Fresenius Kabi received a Warning Letter, dated August 16, from the U.S. Food and Drug Administration (FDA) related to an April 2013 inspection of its Fenwal blood bag manufacturing plant in Maricao, Puerto Rico. Fresenius Kabi acquired Fenwal in December 2012.

The Warning Letter observations are primarily related to complaint-handling procedures, labeling issues, and filing of field alerts not in accordance with FDA regulations. The Warning Letter was not issued as a result of adverse events related to patient safety.

Following the inspection, Fresenius Kabi submitted a detailed remediation action plan to the FDA. The company has made significant progress in remedying the issues cited in the Warning Letter including improvements to its procedures and documentation. Production at the plant is continuing.

The company takes this matter very seriously and intends to respond in a timely and comprehensive manner to the Warning Letter. No material sales and earnings impact on Fresenius Kabi's business is expected. Fresenius Kabi fully confirms its 2013 guidance.

The first "Green Innovation Award" was awarded today by a joint initiative of European Dialysis and Transplant Nurses Association/European Renal Care Association (EDTNA/ERCA) and Fresenius Medical Care at the 42nd EDTNA/ERCA International Conference in Malmö, Sweden. This award pays tribute to innovative ideas, best practices, and procedures that contribute to the promotion and development of environmental protection in hemodialysis treatment.

First prize went to a project from Saudi Arabia. In this pilot project, launched in 2011, overall water consumption was reduced by more than 50% mainly through the use of two reverse osmosis units for waste water. The second-place winner is a Spanish project that achieved significant savings in dialysate and water use by adjusting the dialysate flow to the blood flow rate. This use of technology improved treatment quality and optimized costs, while reducing the burden on the environment.

Eligible for participation were innovative green projects that provide transferrable, measurable and sustainable environmental benefits. An impartial jury, consisting of four experts on environmental matters related to dialysis, nominated the two winning projects, which were honored during a festive award ceremony at the EDTNA/ERCA conference.

Guido Giordana, Director of Business Operation Management NephroCare at Fresenius Medical Care, presented the award. "I feel personally honored to present the very first environmental award in renal care," he said. "Handing over this award, a personal wish comes true. I am happy to find the environmental impact of dialysis is gaining more and more attention, including at the point of care."

Jitka Pancirova, EDTNA/ERCA Executive Director, added: "It is of great importance to raise awareness for environmental protection within dialysis. With this we take the responsibility for our environment inherited through life-saving, resource-demanding dialysis treatment. Considering the increasing worldwide prevalence of End Stage Renal Disease, environmental protection is increasingly gaining importance and urgency in hemodialysis."

With the presentation of the "Green Innovation Award," both EDTNA/ERCA and Fresenius Medical Care are continuing their dedicated cooperation on environmental protection in dialysis, which started in 2009 with the "Go Green in Dialysis" initiative. This joint effort has already developed and published the "Environmental Guidelines for Dialysis," which help guide renal professionals to perform environmentally friendly treatments.

The acquisition will make Fresenius Helios the largest private hospital operator in Europe, with 117 hospitals across Germany and nearly €5.5 billion* in sales.

Fresenius Helios has signed a binding agreement to purchase the majority of Rhön-Klinikum AG's hospitals, acquiring 43 hospitals with a total of approximately 11,800 beds as well as 15 outpatient facilities. On the basis of 2013 pro forma financials, the acquisition is expected to add sales of approximately €2 billion and an EBITDA of approximately €250 million.

The University Hospital Giessen and Marburg, the hospitals in Bad Neustadt (including the Rhön-Klinikum AG headquarters), Bad Berka and Frankfurt/Oder will remain with Rhön-Klinikum AG.

The acquisition will enable Fresenius Helios to significantly expand its hospital operations. By extending its presence across the country, Fresenius Helios will bring the majority of the German population within an hour's drive of a HELIOS hospital. With that platform, Fresenius Helios aims to develop innovative, integrated care offerings.

Fresenius Helios and Rhön-Klinikum AG are planning to enter into a cooperation agreement covering Rhön-Klinikum AG's remaining hospitals. These hospitals will become part of a network offering innovative care models across Germany. Public, non-profit and other private hospitals are welcome to join this network.

Ulf Mark Schneider, CEO of Fresenius, said: "This compelling transaction provides a unique opportunity to create a nationwide hospital network and to establish Europe's largest private hospital operator. The clinics we are acquiring from Rhön-Klinikum are a perfect strategic and geographic fit with Helios' existing portfolio and will allow us to develop innovative approaches to health care. We are looking forward to working with the employees of the newly acquired clinics to advance our joint commitment to high-quality patient care."

