Share
Services
Quirónsalud, a unit of Fresenius Helios, is investing about €40 million to build a proton beam therapy center in Madrid. Scheduled for opening in 2019, it will be the first facility of this type for treating cancer patients in Spain. Currently, every patient who can benefit from proton beam therapy must seek treatment outside the country. In proton beam therapy, the use of a high-energy beam allows tumors to be irradiated with lower total doses of radiation and reduced exposure to surrounding tissue compared with conventional radiation therapy. Quirónsalud will also modernize and expand its radiotherapy clinics in Palmaplanas (Mallorca) and Seville.
March 16, 2017
London, UK
February 28, 2017
Miami, USA
For the sixth straight time, the market research institute Potentialpark has honored the global healthcare group Fresenius as the German company with the best overall Internet offering for job applicants.
In its study for 2017, Potentialpark again put Fresenius in first place in the overall Online Talent Communication ranking. Fresenius won three of four individual categories – Career Website, Applying Online and Mobile – and finished second in the fourth category, Social Media.
Potentialpark has carried out a study of German companies’ Internet offerings for job applicants annually since 2002. For this year’s study, Potentialpark assessed the online activities of 147 German companies according to more than 300 criteria. Some 28,000 students and graduates around the world participated.
“Every honor or award motivates us to continually develop our offering for job applicants,” said Markus Olbert, Senior Vice President for Corporate Human Resources at Fresenius. “Our latest enhancement is the personalized ‘My Fresenius’ offering on the Fresenius Career website. Users receive personalized information such as the status of an application they’ve submitted, listings of job openings that fit their profile, and other relevant content. By doing this we’ve made the application process even more user friendly.”
Flags with Fresenius Logo
Fourth quarter 2016 key figures
| US$ million | Q4 2016 | Q4 2015 | |
| Net revenue | 4,687 | 4,348 | +8% |
| Operative income (EBIT) | 786 | 662 | +19% |
| Net income3 | 388 | 317 | +23% |
| Basic earnings per share (in $) | 1.27 | 1.04 | +22% |
Full year 2016 key figures
| US$ million | Q1-4 2016 | Q1-4 2015 | |
| Net revenue | 17,911 | 16,738 | +7% |
| Operating income (EBIT) | 2,638 | 2,327 | +13% |
| Net income3 | 1,243 | 1,029 | +21% |
| Net income adjusted2 | 1,228 | 1,057 | +16% |
| Basic earnings per share (in $) | 4.07 | 3.38 | +20% |
| Dividend proposal (per share) | 0.96 | 0.80 | +20% |
1At constant currency, excluding acquisitions in 2015 and 2016
2Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA, adjusted for acquisitions and based on an adjusted 2015 net income of $1,057m
3Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
"In our 20th anniversary year, we were able to mark another record year for Fresenius Medical Care and for our shareholders. I am pleased to confirm that we have achieved our financial targets for 2016. We were able to deliver a strong business performance across all segments and realize the planned savings of our Global Efficiency Program thanks to the outstanding dedication and commitment of our employees," said Rice Powell, Chief Executive Officer of Fresenius Medical Care. "Our path to value-based care continues. We are further investing in the dynamic growth of our Care Coordination activities as well as the innovative development of our core dialysis business. For 2017, we have again set ourselves ambitious targets and will continue to deliver high-quality care for our patients."
Revenue
Net revenue for the full year 2016 increased by 7% and reached $17,911 million (+8% at constant currency), driven by a strong performance in Health Care Services. Health Care Services revenue increased by 8% to $14,519 million (+9% at constant currency), mainly due to strong organic growth supported by positive price and volume effects. Dialysis Products revenue increased by 1% to $3,392 million (+4% at constant currency). The growth at constant currency was primarily supported by higher sales of dialyzers and machines. This was partially offset by lower sales of renal pharmaceuticals, resulting from the sale of our European marketing rights for certain renal pharmaceuticals to our joint venture, Vifor Fresenius Medical Care Renal Pharma, in 2015.
Net revenue in the fourth quarter of 2016 increased by 8% to $4,687 million (+9% at constant currency), mainly driven by higher Health Care Services revenue. Health Care Services revenue increased by 10% to $3,799 million (+10% at constant currency), mainly driven by positive price as well as volume effects. Dialysis Products revenue reached the same level as in the previous year ($888 million), an increase of 2% at constant currency.
