Fresenius Medical Care Chile is working to maintain operation of its clinic network and continue ensuring lifesaving dialysis treatment for patients in the country's recently affected earthquake region. Of the company's 28 dialysis clinics in the country, all but the operations in the Huechuraba area north of the nation's capital were functioning again within 48 hours of the initial tremor. Patients from Huechuraba received treatment at other clinics within the company's network. The Feb. 27 early morning offshore tremor registered 8.8 in magnitude and ravaged various portions of the country.
Contributing to further recovery efforts in the affected region, Fresenius Medical Care Chile donated two water treatment units suited for dialysis applications. The company augmented this initiative with technical assistance furnished by a team of water treatment unit specialists from Fresenius Medical Care Chile as well as Fresenius Medical Care Argentina. Working in the epicenter region, this crew has provided support for private clinics and public health care facilities which are not part of the Fresenius Medical Care network but also were impacted by the quake.
Working closely with the Chilean Ministry of Health's dialysis division coordinator, the Fresenius Medical Care team arranged contingent back-up capacities at its clinics for the treatment of 400 patients from affected areas, if necessary. Furthermore, Fresenius Medical Care Chile's peritoneal dialysis equipment also stood ready to provide continuous ambulatory peritoneal dialysis for the urgent treatment of 50 patients if requested by authorities. In addition to joint efforts with various other organizations, the company activated online Internet communications to update patients, clients and staff via its web site, providing information about patient care, staff availability and the operational status of its clinics.
Coordinating activities to ensure the treatment of individuals with chronic kidney disease, the company also teamed efforts to provide services for patients from other providers and regions seriously impacted by the tremor. Approximately 2,400 patients usually receive treatment in clinics located in the area affected by the quake. With service disruptions affecting roughly half of these persons, health authorities have been coordinating transfers of patients to other locations for treatment.
Fresenius Medical Care Chile provides roughly 360,000 dialysis treatments annually. The company is maintaining its monitoring of the contingency situation and is continuing to provide assistance and implement all necessary relief measures within its capacity.
Fresenius Medical Care is the world's largest integrated provider of products and services for individuls undergoing dialysis because of chronic kidney failure, a condition that affects more than 1,890,000 individuals worldwide. Through its network of 2,553 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 195,651 patients around the globe. Fresenius Medical Care also is the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS/P).
For more information about Fresenius Medical Care visit the Company's website at www.fmc-ag.com.
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including changes in business, economic and competitive conditions, regulatory reforms, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. KGaA's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this release.
Summary First Quarter 2010
| Net revenue |
$2,882 million |
+13% |
| Operating income (EBIT) |
$423 million |
+7% |
| Net income attributable to Fresenius Medical Care AG & Co. KGaA |
$211 million |
+7% |
|
Earnings per share |
$0.70 |
+6% |
Bad Homburg, Germany – Fresenius Medical Care AG & Co. KGaA ("the Company" or "FMC AG & Co. KGaA"), the world's largest provider of dialysis products and services, today announced its results for the first quarter of 2010.
Revenue
Net revenue for the first quarter of 2010 increased by 13% to $2,882 million (+10% at constant currency) compared to the first quarter of 2009. Organic revenue growth worldwide was 8%. Dialysis services revenue grew by 13% to $2,171 million (+11% at constant currency) in the first quarter of 2010. Dialysis product revenue rose by 12% to $711 million (+5% at constant currency) in the same period.
North America revenue increased by 10% to $1,960 million. Organic revenue growth was 8%. Dialysis services revenue grew by 12% to $1,760 million. Average revenue per treatment for U.S. clinics increased to $355 in the first quarter of 2010 compared to $338 for the corresponding quarter in 2009. This development was attributable principally to reimbursement increases and increased utilization of pharmaceuticals. Dialysis product revenue increased by 1% to $200 million, led by higher sales of hemodialysis disposables and pharmaceuticals. In peritoneal dialysis we are focused on the continued market launch of the Liberty Cycler, resulting in a 13% growth internally.
International revenue increased by 17% to $922 million. Based on constant currency, revenue grew by 8%. Organic revenue growth was 6%. Dialysis services revenue was $411 million, an increase of 19% (+9% at constant currency). Dialysis product revenue increased by 16% to $511 million (+7% at constant currency), supported by higher sales of dialyzers and dialysis machines.