"With the support of the Supervisory Board, we have made a ground-breaking and at the same time extraordinarily sustainable decision. Through its critical mass, the ‘new Rhön' is well positioned to deliver significant additional medical and economic growth," said Dr. Dr. Martin Siebert, CEO of Rhön-Klinikum AG. "We are starting from a stable earnings position and believe that this can be considerably increased. The ‘new Rhön' with its unique structure and offering will be even more attractive in the future."

The acquisition will create cost synergies – for instance, by bundling procurement – which will result in a potential 1 to 2% increase in the EBIT margin. Mid-term, Fresenius Helios expects the newly acquired hospital portfolio to reach the upper half of the 12-15% EBIT-margin range according to its hospital development plan.

The purchase price of €3.07 billion will be entirely debt-financed. Under the transaction, Fresenius will not assume any financial debt of Rhön-Klinikum AG. Group net debt/EBITDA is expected to temporarily exceed 3.0 in 2013** but remain below 3.5, before returning to the upper end of the 2.5 to 3.0 target range in 2014.

Fresenius expects one-time costs of approximately €80 million before tax. The Company expects the acquisition to be accretive to earnings per share in the first year after closing, excluding one-time costs, and clearly accretive from the second year onwards including one-time costs.

The acquisition is subject to antitrust approval as well as certain approvals of former municipal owners or current minority shareholders. The vast majority of the transaction is expected to close by the end of this year.

*Pro forma 2013
** Pro forma

Fresenius Kabi has started the joint venture announced in August with the leading Indonesian pharmaceutical company PT Soho Global Health (SGH) by completing the acquisition of a 51 percent stake in PT Ethica Industri Farmasi, a subsidiary of SGH, on October 1, 2013.

 

The joint venture operates a production plant in Jakarta and primarily manufactures I.V. generic drugs and infusion solutions. In 2012, the product portfolio of the new joint venture generated sales of more than €40 million.

 

 

The joint venture makes Fresenius Kabi the market leader in I.V. generics in Indonesia, and provides an attractive platform for future growth in one of the fastest-growing emerging economies in Southeast Asia.

 

 

The parties agreed not to disclose the purchase price.

 

Dr. Gerd Krick, Chairman of the Supervisory Board of Fresenius, will celebrate his 75th birthday on October 8. Before he moved to the Supervisory Board in 2003, Dr. Krick spent almost three decades in top management positions at Fresenius, including 11 years as Chief Executive Officer.

Born in Dresden, Germany in 1938, Dr. Krick earned a doctorate in mechanical engineering in 1969. After working as Managing Director of a medical technology company, he joined the former Dr. E. Fresenius KG in 1975 as Managing Director for research & development, production and technology. This began a very successful period in which Dr. Krick played a leading role in developing the company's first dialyzers and dialysis machines, and helped make dialysis-related activities a core business of Fresenius.

When Fresenius was converted into a stock corporation in 1981, Dr. Krick joined the Management Board of the newly established Fresenius AG, with responsibility for medical devices. In 1991, he was appointed Deputy Chairman of the Management Board. The next year he became CEO, succeeding Dr. Hans Kröner, who along with his wife, Else Kröner, had built Fresenius from a small family business into a major enterprise.

Fresenius grew significantly during Dr. Krick's tenure as CEO. Annual sales increased 10 times to €7.5 billion in 2002, and the number of employees rose nine-fold to more than 63,000. An exceptional entrepreneurial success was the 1996 acquisition of the U.S. dialysis company National Medical Care and its merger with the dialysis business of Fresenius. Today, Fresenius Medical Care is the world market leader in dialysis products and services.

After turning the CEO position over to Ulf Mark Schneider in 2003, Dr. Krick became Chairman of the Supervisory Board. In recognition of his accomplishments, the German business monthly Manager Magazin named Dr. Krick to its Hall of Fame in 2011.

"We are very grateful to Gerd Krick for his unique and outstanding contributions to our company," said Ulf Mark Schneider, CEO of Fresenius. "Under his guidance and leadership, Fresenius developed into a significant global player in the health care industry."

Third Quarter 2013 Key Figures:

Net revenue $3,666 million +7%

Operating income (EBIT) $557 million -2%

Adjusted operating income (EBIT) $576 million +2%

Net income ¹⁾ $273 million +1%

Adjusted net income ¹⁾ $285 million +6%

Earnings per ordinary share $0.91 +3%

Adjusted earnings per ordinary share $0.95 +7%


Nine Months 2013 Key Figures:


Net revenue $10,743 million +6%

Operating income (EBIT) $1,595 million -4%

Adjusted operating income (EBIT) $1,625 million -1%

Net income ¹⁾ $761 million -18%

Adjusted net income ¹⁾ $783 million 0%

Earnings per ordinary share $2.50 -18%

Adjusted earnings per ordinary share $2.57 0%


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

Bad Homburg, Germany – Fresenius Medical Care AG & Co. KGaA (the "company" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced its results for the third quarter and first nine months of 2013.


