Full Press Release Details
| Investor News | Oliver Maier |
| Head of Investor Relations | |
| Fresenius Medical Care | |
| Else-Kr ner-Stra e 1 | |
| 61352 Bad Homburg | |
| Germany | |
| T +49 6172 609-2601 | |
| F +49 6172 609-2301 | |
| oliver.maier@fmc-ag.com | |
| www.fmc-ag.com |
Fresenius Medical Care Reports Second Quarter And Half Year 2013 Results
Second Quarter 2013 Key Figures:
| Net revenue | $3,613 million | +5 | % | ||
| Operating income (EBIT) | $544 million | -8 | % | ||
| Adjusted operating income (EBIT) | $555 million | -2 | % | ||
| Net income 1 | $263 million | -9 | % | ||
| Adjusted net income 1 | $272 million | +2 | % | ||
| Earnings per ordinary share | $0.86 | -10 | % | ||
| Adjusted earnings per ordinary share | $0.89 | +2 | % |
First Half 2013 Key Figures:
| Net revenue | $7,076 million | +6 | % | ||
| Operating income (EBIT) | $1,038 million | -5 | % | ||
| Adjusted operating income (EBIT) | $1,049 million | -3 | % | ||
| Net income 1 | $488 million | -26 | % | ||
| Adjusted net income 1 | $498 million | -3 | % | ||
| Earnings per ordinary share | $1.59 | -27 | % | ||
| Adjusted earnings per ordinary share | $1.62 | -4 | % |
1attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
Bad Homburg, Germany Fresenius Medical Care AG & Co. KGaA (the company or Fresenius Medical Care ; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world s largest provider of dialysis products and services, today announced its results for the second quarter and first half of 2013.
Net revenue for the second quarter of 2013 increased by 5% to $3,613 million (+6% at constant currency) compared to the second quarter of 2012. Organic revenue growth worldwide was 5%. Dialysis services revenue grew by 5% to $2,743 million (+6% at constant currency) and dialysis product revenue increased by 6% to $870 million (+5% at constant currency).
North America revenue for the second quarter of 2013 increased by 6% to $2,375 million. Organic revenue growth was 5%. Dialysis services revenue grew by 6% to $2,157 million with a same store treatment growth of 4%. Dialysis product revenue increased by 6% to $218 million.
International revenue increased by 5% to $1,228 million (+6% at constant currency). Organic revenue growth was 5%. Dialysis services revenue increased by 4% to $586 million (+7% at constant currency). Dialysis product revenue increased by 5% to $642 million (+5% at constant currency).
Operating income (EBIT) for the second quarter of 2013 decreased by 8% to $544 million compared to $589 million in the second quarter of 2012. The operating income for North America for the second quarter of 2013 decreased by 9% to $394 million compared to $431 million in the second quarter of 2012. In the International segment, the operating income for the second quarter of 2013 increased by 1% to $209 million compared to $207 million in the second quarter of 2012.
Adjusted for special items related to the acquisition of Liberty Dialysis Holdings Inc. and the impact from the budget cuts in the U.S. (sequestration) that were effectively introduced in April 2013, the operating income for the second quarter of 2013 decreased by 2% to $555 million compared to $568 million in the second quarter of 2012.
Net interest expense for the second quarter of 2013 was $103 million, compared to $104 million in the second quarter of 2012.
Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the second quarter of 2013 was $263 million, a decrease of 9% compared to the corresponding number of $289 million for the second quarter of 2012. Adjusted for the net of tax effects of the special items mentioned above, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the second quarter of 2013 increased by 2% to $272 million compared to $266 million for the second quarter of 2012.
Income tax expense was $144 million for the second quarter of 2013 which translates into an effective tax rate of 32.6%. This compares to income tax expense of $172 million and a tax rate of 34.6% for the second quarter of 2012. Adjusted for the special items mentioned above, the tax rate for the second quarter of 2013 was 32.1% as compared to 34.4% for the second quarter of 2012.
Earnings per ordinary share (EPS) for the second quarter of 2013 was $0.86, a decrease of 10% compared to the corresponding number for the second quarter of 2012. Adjusted for the special items mentioned above, EPS for the second quarter of 2013 increased by 2% to $0.89 compared to $0.88 for the second quarter of 2012. The weighted average number of shares outstanding for the second quarter of 2013 was approximately 306.3 million shares, compared to 304.4 million shares for the second quarter of 2012. The increase in shares outstanding mainly resulted from stock option exercises in the past twelve months, partially offset by the effect of the share buy-back program.
In the second quarter of 2013, the company generated $525 million in cash from operations, an increase of 16% compared to the corresponding figure of last year and representing 14.5% of revenue.
