Fresenius Medical Care Ag · XETR:FME
Fresenius Medical Care — Q2 2017 Earnings Presentation
35 slides from Fresenius Medical Care's earnings presentation, Aug 1, 2017
Slide 1: Q2 2017 Conference call
Q2 2017 Conference call | August 1, 2017 Rice Powell - CEO Mike Brosnan - CFO © │ Conference Call │ Q2 2017 1
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. The Company has based these forward-looking statements on current est
Slide 3: Agenda – Q2 2017
AGENDA – Q2 2017 Business update 1 Financials & outlook 2 Q&A 3 © │ Conference Call │ Q2 2017 3
Slide 4: Q2 2017: Solid growth trend continued
Q2 2017: Solid growth trend continued Employees +5% Treatments +4% Patients +5% Clinics +5% 112,163 12,011,177 315,305 3,690 © │ Conference Call │ Q2 2017 4
Slide 5: H1 2017: Results in line with FY guidance
H1 2017: Results in line with FY guidance H1 2017 H1 2016 Growth Growth € million € million in % in %cc Revenue 9,019 7,942 14 11 Revenue1 8,921 7,942 12 9 (excl. VA agreement) Operating profit (EBIT) 1,235 1,068 16 13 EBIT1 1,144 1,068 7 5 (excl. VA agreement) Net income2 577 477 21 19 Net income1,
Slide 6: Q2 2017: Net income impacted by headwinds
Q2 2017: Net income impacted by headwinds Q2 2017 Q2 2016 Growth Growth € million € million in % in %cc Revenue 4,471 4,026 11 9 Revenue1 4,473 4,026 11 9 (excl. VA agreement) Operating profit (EBIT) 583 571 2 0 EBIT1 591 571 4 2 (excl. VA agreement) Net income2 269 264 2 0 Net income1,2 274 264 4 2
Slide 7: Q2 2017: Top-line growth across all regions
Q2 2017: Top-line growth across all regions North America € million EMEA € million Revenue 3,225 +11% Revenue 642 +7% Organic growth +5% Organic growth +4% Asia-Pacific € million Latin America € million Revenue 417 +19% Revenue 183 +18% Organic growth +11% Organic growth +15% North America with 4
Slide 8: Q2 2017: Health Care Services – strong growth
Q2 2017: Health Care Services – strong growth Same Organic market Q2 2017 Q2 2016 Growth Growth growth growth Revenue € million € million in % in %cc in % in % Total Health Care 3,649 3,273 11 9 6 3 North America 3,017 2,712 11 8 6 3 of which Care Coordination 698 528 32 29 19 - EMEA 310 293 6 5 2 3
Slide 9: Q2 2017: Quality outcomes remain on high level
Q2 2017: Quality outcomes remain on high level North America EMEA Latin America Asia-Pacific Q2 Q1 Q2 Q1 Q2 Q1 Q2 Q1 % of patients1 2017 2017 2017 2017 2017 2017 2017 2017 Kt/V ≥ 1.2 98 98 95 95 93 92 96 96 No catheter (>90 days) 84 84 81 81 81 81 88 89 Hemoglobin = 10 – 12 g/dl 73 73 78 79 51 51 58
Slide 10: Q2 2017: Dialysis Products show good demand
Q2 2017: Dialysis Products show good demand Q2 2017 Q2 2016 Growth Growth € million € million in % in %cc Total Health Care Products 822 753 9 8 Dialysis Products 801 741 8 7 North America 208 204 2 0 EMEA 311 294 6 6 Asia-Pacific 226 194 17 15 Latin America 52 44 17 10 Non-Dialysis Products 21 12 7
Slide 11: H1 2017: Highlights
H1 2017: Highlights Performance H1 in-line with FY 2017 guidance All regions contributed to a solid performance in H1 Value-based care programs continue to develop successfully: BPCI1 program and ESCO2 continue to deliver savings Closing of Cura acquisition contributes to Care Coordination t
Slide 12: Agenda – Q2 2017
AGENDA – Q2 2017 Business update 1 Financials & outlook 2 Q&A 3 © │ Conference Call │ Q2 2017 12
Slide 13: H1 2017: Development in-line with FY 2017 targets
H1 2017: Development in-line with FY 2017 targets Excl. VA agreement H1 2017 H1 2016 Growth H1 2017 H1 2016 Growth Growth € million € million in % € million € million in % in %cc Net revenue 9,019 7,942 14 8,921 7,942 12 9 Operating income 1,235 1,068 16 1,144 1,068 7 5 (EBIT) EBIT-margin in % 13.7
Slide 14: H1 2017: revenue and net income reconciliation
H1 2017: revenue and net income reconciliation Revenue in € million 9,019 98 8,683 238 +2% +3% 741 7,942 +9% H1 2016 Business H1 2017 FX VA agreement H1 2017 growth (cc) (cc, excl. VA) Net income in € million 577 54 513 10 477 36 +11% +2% +8% H1 2016 Business H1 2017 FX VA agreement H1 2017 growth (
Slide 15: Q2 2017: Net income impacted by headwinds
Q2 2017: Net income impacted by headwinds Excl. VA agreement Q2 2017 Q2 2016 Growth Q2 2017 Q2 2016 Growth Growth € million € million in % € million € million in % in %cc Net revenue 4,471 4,026 11 4,473 4,026 11 9 Operating income 583 571 2 591 571 4 2 (EBIT) EBIT-margin in % 13.0 14.2 (1.2) pp 13.
