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Strong organic growth and very positive earnings development in North America
Strong growth dynamic in Care Coordination activities
International performance furthermore impacted by currency fluctuations
EBIT and net income influenced by one-time items

Third quarter 2015 key figures

Net revenue: $4,231 million, +3%
Operating income (EBIT): $614 million, +4%
Operating income (EBIT) excluding one-time items: $632 million, +5%
Net income¹:$262 million, -3%
Net income excluding one-time items¹: $284 million +2%
Basic earnings per share: $0.86, -4%

First nine months 2015 key figures

Net revenue: $12,390 million, +8%
Operating income (EBIT): $1,665 million, +5%
Operating income (EBIT) excluding one-time items: $1,683 million, +5%
Net income¹: $713 million, 0%
Net income excluding one-time items¹: $735 million +3%
Basic earnings per share: $2.34, 0%

¹ attributable for shareholders of Fresenius Medical Care AG & Co. KGaA

Rice Powell, chief executive officer of Fresenius Medical Care stated: “With the dynamic growth in our Care Coordination business and our continued strong operating performance in our core businesses, we are well positioned for future success. We are very satisfied with our accomplishments in the third quarter despite the unfavorable currency impacts. We confirm our outlook for the full year 2015 and remain focused to further strengthen our business to deliver high quality care for our patients.”

Third quarter 2015

Revenue

Net revenue for the third quarter of 2015 increased by 3% to $4,231 million (+9% at constant currency) as compared to the third quarter of 2014. Organic revenue growth worldwide was 6%. Net Health Care revenue grew by 6% to $3,402 million (+10% at constant currency). After two very strong quarters in the product business, we are closer to a normalized organic revenue level. Dialysis product revenue was down by 9% to $829 million as compared to the third quarter of 2014 mainly due to a negative currency impact in the three International segments. On a constant currency basis, the dialysis product revenue increased by 2%.

North America revenue for the third quarter of 2015 increased by 11% to $3,013 million. Organic revenue growth was 6%. Net Health Care revenue grew by 12% to $2,794 million with a same market treatment growth of 5%. Net Dialysis Care revenue increased by 6% to $2,314 million and Care Coordination revenue increased by 56% to $480 million (organic growth of 17%). Dialysis product revenue increased by 3% to $219 million as compared to the third quarter of 2014.

International revenue decreased by 12% to $1,213 million (an increase of 5% on a constant currency basis). Organic revenue growth was 6%. While the underlying organic revenue developed positively, the currency translation resulted in a negative impact. Net Health Care revenue decreased by 13% to $608 million (+6% at constant currency). Dialysis product revenue decreased by 12% to $605 million (+3% at constant currency).

International segments:
Europe, Middle East and Africa (EMEA) revenue decreased by 16% to $659 million (+2% at constant currency). Organic revenue growth was 2%. Net Health Care revenue decreased by 16% to $309 million (+3% at constant currency). Dialysis product revenue decreased by 16% to $350 million (stable at constant currency).

Asia-Pacific revenue decreased by 2% to $378 million (+9% at constant currency). Organic revenue growth was 10%. Net Health Care revenue decreased by 9% to $168 million (+4% at constant currency). Dialysis product revenue increased by 3% to $210 million (+13% at constant currency).

Latin America revenue decreased by 18% to $176 million (+7% at constant currency). Organic revenue growth was 13%. Net Health Care revenue decreased by 12% to $131 million (+12% at constant currency). Dialysis product revenue decreased by 33% to $44 million (a decrease of 6% at constant currency). The regional performance was impacted by the divestiture of our dialysis service business in Venezuela.

Earnings

Operating income (EBIT) increased by 4% from $590 million in the third quarter of 2014 to $614 million in the third quarter of 2015. Operating income, excluding one-time items, increased by 5% from $601 million to $632 million; adjusted for: a negative impact ($26 million) from the divestiture of the dialysis service business in Venezuela, a negative impact due to the closing of a manufacturing plant in the third quarter of 2014 ($11 million) and a positive impact of $8 million from the sale of our European marketing rights for certain renal pharmaceuticals to our joint venture Vifor Fresenius Medical Care Renal Pharma. The sale of remaining marketing rights is being recognized as they are transferred at the country level. Therefore, we anticipate additional gains will be realized in the fourth quarter of 2015.

Operating income for North America for the third quarter of 2015 was $515 million, an increase of 25% as compared to the third quarter of 2014.

International segments:
Operating income for EMEA for the third quarter of 2015 was $130 million, a decrease of 14% as compared to the third quarter of 2014. Operating income, excluding one-time items, was $122 million. Operating income for Asia-Pacific for the third quarter of 2015 was $68 million, a decrease of 25% as compared to the third quarter of 2014. Operating income for Latin America for the third quarter of 2015 was ($8 million). Operating income, excluding one-time items, was $18 million.