A total of $173 million was spent for capital expenditures, net of disposals. Free cash flow before acquisitions was $352 million (representing 9.8% of revenue) compared to $300 million in the second quarter of 2012.
A total of $13 million in cash was spent for acquisitions and investments, net of divestitures. Free cash flow after acquisitions and divestitures was $339 million, compared to $306 million in the second quarter of 2012.
Revenue and Earnings
Net revenue for the first half of 2013 increased by 6% to $7,076 million (+6% at constant currencies) compared to the first half of 2012. Organic revenue growth was 5% in the first half of 2013.
Operating income (EBIT) for the first half of 2013 decreased by 5% to $1,038 million compared to $1,092 million in the first half of 2012. Adjusted for special items related to the acquisition of Liberty Dialysis Holdings Inc. and the impact from sequestration the operating income for the first half of 2013 decreased by 3% to $1,049 million compared to $1,078 million for the first half of 2012.
Net interest expense for the first half of 2013 was $207 million compared to $203 million in the same period of 2012.
For the first half of 2013, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA was $488 million, down by 26% from the corresponding number of $660 million for the first half of 2012. Adjusted for the net of tax effects of the special items mentioned above, net income attributable to shareholders of Fresenius Medical Care AG
& Co. KGaA for the first half of 2013 decreased by 3% to $498 million compared to $514 million for the first half of 2012.
Income tax expense for the first half of 2013 was $273 million which translates into an effective tax rate of 32.8%. This compares to income tax expense of $309 million and a tax rate of 30.1% for the first half of 2012. Adjusted for the special items mentioned above, the tax rate for the first half of 2013 was 32.6% as compared to 33.8% for the first half of 2012.
In the first half of 2013, earnings per ordinary share decreased by 27% to $1.59 compared to $2.17 for the first half of 2012. Adjusted for the special items mentioned above, EPS for the first half of 2013 decreased by 4% to $1.62 compared to $1.69 for the first half of 2012. The weighted average number of shares outstanding during the first half of 2013 was approximately 306.5 million.
Cash from operations during the first half of 2013 was $841 million compared to $932 million for the same period in 2012, representing 11.9% of revenue.
A total of $319 million in cash was spent for capital expenditures, net of disposals. Free cash flow before acquisitions for the first half of 2013 was $522 million compared to $658 million in the same period in 2012. A total of $84 million in cash was spent for acquisitions, net of divestitures. Free cash flow after acquisitions and divestitures was $438 million compared to minus $862 million in the first half of last year.
Please refer to the attachments for a complete overview of the results for the second quarter and first half of 2013 and the reconciliation of non-GAAP financial measures included in this release to the most comparable GAAP financial measures.
Patients Clinics Treatments
As of June 30, 2013, Fresenius Medical Care treated 264,290 patients worldwide, which represents an increase of 3% compared to the previous year s figure. North America
provided dialysis treatments for 168,160 patients, an increase of 3% compared to the corresponding number for 2012. The International segment provided dialysis treatments for 96,130 patients, an increase of 4% over the prior year s figure.
As of June 30, 2013, the company operated a total of 3,212 clinics worldwide, an increase of 3% compared to the corresponding number for 2012. The number of clinics is comprised of 2,104 clinics in North America (+3%) and 1,108 clinics in the International segment (+3%).
During the first half of 2013, Fresenius Medical Care delivered approximately 19.7 million dialysis treatments worldwide. This represents an increase of 5% compared to the previous year s figure. North America accounted for 12.5 million treatments, an increase of 5%. The International segment delivered 7.2 million treatments, an increase of 3%.
As of June 30, 2013, Fresenius Medical Care had 87,944 employees (full-time equivalents) worldwide, compared to 86,153 employees at the end of 2012.
The ratio of debt to earnings before interest, taxes, depreciation and amortization (EBITDA) decreased from 2.92 at the end of the second quarter of 2012 to 2.91 at the end of the second quarter of 2013.
Standard & Poor s rates the company s corporate credit as BB+ , with a positive outlook. Moody s rates the company s corporate credit as Ba1 with a stable outlook. During the second quarter, Fitch has raised the outlook from stable to positive . Fitch continues to rate the company s corporate credit as BB+ .
Share buy-back program
Fresenius Medical Care has started the share buy-back program on May 20, 2013. The company intends to repurchase ordinary shares with an aggregate value of up to 385 million (approximately $500 million). The program is expected to run into the third quarter of 2013. As of June 30, 2013, around 3.58 million shares were repurchased in the amount of approximately 190 million (~$249 million).
