Fresenius Medical Care AG & Co. KGaA (the "company" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced the acquisition of National Cardiovascular Partners ("NCP"). The parties involved agreed not to disclose the financial terms of the acquisition.
The company expects NCP to generate in excess of $200 million in revenue in 2015 and expects the investment to be accretive to earnings in the first year after closing. The investment will be financed through available cash and committed credit facilities, supplemented by additional debt financing.
NCP is the leading operator of endovascular, vascular and cardiovascular services in the comfort and convenience of the outpatient setting. In partnership with over 200 physicians, NCP operates 21 outpatient vascular centers in six states.
Ron Kuerbitz, chief executive officer of Fresenius Medical Care North America said, "Our mission is to improve the quality of life of every patient every day. We share this passion for patient care with NCP. The convenience of NCP's outpatient clinics and the excellent care they provide will enhance our ability to improve health outcomes for people with chronic illness, in particular those with renal and cardiovascular disease".
"We are pleased to join Fresenius Medical Care North America, and believe this partnership will ensure that many more Americans have access to the highest-quality and most affordable outpatient care available" said Ned Schwing, co-founder and chairman of NCP.
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 2.5 million individuals worldwide. Through its network of 3,335 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatments for 280,942 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products.
For more information about Fresenius Medical Care, visit the Company's website at www.fmc-ag.com.
Disclaimer
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" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced its intention to sell U.S. dollar denominated senior unsecured notes (the "senior notes") in an aggregate amount of $900 million with maturities of 6 and 10 years. Net proceeds from the offering are intended to be used to repay short-term borrowings under the 2012 Credit Agreement as well as other short term debt, and for acquisitions and general corporate purposes.
The senior notes will be issued by Fresenius Medical Care US Finance II, Inc., a wholly owned subsidiary of the company. The senior notes will be offered through a private placement to qualified institutional investors and will be guaranteed jointly and severally by the company and its subsidiaries, Fresenius Medical Care Holdings, Inc. and Fresenius Medical Care Deutschland GmbH.
The proposed offering will not be registered under the U.S. Securities Act of 1933. The senior notes will be offered in the U.S. to "qualified institutional buyers" QIBs pursuant to the exemption from registration under Rule 144A of the Securities Act, and in exempted offshore transactions pursuant to Regulation S under the Securities Act. The senior notes may not be offered or sold in the U.S. unless registered under the Securities Act or pursuant to an applicable exemption from registration requirements.
Application will be made for admission of the senior notes to trading on the regulated market of the Luxembourg Stock Exchange.
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 2.5 million individuals worldwide. Through its network of 3,335 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatments for 280,942 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products.
Disclaimer
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.
The information contained in this release may not be issued or distributed in or into South Africa, Australia or Japan and does not constitute an offer to sell nor an invitation to subscribe for, underwrite or otherwise acquire securities in South Africa, Australia or Japan.
This release does not constitute or form part of, and should not be construed as, an offer or invitation to subscribe for, underwrite or otherwise acquire, any securities of Fresenius Medical Care US Finance II, Inc. or Fresenius Medical Care or any present or future member of its group nor should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities of Fresenius Medical Care US Finance II, Inc. or Fresenius Medical Care or any member of its group. In particular, this release is not an offer to sell or a solicitation of offers to purchase any securities in the United States of America including its territories and possessions, and securities of Fresenius Medical Care US Finance II, Inc. and Fresenius Medical Care may not be offered or sold in the United States of America or to United States persons absent registration under the Securities Act of 1933, as amended, or pursuant to an applicable exemption from registration.
This announcement is not a prospectus within the meaning of the European Union Prospectus Directive. Investors should base any decision to purchase or subscribe for any securities referred to in this announcement only on the basis of information in the prospectus to be issued by the company in connection with the offering of such securities in Luxembourg and Germany. Copies of the prospectus will, following publication, be available to investors in Luxembourg and Germany free of charge from Fresenius Medical Care AG & Co. KGaA at Else-Kröner-Strasse 1, 61352 Bad Homburg, Germany.
