• Excellent performance of Fresenius Kabi across all regions and product categories 
• Fresenius Medical Care’s sales and earnings growth below the Company’s expectations
• Preparatory initiatives for expected regulatory requirements and decline in admissions impact Helios Germany; Helios Spain with steady yet dynamic growth 
• Strong momentum in both Vamed’s project and service businesses 

Group guidance for 2018 confirmed and narrowed

As announced on October 16, 2018 Fresenius confirms and narrows its Group guidance¹  for FY/18. This is mainly driven by an excellent development of Fresenius Kabi, which partially offset the lower than expected sales and earnings contributions of Fresenius Medical Care and Helios Germany. Group sales are expected to increase at the low end of the original 5% to 8%² guidance range (in constant currency). Fresenius expects net income^1,3,4  growth at the low end of the original 6% to 9% guidance range (in constant currency). Excluding expenditures for the further development of the biosimilars business, net income^1,3,5  growth is projected at the low end of the original ~10% to 13% guidance range (in constant currency). 

¹ 2018 before special items (excluding effects related to the Akorn and NxStage transactions, gains from divestitures of Care Coordination activities and increase of FCPA provision)
² FY/17 base adjusted for IFRS 15 adoption (-€486 million) and divestitures of Care Coordination activities (-€558 million) at Fresenius Medical Care
³ Net income attributable to shareholders of Fresenius SE & Co. KGaA
⁴ FY/17 base: €1,804 million; FY/18 before special items; including contributions to the campaigns in the U.S. opposing state ballot initiatives at Fresenius Medical Care; including expenditures for further development of the biosimilars business at Fresenius Kabi (€43 million after tax in FY/17 and ~€120 million after tax in FY/18)
⁵ FY/17 base: €1,847 million; FY/18 before special items; including contributions to the campaigns in the U.S. opposing state ballot initiatives at Fresenius Medical Care; excluding expenditures for further development of the biosimilars business at Fresenius Kabi (€43 million after tax in FY/17 and ~€120 million after tax in FY/18)

 

If no timeframe is specified, information refers to Q1-3/18

Q3/18:

• Sales: €8.2 billion (+3%¹, +4% in constant currency¹)
• EBIT²: €1,112 million (+0%, +0% in constant currency)
• EBIT²: (excl. biosimilars business): €1,153 million (+3%, +2% in constant currency)
• Net income^2,3: €445 million (+8%, +8% in constant currency)
• Net income^2,3: €474 million (+13%, +13% in constant currency)
  (excl. biosimilars business)

Q1-3/18:

• Sales: €24.7 billion (+1%1, +5% in constant currency¹)
• EBIT²: €3,311 million (-5%, -1% in constant currency)
• EBIT²: (excl. biosimilars business): €3,424 million (-3%, +2% in constant currency) 
• Net income^2,3: €1,367 million (+3%, +7% in constant currency)
• Net income^2,3: €1,449 million (+8%, +12% in constant currency)
  (excl. biosimilars business)

¹ Growth rates adjusted for IFRS 15 adoption and divestitures of Care Coordination activities (Q3/17 base: €7,927 million; Q1-3/17 base: €24,551 million)
² Before special items (before expenses related to the Akorn transaction, gains from divestitures of Care Coordination activities and increase of FCPA provision); growth rates: 2017 base adjusted for divestitures of Care Coordination activities
³ Net income attributable to shareholders of Fresenius SE & Co. KGaA 
For a detailed overview of special items please see the reconciliation tables on pages 19-20 in the PDF document.

Stephan Sturm, CEO of Fresenius, said: “In the third quarter, Fresenius again achieved healthy sales growth and drove earnings growth even a touch stronger. Fresenius Kabi, Fresenius Vamed and Quirónsalud delivered a truly excellent performance. At the same time, Fresenius Medical Care and our German Helios hospitals will enhance their efforts to further improve and adapt to changing market conditions. From an overall position of strength, we are in the closing stretch for yet another record year.”

5% sales growth in constant currency¹

Group sales increased by 1%¹ (5%¹ in constant currency) to €24,695 million (Q1-3/17: €25,191 million). Organic sales growth was 4%. Acquisitions/divestitures contributed net 1% to growth. Negative currency translation effects of 4% were mainly driven by the devaluation of the U.S. dollar and the Chinese yuan against the euro. In Q3/18, Group sales increased by 3%¹ (4%¹ in constant currency) to €8,192 million (Q3/17: €8,297 million). Organic sales growth was 4%. Acquisitions/divestitures had no net contribution to growth. Currency translation effects reduced sales by 1%.

¹ Growth rates adjusted for IFRS 15 adoption and divestitures of Care Coordination activities at Fresenius Medical Care (Q1-3/17 base: €24,551 million; Q3/17 base: €7,927 million)

Group sales by region:

7% net income^1,2,3 growth in constant currency

Group EBITDA² decreased by 4%³ (0%³ in constant currency) to €4,375 million (Q1-3/17: €4,579 million). Group EBIT² decreased by 5%³ (-1%³ in constant currency) to €3,311 million (Q1-3/17: €3,522 million). The EBIT margin² was 13.4% (Q1 3/17: 14.0%). Group EBIT² before expenses for the further development of the biosimilars business decreased by 3%³ (increased 2%³ in constant currency) to €3,424 million. In the prior-year period the compensation for treatments of U.S. war veterans (“VA agreement”) contributed €88 million as a one-time effect. Group EBIT² excluding the VA agreement and expenses for the further development of the biosimilars business increased by 4% in constant currency. 

In Q3/18, Group EBIT³ was broadly stable year-over-year³ (broadly stable³ in constant currency) at €1,112 million (Q3/17: €1,129 million), with an EBIT margin² of 13.6% (Q3/17: 13.6%). Group EBIT² excluding the prior-year VA agreement and expenses for the further development of the biosimilars business increased by 2%³ in constant currency.

Group net interest² was -€436 million (Q1-3/17: -€484 million). The decrease is mainly driven by currency effects as well as refinancing activities and the divestitures of Care Coordination activities. 

The decrease of the Group tax rate before special items to 22.0% (Q1-3/17: 28.1%) was mainly due to the U.S. tax reform and some one time effects in Q3 at Fresenius Medical Care and Fresenius Kabi. In Q3/18, the Group tax rate² was 21.4% (Q3/17: 27.4%).

Noncontrolling interest² was €876 million (Q1-3/17: €854 million), of which 95% was attributable to the noncontrolling interest in Fresenius Medical Care.

¹ Net income attributable to shareholders of Fresenius SE & Co. KGaA
² Before special items 
³ Base 2017 base adjusted for divestitures of Care Coordination activities
For a detailed overview of special items please see the reconciliation tables on pages 19-20 in the PDF document.
 

Group net income^1,2  increased by 3%³  (7%³ in constant currency) to €1,367 million (Q1 3/17: €1,329 million). Earnings per share^1,2 increased by 3%³ (7%³ in constant currency) to €2.46 (Q1-3/17: €2.40). In Q3/18, Group net income^1,2 increased by 8%³ (8%³ in constant currency) to €445 million (Q3/17: €413 million). Earnings per share^1,2 increased by 7%³ (7%³ in constant currency) to €0.80 (Q3/17: €0.75).

Group net income^1,2,4  before expenses for the further development of the biosimilars business increased by 8%³ (12%³ in constant currency) to €1,449 million (Q1-3/17: €1,339 million). Earnings per share^1,2,4 increased by 8%³ (12%³ in constant currency) to €2.61 (Q1-3/17: €2.42). In Q3/18, Group net income^1,2,4 increased by 13%³ (13%³ in constant currency) to €474 million (Q3/17: €423 million). Earnings per share^1,2,4 increased by 12%³ (12%³ in constant currency) to €0.85 (Q3/17: €0.77).

Group net income^2,5 after special items increased by 16% (by 21% in constant currency) to €1,511 million (Q1-3/17: €1,303 million), mainly due to gains related to divestitures in Care Cordination activities at Fresenius Medical Care. Earnings per share^2,5  increased by 16% (21% in constant currency) to €2.72 (Q1-3/17: €2.35). In Q3/18, Group net income^2,5 increased by 6% (4% in constant currency) to €419 million (Q3/17: €396 million). Earnings per share^2,5 increased by 6% (4% in constant currency) to €0.75 (Q3/17: €0.71).

¹ Before special items 
² Net income attributable to shareholders of Fresenius SE & Co. KGaA
³ 2017 base adjusted for divestitures of Care Coordination activities
⁴ Before expenses for the further development of the biosimilars business
⁵ After special items
For a detailed overview of special items please see the reconciliation tables on pages 19-20 in the PDF document.
 

Continued investment in growth 

Spending on property, plant and equipment was €1,370 million (Q1-3/17: €1,137 million), primarily for the modernization and expansion of dialysis clinics, production facilities as well as hospitals and day clinics. This corresponds to 5.5% of sales.

Total acquisition spending was €876 million (Q1-3/17: €6,662 million). The prior-year period included the acquisition of Quirónsalud.

Cash flow development

Group operating cash flow decreased by 15% to €2,405 million (Q1-3/17: €2,821 million) with a margin of 9.7% (Q1-3/2017: 11.2%). The decrease is mainly due to two effects at Fresenius Medical Care in North America: Receipt of a ~€200 million payment under the VA agreement in the prior-year period as well as increased accounts receivable related to the addition of calcimimetics into the Medicare ESRD payment bundle. In addition, negative currency translation effects weighed on the cash flow development in Q1-3/18. Operating cash flow in Q3/18 increased by 1% to €1,149 million (Q3/17: €1,138 million), with a margin of 14.0% (Q3/17: 13.7%). 

Given the effects described above and growing investments, free cash flow before acquisitions and dividends decreased to €1,049 million (Q1-3/17: €1,705 million). Free cash flow after acquisitions and dividends was €1,172 million (Q1-3/17: -€5,233 million).

Solid balance sheet structure

The Group’s total assets increased by 5% (4% in constant currency) to €55,723 million (Dec. 31, 2017: €53,133 million). Current assets grew by 16% (16% in constant currency) to €14,593 million (Dec. 31, 2017: €12,604 million). Non-current assets increased by 1% (broadly stable in constant currency) to €41,130 million (Dec. 31, 2017: € 40,529 million).

Total shareholders’ equity increased by 10% (9% in constant currency) to €23,998 million (Dec. 31, 2017: €21,720 million). The equity ratio increased to 43.1% (Dec. 31, 2017: 40.9%). 

Group debt was broadly stable unchanged (decreased by 1% in constant currency) at €18,961 million (Dec. 31, 2017: € 19,042 million). Group net debt decreased by 5% (-6% in constant currency) to € 16,505 million (Dec. 31, 2017: € 17,406 million) mainly due to the proceeds from divestitures of Care Coordination activities. 

As of September 30, 2018, the net debt/EBITDA ratio was 2.75^1,2  (December 31, 2017: 2.84^1,2). Excluding the proceeds from divestitures of Care Coordination activities the net debt/EBITDA ratio was 2.96^1,2. At year-end 2018, Fresenius now expects the FY/18 net debt/EBITDA^1,2 ratio to be on a comparable level to year-end 2017.

¹ At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures, excluding Akorn and NxStage transactions 
² Before special items 

Increased number of employees 

As of September 30, 2018, the number of employees was 277,318 (Dec. 31, 2017: 273,249).

Business Segments

Fresenius Medical Care 

Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of September 30, 2018, Fresenius Medical Care was treating 329,085 patients in 3,872 dialysis clinics. Along with its core business, the company provides related medical services in the field of Care Coordination.

• 3% comparable¹ sales growth in constant currency in Q3
• -2% adjusted^4,6 net income decrease in constant currency in Q3
• Outlook for FY/18 adjusted

Sales decreased by 8% (-2% in constant currency) to €12,247 million (Q1-3/17: €13,355 million). Organic sales growth was 3%. Currency translation effects reduced sales by 7%. The adoption of IFRS 15 reduced sales by 3%. Q1-3/17 base additionally adjusted for divestitures of Care Coordination activities, sales decreased by 4% (increased by 3% in constant currency). 

¹ Adjusted for IFRS 15 implementation; base adjusted for divested Care Coordination activities
² Excluding VA agreement Q3: 3%; Q1-3: 4%
³ Excluding gains from divestitures of Care Coordination activities, increase of FCPA provision, ballot initiatives, divested Care Coordination activities in Q3/2017; including Natural disaster costs and VA agreement
⁴ Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
⁵ Consistent with guidance, i.e. excluding gains from divestitures of Care Coordination activities, increase of FCPA provision, ballot initiatives, , divested Care Coordination activities; including Natural disaster costs, the effect of the U.S. Tax Reform and including VA agreement
⁶ Consistent with guidance, i.e. excluding gains from divestitures of Care Coordination activities, the effect of the U.S. Tax Reform, VA agreement, FCPA provision, ballot initiatives, divested Care Coordination activities, Natural disaster costs

In Q3/18, sales decreased by 6% (-6% in constant currency) to €4,058 million (Q3/17: €4,336 million). Organic sales growth was 3%. The adoption of IFRS 15 reduced sales by 3%. Q3/17 base additionally adjusted for divestitures of Care Coordination activities, sales in Q3/18 increased by 2% (increased by 3% in constant currency).

Health Care services sales (dialysis services and care coordination) decreased by 4%¹ (increased by 3%¹  in constant currency) to €9,852 million (Q1-3/17: €10,950 million). With €2,395 million (Q1-3/17: €2,405 million), Health Care product sales were on prior-year’s level (increased by 5% in constant currency).  

In North America, sales decreased by 5%¹ (increased by 1%¹ in constant currency) to €8,589 million (Q1-3/17: €9,715 million). Health Care services sales decreased by 6%¹ (increased by 1%¹ in constant currency) to €7,978 million (Q1-3/17: €9,086 million). Excluding the 2017 effect from the VA Agreement (€96 million), Health Care services sales increased by 2%¹ in constant currency. Health Care product sales decreased by 3% (increased by 4% in constant currency) to €610 million (Q1-3/17: €629 million). 

Sales outside North America increased by 1% (7% in constant currency) to €3,648 million (Q1-3/17: €3,628 million). 

Health Care services sales increased by 1% (9% in constant currency) to €1,873 million (Q1-3/17: €1,864 million). Health Care product sales increased by 1% (5% in constant currency) to €1,774 million (Q1-3/17: €1,764 million). 

Fresenius Medical Care’s EBIT increased by 32% (39% in constant currency) to €2,425 million (Q1-3/17: €1,843 million), driven by the divestitures of Care Coordination activities. The EBIT margin increased to 19.8% (Q1-3/17: 13.8%). EBIT on a comparable basis decreased by 2% in constant currency and EBIT margin was 13.9% (Q1-3/17: 14.3%). 

In Q3/18, EBIT decreased by 13% (-20% in constant currency) to €527 million (Q3/17: €609 million). The EBIT margin decreased to 13.0% (Q3/17: 14.0%). EBIT on a comparable basis increased by 5% (increased by 4% in constant currency) and EBIT margin increased to 15.1% (Q3/17: 14.8%). 

¹ Growth rate adjusted for IFRS 15 implementation and divested Care Coordination activities 
 
Net income¹ increased by 76% (86% in constant currency) to €1,557 million (Q1-3/17: €886 million). Adjusted net income¹ growth was 4% in constant currency. Net income¹ growth on a comparable basis was 16% in constant currency. 

In Q3/18, net income¹ decreased by 8% (-17% in constant currency) to €285 million (Q3/17: €309 million). Adjusted net income¹ growth was -2% in constant currency. Net income¹ growth on a comparable basis was 19% in constant currency.

Operating cash flow was €1,220 million (Q1-3/17: €1,664 million). The cash flow margin was 10.0% (Q1-3/17: 12.5%). The decrease is mainly due to two effects in North America: Receipt of a ~€200 million payment under the VA agreement in the prior-year period as well as increased accounts receivable related to the addition of calcimimetics into the Medicare ESRD payment bundle. In Q3/18, operating cash flow was €609 million (Q3/17: €612 million), mainly driven by higher tax payments and discretionary contributions to pension plan assets in the U.S., almost fully offset by decreases in accounts receivable. The cash flow margin was 15.0% (Q3/17: 14.1%).

Fresenius Medical Care revised its outlook for FY/18 as the business development in Q3/18 was below the company’s expectations. Fresenius Medical Care now expects sales growth of 2% to 3%²  in constant currency (previously: 5% to 7%²). On a comparable basis³, Fresenius Medical Care now expects FY/18 net income¹ to increase by 11% to 12%³ in constant currency (previously: 13% to 15%³). On an adjusted basis⁴, Fresenius Medical Care now expects FY/18 net income¹ to increase by 2% to 3%⁴ in constant currency (previously: 7% to 9%⁴).

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

¹ Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
² 2017 base: €16,739 million (adjusted for IFRS 15 adoption (-€486 million) and divestitures of Care Coordination activities (-€558 million))
³ 2017 base: €1,242 million, excluding H2/17 net income of divestited Care Coordination activities (-€38 million); 2018 including benefits of the U.S. tax reform but excluding gains from divestitures of Care Coordination activities, contributions to the campaigns in the U.S. opposing state ballot initiatives at Fresenius Medical Care and FCPA provision
⁴ 2017 base: €1,162 million, excluding H2/17 net income of divested Care Coordination activities (-€38 million), the effect of the U.S. tax reform, natural disaster costs, FCPA provision and effects of the agreement with the U.S. Departments of Veterans Affairs and Justice (VA agreement); 2018 excluding benefits of the U.S. tax reform, gains from divestitures of Care Coordination activities, contributions to the campaigns in the U.S. opposing state ballot initiatives and FCPA provision 
 

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, we are developing products with a focus on oncology and autoimmune diseases.