Earnings
Operating income (EBIT) for the full year 2016 increased by 13% to $2,638 million, leading to an improved operating income margin of 14.7% (+80 basis points). The development of the EBIT margin was supported by a strong margin development, particularly in North America.
In the fourth quarter of 2016, operating income rose by 19% to $786 million, leading to a strong operating income margin of 16.8% (+160 basis points). The increase in EBIT margin was positively affected by the prior year impact from the GranuFlo® settlement expense as well as the margin improvement in North America and Asia-Pacific and a favorable impact from Corporate due to reduced legal and consulting expenses.
Net interest expense for the full year 2016 increased by 4% to $406 million, particularly due to lower interest income as a result of the repayment of interest bearing notes receivables in the fourth quarter of 2015. This was partially offset by a lower debt level driven by a favorable cash flow development.
For the same reasons, net interest expense in the fourth quarter of 2016 increased by 11% to $98 million.
Income tax expense for the full year 2016 increased by 10% to $683 million. This translates into an effective tax rate of 30.6%, a decrease of 150 basis points compared to the same period of 2015. This decrease was supported by lower tax expense as a result of released tax liabilities, as well as the prior year impact from the non-tax deductible loss from the divestiture of our dialysis service business in Venezuela.
In the fourth quarter of 2016, income tax expense were $212 million, translating into an effective tax rate of 30.8% (-60 basis points).
For the full year 2016, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA grew by 21% to $1,243 million and by 16% to $1,228 million on an adjusted basis1. Based on approximately 305.7 million shares (weighted average number of shares outstanding), basic earnings per share (EPS) increased from $3.38 to $4.07 (+20%). The increase in the weighted average number of shares outstanding was the result of stock options exercised.
12015 net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA adjusted for the impacts of (i) the 2015 settlement cost for an agreement in principle for the GranuFlo case ($37 million) and (ii) acquisitions in 2015 ($9 million), resulting in an adjusted net income of $1,057 million; 2016 net income adjusted for 2016 acquisitions ($15 million), resulting in an adjusted net income of $1,228 million.
In the fourth quarter of 2016, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA grew by 23% to $388 million. Based on approximately 306.2 million shares (weighted average number of shares outstanding), basic EPS increased from $1.04 to $1.27 (+22%).
Segment development
North America: For the full year 2016, North America revenue increased by 9% to $12,886 million (72% of total revenue). Health Care Services revenue grew by 10% to $11,982 million, driven by higher Dialysis Care revenue (+7% to $9,675 million) and increased Care Coordination revenue (+23% to $2,307 million). Dialysis treatments rose by 4%. As of the end of 2016, we had 188,987 patients being treated at the 2,306 clinics that we own, operate or manage in North America. Dialysis Products revenue increased by 3% to $904 million, supported by higher sales of machines, dialyzers and peritoneal dialysis products partially offset by lower sales of renal pharmaceuticals and bloodlines. Operating income in North America came in at $2,119 million (+18%). The operating income margin reached a level of 16.4% (+120 basis points) as a result of lower cost from health care supplies, a higher volume of dialysis treatments with commercial payers and the prior year impact from the GranuFlo® settlement expense. The positive effect was partially offset by higher personnel expense and a cost impact related to the vesting of long term incentive plan grants. The operating income margin of Care Coordination decreased to 2.6%, mainly driven by increased costs for hospitalist and intensivist services.
In the fourth quarter of 2016, North America revenue increased by 9% to $3,374 million, mainly supported by higher dialysis treatments coupled with an increase in US revenue per treatment ($356, +$8). Care Coordination contributed revenues of $603 million (+20%). Operating income increased by 23% to $634 million in the fourth quarter, mainly supported by the prior year impact from the GranuFlo® settlement expense and higher revenue from commercial payers as well as lower cost from health care supplies. This was partially offset by higher personnel expense and an unfavorable impact from Care Coordination. The Care Coordination EBIT margin of -1.1% in North America was mainly impacted by higher costs related to bad debt reserves for hospitalist and intensivist services.
