Exhibit 99.1
Investor News | | Oliver Maier Head of Investor Relations Fresenius Medical Care Else-Kröner-Straße 1 61352 Bad Homburg Germany T +49 6172 609-2601 F +49 6172 609-2301 oliver.maier@fmc-ag.com www.fmc-ag.com |
November 5, 2013
Fresenius Medical Care Reports Third Quarter And Nine Months 2013 Results
Third Quarter 2013 Key Figures:
Net revenue | | $3,666 million | | +7 | % |
Operating income (EBIT) | | $557 million | | -2 | % |
Adjusted operating income (EBIT) | | $576 million | | +2 | % |
Net income1 | | $273 million | | +1 | % |
Adjusted net income1 | | $285 million | | +6 | % |
Earnings per ordinary share | | $0.91 | | +3 | % |
Adjusted earnings per ordinary share | | $0.95 | | +7 | % |
Nine Months 2013 Key Figures:
Net revenue | | $10,743 million | | +6 | % |
Operating income (EBIT) | | $1,595 million | | -4 | % |
Adjusted operating income (EBIT) | | $1,625 million | | -1 | % |
Net income1 | | $761 million | | -18 | % |
Adjusted net income1 | | $783 million | | 0 | % |
Earnings per ordinary share | | $2.50 | | -18 | % |
Adjusted earnings per ordinary share | | $2.57 | | 0 | % |
1attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
1
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, today announced its results for the third quarter and first nine months of 2013.
Rice Powell, chief executive officer of Fresenius Medical Care, commented: “Given the economic challenges we continue to face, we can be satisfied with our business performance in the third quarter, specifically with the strong organic revenue growth of 6%. As indicated after the second quarter we expected the second half of the year to be stronger to achieve our guidance for 2013. And there is no doubt that we need a very strong fourth quarter to get there. We will continue to grow our business and expand our renal network, and with this we will be best positioned for future success.”
Third Quarter 2013
Revenue
Net revenue for the third quarter of 2013 increased by 7% to $3,666 million (+8% at constant currency) compared to the third quarter of 2012. Organic revenue growth worldwide was 6%. Dialysis services revenue grew by 8% to $2,813 million (+9% at constant currency) and dialysis product revenue increased by 5% to $853 million (+4% at constant currency).
North America revenue for the third quarter of 2013 increased by 8% to $2,436 million. Organic revenue growth was 6%. Dialysis services revenue grew by 9% to $2,224 million with a same store treatment growth of 3.5%. Dialysis product revenue increased by 5% to $212 million.
International revenue increased by 5% to $1,222 million (+6% at constant currency). Organic revenue growth was 4%. Dialysis services revenue increased by 5% to $589 million (+8% at constant currency). Dialysis product revenue increased by 5% to $633 million (+4% at constant currency).
Earnings
Operating income (EBIT) for the third quarter of 2013 decreased by 2% to $557 million compared to $568 million in the third quarter of 2012. Operating income for North America for the third quarter of 2013 decreased by 1% to $416 million compared to $420 million in the third quarter of 2012. In the International segment, operating income for the third quarter of 2013 increased by 5% to $204 million compared to $195 million in the third quarter of 2012.
2
Adjusted for the impact from the budget cuts in the U.S. (sequestration), that were effectively introduced in April 2013, the operating income for the third quarter of 2013 increased by 2% to $576 million.
Net interest expense for the third quarter of 2013 was $103 million, compared to $108 million in the third quarter of 2012.
Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the third quarter of 2013 was $273 million, an increase of 1% compared to the corresponding number of $270 million for the third quarter of 2012. Adjusted for the net of tax effects of the special item mentioned above, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the third quarter of 2013 increased by 6% to $285 million.
Income tax expense was $148 million for the third quarter of 2013 which translates into an effective tax rate of 32.6%. This compares to income tax expense of $153 million and a tax rate of 33.3% for the third quarter of 2012.
Earnings per ordinary share (EPS) for the third quarter of 2013 was $0.91, an increase of 3% compared to the corresponding number for the third quarter of 2012. Adjusted for the special item mentioned above, EPS for the third quarter of 2013 increased by 7% to $0.95. The weighted average number of shares outstanding for the third quarter of 2013 was approximately 301.3 million shares, compared to 305.5 million shares for the third quarter of 2012. The decrease in shares outstanding resulted from the effect of the share buy-back program, which was fully completed in August 2013, partially offset by stock option exercises in the past twelve months.
Cash flow
In the third quarter of 2013, the company generated $605 million in cash from operations, an increase of 13% compared to the corresponding figure of last year and representing 16.5% of revenue.
