Fresenius Medical Care AG & Co. KGaA
- WKN: 578580
- ISIN: DE0005785802
- Land: Deutschland
Nachricht vom 20.02.2019 | 08:22
Fresenius Medical Care AG & Co. KGaA: Fresenius Medical Care achieves revised 2018 targets and accelerates investments for future growth
DGAP-News: Fresenius Medical Care AG & Co. KGaA / Key word(s): Annual Results
- Growth trend unchanged: organic revenue growth of 4% for full year 2018
- Net income growth of 60% (14% on a comparable basis) at constant currency
- 22nd consecutive dividend increase proposed: +10% to EUR 1.17
- Share buyback program of up to EUR 1bn over the next 2 years
- Meaningful investments in 2019 to capture future growth opportunities and optimize cost base
- Significantly accelerated net income growth in 2020 expected
For a reconciliation of adjusted figures, please refer to the table at the end of the press release.
Solid revenue growth targeted for 2019 and 2020
For 2020, Fresenius Medical Care expects adjusted revenue2 as well as adjusted net income2 to grow at a mid to high single digit rate.
Global Efficiency Program II on track
Investments in future growth
The second major focus of investment in 2019 will be developing economies such as China. Given the company's more than 15 years of experience in China on the product side, the strong growth of chronic diseases and the current development of the Chinese healthcare market, Fresenius Medical Care will invest in response to the strong growth impulse there and to participate actively in the market opportunity. Our target is to build a network of more than 100 clinics and to invest in home dialysis in China in the coming years. Another example is the Indian market, where we grow our clinic network and have just launched our new 4008A machine, which is engineered for developing economies.
Creating direct shareholder return
Share buyback program
Revenue development reflects portfolio divestitures
Revenue for the full year 2018 decreased by 2% at constant currency to EUR 16,547 million (+4% at constant currency on a comparable basis). Health Care Services revenue decreased by 9% (-4% at constant currency) to EUR 13,264 million, mainly due to the divestitures in Q2 2018, with organic growth at a solid 4%. Health Care Products revenue increased by 1% (+5% at constant currency) to EUR 3,283 million, primarily driven by higher sales of chronic hemodialysis products and renal pharmaceuticals, as well as acute and peritoneal dialysis products.
Corporate cost in the fourth quarter 2018 amounted to EUR 67 million. The fourth quarter 2017 (EUR 289 million) included a EUR 200 million FCPA-related charge. Corporate costs for the full year 2018 declined from EUR 539 million to EUR 359 million, including a EUR 77 million FCPA-related charge.
Operating income (EBIT) in the fourth quarter 2018 rose 18% (+12% at constant currency) to EUR 613 million. On a comparable basis (excluding effects from the divestitures of Care Coordination activities, the H2 2017 contribution from Sound Physicians, the U.S. ballot initiatives and the 2018 FCPA-related charge), EBIT increased by 42% (+39% at constant currency) to EUR 648 million. For the full year 2018, EBIT was EUR 3,038 million, a strong increase of 29% (+33% at constant currency) on the previous year. On a comparable basis, EBIT increased by 3% (+6% at constant currency) to EUR 2,346 million, mainly due to the lower FCPA-related charge.
Excluding (i) the impact from the gain (loss) related to divestitures from Care Coordination activities, (ii) the H2 2017 contribution from Sound Physicians, (iii) the U.S. ballot initiatives and (iv) the FCPA-related charge, the VA agreement and the Natural Disaster costs as well as the effects from the U.S. tax reform, the 2018 effective tax rate decreased by 70 basis points to 30.1%.
Net income1 for the full year 2018 increased by 55% (+60% at constant currency) to EUR 1,982 million. Excluding the four effects described in the previous paragraph ((i) EUR +673 million, (ii) EUR 38 million, (iii) EUR -40 million, and (iv) EUR -28 million), net income increased 11% to EUR 1,377 million (14% at constant currency). Based on approximately 306.5 million shares, basic EPS increased from EUR 4.17 to EUR 6.47 (+55%). Excluding the effects described above, EPS increased 11% (+14% at constant currency) to EUR 4.49. On an adjusted basis, net income and EPS increased by 4% at constant currency.
North America growth affected by divestitures
Operating income in North America in the fourth quarter 2018 was EUR 492 million, a decline of 19%. The operating income margin of 16.5% came in below 2017's strong fourth quarter margin of 19.2%. The Dialysis EBIT in North America fell 4% to EUR 498 million.
For the full year 2018, North America revenue was at EUR 11,570 million, down by 10% (-6% at constant currency). On a comparable basis (excluding the effects from IFRS 15 and the H2 2017 impact from Sound Physicians), revenue fell by 2% (+ 2% at constant currency). Reflecting the divestiture of Care Coordination activities, Health Care Services revenue declined by 11% (-7% at constant currency) to EUR 10,725 million.
1 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
Dialysis Care revenue decreased by 2% (+3% at constant currency) to EUR 9,089 million, mainly due to increased organic revenue per treatment and growth in same-market treatments, partially offset by the effect caused by IFRS 15. Care Coordination revenue fell 42% to EUR 1,636 million (-39% at constant currency).