Fresenius Medical Care AG & Co. KGaA (the "company" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, successfully placed U.S. dollar senior unsecured notes in the amount of $500 million due 2020 with a coupon of 4.125% and in the amount of $400 million due 2024 with a coupon of 4.75% (together "the senior notes"). Net proceeds are intended to be used to repay short-term borrowings under the 2012 Credit Agreement as well as other short term debt, and for acquisitions and general corporate purposes. The senior notes were issued at par by Fresenius Medical Care US Finance II, Inc., a wholly owned subsidiary of the company.
The senior notes were offered through a private placement to qualified institutional investors and will be guaranteed jointly and severally by the company and its subsidiaries, Fresenius Medical Care Holdings, Inc. and Fresenius Medical Care Deutschland GmbH.
The senior notes will not be registered under the U.S. Securities Act of 1933. The senior notes were offered in the U.S. to "qualified institutional buyers" QIBs pursuant to the exemption from registration under Rule 144A of the Securities Act, and in exempted offshore transactions pursuant to Regulation S under the Securities Act. The senior notes may not be offered or sold in the U.S. unless registered under the Securities Act or pursuant to an applicable exemption from registration requirements.
Application has been made for admission of the senior notes to trading on the regulated market of the Luxembourg Stock Exchange.
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 2.5 million individuals worldwide. Through its network of 3,335 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatments for 280,942 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products.
Disclaimer
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.
The information contained in this release may not be issued or distributed in or into South Africa, Australia or Japan and does not constitute an offer to sell nor an invitation to subscribe for, underwrite or otherwise acquire securities in South Africa, Australia or Japan.
This release does not constitute or form part of, and should not be construed as, an offer or invitation to subscribe for, underwrite or otherwise acquire, any securities of Fresenius Medical Care US Finance II, Inc. or Fresenius Medical Care or any present or future member of its group nor should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities of Fresenius Medical Care US Finance II, Inc. or Fresenius Medical Care or any member of its group. In particular, this release is not an offer to sell or a solicitation of offers to purchase any securities in the United States of America including its territories and possessions, and securities of Fresenius Medical Care US Finance II, Inc. and Fresenius Medical Care may not be offered or sold in the United States of America or to United States persons absent registration under the Securities Act of 1933, as amended, or pursuant to an applicable exemption from registration.
This announcement is not a prospectus within the meaning of the European Union Prospectus Directive. Investors should base any decision to purchase or subscribe for any securities referred to in this announcement only on the basis of information in the prospectus issued by the company in connection with the offering of such securities in Luxembourg and Germany. Copies of the prospectus will be available to investors in Luxembourg and Germany free of charge from Fresenius Medical Care AG & Co. KGaA at Else-Kröner-Strasse 1, 61352 Bad Homburg, Germany.
- Third quarter shows strong organic revenue growth
- Operating cash flow on record level in third quarter
- Company remains on track to achieve full year guidance
Third quarter 2014 key figures:
Net Revenue: $4,113 million, +12%
Operating income (EBIT): $590 million, +6%
Net income1: $271 million, -1%
Basic earnings per share: $0.89, -1%
First nine months 2014 key figures
Net Revenue: $11,511 million, +7%
Operating income (EBIT): $1,591 Million, 0%
Net income1: $710 million -7%
Basic earnings per share: $2.35, -6%
1attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
Rice Powell, chief executive officer of Fresenius Medical Care stated: "The third quarter has confirmed the positive trend from the previous quarter. Growth rates in revenue and earnings again improved and our operating cash flow has reached an all time high for a single quarter. We are on track to achieve our guidance as well as our cost savings target for the full year. The recent acquisitions, in combination with financing activities were important steps in the execution of our strategy to achieve our long term target 2020."
Third quarter 2014
Revenue
Net revenue for the third quarter of 2014 increased by 12% to $4,113 million (+13% at constant currency) as compared to the third quarter of 2013. Organic revenue growth worldwide was 7%. Dialysis services revenue grew by 14% to $3,197 million (+15% at constant currency) and dialysis product revenue increased by 7% to $916 million (+7% at constant currency) as compared to the third quarter of 2013.
North America revenue for the third quarter of 2014 increased by 11% to $2,710 million. Organic revenue growth was 5%. Dialysis services revenue grew by 12% to $2,498 million with a same store treatment growth of 3.5%. Dialysis product revenue was flat compared to the third quarter of 2013 at $212 million.
International revenue increased by 13% to $1,386 million (+16% at constant currency). Organic revenue growth was 8%. Dialysis services revenue increased by 19% to $699 million (+25% at constant currency). Dialysis product revenue increased by 9% to $687 million (+9% at constant currency).
