DGAP-News: Fresenius Medical Care AG & Co. KGaA / Key word(s): Quarter
Results/Interim Report
Fresenius Medical Care AG & Co. KGaA: Reports Third Quarter 2012 And
Nine Month 2012 Results
31.10.2012 / 07:17
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October 31, 2012
Fresenius Medical Care Reports Third Quarter 2012 And Nine Months 2012
Results
3rd Quarter 2012 Summary:
<pre>
Net revenue $3,418 million +7%
Operating income (EBIT) $568 million +6%
Net income * $270 million -3%
Earnings per ordinary share $0.88 -4%
</pre>
Nine Months 2012 Summary:
<pre>
Net revenue $10,095 million +8%
Operating income (EBIT) $1,659 million +11%
Net income * $930 million +22%
Earnings per ordinary share $3.05 +21%
Earnings excluding investment gain:
Net income * $790 million +4%
Earnings per ordinary share $2.59 +3%
</pre>
* Attributable 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 third quarter and first nine
months of 2012.
3rd Quarter of 2012
Revenue
Net revenue for the third quarter of 2012 increased by 7% to $3,418 million
(+11% at constant currency) compared to the third quarter of 2011. Organic
revenue growth worldwide was 4%. Dialysis services revenue grew by 10% to
$2,605 million (+12% at constant currency) and dialysis product revenue
decreased by 1% to $813 million and increased by 7% at constant currency.
North America revenue for the third quarter of 2012 increased by 13% to
$2,249 million. Dialysis services revenue grew by 15% to $2,047 million
with a same market treatment growth of 4%. Average revenue per treatment
for U.S. clinics increased to $349 in the third quarter of 2012 compared to
$345 for the corresponding quarter in 2011. Dialysis product revenue
decreased by 1% to $202 million. After adjusting for the Liberty
acquisition, dialysis product revenue increased by 2%.
International revenue decreased by 2% to $1,163 million and increased by 7%
at constant currency. Organic revenue growth was 7%. Dialysis services
revenue decreased by 4% to $558 million and increased by 6% at constant
currency. Dialysis product revenue decreased by 1% to $605 million and
increased by 9% at constant currency.
Earnings
Operating income (EBIT) for the third quarter of 2012 increased by 6% to
$568 million compared to $534 million in the third quarter of 2011. This
resulted in an operating margin of 16.6% for the third quarter of 2012
compared to 16.8% for the corresponding quarter in 2011.
In North America, the operating margin decreased from 18.8% to 18.7%.
Average costs per treatment for U.S. clinics increased by $2 to $281 in the
third quarter of 2012 as compared to $279 in the third quarter of 2011.
In the International segment, the operating margin decreased from 17.3% to
16.8%.
Net interest expense for the third quarter of 2012 was $108 million,
compared to $68 million in the third quarter of 2011. This development was
mainly attributable to the higher level of indebtedness as a result of the
issuance of various tranches of senior notes over the course of 2011 and
2012 to finance dialysis clinic acquisitions.
Income tax expense was $153 million for the third quarter of 2012 compared
to $163 million in the third quarter of 2011, reflecting effective tax
rates of 33.3% and 35.0%, respectively.
Net income attributable to shareholders of Fresenius Medical Care AG & Co.
KGaA for the third quarter of 2012 was $270 million, a decrease of 3%
compared to the corresponding quarter of 2011.
Earnings per ordinary share (EPS) for the third quarter 2012 was $0.88
compared to $0.92 for the third quarter of 2011. The weighted average
number of shares outstanding for the third quarter of 2012 was
approximately 305.5 million shares, compared to 303.2 million shares for
the third quarter of 2011. The increase in shares outstanding resulted from
stock option exercises in the past 12 months.
Cash flow
In the third quarter of 2012, the company generated $535 million in cash
from operations, an increase of 16% compared to the corresponding figure
last year and representing 15.7% of revenue. The cash flow generation was
supported by the favorable earnings development as well as the favorable
development of working capital items including inventory.
A total of $164 million was spent for capital expenditures, net of
disposals. Free cash flow before acquisitions was $371 million
(representing 10.8% of revenue) compared to $313 million in the third
quarter of 2011. A total of $37 million in cash was spent for acquisitions
and investments, net of divestitures. Free cash flow after acquisitions and
divestitures was $334 million, compared to $264 million in the third
quarter of 2011.
Nine Months of 2012
Revenue and Earnings
Net revenue for the first nine months of 2012 increased by 8% to $10,095
million (+11% at constant currency) compared to the first nine months of
2011. Organic revenue growth was 4% in the first nine months of 2012.
Operating income (EBIT) for the first nine months of 2012 increased by 11%
to $1,659 million compared to $1,488 million in the first nine months of
2011. The operating income margin increased to 16.4% for the first nine
months of 2012 as compared to 16.0% in the same period in 2011.
Net interest expense for the first nine months of 2012 was $311 million
compared to $214 million in the same period of 2011.
For the first nine months of 2012, net income attributable to shareholders
of Fresenius Medical Care AG & Co. KGaA was $930 million, up by 22% from
the first nine months of 2011. This includes a non-taxable investment gain
of $140 million related to the acquisition of Liberty Dialysis Holdings,
Inc., including its 51% stake in Renal Advantage Partners, LLC (RAI). The
gain is a result of measuring the 49% equity interest in RAI held by the
company at its fair value at the time of the Liberty acquisition. Excluding
this investment gain, net income attributable to shareholders of Fresenius
Medical Care AG & Co. KGaA increased by 4% to $790 million.
Income tax expense for the first nine months of 2012 was $462 million
compared to $436 million in the same period in 2011, reflecting effective
tax rates of 31.1% and 34.2%, respectively. Excluding the investment gain
the effective tax rate for the first nine months of 2012 was 34.3%.