Conversion of preference shares
At the annual general meeting and in a separate meeting of preference shareholders the shareholders approved the mandatory conversion of all preference shares into ordinary shares on a 1:1 basis. This conversion was finalized on June 28, 2013.
Guidance for 2013 confirmed
The company expects revenue to grow to more than $14.6 billion in 2013, translating into a growth rate of more than 6%.
In April 2013 budget cuts in the U.S. (sequestration) were effectively introduced. We do not assume that these measurements will be revised this year. Therefore the net income guidance range has been confirmed and has been substantiated for the potential impact from sequestration on our business performance. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to be between $1.1 billion and $1.15 billion in 2013.
For 2013, the company expects to spend around $700 million on capital expenditures and around $500 million on acquisitions. The debt/EBITDA ratio is expected to be equal or below 3.0 by the end of 2013.
Rice Powell, chief executive officer of Fresenius Medical Care, commented: Our second quarter results show a mixed picture. On the one hand, we have seen an accelerated growth of our business while on the other hand we were faced with the general budget cuts in the U.S. which affected our operating income performance. Nevertheless, we were able to show an earnings increase in the second quarter on an adjusted basis. To stay ahead of our competition given the challenging environment, we are rigorously focusing on our company-wide Global Efficiency Program that we initiated at the beginning of the year.
Fresenius Medical Care will hold a conference call to discuss the results of the second quarter and first half of 2013 on Tuesday, July 30, 2013, at 3.30 p.m. CEDT / 9.30 a.m. EDT. The company invites investors to follow the live webcast of the call at the company s website www.fmc-ag.com in the Investor Relations section. A replay will be available shortly after the call.
Fresenius Medical Care is the world s largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 2.3 million individuals worldwide. Through its network of 3,212 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatments for 264,290 patients around the globe. Fresenius Medical Care is also the world s leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products.
For more information about Fresenius Medical Care, visit the company s website at www.fmc-ag.com.
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including changes in business, economic and competitive conditions, regulatory reforms, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. KGaA s reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this release.
Fresenius Medical Care
Statement of earnings
| Three months ended June 30, | Six Months Ended June 30, | ||||||||||||||||
| (in US$ thousands, except share data, unaudited) | 2013 | 2012 | Change | 2013 | 2012 | Change | |||||||||||
| Revenue | |||||||||||||||||
| Dialysis care | 2,811,244 | 2,675,422 | 5.1 | % | 5,553,179 | 5,219,481 | 6.4 | % | |||||||||
| Less: patient service bad debt provision | 67,798 | 70,303 | -3.6 | % | 131,547 | 137,162 | -4.1 | % | |||||||||
| Net dialysis care | 2,743,446 | 2,605,119 | 5.3 | % | 5,421,632 | 5,082,319 | 6.7 | % | |||||||||
| Dialysis products | 869,069 | 822,854 | 5.6 | % | 1,654,804 | 1,594,409 | 3.8 | % | |||||||||
| Total net revenue | 3,612,515 | 3,427,973 | 5.4 | % | 7,076,436 | 6,676,728 | 6.0 | % | |||||||||
| Cost of revenue | 2,454,142 | 2,301,099 | 6.7 | % | 4,808,545 | 4,480,345 | 7.3 | % | |||||||||
| Gross profit | 1,158,373 | 1,126,874 | 2.8 | % | 2,267,891 | 2,196,383 | 3.3 | % | |||||||||
| Selling, general and administrative | 595,356 | 539,616 | 10.3 | % | 1,187,070 | 1,092,448 | 8.7 | % | |||||||||
| Gain on sale of dialysis clinics | (7,727 | ) | (24,647 | ) | -68.6 | % | (8,800 | ) | (33,961 | ) | -74.1 | % | |||||
| Research and development | 30,921 | 26,938 | 14.8 | % | 61,293 | 55,460 | 10.5 | % | |||||||||
| Income from equity method investees | (4,416 | ) | (3,858 | ) | 14.4 | % | (9,224 | ) | (9,355 | ) | -1.4 | % | |||||