• 8% organic sales growth and 14% EBIT¹ growth in constant currency (excl. biosimilars expenses) in Q3
• Sales outlook confirmed and strengthened: top end of 4% to 7% organic sales growth expected
• EBIT outlook raised: 1% to 3%⁵  EBIT growth in constant currency expected (~9% to 11%⁶ excl. biosimilars expenses) 

Sales increased by 2% (increased by 7% in constant currency) to €4,857 million (Q1-3/17: €4,764 million). Organic sales growth was 7%. Strong negative currency translation effects (-5%) were mainly related to the devaluation of the U.S. dollar, the Brazilian real and the Argentinian peso against the euro. In Q3/18, sales increased by 6% (8% in constant currency) to €1,650 million (Q3/17: €1,562 million). Organic sales growth was 8%.

Sales in Europe grew by 1% (organic growth: 3%) to €1,658 million (Q1-3/17: €1,635 million). In Q3/18, sales were unchanged (organic growth: 1%) at €538 million. 

¹ Before special items 
² Before expenses for the further development of the biosimilars business: Q3/18: 14%; Q1-3/18: 11%
³ Net income attributable to shareholders of Fresenius SE & Co. KGaA
⁴ Before expenses for the further development of the biosimilars business: Q3/18: 31%; Q1-3/18: 22% 
⁵ FY/17 base: €1,177 million; before special items, including expenditures for the further development of the biosimilars business (€60 million in FY/17 and ~€160 million in FY/18)
⁶ FY/17 base: €1,237 million; before special items, excluding expenditures for the further development of the biosimilars business (€60 million in FY/17 and ~€160 million in FY/18)
For a detailed overview of special items please see the reconciliation tables on pages 19-20 in the PDF document.
 

Sales in North America increased by 1% (organic growth: 8%) to €1,760 million (Q1-3/17: €1,736 million). In Q3/18, sales increased by 13% (organic growth: 12%) to €620 million (Q3/17: €549 million). 

Sales in Asia-Pacific increased by 8% (organic growth: 12%) to €964 million (Q1-3/17: €894 million). In Q3/18, sales increased by 8% (organic growth: 9%) to €337 million (Q3/17: €312 million). Sales in Latin America/Africa decreased by 5% (organic growth: 11%) to €475 million (Q1-3/17: €499 million). In Q3/18, sales decreased by 5% (organic growth increased by 13%) to €155 million (Q3/17: €163 million).

EBIT¹ decreased by 6% (increased by 1% in constant currency) to €854 million (Q1-3/17: €905 million) with an EBIT margin¹ of 17.6% (Q1-3/17: 19.0%). In Q3/18, EBIT¹ increased by 5% (5% in constant currency) to €297 million (Q3/17: €283 million) with an EBIT margin¹ of 18.0% (Q3/17: 18.1%).

EBIT¹ before expenses for the further development of the biosimilars business increased by 5% (11% in constant currency) to €967 million (Q1-3/17: €919 million) with an EBIT margin¹ of 19.9% (Q1-3/17: 19.3%). In Q3/18, EBIT¹ before expenses for the further development of the biosimilars business increased by 14% (14% in constant currency) to €338 million (Q3/17: €297 million) with an EBIT margin¹ of 20.5% (Q3/17: 19.0%).

Net income^1,2  increased by 2% (9% in constant currency) to €554 million (Q1-3/17: €544 million). In Q3/18, net income^1,2 increased by 21% (21% in constant currency) to €199 million (Q3/17: €165 million).

Operating cash flow increased by 28% to €820 million (Q1-3/17: €640 million). The cash flow margin grew to 16.9% (Q1-3/17: 13.4%). In Q3/18, operating cash flow increased by 49% to €366 million (Q3/17: €245 million) with a cash flow margin of 22.2% (Q3/2017: 15.7%) mainly driven by a strong operational performance and working capital improvements. 

¹ Before special items
² Net income attributable to shareholders of Fresenius SE & Co. KGaA 
For a detailed overview of special items please see the reconciliation tables on pages 19-20 of the PDF document.
 
Based on the strong development in Q3/18 Fresenius Kabi confirms and strengthens its organic sales growth guidance of 4% to 7% and now expects to reach the top end of this range. 

Fresenius Kabi has increased its FY/18 EBIT outlook and now expects 1% to 3%¹ growth in constant currency (previously: -2% to +1%¹). The increase is driven by a strong development across all product lines and regions with North America standing out. FY/18 EBIT excluding expenditures for the further development of the biosimilars business is now expected to grow by ~9% to 11%² in constant currency (previously: ~6% to 9%²).

¹ 2017 base: €1,177 million; before special items, including expenditures for the further development of the biosimilars business (€60 million in FY/17 and ~€160 million in FY/18)
² 2017 base: €1,237 million; before special items, excluding expenditures for the further development     of the biosimilars business (€60 million in FY/17 and ~€160 million in FY/18) 
For a detailed overview of special items please see the reconciliation tables on pages 19-20 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 87 hospitals, 89 outpatient centers and treats approximately 5.2 million patients annually. Quirónsalud operates 46 hospitals, 56 outpatient centers and around 300 occupational risk prevention centers, and treats approximately 11.6 million patients annually.

• 2% organic sales growth in Q3
• Preparatory initiatives for expected regulatory requirements and decline in admissions impact financial performance of Helios Germany 
• Helios Spain with steady yet dynamic growth
• 2018 sales outlook confirmed and narrowed, EBIT outlook adjusted: 0% to 2% (previously: 5% to 8%) 

As of July 1, 2018 Fresenius Helios transferred its German post-acute care business to Fresenius Vamed and adjusted its outlook accordingly. For a like-for-like comparison, we also provide sales and EBIT growth rates adjusted for the effects of this transaction. 

Fresenius Helios increased sales by 5% (7%¹) to €6,762 million (Q1-3/17: €6,422 million). Organic sales growth was 3%. In Q3/18, sales decreased by 4% (increased by 2%¹; organic growth: 2%) to €2,088 million (Q3/17: €2,166 million).

Sales of Helios Germany decreased by 1% (grew 2%¹; organic growth: 2%) to €4,531 million (Q1-3/17: €4,562 million). In Q3/18, sales decreased by 7% (0%¹; organic growth: 0%) to €1,410 million (Q3/17: €1,524 million). Sales are impacted by a decline in admissions, inter alia due to a trend towards outpatient treatments. To counter this trend, Helios Germany is expanding outpatient services offerings in a separate division. Helios Spain increased sales by 20% (organic growth: 5%) to €2,231 million (Q1-3/17: €1,860 million), mainly due to the additional month of consolidation compared to the prior-year period (Quirónsalud is consolidated since February 1, 2017). In Q3/18 Helios Spain increased sales by 6% (organic growth: 5%) to €678 million (Q3/17: €642 million). 

¹ Adjusted for German post-acute care business transferred to Fresenius Vamed
² Net income attributable to shareholders of Fresenius SE & Co. KGaA

Fresenius Helios grew EBIT by 1% (3%¹) to €775 million (Q1-3/17: €769 million) with a margin of 11.5% (Q1-3/17: 12.0%). In Q3/18, EBIT decreased by 12% (-6%¹) to €204 million (Q3/17: €232 million) with a margin of 9.8% (Q3/17: 10.7%).

EBIT of Helios Germany decreased by 11% (-8%¹) to €488 million (Q1-3/17: €549 million) with a margin of 10.8% (Q1-3/17: 12.0%). In Q3/18, EBIT decreased by 25% (-17%¹) to €143 million (Q3/17: €190 million) with a margin of 10.1% (Q3/17: 12.5%). Given a  significant fixed cost base, top line performance impacs EBIT over-proportionately. Additionally, EBIT development of Helios Germany is negatively affected by catalogue effects, preparatory initiatives for expected regulatory requirements (i.e. clustering) as well as a lack of privatization opportunities in the German market. 

EBIT of Helios Spain increased by 30% to €286 million (Q1-3/17: €220 million), mainly due to the strong operating performance and the additional month of consolidation compared to the prior-year period, with a margin of 12.8% (Q1-3/17: 11.8%). In Q3/18, from a moderate base, EBIT increased by 40% to €59 million (Q3/17: €42 million) with a margin of 8.7% (Q3/17: 6.5%).

Net income² of Fresenius Helios decreased by 2% to €516 million (Q1-3/17: €526 million). In Q3/18, net income² decreased by 16% to €128 million (Q3/17: €153 million).

Operating cash flow was €387 million (Q1-3/17: €560 million) with a margin of 5.7% (Q1-3/17: 8.7%). 
Fresenius Helios confirmed and narrowed its FY/18 organic sales growth outlook, and now projects growth at the low end of the original 3% to 6% range. Based on the Q3/18 business development in Germany, Fresenius Helios adjusts its FY/18 EBIT outlook and now expects 0% to 2% growth (previously: 5% to 8%). 

¹ Adjusted for German post-acute care business transferred to Fresenius Vamed
² Net income attributable to shareholders of Fresenius SE & Co. KGaA

Fresenius Vamed

Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide and is a 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.

• Excellent organic sales growth of 30% in Q3/18
• Both service and project businesses contributed to strong growth in Q3/18
• FY/18 outlook confirmed

As of July 1, 2018 Fresenius Helios transferred the post-acute care business to Fresenius Vamed. Fresenius Vamed adjusted its outlook accordingly. For a like-for-like comparison, we also provide sales and EBIT growth rates adjusted for the effects of this transaction. 

Sales increased by 32% (17%¹; 33% in constant currency) to €991 million (Q1-3/17: €748 million). Organic sales growth was 14% with a strong momentum in both the project and service businesses as well as increased sales from services for Fresenius Helios. Sales of the project business increased by 17% to €352 million (Q1-3/17: €301 million). Sales in the service business grew by 43% (17%¹) to €639 million (Q1-3/17: €447 million). In Q3/18, sales increased by 110% (32%¹; organic growth: 24%) to €315 million (Q3/17: €150 million).

EBIT increased by 53% (6%¹) to €49 million (Q1-3/17: €32 million) with a margin of 4.9% (Q1-3/17: 4.3%). In Q3/18, EBIT increased by 107% (7%¹) to €31 million (Q3/17: €15 million) with a margin of 6.5% (Q3/17: 5.6%).

Net income² increased by 57% to €33 million (Q1-3/17: €21 million). In Q3/18, net income² increased by 120% to €22 million (Q1-3/17: €10 million).

Order intake decreased by 19% to €567 million (Q1-3/17: €697 million). As of September 30, 2018, order backlog was €2,315 million (December 31, 2017: €2,147 million).

Fresenius Vamed has confirmed its outlook for 2018 and expects organic sales growth in the range of 5% to 10% and EBIT growth of 32% to 37%.

¹ Without German post-acute care business transferred from Fresenius Helios
² Net income attributable to shareholders of VAMED AG

Conference Call 

As part of the publication of the results for the third quarter / first nine month of 2018, a conference call will be held on October 30, 2018 at 2 p.m. CET (9 a.m. EDT). All investors are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com/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. 
 

• Excellent performance of Fresenius Kabi across all regions and product categories 
• Fresenius Medical Care’s sales and earnings growth below the Company’s expectations
• Preparatory initiatives for expected regulatory requirements and decline in admissions impact Helios Germany; Helios Spain with steady yet dynamic growth 
• Strong momentum in both Vamed’s project and service businesses 

Group guidance for 2018 confirmed and narrowed

As announced on October 16, 2018 Fresenius confirms and narrows its Group guidance¹  for FY/18. This is mainly driven by an excellent development of Fresenius Kabi, which partially offset the lower than expected sales and earnings contributions of Fresenius Medical Care and Helios Germany. Group sales are expected to increase at the low end of the original 5% to 8%² guidance range (in constant currency). Fresenius expects net income^1,3,4  growth at the low end of the original 6% to 9% guidance range (in constant currency). Excluding expenditures for the further development of the biosimilars business, net income^1,3,5  growth is projected at the low end of the original ~10% to 13% guidance range (in constant currency). 

¹ 2018 before special items (excluding effects related to the Akorn and NxStage transactions, gains from divestitures of Care Coordination activities and increase of FCPA provision)
² FY/17 base adjusted for IFRS 15 adoption (-€486 million) and divestitures of Care Coordination activities (-€558 million) at Fresenius Medical Care
³ Net income attributable to shareholders of Fresenius SE & Co. KGaA
⁴ FY/17 base: €1,804 million; FY/18 before special items; including contributions to the campaigns in the U.S. opposing state ballot initiatives at Fresenius Medical Care; including expenditures for further development of the biosimilars business at Fresenius Kabi (€43 million after tax in FY/17 and ~€120 million after tax in FY/18)
⁵ FY/17 base: €1,847 million; FY/18 before special items; including contributions to the campaigns in the U.S. opposing state ballot initiatives at Fresenius Medical Care; excluding expenditures for further development of the biosimilars business at Fresenius Kabi (€43 million after tax in FY/17 and ~€120 million after tax in FY/18)

 

If no timeframe is specified, information refers to Q1-3/18

Q3/18:

• Sales: €8.2 billion (+3%¹, +4% in constant currency¹)
• EBIT²: €1,112 million (+0%, +0% in constant currency)
• EBIT² (excl. biosimilars business):  €1,153 million (+3%, +2% in constant currency)
• Net income^2,3: €445 million (+8%, +8% in constant currency)
• Net income^2,3 (excl. biosimilars business): €474 million (+13%, +13% in constant currency)

Q1-3/18:

• Sales: €24.7 billion (+1%1, +5% in constant currency¹)
• EBIT²: €3,311 million (-5%, -1% in constant currency)
• EBIT² (excl. biosimilars business): €3,424 million (-3%, +2% in constant currency) 
• Net income^2,3: €1,367 million (+3%, +7% in constant currency)
• Net income^2,3 (excl. biosimilars business): €1,449 million (+8%, +12% in constant currency)

¹ Growth rates adjusted for IFRS 15 adoption and divestitures of Care Coordination activities (Q3/17 base: €7,927 million; Q1-3/17 base: €24,551 million)
² Before special items (before expenses related to the Akorn transaction, gains from divestitures of Care Coordination activities and increase of FCPA provision); growth rates: 2017 base adjusted for divestitures of Care Coordination activities
³ Net income attributable to shareholders of Fresenius SE & Co. KGaA 
For a detailed overview of special items please see the reconciliation tables on pages 19-20 in the PDF document.

 

5% sales growth in constant currency¹

Group sales increased by 1%¹ (5%¹ in constant currency) to €24,695 million (Q1-3/17: €25,191 million). Organic sales growth was 4%. Acquisitions/divestitures contributed net 1% to growth. Negative currency translation effects of 4% were mainly driven by the devaluation of the U.S. dollar and the Chinese yuan against the euro. In Q3/18, Group sales increased by 3%¹ (4%¹ in constant currency) to €8,192 million (Q3/17: €8,297 million). Organic sales growth was 4%. Acquisitions/divestitures had no net contribution to growth. Currency translation effects reduced sales by 1%.

¹ Growth rates adjusted for IFRS 15 adoption and divestitures of Care Coordination activities at Fresenius Medical Care (Q1-3/17 base: €24,551 million; Q3/17 base: €7,927 million)

 

Group sales by region:

 

7% net income^1,2,3 growth in constant currency

Group EBITDA² decreased by 4%³ (0%³ in constant currency) to €4,375 million (Q1-3/17: €4,579 million). Group EBIT² decreased by 5%³ (-1%³ in constant currency) to €3,311 million (Q1-3/17: €3,522 million). The EBIT margin² was 13.4% (Q1 3/17: 14.0%). Group EBIT² before expenses for the further development of the biosimilars business decreased by 3%³ (increased 2%³ in constant currency) to €3,424 million. In the prior-year period the compensation for treatments of U.S. war veterans (“VA agreement”) contributed €88 million as a one-time effect. Group EBIT² excluding the VA agreement and expenses for the further development of the biosimilars business increased by 4% in constant currency. 

In Q3/18, Group EBIT³ was broadly stable year-over-year³ (broadly stable³ in constant currency) at €1,112 million (Q3/17: €1,129 million), with an EBIT margin² of 13.6% (Q3/17: 13.6%). Group EBIT² excluding the prior-year VA agreement and expenses for the further development of the biosimilars business increased by 2%³ in constant currency.

Group net interest² was -€436 million (Q1-3/17: -€484 million). The decrease is mainly driven by currency effects as well as refinancing activities and the divestitures of Care Coordination activities. 

The decrease of the Group tax rate before special items to 22.0% (Q1-3/17: 28.1%) was mainly due to the U.S. tax reform and some one time effects in Q3 at Fresenius Medical Care and Fresenius Kabi. In Q3/18, the Group tax rate² was 21.4% (Q3/17: 27.4%).

Noncontrolling interest² was €876 million (Q1-3/17: €854 million), of which 95% was attributable to the noncontrolling interest in Fresenius Medical Care.

¹ Net income attributable to shareholders of Fresenius SE & Co. KGaA
² Before special items 
³ Base 2017 base adjusted for divestitures of Care Coordination activities
For a detailed overview of special items please see the reconciliation tables on pages 19-20 in the PDF document.
 

Group net income^1,2  increased by 3%³  (7%³ in constant currency) to €1,367 million (Q1 3/17: €1,329 million). Earnings per share^1,2 increased by 3%³ (7%³ in constant currency) to €2.46 (Q1-3/17: €2.40). In Q3/18, Group net income^1,2 increased by 8%³ (8%³ in constant currency) to €445 million (Q3/17: €413 million). Earnings per share^1,2 increased by 7%³ (7%³ in constant currency) to €0.80 (Q3/17: €0.75).

Group net income^1,2,4  before expenses for the further development of the biosimilars business increased by 8%³ (12%³ in constant currency) to €1,449 million (Q1-3/17: €1,339 million). Earnings per share^1,2,4 increased by 8%³ (12%³ in constant currency) to €2.61 (Q1-3/17: €2.42). In Q3/18, Group net income^1,2,4 increased by 13%³ (13%³ in constant currency) to €474 million (Q3/17: €423 million). Earnings per share^1,2,4 increased by 12%³ (12%³ in constant currency) to €0.85 (Q3/17: €0.77).

