Total acquisition spending of €6,083 million (Q1/2016: €204 million) was mainly related to the acquisition of Quirónsalud.

Strong operating cash flow

Operating cash flow increased by 42% to €476 million (Q1/2016: €336 million), mainly driven by the excellent development at Fresenius Kabi and Fresenius Helios. The cash flow margin was 5.7% (Q1/2016: 4.8%).

Free cash flow before acquisitions and dividends increased to €148 million (Q1/2016: €2 million). Free cash flow after acquisitions and dividends was -€5,393 million
(Q1/2016: -€241 million).

Solid balance sheet structure

The Group’s total assets increased by 17% (17% in constant currency) to €54,418 million (Dec. 31, 2016: €46,697 million), mainly due to the acquisition of Quirónsalud. Current assets grew by 11% (12% in constant currency) to €13,077 million (Dec. 31, 2016: €11,744 million). Non-current assets increased by 18% (19% in constant currency) to €41,341 million (Dec. 31, 2016: € 34,953 million).

Total shareholders’ equity grew by 5% (6% in constant currency) to €21,921 million (Dec. 31, 2016: €20,849 million). The equity ratio was 40.3% (Dec. 31, 2016: 44.6%).

Group debt increased by 37% (37% in constant currency) to €20,210 million (Dec. 31, 2016: € 14,780 million), mainly driven by the acquisition financing of Quirónsalud. As of March 31, 2017, the net debt/EBITDA ratio was 2.98^1,3 (Dec. 31, 2016: 2.33^1,3/3.09^1,2,3).

¹Net debt and EBITDA at LTM average exchange rates
²Pro forma Quirónsalud
³Pro forma acquisitions

Increased number of employees

As of March 31, 2017, the number of employees increased by 13% to 263,957 (Dec. 31, 2016: 232,873).


Business segments

Fresenius Medical Care

Fresenius Medical Care is the world's largest provider of products and services for individuals with chronic kidney failure. As of March 31, 2017, Fresenius Medical Care was treating 310,473 patients in 3,654 dialysis clinics. Along with its core business, the company seeks to expand the range of medical services in the field of care coordination.

• 12% sales growth in constant currency (10% excluding the VA-agreement)
• 41% net income growth¹ in constant currency (14% excluding the VA-agreement)
• 2017 outlook confirmed

¹ Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA

Sales increased by 16% (12% in constant currency) to €4,548 million (Q1/2016: €3,916 million). Organic sales growth was 8%. Acquisitions/divestitures and the VA agreement contributed 4% in total.

Health Care services sales (dialysis services and care coordination) increased by 18% (14% in constant currency) to €3,769 million (Q1/2016: €3,199 million). Product sales increased by 8% (6% in constant currency) to €779 million (Q1/2016: €718 million).

In North America, sales increased by 18% (14% excluding the VA-agreement) to €3,375 million (Q1/2016: €2,862 million). Health Care services sales grew by 19% to €3,165 million (Q1/2016: €2,670 million). Product sales increased by 9% to €210 million (Q1/2016: €192 million).

Sales outside North America increased by 11% (8% in constant currency) to €1,169 million (Q1/2016: €1,051 million). Health Care services sales increased by 14% (10% in constant currency) to €604 million (Q1/2016: €528 million). Product sales increased by 8% (6% in constant currency) to €564 million (Q1/2016: €523 million).

EBIT increased by 31% (28% in constant currency) to €651 million (Q1/2016: €497 million). The EBIT margin was 14.3% (Q1/2016: 12.7%). Excluding the VA-agreement (€99 million) EBIT increased by 11% (8% in constant currency).

Net income¹ increased by 45% (41% in constant currency) to €308 million (Q1/2016: €213 million). Excluding the VA-agreement (€59 million) net income¹ increased by 17% (14% in constant currency).

Operating cash flow increased by 4% to €170 million (Q1/2016: €163 million). The cash flow margin was 3.7% (Q1/2016: 4.2%). The VA-agreement partially offset the impact of seasonality in invoicing at Fresenius Medical Care in North America. Fresenius Medical Care expects that this timing effect will have no meaningful impact on the full year 2017.

Fresenius Medical Care confirms its outlook for 2017. The company expects sales to grow by 8% to 10%² in constant currency. Net income^1,2 is expected to increase by 7% to 9% in constant currency.

¹Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
²Excluding effects of VA-agreement

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


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.