Earnings
Operating income (EBIT) for the third quarter of 2014 increased by 6% to $590 million as compared to $557 million in the third quarter of 2013. Operating income for North America for the third quarter of 2014 was $413 million, flat as compared to the third quarter of 2013. In the International segment, operating income for the third quarter of 2014 increased by 26% to $269 million as compared to $214 million in the third quarter of 2013.
Net interest expense for the third quarter of 2014 was $99 million, compared to $103 million in the third quarter of 2013.
Income tax expense was $162 million for the third quarter of 2014, which translates into an effective tax rate of 32.9%. This compares to income tax expense of $148 million and a tax rate of 32.6% for the third quarter of 2013.
Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the third quarter of 2014 was $271 million, a decrease of 1% compared to the corresponding number of $273 million for the third quarter of 2013.
Basic earnings per share (EPS) for the third quarter of 2014 was $0.89, a decrease of 1% compared to the corresponding number for the third quarter of 2013. The weighted average number of shares outstanding for the third quarter of 2014 was approximately 302.7 million shares, compared to 301.3 million shares for the third quarter of 2013. The increase in shares outstanding resulted from stock option exercises in the past twelve months.
Cash flow
In the third quarter of 2014, the company generated $712 million in net cash provided by operating activities, an increase of 18% compared to the corresponding figure of last year and representing 17% of revenue.
A total of $224 million was spent for capital expenditures, net of disposals. Free cash flow was $488 million compared to $430 million in the third quarter of 2013.
A total of $613 million in cash was spent for acquisitions and investments, net of divestitures. Free cash flow after investing activities was a negative $125 million as compared to $235 million in the third quarter of 2013.
First nine months 2014
Revenue and earnings
Net revenue for the first nine months of 2014 increased by 7% to $11,511 million (+8% at constant currency) as compared to the first nine months of 2013. Organic revenue growth worldwide was 5%.
Operating income (EBIT) for the first nine months of 2014 was $1,591 million as compared to $1,595 million in the first nine months of 2013.
Net interest expense for the first nine months of 2014 was $294 million as compared to $310 million in the first nine months of 2013.
Income tax expense for the first nine months of 2014 was $440 million, which translates into an effective tax rate of 33.9%. This compares to income tax expense of $421 million and a tax rate of 32.8% for the first nine months of 2013.
For the first nine months of 2014, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA was $710 million, down by 7% from the corresponding number of $761 million for the first nine months of 2013.
In the first nine months of 2014, basic earnings per share (EPS) was $2.35, a decrease of 6% compared to the corresponding number for the first nine months of 2013. The weighted average number of shares outstanding during the first nine months of 2014 was approximately 302.0 million shares.
Cash flow
In the first nine months of 2014, the company generated $1,274 million in net cash provided by operating activities as compared to $1,446 million for the same period in 2013 and representing 11% of revenue.
A total of $639 million was spent for capital expenditures, net of disposals. Free cash flow for the first nine months of 2014 was $635 million as compared to $952 million in the first nine months of 2013.
A total of $1,045 million in cash was spent for acquisitions and investments, net of divestitures. Free cash flow after investing activities was a negative $410 million as compared to $673 million in the first nine months of 2013.
Employees
As of September 30, 2014, Fresenius Medical Care had 97,327 employees (full-time equivalents) worldwide, compared to 89,282 employees at the end of September 2013. This increase of more than 8,000 employees was attributable to acquisitions as well as to our continued organic growth.
Balance sheet structure
The company´s total assets were $24,253 million (Dec. 31, 2013: $23,120 million), an increase of 5%. Current assets increased by 3% to $6,459 million (Dec. 31, 2013: $6,287 million). Non-current assets were $17,794 million (Dec. 31, 2013: $16,833 million), an increase of 6%.
Total equity increased by 3% to $9,750 million (Dec. 31, 2013: $9,485 million). The equity ratio was 40% as compared to 41% at the end of 2013. Total debt was $9,068 million (Dec. 31, 2013: $8,417 million). As of September 30, 2014, the debt/EBITDA ratio was 3.0 (Dec. 31, 2013: 2.8).
Please refer to the attachments for a complete overview of the results for the third quarter and first nine months of 2014.
