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Services
1 Adjusted for IFRS 16 effect
2 Q3/18 and Q1-3/18 before special items and adjusted for divestitures of Care Coordination activities at Fresenius Medical Care (FMC)
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
Stephan Sturm, CEO of Fresenius, said: “Our businesses developed solidly in the third quarter, keeping Fresenius on track to deliver the results that we promised earlier this year. We posted strong organic growth across all four business segments. Our investments in future growth are proceeding as planned; whilst they will weigh on earnings this year, they are exactly what is needed to ensure that our company remains efficient and successful. These investments reflect our commitment to provide a growing number of people with highquality, affordable healthcare – tomorrow and beyond.”
Group guidance for 2019 confirmed
Based on the Group’s solid Q1-3/19 results and good prospects for the remainder of the year, Fresenius confirms its 2019 Group sales and earnings guidance. Fresenius projects sales growth1 of 4% to 7% in constant currency. Net income2,3 growth is expected to be ~0% in constant currency. The guidance for 2019 includes the sales and dilutive earnings contributions of the NxStage acquisition.
Fresenius expects net debt/EBITDA4 at year-end to be around the upper-end of the original self-imposed target corridor of 2.5x to 3.0x. This includes the NxStage acquisition which is increasing the net debt/EBITDA ratio in 2019 by ~30 basis points and excludes IFRS 16 effects.
Due to the adoption of the IFRS 16 accounting standard (“IFRS 16 effect”), Fresenius’ self-imposed target corridor has shifted to 3.0x to 3.5x net debt/EBITDA on a reported basis.
1 On a comparable basis: FY/18 base: €33,009 million; FY/18 adjusted for divestitures of Care Coordination activities at FMC; FY/19: adjusted for IFRS 16 effect
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA
3 On a comparable basis: FY/18 base: €1,872 million; FY/18 before special items and adjusted for divestitures of Care Coordination activities at FMC; FY/19: before special items (transaction-related expenses, revaluations of biosimilars contingent liabilities, gain related to divestitures of Care Coordination activities at FMC, expenses associated with the cost optimization program at FMC), adjusted for IFRS 16 effect
4 Both net debt and EBITDA calculated at expected annual average exchange rates; excluding further potential acquisitions
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
Increased number of employees
As of September 30, 2019, the number of employees was 292,635 (Dec. 31, 2018: 276,750).
6% sales growth1 in constant currency
Group sales were €8,842 million including an IFRS 16 effect of -€35 million. Group sales1 on a comparable basis increased by 8% (6% in constant currency) to €8,877 million (Q3/18: €8,185 million). Organic sales growth was 5%. Acquisitions/divestitures contributed net 1% to growth.
In Q1-3/19, Group sales were €26,098 million including an IFRS 16 effect of -€75 million. Group sales1 on a comparable basis increased by 8% (6% in constant currency) to €26,173 million (Q1-3/18: €24,179 million). Organic sales growth was 5%. Acquisitions/divestitures contributed net 1% to growth. Positive currency translation effects of 2% were mainly driven by the U.S. dollar strengthening against the euro.
Net income2,3 growth in constant currency
Group EBITDA before special items was €1,763 million including an IFRS 16 effect of €237 million. Group EBITDA2 on a comparable basis increased by 4% (2% in constant currency) to €1,526 million (Q3/18: €1,463 million).
In Q1-3/19, Group EBITDA before special items was €5,167 million including an IFRS 16 effect of €699 million. Group EBITDA2 on a comparable basis increased by 3% (0% in constant currency) to €4,468 million (Q1-3/18: €4,352 million).
Group EBIT before special items was €1,153 million including an IFRS 16 effect of €23 million. Group EBIT2 on a comparable basis increased by 2% (-1% in constant currency) to €1,130 million (Q3/18: €1,112 million). The EBIT margin2 on a comparable basis was 12.7% (Q3/18: 13.6%). Reported Group EBIT4 was €1,129 million. Group EBIT was impacted by a negative effect from adjustments on accounts receivable in legal dispute of €84 million5 at Fresenius Medical Care, the reduction in patient attribution and a decreasing savings rate for ESCOs, based on recent reports under discussion for current and prior plan years as well as a softer development in North America at Fresenius Kabi. Moreover, investments to counter the regulatory headwinds at Helios Germany continued to weigh on the Group’s EBIT. These effects were partially offset by the remeasurement effect on the fair value of an investment in Humacyte, Inc. at Fresenius Medical Care.
1 On a comparable basis: Q3/18 and Q1-3/18 adjusted for divestitures of Care Coordination activities at FMC;
Q3/19 and Q1-3/19 adjusted for IFRS 16 effect
2 On a comparable basis: Q3/19 and Q1-3/19 before special items and adjusted for IFRS 16 effect;
Q3/18 and Q1-3/18 before special items and adjusted for divestitures of Care Coordination activities at FMC
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
4 After special items and including IFRS 16 effect
5 Please see footnote 5 on page 7 in the FMC section
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
In Q1-3/19, Group EBIT before special items was €3,401 million including an IFRS 16 effect of €79 million. Group EBIT1 on a comparable basis increased by 1% (-2% in constant currency) to €3,322 million (Q1-3/18: €3,297 million). The EBIT margin1 on a comparable basis was 12.7% (Q1-3/18: 13.6%). Reported Group EBIT2 was €3,362 million.
Group net interest before special items was -€171 million including an IFRS 16 effect of -€47 million. On a comparable basis, net interest improved to -€124 million (Q3/18: -€141 million) mainly due to successful refinancing activities and lower interest rates. Reported Group net interest2 was -€172 million.
In Q1-3/19, Group net interest before special items was -€532 million including an IFRS 16 effect of -€153 million. On a comparable basis, net interest1 improved to -€379 million
(Q1-3/18: -€420 million). Reported Group net interest2 was -€535 million.
The Group tax rate before special items and adopting IFRS 16 was 23.1% in both Q3/19 and Q1-3/19. Group tax rate1 on a comparable basis was also 23.1% in both Q3/19 and Q1-3/19 (Q3/18: 21.3%; Q1-3/18: 21.9%).
Noncontrolling interest before special items was €310 million including an IFRS 16 effect of €11 million. Noncontrolling interest1 on a comparable basis was €321 million (Q3/18:
€320 million).
In Q1-3/19, noncontrolling interest before special items was €834 million including an IFRS 16 effect of €31 million. Noncontrolling interest1 on a comparable basis was €865 million (Q1-3/18: €880 million), of which 93% was attributable to the noncontrolling interest in Fresenius Medical Care.
Group net income3 before special items was €445 million including an IFRS 16 effect of -€8 million. Group net income1,3 on a comparable basis increased by 2% (0% in constant currency) to €453 million (Q3/18: €444 million). Reported Group net income2,3 was €444 million.
1 On a comparable basis: Q3/19 and Q1-3/19 before special items and adjusted for IFRS 16 effect;
Q3/18 and Q1-3/18 before special items and adjusted for divestitures of Care Coordination activities at FMC
2 After special items and including IFRS 16 effect
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
Earnings per share1 before special items were €0.80 including an IFRS 16 effect of -€0.01. Earnings per share1,2 on a comparable basis increased by 1% (0% in constant currency) to €0.81 (Q3/18: €0.80). Reported Earnings per share1,3 were €0.80.
In Q1-3/19, Group net income1 before special items was €1,373 million including an IFRS 16 effect of -€25 million. Group net income1,2 on a comparable basis increased by 2% (0% in constant currency) to €1,398 million (Q1-3/18: €1,368 million). Reported Group net income1,3 was €1,368 million. In Q1-3/19, Earnings per share1 before special items were €2.47 including an IFRS 16 effect of -€0.04. Earnings per share1,2 on a comparable basis increased by 2% (0% in constant currency) to €2.51 (Q1-3/18: €2.46). Reported Earnings per share1,3 were €2.46.
Continued investment in growth
2019 is an investment year for the Fresenius Group. Fresenius is making good progress in all of its investment initiatives to secure long-term sustainable growth. Spending on property, plant and equipment was €586 million (Q3/18: €539 million). This corresponds to 7% of sales. In Q1-3/19, spending on property, plant and equipment was €1,592 million (Q1-3/18: €1,370 million), primarily for the modernization and expansion of dialysis clinics, production facilities as well as hospitals and day clinics. This corresponds to 6% of sales.
Total acquisition spending was €135 million (Q3/18: €490 million). In Q1-3/19, total acquisition spending was €2,292 million (Q1-3/18: €876 million), mainly for the acquisition of NxStage by Fresenius Medical Care.
Cash flow development
Group operating cash flow was €1,483 million including an IFRS 16 effect of €185 million. Adjusted for IFRS 16, Group operating cash flow was €1,298 million (Q3/18: €1,293 million) with a margin of 14.6% (Q3/18: 15.8%). Free cash flow before acquisitions and dividends adjusted for IFRS 16 was €722 million (Q3/18: €768 million). Free cash flow after acquisitions and dividends adjusted for IFRS 16 was €547 million (Q3/18: €230 million). The IFRS 16 effect amounts to €185 million respectively. Correspondingly, cash flow from financing activities decreased by €185 million.
1 Net income attributable to shareholders of Fresenius SE & Co. KGaA
2 On a comparable basis: Q3/19 and Q1-3/19 before special items and adjusted for IFRS 16 effect;
Q3/18 and Q1-3/18 before special items and adjusted for divestitures of Care Coordination activities at FMC
3 After special items and including IFRS 16 effect
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
In Q1-3/19, Group operating cash flow was €2,977 million including an IFRS 16 effect of €538 million. Adjusted for IFRS 16, Group operating cash flow was € 2,439 million
(Q1-3/18: €2,549 million) with a margin of 9.3% (Q1-3/18: 10.3%). With €850 million, free cash flow before acquisitions and dividends adjusted for IFRS 16 was below the previous year (Q1-3/18: €1,193 million) mainly due to increasing investments. Free cash flow after acquisitions and dividends adjusted for IFRS 16 was -€2,172 million (Q1-3/18: €1,172 million). The IFRS 16 effect amounts to €538 million, respectively. Correspondingly, cash flow from financing activities decreased by €538 million.
Solid balance sheet structure
The Group’s total assets were €66,759 million including an IFRS 16 effect of €5,667 million. Adjusted for IFRS 16, Group total assets1 increased by 8% (5% in constant currency) to €61,092 million (Dec. 31, 2018: €56,703 million). Current assets1 increased by 3% (1% in constant currency) to €15,180 million (Dec. 31, 2018: €14,790 million). Non-current assets1 increased by 10% (7% in constant currency) to €45,912 million (Dec. 31, 2018: € 41,913 million).
Total shareholders’ equity was €26,696 million including an IFRS 16 effect of -€232 million. Adjusted for IFRS 16, total shareholders’ equity increased by 8% (4% in constant currency) to €26,928 million (Dec. 31, 2018: €25,008 million). The equity ratio was 40.0%. Adjusted for IFRS 16, the equity ratio was 44.1% (Dec. 31, 2018: 44.1%).
Group debt was €27,013 million including an IFRS 16 effect of €5,899 million. Adjusted for IFRS 16, Group debt increased by 11% to €21,114 million (10% in constant currency) (Dec. 31, 2018: € 18,984 million). Group net debt was €25,414 million including an IFRS 16 effect of €5,899 million. Adjusted for IFRS 16, Group net debt increased by 20% (18% in constant currency) to € 19,515 million (Dec. 31, 2018: € 16,275 million) mainly due to the acquisition of NxStage by Fresenius Medical Care.
As of September 30, 2019, the net debt/EBITDA ratio was 3.13x1,2,3,4 (Dec. 31, 2018: 2.71x2,4). Including the IFRS 16 effect, the reported net debt/EBITDA ratio was to 3.55x2,3,4.
1 Adjusted for IFRS 16 effect
2 At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures
3 Including acquisition of NxStage
4 Before special items
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
Business Segments
Fresenius Medical Care (Figures according to Fresenius Medical Care press release)
Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of September 30, 2019, Fresenius Medical Care was treating 342,488 patients in 4,003 dialysis clinics. Along with its core business, the company provides related medical services in the field of Care Coordination.
Adjusted for the contribution from the divested Care Coordination activities, the IFRS 16 effect and the contribution from NxStage, sales of Fresenius Medical Care increased by 8% (5% at constant currency) to €4,375 million (Q3/18: €4,051 million). Organic sales growth was 5%. Positive currency translation effects of 3% were mainly related to the U.S. dollar strengthening against the euro. In Q1-3/19, sales adjusted for the contribution from the divested Care Coordination activities, the IFRS 16 effect and the contribution from NxStage increased by 9% (5% at constant currency) to €12,784 million (Q1-3/18: €11,731 million). Organic sales growth was 5%.
