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| Fresenius Medical Care AG & Co. KGaA | |
| Investor Relations | |
Investor News | Else-Kröner-Str. 1 | |
D-61352 Bad Homburg | ||
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| Contact: | |
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| Oliver Maier | |
| Phone: | + 49 6172 609 2601 |
| Fax: | + 49 6172 609 2301 |
| E-mail: | ir@fmc-ag.com |
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| North America: | |
| Terry L. Morris | |
| Phone: | + 1 800 948 2538 |
| Fax: | + 1 615 345 5605 |
| E-mail: | ir@fmc-ag.com |
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| Internet: www.fmc-ag.com | |
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| November 4, 2008 | |
Fresenius Medical Care Reports Strong Third Quarter and
Nine Months Results; Confirms Outlook for 2008
Summary Third Quarter 2008:
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Net revenue |
| $ | 2,713 million |
| + | 12 | % |
Operating income (EBIT) |
| $ | 422 million |
| + | 6 | % |
Net income |
| $ | 206 million |
| + | 14 | % |
Earnings per share |
| $ | 0.69 |
| + | 14 | % |
Summary First Nine Months 2008:
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Net revenue |
| $ | 7,890 million |
| + | 10 | % |
Operating income (EBIT) |
| $ | 1,240 million |
| + | 8 | % |
Net income |
| $ | 603 million |
| + | 16 | % |
Earnings per share |
| $ | 2.03 |
| + | 16 | % |
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Fresenius Medical Care AG & Co. KGaA, November 4, 2008 | 1 of 17 |
Bad Homburg, Germany – Fresenius Medical Care AG & Co. KGaA (“the Company”), the world’s largest provider of Dialysis Products and Services, today announced its results for the third quarter and first nine months of 2008.
Third Quarter 2008:
Revenue
Net revenue for the third quarter of 2008 increased by 12% to $2,713 million (9% at constant currency) compared to the third quarter of 2007. Organic revenue growth worldwide was 8%. Dialysis Services revenue grew by 10% to $1,985 million (9% at constant currency) in the third quarter of 2008. Dialysis Product revenue increased by 16% to $728 million (11% at constant currency) in the same period.
North America revenue increased by 7% to $1,771 million. Organic revenue growth was 5%. Dialysis Services revenue grew by 6% to $1,587 million. Average revenue per treatment for the U.S. clinics increased to $333 in the third quarter of 2008. This represents an increase of $6 per treatment compared to the third quarter of 2007 as well as sequentially from the second quarter of 2008. The improvement in the revenue per treatment was primarily due to increased commercial revenue rates. Dialysis Product revenue increased by 11% to $184 million. This performance was led by strong sales across almost the entire product portfolio.
International revenue was $942 million, an increase of 23% (14% at constant currency) compared to the third quarter of 2007. Organic revenue growth in the International segment was 13%. Dialysis Services revenue reached $398 million, an increase of 30% (20% at constant currency). Dialysis Product revenue rose 19% to $544 million (11% at constant currency), led by strong dialyzer and dialysis machine sales.
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Fresenius Medical Care AG & Co. KGaA, November 4, 2008 | 2 of 17 |
Earnings
Operating income (EBIT) increased by 6% to $422 million compared to $397 million in the third quarter of 2007, resulting in an operating margin of 15.6% compared to 16.4% for the third quarter 2007. This margin decrease mainly reflected higher personnel expenses, increased costs for the anticoagulant drug Heparin, a mix effect with accelerated growth in the International Service business, start-up costs of new clinics and higher expenditures for our research and development activities. Further, we experienced higher depreciation expenses as a result of our recent investments to expand our production capacities to continue to meet customer demand. The availability of these new capacities allowed a more normalized summer shutdown program for maintenance of our European facilities, in contrast to last year’s shortened program. The exceptional revenue growth was supported by increased reimbursement rates and a continued above market growth of renal products.
Net interest expense for the third quarter of 2008 was $87 million compared to $95 million in the same quarter of 2007. This positive development was mainly attributable to lower average interest rates associated with changes in the financing structure due to the redemption of a portion of the Trust Preferred Securities.
Income tax expense was $123 million for the third quarter of 2008 compared to $115 million in the third quarter of 2007, reflecting effective tax rates of 36.6% and 38.0%, respectively. The decrease is mainly a result of German tax reform which became effective January 1, 2008.
Net income for the third quarter 2008 was $206 million, an increase of 14%.
