Fresenius Medical Care Ag · XETR:FME
Fresenius Medical Care — Q3 2022 Earnings Presentation
32 slides from Fresenius Medical Care's earnings presentation, 2022
Slide 1: Analyst Presentation Q3 2022
Analyst Presentation Q3 2022 © Copyright
Slide 2: Safe harbor statement
Safe harbor statement: This presentation includes certain forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Act of 1934, as amended. Forward-looking statements are inherently subject to risks and uncert
Slide 3: Q3 2022 business highlights
▪ Business development continues to be strongly impacted by highly uncertain macroeconomic environment driving wage and general cost inflation in all reporting segments ▪ Impacts of improvements in North American 3 Health Care Services operations delayed ▪ COVID-19-related excess mortality in line w
Slide 4: Agenda: Business Update
1 Business Update Agenda 2 Financials 3 Outlook
Slide 5: Bold interventions to drive business turnaround
Bold interventions to drive business turnaround and to position FME for future sustainable and profitable growth Business turnaround and new operating model Address performance issues in U.S. through improved employee retention, Care Delivery optimized clinic footprint, cost structure and operationa
Slide 6: Q3 2022 | Challenging environment weighing on business development
Q3 2022 | Challenging environment weighing on business development Q3 2022 Q3 2021 Growth Growth € million € million in % in %cc ▪ Top-line growth in Revenue 5,096 4,441 15 3 both Health Care Services and Health Care Products ▪ Unprecedented Operating income 472 505 (7) (17) labor market situation i
Slide 7: Q3 2022 | Currency effects support revenue development
Q3 2022 | Currency effects support revenue development HEALTH CARE PRODUCTS HEALTH CARE SERVICES Revenue: €4,082 M Revenue: €1,014 M +16% | +2% cc | +2% organic +11% | +4% cc | +4% organic ▪ Organic growth in EMEA, Asia-Pacific and Latin ▪ Higher sales of in-center disposables and renal America, par
Slide 8: Agenda: Financials
1 Business Update Agenda 2 Financials 3 Outlook
Slide 9: Q3 2022 | Revenue expansion driven by currency effects
Q3 2022 | Revenue expansion driven by currency effects North America € million North America | 70% Revenue 3,556 15% EMEA | 14% Organic growth (2%) Asia-Pacific | 11% Latin America | 5% € 5,096 M EMEA € million +2% Revenue 720 7% (Organic) Organic growth 8% Asia-Pacific € million Revenue 565 13% Org
Slide 10: Q3 2022 | Operating income margin development
Q3 2022 | Operating income margin development 11.4% (1.2pp) (1.5pp) 0.6pp 9.2% (1.0pp) 1.1pp 9.3% (1.5pp) 1.7pp (0.3pp) Q3 2021 Business Labor cost Macro- Ballot Governmental FME25 savings Q3 2022 FME25 costs Net gain Q3 2022 operating growth, incl. increase >3% economic initiatives support applied
Slide 11: Q3 2022 | Stable free cash flow development
Q3 2022 | Stable free cash flow development Q3 2022 Q3 2021 € million € million Operating cash flow 658 692 Capital expenditures, net (157) (181) Free cash flow 501 511 Free cash flow after investing activities 557 391 ▪ Cash flow development impacted by lower net income ▪ Lower recoupment Net lever
Slide 12: Solid credit profile
Solid credit profile Long-term debt maturity profile1 Rating outlook stable €m 2,500 2,000 S&P 1,500 872 BBB 1,000 200 Outlook stable 25 1,693 513 500 1,100 650 750 750 410 500 500 Moody’s 0 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 EUR Bonds USD Bonds Schuldschein Loans Baa3 Outlook stable
Slide 13: Agenda: Outlook
1 Business Update Agenda 2 Financials 3 Outlook
Slide 14: FY 2022 | 9 month development for Tail- & Headwinds
FY 2022 | 9 month development for Tail- & Headwinds € 60m additional impact on operating income in FY 2022 Previous Negative impact on operating income (€m) assumption 220 230 Macro-economic inflationary environment 175 and elevated supply chain costs 100 100 COVID-19-related excess mortality 84 100
Slide 15: FY 2022 | Revised guidance
FY 2022 | Revised guidance REVENUE | FY2022 NET INCOME | FY2022 Constant currency growth at1 Constant currency decline at1 low-single digit high teens to mid-twenties percentage rate percentage range 2021: € 17,619m 2021: € 1,018m Excluding special items Special items include costs related to FME25,
Slide 16: FY 2022 | Assumptions for operating income
FY 2022 | Assumptions for operating income Assumptions FY2022 operating income: ▪ Macro-economic inflation and supply chain costs of around EUR 230m ▪ COVID-19: Impact of accumulated excess mortality of around EUR 100m ▪ U.S. labor costs are expected to be around EUR 100 m net of support from U.S. P
Slide 17: FY 2023 | Indicative Tail- & Headwinds
FY 2023 | Indicative Tail- & Headwinds Tailwinds Headwinds Business growth FME25 savings Provider Relief Labor costs contribution Funding 2022 Reduced PPE Ballot costs Macroeconomic Other non- costs 2022 environment recurring positive effects 2022 © │ Analyst Presentation Q3 2022 Page 17