EBIT4 increased by 1% (-3% in constant currency) to €599 million (Q3/18: €592 million). The EBIT margin decreased to 13.7% (Q3/18: 14.6%). EBIT development was impacted by a negative effect from adjustments on accounts receivable in legal dispute of € 84 million5 paired with the reduction in patient attribution and a decreasing savings rate for ESCOs, based on recent reports under discussion for current and prior plan years. These effects were partially offset by the remeasurement effect on the fair value of an investment in Humacyte, Inc.
In Q1-3/19, EBIT4 decreased by 1% (-5% in constant currency) to €1,641 million (Q1-3/18: €1,656 million). The EBIT margin decreased to 12.8% (Q1-3/18: 14.1%).
1 On an adjusted basis: before special items (transaction-related expenses, gain related to divestitures of Care Coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effect, excluding effects from NxStage transaction
2 Q3/18 and Q1-3/18 before special items and adjusted for divestitures of Care Coordination activities
3 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
4 Q3/18 and Q1-3/18 before special items items and after adjustments
Q3/19 and Q1-3/19 before special items (transaction-related expenses, gain related to divestitures of Care Coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effect, excluding effects from NxStage transaction
5 This adjustment results from a material weakness in FMC`s internal controls over financial reporting regarding accounts receivable and revenue recognition specific to fee-for-service in legal dispute. FMC does not expect a restatement of its financial statements previously filed with the SEC. FMC is taking steps to remediate the control weakness.
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
Net income1,2 increased by 6% (2% in constant currency) to €363 million (Q3/18: €343 million). In Q1-3/19, net income1,2 increased by 2% (-3% in constant currency) to €961 million (Q1-3/18: €946 million).
Operating cash flow was €715 million3 (Q3/18: €753 million) with a margin of 16.3% (Q3/18: 18.6%). In Q1-3/19, operating cash flow was €1,3504 million (Q1-3/18: €1,364 million) with a margin of 10.6% (Q1-3/18: 11.1%).
For FY/19, Fresenius Medical Care expects adjusted sales to grow by 3% to 7%5,6 in constant currency. Adjusted net income2 is expected to develop in the range of -2% to +2%5,7 in constant currency.
For further information on the IFRS 16 reconciliation of Fresenius Medical Care, please see page 18 of the PDF document.
For further information, please see Fresenius Medical Care’s press release at www.freseniusmedicalcare.com.
1 Q3/18 and Q1-3/18 before special items and after adjustments; Q3/19 and Q1-3/19 before special items (transaction-related expenses, gain related to divestitures of care coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effect, excluding effects from NxStage transaction
2 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
3 €868 million including an IFRS 16 effect of €153 million
4 €1,796 million including an IFRS 16 effect of €446 million
5 FY/18 before special items, adjusted for divestitures of Care Coordination activities; FY/19 before special items (transaction-related expenses, gain related to divestitures of care coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effects, excluding effects from NxStage transaction
6 FY/18 base: €16,026 million
7 FY/18 base: €1,341 million
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
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. In the biosimilars business, Fresenius Kabi develops products with a focus on oncology and autoimmune diseases.
Sales of Fresenius Kabi increased by 7% (5% in constant currency) to €1,761 million (Q3/18: €1,650 million). Organic sales growth was 5%. In Q1-3/19, sales increased by 6% (5% in constant currency) to €5,153 million (Q1-3/18: €4,857 million). Organic sales growth was 4%. Positive currency translation effects of 1% were mainly related to the U.S. dollar strengthening against the euro.
Sales in North America of €619 million remained at previous year’s level (organic growth: 4%; Q3/18: €620 million). In Q1-3/19, sales in North America increased by 3% (organic growth:-3%) to €1,815 million (Q1-3/18: €1,760 million). Intensifying competition on selected molecules, a further easing of tailwinds from drug shortages as well as a shift in clinical practice towards non-opiods in the hospital-based pain management weighed on the sales development.
Sales in Europe grew by 5% (organic growth: 4%) to €564 million (Q3/18: €538 million). In Q1-3/19, sales in Europe increased by 3% (organic growth: 3%) to €1,709 million
(Q1-3/18: €1,658 million).
Sales in Asia-Pacific increased by 20% (organic growth: 18%) to €406 million (Q3/18: €337 million). In Q1-3/19, sales in Asia-Pacific increased by 16% (organic growth: 15%) to €1,121 million (Q1-3/18: €964 million).
Sales in Latin America/Africa increased by 11% (organic growth: 16%) to €172 million (Q3/18: €155 million). In Q1-3/19, sales in Latin America/Africa increased by 7% (organic growth: 16%) to €508 million (Q1-3/18: €475 million).
EBIT1 increased by 3% (1% in constant currency) to €306 million (Q3/18: €297 million) with an EBIT margin of 17.4% (Q3/18: 18.0%). In Q1-3/19, EBIT1 increased by 7% (4% in constant currency) to €917 million (Q1-3/18: €854 million) with an EBIT margin of 17.8% (Q1-3/18: 17.6%).
Net income1,2 increased by 3% (0% in constant currency) to €204 million (Q3/18: €199 million). In Q1-3/19, net income1,2 increased by 12% (8% in constant currency) to €618 million (Q1-3/18: €554 million).
Operating cash flow3 was €362 million (Q3/18: €366 million). The cash flow margin was 20.6% (Q3/18: 22.2%). In Q1-3/19, operating cash flow3 was €695 million (Q1-3/18: €820 million). The cash flow margin was 13.5% (Q1-3/18: 16.9%).
Fresenius Kabi confirms its outlook for FY/19 and expects organic sales growth4 of 3% to 6% and EBIT growth5 in constant currency of 3% to 6%.
For further information on the IFRS 16 reconciliation of Fresenius Kabi, please see page 18 of the PDF document.
1 On a comparable basis: before special items and adjusted for IFRS 16 effect
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA
3 Adjusted for IFRS 16 effect (operating cash flow after special items)
4 On a comparable basis: FY/18 base: €6,544 million; FY/19 before special items (transaction-related expenses,
revaluations of biosimilars contingent liabilities) and adjusted for IFRS 16 effect
5 On a comparable basis: FY/18 base: €1,139 million; FY/18 before special items; FY/19 before special items
(transaction-related expenses, revaluations of biosimilars contingent liabilities) and adjusted for IFRS 16 effect.
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
Fresenius Helios
Fresenius Helios is Europe's leading private hospital operator. The company comprises Helios Germany and Helios Spain (Quirónsalud). Helios Germany operates 86 hospitals, ~125 outpatient centers and treats approximately 5.3 million patients annually. Quirónsalud operates 50 hospitals, 62 outpatient centers and around 300 occupational risk prevention centers, and treats approximately 13.3 million patients annually.
Sales of Fresenius Helios increased by 7% (organic growth: 6%) to €2,230 million (Q3/18: €2,088 million). In Q1-3/19, sales increased by 2% (5% ; organic growth: 5%) to €6,890 million (Q1-3/18: €6,762 million).
Sales of Helios Germany increased by 5% (organic growth: 5%) to €1,474 million (Q3/18: €1,410 million). Organic sales growth was positively influenced by pricing effects and admissions growth. The reclassification of nursing staff funding from other income to sales contributed about 1% to growth. In Q1-3/19, sales of Helios Germany decreased by 1% (increased by 4%1; organic growth: 4%) to €4,465 million (Q1-3/18: €4,531 million).
Sales of Helios Spain increased by 12% (organic growth: 9%) to €757 million (Q3/18: €678 million). In Q1-3/19, sales of Helios Spain increased by 9% (organic growth: 7%) to €2,425 million (Q1-3/18: €2,231 million).
1 Adjusted for the post-acute care business transferred to Fresenius Vamed as of July 1, 2018
2 Adjusted for IFRS 16 effect
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
EBIT1 of Fresenius Helios decreased by 10% to €183 million (Q3/18: €204 million) with an EBIT margin of 8.2% (Q3/18: 9.8%). In Q1-3/19, EBIT1 of Fresenius Helios decreased by 7% (-5% ) to €723 million (Q1-3/18: €775 million) with an EBIT margin of 10.5% (Q1-3/18: 11.5%).
EBIT1 of Helios Germany decreased by 9% to €130 million (Q3/18: €143 million) with an EBIT margin of 8.8% (Q3/18: 10.1%). Ongoing investments to counter regulatory headwinds continued to weigh on Helios Germany’s financial performance. In Q1-3/19, EBIT1 of Helios Germany decreased by 11% (-9%2) to €433 million (Q1-3/18: €488 million) with an EBIT margin of 9.7% (Q1-3/18: 10.8%).
EBIT1 of Helios Spain decreased by 5% to €56 million (Q3/18: €59 million) with an EBIT margin of 7.4% (Q3/18: 8.7%). EBIT was impacted by costs for temporary workers in order to cope with the higher than anticipated number of admissions. In Q1-3/19, EBIT1 of Helios Spain increased by 5% to €300 million (Q1-3/18: €286 million) with an EBIT margin of 12.4% (Q1-3/18: 12.8%).
Net income1,3 decreased by 12% to €113 million (Q3/18: €128 million). In Q1-3/19, net income1,3 decreased by 9% to €472 million (Q1-3/18: €516 million).
Operating cash flow1 increased to €183 million (Q3/18: €128 million) with a margin of 8.2% (Q3/18: 6.1%). In Q1-3/19, operating cash flow1 increased to €471 million (Q1-3/18: €387 million) with a margin of 6.8% (Q1-3/18: 5.7%).
Fresenius Helios confirms its outlook for FY/19 and expects organic sales growth of 2% to 5% and negative EBIT1 growth of -5% to -2%.
For further information on the IFRS 16 reconciliation of Fresenius Helios, please see page 18 of the PDF document.
1 Adjusted for IFRS 16 effect
2 Adjusted for the post-acute care business transferred to Fresenius Vamed as of July 1, 2018
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
Fresenius Vamed
Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide and is a leading post-acute care provider in Central Europe. The portfolio ranges along the entire value chain: from project development, planning, and turnkey construction, via maintenance and technical management to total operational management.
Sales of Fresenius Vamed increased by 18% to €562 million (Q3/18: €476 million). Organic sales growth was 17%, acquisitions contributed 1% to growth.
Sales in the service business grew by 11% to €349 million (Q3/18: €315 million). Sales of the project business increased by 32% to €213 million (Q3/18: €161 million). In Q1-3/19, sales increased by 48% (28%1) to €1,469 million (Q1-3/18: €991 million). Organic sales growth was 24%, acquisitions contributed 24% to growth. Both the service and the project business showed strong growth momentum.
EBIT2 increased by 10% to €34 million (Q3/18: €31 million) with an EBIT margin of 6.0% (Q3/18: 6.5%). In Q1-3/19, EBIT2 increased by 33% (0%1) to €65 million (Q1-3/18: €49 million) with an EBIT margin of 4.4% (Q1-3/18: 4.9%).
Net income2,3 of €22 million remained at previous year’s level (Q3/18: €22 million). In Q1-3/19, net income2,3 increased by 24% to €41 million (Q1-3/18: €33 million).
Order intake increased by 114% to €240 million (Q3/18: €112 million) and in Q1-3/19 by 30% to €738 million (Q1-3/18: €567 million). As of September 30, 2019, order backlog reached an all-time high at €2,711 million (Dec. 31, 2018: €2,420 million).
Operating cash flow2 decreased to €27 million (Q3/18: €54 million) with a margin of 4.8% (Q3/18: 11.3%). In Q1-3/19, Operating cash flow2 decreased to -€38 million (Q1-3/18:
-€2 million) with a margin of -2.6% (Q1-3/18: -0.2%) given timing of payments in the project business.
Fresenius Vamed confirms its outlook for FY/19 and expects organic sales growth of ~10% and EBIT growth2 of 15% to 20%.
For further information on the IFRS 16 reconciliation of Fresenius Vamed, please see page 18 of the PDF document.
1 Adjusted for German post-acute care business acquired from Fresenius Helios as of July 1, 2018
2 Adjusted for IFRS 16 effect
3 Net income attributable to shareholders of VAMED AG
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
Conference Call
As part of the publication of the results for the third quarter / first three quarters of 2019, a conference call will be held on October 29, 2019 at 1:30 p.m. CET (8:30 a.m. EDT). You are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com/media-calendar. Following the call, a replay will be available on our website.