Group net income^2,5 after special items increased by 16% (by 21% in constant currency) to €1,511 million (Q1-3/17: €1,303 million), mainly due to gains related to divestitures in Care Cordination activities at Fresenius Medical Care. Earnings per share^2,5  increased by 16% (21% in constant currency) to €2.72 (Q1-3/17: €2.35). In Q3/18, Group net income^2,5 increased by 6% (4% in constant currency) to €419 million (Q3/17: €396 million). Earnings per share^2,5 increased by 6% (4% in constant currency) to €0.75 (Q3/17: €0.71).

¹ Before special items 
² Net income attributable to shareholders of Fresenius SE & Co. KGaA
³ 2017 base adjusted for divestitures of Care Coordination activities
⁴ Before expenses for the further development of the biosimilars business
⁵ After special items
For a detailed overview of special items please see the reconciliation tables on pages 19-20 in the PDF document.

 

Continued investment in growth 

Spending on property, plant and equipment was €1,370 million (Q1-3/17: €1,137 million), primarily for the modernization and expansion of dialysis clinics, production facilities as well as hospitals and day clinics. This corresponds to 5.5% of sales.

Total acquisition spending was €876 million (Q1-3/17: €6,662 million). The prior-year period included the acquisition of Quirónsalud.

 

Cash flow development

Group operating cash flow decreased by 15% to €2,405 million (Q1-3/17: €2,821 million) with a margin of 9.7% (Q1-3/2017: 11.2%). The decrease is mainly due to two effects at Fresenius Medical Care in North America: Receipt of a ~€200 million payment under the VA agreement in the prior-year period as well as increased accounts receivable related to the addition of calcimimetics into the Medicare ESRD payment bundle. In addition, negative currency translation effects weighed on the cash flow development in Q1-3/18. Operating cash flow in Q3/18 increased by 1% to €1,149 million (Q3/17: €1,138 million), with a margin of 14.0% (Q3/17: 13.7%). 

Given the effects described above and growing investments, free cash flow before acquisitions and dividends decreased to €1,049 million (Q1-3/17: €1,705 million). Free cash flow after acquisitions and dividends was €1,172 million (Q1-3/17: -€5,233 million).

 

Solid balance sheet structure

The Group’s total assets increased by 5% (4% in constant currency) to €55,723 million (Dec. 31, 2017: €53,133 million). Current assets grew by 16% (16% in constant currency) to €14,593 million (Dec. 31, 2017: €12,604 million). Non-current assets increased by 1% (broadly stable in constant currency) to €41,130 million (Dec. 31, 2017: € 40,529 million).

Total shareholders’ equity increased by 10% (9% in constant currency) to €23,998 million (Dec. 31, 2017: €21,720 million). The equity ratio increased to 43.1% (Dec. 31, 2017: 40.9%). 

Group debt was broadly stable unchanged (decreased by 1% in constant currency) at €18,961 million (Dec. 31, 2017: € 19,042 million). Group net debt decreased by 5% (-6% in constant currency) to € 16,505 million (Dec. 31, 2017: € 17,406 million) mainly due to the proceeds from divestitures of Care Coordination activities. 

As of September 30, 2018, the net debt/EBITDA ratio was 2.75^1,2  (December 31, 2017: 2.84^1,2). Excluding the proceeds from divestitures of Care Coordination activities the net debt/EBITDA ratio was 2.96^1,2. At year-end 2018, Fresenius now expects the FY/18 net debt/EBITDA^1,2 ratio to be on a comparable level to year-end 2017.

¹ At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures, excluding Akorn and NxStage transactions 
² Before special items 

 

Business Segments

Fresenius Medical Care 

Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of September 30, 2018, Fresenius Medical Care was treating 329,085 patients in 3,872 dialysis clinics. Along with its core business, the company provides related medical services in the field of Care Coordination.

• 3% comparable¹ sales growth in constant currency in Q3
• -2% adjusted^4,6 net income decrease in constant currency in Q3
• Outlook for FY/18 adjusted

Sales decreased by 8% (-2% in constant currency) to €12,247 million (Q1-3/17: €13,355 million). Organic sales growth was 3%. Currency translation effects reduced sales by 7%. The adoption of IFRS 15 reduced sales by 3%. Q1-3/17 base additionally adjusted for divestitures of Care Coordination activities, sales decreased by 4% (increased by 3% in constant currency). 

¹ Adjusted for IFRS 15 implementation; base adjusted for divested Care Coordination activities
² Excluding VA agreement Q3: 3%; Q1-3: 4%
³ Excluding gains from divestitures of Care Coordination activities, increase of FCPA provision, ballot initiatives, divested Care Coordination activities in Q3/2017; including Natural disaster costs and VA agreement
⁴ Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
⁵ Consistent with guidance, i.e. excluding gains from divestitures of Care Coordination activities, increase of FCPA provision, ballot initiatives, , divested Care Coordination activities; including Natural disaster costs, the effect of the U.S. Tax Reform and including VA agreement
⁶ Consistent with guidance, i.e. excluding gains from divestitures of Care Coordination activities, the effect of the U.S. Tax Reform, VA agreement, FCPA provision, ballot initiatives, divested Care Coordination activities, Natural disaster costs

 

In Q3/18, sales decreased by 6% (-6% in constant currency) to €4,058 million (Q3/17: €4,336 million). Organic sales growth was 3%. The adoption of IFRS 15 reduced sales by 3%. Q3/17 base additionally adjusted for divestitures of Care Coordination activities, sales in Q3/18 increased by 2% (increased by 3% in constant currency).

Health Care services sales (dialysis services and care coordination) decreased by 4%¹ (increased by 3%¹  in constant currency) to €9,852 million (Q1-3/17: €10,950 million). With €2,395 million (Q1-3/17: €2,405 million), Health Care product sales were on prior-year’s level (increased by 5% in constant currency).  

In North America, sales decreased by 5%¹ (increased by 1%¹ in constant currency) to €8,589 million (Q1-3/17: €9,715 million). Health Care services sales decreased by 6%¹ (increased by 1%¹ in constant currency) to €7,978 million (Q1-3/17: €9,086 million). Excluding the 2017 effect from the VA Agreement (€96 million), Health Care services sales increased by 2%¹ in constant currency. Health Care product sales decreased by 3% (increased by 4% in constant currency) to €610 million (Q1-3/17: €629 million). 

Sales outside North America increased by 1% (7% in constant currency) to €3,648 million (Q1-3/17: €3,628 million). 

Health Care services sales increased by 1% (9% in constant currency) to €1,873 million (Q1-3/17: €1,864 million). Health Care product sales increased by 1% (5% in constant currency) to €1,774 million (Q1-3/17: €1,764 million). 

Fresenius Medical Care’s EBIT increased by 32% (39% in constant currency) to €2,425 million (Q1-3/17: €1,843 million), driven by the divestitures of Care Coordination activities. The EBIT margin increased to 19.8% (Q1-3/17: 13.8%). EBIT on a comparable basis decreased by 2% in constant currency and EBIT margin was 13.9% (Q1-3/17: 14.3%). 

In Q3/18, EBIT decreased by 13% (-20% in constant currency) to €527 million (Q3/17: €609 million). The EBIT margin decreased to 13.0% (Q3/17: 14.0%). EBIT on a comparable basis increased by 5% (increased by 4% in constant currency) and EBIT margin increased to 15.1% (Q3/17: 14.8%). 

¹ Growth rate adjusted for IFRS 15 implementation and divested Care Coordination activities 
 
Net income¹ increased by 76% (86% in constant currency) to €1,557 million (Q1-3/17: €886 million). Adjusted net income¹ growth was 4% in constant currency. Net income¹ growth on a comparable basis was 16% in constant currency. 

In Q3/18, net income¹ decreased by 8% (-17% in constant currency) to €285 million (Q3/17: €309 million). Adjusted net income¹ growth was -2% in constant currency. Net income¹ growth on a comparable basis was 19% in constant currency.

Operating cash flow was €1,220 million (Q1-3/17: €1,664 million). The cash flow margin was 10.0% (Q1-3/17: 12.5%). The decrease is mainly due to two effects in North America: Receipt of a ~€200 million payment under the VA agreement in the prior-year period as well as increased accounts receivable related to the addition of calcimimetics into the Medicare ESRD payment bundle. In Q3/18, operating cash flow was €609 million (Q3/17: €612 million), mainly driven by higher tax payments and discretionary contributions to pension plan assets in the U.S., almost fully offset by decreases in accounts receivable. The cash flow margin was 15.0% (Q3/17: 14.1%).

Fresenius Medical Care revised its outlook for FY/18 as the business development in Q3/18 was below the company’s expectations. Fresenius Medical Care now expects sales growth of 2% to 3%²  in constant currency (previously: 5% to 7%²). On a comparable basis³, Fresenius Medical Care now expects FY/18 net income¹ to increase by 11% to 12%³ in constant currency (previously: 13% to 15%³). On an adjusted basis⁴, Fresenius Medical Care now expects FY/18 net income¹ to increase by 2% to 3%⁴ in constant currency (previously: 7% to 9%⁴).

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

¹ Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
² 2017 base: €16,739 million (adjusted for IFRS 15 adoption (-€486 million) and divestitures of Care Coordination activities (-€558 million))
³ 2017 base: €1,242 million, excluding H2/17 net income of divestited Care Coordination activities (-€38 million); 2018 including benefits of the U.S. tax reform but excluding gains from divestitures of Care Coordination activities, contributions to the campaigns in the U.S. opposing state ballot initiatives at Fresenius Medical Care and FCPA provision
⁴ 2017 base: €1,162 million, excluding H2/17 net income of divested Care Coordination activities (-€38 million), the effect of the U.S. tax reform, natural disaster costs, FCPA provision and effects of the agreement with the U.S. Departments of Veterans Affairs and Justice (VA agreement); 2018 excluding benefits of the U.S. tax reform, gains from divestitures of Care Coordination activities, contributions to the campaigns in the U.S. opposing state ballot initiatives and FCPA provision 
 

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, we are developing products with a focus on oncology and autoimmune diseases.

• 8% organic sales growth and 14% EBIT¹ growth in constant currency (excl. biosimilars expenses) in Q3
• Sales outlook confirmed and strengthened: top end of 4% to 7% organic sales growth expected
• EBIT outlook raised: 1% to 3%⁵  EBIT growth in constant currency expected (~9% to 11%⁶ excl. biosimilars expenses) 

Sales increased by 2% (increased by 7% in constant currency) to €4,857 million (Q1-3/17: €4,764 million). Organic sales growth was 7%. Strong negative currency translation effects (-5%) were mainly related to the devaluation of the U.S. dollar, the Brazilian real and the Argentinian peso against the euro. In Q3/18, sales increased by 6% (8% in constant currency) to €1,650 million (Q3/17: €1,562 million). Organic sales growth was 8%.

Sales in Europe grew by 1% (organic growth: 3%) to €1,658 million (Q1-3/17: €1,635 million). In Q3/18, sales were unchanged (organic growth: 1%) at €538 million. 

¹ Before special items 
² Before expenses for the further development of the biosimilars business: Q3/18: 14%; Q1-3/18: 11%
³ Net income attributable to shareholders of Fresenius SE & Co. KGaA
⁴ Before expenses for the further development of the biosimilars business: Q3/18: 31%; Q1-3/18: 22% 
⁵ FY/17 base: €1,177 million; before special items, including expenditures for the further development of the biosimilars business (€60 million in FY/17 and ~€160 million in FY/18)
⁶ FY/17 base: €1,237 million; before special items, excluding expenditures for the further development of the biosimilars business (€60 million in FY/17 and ~€160 million in FY/18)
For a detailed overview of special items please see the reconciliation tables on page 19 - 20 in the PDF document.
 

Sales in North America increased by 1% (organic growth: 8%) to €1,760 million (Q1-3/17: €1,736 million). In Q3/18, sales increased by 13% (organic growth: 12%) to €620 million (Q3/17: €549 million). 

Sales in Asia-Pacific increased by 8% (organic growth: 12%) to €964 million (Q1-3/17: €894 million). In Q3/18, sales increased by 8% (organic growth: 9%) to €337 million (Q3/17: €312 million). Sales in Latin America/Africa decreased by 5% (organic growth: 11%) to €475 million (Q1-3/17: €499 million). In Q3/18, sales decreased by 5% (organic growth increased by 13%) to €155 million (Q3/17: €163 million).

EBIT¹ decreased by 6% (increased by 1% in constant currency) to €854 million (Q1-3/17: €905 million) with an EBIT margin¹ of 17.6% (Q1-3/17: 19.0%). In Q3/18, EBIT¹ increased by 5% (5% in constant currency) to €297 million (Q3/17: €283 million) with an EBIT margin¹ of 18.0% (Q3/17: 18.1%).

EBIT¹ before expenses for the further development of the biosimilars business increased by 5% (11% in constant currency) to €967 million (Q1-3/17: €919 million) with an EBIT margin¹ of 19.9% (Q1-3/17: 19.3%). In Q3/18, EBIT¹ before expenses for the further development of the biosimilars business increased by 14% (14% in constant currency) to €338 million (Q3/17: €297 million) with an EBIT margin¹ of 20.5% (Q3/17: 19.0%).

Net income^1,2  increased by 2% (9% in constant currency) to €554 million (Q1-3/17: €544 million). In Q3/18, net income^1,2 increased by 21% (21% in constant currency) to €199 million (Q3/17: €165 million).

Operating cash flow increased by 28% to €820 million (Q1-3/17: €640 million). The cash flow margin grew to 16.9% (Q1-3/17: 13.4%). In Q3/18, operating cash flow increased by 49% to €366 million (Q3/17: €245 million) with a cash flow margin of 22.2% (Q3/2017: 15.7%) mainly driven by a strong operational performance and working capital improvements. 

¹ Before special items
² Net income attributable to shareholders of Fresenius SE & Co. KGaA 
For a detailed overview of special items please see the reconciliation tables on page 19 - 20 of the PDF document.
 
Based on the strong development in Q3/18 Fresenius Kabi confirms and strengthens its organic sales growth guidance of 4% to 7% and now expects to reach the top end of this range. 

Fresenius Kabi has increased its FY/18 EBIT outlook and now expects 1% to 3%¹ growth in constant currency (previously: -2% to +1%¹). The increase is driven by a strong development across all product lines and regions with North America standing out. FY/18 EBIT excluding expenditures for the further development of the biosimilars business is now expected to grow by ~9% to 11%² in constant currency (previously: ~6% to 9%²).

¹ 2017 base: €1,177 million; before special items, including expenditures for the further development of the biosimilars business (€60 million in FY/17 and ~€160 million in FY/18)
² 2017 base: €1,237 million; before special items, excluding expenditures for the further development     of the biosimilars business (€60 million in FY/17 and ~€160 million in FY/18) 
For a detailed overview of special items please see the reconciliation tables on page 19 - 20 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 87 hospitals, 89 outpatient centers and treats approximately 5.2 million patients annually. Quirónsalud operates 46 hospitals, 56 outpatient centers and around 300 occupational risk prevention centers, and treats approximately 11.6 million patients annually.

 

• 2% organic sales growth in Q3
• Preparatory initiatives for expected regulatory requirements and decline in admissions impact financial performance of Helios Germany 
• Helios Spain with steady yet dynamic growth
• 2018 sales outlook confirmed and narrowed, EBIT outlook adjusted: 0% to 2% (previously: 5% to 8%) 

As of July 1, 2018 Fresenius Helios transferred its German post-acute care business to Fresenius Vamed and adjusted its outlook accordingly. For a like-for-like comparison, we also provide sales and EBIT growth rates adjusted for the effects of this transaction. 

Fresenius Helios increased sales by 5% (7%¹) to €6,762 million (Q1-3/17: €6,422 million). Organic sales growth was 3%. In Q3/18, sales decreased by 4% (increased by 2%¹; organic growth: 2%) to €2,088 million (Q3/17: €2,166 million).

Sales of Helios Germany decreased by 1% (grew 2%¹; organic growth: 2%) to €4,531 million (Q1-3/17: €4,562 million). In Q3/18, sales decreased by 7% (0%¹; organic growth: 0%) to €1,410 million (Q3/17: €1,524 million). Sales are impacted by a decline in admissions, inter alia due to a trend towards outpatient treatments. To counter this trend, Helios Germany is expanding outpatient services offerings in a separate division. Helios Spain increased sales by 20% (organic growth: 5%) to €2,231 million (Q1-3/17: €1,860 million), mainly due to the additional month of consolidation compared to the prior-year period (Quirónsalud is consolidated since February 1, 2017). In Q3/18 Helios Spain increased sales by 6% (organic growth: 5%) to €678 million (Q3/17: €642 million). 

¹ Adjusted for German post-acute care business transferred to Fresenius Vamed
² Net income attributable to shareholders of Fresenius SE & Co. KGaA

Fresenius Helios grew EBIT by 1% (3%¹) to €775 million (Q1-3/17: €769 million) with a margin of 11.5% (Q1-3/17: 12.0%). In Q3/18, EBIT decreased by 12% (-6%¹) to €204 million (Q3/17: €232 million) with a margin of 9.8% (Q3/17: 10.7%).

EBIT of Helios Germany decreased by 11% (-8%¹) to €488 million (Q1-3/17: €549 million) with a margin of 10.8% (Q1-3/17: 12.0%). In Q3/18, EBIT decreased by 25% (-17%¹) to €143 million (Q3/17: €190 million) with a margin of 10.1% (Q3/17: 12.5%). Given a  significant fixed cost base, top line performance impacs EBIT over-proportionately. Additionally, EBIT development of Helios Germany is negatively affected by catalogue effects, preparatory initiatives for expected regulatory requirements (i.e. clustering) as well as a lack of privatization opportunities in the German market. 

EBIT of Helios Spain increased by 30% to €286 million (Q1-3/17: €220 million), mainly due to the strong operating performance and the additional month of consolidation compared to the prior-year period, with a margin of 12.8% (Q1-3/17: 11.8%). In Q3/18, from a moderate base, EBIT increased by 40% to €59 million (Q3/17: €42 million) with a margin of 8.7% (Q3/17: 6.5%).

Net income² of Fresenius Helios decreased by 2% to €516 million (Q1-3/17: €526 million). In Q3/18, net income² decreased by 16% to €128 million (Q3/17: €153 million).

