EX-99.1 2 a16-4824_1ex99d1.htm INVESTOR NEWS DATED FEBRUARY 24, 2016

Exhibit 99.1

 

February 24, 2016

 

INVESTOR

 

NEWS

 

Fresenius Medical Care reports

 

fourth quarter and full year 2015 results

 

 



 

·                  Targets for 2015 achieved: revenue + 11% constant currency, net income1,2 +2%

·                  3% dividend increase to be proposed at the Annual General Meeting

·                  Excellent organic growth and positive operating earnings development in North America

·                  Strong organic growth dynamic in Care Coordination activities, still in investment mode

·                  International performance furthermore impacted by currency fluctuations

·                  Result pushed by Global Efficiency Program lower costs for healthcare supplies

·                  2016 outlook in line with projection

 

Fourth quarter 2015 key figures:

 

Net revenue

 

$

4,348 million

 

+1%/+5

% cc

Operating income (EBIT)

 

$

662 million

 

0

%

Operating income (EBIT) excluding special items2

 

$

704 million

 

+5

%

Net income1

 

$

317 million

 

-6

%

Net income excluding special items1,2

 

$

347 million

 

+2

%

Basic earnings per share

 

$

1.04

 

-6

%

 

Full year 2015 key figures:

 

Net revenue

 

$

16,738 million

 

+6%/+11

% cc

Operating income (EBIT)

 

$

2,327 million

 

+3

%

Operating income (EBIT) excluding special items2

 

$

2,388 million

 

+5

%

Net income1

 

$

1,029 million

 

-2

%

Net income excluding special items1,2

 

$

1,082 million

 

+2

%

Basic earnings per share

 

$

3.38

 

-2

%

 

Dividend proposal:

 

Per share

 

0.80

 

+3

%

 

cc = at constant currency rate

 

Rice Powell, Chief Executive Officer of Fresenius Medical Care stated: “Our commitment to our patients continues to produce substantial results. After investing heavily in new business activities, 2015 was a year that focused on operational excellence. Strong market dynamics in our core dialysis markets had been supported by new operating profitability levels. In 2016 we even want to accelerate the value creation for all our shareholders. We delivered on revenue, net income guidance for 2015 and confirm our targets for 2016: strong revenue growth combined with even higher net income growth.

 


1  attributable to shareholders of Fresenius Medical Care AG & Co. KGaA, ² excluding special items: divestiture of dialysis business in Venezuela, sale of the European marketing rights to Vifor and settlement costs for an agreement in principle for the GranuFlo® case in 2015 as well as closing of manufacturing plants in 2014

 

2



 

Fourth quarter 2015

 

Revenue

 

Net revenue for the fourth quarter of 2015 increased slightly by 1% to $4,348 million (+5% at constant currency) as compared to the fourth quarter of 2014. Organic revenue growth was 5%. Net Health Care revenue grew by 4% to $3,462 million (+7% at constant currency). The organic growth rate was 6%. After a very strong first half in the product business, the dialysis product revenue was down by 11% to $886 million. The company generated more than 70% of the product business in the three International segments which implied a strong currency headwind. On a constant currency basis, dialysis product revenue decreased by 2%.

 

North America revenue for the fourth quarter of 2015 increased by 7% to $3,084 million. Organic revenue growth was 5%. Net Health Care revenue contributed $2,845 million (+8% on a year on year basis), the product business $239 million (+1% on a year on year basis).  The Care Coordination business recorded revenue of $501 million — corresponding to a significant growth of 27% over the previous years fourth quarter. Organic revenue growth was 23%.

 

International revenue decreased by 12% to $1,257 million (an increase of 2% on a constant currency basis), clearly negatively impacted by currency translation. Organic revenue growth was 3%. Net Health Care revenue was $617 million (-10%, +5% at constant currency). Dialysis product revenue decreased by 13% to $640 million (-1% at constant currency).

 

International segments:

 

Europe, Middle East and Africa (EMEA) revenue decreased by 12% to $673 million. Constant currency and organic revenue growth was 1%. Net Health Care revenue decreased by 11% to $306 million (+4% at constant currency). Dialysis product revenue decreased by 13% to $367 million (-1% at constant currency and stable on an organic perspective).

 

Asia-Pacific revenue decreased by 6% to $394 million (+1% at constant currency). Net Health Care revenue amounted to $171 million (+3% at constant currency), dialysis product revenue decreased to $223 million (stable level at constant currency rates).

 

Latin America revenue decreased by 20% to $ 190 million. At constant currency revenue grew by 3%. Organic revenue growth was 15%. Net Health Care revenue decreased by 14% to $140 million (+9% at constant currency). With a plus of 27% organic growth was very strong.

 

3



 

Dialysis product revenue decreased by 33% to $50 million (a decrease of 9% at constant currency).

 

Earnings

 

Operating income (EBIT)  was $662 million, stable compared to last year.  The sale of remaining European marketing rights to a Joint Venture was recognized in the fourth quarter resulting in an additional gain of $18 million. The company also reached an agreement in principle to resolve a product liability litigation in the United States involving GranuFlo®/NaturaLyte®. This caused a pre-tax charge of $60 million. Excluding both special items operating income increased 5% from $669 million to $704 million.

