Fresenius Medical Care Ag · XETR:FME

Fresenius Medical Care — Q1 2019 Earnings Presentation

29 slides from Fresenius Medical Care's earnings presentation, May 2, 2019

  1. Slide 1: Q1 2019 Conference Call

    Q1 2019 CONFERENCE CALL MAY 2, 2019 Rice Powell – CEO Mike Brosnan – CFO © Copyright

  2. 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

  3. Slide 3: Agenda

    1 BUSINESS UPDATE AGENDA 2 FINANCIALS & OUTLOOK 3 Q&A

  4. Slide 4: Growth continued

    Q1 2019: GROWTH CONTINUED +5% Clinics +4% Patients 3,971 336,716 Quality remains +3% Treatments on a consistently 12,561,531 high level © │ Conference Call │ Q1 2019 5/2/2019 Page 4

  5. Slide 5: Quality outcomes remain on high level

    Q1 2019: QUALITY OUTCOMES REMAIN ON HIGH LEVEL1 NORTH AMERICA EMEA LATIN AMERICA ASIA-PACIFIC % of patients Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Kt/V ≥ 1.2 97 97 94 95 90 92 95 96 Hemoglobin = 10–12 g/dl 70 71 82 83 49 52 56 57 Calcium = 8.4–10.2 mg/dl 85 85 79 80 77 78 74

  6. Slide 6: Update

    Q1 2019: UPDATE NxStage acquisition successfully closed and integration started Underlying business development as expected Earnings supported by agreements that materialized earlier than planned Cost optimization program initiated Non-prosecution agreement concluded with U.S. government Outlook 201

  7. Slide 7: Solid start to the year

    Q1 2019: SOLID START TO THE YEAR1 Q1 2019 Q1 2018 Growth Growth € million € million in % in %cc Revenue 4,133 3,976 4 (1) ▪ Tailwind from FX Revenue adjusted 4,125 3,725 11 6 effects ▪ Revenue adjusted growth in line with Operating income (EBIT) 537 497 8 3 outlook ▪ Growth of net EBIT adjusted 551

  8. Slide 8: Organic growth in all regions

    Q1 2019: ORGANIC GROWTH IN ALL REGIONS NORTH AMERICA € million Latin America 4% Revenue 2,887 (4)%cc Organic growth +6% Asia-Pacific 10% North America EMEA € million €m 70% Revenue 653 +4%cc 4,133 EMEA 6%1 Organic growth +4% 16% ASIA-PACIFIC € million Revenue 428 +6%cc Organic growth +6% ▪ Organic g

  9. Slide 9: Q1 2019 Services: solid organic growth continued

    Q1 2019 SERVICES: SOLID ORGANIC GROWTH CONTINUED Organic Same market Q1 2019 Q1 2018 Growth Growth € million € million in % in %cc growth growth in % in %cc ▪ North America Total 3,317 3,209 3 (2) 6 3 growth negatively North America 2,680 2,590 3 (4) 6 3 impacted by Care of which Care Coordination 3

  10. Slide 10: Q1 2019 Products: solid organic growth in all regions

    Q1 2019 PRODUCTS: SOLID ORGANIC GROWTH IN ALL REGIONS Organic Q1 2019 Q1 2018 Growth Growth growth PRODUCT REVENUE € million € million in % in %cc in % DRIVEN BY Total Health Care Products 816 767 6 4 5 Dialysis Products 797 747 7 5 5 ▪ EMEA North America 2071 184 12 4 5 machines, dialyzers, EMEA 31

  11. Slide 11: Agenda

    1 BUSINESS UPDATE AGENDA 2 FINANCIALS & OUTLOOK 3 Q&A

  12. Slide 12: Revenue and net income growth

    Q1 2019: REVENUE AND NET INCOME GROWTH REVENUE ADJUSTED, € MILLION – TARGET: 3–7%CC GROWTH 6%cc 4,133 22 30 3,976 3,935 190 251 210 3,725 Q1 2018 Revenue Sound Q1 2018 Q1 2018 Revenue Business growth cc Q1 2019 Revenue FX IFRS 16 NxStage Operations Q1 2019 Revenue reported adjusted adjusted reported

  13. Slide 13: Regional margin profile: North America

    Q1 2019: REGIONAL MARGIN PROFILE NORTH AMERICA (60% OF EBIT1) DIALYSIS BUSINESS MARGIN OF 12.9% 362 372 ▪ Negative: Higher personnel expense, integration and operational costs associated with NxStage, unfavorable impact from legal settlements ▪ Positive: Contributions from income attributable to a c

  14. Slide 14: Regional margin profile: EMEA, Asia-Pacific, Latin America

    Q1 2019: REGIONAL MARGIN PROFILE Operating income margin development reflects 138 109 ▪ Positive: Reduction of a contingent consideration EMEA liability related to Xenios 21.1% 21.1% (22% of EBIT1) 17.1% ▪ Negative: Higher bad debt expense, higher rent expense, impact from one less dialysis day Q1 2

  15. Slide 15: Cash flow, net leverage ratio & current ratings

    Q1 2019: CASH FLOW, NET LEVERAGE RATIO & CURRENT RATINGS Q1 2019 Q1 2018 € million € million Operating cash flow 76 (45) in % of revenue 1.8 (1.1) Capital expenditures, net (199) (218) Free cash flow (123) (263) Free cash flow, after net acquisitions and investments, incl. net investments in securit

  16. Slide 16: Outlook confirmed

    OUTLOOK CONFIRMED1 TARGETS 2019 2018 BASE (cc) (in € million) Revenue growth adjusted 3 to 7% 16,026 Net income growth adjusted (2) to 2% 1,341 (cc) TARGETS 2020 Revenue growth adjusted Mid to high single digit growth rate Net income growth adjusted Mid to high single digit growth rate 1 Targets for