Net interest expense for the third quarter of 2015 was with $100 million at the same level as compared to the third quarter of 2014.

Income tax expense was $168 million for the third quarter of 2015, which translates into an effective tax rate of 32.8%. This compares to income tax expense of $162 million and a tax rate of 32.9% for the third quarter of 2014.

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the third quarter of 2015 was $262 million, a decrease of 3% compared to $271 million for the third quarter of 2014. Net income attributable to noncontrolling interest increased to $84 million ($58 million in the third quarter of 2014) due to the strong earnings development in North America. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the third quarter of 2015, excluding one-time items, increased by 2% to $284 million.

Basic earnings per share (EPS) for the third quarter of 2015 was $0.86, a decrease of 4% compared to the corresponding number for the third quarter of 2014. The weighted average number of shares outstanding for the third quarter of 2015 was approximately 304.7 million shares, compared to approximately 302.7 million shares for the third quarter of 2014. The increase in shares outstanding resulted from stock option exercises during the last twelve months.

Cash flow

In the third quarter of 2015, the company generated $579 million, representing roughly 14% of revenue, in net cash provided by operating activities, compared to the corresponding figure of last year of $712 million.

A total of $224 million was spent for capital expenditures, net of disposals. Free cash flow was $355 million compared to $488 million in the third quarter of 2014.

A total of $57 million in cash was spent for acquisitions and investments, net of divestitures. Free cash flow after investing activities was $298 million as compared to ($125) million in the third quarter of 2014.

First nine months 2015

Revenue and earnings

Net revenue for the first nine months of 2015 increased by 8% to $12,390 million (+13% at constant currency) as compared to the first nine months of 2014. Organic revenue growth worldwide was 7%.

Operating income (EBIT) for the first nine months of 2015 was $1,665 million as compared to $1,591 million in the first nine months of 2014. This represents an increase of 5%. Operating income, excluding one-time items, increased by 5% to $1,683 million.

Net interest expense for the first nine months of 2015 was $304 million as compared to $294 million in the first nine months of 2014.

Income tax expense for the first nine months of 2015 was $441 million, which translates into an effective tax rate of 32.4%. This compares to income tax expense of $440 million and a tax rate of 33.9% for the first nine months of 2014. For the full year, the company expects the tax rate to be on the lower end of its guidance range of 33 to 34%.

For the first nine months of 2015, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA was stable at $713 million ($710 million in the same period in the previous year). Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA excluding one-time items for the first nine months of 2015 increased by 3% to $735 million.

In the first nine months of 2015, basic earnings per share (EPS) remained stable with $2.34 as compared to the corresponding number for the first nine months of 2014 ($2.35). The weighted average number of shares outstanding during the first nine months of 2015 was approximately 304.2 million shares.

Cash flow

In the first nine months of 2015, the company generated $1,412 million in net cash provided by operating activities, representing 11.4% of revenue, as compared to $1,274 million for the same period in 2014.

A total of $636 million was spent for capital expenditures, net of disposals. Free cash flow for the first nine months of 2015 was $776 million as compared to $635 million in the first nine months of 2014.

A total of $124 million in cash was spent for acquisitions and investments, net of divestitures. Free cash flow after investing activities was $652 million as compared to ($410) million in the first nine months of 2014.

Employees

As of September 30, 2015, Fresenius Medical Care had 102,591 employees (full-time equivalents) worldwide, compared to 97,327 employees at the end of September 2014. This increase was mainly attributable to acquisitions as well as to our continued organic growth.

Balance sheet structure

The company´s total assets were stable at $25,414 million (Dec. 31, 2014: $25,447 million). Current assets were comparable at $6,760 million (Dec. 31, 2014: $6,725 million). Non-current assets were slightly down at $18,654 million (Dec. 31, 2014: $18,722 million). Total equity increased by 2% to $10,243 million (Dec. 31, 2014: $10,028 million). The equity ratio was 40% as compared to 39% at the end of 2014. Total debt was $9,093 million (Dec. 31, 2014: $9,532 million). As of September 30, 2015, the debt/EBITDA ratio was 2.9 (Dec. 31, 2014: 3.1).

Please refer to the attachments for a complete overview of the results for the third quarter and first nine months of 2015.

Outlook¹confirmed

For the 2015 outlook the company expects revenue to grow at 5-7%, which at constant currency is a growth rate of 10-12%. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to increase by 0-5% in 2015.