Health Care Products revenue grew by a solid 5% in constant currency to EUR 845 million, driven by higher sales of renal pharmaceuticals and products for peritoneal dialysis and hemodialysis.
Operating income increased by 28% to EUR 2,665 million (+33% at constant currency). The operating income margin reached 23.0% (FY 2017: 16.2%). While the Care Coordination margin was positively influenced by the divestiture of certain activities, the margin in the Dialysis business declined to 17.6% (FY 2017: 19.3%), primarily due to the effect from the prior-year agreement with the U.S. Department of Veterans Affairs, the move of calcimimetic drugs in dialysis services, and lower revenue from commercial payors.
At the end of 2018, 204,107 patients were being treated at the company's 2,529 clinics in North America. Dialysis treatments increased by 3%.
At $354, revenue per treatment in the United States in 2018 was up by 4% due to the move of calcimimetic drugs, partially offset by lower revenue from commercial payors and higher implicit price concessions. Cost per treatment increased by 6% to $289, largely driven by the move of calcimimetic drugs and property-related costs, partially offset by lower costs for healthcare supplies.
Highest 5-Diamond Patient Safety results in the U.S. achieved
For the full year 2018, EMEA revenue increased by 2% (+4% at constant currency) to EUR 2,587 million. Health Care Services revenue increased by 3% (+6% in constant currency), based on same-market treatment growth and contributions from acquisitions. Health Care Products revenue was stable at EUR 1,313 million (+2% at constant currency), driven by higher sales of machines, products for acute care, renal pharmaceuticals, bloodlines and concentrates, partially offset by lower sales of dialyzers as well as products for peritoneal dialysis. Operating income decreased by 10% to EUR 399 million (-10% at constant currency). The operating income margin fell to 15.4% (FY 2017: 17.4%), mainly due to an impairment of intangible assets and higher personnel costs in certain countries.
At the end of 2018, 65,061 patients were being treated at the company's 776 clinics in EMEA. Dialysis treatments increased by 4%.
Strong year-end performance in Asia-Pacific
For the full year 2018, Asia-Pacific revenue grew by 4% (+8% at constant currency) to EUR 1,689 million, mainly driven by same-market treatment growth and acquisitions. Health Care Services contributed EUR 776 million. Health Care Products revenue of EUR 913 million was mainly supported by higher sales of products for chronic hemodialysis and acute care treatments. Operating income declined by 3% (-1% at constant currency) to EUR 304 million, while the operating income margin was 18.0% (FY 2017: 19.3%).
At the end of 2018, 31,476 patients were being treated at the company's 394 clinics in Asia-Pacific. Dialysis treatments increased by 3%.
Lower contribution from Latin America
For the full year 2018, Latin America revenue decreased by 5% (+22% at constant currency) to EUR 686 million. Revenue in Health Care Services was EUR 489 million, a decrease of 5% (+27% at constant currency) due to organic revenue increase driven by hyperinflation in Argentina, contributions from acquisitions, and same-market growth. Health Care Products revenue of EUR 197 million decreased by 4% (+11% at constant currency), driven by higher sales of machines and acute and peritoneal dialysis products, partially offset by lower sales in dialyzers. Operating income decreased by 51% (-65% at constant currency) to EUR 29 million. The operating income margin was 4.2% (FY 2017: 8.1%), mainly impacted by hyperinflation in Argentina and unfavorable currency transaction effects.
At the end of 2018, Fresenius Medical Care treated 32,687 patients at 229 clinics in Latin America. Dialysis treatments increased by 4%.
Solid operating cash flow
In the full year 2018, the company generated net cash provided by operating activities of EUR 2,062 million, compared with EUR 2,192 million for the full year 2017. This represents 12.5% of revenue, clearly exceeding our 2018 target of more than 10%. The slight decrease in net cash provided by operating activities was largely driven by the 2017 payment under the VA agreement, increased inventory levels and a discretionary contribution to plan assets in the U.S., partially offset by lower income tax payments. Free cash flow reached EUR 1,059 million (FY 2017: EUR 1,351 million). DSO as of December 31, 2018 was 75 days, the same level as at the end of 2017.
Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases of which around 3.4 million patients worldwide regularly undergo dialysis treatment. Through its network of 3,928 dialysis clinics, Fresenius Medical Care provides dialysis treatments for 333,331 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 related medical services in the field of Care Coordination. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME) and on the New York Stock Exchange (FMS).
For more information visit the Company's website at www.freseniusmedicalcare.com.
/ Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
Dr. Dominik Heger
SVP & Head of Investor Relations & Corporate Communications
P. +49 6172 609 2601
|Company:||Fresenius Medical Care AG & Co. KGaA|
|61352 Bad Homburg|
|Phone:||+49 (0) 6172- 609 2525|
|Fax:||+49 (0) 6172- 609 2301|
|Listed:||Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange; NYSE, Luxembourg Stock Exchange|
|End of News||DGAP News Service|
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