Operating cash flow was €387 million (Q1-3/17: €560 million) with a margin of 5.7% (Q1-3/17: 8.7%). 
Fresenius Helios confirmed and narrowed its FY/18 organic sales growth outlook, and now projects growth at the low end of the original 3% to 6% range. Based on the Q3/18 business development in Germany, Fresenius Helios adjusts its FY/18 EBIT outlook and now expects 0% to 2% growth (previously: 5% to 8%). 

¹ Adjusted for German post-acute care business transferred to Fresenius Vamed
² Net income attributable to shareholders of Fresenius SE & Co. KGaA

Fresenius Vamed

Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide and is a 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.

 

• Excellent organic sales growth of 30% in Q3/18
• Both service and project businesses contributed to strong growth in Q3/18
• FY/18 outlook confirmed

As of July 1, 2018 Fresenius Helios transferred the post-acute care business to Fresenius Vamed. Fresenius Vamed adjusted its outlook accordingly. For a like-for-like comparison, we also provide sales and EBIT growth rates adjusted for the effects of this transaction. 

Sales increased by 32% (17%¹; 33% in constant currency) to €991 million (Q1-3/17: €748 million). Organic sales growth was 14% with a strong momentum in both the project and service businesses as well as increased sales from services for Fresenius Helios. Sales of the project business increased by 17% to €352 million (Q1-3/17: €301 million). Sales in the service business grew by 43% (17%¹) to €639 million (Q1-3/17: €447 million). In Q3/18, sales increased by 110% (32%¹; organic growth: 24%) to €315 million (Q3/17: €150 million).

EBIT increased by 53% (6%¹) to €49 million (Q1-3/17: €32 million) with a margin of 4.9% (Q1-3/17: 4.3%). In Q3/18, EBIT increased by 107% (7%¹) to €31 million (Q3/17: €15 million) with a margin of 6.5% (Q3/17: 5.6%).

Net income² increased by 57% to €33 million (Q1-3/17: €21 million). In Q3/18, net income² increased by 120% to €22 million (Q1-3/17: €10 million).

Order intake decreased by 19% to €567 million (Q1-3/17: €697 million). As of September 30, 2018, order backlog was €2,315 million (December 31, 2017: €2,147 million).

Fresenius Vamed has confirmed its outlook for 2018 and expects organic sales growth in the range of 5% to 10% and EBIT growth of 32% to 37%.

¹ Without German post-acute care business transferred from Fresenius Helios
² Net income attributable to shareholders of VAMED AG

Conference Call 

As part of the publication of the results for the third quarter / first nine months of 2018, a conference call will be held on October 30, 2018 at 2 p.m. CET (9 a.m. EDT). All investors are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com/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. 
 

Fresenius confirms and narrows its Group guidance¹ for FY/18. Group sales are expected to increase at the low end of the original 5% to 8%² guidance range (in constant currency). Fresenius expects net income^3,4 growth at the low end of the original 6% to 9% guidance range (in constant currency). Excluding expenditures for the further development of the biosimilars business, net income^3,5 growth is projected at the low end of the original ~10% to 13% guidance range (in constant currency). Narrowing the Group guidance ranges is due to updated expectations at Fresenius Medical Care, Fresenius Kabi and Fresenius Helios.

Fresenius Medical Care adjusts its outlook for FY/18 as the business development in Q3/18 was below the company’s expectations. Fresenius Medical Care now expects sales growth of 2% to 3%⁶ in constant currency (previously: 5% to 7%⁶). Whilst Fresenius Kabi confirms its guidance of 4% to 7% organic sales growth, it now expects to reach the top end of this range. Fresenius Kabi sees a strong development across all product lines and regions with North America standing out. Fresenius Helios confirms and narrows its FY/18 organic sales growth outlook, and now projects growth at the low end of the original 3% to 6% range. The business development in Germany in Q3/18 was below the company’s expectations mainly due to a decline in admissions and additional catalogue effects. In line with market development in Germany, Fresenius Helios sees a trend towards outpatient treatments leading to fewer admissions in its hospitals.

On a comparable basis⁸, Fresenius Medical Care now expects FY/18 net income⁷ to increase by 11% to 12%⁸ in constant currency (previously: 13% to 15%⁸). On an adjusted basis⁹, Fresenius Medical Care now expects FY/18 net income⁷ to increase by 2% to 3%⁹ in constant currency (previously: 7% to 9%⁹). Fresenius Kabi increases its FY/18 EBIT outlook and now expects 1% to 3%¹⁰ growth in constant currency (previously: -2% to +1%¹⁰). The increase is driven by a strong development across all product lines and regions with North America standing out. FY/18 EBIT excluding expenditures for the further development of the biosimilars business is now expected to grow by ~9% to 11%¹¹ in constant currency (previously: ~6% to 9%¹¹). Fresenius Helios adjusts its FY/18 EBIT outlook and now expects 0% to 2% growth (previously: 5% to 8%), driven by lower sales growth in Germany. Moreover, preparatory structural activities for anticipated regulatory requirements (e.g. clustering), as well as a lack of privatization opportunities in the German market continue to weigh on earnings growth.

Fresenius Vamed confirms its outlook for FY/18 and expects organic sales growth in the range of 5% to 10% and FY/18 EBIT growth of 32% to 37%. The integration of the inpatient post-acute care business acquired from Helios Germany is fully on track.

Q3/2018 preliminary financial results

In Q3/18, Fresenius Group sales increased by ~3%¹² (~4%¹² in constant currency) to ~€8.2 billion (Q3/2017: €8.297 billion). Group net income³ before special items¹³ increased by ~8% (~8% in constant currency) to ~€445 million (Q3/2017: €413 million). Fresenius Medical Care has increased the provision for the FCPA (Foreign Corrupt Practices Act) related charge by €75 million (not tax deductible). As in 2017, this charge is treated as a special item. Group net income³ before special items¹³ and before expenses for the further development of the biosimilars business increased by ~13% (~13% in constant currency) to ~€474 million (Q3/2017: €423 million).

Fresenius will publish its detailed Q3/18 and Q1-Q3/18 financial results on October 30, 2018.

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¹Excluding effects related to the Akorn and NxStage transactions, gains from divestitures of Care Coordination activities and FCPA provision
²2017 base adjusted for IFRS 15 adoption (deduction of €486 million at Fresenius Medical Care) and divestitures of Care Coordination activities (deduction of €558 million at Fresenius Medical Care)
³Net income attributable to shareholders of Fresenius SE & Co. KGaA
⁴2017 base: €1,804 million; 2018 before special items (i.e. expenses related to the Akorn and NxStage transactions, gains from divestitures of Care Coordination activities and FCPA provision; including contributions to the campaigns in the U.S. opposing state ballot initiatives at Fresenius Medical Care and including expenditures for further development of the biosimilars business at Fresenius Kabi (€43 million after tax in FY/17 and ~€120 million after tax in FY/18))
⁵2017 base: €1,847 million; 2018 before special items (i.e. expenses related to the Akorn and NxStage transactions, gains from divestitures of Care Coordination activities and FCPA provision; including contributions to the campaigns in the U.S. opposing state ballot initiatives at Fresenius Medical Care excluding the expenditures for further development of the biosimilars business at Fresenius Kabi (€43 million after tax in FY/17 and ~€120 million after tax in FY/18))
⁶2017 base: €16,739 million (adjusted for IFRS 15 adoption (-€486 million) and divestitures of Care Coordination activities (-€558 million))
⁷Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
⁸2017 base: €1,242 million, excluding H2/17 net income of divestitures of Care Coordination activities (-€38 million); 2018 including benefits of the U.S. tax reform but excluding gains from divestitures of Care Coordination activities, contributions to the campaigns in the U.S. opposing state ballot initiatives at Fresenius Medical Care and FCPA provision
⁹2017 base: €1,162 million, excluding divestitures of Care Coordination activities (-€38 million), the effect of the U.S. tax reform, natural disaster costs, FCPA provision and effects of the agreement with the U.S. Departments of Veterans Affairs and Justice (VA agreement)
¹⁰2017 base: €1,177 million; 2017 & 2018 before special items, including expenditures for the further development of the biosimilars business (€60 million in FY/17 and ~€160 million in FY/18)
¹¹2017 base: €1,237 million; 2017 & 2018 before special items, excluding expenditures for the further development of the biosimilars business (€60 million in FY/17 and ~€160 million in FY/18)
¹²Growth rates adjusted for IFRS 15 adoption and divestitures of Care Coordination activities (Q3/17 base: €7,927 million)
¹³Before expenses related to the Akorn transaction, gains from divestitures of Care Coordination activities and FCPA provision, but including contributions to the campaigns in the U.S. opposing state ballot initiatives at Fresenius Medical Care

Fresenius confirms and narrows its Group guidance¹ for FY/18. Group sales are expected to increase at the low end of the original 5% to 8%² guidance range (in constant currency). Fresenius expects net income^3,4 growth at the low end of the original 6% to 9% guidance range (in constant currency). Excluding expenditures for the further development of the biosimilars business, net income^3,5 growth is projected at the low end of the original ~10% to 13% guidance range (in constant currency). Narrowing the Group guidance ranges is due to updated expectations at Fresenius Medical Care, Fresenius Kabi and Fresenius Helios.

Fresenius Medical Care adjusts its outlook for FY/18 as the business development in Q3/18 was below the company’s expectations. Fresenius Medical Care now expects sales growth of 2% to 3%⁶ in constant currency (previously: 5% to 7%⁶). Whilst Fresenius Kabi confirms its guidance of 4% to 7% organic sales growth, it now expects to reach the top end of this range. Fresenius Kabi sees a strong development across all product lines and regions with North America standing out. Fresenius Helios confirms and narrows its FY/18 organic sales growth outlook, and now projects growth at the low end of the original 3% to 6% range. The business development in Germany in Q3/18 was below the company’s expectations mainly due to a decline in admissions and additional catalogue effects. In line with market development in Germany, Fresenius Helios sees a trend towards outpatient treatments leading to fewer admissions in its hospitals.

On a comparable basis⁸, Fresenius Medical Care now expects FY/18 net income⁷ to increase by 11% to 12%⁸ in constant currency (previously: 13% to 15%⁸). On an adjusted basis⁹, Fresenius Medical Care now expects FY/18 net income⁷ to increase by 2% to 3%⁹ in constant currency (previously: 7% to 9%⁹). Fresenius Kabi increases its FY/18 EBIT outlook and now expects 1% to 3%¹⁰ growth in constant currency (previously: -2% to +1%¹⁰). The increase is driven by a strong development across all product lines and regions with North America standing out. FY/18 EBIT excluding expenditures for the further development of the biosimilars business is now expected to grow by ~9% to 11%¹¹ in constant currency (previously: ~6% to 9%¹¹). Fresenius Helios adjusts its FY/18 EBIT outlook and now expects 0% to 2% growth (previously: 5% to 8%), driven by lower sales growth in Germany. Moreover, preparatory structural activities for anticipated regulatory requirements (e.g. clustering), as well as a lack of privatization opportunities in the German market continue to weigh on earnings growth.

Fresenius Vamed confirms its outlook for FY/18 and expects organic sales growth in the range of 5% to 10% and FY/18 EBIT growth of 32% to 37%. The integration of the inpatient post-acute care business acquired from Helios Germany is fully on track.

Q3/2018 preliminary financial results

In Q3/18, Fresenius Group sales increased by ~3%¹² (~4%¹² in constant currency) to ~€8.2 billion (Q3/2017: €8.297 billion). Group net income³ before special items¹³ increased by ~8% (~8% in constant currency) to ~€445 million (Q3/2017: €413 million). Fresenius Medical Care has increased the provision for the FCPA (Foreign Corrupt Practices Act) related charge by €75 million (not tax deductible). As in 2017, this charge is treated as a special item. Group net income³ before special items¹³ and before expenses for the further development of the biosimilars business increased by ~13% (~13% in constant currency) to ~€474 million (Q3/2017: €423 million).

Fresenius will publish its detailed Q3/18 and Q1-Q3/18 financial results on October 30, 2018.

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¹Excluding effects related to the Akorn and NxStage transactions, gains from divestitures of Care Coordination activities and FCPA provision
²2017 base adjusted for IFRS 15 adoption (deduction of €486 million at Fresenius Medical Care) and divestitures of Care Coordination activities (deduction of €558 million at Fresenius Medical Care)
³Net income attributable to shareholders of Fresenius SE & Co. KGaA
⁴2017 base: €1,804 million; 2018 before special items (i.e. expenses related to the Akorn and NxStage transactions, gains from divestitures of Care Coordination activities and FCPA provision; including contributions to the campaigns in the U.S. opposing state ballot initiatives at Fresenius Medical Care and including expenditures for further development of the biosimilars business at Fresenius Kabi (€43 million after tax in FY/17 and ~€120 million after tax in FY/18))
⁵2017 base: €1,847 million; 2018 before special items (i.e. expenses related to the Akorn and NxStage transactions, gains from divestitures of Care Coordination activities and FCPA provision; including contributions to the campaigns in the U.S. opposing state ballot initiatives at Fresenius Medical Care excluding the expenditures for further development of the biosimilars business at Fresenius Kabi (€43 million after tax in FY/17 and ~€120 million after tax in FY/18))
⁶2017 base: €16,739 million (adjusted for IFRS 15 adoption (-€486 million) and divestitures of Care Coordination activities (-€558 million))
⁷Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
⁸2017 base: €1,242 million, excluding H2/17 net income of divestitures of Care Coordination activities (-€38 million); 2018 including benefits of the U.S. tax reform but excluding gains from divestitures of Care Coordination activities, contributions to the campaigns in the U.S. opposing state ballot initiatives at Fresenius Medical Care and FCPA provision
⁹2017 base: €1,162 million, excluding divestitures of Care Coordination activities (-€38 million), the effect of the U.S. tax reform, natural disaster costs, FCPA provision and effects of the agreement with the U.S. Departments of Veterans Affairs and Justice (VA agreement)
¹⁰2017 base: €1,177 million; 2017 & 2018 before special items, including expenditures for the further development of the biosimilars business (€60 million in FY/17 and ~€160 million in FY/18)
¹¹2017 base: €1,237 million; 2017 & 2018 before special items, excluding expenditures for the further development of the biosimilars business (€60 million in FY/17 and ~€160 million in FY/18)
¹²Growth rates adjusted for IFRS 15 adoption and divestitures of Care Coordination activities (Q3/17 base: €7,927 million)
¹³Before expenses related to the Akorn transaction, gains from divestitures of Care Coordination activities and FCPA provision, but including contributions to the campaigns in the U.S. opposing state ballot initiatives at Fresenius Medical Care

In the lawsuit by Akorn, Inc. against Fresenius for the consummation of the April 2017 merger agreement the Court of Chancery in the U.S. state of Delaware today ruled in favor of Fresenius. The judgment is not yet final.

Fresenius terminated the merger agreement due to Akorn’s failure to fulfill several closing conditions. An independent investigation initiated by Fresenius had revealed, among other things, material breaches of FDA data integrity requirements relating to Akorn's operations. Akorn responded by suing in the Court of Chancery in Delaware for the consummation of the agreement.

If no timeframe is specified, information refers to H1/2018

Q2/2018:

 

• Sales: €8.4 billion (-2%, +5% in constant currency¹)
• EBIT²: €1,145 million (-3%, +2% in constant currency)
• EBIT² (excl. biosimilars business): €1,182 million (0%, +5% in constant currency)
• Net income^2,3: €472 million (+3%, +7% in constant currency)
• Net income^2,3 (excl. biosimilars business): €499 million (+9%, +12% in constant currency)

H1/2018:

 

• Sales: €16.5 billion (-2%, +6% in constant currency¹)
• EBIT²: €2,199 million (-8%, -2% in constant currency)
• EBIT²: (excl. biosimilars business) €2,271 million (-5%, +1% in constant currency)
• Net income^2,3: €922 million (+1%, +7% in constant currency)
• Net income^2,3 (excl. biosimilars business): €975 million (+6%, +12% in constant currency)

 

^{1 Growth rate adjusted for IFRS 15 adoption (Q2/17 base: €8,401 million; H1/2017 base: €16,624 million)2 Before special items (i.e., expenses related to the Akorn transaction, gains related to divestitures of Care Coordination activities)3 Net income attributable to shareholders of Fresenius SE & Co. KGaA}For a detailed overview of special items please see the reconciliation tables on pages 19 - 20 in the PDF document.

Stephan Sturm, CEO of Fresenius, said: “The first half of 2018 was a very good one for Fresenius. After our successful start, we have delivered a strong second quarter with continued healthy growth in sales and earnings. All four business segments contributed to this, and all four business segments display outstanding prospects for the future. For Fresenius Kabi, we are even a bit more optimistic than before. We are therefore fully on track to achieve our ambitious growth targets as we steer toward another excellent year for Fresenius.”

Group guidance¹ for 2018 confirmed

Fresenius confirms its guidance for 2018. Group sales are expected to increase by 5% to 8%² in constant currency. Net income^3,4 is expected to grow by 6% to 9% in constant currency. Excluding expenditures for the further development of the biosimilars business, net income^3,5 is expected to grow by ~10% to 13% in constant currency.

Fresenius expects to further reduce its net debt/EBITDA ratio⁶ by year-end 2018.

6% sales growth in constant currency⁷

Group sales decreased by 1%⁷ (increased by 6%⁷ in constant currency) to €16,503 million (H1/2017: €16,894 million). Organic sales growth was 4%. Acquisitions/divestitures contributed net 2% to growth. Negative currency translation effects (7%) were mainly driven by the devaluation of the U.S. dollar and the Chinese yuan against the euro. In Q2/2018, Group sales were nearly unchanged⁷ (increased 5%⁷ in constant currency) at €8,382 million (Q2/2017: €8,532 million). Organic sales growth was 4%. Acquisitions/divestitures contributed net 1% to growth.

