DGAP-News: Fresenius Medical Care AG & Co. KGaA / Key word(s): Final Results Fresenius Medical Care reports fourth quarter and full year 2015 results 24.02.2016 / 07:28 The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- 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 income ,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 and 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 EUR0.80 +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." 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. 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(R)/NaturaLyte(R). 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(R)/NaturaLyte(R) 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. 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 of 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. 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. 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 EUR0.80 per share, an increase of 3% compared to 2014 (EUR0.78). This would mean the 19th consecutive dividend increase shareholders can expect. 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 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(R)/NaturaLyte(R) 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. --------------------------------------------------------------------------- 24.02.2016 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP 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-Straße 1 61352 Bad Homburg Germany Phone: +49 (0) 6172- 609 2525 Fax: +49 (0) 6172- 609 2301 E-mail: [email protected] Internet: www.fmc-ag.de ISIN: DE0005785802, DE0005785836, WKN: 578580, 578583 Indices: DAX Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart; Terminbörse EUREX; NYSE End of News DGAP News Service --------------------------------------------------------------------------- 439655 24.02.2016