EMEA: For the full year 2016, EMEA revenue increased by 1% to $2,667 million (+4% at constant currency). Health Care Services revenue for the EMEA segment increased by 6% to $1,294 million (+9% at constant currency), mainly as the result of contributions from acquisitions and same market treatment growth, partially offset by the negative effect of exchange rate fluctuations. Dialysis treatments increased by 8%. As of the end of 2016, we had 59,767 patients being treated at the 711 dialysis clinics that we own, operate or manage in EMEA. Dialysis Products revenue decreased by 2% to $1,373 million (flat at constant currency), mainly due to lower sales of renal pharmaceuticals (whose marketing rights were sold in 2015), dialyzers and machines, mostly offset by increased sales of bloodlines and products for acute care treatments. Operating income in EMEA decreased by 9% to $524 million for the full year. The operating income margin decreased to 19.7% (-220 basis points), mainly due to the prior year impact from a gain from the sale of European marketing rights for certain renal pharmaceuticals, higher bad debt expense, lower income from equity method investees and unfavorable foreign exchange effects.
In the fourth quarter of 2016, EMEA revenue increased by 2% to $684 million (+4% at constant currency), mainly driven by a strong performance in Health Care Services (revenue +7% to $327 million, +10% at constant currency). Dialysis Products revenue in EMEA declined by 3% to $357 million in the fourth quarter (flat at constant currency). Operating income in EMEA decreased by 25% to $130 million due to the gain from the sale of European marketing rights for certain renal pharmaceuticals in 2015, lower income from equity method investees driven by higher product development cost, IT project cost as well as higher bad debt expense.
Asia-Pacific: Total revenue for the Asia-Pacific segment increased by 9% to $1,632 million (+8% at constant currency) for the full year 2016. Health Care Services revenue increased by 9% to $730 million (+3% at constant currency), based on an increase of 6% in dialysis treatments. With an 8% growth in revenue to $902 million (+12% at constant currency), the product business showed an excellent sales performance across the entire dialysis products range. As of the end of 2016, we had 29,328 patients being treated at the 374 dialysis clinics that we own, operate or manage in Asia-Pacific. Operating income increased by 7% to $319 million. Due to unfavorable foreign exchange effects and costs associated with changes in the Management Board, the EBIT margin decreased slightly to 19.6% (-20 basis points).
In the fourth quarter of 2016, revenue in the Asia-Pacific segment increased by 10% to $433 million (+8% at constant currency), driven by a good revenue growth in both the Health Care Services business (+12%/+5% at constant currency) as well as the products business (+8%/+10% at constant currency). Operating income increased by 20% to $94 million. The EBIT margin increased accordingly to 21.8% (+180 basis points) in the fourth quarter, mainly due to the favorable effect of prior year costs related to customs duties in India.
Latin America: Total revenue for the Latin America segment decreased by 7% to $712 million (+13% at constant currency) for the full year 2016. Health Care Services revenue decreased by 9% to $513 million (+15% at constant currency), mainly as a result of the negative effect of exchange rate fluctuations and the effect of closed or sold clinics (mainly Venezuela and Brazil), partially offset by increases in organic revenue per treatment. Dialysis treatments decreased by 3%, mainly due to the effect of closed or sold clinics. As of the end of 2016, we had 30,389 patients being treated at the 233 dialysis clinics that we own, operate or manage in Latin America. Dialysis Products revenue for the full year remained unchanged at $199 million (+7% at constant currency). The growth at constant currency was mainly driven by increased sales of dialyzers, hemodialysis solutions and concentrates, partially offset by lower sales of peritoneal dialysis products and machines. Operating income increased by a strong 37% to $66 million, mainly due to the prior-year loss from the divestment of the dialysis service business in Venezuela. The EBIT margin in Latin America increased to 9.2% (+290 basis points) for the full year, mainly driven by the above mentioned prior-year loss.
In the fourth quarter of 2016, revenue in the Latin America segment increased by 1% to $192 million (+13% at constant currency), mainly driven by a strong increase in Dialysis Products revenue (+11% to $56 million, +7% at constant currency). The growth at constant currency was the result of higher sales of dialyzers as well as hemodialysis solutions and concentrates, partially offset by lower sales of machines. Health Care Services revenue decreased by 3% to $136 million (+14% at constant currency), strongly impacted by unfavorable foreign exchange effects. Operating income in Latin America decreased by 18% to $19 million in the fourth quarter, mainly driven by higher bad debt expense. The EBIT margin decreased accordingly to 9.7% (-230 basis points).