 

Operating income for North America for the fourth quarter of 2015 was $514 million, an increase of 4% as compared to the corresponding quarter in 2014. Excluding the $60 million settlement costs for the GranuFlo®/NaturaLyte® case the operating income was $574 million, a strong increase of 16%.

 

International segments:

 

Operating income for EMEA for the fourth quarter of 2015 increased by 20% to $172 million as compared to the same quarter 2014. Operating income, excluding the $18 million gain  resulting from the sale of the European marketing rights, was $154 million, reflecting an increase of 8%. Operating income for Asia-Pacific was $79 million, a sequential improvement of $11 million and a decrease of 21% on a year on year basis. Operating income for Latin America for the fourth quarter of 2015 was $23 million (Q4 2014: $35 million). The corporate costs were up at $ 126 million compared to $108 million in Q4 2014.

 

Net interest expense for the reported quarter was with $88 million clearly below Q4 of last year (-25%) due to higher interest income resulting from the early repayment of interest-bearing notes receivables and due to a decreased average debt level.

 

Income tax expense was $180 million for Q4 2015, which translates into an effective tax rate of 31.4%. This compares to income tax expense of $143 million and a tax rate of 26.2%, which was influenced favorably by the resolution of challenged deductions for the civil payments taken in prior years.

 

4



 

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the fourth quarter of 2015 was $317 million compared to $335 million in the fourth quarter 2014. Excluding special items  net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA  was $347 million — this means an increase by 2%. Net income attributable to noncontrolling interest increased to $77 million ($68 million in Q4 2014).

 

Basic earnings per share (EPS) for the fourth quarter of 2015 was $1.04, compared to $1.11 for the corresponding period in 2014. The weighted average number of shares outstanding for Q4 2015 was approximately 305.1 million shares, compared to approximately 303.3 million shares.

 

Cash flow

 

In the fourth quarter of 2015, the company generated $548 million, representing approximately 13% of revenue, in net cash provided by operating activities, compared to the corresponding figure of last year of $588 million.

 

A total of $299 million was spent for capital expenditures, net of disposals. Free cash flow was $249 million compared to $306 million in the comparable quarter of 2014.

 

A total of $151 million in cash was spent for acquisitions and investments. Divestitures driven by the early repayment of interest bearing notes receivables were  $209 million. Free cash flow after investing activities was $307 million as compared to ($419) million in Q4 2014.

 

5



 

Full year 2015

 

Revenue and earnings

 

Net revenue for full year 2015 increased by 6% to $16,738 million (+11% at constant currency) as compared to fiscal 2014. Organic revenue growth worldwide was 6%.

 

Operating income (EBIT) for the full year 2015 decreased by 2% to $2,327 million. Excluding special items operating income grew by 5% and reached $2,388 million as compared to $2,271 million for fiscal 2014.

 

Net interest expense for fiscal 2015 was $391 million as compared to $411 million for the corresponding period in 2014.

 

Income tax expense for full year 2015 was $623 million, which translates into an effective tax rate of 32.1%. This compares to income tax expense of $584 million and a tax rate of 31.7% for 2014.

 

For full year 2015, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA  was $1,029 million compared to $ 1,045 million in 2014.  Excluding special items  net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA increased to $1,082 million, plus 2% compared with the comparable number of $1,058 million for fiscal 2014.

 

For fiscal year 2015, basic earnings per share (EPS) was down at $3.38 as compared to the corresponding number for full year 2014 ($3.46). The weighted average number of shares outstanding for 12 months of 2015 was approximately 304.4 million shares (full year 2014: 302.3 million).

 

Cash flow

 

In the reported period 2015, the company generated $1,960 million in net cash provided by operating activities, representing 11.7% of revenue, as compared to $1,861 million for the same period in 2014.

 

6



 

A total of $935 million was spent for capital expenditures, net of disposals. Free cash flow was $1,025 million as compared to $941 million in 2014, a strong increase of roughly 9% on a year on year basis.

 

A total of $66 million in cash was spent for acquisitions and investments, net of divestitures. Free cash flow after investing activities was $959 million as compared to ($829) million for the twelve months of 2014.

 

Employees

 

As of December 31, 2015, Fresenius Medical Care had 104,033 employees (full-time equivalents) worldwide, compared to 99,895 employees at the end of 2014. This increase of 4% was mainly attributable to our continued organic growth and acquisitions.

 

Balance sheet structure

 

The company´s total assets were slightly above last years level and amounted to $25,533 million (Dec. 31, 2014: $25,381 million). Current assets increased by 4% to $6,984 million (Dec. 31, 2014: $6,718 million). Goodwill and intangible assets as well as non-current assets remained stable with $13,863 million (Dec. 31, 2014: 13,951 million) and $4,686 million (Dec. 31, 2014: 4,712 million) respectively. Total equity increased by 5% to $10,496 million (Dec. 31, 2014: $10,028 million). The equity ratio was 41% as compared to 40% at the end of 2014. Total debt was $8,646 million (Dec. 31, 2014: $9,466 million).

 

Please refer to the attachments for a complete overview of the results for the fourth quarter and full year 2015 and the reconciliation of non-GAAP financial measures included in this release to the most comparable GAAP financial measures.

 

Dividend

 

At the Annual General Meeting to be held on May 12, 2016, shareholders will be asked to approve a dividend of €0.80 per share, an increase of 3% compared to 2014 (€0.78). This would mean the 19th consecutive dividend increase, shareholders can expect.