Earnings
Operating income (EBIT) for the first quarter of 2010 increased by 7% to $423 million compared to the first quarter of 2009. The operating margin decreased from 15.5% in the first quarter of 2009 to 14.7% in the first quarter of 2010.
In North America, the operating margin increased from 15.3% in the first quarter of 2009 to 15.6% in the first quarter of 2010. The margin development was impacted favorably by an increase in revenue per treatment and effective cost-containment measures.
In the International segment, the operating margin decreased from 18.7% in the first quarter of 2009 to 16.4% in the first quarter of 2010. The margin development was influenced negatively by the devaluation of the Venezuelan Bolivar.
Net interest expense for the first quarter of 2010 was $67 million compared to $74 million in the comparable quarter of 2009, mainly due to lower short-term interest rates.
Income tax expense was $128 million for the first quarter of 2010 compared to $111 million in the first quarter of 2009, reflecting effective tax rates of 35.8% and 34.3%, respectively.
Net income attributable to FMC AG & Co. KGaA for the first quarter of 2010 was $211 million, an increase of 7% compared to the first quarter of 2009.
Earnings per share (EPS) for the first quarter of 2010 rose by 6% to $0.70 per ordinary share. The weighted average number of shares outstanding for the first quarter of 2010 was approximately 299.6 million shares compared to 297.7 million shares for the first quarter of 2009. The increase in shares outstanding resulted from stock option exercises in the past 12 months.
Cash Flow
In the first quarter of 2010, the Company generated $349 million in cash from operations, an increase of 124% compared to the first quarter of 2009 and representing approximately 12% of revenue. The cash flow performance was influenced positively by improvements in working capital, increased earnings and lower income tax payments.
A total of $99 million was spent for capital expenditures, net of disposals. Free cash flow before acquisitions was $250 million compared to $45 million in the first quarter of 2009. A total of $82 million in cash was used for acquisitions net of divestitures. Free cash flow after acquisitions and divestitures was $168 million compared to $9 million in the first quarter of the previous year.
Please refer to the appendix for a complete overview on the first quarter of 2010.
Patients – Clinics – Treatments
As of March 31, 2010, Fresenius Medical Care treated 198,774 patients worldwide, which represents a 6% increase compared to the previous year. North America provided dialysis treatments for 133,105 patients, an increase of 5%. Including 30 clinics managed by Fresenius Medical Care North America, the number of patients in North America was 134,847. The International segment served 65,669 patients, an increase of 9% over the prior year's figure.
As of March 31, 2010, the Company operated a total of 2,580 clinics worldwide, which represents a 5% increase compared to the previous year. The number of clinics is comprised of 1,788 clinics in North America (1,818 including managed clinics), and 792 clinics in the International segment, representing an increase of 4% and 8%, respectively.
Fresenius Medical Care delivered approximately 7.51 million dialysis treatments worldwide during the first quarter of 2010. This represents an increase of 7% over the same quarter last year. North America accounted for 5.03 million treatments, an increase of 6%, and the International segment delivered 2.47 million treatments, an increase of 8%.
Employees
As of March 31, 2010, Fresenius Medical Care had 69,329 employees (full-time equivalents) worldwide compared to 67,988 employees at the end of 2009. This increase of 1,341 employees is due to overall growth in the Company's business.
Debt/EBITDA Ratio
The ratio of debt to Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) decreased from 2.64 at the end of the first quarter of 2009 to 2.30 at the end of the first quarter of 2010.
Rating
There have been no rating changes in the first quarter of 2010. On April 29, 2010, Standard & Poor's Rating Services has raised the outlook from ‘stable' to 'positive'. Standard & Poor's continues to rate the Company's corporate credit as ‘BB'. Moody's rates the Company's corporate credit as ‘Ba1' with a ‘stable' outlook. Fitch rates the Company's corporate credit as ‘BB' with a ‘stable' outlook.
For further information on Fresenius Medical Care's credit ratings, maturity profiles and credit instruments, please visit our website at www.fmc-ag.com / Investor Relations / Credit Relations.
Issuance of Senior Notes
At the start of 2010, Fresenius Medical Care issued €250 million aggregate principal amount of senior notes with a maturity in 2016. The proceeds from the issue were used to pay back short-term financial liabilities and for general business purposes.
