DGAP-News: Fresenius Medical Care AG & Co. KGaA / Key word(s): Final Results/Forecast Fresenius Medical Care AG & Co. KGaA Reports Very Strong Fourth Quarter and Full Year Results; Another Record Year expected for 2012 21.02.2012 / 08:05 --------------------------------------------------------------------- Contact: Fresenius Medical Care AG & Co. KGaA Oliver Maier Else-Kröner-Str.1 Phone: + 49 6172 609 2601 61352 Bad Homburg Fax: + 49 6172 609 2301 Germany www.fmc-ag.com North America: Terry L. Morris Phone: + 1 800 948 2538 Fax: + 1 615 345 5605 E-mail: ir@fmc-ag.com February 21, 2012 Investor News Fresenius Medical Care Reports Very Strong Fourth Quarter and Full Year Results; Another Record Year expected for 2012 4th Quarter 2011 Summary: |[![CDATA[|[pre|]]]|] Net revenue $3,323 +5% million Operating income (EBIT) $587 +9% million Net income attributable to shareholders ofFresenius $310 +14% Medical Care AG & Co. KGaA million Earnings per share $1.02 +14% |[![CDATA[|[/pre|]]]|] Full Year 2011 Summary: |[![CDATA[|[pre|]]]|] Net revenue $12,795 +6% million Operating income (EBIT) $2,075 +8% million Net income attributable to shareholders ofFresenius $1,071 +9% Medical Care AG & Co. KGaA million Earnings per share $3.54 +9% Dividend Proposal Ordinary share EUR0.69 +6% Preference share EUR0.71 +6% |[![CDATA[|[/pre|]]]|] 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 fourth quarter and full year of 2011. 4th Quarter 2011: Revenue Net revenue for the fourth quarter of 2011 increased by 5% to $3,323 million (+6% at constant currency) compared to the fourth quarter of 2010. Organic revenue growth worldwide was 3%. Dialysis services revenue grew by 3% to $2,435 million (+4% at constant currency) and dialysis product revenue increased by 9% to $888 million (+10% at constant currency). North America revenue for the fourth quarter of 2011 increased by 1% to $2,096 million including the impact of the new Medicare end-stage renal disease prospective payment system in the United States. Dialysis services revenue increased by 1% to $1,882 million with a same market growth of 3%. Average revenue per treatment for U.S. clinics decreased to $351 in the fourth quarter of 2011 compared to $355 for the corresponding quarter in 2010 reflecting the implementation of the new prospective payment system. Dialysis product revenue increased by 2% to $214 million, mainly as a result of increased sales of hemodialysis products partially offset by lower pricing of renal pharmaceuticals. International revenue increased by 12% to $1,223 million (+14% at constant currency). Organic revenue growth was 8%. Dialysis services revenue increased by 13% to $553 million (+16% at constant currency). Dialysis product revenue increased by 11% to $669 million and increased by 12% at constant currency, mainly driven by higher sales of peritoneal dialysis products, dialysis machines, dialyzers, products for acute care treatments and renal pharmaceuticals. Earnings Operating income (EBIT) for the fourth quarter of 2011 increased by 9% to $587 million compared to $539 million in the fourth quarter of 2010. This resulted in an operating margin of 17.7% for the fourth quarter of 2011 compared to 17.0% for the corresponding quarter in 2010. In North America, the operating margin increased from 17.9% in the fourth quarter of 2010 to 19.1% in the fourth quarter of 2011. This increase was favorably influenced by the development of pharmaceutical costs. Average costs per treatment for U.S. clinics decreased to $279 in the fourth quarter of 2011 compared to $287 for the corresponding quarter in 2010. In the International segment, the operating margin increased from 18.0% to 18.7% mainly due to favorable exchange rate effects and business growth in Asia-Pacific. Net interest expense for the fourth quarter of 2011 was $82 million compared to $74 million in the fourth quarter of 2010. This development was mainly attributable to the higher level of financial debt as a result of the issuance of various tranches of senior notes over the course of 2011. Income tax expense was $165 million for the fourth quarter of 2011 compared to $169 million in the fourth quarter of 2010. The effective tax rate decreased to 32.7% from 36.3%. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the fourth quarter of 2011 was $310 million, an increase of 14% compared to the corresponding quarter of 2010. Earnings per share (EPS) for the fourth quarter of 2011 rose by 14% to $1.02 per ordinary share compared to $0.90 for the fourth quarter of 2010. The weighted average number of shares outstanding for the fourth quarter of 2011 was approximately 303.9 million shares compared to 302.1 million shares for the fourth quarter of 2010. The increase in shares outstanding resulted from stock option exercises in the past 12 months. Cash flow In the fourth quarter of 2011, the company generated $497 million in cash from operations, an increase of 46% compared to the corresponding figure last year and representing approximately 15% of revenue. The cash flow generation was supported by increased earnings, a favorable development of days sales outstanding (DSO) compared to the