Fresenius Medical Care Ag · XETR:FME

Fresenius Medical Care — Q1 2020 Earnings Presentation

26 slides from Fresenius Medical Care's earnings presentation, May 6, 2020

  1. Slide 1: Q1 2020 Conference Call, May 6, 2020

    Q1 2020 CONFERENCE CALL MAY 6, 2020 Rice Powell - CEO Helen Giza - 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: Q1 2020: Underlying Resilience

    Q1 2020 | UNDERLYING RESILIENCE > Revenue growth of 9% supported by growth in all regions > Positive Q1 earnings growth despite impact from COVID-19 pandemic > Q1 earnings growth excl. COVID-19 pandemic impact would be at the top end of the 2020 guidance range > Solid cash flow development > 2020 fi

  5. Slide 5: COVID-19 Impact

    COVID-19 IMPACT > Broad and early implementation of wide-ranging measures to ensure continuity of care and reduce the risk of infection for patients and employees at increased cost as important contribution to the healthcare system and society as a whole > Pandemic did not cause any major disruption

  6. Slide 6: Continued Growth

    Q1 2020 | CONTINUED GROWTH +1% Clinics +4% Patients 4,002 348,703 Quality remains +5% Treatments on a consistently 13,179,096 high level © │ Conference Call │ Q1 2020 05/06/2020 Page 6

  7. Slide 7: Quality Outcomes Remain Key

    Q1 2020 | QUALITY OUTCOMES REMAIN KEY NORTH AMERICA EMEA LATIN AMERICA ASIA-PACIFIC % of patients Q1 2020 Q1 2019 Q1 2020 Q1 2019 Q1 2020 Q1 2019 Q1 2020 Q1 2019 Kt/V ≥ 1.2 97 97 94 94 90 90 94 95 Hemoglobin = 10–12 g/dl 70 70 82 82 50 49 55 56 Calcium = 8.4–10.2 mg/dl 80 85 79 79 75 77 74 74 Albumi

  8. Slide 8: Strong Revenue Growth Continued

    Q1 2020 | STRONG REVENUE GROWTH CONTINUED Q1 2020 Q1 2019 Growth Growth € million € million in % in %cc ▪ 3.8% organic Revenue 4,488 4,133 9 7 revenue growth ▪ Continued tailwind from FX effects Operating ▪ Services and 555 537 3 1 income products contributing to growth Net income 283 271 4 2 ▪ Posi

  9. Slide 9: All Regions Contribute to Organic Growth

    Q1 2020 | ALL REGIONS CONTRIBUTE TO ORGANIC GROWTH NORTH AMERICA € million Revenue 3,186 10% NORTH AMERICA Organic growth 3% EMEA 71% 15% EMEA 4,488 € million €m ASIA-PACIFIC Revenue 679 4% 10% +4% Organic growth 3% (Organic) ASIA-PACIFIC € million LATIN AMERICA 4% Revenue 443 4% Organic growth 2% ▪

  10. Slide 10: Services: Strong Growth Despite COVID-19

    Q1 2020 SERVICES | STRONG GROWTH DESPITE COVID-19 Same market Organic Q1 2020 Q1 2019 Growth Growth treatment growth € million € million in % in %cc in % growth Revenue in % Health Care Services 3,595 3,317 8 7 4 3 North America 2,908 2,680 9 5 3 3 Drivers of which Care Coordination 337 308 9 6 9 +

  11. Slide 11: Products: Growth Impacted by COVID-19

    Q1 2020 PRODUCTS | GROWTH IMPACTED BY COVID-19 Organic Q1 2020 Q1 2019 Growth Growth € million € million in % in %cc growth Revenue in % Health Care Products 893 816 10 9 2 Dialysis Products 864 797 9 8 1 Drivers North America 278 207 34 31 6 + Acute care EMEA 314 310 1 1 0 products Asia-Pacific 220

  12. Slide 12: Agenda

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

  13. Slide 13: Operating Income Growth Despite COVID-19

    Q1 2020 | OPERATING INCOME GROWTH DESPITE COVID-19 COVID-19 impact Margin 13.0% 12.4% Margin − Higher cost for 648 616 7 4.1% − Personal protective equipment 7.1% 11 77 17.3% 22.1% 95 − Personnel expense 101 14.9% − Patient transportation 21.1% 138 % − Logistics − Unfavorable effect on market valuat