For additional information on the performance indicators used please refer to our website www.fresenius.com/alternative-performance-measures.
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.
1 Adjusted for IFRS 16 effect
2 Q3/18 and Q1-3/18 before special items and adjusted for divestitures of Care Coordination activities at Fresenius Medical Care (FMC)
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
Group guidance for 2019 confirmed
Based on the Group’s solid Q1-3/19 results and good prospects for the remainder of the year, Fresenius confirms its 2019 Group sales and earnings guidance. Fresenius projects sales growth1 of 4% to 7% in constant currency. Net income2,3 growth is expected to be ~0% in constant currency. The guidance for 2019 includes the sales and dilutive earnings contributions of the NxStage acquisition.
Fresenius expects net debt/EBITDA4 at year-end to be around the upper-end of the original self-imposed target corridor of 2.5x to 3.0x. This includes the NxStage acquisition which is increasing the net debt/EBITDA ratio in 2019 by ~30 basis points and excludes IFRS 16 effects.
Due to the adoption of the IFRS 16 accounting standard (“IFRS 16 effect”), Fresenius’ self-imposed target corridor has shifted to 3.0x to 3.5x net debt/EBITDA on a reported basis.
1 On a comparable basis: FY/18 base: €33,009 million; FY/18 adjusted for divestitures of Care Coordination activities at FMC; FY/19: adjusted for IFRS 16 effect
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA
3 On a comparable basis: FY/18 base: €1,872 million; FY/18 before special items and adjusted for divestitures of Care Coordination activities at FMC; FY/19: before special items (transaction-related expenses, revaluations of biosimilars contingent liabilities, gain related to divestitures of Care Coordination activities at FMC, expenses associated with the cost optimization program at FMC), adjusted for IFRS 16 effect
4 Both net debt and EBITDA calculated at expected annual average exchange rates; excluding further potential acquisitions
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
6% sales growth1 in constant currency
Group sales were €8,842 million including an IFRS 16 effect of -€35 million. Group sales1 on a comparable basis increased by 8% (6% in constant currency) to €8,877 million (Q3/18: €8,185 million). Organic sales growth was 5%. Acquisitions/divestitures contributed net 1% to growth.
In Q1-3/19, Group sales were €26,098 million including an IFRS 16 effect of -€75 million. Group sales1 on a comparable basis increased by 8% (6% in constant currency) to €26,173 million (Q1-3/18: €24,179 million). Organic sales growth was 5%. Acquisitions/divestitures contributed net 1% to growth. Positive currency translation effects of 2% were mainly driven by the U.S. dollar strengthening against the euro.
Net income2,3 growth in constant currency
Group EBITDA before special items was €1,763 million including an IFRS 16 effect of €237 million. Group EBITDA2 on a comparable basis increased by 4% (2% in constant currency) to €1,526 million (Q3/18: €1,463 million).
In Q1-3/19, Group EBITDA before special items was €5,167 million including an IFRS 16 effect of €699 million. Group EBITDA2 on a comparable basis increased by 3% (0% in constant currency) to €4,468 million (Q1-3/18: €4,352 million).
Group EBIT before special items was €1,153 million including an IFRS 16 effect of €23 million. Group EBIT2 on a comparable basis increased by 2% (-1% in constant currency) to €1,130 million (Q3/18: €1,112 million). The EBIT margin2 on a comparable basis was 12.7% (Q3/18: 13.6%). Reported Group EBIT4 was €1,129 million. Group EBIT was impacted by a negative effect from adjustments on accounts receivable in legal dispute of €84 million5 at Fresenius Medical Care, the reduction in patient attribution and a decreasing savings rate for ESCOs, based on recent reports under discussion for current and prior plan years as well as a softer development in North America at Fresenius Kabi. Moreover, investments to counter the regulatory headwinds at Helios Germany continued to weigh on the Group’s EBIT. These effects were partially offset by the remeasurement effect on the fair value of an investment in Humacyte, Inc. at Fresenius Medical Care.
1 On a comparable basis: Q3/18 and Q1-3/18 adjusted for divestitures of Care Coordination activities at FMC;
Q3/19 and Q1-3/19 adjusted for IFRS 16 effect
2 On a comparable basis: Q3/19 and Q1-3/19 before special items and adjusted for IFRS 16 effect;
Q3/18 and Q1-3/18 before special items and adjusted for divestitures of Care Coordination activities at FMC
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
4 After special items and including IFRS 16 effect
5 Please see footnote 5 on page 7 in the FMC section
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
In Q1-3/19, Group EBIT before special items was €3,401 million including an IFRS 16 effect of €79 million. Group EBIT1 on a comparable basis increased by 1% (-2% in constant currency) to €3,322 million (Q1-3/18: €3,297 million). The EBIT margin1 on a comparable basis was 12.7% (Q1-3/18: 13.6%). Reported Group EBIT2 was €3,362 million.
Group net interest before special items was -€171 million including an IFRS 16 effect of -€47 million. On a comparable basis, net interest improved to -€124 million (Q3/18: -€141 million) mainly due to successful refinancing activities and lower interest rates. Reported Group net interest2 was -€172 million.
In Q1-3/19, Group net interest before special items was -€532 million including an IFRS 16 effect of -€153 million. On a comparable basis, net interest1 improved to -€379 million
(Q1-3/18: -€420 million). Reported Group net interest2 was -€535 million.
The Group tax rate before special items and adopting IFRS 16 was 23.1% in both Q3/19 and Q1-3/19. Group tax rate1 on a comparable basis was also 23.1% in both Q3/19 and Q1-3/19 (Q3/18: 21.3%; Q1-3/18: 21.9%).
Noncontrolling interest before special items was €310 million including an IFRS 16 effect of €11 million. Noncontrolling interest1 on a comparable basis was €321 million (Q3/18:
€320 million).
In Q1-3/19, noncontrolling interest before special items was €834 million including an IFRS 16 effect of €31 million. Noncontrolling interest1 on a comparable basis was €865 million (Q1-3/18: €880 million), of which 93% was attributable to the noncontrolling interest in Fresenius Medical Care.
Group net income3 before special items was €445 million including an IFRS 16 effect of -€8 million. Group net income1,3 on a comparable basis increased by 2% (0% in constant currency) to €453 million (Q3/18: €444 million). Reported Group net income2,3 was €444 million.
1 On a comparable basis: Q3/19 and Q1-3/19 before special items and adjusted for IFRS 16 effect;
Q3/18 and Q1-3/18 before special items and adjusted for divestitures of Care Coordination activities at FMC
2 After special items and including IFRS 16 effect
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
Earnings per share1 before special items were €0.80 including an IFRS 16 effect of -€0.01. Earnings per share1,2 on a comparable basis increased by 1% (0% in constant currency) to €0.81 (Q3/18: €0.80). Reported Earnings per share1,3 were €0.80.
In Q1-3/19, Group net income1 before special items was €1,373 million including an IFRS 16 effect of -€25 million. Group net income1,2 on a comparable basis increased by 2% (0% in constant currency) to €1,398 million (Q1-3/18: €1,368 million). Reported Group net income1,3 was €1,368 million. In Q1-3/19, Earnings per share1 before special items were €2.47 including an IFRS 16 effect of -€0.04. Earnings per share1,2 on a comparable basis increased by 2% (0% in constant currency) to €2.51 (Q1-3/18: €2.46). Reported Earnings per share1,3 were €2.46.
Continued investment in growth
2019 is an investment year for the Fresenius Group. Fresenius is making good progress in all of its investment initiatives to secure long-term sustainable growth. Spending on property, plant and equipment was €586 million (Q3/18: €539 million). This corresponds to 7% of sales. In Q1-3/19, spending on property, plant and equipment was €1,592 million (Q1-3/18: €1,370 million), primarily for the modernization and expansion of dialysis clinics, production facilities as well as hospitals and day clinics. This corresponds to 6% of sales.
Total acquisition spending was €135 million (Q3/18: €490 million). In Q1-3/19, total acquisition spending was €2,292 million (Q1-3/18: €876 million), mainly for the acquisition of NxStage by Fresenius Medical Care.
Cash flow development
Group operating cash flow was €1,483 million including an IFRS 16 effect of €185 million. Adjusted for IFRS 16, Group operating cash flow was €1,298 million (Q3/18: €1,293 million) with a margin of 14.6% (Q3/18: 15.8%). Free cash flow before acquisitions and dividends adjusted for IFRS 16 was €722 million (Q3/18: €768 million). Free cash flow after acquisitions and dividends adjusted for IFRS 16 was €547 million (Q3/18: €230 million). The IFRS 16 effect amounts to €185 million respectively. Correspondingly, cash flow from financing activities decreased by €185 million.
1 Net income attributable to shareholders of Fresenius SE & Co. KGaA
2 On a comparable basis: Q3/19 and Q1-3/19 before special items and adjusted for IFRS 16 effect;
Q3/18 and Q1-3/18 before special items and adjusted for divestitures of Care Coordination activities at FMC
3 After special items and including IFRS 16 effect
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
In Q1-3/19, Group operating cash flow was €2,977 million including an IFRS 16 effect of €538 million. Adjusted for IFRS 16, Group operating cash flow was € 2,439 million
(Q1-3/18: €2,549 million) with a margin of 9.3% (Q1-3/18: 10.3%). With €850 million, free cash flow before acquisitions and dividends adjusted for IFRS 16 was below the previous year (Q1-3/18: €1,193 million) mainly due to increasing investments. Free cash flow after acquisitions and dividends adjusted for IFRS 16 was -€2,172 million (Q1-3/18: €1,172 million). The IFRS 16 effect amounts to €538 million, respectively. Correspondingly, cash flow from financing activities decreased by €538 million.
Solid balance sheet structure
The Group’s total assets were €66,759 million including an IFRS 16 effect of €5,667 million. Adjusted for IFRS 16, Group total assets1 increased by 8% (5% in constant currency) to €61,092 million (Dec. 31, 2018: €56,703 million). Current assets1 increased by 3% (1% in constant currency) to €15,180 million (Dec. 31, 2018: €14,790 million). Non-current assets1 increased by 10% (7% in constant currency) to €45,912 million (Dec. 31, 2018: € 41,913 million).
Total shareholders’ equity was €26,696 million including an IFRS 16 effect of -€232 million. Adjusted for IFRS 16, total shareholders’ equity increased by 8% (4% in constant currency) to €26,928 million (Dec. 31, 2018: €25,008 million). The equity ratio was 40.0%. Adjusted for IFRS 16, the equity ratio was 44.1% (Dec. 31, 2018: 44.1%).
Group debt was €27,013 million including an IFRS 16 effect of €5,899 million. Adjusted for IFRS 16, Group debt increased by 11% to €21,114 million (10% in constant currency) (Dec. 31, 2018: € 18,984 million). Group net debt was €25,414 million including an IFRS 16 effect of €5,899 million. Adjusted for IFRS 16, Group net debt increased by 20% (18% in constant currency) to € 19,515 million (Dec. 31, 2018: € 16,275 million) mainly due to the acquisition of NxStage by Fresenius Medical Care.
As of September 30, 2019, the net debt/EBITDA ratio was 3.13x1,2,3,4 (Dec. 31, 2018: 2.71x2,4). Including the IFRS 16 effect, the reported net debt/EBITDA ratio was to 3.55x2,3,4.
1 Adjusted for IFRS 16 effect
2 At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures
3 Including acquisition of NxStage
4 Before special items
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
Business Segments
Fresenius Medical Care (Figures according to Fresenius Medical Care press release)
Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of September 30, 2019, Fresenius Medical Care was treating 342,488 patients in 4,003 dialysis clinics. Along with its core business, the company provides related medical services in the field of Care Coordination.
Adjusted for the contribution from the divested Care Coordination activities, the IFRS 16 effect and the contribution from NxStage, sales of Fresenius Medical Care increased by 8% (5% at constant currency) to €4,375 million (Q3/18: €4,051 million). Organic sales growth was 5%. Positive currency translation effects of 3% were mainly related to the U.S. dollar strengthening against the euro. In Q1-3/19, sales adjusted for the contribution from the divested Care Coordination activities, the IFRS 16 effect and the contribution from NxStage increased by 9% (5% at constant currency) to €12,784 million (Q1-3/18: €11,731 million). Organic sales growth was 5%.
EBIT4 increased by 1% (-3% in constant currency) to €599 million (Q3/18: €592 million). The EBIT margin decreased to 13.7% (Q3/18: 14.6%). EBIT development was impacted by a negative effect from adjustments on accounts receivable in legal dispute of € 84 million5 paired with the reduction in patient attribution and a decreasing savings rate for ESCOs, based on recent reports under discussion for current and prior plan years. These effects were partially offset by the remeasurement effect on the fair value of an investment in Humacyte, Inc.