Cash flow
In the full year 2016, the company generated net cash provided by operating activities of $2,140 million ($1,960 million for full year 2015), representing 11.9% of revenue, and thereby clearly reaching our target for 2016 (operating cash flow > 10% of revenue). The increase was mainly the result of improved inventory levels in North America driven by lower health care supplies, as well as increased earnings. This was partially offset by unfavorable effects from other working capital items and a $100 million discretionary cash contribution to pension plan assets in the United States. The number of DSO (days sales outstanding) as of December 31, 2016 was 70 days, a decrease of 1 day compared to the previous year.
In the fourth quarter of 2016, the company generated net cash provided by operating activities of $844 million, representing 18% of revenue ($548 million in the fourth quarter of 2015). The increase was primarily attributable to higher net income, a favorable effect from DSO and deferred income tax payments in the United States.
Employees
As of December 31, 2016, Fresenius Medical Care had 109,319 employees (full-time equivalents) worldwide, compared to 104,033 employees at the end of December 2015. This increase of 5% was primarily attributable to our continued organic growth and acquisitions.
Recent events: Acquisition of a majority stake in Cura Group
In February 2017, Fresenius Medical Care announced the acquisition of a majority stake in Cura Group (“Cura”), a leading operator of high-quality day hospitals in Australia. In its 19 private day hospitals across Australia, Cura provides a variety of specialized ambulant services, such as ophthalmology and orthopedic surgeries in an outpatient setting. Cura was established in 2008 and generated revenue of AU$127 million (€87 million) in the financial year 2015/2016. This acquisition allows Fresenius Medical Care to further leverage its core competence in operating outpatient facilities, extend its dialysis network and thereby lay the foundation for future growth in the Australian market. This transaction is subject to remaining shareholder agreements and authority approval.
Guidance 2017
Beginning January 1, 2017, Fresenius Medical Care AG & Co. KGaA focusses its reporting on financial statements in accordance with International Financial Reporting Standards (IFRS) in Euro currency. For full year 2017, the company expects revenue to grow by 8 to 10% at constant currency, based on 2016 revenue of €16,570 million. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to grow by 7 to 9% at constant currency, based on 2016 net income of €1,144 million. The effects of the agreement with the U.S. Departments of Veterans Affairs and Justice are excluded.
Vision 2020
In April 2014, Fresenius Medical Care set medium-term targets on a constant-currency, US-GAAP basis. The company targeted an average, annual revenue increase of about 10 percent through 2020. At current exchange rates, this would result in a 2020 revenue target of €24 billion on an IFRS basis. Over the same period, Fresenius Medical Care expects an average annual growth of net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA in the high-single-digit percentage range. These goals are unchanged.
Press Conference
Fresenius Medical Care will hold a press conference at its headquarters in Bad Homburg, Germany to discuss the results of the fourth quarter and full year 2016 on Wednesday, February 22, 2017, at 10 am CET. The company cordially invites journalists to view the live video webcast at the company's website. A replay will be available shortly after the meeting.
Please refer to the PDF for a complete overview of the results for the fourth quarter and full year 2016.
Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases of which around 3 million patients worldwide regularly undergo dialysis treatment. Through its network of 3,624 dialysis clinics, Fresenius Medical Care provides dialysis treatments for 308,471 around the globe. Fresenius Medical Care is also the leading provider of dialysis products such as dialysis machines or dialyzers. Along with the core business, the company focuses on expanding the range of related medical services in the field of Care Coordination. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME) and on the New York Stock Exchange (FMS).
For more information visit the Company’s website at www.freseniusmedicalcare.com.
Disclaimer
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including changes in business, economic and competitive conditions, regulatory reforms, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. KGaA's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this release.
If no timeframe is specified, information refers to fiscal year 2016.
Fiscal year 2016:
Q4/2016:
Group guidance 20173:
Targets 20203:
1 2015 before special items2 Net income attributable to shareholders of Fresenius SE & Co. KGaA3 Guidance according to IFRS; for a detailed overview of 2016 IFRS figures please see p. 14 of the pdf file4 At comparable exchange rates; includes small and mid-size acquisitions; at current IFRS-rules
Stephan Sturm, CEO of Fresenius, said: “Fresenius had another truly outstanding year in 2016, setting new sales and earnings records. All four business segments again developed very successfully. The company’s prospects are excellent, and in the coming years Fresenius is targeting continued, dynamic growth. We never forget that patients are at the center of everything we do. Providing them with high-quality yet affordable healthcare around the world is the key to our business success."