Rice Powell, chief executive officer of Fresenius Medical Care, commented: "Given the economic challenges we continue to face, we can be satisfied with our business performance in the third quarter, specifically with the strong organic revenue growth of 6%. As indicated after the second quarter we expected the second half of the year to be stronger to achieve our guidance for 2013. And there is no doubt that we need a very strong fourth quarter to get there. We will continue to grow our business and expand our renal network, and with this we will be best positioned for future success."


Third Quarter 2013


Revenue


Net revenue for the third quarter of 2013 increased by 7% to $3,666 million (+8% at constant currency) compared to the third quarter of 2012. Organic revenue growth worldwide was 6%. Dialysis services revenue grew by 8% to $2,813 million (+9% at constant currency) and dialysis product revenue increased by 5% to $853 million (+4% at constant currency).


North America revenue for the third quarter of 2013 increased by 8% to $2,436 million. Organic revenue growth was 6%. Dialysis services revenue grew by 9% to $2,224 million with a same store treatment growth of 3.5%. Dialysis product revenue increased by 5% to $212 million.


International revenue increased by 5% to $1,222 million (+6% at constant currency). Organic revenue growth was 4%. Dialysis services revenue increased by 5% to $589 million (+8% at constant currency). Dialysis product revenue increased by 5% to $633 million (+4% at constant currency).


Earnings


Operating income (EBIT) for the third quarter of 2013 decreased by 2% to $557 million compared to $568 million in the third quarter of 2012. Operating income for North America for the third quarter of 2013 decreased by 1% to $416 million compared to $420 million in the third quarter of 2012. In the International segment, operating income for the third quarter of 2013 increased by 5% to $204 million compared to $195 million in the third quarter of 2012.


Adjusted for the impact from the budget cuts in the U.S. (sequestration), that were effectively introduced in April 2013, the operating income for the third quarter of 2013 increased by 2% to $576 million.


Net interest expense for the third quarter of 2013 was $103 million, compared to $108 million in the third quarter of 2012.


Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the third quarter of 2013 was $273 million, an increase of 1% compared to the corresponding number of $270 million for the third quarter of 2012. Adjusted for the net of tax effects of the special item mentioned above, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the third quarter of 2013 increased by 6% to $285 million.


Income tax expense was $148 million for the third quarter of 2013 which translates into an effective tax rate of 32.6%. This compares to income tax expense of $153 million and a tax rate of 33.3% for the third quarter of 2012.


Earnings per ordinary share (EPS) for the third quarter of 2013 was $0.91, an increase of 3% compared to the corresponding number for the third quarter of 2012. Adjusted for the special item mentioned above, EPS for the third quarter of 2013 increased by 7% to $0.95. The weighted average number of shares outstanding for the third quarter of 2013 was approximately 301.3 million shares, compared to 305.5 million shares for the third quarter of 2012. The decrease in shares outstanding resulted from the effect of the share buy-back program, which was fully completed in August 2013, partially offset by stock option exercises in the past twelve months.


Cash flow


In the third quarter of 2013, the company generated $605 million in cash from operations, an increase of 13% compared to the corresponding figure of last year and representing 16.5% of revenue.


A total of $175 million was spent for capital expenditures, net of disposals. Free cash flow before acquisitions was $430 million (representing 11.7% of revenue) compared to $371 million in the third quarter of 2012.


A total of $195 million in cash was spent for acquisitions and investments, net of divestitures. Free cash flow after acquisitions and divestitures was $235 million, compared to $334 million in the third quarter of 2012.


First Nine Months 2013:


Revenue and Earnings


Net revenue for the first nine months of 2013 increased by 6% to $10,743 million (+7% at constant currencies) compared to the first nine months of 2012.


Operating income (EBIT) for the first nine months of 2013 decreased by 4% to $1,595 million compared to $1,659 million in the first nine months of 2012. Adjusted for special items related to the acquisition of Liberty Dialysis Holdings Inc. and the impact from sequestration the operating income for the first nine months of 2013 decreased by 1% to $1,625 million compared to $1,645 million for the first nine months of 2012.


Net interest expense for the first nine months of 2013 was $310 million compared to $311 million for the first nine months of 2012.


For the first nine months of 2013, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA was $761 million, down by 18% from the corresponding number of $930 million for the first nine months of 2012. Adjusted for the net of tax effects of the special items mentioned above, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the first nine months of 2013 was $783 million as compared to $784 million for the first nine months of 2012.


