Fresenius Medical Care Ag · XETR:FME
Fresenius Medical Care — Q3 2020 Earnings Presentation
28 slides from Fresenius Medical Care's earnings presentation, Oct 29, 2020
Slide 1: Q3 2020 Conference Call, October 29, 2020
Q3 2020 CONFERENCE CALL OCTOBER 29, 2020 Rice Powell - CEO Helen Giza - CFO © Copyright
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
Slide 3: Agenda
1 BUSINESS UPDATE AGENDA 2 FINANCIALS & OUTLOOK 3 Q&A
Slide 4: Business Update
Q3 2020 | BUSINESS UPDATE > Solid revenue and strong earnings development at constant currency > Third quarter impacted by sizable FX headwinds > Continued strong performance in North America despite expected headwinds from calcimimetics > Financial targets for 2020 confirmed inclusive of anticipate
Slide 5: 9M 2020 | Quality Remains Key
9M 2020 | QUALITY REMAINS KEY +2% Clinics +2% Patients 4,073 349,167 Quality remains +3% Treatments on a consistently 40,098,653 high level As of September 30, 2020 © │ Conference Call │ Q3 2020 10/29/2020 Page 5
Slide 6: Q3 2020 | Quality Outcomes on a High Level
Q3 2020 | QUALITY OUTCOMES ON A HIGH LEVEL NORTH AMERICA EMEA LATIN AMERICA ASIA-PACIFIC % of patients Q3 2020 Q3 2019 Q3 2020 Q3 2019 Q3 2020 Q3 2019 Q3 2020 Q3 2019 Kt/V ≥ 1.2 97 97 93 94 91 91 94 95 Hemoglobin = 10–12 g/dl 71 71 82 83 46 50 52 55 Calcium = 8.4–10.2 mg/dl 80 82 77 78 74 76 71 73 A
Slide 7: Q3 2020 | Strong Earnings Momentum
Q3 2020 | STRONG EARNINGS MOMENTUM Q3 2020 Q3 2019 Growth Growth ▪ Underlying earnings € million € million in % in %cc growth trend Revenue 4,414 4,419 0 6 continues ▪ Strong operating performance and Operating ongoing cost saving 632 595 6 11 income measures to mitigate COVID-19 impact Net income 3
Slide 8: Q3 2020 | All Regions Contributed to Organic Growth
Q3 2020 | ALL REGIONS CONTRIBUTED TO ORGANIC GROWTH NORTH AMERICA € million Revenue 3,069 0% NORTH AMERICA Organic growth 2% EMEA 70% 15% EMEA 4,414 € million €m ASIA-PACIFIC Revenue 682 0% 11% +3% Organic growth 1% (Organic) ASIA-PACIFIC € million LATIN AMERICA 4% Revenue 484 2% Organic growth 6% ▪
Slide 9: Services | Robust Constant Currency Growth
Q3 2020 SERVICES | ROBUST CONSTANT CURRENCY GROWTH Same market Organic Q3 2020 Q3 2019 Growth Growth treatment € million € million in % in %cc growth in % growth Revenue in % Health Care Services 3,499 3,492 0 6 3 2 North America 2,801 2,795 0 6 2 1 Drivers of which Care Coordination 329 273 20 27 3
Slide 10: Products | FX Effects Impacting Product Sales
Q3 2020 PRODUCTS | FX EFFECTS IMPACTING PRODUCT SALES Organic Q3 2020 Q3 2019 Growth Growth € million € million in % in %cc growth Revenue in % Health Care Products 915 927 (1) 4 3 Dialysis Products 891 907 (2) 4 2 Drivers North America 267 278 (4) 2 0 + Acute care products EMEA 313 320 (2) 0 (2) +
Slide 11: Agenda
1 BUSINESS UPDATE AGENDA 2 FINANCIALS & OUTLOOK 3 Q&A
Slide 12: Q3 2020 | Profitability on a High Level
Q3 2020 | PROFITABILITY ON A HIGH LEVEL Q3 margin drivers Group Margin % 13.5% 14.3% + Negative prior year earnings effect 721 678 11 + Commercial revenue Margins 11 97 Margins 90 + Favorable cost management of 5.8% 99 6.6% pharmaceuticals 100 19.0% 20.0% ‒ Lower reimbursement for calcimimetics % 14
Slide 13: Q3 2020 | Solid Cash Flow Generation
Q3 2020 | SOLID CASH FLOW GENERATION Q3 2020 Q3 2019 € million € million Operating cash flow 746 868 in % of revenue 16.9 19.7 Capital expenditures, net (239) (284) Free cash flow 507 584 Free cash flow after investing activities 458 516 NET LEVERAGE RATIO (NET DEBT/EBITDA)1 Current ratings4 S&P Moo
Slide 14: 2020 Targets Confirmed
2020 TARGETS CONFIRMED REVENUE NET INCOME (constant currency) (constant currency) Mid to high Mid to high single digit single digit growth rate growth rate Excluding special items: Special items are effects that are unusual in 2019: EUR 17,477m 2019: EUR 1,236m nature and have not been foreseeable o
Slide 15: Agenda
1 BUSINESS UPDATE AGENDA 2 FINANCIALS & OUTLOOK 3 Q&A
Slide 16: Your Questions Are Welcome!
