Fresenius Medical Care Ag · XETR:FME
Fresenius Medical Care — Q3 2017 Earnings Presentation
34 slides from Fresenius Medical Care's earnings presentation, Nov 2, 2017
Slide 1: Q3 2017 Conference call
Q3 2017 Conference call | November 2, 2017 Rice Powell - CEO Mike Brosnan - CFO © │ Conference Call │ Q3 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 – Q3 2017
AGENDA – Q3 2017 Business update 1 Financials & outlook 2 Q&A 3 © │ Conference Call │ Q3 2017 3
Slide 4: Q3 2017: Some things new, some continue
Q3 2017: Some things new, some continue Natural Disaster in North America impressively managed by disaster response teams but impacted operations Solid underlying growth in Healthcare Products and Services Turnaround of Care Coordination margin as expected FX headwinds negatively affected re
Slide 5: Q3 2017: Growth trend continued
Q3 2017: Growth trend continued Employees +4% Treatments +3% Patients +4% Clinics +4% 113,648 12,205,278 317,792 3,714 © │ Conference Call │ Q3 2017 5
Slide 6: 9m 2017: Solid growth delivered
9m 2017: Solid growth delivered 9m 2017 9m 2016 Growth Growth € million € million in % in %cc Revenue 13,355 12,153 10 10 Revenue adjusted1 13,259 12,153 9 9 EBIT 1,843 1,679 10 10 EBIT adjusted1,2 1,767 1,679 5 5 Net income3 886 781 13 14 Net income adjusted1,2,3 842 781 8 8 Basic EPS [€] 2.89 2.56
Slide 7: Q3 2017: Net income impacted by headwinds
Q3 2017: Net income impacted by headwinds Q3 2017 Q3 2016 Growth Growth € million € million in % in %cc Revenue 4,336 4,211 3 8 Revenue adjusted1 4,339 4,211 3 8 EBIT 609 611 0 4 EBIT adjusted1,2 624 611 2 6 Net income3 309 304 2 6 Net income adjusted1,2,3 319 304 5 8 Basic EPS [€] 1.01 0.99 1 6 Bas
Slide 8: Q3 2017: Organic growth across all regions
Q3 2017: Organic growth across all regions North America € million EMEA € million Revenue 3,115 +2% Revenue 632 +5% Organic growth +6% Organic growth +3% Asia-Pacific € million Latin America € million Revenue 411 +7% Revenue 175 +2% Organic growth +7% Organic growth +10% Solid organic growth acros
Slide 9: Q3 2017: Health Care Services – strong growth
Q3 2017: Health Care Services – strong growth Same Organic market Q3 2017 Q3 2016 Growth Growth growth growth Revenue € million € million in % in %cc in % in % Total Health Care 3,532 3,438 3 8 6 2 North America 2,904 2,841 2 8 6 2 of which Care Coordination 705 588 20 26 20 - EMEA 311 300 4 5 2 3 A
Slide 10: Q3 2017: Quality outcomes remain on high level
Q3 2017: Quality outcomes remain on high level North America EMEA Latin America Asia-Pacific Q3 Q2 Q3 Q2 Q3 Q2 Q3 Q2 % of patients1 2017 2017 2017 2017 2017 2017 2017 2017 Kt/V ≥ 1.2 98 98 95 95 92 93 96 96 No catheter (>90 days) 84 84 80 81 81 81 88 88 Hemoglobin = 10 – 12 g/dl 73 73 78 78 51 51 58
Slide 11: Q3 2017: Dialysis Products show strong demand
Q3 2017: Dialysis Products show strong demand Q3 2017 Q3 2016 Growth Growth € million € million in % in %cc Total Health Care Products 804 773 4 8 Dialysis Products 785 761 3 7 North America 211 209 1 6 EMEA 302 293 3 5 Asia-Pacific 217 210 4 9 Latin America 52 48 9 13 Non-Dialysis Products 19 12 58
Slide 12: Agenda – Q3 2017
AGENDA – Q3 2017 Business update 1 Financials & outlook 2 Q&A 3 © │ Conference Call │ Q3 2017 12
Slide 13: 9m 2017: revenue and net income reconciliation
9m 2017: revenue and net income reconciliation Revenue in € million 13,355 13,244 96 15 +1% 0% 1,091 12,153 +9% 9m 2016 Business 9m 2017 FX VA agreement 9m 2017 growth (cc) (cc, excl. VA) Net income in € million 886 -8 843 52 -1 (1)% 781 62 0% +6% +8% 9m 2016 Business 9m 2017 FX VA agreement Nat. Di
Slide 14: 9m 2017: Solid growth delivered
9m 2017: Solid growth delivered Adjusted2 9m 2017 9m 2016 Growth 9m 2017 9m 2016 Growth Growth € million € million in % € million € million in % in %cc Net revenue 13,355 12,153 10 13,2593 12,153 9 9 Operating income 1,843 1,679 10 1,767 1,679 5 5 (EBIT) EBIT-margin in % 13.8 13.8 0.0 pp 13.3 13.8 (
Slide 15: Q3 2017: revenue and net income reconciliation
Q3 2017: revenue and net income reconciliation Revenue in € million 4,562 -223 351 4,336 -3 (5)% 0% 4,211 +8% Q3 2016 Business Q3 2017 FX VA agreement Q3 2017 growth (cc) (cc, excl. VA) Net income in € million 330 -11 26 -2 -8 309 304 (3)% (1)% +8% (3)% Q3 2016 Business Q3 2017 FX VA agreement Nat.