 

7



 

Outlook 2016

 

Based on the projection Fresenius Medical Care provided for 2016, the company is guiding for  revenue to grow 7-10% at constant currency excluding acquisitions in 2015 and 2016. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to increase by 15-20% in 2016 excluding acquisitions in 2015 and 2016, based on net income for 2015 of $ 1,057 million (net income excluding settlement costs for an agreement in principle for the GranuFlo®/NaturaLyre® case of -$37 million and +$9 million acquisitions).

 

The company expects to spend capital expenditures of $1.0 - $1.1 billion and around $750 million on acquisitions. The debt/EBITDA ratio is expected to be below 3.0 by the end of 2016.

 

Conference call

 

Fresenius Medical Care will hold a conference call to discuss the results of the fourth quarter and full year 2015 on Wednesday, February 24, 2016 at 9:30 a.m. EST / 3:30 p.m. CET / 10.30 a.m. EDT. The company invites investors to follow the live webcast of the call at the company’s website www.freseniusmedicalcare.com in the “Investors/Events & Presentations” section. A replay will be available shortly after the call.

 

Fresenius Medical Care is the world’s largest provider of products and services for individuals with renal diseases of which around 2.8 million patients worldwide regularly undergo dialysis treatment. Through its network of 3,418 dialysis clinics, Fresenius Medical Care provides dialysis treatments for 294,381 patients around the globe. Fresenius Medical Care is also the leading provider of dialysis products such as dialysis machines or dialyzers. Along with the core business, the company focuses on expanding the range of additional medical services in the field of care coordination.

 

For more information about Fresenius Medical Care, visit the company’s website at www.freseniusmedicalcare.com.

 

Disclaimer

 

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.

 

8



 

Statement of earnings

 

 

 

Three months ended
December 31

 

 

 

Twelve months ended
December 31

 

 

 

in US$ million, except share data, audited

 

2015

 

2014

 

Change

 

2015

 

2014

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Health Care revenue

 

3,552

 

3,417

 

3.9

%

13,801

 

12,553

 

9.9

%

Less: patient service bad debt provision

 

90

 

95

 

-5.5

%

409

 

303

 

35.3

%

Net Health Care revenue

 

3,462

 

3,322

 

4.2

%

13,392

 

12,250

 

9.3

%

Dialysis products revenue

 

886

 

998

 

-11.3

%

3,346

 

3,582

 

-6.6

%

Total net revenue

 

4,348

 

4,320

 

0.6

%

16,738

 

15,832

 

5.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs of revenue

 

2,880

 

2,906

 

-0.9

%

11,407

 

10,836

 

5.3

%

Gross profit

 

1,468

 

1,414

 

3.8

%

5,331

 

4,996

 

6.7

%

Selling, general and administrative

 

775

 

723

 

7.4

%

2,895

 

2,644

 

9.5

%

Research and development

 

40

 

31

 

28.2

%

140

 

122

 

14.9

%

Income from equity method investees

 

(9

)

(3

)

225.0

%

(31

)

(25

)

26.6

%

Operating income (EBIT)

 

662

 

663

 

-0.2

%

2,327

 

2,255

 

3.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

(37

)

(45

)

-16.6

%

(117

)

(84

)

38.4

%

Interest expense

 

125

 

162

 

-22.7

%

508

 

495

 

2.6

%

Interest expense, net

 

88

 

117

 

-25.1

%

391

 

411

 

-4.8

%

Income before taxes

 

574

 

546

 

5.1

%

1,936

 

1,844

 

5.0

%

Income tax expense

 

180

 

143

 

25.9

%

623

 

584

 

6.6

%

Net income

 

394

 

403

 

-2.0

%

1,313

 

1,260

 

4.1

%

Less: Net income attributable to noncontrolling interests

 

77

 

68

 

13.6

%

284

 

215

 

32.2

%

Net income attributable to shareholders of FMC AG & Co. KGaA

 

317

 

335

 

-5.5

%

1,029

 

1,045

 

-1.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (EBIT)

 

662

 

663

 

-0.2

%

2,327

 

2,255

 

3.2

%

Depreciation and amortization

 

181

 

186

 

-2.8

%

717

 

699

 

2.6

%

EBITDA

 

843

 

849

 

-0.8

%

3,044

 

2,954

 

3.1

%

EBITDA margin

 

19.4

%

19.7

%

 

 

18.2

%

18.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares

 

305,147,599

 

303,347,550

 

 

 

304,440,184

 

302,339,124

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

1.04

 

$

1.11

 

-6.1

%

$

3.38

 

$

3.46

 

-2.2

%

Basic earnings per ADS

 

$

0.52

 

$

0.55

 

-6.1

%

$

1.69

 

$

1.73

 

-2.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In percent of revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs of revenue

 

66.2

%

67.3

%

 

 

68.1

%

68.4

%

 

 

Gross profit

 

33.8

%

32.7

%

 

 

31.9

%

31.6

%

 

 

Operating income (EBIT)

 

15.2

%

15.4

%

 

 

13.9

%

14.2

%

 

 

Net income attributable to shareholders of FMC AG & Co. KGaA

 

7.3

%

7.8

%

 

 

6.1

%

6.6

%

 

 

 

9



 