fourth quarter of 2010 and lower income tax payments. A total of $191 million in cash was spent for capital expenditures, net of disposals. Free cash flow before acquisitions was $306 million compared to $173 million in the fourth quarter of 2010. A total of $604 million in cash was spent for acquisitions, net of divestitures. Free cash flow after acquisitions and divestitures was minus $298 million compared to minus $75 million in the fourth quarter of 2010. Full Year 2011: Revenue and Earnings Net revenue for the full year 2011 increased by 6% to $12,795 million (+5% at constant currency) compared to the full year 2010 and in line with our guidance. Organic revenue growth was 2% in the full year 2011. Operating income (EBIT) for the full year 2011 increased by 8% to $2,075 million compared to $1,924 million in 2010, resulting in an operating margin of 16.2% compared to 16.0% for the full year 2010. Net interest expense for the full year 2011 was $297 million compared to $280 million in the same period of 2010. Income tax expense for the full year 2011 was $601 million compared to $578 million in the same period in 2010, reflecting effective tax rates of 33.8% and 35.2%, respectively. For the full year 2011, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA was $1,071 million, up by 9% from the full year 2010 and in line with our guidance. In the full year 2011, earnings per ordinary share rose by 9% to $3.54. The weighted average number of shares outstanding during the full year 2011 was approximately 303.0 million. Cash Flow Cash from operations during 2011 was $1,446 million compared to $1,368 million for the same period in 2010, representing approximately 11% of revenue and above our targeted 10% level. A total of $570 million in cash was spent for capital expenditures, net of disposals. Free cash flow before acquisitions for the full year 2011 was $876 million compared to $861 million in the same period in 2010. A total of $1,775 million in cash was spent for acquisitions, net of divestitures. Free cash flow after acquisitions and divestitures was minus $899 million compared to $243 million in the last year. Please refer to the attachments for a complete overview on the fourth quarter and the full year 2011 and the reconciliation of non-GAAP financial measures included in this release to the most comparable GAAP financial measures. Patients - Clinics - Treatments As of December 31, 2011, Fresenius Medical Care treated 233,156 patients worldwide, which represents a 9% increase compared to the previous year's figure. North America provided dialysis treatments for 142,319 patients, an increase of 3%. Including 21 clinics managed by Fresenius Medical Care North America, the number of patients in North America was 143,679. The International segment provided dialysis treatments to 90,837 patients, an increase of 18% over the prior year's figure. As of December 31, 2011, the company operated a total of 2,898 clinics worldwide, which represents a 6% increase compared to the previous year's figure. The number of clinics is comprised of 1,838 clinics in North America (1,859 including managed clinics), and 1,060 clinics in the International segment, representing an increase of 2% and 13%, respectively. During the full year 2011, Fresenius Medical Care delivered approximately 34.39 million dialysis treatments worldwide. This represents an increase of 9% compared to last year's figure. North America accounted for 21.61 million treatments, an increase of 4%. The International segment delivered 12.78 million treatments, an increase of 18%. Employees As of December 31, 2011, Fresenius Medical Care had 79,159 employees (full-time equivalents) worldwide compared to 73,452 employees at the end of 2010. This increase of more than 5,700 employees is due to overall growth in the company's business and acquisitions. Dividend The company intends to continue its earnings-driven dividend policy. At the Annual General Meeting to be held on May 10, 2012, shareholders will be asked to approve a dividend of EUR0.69 per ordinary share, an increase of 6% from 2010 (EUR0.65). For the 15th consecutive year, shareholders can expect to receive an increased annual dividend. Debt/EBITDA ratio The ratio of debt to Earnings before interest, taxes, depreciation and amortization (EBITDA) increased from 2.38 at the end of 2010 to 2.69 at the end of 2011. The debt/EBITDA ratio at the end of the third quarter 2011 was 2.55. Rating Standard & Poor's Ratings Services 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, and Fitch rates the company's corporate credit as 'BB+' with a 'stable' outlook. For further information on Fresenius Medical Care's credit ratings, maturity profiles and credit instruments, please visit our website at www.fmc-ag.com / Investor Relations / Credit Relations. Vifor Fresenius Medical Care Renal Pharma Ltd. Formation Completed After the recent clearance by the European Union antitrust commissions, the formation of Vifor Fresenius Medical Care Renal Pharma Ltd. was completed globally on November 1, 2011. Acquisition of American Access Care Completed The American Accesss Care (AAC) acquisition was closed