Fresenius Se & Co. Kgaa · XETR:FRE

Fresenius Se & Co. Kgaa — Goldman Sachs Leveraged Finance Healthcare Conference 2014

45 slides from Fresenius Se & Co. Kgaa's conference presentation, Mar 4, 2014

  1. Slide 1: Health Care Worldwide

    Health Care Worldwide Goldman Sachs - Leveraged Finance Healthcare Conference March 4, 2014 – New York Goldman Sachs Leveraged Finance Conference, Fresenius SE & Co. KGaA © Copyright, March 4, 2014 Page 1

  2. Slide 2: Safe Harbor Statement

    Safe Harbor Statement This presentation contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive

  3. Slide 3: Agenda

    Agenda  Company Overview  Business Segments - Fresenius Medical Care - Fresenius Kabi - Fresenius Helios - Fresenius Vamed  Outlook  Appendix Goldman Sachs Leveraged Finance Conference, Fresenius SE & Co. KGaA © Copyright, March 4, 2014 Page 3

  4. Slide 4: Company Overview

    Company Overview Goldman Sachs Leveraged Finance Conference, Fresenius SE & Co. KGaA © Copyright, March 4, 2014 Page 4

  5. Slide 5: A Global Leader in Health Care Products and Services

    A Global Leader in Health Care Products and Services - Sales €20.3bn, net income1 €1.8bn for FY 2013 - Strong and well-diversified portfolio - Global presence in more than 100 countries - Long-term opportunities in growing markets 1 - Net income before minorities, adjusted (before special items) Gol

  6. Slide 6: Strong and Balanced Health Care Portfolio

    Fresenius Group: Strong and Balanced Health Care Portfolio Sales7 €20.3 bn EBITDA4, 7 €3.9 bn S&P: BB+ positive Market Cap.1 $29.5 bn Moody‘s: Ba1 negative Group EV2 $61.7 bn Fitch: BB+ evolving5 c 31% 100% 100%3 77%3 Sales7 $14,610 m €4,996 m €3,393 m €1,020 m EBITDA4, 7 $2,904 m €1,143 m €508 m €6

  7. Slide 7: Sales Distribution by Region 2013

    Fresenius Group: Sales Distribution by Region –2013 Asia-Pacific Africa 10% 2% Latin America 6% Europe €20.3 bn 40% North America 42% Goldman Sachs Leveraged Finance Conference, Fresenius SE & Co. KGaA © Copyright, March 4, 2014 Page 7

  8. Slide 8: Financial Results

    Fresenius Group: Financial Results €m 20,331 +8% cc Sales 19,290 5-year CAGR: 9% 16,3613 15,972 3,045 EBIT1 14,164 3,075 +1% cc 5-year CAGR: 10% 2,563 2,418 2,054 1,778 Net Income2 1,707 +7% cc 5-year CAGR: 15% 1,408 1,243 1,011 2009 2010 2011 2012 2013 1 – before special items 2 – incl. attributabl

  9. Slide 9: Organic Growth 1999 – 2013

    Fresenius Group: Organic Growth 1999 – 2013 Target: > 2x World GDP 9% Growth 9% 8% 8% 8% 7% 7% 7% 6% 6% 6% 6% 4% 4% 3% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Goldman Sachs Leveraged Finance Conference, Fresenius SE & Co. KGaA © Copyright, March 4, 2014 Page 9

  10. Slide 10: Sustainable Organic Sales Growth in all Business Segments

    Fresenius Group: Sustainable Organic Sales Growth in all Business Segments Fresenius Medical Care Fresenius Kabi 8% 12% 7% 6% 6% 9% 9% 9% 5% 8% 8% 5% 5% 2% 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013 Fresenius Helios Fresenius Vamed 7% 25% 5% 5% 5% 4% 15% 15% 13% 3% 3% 4% 4

  11. Slide 11: Ideal Strategic Posture to Benefit from Major Healthcare Trends

    Fresenius Group: Ideal Strategic Posture to Benefit from Major Healthcare Trends Aging population and higher incidence of chronic diseases World population aged 60+ will more than double by 2050 to >2 bn (OECD) Increasing health care spending in emerging markets Increasing health care coverage and p

  12. Slide 12: Consistent Cash Generation and Proven Track Record of Deleveraging

    Fresenius Group: Consistent Cash Generation and Proven Track Record of Deleveraging CFFO margin FCF margin (before acquisitions & dividends) % % 14 10 13 12.6 7.8 12.0 8 7.4 7.7 11.7 12 11.4 11.4 11.0 6.3 5.7 6.2 10.3 5.7 5.6 11 6 9.9 9.8 4.5 10 8.7 4 2.7 9 8 2 2004 2005 2006 2007 2008 2009 2010 201