In the first nine months of 2012, earnings per ordinary share rose by 21%
to $3.05 and by 3% to $2.59 if excluding the investment gain. The weighted
average number of shares outstanding during the first nine months of 2012
was approximately 304.7 million compared to 302.7 million shares for the
first nine months of 2011.
Cash Flow
Cash from operations during the first nine months of 2012 was $1,467
million compared to $950 million for the same period in 2011, representing
14.5% of revenue.
A total of $438 million in cash was spent for capital expenditures, net of
disposals. Free cash flow before acquisitions for the first nine months of
2012 was $1,029 million compared to $570 million in the same period in
2011. A total of $1,557 million in cash was spent for acquisitions, net of
divestitures. Free cash flow after acquisitions and divestitures was minus
$528 million compared to minus $601 million in the first nine months of
last year.
Please refer to the attachments for a complete overview on the third
quarter and first nine months of 2012 and the reconciliation of non-GAAP
financial measures included in this release to the most comparable GAAP
financial measures.
Patients - Clinics - Treatments
As of September 30, 2012, Fresenius Medical Care treated 256,521 patients
worldwide, which represents a 12% increase compared to the previous year's
figure. North America provided dialysis treatments for 163,454 patients, an
increase of 16%. Including 31 clinics managed by Fresenius Medical Care
North America, the number of patients in North America was 165,754. The
International segment provided dialysis treatment to 93,067 patients, an
increase of 6% over the prior year's figure.
As of September 30, 2012, the company operated a total of 3,135 clinics
worldwide, which represents a 9% increase compared to the previous year's
figure. The number of clinics is comprised of 2,056 clinics in North
America (2,087 including managed clinics), and 1,079 clinics in the
International segment, representing an increase of 12% and 4%,
respectively.
During the first nine months of 2012, Fresenius Medical Care delivered
approximately 28.6 million dialysis treatments worldwide. This represents
an increase of 12%, compared to last year's figure. North America accounted
for 18.1 million treatments, an increase of 12%. The International segment
delivered 10.5 million treatments, an increase of 13%.
Employees
As of September 30, 2012, Fresenius Medical Care had 85,368 employees
(full-time equivalents) worldwide, compared to 79,159 employees at the end
of 2011. This increase of more than 6,200 employees is due to overall
growth in the company's business and acquisitions including Liberty
Dialysis Holdings, Inc.
Debt/EBITDA ratio
The ratio of debt to earnings before interest, taxes, depreciation and
amortization (EBITDA) increased from 2.55 at the end of the third quarter
of 2011 to 2.81 at the end of the third quarter of 2012. The debt/EBITDA
ratio at the end of the second quarter 2012 was 2.92.
Rating
During the third quarter of 2012, Standard & Poor's removed the company's
ratings from review and affirmed the company's corporate credit as 'BB+'
with a 'stable' 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.
Successful Renewal of Credit Agreement
Fresenius Medical Care successfully renewed its syndicated credit agreement
including a revolving facility and a long term loan. The refinancing of
those facilities was well received in the bank market. The company entered
into a $3.85 billion syndicated credit agreement, comprised of 5-year
revolving facilities (including a $200 million U.S. Dollar facility, a
EUR500 million Euro facility and a $ 400 million multi-currency facility)
and a 5-year $2.6 billion term loan. Proceeds from the credit facilities
were used to refinance the company's existing credit facilities, which
otherwise would have matured on March 31, 2013, and for general corporate
purposes.
Sales and earnings outlook for 2012 confirmed
For the full year 2012, the company confirms its sales and earnings
outlook.
The company expects revenue to grow to ~ $14 billion in 2012 . Net income
attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is
expected to grow to ~ $1.14 billion1. This does neither include the
investment gain in the amount of $140 million in the first nine months of
2012 nor does it consider charges of up to $70 million after tax mainly
related to the intended renegotiation of the distribution, manufacturing
and supply agreement for iron products in North America to reflect changes
in the market and a donation to the American Society of Nephrology
foundation to establish the Ben J. Lipps Research Fellowship Program.
For 2012, the company expects to spend ~ $700 million on capital
expenditures and ~ $1.8 billion on acquisitions. The debt/EBITDA ratio is
expected to be below 3.0 by the end of 2012.
Ben Lipps, chief executive officer of Fresenius Medical Care, commented:
'In light of the negative implications from the difficult economic
environment and from currency fluctuations, we achieved good operating
results with an excellent operating cash flow in the third quarter of 2012.
In summary, we are confirming our guidance for the full year at the lower
end of the previously indicated range. We anticipate some special
collection efforts related to services performed in prior years and other
initiatives in the fourth quarter that will help us to achieve our
guidance. The integration progress of our latest acquisitions continues and
we are very pleased with our Quality Improvement programs and patient
outcomes continuing to improve in nutritional status and reduced hospital
days. The CEO transition to Rice Powell continues on track with the
appointment of Ron Kuerbitz as the new CEO for North America effective
January 2013.'
Conference call
Fresenius Medical Care will hold a conference call to discuss the results
of the third quarter and first nine months of 2012 on Wednesday, October
31, 2012, at 3:30 p.m. CET / 10:30 a.m. EDT. The company invites investors
to view 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 2.1 million
individuals worldwide. Through its network of 3,135 dialysis clinics in
North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius
Medical Care provides dialysis treatment to 256,521 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.
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.
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' 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
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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
Indices: DAX
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover,
München, Stuttgart; Terminbörse EUREX; NYSE
End of News DGAP News-Service
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190894 31.10.2012
DGAP-News: Fresenius Medical Care AG & Co. KGaA: Reports Third Quarter 2012 And Nine Month 2012 Results
| Source: EQS Group AG