effective October 1, 2011. AAC operates 28 freestanding out-patient centers primarily dedicated to serving vascular access needs of dialysis patients. The acquired operations will add approximately $175 million in annual revenue and are expected to be accretive to earnings in the first year after closing of the transaction. Acquisition of Liberty Dialysis Holdings, Inc. The acquisition of Liberty Dialysis Holdings, Inc. is on schedule and is still expected to close in the first quarter of 2012. Issuance of senior notes In January 2012, Fresenius Medical Care successfully completed the largest placement of senior notes in the history of the company. Proceeds from the offering of three tranches of U.S. dollar and euro-denominated senior unsecured notes amounting to approximately $1.81 billion are intended to be used for acquisitions, including the acquisition of Liberty Dialysis Holdings, Inc., to refinance indebtedness and for general corporate purposes. The coupon for the dollar-denominated senior notes in the principal amount of $800 million due 2019 is 5.625% and the coupon for the dollar-denominated senior notes in the principal amount of $700 million due 2022 is 5.875%. The coupon for the euro-denominated senior notes in the principal amount of EUR250 million due 2019 is 5.25%. All tranches were issued at par. Issuance of floating rate senior notes In October 2011, Fresenius Medical Care issued euro-denominated floating rate senior notes in the principal amount of EUR100 million, due 2016. The coupon is equal to the three-month Euribor rate plus 350 basis points. Outlook for 2012 For the year 2012, the company expects revenue to grow to around $14 billion. This takes into account a change in US-GAAP1) in the presentation of U.S. dialysis service revenue which will be shown net of the provision for bad debt. Based on the comparable revenue for 2011 of $12,571 million the revenue outlook represents an increase of 11% and between 13% and 15% based on constant currencies. Net income is expected to grow to around $1.3 billion and net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to grow to around $1.14 billion with operating margins forecast to increase to approximately 16.9%. For 2012, the company expects to spend around $700 million on capital expenditures and around $1.8 billion on acquisitions. The debt/EBITDA ratio is expected to be below 3.0 by the end of 2012. 'We are very pleased to have achieved another year of record results in 2011. In the past 15 years, since the foundation of the company, Fresenius Medical Care has been able to quadruple its sales and to increase its earnings tenfold. With our strong performance in 2011 we are proposing to deliver our fifteenth consecutive dividend increase to our shareholders', said Ben Lipps, chief executive officer of Fresenius Medical Care. 'We successfully handled the implementation of the new reimbursement system in the U.S. and have made good progress on our growth initiatives. We are confident that we will continue our strong performance targeting another record year in 2012.' 1) First time adoption of Accounting Standards Codification 954-605 in 2012 (Patient service revenue less provision for bad debt). Video Webcast Fresenius Medical Care will hold an analyst meeting at its headquarters in Bad Homburg, Germany to discuss the results of the fourth quarter and full year of 2011 on Tuesday, February 21, 2012, at 3:15 p.m. CET / 9:15 a.m. EDT. The company invites investors to view the live webcast of the meeting at the company's website www.fmc-ag.com in the 'Investor Relations' section. A replay will be available shortly after the meeting. About Fresenius Medical Care 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 2.1 million individuals worldwide. Through its network of 2,898 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 233,156 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. 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. 1 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 its revenue from period to period. However, we also believe that data on constant currency period-over-period changes have limitations, particularly as the currency effects that are eliminated could constitute a significant element of our revenue and could 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. End of Corporate News --------------------------------------------------------------------- 21.02.2012 Dissemination of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: Fresenius Medical Care AG & Co. KGaA Else-Kröner-StraÃe 1 61352 Bad Homburg Germany Phone: +49 (0) 6172- 609 2525 Fax: +49 (0) 6172- 609 2301 E-mail: ir@fmc-ag.com Internet: www.fmc-ag.de ISIN: DE0005785802, DE0005785836, WKN: 578580, 578583 Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover, München, Stuttgart; Terminbörse EUREX; NYSE End of News DGAP News-Service --------------------------------------------------------------------- 157461 21.02.2012
DGAP-News: Fresenius Medical Care AG & Co. KGaA Reports Very Strong Fourth Quarter and Full Year Results; Another Record Year expected for 2012
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