Your Questions Are Welcome! © │ Conference Call │ Q3 2020 10/29/2020 Page 16
Slide 17: Q3 2020 | Profit and Loss
Q3 2020 | PROFIT AND LOSS Q3 2020 Q3 2019 Growth Growth € million € million in % in %cc Revenue 4,414 4,419 0 6 Operating income 632 595 6 11 Operating income margin in % 14.3 13.5 Net interest expense 88 105 (16) (11) Income before taxes 544 490 11 16 Income tax expense 124 98 25 31 Tax rate in % 2
Slide 18: 9M 2020 | Profit and Loss
9M 2020 | PROFIT AND LOSS 9M 2020 9M 2019 Growth Growth € million € million in % in %cc Revenue 13,459 12,897 4 6 Operating income 1,843 1,653 11 12 Operating income margin in % 13.7 12.8 Net interest expense 284 327 (13) (12) Income before taxes 1,559 1,326 18 18 Income tax expense 362 292 24 24 Ta
Slide 19: 9M 2020 | Services
9M 2020 | SERVICES 9M 2020 9M 2019 Growth Growth Organic Same market growth growth € million € million in % in %cc in % in % Total 10,708 10,265 4 6 4 3 North America 8,660 8,264 5 5 3 2 of which Care Coordination 1,015 859 18 18 23 EMEA 1,028 1,002 3 5 4 2 Asia-Pacific 641 632 1 1 2 8 of which Care
Slide 20: 9M 2020 | Products
9M 2020 | PRODUCTS 9M 2020 9M 2019 Growth Growth Organic growth € million € million in % in %cc in % Total Health Care Products 2,751 2,632 5 7 4 Dialysis Products 2,675 2,576 4 6 3 North America 834 757 10 10 3 EMEA 950 926 3 4 2 Asia-Pacific 731 728 0 2 2 Latin America 148 149 (1) 20 18 Non-Dialys
Slide 21: Debt
DEBT RECONCILIATION OF NON-IFRS FINANCIAL MEASURES TO THE MOST DIRECTLY COMPARABLE IFRS FINANCIAL MEASURES Q3 2020 FY 2019 FY 2018 € million € million € million Debt Short term debt 307 1,150 1,205 + Short term debt from related parties 86 22 189 + Current portion of long-term debt 1,046 1,447 1,107
Slide 22: EBITDA
EBITDA RECONCILIATION OF ANNUALIZED ADJUSTED EBITDA AND NET LEVERAGE RATIO TO THE MOST DIRECTLY COMPARABLE IFRS FINANCIAL MEASURES Q3 2020 LTM FY 2019 FY 2018 € million € million € million Net income 1,602 1,439 2,226 + Income tax expense 471 402 511 − Interest income (42) (62) (147) + Interest expe
Slide 23: 2019 Base for Guidance 2020, Reconciliation Adjustments
2019 BASE FOR GUIDANCE 2020, RECONCILIATION ADJUSTMENTS FY 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2019 € million € million € million € million € million Revenue excl. special items 17,477 4,133 4,345 4,419 4,580 Net income excl. special items 1,236 286 250 332 368 RECONCILIATION OF NON-IFRS FINANCIAL MEASU
Slide 24: Return on Invested Capital (ROIC)
RETURN ON INVESTED CAPITAL (ROIC) ▪ Long-term value 12.4% rep. creation based on accretive acquisitions and organic growth 8.6% 7.8% 8.0% adj. 8.0% adj. ▪ 2018 positive 7.1% impact from 6.1% rep. 6.4% Sound divestiture ▪ 2019 negative 2015 2016 2017 2018 2019 Q3 2020 impact from NxStage acquisition
Slide 25: 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. 9M 2020 9M 2019 FY 2019 Q1 Q2 Q3 Q4 Full year €:$ Period end 1.171 1.089 1.123 2020 77 78 79 79 313 Average 1.125 1.124 1.119 2019 76 78 79 80 313 2018 77 78 78 80 313 €:CNY Period end
Slide 26: 9M 2020 | Patients, Treatments, Clinics
9M 2020 | PATIENTS, TREATMENTS, CLINICS Patients Treatments Clinics Patients Treatments Clinics as of Sep. 30, as of Sep. 30, as of Sep. 30, as of Sep. 30, as of Sep. 30, as of Sep. 30, 2020 2020 2020 2019 2019 2019 North America 211,766 24,600,114 2,620 209,633 23,872,968 2,585 Growth in % 1 3 1 4
Slide 27: Financial Calendar 2020
FINANCIAL CALENDAR 2020 REPORTING DATES & AGM February 23, 2021 Q4 Earnings Release and Conference Call CONFERENCES & MEET THE MANAGMENT November 10 UBS European Healthcare Conference November 10 Credit Suisse 29th Annual Healthcare Conference November 17 Jefferies Global Healthcare Conference Novem
Slide 28: 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, Vice President Director Strategic Development & Investor Relations Investor Relations Communications | EVP TICKER: FME or FMS (NYSE) +49(0)
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