A total of $175 million was spent for capital expenditures, net of disposals. Free cash flow before acquisitions was $430 million (representing 11.7% of revenue) compared to $371 million in the third quarter of 2012.
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A total of $195 million in cash was spent for acquisitions and investments, net of divestitures. Free cash flow after acquisitions and divestitures was $235 million, compared to $334 million in the third quarter of 2012.
First Nine Months 2013:
Revenue and Earnings
Net revenue for the first nine months of 2013 increased by 6% to $10,743 million (+7% at constant currencies) compared to the first nine months of 2012.
Operating income (EBIT) for the first nine months of 2013 decreased by 4% to $1,595 million compared to $1,659 million in the first nine months of 2012. Adjusted for special items related to the acquisition of Liberty Dialysis Holdings Inc. and the impact from sequestration the operating income for the first nine months of 2013 decreased by 1% to $1,625 million compared to $1,645 million for the first nine months of 2012.
Net interest expense for the first nine months of 2013 was $310 million compared to $311 million for the first nine months of 2012.
For the first nine months of 2013, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA was $761 million, down by 18% from the corresponding number of $930 million for the first nine months of 2012. Adjusted for the net of tax effects of the special items mentioned above, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the first nine months of 2013 was $783 million as compared to $784 million for the first nine months of 2012.
Income tax expense for the first nine months of 2013 was $421 million which translates into an effective tax rate of 32.8%. This compares to income tax expense of $462 million and a tax rate of 31.1% for the first nine months of 2012.
In the first nine months of 2013, earnings per ordinary share (EPS) decreased by 18% to $2.50 compared to $3.05 for the first nine months of 2012. Adjusted for the special items mentioned above, EPS for the first nine months of 2013 remained
4
unchanged at $2.57 compared to the first nine months of 2012. The weighted average number of shares outstanding during the first nine months of 2013 was approximately 304.7 million.
Cash Flow
Cash from operations during the first nine months of 2013 was $1,446 million (representing 13.5% of revenue) compared to $1,467 million for the same period in 2012.
A total of $494 million in cash was spent for capital expenditures, net of disposals. Free cash flow before acquisitions for the first nine months of 2013 was $952 million compared to $1,029 million in the same period in 2012. A total of $279 million in cash was spent for acquisitions, net of divestitures. Free cash flow after acquisitions and divestitures was $673 million compared to a negative $528 million in the first nine months of last year.
Please refer to the attachments for a complete overview of the results for the third quarter and first nine months of 2013 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, 2013, Fresenius Medical Care treated 265,824 patients worldwide, which represents an increase of 4% compared to the previous year’s figure. North America provided dialysis treatments for 168,893 patients, an increase of 3% compared to the corresponding number for 2012. The International segment provided dialysis treatments for 96,931 patients, an increase of 4% over the prior year’s figure.
As of September 30, 2013, the company operated a total of 3,225 clinics worldwide, an increase of 3% compared to the corresponding number for 2012. The number of clinics is comprised of 2,116 clinics in North America (+3%) and 1,109 clinics in the International segment (+3%).
5
During the first nine months of 2013, Fresenius Medical Care delivered approximately 30.03 million dialysis treatments worldwide. This represents an increase of 5% compared to the previous year’s figure. North America accounted for 19.04 million treatments, an increase of 5%. The International segment delivered 10.99 million treatments, an increase of 4%.
Employees
As of September 30, 2013, Fresenius Medical Care had 89,282 employees (full-time equivalents) worldwide, compared to 86,153 employees at the end of 2012.
Debt/EBITDA ratio
The ratio of debt to earnings before interest, taxes, depreciation and amortization (EBITDA) slightly increased from 2.92 at the end of the second quarter of 2013 to 2.94 at the end of the third quarter of 2013.
Rating
Standard & Poor’s rates the company’s corporate credit as ‘BB+’, with a ‘positive’ outlook. Moody’s rates the company’s corporate credit as ‘Ba1’ with a ‘stable’ outlook. Fitch Ratings is currently reviewing Fresenius Medical Care`s ratings.
Share buy-back program
Fresenius Medical Care`s share buy-back program was completed on August 14, 2013. The company bought back a total number of approximately 7.5 million shares with an aggregate value of €385 million (approximately $500 million). The program was financed from cash flow and existing credit facilities.
6
Guidance for 2013 confirmed
The company expects revenue to grow to more than $14.6 billion in 2013, translating into a growth rate of more than 6%.
Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to be between $1.1 billion and $1.15 billion in 2013, likely at the low end of the range.
For 2013, the company expects to spend around $700 million on capital expenditures and around $500 million on acquisitions. The debt/EBITDA ratio is expected to be equal or below 3.0 by the end of 2013.