Outlook for 2010
For the full year of 2010, the Company confirms its outlook.
Revenue is expected to grow to more than $12 billion.
Net income attributable to FMC AG & Co. KGaA is expected to be between $950 million and $980 million in 2010.
The Company expects to spend $550 million to $650 million on capital expenditures and up to $400 million on acquisitions. The debt/EBITDA ratio is expected to be below 2.5 by the end of 2010.
"We are pleased to report a strong start for 2010 and we confirm our outlook for the full year," said Ben Lipps, chief executive officer of Fresenius Medical Care. "Strong organic growth is expected to continue and we also expect to strengthen our global presence through selective acquisitions, especially in the area of dialysis services. We had an excellent cash flow performance in the first quarter of 2010, supported by a continued impressive development in the days sales outstanding. Our most important goal for clinical and product research is to continue improving our patients' quality of life with innovative products and treatment concepts. We remain confident that we are well-positioned to meet our challenges, in particular the global reimbursement structural changes, and we look forward to the opportunity to further improve quality outcomes under these payment models."
Conference Call
Fresenius Medical Care will hold a conference call to discuss the results of the first quarter of 2010 on Tuesday, May 4, 2010, at 3:30 p.m. CEDT / 9:30 a.m. EDT. The Company invites investors to view the live webcast of the call at the Company's website www.fmc-ag.com. A replay will be available shortly after the call.
Fresenius Medical Care is the world's largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1,890,000 individuals worldwide. Through its network of 2,580 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 198,774 patients around the globe. Fresenius Medical Care also is the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS/P).
For more information about Fresenius Medical Care visit the Company's website at www.fmc-ag.com.
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including changes in business, economic and competitive conditions, regulatory reforms, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. KGaA's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this release.
Fresenius Medical Care
Statement of Earnings
see PDF-file
Fresenius Medical Care's Chief Executive Officer, Dr. Ben Lipps, continues to see attractive growth opportunities, confirming the company's positive outlook for the 2010 financial year at the annual general meeting in Frankfurt today. Lipps: "The 2009 fiscal year was another very successful one for Fresenius Medical Care. Once again, we were able to demonstrate that Fresenius Medical Care's business model is robust and sustainable. We had a very good start into 2010. We are clearly on track to meet our targets for the full year and achieve another record year." For 2010, Fresenius Medical Care expects more than $12 billion in revenue and net income* between $950 million and $980 million.
Lipps also expects continued sustainable growth driven by an annual 5% to 6% increase in patients requiring dialysis treatment worldwide. Furthermore, Fresenius Medical Care will pursue strategic opportunities to consolidate its leading market positions. Key drivers of these opportunities include: increasing market share through a superior product portfolio, a strong commitment to quality, expanding the clinic network, a focus on integrated care and rolling out additional dialysis services.
Lipps also pointed out a significant increase in its number of employees. The addition of 3,322 people, an increase of 5.0% to a total of approximately 68,000 employees worldwide, was attributed primarily to strong organic growth of the dialysis care business in every region. Selected acquisitions also contributed to this growth. The number of employees is expected to rise again in 2010.
During the annual general meeting, the shareholders approved the 13th consecutive dividend increase with a large majority of 99.02%. The dividend will increase to €0.61 from €0.58 per ordinary share and to €0.63 from €0.60 per preference share.
With a further majority of 96.80%, shareholders also approved cancellation of the existing authorized capital along with the creation of new authorized capitals identical to those expiring in August 2010 and totaling up to €35 million and €25 million, respectively.
In addition, shareholders approved the actions taken and decisions made by the supervisory board and the management board with a majority of more than 99%.
At the annual general meeting, 74.36% of the subscribed capital was represented. Only ordinary-share holders were entitled to vote.
*Net income attributable to FMC AG & Co. KGaA
Fresenius Medical Care is the world's largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1,890,000 individuals worldwide. Through its network of 2,580 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 198,774 patients around the globe. Fresenius Medical Care also is the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS/P).
For more information about Fresenius Medical Care visit the Company's website at www.fmc-ag.com.
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including changes in business, economic and competitive conditions, regulatory reforms, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. KGaA's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this release.