Earnings per share (EPS) for the third quarter of 2008 rose 14% to $0.69 per ordinary share compared to $0.61 for the third quarter of 2007. Earnings per ordinary American Depository Share (ADS) are equivalent as one ADS represents one share as a result of the change in ratio of the Company’s ordinary shares and preference shares to ADSs. The weighted average number of shares outstanding for the third quarter of 2008 was approximately 297.2 million shares compared to 295.8 million shares for the third quarter
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Fresenius Medical Care AG & Co. KGaA, November 4, 2008 | 3 of 17 |
of 2007. The increase in shares outstanding is due to stock option exercises in the fourth quarter of 2007 and in the first nine months of 2008.
Cash Flow
In the third quarter of 2008, the Company generated a very strong $315 million in cash from operations, representing 12% of revenue. The cash flow generation was impacted by our strong operating income combined with a slight increase in working capital.
A total of $160 million was spent for capital expenditures, net of disposals. Free Cash Flow before acquisitions was $155 million. A total of $39 million in cash was used for acquisitions, net of divestitures.
Nine Months Ended September 30, 2008:
Revenue and Earnings
Net revenue was $7,890 million, up 10% from the first nine months of 2007. In constant currency net revenue rose 7%. Organic growth was 7% in the first nine months of 2008.
Operating income (EBIT) increased by 8% to $1,240 million compared to $1,152 million in the first nine months of 2007, resulting in an operating margin of 15.7% compared to 16.1% for the first nine months of 2007. This development mainly reflected higher research and development expenses and start-up costs for new clinics. Reduced reimbursement rates for EPO, lower utilization levels of EPO as well as increased costs for the anticoagulant drug Heparin and higher personnel expenses were partially offset by increases in underlying reimbursement rates and strong contributions from renal products.
Net interest expense for the first nine months of 2008 was $252 million compared to $281 million in the same period of 2007. The reduction was mainly due to lower average interest rates associated with changes in our financing structure.
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Fresenius Medical Care AG & Co. KGaA, November 4, 2008 | 4 of 17 |
Income tax expense was $366 million in the first nine months of 2008 compared to $331 million in the same period in 2007, reflecting tax rates of 37.0% and 38.0%, respectively.
For the first nine months of 2008, net income was $603 million, an increase of 16% from the first nine months of 2007.
Earnings per ordinary share rose 16% to $2.03. The weighted average number of shares outstanding during the first nine months of 2008 was approximately 296.8 million.
Cash Flow
Cash from operations during the first nine months of 2008 was $716 million, representing 9% of revenue. Cash Flow generation was impacted by our strong operating income, partially offset by slight increases in the Days Sales Outstanding (DSO) and other working capital.
A total of $493 million was used for capital expenditures, net of disposals. Free Cash Flow before acquisitions for the first nine months of 2008 was $223 million. A total of $130 million in cash was used for acquisitions, net of divestitures.
Please refer to the attachments for a complete overview on the third quarter and first nine months of 2008 and the reconciliation of non-GAAP financial measures included in this release to the most comparable GAAP financial measures.
Patients – Clinics – Treatments
As of September 30, 2008, Fresenius Medical Care treated 181,937 patients worldwide, which represents a 6% increase compared to last year. North America provided dialysis treatments for 125,356 patients, an increase of 4%. Including 34 clinics managed by Fresenius Medical Care North America, the number of patients in North America was 127,172. The International segment served 56,581 patients, an increase of 10% over last year.
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Fresenius Medical Care AG & Co. KGaA, November 4, 2008 | 5 of 17 |
As of September 30, 2008, the Company operated a total of 2,349 clinics worldwide. This is comprised of 1,666 clinics in North America (1,700 including managed clinics), an increase of 5%, and 683 clinics in the International segment, an increase of 8%.
Fresenius Medical Care delivered approximately 20.7 million dialysis treatments worldwide during the first nine months of 2008. This represents an increase of 5% year over year. North America accounted for 14.2 million treatments, an increase of 4%, and the International segment delivered 6.4 million treatments, an increase of 9% over last year.
Employees
As of September 30, 2008, Fresenius Medical Care had 63,990 employees (full-time equivalents) worldwide compared to 61,406 employees at the end of 2007.
Debt/EBITDA Ratio
The ratio of debt to Earnings before Interest, Taxes and Amortization (EBITDA) decreased from 2.88 at the end of the third quarter of 2007 to 2.71 at the end of the third quarter 2008.