7
Conference Call
Fresenius Medical Care will hold a conference call to discuss the results of the third quarter and first nine months of 2013 on Tuesday, November 5, 2013, 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 2.3 million individuals worldwide. Through its network of 3,225 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatments for 265,824 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.
8
Fresenius Medical Care
Statement of earnings
| | Three months ended | | | | Nine months ended | | | |
| | September 30, | | | | September 30, | | | |
(in US$ thousands, except share data, unaudited) | | 2013 | | 2012 | | Change | | 2013 | | 2012 | | Change | |
| | | | | | | | | | | | | |
Revenue | | | | | | | | | | | | | |
Dialysis care | | 2,886,742 | | 2,674,893 | | 7.9 | % | 8,439,921 | | 7,894,374 | | 6.9 | % |
Less: patient service bad debt provision | | 73,590 | | 69,503 | | 5.9 | % | 205,137 | | 206,665 | | -0.7 | % |
Net dialysis care | | 2,813,152 | | 2,605,390 | | 8.0 | % | 8,234,784 | | 7,687,709 | | 7.1 | % |
Dialysis products | | 852,980 | | 812,548 | | 5.0 | % | 2,507,784 | | 2,406,957 | | 4.2 | % |
Total net revenue | | 3,666,132 | | 3,417,938 | | 7.3 | % | 10,742,568 | | 10,094,666 | | 6.4 | % |
| | | | | | | | | | | | | |
Cost of revenue | | 2,497,003 | | 2,305,627 | | 8.3 | % | 7,305,548 | | 6,785,972 | | 7.7 | % |
Gross profit | | 1,169,129 | | 1,112,311 | | 5.1 | % | 3,437,020 | | 3,308,694 | | 3.9 | % |
Selling, general and administrative | | 584,549 | | 522,177 | | 11.9 | % | 1,771,619 | | 1,614,625 | | 9.7 | % |
Gain on sale of dialysis clinics | | (597 | ) | (58 | ) | 945.1 | % | (9,397 | ) | (34,019 | ) | -72.4 | % |
Research and development | | 33,211 | | 27,867 | | 19.2 | % | 94,504 | | 83,327 | | 13.4 | % |
Income from equity method investees | | (5,294 | ) | (5,317 | ) | -0.4 | % | (14,518 | ) | (14,672 | ) | -1.1 | % |
Operating income (EBIT) | | 557,260 | | 567,642 | | -1.8 | % | 1,594,812 | | 1,659,433 | | -3.9 | % |
Investment gain | | — | | — | | | | — | | (139,600 | ) | | |
Interest income | | (8,740 | ) | (7,210 | ) | 21.2 | % | (25,982 | ) | (40,012 | ) | -35.1 | % |
Interest expense | | 111,912 | | 115,175 | | -2.8 | % | 336,434 | | 351,052 | | -4.2 | % |
Interest expense, net | | 103,172 | | 107,965 | | -4.4 | % | 310,452 | | 311,040 | | -0.2 | % |
Income before taxes | | 454,088 | | 459,677 | | -1.2 | % | 1,284,360 | | 1,487,993 | | -13.7 | % |
Income tax expense | | 148,259 | | 153,036 | | -3.1 | % | 420,873 | | 462,354 | | -9.0 | % |
Net income | | 305,829 | | 306,641 | | -0.3 | % | 863,487 | | 1,025,639 | | -15.8 | % |
Less: Net income attributable to noncontrolling interests | | 32,855 | | 36,779 | | -10.7 | % | 102,490 | | 95,942 | | 6.8 | % |
Net income attributable to shareholders of FMC AG & Co. KGaA | | 272,974 | | 269,862 | | 1.2 | % | 760,997 | | 929,697 | | -18.1 | % |
| | | | | | | | | | | | | |
Operating income (EBIT) | | 557,260 | | 567,642 | | -1.8 | % | 1,594,812 | | 1,659,433 | | -3.9 | % |
Depreciation and amortization | | 164,279 | | 152,212 | | 7.9 | % | 479,433 | | 446,463 | | 7.4 | % |
EBITDA | | 721,539 | | 719,854 | | 0.2 | % | 2,074,245 | | 2,105,896 | | -1.5 | % |
| | | | | | | | | | | | | |
Earnings per ordinary share | | $ | 0.91 | | $ | 0.88 | | 2.6 | % | $ | 2.50 | | $ | 3.05 | | -18.2 | % |
Earnings per ordinary ADS | | $ | 0.45 | | $ | 0.44 | | 2.6 | % | $ | 1.25 | | $ | 1.53 | | -18.2 | % |
| | | | | | | | | | | | | |
Weighted average number of shares | | | | | | | | | | | | | |
Ordinary shares | | 301,310,149 | | 301,531,173 | | | | 302,158,886 | | 300,720,312 | | | |
Preference shares | | — | | 3,971,607 | | | | 2,590,857 | | 3,968,082 | | | |