Income tax expense for the first nine months of 2013 was $421 million which translates into an effective tax rate of 32.8%. This compares to income tax expense of $462 million and a tax rate of 31.1% for the first nine months of 2012.


In the first nine months of 2013, earnings per ordinary share (EPS) decreased by 18% to $2.50 compared to $3.05 for the first nine months of 2012. Adjusted for the special items mentioned above, EPS for the first nine months of 2013 remained unchanged at $2.57 compared to the first nine months of 2012. The weighted average number of shares outstanding during the first nine months of 2013 was approximately 304.7 million.


Cash Flow


Cash from operations during the first nine months of 2013 was $1,446 million (representing 13.5% of revenue) compared to $1,467 million for the same period in 2012.


A total of $494 million in cash was spent for capital expenditures, net of disposals. Free cash flow before acquisitions for the first nine months of 2013 was $952 million compared to $1,029 million in the same period in 2012. A total of $279 million in cash was spent for acquisitions, net of divestitures. Free cash flow after acquisitions and divestitures was $673 million compared to a negative $528 million in the first nine months of last year.


Please refer to the attachments for a complete overview of the results for the third quarter and first nine months of 2013.

Patients – Clinics – Treatments


As of September 30, 2013, Fresenius Medical Care treated 265,824 patients worldwide, which represents an increase of 4% compared to the previous year's figure. North America provided dialysis treatments for 168,893 patients, an increase of 3% compared to the corresponding number for 2012. The International segment provided dialysis treatments for 96,931 patients, an increase of 4% over the prior year's figure.


As of September 30, 2013, the company operated a total of 3,225 clinics worldwide, an increase of 3% compared to the corresponding number for 2012. The number of clinics is comprised of 2,116 clinics in North America (+3%) and 1,109 clinics in the International segment (+3%).


During the first nine months of 2013, Fresenius Medical Care delivered approximately 30.03 million dialysis treatments worldwide. This represents an increase of 5% compared to the previous year's figure. North America accounted for 19.04 million treatments, an increase of 5%. The International segment delivered 10.99 million treatments, an increase of 4%.


Employees


As of September 30, 2013, Fresenius Medical Care had 89,282 employees (full-time equivalents) worldwide, compared to 86,153 employees at the end of 2012.


Debt/EBITDA ratio


The ratio of debt to earnings before interest, taxes, depreciation and amortization (EBITDA) slightly increased from 2.92 at the end of the second quarter of 2013 to 2.94 at the end of the third quarter of 2013.


Rating


Standard & Poor's rates the company's corporate credit as ‘BB+', with a ‘positive' outlook. Moody's rates the company's corporate credit as ‘Ba1' with a ‘stable' outlook. Fitch Ratings is currently reviewing Fresenius Medical Care's ratings.


Share buy-back program


Fresenius Medical Care`s share buy-back program was completed on August 14, 2013. The company bought back a total number of approximately 7.5 million shares with an aggregate value of €385 million (approximately $500 million). The program was financed from cash flow and existing credit facilities.


Guidance for 2013 confirmed


The company expects revenue to grow to more than $14.6 billion in 2013, translating into a growth rate of more than 6%.


Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to be between $1.1 billion and $1.15 billion in 2013, likely at the low end of the range.


For 2013, the company expects to spend around $700 million on capital expenditures and around $500 million on acquisitions. The debt/EBITDA ratio is expected to be equal or below 3.0 by the end of 2013.


Conference Call
 

Fresenius Medical Care will hold a conference call to discuss the results of the third quarter and first nine months of 2013 on Tuesday, November 5, 2013, at 3.30 p.m. CET / 9.30 a.m. EST. The company invites investors to follow the live webcast of the call at the company's website www.fmc-ag.com in the "Investor Relations" section. A replay will be available shortly after the call.

Q1-3/2013:

• Sales: €15.0 billion (+9% in constant currency, +7% at actual rates)
• EBIT*: €2.2 billion (+1% in constant currency, -1% at actual rates)
• Net income: €753 million (+12% in constant currency, +10% at actual rates)

Ulf Mark Schneider, CEO of Fresenius, said: "Fresenius had yet another outstanding quarter, posting the highest quarterly earnings in the company's history. We also made significant progress regarding the Group's strategic posture. Our landmark acquisition of 43 hospitals from Rhön-Klinikum AG will enable us to build a hospital network across Germany offering innovative approaches to health care."

*2013 excluding one-time integration costs of Fenwal Holdings, Inc. ("Fenwal"). 2012 before one-time items.
**Net income attributable to shareholders of Fresenius SE & Co. KGaA. 2013 excluding one-time integration costs of Fenwal. 2012 before one-time items.