Fresenius Medical Care AG & Co. KGaA ("the company"), the world's largest provider of dialysis products and services, today announced its signing of a sales and purchase agreement with Bumrungrad International Ltd. to acquire Asia Renal Care Ltd. The acquisition marks a significant expansion of the company's activities in the field of dialysis services in the Asia-Pacific region.
The transaction will be subject to antitrust notification in Taiwan and Singapore. If approved and closed, the acquired operations will add approximately $80 million in annual revenue and be accretive to earnings in the first year after closing of the transaction.
Founded in 1997, Asia Renal Care has since become the second largest provider of dialysis and related services in the Asia-Pacific region (behind Fresenius Medical Care). Asia Renal Care operates more than 100 clinics throughout Asia treating about 6,200 patients. In 2007 Asia Renal Care became a wholly owned subsidiary of Bumrungrad International Ltd., an associate company of Bumrungrad Hospital PCL.
The acquisition of Asia Renal Care will strengthen Fresenius Medical Care's leading market position in the Asia-Pacific region, where more than 680,000 patients require regular and life-sustaining dialysis treatment. The Asian markets are set to experience strong growth in the next few years. The number of dialysis patients is forecast to grow to over 1 million within the next five years.
"We are very pleased to further strengthen our activities and presence in dialysis services across most of the key Asian countries. Through this strategic and significant acquisition, we add to our existing leading position a large business managed by excellent professionals and very valuable partners in every single market," said Roberto Fusté, Member of the Management Board and Chief Executive Officer for Asia-Pacific.
Fresenius Medical Care is the world's largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1,890,000 individuals worldwide. Through its network of 2,580 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 198,774 patients around the globe. Fresenius Medical Care also is the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS/P).
For more information about Fresenius Medical Care visit the Company's website at www.fmc-ag.com.
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including changes in business, economic and competitive conditions, regulatory reforms, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. KGaA's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this release.
Fresenius Medical Care AG & Co. KGaA ("the company"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, is expanding its dialysis services business in the Russian Federation. The company announced today that it has signed an agreement to acquire KNC (KRAEVOY NEFROLOGICHESKIY CENTR), a private operator of dialysis clinics in Russia's Krasnodar region. The acquired operations will add approximately $25 million in annual revenue and are expected to be accretive to earnings in the first year after closing of the transaction.
By acquiring KNC, Fresenius Medical Care intends to strengthen its position in the Russian Federation's growing dialysis services market, where today more than 20,000 patients require a regular and life-sustaining renal replacement therapy. Fresenius Medical Care currently operates five dialysis clinics treating around 570 patients and is the leading provider of dialysis products in Russia. KNC currently treats around 1,000 patients in five dialysis clinics located in Krasnodar, a region situated approximately 1,200 kilometers south of Moscow, on the Black Sea. KNC is the only provider of dialysis services in Krasnodar, which at an estimated patient growth of more than 10% per year is one of the regions with the highest demand for dialysis services in the Russian Federation.
In order to meet this rising demand, Fresenius Medical Care plans to expand the capacity of the acquired clinics directly upon closing of the acquisition. "We are very pleased that we soon will be able to provide both high-quality dialysis products and services to Krasnodar's patients," said Dr. Emanuele Gatti, chief executive officer for Europe, Latin America, the Middle East and Africa as well as global chief strategist of Fresenius Medical Care. "While we seek to enhance our presence in Russia on a long-term basis, our first aim will be to accommodate the large number of patients in Krasnodar who until now have been unable to receive treatment due to a lack of capacities."
Fresenius Medical Care is the world's largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1.89 million individuals worldwide. Through its network of 2,580 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 198,774 patients around the globe. Fresenius Medical Care also is the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS/P).
For more information about Fresenius Medical Care visit the Company's website at www.fmc-ag.com.
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including changes in business, economic and competitive conditions, regulatory reforms, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. KGaA's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this release.
Fresenius Medical Care AG & Co. KGaA ("the company"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, has entered into a long-term, 10-year exclusive distribution agreement with Japanese-based Nikkiso Co. Ltd. for hemodialysis and peritoneal dialysis products in Japan. With this agreement, both companies aim to further expand their market share of dialysis products, particularly dialyzers and peritoneal dialysis products, in Japan by utilizing Fresenius Medical Care's efficient manufacturing technologies while relying on Nikkiso's strong domestic distribution network.