| | | | | | | | | | | | | |
In percent of revenue | | | | | | | | | | | | | |
Cost of revenue | | 68.1 | % | 67.5 | % | | | 68.0 | % | 67.2 | % | | |
Gross profit | | 31.9 | % | 32.5 | % | | | 32.0 | % | 32.8 | % | | |
Selling, general and administrative | | 15.9 | % | 15.3 | % | | | 16.5 | % | 16.0 | % | | |
Gain on sale of dialysis clinics | | 0.0 | % | 0.0 | % | | | -0.1 | % | -0.3 | % | | |
Research and development | | 0.9 | % | 0.8 | % | | | 0.9 | % | 0.8 | % | | |
Income from equity method investees | | -0.1 | % | -0.2 | % | | | -0.1 | % | -0.1 | % | | |
Operating income (EBIT) | | 15.2 | % | 16.6 | % | | | 14.8 | % | 16.4 | % | | |
Investment gain | | — | | — | | | | — | | -1.4 | % | | |
Interest expense, net | | 2.8 | % | 3.2 | % | | | 2.9 | % | 3.1 | % | | |
Income before taxes | | 12.4 | % | 13.4 | % | | | 12.0 | % | 14.7 | % | | |
Income tax expense | | 4.0 | % | 4.5 | % | | | 3.9 | % | 4.6 | % | | |
Net income attributable to noncontrolling interests | | 0.9 | % | 1.1 | % | | | 1.0 | % | 1.0 | % | | |
Net income attributable to shareholders of FMC AG & Co. KGaA | | 7.4 | % | 7.9 | % | | | 7.1 | % | 9.2 | % | | |
| | | | | | | | | | | | | |
EBITDA | | 19.7 | % | 21.1 | % | | | 19.3 | % | 20.9 | % | | |
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Fresenius Medical Care
Segment and other information
| | Three months ended | | | | Nine months ended | | | |
| | September 30, | | | | September 30, | | | |
(in US$ million, except employees, unaudited) | | 2013 | | 2012 | | Change | | 2013 | | 2012 | | Change | |
| | | | | | | | | | | | | |
Net revenue | | | | | | | | | | | | | |
North America | | 2,436 | | 2,249 | | 8.3 | % | 7,099 | | 6,602 | | 7.5 | % |
International | | 1,222 | | 1,163 | | 5.0 | % | 3,619 | | 3,470 | | 4.3 | % |
Corporate | | 8 | | 6 | | 36.1 | % | 25 | | 23 | | 11.7 | % |
Total net revenue | | 3,666 | | 3,418 | | 7.3 | % | 10,743 | | 10,095 | | 6.4 | % |
| | | | | | | | | | | | | |
Operating income (EBIT) | | | | | | | | | | | | | |
North America | | 416 | | 420 | | -1.1 | % | 1,178 | | 1,199 | | -1.8 | % |
International | | 204 | | 195 | | 4.7 | % | 597 | | 597 | | 0.0 | % |
Corporate | | (63 | ) | (47 | ) | 30.9 | % | (181 | ) | (137 | ) | 31.6 | % |
Total operating income (EBIT) | | 557 | | 568 | | -1.8 | % | 1,595 | | 1,659 | | -3.9 | % |
| | | | | | | | | | | | | |
Operating income in percent of revenue | | | | | | | | | | | | | |
North America | | 17.1 | % | 18.7 | % | | | 16.6 | % | 18.2 | % | | |
International | | 16.7 | % | 16.8 | % | | | 16.5 | % | 17.2 | % | | |
Total | | 15.2 | % | 16.6 | % | | | 14.8 | % | 16.4 | % | | |
| | | | | | | | | | | | | |
Employees | | | | | | | | | | | | | |
Full-time equivalents | | | | | | | | 89,282 | | 85,368 | | | |
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Fresenius Medical Care
Reconciliation of non U.S. GAAP
financial measures to the most directly
comparable U.S. GAAP financial measures
| | Three months ended | | | | Nine months ended | | | |
| | September 30, | | | | September 30, | | | |
(in US$ million, unaudited) | | 2013 | | 2012 | | Change | | 2013 | | 2012 | | Change | |
| | | | | | | | | | | | | |
EBIT, as reported | | 557 | | 568 | | -1.8 | % | 1,595 | | 1,659 | | -3.9 | % |
Special items related to Liberty acquisition 1) | | — | | — | | | | (8 | ) | (14 | ) | | |
Sequestration impact | | 19 | | — | | | | 38 | | — | | | |
EBIT, adjusted | | 576 | | 568 | | 1.5 | % | 1,625 | | 1,645 | | -1.2 | % |
| | | | | | | | | | | | | |
Income before taxes, as reported | | 454 | | 460 | | -1.2 | % | 1,285 | | 1,488 | | -13.7 | % |
Special items related to Liberty acquisition 2) | | — | | — | | | | (8 | ) | (162 | ) | | |