^{1 Excluding expenses related to the Akorn and NxStage transactions and gains from divestitures of Care Coordination activities 2 2017 base adjusted for IFRS 15 adoption (deduction of €486 million at Fresenius Medical Care) and divestitures of Care Coordination activities (deduction of €558 million at Fresenius Medical Care) 3 Net income attributable to shareholders of Fresenius SE & Co. KGaA4 2017 base: €1,804 million; 2018 before special items; including expenditures for further development of biosimilars business (€43 million after tax in FY/17 and ~€120 million after tax in FY/18)5 2017 base: €1,847 million; 2018 before special items6 Calculated at expected annual average exchange rates for both net debt and EBITDA; excluding effects of the Akorn and NxStage transactions and gains from divestitures of Care Coordination activities; excluding further potential acquisitions; at current IFRS rules7 Growth rates adjusted for IFRS 15 adoption (H1/17 base: €16,624 million; Q2/17 base: €8,401 million)}

Group sales by region:

7% net income^1,2 growth in constant currency

Group EBITDA² decreased by 6% (0% in constant currency) to €2,912 million (H1/2017: €3,098 million). Group EBIT² decreased by 8% (-2% in constant currency) to €2,199 million (H1/2017: €2,393 million). The prior-year period saw the compensation for treatments of U.S. war veterans (“VA agreement”) contributing €91 million as a one-time effect. Excluding the VA agreement, EBIT² increased by 2% in constant currency in H1/2018. The EBIT margin² was 13.3% (13.1% before IFRS 15; H1/17: 14.2%). Group EBIT² before expenses for the further development of the biosimilars business decreased by 5% (increased 1% in constant currency) to €2,271 million. Group EBIT² excluding the VA agreement and expenses for the biosimilars business increased by 5% in constant currency.

In Q2/2018, Group EBIT² decreased by 3% (increased 2% in constant currency) to €1,145 million (Q2/2017: €1,177 million), with an EBIT margin² of 13.7% (13.4% before IFRS 15; Q2/2017: 13.8%). Group EBIT² excluding expenses for the biosimilars business increased by 5% in constant currency.

^{1 Net income attributable to shareholders of Fresenius SE & Co. KGaA2 Before special items}For a detailed overview of special items please see the reconciliation tables on pages 19-20 in the PDF document.

Group net interest² was -€297 million (H1/2017: -€326 million). The decrease is mainly driven by currency effects and reduced interest following refinancing activities.

The decrease of the Group tax rate before special items to 22.3% (H1/2017: 28.5%) was mainly due to the U.S. tax reform. In Q2/2018, the Group tax rate² was 23.4% (Q2/2017: 27.9%).

Noncontrolling interest² was €556 million (H1/2017: €562 million), of which 95% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income^1,2 increased by 1% (7% in constant currency) to €922 million (H1/2017: €916 million). Earnings per share^1,2 increased by 1% (7% in constant currency) to €1.66 (H1/2017: €1.65). In Q2/2018, Group net income^1,2 increased by 3% (7% in constant currency) to €472 million (Q2/2017: €459 million). Earnings per share^1,2 increased by 3% (7% in constant currency) to €0.85 (Q2/2017: €0.82).

Group net income^1,2 before expenses for the further development of the biosimilars business increased by 6% (12% in constant currency) to €975 million (H1/2017: €916 million). Earnings per share^1,2 before expenses for the further development of the biosimilars business increased by 6% (12% in constant currency) to €1.76 (H1/2017: €1.65). In Q2/2018, Group net income^1,2 before expenses for the further development of the biosimilars business increased by 9% (12% in constant currency) to €499 million (Q2/2017: €459 million). Earnings per share^1,2 before expenses for the further development of the biosimilars business increased by 9% (12% in constant currency) to €0.90 (Q2/2017: €0.82).

Group net income¹ after special items increased by 20% (29% in constant currency) to €1,092 million (H1/2017: €907 million), mainly due to gains related to divestitures in Care Cordination activities at Fresenius Medical Care. Earnings per share¹ after special items increased by 20% (29% in constant currency) to €1.97 (H1/2017: €1.64). In Q2/2018, Group net income¹ after special items increased by 45% (54% in constant currency) to €652 million (Q2/2017: €450 million). Earnings per share¹ after special items increased by 45% (54% in constant currency) to €1.18 (Q2/2017: €0.81).

^{1 Net income attributable to shareholders of Fresenius SE & Co. KGaA2 Before special items}For a detailed overview of special items please see the reconciliation tables on pages 19-20 in the PDF document.

Continued investment in growth

Spending on property, plant and equipment was €831 million (H1/2017: €709 million), primarily for the modernization and expansion of dialysis clinics, production facilities as well as hospitals and day clinics. This corresponds to 5.0% of sales.

Total acquisition spending was €386 million (H1/2017: €6,421 million). The prior-year period included the acquisition of Quirónsalud.

 

Cash flow development

Operating cash flow decreased by 25% to €1,256 million (H1/2017: €1,683 million) with a margin of 7.6% (H1/2017: 10.0%). The decrease is mainly due to two effects at Fresenius Medical Care in North America: Receipt of a ~€200 million payment under the VA agreement in the prior-year period as well as increased accounts receivable related to the addition of calcimimetics into the Medicare ESRD payment bundle. Moreover negative currency translation effects weighed on the cash flow development in H1/2018. Operating cash flow in Q2/2018 decreased by 15% to €1,020 million (Q2/2017: €1,207 million), with a margin of 12.2% (Q2/2017: 14.1%). Negative currency translation effects weighed on the cash flow development in Q2/2018.

Given the effects described above and growing investments, free cash flow before acquisitions and dividends decreased to €425 million (H1/2017: €998 million). Free cash flow after acquisitions and dividends was €942 million (H1/2017: -€5,645 million).

Solid balance sheet structure

The Group’s total assets increased by 3% (3% in constant currency) to €54,982 million (Dec. 31, 2017: €53,133 million). Current assets grew by 13% (13% in constant currency) to €14,287 million (Dec. 31, 2017: €12,604 million). Non-current assets were nearly unchanged (decreased by 1% in constant currency) at €40,695 million (Dec. 31, 2017: € 40,529 million).

Total shareholders’ equity increased by 7% (6% in constant currency) to €23,269 million (Dec. 31, 2017: €21,720 million). The equity ratio increased to 42.3% (Dec. 31, 2017: 40.9%).

Group debt was nearly unchanged (decreased by 1% in constant currency) at €18,989 million (Dec. 31, 2017: € 19,042 million). Group net debt decreased by 4% (-5% in constant currency) to € 16,722 million (Dec. 31, 2017: € 17,406 million) mainly due to the proceeds from divestitures of Care Coordination activities.

As of June 30, 2018, the net debt/EBITDA ratio was 2.80^1,2 (December 31, 2017: 2.84^1,2). Excluding the proceeds from divestitures of Care Coordination activities the net debt/EBITDA ratio was 3.02^1,2.

^{1 At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures, excluding Akorn and NxStage transactions2 Before special items}For a detailed overview of special items please see the reconciliation tables on pages 19-20 in the PDF document.

Increased number of employees

As of June 30, 2018, the number of employees was 273,632 (Dec. 31, 2017: 273,249).


Business Segments

Fresenius Medical Care

Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of June 30, 2018, Fresenius Medical Care was treating 325,188 patients in 3,815 dialysis clinics. Along with its core business, the company provides related medical services in the field of Care Coordination.

• Q2/2018 reported results significantly positively influenced by divestitures of Care Coordination activities
• 5% adjusted^1,2 sales growth in constant currency in Q2
• 6% adjusted^4,6 net income growth in constant currency in Q2
• 22% net income growth in constant currency on a comparable basis^4,7 in Q2

Reported sales were strongly impacted by headwinds from foreign exchange rates and by the already anticipated decline in Fresenius Medical Care North America’s pharmacy business. Sales decreased by 9% (increased by 3%¹ in constant currency) to €8,189 million (H1/2017: €9,019 million). Organic sales growth was 3%. Currency translation effects reduced sales by 9%. Adoption of IFRS 15 reduced sales by 3%. Excluding the VA agreement in the prior-year quarter, sales growth¹ was 4% in constant currency.

^{1 Growth rate adjusted for IFRS 15 implementation (Q2/17 base: €4,340 million; H1/17 base: €8,749 million)2 Excluding VA agreement: Q2/2018: 5%; H1/2018: 4%3 Adjusted for gains from divestitures of Care Coordination activities: Q2/2018: 4%;}H1/2018: -5%^{4 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA5 Adjusted for gains from divestitures of Care Coordination activities and the effect of the U.S. Tax Reform: Q2/2018: 8%; H1/2018: -3%6 Consistent with guidance, i.e. excluding gains from divestitures of Care Coordination activities, excluding the effect of the U.S. Tax Reform and excluding VA agreement7 Consistent with guidance, i.e. excluding gains from divestitures of Care Coordination activities, including the effect of the U.S. Tax Reform and including VA agreement}

In Q2/2018, sales decreased by 6% (increased 5%¹ in constant currency) to €4,214 million (Q2/2017: €4,471 million). Organic sales growth was 4%. Currency translation effects reduced sales by 8%. Adoption of IFRS 15 reduced sales by 3%.

Health Care services sales (dialysis services and care coordination) decreased by 8%¹ (increased by 3%¹ in constant currency) to €6,594 million (H1/2017: €7,418 million). With €1,595 million (H1/2017: €1,601 million), Health Care product sales were on prior-year’s level (increased by 6% in constant currency).

In North America, sales decreased by 9%¹ (increased by 1%¹ in constant currency) to €5,746 million (H1/2017: €6,600 million). Health Care services sales decreased by 9%¹ (increased by 1%¹ in constant currency) to €5,351 million (H1/2017: €6,182 million). Excluding the 2017 effect from the VA Agreement (€98 million), Health Care services sales increased by 3%¹ in constant currency. Health Care product sales decreased by 5% (increased by 6% in constant currency) to €395 million (H1/2017: €418 million).

Sales outside North America increased by 1% (8% in constant currency) to €2,436 million (H1/2017: €2,410 million). Health Care services sales increased by 1% (10% in constant currency) to €1,243 million (H1/2017: €1,236 million). Health Care product sales increased by 2% (7% in constant currency) to €1,193 million (H1/2017: €1,174 million).

Fresenius Medical Care’s EBIT increased by 54% (68% in constant currency) to €1,898 million (H1/2017: €1,235 million), driven by the divestitures of Care Coordination activities in Q2/18. The EBIT margin increased to 23.2% (H1/2017: 13.7%). Adjusted for the implementation of IFRS 15 and excluding the gains from divestitures of Care Coordination activities and the VA agreement in the prior-year period, EBIT increased by 3% in constant currency and EBIT margin was 13.2% (H1/2017: 13.2%). In Q2/2018, EBIT increased by 140% (increased by 162% in constant currency) to €1,401 million (Q2/2017: €583 million). The EBIT margin increased to 33.3% (Q2/2017: 13.0%). Adjusted for the adoption of IFRS 15 and excluding the gains from divestitures of Care Coordination activities, EBIT increased by 4% in constant currency and EBIT margin increased to 13.5%.  

^{1 Growth rate adjusted for IFRS 15 implementation (Q2/17: -€131 million; H1/17: -€270 million)}

Net income¹ increased by 121% (141% in constant currency) to €1,273 million (H1/2017: €577 million). Consistent with full-year guidance, i.e. excluding the gains from divestitures of Care Coordination activities, the effect of the U.S. Tax Reform and the VA agreement in the prior-year period, net income growth¹ was 7% in constant currency. Net income¹ growth on a comparable basis, i.e. excluding the gains from divestitures of Care Coordination activities, but including the effect of the U.S. Tax Reform and the VA agreement in the prior-year period, was 13% in constant currency.

In Q2/2018, net income¹ grew by 270% (303% in constant currency) to €994 million (Q2/2017: €269 million). Consistent with full-year guidance, i.e. excluding the gains from divestitures of Care Coordination activities, the effect of the U.S. Tax Reform and the VA agreement in the prior-year period, net income growth¹ was 6% in constant currency. Net income¹ growth on comparable basis, i.e. excluding the gains from divestitures of Care Coordination activities, but including the effect of the U.S. Tax Reform and the VA agreement in the prior-year period was 22% in constant currency.

Operating cash flow was €611 million (H1/2017: €1,052 million). The cash flow margin was 7.5% (H1/2017: 11.7%). The decrease is mainly due to two effects in North America: Receipt of a ~€200 million payment under the VA agreement in the prior-year period as well as increased accounts receivable related to the addition of calcimimetics into the Medicare ESRD payment bundle. In Q2/2018, operating cash flow was €656 million (Q2/2017: €882 million) with a cash flow margin of 15.6% (Q2/2017: 19.7%).

Fresenius Medical Care confirms its outlook for 2018 and expects sales growth of 5 to 7%² in constant currency and net income¹ comparable growth of 13% to 15%³ in constant currency (7% to 9%⁴ adjusted net income growth).

The 2018 growth targets are based on 2017 figures and exclude effects from the planned acquisition of NxStage Medical and gains from divestitures of Care Coordination activities.

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 2017 base: €16,739 million (adjusted for IFRS 15 adoption (-€486 million) and excluding Sound´s revenue for H2/2017 (-€558 million))
³ 2017 base: €1,242 million, excluding Sound´s H2/17 net income (-€38 million); 2018 including benefits from U.S. tax reform but excluding gains from divestitures of Care Coordination activities
⁴ Excluding gains from divestitures of Care Coordination activities, excluding the effect of the U.S. Tax Reform natural disaster, FCPA related charge and excluding VA agreement
 

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, we are developing products with a focus on oncology and autoimmune diseases.

• 6% organic sales growth and 11% EBIT¹ growth in constant currency (excluding biosimilars business) in Q2
• European Commission confirms marketing authorizations of HES subject to the implementation of risk minimization measures
• Sales outlook confirmed: 4% to 7% organic sales growth expected
• EBIT outlook raised: -2% to +1%⁵ EBIT growth in constant currency expected (~6% to 9%⁶ excl. biosimilars expenses)

Sales of €3,207 million (H1/2017: €3,202 million) were on prior-year level (increased by 7% in constant currency). Organic sales growth was 7%. Strong negative currency translation effects (-7%) were mainly related to the devaluation of the U.S. dollar, the Brazilian real and the Chinese yuan against the euro. In Q2/2018, sales of €1,604 million were nearly unchanged (increased by 6% in constant currency) from the prior-year level (Q2/2017: €1,598 million). Organic sales growth was 6%.

Sales in Europe grew by 2% (organic growth: 3%) to €1,120 million (H1/2017: €1,097 million). In Q2/2018, sales increased by 2% (organic growth: 3%) to €563 million (Q2/2017: €553 million).

Sales in North America decreased by 4% (organic growth: 7%) to €1,140 million (H1/2017: €1,187 million). In Q2/2018, sales decreased by 3% (organic growth: 4%) to €549 million (Q2/2017: €568 million).

^{1 Before special items2 Before expenses for the further development of the biosimilars business: Q2/2018: 11%; H1/2018: 10%3 Net income attributable to shareholders of Fresenius SE & Co. KGaA4 Before expenses for the further development of the biosimilars business: Q2/2018: 19%; H1/2018: 17%5 2017 base: €1,177 million; 2017 & 2018 before special items, including expenditures for the further development of the biosimilars business (€60 million in FY/17, and expected expenditures of ~€160 million in FY/18)6 2017 base: €1,237 million; 2017 & 2018 before special items}For a detailed overview of special items please see the reconciliation tables on pages 19-20 in the PDF document.

Sales in Asia-Pacific increased by 8% (organic growth: 13%) to €627 million (H1/2017: €582 million). In Q2/2018, sales increased by 8% (organic growth: 11%) to €326 million (Q2/2017: €302 million). Sales in Latin America/Africa decreased by 5% (organic growth: 10%) to €320 million (H1/2017: €336 million). In Q2/2018, sales decreased by 5% (organic growth: 10%) to €166 million (Q2/2017: €175 million).

EBIT¹ decreased by 10% (-1% in constant currency) to €557 million (H1/2017: €622 million) with an EBIT margin¹ of 17.4% (H1/2017: 19.4%). In Q2/2018, EBIT¹ decreased by 6% (-1% in constant currency) to €289 million (Q2/2017: €309 million) with an EBIT margin¹ of 18.0% (Q2/2017: 19.3%).

EBIT¹ before expenses for the further development of the biosimilars business increased by 1% (10% in constant currency) to €629 million (H1/2017: €622 million) with an EBIT margin¹ of 19.6% (H1/2017: 19.4%). In Q2/2018, EBIT¹ before expenses for the further development of the biosimilars business increased by 6% (11% in constant currency) to €326 million (Q2/2017: €309 million) with an EBIT margin¹ of 20.3% (Q2/2017: 19.3%).

Net income^1,2 decreased by 6% (increased by 4% in constant currency) to €355 million (H1/2017: €379 million). In Q2/2018, net income^1,2 decreased by 2% (increased by 5% in constant currency) to €185 million (Q2/2017: €188 million).

Operating cash flow increased by 15% to €454 million (H1/2017: €395 million). The cash flow margin grew to 14.2% (H1/2017: 12.3%). In Q2/2018, operating cash flow increased by 12% to €228 million (Q2/2017: €203 million) with a cash flow margin of 14.2% (Q2/2017: 12.7%).

^{1 Before special items2 Net income attributable to shareholders of Fresenius SE & Co. KGaA}For a detailed overview of special items please see the reconciliation tables on pages 19-20 in the PDF document.

Based on the strong development of Fresenius Kabi in H1/2018 and the reversal of some HES¹ associated risk adjustments, Fresenius Kabi raises its EBIT outlook for 2018 by 4%-points and now expects EBIT growth in constant currency of -2% to +1%² (previously: -6% to -3%² in constant currency). Excluding expenditures for the further development of the biosimilars business, EBIT is now expected to grow by ~6% to 9%³ in constant currency (previously: ~2% to 5%³ in constant currency). Fresenius Kabi confirms its sales guidance of 4% to 7% organic growth.