In Q1-3/19, EBIT4 decreased by 1% (-5% in constant currency) to €1,641 million (Q1-3/18: €1,656 million). The EBIT margin decreased to 12.8% (Q1-3/18: 14.1%).
1 On an adjusted basis: before special items (transaction-related expenses, gain related to divestitures of Care Coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effect, excluding effects from NxStage transaction
2 Q3/18 and Q1-3/18 before special items and adjusted for divestitures of Care Coordination activities
3 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
4 Q3/18 and Q1-3/18 before special items items and after adjustments
Q3/19 and Q1-3/19 before special items (transaction-related expenses, gain related to divestitures of Care Coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effect, excluding effects from NxStage transaction
5 This adjustment results from a material weakness in FMC`s internal controls over financial reporting regarding accounts receivable and revenue recognition specific to fee-for-service in legal dispute. FMC does not expect a restatement of its financial statements previously filed with the SEC. FMC is taking steps to remediate the control weakness.
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
Net income1,2 increased by 6% (2% in constant currency) to €363 million (Q3/18: €343 million). In Q1-3/19, net income1,2 increased by 2% (-3% in constant currency) to €961 million (Q1-3/18: €946 million).
Operating cash flow was €715 million3 (Q3/18: €753 million) with a margin of 16.3% (Q3/18: 18.6%). In Q1-3/19, operating cash flow was €1,3504 million (Q1-3/18: €1,364 million) with a margin of 10.6% (Q1-3/18: 11.1%).
For FY/19, Fresenius Medical Care expects adjusted sales to grow by 3% to 7%5,6 in constant currency. Adjusted net income2 is expected to develop in the range of -2% to +2%5,7 in constant currency.
For further information on the IFRS 16 reconciliation of Fresenius Medical Care, please see page 18 of the PDF document.
For further information, please see Fresenius Medical Care’s press release at www.freseniusmedicalcare.com.
1 Q3/18 and Q1-3/18 before special items and after adjustments; Q3/19 and Q1-3/19 before special items (transaction-related expenses, gain related to divestitures of care coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effect, excluding effects from NxStage transaction
2 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
3 €868 million including an IFRS 16 effect of €153 million
4 €1,796 million including an IFRS 16 effect of €446 million
5 FY/18 before special items, adjusted for divestitures of Care Coordination activities; FY/19 before special items (transaction-related expenses, gain related to divestitures of care coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effects, excluding effects from NxStage transaction
6 FY/18 base: €16,026 million
7 FY/18 base: €1,341 million
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
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. In the biosimilars business, Fresenius Kabi develops products with a focus on oncology and autoimmune diseases.
Sales of Fresenius Kabi increased by 7% (5% in constant currency) to €1,761 million (Q3/18: €1,650 million). Organic sales growth was 5%. In Q1-3/19, sales increased by 6% (5% in constant currency) to €5,153 million (Q1-3/18: €4,857 million). Organic sales growth was 4%. Positive currency translation effects of 1% were mainly related to the U.S. dollar strengthening against the euro.
Sales in North America of €619 million remained at previous year’s level (organic growth: 4%; Q3/18: €620 million). In Q1-3/19, sales in North America increased by 3% (organic growth:-3%) to €1,815 million (Q1-3/18: €1,760 million). Intensifying competition on selected molecules, a further easing of tailwinds from drug shortages as well as a shift in clinical practice towards non-opiods in the hospital-based pain management weighed on the sales development.
Sales in Europe grew by 5% (organic growth: 4%) to €564 million (Q3/18: €538 million). In Q1-3/19, sales in Europe increased by 3% (organic growth: 3%) to €1,709 million
(Q1-3/18: €1,658 million).
Sales in Asia-Pacific increased by 20% (organic growth: 18%) to €406 million (Q3/18: €337 million). In Q1-3/19, sales in Asia-Pacific increased by 16% (organic growth: 15%) to €1,121 million (Q1-3/18: €964 million).
Sales in Latin America/Africa increased by 11% (organic growth: 16%) to €172 million (Q3/18: €155 million). In Q1-3/19, sales in Latin America/Africa increased by 7% (organic growth: 16%) to €508 million (Q1-3/18: €475 million).
EBIT1 increased by 3% (1% in constant currency) to €306 million (Q3/18: €297 million) with an EBIT margin of 17.4% (Q3/18: 18.0%). In Q1-3/19, EBIT1 increased by 7% (4% in constant currency) to €917 million (Q1-3/18: €854 million) with an EBIT margin of 17.8% (Q1-3/18: 17.6%).
Net income1,2 increased by 3% (0% in constant currency) to €204 million (Q3/18: €199 million). In Q1-3/19, net income1,2 increased by 12% (8% in constant currency) to €618 million (Q1-3/18: €554 million).
Operating cash flow3 was €362 million (Q3/18: €366 million). The cash flow margin was 20.6% (Q3/18: 22.2%). In Q1-3/19, operating cash flow3 was €695 million (Q1-3/18: €820 million). The cash flow margin was 13.5% (Q1-3/18: 16.9%).
Fresenius Kabi confirms its outlook for FY/19 and expects organic sales growth4 of 3% to 6% and EBIT growth5 in constant currency of 3% to 6%.
For further information on the IFRS 16 reconciliation of Fresenius Kabi, please see page 18 of the PDF document.
1 On a comparable basis: before special items and adjusted for IFRS 16 effect
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA
3 Adjusted for IFRS 16 effect (operating cash flow after special items)
4 On a comparable basis: FY/18 base: €6,544 million; FY/19 before special items (transaction-related expenses,
revaluations of biosimilars contingent liabilities) and adjusted for IFRS 16 effect
5 On a comparable basis: FY/18 base: €1,139 million; FY/18 before special items; FY/19 before special items
(transaction-related expenses, revaluations of biosimilars contingent liabilities) and adjusted for IFRS 16 effect.
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
Fresenius Helios
Fresenius Helios is Europe's leading private hospital operator. The company comprises Helios Germany and Helios Spain (Quirónsalud). Helios Germany operates 86 hospitals, ~125 outpatient centers and treats approximately 5.3 million patients annually. Quirónsalud operates 50 hospitals, 62 outpatient centers and around 300 occupational risk prevention centers, and treats approximately 13.3 million patients annually.
Sales of Fresenius Helios increased by 7% (organic growth: 6%) to €2,230 million (Q3/18: €2,088 million). In Q1-3/19, sales increased by 2% (5% ; organic growth: 5%) to €6,890 million (Q1-3/18: €6,762 million).
Sales of Helios Germany increased by 5% (organic growth: 5%) to €1,474 million (Q3/18: €1,410 million). Organic sales growth was positively influenced by pricing effects and admissions growth. The reclassification of nursing staff funding from other income to sales contributed about 1% to growth. In Q1-3/19, sales of Helios Germany decreased by 1% (increased by 4%1; organic growth: 4%) to €4,465 million (Q1-3/18: €4,531 million).
Sales of Helios Spain increased by 12% (organic growth: 9%) to €757 million (Q3/18: €678 million). In Q1-3/19, sales of Helios Spain increased by 9% (organic growth: 7%) to €2,425 million (Q1-3/18: €2,231 million).
1 Adjusted for the post-acute care business transferred to Fresenius Vamed as of July 1, 2018
2 Adjusted for IFRS 16 effect
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
EBIT1 of Fresenius Helios decreased by 10% to €183 million (Q3/18: €204 million) with an EBIT margin of 8.2% (Q3/18: 9.8%). In Q1-3/19, EBIT1 of Fresenius Helios decreased by 7% (-5% ) to €723 million (Q1-3/18: €775 million) with an EBIT margin of 10.5% (Q1-3/18: 11.5%).
EBIT1 of Helios Germany decreased by 9% to €130 million (Q3/18: €143 million) with an EBIT margin of 8.8% (Q3/18: 10.1%). Ongoing investments to counter regulatory headwinds continued to weigh on Helios Germany’s financial performance. In Q1-3/19, EBIT1 of Helios Germany decreased by 11% (-9%2) to €433 million (Q1-3/18: €488 million) with an EBIT margin of 9.7% (Q1-3/18: 10.8%).
EBIT1 of Helios Spain decreased by 5% to €56 million (Q3/18: €59 million) with an EBIT margin of 7.4% (Q3/18: 8.7%). EBIT was impacted by costs for temporary workers in order to cope with the higher than anticipated number of admissions. In Q1-3/19, EBIT1 of Helios Spain increased by 5% to €300 million (Q1-3/18: €286 million) with an EBIT margin of 12.4% (Q1-3/18: 12.8%).
Net income1,3 decreased by 12% to €113 million (Q3/18: €128 million). In Q1-3/19, net income1,3 decreased by 9% to €472 million (Q1-3/18: €516 million).
Operating cash flow1 increased to €183 million (Q3/18: €128 million) with a margin of 8.2% (Q3/18: 6.1%). In Q1-3/19, operating cash flow1 increased to €471 million (Q1-3/18: €387 million) with a margin of 6.8% (Q1-3/18: 5.7%).
Fresenius Helios confirms its outlook for FY/19 and expects organic sales growth of 2% to 5% and negative EBIT1 growth of -5% to -2%.
For further information on the IFRS 16 reconciliation of Fresenius Helios, please see page 18 of the PDF document.
1 Adjusted for IFRS 16 effect
2 Adjusted for the post-acute care business transferred to Fresenius Vamed as of July 1, 2018
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
Fresenius Vamed
Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide and is a leading post-acute care provider in Central Europe. The portfolio ranges along the entire value chain: from project development, planning, and turnkey construction, via maintenance and technical management to total operational management.
Sales of Fresenius Vamed increased by 18% to €562 million (Q3/18: €476 million). Organic sales growth was 17%, acquisitions contributed 1% to growth.
Sales in the service business grew by 11% to €349 million (Q3/18: €315 million). Sales of the project business increased by 32% to €213 million (Q3/18: €161 million). In Q1-3/19, sales increased by 48% (28%1) to €1,469 million (Q1-3/18: €991 million). Organic sales growth was 24%, acquisitions contributed 24% to growth. Both the service and the project business showed strong growth momentum.
EBIT2 increased by 10% to €34 million (Q3/18: €31 million) with an EBIT margin of 6.0% (Q3/18: 6.5%). In Q1-3/19, EBIT2 increased by 33% (0%1) to €65 million (Q1-3/18: €49 million) with an EBIT margin of 4.4% (Q1-3/18: 4.9%).
Net income2,3 of €22 million remained at previous year’s level (Q3/18: €22 million). In Q1-3/19, net income2,3 increased by 24% to €41 million (Q1-3/18: €33 million).
Order intake increased by 114% to €240 million (Q3/18: €112 million) and in Q1-3/19 by 30% to €738 million (Q1-3/18: €567 million). As of September 30, 2019, order backlog reached an all-time high at €2,711 million (Dec. 31, 2018: €2,420 million).
Operating cash flow2 decreased to €27 million (Q3/18: €54 million) with a margin of 4.8% (Q3/18: 11.3%). In Q1-3/19, Operating cash flow2 decreased to -€38 million (Q1-3/18:
-€2 million) with a margin of -2.6% (Q1-3/18: -0.2%) given timing of payments in the project business.
Fresenius Vamed confirms its outlook for FY/19 and expects organic sales growth of ~10% and EBIT growth2 of 15% to 20%.
For further information on the IFRS 16 reconciliation of Fresenius Vamed, please see page 18 of the PDF document.
1 Adjusted for German post-acute care business acquired from Fresenius Helios as of July 1, 2018
2 Adjusted for IFRS 16 effect
3 Net income attributable to shareholders of VAMED AG
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
Conference Call
As part of the publication of the results for the third quarter / first three quarters of 2019, a conference call will be held on October 29, 2019 at 1:30 p.m. CET (8:30 a.m. EDT). All investors are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com/investors. Following the call, a replay will be available on our website.
For additional information on the performance indicators used please refer to our website www.fresenius.com/alternative-performance-measures.
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.
The healthcare group Fresenius has nearly completed the work begun two years ago to expand company headquarters in Bad Homburg. Two new office buildings; “EK3” at Else-Kröner Street and “D15A” located at Daimler Street have been in operation since April. Now the redesigned exterior grounds fronting Else-Kröner Street are completed. These grounds link the additions with existing buildings to create the new “Fresenius Campus.”