Positive Group guidance for 20171
For 2017, Fresenius projects sales growth of 15% to 17% in constant currency. Net income2 is expected to grow by 17% to 20% in constant currency.
The net debt/EBITDA3 ratio is expected to be within the bottom half of Fresenius’ self-imposed target range of 2.5 to 3.0 at the end of 2017.
New ambitious targets for 20201,4
For 2020, Group sales are expected to reach €43 billion to €47 billion. Calculated on the basis of reported 2016 IFRS sales (€29,471 million) and the mid-point of the target range (€45 billion), this corresponds to a compounded annual growth rate (CAGR) of 11.2%. Based on the very strong guidance for 2017, this would result in a 2018-2020 CAGR of 8.7%.5
Group net income2 is expected to increase to €2.4 billion to €2.7 billion. Calculated on the basis of reported 2016 IFRS net income (€1,560 million) and the mid-point of the target range (€2,550 million) this corresponds to a CAGR of 13.1%. Based on the very strong guidance for 2017, this would result in a 2018-2020 CAGR of 10.5%.6
24th consecutive dividend increase proposed
Based on the strong financial results, the Management Board will propose to the Supervisory Board a dividend increase of 13% to €0.62 per share (2015: €0.55). The expected total dividend distribution is €343 million.
1 Guidance according to IFRS; for a detailed overview of 2016 IFRS figures please see p. 14of the pdf file2 Net income attributable to shareholders of Fresenius SE & Co. KGaA3 Calculated at expected annual average exchange rates, for both net debt and EBITDA; without large unannounced acquisitions4 At comparable exchange rates; including small and mid-size acquisitions; at current IFRS rules5 Based on the mid-point of the 2017 sales guidance, adjusted for current exchange rates (~€35 bn), and the mid-point of the 2020 sales target range (€45 bn)6 Based on the mid-point of the 2017 net income guidance, adjusted for current exchange rates (~€1,890 m), and the mid-point of the 2020 net income target range (€2,550 m)
6% sales growth in constant currency
Group sales increased by 5% (6% in constant currency) to €29,083 million (2015: €27,626 million). Organic sales growth was 6%. Acquisitions contributed 1% and divestitures reduced sales by 1%. Slightly negative currency translation effects (1%) were mainly driven by the devaluation of Latin American currencies and the Chinese yuan against the Euro. In Q4/2016, Group sales increased by 7% (6% in constant currency) to €7,738 million (Q4/2015: €7,257 million). Organic sales growth was 5%. Acquisitions contributed 1%, while divestitures had no major impact on sales.
Group sales by region:
13% net income1,2 growth in constant currency
Group EBITDA2 increased by 8% (9% in constant currency) to €5,500 million (2015: €5,073 million). Group EBIT2 increased by 9% (10% in constant currency) to €4,327 million (2015: €3,958 million). The EBIT margin2 increased to 14.9% (2015: 14.3%).
In Q4/2016, Group EBIT2 increased by 11% (11% in constant currency) to €1,235 million (Q4/2015: €1,109 million), the EBIT margin2 improved to 16.0% (Q4/2015: 15.3%).
Group net interest decreased to -€582 million (2015: -€613 million), mainly due to favourable financing terms and interest savings on lower average debt. In Q4/2016, Group net interest increased to -€149 million (Q4/2015: -€137 million) mainly due to the bridge financing for the Quirónsalud acquisition.
The Group tax rate2 decreased to 28.1% (2015: 29.4%). The decrease is mainly due to released tax liabililities at Fresenius Medical Care in Q3/2016. In Q4/2016, the Group tax rate also decreased to 28.1% (Q4/2015: 28.8%).
Noncontrolling interest was €1,101 million (2015: €939 million), of which 96% was attributable to the noncontrolling interest in Fresenius Medical Care.
Group net income1,2 increased by 12% (13% in constant currency) to €1,593 million (2015: €1,423 million). Earnings per share1,2 increased by 12% (13% in constant currency) to €2.92 (2015: €2.61). In Q4/2016, Group net income1,2 increased by 6% (7% in constant currency) to €439 million (Q4/2015: €414 million). Earnings per share1,2 increased by 7% (8% in constant currency) to €0.81 (Q4/2015: €0.75).