Group outlook 2013 fully confirmed
Based on the Group's strong financial results in the first three quarters, Fresenius fully confirms its guidance for 2013. Sales are expected to increase by 7% to 10% and net income* is expected to increase by 11% to 14% (both in constant currency).

The Group plans to invest around 5% of sales in property, plant and equipment.

On September 13, 2013, Fresenius announced the acquisition of 43 hospitals from Rhön-Klinikum AG. The vast majority of the transaction is expected to close by the end of this year. The purchase price of €3.07 billion will be entirely debt-financed. The pro forma Group net debt/EBITDA is expected to temporarily exceed 3.0 in 2013 but remain below 3.5, before returning to the upper end of the 2.5 to 3.0 target range in 2014.

 

*Net income attributable to shareholders of Fresenius SE & Co. KGaA.2013 excluding one-time integration costs of Fenwal (~€50 million pre tax). 2012 before one-time items.   

 

Sales growth of 9% in constant currency
Group sales increased by 7% (9% in constant currency) to €15,032 million (Q1-3 2012: €14,100 million). Organic sales growth was 5%. Acquisitions contributed 5%. Divestitures reduced sales growth by 1%. Sales of the business segments developed as follows:

 

Group sales by region developed as follows:

 

 

Organic sales growth was 5% in North America and 2% in Europe. In Latin America (13%) and Africa (27%) organic sales growth was particularly strong. In Asia-Pacific organic sales growth was 6%.

Net income growth of 12% in constant currency
Group EBITDA* grew by 1% (4% in constant currency) to € 2,824 million (Q1-3 2012: €2,786 million). Group EBIT* decreased by 1% to €2,202 million (Q1-3 2012: €2,224 million). In constant currency EBIT increased by 1%. The EBIT margin of 14.6% (Q1-3 2012: 15.8%) was impacted by a margin reduction at Fresenius Medical Care as well as the first-time consolidation of Fenwal. The Q3/2013 Group EBIT margin of 14.9% showed an improvement over H1/2013 (14.5%).

Group net interest decreased to -€449 million (Q1-3 2012:-€480 million), although this figure includes €14 million one-time costs resulting from the early redemption of the Senior Notes originally due in 2016.

The Group tax rate* improved to 28.3% (Q1-3 2012: 30.1%).

Noncontrolling interest was €504 million (Q1-3 2012: €537 million), of which 95% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income** increased by 10% (12% in constant currency) to €753 million (Q1-3 2012: €682 million). Earnings per share** increased by 6% to €4.22 (Q1-3 2012: €3.98). The weighted average number of shares outstanding in Q1-3 2013 was 178,455,438 (Q1-3 2012: 171,263,663).

Group net income attributable to shareholders of Fresenius SE & Co. KGaA including one-time integration costs for Fenwal was €727 million or €4.07 per share.

 

 

 

 

 

 

 

*2013 excluding one-time integration costs of Fenwal. 2012 before one-time items.
**Net income attributable to shareholders of Fresenius SE & Co. KGaA. 2013 excluding one-time integration costs of Fenwal. 2012 before one-time items.

 

 

 

 

 

 

 

 

Continued investment in growth
The Fresenius Group spent €676 million on property, plant and equipment (Q1-3 2012: €611 million). Acquisition spending was €442 million (Q1-3 2012: €2,192 million).

Operating cash flow margin of 10.4%
Operating cash flow was €1,566 million (Q1-3 2012: €1,807 million). The decrease relates primarily to a one-time payment by Fresenius Medical Care regarding the amendment of the supply agreement for the iron product Venofer in North America. In Q1-3 2012, the operating cash flow was positively influenced by extraordinary payments on trade accounts receivable. The cash flow margin reached 10.4% (Q1-3 2012: 12.8%). Net capital expenditure increased to €659 million (Q1-3 2012: €564 million). Free cash flow before acquisitions and dividends was €907 million (Q1-3 2012: €1,243 million). Free cash flow after acquisitions and dividends increased to €151 million (Q1-3 2012: -€823 million).

Solid balance sheet structure
The Group's total assets were €30,678 million (Dec. 31, 2012: €30,664 million), a constant currency increase of 2%. Current assets grew by 1% (4% in constant currency) to €8,188 million (Dec. 31, 2012: €8,113 million). Non-current assets were €22,490 million (Dec. 31, 2012: €22,551 million), a constant currency increase of 2%.

Total shareholders' equity increased by 1% (4% in constant currency) to €12,903 million (Dec. 31, 2012: €12,758 million). The equity ratio was 42.1% (Dec. 31, 2012: 41.6%).

Group debt was €11,079 million (Dec. 31, 2012: €11,028 million). Net debt was €10,206 million (Dec. 31, 2012: €10,143 million). As of September 30, 2013, the net debt/EBITDA ratio was 2.62 (Dec. 31, 2012: 2.56 ).