Sequestration impact | | 19 | | — | | | | 38 | | — | | | |
Income before taxes, adjusted | | 473 | | 460 | | 2.9 | % | 1,315 | | 1,326 | | -0.8 | % |
| | | | | | | | | | | | | |
Income tax expense, as reported | | 148 | | 153 | | -3.1 | % | 421 | | 462 | | -9.0 | % |
Special items related to Liberty acquisition 3) | | — | | — | | | | (5 | ) | (16 | ) | | |
Sequestration impact | | 7 | | — | | | | 13 | | — | | | |
Income tax expense, adjusted | | 155 | | 153 | | 1.3 | % | 429 | | 446 | | -3.7 | % |
| | | | | | | | | | | | | |
Net income attributable to shareholders of FMC AG & Co. KGaA, as reported | | 273 | | 270 | | 1.2 | % | 761 | | 930 | | -18.1 | % |
Special items related to Liberty acquisition 4) | | — | | — | | | | (3 | ) | (146 | ) | | |
Sequestration impact | | 12 | | — | | | | 25 | | — | | | |
Net income attributable to shareholders of FMC AG & Co. KGaA, adjusted | | 285 | | 270 | | 5.6 | % | 783 | | 784 | | -0.1 | % |
1) Legal, consulting and other expenses and gain on sale of clinics.
2) Legal, consulting and other expenses, gain on sale of clinics, gain on retirement of loan receivable and investment gain.
3) Tax benefit/ expense on legal, consulting and other expenses, gain on sale of clinics and gain on retirement of loan receivable.
4) Net of tax effects of legal, consulting and other expenses, gain on sale of clinics, gain on retirement of loan receivable and investment gain.
11
Fresenius Medical Care
Reconciliation of non U.S. GAAP
financial measures to the most directly
comparable U.S. GAAP financial measures
| | Three months ended | | Nine months ended | |
| | September 30, | | September 30, | |
(in US$ million, unaudited) | | 2013 | | 2012 | | 2013 | | 2012 | |
| | | | | | | | | |
Segment information North America | | | | | | | | | |
Net revenue | | 2,436 | | 2,249 | | | | | |
Costs of revenue and research and development | | 1,690 | | 1,528 | | | | | |
Selling, general and administrative | | 334 | | 308 | | | | | |
Gain on sale of dialysis clinics | | — | | — | | | | | |
Income from equity method investees | | (4 | ) | (7 | ) | | | | |
Costs of revenue and operating expenses | | 2,020 | | 1,829 | | | | | |
| | | | | | | | | |
Operating income (EBIT) | | 416 | | 420 | | | | | |
| | | | | | | | | |
In percent of revenue | | 17.1 | % | 18.7 | % | | | | |
| | | | | | | | | |
Dialysis products revenue incl. and excl. internal sales | | | | | | | | | |
North America | | | | | | | | | |
Dialysis products revenue incl. internal sales | | 422 | | 398 | | | | | |
Less internal sales | | (210 | ) | (196 | ) | | | | |
Dialysis products external sales | | 212 | | 202 | | | | | |
International | | | | | | | | | |
Dialysis products revenue incl. internal sales | | 758 | | 717 | | | | | |
Less internal sales | | (125 | ) | (112 | ) | | | | |
Dialysis products external sales | | 633 | | 605 | | | | | |
| | | | | | | | | |
Reconciliation of cash flow from operating activities to EBITDA 1) | | | | | | | | | |
Total EBITDA | | | | | | 2,074 | | 2,106 | |
Interest expense, net | | | | | | (310 | ) | (311 | ) |
Income tax expense | | | | | | (421 | ) | (462 | ) |
Change in working capital and other non-cash items | | | | | | 103 | | 134 | |
Net cash provided by operating activities | | | | | | 1,446 | | 1,467 | |
| | | | | | | | | |
Annualized EBITDA 2) | | | | | | | | | |
Operating income (EBIT) last twelve months | | | | | | 2,154 | | 2,329 | |
Depreciation and amortization last twelve months | | | | | | 636 | | 614 | |
Non-cash charges | | | | | | 76 | | 61 | |
Annualized EBITDA | | | | | | 2,866 | | 3,004 | |
1) EBITDA is the basis for determining compliance with certain covenants in Fresenius Medical Care’s long-term debt instruments.
