01.08.2016
Fresenius Medical Care AG & Co. KGaA DE0005785802
DGAP-News: Fresenius Medical Care posts accelerated earnings growth in the 2nd quarter
DGAP-News: Fresenius Medical Care AG & Co. KGaA / Key word(s): Quarter
Results/Half Year Results
Fresenius Medical Care posts accelerated earnings growth in the 2nd quarter
01.08.2016 / 22:55
The issuer is solely responsible for the content of this announcement.
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- Group revenue +5% (+7% at constant currency), driven by very good
results in health care services
- Considerable net income growth of 22%, supported by lower costs for
health care supplies and Global Efficiency Program
- Strong operating performance in North America: revenue +8%, operating
income (EBIT) +20%
- Care Coordination maintains significant revenue growth (+21%) and
continues to invest in infrastructure
- Fresenius Medical Care on track to achieve full year guidance
Key figures - second quarter/first half 2016:
Second quarter Growth yoy First half Growth yoy
Net revenue $4,420 million +5% $8,626 million +6%
Operating income (EBIT) $641 million +17% $1,181 million +12%
Net income attributable to shareholders
of Fresenius Medical Care AG & Co. KGaA $294 million +22% $522 million +16%
Basic earnings per share $0.96 +22% $1.71 +15%
"Following a solid start to the year, we have accelerated our growth in the
second quarter", said Rice Powell, Chief Executive Officer of Fresenius
Medical Care. "Our strong earnings growth demonstrates our ability to
further improve our cost base and the success of our Global Efficiency
Program. I am extremely pleased with our excellent operational performance
in the core dialysis services business. Care Coordination maintains strong
topline growth and we continue to invest in the infrastructure of this
business. Despite unfavorable foreign currency developments and continuous
cost pressure, we are confident we will achieve our full year guidance."
Revenue & earnings
Net revenue for the second quarter improved by 5% and reached $4,420
million (+7% at constant currency), driven by very good health care
services revenue growth in North America. Health care services revenue
increased by 7% to $3,571 million, mainly due to organic revenue growth.
Dialysis products revenue decreased by 1% to $849 million in the second
quarter, impacted by negative currency developments (+2% at constant
currency) and compared to an exceptionally strong performance in the
previous year's second quarter. The revenue increase at constant exchange
rates was driven by higher sales of dialyzers and machines.
Net revenue in the first half of 2016 increased by 6% (health care services
revenue +7%/+9% at constant currency; dialysis products revenue +1%/+4% at
constant currency).
In the second quarter, operating income (EBIT) increased by 17% to $641
million. The operating income margin increased to 14.5%, due to strong
operating performance across all segments. The increase in North America
was supported by lower costs for health care supplies and a favorable
impact from higher volume with commercial payors. This was partially offset
by higher personnel expenses related to dialysis services in the North
America segment. The increase in the Asia-Pacific segment was driven by
favorable exchange rate effects and higher business growth.
For the first half of 2016, operating income (EBIT) increased by 12% to
$1,181 million.
Net interest expense in the second quarter remained at the previous year's
level ($102 million). For the first half of 2016, net interest expense
increased by 2% to $208 million.
Income tax expense increased to $169 million in the second quarter. This
translates into an effective tax rate of 31.3%, an increase of 90 basis
points compared to Q2 2015 (30.4%). This increase was mainly driven by a
relative to income before taxes lower increase of tax-free income
attributable to noncontrolling interests.
For the first half of 2016, tax expense increased to $306 million,
translating into an effective tax rate of 31.5% (-70 basis points).
Net income attributable to shareholders of Fresenius Medical Care AG & Co.
KGaA increased by 22% to $294 million in the second quarter, mainly driven
by the strong performance of the North America segment. Based on
approximately 305.5 million shares (weighted average number of shares
outstanding), basic earnings per share (EPS) increased accordingly to $0.96
(+22%), compared to $0.79 in the previous year's second quarter.
For the first half of 2016, net income attributable to shareholders of
Fresenius Medical Care AG & Co. KGaA increasead by 16% to $522 million.