 

 

 

 

 

 

 

*Pro forma including Fenwal; before one-time costs (non-financing expenses) related to the takeover offer to Rhön-Klinikum AG shareholders, one-time costs at Fresenius Medical Care and one-time integration costs of Fenwal.
**Pro forma including Damp Group, Liberty Dialysis Holdings, Inc. and Fenwal; before one-time costs (non-financing expenses) related to the takeover offer to Rhön-Klinikum AG shareholders, and one-time costs at Fresenius Medical Care.

 

 

 

 

 

 

 

 

Increased number of employees
As of September 30, 2013, the number of employees increased by 3% to 175,249 (Dec. 31, 2012: 169,324).


Business Segments

Fresenius Medical Care
Fresenius Medical Care is the world's leading provider of services and products for patients with chronic kidney failure. As of September 30, 2013, Fresenius Medical Care was treating 265,824 patients in 3,225 dialysis clinics.

 

 

 

 

• Strong organic sales growth of 5%
• Excellent operating cash flow margin of 13.5%
• 2013 guidance confirmed

 

 

 

 

 

 

 

Sales increased by 6% (7% in constant currency) to US$10,743 million (Q1-3 2012: US$10,095 million). Organic sales growth was 5%. Acquisitions contributed 3%, while divestitures reduced sales growth by 1%.

Sales in dialysis services increased by 7% (8% in constant currency) to US$8,235 million (Q1-3 2012: US$7,688 million). Dialysis product sales grew by 4% (4% in constant currency) to US$2,508 million (Q1-3 2012: US$2,407 million).

In North America, sales grew 8% to US$7,099 million (Q1-3 2012: US$6,602 million). Dialysis services sales grew by 8% to US$6,485 million (Q1-3 2012: US$6,007 million). Dialysis product sales increased by 3% to US$614 million (Q1-3 2012: US$595 million).

Sales outside North America ("International" segment) grew by 4% (5% in constant currency) to US$3,619 million (Q1-3 2012: US$3,470 million). Sales in dialysis services increased by 4% to US$ 1,750 million (Q1-3 2012: US$1,680 million). Dialysis product sales grew by 4% to US$1,869 million (Q1-3 2012: US$1,790 million).

EBIT decreased by 4% to US$1,595 million (Q1-3 2012: US$1,659 million).

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA decreased by 4% to US$761 million (Q1-3 2012*: US$790 million). Net income for Q3 2013 was US$273 million, an increase of 1% compared to Q3 2012.

The operating cash flow of US$1,446 million was below previous year's US$1,467 million. The decrease relates to a one-time payment regarding the amendment of the supply agreement for the iron product Venofer in North America (US$100 million). The cash flow margin was 13.5% (Q1-3 2012: 14.5%).

Fresenius Medical Care expects revenue to grow to more than US$14.6 billion in 2013. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to be between US$1.1 billion and US$1.15 billion in 2013, likely at the low end of that range.

For further information, please see Fresenius Medical Care's Press Release at www.fmc-ag.com.

 

 

 

 

 

 

 

*Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA; 2012 adjusted for a non-taxable investment gain of US$140 million.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fresenius Kabi
Fresenius Kabi offers infusion therapies, intravenously administered generic drugs and clinical nutrition 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

• 5% organic sales growth, at the upper end of guidance
• 7% organic sales growth in North America in the first nine months
• 2013 guidance fully confirmed

 

 

 

 

 

 

 

Sales increased by 11% (14% in constant currency) to € 3,742 million (Q1-3 2012: €3,363 million). Organic sales growth was 5%. Acquisitions contributed 10% sales growth, while divestitures reduced sales growth by 1%. Currency translation had a negative effect of 3% in Q1-3 2013 and of 6% in Q3 2013.

Sales in Europe grew by 5% (organic growth: 2%) to € 1,524 million (Q1-3 2012: €1,449 million). Sales in North America increased by 27% to €1,158 million (Q1-3 2012: €910 million), primarily driven by the consolidation of Fenwal. Organic sales growth was 7%.

In Asia-Pacific sales increased by 7% (organic growth: 6%) to €689 million (Q1-3 2012: €642 million). Sales in Latin America/Africa increased by 2% (organic growth: 8%) to €371 million (Q1-3 2012: €362 million). Growth in Q1-3 2013 comes over a strong
Q1-3/2012 base, posting 10% organic sales growth in North America, 6% in Europe, 15% in Asia-Pacific and 14% in Latin America/Africa.