Segment and other information

 

 

 

Three months ended
December 31

 

 

 

Twelve months ended
December 31

 

 

 

audited

 

2015

 

2014

 

Change

 

2015

 

2014

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue in US$ million

 

4,348

 

4,320

 

0.6

%

16,738

 

15,832

 

5.7

%

Operating income (EBIT) in US$ million

 

662

 

663

 

-0.2

%

2,327

 

2,255

 

3.2

%

Operating income margin in %

 

15.2

%

15.4

%

 

 

13.9

%

14.2

%

 

 

Delivered EBIT in US$ million

 

585

 

595

 

-1.8

%

2,043

 

2,040

 

0.1

%

Days sales outstanding (DSO)

 

 

 

 

 

 

 

71

 

72

 

 

 

Employees (full-time equivalents)

 

 

 

 

 

 

 

104,033

 

99,895

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue in US$ million

 

3,084

 

2,876

 

7.2

%

11,813

 

10,500

 

12.5

%

Operating income (EBIT) in US$ million

 

514

 

493

 

4.2

%

1,798

 

1,643

 

9.4

%

Operating income margin in %

 

16.7

%

17.2

%

 

 

15.2

%

15.6

%

 

 

Delivered EBIT in US$ million

 

440

 

428

 

2.8

%

1,524

 

1,436

 

6.1

%

Days sales outstanding (DSO)

 

 

 

 

 

 

 

53

 

50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue per dialysis treatment in US$

 

348

 

346

 

0.5

%

346

 

342

 

1.2

%

Cost per dialysis treatment in US$

 

268

 

277

 

-3.0

%

279

 

280

 

-0.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue in US$ million

 

1,257

 

1,422

 

-11.5

%

4,897

 

5,265

 

-7.0

%

Operating income (EBIT) in US$ million

 

274

 

278

 

-1.9

%

923

 

970

 

-4.9

%

Operating income margin in %

 

21.7

%

19.6

%

 

 

18.8

%

18.4

%

 

 

Delivered EBIT in US$ million

 

271

 

275

 

-2.1

%

913

 

962

 

-5.1

%

Days sales outstanding (DSO)

 

 

 

 

 

 

 

112

 

114

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EMEA

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue in US$ million

 

673

 

766

 

-12.1

%

2,629

 

3,072

 

-14.4

%

Operating income (EBIT) in US$ million

 

172

 

143

 

20.0

%

577

 

590

 

-2.2

%

Operating income margin in %

 

25.5

%

18.7

%

 

 

21.9

%

19.2

%

 

 

Delivered EBIT in US$ million

 

171

 

142

 

19.7

%

574

 

587

 

-2.3

%

Days sales outstanding (DSO)

 

 

 

 

 

 

 

104

 

104

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asia-Pacific

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue in US$ million

 

394

 

419

 

-5.8

%

1,502

 

1,357

 

10.7

%

Operating income (EBIT) in US$ million

 

79

 

100

 

-21.3

%

298

 

279

 

6.7

%

Operating income margin in %

 

20.0

%

23.9

%

 

 

19.8

%

20.6

%

 

 

Delivered EBIT in US$ million

 

77

 

98

 

-21.8

%

291

 

274

 

6.3

%

Days sales outstanding (DSO)

 

 

 

 

 

 

 

113

 

124

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Latin America

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue in US$ million

 

190

 

237

 

-19.7

%

766

 

836

 

-8.3

%

Operating income (EBIT) in US$ million

 

23

 

35

 

-35.5

%

48

 

101

 

-52.5

%

Operating income margin in %

 

12.0

%

14.9

%

 

 

6.3

%

12.1

%

 

 

Delivered EBIT in US$ million

 

23

 

35

 

-35.2

%

48

 

101

 

-52.5

%

Days sales outstanding (DSO)

 

 

 

 

 

 

 

141

 

128

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue in US$ million

 

7

 

22

 

-72.5

%

28

 

67

 

-58.4

%

Operating income (EBIT) in US$ million

 

(126

)

(108

)

15.6

%

(394

)

(358

)

9.8

%

Delivered EBIT in US$ million

 

(126

)

(108

)

15.6

%

(394

)

(358

)

9.9

%

 

10



 

Balance sheet

 

 

 

December 31

 

December 31

 

in US$ million, except debt/EBITDA ratio

 

2015

 

2014

 

 

 

(audited)

 

(audited)

 

Assets

 

 

 

 

 

Current assets

 

6,984

 

6,718

 

Goodwill and Intangible assets

 

13,863

 

13,951

 

Other non-current assets

 

4,686

 

4,712

 

Total assets

 

25,533

 

25,381

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

Current liabilities

 

4,185

 

3,477

 

Long-term liabilities

 

9,824

 

11,051

 

Noncontrolling interests subject to put provisions and other temporary equity

 

1,028

 

825

 

Total equity

 

10,496

 

10,028

 

Total liabilities and equity

 

25,533

 

25,381

 

 

 

 

 

 

 

Equity/assets ratio

 

41

%

40

%

 

 

 

 

 

 

Debt

 

 

 

 

 

Short-term debt

 

109

 

133

 

Short-term debt from related parties

 

19

 

5

 

Current portion of long-term debt and capital lease obligations

 

664

 

314

 

Long-term debt and capital lease obligations, less current portion

 

7,854

 

9,014

 

Total debt

 

8,646

 

9,466

 

 

 

 

 

 

 

Debt/EBITDA ratio

 

2.8

 

3.0

 

 

At December 31, 2014 debt issuance costs in the amount of $66 M have been reclassified from current assets and other non-current assets to long-term liabilities to conform to the current year´s presentation.