2) EBITDA 2012: Pro forma numbers including Liberty Dialysis Holdings Inc., after FTC mandated divestitures.
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Fresenius Medical Care
Balance sheet
| | September 30, | | December 31, | |
(in US$ million) | | 2013 | | 2012 | |
| | (unaudited) | | (audited) | |
| | | | | |
Assets | | | | | |
Current assets | | 6,044 | | 6,127 | |
Intangible assets | | 12,192 | | 12,132 | |
Other non-current assets | | 4,299 | | 4,067 | |
Total assets | | 22,535 | | 22,326 | |
| | | | | |
Liabilities and equity | | | | | |
Current liabilities | | 3,390 | | 3,170 | |
Long-term liabilities | | 9,406 | | 9,426 | |
Noncontrolling interests subject to put provisions | | 641 | | 523 | |
Total equity | | 9,098 | | 9,207 | |
Total liabilities and equity | | 22,535 | | 22,326 | |
| | | | | |
Equity/assets ratio | | 40 | % | 41 | % |
| | | | | |
Debt | | | | | |
Short-term borrowings | | 112 | | 118 | |
Short-term borrowings from related parties | | 73 | | 4 | |
Current portion of long-term debt and capital lease obligations | | 472 | | 335 | |
Long-term debt and capital lease obligations, less current portion | | 7,772 | | 7,841 | |
| | | | | |
Total debt | | 8,429 | | 8,298 | |
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Fresenius Medical Care
Cash flow statement
| | Nine months ended | |
| | September 30, | |
(in US$ million, unaudited) | | 2013 | | 2012 | |
| | | | | |
Operating activities | | | | | |
Net income | | 864 | | 1,026 | |
Depreciation / amortization | | 479 | | 447 | |
Investment gain | | _ | | (140 | ) |
Change in working capital and other non-cash items | | 103 | | 134 | |
Cash flow from operating activities | | 1,446 | | 1,467 | |
| | | | | |
Investing activities | | | | | |
Purchases of property, plant and equipment | | (512 | ) | (450 | ) |
Proceeds from sale of property, plant and equipment | | 18 | | 12 | |
Capital expenditures, net | | (494 | ) | (438 | ) |
Free cash flow | | 952 | | 1,029 | |
| | | | | |
Acquisitions, net of cash acquired, and purchases of intangible assets | | (297 | ) | (1,789 | ) |
Proceeds from divestitures | | 18 | | 232 | |
Acquisitions, net of divestitures | | (279 | ) | (1,557 | ) |
Free cash flow after investing activities | | 673 | | (528 | ) |
| | | | | |
Financing activities | | | | | |
Change in accounts receivable securitization program | | 37 | | 13 | |
Change in intercompany debt | | 11 | | 66 | |
Change in other debt | | 10 | | 903 | |
Proceeds from exercise of stock options | | 75 | | 95 | |
Proceeds from conversion of preference shares into ordinary shares | | 35 | | — | |
Purchase of treasury stock | | (505 | ) | — | |
Distributions to noncontrolling interests | | (162 | ) | (132 | ) |
Contributions from noncontrolling interests | | 52 | | 15 | |
Dividends paid | | (296 | ) | (272 | ) |
Cash flow from financing activities | | (743 | ) | 688 | |
| | | | | |
Effects of exchange rates on cash | | (16 | ) | 2 | |
Net increase (decrease) in cash | | (86 | ) | 162 | |
| | | | | |
Cash at beginning of period | | 688 | | 457 | |
Cash at end of period | | 602 | | 619 | |
14
Fresenius Medical Care
Quarterly performance scorecard - revenue
Three months ended September 30, | | 2013 | | cc | | 2012 | | cc | |
(in US$ thousands, except per-treatment revenue) | | | | | | | | | |
(unaudited) | | | | | | | | | |
| | | | | | | | | |
North America | | | | | | | | | |
Net revenue | | 2,436,141 | | | | 2,248,724 | | | |
Growth year-over-year | | 8.3 | % | | | 12.9 | % | | |
| | | | | | | | | |
Net dialysis care | | 2,224,030 | | | | 2,046,921 | | | |
Growth year-over-year | | 8.7 | % | | | 14.5 | % | | |
U.S. per treatment | | 359 | | | | 349 | | | |
Per treatment | | 352 | | | | 342 | | | |
Sequential growth | | 1.3 | % | | | -0.6 | % | | |