• 7% organic sales growth; positive contributions from all regions
• 2% constant currency EBIT growth despite very strong PY quarter
• 2017 outlook raised: 6% to 8%^2,3, EBIT growth in constant currency expected

Sales increased by 9% (organic growth: 7%) to €1,604 million (Q1/2016: €1,470 million). Positive currency translation effects (2%) were mainly related to the appreciation of the US-Dollar against the Euro. Acquisitions/divestitures had no impact on sales.

Sales in Europe increased by 6% (organic growth: 7%) to €544 million (Q1/2016: €512 million). Currency translation effects reduced sales by 1%.

Sales in North America increased by 7% (organic growth: 4%) to €619 million (Q1/2016: €576 million).

Sales in Asia-Pacific increased by 10% (organic growth: 10%) to €280 million (Q1/2016: €254 million).

Sales in Latin America/Africa increased by 26% to €161 million (Q1/2016: €128 million). Organic sales growth was 14%, mainly due to inflation-driven price increases.

EBIT increased by 3% (2% in constant currency) to €313 million (Q1/2016: €303 million). The EBIT margin was 19.5% (Q1/2016: 20.6%).

Net income¹ increased by 10% (9% in constant currency) to €191 million (Q1/2016: €173 million).

Operating cash flow increased by 51% to €192 million (Q1/2016: €127 million) driven by strong operating results and improved net working capital. The margin increased to 12.0% (Q1/2016: 8.6%).

Fresenius Kabi raises its outlook for 2017 and now expects EBIT growth in constant currency of 6% to 8%^2,3, (previously 5% to 7%). The company confirms its guidance of 5% to 7% organic sales growth.

¹Net income attributable to shareholders of Fresenius SE & Co. KGaA
²Before transaction costs of ~€50 million for the acquisitions of Akorn, Inc. and Merck KGaA’s biosimilars business
³Before expected expenditures for the further development of Merck KGaA’s biosimilars business of ~€50 million (expected closing H2/17)


Fresenius Helios

Fresenius Helios is Europe's leading private hospital operator. The company comprises HELIOS Kliniken in Germany and Quirónsalud in Spain. HELIOS Kliniken operates 112 hospitals, thereof 88 acute care clinics and 24 post-acute care clinics, and treats more than 5.2 million patients annually. Quirónsalud operates 44 hospitals, 43 outpatient centers and around 300 occupational risk prevention centers, and treats approximately 9.7 million patiens per year.

• 5% organic sales growth
• 60% EBIT increase (14% excluding Quirónsalud)
• 2017 outlook confirmed

Sales increased by 41% (organic growth: 5%) to €2,018 million (Q1/2016: €1,435 million). Acquisitions, mainly Quirónsalud, increased sales by 36%. Quirónsalud is consolidated since February 1, 2017. Sales of Quirónsalud were €490 million in February and March 2017.

Sales of HELIOS Kliniken² increased by 6% (organic growth: 5%) to €1,528 million.

EBIT grew by 60% to €255 million (Q1/2016: €159 million). The EBIT margin increased to 12.6% (Q1/2016: 11.1%).

EBIT of HELIOS Kliniken² increased by 14% to €181 million with a margin of 11.8% (Q1/2016: 11.1%). EBIT of Quirónsalud was €74 million with a margin of 15.1%.

Net income¹ increased by 46% to €181 million (Q1/2016: €124 million).

¹ Net income attributable to shareholders of Fresenius SE & Co. KGaA
² HELIOS Kliniken Germany, excluding Quirónsalud

Operating cash flow increased by 179% to €184 million (Q1/2016: €66 million) driven by the first time consolidation of Quirónsalud and good operating results. The margin increased to 9.1% (Q1/2016: 4.6%).

Fresenius Helios confirms its outlook for 2017 and projects organic sales growth of 3% to 5%¹ and sales of ~€8.6 billion (thereof Quirónsalud: ~€2.5 billion²). EBIT is expected to increase to €1,020 to €1,070 million (thereof Quirónsalud: €300 to 320 million²).

¹ HELIOS Kliniken Germany, excluding Quirónsalud
² Quirónsalud consolidated for 11 months

Fresenius Vamed

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

• 2% organic sales growth driven by service business
• Project business with strong order intake of €220 million
• 2017 outlook confirmed

Sales increased by 2% (organic growth: 2%) to €223 million (Q1/2016: €218 million). Sales in the project business decreased by 9% to €77 million (Q1/2016: €85 million). Sales in the service business grew by 10% to €146 million (Q1/2016: €133 million).

EBIT decreased by 14% to €6 million (Q1/2016: €7 million). The EBIT margin decreased to 2.7% (Q1/2016: 3.2%).