Continued investment in growth
Spending on property, plant and equipment was €1,621 million (2015: €1,512 million), primarily for the modernization and expansion of dialysis clinics, production facilities and hospitals. This corresponds to 5.6% of sales.
Total acquisition spending increased to €926 million (2015: €517 million), mainly related to acquisitions at Fresenius Medical Care.
1 Net income attributable to shareholders of Fresenius SE & Co. KGaA2 2015 before special items
For a detailed overview of special items please see the reconciliation tables on pages 17-18 of the pdf file.
Excellent cash flow development
Operating cash flow increased by 7% to €3,574 million (2015: €3,327 million) with a margin of 12.3% (2015: 12.0%). The excellent cash flow was driven by a strong cash flow generation at Fresenius Medical Care and especially the record cash flow at Fresenius Kabi. Operating cash flow in Q4/2016 increased by 12% to €1,315 million (Q4/2015: €1,176 million) with a margin of 17.0% (Q4/2015: 16.2%).
Free cash flow before acquisitions and dividends increased by 6% to €1,971 million (2015: €1,865 million), with a margin of 6.8% (2015: 6.8%). Free cash flow after acquisitions and dividends was €748 million (2015: €1,194 million).
Solid balance sheet structure
The Group’s total assets increased by 8% (6% in constant currency) to €46,447 million (Dec. 31, 2015: €42,959 million), driven by its growing scale of operations. Current assets grew by 13% (11% in constant currency) to €11,799 million (Dec. 31, 2015: €10,479 million). Non-current assets increased by 7% (5% in constant currency) to €34,648 million (Dec. 31, 2015: € 32,480 million).
Total shareholders’ equity increased by 13% (11% in constant currency) to €20,420 million (Dec. 31, 2015: €18,003 million). The equity ratio increased to 44.0% (Dec. 31, 2015: 41.9%).
Group debt remained nearly unchanged (-2% in constant currency) at €14,780 million (Dec. 31, 2015: € 14,769 million). Group net debt decreased by 4% (-5% in constant currency) to € 13,201 million (Dec. 31, 2015: € 13,725 million). As of December 31, 2016, the net debt/EBITDA ratio was 2.341 (December 31, 2015: 2.682). EBITDA growth and net debt reduction made an about equal contribution to this substantial improvement of the ratio.
Increased number of employees
As of December 31, 2016, the number of employees increased by 5% to 232,873 (Dec. 31, 2015: 222,305).
1 At LTM average exchange rates for both net debt and EBITDA; pro forma acquisitions2 Before special items; at LTM average exchange rates for both net debt and EBITDA
For a detailed overview of special items please see the reconciliation tables on pages 17-18 of the pdf file.
Business Segments
Fresenius Medical Care
Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of December 31, 2016, Fresenius Medical Care was treating 308,471 patients in 3,624 dialysis clinics. Along with its core business, the company seeks to expand the range of medical services in the field of care coordination.
Sales increased by 7% (8% in constant currency) to US$17,911 million (2015: US$16,738 million). Organic sales growth was 7%. Acquisitions and divestitures increased sales by 1%. Currency translation effects reduced sales by 1%. In Q4/2016, sales increased by 8% (9% in constant currency) to US$4,687 million (Q4/2015: US$4,348 million).
Health Care services sales (dialysis services and care coordination) increased by 8% (9% in constant currency) to US$14,519 million (2015: US$13,392 million). Dialysis product sales increased by 1% (4% in constant currency) to US$3,392 million (2015: US$3,346 million).
In North America, sales increased by 9% to US$12,886 million (2015: US$11,813 million). Health Care services sales grew by 10% to US$11,982 million (2015: US$10,932 million). Dialysis product sales increased by 3% to US$904 million (2015: US$881 million).
1 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA2 2016 before acquisitions (US$ 15 million after tax), 2015 before settlement costs for an agreement in principle for GranuFlo® / NaturaLyte® case (- US$ 37 million after tax), and acquisitions (US$ 9 million after tax)3 Guidance according to IFRS and in Euro currency; for a detailed overview of 2016 IFRS figures please see p. 15 of the pdf file4 Based on 2016 sales of €16,570 million. The effects of the agreement with the U.S. Departments of Veterans Affairs and Justice are excluded.5 Based on 2016 net income of €1,144 million. The effects of the agreement with the U.S. Departments of Veterans Affairs and Justice are excluded.