Slide 16: Q2 2017: revenue and net income reconciliation
Q2 2017: revenue and net income reconciliation Revenue in € million 4,471 -2 4,379 94 -0% +2% 353 4,026 +9% Q2 2016 Business Q2 2017 FX VA agreement Q2 2017 growth (cc) (cc, excl. VA) Net income in € million 270 4 -5 269 264 6 +2% -2% +2% Q2 2016 Business Q2 2017 FX VA agreement Q2 2017 growth (cc)
Slide 17: Q2 2017: regional margin profile
Q2 2017: regional margin profile North America (71% of EBIT1) Dialysis business margin of 18.2% reflect – higher expense for personnel, supplies and rent 456 470 – gain from a consent agreement on certain pharmaceuticals, lower costs for 15.7% 14.6% pharmaceuticals and lower bad debt expenses Ca
Slide 18: Q2 2017: regional margin profile
Q2 2017: regional margin profile Asia-Pacific (11% of EBIT1) Operating profit margin development 78 impacted by unfavourable foreign currency 67 transaction losses, partially offset by business growth in China 19.0% 18.7% Care Coordination performance impacted by integration cost and building up
Slide 19: Q2 2017: Strong cash flow generation
Q2 2017: Strong cash flow generation Q2 2017 Q2 2016 H1 20171 H1 2016 in € million in € million in € million in € million Operating cash flow 883 604 1,052 767 in % of revenue 19.7 15.0 11.7 9.7 Capital expenditures, net (193) (223) (388) (446) Free cash flow 690 381 664 321 Free cash flow, after ac
Slide 20: Successful refinancing of credit agreement
Successful refinancing of credit agreement Amended and extended credit agreement in the amount of approximately USD 3.9 billion denominated in U.S. Dollar and Euro Maturities in 2020 and 2022 Simplified, unsecured structure consistent with the investment grade rating of the company and lower t
Slide 21: Outlook 2017 confirmed
Outlook 2017 confirmed Guidance 2017 2016 base (IFRS/€m) Revenue growth 8 to 10% 16,570 Net income growth 7 to 9% 1,144 Assumptions: Numbers at constant currency Guidance 2017 excluding effect from agreement with United States Departments of Veterans Affairs and Justice Net income refers to ne
Slide 22: Agenda – Q2 2017
AGENDA – Q2 2017 Business update 1 Financials & outlook 2 Q&A 3 © │ Conference Call │ Q2 2017 22
Slide 23: Your questions are welcome
Your questions are welcome Conference call | August 1, 2017 Rice Powell - CEO Mike Brosnan - CFO © │ Conference Call │ Q2 2017 23
Slide 24: Attachment 1
Attachment 1 Reconciliation of non-IFRS financial measures to the most comparable IFRS measure € million Debt FY 2015 FY 2016 Q2 2017 Short term debt 101 572 970 + Short term debt from related parties 18 3 18 + Current portion of long-term debt and 610 724 670 capital lease obligations + Long-term d
Slide 25: Attachment 2
Attachment 2 Reconciliation of non-IFRS financial measures to the most comparable IFRS measure € million Cash Flow Q2 2016 Q2 2017 H1 2016 H1 2017 Acquisitions, investments and net purchases of (190) (191) (273) (352) intangible assets + Proceeds from divestitures 132 9 132 10 = Acquisitions and inv
Slide 26: Attachment 3