 

Cash flow statement

 

 

 

Three months ended
December 31

 

Twelve months ended
December 31

 

in US$ million, audited

 

2015

 

2014

 

2015

 

2014

 

Operating activities

 

 

 

 

 

 

 

 

 

Net income

 

394

 

403

 

1,313

 

1,260

 

Depreciation / amortization

 

181

 

186

 

717

 

699

 

Change in working capital and other non-cash items

 

(27

)

(1

)

(70

)

(98

)

Net cash provided by operating activities

 

548

 

588

 

1,960

 

1,861

 

In percent of revenue

 

12.6

%

13.6

%

11.7

%

11.8

%

 

 

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

(306

)

(285

)

(953

)

(932

)

Proceeds from sale of property, plant and equipment

 

7

 

3

 

18

 

12

 

Capital expenditures, net

 

(299

)

(282

)

(935

)

(920

)

 

 

 

 

 

 

 

 

 

 

Free cash flow

 

249

 

306

 

1,025

 

941

 

In percent of revenue

 

5.7

%

7.1

%

6.1

%

5.9

%

 

 

 

 

 

 

 

 

 

 

Acquisitions and investments, net of cash acquired, and purchases of intangible assets

 

(151

)

(730

)

(317

)

(1,779

)

Proceeds from divestitures

 

209

 

5

 

251

 

9

 

Acquisitions and investments, net of divestitures

 

58

 

(725

)

(66

)

(1,770

)

Free cash flow after investing activities

 

307

 

(419

)

959

 

(829

)

 

11



 

Revenue development for fourth quarter

 

in US$ million, audited

 

2015

 

2014

 

Change

 

Change
at cc

 

Organic
growth

 

Same market
treatment
growth
1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended December 31

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

4,348

 

4,320

 

0.6

%

5.0

%

4.7

%

 

 

Net Health Care

 

3,462

 

3,322

 

4.2

%

7.2

%

6.4

%

4.2

%

Dialysis products

 

886

 

998

 

-11.3

%

-2.4

%

-0.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

3,084

 

2,876

 

7.2

%

7.2

%

5.5

%

 

 

Net Health Care

 

2,845

 

2,640

 

7.8

%

7.8

%

5.9

%

4.2

%

Thereof Net Care Coordination revenue

 

501

 

395

 

26.8

%

26.8

%

22.8

%

 

 

Thereof Net Dialysis Care revenue

 

2,344

 

2,245

 

4.4

%

4.4

%

4.3

%

4.2

%

Dialysis products

 

239

 

236

 

0.9

%

0.9

%

1.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International

 

1,257

 

1,422

 

-11.5

%

1.6

%

3.1

%

 

 

Net Health Care

 

617

 

682

 

-9.5

%

4.9

%

8.8

%

4.0

%

Dialysis products

 

640

 

740

 

-13.4

%

-1.4

%

-1.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EMEA

 

673

 

766

 

-12.1

%

1.3

%

1.2

%

 

 

Net Health Care

 

306

 

342

 

-10.6

%

3.7

%

2.6

%

2.9

%

Dialysis products

 

367

 

424

 

-13.4

%

-0.6

%

0.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asia-Pacific

 

394

 

419

 

-5.8

%

1.0

%

0.0

%

 

 

Net Health Care

 

171

 

178

 

-3.7

%

3.0

%

4.2

%

4.7

%

Dialysis products

 

223

 

241

 

-7.4

%

-0.4

%

-1.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Latin America

 

190

 

237

 

-19.7

%

3.4

%

15.2

%

 

 

Net Health Care

 

140

 

162

 

-13.7

%

9.3

%

27.3

%

5.7

%

Dialysis products

 

50

 

75

 

-32.8

%

-9.4

%

-6.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate

 

7

 

22

 

-72.5

%

-69.0

%

 

 

 

 

 


1 same market treatment growth = organic growth less price effects

 

cc = 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 or Constant Currency 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. Once we translate the local currency revenues for the Constant Currency, 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 Currency.

 

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.

 

12



 

Revenue development for full year

 

in US$ million, audited

 

2015

 

2014

 

Change

 

Change
at cc

 

Organic
growth

 

Same market
treatment
growth
1

 

Twelve months ended December 31

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

16,738

 

15,832

 

5.7

%

11.1

%

6.5

%

 

 

Net Health Care

 

13,392

 

12,250

 

9.3

%

13.1

%

6.9

%

4.3

%

Dialysis products

 

3,346

 

3,582

 

-6.6

%

4.3

%

5.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

11,813

 

10,500

 

12.5

%

12.5

%

6.4

%

 

 

Net Health Care

 

10,932

 

9,655

 

13.2

%

13.2

%

6.6

%

4.1

%

Thereof Net Care Coordination revenue

 

1,882

 

1,039

 

81.1

%

81.1

%

24.7

%

 

 

Thereof Net Dialysis Care revenue

 

9,050

 

8,616

 