Credit Ratings
During Q3, Moody´s did not change any Rating of Fresenius Medical Care. Standard & Poor´s revised its outlook on July 9th, 2008 from positive to negative in connection with Fresenius SE´s acquisition of APP Pharmaceuticals Inc. All other Ratings of Fresenius Medical Care were affirmed, last on September 4th, 2008. For further detailed information on Fresenius Medical Care´s Credit Relations we would like to refer you to our Internet Page at www.fmc-ag.com / Investor Relations / Credit Relations where one can find for example additional information on our credit ratings, maturity profiles and credit instruments.
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Fresenius Medical Care AG & Co. KGaA, November 4, 2008 | 6 of 17 |
Outlook for 2008
For the year 2008, the Company confirms its outlook and expects to achieve revenue of more than $10.4 billion, an increase of more than 7%.
Net income is projected to be between $805 million and $825 million in the fiscal year 2008. This represents an increase of 12% to 15%.
In addition, the Company expects to spend $650 to $750 million on capital expenditures and $150 to $250 million on acquisitions. The debt/EBITDA ratio is projected to decrease to below 2.8 by the end of 2008.
For 2010, Fresenius Medical Care continues to expect revenue of more than $11.5 billion. Earnings after tax are projected to grow in the low- to mid-teens each year.
Ben Lipps, Chief Executive Officer of Fresenius Medical Care, commented: “We are very pleased to report a strong third quarter and first nine months of 2008. Our organic revenue growth clearly accelerated during the year 2008 showing an excellent growth of 8% in the third quarter of 2008. With 12% of revenue, we have seen a very strong operating cash flow performance. We continued our investments in future growth by expanding our clinic network and production capacities as well as our research and development activities. Despite cost pressures, an uncertain economic environment and volatile currency developments, we are proud to say that we can reconfirm our guidance for 2008 and are confident of achieving our mid term financial targets for 2010. More importantly in the current environment, our financing is very stable through 2011. We remain focused on continuing to execute our strategic objectives, in particular, providing our patients the best dialysis treatment possible to ensure a maximum of quality of life.”
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Fresenius Medical Care AG & Co. KGaA, November 4, 2008 | 7 of 17 |
Conference Call
Fresenius Medical Care will hold a conference call to discuss the results of the third quarter and the first nine months of 2008 on Tuesday, November 4, 2008, at 3:30 pm CET / 9:30 am EST. The Company invites investors to view the live webcast of the conference 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 1,600,000 individuals worldwide. Through its network of 2,349 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 181,937 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. 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.
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Fresenius Medical Care AG & Co. KGaA, November 4, 2008 | 8 of 17 |
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Fresenius Medical Care |
| Three Months Ended |
| Nine Months Ended |
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Statement of Earnings |
| September 30, |
| September 30, |
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(in US-$ thousands, except |
| 2008 |
| 2007 |
| % Change |
| 2008 |
| 2007 |
| % Change |
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share and per share data) |
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(unaudited) |
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Net revenue |
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Dialysis Care |
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| 1,984,938 |
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| 1,800,771 |
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| 10.2 | % |
| 5,753,484 |
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| 5,356,669 |
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| 7.4 | % |
Dialysis Products |
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| 728,327 |
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| 625,371 |
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| 16.5 | % |
| 2,136,801 |
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| 1,794,357 |
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| 19.1 | % |
Total net revenue |
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| 2,713,265 |
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| 2,426,142 |
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| 11.8 | % |
| 7,890,285 |
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| 7,151,026 |
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| 10.3 | % |
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Cost of revenue |
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| 1,803,886 |
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| 1,588,201 |
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| 13.6 | % |
| 5,201,721 |
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| 4,691,347 |
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| 10.9 | % |
Gross profit |
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| 909,379 |