Slide 18: Appendix
“ey” FRESENIUS Y MEDICAL CARE Appendix
Slide 19: Q3 2022 | Profit and Loss
Q3 2022 | Profit and Loss Q3 2022 Q3 2021 Growth Growth € million € million in % in %cc Revenue 5,096 4,441 15 3 Operating income 472 505 (7) (17) Operating income margin in % 9.3 11.4 Operating income excl. special items 470 513 (8) (18) Operating income margin in % excl. special items 9.2 11.6 Net
Slide 20: 9M 2022 | Profit and Loss
9M 2022 | Profit and Loss 9M 2022 9M 2021 Growth Growth € million € million in % in %cc Revenue 14,401 12,972 11 2 Operating income 1,160 1,403 (17) (24) Operating income margin in % 8.1 10.8 Operating income excl. special items 1,322 1,423 (7) (14) Operating income margin in % excl. special items 9
Slide 21: Q3 2022 | Health Care Services
Q3 2022 | Health Care Services Q3 2022 Q3 2021 Growth Growth Organic Same market € million € million in % in %cc growth treatment in % growth Revenue in % Health Care Services 4,082 3,530 16 2 2 (1) North America 3,269 2,810 16 (0) (1) (3) EMEA 377 346 9 8 8 1 Asia-Pacific 256 239 7 5 5 2 Latin Amer
Slide 22: Q3 2022 | Health Care Products
Q3 2022 | Health Care Products Q3 2022 Q3 2021 Growth Growth Organic growth € million € million in % in %cc in % Revenue Health Care Products 1,014 911 11 4 4 North America 287 270 6 (9) (9) EMEA 343 325 6 8 8 Asia-Pacific 309 262 18 9 9 Latin America 70 52 35 23 23 cc = at constant currency North A
Slide 23: 9M 2022 | Health Care Services
9M 2022 | Health Care Services 9M 2022 9M 2021 Growth Growth Organic Same market € million € million in % in %cc growth treatment in % growth Revenue in % Health Care Services 11,471 10,255 12 2 1 (1) North America 9,184 8,148 13 0 (1) (2) EMEA 1,083 1,020 6 7 6 (0) Asia-Pacific 730 694 5 3 3 2 Lati
Slide 24: 9M 2022 | Health Care Products
9M 2022 | Health Care Products 9M 2022 9M 2021 Growth Growth € million € million in % in %cc Organic growth Revenue in % Health Care Products 2,930 2,717 8 3 3 North America 837 783 7 (5) (5) EMEA 1,038 1,013 2 5 5 Asia-Pacific 858 764 12 5 5 Latin America 181 144 26 17 16 cc = at constant currency
Slide 25: Debt
Debt Reconciliation of non-IFRS financial measures to most directly comparable IFRS financial measures Q3 2022 FY 2021 FY 2020 € million € million € million Debt Short-term debt from unrelated parties 544 1,178 63 + Short-term debt from related parties 39 78 17 + Current portion of long-term debt 58
Slide 26: EBITDA
EBITDA Reconciliation of annualized adjusted EBITDA and net leverage ratio to the most directly comparable IFRS financial measures LTM Q3 2022 FY 2021 FY 2020 € million € million € million Net income 1,004 1,219 1,435 + Income tax expense 321 353 501 − Interest income (71) (73) (42) + Interest expen
Slide 27: 2021 base for 2022 targets, reconciliation adjustments
2021 base for 2022 targets, reconciliation adjustments FY 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2021 € million € million € million € million € million Revenue 17,619 4,210 4,320 4,441 4,647 Net income excl. special items 1,018 251 225 280 263 Reconciliation of non-IFRS financial measures to the most direc
Slide 28: Return on Invested Capital (ROIC)
Return on Invested Capital (ROIC) 12.4% rep. ▪ Long-term value creation based on accretive acquisitions and organic growth 8.6% ▪ 2018 positive impact 7.8% 8.0% adj. 8.0% adj. from Sound divestiture 7.1% 6.6%adj. ▪ 2019 negative impact from NxStage acquisition 6.1% rep. 5.1% adj. 5.8% rep. 4.2% adj.
Slide 29: Exchange rates, U.S. dialysis days per quarter, definitions
Exchange rates, U.S. dialysis days per quarter, definitions Exchange rates U.S. dialysis days per quarter 9M 2022 FY 2021 FY 2020 Q1 Q2 Q3 Q4 Full year €:USD Period end 0.975 1.133 1.227 2022 77 78 79 79 313 Average 1.064 1.182 1.142 2021 77 78 79 79 313 2020 77 78 79 79 313 €:CNY Period end 6.937 7
Slide 30: Patients, treatments, clinics
Patients, treatments, clinics as of September 30, 2022 as of September 30, 2021 Patients Treatments Clinics Patients Treatments Clinics North America 208,275 23,816,538 2,699 209,651 24,158,943 2,683 Growth in % (1) (1) 1 (1) (2) 2 EMEA 66,293 7,428,380 814 65,336 7,384,018 816 Growth in % 1 1 0 (3)
Slide 31: Conferences & Management
Financial calendar Date Event Reporting February 22, 2023 Report on 4th quarter and FY 2022: Earnings Release and Conference Call & AGM May 9, 2023 Report on 1st quarter 2023: Earnings Release and Conference Call May 16, 2023 Annual General Meeting November 8, 2022 UBS - Flagship European Conference
Slide 32: Contacts
Contacts FME Investor Relations Dr. Dominik Heger Robert Adolph Else-Kröner-Str. 1 Head of Investor Relations, Vice President 61352 Bad Homburg v. d. H. Strategic Development & Investor Relations Germany Communications | EVP Ticker: FME or FMS (NYSE/ADR) +49(0) 6172-609-2601 +49(0) 6172-609-2477 dom
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