| Operating income (EBIT) | 544,239 | 588,825 | -7.6 | % | 1,037,552 | 1,091,791 | -5.0 | % | |||||||||
| Investment gain | (12,915 | ) | (139,600 | ) | |||||||||||||
| Interest income | (6,653 | ) | (12,496 | ) | -46.8 | % | (17,242 | ) | (32,802 | ) | -47.4 | % | |||||
| Interest expense | 109,704 | 116,691 | -6.0 | % | 224,522 | 235,877 | -4.8 | % | |||||||||
| Interest expense, net | 103,051 | 104,195 | -1.1 | % | 207,280 | 203,075 | 2.1 | % | |||||||||
| Income before taxes | 441,188 | 497,545 | -11.3 | % | 830,272 | 1,028,316 | -19.3 | % | |||||||||
| Income tax expense | 143,613 | 172,241 | -16.6 | % | 272,614 | 309,318 | -11.9 | % | |||||||||
| Net income | 297,575 | 325,304 | -8.5 | % | 557,658 | 718,998 | -22.4 | % | |||||||||
| Less: Net income attributable to noncontrolling interests | 35,051 | 35,967 | -2.5 | % | 69,635 | 59,163 | 17.7 | % | |||||||||
| Net income attributable to shareholders of FMC AG & Co. KGaA | 262,524 | 289,337 | -9.3 | % | 488,023 | 659,835 | -26.0 | % | |||||||||
| Operating income (EBIT) | 544,239 | 588,825 | -7.6 | % | 1,037,552 | 1,091,791 | -5.0 | % | |||||||||
| Depreciation and amortization | 158,801 | 150,877 | 5.3 | % | 315,154 | 294,251 | 7.1 | % | |||||||||
| EBITDA | 703,040 | 739,702 | -5.0 | % | 1,352,706 | 1,386,042 | -2.4 | % | |||||||||
| Earnings per ordinary share | $ | 0.86 | $ | 0.95 | -9.8 | % | $ | 1.59 | $ | 2.17 | -26.6 | % | |||||
| Earnings per ordinary ADS | $ | 0.43 | $ | 0.48 | -9.8 | % | $ | 0.80 | $ | 1.08 | -26.6 | % | |||||
| Weighted average number of shares | |||||||||||||||||
| Ordinary shares | 302,409,369 | 300,415,725 | 302,590,288 | 300,310,425 | |||||||||||||
| Preference shares | 3,842,900 | 3,966,600 | 3,907,756 | 3,966,301 | |||||||||||||
| In percent of revenue | |||||||||||||||||
| Cost of revenue | 67.9 | % | 67.1 | % | 68.0 | % | 67.1 | % | |||||||||
| Gross profit | 32.1 | % | 32.9 | % | 32.0 | % | 32.9 | % | |||||||||
| Selling, general and administrative | 16.5 | % | 15.7 | % | 16.8 | % | 16.4 | % | |||||||||
| Gain on sale of dialysis clinics | -0.2 | % | -0.7 | % | -0.1 | % | -0.5 | % | |||||||||
| Research and development | 0.9 | % | 0.8 | % | 0.9 | % | 0.8 | % | |||||||||
| Income from equity method investees | -0.1 | % | -0.1 | % | -0.1 | % | -0.1 | % | |||||||||
| Operating income (EBIT) | 15.1 | % | 17.2 | % | 14.7 | % | 16.4 | % | |||||||||
| Investment gain | -0.4 | % | -2.1 | % | |||||||||||||
| Interest expense, net | 2.9 | % | 3.0 | % | 2.9 | % | 3.0 | % | |||||||||
| Income before taxes | 12.2 | % | 14.5 | % | 11.7 | % | 15.4 | % | |||||||||
| Income tax expense | 4.0 | % | 5.0 | % | 3.9 | % | 4.6 | % | |||||||||
| Net income attributable to noncontrolling interests | 1.0 | % | 1.0 | % | 1.0 | % | 0.9 | % | |||||||||
| Net income attributable to shareholders of FMC AG & Co. KGaA | 7.3 | % | 8.4 | % | 6.9 | % | 9.9 | % | |||||||||
| EBITDA | 19.5 | % | 21.6 | % | 19.1 | % | 20.8 | % |
Fresenius Medical Care
Segment and other information
| Three months ended June 30, | Six Months Ended June 30, | ||||||||||||
| (in US$ million, except employees, unaudited) | 2013 | 2012 | Change | 2013 | 2012 | Change | |||||||
| Net revenue | |||||||||||||
| North America | 2,375 | 2,249 | 5.6 | % | 4,662 | 4,353 | 7.1 | % | |||||
| International | 1,228 | 1,171 | 4.9 | % | 2,397 | 2,307 | 3.9 | % | |||||
| Corporate | 10 | 8 | 6.8 | % | 17 | 17 | 3.1 | % | |||||
| Total net revenue | 3,613 | 3,428 | 5.4 | % | 7,076 | 6,677 | 6.0 | % | |||||
| Operating income (EBIT) | |||||||||||||
| North America | 394 | 431 | -8.6 | % | 763 | 779 | -2.1 | % | |||||
| International | 209 | 207 | 0.8 | % | 393 | 402 | -2.3 | % | |||||
| Corporate | (59 | ) | (49 | ) | 18.3 | % | (118 | ) | (89 | ) | 32.1 | % | |
| Total operating income (EBIT) | 544 | 589 | -7.6 | % | 1,038 | 1,092 | -5.0 | % | |||||
| Operating income in percent of revenue | |||||||||||||
| North America | 16.6 | % | 19.2 | % | 16.4 | % | 17.9 | % | |||||
| International | 17.0 | % | 17.7 | % | 16.4 | % | 17.4 | % | |||||
| Total | 15.1 | % | 17.2 | % | 14.7 | % | 16.4 | % | |||||
| Employees | |||||||||||||