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| 837,941 |
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| 8.5 | % |
| 2,688,564 |
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| 2,459,679 |
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| 9.3 | % |
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Selling, general and administrative |
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| 466,983 |
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| 425,590 |
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| 9.7 | % |
| 1,388,680 |
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| 1,263,681 |
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| 9.9 | % |
Research and development |
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| 20,206 |
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| 15,639 |
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| 29.2 | % |
| 59,978 |
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| 43,546 |
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| 37.7 | % |
Operating income (EBIT) |
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| 422,190 |
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| 396,712 |
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| 6.4 | % |
| 1,239,906 |
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| 1,152,452 |
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| 7.6 | % |
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Interest income |
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| (6,467 | ) |
| (8,705 | ) |
| -25.7 | % |
| (19,266 | ) |
| (19,048 | ) |
| 1.1 | % |
Interest expense |
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| 93,516 |
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| 103,538 |
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| -9.7 | % |
| 271,275 |
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| 300,367 |
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| -9.7 | % |
Interest expense, net |
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| 87,049 |
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| 94,833 |
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| -8.2 | % |
| 252,009 |
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| 281,319 |
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| -10.4 | % |
Earnings before income taxes and minority interest |
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| 335,141 |
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| 301,879 |
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| 11.0 | % |
| 987,897 |
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| 871,133 |
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| 13.4 | % |
Income tax expense |
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| 122,534 |
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| 114,750 |
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| 6.8 | % |
| 365,621 |
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| 331,097 |
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| 10.4 | % |
Minority interest |
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| 6,272 |
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| 6,371 |
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| 18,980 |
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| 20,320 |
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Net income |
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| 206,335 |
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| 180,758 |
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| 14.1 | % |
| 603,296 |
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| 519,716 |
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| 16.1 | % |
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Operating income (EBIT) |
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| 422,190 |
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| 396,712 |
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| 6.4 | % |
| 1,239,906 |
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| 1,152,452 |
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| 7.6 | % |
Depreciation and amortization |
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| 107,897 |
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| 89,368 |
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| 20.7 | % |
| 306,761 |
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| 259,861 |
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| 18.0 | % |
EBITDA |
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| 530,087 |
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| 486,080 |
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| 9.1 | % |
| 1,546,667 |
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| 1,412,313 |
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| 9.5 | % |
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Total bad debt expenses |
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| 56,274 |
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| 53,127 |
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| 157,922 |
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| 152,762 |
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Earnings per ordinary share |
| $ | 0.69 |
| $ | 0.61 |
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| 13.6 | % | $ | 2.03 |