  13. Slide 13: Business Segments

    Business Segments Goldman Sachs Leveraged Finance Conference, Fresenius SE & Co. KGaA © Copyright, March 4, 2014 Page 13

  14. Slide 14: Fresenius Medical Care: Global Market Leader in Dialysis

    Fresenius Medical Care: Global Market Leader in Dialysis - World leader in dialysis products and services Industry Dynamics treating 270,122 patients in 3,250 clinics Expected global patient growth: ~6% p.a.; 2020E: ~3.8 million patients worldwide1 Patients in million - Provide highest standard of p

  15. Slide 15: Fresenius Medical Care: Key Figures 2013

    Fresenius Medical Care: Key Figures 2013 $ million 2013 20121 Growth Sales 14,610 13,800 + 6%2 EBITDA 2,904 2,931 - 1% EBITDA margin 19.9% 21.2% EBIT 2,256 2,329 - 3% EBIT margin 15.4% 16.9% Net income 1,110 1,118 - 1% 1– Before one-time items 2– 5% organic growth, 1% net acquisitions Goldman Sachs

  16. Slide 16: Fresenius Kabi: A Worldwide Leading Hospital Supplier

    Fresenius Kabi: A Worldwide Leading Hospital Supplier - Comprehensive product portfolio for critically and 2013 Sales by Region chronically ill patients - IV Drugs 29% - Clinical Nutrition Emerging markets €1,421 m - Infusion Therapy 41% - Medical Devices / Transfusion Technology €5.0 bn Europe €2,0

  17. Slide 17: Fresenius Kabi: Profitability Improvement

    Fresenius Kabi: Profitability Improvement Sales in € m EBITDA in € m EBITDA Margin (in %) 4,996 CAGR CAGR 1 24% 24% 24% 24% 1,143 16% 4,539 19% 1,101 23% 22% 3,964 955 20% 3,672 893 3,086 742 2,495 544 2,030 408 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 201

  18. Slide 18: Fresenius Kabi: Key Figures 2013

    Fresenius Kabi: Key Figures 2013 € million 20131 2012 Growth Sales 4,996 4,539 + 10%2 - Infusion Therapy 980 1,010 -3% - I.V. Drugs 1,733 1,701 +2 % - Clinical Nutrition 1,332 1,314 +1 % - Medical Devices/ 951 514 +85% Transfusion Technology EBITDA 1,143 1,101 + 4% EBITDA margin 22.9% 24.3% EBIT 926

  19. Slide 19: Fresenius Helios: Landmark Hospital Acquisition Provides Excellent Long-Term Growth Opportunities

    Fresenius Helios: Landmark Hospital Acquisition Provides Excellent Long-Term Growth Opportunities Largest German network – 112 hospitals1 - Received antitrust approval, acquisition to close Majority of population has access to a Feb, 27 HELIOS hospital within one hour‘s drive - Consolidate ~70% of t

  20. Slide 20: Fresenius Helios: 2013 Clinic Development Plan

    Fresenius Helios: 2013 Clinic Development Plan Years in Portfolio <1 1 2 3 4 5 6 >6 Total No. of clinics - 12 3 1 - 6 4 48 74 Revenue (€m) - 390 155 38 - 196 312 2,198 3,289 Target EBIT margin (%) - 2.0 4.0 6.0 8.0 10.0 12.0 12.0-15.0 EBIT (€m) - 7.8 6.2 2.3 - 19.6 37.4 263.8 337.1 Reported EBIT mar

  21. Slide 21: Fresenius Helios: Key Figures 2013

    Fresenius Helios: Key Figures 2013 € million 2013 2012 Growth Sales 3,393 3,200 +6%1 EBITDA 508 432 +18% EBITDA margin 15.0% 13.5% EBIT 390 322 +21% EBIT margin 11.5% 10.1% Net income 275 203 +35% 1 – 3% organic growth, 3% net acquisitions Goldman Sachs Leveraged Finance Conference, Fresenius SE & C

  22. Slide 22: Fresenius Vamed: A Leading Global Specialist in Hospital Projects and Services

    Fresenius Vamed: A Leading Global Specialist in Hospital Projects and Services - Specialized in project development building 2013 Sales by Business hospital infrastructure and providing hospital services (technical services and operational management) 43% Services €437 m €1,020 m - Track record: 57%

  23. Slide 23: Fresenius Vamed: Achievements 2013

    Fresenius Vamed: Achievements 2013 - Outstanding year with 21% sales growth, exceeding €1 billion sales target one year ahead of plan - Project business: 5-year sales CAGR of 12%; 2013 order entry (€744 m) at all-time high – driving further growth Technical Service Contract – University Medical Cent