The company expects to spend around $1.0 billion on capital expenditures and around $300 million on acquisitions in 2015. The debt/EBITDA ratio is expected to be around 3.0 by the end of 2015.

In addition we confirm our 2016 projections. We expect revenue to increase around 7-10% (at constant currency) and net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA to grow by 15-20%.

We expect the progress in our business to be consistent with our long-term targets.

¹The outlook/projection provided for 2015/2016 is based on current exchange rates. Savings from the global efficiency program are included, while potential acquisitions are not. In addition the outlook reflects further operating cost investments within the Care Coordination business for future growth in line with our 2020 strategy.

Conference call

Fresenius Medical Care will hold a conference call to discuss the results of the third quarter 2015 on Thursday, October 29, 2015 at 3.30 p.m. CET/ 10.30 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 & Presentations” section. A replay will be available shortly after the call.

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.

Contact

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

Documents

Text as PDF document (PDF, 221 KB)

If no timeframe is specified, information refers to the first nine months of 2015.

For a detailed overview of special items please see the reconciliation tables on pages 17-18.

Q3/2015:

Sales €6.9 billion (+16% at actual rates, +7% in constant currency)
EBIT¹ €1,027 million (+25% at actual rates, +12% in constant currency)
Net income² €367 million (+31% at actual rates, +20% in constant currency)

Q1-3/2015:

Sales €20.4 billion (+22% at actual rates, +11% in constant currency)
EBIT¹ €2.8 billion (+28% at actual rates, +14% in constant currency)
Net income² €1,009 million (+31% at actual rates, +19% in constant currency)

Ulf Mark Schneider, CEO of Fresenius, said: “Our strong growth trend continued with double-digit constant currency sales and earnings growth in the first nine months. All business segments contributed to the excellent financial results. Fresenius Kabi in particular stood out, benefiting from drug shortages and new product launches in the U.S. market. We raise our Group earnings guidance for 2015 and remain optimistic about the positive fundamentals in our markets.”

^{1 Before special items}^{2 Net income attributable to shareholders of Fresenius SE & Co. KGaA; before special items}

2015 Group earnings guidance¹ raised
Based on the Group’s excellent financial results in the first nine months of 2015 and strong prospects for the remainder of the year, Fresenius raises its 2015 Group earnings guidance. Net income² is now expected to grow by 20% to 22% in constant currency. Previously, Fresenius expected net income² growth of 18% to 21% in constant currency. The company fully confirms its Group sales guidance. Sales are expected to increase by 8% to 10% in constant currency.

The net debt/EBITDA³ ratio is now expected to be below 3.0 at the end of 2015. Previously, Fresenius expected the ratio to be approximately 3.0.

^{1 Based on the average exchange rates through October 23 and the exchange rates of October 23 applied to the remainder of the year, this implies sales of ~€27.4 billion and net income of ~€1.42 billion, at the lower end of the respective guidance range.}^{2 Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2015 before integration costs (€12 million before tax for hospitals acquired from Rhön-Klinikum AG), before costs for the efficiency program at Fresenius Kabi (~€100 million before tax), and before the disposal gains from the divestment of two HELIOS hospitals (€34 million before tax); 2014 before special items}^{3 At average exchange rates for the last twelve months for both net debt and EBITDA; without major unannounced acquisitions; before special items}

11% sales growth in constant currency
Group sales increased by 22% (11% in constant currency) to €20,369 million (Q1-3/2014: €16,711 million). Organic sales growth was 6%. Acquisitions contributed 5%. In Q3/2015, Group sales increased by 16% (7% in constant currency) to €6,940 million (Q3/2014: €5,978 million). Organic sales growth was 6%. Acquisitions contributed 2%, while divestitures reduced sales by 1%.

Group sales by region:

19% Group net income¹ growth in constant currency
Group EBITDA² increased by 26% (13% in constant currency) to €3,674 million (Q1-3/2014: €2,905 million). Group EBIT² increased by 28% (14% in constant currency) to €2,849 million (Q1-3/2014: €2,223 million). The EBIT margin² was 14.0% (Q1 3/2014: 13.3%). In Q3/2015 Group EBIT² increased by 25% (12% in constant currency) to €1,027 million (Q3/2014: €820 million), the EBIT margin² was 14.8% (Q3/2014: 13.7%).

Group net interest increased to -€476 million (Q1-3/2014: -€431 million). Interest rate savings were more than offset by interest on incremental debt for acquisitions completed in 2014 and by currency translation effects. In Q3/2015, Group net interest of -€146 million was slightly below the prior-year level (Q3/2014: €148 million). More favorable financing terms offset negative currency translation effects.

The Group tax rate² was 29.6% (Q1-3/2014: 29.5%). In Q3/2015, the Group tax rate was 29.7% (Q3/2014: 29.3%).