| $ | 1.76 |
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| 15.5 | % |
Earnings per ordinary ADS |
| $ | 0.69 |
| $ | 0.61 |
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| 13.6 | % | $ | 2.03 |
| $ | 1.76 |
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| 15.5 | % |
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Weighted average number of shares |
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Ordinary shares |
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| 293,417,973 |
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| 292,062,414 |
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| 293,030,504 |
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| 291,721,451 |
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Preference shares |
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| 3,802,913 |
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| 3,747,548 |
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| 3,790,298 |
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| 3,728,265 |
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Percentages of revenue |
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Cost of revenue |
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| 66.5 | % |
| 65.5 | % |
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| 65.9 | % |
| 65.6 | % |
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Gross profit |
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| 33.5 | % |
| 34.5 | % |
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| 34.1 | % |
| 34.4 | % |
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Selling, general and administrative |
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| 17.2 | % |
| 17.5 | % |
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| 17.6 | % |
| 17.7 | % |
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Research and development |
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| 0.7 | % |
| 0.6 | % |
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| 0.8 | % |
| 0.6 | % |
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Operating income (EBIT) |
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| 15.6 | % |
| 16.4 | % |
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| 15.7 | % |
| 16.1 | % |
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Interest expense, net |
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| 3.2 | % |
| 3.9 | % |
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| 3.2 | % |
| 3.9 | % |
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Earnings before income taxes and minority interest |
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| 12.4 | % |
| 12.4 | % |
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| 12.5 | % |
| 12.2 | % |
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Income tax expense |
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| 4.5 | % |
| 4.7 | % |
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| 4.6 | % |
| 4.6 | % |
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Minority interest |
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| 0.2 | % |
| 0.3 | % |
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| 0.2 | % |
| 0.3 | % |
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Net income |
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| 7.6 | % |
| 7.5 | % |
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| 7.6 | % |
| 7.3 | % |
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EBITDA |
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| 19.5 | % |
| 20.0 | % |
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| 19.6 | % |
| 19.7 | % |
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Fresenius Medical Care AG & Co. KGaA, November 4, 2008 | 9 of 17 |
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Fresenius Medical Care |
| Three Months Ended |
| Nine Months Ended |
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Segment and Other Information |
| September 30, |
| September 30, |
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(in US-$ million) |
| 2008 |
| 2007 |
| % Change |
| 2008 |
| 2007 |
| % Change |
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(unaudited) |
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Net revenue |
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North America |
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| 1,771 |
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| 1,660 |
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| 6.6 | % |
| 5,153 |
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| 4,957 |
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| 3.9 | % |
International |
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| 942 |
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| 766 |
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| 23.1 | % |
| 2,737 |
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| 2,194 |
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| 24.8 | % |
Total net revenue |
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| 2,713 |
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| 2,426 |
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| 11.8 | % |
| 7,890 |
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| 7,151 |
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| 10.3 | % |