EBIT* was €695 million (Q1-3 2012: €700 million), an increase of 1% in constant currency. EBIT includes one-time charges of €32 million to remediate manufacturing issues following FDA audits at the Grand Island, USA, and Kalyani, India, facilities. The EBIT margin was 18.6%. Excluding Fenwal, the EBIT margin was 19.6 % (Q1-3 2012: 20.8%). Margin development is fully in line with guidance.

Net income*^,** increased by 11% to €367 million (Q1-3 2012: €330 million).

Fresenius Kabi's operating cash flow was €303 million (Q1-3 2012: €452 million). Last year's operating cash flow was positively influenced by extraordinary payments on trade accounts receivable. The cash flow margin was 8.1% (Q1-3 2012: 13.4%). Cash flow before acquisitions and dividends was €114 million (Q1-3 2012: €322 million).

The integration of Fenwal progressed as planned with related Q1-Q3 2013 one-time costs of €34 million pre-tax. These costs are reported in the Group Corporate/Other segment.

On October 1, 2013, Fresenius Kabi has started a joint venture with the leading Indonesian pharmaceutical company PT Soho Global Health. The joint venture operates a production plant in Jakarta and primarily manufactures I.V. generic drugs and infusion solutions. In 2012, the joint venture generated sales of more than €40 million (pro forma). Via the joint venture Fresenius Kabi becomes market leader in I.V. generics in Indonesia.

Fresenius Kabi fully confirms its outlook for 2013 and projects sales growth of 12% to 14% in constant currency. Organic sales growth is expected in the range of 3% to 5%.

The company projects an EBIT margin of 19% to 20%* excluding the Fenwal operations and of 18% to 19%* including the Fenwal operations. EBIT in constant currency is expected to exceed 2012 EBIT. The guidance includes one-time charges to remediate manufacturing issues following FDA audits at the Grand Island, USA, and Kalyani, India, facilities. It also includes a gain related to the sale of the respiratory homecare business in France.

 

 

 

 

 

 

 

*Excluding Fenwal integration costs.
**Net income attributable to shareholders of Fresenius Kabi AG.
Fresenius Kabi guidance excludes Fenwal integration costs (~€50 million pre tax); also see Group guidance.

 

 

 

 

 

 

 

 
Fresenius Helios
Fresenius Helios is one of the largest private hospital operators in Germany. HELIOS owns 74 hospitals, thereof 51 acute care clinics including six maximum care hospitals in Berlin-Buch, Duisburg, Erfurt, Krefeld, Schwerin and Wuppertal and 23 post-acute care clinics. HELIOS treats more than 2.9 million patients per year, thereof more than 780,000 inpatients, and operates more than 23,000 beds.

 

 

 

 

 

 

 

 

 

 

 

 

 

• Acquisition of 43 hospitals from Rhön-Klinikum AG announced
• 11.1% EBIT margin, up 120 basis points
• 2013 EBIT now expected in upper half of guidance range

 

 

 

 

 

 

 

Sales increased by 8% to €2,537 million (Q1-3 2012: €2,347 million). Organic sales growth was 4%, acquisitions contributed 5%. Divestitures reduced sales growth by 1%.

EBIT grew by 22% to €282 million (Q1-3 2012: €232 million). The EBIT margin increased to 11.1% (Q1-3 2012: 9.9%).

Net income* increased by 31% to €194 million (Q1-3 2012: €148 million).

Sales of the established hospitals grew by 4% to €2,424 million. EBIT improved by 19% to €279 million. The EBIT margin increased to 11.5% (Q1-3 2012: 10.0%). Sales of the acquired hospitals (consolidation <1 year) were €113 million, EBIT was €3 million.

On September 13, 2013, Fresenius announced the acquisition of 43 hospitals and 15 outpatient facilities from Rhön-Klinikum AG. On the basis of 2013 pro forma financials, the acquisition is expected to add sales of approximately €2 billion and an EBITDA of approximately €250 million. The purchase price of €3.07 billion will be entirely debt-financed. Fresenius expects one-time integration costs of approximately €80 million before tax. Substantial cost synergies totaling approximately €85 million p.a. before tax are expected from 2015 onwards. The acquisition is subject to antitrust approval as well as certain approvals of former municipal owners or current minority shareholders. The vast majority of the transaction is expected to close by the end of this year.

Fresenius Helios fully confirms its outlook for 2013. The company projects organic sales growth of 3% to 5%. EBIT is now expected in the upper half of the €370 to €395 million guidance range.

 

 

 

 

 

 

 

*Net income attributable to shareholders of HELIOS Kliniken GmbH.

 

 

 

 

 

 

 

 
Fresenius Vamed

 

 

 

 

 

 

 

Fresenius Vamed offers engineering and services for hospitals and other health care facilities.