| Full-time equivalents | 87,944 | 84,194 |
Fresenius Medical Care
Reconciliation of non U.S. GAAP
financial measures to the most directly
comparable U.S. GAAP financial measures
| Three months ended June 30, | Six months ended June 30, | ||||||||||||
| (in US$ million, unaudited) | 2013 | 2012 | Change | 2013 | 2012 | Change | |||||||
| EBIT, as reported | 544 | 589 | -7.6 | % | 1,038 | 1,092 | -5.0 | % | |||||
| Special items related to Liberty acquisition 1 | (8 | ) | (21 | ) | (8 | ) | (14 | ) | |||||
| Sequestration impact | 19 | 19 | |||||||||||
| EBIT, adjusted | 555 | 568 | -2.2 | % | 1,049 | 1,078 | -2.7 | % | |||||
| Income before taxes, as reported | 441 | 498 | -11.3 | % | 831 | 1,029 | -19.3 | % | |||||
| Special items related to Liberty acquisition 2 | (8 | ) | (37 | ) | (8 | ) | (163 | ) | |||||
| Sequestration impact | 19 | 19 | |||||||||||
| Income before taxes, adjusted | 452 | 461 | -1.8 | % | 842 | 866 | -2.8 | % | |||||
| Income tax expense, as reported | 144 | 172 | -16.6 | % | 273 | 309 | -11.9 | % | |||||
| Special items related to Liberty acquisition 3 | (6 | ) | (14 | ) | (6 | ) | (16 | ) | |||||
| Sequestration impact | 7 | 7 | |||||||||||
| Income tax expense, adjusted | 145 | 158 | -8.2 | % | 274 | 293 | -6.3 | % | |||||
| Net income attributable to shareholders of FMC AG & Co. KGaA, as reported | 263 | 289 | -9.3 | % | 488 | 660 | -26.0 | % | |||||
| Special items related to Liberty acquisition 4 | (3 | ) | (23 | ) | (3 | ) | (146 | ) | |||||
| Sequestration impact | 12 | 13 | |||||||||||
| Net income attributable to shareholders of FMC AG & Co. KGaA, adjusted | 272 | 266 | 2.1 | % | 498 | 514 | -3.1 | % |
1) Legal, consulting and other expenses and gain on sale of clinics.
2) Legal, consulting and other expenses, gain on sale of clinics, gain on retirement of loan receivable and investment gain.
3) Tax benefit/ expense on legal, consulting and other expenses, gain on sale of clinics and gain on retirement of loan receivable.
4) Net of tax effects of legal, consulting and other expenses, gain on sale of clinics, gain on retirement of loan receivable and investment gain.
Fresenius Medical Care
Reconciliation of non U.S. GAAP
financial measures to the most directly
comparable U.S. GAAP financial measures
| Three months ended | Six Months Ended | ||||||||
| June 30, | June 30, | ||||||||
| (in US$ million, unaudited) | 2013 | 2012 | 2013 | 2012 | |||||
| Segment information North America | |||||||||
| Net revenue | 2,375 | 2,249 | |||||||
| Costs of revenue and research and development | 1,650 | 1,534 | |||||||
| Selling, general and administrative | 343 | 317 | |||||||
| Gain on sale of dialysis clinics | (8 | ) | (25 | ) | |||||
| Income from equity method investees | (4 | ) | (8 | ) | |||||
| Costs of revenue and operating expenses | 1,981 | 1,818 | |||||||
| Operating income (EBIT) | 394 | 431 | |||||||
| In percent of revenue | 16.6 | % | 19.2 | % | |||||
| Dialysis products revenue incl. and excl. internal sales | |||||||||
| North America | |||||||||
| Dialysis products revenue incl. internal sales | 423 | 400 | |||||||
| Less internal sales | (205 | ) | (194 | ) | |||||
| Dialysis products external sales | 218 | 206 | |||||||
| International | |||||||||
| Dialysis products revenue incl. internal sales | 767 | 712 | |||||||
| Less internal sales | (125 | ) | (103 | ) | |||||
| Dialysis products external sales | 642 | 609 | |||||||
| Reconciliation of cash flow from operating activities to EBITDA 1) | |||||||||
| Total EBITDA | 1,353 | 1,386 | |||||||
| Interest expense, net | (207 | ) | (203 | ) | |||||
| Income tax expense | (273 | ) | (309 | ) | |||||
| Change in working capital and other non-cash items | (32 | ) | 58 | ||||||
| Net cash provided by operating activities | 841 | 932 | |||||||
| Annualized EBITDA 2) | |||||||||
| Operating income (EBIT) last twelve months | 2,164 | 2,349 | |||||||
| Depreciation and amortization last twelve months | 624 | 603 | |||||||
| Non-cash charges | 79 | 53 | |||||||
| Annualized EBITDA | 2,867 | 3,005 |
1) EBITDA is the basis for determining compliance with certain covenants in Fresenius Medical Care s long-term debt instruments.