Sales outside North America increased by 2% (7% in constant currency) to US$5,011 million (2015: US$4,897 million). Health Care services sales increased by 3% (9% in constant currency) to US$2,537 million (2015: US$2,459 million). Dialysis product sales increased by 2% (5% in constant currency) to US$2,474 million (2015: US$2,437 million).
EBIT increased by 13% (14% in constant currency) to US$2,638 million (2015: US$2,327 million). The EBIT margin was 14.7% (2015: 13.9%). Adjusted for one-time items1, EBIT increased by 10%. In Q4/2016, EBIT increased by 19% (19% in constant currency) to US$786 million (Q4/2015: US$662 million). The EBIT margin was 16.8% (Q4/2015: 15.2%).
Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA excluding one-time items2 increased by 16% to US$1,228 million (2015: US$1,057 million). Net income5 including one-time items increased by 21% (21% in constant currency). Net income attributable to non-controlling interest increased by 8% to US$306 million. In Q4/2016, net income5 increased by 23% to US$388 million (2015: US$317 million).
Operating cash flow increased by 9% to US$2,140 million (2015: US$1,960 million), despite a discretionary cash contribution of US$100 million to Fresenius Medical Care’s pension plan assets in the United States in Q3/2016. The cash flow margin was 11.9% (2015: 11.7%). In Q4/2016, operating cash flow reached an excellent US$844 million (Q4/2015: US$548 million) with a margin of 18.0% (Q4/2015: 12.6%).
For 2017, Fresenius Medical Care expects sales to grow by 8% to 10%3,4 in constant currency. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to increase by 7% to 9%3,5,6 in constant currency in 2017. The effects of the agreement with the U.S. Departments of Veterans Affairs and Justice are excluded.
For further information, please see Fresenius Medical Care’s Investor News at www.freseniusmedicalcare.com.
1 2016 before acquisitions (US$39 million before tax), 2015 before settlement costs for an agreement in principle for GranuFlo® / NaturaLyte® case (- US$ 60 million before tax), and acquisitions (US$ 16 million before tax)2 2016 before acquisitions (US$ 15 million after tax), 2015 before settlement costs for an agreement in principle for GranuFlo® / NaturaLyte® case (- US$ 37 million after tax), and acquisitions (US$ 9 million after tax)3 Guidance according to IFRS and in Euro currency; for a detailed overview of 2016 IFRS figures please see p. 15 of the pdf file4 Based on 2016 sales of €16,570 million.5 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA6 Based on 2016 net income of €1,144 million.
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.
Sales increased by 1% (4% in constant currency) to €6,007 million (2015: €5,950 million). Organic sales growth was 5%. Divestitures reduced sales by 1%. Negative currency translation effects (-3%) were mainly related to the devaluation of Latin American currencies and the Chinese yuan against the Euro. In Q4/2016, sales increased by 2% (3% in constant currency) to €1,550 million (Q4/2015: €1,519 million). Organic sales growth was 3%.
Sales in Europe grew by 1% (organic growth: 3%) to €2,135 million (2015: €2,123 million). Divestments, including the sale of the German oncology compounding business in February 2015, reduced sales by 1%.
Sales in North America increased by 4% (organic growth: 3%) to €2,170 million (2015: €2,093 million), mainly driven by new product launches. Asia-Pacific sales decreased by 3% (organic growth: 8%) to €1,108 million (2015: €1,141 million) due to currency translation effects. With €594 million (2015: €593 million), sales in Latin America/Africa was on prior year level (organic growth: 14%).
EBIT1 increased by 3% (5% in constant currency) to €1,224 million (2015: €1,189 million). The EBIT margin1 improved to 20.4% (2015: 20.0%). In Q4/2016, EBIT1 decreased by 3% ( 1% in constant currency) to €308 million (Q4/2015: €317 million). The EBIT margin1 was 19.9% (Q4/2015: 20.9%).
Net income2 increased by 7% (9% in constant currency) to €716 million (2015: €669 million). In Q4/2016, net income2 decreased by 3% (-2% in constant currency) to €184 million (Q4/2015: €190 million).
Operating cash flow reached an all-time high of €991 million (2015: €913 million). The cash flow margin increased to 16.5% (2015: 15.3%). In Q4/2016, operating cash flow increased by 6% to €345 million (Q4/2015: €324 million) driven by excellent operating results, lower sequential inventory and a reduction of the Days Sales Outstanding (DSO). The margin reached an outstanding 22.3% (Q4/2015: 21.3%).
