Fresenius Medical Care Ag · XETR:FME
Fresenius Medical Care — Q2 2020 Earnings Presentation
30 slides from Fresenius Medical Care's earnings presentation, Jul 30, 2020
Slide 1: Q2 2020 Conference Call
Q2 2020 CONFERENCE CALL JULY 30, 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: Q2 2020 Business Update
Q2 2020 | BUSINESS UPDATE > Solid revenue growth continued > Significant net income growth > Exceptionally positive free cash flow development > Financial targets for 2020 confirmed inclusive of anticipated COVID-19 effects > Draft rule for ESRD PPS proposes a 1.8% rate increase © │ Conference Call
Slide 5: COVID-19 Update
COVID-19 UPDATE > Continuing wide-ranging measures to fight COVID-19 > COVID-19 affected people with advanced kidney disease generating an increase in hospitalization and somewhat higher mortality > Temporary pause in routine medical visits for many patients with advanced CKD needing to consider ren
Slide 6: H1 2020 Steady on the Path of Growth
H1 2020 | STEADY ON THE PATH OF GROWTH +1% Clinics +2% Patients 4,036 347,683 Quality remains +4% Treatments on a consistently 26,526,147 high level As of June 30, 2020 © │ Conference Call │ Q2 2020 7/30/2020 Page 6
Slide 7: Q2 2020 Quality Outcomes Remain Key
Q2 2020 | QUALITY OUTCOMES REMAIN KEY NORTH AMERICA EMEA LATIN AMERICA ASIA-PACIFIC % of patients Q2 2020 Q2 2019 Q2 2020 Q2 2019 Q2 2020 Q2 2019 Q2 2020 Q2 2019 Kt/V ≥ 1.2 97 97 93 94 90 90 94 96 Hemoglobin = 10–12 g/dl 73 71 82 82 46 49 52 56 Calcium = 8.4–10.2 mg/dl 81 83 77 79 75 76 72 73 Albumi
Slide 8: Solid Revenue and Strong Income Growth
Q2 2020 | SOLID REVENUE AND STRONG INCOME GROWTH ▪ Solid 4% organic Q2 2020 Q2 2019 Growth Growth revenue growth € million € million in % in %cc ▪ Services and Revenue 4,557 4,345 5 5 products contributing to growth Operating ▪ Strong underlying 656 521 26 24 income business performance ▪ Recovery o
Slide 9: Strong Organic Growth in North America & EMEA
Q2 2020 | STRONG ORGANIC GROWTH IN NORTH AMERICA & EMEA NORTH AMERICA € million Revenue 3,240 6% NORTH AMERICA Organic growth 4% EMEA 71% 15% EMEA 4,557 € million €m ASIA-PACIFIC Revenue 687 6% 10% +4% Organic growth 7% (Organic) ASIA-PACIFIC € million LATIN AMERICA 4% Revenue 450 (2%) Organic growt
Slide 10: Q2 2020 Services: Robust Growth Despite COVID-19
Q2 2020 SERVICES | ROBUST GROWTH DESPITE COVID-19 Same market Organic Q2 2020 Q2 2019 Growth Growth treatment growth € million € million in % in %cc in % growth Revenue in % Health Care Services 3,614 3,455 5 4 4 2 North America 2,951 2,789 6 4 4 2 Drivers of which Care Coordination 349 278 26 23 32
Slide 11: Q2 2020 Products: Growth Despite COVID-19
Q2 2020 PRODUCTS | GROWTH DESPITE COVID-19 Organic Q2 2020 Q2 2019 Growth Growth € million € million in % in %cc growth Revenue in % Health Care Products 943 890 6 7 7 Dialysis Products 921 873 5 7 6 North America 289 272 6 4 4 Drivers EMEA 324 296 10 11 9 + Acute care Asia-Pacific 254 248 2 4 4 pro
Slide 12: Agenda
1 BUSINESS UPDATE AGENDA 2 FINANCIALS & OUTLOOK 3 Q&A
Slide 13: H1 2020 Solid Operating Income Development
H1 2020 | SOLID OPERATING INCOME DEVELOPMENT Group Margin % 12.5% 13.4% 1,410 18 COVID-19 impact Margins 1,217 140 Margins 17 = In North America direct cost almost 5.2% 179 5.3% 164 neutralized on H1 basis by CARES Act 18.5% 15.7% - Impact on business in Asia-Pacific in 235 % particular in Care Coor
Slide 14: Q2 2020 Strong Operating Income Growth Despite COVID-19
Q2 2020 | STRONG OPERATING INCOME GROWTH DESPITE COVID-19 Group Margin % 12.0% 14.4% 761 COVID-19 impact 11 Margins 63 Margins + Recovery of direct negative effects 600 78 3.4% 6 6.4% experienced in Q1 69 + Recovery of net valuation effects 15.1% 14.1% 96 % + Ongoing cost saving measures to mitigate
Slide 15: Very Strong Cash Flow and Financial Metrics
Q2 2020 | VERY STRONG CASH FLOW AND FINANCIAL METRICS Q2 2020 Q2 2019 € million € million Operating cash flow 2,319 852 in % of revenue 50.9 19.6 Capital expenditures, net (216) (293) Free cash flow 2,103 559 Free cash flow after investing activities 2,039 476 NET LEVERAGE RATIO (NET DEBT/EBITDA)1 C
Slide 16: 2020 Target Confirmed
2020 TARGET 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 or
Slide 17: Agenda
1 BUSINESS UPDATE AGENDA 2 FINANCIALS & OUTLOOK 3 Q&A
Slide 18: Your Questions Are Welcome!
