Fresenius Medical Care AG
Fresenius Medical Care AG & Co. KGaA reports strong third quarter and confirms full year guidance
DGAP-News: Fresenius Medical Care AG & Co. KGaA / Key word(s): Quarter Results – Group revenue +9% (+9% at constant currency), driven by a strong performance in Health Care services – EBIT growth in line with revenue growth, supported by very good development in Latin America and Asia-Pacific – Significant net income growth of 27% (+17% excluding special items) – Care Coordination with positive growth momentum (revenue +29%) and improved sequential margin of 5% (+60 basis points) in line with expectations – Full year 2016 guidance confirmed Key figures – third quarter and first nine months 2016: “We are very pleased with our performance in the third quarter of 2016, which is the result of a strong execution in all regions, the success of our Global Efficiency Program as well as further expansion of our global footprint,” said Rice Powell, Chief Executive Officer of Fresenius Medical Care. “Care Coordination services maintain excellent growth momentum which will help us to extend our range of health care services even further. Based on our strong result for the third quarter, we hereby confirm our guidance for the full-year 2016.” Revenue & earnings Net revenue in the first nine months of 2016 increased by 7% (Health Care services revenue +8%/+9% at constant currency; dialysis products revenue +2%/+4% at constant currency). For the first nine months of 2016, operating income (EBIT) increased by 11% to $1,851 million. Net interest expense in the third quarter remained at the previous year’s level ($100 million). For the first nine months of 2016, net interest expense increased by 1% to $308 million, mainly due to lower interest income as a result of the repayment of interest bearing notes receivables in the fourth quarter of 2015, partially offset by a lower debt level. Income tax expense decreased by 2% to $164 million in the third quarter. This translates into an effective tax rate of 28.8%, a decrease of 400 basis points compared to the third quarter of 2015 (32.8%). This decrease was mainly driven by a lower tax expense as a result of released tax liabilities in the third quarter of 2016 due to tax audit settlements with tax authorities, as well as a favorable impact from the prior-year non-tax deductible loss from the divestiture of our dialysis service business in Venezuela. For the first nine months of 2016, income tax expense increased to $471 million, translating into an effective tax rate of 30.5% (-190 basis points). Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA increased by 27% to $333 million in the third quarter. Excluding the 2015 impacts of (i) the after tax loss, $26.9 million, from the divestment of our dialysis service business in Venezuela and (ii) the realized portion of the after tax gain, $4.8 million, from the sale of our European marketing rights for certain renal pharmaceuticals to our joint venture, Vifor Fresenius Medical Care Renal Pharma, net income increased from $284 million to $333 million (+17%) in the third quarter. Based on approximately 306.0 million shares (weighted average number of shares outstanding), basic earnings per share (EPS) increased from $0.86 to $1.09 (+26%); EPS excluding special items increased from $0.93 to $1.09 (+17%). For the first nine months of 2016, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA increased by 20% to $855 million. Segment development For the first nine months of 2016, North America revenue increased by 9% to $9,512 million. Operating income increased by 16% to $1,486 million. EMEA revenue increased by 2% to $675 million in the third quarter of 2016 (+4% at constant currency). Health Care services revenue for the EMEA segment increased by 8% (+10% at constant currency) to $335 million. This was mainly the result of contributions from acquisitions (8%), partially offset by the negative effect of exchange rate fluctuations (2%). Dialysis treatments increased by 9% in the third quarter. Dialysis products revenue decreased by 3% (-1% at constant currency) to $340 million. The decrease was driven by lower sales of renal drugs (whose marketing rights were sold in 2015) and dialyzers, partially offset by higher sales of machines and bloodlines. Operating income in the EMEA segment decreased by 4% to $125 million in the third quarter due to the prior-year impact from the gain resulting from the sale of European marketing rights for certain renal pharmaceuticals, an unfavorable impact from manufacturing costs as well as higher bad debt expense. This was partially offset by favorable foreign exchange effects. The operating income margin decreased to 18.5% (-120 basis points). For the first nine months of 2016, EMEA revenue increased by 1% to $1,982 million (+4% at constant currency) and operating income decreased by 3% to $395 million. Asia-Pacific revenue grew by 13% (+8% at constant currency) to $427 million in the third quarter. The region recorded $192 million in Health Care services revenue, based on an increase of 5% in dialysis treatments. With an 11% growth in revenue to $235 million (+12% at constant currency), the product business showed an excellent sales performance across the entire dialysis products range. Operating income showed a significant increase (+25%) to $85 million. The operating income margin increased substantially to 19.8% (+190 basis points). This was primarily driven by the positive impact from overall business growth and favorable foreign exchange effects. For the first nine months of 2016, Asia-Pacific revenue grew by 8% to $1,198 million (+8% at constant currency) and operating income increased by 3% to $225 million. Latin America delivered revenue of $192 million, an increase of 9% and an impressive improvement of 27% at constant currency. Health Care services revenue increased by 6% to $139 million (+31% at constant currency) as a result of higher organic revenue per treatment primarily driven by a retrospective reimbursement rate increase, contributions from acquisitions and growth in same market treatments, partially offset by the effect of the divested dialysis care business in Venezuela. Dialysis treatments increased by 1% in the third quarter. Dialysis products revenue increased by 19% to $53 million (+18% at constant currency), as a result of higher sales of dialyzers, concentrates and bloodlines. Operating income came in at $20 million supported by the impact from higher revenue in the region, partially offset by unfavorable foreign currency effects and higher costs mainly related to inflation. The operating margin increased to 10.5%. For the first nine months of 2016, Latin America revenue decreased by 10% to $520 million (+13% at constant currency) and operating income increased by 86% to $47 million. Cash flow In the first nine months of 2016, the company generated net cash provided by operating activities of $1,296 million, representing 9.8% of revenue. Employees Recent events: Acquisition of Sandor Nephro Services in India Outlook 2016 confirmed Please refer to our statement of earnings included at the end of this news and to the attachments as separate excel- and PDF-files for a complete overview of the results for the third quarter/first nine months 2016. 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 3,579 dialysis clinics, Fresenius Medical Care provides dialysis treatments for 306,366 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
2016-10-27 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG. |
Language: | English | |
Company: | Fresenius Medical Care AG & Co. KGaA | |
Else-Kröner-Straße 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.freseniusmedicalcare.com | |
ISIN: | DE0005785802, , | |
WKN: | 578580, 578583 | |
Indices: | DAX | |
Listed: | Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange; NYSE | |
End of News | DGAP News Service |