Slide 16: Q3 2017: Net income impacted by headwinds
Q3 2017: Net income impacted by headwinds Adjusted2 Q3 2017 Q3 2016 Growth Q3 2017 Q3 2016 Growth Growth € million € million in % € million € million in % in %cc Net revenue 4,336 4,211 3 4,3393 4,211 3 8 Operating income 609 611 0 624 611 2 6 (EBIT) EBIT-margin in % 14.0 14.5 (0.5) pp 14.4 14.5 (0.
Slide 17: Q3 2017: regional margin profile
Q3 2017: regional margin profile North America (71% of EBIT1) Dialysis business margin of 18.1% reflect – negative: Natural Disaster Costs, higher personnel expense, higher costs such as other supplies and 490 483 rent expense, higher bad debt – positive: lower costs for health care supplies 16.1%
Slide 18: Q3 2017: regional margin profile
Q3 2017: regional margin profile Asia-Pacific (11% of EBIT1) Operating profit margin development impacted by: 76 77 – negative: unfavorable mix effects related to acquisitions with lower margins, foreign currency transaction effects, lower income from equity 19.9% method investees 18.8% – positive
Slide 19: Q3 2017: Strong cash flow & deleveraging
Q3 2017: Strong cash flow & deleveraging Q3 2017 Q3 2016 9m 20171 9m 2016 in € million in € million in € million in € million Operating cash flow 612 393 1,664 1,160 in % of revenue 14.1 9.3 12.5 9.5 Capital expenditures, net (226) (211) (614) (658) Free cash flow 386 182 1,050 502 Free cash flow, a
Slide 20: 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 and Natural Disaster Cost
Slide 21: Agenda – Q3 2017
AGENDA – Q3 2017 Business update 1 Financials & outlook 2 Q&A 3 © │ Conference Call │ Q3 2017 21
Slide 22: Your questions are welcome
Your questions are welcome Conference call | November 2, 2017 Rice Powell - CEO Mike Brosnan - CFO © │ Conference Call │ Q3 2017 22
Slide 23: Attachment 1
Attachment 1 Reconciliation of non-IFRS financial measures to the most comparable IFRS measure € million Debt FY 2015 FY 2016 9m 2017 Short term debt 101 572 936 + Short term debt from related parties 18 3 3 + Current portion of long-term debt and 610 724 891 capital lease obligations + Long-term de
Slide 24: Attachment 2
Attachment 2 Reconciliation of non-IFRS financial measures to the most comparable IFRS measure € million Cash Flow Q3 2016 Q3 2017 9m 2016 9m 2017 Acquisitions, investments and net purchases of (74) (77) (346) (428) intangible assets - Proceeds from divestitures 41 21 173 31 = Acquisitions and inves
Slide 25: Attachment 3
Attachment 3 Reconciliation of non IFRS financial measures to the most directly comparable IFRS financial measures Operating performance excluding VA agreement and adjusted for the cost effects, net of anticipated recoveries from natural disasters in North America (Special Items) – basis for guidanc
Slide 26: Day sales outstanding (DSO)
Day sales outstanding (DSO) in days 160 140 Latin America 120 EMEA 100 Asia-Pacific 80 71 71 74 72 73 70 70 67 66 Total 60 North America 40 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2015 2015 2016 2016 2016 2016 2017 2017 2017 © │ Conference Call │ Q3 2017 26
Slide 27: 9m 2017: Health care services revenue
9m 2017: Health care services revenue Same Organic market Revenue 9m 2017 9m 2016 Growth Growth growth growth in € million € million in % in %cc in % % Total Health Care 10,950 9,910 11 10 7 3 Services North America 9,086 8,224 10 10 7 3 of which Care Coordination 2,094 1,615 30 29 22 - EMEA 925 866
Slide 28: 9m 2017: Health care products revenue
9m 2017: Health care products revenue Revenue 9m 2017 9m 2016 Growth Growth € million € million in % in %cc Total Health Care Products 2,405 2,243 7 7 Dialysis Products 2,345 2,207 6 6 North America 629 604 4 4 EMEA 903 874 3 4 Asia-Pacific 653 592 10 11 Latin America 149 128 16 10 Non-Dialysis Prod
Slide 29: 9m 2017: patients, treatments, clinics
9m 2017: patients, treatments, clinics Patients Treatments Clinics as of Sept. 30, 2017 9m 2017, in million as of Sept. 30, 2017 North America 195,027 22.2 2,363 Growth in % 4 3 4 EMEA 61,983 7.0 732 Growth in % 5 6 4 Asia-Pacific 30,151 3.2 389 Growth in % 3 8 5 Latin America 30,631 3.6 230 Growth
Slide 30: 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 │ Q3 2017 30
Slide 31: Exchange rates
Exchange rates 9m 2016 FY 2016 9m 2017 €:$ Period end 1.116 1.054 1.181 Average 1.116 1.107 1.114 €:CNY Period end 7.446 7.320 7.853 Average 7.347 7.352 7.577 €:RUB Period end 70.514 64.300 68.252 Average 76.183 74.145 64.999 €:ARS Period end 17.073 16.718 20.500 Average 16.225 16.334 18.135 €:BRL P
Slide 32: Financial calendar
Financial calendar1 February 27, 2018 Report on 4th quarter 2017 November 7, 2017 Credit Suisse Healthcare Conference, Scottsdale November 14, 2017 Bernstein Healthcare Services Disruptors Long View Conference, Boston November 16, 2017 Bryan Garnier Healthcare Conference, Paris November 20-23, 2017
Slide 33: 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 34: 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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