Full Press Release Details
Medical Care continues solid revenue and strong earnings growth in the third quarter
global COVID-19 pandemic has posed further challenges to us in the third quarter; and it will be a sizable challenge to be managed
also in the months to come", said Rice Powell, Chief Executive Officer of Fresenius Medical Care. "It is at times
like these that the value of our strong network, of our vertically integrated, resilient business model and of the commitment
of our entire Fresenius Medical Care team becomes evident - and proves to be decisive for fostering the wellbeing of our
patients as well as creating value for our shareholders. On the back of our strong earnings development in the first nine months,
we confirm our outlook for the financial year 2020. Thanks to the lessons learned from the first phase of the pandemic and our
highly committed team, I am very confident that our company will successfully cope with COVID-19."
| Q3 2020 EUR m | Q3 2019 EUR m | Growth yoy | Growth yoy, cc | 9M 2020 EUR m | 9M 2019 EUR m | Growth yoy | Growth yoy, cc | |
| Revenue | 4,414 | 4,419 | +/- 0% | + 6% | 13,459 | 12,897 | + 4% | + 6% |
| Operating income | 632 | 595 | + 6% | + 11% | 1,843 | 1,653 | + 11% | + 12% |
| Net income 1 | 354 | 333 | + 6% | + 11% | 987 | 857 | + 15% | + 15 % |
| Net income adjusted 1,2 | 354 | 332 | + 7% | + 11% | 987 | 868 | + 14% | + 14 % |
| Basic EPS (EUR) | 1.21 | 1.10 | + 9% | + 14% | 3.35 | 2.82 | + 19% | + 19% |
= at constant currency, EPS = earnings per share
targets confirmed: mid to high single digit growth rates
Medical Care continues to expect both revenue and net income to grow at a mid to high single digit rate in
2020. These targets are inclusive of anticipated COVID-19 effects, in constant currency and exclude special items3.
They are based on the adjusted results 2019, including the effects of the operations of the NxStage acquisition and the IFRS 16
continues to affect dialysis business
in previous months - and thanks to the comprehensive protective measures initiated at the beginning of the pandemic -
Fresenius Medical Care was able to minimize the impact on patients and to maintain operations in its more than 4,000 dialysis
centers worldwide without significant interruptions.
the COVID-19 pandemic continued to affect people with advanced kidney disease and the resulting severity of illness generated
an increase in hospitalization and mortality rate. The resulting increase in missed treatments and, in addition, delayed referrals
of patients with late stage chronic kidney disease, slowed down the organic growth in the
Net income attributable to shareholders of Fresenius Medical
For a reconciliation of adjusted figures, please refer to
the table at the end of the press release
Special items are effects that are unusual in nature and
have not been foreseeable or not foreseeable in size or impact at the time of giving guidance.
quarter to 3%. In the first nine months the COVID-19 related net effect on operating income was neutral.
Clinics and Employees
of September 30, 2020, Fresenius Medical Care treated 349,167 patients in 4,073 dialysis clinics worldwide. At the
end of the third quarter, the Company had 126,463 employees (full-time equivalents) worldwide, compared to 120,734 employees
as of September 30, 2019.
net income growth despite headwinds from exchange rates
a sizable headwind from exchange rates, revenue was stable and amounted to EUR 4,414 million (+6% at constant currency).
Organic growth of 3% was realized including the expected negative impacts from lower reimbursement for calcimimetics and COVID-19
related slower growth in the number of treatments.
Care Services revenue remained stable despite the negative effects from exchange rates and amounted to EUR 3,499 million (+6%
at constant currency). On a constant currency basis, growth was driven by negative prior year revenue effects ("prior year
revenue effects")4, contributions from acquisitions and was achieved despite
the lower reimbursement for calcimimetics as well as COVID-19 related slower growth of the number of treatments.
Care Products revenue was negatively impacted by exchange rates as well and decreased by 1% to EUR 915 million (+4% at constant
currency). On a constant currency basis, growth was driven by higher sales of products for acute care treatments, machines for
chronic treatment and peritoneal dialysis products.
the first nine months of 2020 revenue increased by 4% to EUR 13,459 million (+6% at constant currency), with organic growth of
4%. Health Care Services revenue grew by 4% to EUR 10,708 million (+6% at constant currency). Health Care Products revenue rose
by 5% to EUR 2,751 million (+7% at constant currency).
