Contact

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

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Text as PDF document (PDF, 130 KB)

Fresenius has proven the resilience of its business model in a challenging environment in FY/20. Based on preliminary and unaudited results, Fresenius achieved its sales and net income¹ guidance including COVID-19 effects. Fresenius expected sales growth² of 3% to 6% and a net income^1,3 development at the lower end of a range of -4% to +1%, both in constant currency.

Excluding estimated COVID-19 effects, the Group performed very well against its original guidance ranges of 4% to 7% sales growth and 1% to 5% net income^1,3 growth, both in constant currency.

The previously flagged risk of an impairment of goodwill and tradenames at Fresenius Medical Care Latin America, as a consequence of the macro-economic downturn and increasing risk adjustment rates for certain countries in Latin America, has materialized and impacts reported FY/20 Group net income¹.

Fresenius firmly intends to extend its track record of 27 consecutive dividend increases.

¹Net income attributable to shareholders of Fresenius SE & Co. KGaA
²FY/19 base: €35,409 million
³FY/19 base: €1,879 million; before special items (transaction-related expenses, revaluations of biosimilars contingent purchase price liabilities, gain related to divestitures of Care Coordination activities at FMC, expenses associated with the cost optimization program at FMC); FY/20: before special items

Current expectations for FY/21
Based on the current status of the Group’s financial planning process and assuming that the current burdens and constraints caused by the COVID-19 pandemic only begin to recede in the second half of the year, Fresenius targets healthy sales growth¹ and at least broadly stable net income² year over year in FY/21.

The FY/21 earnings are, hence, expected to be very meaningfully impacted by COVID-19 effects. In particular, the significant acceleration of mortality among dialysis patients due to COVID-19 is expected to have a material impact on Fresenius Medical Care’s results and hence on Fresenius Group’s net income² growth.

¹In constant currency
²Net income attributable to shareholders of Fresenius SE & Co. KGaA; in constant currency; before any special items and any one-time expenses related to likely efficiency and cost saving programs

Fresenius continues to monitor and analyse the COVID-19 pandemic and associated implications, including the availability of government support, as well as pace, adoption and effectiveness of vaccinations, and will comment further as part of its FY/20 earnings call.

Stephan Sturm, CEO of Fresenius, said: “In 2020, we coped well with the burdens and restrictions caused by the pandemic. For 2021, I am confident that our Company will continue to perform solidly - despite the COVID-related impact on earnings anticipated at Fresenius Medical Care. Our underlying growth prospects remain robust. Fresenius continues to make a significant contribution to overcoming this global health crisis as swiftly as possible. Since the beginning of the pandemic, we have made an enormous effort to ensure that our patients continue to receive excellent medical care and that they – as well as our employees – are protected from infection. For this to succeed, close cooperation between all partners in the healthcare sector is needed more than ever, backed by political support. For instance, the conditions must be created to vaccinate the particularly vulnerable group of dialysis patients with high priority. We must not forget: Behind the numbers are people’s fates. Every single patient, every life counts.”

Efficiency and cost saving programs
To counter the current challenging business environment, Fresenius will launch additional initiatives across the Group to further improve profitability. More details will be announced with the publication of FY/20 results.

Group medium-term targets
The current information and assumptions do not trigger a revision of Fresenius’ medium-term growth targets, which were set before the COVID-19 pandemic emerged. As usual, the company will give an update on its medium-term expectations with the publication of its FY/20 results.    

Next steps
Fresenius will announce more detailed FY/21 financial guidance with the release of its FY/20 results on February 23, 2021.

Contact

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

Documents

Text as PDF document (PDF, 93 KB)

• Based on preliminary numbers financial targets for 2020 achieved with net income slightly above the top end of the target range
• Reported earnings in Q4 impacted by macro-economic driven impairment in the Latin America segment
• Accelerated COVID-19 related excess mortality of dialysis patients and continued related higher direct costs negatively affects 2021 business development
• Relevant further developments, including effects of adoption and speed of the roll out of vaccinations and availability of government support, are closely monitored and analyzed
• Cost-base adjustments and restructuring initiatives under evaluation
• Mid-term targets confirmed as defined in October 2020

Throughout 2020, Fresenius Medical Care, the world’s leading provider of products and services for individuals with renal diseases, reported COVID-19 affecting patients with advanced kidney disease and, in particular, the severity of illness resulting in an increased mortality. The excess mortality trend significantly accelerated in the U.S. and in EMEA in particular in November and December 2020 and accumulated to approximately 10,000 patients in 2020 over the pre-pandemic baseline.

In order to protect patients during the COVID-19 pandemic and maintain safe operations in the Company’s more than 4,000 dialysis centers and 45 manufacturing sites, comprehensive measures had been taken. These measures included the provision of personal protective equipment for employees and patients as well as higher compensation for employees working in the isolation clinics. These measures have resulted in significantly increased costs in the Dialysis Services business, which in 2020 was largely compensated by governmental support, in particular in the U.S., accelerated efficiency measures and a strong products business development.

Despite those negative impacts of the COVID-19 pandemic, Fresenius Medical Care has achieved - based on the preliminary and unaudited financials - its revenue target and slightly exceeded its net income¹ targets for 2020².  

The previously flagged impairment of goodwill and tradenames in the Latin America segment has materialized with an impact of approximately EUR 195 million as a consequence of the macro-economic downturn and increasing risk adjustment rates for certain countries in Latin America and will be treated as a special item.