Growth year-over-year | | 2.9 | % | | | 1.5 | % | | |
| | | | | | | | | |
Dialysis products | | | | | | | | | |
Incl. internal sales | | 422,459 | | | | 397,511 | | | |
Growth year-over-year | | 6.3 | % | | | -1.0 | % | | |
External sales | | 212,111 | | | | 201,802 | | | |
Growth year-over-year | | 5.1 | % | | | -1.1 | % | | |
| | | | | | | | | |
International | | | | | | | | | |
Net revenue | | 1,222,026 | | | | 1,163,362 | | | |
Growth year-over-year | | 5.0 | % | 5.9 | % | -2.0 | % | 7.3 | % |
| | | | | | | | | |
Net dialysis care | | 589,122 | | | | 558,468 | | | |
Growth year-over-year | | 5.5 | % | 8.3 | % | -3.6 | % | 5.6 | % |
Per treatment | | 156 | | 160 | | 158 | | 173 | |
Sequential growth | | -2.0 | % | | | -0.8 | % | | |
Growth year-over-year | | -1.1 | % | 1.5 | % | -7.2 | % | 1.7 | % |
| | | | | | | | | |
Dialysis products | | | | | | | | | |
Incl. internal sales | | 757,828 | | | | 717,388 | | | |
Growth year-over-year | | 5.6 | % | 5.0 | % | -0.8 | % | 9.0 | % |
External sales | | 632,903 | | | | 604,894 | | | |
Growth year-over-year | | 4.6 | % | 3.6 | % | -0.5 | % | 9.0 | % |
cc = Constant currency
Changes in revenue include the impact of changes in foreign currency exchange rates. We use the non-GAAP financial measure “at constant exchange rates” in our filings to show changes in our revenue without giving effect to period-to-period currency fluctuations. Under U.S. GAAP, revenues received in local (non-U.S. dollar) currency are translated into U.S. dollars at the average exchange rate for the period presented. When we use the term “constant currency,” it means that we have translated local currency revenues for the current reporting period into U.S. dollars using the same average foreign currency exchange rates for the conversion of revenues into U.S. dollars that we used to translate local currency revenues for the comparable reporting period of the prior year. We then calculate the change, as a percentage, of the current period revenues using the prior period exchange rates versus the prior period revenues. This resulting percentage is a non-GAAP measure referring to a change as a percentage “at constant currency rates.”
We believe that revenue growth is a key indication of how a company is progressing from period to period and that the non-GAAP financial measure constant currency is useful to investors, lenders, and other creditors because such information enables them to gauge the impact of currency fluctuations on a company’s revenue from period to period. However, we also believe that the usefulness of data on constant currency period-over-period changes is subject to limitations, particularly if the currency effects that are eliminated constitute a significant element of our revenue and significantly impact our performance. We therefore limit our use of constant currency period-over-period changes to a measure for the impact of currency fluctuations on the translation of local currency revenue into U.S. dollars. We do not evaluate our results and performance without considering both constant currency period-over-period changes in non-U.S. GAAP revenue on the one hand and changes in revenue prepared in accordance with U.S. GAAP on the other. We caution the readers of this report to follow a similar approach by considering data on constant currency period-over-period changes only in addition to, and not as a substitute for or superior to, changes in revenue prepared in accordance with U.S. GAAP. We present the fluctuation derived from U.S. GAAP revenue next to the fluctuation derived from non-GAAP revenue. Because the reconciliation is inherent in the disclosure, we believe that a separate reconciliation would not provide any additional benefit.