In addition, the company intends to expand its leadership in the Republic of Korea's dialysis product market by acquiring Nikkiso Medical Korea Co. Ltd., a wholly owned subsidiary of Nikkiso Co. Ltd.
The acquired operations will add approximately $15 million in annual revenue and are expected to be accretive to earnings in the first year after closing of the transaction.
"The strategic alliance with Nikkiso will generate significant value to both parties in Japan and Korea, as each company is concentrating on its strengths in these markets," said Roberto Fusté, Fresenius Medical Care's chief executive officer for the Asia-Pacific region. Background information on the dialysis market in Japan With approximately 300,000 dialysis patients, Japan is the biggest dialysis market in the Asia-Pacific region. The patient growth rate is around 2%-3% p.a. In Japan, Fresenius Medical Care is active in the dialysis product business by means of its own sales and marketing channels as well as through distribution partners. The company also provides consulting services for dialysis clinics. However, it does not directly operate dialysis clinics in Japan due to legal restrictions.
Background information on the dialysis market in Korea The Republic of Korea is a fast-growing market with a patient growth rate of 6%-7%. The number of patients requiring regular dialysis therapy is approximately 50,000. Fresenius Medical Care is the leading company in the Republic of Korea's dialysis product market and, through its partnership with the Yeolin-Medical Foundation, is currently treating more than 850 patients in 16 dialysis clinics.
Fresenius Medical Care is the world's largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1.89 million individuals worldwide. Through its network of 2,580 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 198,774 patients around the globe. Fresenius Medical Care also is the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS/P).
For more information about Fresenius Medical Care, visit the company's website at www.fmc-ag.com.
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including changes in business, economic and competitive conditions, regulatory reforms, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. KGaA's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this release.
Summary Second Quarter 2010
| Net revenue | $ 2,946 million |
+ 7% |
| Operating income (EBIT) | $ 465 million |
+ 11% |
| Net income attributable to Fresenius Medical Care AG & Co. KGaA |
$ 248 million |
+ 12% |
| Earnings per share | $ 0.83 |
+ 12% |
Summary First Half 2010
| Net revenue | $ 5,828 million |
+ 9% |
| Operating income (EBIT) | $ 888 million |
+ 9% |
| Net income attributable to Fresenius Medical Care AG & Co. KGaA |
$ 459 million |
+ 10% |
| Earnings per share | $ 1.53 |
+ 9% |
Bad Homburg, Germany – Fresenius Medical Care AG & Co. KGaA ("the Company" or "FMC AG & Co. KGaA"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced its results for the second quarter and first half of 2010.
Second Quarter 2010
Revenue
Net revenue for the second quarter of 2010 increased by 7% to $2,946 million (also +7% at constant currency) compared to the second quarter of 2009. Organic revenue growth worldwide was 6%. Dialysis services revenue grew by 8% to $2,224 million (also +8% at constant currency) in the second quarter of 2010. Dialysis product revenue rose by 2% to $722 million (+3% at constant currency) in the same period.
North America revenue increased by 8% to $2,027 million. Organic revenue growth was 7%. Dialysis services revenue grew by 8% to $1,817 million. Average revenue per treatment for U.S. clinics increased to $356 in the second quarter of 2010 compared to $344 for the same quarter in 2009 and $355 for the first quarter of 2010. This development was attributable principally to reimbursement increases and increased utilization of pharmaceuticals. Dialysis product revenue increased by 5% to $210 million due to higher sales of hemodialysis disposables and dialysis machines.
International revenue increased by 4% to $919 million. Based on constant currency, revenue grew by 5%. Organic revenue growth was 3%. Dialysis services revenue was $407 million, an increase of 8% (+9% at constant currency). Dialysis product revenue was stable at $512 million compared to the corresponding figure last year and increased by 2% at constant currency, led by increased sales of hemodialysis solutions and concentrates, dialyzers and bloodlines as well as products for acute care treatment.
Earnings
Operating income (EBIT) increased by 11% to $465 million compared to $418 million in the second quarter of 2009 resulting in an operating margin of 15.8% compared to 15.1% for the corresponding quarter in 2009.
In North America, the operating margin increased from 15.9% to 16.3% in the second quarter of 2010. The margin development was mainly impacted favorably by an increase in revenue per treatment as well as the effect of economies of scale from revenue growth.