2) EBITDA 2012: Pro forma numbers including Liberty Dialysis Holdings Inc., after FTC mandated divestitures.
Fresenius Medical Care
| June 30, | December 31, | ||||
| (in US$ million) | 2013 | 2012 | |||
| (unaudited) | (audited) | ||||
| Assets | |||||
| Current assets | 6,150 | 6,127 | |||
| Intangible assets | 12,150 | 12,132 | |||
| Other non-current assets | 4,028 | 4,067 | |||
| Total assets | 22,328 | 22,326 | |||
| Liabilities and equity | |||||
| Current liabilities | 3,406 | 3,170 | |||
| Long-term liabilities | 9,271 | 9,426 | |||
| Noncontrolling interests subject to put provisions | 541 | 523 | |||
| Total equity | 9,110 | 9,207 | |||
| Total liabilities and equity | 22,328 | 22,326 | |||
| Equity/assets ratio | 41 | % | 41 | % | |
| Debt | |||||
| Short-term borrowings | 115 | 118 | |||
| Short-term borrowings from related parties | 59 | 4 | |||
| Current portion of long-term debt and capital lease obligations | 515 | 335 | |||
| Long-term debt and capital lease obligations, less current portion | 7,657 | 7,841 | |||
| Total debt | 8,346 | 8,298 |
Fresenius Medical Care
| Six months ended | |||||
| June 30, | |||||
| (in US$ million, unaudited) | 2013 | 2012 | |||
| Operating activities | |||||
| Net income | 558 | 720 | |||
| Depreciation / amortization | 315 | 294 | |||
| Investment gain | (140 | ) | |||
| Change in working capital and other non-cash items | (32 | ) | 58 | ||
| Cash flow from operating activities | 841 | 932 | |||
| Investing activities | |||||
| Purchases of property, plant and equipment | (334 | ) | (277 | ) | |
| Proceeds from sale of property, plant and equipment | 15 | 3 | |||
| Capital expenditures, net | (319 | ) | (274 | ) | |
| Free cash flow | 522 | 658 | |||
| Acquisitions, net of cash acquired, and purchases of intangible assets | (102 | ) | (1,748 | ) | |
| Proceeds from divestitures | 18 | 228 | |||
| Acquisitions, net of divestitures | (84 | ) | (1,520 | ) | |
| Free cash flow after investing activities | 438 | (862 | ) | ||
| Financing activities | |||||
| Change in accounts receivable securitization program | 23 | (83 | ) | ||
| Change in intercompany debt | (2 | ) | 25 | ||
| Change in other debt | 37 | 1,463 | |||
| Proceeds from exercise of stock options | 36 | 23 | |||
| Purchase of treasury stock | (231 | ) | |||
| Distributions to noncontrolling interests | (118 | ) | (79 | ) | |
| Contributions from noncontrolling interests | 27 | 12 | |||
| Dividends paid | (296 | ) | (272 | ) | |
| Cash flow from financing activities | (524 | ) | 1,089 | ||
| Effects of exchange rates on cash | (16 | ) | (7 | ) | |
| Net increase (decrease) in cash | (102 | ) | 220 | ||
| Cash at beginning of period | 688 | 457 | |||
| Cash at end of period | 586 | 677 |
Fresenius Medical Care
Quarterly performance scorecard - revenue
| Three months ended June 30, | 2013 | cc | 2012 | cc | |||||
| (in US$ thousands, except per-treatment revenue) | |||||||||
| (unaudited) | |||||||||
| North America | |||||||||
| Net revenue | 2,375,247 | 2,248,692 | |||||||
| Growth year-over-year | 5.6 | % | 14.1 | % | |||||
| Net dialysis care | 2,157,019 | 2,043,127 | |||||||
| Growth year-over-year | 5.6 | % | 15.3 | % | |||||
| U.S. per treatment | 355 | 351 | |||||||
| Per treatment | 347 | 344 | |||||||
| Sequential growth | -1.1 | % | -0.5 | % | |||||
| Growth year-over-year | 0.9 | % | 1.1 | % | |||||
| Dialysis products | |||||||||
| Incl. internal sales | 422,517 | 399,979 | |||||||