^{1 Hydroxyethyl starch (HES)2 2017 base: €1,177 million; 2017 & 2018 before special items, including expenditures for the further development of the biosimilars business (€60 million in FY/17 and expected expenditures of ~€160 million in FY/18)3 2017 base: €1,237 million; 2017 & 2018 before special items}For a detailed overview of special items please see the reconciliation tables on pages 19-20 in 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 87 acute care hospitals, 89 outpatient centers and treats approximately 5.2 million patients annually. Quirónsalud operates 45 hospitals, 56 outpatient centers and around 300 occupational risk prevention centers, and treats approximately 11.6 million patients annually.

• 4% organic sales growth in Q2
• DRG catalogue effects and preparatory structural activities for anticipated regulatory measures weigh on financial performance of Helios Germany
• Helios Spain with accelerated growth: 8% organic sales growth and 19% EBIT growth in Q2
• 2018 outlook confirmed

Fresenius Helios increased sales by 10% to €4,674 million (H1/2017: €4,256 million). Organic sales growth was 4%. In Q2/2018, sales increased by 5% (organic growth: 4%) to €2,343 million (Q2/2017: €2,238 million).

Sales of Helios Germany increased by 3% (organic growth: 3%) to €3,121 million (H1/2017: €3,038 million). In Q2/2018, sales increased by 2% (organic growth: 3%) to €1,547 million (Q2/2017: €1,510 million). Helios Spain increased sales by 28% (organic growth: 5%) to €1,553 million (H1/2017: €1,218 million), mainly due to the additional month of consolidation compared to the prior-year period (Quirónsalud is consolidated since February 1, 2017). In Q2/2018 Helios Spain increased sales by 9% (organic growth: 8%) to €796 million (Q2/2017: €728 million).

Fresenius Helios grew EBIT by 6% to €571 million (H1/2017: €537 million) with a margin of 12.2% (H1/2017: 12.6%). In Q2/2018, EBIT increased by 4% to €293 million (Q2/2017: €282 million) with a margin of 12.5% (Q2/2017: 12.6%).

EBIT of Helios Germany decreased by 4% to €345 million (H1/2017: €359 million) with a margin of 11.1% (H1/2017: 11.8%). The decline is mainly due to additional catalogue effects, preparatory structural activities for anticipated regulatory requirements (i.e. clustering) as well as a lack of privatization opportunities in the German market. In Q2/2018, EBIT decreased by 6% to €168 million (Q2/2017: €178 million) with a margin of 10.9% (Q2/2017: 11.8%).

EBIT of Helios Spain increased by 28% to €227 million (H1/2017: €178 million), mainly due to the additional month of consolidation compared to the prior-year period, with a margin of 14.6% (H1/2017: 14.6%). In Q2/2018, EBIT increased by 19% to €124 million (Q2/2017: €104 million) with a margin of 15.6% (Q2/2017: 14.3%).

Net income¹ of Fresenius Helios increased by 4% to €388 million (H1/2017: €373 million). In Q2/2018, net income¹ increased by 3% to €197 million (Q2/2017: €192 million).
Operating cash flow was €259 million (H1/2017: €304 million) with a margin of 5.5% (H1/2017: 7.1%).

The already announced transfer of the in-patient post-acute care business from Fresenius Helios to Fresenius Vamed has become effective as of July 1, 2018. As a consequence, Fresenius Helios’ EBIT growth outlook for 2018 was adjusted to 5% to 8% (previously: 7% to 10%).

Fresenius Helios confirms its outlook for 2018 and expects organic sales growth of 3% to 6% and EBIT growth of 5% to 8%.

¹ Net income attributable to shareholders of Fresenius SE & Co. KGaA
 

Fresenius Vamed

Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide and is a 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.

• Service business with continued good momentum: 11% sales growth in Q2
• Project business with good order intake of €195 million in Q2
• Transfer of inpatient post-acute care business from Helios Germany to Vamed as of July 1, 2018
• 2018 outlook confirmed

Sales increased by 7% (7% in constant currency) to €515 million (H1/2017: €481 million). Organic sales growth was 5%. Sales in the project business increased by 4% to €191 million (H1/2017: €184 million). Sales in the service business grew by 9% to €324 million (H1/2017: €297 million). In Q2/2018, sales increased by 3% (organic growth: 1%) to €266 million (Q2/2017: €258 million).

EBIT increased by 6% to €18 million (H1/2017: €17 million) with a margin of 3.5% (H1/2017: 3.5%). In Q2/2018, EBIT increased by 9% to €12 million (Q2/2017: €11 million) with a margin of 4.5% (Q2/2017: 4.3%).

Net income¹ of €11 million was unchanged from prior-year’s level. In Q2/2018, net income¹ was also unchanged at €7 million.

Order intake increased by 10% to €455 million (H1/2017: €412 million). As of June 30, 2018, order backlog was €2,372 million (December 31, 2017: €2,147 million).

The already announced transfer of the in-patient post-acute care business from Fresenius Helios to Fresenius Vamed has become effective as of July 1, 2018. As a consequence, Fresenius Vamed’s EBIT growth outlook for 2018 was adjusted to 32% to 37% (previously: 5% to 10%).

Fresenius Vamed confirms its outlook for 2018 and expects organic sales growth in the range of 5% to 10% and EBIT growth of 32% to 37%.

^{1 Net income attributable to shareholders of VAMED AG}

Conference Call

As part of the publication of the results for the second quarter / first half of 2018, a conference call will be held on July 31, 2018 at 2 p.m. CET (8 a.m. EST). All investors are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com/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 https://www.fresenius.com/alternative-performance-measures.

If no timeframe is specified, information refers to H1/2018

Q2/2018:

• Sales: €8.4 billion (-2%, +5% in constant currency² )
• EBIT²: €1,145 million (-3%, +2% in constant currency)
• EBIT² (excl. biosimilars business): €1,182 million (0%, +5% in constant currency)
• Net income^2,3: €472 million (+3%, +7% in constant currency)
• Net income^2,3 (excl. biosimilars business): €499 million (+9%, +12% in constant currency)

 

H1/2018:

• Sales: €16.5 billion (-2%, +6% in constant currency¹)
• EBIT²: €2,199 million (-8%, -2% in constant currency)
• EBIT²: (excl. biosimilars business) €2,271 million (-5%, +1% in constant currency)
• Net income^2,3: €922 million (+1%, +7% in constant currency)
• Net income^2,3 (excl. biosimilars business): €975 million (+6%, +12% in constant currency)

 

¹ Growth rate adjusted for IFRS 15 adoption (Q2/17 base: €8,401 million; H1/2017 base: €16,624 million)² Before special items (i.e., expenses related to the Akorn transaction, gains related to divestitures of Care Coordination activities) ³ Net income attributable to shareholders of Fresenius SE & Co. KGaA
For a detailed overview of special items please see the reconciliation tables on pages 18-19 in the PDF document.

Group guidance¹ for 2018 confirmed

Fresenius confirms its guidance for 2018. Group sales are expected to increase by 5% to 8%² in constant currency. Net income^3,4 is expected to grow by 6% to 9% in constant currency. Excluding expenditures for the further development of the biosimilars business, net income^3,5 is expected to grow by ~10% to 13% in constant currency.

Fresenius expects to further reduce its net debt/EBITDA ratio⁶ by year-end 2018.

6% sales growth in constant currency⁷

Group sales decreased by 1%⁷ (increased by 6%⁷ in constant currency) to €16,503 million (H1/2017: €16,894 million). Organic sales growth was 4%. Acquisitions/divestitures contributed net 2% to growth. Negative currency translation effects (7%) were mainly driven by the devaluation of the U.S. dollar and the Chinese yuan against the euro. In Q2/2018, Group sales were nearly unchanged⁷ (increased 5%⁷ in constant currency) at €8,382 million (Q2/2017: €8,532 million). Organic sales growth was 4%. Acquisitions/divestitures contributed net 1% to growth.

¹ Excluding expenses related to the Akorn and NxStage transactions and gains from divestitures of Care Coordination activities² 2017 base adjusted for IFRS 15 adoption (deduction of €486 million at Fresenius Medical Care) and divestitures of Care Coordination activities (deduction of €558 million at Fresenius Medical Care)³ Net income attributable to shareholders of Fresenius SE & Co. KGaA⁴ 2017 base: €1,804 million; 2018 before special items; including expenditures for further development of biosimilars business (€43 million after tax in FY/17 and ~€120 million after tax in FY/18) ⁵ 2017 base: €1,847 million; 2018 before special items ⁶ Calculated at expected annual average exchange rates for both net debt and EBITDA; excluding effects of the Akorn and NxStage transactions and gains from divestitures of Care Coordination activities; excluding further potential acquisitions; at current IFRS rules ⁷ Growth rates adjusted for IFRS 15 adoption (H1/17 base: €16,624 million; Q2/17 base: €8,401 million)

 

 

7% net income^1,2 growth in constant currency

Group EBITDA² decreased by 6% (0% in constant currency) to €2,912 million (H1/2017: €3,098 million). Group EBIT² decreased by 8% (-2% in constant currency) to €2,199 million (H1/2017: €2,393 million). The prior-year period saw the compensation for treatments of U.S. war veterans (“VA agreement”) contributing €91 million as a one-time effect. Excluding the VA agreement, EBIT² increased by 2% in constant currency in H1/2018. The EBIT margin² was 13.3% (13.1% before IFRS 15; H1/17: 14.2%). Group EBIT² before expenses for the further development of the biosimilars business decreased by 5% (increased 1% in constant currency) to €2,271 million. Group EBIT² excluding the VA agreement and expenses for the biosimilars business increased by 5% in constant currency.

In Q2/2018, Group EBIT² decreased by 3% (increased 2% in constant currency) to €1,145 million (Q2/2017: €1,177 million), with an EBIT margin² of 13.7% (13.4% before IFRS 15; Q2/2017: 13.8%). Group EBIT² excluding expenses for the biosimilars business increased by 5% in constant currency.

¹ Net income attributable to shareholders of Fresenius SE & Co. KGaA ² Before special itemsFor a detailed overview of special items please see the reconciliation tables on pages 18-19 in the PDF document.

Group net interest² was -€297 million (H1/2017: -€326 million). The decrease is mainly driven by currency effects and reduced interest following refinancing activities.

The decrease of the Group tax rate before special items to 22.3% (H1/2017: 28.5%) was mainly due to the U.S. tax reform. In Q2/2018, the Group tax rate² was 23.4% (Q2/2017: 27.9%).

Noncontrolling interest² was €556 million (H1/2017: €562 million), of which 95% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income^1,2 increased by 1% (7% in constant currency) to €922 million (H1/2017: €916 million). Earnings per share^1,2 increased by 1% (7% in constant currency) to €1.66 (H1/2017: €1.65). In Q2/2018, Group net income^1,2 increased by 3% (7% in constant currency) to €472 million (Q2/2017: €459 million). Earnings per share^1,2 increased by 3% (7% in constant currency) to €0.85 (Q2/2017: €0.82).

Group net income^1,2 before expenses for the further development of the biosimilars business increased by 6% (12% in constant currency) to €975 million (H1/2017: €916 million). Earnings per share^1,2 before expenses for the further development of the biosimilars business increased by 6% (12% in constant currency) to €1.76 (H1/2017: €1.65). In Q2/2018, Group net income^1,2 before expenses for the further development of the biosimilars business increased by 9% (12% in constant currency) to €499 million (Q2/2017: €459 million). Earnings per share^1,2 before expenses for the further development of the biosimilars business increased by 9% (12% in constant currency) to €0.90 (Q2/2017: €0.82).

Group net income¹ after special items increased by 20% (29% in constant currency) to €1,092 million (H1/2017: €907 million), mainly due to gains related to divestitures in Care Cordination activities at Fresenius Medical Care. Earnings per share¹ after special items increased by 20% (29% in constant currency) to €1.97 (H1/2017: €1.64). In Q2/2018, Group net income¹ after special items increased by 45% (54% in constant currency) to €652 million (Q2/2017: €450 million). Earnings per share¹ after special items increased by 45% (54% in constant currency) to €1.18 (Q2/2017: €0.81).

1 Net income attributable to shareholders of Fresenius SE & Co. KGaA² Before special itemsFor a detailed overview of special items please see the reconciliation tables on pages 18-19 in the PDF document.

Continued investment in growth

Spending on property, plant and equipment was €831 million (H1/2017: €709 million), primarily for the modernization and expansion of dialysis clinics, production facilities as well as hospitals and day clinics. This corresponds to 5.0% of sales.

Total acquisition spending was €386 million (H1/2017: €6,421 million). The prior-year period included the acquisition of Quirónsalud.

 

Cash flow development

Operating cash flow decreased by 25% to €1,256 million (H1/2017: €1,683 million) with a margin of 7.6% (H1/2017: 10.0%). The decrease is mainly due to two effects at Fresenius Medical Care in North America: Receipt of a ~€200 million payment under the VA agreement in the prior-year period as well as increased accounts receivable related to the addition of calcimimetics into the Medicare ESRD payment bundle. Moreover negative currency translation effects weighed on the cash flow development in H1/2018. Operating cash flow in Q2/2018 decreased by 15% to €1,020 million (Q2/2017: €1,207 million), with a margin of 12.2% (Q2/2017: 14.1%). Negative currency translation effects weighed on the cash flow development in Q2/2018.

Given the effects described above and growing investments, free cash flow before acquisitions and dividends decreased to €425 million (H1/2017: €998 million). Free cash flow after acquisitions and dividends was €942 million (H1/2017: -€5,645 million).

Solid balance sheet structure

The Group’s total assets increased by 3% (3% in constant currency) to €54,982 million (Dec. 31, 2017: €53,133 million). Current assets grew by 13% (13% in constant currency) to €14,287 million (Dec. 31, 2017: €12,604 million). Non-current assets were nearly unchanged (decreased by 1% in constant currency) at €40,695 million (Dec. 31, 2017: €40,529 million).

Total shareholders’ equity increased by 7% (6% in constant currency) to €23,269 million (Dec. 31, 2017: €21,720 million). The equity ratio increased to 42.3% (Dec. 31, 2017: 40.9%).

Group debt was nearly unchanged (decreased by 1% in constant currency) at €18,989 million (Dec. 31, 2017: €19,042 million). Group net debt decreased by 4% (-5% in constant currency) to €?16,722 million (Dec. 31, 2017: €?17,406 million) mainly due to the proceeds from divestitures of Care Coordination activities.

As of June 30, 2018, the net debt/EBITDA ratio was 2.80^1,2 (December 31, 2017: 2.84^1,2). Excluding the proceeds from divestitures of Care Coordination activities the net debt/EBITDA ratio was 3.02^1,2.

¹ At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures, excluding Akorn and NxStage transactions² Before special itemsFor a detailed overview of special items please see the reconciliation tables on pages 18-19 in the PDF document.



Business Segments

Fresenius Medical Care

Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of June 30, 2018, Fresenius Medical Care was treating 325,188 patients in 3,815 dialysis clinics. Along with its core business, the company provides related medical services in the field of Care Coordination.

 

• Q2/2018 reported results significantly positively influenced by divestitures of Care Coordination activities
• 5% adjusted^1,2 sales growth in constant currency in Q2
• 6% adjusted^4,6 net income growth in constant currency in Q2
• 22% net income growth in constant currency on a comparable basis^4,7 in Q2

Reported sales were strongly impacted by headwinds from foreign exchange rates and by the already anticipated decline in Fresenius Medical Care North America’s pharmacy business. Sales decreased by 9% (increased by 3%¹ in constant currency) to €8,189 million (H1/2017: €9,019 million). Organic sales growth was 3%. Currency translation effects reduced sales by 9%. Adoption of IFRS 15 reduced sales by 3%. Excluding the VA agreement in the prior-year quarter, sales growth¹ was 4% in constant currency.

¹ Growth rate adjusted for IFRS 15 implementation (Q2/17 base: €4,340 million; H1/17 base: €8,749 million) ² Excluding VA agreement: Q2/2018: 5%; H1/2018: 4%³ Adjusted for gains from divestitures of Care Coordination activities: Q2/2018: 4%; H1/2018: -5% ⁴ Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA ⁵ Adjusted for gains from divestitures of Care Coordination activities and the effect of the U.S. Tax Reform: Q2/2018: 8%; H1/2018: -3% ⁶ Consistent with guidance, i.e. excluding gains from divestitures of Care Coordination activities, excluding the effect of the U.S. Tax Reform and excluding VA agreement ⁷ Consistent with guidance, i.e. excluding gains from divestitures of Care Coordination activities, including the effect of the U.S. Tax Reform and including VA agreement

In Q2/2018, sales decreased by 6% (increased 5%¹ in constant currency) to €4,214 million (Q2/2017: €4,471 million). Organic sales growth was 4%. Currency translation effects reduced sales by 8%. Adoption of IFRS 15 reduced sales by 3%.

Health Care services sales (dialysis services and care coordination) decreased by 8%¹ (increased by 3%¹ in constant currency) to €6,594 million (H1/2017: €7,418 million). With €1,595 million (H1/2017: €1,601 million), Health Care product sales were on prior-year’s level (increased by 6% in constant currency).

In North America, sales decreased by 9%¹ (increased by 1%¹ in constant currency) to €5,746 million (H1/2017: €6,600 million). Health Care services sales decreased by 9%¹ (increased by 1%¹ in constant currency) to €5,351 million (H1/2017: €6,182 million). Excluding the 2017 effect from the VA Agreement (€98 million), Health Care services sales increased by 3%¹ in constant currency. Health Care product sales decreased by 5% (increased by 6% in constant currency) to €395 million (H1/2017: €418 million).

Sales outside North America increased by 1% (8% in constant currency) to €2,436 million (H1/2017: €2,410 million). Health Care services sales increased by 1% (10% in constant currency) to €1,243 million (H1/2017: €1,236 million). Health Care product sales increased by 2% (7% in constant currency) to €1,193 million (H1/2017: €1,174 million).