Noncontrolling interest was €661 million (Q1-3/2014: €495 million), of which 95% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income³ before special items increased by 31% (19% in constant currency) to €1,009 million (Q1-3/2014: €768 million). Earnings per share¹ increased by 31% (19% in constant currency) to €1.86 (Q1-3/2014: €1.42). In Q3/2015, Group net income³ before special items increased by 31% (20% in constant currency) to €367 million (Q3/2014: €281 million). Earnings per share¹ increased by 31% (19% in constant currency) to €0.68 (Q3/2014: €0.52).

Group net income³ including special items increased by 23% (12% in constant currency) to €999 million (Q1-3/2014: €810 million). Earnings per share³ increased by 23% (11% in constant currency) to €1.84 (Q1-3/2014: € 1.50). In Q3/2015, Group net income³ including special items increased by 29% (18% in constant currency) to €357 million (Q3/2014: €276 million). Earnings per share³ increased by 29% (18% in constant currency) to €0.66 (Q3/2014: €0.51).

A reconciliation to earnings according to U.S. GAAP can be found on pages 17-18 in the pdf of this Investor News.

^{1 Net income attributable to shareholders of Fresenius SE & Co. KGaA; before special items}^{2 Before special items}^{3 Net income attributable to shareholders of Fresenius SE & Co. KGaA}

Continued investment in growth
Spending on property, plant and equipment was €950 million (Q1-3/2014: €854 million), primarily for the modernization and expansion of dialysis clinics, production facilities and hospitals. Total acquisition spending was €272 million (Q1-3/2014: €1,861 million).

Strong cash flow development
Operating cash flow increased by 27% to €2,151 million (Q1-3/2014: €1,695 million) with a margin of 10.6% (Q1-3/2014: 10.1%). Operating cash flow in the prior-year period was reduced by the US$115 million¹ payment for the W.R. Grace bankruptcy settlement. Operating cash flow in Q3/2015 reached a very strong €900 million, but could not quite match the exceptional prior-year quarter (Q3/2014: €945 million). The same applies to the cash flow margin of 13.0% (Q3/2014: 15.8%).

Net capital expenditure increased to €932 million (Q1-3/2014: €848 million). Free cash flow before acquisitions and dividends improved to €1,219 million (Q1-3/2014: €847 million). Free cash flow after acquisitions and dividends increased to €574 million (Q1 3/2014: €1,154 million).

^{1 See Annual Report 2014, page 152 f.}

Solid balance sheet structure
The Group’s total assets increased by 6% (2% in constant currency) to €42,169 million (Dec. 31, 2014: €39,897 million). Current assets grew by 5% (3% in constant currency) to €10,550 million (Dec. 31, 2014: €10,028 million). Non-current assets increased by 6% (1% in constant currency) to €31,619 million (Dec. 31, 2014: € 29,869 million).

Total shareholders’ equity increased by 11% (7% in constant currency) to €17,170 million (Dec. 31, 2014: €15,483 million). The equity ratio increased to 40.7% (Dec. 31, 2014: 38.8%).

Group debt decreased by 1% (-5% in constant currency) to €15,237 million (Dec. 31, 2014: € 15,454 million). As of September 30, 2015, the net debt/EBITDA ratio was 2.93¹ (2.89¹ at LTM average exchange rates for both net debt and EBITDA).

^{1 Pro forma acquisitions; before special items}

Business Segments

Fresenius Medical Care
Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of September 30, 2015, Fresenius Medical Care was treating 290,250 patients in 3,402 dialysis clinics. Along with its core business, the company seeks to expand the range of medical services in the field of care coordination.

Strong Q3 sales growth in North America
Adverse currency developments and special items weigh on business outside North America
2015 outlook confirmed

Sales increased by 8% (13% in constant currency) to US$12,390 million (Q1-3/2014: US$11,511 million). Organic sales growth was 7%. Acquisitions contributed 7%, while divestitures reduced sales by 1%. Currency effects reduced sales by -5%. In Q3/2015, sales increased by 3% (9% in constant currency) to US$4,231 million (Q3/2014: US$4,113 million).

Health Care services sales (dialysis services and care coordination) increased by 11% (15% in constant currency) to US$9,929 million (Q1-3/2014: US$8,928 million). Dialysis product sales decreased by 5% (increased by 7% in constant currency) to US$2,461 million (Q1 3/2014: US$2,583 million).

In North America sales increased by 15% to US$8,730 million (Q1-3/2014: US$7,624 million). Health Care services sales grew by 15% to US$8,087 million (Q1-3/2014: US$7,015 million). Dialysis product sales increased by 6% to US$643 million (Q1-3/2014: US$609 million).