To mark the occasion, the company leadership yesterday invited employees who work on the premise to a “Campus Fest.” Together with Bad Homburg Lord Mayor Alexander Hetjes and Fresenius Chief Executive Officer Stephan Sturm, they celebrated this new milestone in Fresenius company history.
In opening remarks, Stephan Sturm emphasized the ongoing growth at Fresenius, both worldwide and in the spa city. “Only 10 years ago we had about 2,000 employees in Bad Homburg. Now we have twice as many. All the signs point to continued growth in the future – because demand for our products and services is growing worldwide, and because our employees are doing everything they can to meet this demand.”
“The company’s headquarters also symbolizes the impressive growth of Fresenius, which continues to make its mark on Bad Homburg as a business location,” said Hetjes. “The energy efficiency is exemplary, and thanks to the headquarters’ campus character and modern design the company can offer employees a very attractive working environment in our city.”
Construction on EK3 began in September, 2017. The five-story building accommodates 600 modern office workspaces, conference rooms, an additional employee cafeteria and an underground parking garage. Work on D15A began in May, 2018. This building expands on the existing Research & Development Center of Fresenius Medical Care, to which it is connected by a footbridge. It offers 150 office workspaces spread over six floors.
Altogether Fresenius invested 70 million euros in the headquarters expansion. The company currently employs about 4,000 people in Bad Homburg and another 300 in neighboring Oberursel.
Construction on another office building to be rented by Fresenius, Uniqus 2 at Horex Street, is expected to be finished by the end of this year. The building will accommodate 250 workspaces.
Fresenius will be included in the Dow Jones Sustainability Index Europe (DJSI Europe) for the first time as from 23 September 2019. The selected companies must demonstrate continuous improvement with regard to sustainability and are assessed by analysts from asset manager RobecoSAM.
Fresenius will be included in the Dow Jones Sustainability Index Europe (DJSI Europe) for the first time as from 23 September 2019. The selected companies must demonstrate continuous improvement with regard to sustainability and are assessed by analysts from asset manager RobecoSAM.
Logo at the Fresenius corporate head office in Bad Homburg.
If no timeframe is specified, information refers to Q2/2019
1 Adjusted for IFRS 16 effect
2 Q2/18 and H1/18 adjusted for divestitures of Care Coordination activities at Fresenius Medical Care (FMC)
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 of the PDF document.
Stephan Sturm, CEO of Fresenius, said: “We are reporting a good second quarter 2019, with healthy organic growth in all four business segments. Our investments in future growth are moving ahead according to plan, as we further strengthen the foundations for the long-term, successful development of Fresenius. So we are very confident about the second half and the coming years.”
Group sales growth guidance for 2019 raised
Based on the Group’s good H1/19 results and good prospects for the remainder of the year, Fresenius raises its 2019 Group sales growth guidance. Fresenius now projects sales growth1 of 4% to 7% in constant currency. Previously, Fresenius expected sales growth1 of 3% to 6% in constant currency. The company confirms its earnings guidance. Net income2,3 growth is expected to be ~0% in constant currency. The guidance for 2019 includes the related sales and dilutive earnings contributions of the NxStage acquisition.
Fresenius expects net debt/EBITDA4 at year-end to be around the upper-end of the original self-imposed target corridor of 2.5x to 3.0x. This includes the NxStage acquisition which is increasing the net debt/EBITDA ratio in 2019 by ~30 basis points and excludes IFRS 16 effects.
Due to the adoption of the IFRS 16 accounting standard (“IFRS 16 effect”), Fresenius’ self-imposed target corridor has shifted to 3.0x to 3.5x net debt/EBITDA on a reported basis.
1 On a comparable basis: FY/18 base: €33,009 million; FY/18 adjusted for divestitures of Care Coordination activities at FMC (H1/18); FY/19: adjusted for IFRS 16 effect
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA
3 On a comparable basis: FY/18 base: €1,872 million; FY/18 before special items and adjusted for divestitures of Care Coordination activities at FMC (H1/18); FY/19: before special items (transaction-related expenses, revaluations of biosimilars contingent liabilities, gain related to divestitures of Care Coordination activities at FMC, expenses associated with the cost optimization program at FMC), adjusted for IFRS 16 effect
4 Both net debt and EBITDA calculated at expected annual average exchange rates; excluding further potential acquisitions
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 of the PDF document.
6% sales growth1 in constant currency
Group sales were €8,761 million including an IFRS 16 effect of -€18 million. Group sales1 on a comparable basis increased by 8% (6% in constant currency) to €8,779 million (Q2/18: €8,124 million). Organic sales growth was 5%. Acquisitions/divestitures contributed net 1% to growth. In H1/19, Group sales were €17,256 million including an IFRS 16 effect of -€40 million. Group sales1 on a comparable basis increased by 8% (6% in constant currency) to €17,296 million (H1/18: €15,994 million). Organic sales growth was 5%. Acquisitions/divestitures contributed net 1% to growth. Positive currency translation effects of 2% were mainly driven by the U.S. dollar strengthening against the euro.
Net income2,3 growth in constant currency
Group EBITDA before special items was €1,703 million including an IFRS 16 effect of €242 million. Group EBITDA2 on a comparable basis decreased by 2% (-5% in constant currency) to €1,461 million (Q2/18: €1,495 million). In H1/19, Group EBITDA before special items was €3,404 million including an IFRS 16 effect of €462 million. Group EBITDA2 on a comparable basis increased by 2% (-1% in constant currency) to €2,942 million (H1/18: €2,889 million).
Group EBIT before special items was €1,118 million including an IFRS 16 effect of €37 million. Group EBIT2 on a comparable basis decreased by 5% (-7% in constant currency) to €1,081 million (Q2/18: €1,135 million). The EBIT margin2 on a comparable basis was 12.3% (Q2/18: 14.0%). A significant contributor was the reduction in patient attribution and a decreasing savings rate for ESCOs, based on recent reports for prior plan years (“ESCO effect”). Reported Group EBIT4 was €1,118 million. In H1/19, Group EBIT before special items was €2,248 million including an IFRS 16 effect of €56 million. Group EBIT2 on a comparable basis remained at previous year’s level (-3% in constant currency) at €2,192 million (H1/18: €2,185 million). The EBIT margin2 on a comparable basis was 12.7% (H1/18: 13.7%). Reported Group EBIT4 was €2,233 million.
Group net interest before special items was -€180 million including an IFRS 16 effect of -€58 million. On a comparable basis, net interest2 improved to -€122 million (Q2/18: -€140 million) mainly due to successful refinancing activities and lower interest rates. Reported Group net interest4 was -€179 million. In H1/19, Group net interest before special items was -€361 million including an IFRS 16 effect of -€106 million. On a comparable basis, net interest1 improved to -€255 million (H1/18: -€279 million). Reported Group net interest3 was -€363 million.
1 On a comparable basis: Q2/18 and H1/18 adjusted for divestitures of Care Coordination activities at FMC;
Q2/19 and H1/19 adjusted for IFRS 16 effect
2 On a comparable basis: Q2/19 and H1/19 before special items and adjusted for IFRS 16 effect;
Q2/18 and H1/18 adjusted for divestitures of Care Coordination activities at FMC
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
4 After special items and including IFRS 16 effect
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 of the PDF document.
The Group tax rate before special items and adopting IFRS 16 was 22.8%. Group tax rate1 on a comparable basis was 22.8% (Q2/18: 23.3%). In H1/19, the Group tax rate before special items and adopting IFRS 16 was 23.1%. In H1/19, Group tax rate1 on a comparable basis was 23.1% (H1/18: 22.1%).
Noncontrolling interest before special items was €253 million including an IFRS 16 effect of €7 million. Noncontrolling interest1 on a comparable basis was €260 million (Q2/18:
€290 million). In H1/19, Noncontrolling interest before special items was €524 million including an IFRS 16 effect of €20 million. Noncontrolling interest1 on a comparable basis was €544 million (H1/18: €560 million), of which 93% was attributable to the Noncontrolling interest in Fresenius Medical Care.
Group net income2 before special items was €471 million including an IFRS 16 effect of -€9 million. Group net income1,2 on a comparable basis increased by 1% (0% in constant currency) to €480 million (Q2/18: €473 million). Reported Group net income2,3 was €471 million. Earnings per share2 before special items were €0.85 including an IFRS 16 effect of -€0.01. Earnings per share1,2 on a comparable basis increased by 1% (0% in constant currency) to €0.86 (Q2/18: €0.85). Reported Earnings per share2,3 were €0.85.
In H1/19, Group net income2 before special items was €928 million including an IFRS 16 effect of -€17 million. Group net income1,2 on a comparable basis increased by 2% (0% in constant currency) to €945 million (H1/18: €924 million). Reported Group net income2,3 was €924 million. In H1/19, Earnings per share2 before special items were €1.67 including an IFRS 16 effect of -€0.03. Earnings per share1,2 on a comparable basis increased by 2% (0% in constant currency) to €1.70 (H1/18: €1.66). Reported Earnings per share2,3 were €1.66.
Continued investment in growth
2019 is an investment year for the Fresenius Group. Fresenius is making good progress in all of its investment initiatives to secure long-term sustainable growth. Spending on property, plant and equipment was €565 million (Q2/18: €451 million). This corresponds to 6% of sales. In H1/19, spending on property, plant and equipment was €1,006 million (H1/18: €831 million), primarily for the modernization and expansion of dialysis clinics, production facilities as well as hospitals and day clinics. This corresponds to 6% of sales.
Total acquisition spending was €234 million (Q2/18: €194 million) including the acquisition of Clínica Medellín in Colombia by Fresenius Helios, among others. In H1/19, total acquisition spending was €2,157 million (H1/18: €386 million), mainly for the acquisition of NxStage by Fresenius Medical Care.
1 On a comparable basis: Q2/19 and H1/19 before special items and adjusted for IFRS 16 effect;
Q2/18 and H1/18 adjusted for divestitures of Care Coordination activities at FMC
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA
3 After special items and including IFRS 16 effect
Cash flow development
Group operating cash flow was €1,205 million including an IFRS 16 effect of €182 million. On a comparable basis, Group operating cash flow was €1,023 million (Q2/18: €1,020 million) with a margin of 11.7% (Q2/18: 12.2%). Free cash flow before acquisitions and dividends adjusted for IFRS 16 was €467 million (Q2/18: €580 million). Free cash flow after acquisitions and dividends adjusted for IFRS 16 was -€437 million (Q2/18: €1,331 million). The IFRS 16 effect amounts to €182 million respectively. Correspondingly, cash flow from financing activities decreased by €182 million.
In H1/19, Group operating cash flow was €1,494 million including an IFRS 16 effect of €353 million. On a comparable basis, Group operating cash flow was €1,141 million (H1/18: €1,256 million) with a margin of 6.6% (H1/18: 7.6%). Free cash flow before acquisitions and dividends adjusted for IFRS 16 was €128 million (H1/18: €425 million) mainly due to increasing investments. Free cash flow after acquisitions and dividends adjusted for IFRS 16 was -€2,719 million (H1/18: €942 million). The IFRS 16 effect amounts to €353 million respectively. Correspondingly, cash flow from financing activities decreased by €353 million.
Solid balance sheet structure
The Group’s total assets were €64,929 million including an IFRS 16 effect of €5,587 million. Adjusted for IFRS 16, Group total assets1 increased by 5% (4% in constant currency) to €59,342 million (Dec. 31, 2018: €56,703 million). Current assets1 remained flat (remained flat in constant currency) to €14,851 million (Dec. 31, 2018: €14,790 million). Non-current assets1 increased by 6% (6% in constant currency) to €44,491 million (Dec. 31, 2018: € 41,913 million).
Total shareholders’ equity was €25,382 million including an IFRS 16 effect of -€186 million. Adjusted for IFRS 16, total shareholders’ equity increased by 2% (2% in constant currency) to €25,568 million (Dec. 31, 2018: €25,008 million). The equity ratio was 39.1%. Adjusted for IFRS 16, the equity ratio was 43.1% (Dec. 31, 2018: 44.1%).
Group debt was €26,879 million including an IFRS 16 effect of €5,773 million. Adjusted for IFRS 16, Group debt increased by 11% to €21,106 million (11% in constant currency) (Dec. 31, 2018: € 18,984 million). Group net debt was €25,416 million including an IFRS 16 effect of €5,773 million. Adjusted for IFRS 16, Group net debt increased by 21% (21% in constant currency) to € 19,643 million (Dec. 31, 2018: € 16,275 million) mainly due to the acquisition of NxStage by Fresenius Medical Care.