Outlook
The company expects revenue to be at around $15.2 billion in 2014, translating into a growth rate of around 4%. This outlook excludes revenue of approximately $500 million from acquisitions completed during the first nine months of 2014.
Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to be unchanged between $1.0 billion and $1.05 billion in 2014. The company initiated a global efficiency program designed to enhance the company's performance over a multi-year period. Potential cost savings, before income taxes, of up to $60 million generated from this program, and net of implementation costs are not included in the outlook for 2014.
For 2014, the company expects to spend around $900 million on capital expenditures. Reflecting the latest acquisitions the company now expects acquisition spending of around $1.3 billion for fiscal year 2014 (previously $1 billion). The debt/EBITDA ratio is expected to be around 3.0 by the end of 2014.
Conference call
Fresenius Medical Care will hold a conference call to discuss the results of the second quarter 2014 on Tuesday, November 4, 2014 at 3.30 p.m. CET/ 9.30 a.m. EST. The company invites investors to follow the live webcast of the call at the company's website www.fmc-ag.com in the "Investor Relations" section. A replay will be available shortly after the call.
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 2.5 million individuals worldwide. Through its network of 3,349 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatments for 283,135 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products.
For more information about Fresenius Medical Care, visit the company's website at www.fmc-ag.com.
Disclaimer
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.
Acquisition will widen the presence in the Hospitalist industry
Fresenius Medical Care AG & Co. KGaA (the "company" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS) announced today that Sound Physicians Inc. (Sound) has entered into an agreement to acquire Cogent Healthcare (Cogent) with more than 650 providers, who offer hospitalist and intensivist services to more than 80 hospitals throughout the United States. Combined, the expanded Sound Physicians organization will now serve over 180 hospitals in 35 states with more than 2,250 providers including physicians and advanced care practitioners. Fresenius Medical Care is the majority shareholder in Sound.
The company expects Cogent to generate approximately $250 million in revenue in 2015 and expects the investment to be accretive to earnings within 18-24 months after closing including the transaction/integration cost and potential synergies. The investment will be financed through available cash. The parties involved agreed not to disclose the financial terms of the acquisition.
"Sound Physicians is a critical partner in fulfilling our mission to improve the lives of every patient every day," said Rice Powell, Fresenius Medical Care Chief Executive Officer. "With this acquisition, Sound Physicians continues to augment our network of dialysis, cardiac and vascular care centers, renal pharmacy and full service and specialty laboratories to help us better address the full spectrum of our patients' health care needs. Going forward, Sound will be better positioned than ever to deliver the highest quality care to patients in the acute setting and reduce costs for its hospital partners."
"Combining Cogent Healthcare's reach with Sound Physicians' patient-centered approach, web-based workflow platform and experienced physician leadership together clearly positions Sound Physicians as the partner of choice for the acute episode of care and the practice of choice for providers," noted Rob Bessler, MD, Chief Executive Officer of Sound Physicians. "By coming together, we believe we can continue to advance innovation and improvement in the acute episode of care throughout the U.S."
The parties expect the transaction, which remains subject to regulatory clearance, to close this quarter.
About 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 2.5 million individuals worldwide. Through its network of 3,349 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatments for 283,135 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products.
For more information about Fresenius Medical Care, visit the company's website at www.fmc-ag.com.
Disclaimer
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" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, has upsized its syndicated credit facility by 850 million U.S. dollar equivalent to a total amount of approximately 4.4 billion U.S. dollar equivalent, with pricing and other conditions more favorable to the company. The amended credit facility consists of revolving facilities and term loans, both U.S. dollar and euro denominated. The final maturity date was extended by two years to October 30, 2019. The facilities will be used to refinance existing debt, for working capital needs and general corporate purposes.
Fresenius Medical Care also successfully extended its $800 million accounts receivable facility with improved terms. The new facility will now mature November 24, 2017.
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 2.5 million individuals worldwide. Through its network of 3,349 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatments for 283,135 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products.
For more information about Fresenius Medical Care, visit the company's website at www.fmc-ag.com.
Disclaimer
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" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced that Standard & Poor's has upgraded the corporate credit rating of Fresenius Medical Care from BB+ to BBB- with a stable outlook. The company's financial policy remains unchanged. Fresenius Medical Care will continue to focus on the execution of the long-term strategy introduced in early 2014.