Sales outside North America decreased by 5% (increased by 12% in constant currency) to US$3,639 million (Q1-3/2014: US$3,843 million). Regional financial results were impacted by special items². Health Care services sales decreased by 4% (increased by 15% in constant currency) to US$1,842 million (Q1-3/2014: US$1,913 million). Dialysis product sales decreased by 7% (increased by 8% in constant currency) to US$1,797 million (Q1-3/2014: US$1,930 million).

EBIT increased by 5% (10% in constant currency) to US$1,665 million (Q1-3/2014: US$1,591 million). The EBIT margin was 13.4% (Q1-3/2014: 13.8%). Adjusted for special items³ EBIT increased by 5% to US$1,683 million. In Q3/2015, EBIT increased by 4% (8% in constant currency) to US$614 million (Q3/2014: US$590 million). The EBIT margin increased to 14.5% (Q3/2014: 14.3%). EBIT excluding special items³ increased by 5% to $632 million.

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA of US$713 million was at prior-year level (Q1-3/2014: US$710 million). Net income attributable to non-controlling interest increased by 41% to US$207 million, mainly due to the strong earnings development in North America. In constant currency net income increased by 6%. Net income excluding special items⁴ increased by 3% to US$735 million. In Q3/2015, net income decreased by 3% (-1% in constant currency) to US$262 million (Q3/2014: US$271 million). Net income excluding special items⁴ increased by 2% to US$284 million.

Operating cash flow increased by 11% to US$1,412 million (Q1-3/2014: US$1,274 million). Operating cash flow in the prior-year period was reduced by the US$115 million⁵ payment for the W.R.Grace bankruptcy settlement. The cash flow margin increased to 11.4% (Q1 3/2014: 11.1%). In Q3/2015, operating cash flow reached a very strong US$579 million, but could not match the exceptional prior-year quarter (Q3/2014: US$712 million). The same applies to the cash flow margin of 13.7% (Q3/2014: 17.3%).

Fresenius Medical Care confirms its outlook for 2015. The company expects sales to grow by 5% to 7%, which equals a growth rate of 10% to 12% in constant currency. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to increase by 0% to 5% in 2015.

The outlook is based on current exchange rates. Savings from the global efficiency program are included, while earnings contributions from potential acquisitions are not. The outlook reflects further operating cost investments within the Care Coordination segment.

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

^{1 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA}^{2 Divestiture of dialysis business in Venezuela and European pharmaceutical business}^{3 2015 before divestiture of dialysis business in Venezuela (-US$26 million before tax) and European pharmaceutical business (US$8 million before tax); 2014 before closing of manufacturing plant (-US$11 million before tax)}^{4 2015 before divestiture of dialysis business in Venezuela (-US$27 million after tax) and European pharmaceutical business (US$5 million after tax); 2014 before closing of manufacturing plant ( US$7 million after tax)}^{5 See Annual Report 2014, page 152 f.}

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.

10% organic sales growth in Q3
19% constant currency EBIT1 growth in Q3
2015 outlook: organic sales growth of ~8% and constant currency EBIT1 growth of 19% to 22% expected

Sales increased by 18% (8% in constant currency) to €4,431 million (Q1-3/2014: €3,760 million). Organic sales growth was 9%. Acquisitions contributed 1% while divestitures reduced sales by 2%. Positive currency translation effects (10%) were mainly related to the Euro’s depreciation against the U.S. dollar and the Chinese yuan. In Q3/2015, sales increased by 16% (9% in constant currency) to €1,499 million (Q3/2014: €1,294 million). Organic sales growth was 10%.

Sales in Europe grew by 2% (organic growth: 4%) to €1,566 million (Q1-3/2014: €1,538 million). Sales in North America increased by 39% (organic growth: 16%) to €1,555 million (Q1-3/2014: €1,118 million). North American sales growth was driven by persisting IV drug shortages and new product launches. Asia-Pacific sales increased by 19% (organic growth: 4%) to €862 million (Q1-3/2014: €723 million). Sales in Latin America/Africa grew by 18% (organic growth: 12%) to €448 million (Q1-3/2014: €381 million).

EBIT¹ increased by 38% (19% in constant currency) to €872 million (Q1-3/2014: €634 million). The EBIT margin¹ was 19.7% (Q1-3/2014: 16.9%). In Q3/2015, EBIT¹ increased by 35% (19% in constant currency) to €301 million (Q3/2014: €223 million). The EBIT margin¹ was 20.1% (Q3/2014: 17.2%).