  24. Slide 24: Fresenius Vamed: Key Figures 2013

    Fresenius Vamed: Key Figures 2013 € million 2013 2012 Growth Total Sales 1,0201 846 21% 1 EBITDA 65 59 10% EBITDA margin 6.4% 7.0% EBIT 55 51 8% EBIT margin 5.4% 6.0% Net income 37 35 6% Order intake2 744 657 13% 1 – 13% organic growth, 8% acquisitions 2 – project business only Goldman Sachs Leverag

  25. Slide 25: Investment Highlights

    Investment Highlights Leading market positions Diversified revenue base with four strong business segments Global presence in growing, non-cyclical markets Proven ability to integrate acquisitions Clear track record of and commitment to de-leveraging Strong financial performance and cash flow genera

  26. Slide 26: Outlook

    Outlook Goldman Sachs Leveraged Finance Conference, Fresenius SE & Co. KGaA © Copyright, March 4, 2014 Page 26

  27. Slide 27: Fresenius Kabi: Financial Outlook

    Fresenius Kabi: Financial Outlook Guidance 2014 Sales Organic Growth 3% 7% EBIT Margin 16% 18% U.S. I.V. drug Significant market shortage Ongoing ease uncertainty Guidance reflects  Uncertainty about U.S. I.V. drug market shortages  Full-year effect from restricted use of HES blood volume substitu

  28. Slide 28: Fresenius Helios & Fresenius Vamed: Financial Outlook

    Fresenius Helios & Fresenius Vamed: Financial Outlook Fresenius Helios excl. Guidance 2014 acquired Rhön hospitals Sales Organic growth 3% – 5% EBIT €390 million – €410 million Guidance excludes integration costs for acquired hospitals from Rhön Klinikum (total ~€80 million; thereof vast majority in

  29. Slide 29: Fresenius Group: Financial Outlook

    Fresenius Group: Financial Outlook Guidance 20141 Revenue growth 12% ‒ 15% at constant currency Net income growth2 2% ‒ 5% at constant currency 2014 guidance reflects - U.S. Medicare dialysis reimbursement cut - Uncertainty about U.S. I.V. drug market shortages - Full-year effects from restricted us

  30. Slide 30: Attractive Mid-Term Growth Prospects, New Stretch Target

    Fresenius Group: Attractive Mid-Term Growth Prospects New Stretch Target ~€30 billion sales €1.4 to €1.5 billion net income by 2017 Strong and Balanced Health Care Portfolio Goldman Sachs Leveraged Finance Conference, Fresenius SE & Co. KGaA © Copyright, March 4, 2014 Page 30

  31. Slide 31: Appendix

    Appendix Goldman Sachs Leveraged Finance Conference, Fresenius SE & Co. KGaA © Copyright, March 4, 2014 Page 31

  32. Slide 32: Fresenius Group: Financial Results

    Fresenius Group: Financial Results Sales EBIT1 Net income1 2013 €20,331 m €3,045 m €1,051 m Growth at constant 8% 1% 14% currency rates Growth at actual 5% -1% 12% currency rates 1- Before one-time items Goldman Sachs Leveraged Finance Conference, Fresenius SE & Co. KGaA © Copyright, March 4, 2014 P

  33. Slide 33: Financial Results by Business Segment

    Fresenius Group: Financial Results by Business Segment 2013 Fresenius Fresenius Fresenius Fresenius Medical Care Kabi Helios Vamed Sales US$14,610 m €4,996 m €3,393 m €1,020 m Growth 6% 10% 6% 21% EBIT US$2,256 m €926 m €390 m €55m Growth -3% -1% 21% 8% Goldman Sachs Leveraged Finance Conference, Fr

  34. Slide 34: Demonstrated Strong Sales and EBITDA Growth

    Fresenius Group: Demonstrated Strong Sales and EBITDA Growth Sales in € bn EBITDA in € bn1 CAGR 20.3 CAGR 10% 19.3 12% 3.9 3.9 16.5 16.0 3.2 3.1 14.2 2.6 12.3 11.4 2.2 2.0 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013 1 – Before special items Goldman Sachs Leveraged Finance C

  35. Slide 35: Key Figures 2013

    Fresenius Group: Key Figures 2013 2013 2012 Change Change €m actual constant FX rates FX rates Sales 20,331 19,290 5% 8% EBITDA 3,888 3,851 1% 3% EBIT 3,045 3,075 -1% 1% Interest, net - 584 - 666 12% 10% EBT 2,461 2,409 2% 5% Taxes - 683 - 702 3% 0% Net income1 1,778 1,707 4% 7% Employees2 178,337 1