In the International segment, the operating margin increased from 17.3% to 18.8%. The margin development was mainly influenced positively by economies of scale from revenue growth, favorable foreign exchange rates and lower bad debt expenses. This was partially offset by higher depreciation expenses as a result of the expansion of our production capacities.
Net interest expense for the second quarter of 2010 was $68 million compared to $76 million in the comparable quarter of 2009, mainly attributable to lower short-term interest rates.
Income tax expense was $129 million for the second quarter of 2010 compared to $103 million in the second quarter of 2009, reflecting effective tax rates of 32.6% and 30.2%, respectively. In both the second quarter of 2010 and 2009 tax expense benefited from changes in estimates of future tax payments.
Net income attributable to FMC AG & Co. KGaA for the second quarter of 2010 was $248 million, an increase of 12% compared to the same quarter of 2009.
Earnings per share (EPS) for the second quarter of 2010 rose by 12% to $0.83 per ordinary share compared to $0.74 for the second quarter of 2009. The weighted average number of shares outstanding for the second quarter of 2010 was approximately 300.0 million shares compared to 298.0 million shares for the second quarter of 2009. The increase in shares outstanding resulted from stock option exercises in the past twelve months.
Cash Flow
In the second quarter of 2010, the Company generated $294 million in cash from operations, representing approximately 10% of revenue. The cash flow performance was influenced positively by improvements in elements of working capital and increased earnings, partially offset by higher income tax payments.
A total of $119 million was spent for capital expenditures, net of disposals. Free Cash Flow before acquisitions was $175 million compared to $143 million in the second quarter of 2009. A total of $68 million in cash was spent for acquisitions, net of divestitures. Free Cash Flow after acquisitions and divestitures was $107 million compared to $98 million in the second quarter of last year.
First Half 2010
Revenue and Earnings
Net revenue was $5,828 million, up 9% from the first half of 2009. At constant currency, net revenue rose 8%. Organic growth was 7% in the first six months of 2010.
Operating income (EBIT) increased by 9% to $888 million compared to $813 million in the first half of 2009, resulting in an operating margin of 15.2% compared to 15.3% for the first half of 2009.
Net interest expense for the first six months of 2010 was $135 million compared to $149 million in the same period of 2009.
Income tax expense was $257 million in the first half of 2010 compared to $214 million in the same period in 2009, reflecting effective tax rates of 34.1% and 32.2%, respectively.
For the first half of 2010, net income attributable to FMC AG & Co. KGaA was $459 million, up 10% from the first half of 2009.
In the first six months of 2010, earnings per ordinary share rose 9% to $1.53. The weighted average number of shares outstanding during the first half of 2010 was approximately 299.8 million.
Cash flow
Cash from operations during the first six months of 2010 was $643 million compared to $437 million for the same period in 2009, representing approximately 11% of revenue.
A total of $218 million was spent for capital expenditures, net of disposals. Free Cash Flow before acquisitions for the first six months of 2010 was $425 million compared to $188 million in the same period in 2009. A total of $150 million in cash was spent for acquisitions, net of divestitures. Free Cash Flow after acquisitions and divestitures was $275 million compared to $107 million in the first half of last year.
Please refer to the attachments for a complete overview on the second quarter and first half 2010.
Patients – Clinics – Treatments
As of June 30, 2010, Fresenius Medical Care treated 202,414 patients worldwide, which represents a 6% increase compared to the previous year. North America provided dialysis treatments for 135,088 patients, the number of patients treated rose by 5%. Including 29 clinics managed by Fresenius Medical Care North America, the number of patients in North America was 136,884. The International segment served 67,326 patients, the number of patients treated increased by 11%.
As of June 30, 2010, the Company operated a total of 2,599 clinics worldwide, which represents a 5% increase compared to the previous year. The number of clinics is comprised of 1,795 clinics in North America (1,824 including managed clinics) and 804 clinics in the International segment, representing an increase of 4% and 9%, respectively.
Fresenius Medical Care delivered approximately 15.26 million dialysis treatments worldwide during the first six months of 2010. This represents an increase of 6% compared to the corresponding period last year. North America accounted for 10.22 million treatments, an increase of 6%, and the International segment delivered 5.03 million treatments, an increase of 8%.