5.0

%

5.0

%

5.0

%

4.1

%

Dialysis products

 

881

 

845

 

4.3

%

4.3

%

4.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International

 

4,897

 

5,265

 

-7.0

%

9.0

%

6.7

%

 

 

Net Health Care

 

2,460

 

2,595

 

-5.2

%

12.4

%

7.9

%

4.6

%

Dialysis products

 

2,437

 

2,670

 

-8.7

%

5.7

%

5.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EMEA

 

2,629

 

3,072

 

-14.4

%

3.0

%

3.4

%

 

 

Net Health Care

 

1,226

 

1,438

 

-14.8

%

3.5

%

4.0

%

3.8

%

Dialysis products

 

1,403

 

1,634

 

-14.1

%

2.6

%

2.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asia-Pacific

 

1,502

 

1,357

 

10.7

%

20.1

%

9.3

%

 

 

Net Health Care

 

667

 

569

 

17.3

%

30.3

%

5.3

%

3.8

%

Dialysis products

 

835

 

788

 

5.8

%

12.7

%

11.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Latin America

 

766

 

836

 

-8.3

%

13.1

%

15.8

%

 

 

Net Health Care

 

567

 

588

 

-3.6

%

17.0

%

20.1

%

6.5

%

Dialysis products

 

199

 

248

 

-19.4

%

3.6

%

6.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate

 

28

 

67

 

-58.4

%

-50.3

%

 

 

 

 

 


1 same market treatment  growth = organic growth less price effects

 

cc = 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 or Constant Currency 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. Once we translate the local currency revenues for the Constant Currency, 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 Currency.

 

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.

 

13



 

Additional information segment North America

 

 

 

Three months ended
December 31

 

 

 

Twelve months ended
December 31

 

 

 

audited

 

2015

 

2014

 

Change

 

2015

 

2014

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Care Coordination

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue in US$ million

 

501

 

395

 

26.8

%

1,882

 

1,039

 

81.1

%

Operating income (EBIT) in US$ million

 

13

 

30

 

-58.5

%

97

 

77

 

25.9

%

Operating income margin in %

 

2.5

%

7.6

%

 

 

5.2

%

7.4

%

 

 

Delivered EBIT in US$ million

 

5

 

19

 

-71.5

%

57

 

57

 

1.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dialysis

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue in US$ million

 

2,583

 

2,481

 

4.1

%

9,931

 

9,461

 

5.0

%

Operating income (EBIT) in US$ million

 

501

 

463

 

8.3

%

1,701

 

1,566

 

8.6

%

Operating income margin in %

 

19.4

%

18.7

%

 

 

17.1

%

16.5

%

 

 

Delivered EBIT in US$ million

 

435

 

409

 

6.2

%

1,467

 

1,379

 

6.3

%

 

Key metrics Dialysis Care Services

 

 

 

Twelve months ended December 31, 2015

 

audited

 

Clinics

 

Growth
in %

 

De novos

 

Patients

 

Growth
in %

 

Treatments

 

Growth
in %

 

Total

 

3,418

 

2

%

83

 

294,381

 

3

%

44,596,446

 

4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

2,210

 

2

%

51

 

182,852

 

4

%

27,686,877

 

4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EMEA

 

659

 

4

%

20

 

54,857

 

4

%

8,211,464

 

2

%

Asia-Pacific

 

320

 

1

%

9

 

26,472

 

5

%

3,790,924

 

16

%

Latin America

 

229

 

-7

%

3

 

30,200

 

-6

%

4,907,181

 

2

%

 

Key metrics Care Coordination

 

 

 

Twelve months ended December 31, 2015

 

audited

 

2015

 

2014

 

Growth in %

 

North America

 

 

 

 

 

 

 

Member months under medical cost management1)

 

208,933

 

15,853

 

1218

%

Medical cost under management (in US$ million)1)

 

1,660

 

122

 

1255

%

Care Coordination patient encounters

 

5,005,695

 

1,818,170

 

175

%

 


1) The 2015 metrics may be understated as there was a physician mapping issue related to the BPCI program within a CMS system which has not yet been resolved.

 

14



 

Member months under medical cost management

 

Member months under medical cost management is calculated by multiplying the number of members who are included in value-based reimbursement programs, such as Medicare Advantage plans or other value-based programs in the U.S., by the corresponding number of months these members participate in those programs (“Member Months”). An increase in patient membership may indicate future earnings or losses as our performance is determined through these managed care programs.

 

Medical cost under management

 

Medical cost under management represents the management of medical costs associated with our patient membership in value-based programs. For ESCO, BPCI and other shared savings programs, this is calculated by multiplying the Member Months in each program by the benchmark of expected medical cost per member per month. The sub-capitation and MA-CSNPs calculation multiplies the premium per member of the program per month by the number of Member Months associated with the plan, as noted above.

 

Care Coordination patient encounters

 

Care Coordination patient encounters represents the total patient encounters and procedures conducted by certain of our Care Coordination activities. Specifically, Care Coordination patient encounters is the sum of all encounters and procedures completed during the period by Sound Inpatient Physicians, Inc (“Sound”), MedSpring Urgent Care (“MedSpring”), Fresenius Vascular Care, and National Cardiovascular Partners (“NCP”) as well as patients in our Fresenius Medical Care Rx Bone Mineral Metabolism program.