As of June 30, 2019, the net debt/EBITDA ratio increased to 3.21x1,2,3,4 (December 31, 2018: 2.71x2,4). Including the IFRS 16 effect, the reported net debt/EBITDA ratio increased to 3.64x2,3,4.
1 Adjusted for IFRS 16 effect
2 At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures
3 Including acquisition of NxStage
4 Before special items
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32.
Increased number of employees
As of June 30, 2019, the number of employees was 288,459 (Dec. 31, 2018: 276,750).
Business Segments
Fresenius Medical Care (Figures according to Fresenius Medical Care press release)
Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of June 30, 2019, Fresenius Medical Care was treating 339,550 patients in 3,996 dialysis clinics. Along with its core business, the company provides related medical services in the field of Care Coordination.
Adjusted for the Q2/18 contribution from the divested Care Coordination activities, the IFRS 16 effect and the contribution from NxStage, sales of Fresenius Medical Care increased by 8% (5% at constant currency) to €4,284 million (Q2/18: €3,956 million). Organic sales growth was 4%. Positive currency translation effects of 3% were mainly related to the U.S. dollar strengthening against the euro. In H1/19, sales adjusted for the H1/18 contribution from the divested Care Coordination activities, the IFRS 16 effect and the contribution from NxStage increased by 9% (5% at constant currency) to €8,409 million (H1/18: €7,680 million). Organic sales growth was 5%.
EBIT4 decreased by 12% (-17% in constant currency) to €491 million (Q2/19: €558 million) The EBIT margin4 decreased to 11.5% (Q2/18: 14.1%). A significant contributor was the reduction in patient attribution and a decreasing savings rate for ESCOs, based on recent reports for prior plan years (“ESCO effect”).
1 On an adjusted basis: before special items (transaction-related expenses, gain related to divestitures of Care Coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effect, excluding effects from NxStage transaction
2 Q2/18 and H1/18 adjusted for divestitures of Care Coordination activities
3 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
4 Q2/18 and H1/18 before special items and after adjustments; Q2/19 and H1/19 before special items (transaction-related expenses, gain related to divestitures of Care Coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effect, excluding effects from NxStage transaction
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32.
In H1/19, EBIT6 decreased by 2% (-7% in constant currency) to €1,042 million (H1/18: €1,064 million). The EBIT margin4 decreased to 12.4% (H1/18: 13.9%).
Net income1,2 decreased by 9% (-14% in constant currency) to €279 million (Q2/18: €308 million). A significant contributor was the ESCO effect. In H1/19, net income1,2 decreased by 1% (-6% in constant currency) to €597 million (H1/18: €604 million).
Operating cash flow was €700 million3 (Q2/18: €656 million) with a margin of 16.0% (Q2/18: 15.6%). In H1/19, operating cash flow was €635 million (H1/18: €611 million) with a margin of 7.6% (H1/18: 7.5%).
For FY/19, Fresenius Medical Care expects adjusted sales to grow by 3% to 7%5,6 in constant currency. Adjusted net income1 is expected to develop in the range of -2% to +2%5,7 in constant currency.
For further information on the IFRS 16 reconciliation of Fresenius Medical Care, please see page 18 in the PDF document.
For further information, please see Fresenius Medical Care’s press release at www.freseniusmedicalcare.com.
1 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
2 Q2/18 and H1/18 before special items and after adjustments; Q2/19 and H1/19 before special items (transaction-related expenses, gain related to divestitures of care coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effect, excluding effects from NxStage transaction
3 €852 million including an IFRS 16 effect of €152 million
4 €928 million including an IFRS 16 effect of €293 million
5 FY/18 before special items, Q2/18 and H1/18 adjusted for divestitures of Care Coordination activities;
FY/19 before special items (transaction-related expenses, gain related to divestitures of care coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effects, excluding effects from NxStage transaction
6 FY/18 base: €16,026 million
7 FY/18 base: €1,341 million
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 in the PDF document.
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. In the biosimilars business, Fresenius Kabi develops products with a focus on oncology and autoimmune diseases.
Sales of Fresenius Kabi increased by 5% (5% in constant currency) to €1,691 million (Q2/18: €1,604 million). Organic sales growth was 4%. In H1/19, sales increased by 6% (4% in constant currency) to €3,392 million (H1/18: €3,207 million). Organic sales growth was 4%. Positive currency translation effects of 2% were mainly related to the U.S. dollar strengthening against the euro.
Sales in North America increased by 4% (organic growth: -1%) to €573 million (Q2/18: €549 million). In H1/19, sales in North America increased by 5% (organic growth:
-1%) to €1,196 million (H1/18: €1,140 million). The anticipated easing of shortage situations, intensified competition in individual molecules, and a prescribing trend towards non-opioids pain management were the main headwinds.
Sales in Europe grew by 2% (organic growth: 1%) to €572 million (Q2/18: €563 million). In H1/19, sales in Europe increased by 2% (organic growth: 2%) to €1,145 million (H1/18: €1,120 million).
Sales in Asia-Pacific increased by 15% (organic growth: 15%) to €374 million (Q2/18: €326 million). In H1/19, sales in Asia-Pacific increased by 14% (organic growth: 13%) to €715 million (H1/18: €627 million).
Sales in Latin America/Africa increased by 4% (organic growth: 13%) to €172 million (Q2/18: €166 million). In H1/19, sales in Latin America/Africa increased by 5% (organic growth: 15%) to €336 million (H1/18: €320 million).
EBIT1 increased by 7% (4% in constant currency) to €308 million (Q2/18: €289 million) with an EBIT margin1 of 18.2% (Q2/18: 18.0%). In H1/19, EBIT1 increased by 10% (6% in constant currency) to €611 million (H1/18: €557 million) with an EBIT margin1 of 18.0% (H1/18: 17.4%).
Net income1,2 increased by 14% (12% in constant currency) to €211 million (Q2/18: €185 million). In H1/19, net income1,2 increased by 17% (12% in constant currency) to €414 million (H1/18: €355 million).
Operating cash flow3 was €201 million (Q2/18: €228 million). The cash flow margin was 11.9% (Q2/18: 14.2%). In H1/19, operating cash flow3 was €333 million (H1/18: €454 million). The cash flow margin was 9.8% (H1/18: 14.2%).
Fresenius Kabi confirms its outlook for FY/19 and expects organic sales growth4 of 3% to 6% and EBIT growth5 in constant currency of 3% to 6%.
For further information on the IFRS 16 reconciliation of Fresenius Kabi, please see page 18 of the PDF document.
1 On a comparable basis: before special items and adjusted for IFRS 16 effect
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA
3 Adjusted for IFRS 16 effect (operating cash flow after special items)
4 On a comparable basis: FY/18 base: €6,544 million; FY/19 before special items (acquisition-related expenses, revaluations of biosimilars contingent liabilities) and adjusted for IFRS 16 effect
5 On a comparable basis: FY/18 base: €1,139 million; FY/18 before special items; FY/19 before special items (acquisition-related expenses, revaluations of biosimilars contingent liabilities) and adjusted for IFRS 16 effect.
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 of the PDF document.
Fresenius Helios
Fresenius Helios is Europe's leading private hospital operator. The company comprises Helios Germany and Helios Spain (Quirónsalud). Helios Germany operates 86 hospitals, ~125 outpatient centers and treats approximately 5.3 million patients annually. Quirónsalud operates 50 hospitals, 62 outpatient centers and around 300 occupational risk prevention centers, and treats approximately 13.3 million patients annually.
Sales of Fresenius Helios remained at previous year’s level (increased by 6%1 organic growth: 5%) to €2,349 million (Q2/18: €2,343 million). In H1/19, sales also remained at previous year’s level (increased by 5%1; organic growth: 4%) to €4,660 million (H1/18: €4,674 million).
Sales of Helios Germany decreased by 3% (increased by 5%1; organic growth: 5%) to €1,506 million (Q2/18: €1,547 million). Organic sales growth was positively influenced by pricing effects and a strong case mix. In H1/19, sales of Helios Germany decreased by 4% (increased by 3%1; organic growth: 3%) to €2,991 million (H1/18: €3,121 million).
Sales of Helios Spain increased by 6% (organic growth: 4%) to €842 million (Q2/18: €796 million) despite the negative effect related to the Easter holidays. In H1/19, sales of Helios Spain increased by 7% (organic growth: 6%) to €1,668 million (H1/18: €1,553 million).
1 Adjusted for the post-acute care business transferred to Fresenius Vamed as of July 1, 2018
2 Adjusted for IFRS 16 effect
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 of the PDF document.
EBIT1 of Fresenius Helios decreased by 6% (-4% ) to €274 million (Q2/18: €293 million) with an EBIT margin of 11.7% (Q2/18: 12.5%). In H1/19, EBIT1 of Fresenius Helios decreased by 5% (-4%2) to €540 million (H1/18: €571 million) with an EBIT margin of 11.6% (H1/18: 12.2%).
EBIT1 of Helios Germany decreased by 8% (-4%2) to €154 million (Q2/18: €168 million) with an EBIT margin of 10.2% (Q2/18: 10.9%). In H1/19, EBIT1 of Helios Germany decreased by 12% (-10%2) to €303 million (H1/18: €345 million) with an EBIT margin of 10.1% (H1/18: 11.1%). Whilst EBIT and margin have further stabilized, investments for preparatory structural measures continue to weigh on Helios Germany’s financial performance.
Despite the negative Easter effect, EBIT1 of Helios Spain increased by 1% to €125 million (Q2/18: €124 million) with an EBIT margin of 14.8% (Q2/18: 15.6%). In H1/19, EBIT1 of Helios Spain increased by 7% to €244 million (H1/18: €227 million).
Net income1,3 decreased by 7% to €183 million (Q2/18: €197 million). In H1/19, net income1,3 also decreased by 7% to €359 million (H1/18: €388 million).
Operating cash flow1 was €197 million (Q2/18: €162 million) with a margin of 8.4% (Q2/18: 6.9%). In H1/19, operating cash flow1 was €288 million (H1/18: €259 million) with a margin of 6.2% (H1/18: 5.5%). The increase is mainly attributable to the decrease in days sales outstanding (DSO) at Helios Spain.
Fresenius Helios confirms its outlook for FY/19 and expects organic sales growth of 2% to 5% and an EBIT1 growth of -5% to -2%.
For further information on the IFRS 16 reconciliation of Fresenius Helios, please see page 18.
1 Adjusted for IFRS 16 effect
2 Adjusted for the post-acute care business transferred to Fresenius Vamed as of July 1, 2018
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 of the PDF document.
Fresenius Vamed
Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide and is a leading post-acute care provider in Central Europe. The portfolio ranges along the entire value chain: from project development, planning, and turnkey construction, via maintenance and technical management to total operational management.
Sales of Fresenius Vamed increased by 76% (31%1) to €467 million (Q2/18: €266 million). Organic sales growth was 27%, acquisitions contributed 3%1 to growth. Positive currency translation effects increased sales by 1%. Sales in the service business grew by 106% (35%1) to €344 million (Q2/18: €167 million), supported by an intensified collaboration with Fresenius Helios. Sales of the project business increased by 24% to €123 million (Q2/18: €99 million). In H1/19, sales increased by 76% (32%1) to €907 million (H1/18: €515 million). Organic sales growth was 29%, acquisitions contributed 3%1 to growth. Both the service and the project business showed strong growth momentum.
EBIT2 increased by 67% to €20 million (Q2/18: €12 million) with an EBIT margin of 4.3% (Q2/18: 4.5%). EBIT2 additionally adjusted for the acquisition of Helios’ German post-acute care business was €8 million (-33% YoY) with an EBIT margin of 2.3% - the decrease was mainly driven by phasing effects in the project business. In H1/19, EBIT2 increased by 72% to €31 million (H1/18: €18 million) with an EBIT margin of 3.4% (H1/18: 3.5%). EBIT2 additionally adjusted for the acquisition of Helios’ German post-acute care business was €15 million (-17% YoY) with an EBIT margin of 2.2%.
Net income2,3 increased by 86% to €13 million (Q2/18: €7 million). In H1/19, net income2,3 increased by 73% to €19 million (H1/18: €11 million).
Order intake decreased by -41% to €115 million (Q2/18: €195 million) but increased by 9% to €498 million in H1/19 (H1/18: €455 million). As of June 30, 2019, order backlog was at €2,690 million (Dec 31, 2018: €2,420 million).