Employees
As of June 30, 2010, Fresenius Medical Care had 70,096 employees (full-time equivalents) worldwide compared to 67,988 employees at the end of 2009. The increase of approximately 2,100 employees is due to overall growth in the Company's business.
Debt/EBITDA Ratio
The ratio of debt to Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) decreased from 2.78 at the end of the second quarter of 2009 to 2.46 at the end of the second quarter 2010. At the end of 2009, the debt/EBITDA ratio was 2.46.
Rating
Standard & Poor's Rating Services continued to rate the Company's corporate credit as ‘BB'. On April 29, 2010, Standard & Poor's has raised the outlook from ‘stable' to ‘positive'. Moody's continued to rate the Company's corporate credit as ‘Ba1' with a ‘stable' outlook. Fitch rates the Company's corporate credit as ‘BB' also with a ‘stable' outlook. For further information on Fresenius Medical Care's credit ratings, maturity profiles and credit instruments, please visit our website at www.fmc-ag.com / Investor Relations / Credit Relations.
Outlook for 2010
For the full year of 2010, the Company confirms its outlook.
Revenue is expected to grow to more than $12 billion.
Net income attributable to FMC AG & Co. KGaA is expected to be between $950 million and $980 million in 2010.
The Company expects to spend $550 million to $650 million on capital expenditures and up to $500 million (previously up to $400 million) on acquisitions. The debt/EBITDA ratio is expected to be below 2.5 by the end of 2010.
Ben Lipps, Chief Executive Officer of Fresenius Medical Care, commented: "We are pleased to report that, after our successful start into the year, Fresenius Medical Care has carried forward a strong performance this past quarter and half year that is fully on track with our full-year guidance and strategy. Our operational performance, but also our quality performance in products and services has been excellent. We have continued to strategically expand our global presence in dialysis services through acquisitions in attractive growing markets such as the Russian Federation and Asia. And we look forward to the opportunities posed by the upcoming "bundled" reimbursement system in the U.S. – opportunities we feel we are uniquely poised to seize, given our vertical integration and consistent focus on delivering the best quality care for our patients in the most efficient way possible."
Conference Call
Fresenius Medical Care will hold a conference call to discuss the results of the second quarter and the first half year of 2010 on Tuesday, August 3, 2010, at 3:30 p.m. CEDT / 9:30 a.m. EDT. The Company invites investors to listen to the live webcast of the call at the Company's website www.fmc-ag.com in the "Investor Relations" section. A replay will be available shortly after the call.
Fresenius Medical Care is the world's largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1.89 million individuals worldwide. Through its network of 2,599 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 202,414 patients around the globe. Fresenius Medical Care also is the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS/P).
For more information about Fresenius Medical Care visit the Company's website at www.fmc-ag.com.
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including changes in business, economic and competitive conditions, regulatory reforms, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. KGaA's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this release.
Fresenius Medical Care
Statement of Earnings
see PDF-file
Fresenius Medical Care AG & Co. KGaA (Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced that it has signed an agreement to acquire Gambro's worldwide peritoneal dialysis (PD) business. Gambro has decided to prioritize its investments in the hemodialysis field. Fresenius Medical Care is taking advantage of this opportunity to expand its activities in the homecare market, especially in Europe and Asia-Pacific.
The transaction is still subject to necessary regulatory approvals by the relevant antitrust authorities as well as works council consultations in some jurisdictions. Once the acquisition is approved and closed, the acquired operations will add approximately $60 million in annual revenue and are expected to be accretive to earnings in the first year after closing of the transaction.
As the third-largest provider of PD products and services, Gambro currently serves over 4,000 PD patients in more than 25 countries, with a specific focus on Asia-Pacific and Europe. Fresenius Medical Care, the leader in hemodialysis and the world's No. 2 in PD, currently serves more than 190,000 hemodialysis patients and more than 37,000 PD patients around the globe. Approximately 11% of the world's dialysis patients are treated by means of PD today; in 2009 their number grew by more than 6% to around 203,000.