Fresenius Medical Care
Quarterly performance scorecard - dialysis care volume
Three months ended September 30, | | 2013 | | 2012 | |
(unaudited) | | | | | |
| | | | | |
North America | | | | | |
Number of treatments | | 6,509,064 | | 6,178,211 | |
Treatments per day | | 82,393 | | 79,208 | |
Per day sequential growth | | 0.7 | % | 0.6 | % |
Per day year-over-year growth | | 4.0 | % | 14.0 | % |
Same market growth year-over-year | | 3.5 | % | 3.7 | % |
| | | | | |
International | | | | | |
Number of treatments | | 3,776,091 | | 3,538,895 | |
Same market growth year-over-year | | 4.8 | % | 2.0 | % |
15
Fresenius Medical Care
Quarterly performance scorecard - expenses
Three months ended September 30, | | 2013 | | 2012 | |
(unaudited) | | | | | |
| | | | | |
North America | | | | | |
Costs of revenue and operating expenses, gain on sale of dialysis clinics and income from equity method investees | | | | | |
In percent of revenue | | 82.9 | % | 81.3 | % |
Selling, general and administrative | | | | | |
In percent of revenue | | 13.7 | % | 13.7 | % |
U.S. Dialysis care operating expenses/treatment (in US$) | | 293 | | 281 | |
Sequential growth | | 0.8 | % | 0.5 | % |
Growth year-over-year | | 4.3 | % | 0.9 | % |
Dialysis care operating expenses/treatment (in US$) | | 287 | | 276 | |
Sequential growth | | 0.6 | % | 0.4 | % |
Growth year-over-year | | 4.1 | % | 0.8 | % |
| | | | | |
Total Group | | | | | |
Costs of revenue and operating expenses, gain on sale of dialysis clinics and income from equity method investees | | | | | |
In percent of revenue | | 84.8 | % | 83.4 | % |
Selling, general and administrative | | | | | |
In percent of revenue | | 15.9 | % | 15.3 | % |
Effective tax rate | | 32.6 | % | 33.3 | % |
Fresenius Medical Care
Quarterly performance scorecard - cash flow/investing activities
Three months ended September 30, | | 2013 | | 2012 | |
(in US$ thousands, except number of de novos) | | | | | |
(unaudited) | | | | | |
| | | | | |
Total Group | | | | | |
Operating cash flow | | 605,483 | | 535,414 | |
In percent of revenue | | 16.5 | % | 15.7 | % |
| | | | | |
Free cash flow before acquisitions | | 430,436 | | 370,503 | |
In percent of revenue | | 11.7 | % | 10.8 | % |
| | | | | |
Acquisitions and investments, net of divestitures | | 195,487 | | 37,111 | |
| | | | | |
Capital expenditures, net | | 175,047 | | 164,911 | |
In percent of revenue | | 4.8 | % | 4.8 | % |
| | | | | |
Maintenance | | 105,424 | | 93,453 | |
In percent of revenue | | 2.9 | % | 2.7 | % |
| | | | | |
Growth | | 69,623 | | 71,458 | |
In percent of revenue | | 1.9 | % | 2.1 | % |
| | | | | |
Number of de novos | | 22 | | 18 | |
North America | | 14 | | 11 | |
International | | 8 | | 7 | |
Fresenius Medical Care
Quarterly performance scorecard - balance sheet
September 30, | | 2013 | | 2012 | |
(unaudited) | | | | | |
| | | | | |
Total Group | | | | | |
Debt (in US$ million) | | 8,429 | | 8,441 | |
Debt/EBITDA | | 2.94 | | 2.81 | |
| | | | | |
North America | | | | | |
Days sales outstanding | | 51 | | 53 | |
| | | | | |
International | | | | | |
Days sales outstanding | | 114 | | 120 | |
16
Fresenius Medical Care
Quarterly performance scorecard
Three months ended September 30, | | 2013 | | 2012 | |
| | | | | |
North America (U.S.) | | | | | |
Clinical Performance | | | | | |
Single Pool Kt/v > 1.2 | | 97 | % | 97 | % |
Hemoglobin = 10-12 g/dl | | 76 | % | 74 | % |
Hemoglobin = 10-13 g/dl | | 81 | % | 83 | % |
Calcium = 8.4-10.2 mg/dl | | 84 | % | 84 | % |
Albumin > 3.5 g/dl1) | | 85 | % | 85 | % |
No catheter (> 90 days) | | 84 | % | 82 | % |
Phosphate < 5.5 mg/dl | | 66 | % | 66 | % |
Hospitalization days per patient
(12 months ending September 30) | | 9.4 | | 9.7 | |
| | | | | |
Demographics | | | | | |
Average age (in years) | | 62 | | 62 | |
Average time on dialysis (in years) | | 4.0 | | 3.9 | |
Average body weight (in kg) | | 82 | | 81 | |
Prevalence of diabetes | | 58 | % | 58 | % |
| | | | | |
Europe, Middle East and Africa | | | | | |
Clinical Performance | | | | | |
Single Pool Kt/v > 1.2 | | 96 | % | 96 | % |
Hemoglobin = 10-12 g/dl | | 59 | % | 59 | % |
Hemoglobin = 10-13 g/dl | | 78 | % | 78 | % |
Calcium = 8.4-10.2 mg/dl | | 79 | % | 77 | % |
Albumin > 3.5 g/dl1) | | 88 | % | 87 | % |
No catheter (> 90 days) | | 85 | % | 85 | % |
Phosphate < 5.5 mg/dl | | 76 | % | 78 | % |
Hospitalization days per patient
(12 months ending September 30) | | 9.3 | | 9.3 | |
| | | | | |
Demographics | | | | | |
Average age (in years) | | 64 | | 64 | |
Average time on dialysis (in years) | | 5.3 | | 5.3 | |
Average body weight (in kg) | | 72 | | 71 | |
Prevalence of diabetes | | 28 | % | 27 | % |
1) International standard BCR CRM470
17