Operating cash flow2 decreased to -€42 million (Q2/18: -€14 million) with a margin of -9.0% (Q2/18: -5.3%). In H1/19, Operating cash flow2 decreased to -€65 million (H1/18:
-€56 million) with a margin of -7.2% (H1/18: -10.9%).
Fresenius Vamed confirms its outlook for FY/19 and expects organic sales growth of ~10% and EBIT growth2 of 15% to 20%.
For further information on the IFRS 16 reconciliation of Fresenius Vamed, please see page 18 of the PDF document.
1 Adjusted for German post-acute care business acquired from Fresenius Helios as of July 1, 2018
2 Adjusted for IFRS 16 effect
3 Net income attributable to shareholders of VAMED AG
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 of the PDF document.
Conference Call
As part of the publication of the results for the second quarter 2019, a conference call will be held on July 30, 2019 at 1:30 p.m. CEDT (7:30 a.m. EDT). You are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com/media-calendar. Following the call, a replay will be available on our website.
For additional information on the performance indicators used please refer to our website www.fresenius.com/alternative-performance-measures.
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.
If no timeframe is specified, information refers to Q2/2019
1 Adjusted for IFRS 16 effect
2 Q2/18 and H1/18 adjusted for divestitures of Care Coordination activities at Fresenius Medical Care (FMC)
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 of the PDF document.
Group sales growth guidance for 2019 raised
Based on the Group’s good H1/19 results and good prospects for the remainder of the year, Fresenius raises its 2019 Group sales growth guidance. Fresenius now projects sales growth1 of 4% to 7% in constant currency. Previously, Fresenius expected sales growth1 of 3% to 6% in constant currency. The company confirms its earnings guidance. Net income2,3 growth is expected to be ~0% in constant currency. The guidance for 2019 includes the related sales and dilutive earnings contributions of the NxStage acquisition.
Fresenius expects net debt/EBITDA4 at year-end to be around the upper-end of the original self-imposed target corridor of 2.5x to 3.0x. This includes the NxStage acquisition which is increasing the net debt/EBITDA ratio in 2019 by ~30 basis points and excludes IFRS 16 effects.
Due to the adoption of the IFRS 16 accounting standard (“IFRS 16 effect”), Fresenius’ self-imposed target corridor has shifted to 3.0x to 3.5x net debt/EBITDA on a reported basis.
1 On a comparable basis: FY/18 base: €33,009 million; FY/18 adjusted for divestitures of Care Coordination activities at FMC (H1/18); FY/19: adjusted for IFRS 16 effect
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA
3 On a comparable basis: FY/18 base: €1,872 million; FY/18 before special items and adjusted for divestitures of Care Coordination activities at FMC (H1/18); FY/19: before special items (transaction-related expenses, revaluations of biosimilars contingent liabilities, gain related to divestitures of Care Coordination activities at FMC, expenses associated with the cost optimization program at FMC), adjusted for IFRS 16 effect
4 Both net debt and EBITDA calculated at expected annual average exchange rates; excluding further potential acquisitions
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 of the PDF document.
6% sales growth1 in constant currency
Group sales were €8,761 million including an IFRS 16 effect of -€18 million. Group sales1 on a comparable basis increased by 8% (6% in constant currency) to €8,779 million (Q2/18: €8,124 million). Organic sales growth was 5%. Acquisitions/divestitures contributed net 1% to growth. In H1/19, Group sales were €17,256 million including an IFRS 16 effect of -€40 million. Group sales1 on a comparable basis increased by 8% (6% in constant currency) to €17,296 million (H1/18: €15,994 million). Organic sales growth was 5%. Acquisitions/divestitures contributed net 1% to growth. Positive currency translation effects of 2% were mainly driven by the U.S. dollar strengthening against the euro.
Net income2,3 growth in constant currency
Group EBITDA before special items was €1,703 million including an IFRS 16 effect of €242 million. Group EBITDA2 on a comparable basis decreased by 2% (-5% in constant currency) to €1,461 million (Q2/18: €1,495 million). In H1/19, Group EBITDA before special items was €3,404 million including an IFRS 16 effect of €462 million. Group EBITDA2 on a comparable basis increased by 2% (-1% in constant currency) to €2,942 million (H1/18: €2,889 million).
Group EBIT before special items was €1,118 million including an IFRS 16 effect of €37 million. Group EBIT2 on a comparable basis decreased by 5% (-7% in constant currency) to €1,081 million (Q2/18: €1,135 million). The EBIT margin2 on a comparable basis was 12.3% (Q2/18: 14.0%). A significant contributor was the reduction in patient attribution and a decreasing savings rate for ESCOs, based on recent reports for prior plan years (“ESCO effect”). Reported Group EBIT4 was €1,118 million. In H1/19, Group EBIT before special items was €2,248 million including an IFRS 16 effect of €56 million. Group EBIT2 on a comparable basis remained at previous year’s level (-3% in constant currency) at €2,192 million (H1/18: €2,185 million). The EBIT margin2 on a comparable basis was 12.7% (H1/18: 13.7%). Reported Group EBIT4 was €2,233 million.
Group net interest before special items was -€180 million including an IFRS 16 effect of -€58 million. On a comparable basis, net interest2 improved to -€122 million (Q2/18: -€140 million) mainly due to successful refinancing activities and lower interest rates. Reported Group net interest4 was -€179 million. In H1/19, Group net interest before special items was -€361 million including an IFRS 16 effect of -€106 million. On a comparable basis, net interest1 improved to -€255 million (H1/18: -€279 million). Reported Group net interest3 was -€363 million.
1 On a comparable basis: Q2/18 and H1/18 adjusted for divestitures of Care Coordination activities at FMC;
Q2/19 and H1/19 adjusted for IFRS 16 effect
2 On a comparable basis: Q2/19 and H1/19 before special items and adjusted for IFRS 16 effect;
Q2/18 and H1/18 adjusted for divestitures of Care Coordination activities at FMC
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
4 After special items and including IFRS 16 effect
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 of the PDF document.
The Group tax rate before special items and adopting IFRS 16 was 22.8%. Group tax rate1 on a comparable basis was 22.8% (Q2/18: 23.3%). In H1/19, the Group tax rate before special items and adopting IFRS 16 was 23.1%. In H1/19, Group tax rate1 on a comparable basis was 23.1% (H1/18: 22.1%).
Noncontrolling interest before special items was €253 million including an IFRS 16 effect of €7 million. Noncontrolling interest1 on a comparable basis was €260 million (Q2/18:
€290 million). In H1/19, Noncontrolling interest before special items was €524 million including an IFRS 16 effect of €20 million. Noncontrolling interest1 on a comparable basis was €544 million (H1/18: €560 million), of which 93% was attributable to the Noncontrolling interest in Fresenius Medical Care.
Group net income2 before special items was €471 million including an IFRS 16 effect of -€9 million. Group net income1,2 on a comparable basis increased by 1% (0% in constant currency) to €480 million (Q2/18: €473 million). Reported Group net income2,3 was €471 million. Earnings per share2 before special items were €0.85 including an IFRS 16 effect of -€0.01. Earnings per share1,2 on a comparable basis increased by 1% (0% in constant currency) to €0.86 (Q2/18: €0.85). Reported Earnings per share2,3 were €0.85.
In H1/19, Group net income2 before special items was €928 million including an IFRS 16 effect of -€17 million. Group net income1,2 on a comparable basis increased by 2% (0% in constant currency) to €945 million (H1/18: €924 million). Reported Group net income2,3 was €924 million. In H1/19, Earnings per share2 before special items were €1.67 including an IFRS 16 effect of -€0.03. Earnings per share1,2 on a comparable basis increased by 2% (0% in constant currency) to €1.70 (H1/18: €1.66). Reported Earnings per share2,3 were €1.66.
Continued investment in growth
2019 is an investment year for the Fresenius Group. Fresenius is making good progress in all of its investment initiatives to secure long-term sustainable growth. Spending on property, plant and equipment was €565 million (Q2/18: €451 million). This corresponds to 6% of sales. In H1/19, spending on property, plant and equipment was €1,006 million (H1/18: €831 million), primarily for the modernization and expansion of dialysis clinics, production facilities as well as hospitals and day clinics. This corresponds to 6% of sales.
Total acquisition spending was €234 million (Q2/18: €194 million) including the acquisition of Clínica Medellín in Colombia by Fresenius Helios, among others. In H1/19, total acquisition spending was €2,157 million (H1/18: €386 million), mainly for the acquisition of NxStage by Fresenius Medical Care.
1 On a comparable basis: Q2/19 and H1/19 before special items and adjusted for IFRS 16 effect;
Q2/18 and H1/18 adjusted for divestitures of Care Coordination activities at FMC
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA
3 After special items and including IFRS 16 effect
Cash flow development
Group operating cash flow was €1,205 million including an IFRS 16 effect of €182 million. On a comparable basis, Group operating cash flow was €1,023 million (Q2/18: €1,020 million) with a margin of 11.7% (Q2/18: 12.2%). Free cash flow before acquisitions and dividends adjusted for IFRS 16 was €467 million (Q2/18: €580 million). Free cash flow after acquisitions and dividends adjusted for IFRS 16 was -€437 million (Q2/18: €1,331 million). The IFRS 16 effect amounts to €182 million respectively. Correspondingly, cash flow from financing activities decreased by €182 million.
In H1/19, Group operating cash flow was €1,494 million including an IFRS 16 effect of €353 million. On a comparable basis, Group operating cash flow was €1,141 million (H1/18: €1,256 million) with a margin of 6.6% (H1/18: 7.6%). Free cash flow before acquisitions and dividends adjusted for IFRS 16 was €128 million (H1/18: €425 million) mainly due to increasing investments. Free cash flow after acquisitions and dividends adjusted for IFRS 16 was -€2,719 million (H1/18: €942 million). The IFRS 16 effect amounts to €353 million respectively. Correspondingly, cash flow from financing activities decreased by €353 million.
Solid balance sheet structure
The Group’s total assets were €64,929 million including an IFRS 16 effect of €5,587 million. Adjusted for IFRS 16, Group total assets1 increased by 5% (4% in constant currency) to €59,342 million (Dec. 31, 2018: €56,703 million). Current assets1 remained flat (remained flat in constant currency) to €14,851 million (Dec. 31, 2018: €14,790 million). Non-current assets1 increased by 6% (6% in constant currency) to €44,491 million (Dec. 31, 2018: € 41,913 million).
Total shareholders’ equity was €25,382 million including an IFRS 16 effect of -€186 million. Adjusted for IFRS 16, total shareholders’ equity increased by 2% (2% in constant currency) to €25,568 million (Dec. 31, 2018: €25,008 million). The equity ratio was 39.1%. Adjusted for IFRS 16, the equity ratio was 43.1% (Dec. 31, 2018: 44.1%).
Group debt was €26,879 million including an IFRS 16 effect of €5,773 million. Adjusted for IFRS 16, Group debt increased by 11% to €21,106 million (11% in constant currency) (Dec. 31, 2018: € 18,984 million). Group net debt was €25,416 million including an IFRS 16 effect of €5,773 million. Adjusted for IFRS 16, Group net debt increased by 21% (21% in constant currency) to € 19,643 million (Dec. 31, 2018: € 16,275 million) mainly due to the acquisition of NxStage by Fresenius Medical Care.
As of June 30, 2019, the net debt/EBITDA ratio increased to 3.21x1,2,3,4 (December 31, 2018: 2.71x2,4). Including the IFRS 16 effect, the reported net debt/EBITDA ratio increased to 3.64x2,3,4.
1 Adjusted for IFRS 16 effect
2 At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures
3 Including acquisition of NxStage
4 Before special items
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32.
Business Segments
Fresenius Medical Care (Figures according to Fresenius Medical Care press release)
Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of June 30, 2019, Fresenius Medical Care was treating 339,550 patients in 3,996 dialysis clinics. Along with its core business, the company provides related medical services in the field of Care Coordination.
Adjusted for the Q2/18 contribution from the divested Care Coordination activities, the IFRS 16 effect and the contribution from NxStage, sales of Fresenius Medical Care increased by 8% (5% at constant currency) to €4,284 million (Q2/18: €3,956 million). Organic sales growth was 4%. Positive currency translation effects of 3% were mainly related to the U.S. dollar strengthening against the euro. In H1/19, sales adjusted for the H1/18 contribution from the divested Care Coordination activities, the IFRS 16 effect and the contribution from NxStage increased by 9% (5% at constant currency) to €8,409 million (H1/18: €7,680 million). Organic sales growth was 5%.