Fresenius Medical Care’s EBIT increased by 54% (68% in constant currency) to €1,898 million (H1/2017: €1,235 million), driven by the divestitures of Care Coordination activities in Q2/18. The EBIT margin increased to 23.2% (H1/2017: 13.7%). Adjusted for the implementation of IFRS 15 and excluding the gains from divestitures of Care Coordination activities and the VA agreement in the prior-year period, EBIT increased by 3% in constant currency and EBIT margin was 13.2% (H1/2017: 13.2%). In Q2/2018, EBIT increased by 140% (increased by 162% in constant currency) to €1,401 million (Q2/2017: €583 million). The EBIT margin increased to 33.3% (Q2/2017: 13.0%). Adjusted for the adoption of IFRS 15 and excluding the gains from divestitures of Care Coordination activities, EBIT increased by 4% in constant currency and EBIT margin increased to 13.5%.

¹ Growth rate adjusted for IFRS 15 implementation (Q2/17: -€131 million; H1/17: -€270 million)

Net income¹ increased by 121% (141% in constant currency) to €1,273 million (H1/2017: €577 million). Consistent with full-year guidance, i.e. excluding the gains from divestitures of Care Coordination activities, the effect of the U.S. Tax Reform and the VA agreement in the prior-year period, net income growth¹ was 7% in constant currency. Net income¹ growth on a comparable basis, i.e. excluding the gains from divestitures of Care Coordination activities, but including the effect of the U.S. Tax Reform and the VA agreement in the prior-year period, was 13% in constant currency.

In Q2/2018, net income¹ grew by 270% (303% in constant currency) to €994 million (Q2/2017: €269 million). Consistent with full-year guidance, i.e. excluding the gains from divestitures of Care Coordination activities, the effect of the U.S. Tax Reform and the VA agreement in the prior-year period, net income growth¹ was 6% in constant currency. Net income¹ growth on comparable basis, i.e. excluding the gains from divestitures of Care Coordination activities, but including the effect of the U.S. Tax Reform and the VA agreement in the prior-year period was 22% in constant currency.

Operating cash flow was €611 million (H1/2017: €1,052 million). The cash flow margin was 7.5% (H1/2017: 11.7%). The decrease is mainly due to two effects in North America: Receipt of a ~€200 million payment under the VA agreement in the prior-year period as well as increased accounts receivable related to the addition of calcimimetics into the Medicare ESRD payment bundle. In Q2/2018, operating cash flow was €656 million (Q2/2017: €882 million) with a cash flow margin of 15.6% (Q2/2017: 19.7%).

Fresenius Medical Care confirms its outlook for 2018 and expects sales growth of 5 to 7%² in constant currency and net income¹ comparable growth of 13% to 15%³ in constant currency (7% to 9%⁴ adjusted net income growth).

The 2018 growth targets are based on 2017 figures and exclude effects from the planned acquisition of NxStage Medical and gains from divestitures of Care Coordination activities.

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 2017 base: €16,739 million (adjusted for IFRS 15 adoption (-€486 million) and excluding Sound´s revenue for H2/2017 (-€558 million))
³ 2017 base: €1,242 million, excluding Sound´s H2/17 net income (-€38 million); 2018 including benefits from U.S. tax reform but excluding gains from divestitures of Care Coordination activities
⁴ Excluding gains from divestitures of Care Coordination activities, excluding the effect of the U.S. Tax Reform natural disaster, FCPA related charge and excluding VA agreement
 

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, we are developing products with a focus on oncology and autoimmune diseases.

 

• 6% organic sales growth and 11% EBIT¹ growth in constant currency (excluding biosimilars business) in Q2
• European Commission confirms marketing authorizations of HES subject to the implementation of risk minimization measures
• Sales outlook confirmed: 4% to 7% organic sales growth expected
• EBIT outlook raised: -2% to +1%⁵ EBIT growth in constant currency expected (~6% to 9%⁶ excl. biosimilars expenses)

Sales of €3,207 million (H1/2017: €3,202 million) were on prior-year level (increased by 7% in constant currency). Organic sales growth was 7%. Strong negative currency translation effects (-7%) were mainly related to the devaluation of the U.S. dollar, the Brazilian real and the Chinese yuan against the euro. In Q2/2018, sales of €1,604 million were nearly unchanged (increased by 6% in constant currency) from the prior-year level (Q2/2017: €1,598 million). Organic sales growth was 6%.

Sales in Europe grew by 2% (organic growth: 3%) to €1,120 million (H1/2017: €1,097 million). In Q2/2018, sales increased by 2% (organic growth: 3%) to €563 million (Q2/2017: €553 million).

Sales in North America decreased by 4% (organic growth: 7%) to €1,140 million (H1/2017: €1,187 million). In Q2/2018, sales decreased by 3% (organic growth: 4%) to €549 million (Q2/2017: €568 million).

 ¹ Before special items ² Before expenses for the further development of the biosimilars business: Q2/2018: 11%; H1/2018: 10% ³ Net income attributable to shareholders of Fresenius SE & Co. KGaA ⁴ Before expenses for the further development of the biosimilars business: Q2/2018: 19%; H1/2018: 17%⁵ 2017 base: €1,177 million; 2017 & 2018 before special items, including expenditures for the further development of the biosimilars business (€60 million in FY/17, and expected expenditures of ~€160 million in FY/18)⁶ 2017 base: €1,237 million; 2017 & 2018 before special items
For a detailed overview of special items please see the reconciliation tables on pages 18-19 in the PDF document.

Sales in Asia-Pacific increased by 8% (organic growth: 13%) to €627 million (H1/2017: €582 million). In Q2/2018, sales increased by 8% (organic growth: 11%) to €326 million (Q2/2017: €302 million). Sales in Latin America/Africa decreased by 5% (organic growth: 10%) to €320 million (H1/2017: €336 million). In Q2/2018, sales decreased by 5% (organic growth: 10%) to €166 million (Q2/2017: €175 million).

EBIT¹ decreased by 10% (-1% in constant currency) to €557 million (H1/2017: €622 million) with an EBIT margin¹ of 17.4% (H1/2017: 19.4%). In Q2/2018, EBIT¹ decreased by 6% (-1% in constant currency) to €289 million (Q2/2017: €309 million) with an EBIT margin¹ of 18.0% (Q2/2017: 19.3%).

EBIT¹ before expenses for the further development of the biosimilars business increased by 1% (10% in constant currency) to €629 million (H1/2017: €622 million) with an EBIT margin¹ of 19.6% (H1/2017: 19.4%). In Q2/2018, EBIT¹ before expenses for the further development of the biosimilars business increased by 6% (11% in constant currency) to €326 million (Q2/2017: €309 million) with an EBIT margin¹ of 20.3% (Q2/2017: 19.3%).

Net income^1,2 decreased by 6% (increased by 4% in constant currency) to €355 million (H1/2017: €379 million). In Q2/2018, net income^1,2 decreased by 2% (increased by 5% in constant currency) to €185 million (Q2/2017: €188 million).

Operating cash flow increased by 15% to €454 million (H1/2017: €395 million). The cash flow margin grew to 14.2% (H1/2017: 12.3%). In Q2/2018, operating cash flow increased by 12% to €228 million (Q2/2017: €203 million) with a cash flow margin of 14.2% (Q2/2017: 12.7%).

 ¹ Before special items ² Net income attributable to shareholders of Fresenius SE & Co. KGaA
For a detailed overview of special items please see the reconciliation tables on pages 18-19 in the PDF document.

Based on the strong development of Fresenius Kabi in H1/2018 and the reversal of some HES¹ associated risk adjustments, Fresenius Kabi raises its EBIT outlook for 2018 by 4%-points and now expects EBIT growth in constant currency of -2% to +1%² (previously: -6% to -3%² in constant currency). Excluding expenditures for the further development of the biosimilars business, EBIT is now expected to grow by ~6% to 9%³ in constant currency (previously: ~2% to 5%³ in constant currency). Fresenius Kabi confirms its sales guidance of 4% to 7% organic growth.

 ¹ Hydroxyethyl starch (HES) ² 2017 base: €1,177 million; 2017 & 2018 before special items, including expenditures for the further development of the biosimilars business (€60 million in FY/17 and expected expenditures of ~€160 million in FY/18) ³ 2017 base: €1,237 million; 2017 & 2018 before special items
For a detailed overview of special items please see the reconciliation tables on pages 19-20 in 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 87 acute care hospitals, 89 outpatient centers and treats approximately 5.2 million patients annually. Quirónsalud operates 45 hospitals, 56 outpatient centers and around 300 occupational risk prevention centers, and treats approximately 11.6 million patients annually.

 

 

• 4% organic sales growth in Q2
• DRG catalogue effects and preparatory structural activities for anticipated regulatory measures weigh on financial performance of Helios Germany
• Helios Spain with accelerated growth: 8% organic sales growth and 19% EBIT growth in Q2
• 2018 outlook confirmed

Fresenius Helios increased sales by 10% to €4,674 million (H1/2017: €4,256 million). Organic sales growth was 4%. In Q2/2018, sales increased by 5% (organic growth: 4%) to €2,343 million (Q2/2017: €2,238 million).

Sales of Helios Germany increased by 3% (organic growth: 3%) to €3,121 million (H1/2017: €3,038 million). In Q2/2018, sales increased by 2% (organic growth: 3%) to €1,547 million (Q2/2017: €1,510 million). Helios Spain increased sales by 28% (organic growth: 5%) to €1,553 million (H1/2017: €1,218 million), mainly due to the additional month of consolidation compared to the prior-year period (Quirónsalud is consolidated since February 1, 2017). In Q2/2018 Helios Spain increased sales by 9% (organic growth: 8%) to €796 million (Q2/2017: €728 million).

Fresenius Helios grew EBIT by 6% to €571 million (H1/2017: €537 million) with a margin of 12.2% (H1/2017: 12.6%). In Q2/2018, EBIT increased by 4% to €293 million (Q2/2017: €282 million) with a margin of 12.5% (Q2/2017: 12.6%).

EBIT of Helios Germany decreased by 4% to €345 million (H1/2017: €359 million) with a margin of 11.1% (H1/2017: 11.8%). The decline is mainly due to additional catalogue effects, preparatory structural activities for anticipated regulatory requirements (i.e. clustering) as well as a lack of privatization opportunities in the German market. In Q2/2018, EBIT decreased by 6% to €168 million (Q2/2017: €178 million) with a margin of 10.9% (Q2/2017: 11.8%).

EBIT of Helios Spain increased by 28% to €227 million (H1/2017: €178 million), mainly due to the additional month of consolidation compared to the prior-year period, with a margin of 14.6% (H1/2017: 14.6%). In Q2/2018, EBIT increased by 19% to €124 million (Q2/2017: €104 million) with a margin of 15.6% (Q2/2017: 14.3%).

Net income¹ of Fresenius Helios increased by 4% to €388 million (H1/2017: €373 million). In Q2/2018, net income¹ increased by 3% to €197 million (Q2/2017: €192 million).

Operating cash flow was €259 million (H1/2017: €304 million) with a margin of 5.5% (H1/2017: 7.1%).

The already announced transfer of the in-patient post-acute care business from Fresenius Helios to Fresenius Vamed has become effective as of July 1, 2018. As a consequence, Fresenius Helios’ EBIT growth outlook for 2018 was adjusted to 5% to 8% (previously: 7% to 10%).

Fresenius Helios confirms its outlook for 2018 and expects organic sales growth of 3% to 6% and EBIT growth of 5% to 8%.

¹ Net income attributable to shareholders of Fresenius SE & Co. KGaA

 

Fresenius Vamed

Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide and is a 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.

• Service business with continued good momentum: 11% sales growth in Q2
• Project business with good order intake of €195 million in Q2
• Transfer of inpatient post-acute care business from Helios Germany to Vamed as of July 1, 2018
• 2018 outlook confirmed

Sales increased by 7% (7% in constant currency) to €515 million (H1/2017: €481 million). Organic sales growth was 5%. Sales in the project business increased by 4% to €191 million (H1/2017: €184 million). Sales in the service business grew by 9% to €324 million (H1/2017: €297 million). In Q2/2018, sales increased by 3% (organic growth: 1%) to €266 million (Q2/2017: €258 million).

EBIT increased by 6% to €18 million (H1/2017: €17 million) with a margin of 3.5% (H1/2017: 3.5%). In Q2/2018, EBIT increased by 9% to €12 million (Q2/2017: €11 million) with a margin of 4.5% (Q2/2017: 4.3%).

Net income¹ of €11 million was unchanged from prior-year’s level. In Q2/2018, net income¹ was also unchanged at €7 million.

Order intake increased by 10% to €455 million (H1/2017: €412 million). As of June 30, 2018, order backlog was €2,372 million (December 31, 2017: €2,147 million).

The already announced transfer of the in-patient post-acute care business from Fresenius Helios to Fresenius Vamed has become effective as of July 1, 2018. As a consequence, Fresenius Vamed’s EBIT growth outlook for 2018 was adjusted to 32% to 37% (previously: 5% to 10%).

Fresenius Vamed confirms its outlook for 2018 and expects organic sales growth in the range of 5% to 10% and EBIT growth of 32% to 37%.

 ¹ Net income attributable to shareholders of VAMED AG

Conference Call

As part of the publication of the results for the second quarter / first half of 2018, a conference call will be held on July 31, 2018 at 2 p.m. CET (8 a.m. EST). All investors are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com/investors. Following the call, a replay will be available on our website.

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

Fresenius remains on track to continue strong growth. At the Annual General meeting in Frankfurt today, Stephan Sturm, CEO of Fresenius, confirmed the global health care group’s 2018 targets, which foresee increases of 5 to 8 percent in sales and 6 to 9 percent in net income^1,2, both in constant currency. Excluding the investments for the development of the biosimilars business, net income¹ is expected to increase by about 10 to 13 percent in constant currency.

“Fresenius has been highly successful over many years. And Fresenius will continue to be highly successful in the coming years,” Sturm said in his speech to shareholders. “Our entry into biosimilars. The expansion of our home dialysis activities. The internationalization of Fresenius Helios. And our huge investments to secure even more quality and efficiency in our production. These are all examples of how we are shaping our business, today, to stay successful in the future. The dynamic growth of Fresenius continues.”

Shareholders approved with a majority of 89.2 percent the proposal of the General Partner and the Supervisory Board to increase the dividend for the 25th consecutive time. It was raised by 21 percent, to €0.75 per share.

With a majority of 94.3 percent, the shareholders approved a new Authorized Capital I in the amount of €125 million. New authorizations to issue convertible bonds, to repurchase own shares, and to use equity derivatives for repurchasing own shares were also approved. In addition, the shareholders approved the revised compensation system for the members of the Management Board of the General Partner.

Shareholder majorities of 97.5 percent and 89.0 percent, respectively, approved the actions of the Management and Supervisory Boards in 2017.

At the Annual General Meeting, 73 percent of the subscribed capital was represented.

¹ Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2017 base: €1,859 million; 2018 before special items (i.e., transaction-related effects)
² including expenditures for further development of biosimilars business (€43 million after tax in FY/17 and ~€120 million after tax in FY/18)

Fresenius held the topping-out ceremony today for a new office building, part of the global healthcare group’s headquarters expansion in Bad Homburg. Local officials and business representatives joined a large number of employees for the festivities.

When the building opens next year it will offer modern workplaces for about 600 members of the company’s steadily growing workforce, as well as conference rooms, an additional staff canteen and a parking garage. Known internally as “EK3” because it will be the third Fresenius headquarters building on Else-Kröner Strasse, the five-story, “L”-formed structure will have a total volume of more than 100,000 cubic meters (over 3.5 million cubic feet) – the equivalent of about 175 single-family homes. About 11,000 cubic meters of earth were moved to make way for the building, with some 2,000 truckloads of cement and 2,000 tons of steel being used in its now-completed structural shell.

Addressing the topping-out ceremony, Rachel Empey, the Chief Financial Officer of Fresenius, stressed the importance of layout and design in facilitating cooperation between colleagues inside a building. “I hope that we’ll all use this space here in EK3 to work well together, and to cooperate even more effectively in the future,” Empey said. “It’s important that we are closely interconnected throughout the Fresenius Group. Fresenius possesses an incredible amount of knowledge and know-how: We have to share it, and make it transparent inside the Group, in order to continue growing as we are now. And then we will be able to dedicate a few more buildings here in Bad Homburg.”

Mayor Alexander Hetjes of Bad Homburg said: “We congratulate Fresenius on the very rapid and smooth construction. The residents of Bad Homburg have been following the headquarters expansion with great interest. Fresenius is a major employer, a leader in its sector, and a company that organizes and stages many activities to promote good health among the people in our city. We wish the company and everyone involved every success for the rest of the construction.”

Fresenius is investing a total of about €70 million in its headquarters expansion. The company currently employs about 3,600 people in Bad Homburg, and an additional 300 in the neighboring town of Oberursel.

Q1/2018:

• Sales: €8.1 billion (-1%, +7% in constant currency¹)
• EBIT²: €1,054 million (-13%, -5% in constant currency)
• EBIT²: €1,089 million (-10%, -2% in constant currency) (excluding biosimilars business)
• Net income^2,3: €450 million (-2%, +7% in constant currency)
• Net income^2,3: €476 million (+4%, +12% in constant currency) (excluding biosimilars business)

^{1 Growth rates adjusted for IFRS 15 adoption (Q1/17 base: €8,223 million)2 Before special items (i.e., expenses related to (i) the Akorn transaction, and (ii) the re-valuation of Sound Physicians’ share-based payment program caused by its announced divestiture)3 Net income attributable to shareholders of Fresenius SE & Co. KGaA}For a detailed overview of special items please see the reconciliation table on page 16 of the PDF.

Stephan Sturm, CEO of Fresenius, said: “We have started into the year with great momentum. All four Fresenius business segments and all regions showed healthy organic growth in the first quarter. Once again, Fresenius Kabi stood out with a strong development across all regions and product areas. From this position of strength, we are well on track to reach our ambitious 2018 growth targets and achieve yet another record year.”

 

Fresenius terminates merger agreement with Akorn

Fresenius decided on April 22, 2018, to terminate the company’s merger agreement with Akorn, due to Akorn’s failure to fulfill several closing conditions. Fresenius’ decision is based on, among other factors, material breaches of FDA (Food and Drug Administration) data integrity requirements relating to Akorn’s operations found during Fresenius’ independent investigation. Fresenius had offered to delay its decision in order to allow Akorn additional opportunity to complete its own investigation and present any information it wished Fresenius to consider, but Akorn declined that offer.