Net income¹ decreased by 20% to €4 million (Q1/2016: €5 million).

Order intake reached a strong €220 million, could not quite match the previous year’s excellent level (Q1/2016: €237 million). As of March 31, 2017, order backlog grew to a record €2,104 million (December 31, 2016: €1,961 million).

Fresenius Vamed confirms its outlook for 2017 and expects both organic sales growth and EBIT growth in the range of 5% to 10%.

¹ Net income attributable to shareholders of VAMED AG

Conference Call

As part of the publication of the results for the first quarter of 2017, a conference call for analysts and investors will be held on May 3, 2017 at 2 p.m. CEDT (8 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 https://www.fresenius.com/alternative-performance-measures.

 

 

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• Strong revenue increase by 14%¹ supported by growth in all regions and Care Coordination activities
• Net income^1,2 growth of 17% ahead of revenue development
• First quarter performance in line to achieve full year guidance
• Acquisition of majority stake in Cura Group, Australia, completed

Key figures (IFRS)

EUR million	Q1 2017	Q1 2016	growth
Revenue	4,548	3,916	+16%
Adjusted revenue1	4,448	3,916	+14%
Operating income (EBIT)	651	497	+31%
Adjusted operating income (EBIT)1	552	497	+11%
Net income1	308	213	+45%
Adjusted net income1,2	249	213	+17%
Basic earnings per share (in EUR)	1.01	0.70	+44%

¹ Adjusted for the effects of the agreement with United States Departments of Veterans Affairs and Justice on outstanding payments
² Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA

Rice Powell, Chief Executive Officer of Fresenius Medical Care, stated: “We saw a very positive start to the year. While both our dialysis services and products business showed strong growth, our Care Coordination activities confirmed its high growth potential. We are shaping our activities in this area and expect the profitability to improve in the course of the year. We are clearly on track to deliver on our ambitious targets for 2017.”

 

Revenue & earnings

Revenue for the company improved by 16% and reached EUR 4,548 million (12% at constant currency), largely driven by strong Health Care Services revenue growth of 19% in North America (15% at constant currency). Total Health Care Services revenue increased by 18% (14% at constant currency) to EUR 3,769 million, while product revenue grew 8% (6% at constant currency) to EUR 779 million. Organic growth³ of 9% for Health Care Services and 5% for the products business confirmed the strong underlying dynamic in the first quarter 2017.

Total operating income (EBIT) increased by 31% to EUR 651 million (margin of 14.3%). This increase was strongly supported by the Dialysis business in North America, the agreement with the United States Departments of Veterans Affairs and Justice and the business growth in Asia Pacific.

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA was EUR 308 million, a very strong increase of 45%. Excluding the agreement with the United States Departments of Veterans Affairs and Justice, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA increased by 17%. Based on a number of approximately 306.2 million shares (weighted average number of shares outstanding), basic earnings per share (EPS) amounted to EUR 1.01, compared to EUR 0.70 for the first quarter of 2016.

 

 

 

³ Adjusted for the effects of the agreement with United States Departments of Veterans Affairs and Justice for outstanding payments

Development of Reporting Segments

North America revenue increased by 18% to EUR 3,375 million and corresponds to 74% of total revenue. At constant currency rates growth was at 14%. The Dialysis business grew by 14% (10% at constant currency), Care Coordination increased by 39% (34% at constant currency). The continued progress in Care Coordination was driven by organic growth of 27% and contributed EUR 691 million in revenues. Dialysis Care Services revenue growth was positively influenced by the positive effect from the agreement with the United States Departments of Veterans Affairs and Justice, a favourable impact from commercial payors and an increased number of treatments. Product revenue increased by 9% (6% at constant currency) due to higher sales of machines and products for peritoneal dialysis.

The substantially improved Dialysis operating income margin of 19.6% (+310 bp compared to Q1 2016) was driven by the agreement with the United States Departments of Veterans Affairs and Justice, a favourable impact from commercial payors, lower costs for health care supplies partially offset by higher personnel expense. The year over year lower margin in the Care Coordination activities was driven by higher bad debt expense, the impact from lower revenue for vascular services and increased costs for pharmacy services, partially offset by earnings recognized from the Bundled Payment for Care Improvement (BPCI) initiative related to hospitalist and intensivist services.

The total operating income of the North America segment was EUR 526 million (+31%), the operating income margin improved to 15.6%. Operating income (EBIT) for the first quarter 2017 excluding the agreement with the Veteran Administration was EUR 427 million, an increase of 6% compared to Q1 2016 (3% at constant currency). Excluding the agreement with the United States Departments of Veterans Affairs and Justice the operating income margin was 13.0%.

