Full Press Release Details
Fresenius Medical Care publishes financial results for the
second quarter and first half of 2022 in line with preliminary results
| - | Results unchanged compared with preliminary figures published on July 27, 2022 | |
| - | Business development impacted by unprecedented U.S. labor market situation and worsening macroeconomic environment driving cost inflation and supply chain disruptions | |
| - | Meaningful decline in COVID-19-related excess mortality | |
| - | Solid support by positive exchange rates | |
| - | FME25: transformation to new operating model and savings generation on track |
| Key figures (IFRS, unaudited) | ||||||||||||||||||||||||||||||||
| Q2 2022 | Q2 2021 | Growth | Growth | H1 2022 | H1 2021 | Growth | Growth | |||||||||||||||||||||||||
| EUR m | EUR m | yoy | yoy, cc | EUR m | EUR m | yoy | yoy, cc | |||||||||||||||||||||||||
| Revenue | 4,757 | 4,320 | +10 | % | +1 | % | 9,305 | 8,530 | +9 | % | +2 | % | ||||||||||||||||||||
| Operating income | 341 | 424 | -20 | % | -27 | % | 688 | 898 | -23 | % | -29 | % | ||||||||||||||||||||
| excl. special items 1 | 445 | 433 | +3 | % | -6 | % | 852 | 910 | -6 | % | -13 | % | ||||||||||||||||||||
| Net income 2 | 147 | 219 | -33 | % | -39 | % | 305 | 468 | -35 | % | -39 | % | ||||||||||||||||||||
| excl. special items 1 | 225 | 225 | 0 | % | -7 | % | 428 | 476 | -10 | % | -15 | % | ||||||||||||||||||||
| Basic EPS (EUR) | 0.50 | 0.75 | -33 | % | -39 | % | 1.04 | 1.60 | -35 | % | -39 | % | ||||||||||||||||||||
| excl. special items 1 | 0.77 | 0.77 | 0 | % | -7 | % | 1.46 | 1.62 | -10 | % | -15 | % |
yoy = year-on-year, cc = at constant currency, EPS = earnings per
Decline in COVID-19-related
the second quarter of 2022, COVID-19-related excess mortality among Fresenius Medical Care's patients declined and amounted to
approximately 300 (Q3 2021: ~2,900; Q4 2021: ~2,000; Q1 2022: ~2,4003). Thus, excess mortality accumulated to approximately
7,600 patients over the past twelve months and to approximately 23,000 since the start of the pandemic.
While excess mortality sequentially declined
in line with the Company's projections, infection rates remained on a high level resulting in a continued need and costs for isolation
clinics and shifts as well as personal protective equipment.
The overall estimated adverse effect of accumulated
excess mortality on organic growth in the Health Care Services business amounted to around 260 basis points in the second quarter.
Special items include costs related to the FME25 program, the impact of the war in Ukraine, the impact of hyperinflation
in Turkiye, the remeasurement effect on the fair value of the investment in Humacyte, Inc. (Humacyte investment remeasurement) and other
effects that are unusual in nature and have not been foreseeable or not foreseeable in size or impact at the time of giving guidance.
These items are excluded to ensure comparability of the figures presented with the Company's financial targets which have been
defined excluding special items.
Attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
Historical excess mortality updated for late entries
Increased headwinds from labor
The unprecedented U.S. labor market challenges
materially worsened in the second quarter. For Fresenius Medical Care, this resulted in meaningfully higher than assumed wage inflation,
surcharges, retention payments and additional costs for contract labor to contain the increasing staff shortages. Despite these additional
investments in labor, including application of monies received from the U.S. government's Provider Relief Fund, staff shortages and turnover
rates have continued to increase. The Company's growth in the second quarter was affected by the number of clinics with constrained
ability to accept new patients for treatment.
The already existing challenging macroeconomic
environment has further significantly deteriorated in the second quarter as well, driving accelerated non-wage cost inflation. This has
been exacerbated by the ongoing war in Ukraine and its global economic impact and results in higher logistics costs, raw material and
energy prices as well as further supply chain disruptions.
increased by 10% to EUR 4,757 million (+1% at constant currency, +0% organic) in the second quarter.
Health Care Services revenue grew by 11% to EUR
3,782 million (+1% at constant currency, +0% organic). Growth at constant currency was mainly driven by contributions from acquisitions.
Health Care Products revenue increased by 6%
to EUR 975 million (+1% at constant currency, +1% organic). Constant currency growth was mainly driven by higher sales of in-center disposables,
partially offset by lower sales of acute cardiopulmonary products.
In the first half, revenue grew by 9% to EUR
9,305 million (+2% at constant currency, +1% organic). Health Care Services revenue increased by 10% to EUR 7,389 million (+2% at constant
currency, +1% organic); Health Care Products revenue grew by 6% to EUR 1,916 million (+2% at constant currency, +2% organic).
income decreased by 20% to EUR 341 million (-27% at constant currency) in the second quarter, resulting in a margin of 7.2%
(Q2 2021: 9.8%). Operating income excluding special items, i.e. costs incurred for FME25, the impacts related to the war in Ukraine,
the impact of hyperinflation in Turkiye, and the remeasurement effect on the fair value of the investment in Humacyte, Inc. (Humacyte
investment remeasurement), increased by 3% to EUR 445 million (-6% at constant currency), resulting in a margin of 9.4% (Q2 2021: 10.0%).
