Fresenius Medical Care Ag · XETR:FME
Fresenius Medical Care — FY2017 Earnings Presentation
37 slides from Fresenius Medical Care's earnings presentation, Feb 27, 2018
Slide 1: Full year 2017 Conference call
Full year 2017 Conference call | February 27, 2018 Rice Powell - CEO Mike Brosnan - CFO © │ Conference Call │ FY 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 – FY 2017
AGENDA – FY 2017 Business update 1 Financials & outlook 2 Q&A 3 © │ Conference Call │ FY 2017 3
Slide 4: FY 2017: Growth trend continued
FY 2017: Growth trend continued +4% Clinics: 3,752 +4% Patients: 320,960 +4% Treatments: 48,269,144 Revenue growth target achieved Net income growth target achieved © │ Conference Call │ FY 2017 4
Slide 5: Q4 2017: Quality outcomes remain on high level
Q4 2017: Quality outcomes remain on high level1 North America EMEA Latin America Asia-Pacific Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 % of patients 2017 2016 2017 2016 2017 2016 2017 2016 Kt/V > 1.2 98 98 95 96 93 91 96 97 Hemoglobin = 10–12 g/dl 73 73 79 78 52 52 58 60 Calcium = 8.4–10.2 mg/dl 85 84 76 76 77 79 75
Slide 6: FY 2017: At a glance
FY 2017: At a glance Quality remains on high level Delivered on ambitious 2017 outlook Special items that impacted 2017 VA Agreement Natural Disasters U.S. tax reform FCPA related charge Further portfolio optimization Dialysis business: Offer for NxStage Care Coordination: Acquisition of
Slide 7: FY 2017: Profitable growth continued
FY 2017: Profitable growth continued 2017 2016 Growth Growth € million € million in % in %cc Revenue 17,784 16,570 7 9 Revenue adjusted1 17,690 16,570 7 9 EBIT 2,362 2,409 (2) 0 EBIT adjusted1,2 2,493 2,409 4 5 Net income3 1,280 1,144 12 14 Net income adjusted1,2,3,4 1,204 1,144 5 7 Basic EPS [€] 4.
Slide 8: Q4 2017: Solid underlying growth trend continued
Q4 2017: Solid underlying growth trend continued Q4 2017 Q4 2016 Growth Growth € million € million in % in %cc Revenue 4,429 4,417 0 8 Revenue adjusted1 4,430 4,417 0 8 EBIT 519 730 (29) (22) EBIT adjusted1,2 726 730 0 6 Net income3 394 363 8 16 Net income adjusted1,2,3,4 362 363 0 6 Basic EPS [€] 1
Slide 9: Q4 2017: Organic growth across all regions
Q4 2017: Organic growth across all regions North America € million EMEA € million Revenue 3,164 +8%1 Revenue 660 +6%1 Organic growth +5% Organic growth +4% Asia-Pacific € million Latin America € million Revenue 418 +12%1 Revenue 185 +16%1 Organic growth +6% Organic growth +17% Solid organic growth
Slide 10: Q4 2017: Health Care Services – solid growth
Q4 2017: Health Care Services – solid growth Same Organic market Q4 2017 Q4 2016 Growth Growth growth growth Revenue € million € million in % in %cc in % in % Total Health Care 3,581 3,596 0 8 5 3 North America 2,950 2,990 (1) 8 5 2 of which Care Coordination 715 624 14 24 19 - EMEA 312 303 3 4 3 4
Slide 11: Q4 2017: Products show strong demand
Q4 2017: Products show strong demand Q4 2017 Q4 2016 Growth Growth € million € million in % in %cc Total Health Care Products 848 821 3 8 Dialysis Products 828 808 3 7 North America 214 212 1 9 EMEA 328 317 3 5 Asia-Pacific 227 223 1 7 Latin America 57 51 9 15 Non-Dialysis Products 20 13 48 48 73%
Slide 12: 21th consecutive dividend increase proposed
21th consecutive dividend increase proposed Dividend per share in EUR 1.061 +10% 0.96 0.80 0.77 0.78 2013 2014 2015 2016 2017 Continuously delivering returns to shareholders Dividend proposal in line with net income growth 1 proposed dividend for approval at the AGM on May 17, 2018 © │ Conferenc
Slide 13: Agenda – FY 2017