 

Quality data

 

 

 

North America

 

EMEA

 

Latin America

 

Asia-Pacific

 

in % of patients

 

Q4 2015

 

Q3 2015

 

Q4 2015

 

Q3 2015

 

Q4 2015

 

Q3 2015

 

Q4 2015

 

Q3 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Clinical Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Single Pool Kt/v > 1.21)

 

98

 

98

 

96

 

96

 

92

 

96

 

97

 

97

 

No catheter (> 90 days)

 

84

 

83

 

82

 

82

 

82

 

83

 

91

 

91

 

Hemoglobin = 10-12 g/dl

 

72

 

72

 

77

 

77

 

52

 

51

 

60

 

60

 

Hemoglobin = 10-13 g/dl

 

78

 

78

 

77

 

77

 

69

 

69

 

68

 

68

 

Albumin > 3.5 g/dl2)

 

81

 

81

 

92

 

92

 

90

 

90

 

89

 

88

 

Phosphate < 5.5 mg/dl

 

64

 

65

 

79

 

77

 

75

 

76

 

72

 

71

 

Calcium = 8.4-10.2 mg/dl

 

84

 

84

 

77

 

77

 

75

 

76

 

75

 

75

 

Hospitalization days3)

 

10.0

 

10.1

 

9.5

 

9.6

 

3.5

 

3.5

 

4.2

 

4.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demographics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average age (in years)

 

62

 

62

 

64

 

64

 

58

 

58

 

64

 

64

 

Average time on dialysis (in years)

 

4.0

 

4.0

 

5.6

 

5.5

 

5.0

 

5.0

 

5.0

 

4.9

 

Average body weight (in kg)

 

82

 

82

 

72

 

72

 

68

 

68

 

60

 

60

 

Prevalence of diabetes (in%)

 

61

 

61

 

31

 

31

 

25

 

25

 

41

 

40

 

 


1)Restated number for Latin America: in the previous quarter (3rd quarter 2015) it was calculated eKt/V. For single pool it was 96%.

2) International standard BCR CRM470

3) Revised U.S. hospitalization data source in Q4 2015 includes open hospitalization records, therefore restated numbers for Q3 2015.

 

15



 

Reconciliation of non U.S. GAAP financial measures

to the most directly comparable U.S. GAAP financial measures

 

 

 

Three months ended
December 31

 

Twelve months ended
December 31

 

in US$ million, audited

 

2015

 

2014

 

2015

 

2014

 

Delivered EBIT reconciliation

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

Operating income (EBIT)

 

662

 

663

 

2,327

 

2,255

 

less noncontrolling interests

 

(77

)

(68

)

(284

)

(215

)

Delivered EBIT

 

585

 

595

 

2,043

 

2,040

 

 

 

 

 

 

 

 

 

 

 

North America

 

 

 

 

 

 

 

 

 

Operating income (EBIT)

 

514

 

493

 

1,798

 

1,643

 

less noncontrolling interests

 

(74

)

(65

)

(274

)

(207

)

Delivered EBIT

 

440

 

428

 

1,524

 

1,436

 

 

 

 

 

 

 

 

 

 

 

Care Coordination

 

 

 

 

 

 

 

 

 

Operating income (EBIT)

 

13

 

30

 

97

 

77

 

less noncontrolling interests

 

(8

)

(11

)

(40

)

(20

)

Delivered EBIT

 

5

 

19

 

57

 

57

 

 

 

 

 

 

 

 

 

 

 

Dialysis

 

 

 

 

 

 

 

 

 

Operating income (EBIT)

 

501

 

463

 

1,701

 

1,566

 

less noncontrolling interests

 

(66

)

(54

)

(234

)

(187

)

Delivered EBIT

 

435

 

409

 

1,467

 

1,379

 

 

 

 

 

 

 

 

 

 

 

International

 

 

 

 

 

 

 

 

 

Operating income (EBIT)

 

274

 

278

 

923

 

970

 

less noncontrolling interests

 

(3

)

(3

)

(10

)

(8

)

Delivered EBIT

 

271

 

275

 

913

 

962

 

 

 

 

 

 

 

 

 

 

 

EMEA

 

 

 

 

 

 

 

 

 

Operating income (EBIT)

 

172

 

143

 

577

 

590

 

less noncontrolling interests

 

(1

)

(1

)

(3

)

(3

)

Delivered EBIT

 

171

 

142

 

574

 

587

 

 

 

 

 

 

 

 

 

 

 

Asia-Pacific

 

 

 

 

 

 

 

 

 

Operating income (EBIT)

 

79

 

100

 

298

 

279

 

less noncontrolling interests

 

(2

)

(2

)

(7

)

(5

)

Delivered EBIT

 

77

 

98

 

291

 

274

 

 

 

 

 

 

 

 

 

 

 

Latin America

 

 

 

 

 

 

 

 

 

Operating income (EBIT)

 

23

 

35

 

48

 

101

 

less noncontrolling interests

 

 

 

 

 

Delivered EBIT

 

23

 

35

 

48

 

101

 

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

 

 

 

 

 

 

 

Operating income (EBIT)

 

(126

)

(108

)

(394

)

(358

)

less noncontrolling interests

 

 

 

 

 

Delivered EBIT

 

(126

)

(108

)

(394

)

(358

)

 

 