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Operating income (EBIT) |
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North America |
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| 296 |
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| 283 |
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| 4.6 | % |
| 858 |
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| 826 |
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| 3.9 | % |
International |
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| 152 |
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| 135 |
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| 12.7 | % |
| 462 |
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| 386 |
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| 19.8 | % |
Corporate |
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| (26 | ) |
| (21 | ) |
| 21.6 | % |
| (80 | ) |
| (60 | ) |
| 35.7 | % |
Total operating income (EBIT) |
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| 422 |
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| 397 |
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| 6.4 | % |
| 1,240 |
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| 1,152 |
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| 7.6 | % |
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Operating income in percentage of revenue |
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North America |
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| 16.7 | % |
| 17.0 | % |
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| 16.7 | % |
| 16.7 | % |
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International |
|
| 16.1 | % |
| 17.6 | % |
|
|
|
| 16.9 | % |
| 17.6 | % |
|
|
|
Total |
|
| 15.6 | % |
| 16.4 | % |
|
|
|
| 15.7 | % |
| 16.1 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full-time equivalents (Sep.30 compared to Dec. 31) |
|
|
|
|
|
|
|
|
|
|
| 63,990 |
|
| 61,406 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
Fresenius Medical Care AG & Co. KGaA, November 4, 2008 | 10 of 17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fresenius Medical Care |
| Three Months Ended |
| Nine Months Ended |
| ||||||||
|
| ||||||||||||
(in US-$ million) |
| 2008 |
| 2007 |
| 2008 |
| 2007 |
| ||||
(unaudited) |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment information North America |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue |
|
| 1,771 |
|
| 1,660 |
|
|
|
|
|
|
|
Costs of revenue and research and development |
|
| 1,187 |
|
| 1,102 |
|
|
|
|
|
|
|
Selling, general and administrative |
|
| 288 |
|
| 275 |
|
|
|
|
|
|
|
Costs of revenue and operating expenses |
|
| 1,475 |
|
| 1,377 |
|
|
|
|
|
|
|
Operating income (EBIT) |
|
| 296 |
|
| 283 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent of revenue |
|
| 16.7 | % |
| 17.1 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dialysis Products revenue incl. and excl. internal sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dialysis Products revenue incl. internal sales |
|
| 321 |
|
| 297 |
|
|
|
|
|
|
|
less internal sales |
|
| (137 | ) |
| (130 | ) |
|
|
|
|
|
|
Dialysis Products external sales |
|
| 184 |
|
| 167 |
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dialysis Products revenue incl. internal sales |
|
| 622 |
|
| 524 |
|
|
|
|
|
|
|
less internal sales |
|
| (78 | ) |
| (65 | ) |
|
|
|
|
|
|
Dialysis Products external sales |
|
| 544 |
|
| 459 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of cash flow from operating activities to EBITDA 1) |
|
|
|
|
|
|
|
|
|
|
| ||
Total EBITDA |
|
|
|
|
|
|
|
| 1,547 |
|
| 1,412 |
|
Interest expense, net |
|
|
|
|
|
|
|
| (252 | ) |
| (281 | ) |
Income tax expense |
|
|
|
|
|
|
|
| (366 | ) |
| (331 | ) |
Change in working capital and other non cash items |
|
|
|
|
|
|
|
| (213 | ) |
| 90 |
|
Net cash provided by operating activities |
|
|
|
|
|
|
|
| 716 |
|
| 890 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized EBITDA 2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (EBIT) last twelve months |
|
|
|
|
|
|
|
| 1,668 |
|
| 1,533 |
|
Depreciation and amortization last twelve months |
|
|
|
|
|
|
|
| 410 |
|
| 347 |
|
Non cash charges |
|
|
|
|
|
|
|
| 44 |
|
| 37 |
|
Annualized EBITDA |
|
|
|
|
|
|
|
| 2,122 |
|
| 1,917 |
|
|
|
1) | EBITDA is the basis for determining compliance with certain covenants in Fresenius Medical Care’s long-term debt instruments. |
| |
2) | EBITDA 2007: Excluding restructuring costs and in-process R&D. |
|
|
Fresenius Medical Care AG & Co. KGaA, November 4, 2008 | 11 of 17 |
|
|
|
|
|
|
|
|
Fresenius Medical Care |
| September 30, |
| December 31, |
| ||
| |||||||
(in US-$ million) |
| 2008 |
| 2007 |
| ||
|
|
|
|
|
| ||
Assets |
|
|
|
|
| ||
Current assets |
|
| 4,095 |
|
| 3,859 |
|
Intangible assets |
|
| 8,101 |
|
| 7,936 |
|
Other non-current assets |
|
| 2,588 |
|
| 2,375 |
|
Total assets |
|
| 14,784 |
|
| 14,170 |
|
|
|
|
|
|
|
|
|
Shareholders’ equity and liabilities |
|
|
|
|
|
|
|
Current liabilities |
|
| 3,155 |
|
| 3,026 |
|
Long-term liabilities |
|
| 5,721 |
|
| 5,569 |
|
Shareholders’ equity |
|
| 5,908 |
|
| 5,575 |
|
Total Shareholders’ equity and liabilities |
|
| 14,784 |
|
| 14,170 |
|
|
|
|
|
|
|
|
|
Equity/assets ratio: |
|
| 40 | % |
| 39 | % |
|
|
|
|
|
|
|
|
Debt |
|
|
|
|
|
|
|
Short term borrowings |
|
| 686 |
|
| 217 |
|
Short-term borrowings from related parties |
|
| 1 |
|
| 2 |
|