AGENDA – FY 2017 Business update 1 Financials & outlook 2 Q&A 3 © │ Conference Call │ FY 2017 13
Slide 14: FY 2017: Revenue and net income reconciliation
FY 2017: Revenue and net income reconciliation Revenue in € million +8.7% 18,016 17,784 -326 94 1,446 16,570 2016 Business 2017 as guided FX VA Agreement 2017 reported growth (cc) (cc, excl. VA) Net income in € million 1,280 +7.3% 1,228 -24 51 -11 1,144 84 236 -200 2016 Business 2017 as FX VA Nat. D
Slide 15: FY 2017: Solid growth delivered
FY 2017: Solid growth delivered Adjusted2 2017 2016 Growth 2017 2016 Growth Growth € million € million in % € million € million in % in %cc Revenue 17,784 16,570 7 17,690 16,570 7 9 Operating income 2,362 2,409 (2) 2,493 2,409 4 5 (EBIT) EBIT margin in % 13.3 14.5 (1.2)pp 14.1 14.5 (0.4)pp (0.4)pp N
Slide 16: Q4 2017: Revenue and net income reconciliation
Q4 2017: Revenue and net income reconciliation Revenue in € million +8.0% 4,771 354 -341 4,417 4,429 -1 Q4 2016 Business Q4 2017 as FX VA Agreement Q4 2017 growth (cc) guided reported (cc, excl. VA) Net income in € million +6.1% 385 394 363 22 -23 -1 -3 -200 236 Q4 2016 Business Q4 2017 FX VA Nat. D
Slide 17: Q4 2017: Net income in-line with guidance
Q4 2017: Net income in-line with guidance Adjusted2 Q4 2017 Q4 2016 Growth Q4 2017 Q4 2016 Growth Growth € million € million in % € million € million in % in %cc Revenue 4,429 4,417 0 4,430 4,417 0 8 Operating income 519 730 (29) 726 730 0 6 (EBIT) EBIT margin in % 11.7 16.5 (4.8)pp 16.4 16.5 (0.1)p
Slide 18: Q4 2017: Regional margin profile
Q4 2017: Regional margin profile North America (75% of EBIT1) Solid Dialysis business margin of 21.2% reflects – Negative: Higher bad debt expense, higher personnel expense, lower revenue from commercial 588 608 payors, higher costs for rent and insurance, natural disasters, higher costs for healt
Slide 19: Q4 2017: Regional margin profile
Q4 2017: Regional margin profile EMEA (14% of EBIT1) Operating profit margin development reflects 120 110 – Negative: Investments in Xenios, unfavorable foreign currency transaction effects and higher overhead costs 19.0% 16.7% – Positive: Release of accruals as a result of favorable court settlem
Slide 20: Q4 2017: Very strong cash flow & deleveraging
Q4 2017: Very strong cash flow & deleveraging Q4 2017 Q4 2016 20171 2016 in € million in € million in € million in € million Operating cash flow 528 772 2,192 1,932 in % of revenue 11.9 17.5 12.3 11.7 Capital expenditures, net (227) (257) (841) (915) Free cash flow 301 515 1,351 1,017 Free cash flow
Slide 21: Global Efficiency Program
Global Efficiency Program GEP II – sustained savings 2018 - 2020 100–200 ~60% EUR m 20% Procurement 5% Supply Chain Management 25% Shared Services ~30% 40% Operational Excellence ~10% 10% Capital Efficiency 2018 2019 2020 Sustained savings © │ Conference Call │ FY 2017 21
Slide 22: Return on Invested Capital (ROIC)
Return on Invested Capital1 (ROIC) ROIC to improve by 100 basis points from 2013 to 8.5‒9.0% in 20202 ROIC 8.6% 7.8% 7.8% 6.9% 7.1% 2013 2014 2015 2016 2017 Long-term value creation based on accretive acquisitions and organic growth 1 Based on net operating profit after tax (adjusted for largest
Slide 23: Outlook
Outlook1 Targets 2018 2017 base (in € million) Revenue growth2 ~8% 17,298 Net income growth3 13 to 15% 1,280 Targets 2020 20204 (2014-2020, avg. % p.a.) (in € billion) Revenue growth ~10% 24 Net income growth5 high single digit 1 Outlook based on constant currencies & excl. effects from NxStage acqu
Slide 24: Agenda – FY 2017