Prior year revenue effects: revenue recognition adjustment
for accounts receivable in legal dispute (- EUR 84 million), reduction in patient attribution and a decreasing savings rate for
ESCOs (- EUR 46 million)
income increased by 6% to EUR 632 million (+11% at constant currency), resulting in a margin of 14.3% (Q3 2019: 13.5%). The
margin increase was driven by negative prior year earnings effects ("prior year earnings effects")5,
an increase in commercial revenue and favorable cost management of pharmaceuticals, offsetting the lower reimbursement for calcimimetics,
all in the North America region.
income for the first nine months increased by 11% to EUR 1,843 million (+12% at constant currency), resulting in a margin of 13.7%
income1 grew by 6% to EUR 354 million (+11% at constant currency), driven by
the earnings effects described above and lower refinancing cost in light of favorable market conditions. Basic earnings per
share (EPS) rose by 9% to EUR 1.21 (+14% at constant currency), supported by the Company's completed share buyback program
decreasing the average weighted number of shares outstanding.
the first nine months of 2020, net income increased by 15% to EUR 987 million (+15% at constant currency). EPS rose by 19% to
EUR 3.35 (+19% at constant currency).
cash-flow development in the first nine months
Medical Care generated EUR 746 million of operating cash flow (Q3 2019: EUR 868 million), resulting in a margin of 16.9%
(Q3 2019: 19.7%). For the first nine months of 2020, operating cash flow increased to EUR 3,649 million (9M 2019: EUR 1,796 million).
This increase was mainly due to U.S. federal relief funding and advanced payments under the CARES Act, other COVID-19 relief,
as well as working capital improvements driven by cash collections.
cash flow (net cash used in operating activities, after capital expenditures, before acquisitions, investments and dividends)
amounted to EUR 507 million (Q3 2019: EUR 584 million), resulting in a margin of 11.5% (Q3 2019: 13.2%). In the first nine months
of 2020, the Company generated a free cash flow of EUR 2,913 million (9M 2019: EUR 1,019 million).
Prior year earnings effects: revenue recognition adjustment
for accounts receivable in legal dispute (- EUR 84 million), reduction in patient attribution and a decreasing savings rate for
ESCOs (- EUR 46 million) as well as a remeasurement effect of the fair value of the Humacyte investment (EUR 76 million).
North America, despite a sizable negative exchange rate effect, revenue remained stable and amounted to EUR 3,069 million
(+5% at constant currency, +2% organic). On a constant currency basis, growth drivers were the prior year revenue effects4,
an improved commercial mix and contributions from acquisitions. This was partially offset by expected headwinds from lower reimbursement
for calcimimetics as well as a COVID-19 related slower growth of the number of treatments. For the first nine months, North America
revenue increased by 5% to EUR 9,495 million (+5% at constant currency, +3% organic).
significant headwinds from exchange rates, operating income increased by 8% to EUR 514 million (+13% at constant currency), resulting
in a margin of 16.8% (Q3 2019: 15.5%). The margin increase was mainly due to the prior year earnings effects5, an increase
in commercial revenue and favorable cost management of pharmaceuticals, offsetting the lower reimbursement for calcimimetics.
For the first nine months, operating income rose by 24% to EUR 1,587 million (+24% at constant currency), resulting in a margin
of 16.7% (9M 2019: 14.2%).
a negative effect from exchange rates, revenue in EMEA remained stable and amounted to EUR 682 million (+3% at constant
currency, +1% organic). Growth on a constant currency basis was supported by contributions from acquisitions and growth in same
market treatments. For the first nine months, EMEA revenue increased by 3% to EUR 2,048 million (+5% at constant currency, +4%
income for the EMEA region also remained stable and amounted to EUR 99 million (+0% at constant currency), resulting in a
margin of 14.6% (Q3 2019: 14.6%). At constant currency, operating income development was negatively influenced by unfavorable
impact from foreign currency transaction effects. For the first nine months, operating income decreased by 17% to EUR 278
million (-16% at constant currency), resulting in a margin of 13.6% (9M 2019: 16.8%). The decrease was mainly due to the
reduction of a contingent consideration liability related to Xenios in the prior year and an impairment of a license held by
the joint venture with Vifor based on an unfavorable clinical trial.
Asia-Pacific, revenue development was affected by exchange rates and increased by 2% to EUR 484 million (+6% at constant
currency, +6 organic), mainly driven by growth in same market treatments, contributions from acquisitions, higher sales of in-center
disposables and products for acute care treatments, as well as organic growth in the Care Coordination business. This was partially
offset by missing contributions from closed or sold clinics. For the first nine months, revenue grew by 1% to EUR 1,377 million
(+2% at constant currency, +2% organic).
income grew by 7% to EUR 97 million (+9% at constant currency), resulting in a margin of 20.0% (Q3 2019: 19.0%). The increase
in margin was supported by a favorable impact from cost management initiatives and business growth. For the first nine months,
operating income decreased by 7% to EUR 237 million (-7% at constant currency) resulting in a margin of 17.2% (9M 2019: 18.7%).
a very significant headwind from exchange rates, Latin America revenue decreased by 7% to EUR 170 million (+22% at constant
currency, +17% organic). For the first nine months, revenue decreased by 2% to EUR 508 million (+23% at constant currency, +17%
income increased by 6% to EUR 11 million (+28% at constant currency), resulting in a margin of 6.6% (Q3 2019: 5.8%). For the first