Your Questions Are Welcome! © │ Conference Call │ Q2 2020 7/30/2020 Page 18
Slide 19: Q2 2020 Profit and Loss
Q2 2020 | PROFIT AND LOSS Q2 2020 Q2 2019 Growth Growth € million € million in % in %cc Revenue 4,557 4,345 5 5 Operating income 656 521 26 24 Operating income margin in % 14.4 12.0 Net interest expense 92 114 (20) (20) Income before taxes 564 407 39 36 Income tax expense 137 92 49 46 Tax rate in %
Slide 20: H1 2020 Profit and Loss
H1 2020 | PROFIT AND LOSS H1 2020 H1 2019 Growth Growth € million € million in % in %cc Revenue 9,045 8,478 7 6 Operating income 1,211 1,058 14 12 Operating income margin in % 13.4 12.5 Net interest expense 196 222 (12) (13) Income before taxes 1,015 836 21 19 Income tax expense 237 193 23 21 Tax ra
Slide 21: H1 2020 Services
H1 2020 SERVICES Organic Same market H1 2020 H1 2019 Growth Growth € million € million in % in %cc growth growth in % in % Total 7,209 6,773 6 5 4 3 North America 5,859 5,469 7 5 3 3 of which Care Coordination 686 586 17 14 19 EMEA 682 659 3 5 4 3 Asia-Pacific 414 409 1 (1) 0 3 of which Care Coordin
Slide 22: H1 2020 Products
H1 2020 PRODUCTS Organic H1 2020 H1 2019 Growth Growth € million € million in % in %cc growth in % Total Health Care Products 1,836 1,705 8 8 5 Dialysis Products 1,786 1,669 7 8 4 North America 567 479 18 15 8 EMEA 638 606 5 6 4 Asia-Pacific 474 477 0 1 0 Latin America 98 98 (1) 17 14 Non-Dialysis P
Slide 23: Debt
DEBT RECONCILIATION OF NON-IFRS FINANCIAL MEASURES TO THE MOST DIRECTLY COMPARABLE IFRS FINANCIAL MEASURES Q2 2020 FY 2019 FY 2018 € million € million € million Debt Short term debt 876 1,150 1,205 + Short term debt from related parties 3 22 189 + Current portion of long-term debt 1,513 1,447 1,107
Slide 24: EBITDA
EBITDA RECONCILIATION OF ANNUALIZED ADJUSTED EBITDA AND NET LEVERAGE RATIO TO THE MOST DIRECTLY COMPARABLE IFRS FINANCIAL MEASURES Q2 2020 LTM FY 2019 FY 2018 € million € million € million Net income 1,574 1,439 2,226 + Income tax expense 446 402 511 − Interest income (56) (62) (147) + Interest expe
Slide 25: 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 26: 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. 6.3% Sound divestiture ▪ 2019 negative 2015 2016 2017 2018 2019 Q2 2020 impact from NxStage acquisition
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. H1 2020 H1 2019 FY 2019 Q1 Q2 Q3 Q4 Full year €:$ Period end 1.120 1.138 1.123 2020 77 78 79 79 313 Average 1.102 1.130 1.119 2019 76 78 79 80 313 2018 77 78 78 80 313 €:CNY Period end
Slide 28: H1 2020 Patients, Treatments, Clinics
H1 2020 | PATIENTS, TREATMENTS, CLINICS Patients Treatments Clinics Patients Treatments Clinics as of June 30, as of June 30, as of June 30, as of June 30, as of June 30, as of June 30, 2020 2020 2020 2019 2019 2019 North America 212,149 16,303,730 2,614 208,019 15,698,880 2,583 Growth in % 2 4 1 4
Slide 29: Financial Calendar 2020
FINANCIAL CALENDAR 2020 REPORTING DATES & AGM August 27 Virtual Annual General Meeting October 29 Q3 Earnings Release and Conference Call CONFERENCES & MEET THE MANAGMENT October 8 Virtual Capital Markets Day 2020 Please note that dates and/or participation might be subject to change © │ Conference
Slide 30: 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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