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 2.5 million individuals worldwide. Through its network of 3,349 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatments for 283,135 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products.
For more information visit the Company's website at www.fmc-ag.com.
Disclaimer
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.
- Further expansion of our operations and new record level of revenue
- Increased dividend to be proposed at the Annual General Meeting
- Accelerated earnings growth expected
Fourth quarter 2014 key figures:
Net revenue: $4,320 million, +12%
Operating income (EBIT): $663 million, 0%
Net income*: $335 million, -4%
Basic earnings per share: $1.11, -5%
Full year 2014 key figures:
Net revenue: $15,832 million, +8%
Operating income (EBIT): $2,255 million, 0%
Net income*: $1,045 million, -6%
Basic earnings per share: $3.46, -5%
Dividend proposal:
Ordinary share: €0.78, +1%
*attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
Rice Powell, chief executive officer of Fresenius Medical Care, stated: "During fiscal year 2014, we continuously improved our results and delivered on revenue and net income guidance. We have strengthened our core business and also expanded our portfolio with acquisitions in the field of care coordination. After revenue of approximately 500 million US$ in 2013 we now expect our Care Coordination business to generate around 1.7 billion of revenue in 2015. We expect accelerated earnings growth for 2015 and beyond supported mainly by a strong organic business, our acquisitions and the global efficiency program".
Fourth Quarter 2014
Revenue
Net revenue for the fourth quarter of 2014 increased by 12% to $4,320 million (+15% at constant currency) as compared to the fourth quarter of 2013. Organic revenue growth worldwide was 7%. Health Care revenue grew by 15% to $3,322 million (+18% at constant currency) and dialysis product revenue increased by 3% to $998 million (+8% at constant currency) as compared to the fourth quarter of 2013.
North America revenue for the fourth quarter of 2014 increased by 15% to $2,876 million. Organic revenue growth was 6%. Health Care revenue grew by 15% to $2,640 million with a same market treatment growth of 4%. Net Dialysis Care revenue increased by 5% to $2,245 million. Care Coordination revenue increased by 151% to $395 million. Dialysis product revenue increased by 8% to 236 million compared to the fourth quarter of 2013.
International revenue increased by 5% to $1,422 million (+15% at constant currency). Organic revenue growth was 7%. Health Care revenue increased by 12% to $682 million (+26% at constant currency). Dialysis product revenue decreased by 1% to $740 million (+6% at constant currency).
Earnings
Operating income (EBIT) increased from $661 million in the fourth quarter of 2013 to $663 million in the fourth quarter of 2014. Operating income for North America for the fourth quarter of 2014 was $493 million, an increase of 9% as compared to the fourth quarter of 2013. In the International segment, operating income for the fourth quarter of 2014 increased by 2% to $278 million as compared to $274 million in the fourth quarter of 2013.
Net interest expense for the fourth quarter of 2014 was $117 million, compared to $98 million in the fourth quarter of 2013.
Income tax expense was $143 million for the fourth quarter of 2014, which translates into an effective tax rate of 26.2%. This compares to income tax expense of $171 million and a tax rate of 30.4% for the fourth quarter of 2013. The tax rate was affected favorably by the resolution of challenged deductions for civil settlement payments taken in prior years.
Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the fourth quarter of 2014 was $335 million, a decrease of 4% compared to $349 million for the fourth quarter of 2013.
Basic earnings per share (EPS) for the fourth quarter of 2014 was $1.11, a decrease of 5% compared to the corresponding number for the fourth quarter of 2013. The weighted average number of shares outstanding for the fourth quarter of 2014 was approximately 303.3 million shares, compared to approximately 301.0 million shares for the fourth quarter of 2013. The increase in shares outstanding resulted from stock option exercises during 2014.
Cash flow
In the fourth quarter of 2014, the company generated $588 million in net cash provided by operating activities, representing 14% of revenue, almost unchanged compared to the corresponding figure of last year ($ 589 million).
A total of $282 million was spent for capital expenditures, net of disposals. Free cash flow was $306 million compared to $355 million in the fourth quarter of 2013.
A total of $725 million in cash was spent for acquisitions and investments, net of divestitures. Free cash flow after investing activities was a negative $419 million as compared to $157 million in the fourth quarter of 2013.