Current portion of long-term debt and capital lease obligations |
|
| 437 |
|
| 85 |
|
Current portion of Trust Preferred Securities |
|
| — |
|
| 670 |
|
| |||||||
Long-term debt and capital lease obligations, less current portion |
|
| 3,972 |
|
| 4,004 |
|
Trust Preferred Securities, less current portion |
|
| 652 |
|
| 664 |
|
Total debt |
|
| 5,748 |
|
| 5,642 |
|
|
|
Fresenius Medical Care AG & Co. KGaA, November 4, 2008 | 12 of 17 |
|
|
|
|
|
|
|
|
Fresenius Medical Care |
|
|
|
|
|
|
|
Cash Flow Statement |
|
|
|
|
|
|
|
Nine Months Ended September 30, |
| 2008 |
| 2007 |
| ||
in US-$ million |
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities |
|
|
|
|
|
|
|
Net income |
|
| 603 |
|
| 520 |
|
Depreciation / amortization |
|
| 307 |
|
| 260 |
|
Change in working capital and other non cash items |
|
| (194 | ) |
| 110 |
|
Cash Flow from operating activities |
|
| 716 |
|
| 890 |
|
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
| (502 | ) |
| (380 | ) |
Proceeds from sale of property, plant and equipment |
|
| 9 |
|
| 21 |
|
Capital expenditures, net |
|
| (493 | ) |
| (359 | ) |
Free Cash Flow |
|
| 223 |
|
| 531 |
|
|
|
|
|
|
|
|
|
Acquisitions and investments, net of cash acquired and net purchases of intangible assets |
|
| (176 | ) |
| (144 | ) |
Proceeds from divestitures |
|
| 46 |
|
| 29 |
|
Acquisitions, net of divestitures |
|
| (130 | ) |
| (115 | ) |
Free Cash Flow after investing activities |
|
| 93 |
|
| 416 |
|
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
|
Change in accounts receivable securitization program |
|
| 452 |
|
| (266 | ) |
Change in intercompany debt |
|
| (1 | ) |
| 39 |
|
Change in other debt |
|
| 310 |
|
| 54 |
|
Redemption of Trust Preferred Securities |
|
| (678 | ) |
| — |
|
Proceeds from exercise of stock options |
|
| 38 |
|
| 33 |
|
Change in minority interest |
|
| (27 | ) |
| (15 | ) |
Dividends paid |
|
| (252 | ) |
| (188 | ) |
Cash Flow from financing activities |
|
| (158 | ) |
| (343 | ) |
|
|
|
|
|
|
|
|
Effects of exchange rates on cash |
|
| — |
|
| 6 |
|
Net (decrease) increase in cash |
|
| (65 | ) |
| 79 |
|
|
|
|
|
|
|
|
|
Cash at beginning of period |
|
| 245 |
|
| 159 |
|
Cash at end of period |
|
| 180 |
|
| 238 |
|
|
|
Fresenius Medical Care AG & Co. KGaA, November 4, 2008 | 13 of 17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fresenius Medical Care |
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly Performance Scorecard - Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
| 2008 |
| cc |
| 2007 |
| cc |
| ||||
(in US-$ thousands, except per-treatment revenue) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue |
|
| 1,770,820 |
|
|
|
|
| 1,660,462 |
|
|
|
|
Growth year-over-year |
|
| 6.6 | % |
|
|
|
| 2.9 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dialysis Care |
|
| 1,586,594 |
|
|
|
|
| 1,493,793 |
|
|
|
|
Growth year-over-year |
|
| 6.2 | % |
|
|
|
| 1.5 | % |
|
|
|
U.S. per treatment |
|
| 333 |
|
|
|
|
| 327 |
|
|
|
|
Per treatment |
|
| 328 |
|
|
|
|
| 323 |
|
|
|
|
Sequential growth |
|
| 1.7 | % |
|
|
|
| -0.2 | % |
|
|
|
Growth year-over-year |
|
| 1.8 | % |
|
|
|
| 0.6 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dialysis Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
incl. internal sales |
|
| 320,908 |
|
|
|
|
| 296,897 |
|
|
|
|
Growth year-over-year |
|
| 8.1 | % |
|
|
|
| 10.8 | % |
|
|
|
External sales |
|
| 184,226 |
|
|
|
|
| 166,669 |
|
|
|
|
Growth year-over-year |
|
| 10.5 | % |
|
|
|
| 18.2 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue |
|
| 942,278 |
|
|
|
|
| 765,681 |
|
|
|
|
Growth year-over-year |
|
| 23.1 | % |
| 14.4 | % |
| 23.2 | % |
| 14.4 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dialysis Care |
|
| 398,345 |
|
|
|
|
| 306,987 |
|
|
|
|
Growth year-over-year |
|
| 29.8 | % |
| 20.1 | % |
| 32.5 | % |
| 22.8 | % |
Per treatment |
|
| 179 |
|
| 166 |
|
| 153 |
|
| 142 |
|
Sequential growth |
|
| -2.1 | % |
|
|
|
| 3.0 | % |
|
|
|
Growth year-over-year |
|
| 16.8 | % |
| 8.1 | % |
| 15.9 | % |
| 7.4 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dialysis Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
incl. internal sales |
|
| 622,010 |
|
|
|
|
| 523,856 |
|
|
|
|
Growth year-over-year |
|
| 18.7 | % |
| 10.3 | % |
| 19.4 | % |
| 10.6 | % |
External sales |
|
| 543,933 |
|
|
|
|
| 458,704 |
|
|
|
|
Growth year-over-year |
|
| 18.6 | % |
| 10.5 | % |
| 17.8 | % |
| 9.4 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
cc = at constant exchange rates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fresenius Medical Care AG & Co. KGaA, November 4, 2008 | 14 of 17 |
|
|
|
|
|
|
|
|
Fresenius Medical Care |
|
|
|
|
|
|
|
Quarterly Performance Scorecard - Dialysis Care Volume |
|
|
|
|
|
|
|
Three months ended September 30, |
| 2008 |
| 2007 |
| ||
|
|
|
|
|
|
|
|
North America |
|
|
|
|
|
|
|
Number of treatments |
|
| 4,829,339 |
|
| 4,621,343 |
|
Treatments per day |
|
| 61,131 |
|
| 59,248 |
|
Per day sequential growth |
|
| 0.5 | % |
| 0.6 | % |
Per day year-over-year growth |
|
| 3.2 | % |
| 4.1 | % |
Same market growth year-over-year |
|
| 3.0 | % |
| 3.0 | % |
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
Number of treatments |
|
| 2,226,681 |
|
| 2,003,872 |
|
Same market growth year-over-year |
|
| 9.5 | % |
| 4.9 | % |
|
|
|
|
|
|
|
|
Fresenius Medical Care |
|
|
|
|
|
|
|
Quarterly Performance Scorecard - Expenses |
|
|
|
|
|
|
|
Three months ended September 30, |