 

 

 

 

 

 

 

 

Reconciliation of net cash provided by operating activities to EBITDA1)

 

 

 

 

 

 

 

 

 

Total EBITDA

 

 

 

 

 

3,044

 

2,954

 

Interest expense, net

 

 

 

 

 

(391

)

(411

)

Income tax expense

 

 

 

 

 

(623

)

(584

)

Change in working capital and other non-cash items

 

 

 

 

 

(70

)

(98

)

Net cash provided by operating activities

 

 

 

 

 

1,960

 

1,861

 

 

 

 

 

 

 

 

 

 

 

Annualized EBITDA2)

 

 

 

 

 

 

 

 

 

Operating income (EBIT)

 

 

 

 

 

2,327

 

2,347

 

Depreciation and amortization

 

 

 

 

 

717

 

716

 

Non-cash charges

 

 

 

 

 

83

 

57

 

Annualized EBITDA

 

 

 

 

 

3,127

 

3,120

 

 


1) EBITDA is the basis for determining compliance with certain covenants in Fresenius Medical Care’s long-term debt instruments.

2) EBITDA 2014: including largest acquisitions.

 

16



 

Reconciliation of non U.S. GAAP financial measures

to the most directly comparable U.S. GAAP financial measures:

 

 

 

Three months ended
December 31

 

Twelve months ended
December 31

 

in US$ million, audited

 

2015

 

2014

 

2015

 

2014

 

Operating performance excluding one-time items

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

Operating income (EBIT)

 

662

 

663

 

2,327

 

2,255

 

One-time items

 

42

 

6

 

61

 

16

 

Net settlement expense

 

60

 

 

60

 

 

Divestiture of dialysis service business in Venezuela

 

 

 

 

26

 

 

 

Sale of European marketing rights for certain renalpharmaceuticals1

 

(18

)

 

 

(25

)

 

 

Closing of manufacturing plants

 

 

 

6

 

 

 

16

 

Operating income (EBIT) excluding one-time items

 

704

 

669

 

2,388

 

2,271

 

 

 

 

 

 

 

 

 

 

 

North America

 

 

 

 

 

 

 

 

 

Operating income (EBIT)

 

514

 

493

 

1,798

 

1,643

 

One-time items

 

60

 

 

60

 

 

Operating income (EBIT) excluding one-time items

 

574

 

493

 

1,858

 

1,643

 

 

 

 

 

 

 

 

 

 

 

International

 

 

 

 

 

 

 

 

 

Operating income (EBIT)

 

274

 

278

 

923

 

970

 

One-time items

 

(18

)

 

 

1

 

 

 

Operating income (EBIT) excluding one-time items

 

256

 

278

 

924

 

970

 

 

 

 

 

 

 

 

 

 

 

EMEA

 

 

 

 

 

 

 

 

 

Operating income (EBIT)

 

172

 

143

 

577

 

590

 

One-time items

 

(18

)

0

 

(25

)

0

 

Operating income (EBIT) excluding one-time items

 

154

 

143

 

552

 

590

 

 

 

 

 

 

 

 

 

 

 

Asia-Pacific

 

 

 

 

 

 

 

 

 

Operating income (EBIT)

 

79

 

100

 

298

 

279

 

One-time items

 

 

 

 

 

Operating income (EBIT) excluding one-time items

 

79

 

100

 

298

 

279

 

 

 

 

 

 

 

 

 

 

 

Latin America

 

 

 

 

 

 

 

 

 

Operating income (EBIT)

 

23

 

35

 

48

 

101

 

One-time items

 

 

 

26

 

 

Operating income (EBIT) excluding one-time items

 

23

 

35

 

74

 

101

 

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

 

 

 

 

 

 

 

Operating income (EBIT)

 

(126

)

(108

)

(394

)

(358

)

One-time items

 

 

6

 

 

16

 

Operating income (EBIT) excluding one-time items

 

(126

)

(102

)

(394

)

(342

)

 

 

 

 

 

 

 

 

 

 

Net income2

 

317

 

335

 

1,029

 

1,045

 

One-time items

 

30

 

6

 

53

 

13

 

Net settlement expense

 

37

 

 

 

37

 

 

 

Divestiture of dialysis service business in Venezuela

 

 

 

 

27

 

 

 

Sale of European marketing rights for certain renal pharmaceuticals1

 

(7

)

 

 

(11

)

 

 

Closing of manufacturing plants

 

 

 

6

 

 

 

13

 

Net income excluding one-time items2

 

347

 

341

 

1,082

 

1,058

 

 


1 to our Joint Venture Vifor Fresenius Medical Care Renal Pharma

2 attributable to shareholders of FMC AG & Co. KGaA

 

17



 

CONTACT

 

Fresenius Medical Care AG & Co. KGaA

Investor Relations

 

61352 Bad Homburg v. d. H.

Germany

www.freseniusmedicalcare.com

 

Oliver Maier

Head of Investor Relations &

Corporate Communications

Tel. +49 6172 609 2601

Fax +49 6172 609 2301

email: ir@fmc-ag.com

 

Published by

Fresenius Medical Care AG & Co. KGaA

Investor Relations

 

Annual reports, interim reports and further

information on the company are also available on our website.

Please visit us at www.freseniusmedicalcare.com

 

For printed material, please contact Investor Relations.