| Growth year-over-year | 5.6 | % | 1.4 | % | |||||
| External sales | 218,228 | 205,565 | |||||||
| Growth year-over-year | 6.2 | % | 3.1 | % | |||||
| International | |||||||||
| Net revenue | 1,228,322 | 1,170,902 | |||||||
| Growth year-over-year | 4.9 | % | 5.9 | % | 0.7 | % | 10.8 | % | |
| Net dialysis care | 586,427 | 561,992 | |||||||
| Growth year-over-year | 4.3 | % | 6.8 | % | 5.3 | % | 16.3 | % | |
| Per treatment | 159 | 163 | 159 | 176 | |||||
| Sequential growth | -2.1 | % | -1.4 | % | |||||
| Growth year-over-year | 0.1 | % | 2.4 | % | -10.4 | % | -1.0 | % | |
| Dialysis products | |||||||||
| Incl. internal sales | 766,790 | 711,970 | |||||||
| Growth year-over-year | 7.7 | % | 7.6 | % | -2.2 | % | 7.6 | % | |
| External sales | 641,896 | 608,910 | |||||||
| Growth year-over-year | 5.4 | % | 5.0 | % | -3.2 | % | 6.1 | % |
cc = at constant currency
Changes in revenue include the impact of changes in foreign currency exchange rates. We use the non-GAAP financial measure at constant exchange rates in our filings to show changes in our revenue without giving effect to period-to-period currency fluctuations. Under U.S. GAAP, revenues received in local (non-U.S. dollar) currency are translated into U.S. dollars at the average exchange rate for the period presented. When we use the term constant currency, it means that we have translated local currency revenues for the current reporting period into U.S. dollars using the same average foreign currency exchange rates for the conversion of revenues into U.S. dollars that we used to translate local currency revenues for the comparable reporting period of the prior year. We then calculate the change, as a percentage, of the current period revenues using the prior period exchange rates versus the prior period revenues. This resulting percentage is a non-GAAP measure referring to a change as a percentage at constant exchange rates.
We believe that revenue growth is a key indication of how a company is progressing from period to period and that the non-GAAP financial measure constant currency is useful to investors, lenders, and other creditors because such information enables them to gauge the impact of currency fluctuations on a company s revenue from period to period. However, we also believe that the usefulness of data on constant currency period-over-period changes is subject to limitations, particularly if the currency effects that are eliminated constitute a significant element of our revenue and significantly impact our performance. We therefore limit our use of constant currency period-over-period changes to a measure for the impact of currency fluctuations on the translation of local currency revenue into U.S. dollars. We do not evaluate our results and performance without considering both constant currency period-over-period changes in non-U.S. GAAP revenue on the one hand and changes in revenue prepared in accordance with U.S. GAAP on the other. We caution the readers of this report to follow a similar approach by considering data on constant currency period-over-period changes only in addition to, and not as a substitute for or superior to, changes in revenue prepared in accordance with U.S. GAAP. We present the fluctuation derived from U.S. GAAP revenue next to the fluctuation derived from non-GAAP revenue. Because the reconciliation is inherent in the disclosure, we believe that a separate reconciliation would not provide any additional benefit.