AGENDA – FY 2017 Business update 1 Financials & outlook 2 Q&A 3 © │ Conference Call │ FY 2017 24
Slide 25: Your questions are welcome
Your questions are welcome Conference call | February 27, 2018 Rice Powell - CEO Mike Brosnan - CFO © │ Conference Call │ FY 2017 25
Slide 26: Attachment 1
Attachment 1 Reconciliation of non-IFRS financial measures to the most comparable IFRS measure € million Debt FY 2015 FY 2016 FY 2017 Short term debt 101 572 760 + Short term debt from related parties 18 3 9 + Current portion of long-term debt and 610 724 884 capital lease obligations + Long-term de
Slide 27: Attachment 2
Attachment 2 Reconciliation of non-IFRS financial measures to the most comparable IFRS measure € million Cash Flow Q4 2016 Q4 2017 2016 2017 Acquisitions, investments and net purchases of (175) (138) (522) (566) intangible assets - Proceeds from divestitures 17 385 191 415 = Acquisitions and investm
Slide 28: Attachment 3
Attachment 3 Reconciliation of non IFRS financial measures to the most directly comparable IFRS financial measures Revenue excluding VA Agreement, operating performance excluding VA Agreement and adjusted for the cost effects, net of anticipated recoveries from Natural Disasters in North America and
Slide 29: Day sales outstanding (DSO)
Day sales outstanding (DSO) in days 160 140 Latin America 120 EMEA 100 Asia-Pacific 80 71 74 72 73 70 70 67 67 66 Total 60 North America 40 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 2016 2016 2016 2017 2017 2017 2017 © │ Conference Call │ FY 2017 29
Slide 30: FY 2017: Health care services revenue
FY 2017: Health care services revenue Same Organic market Revenue 2017 2016 Growth Growth growth growth in € million € million in % in %cc in % % Total Health Care 14,532 13,506 8 10 7 3 Services North America 12,036 11,214 7 10 7 2 of which Care Coordination 2,809 2,239 25 28 21 - EMEA 1,237 1,169
Slide 31: FY 2017: Health care products revenue
FY 2017: Health care products revenue Revenue 2017 2016 Growth Growth € million € million in % in %cc Total Health Care Products 3,252 3,064 6 7 Dialysis Products 3,173 3,015 5 6 North America 843 816 3 5 EMEA 1,231 1,191 3 4 Asia-Pacific 879 815 8 10 Latin America 205 179 14 11 Non-Dialysis Product
Slide 32: FY 2017: Patients, treatments, clinics
FY 2017: Patients, treatments, clinics Patients Treatments Clinics as of Dec. 31, 2017 2017, in million as of Dec. 31, 2017 North America 197,356 29,804,196 2,393 Growth in % 4 3 4 EMEA 62,490 9,350,024 746 Growth in % 5 5 5 Asia-Pacific 29,739 4,249,878 381 Growth in % 1 6 2 Latin America 31,375 4,
Slide 33: 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 2018 77 78 78 80 313 © │ Conference Call │ FY 2017 33
Slide 34: Exchange rates
Exchange rates FY 2016 2017 €:$ Period end 1.054 1.199 Average 1.107 1.130 €:CNY Period end 7.320 7.804 Average 7.352 7.629 €:RUB Period end 64.300 69.392 Average 74.145 65.938 €:ARS Period end 16.718 22.639 Average 16.334 18.754 €:BRL Period end 3.431 3.973 Average 3.856 3.605 © │ Conference Call │
Slide 35: Financial calendar 2018
Financial calendar 20181 May 3 Report on 1st quarter 2018 May 17 Annual General Meeting, Frankfurt March 13-14 Barclays Global Healthcare Conference, Miami April 18 Bankhaus Lampe Deutschlandkonferenz , Baden-Baden May 8 Deutsche Bank Annual Healthcare Conference, Boston June 6-7 dbAccess Berlin Con
Slide 36: 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 Direc
Slide 37: 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
Fresenius Medical Care — FY2017 Earnings Presentation on 6ix