| 2008 |
| 2007 |
| ||
|
|
|
|
|
| ||
North America |
|
|
|
|
|
|
|
Costs of revenue and operating expenses |
|
|
|
|
|
|
|
Percent of revenue |
|
| 83.3 | % |
| 83.0 | % |
Selling, general and administrative |
|
|
|
|
|
|
|
Percent of revenue |
|
| 16.3 | % |
| 16.5 | % |
Bad debt expenses |
|
|
|
|
|
|
|
Percent of revenue |
|
| 2.9 | % |
| 3.0 | % |
Dialysis Care operating expenses/Treatment (in US-$) |
|
| 274 |
|
| 268 |
|
Sequential growth |
|
| 1.6 | % |
| 0.2 | % |
Growth year-over-year |
|
| 2.1 | % |
| -0.1 | % |
|
|
|
|
|
|
|
|
Total Group |
|
|
|
|
|
|
|
Costs of revenue and operating expenses |
|
|
|
|
|
|
|
Percent of revenue |
|
| 84.4 | % |
| 83.6 | % |
Selling, general and administrative |
|
|
|
|
|
|
|
Percent of revenue |
|
| 17.2 | % |
| 17.5 | % |
Effective tax rate |
|
| 36.6 | % |
| 38.0 | % |
|
|
Fresenius Medical Care AG & Co. KGaA, November 4, 2008 | 15 of 17 |
|
|
|
|
|
|
|
|
Fresenius Medical Care |
|
|
|
|
|
|
|
Quarterly Performance Scorecard - Cash Flow/Investing Activities |
|
|
|
|
|
|
|
Three months ended September 30, |
| 2008 |
| 2007 |
| ||
|
|
|
|
|
|
|
|
Total Group |
|
|
|
|
|
|
|
Operating Cash Flow |
|
| 314,512 |
|
| 382,472 |
|
Percent of revenue |
|
| 11.6 | % |
| 15.8 | % |
|
|
|
|
|
|
|
|
Free Cash Flow before acquisitions |
|
| 154,670 |
|
| 260,166 |
|
Percent of revenue |
|
| 5.7 | % |
| 10.7 | % |
|
|
|
|
|
|
|
|
Acquisitions, net of divestitures |
|
| 39,034 |
|
| 25,140 |
|
|
|
|
|
|
|
|
|
Capital expenditures, net |
|
| 159,842 |
|
| 122,306 |
|
Percent of revenue |
|
| 5.9 | % |
| 5.0 | % |
|
|
|
|
|
|
|
|
Maintenance |
|
| 63,818 |
|
| 52,443 |
|
Percent of revenue |
|
| 2.4 | % |
| 2.2 | % |
|
|
|
|
|
|
|
|
Growth |
|
| 96,024 |
|
| 69,863 |
|
Percent of revenue |
|
| 3.5 | % |
| 2.9 | % |
|
|
|
|
|
|
|
|
Number of de novos |
|
| 29 |
|
| 23 |
|
North America |
|
| 19 |
|
| 14 |
|
International |
|
| 10 |
|
| 9 |
|
|
|
|
|
|
|
|
|
Fresenius Medical Care |
|
|
|
|
|
|
|
Quarterly Performance Scorecard - Balance Sheet |
|
|
|
|
|
|
|
Three months ended September 30, |
|
| 2008 |
|
| 2007 |
|
|
|
|
|
|
|
|
|
Total Group |
|
|
|
|
|
|
|
Debt (in US-$ million) |
|
| 5,748 |
|
| 5,513 |
|
Debt/EBITDA |
|
| 2.7 |
|
| 2.9 |
|
|
|
|
|
|
|
|
|
North America |
|
|
|
|
|
|
|
Days sales outstanding |
|
| 60 |
|
| 57 |
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
Days sales outstanding |
|
| 108 |
|
| 106 |
|
|
|
Fresenius Medical Care AG & Co. KGaA, November 4, 2008 | 16 of 17 |
|
|
|
|
|
|
|
|
|
|
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Fresenius Medical Care |
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Quarterly Performance Scorecard |
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Three months ended September 30, |
| 2008 |
| 2007 |
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Clinical Performance |
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North America (U.S.) |
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Single Pool Kt/v > 1.2 |
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| 95 | % |
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| 95 | % |
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Hemoglobin >= 11g/dl |
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| 76 | % |
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| 80 | % |
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Hemoglobin 10-13g/dl |
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| 85 | % |
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| 80 | % |
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Albumin >= 3.5 g/dl 1) |
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| 81 | % |
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| 80 | % |
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Phosphate 3.5-5.5mg/dl |
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| 53 | % |
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| 52 | % |
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Hospitalization Days per patient 2) (12 months ending September 30) |
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| 10.5 |
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| 11.1 |
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Demographics |
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North America (U.S.) |
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Average age (yr) |
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| 62 |
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| 62 |
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Average time on dialysis (yr) |
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| 3.6 |
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| 3.5 |
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Average body weight (kg) |
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| 79 |
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| 78 |
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Prevalence of diabetes |
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| 53 | % |
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| 53 | % |
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1) | International standard BCR CRM470 |
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2) | Hospitalization data without former RCG facilities |
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Fresenius Medical Care AG & Co. KGaA, November 4, 2008 | 17 of 17 |