The accelerating effects of excess mortality due to the COVID-19 pandemic are continuing into 2021 and are expected to have a significant adverse annualization effect on treatment volumes. This also negatively impacts the operating leverage on clinic utilization and downstream effects on complementary assets.

Against this backdrop, Fresenius Medical Care anticipates, based on the currently available information and status of analysis, revenue growth of up to mid-single digits and assumes net income¹ before potential restructuring measures to decline by up to 25 percent.³

This current estimate is based on the following high-level assumptions:

• Excess mortality to continue to accumulate for the first half of 2021 depending on the adoption and speed of the roll out of vaccinations to our worldwide patient population
• COVID-19-related additional costs, such as for personal protective equipment or increased personnel costs in the Dialysis Services business, to remain on high level
• Besides the extended suspension of the U.S. Medicare sequestration (until end of March 2021), no further public relief funding assumed for dialysis providers

Fresenius Medical Care continues to monitor closely the development of mortality, including the adoption and speed of roll out of vaccinations to its patient population, as well as potential availability of government relief. Additionally, potential cost efficiency and restructuring measures to further adjust the cost base are under close evaluation.

The final results for the financial year 2020 and the targets for 2021 will be published, as scheduled, on February 23, 2021.

Fresenius Medical Care’s mid-term targets until 2025 as defined in October 2020, remain unchanged.

Conference call
Fresenius Medical Care will host a public presentation on the early indication for 2021 on February 3, 2021 at 2:00 p.m. CET / 8.00 a.m. ET. Please find the registration link here. The quiet period will end with the publication of the results of the fourth quarter and full year 2020 on February 23, 2021.

¹Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA.
²2020 targets are inclusive of anticipated COVID-19 effects, in constant currency and exclude special items. Special items are effects that are unusual in nature and have not been foreseeable or not foreseeable in size or impact at the time of giving guidance. Special item in 2020: impairment in Latin America segment.
³These early indications for 2021 are inclusive of anticipated COVID-19 effects, in constant currency and exclude special items such as restructuring costs. They are based on the preliminary and unaudited operational 2020 results excluding special items.

Fresenius has proven the resilience of its business model in a challenging environment in FY/20. Based on preliminary and unaudited results, Fresenius achieved its sales and net income¹ guidance including COVID-19 effects. Fresenius expected sales growth² of 3% to 6% and a net income^1,3 development at the lower end of a range of -4% to +1%, both in constant currency.
Excluding estimated COVID-19 effects, the Group performed very well against its original guidance ranges of 4% to 7% sales growth and 1% to 5% net income^1,3 growth, both in constant currency.

The previously flagged risk of an impairment of goodwill and tradenames at Fresenius Medical Care Latin America, as a consequence of the macro-economic downturn and increasing risk adjustment rates for certain countries in Latin America, has materialized and impacts reported FY/20 Group net income¹.

Fresenius firmly intends to extend its track record of 27 consecutive dividend increases.

¹  Net income attributable to shareholders of Fresenius SE & Co. KGaA
²  FY/19 base: €35,409 million
³  FY/19 base: €1,879 million; before special items (transaction-related expenses, revaluations of biosimilars contingent purchase price liabilities, gain related to divestitures of Care Coordination activities at FMC, expenses associated with the cost optimization program at FMC); FY/20: before special items

Current expectations for FY/21
Based on the current status of the Group’s financial planning process and assuming that the current burdens and constraints caused by the COVID-19 pandemic only begin to recede in the second half of the year, Fresenius targets healthy sales growth¹ and at least broadly stable net income² year over year in FY/21.

The FY/21 earnings are, hence, expected to be very meaningfully impacted by COVID-19 effects. In particular, the significant acceleration of mortality among dialysis patients due to COVID-19 is expected to have a material impact on Fresenius Medical Care’s results and hence on Fresenius Group’s net income² growth.

Fresenius continues to monitor and analyse the COVID-19 pandemic and associated implications, including the availability of government support, as well as pace, adoption and effectiveness of vaccinations, and will comment further as part of its FY/20 earnings call.

Stephan Sturm, CEO of Fresenius, said: “In 2020, we coped well with the burdens and restrictions caused by the pandemic. For 2021, I am confident that our Company will continue to perform solidly - despite the COVID-related impact on earnings anticipated at Fresenius Medical Care. Our underlying growth prospects remain robust. Fresenius continues to make a significant contribution to overcoming this global health crisis as swiftly as possible. Since the beginning of the pandemic, we have made an enormous effort to ensure that our patients continue to receive excellent medical care and that they – as well as our employees – are protected from infection. For this to succeed, close cooperation between all partners in the healthcare sector is needed more than ever, backed by political support. For instance, the conditions must be created to vaccinate the particularly vulnerable group of dialysis patients with high priority. We must not forget: Behind the numbers are people’s fates. Every single patient, every life counts.”

¹ In constant currency
² Net income attributable to shareholders of Fresenius SE & Co. KGaA; in constant currency; before any special items and any one-time expenses related to likely efficiency and cost saving programs

Efficiency and cost saving programs
To counter the current challenging business environment, Fresenius will launch additional initiatives across the Group to further improve profitability. More details will be announced with the publication of FY/20 results.

Group medium-term targets
The current information and assumptions do not trigger a revision of Fresenius’ medium-term growth targets, which were set before the COVID-19 pandemic emerged. As usual, the company will give an update on its medium-term expectations with the publication of its FY/20 results.    

Next steps
Fresenius will announce more detailed FY/21 financial guidance with the release of its FY/20 results on February 23, 2021.

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