Net income² increased by 42% (23% in constant currency) to €479 million (Q1-3/2014: €337 million). In Q3/2015, net income² increased by 42% (25% in constant currency) to €170 million (Q3/2014: €120 million).

Operating cash flow increased by 36% to €589 million (Q1-3/2014: €432 million) with a margin of 13.3% (Q1-3/2014: 11.5%). In Q3/2015, operating cash flow increased to €235 million (Q3/2014: €217 million) with a margin of 15.7% (Q3/2014: 16.8%).

Fresenius Kabi’s initiatives to increase production efficiency and streamline administrative structures are well on track. Costs of €50 million before tax were incurred in the first nine months of 2015 (Q3/2015: €10 million). The remainder of approx. €50 million will be recorded in Q4/2015. These costs are reported in the Group segment Corporate/Other.

Fresenius Kabi raises its outlook³ for 2015 and now expects organic sales growth of ~8% and constant currency EBIT¹ growth in the range of 19% to 22% with an implied EBIT margin¹ of approximately 20.0%. Previously, Fresenius Kabi projected organic sales growth of 6% to 8% and constant currency EBIT¹ growth in the range of 18% to 21% with an implied EBIT margin in the range of 19.0% to 20.0%.

^{1 Before special items}^{2 Net income attributable to shareholders of Fresenius Kabi AG; before special items}^{3 Based on the average exchange rates through October 23 and the exchange rates of October 23 applied to the remainder of the year, this implies sales of ~€5.9 billion (equivalent to 8% organic sales growth) and EBIT¹ of ~€1.18 billion (equivalent to the lower end of the expected range)}

Fresenius Helios
Fresenius Helios is Germany’s largest hospital operator. HELIOS operates 111 hospitals, thereof 87 acute care clinics (including seven maximum care hospitals in Berlin-Buch, Duisburg, Erfurt, Krefeld, Schwerin, Wiesbaden and Wuppertal) and 24 post-acute care clinics. HELIOS treats more than 4.5 million patients per year, thereof more than 1.2 million inpatients, and operates more than 34,000 beds.

12% EBIT¹ growth in Q3
20 bps sequential EBIT margin¹ increase
2015 outlook confirmed

Sales increased by 7% to €4,167 million (Q1-3/2014: €3,883 million). Organic sales growth was 3% (Q1-3/2014: 4%). Acquisitions contributed 5% while divestitures reduced sales by 1%. In Q3/2015, sales increased by 2% to €1,393 million (Q3/2014: €1,362 million), organic sales growth was 2% (Q3/2014: 6%).

EBIT¹ grew by 19% to €472 million (Q1-3/2014: €397 million). The EBIT margin¹ increased to 11.3% (Q1-3/2014: 10.2%). In Q3/2015, EBIT¹ increased by 12% to €165 million (Q3/2014: €147 million). Sequentially, the EBIT margin¹ increased by 20 bps to 11.8%.

Net income² increased by 23% to €352 million (Q1-3/2014: €286 million). In Q3/2015, net income² increased by 18% to €126 million (Q3/2014: €107 million).

Sales of the established hospitals, including the former Rhön-Klinikum facilities consolidated for more than one year, grew by 3% to €3,970 million (Q1-3/2014: €3,861 million). EBIT¹ increased by 17% to €463 million (Q1-3/2014: €395 million). The EBIT margin¹ increased to 11.7% (Q1-3/2014: 10.2%). Sales of the acquired hospitals consolidated for less than one year were €197 million. EBIT¹ was €9 million with a margin of 4.6%.

The integration of the hospitals acquired from Rhön-Klinikum AG remains well on track. Integration costs were €12 million in the first nine months of 2015 (Q3/2015: €4 million) taking the total to date to €63 million. Fresenius Helios does not expect any further integration costs. Amount (€85 million p.a.) and timing (spring 2016) of targeted near-term cost synergies are confirmed.

Fresenius Helios confirms its outlook for 2015, projecting organic sales growth of 3% to 5% and reported sales growth of 6% to 9%. EBIT¹ is expected to increase to €630 to €650 million.

Fresenius Helios’ outlook excludes integration costs for the hospitals acquired from Rhön-Klinikum AG (€12 million before tax) and the disposal gains from the divestment of two HELIOS hospitals (€34 million before tax). For segment reporting purposes, these items will not be reported in the Fresenius Helios segment, but as special items in the Group segment Corporate/Other.

^{1 Before special items}^{2 Net income attributable to shareholders of HELIOS Kliniken GmbH; before special items}

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.