  17. Slide 17: Agenda

    1 BUSINESS UPDATE AGENDA 2 FINANCIALS & OUTLOOK 3 Q&A

  18. Slide 18: Profit and loss

    Q1 2019: PROFIT AND LOSS1 Q1 2019 Q1 2018 Growth Growth € million € million in % in %cc Revenue 4,133 3,976 4 (1) Revenue adjusted 4,125 3,725 11 6 EBIT 537 497 8 3 EBIT margin in % 13.0 12.5 (0.5)pp (0.5)pp EBIT adjusted 551 506 9 4 EBIT adjusted margin in % 13.4 13.6 (0.2)pp (0.2)pp Net interest e

  19. Slide 19: Reconciliation adjustments

    Q1 2019: RECONCILIATION ADJUSTMENTS RECONCILIATION OF NON-IFRS FINANCIAL MEASURES TO THE MOST DIRECTLY COMPARABLE IFRS FINANCIAL MEASURES Q1 2019 Q1 2018 € million € million Revenue 4,133 3,976 IFRS 16 Implementation 22 NxStage operations (30) Sound Q1 20181 (251) Revenue adjusted 4,125 3,725 Net in

  20. Slide 20: Debt

    DEBT RECONCILIATION OF NON-IFRS FINANCIAL MEASURES TO THE MOST DIRECTLY COMPARABLE IFRS FINANCIAL MEASURES Q1 2019 € million excl. IFRS 16 Q1 2019 2018 2017 Debt Short term debt 1,320 1,320 1,205 760 + Short term debt from related parties 107 107 189 9 + Current portion of long-term debt 1,516 1,512

  21. Slide 21: EBITDA

    EBITDA RECONCILIATION OF NON-IFRS FINANCIAL MEASURES TO THE MOST DIRECTLY COMPARABLE IFRS FINANCIAL MEASURES Q1 2019 € million excl. IFRS 16 Q1 2019 2018 2017 EBITDA1 Last twelve month operating income (EBIT) 2,244 2,898 2,215 2,372 + Last twelve month depreciation and amortization 770 937 716 731 +

  22. Slide 22: Acquisitions & investments and capital expenditures

    ACQUISITIONS & INVESTMENTS AND CAPITAL EXPENDITURES RECONCILIATION OF NON-IFRS FINANCIAL MEASURES TO THE MOST DIRECTLY COMPARABLE IFRS FINANCIAL MEASURES € million Q1 2019 Q1 2018 Acquisitions and investments Acquisitions, investments and net purchases (1,829) (181) of intangible assets - Proceeds f

  23. Slide 23: Effects according to IFRS 16

    Q1 2019: EFFECTS ACCORDING TO IFRS 16 EFFECTS INCLUDING NXSTAGE Q1 2019 Q1 2019 Q1 2019 Balance Sheet € million Profit and loss statement € million Cash flow statement € million Assets 4,228 Revenue (22) Cash provided by 142 operating activities Right-of-use assets 4,311 Profit from sale-leaseback (

  24. Slide 24: Update: estimated effects according to IFRS 16

    UPDATE: ESTIMATED EFFECTS ACCORDING TO IFRS 16 ESTIMATED EFFECTS EXCLUDING NXSTAGE Impact 2019e Impact 2019e Impact 2019e Balance Sheet € million Profit and loss statement € million Cash flow statement € million Assets Revenue ~(110) Cash provided by ~580 operating activities Right-of-use assets ~3,

  25. Slide 25: NxStage: excluded from the targets 2019 and 2020

    NXSTAGE: EXCLUDED FROM THE TARGETS 2019 AND 2020 EFFECTS FROM THE NXSTAGE ACQUISITION ▪ All effects from the NxStage acquisition are excluded from the company’s communicated targets 2019 and 2020. ▪ Total integration costs of around EUR 50 to EUR 75 million over the three years following the closing

  26. Slide 26: Basis for targets 2019

    BASIS FOR TARGETS 2019 2018 BASE FOR TARGETS 2019 ON A QUARTERLY BASIS EUR million FY 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Revenue 16,547 3,976 4,214 4,058 4,300 Sound H1 20181 (521) (251) (258) (7) (5) Revenue adjusted 16,026 3,725 3,956 4,051 4,295 EBIT 3,038 497 1,401 527 613 Sound H1 20181 (14)

  27. Slide 27: 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 Euro vs. Q1 2019 Q1 2018 FY 2018 Q1 Q2 Q3 Q4 Full year €:$ Period end 1.124 1.232 1.145 2019 76 78 79 80 313 Average 1.136 1.229 1.181 2018 77 78 78 80 313 2017 77 78 79 79 313 €:CNY Period end

  28. Slide 28: Financial calendar 2019

    FINANCIAL CALENDAR 20191 REPORTING DATES & AGM May 16 Annual General Meeting, Frankfurt July 30 Report on 2nd quarter 2019 October 29 Report on 3rd quarter 2019 CONFERENCES & MEET THE MANAGMENT May 7 Deutsche Bank Annual Healthcare Conference, Boston May 20 Path to Home, Meet the Management, Virtual

  29. Slide 29: Contacts

    CONTACTS FME INVESTOR RELATIONS Else-Kröner-Str. 1 61352 Bad Homburg v.d.H. DR DOMINIK HEGER ROBERT ADOLPH PHILIPP GEBHARDT Germany Head of Investor Relations and Senior Director Senior Manager Corporate Communications Investor Relations Investor Relations TICKER: FME or FMS (NYSE) +49(0) 6172–609–2

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