Akorn disagrees with Fresenius’ position and has filed a corresponding complaint. Fresenius in turn has filed a counterclaim on April 30, 2018.

Stephan Sturm, CEO of Fresenius, said: “We will continue to pursue the strategic goal of expanding our portfolio of injectable generic drugs in North America. This strategy has been, and remains, valid. And given the continuing strong development of Fresenius Kabi in North America, we are in an excellent position to achieve it.”

Group guidance¹ for 2018 confirmed

Fresenius confirms its guidance for 2018. Group sales are expected to increase by 5% to 8%² in constant currency. Net income^3,4 is expected to grow by 6% to 9% in constant currency. Excluding expenditures for the further development of the biosimilars business, net income^3,5 is expected to grow by ~10% to 13% in constant currency.

Fresenius expects to further reduce its net debt/EBITDA⁶ ratio by year-end 2018.

7% sales growth in constant currency⁷

Group sales decreased by 1%⁷ (increased by 7%⁷ in constant currency) to €8,121 million (Q1/2017: €8,362 million). Organic sales growth was 4%. Acquisitions/divestitures contributed net 3% to growth. Sales growth was impacted by the anticipated decline in the pharmacy business within Care Coordination at Fresenius Medical Care North America. Also at Fresenius Medical Care, the prior-year quarter saw the compensation for treatments of U.S. war veterans in previous years ("VA agreement"), contributing €100 million as a one-time effect. Negative currency translation effects (8%) were mainly driven by the devaluation of the U.S. dollar and the Chinese yuan against the euro.

^{1 Excluding effects of the Akorn, NxStage and Sound Physicians transactions2 2017 base adjusted for IFRS 15 adoption (deduction of €486 million at Fresenius Medical Care)3 Net income attributable to shareholders of Fresenius SE & Co. KGaA4 2017 base: €1,816 million; 2018 before special items (i.e., transaction-related effects); including expenditures for further development of biosimilars business (€43 million after tax in FY/17 and ~€120 million after tax in FY/18)5 2017 base: €1,859 million; 2018 before special items (i.e., transaction-related effects)6 Calculated at expected annual average exchange rates, for both net debt and EBITDA; excluding effects of the Akorn, NxStage and Sound Physicians transactions; excluding further potential acquisitions; at current IFRS rules7 Growth rates adjusted for IFRS 15 adoption (Q1/17 base: €8,223 million)}

Group sales by region:

7% net income^1,2 growth in constant currency

Group EBITDA² decreased by 10% (-2% in constant currency) to €1,403 million (Q1/2017: €1,560 million). Group EBIT² decreased by 13% (-5% in constant currency) to €1,054 million (Q1/2017: €1,216 million). The prior-year quarter was strongly influenced by a positive one-time effect: the VA agreement contributed €99 million, or 10%, to EBIT growth in constant currency in Q1/17. The EBIT margin² was 13.0% (12.7% before IFRS 15; Q1/2017: 14.5%). Group EBIT² before expenses for the further development of the biosimilars business decreased by 10% (-2% in constant currency) to €1,089 million. Group EBIT² before VA agreement and excluding the expenses for the biosimilars business increased by 6% in constant currency.

Group net interest² was -€146 million (Q1/2017: -€157 million). The decrease is mainly driven by currency effects and positive refinancing activities.

The decrease of the Group tax rate before special items to 21.0% (Q1/2017: 29.1%) was mainly due to the U.S. tax reform and a one-time tax effect at Fresenius Medical Care.

Noncontrolling interest² was €267 million (Q1/2017: €294 million), of which 95% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income^1,2 decreased by 2% (increased by 7% in constant currency) to €450 million (Q1/2017: €457 million). Earnings per share^1,2 decreased by 2% (increased by 6% in constant currency) to €0.81 (Q1/2017: €0.83).

Group net income^1,2 before expenses for the further development of the biosimilars business increased by 4% (12% in constant currency) to €476 million (Q1/2017: €457 million). Earnings per share^1,2 before expenses for the further development of the biosimilars business increased by 4% (11% in constant currency) to €0.86 (Q1/2017: €0.83).

Group net income¹ after special items decreased by 4% (increased by 4% in constant currency) to €440 million (Q1/2017: €457 million). Earnings per share¹ after special items decreased by 5% (increased by 4% in constant currency) to €0.79 (Q1/2017: €0.83).

 

^{1 Net income attributable to shareholders of Fresenius SE & Co. KGaA2 Before special items}For a detailed overview of special items please see the reconciliation table on page 16 of the PDF.

 

Continued investment in growth

Spending on property, plant and equipment was €380 million (Q1/2017: €328 million), primarily for the modernization and expansion of dialysis clinics, production facilities as well as hospitals and day clinics. This corresponds to 4.7% of sales.

Total acquisition spending was €192 million (Q1/2017: €6,083 million). The prior-year quarter included the acquisition of Quirónsalud.

Cash flow development

Operating cash flow decreased by 50% to €236 million (Q1/2017: €476 million) with a margin of 2.9% (Q1/2017: 5.7%). The decrease is mainly attributable to prior years’ received payment under the VA agreement of ~€200 million as well as to the seasonality in invoicing at Fresenius Medical Care North America, which is not expected to impact full year 2018 cash flow.

Free cash flow before acquisitions and dividends decreased to -€155 million (Q1/2017: €148 million). Free cash flow after acquisitions and dividends was -€389 million (Q1/2017: -€5,393 million).

Solid balance sheet structure

The Group’s total assets increased by 1% (2% in constant currency) to €53,502 million (Dec. 31, 2017: €53,133 million). Current assets grew by 6% (8% in constant currency) to €13,409 million (Dec. 31, 2017: €12,604 million). Non-current assets decreased by 1% (0% in constant currency) to €40,093 million (Dec. 31, 2017: € 40,529 million).

Total shareholders’ equity increased by 1% (3% in constant currency) to €22,020 million (Dec. 31, 2017: €21,720 million). The equity ratio increased to 41.2% (Dec. 31, 2017: 40.9%).

Group debt increased by 1% (2% in constant currency) to €19,200 million (Dec. 31, 2017: € 19,042 million). Group net debt increased by 2% (3% in constant currency) to € 17,716 million (Dec. 31, 2017: € 17,406 million).

As of March 31, 2018, the net debt/EBITDA ratio was 2.98 , (December 31, 2017: 2.84^1,2).

 

^{1 At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions, excluding Akorn, NxStage and Sound Physicians transactions2 Before special items}For a detailed overview of special items please see the reconciliation table on page 16 of the PDF.

Increased number of employees

As of March 31, 2018, the number of employees increased by 1% to 275,674 (Dec. 31, 2017: 273,249).

Business Segments

Fresenius Medical Care

Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of March 31, 2018, Fresenius Medical Care was treating 322,253 patients in 3,790 dialysis clinics. Along with its core business, the company provides related medical services in the field of Care Coordination.

• Q1/2018 growth impacted by significant currency headwinds and positive one-time effect in prior years’ quarter
• 2018 outlook of net income growth^4,7 of 13 to 15% in constant currency confirmed
• 2018 sales growth⁸ target adjusted to 5 to 7% at constant currency (previously ~8%), mainly due to recent reduction in dosing of calcimimetic drugs in the U.S.

Reported sales were strongly impacted by headwinds from foreign exchange rates and by the anticipated decline in the pharmacy business within Care Coordination at Fresenius Medical Care North America. Sales decreased by 10%¹ (increased by 2%¹ in constant currency) to €3,976 million (Q1/2017: €4,548 million). Organic sales growth was 3%. Acquisitions/divestitures and the VA agreement in the prior-year quarter decreased sales by 1%. Currency translation effects reduced sales by 12%. Excluding the VA agreement in the prior-year quarter, sales growth¹ was 4% in constant currency.

^{1 Growth rate adjusted for IFRS 15 adoption (Q1/17 base: €4,409 million)2 Excluding VA agreement: 4%3 Adjusted for re-valuation of Sound Physicians’ share-based payment program and excluding VA agreement: 3%4 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA5 Adjusted for re-valuation of Sound Physicians’ share-based payment program, the effect of the U.S. Tax Reform and excluding VA agreement: 8%6 Consistent with guidance, adjusted for re-valuation of Sound Physicians’ share-based payment program, including the effect of the U.S. Tax Reform and including VA agreement7 2017 base: €1,280 million; 2018 including benefits from U.S. tax reform and adjusted for the Sound valuation impact8 2017 reported sales: €17,784 million, adjusted for IFRS 15 adoption (deduction of €486 million)}

Health Care services sales (dialysis services and care coordination) decreased by 12%¹ (increased by 1%¹ in constant currency) to €3,209 million (Q1/2017: €3,769 million). Health Care product sales decreased by 2% (increased by 6% in constant currency) to €767 million (Q1/2017: €779 million).

In North America, sales decreased by 14%¹ (-1%¹ in constant currency) to €2,774 million (Q1/2017: €3,375 million). Health Care services sales decreased by 14%¹ (-1%¹ in constant currency) to €2,590 million (Q1/2017: €3,165 million) mainly due to the prior-year VA agreement (€100 million). Excluding the 2017 effect from the VA Agreement Health Care services sales increased by 2%¹ in constant currency. Health Care product sales decreased by 12% (increased by 1% in constant currency) to €184 million (Q1/2017: €210 million).

Sales outside North America increased by 2% (10% in constant currency) to €1,198 million (Q1/2017: €1,169 million). Health Care services sales increased by 2% (12% in constant currency) to €619 million (Q1/2017: €604 million). Health Care product sales increased by 3% (8% in constant currency) to €579 million (Q1/2017: €564 million).

Fresenius Medical Care’s EBIT decreased by 24% (-15% in constant currency) to €497 million (Q1/2017: €651 million). The EBIT margin was 12.5% (Q1/2017: 14.3%). Adjusted for the effect of the implementation of IFRS 15, the re-valuation of Sound Physicians’ share-based payment program in connection with the announced divestiture of Sound Physicians and for the positive effect of the VA Agreement in Q1/2017, EBIT was up by 3% in constant currency and EBIT margin was stable at 12.8%.

Net income² of Fresenius Medical Care decreased by 10% (0% in constant currency) to €279 million (Q1/2017: €308 million). Consistent with guidance, i.e. adjusted for the re-valuation of Sound Physicians’ share-based payment program, net income growth² was 5% in constant currency. Adjusted for the re-valuation of Sound Physicians’ share-based payment program and the effect of the U.S. Tax Reform in 2018 and for the positive effect of the VA agreement, net income growth2 was 8% in constant currency.

^{1 Growth rate adjusted for IFRS 15 adoption (Q1/17: deduction of €139 million)2 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA}

Operating cash flow was -€45 million (Q1/2017: €170 million). The cash flow margin was 1.1% (Q1/2017: 3.7%). The decrease is mainly attributable to prior years’ payment under the VA agreement of ~€200 million as well as to the seasonality in invoicing at Fresenius Medical Care North America, which is not expected to impact full year 2018 cash flow.

Mainly driven by the change in dosing of calcimimetic drugs, Fresenius Medical Care expects sales to grow by 5 to 7%¹ (previously: ~8%¹ ) in constant currency. Fresenius Medical Care expects net income² growth of 13% to 15%³ in constant currency and excluding special items of 7% to 9%⁴.

The 2018 targets are based on 2017 figures adjusted for the adoption of IFRS 15 implementation and exclude effects from the planned acquisition of NxStage Medical and the announced divestiture of Sound Physicians.

^{1 2017 reported sales: €17,784 million, adjusted for IFRS 15 adoption (deduction of €486 million)2 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA3 2017 base: €1,280 million; 2018 including benefits from U.S. tax reform and adjusted for the Sound valuation impact4 VA Agreement, Natural Disaster Costs, FCPA related charge, U.S. Tax Reform}

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

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, we are developing products with a focus on oncology and autoimmune diseases.

• Excellent start to 2018
• 9% organic sales growth; 10% EBIT¹ growth in constant currency (excluding biosimilars business)
• Strong negative currency translation effects
• Strong operating cash flow
• 2018 outlook confirmed

With €1,603 million (Q1/2017: €1,604 million), sales of Fresenius Kabi were on prior years level (increased by 9% in constant currency). Organic sales growth was 9%. Strong negative currency translation effects (-9%) were mainly related to the devaluation of the U.S. dollar and the Chinese yuan against the euro.

Sales in Europe grew by 2% (organic growth: 3%) to €557 million (Q1/2017: €544 million).

Sales in North America decreased by 5% (organic growth: 10%) to €591 million (Q1/2017: €619 million).

Sales in Asia-Pacific increased by 8% (organic growth: 15%) to €301 million (Q1/2017: €280 million). Sales in Latin America/Africa decreased by 4% (organic growth: 10%) to €154 million (Q1/2017: €161 million).

EBIT¹ decreased by 14% (-2% in constant currency) to €268 million (Q1/2017: €313 million). The EBIT margin¹ was 16.7% (Q1/2017: 19.5%).

^{1 Before special items2 Before expenses for the further development of the biosimilars business: 10%3 Net income attributable to shareholders of Fresenius SE & Co. KGaA4 Before expenses for the further development of the biosimilars business: 16%}For a detailed overview of special items please see the reconciliation table on page 16 of the PDF.

EBIT¹ before expenses for the further development of the biosimilars business decreased by 3% (increased by 10% in constant currency) to €303 million (Q1/2017: €313 million). The EBIT margin¹ before expenses for the further development of the biosimilars business was 18.9% (Q1/2017: 19.5%).

Net income^1,2 decreased by 11% (increased by 3% in constant currency) to €170 million (Q1/2017: €191 million).

Operating cash flow increased by 18% to €226 million (Q1/2017: €192 million). The cash flow margin was 14.1% (Q1/2017: 12.0%).
Fresenius Kabi confirms its outlook for 2018 and expects organic sales growth of 4% to 7% and EBIT growth in constant currency of -3% to -6%³. Excluding expenditures for the further development of the biosimilars business, EBIT is expected to grow by ~2% to 5%⁴ in constant currency.

^{1 Before special items2 Net income attributable to shareholders of Fresenius SE & Co. KGaA3 2017 base: €1,177 million; 2018 before special items (i.e., transaction-related expenses), including expenditures for the further development of the biosimilars business (€60 million in FY/17 and expected expenditures of ~€160 million in FY/18)4 2017 base: €1,237 million; 2018 before special items (i.e., transaction-related expenses)}For a detailed overview of special items please see the reconciliation table on page 16 of the PDF.

 

Fresenius Helios

Fresenius Helios is Europe's leading private hospital operator. The company comprises Helios Germany and Helios Spain (Quirónsalud). Helios Germany operates 111 hospitals, thereof 88 acute care clinics and 23 post-acute care clinics, and treats more than 5.3 million patients annually. Quirónsalud operates 45 hospitals, 55 outpatient centers and around 300 occupational risk prevention centers, and treats approximately 11.6 million patients per year.

• 3% organic sales growth
• 9% EBIT increase
• 2018 outlook confirmed

Fresenius Helios increased sales by 16% to €2,331 million (Q1/2017: €2,018 million). Organic sales growth was 3%. The acquisition of Quirónsalud contributed 13% to sales growth. Helios Spain (Quirónsalud) has been consolidated since February 1, 2017.

Sales of Helios Germany increased by 3% (organic growth: 3%) to €1,574 million (Q1/2017: €1,528 million). Helios Spain increased sales by 54% (organic growth: 1%) to €757 million (Q1/2017: €490 million), mainly due to the additional month of consolidation compared to the prior-year quarter.

Fresenius Helios grew EBIT by 9% to €278 million (Q1/2017: €255 million). The EBIT margin was 11.9% (Q1/2017: 12.6%).

EBIT of Helios Germany decreased by 2% to €177 million (Q1/2017: €181 million) with a margin of 11.2% (Q1/2017: 11.8%). The decline is due to preparatory measures for anticipated regulatory structural requirements for minimum staffing as well as catalogue effects. The anticipated regulatory requirements will be countered by clustering.

EBIT of Helios Spain increased by 39% to €103 million (Q1/2017: €74 million), mainly due to the additional month of consolidation compared to prior-year quarter. The EBIT margin was 13.6% (Q1/2017: 15.1%).  

Net income¹ of Fresenius Helios increased by 6% to €191 million (Q1/2017: €181 million).

Operating cash flow was €97 million (Q1/2017: €184 million). The margin was 4.2% (Q1/2017: 9.1%).

Fresenius Helios confirms its outlook for 2018 and expects organic sales growth of 3% to 6% and EBIT growth of 7% to 10%.

^{1 Net income attributable to shareholders of Fresenius SE & Co. KGaA}

Fresenius Vamed

Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide. The portfolio ranges along the entire value chain: from project development, planning, and turnkey construction, via maintenance and technical management, to total operational management.

• 9% organic sales growth
• Order backlog of €2,391 million at all-time high
• 2018 outlook confirmed

Sales increased by 12% (12% in constant currency) to €249 million (Q1/2017: €223 million). Organic sales growth was 9%. Sales in the project business increased by 19% to €92 million (Q1/2017: €77 million). Sales in the service business grew by 8% to €157 million (Q1/2017: €146 million).

EBIT of €6 million was unchanged from the prior-year level.

Net income¹ of €4 million was also unchanged from prior-year level.

Order intake was €260 million (Q1/2017: €220 million). As of March 31, 2018, order backlog was €2,391 million (December 31, 2017: €2,147 million).

For 2018, Fresenius Vamed expects organic sales growth in the range of 5% to 10% and EBIT growth of 5% to 10%.

^{1 Net income attributable to shareholders of VAMED AG}

Conference Call

As part of the publication of the results for the first quarter 2018, a conference call will be held on May 3, 2018 at 2 p.m. CET (8 a.m. EST). All investors are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com/investors. Following the call, a replay will be available on our website.

For additional information on the performance indicators used please refer to www.fresenius.com/alternative-performance-measures.