Q3 organic sales growth driven by strong service business
Q3 order intake €192 million
2015 outlook: organic sales growth now projected to reach 5% to 10%, EBIT growth expectation of 5% to 10% confirmed

Sales increased by 12% (11% in constant currency) to €731 million (Q1-3/2014: €655 million). Organic sales growth was 9%. Acquisitions contributed 2%. Sales in the project business increased by 9% to €333 million (Q1-3/2014: €306 million). Sales in the service business grew by 14% to €398 million (Q1-3/2014: €349 million). In Q3/2015, sales increased by 4% to €268 million (Q3/2014: €257 million). Organic sales growth was 4%.

EBIT grew by 11% to €30 million (Q1-3/2014: €27 million). The EBIT margin remained unchanged at 4.1% (Q1-3/2014: 4.1%). In Q3/2015, EBIT increased by 17% to €14 million (Q3/2014: €12 million). Sequentially, the EBIT margin increased by 170 bps to 5.2%.

Net income¹ grew by 11% to €20 million (Q1-3/2014: €18 million). In Q3/2015, net income¹ increased by 25% to €10 million (Q3/2014: €8 million).

Order intake reached a very strong €476 million (Q1-3/2014: €678 million). The prior-year period was boosted by the major project for the modernization of the University Hospital of Schleswig-Holstein/Germany. As of September 30, 2015, order backlog was €1,528 million (Dec. 31, 2014: €1,398 million).

Based on the strong sales development in the first nine months of 2015, Fresenius Vamed narrows its 2015 organic sales growth outlook to a range of 5% to 10%. Previously, Fresenius Vamed expected single-digit organic sales growth. Fresenius Vamed fully confirms its EBIT outlook and projects EBIT growth 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 nine months of 2015, a conference call will be held on October 29, 2015 at 2 p.m. CET (9 a.m. EDT). All investors are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com, see Investor Relations, Presentations. 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.

Documents

Text as PDF document (PDF, 139 KB)

If no timeframe is specified, information refers to the first nine months of 2015.

For a detailed overview of special items please see the reconciliation tables on pages 17-18 in the pdf file of this Investor News.

Q3/2015:

Sales €6.9 billion (+16% at actual rates, +7% in constant currency)
EBIT¹ €1,027 million (+25% at actual rates, +12% in constant currency)
Net income² €367 million (+31% at actual rates, +20% in constant currency)

Q1-3/2015:

Sales €20.4 billion (+22% at actual rates, +11% in constant currency)
EBIT¹ €2.8 billion (+28% at actual rates, +14% in constant currency)
Net income² €1,009 million (+31% at actual rates, +19% in constant currency)

Ulf Mark Schneider, CEO of Fresenius, said: “Our strong growth trend continued with double-digit constant currency sales and earnings growth in the first nine months. All business segments contributed to the excellent financial results. Fresenius Kabi in particular stood out, benefiting from drug shortages and new product launches in the U.S. market. We raise our Group earnings guidance for 2015 and remain optimistic about the positive fundamentals in our markets.”

¹ Before special items² Net income attributable to shareholders of Fresenius SE & Co. KGaA; before special items

2015 Group earnings guidance¹ raised
Based on the Group’s excellent financial results in the first nine months of 2015 and strong prospects for the remainder of the year, Fresenius raises its 2015 Group earnings guidance. Net income² is now expected to grow by 20% to 22% in constant currency. Previously, Fresenius expected net income² growth of 18% to 21% in constant currency. The company fully confirms its Group sales guidance. Sales are expected to increase by 8% to 10% in constant currency.

The net debt/EBITDA³ ratio is now expected to be below 3.0 at the end of 2015. Previously, Fresenius expected the ratio to be approximately 3.0.

¹ Based on the average exchange rates through October 23 and the exchange rates of October 23 applied to the remainder of the year, this implies sales of ~€27.4 billion and net income of ~€1.42 billion, at the lower end of the respective guidance range.² Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2015 before integration costs (€12 million before tax for hospitals acquired from Rhön-Klinikum AG), before costs for the efficiency program at Fresenius Kabi (~€100 million before tax), and before the disposal gains from the divestment of two HELIOS hospitals (€34 million before tax); 2014 before special items³ At average exchange rates for the last twelve months for both net debt and EBITDA; without major unannounced acquisitions; before special items

11% sales growth in constant currency
Group sales increased by 22% (11% in constant currency) to €20,369 million (Q1-3/2014: €16,711 million). Organic sales growth was 6%. Acquisitions contributed 5%. In Q3/2015, Group sales increased by 16% (7% in constant currency) to €6,940 million (Q3/2014: €5,978 million). Organic sales growth was 6%. Acquisitions contributed 2%, while divestitures reduced sales by 1%.