Fresenius Medical Care
Quarterly performance scorecard - dialysis care volume
| Three months ended June 30, | 2013 | 2012 | |||
| (unaudited) | |||||
| North America | |||||
| Number of treatments | 6,383,556 | 6,141,414 | |||
| Treatments per day | 81,829 | 78,736 | |||
| Per day sequential growth | 1.1 | % | 6.9 | % | |
| Per day year-over-year growth | 3.9 | % | 14.2 | % | |
| Same market growth year-over-year | 3.8 | % | 3.6 | % | |
| International | |||||
| Number of treatments | 3,682,841 | 3,531,153 | |||
| Same market growth year-over-year | 4.0 | % | 3.9 | % |
Fresenius Medical Care
Quarterly performance scorecard - expenses
| Three months ended June 30, | 2013 | 2012 | |||
| (unaudited) | |||||
| North America | |||||
| Costs of revenue and operating expenses, gain on sale of dialysis clinics and income from equity method investees | |||||
| In percent of revenue | 83.4 | % | 80.8 | % | |
| Selling, general and administrative | |||||
| In percent of revenue | 14.4 | % | 14.1 | % | |
| U.S. Dialysis care operating expenses/treatment (in US-$) | 291 | 280 | |||
| Sequential growth | -1.2 | % | -2.1 | % | |
| Growth year-over-year | 4.0 | % | -0.9 | % | |
| Dialysis care operating expenses/treatment (in US-$) | 286 | 275 | |||
| Sequential growth | -0.9 | % | -2.0 | % | |
| Growth year-over-year | 4.0 | % | -0.7 | % | |
| Total Group | |||||
| Costs of revenue and operating expenses, gain on sale of dialysis clinics and income from equity method investees | |||||
| In percent of revenue | 84.9 | % | 82.8 | % | |
| Selling, general and administrative | |||||
| In percent of revenue | 16.5 | % | 15.7 | % | |
| Effective tax rate | 32.6 | % | 34.6 | % |
Fresenius Medical Care
Quarterly performance scorecard - cash flow/investing activities
| Three months ended June 30, | 2013 | 2012 | |||
| (in US$ thousands, except number of de novos) | |||||
| (unaudited) | |||||
| Total Group | |||||
| Operating cash flow | 525,119 | 450,783 | |||
| In percent of revenue | 14.5 | % | 13.2 | % | |
| Free cash flow before acquisitions | 352,303 | 299,593 | |||
| In percent of revenue | 9.8 | % | 8.7 | % | |
| Acquisitions and investments, net of divestitures | 12,807 | (6,108 | ) | ||
| Capital expenditures, net | 172,816 | 151,190 | |||
| In percent of revenue | 4.8 | % | 4.4 | % | |
| Maintenance | 96,837 | 87,802 | |||
| In percent of revenue | 2.7 | % | 2.6 | % | |
| Growth | 75,979 | 63,388 | |||
| In percent of revenue | 2.1 | % | 1.8 | % | |
| Number of de novos | 20 | 21 | |||
| North America | 12 | 16 | |||
| International | 8 | 5 |
Fresenius Medical Care
Quarterly performance scorecard - balance sheet
| June 30, | 2013 | 2012 | |||
| (unaudited) | |||||
| Total Group | |||||
| Debt (in US$ million) | 8,346 | 8,784 | |||
| Debt/EBITDA | 2.91 | 2.92 | |||
| North America | |||||
| Days sales outstanding | 54 | 54 | |||
| International | |||||
| Days sales outstanding | 116 | 120 |
Fresenius Medical Care
Quarterly performance scorecard
| Three months ended June 30, | 2013 | 2012 | |||
| North America (U.S.) | |||||
| Clinical Performance | |||||
| Single Pool Kt/v > 1.2 | 97 | % | 97 | % | |
| Hemoglobin = 10-12 g/dl | 73 | % | 77 | % | |
| Hemoglobin = 10-13 g/dl | 78 | % | 83 | % | |
| Calcium = 8.4-10.2 mg/dl | 84 | % | 83 | % | |
| Albumin > 3.5 g/dl 1) | 85 | % | 86 | % | |
| No catheter (> 90 days) | 83 | % | 82 | % | |
| Phosphate < 5.5 mg/dl | 64 | % | 65 | % | |
| Hospitalization days per patient (12 months ending June 30) | 9.6 | 9.7 | |||
| Demographics | |||||
| Average age (in years) | 62 | 62 | |||
| Average time on dialysis (in years) | 3.9 | 3.8 | |||
| Average body weight (in kg) | 82 | 81 | |||
| Prevalence of diabetes | 58 | % | 58 | % | |
| Europe, Middle East and Africa | |||||
| Clinical Performance | |||||
| Single Pool Kt/v > 1.2 | 96 | % | 96 | % | |
| Hemoglobin = 10-12 g/dl | 60 | % | 59 | % | |
| Hemoglobin = 10-13 g/dl | 78 | % | 78 | % | |
| Calcium = 8.4-10.2 mg/dl | 77 | % | 76 | % | |
| Albumin > 3.5 g/dl 1) | 86 | % | 88 | % | |
| No catheter (> 90 days) | 85 | % | 86 | % | |
| Phosphate < 5.5 mg/dl | 75 | % | 77 | % | |
| Hospitalization days per patient (12 months ending June 30) | 9.3 | 9.2 | |||
| Demographics | |||||
| Average age (in years) | 64 | 64 | |||
| Average time on dialysis (in years) | 5.2 | 5.2 | |||
| Average body weight (in kg) | 72 | 71 | |||
| Prevalence of diabetes | 28 | % | 27 | % |
1) International standard BCR CRM470