At constant currency, the decline was mainly due to higher labor costs as well as inflationary and supply chain cost increases. This
was partially offset by Provider Relief Funding received from the U.S. government to compensate for certain COVID-19-related costs.
In the first half, operating income declined
by 23% to EUR 688 million (-29% at constant currency), resulting in a margin of 7.4% (H1 2021: 10.5%). Excluding special items, operating
income decreased by 6% to EUR 852 million (-13% at constant currency), resulting in a margin of 9.2% (H1 2021: 10.7%).
income2 decreased by 33% to EUR 147 million (-39% at constant currency). Excluding special items, net income2
was stable and amounted to EUR 225 million (-7% at constant currency). At constant currency, the decline was mainly due to the
mentioned negative effects on operating income. Basic earnings per share (EPS) decreased by 33% to EUR 0.50 (-39% at constant
currency). Excluding special items, EPS was stable and amounted to EUR 0.77 (-7% at constant currency).
In the first half, net income2
declined by 35% to EUR 305 million (-39% at constant currency). Excluding special items, net income2 decreased by 10% to
EUR 428 million (-15% at constant currency). EPS decreased by 35% to EUR 1.04 (-39% at constant currency). Excluding special
items, EPS declined by 10% to EUR 1.46 (-15% at constant currency).
Regional developments
North America, revenue increased by 12% to EUR 3,294 million (-1% at constant currency, -2% organic) in the second quarter. At
constant currency, this was mainly due to a decline in organic growth - which was driven by COVID-19 as well as by declines in
co-insurance, increases in patient choice of higher deductibles plans, and lower than expected collections in aged accounts receivable
in the Health Care Services business - and due to lower sales of in-center disposables, machines for chronic treatment,
renal pharmaceuticals and home hemodialysis products. These effects were only partially offset by contributions from acquisitions. In
the first half, revenue grew by 10% to EUR 6,464 million (+0% at constant currency, -1% organic).
Operating income in North America decreased by
14% to EUR 340 million (-24% at constant currency) in the second quarter, resulting in a margin of 10.3% (Q2 2021: 13.5%). At constant
currency, the decline in operating income was mainly due to higher labor costs, the Humacyte investment remeasurement, declines in co-insurance,
increases in patient choice of higher deductibles plans, and lower than expected collections in aged accounts receivable, the impact
of COVID-19, as well as inflationary and supply chain costs. This was partially offset by provider relief funding received from the U.S.
government to compensate for certain COVID-19-related costs. In the first half, operating income declined by 19% to EUR 644 million (-26%
at constant currency), resulting in a margin of 10.0% (H1 2021: 13.6%).
in the EMEA region increased by 5% to EUR 727 million in the second quarter (+7% at constant currency, +6% organic). At
constant currency, this was mainly due to organic growth in Health Care Services and Health Care Products,
both including the effects of hyperinflation in Turkiye. Growth in Health Care Products was driven by higher sales of in-center
disposables, machines for chronic treatment and renal pharmaceuticals, partially offset by lower sales of acute cardiopulmonary products.
In the first half, revenue grew by 3% to EUR 1,401 million (+5% at constant currency, +4% organic).
income in EMEA decreased by 19% to EUR 60 million (-18% at constant currency) in the second quarter, resulting in a margin of 8.2% (Q2
2021: 10.6%). At constant currency, the decline in operating income was mainly due to inflationary cost increases, the impact
of hyperinflation in Turkiye and costs associated with the FME25 program, partially offset by favorable currency transaction effects.
In the first half, operating income declined by 21% to EUR 121 million (-18% at constant currency), resulting in a margin of 8.6% (H1
Asia-Pacific, revenue increased by 6% to EUR 516 million (+2% at constant currency, +2% organic) in the second quarter. At constant
currency, this was mainly driven by organic growth in the Health Care Services business. In the first half, revenue increased by 7% to
EUR 1,023 million (+3% at constant currency, +3% organic).
Operating income decreased by 16% to EUR 71 million
(-16% at constant currency) in the second quarter, resulting in a margin of 13.8% (Q2 2021: 17.3%). At constant currency, the decline
in operating income was mainly due to the unfavorable impact of growth in lower margin businesses and inflationary cost increases. In
the first half, operating income was stable and amounted to EUR 170 million (-1% at constant currency), resulting in a margin of 16.6%
America revenue increased by 21% to EUR 207 million (+17% at constant currency, +18% organic) in the second quarter,
mainly driven by organic growth in the Health Care Services business, as well as higher sales of in-center disposables and machines for
chronic treatment. In the first half, revenue grew by 18% to EUR 391 million (+16% at constant currency, +17% organic).
Operating income decreased to EUR -6 million
in the second quarter, resulting in a margin of -3.0% (Q2 2021: 1.5%). At constant currency, the decline in operating income was mainly
due to inflationary cost increases and unfavorable foreign currency transaction effects, partially offset by lower bad debt expense.
In the first half, operating income decreased by 46% to EUR 5 million (-71% at constant currency), resulting in a margin of 1.3% (H1
Cash flow development
the second quarter, Fresenius Medical Care generated EUR 751 million of operating cash flow (Q2 2021: EUR 921 million), resulting
in a margin of 15.8% (Q2 2021: 21.3%). The decrease was mainly due to an unfavorable development of days sales outstanding as well as
a decrease in net income2, partially offset by U.S. government relief funding. In the first half, operating cash flow amounted
to EUR 910 million (H1 2021: EUR 1,129 million), resulting in a margin of 9.8% (H1 2021: 13.2%).