Group sales by region:

19% Group net income¹ growth in constant currency
Group EBITDA² increased by 26% (13% in constant currency) to €3,674 million (Q1-3/2014: €2,905 million). Group EBIT² increased by 28% (14% in constant currency) to €2,849 million (Q1-3/2014: €2,223 million). The EBIT margin² was 14.0% (Q1 3/2014: 13.3%). In Q3/2015 Group EBIT² increased by 25% (12% in constant currency) to €1,027 million (Q3/2014: €820 million), the EBIT margin² was 14.8% (Q3/2014: 13.7%).

Group net interest increased to -€476 million (Q1-3/2014: -€431 million). Interest rate savings were more than offset by interest on incremental debt for acquisitions completed in 2014 and by currency translation effects. In Q3/2015, Group net interest of -€146 million was slightly below the prior-year level (Q3/2014: €148 million). More favorable financing terms offset negative currency translation effects.

The Group tax rate² was 29.6% (Q1-3/2014: 29.5%). In Q3/2015, the Group tax rate was 29.7% (Q3/2014: 29.3%).

Noncontrolling interest was €661 million (Q1-3/2014: €495 million), of which 95% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income³ before special items increased by 31% (19% in constant currency) to €1,009 million (Q1-3/2014: €768 million). Earnings per share¹ increased by 31% (19% in constant currency) to €1.86 (Q1-3/2014: €1.42). In Q3/2015, Group net income³ before special items increased by 31% (20% in constant currency) to €367 million (Q3/2014: €281 million). Earnings per share¹ increased by 31% (19% in constant currency) to €0.68 (Q3/2014: €0.52).

Group net income³ including special items increased by 23% (12% in constant currency) to €999 million (Q1-3/2014: €810 million). Earnings per share³ increased by 23% (11% in constant currency) to €1.84 (Q1-3/2014: € 1.50). In Q3/2015, Group net income³ including special items increased by 29% (18% in constant currency) to €357 million (Q3/2014: €276 million). Earnings per share³ increased by 29% (18% in constant currency) to €0.66 (Q3/2014: €0.51).

A reconciliation to earnings according to U.S. GAAP can be found on pages 17-18 in the pdf of this Investor News.

¹ Net income attributable to shareholders of Fresenius SE & Co. KGaA; before special items² Before special items³ Net income attributable to shareholders of Fresenius SE & Co. KGaA

Continued investment in growth
Spending on property, plant and equipment was €950 million (Q1-3/2014: €854 million), primarily for the modernization and expansion of dialysis clinics, production facilities and hospitals. Total acquisition spending was €272 million (Q1-3/2014: €1,861 million).

Strong cash flow development
Operating cash flow increased by 27% to €2,151 million (Q1-3/2014: €1,695 million) with a margin of 10.6% (Q1-3/2014: 10.1%). Operating cash flow in the prior-year period was reduced by the US$115 million¹ payment for the W.R. Grace bankruptcy settlement. Operating cash flow in Q3/2015 reached a very strong €900 million, but could not quite match the exceptional prior-year quarter (Q3/2014: €945 million). The same applies to the cash flow margin of 13.0% (Q3/2014: 15.8%).

Net capital expenditure increased to €932 million (Q1-3/2014: €848 million). Free cash flow before acquisitions and dividends improved to €1,219 million (Q1-3/2014: €847 million). Free cash flow after acquisitions and dividends increased to €574 million (Q1 3/2014: €1,154 million).

¹ See Annual Report 2014, page 152 f.

Solid balance sheet structure
The Group’s total assets increased by 6% (2% in constant currency) to €42,169 million (Dec. 31, 2014: €39,897 million). Current assets grew by 5% (3% in constant currency) to €10,550 million (Dec. 31, 2014: €10,028 million). Non-current assets increased by 6% (1% in constant currency) to €31,619 million (Dec. 31, 2014: € 29,869 million).

Total shareholders’ equity increased by 11% (7% in constant currency) to €17,170 million (Dec. 31, 2014: €15,483 million). The equity ratio increased to 40.7% (Dec. 31, 2014: 38.8%).

Group debt decreased by 1% (-5% in constant currency) to €15,237 million (Dec. 31, 2014: € 15,454 million). As of September 30, 2015, the net debt/EBITDA ratio was 2.93¹ (2.89¹ at LTM average exchange rates for both net debt and EBITDA).

¹ Pro forma acquisitions; before special items

Business Segments

Fresenius Medical Care
Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of September 30, 2015, Fresenius Medical Care was treating 290,250 patients in 3,402 dialysis clinics. Along with its core business, the company seeks to expand the range of medical services in the field of care coordination.

Strong Q3 sales growth in North America
Adverse currency developments and special items weigh on business outside North America
2015 outlook confirmed