 

 

 

 

 

 

 

 

 

 

 

 

 

• 18% order intake increase to €380 million
• 13% organic sales growth
• 2013 sales growth now expected at upper end of guidance range

 

 

 

 

 

 

 

Sales increased by 22% to €654 million (Q1-3 2012: €536 million). Organic sales growth was 13%, acquisitions contributed 9%. Sales in the project business increased by 16% to €332 million (Q1-3 2012: €285 million). Sales in the service business grew by 28% to €322 million (Q1-3 2012: €251 million).

EBIT grew by 4% to €25 million (Q1-3 2012: €24 million). The EBIT margin reached 3.8% (Q1-3 2012: 4.5%).

Net income* was at previous year's level of €16 million.

Order intake increased by 18% to €380 million (Q1-3 2012: €322 million). As of September 30, 2013, the company's order backlog was €1,034 million (Dec. 31, 2012: €987 million).

Fresenius Vamed now expects to achieve sales growth at the upper end of the 8% to 12% guidance range. EBIT growth expectations remain in the range of 5% to 10%.

*Net income attributable to shareholders of Vamed AG.

 

 

 

 

 

 

 

Analyst-/Investor Conference Call
As part of the publication of the results for the first three quarters of 2013, a conference call will be held on November 5, 2013 at 2 p.m. CET (8 a.m. EST). All investors are cordially invited to follow the conference call in a live broadcast via the Internet at www.fresenius.com, see Investor Relations, Presentations. Following the call, a replay of the conference call will be available on our website.

 

 

 

Fresenius Helios will join Rhön-Klinikum AG in defending against the lawsuit filed by B. Braun Melsungen AG on November 21, 2013, which seeks to void the agreement between Fresenius Helios and Rhön-Klinikum on the sale of 43 hospitals and 15 outpatient facilities.

The lawsuit is without merit: the Management and Supervisory Boards of Rhön-Klinikum were in full compliance with all relevant laws when they entered into the purchase agreement. Approval of the sale by a general meeting of shareholders is not required. Separate legal opinions, which were obtained independently by Rhön-Klinikum and Fresenius before the contract was signed, confirmed this unanimously.

Ulf Mark Schneider, CEO of Fresenius, said: "We believe the lawsuit has no merit, and we will fully support Rhön-Klinikum in defending against it. We still want to resolve this matter amicably. But for that to happen, all the parties concerned must be ready to accept a reasonable solution."

The lawsuit by B. Braun has no suspensive effect on the transaction, which will be completed as soon as approval is received from Germany's Federal Cartel Office.

Fresenius, Asklepios and B. Braun have settled their dispute over Fresenius Helios' purchase of 43 hospitals and 15 outpatient facilities from Rhön-Klinikum AG. At the same time, they have reached agreement on their future relationships.

B. Braun and Asklepios agree to maintain neutrality toward the sale and to refrain from taking any action against it. The lawsuit opposing the transaction will be withdrawn by B. Braun.

Fresenius Helios is entering into a non-exclusive long-term supply agreement with B. Braun. Fresenius Kabi will not be given preference as a supplier.

Asklepios will join Fresenius Helios and Rhön-Klinikum as a founding partner in the planned hospital network, with Fresenius Helios making a one-time, €5 million payment to Asklepios to support its entry into the network. Completion of the network agreement is subject to antitrust approval.

B. Braun has increased its stake in Rhön-Klinikum AG to 15.08 percent. Asklepios and Fresenius will retain their individual stakes of approximately 5 percent each in Rhön-Klinikum AG.

Ulf Mark Schneider, CEO of Fresenius; Dr. Bernard gr. Broermann, founder and sole shareholder of Asklepios, and Prof. Dr. Ludwig-Georg Braun, Chairman of the Supervisory Board of B. Braun, said in a joint statement: "For many years now, our companies have contributed significantly to the provision of high-quality and efficient health care in Germany. Our differences over the last two years have overshadowed these important contributions in the eyes of the public, which gives us even more reason to welcome today's agreement. It underlines our interest in maintaining open competition in the German healthcare product and services markets and enables each company to achieve its own goals while strengthening the public's confidence in high-quality, private health care. We will compete on the basis of mutual respect, always putting the patient at the center of everything we do."

Fresenius Helios and Rhön-Klinikum AG are well under way to finalizing the purchase of 43 hospitals and 15 outpatient facilities. Fresenius Helios expects to receive antitrust approval and to close the major part of the transaction in the first quarter of 2014. The parties have adjusted the contract accordingly.

Fresenius still expects the acquisition to be accretive to earnings per share in the first twelve months after closing, excluding one-time costs*. The acquisition is expected to be clearly accretive from the second year onwards including one-time costs.

*The one-time costs are approximately €80 million before tax.