  14. Slide 14: Strong Cash Flow and Financial Metrics

    Q1 2020 | STRONG CASH FLOW AND FINANCIAL METRICS Q1 2020 Q1 2019 € million € million Operating cash flow 584 76 in % of revenue 13.0 1.8 Capital expenditures, net (280) (199) Free cash flow 304 (123) Free cash flow after investing activities 272 (1,941) NET LEVERAGE RATIO (NET DEBT/EBITDA)1 Current

  15. Slide 15: Confirm 2020 Targets

    CONFIRM 2020 TARGETS REVENUE NET INCOME (constant currency) (constant currency) Mid to high Mid to high single digit single digit growth rate growth rate Excluding impact from COVID-19 and special items. Special items are effects that are unusual in nature and have not been 2019: EUR 17,477m 2019: E

  16. Slide 16: Agenda

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

  17. Slide 17: Your Questions Are Welcome!

    Your Questions Are Welcome! © │ Conference Call │ Q1 2020 05/06/2020 Page 17

  18. Slide 18: Profit and Loss

    Q1 2020 | PROFIT AND LOSS Q1 2020 Q1 2019 Growth Growth € million € million in % in %cc Revenue 4,488 4,133 9 7 Operating income 555 537 3 1 Operating income margin in % 12.4 13.0 (0.6)pp (0.7)pp Net interest expense 104 108 (3) (5) Income before taxes 451 429 5 3 Income tax expense 100 101 0 (3) Ta

  19. Slide 19: Debt

    DEBT RECONCILIATION OF NON-IFRS FINANCIAL MEASURES TO THE MOST DIRECTLY COMPARABLE IFRS FINANCIAL MEASURES Q1 2020 FY 2019 FY 2018 € million € million € million Debt Short term debt 1,507 1,150 1,205 + Short term debt from related parties 521 22 189 + Current portion of long-term debt 1,965 1,447 1,

  20. Slide 20: EBITDA

    EBITDA RECONCILIATION OF ANNUALIZED ADJUSTED EBITDA AND NET LEVERAGE RATIO TO THE MOST DIRECTLY COMPARABLE IFRS FINANCIAL MEASURES Q1 2020 LTM FY 2019 FY 2018 € million € million € million Net income 1,461 1,439 2,226 + Income tax expense 401 402 511 − Interest income (42) (62) (147) + Interest expe

  21. Slide 21: 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 before special items 17,477 4,133 4,345 4,419 4,580 Net income before special items 1,236 286 250 332 368 RECONCILIATION OF NON-IFRS FINANCIAL MEA

  22. Slide 22: 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. 6.0% Sound divestiture ▪ 2019 negative 2015 2016 2017 2018 2019 Q1 2020 impact from NxStage acquisition

  23. Slide 23: 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 2020 Q1 2019 FY 2019 Q1 Q2 Q3 Q4 Full year €:$ Period end 1.096 1.124 1.123 2020 77 78 79 79 313 Average 1.103 1.136 1.119 2019 76 78 79 80 313 2018 77 78 78 80 313 €:CNY Period end

  24. Slide 24: Patients, Treatments, Clinics

    Q1 2020 | PATIENTS, TREATMENTS, CLINICS Patients Treatments Clinics Patients Treatments Clinics as of March 31, as of March 31, as of March 31, as of March 31, as of March 31, as of March 31, 2020 2020 2020 2019 2019 2019 North America 213,221 8,096,332 2,597 205,775 7,707,848 2,559 Growth in % 4 5

  25. Slide 25: Financial Calendar 2020

    FINANCIAL CALENDAR 2020 REPORTING DATES & AGM July 30 Q2 Earnings Release and Conference Call October 29 Q3 Earnings Release and Conference Call CONFERENCES & MEET THE MANAGEMENT May 12 Bank of America Merrill Lynch Conference, Las Vegas (Virtual Conference) May 27 UBS Best od Europe 1on1 Conference

  26. Slide 26: 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)

Fresenius Medical Care — Q1 2020 Earnings Presentation on 6ix