Attachment 3 Reconciliation of non IFRS financial measures to the most directly comparable IFRS financial measures Operating performance excluding VA agreement – basis for guidance 2017 € million Q2 2016 Q2 2017 H1 2016 H1 2017 Revenue 4,026 4,471 7,942 9,019 VA agreement - (2) - 98 Revenue excludin
Slide 27: Day sales outstanding (DSO)
Day sales outstanding (DSO) in days 160 140 Latin America 120 EMEA 100 Asia-Pacific 80 71 71 71 74 72 73 70 70 66 Total 60 North America 40 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2015 2015 2016 2016 2016 2016 2017 2017 Total DSO decrease driven by North America © │ Conference Call │ Q2 2017 27
Slide 28: H1 2017: Health care services revenue
H1 2017: Health care services revenue Same Organic market Revenue H1 2017 H1 2016 Growth Growth growth growth in € million € million in % in %cc in % % Total Health Care 7,418 6,472 15 11 8 3 Services North America 6,182 5,383 15 11 8 3 of which Care Coordination 1,389 1,027 35 31 23 - EMEA 613 567
Slide 29: H1 2017: Health care products revenue
H1 2017: Health care products revenue Revenue H1 2017 H1 2016 Growth Growth € million € million in % in %cc Total Health Care Products 1,601 1,470 9 7 Dialysis Products 1,560 1,447 8 6 North America 418 395 6 3 EMEA 601 581 4 4 Asia-Pacific 435 382 14 12 Latin America 97 81 20 8 Non-Dialysis Product
Slide 30: H1 2017: patients, treatments, clinics
H1 2017: patients, treatments, clinics Patients Treatments Clinics as of June 30, 2017 H1 2017, in million as of June 30, 2017 North America 193,605 14.7 2,345 Growth in % 4 3 4 EMEA 61,256 4.6 727 Growth in % 5 7 4 Asia-Pacific 30,099 2.1 387 Growth in % 11 8 19 Latin America 30,345 2.4 231 Growth
Slide 31: U.S. dialysis days per quarter
U.S. dialysis days per quarter Q1 Q2 Q3 Q4 Full year 2015 76 78 79 79 312 2016 78 78 79 79 314 2017 77 78 79 79 313 © │ Conference Call │ Q2 2017 31
Slide 32: Exchange rates
Exchange rates H1 2016 FY 2016 H1 2017 €:$ Period end 1.110 1.054 1.141 Average 1.116 1.107 1.083 €:CNY Period end 7.376 7.320 7.739 Average 7.297 7.352 7.445 €:RUB Period end 71.520 64.300 67.545 Average 78.297 74.145 62.806 €:ARS Period end 16.554 16.718 18.956 Average 15.987 16.334 17.028 €:BRL P
Slide 33: Financial calendar
Financial calendar1 November 2, 2017 Report on 3rd quarter 2017 August 29, 2017 Commerzbank Sector Conference, Frankfurt September 6, 2017 Wells Fargo Conference, Boston September 7, 2017 Goldman Sachs Medtech and Healthcare Services Conference, London September 11-12, 2017 Morgan Stanley Global Hea
Slide 34: Contacts
Contacts FME Investor Relations Ticker: FME or FMS (NYSE) Else-Kröner-Str. 1 WKN: 578 580 61352 Bad Homburg v.d.H. ISIN: DE00057858002 Germany Dr. Dominik Heger Head of Investor Relations and Corporate Communications Tel: +49–(0) 6172–609–2601 Email: dominik.heger@fmc-ag.com Robert Adolph Direct
Slide 35: Constant currency
Constant currency: Changes in revenue, operating income, net income attributable to shareholders of FMC AG & Co. KGaA and other items include the impact of changes in foreign currency exchange rates. We use the non-IFRS financial measure “at constant exchange rates” or constant currency in our filin
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