"Promoting our growth in home therapies, of which PD is a key element, has been a defined path in our overall growth strategy, and we are convinced that Gambro's PD operations will be an excellent fit with Fresenius Medical Care. Bringing together the experienced PD teams of both companies and our mutual focus on biocompatible PD solutions for high-quality patient care will give us a unique opportunity to complete our PD-product offering. The acquisition will also significantly strengthen our sales and distribution network and expand our global presence in the homecare market," said Ben Lipps, chief executive officer of Fresenius Medical Care.
Fresenius Medical Care is the world's largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1.89 million individuals worldwide. Through its network of 2,599 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 202,414 patients around the globe. Fresenius Medical Care also is the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS/P).
For more information about Fresenius Medical Care visit the Company's website at www.fmc-ag.com.
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including changes in business, economic and competitive conditions, regulatory reforms, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. KGaA's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this release.
Fresenius Medical Care AG & Co. KGaA (Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced successful completion of the upsizing and extension of its senior secured credit facility. The refinancing of the revolving facility and Term Loan A was well received with a substantial oversubscription and enabled the company to upsize these facilities by US$250 million for a total facility of US$2.565 billion. The new agreement was extended from March 31, 2011, to March 31, 2013, matching the final maturity of the US$1.546 billion Term Loan B. The facilities will be used for general corporate purposes and working capital needs.
Michael Brosnan, chief financial officer of the company, commented: "We are pleased to have successfully extended our senior credit agreement which provides continued financial flexibility for the company. The significant interest expressed by our lenders reflects their confidence in our sustainable financial strength and Fresenius Medical Care's future development."
Fresenius Medical Care is the world's largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1.89 million individuals worldwide. Through its network of 2,599 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 202,414 patients around the globe. Fresenius Medical Care also is the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS/P).
For more information about Fresenius Medical Care visit the Company's website at www.fmc-ag.com.
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including changes in business, economic and competitive conditions, regulatory reforms, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. KGaA's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this release.
Christian Wulff, President of the Federal Republic of Germany, today experienced Fresenius Medical Care's activities in the treatment of dialysis patients in Russia first-hand. During his current trip to Russia, Wulff visited a Fresenius Medical Care dialysis clinic in Ulyanovsk, about 700 kilometers east of Moscow. A 50-person delegation of businessmen, politicians and journalists joined the Federal President. The president took the opportunity to learn about the treatment of patients with chronic kidney failure and spoke with doctors, care personnel and patients. The clinic in Ulyanovsk is one of the 10 dialysis clinics the world's leading provider of dialysis services and products now operates in Russia.
"The president's visit is a major honor for our company as well as the clinic's employees and management," said Dr. Emanuele Gatti, chief executive officer for Europe, Latin America, Middle East and Africa as well as global chief strategist of Fresenius Medical Care. "At the same time, it highlights how important the close cooperation between German and Russian partners is to improving health care in this large country. There is still not enough capacity to treat all the dialysis patients in Russia. We expect the strong increase in the number of cases to continue in the coming years. Our goal is to further expand our long-time presence in the country and to treat as many dialysis patients as possible at a supreme quality."
Fresenius Medical Care is the leading provider of dialysis products in Russia. In cooperation with the Russian pharmaceutical company Rester, Fresenius Medical Care has operated a production site for peritoneal dialysis solutions in Izhevsk, the capital of the Udmurt Republic, since 2008. The company also offers dialysis services for patients with chronic kidney failure in its 10 Russian clinics. Currently, more than 20,000 patients regularly receive life-sustaining renal replacement therapy in Russia.
Fresenius Medical Care first opened the Ulyanovsk clinic in 2007. It was the first of the company's own clinics in Russia. Currently, 281 patients receive hemodialysis and 61 peritoneal dialysis there. The clinic employs a team of 73, among them 10 doctors, including the head nephrologist, as well as 52 nurses and nurses' assistants. This year Fresenius Medical Care also started construction on a second dialysis clinic in another Ulyanovsk neighborhood. It should be complete in 2011.
Note for the media: Pictures related to this press release can be found in the internet under: http://tinyurl.com/fme-ulyanovsk
Fresenius Medical Care is the world's largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1.89 million individuals worldwide. Through its network of 2,599 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 202,414 patients around the globe. Fresenius Medical Care also is the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS/P).
For more information about Fresenius Medical Care visit the Company's website at www.fmc-ag.com.
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including changes in business, economic and competitive conditions, regulatory reforms, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. KGaA's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this release.