For 2017, Fresenius Kabi expects organic sales growth of 5% to 7%3 and EBIT growth in constant currency of 5% to 7%3.
1 2015 before special items2 Net income attributable to shareholders of Fresenius Kabi AG; 2015 before special items3 Guidance according to IFRS; for a detailed overview of 2016 IFRS figures please see p. 15 of the pdf fileFor a detailed overview of special items please see the reconciliation tables on pages 17-18 of the pdf file
Fresenius Helios
Fresenius Helios is Europe’s largest private hospital operator. In Germany, HELIOS operates 112 hospitals, thereof 88 acute care clinics (including seven maximum care hospitals in Berlin-Buch, Duisburg, Erfurt, Krefeld, Schwerin, Wiesbaden and Wuppertal) and 24 post-acute care clinics. Through Quirónsalud, Fresenius Helios operates 43 hospitals, 39 outpatient centers and around 300 Occupational Risk Prevention (ORP) centers in Spain.
Sales increased by 5% to €5,843 million (2015: €5,578 million). Organic sales growth was 4%. Acquisitions contributed 1%. In Q4/2016, sales increased by 4% to €1,461 million (Q4/2015: €1,411 million), organic sales growth was 2%.
EBIT1 grew by 7% to €682 million (2015: €640 million). The EBIT margin1 increased to 11.7% (2015: 11.5%). In Q4/2016, EBIT1 increased by 4% to €175 million (Q4/2015: €168 million) with a margin1 of 12.0% (Q4/2015: 11.9%).
Net income2 increased by 12% to €543 million (2015: €483 million). In Q4/2016, net income2 increased by 8% to €141 million (Q4/2015: €131 million).
Operating cash flow increased by 1% to €622 million (2015: €618 million) with a margin of 10.6% (2015: 11.1%). In Q4/2016, operating cash flow reached a strong €185 million, but could not match the exceptional prior-year quarter (Q4/2015: €232 million). The same applies to the cash flow margin of 12.7% (Q4/2015: 16.4%).
For 2017, Fresenius Helios expects organic sales growth of 3% to 5%3,4 and sales of ~€8.6 bn3 (thereof Quirónsalud ~€2.5 bn5). EBIT is expected to increase to €1,020 to €1,070 million3 (thereof Quirónsalud €300 to €320 million5,6).
1 2015 before special items2 Net income attributable to shareholders of HELIOS Kliniken GmbH; before special items3 Guidance according to IFRS; for a detailed overview of 2016 IFRS figures please see p. 15 of the pdf file4 Helios Kliniken Germany, excluding Quirónsalud5 Quirónsalud consolidated for 11 months6 EBITDA of €480 to €500 million, Amortization of €80 million and depreciation of €100 million
For a detailed overview of special items please see the reconciliation tables on pages 17-18 of the pdf file.
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.
Sales increased by 4% (4% in constant currency) to €1,160 million (2015: €1,118 million). Organic sales growth was 5%. Sales in the project business increased by 3% to €594 million (2015: €575 million). Sales in the service business grew by 4% to €566 million (2015: €543 million). In Q4/2016, sales increased to €420 million (Q4/2015: €387 million). Organic sales growth was 10%.
EBIT grew by 8% to €69 million (2015: €64 million). The EBIT margin increased to 5.9% (2015: 5.7%). In Q4/2016, EBIT increased by 12% to €38 million (Q4/2015: €34 million). The EBIT margin increased to 9.0%.
Net income2 grew by 2% to €45 million (2015: €44 million). In Q4/2016, net income2 remained unchanged at €24 million (Q4/2015: €24 million).
Order intake increased to €1,017 million (2015: €904 million), reaching an all-time high. As of December 31, 2016, order backlog was €1,961 million (Dec. 31, 2015: €1,650 million).
For 2017, Fresenius Vamed expects organic sales growth in the range of 5% to 10%1 and EBIT growth of 5% to 10%1.
1 Guidance according to IFRS; for a detailed overview of 2016 IFRS figures please see p. 15 of the pdf file2 Net income attributable to shareholders of VAMED AG
Conference Call
As part of the publication of the results for fiscal year 2016, a conference call will be held on February 22, 2017 at 2 p.m. CET (8 a.m. EST). 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.
This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.