EBIT4 decreased by 12% (-17% in constant currency) to €491 million (Q2/19: €558 million) The EBIT margin4 decreased to 11.5% (Q2/18: 14.1%). A significant contributor was the reduction in patient attribution and a decreasing savings rate for ESCOs, based on recent reports for prior plan years (“ESCO effect”).
1 On an adjusted basis: before special items (transaction-related expenses, gain related to divestitures of Care Coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effect, excluding effects from NxStage transaction
2 Q2/18 and H1/18 adjusted for divestitures of Care Coordination activities
3 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
4 Q2/18 and H1/18 before special items and after adjustments; Q2/19 and H1/19 before special items (transaction-related expenses, gain related to divestitures of Care Coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effect, excluding effects from NxStage transaction
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32.
In H1/19, EBIT6 decreased by 2% (-7% in constant currency) to €1,042 million (H1/18: €1,064 million). The EBIT margin4 decreased to 12.4% (H1/18: 13.9%).
Net income1,2 decreased by 9% (-14% in constant currency) to €279 million (Q2/18: €308 million). A significant contributor was the ESCO effect. In H1/19, net income1,2 decreased by 1% (-6% in constant currency) to €597 million (H1/18: €604 million).
Operating cash flow was €700 million3 (Q2/18: €656 million) with a margin of 16.0% (Q2/18: 15.6%). In H1/19, operating cash flow was €635 million (H1/18: €611 million) with a margin of 7.6% (H1/18: 7.5%).
For FY/19, Fresenius Medical Care expects adjusted sales to grow by 3% to 7%5,6 in constant currency. Adjusted net income1 is expected to develop in the range of -2% to +2%5,7 in constant currency.
For further information on the IFRS 16 reconciliation of Fresenius Medical Care, please see page 18 in the PDF document.
For further information, please see Fresenius Medical Care’s press release at www.freseniusmedicalcare.com.
1 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
2 Q2/18 and H1/18 before special items and after adjustments; Q2/19 and H1/19 before special items (transaction-related expenses, gain related to divestitures of care coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effect, excluding effects from NxStage transaction
3 €852 million including an IFRS 16 effect of €152 million
4 €928 million including an IFRS 16 effect of €293 million
5 FY/18 before special items, Q2/18 and H1/18 adjusted for divestitures of Care Coordination activities;
FY/19 before special items (transaction-related expenses, gain related to divestitures of care coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effects, excluding effects from NxStage transaction
6 FY/18 base: €16,026 million
7 FY/18 base: €1,341 million
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 in the PDF document.
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. In the biosimilars business, Fresenius Kabi develops products with a focus on oncology and autoimmune diseases.
Sales of Fresenius Kabi increased by 5% (5% in constant currency) to €1,691 million (Q2/18: €1,604 million). Organic sales growth was 4%. In H1/19, sales increased by 6% (4% in constant currency) to €3,392 million (H1/18: €3,207 million). Organic sales growth was 4%. Positive currency translation effects of 2% were mainly related to the U.S. dollar strengthening against the euro.
Sales in North America increased by 4% (organic growth: -1%) to €573 million (Q2/18: €549 million). In H1/19, sales in North America increased by 5% (organic growth:
-1%) to €1,196 million (H1/18: €1,140 million). The anticipated easing of shortage situations, intensified competition in individual molecules, and a prescribing trend towards non-opioids pain management were the main headwinds.
Sales in Europe grew by 2% (organic growth: 1%) to €572 million (Q2/18: €563 million). In H1/19, sales in Europe increased by 2% (organic growth: 2%) to €1,145 million (H1/18: €1,120 million).
Sales in Asia-Pacific increased by 15% (organic growth: 15%) to €374 million (Q2/18: €326 million). In H1/19, sales in Asia-Pacific increased by 14% (organic growth: 13%) to €715 million (H1/18: €627 million).
Sales in Latin America/Africa increased by 4% (organic growth: 13%) to €172 million (Q2/18: €166 million). In H1/19, sales in Latin America/Africa increased by 5% (organic growth: 15%) to €336 million (H1/18: €320 million).
EBIT1 increased by 7% (4% in constant currency) to €308 million (Q2/18: €289 million) with an EBIT margin1 of 18.2% (Q2/18: 18.0%). In H1/19, EBIT1 increased by 10% (6% in constant currency) to €611 million (H1/18: €557 million) with an EBIT margin1 of 18.0% (H1/18: 17.4%).
Net income1,2 increased by 14% (12% in constant currency) to €211 million (Q2/18: €185 million). In H1/19, net income1,2 increased by 17% (12% in constant currency) to €414 million (H1/18: €355 million).
Operating cash flow3 was €201 million (Q2/18: €228 million). The cash flow margin was 11.9% (Q2/18: 14.2%). In H1/19, operating cash flow3 was €333 million (H1/18: €454 million). The cash flow margin was 9.8% (H1/18: 14.2%).
Fresenius Kabi confirms its outlook for FY/19 and expects organic sales growth4 of 3% to 6% and EBIT growth5 in constant currency of 3% to 6%.
For further information on the IFRS 16 reconciliation of Fresenius Kabi, please see page 18 of the PDF document.
1 On a comparable basis: before special items and adjusted for IFRS 16 effect
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA
3 Adjusted for IFRS 16 effect (operating cash flow after special items)
4 On a comparable basis: FY/18 base: €6,544 million; FY/19 before special items (acquisition-related expenses, revaluations of biosimilars contingent liabilities) and adjusted for IFRS 16 effect
5 On a comparable basis: FY/18 base: €1,139 million; FY/18 before special items; FY/19 before special items (acquisition-related expenses, revaluations of biosimilars contingent liabilities) and adjusted for IFRS 16 effect.
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 of the PDF document.
Fresenius Helios
Fresenius Helios is Europe's leading private hospital operator. The company comprises Helios Germany and Helios Spain (Quirónsalud). Helios Germany operates 86 hospitals, ~125 outpatient centers and treats approximately 5.3 million patients annually. Quirónsalud operates 50 hospitals, 62 outpatient centers and around 300 occupational risk prevention centers, and treats approximately 13.3 million patients annually.
Sales of Fresenius Helios remained at previous year’s level (increased by 6%1 organic growth: 5%) to €2,349 million (Q2/18: €2,343 million). In H1/19, sales also remained at previous year’s level (increased by 5%1; organic growth: 4%) to €4,660 million (H1/18: €4,674 million).
Sales of Helios Germany decreased by 3% (increased by 5%1; organic growth: 5%) to €1,506 million (Q2/18: €1,547 million). Organic sales growth was positively influenced by pricing effects and a strong case mix. In H1/19, sales of Helios Germany decreased by 4% (increased by 3%1; organic growth: 3%) to €2,991 million (H1/18: €3,121 million).
Sales of Helios Spain increased by 6% (organic growth: 4%) to €842 million (Q2/18: €796 million) despite the negative effect related to the Easter holidays. In H1/19, sales of Helios Spain increased by 7% (organic growth: 6%) to €1,668 million (H1/18: €1,553 million).
1 Adjusted for the post-acute care business transferred to Fresenius Vamed as of July 1, 2018
2 Adjusted for IFRS 16 effect
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 of the PDF document.
EBIT1 of Fresenius Helios decreased by 6% (-4% ) to €274 million (Q2/18: €293 million) with an EBIT margin of 11.7% (Q2/18: 12.5%). In H1/19, EBIT1 of Fresenius Helios decreased by 5% (-4%2) to €540 million (H1/18: €571 million) with an EBIT margin of 11.6% (H1/18: 12.2%).
EBIT1 of Helios Germany decreased by 8% (-4%2) to €154 million (Q2/18: €168 million) with an EBIT margin of 10.2% (Q2/18: 10.9%). In H1/19, EBIT1 of Helios Germany decreased by 12% (-10%2) to €303 million (H1/18: €345 million) with an EBIT margin of 10.1% (H1/18: 11.1%). Whilst EBIT and margin have further stabilized, investments for preparatory structural measures continue to weigh on Helios Germany’s financial performance.
Despite the negative Easter effect, EBIT1 of Helios Spain increased by 1% to €125 million (Q2/18: €124 million) with an EBIT margin of 14.8% (Q2/18: 15.6%). In H1/19, EBIT1 of Helios Spain increased by 7% to €244 million (H1/18: €227 million).
Net income1,3 decreased by 7% to €183 million (Q2/18: €197 million). In H1/19, net income1,3 also decreased by 7% to €359 million (H1/18: €388 million).
Operating cash flow1 was €197 million (Q2/18: €162 million) with a margin of 8.4% (Q2/18: 6.9%). In H1/19, operating cash flow1 was €288 million (H1/18: €259 million) with a margin of 6.2% (H1/18: 5.5%). The increase is mainly attributable to the decrease in days sales outstanding (DSO) at Helios Spain.
Fresenius Helios confirms its outlook for FY/19 and expects organic sales growth of 2% to 5% and an EBIT1 growth of -5% to -2%.
For further information on the IFRS 16 reconciliation of Fresenius Helios, please see page 18.
1 Adjusted for IFRS 16 effect
2 Adjusted for the post-acute care business transferred to Fresenius Vamed as of July 1, 2018
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 of the PDF document.
Fresenius Vamed
Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide and is a leading post-acute care provider in Central Europe. The portfolio ranges along the entire value chain: from project development, planning, and turnkey construction, via maintenance and technical management to total operational management.
Sales of Fresenius Vamed increased by 76% (31%1) to €467 million (Q2/18: €266 million). Organic sales growth was 27%, acquisitions contributed 3%1 to growth. Positive currency translation effects increased sales by 1%. Sales in the service business grew by 106% (35%1) to €344 million (Q2/18: €167 million), supported by an intensified collaboration with Fresenius Helios. Sales of the project business increased by 24% to €123 million (Q2/18: €99 million). In H1/19, sales increased by 76% (32%1) to €907 million (H1/18: €515 million). Organic sales growth was 29%, acquisitions contributed 3%1 to growth. Both the service and the project business showed strong growth momentum.
EBIT2 increased by 67% to €20 million (Q2/18: €12 million) with an EBIT margin of 4.3% (Q2/18: 4.5%). EBIT2 additionally adjusted for the acquisition of Helios’ German post-acute care business was €8 million (-33% YoY) with an EBIT margin of 2.3% - the decrease was mainly driven by phasing effects in the project business. In H1/19, EBIT2 increased by 72% to €31 million (H1/18: €18 million) with an EBIT margin of 3.4% (H1/18: 3.5%). EBIT2 additionally adjusted for the acquisition of Helios’ German post-acute care business was €15 million (-17% YoY) with an EBIT margin of 2.2%.
Net income2,3 increased by 86% to €13 million (Q2/18: €7 million). In H1/19, net income2,3 increased by 73% to €19 million (H1/18: €11 million).
Order intake decreased by -41% to €115 million (Q2/18: €195 million) but increased by 9% to €498 million in H1/19 (H1/18: €455 million). As of June 30, 2019, order backlog was at €2,690 million (Dec 31, 2018: €2,420 million).
Operating cash flow2 decreased to -€42 million (Q2/18: -€14 million) with a margin of -9.0% (Q2/18: -5.3%). In H1/19, Operating cash flow2 decreased to -€65 million (H1/18:
-€56 million) with a margin of -7.2% (H1/18: -10.9%).
Fresenius Vamed confirms its outlook for FY/19 and expects organic sales growth of ~10% and EBIT growth2 of 15% to 20%.
For further information on the IFRS 16 reconciliation of Fresenius Vamed, please see page 18 of the PDF document.
1 Adjusted for German post-acute care business acquired from Fresenius Helios as of July 1, 2018
2 Adjusted for IFRS 16 effect
3 Net income attributable to shareholders of VAMED AG
For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 of the PDF document.
Conference Call
As part of the publication of the results for the second quarter / first half of 2019, a conference call will be held on July 30, 2019 at 1:30 p.m. CEDT (7:30 a.m. EDT). All investors are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com/investors. Following the call, a replay will be available on our website.
For additional information on the performance indicators used please refer to our website www.fresenius.com/alternative-performance-measures.
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.
Standard & Poor’s has revised Fresenius’ corporate credit rating to BBB with a stable outlook from BBB- with a positive outlook. Fresenius is rated investment grade by the three leading rating agencies Standard & Poor’s (BBB/stable), Moody's (Baa3/stable) and Fitch (BBB-/stable).
Standard & Poor’s has revised Fresenius’ corporate credit rating to BBB with a stable outlook from BBB- with a positive outlook. Fresenius is rated investment grade by the three leading rating agencies Standard & Poor’s (BBB/stable), Moody's (Baa3/stable) and Fitch (BBB-/stable).