EMEA revenue increased by 7% (6% at constant currency) to EUR 614 million, mainly driven by a positive business development in Health Care Services revenue which increased by 11% (9% at constant currency). The increase at constant currency was driven by acquisitions and same-market treatment growth. Dialysis Product revenue grew by 1% to EUR 290 million. Positively influenced by an acquired business, the company generated EUR 21 million of non-dialysis product revenue. Operating income was EUR 114 million in Q1 2017, the operating income margin decreased from 20.6% to 18.7% mainly due to an unfavorable impact from acquisitions, overhead costs and a lower income from equity method investees.

Asia-Pacific revenue grew by 11% (7% at constant currency) to EUR 378 million. In the region Health Care Services generated revenue of EUR 169 million and therewith showed a 4% organic revenue growth. With a growth of 11% (8% constant currency) to EUR 209 million, the product business showed a solid sales performance, mainly driven by higher sales of dialyzers, machines and products for acute care treatments. Operating income increased to EUR 82 million (38%) and was supported by an improved revenue mix and the prior year impact from costs associated with changes in the management board. Operating income margin improved to 21.7% (compared to 17.5% in Q1 2016).

End of April 2017 Fresenius Medical Care successfully closed the acquisition of Cura day hospital group in Australia - the first step into Care Coordination outside the North American market. The transaction is strengthening the Company’s regional footprint by scaling up to around 40 outpatient facilities. The new entity generated EUR 87 million in revenues in the business year 2015/2016. Consolidation effects are already reflected in the given guidance for 2017.

Latin America delivered revenue of EUR 177 million, a significant improvement of 28%. At constant currency rates the business grew by 17%. The growth was mainly driven by reimbursement increases, higher number of treatments and a favorable currency impact. Product revenue grew by 23% based on higher machine sales. Operating income was at EUR 14 million, compared to EUR 10 million in previous year’s Q1. Operating income margin increased to 8.1% in Q1 2017 from 7.0% in Q1 2016.

Net interest expense was EUR 92 million compared to EUR 96 million in the first quarter of 2016. The decrease was driven by the replacement of high interest bearing senior notes repaid in 2016 by debt instruments at lower interest rates partially offset by an increased average debt level. Income tax expense was EUR 182 million for the first quarter of 2017, which translates into an effective tax rate of 32.5%, compared to last year’s Q1 with a tax rate of 31.4%. The increase was primarily driven by a lower portion of tax-free income attributable to non-controlling interests and the agreement with the United States Departments of Veterans Affairs and Justice.

Cash flow

In the first quarter of 2017, the company generated EUR 170 million in net cash provided by operating activities, representing 4% of revenue, compared to EUR 163 million in last year’s Q1. The cash flow was positively influenced by the payment related to the agreement with the United States Departments of Veterans Affairs and Justice, offset by seasonality in invoicing. The seasonality in invoicing will have no meaningful impact on the full year 2017. The number for DSO (days sales outstanding) increased sequentially by 3 days compared to Q4 2016 and reached 73 days.

Employees

As of March 31, 2017, Fresenius Medical Care had 110,530 employees (full-time equivalents) worldwide, compared to 104,687 employees at the end of March 2016. This increase was mainly attributable to our continued organic growth and acquired companies.

Outlook 2017 confirmed

Based on the very positive Q1 business development, Fresenius Medical Care confirms its full year outlook 2017. The company expects revenue growth between 8% and 10% at constant currency for fiscal 2017. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to increase by 7% to 9% at constant currency over the previous year. The effects of the agreement with the U.S. Departments of Veterans Affairs and Justice are excluded.

Conference call

Fresenius Medical Care will hold a conference call to discuss the results of the first quarter 2017 on Wednesday, May 3, 2017 at 3.30 p.m. CEDT/ 9.30 a.m. EDT. The company invites investors to follow the live webcast of the call at the company’s website www.freseniusmedicalcare.com in the “Investors/Events” section. A replay will be available shortly after the call.

Please refer to the pdf file for a complete overview of the results for the first quarter 2017.

Following Fresenius’ announcement to acquire Akorn, Inc. and Merck KGaA’s biosimilars business, the rating agencies Standard & Poor’s (BBB-, stable), Moody’s (Baa3, stable) and Fitch (BBB-, stable) confirm the corporate credit ratings of Fresenius to be unaffected.