Full year 2014
Revenue and Earnings
Net revenue for the full year 2014 increased by 8% to $15,832 million (+10% at constant currency) as compared to the full year 2013. Organic revenue growth worldwide was 5%.
Operating income (EBIT) for the full year 2014 was $2,255 million as compared to $2,256 million in the full year 2013.
Net interest expense for the full year 2014 was $411 million as compared to $409 million in the full year 2013.
Income tax expense for the full year 2014 was $584 million, which translates into an effective tax rate of 31.7%. This compares to income tax expense of $592 million and a tax rate of 32.0% for the full year 2013. In 2014, the tax rate was influenced by different tax effects partially offsetting each other. In the second quarter the tax rate increased by a reversal of an original tax benefit following a financial court ruling issued against another company, while in the fourth quarter the tax rate was favourably influenced by the resolution of challenged deductions for civil settlement payments taken in prior years.
For the full year 2014, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA was $1,045 million, down by 6% from the corresponding number of $1,110 million for the full year 2013.
In the full year 2014, basic earnings per share (EPS) was $3.46, a decrease of 5% compared to the corresponding number for the full year 2013. The weighted average number of shares outstanding during the full year 2014 was approximately 302.3 million shares.
Cash flow
In the full year 2014, the company generated $1,861 million in net cash provided by operating activities, representing 12% of revenue, as compared to $2,035 million for the same period in 2013.
A total of $920 million was spent for capital expenditures, net of disposals. Free cash flow for the full year 2014 was $941 million as compared to $1,307 million in the full year 2013.
A total of $1,770 million in cash was spent for acquisitions and investments, net of divestitures. Free cash flow after investing activities was a negative $829 million as compared to a positive $829 million in the full year 2013.
Employees
As of December 31, 2014, Fresenius Medical Care had 99,895 employees (full-time equivalents) worldwide, compared to 90,690 employees at the end of December 2013. This increase of more than 9,200 employees was mainly attributable to acquisitions as well as to our continued organic growth.
Balance sheet structure
The company´s total assets were $25,447 million (Dec. 31, 2013: $23,120 million), an increase of 10%. Current assets increased by 7% to $6,725 million (Dec. 31, 2013: $6,287 million). Non-current assets were $18,722 million (Dec. 31, 2013: $16,833 million), an increase of 11%. Total equity increased by 6% to $10,028 million (Dec. 31, 2013: $9,485 million). The equity ratio was 39% as compared to 41% at the end of 2013. Total debt was $9,532 million (Dec. 31, 2013: $8,417 million). As of December 31, 2014, the debt/EBITDA ratio was 3.1 (Dec. 31, 2013: 2.8).
Please refer to the attachments for a complete overview of the results for the fourth quarter and full year 2014.
Dividend
At the Annual General Meeting to be held on May 19, 2015, shareholders will be asked to approve a dividend of €0.78 per share, an increase of 1% from 2013 (€0.77). For the 18th consecutive year, shareholders can expect to receive an increased annual dividend.
Outlook
The information provided is based on exchange rates prevailing at the beginning of 2015. Savings from the global efficiency program are included, while potential acquisitions are not. In addition the outlook reflects further operating cost investments within the Care Coordination segment for future growth in line with our 2020 strategy.
For 2015 the company expects revenue to grow at 5-7% which at constant currency is a growth rate of 10-12%.
Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to increase 0–5% in 2015.
The company expects to spend around $1.0 billion on capital expenditures and around $400 million on acquisitions in 2015. The debt/EBITDA ratio is expected to be around 3.0 by the end of 2015.
For the year 2016 we expect an acceleration of growth with a revenue increase of 9–12% and net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA growing by 15–20%.
As disclosed in the company's long-term target for 2020 the company expects revenue to grow at an annual average growth rate of approx. 10% and net income attributable to shareholders in the high single digits.
Press Conference
Fresenius Medical Care will hold a press conference at its headquarters in Bad Homburg, Germany to discuss the results of the fourth quarter and full year 2014 on Wednesday, February 25, 2015, at 10 am CET. The company cordially invites journalists to view the live video webcast at the company's website www.freseniusmedicalcare.com in the section "News and Press / Video service". A replay will be available shortly after the meeting.
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 2.7 million individuals worldwide. Through its network of 3,361 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatments for 286,312 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products.
For more information visit the Company's website at www.freseniusmedicalcare.com.
Disclaimer
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.