Full Press Release Details
FRESENIUS MEDICAL CARE
Investor News Fresenius Medical Care AG & Co. KGaA
Phone: + 49 6172 609 2601
Fax + 49 6172 609 2301
E-mail: ir@fmc-ag.com
Phone: + 1 781 402 9000
Fax: + 1 781 402 9741
E-mail: ir@fmc-ag.com
Internet: http://www.fmc-ag.com
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Fresenius Medical Care reports Fourth Quarter
and Full Year 2005 Results
Excellent Full Year 2005:
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The Company exceeded its financial targets, achieved record earnings and
proposes its 9th consecutive annual dividend increase.
Net Revenue $ 6,772 million + 9%
Operating Income (EBIT) $ 939 million + 10%
Operating Income (EBIT) excluding one-time-costs $ 961 million + 13%
Net Income $ 455 million + 13%
Net Income excluding one-time-costs $ 472 million + 17%
Dividend Proposal Ordinary Share (euro) 1.23 + 10%
Preference Share (euro) 1.29 + 9%
Fresenius Medical Care AG & Co. KGaA, February 22, 2006 1 of 17
Bad Homburg, Germany - February 22, 2006 - Fresenius Medical Care AG & Co. KGaA
("the Company") (Frankfurt Stock Exchange: FME, FME3) (NYSE: FMS, FMS-p), the
world's largest provider of Dialysis Products and Services, today announced its
results for the fourth quarter and full year of 2005.
Fourth Quarter 2005:
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Total revenue for the fourth quarter 2005 compared to the fourth quarter 2004
increased by 8% (10% at constant currency) to $1,772 million. The organic growth
rate worldwide was 9%. Dialysis Services revenue grew by 8% to $1,257 million
(8% at constant currency) in the fourth quarter of 2005. Dialysis Products
revenue increased by 9% to $516 million (13% at constant currency) in the same
North America revenue increased by 9% to $1,194 million. Dialysis Services
revenue increased by 7% to $1,049 million. Average revenue per treatment for the
U.S. clinics increased by 4% to $302 in the fourth quarter 2005, as compared to
$290 for the same quarter in 2004. Dialysis Products revenue increased by 22% to
$145 million led by strong sales of our 2008K hemodialysis machines and
International revenue was $578 million, an increase of 7% (12% at constant
currency) as compared to the fourth quarter of 2004. Dialysis Services revenue
reached $208 million, an increase of 11% (15% at constant currency). Dialysis
Products revenue increased by 5% to $370 million (10% at constant currency).
Operating income (EBIT) increased by 7% to $244 million. Operating income for
the fourth quarter 2005 includes $14 million of one-time costs associated with
the transformation of Fresenius Medical Care's legal form into a
Kommanditgesellschaft auf Aktien (or KGaA, a partnership limited by shares) and
related legal fees and costs concerning the settlement of shareholder
Fresenius Medical Care AG & Co. KGaA, February 22, 2006 2 of 17
Excluding one-time costs, operating income for the fourth quarter 2005 increased
by 14% to $258 million. This very good performance resulted in an operating
margin of 14.6% as compared to 13.9% for the same quarter in 2004.
Compared to the fourth quarter 2004, the operating margin in North America
increased by 50 basis points to 14.5%. In our International segment, the
operating margin increased by 210 basis points to 17.4%. Our strong operational
performance in the International segment was positively impacted by better
production efficiencies, a favorable reimbursement environment in major dialysis
service countries and foreign currency gains.
Net interest expense remained unchanged at $46 million for the fourth quarter of
2005 as compared to the same quarter in 2004.
Income tax expense was $82 million in the fourth quarter of 2005, as compared to
$72 million in the fourth quarter of 2004, reflecting effective tax rates of
41.3% and 39.8%, respectively.
Net income for the fourth quarter 2005 was $116 million, an increase of 7%.
Excluding one-time costs, net income increased by 18% to $127 million.
Earnings per share (EPS) for the fourth quarter of 2005 rose by 5% to $1.18 per
ordinary share ($0.39 per American Depositary Share (ADS)), as compared to $1.12
($0.37 per ADS) for the fourth quarter of 2004. The weighted average number of
shares outstanding for the fourth quarter of 2005 was approximately 97.6 million
shares, as compared to 96.3 million shares for the fourth quarter 2004. The
increase in shares outstanding results from stock option exercises in 2005.
Fresenius Medical Care AG & Co. KGaA, February 22, 2006 3 of 17
In the fourth quarter of 2005, the Company generated $200 million in net cash
from operations, or 11.3% of revenue, which is at the high end of our
A total of $135 million, net of disposals, was used for capital expenditures.
Free Cash Flow before acquisitions was $65 million for the fourth quarter of
2005. Days Sales Outstanding (DSO) in the fourth quarter of 2005 remained
unchanged at 82 days from the third quarter of 2005 as a result of strong cash
collection efforts. A total of $39 million in cash was used for acquisitions.
Earnings and Revenue
For the full year 2005, net income was $455 million, up 13% from 2004. Excluding
one-time costs, net income increased by 17% to $472 million.
Net revenue was $6,772 million, up 9% compared to 2004. Adjusted for currency,
net revenue rose 8%.
Operating income (EBIT) increased by 10% to $939 million. Operating income for
the full year 2005 includes $22 million of one-time costs associated with the
transformation of Fresenius Medical Care's legal form into a
Kommanditgesellschaft auf Aktien and related legal fees and costs concerning the
settlement of shareholder litigation.
Excluding one-time costs, operating income increased by 13% to $961 million,
resulting in an operating margin of 14.2% as compared to 13.7% for the year
Net interest expense for the full year 2005 decreased by 6% to $173 million.
Income tax expense was $309 million for the full year as compared to $265
million in 2004. This reflects an effective tax rate of 40.3% for 2005.
Fresenius Medical Care AG & Co. KGaA, February 22, 2006 4 of 17
For the full year 2005, earnings per ordinary share rose by 13% to $4.68 ($1.56
per ADS). The weighted average number of shares outstanding during 2005 was
approximately 96.8 million.
Cash from operations during the full year 2005 was $670 million as compared to