  36. Slide 36: Cash Flow 2013

    Fresenius Group: Cash Flow 2013 €m 2013 Margin 2012 Margin Growth YoY Operating Cash Flow 2,320 11.4% 2,438 12.6% -5% Capex (net) -1,047 -5.1% -952 -4.9% -10% Free Cash Flow 1,273 6.3% 1,486 7.7% -14% (before acquisitions and dividends) Acquisitions (net) -2,556 -2,299 -11% Dividends -491 -446 -10%

  37. Slide 37: Cash Flow Development 2013

    Cash Flow Development 2013 €m Operating CF Capex (net) Free Cash Flow1 2013 Margin 2013 Margin 2013 Margin 488 9.8% -311 -6.3% 177 3.5% 3 258 7.6% -167 -4.9% 91 2.7% 31 3.0% -11 -1.0% 20 2.0% Corporate/ Other 11 n/a -10 n/a 1 n/a 2 excl. FMC 788 9.2% 2 -499 -5.4% 289 3.8% Group 2,320 11.4% -1,047 -5

  38. Slide 38: Fresenius Kabi: 2013 Sales by Region – 2014 Prospects

    Fresenius Kabi: 2013 Sales by Region – 2014 Prospects 2013 2014e Organic Sales Growth Organic Sales Growth Restricted use of blood volume Europe 2% to 5% 2% substitute HES, tough 2012 full-year HES impact comparable Above expectations due to -5% to +5% dependent on North America 5% I.V. drug shortag

  39. Slide 39: Fresenius Kabi: Attractive Long-Term Growth Opportunities

    Fresenius Kabi: Attractive Long-Term Growth Opportunities U.S. I.V. Drugs Asia-Pacific ~$16bn branded sales go off-patent by 2021 Roll-out product portfolio Clinical Infusion Medical 16.2 IV Drugs 15.4 Nutrition Therapy Devices 14.0 China Australia China Indonesia Taiwan Hong Kong China India 10.1 A

  40. Slide 40: Financing Facilities and Debt Structure

    Financing Facilities and Debt Structure

  41. Slide 41: Rating Evolution

    Fresenius Group: Rating evolution BBB-/stab Baa3/stab BBB-/neg Baa3/neg BB+/pos Ba1/pos BB+/stab Ba1/stab BB+/neg Ba1/neg BB/pos Ba2/pos BB/stab Ba2/stab BB/neg Ba2/neg Q4/02 Q1/03 Q4/03 Q1/04 Q4/04 Q1/05 Q4/05 Q1/06 Q4/06 Q1/07 Q4/07 Q1/08 Q4/08 Q1/09 Q4/09 Q1/10 Q4/10 Q1/11 Q4/11 Q1/12 Q4/12 Q1/13

  42. Slide 42: Current Debt and Cash Flow Structure as of December 31, 2013

    Fresenius Group: Current Debt and Cash Flow Structure as of December 31, 2013 €11,940 m Total Net Debt1 Total Net Debt €6.3 bn €6,253 m Net Debt2 Profit transfer Profit transfer Profit transfer Agreements, Agreements, Agreements, Market Value Upstream Upstream Upstream > €4.5 bn Guarantee Guarantee

  43. Slide 43: Proven Track Record of Deleveraging

    Fresenius Group: Proven Track Record of Deleveraging Acquisition Acquisition of Renal of APP Care Group Pharmaceuticals 3.6x 3.5x Target 2014YE: 3.2x 3.0 to 3.25 (lower end) 3.0x 3.0x 3.0x 2.7x 2.8x 2.5x 2.6x 2.6x 2.6x 2.3x 2.2x 2001 2002 2003 2004 2005 Q1/06 2006 2007 2008 2009 2010 2011 2012 2013

  44. Slide 44: Debt Maturity Profile, Pro-forma 2014 Senior Notes Issuances

    Fresenius Group: Debt Maturity Profile1 Dec 31, 2013 – Pro-forma 2014 Senior Notes Issuances2 €m Fresenius Medical Care 2,000 Fresenius excl. FMC 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1– Based on utilization of major long-term financin

  45. Slide 45: Debt and Interest Ratios

    Fresenius Group: Debt and Interest Ratios Dec 31, Dec 31, Net debt/EBITDA 2013 2012 Target 2014YE: Debt (€m) 12,804 11,028 3.0-3.25 thereof 46% US$ denominated 3.07 Net debt (€m) 11,940 10,143 Net debt/EBITDA 2.511 2.562,3 2.60 2.65 2.66 2.72 2.57 2.63 EBITDA/Interest 6.7 5.8 at actual 2.56 at ident

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