Segment development
In the second quarter, North America revenue increased by 8% to $3,168
million (72% of total revenue). Health care services revenue grew by 8% to
$2,938 million, of which Care Coordination contributed $564 million (+21%),
supported by considerable organic revenue growth of 17%. Dialysis care
revenue contributed $2,374 million (+5%), driven by growth in dialysis
treatments and increases in revenue per treatment. Dialysis products
revenue grew by 2% to $230 million, due to increased product sales
(especially machines and dialyzers). Operating income in North America came
in at $513 million (+20%). The substantially improved operating income
margin of 16.2% (+170 basis points) was attributable to lower costs for
health care supplies, a favorable impact from commercial payors, lower
legal expenses and increased income from equity method investees. This was
partially offset by higher personnel expenses related to dialysis services
and a lower margin in Care Coordination. The margin decrease in Care
Coordination was driven by increased costs for hospitalist and intensivist
services due to further infrastructure development, partially offset by
one-time gains from the endovascular and cardiovascular services business.
For the first half of 2016, North America revenue increased by 9% to $6,212
million. Operating income increased by 24% to $949 million.
EMEA revenue increased by 1% to $676 million in the second quarter of 2016
(+3% at constant currency). Health care services revenue for the EMEA
segment increased by 7% (+9% at constant curreny) to $331 million. This was
the result of contributions from acquisitions (7%) and organic revenue
growth (3%), partially offset by the negative effect of exchange rate
fluctuations (2%) and the effect of closed or sold clinics (1%). Dialysis
treatments increased by 9% in the second quarter. Dialysis products revenue
decreased by 4% (-3% at constant currency) to $345 million. The decrease
was driven by lower sales of dialyzers, machines, renal pharmaceuticals and
bloodlines, partially offset by higher sales of products for acute care
treatments and peritoneal dialysis products. Operating income in the EMEA
segment increased by 4% to $139 million in the second quarter, due to
favorable foreign exchange effects and a positive impact from
manufacturing, driven by higher volumes and production efficiencies. The
operating income margin increased to 20.6% (+50 basis points).
For the first half of 2016, EMEA revenue increased by 1% to $1,307 million
and operating income decreased by 2% to $269 million.
Asia-Pacific revenue grew by 5% (+6% at constant currency) to $397 million
in the second quarter. The region recorded $177 million in health care
services revenue, based on an increase of 4% in dialysis treatments. With a
4% growth in revenue to $220 million (+9% at constant currency), the
product business showed a very good sales performance across the entire
dialysis products range. Operating income showed a strong increase (+12%)
to $75 million. The operating income margin increased to 18.9% (+110 basis
points). This was driven by favorable foreign currency effects and the
positive underlying business performance, in particular in China and India.
For the first half of 2016, Asia-Pacific revenue grew by 6% to $771 million
(+8% at constant currency) and operating income decreased by 8% to $140
million.
Latin America delivered revenue of $175 million, a decrease of 14% and an
improvement of 9% at constant currency. Health care services revenue
decreased by 17% to $125 million (+9% at constant currency) as a result of
negative foreign currency effects and the effect of closed or sold clinics
(mainly in Venezuela). Dialysis treatments decreased accordingly by 7% in
the second quarter. This was partially offset by the strong organic revenue
growth of 19%. Dialysis products revenue decreased by 5% to $50 million
(+8% at constant currency). The 8% increase at constant curreny was driven
by higher sales of dialyzers, hemodialysis solutions and concentrates,
machines and bloodlines, partially offset by lower sales of peritoneal
dialysis products. Operating income came in at $16 million (+4%) with the
operating margin increasing to 9.3%. The margin increase was primarily
driven by favorable foreign exchange effects.
For the first half of 2016, Latin America revenue decreased by 18% to $328
million (+7% at constant currency) and operating income decreased by 19% to
$27 million.
Cash flow
In the second quarter of 2016, the company generated $678 million in net
cash provided by operating activities, representing 15.3% of revenue ($385
million in Q2 2015). The strong increase was primarily driven by an
adjustment during the first quarter which impacted invoicing and was
largely resolved during the second quarter. In addition, the timing of
working capital items and higher earnings had a positive effect on cash
flow. These effects were partially offset by higher income tax payments.
The number of DSO (days sales outstanding) came in at 70 days, a reduction
of 4 days compared to the first quarter of 2016.
In the first half of 2016, the company generated net cash provided by
operating activities of $857 million, representing 9.9% of revenue.
Employees
As of June 30, 2016, Fresenius Medical Care had 106,556 employees (full-
time equivalents) worldwide, compared to 102,893 employees at the end of
June 2015. This increase was attributable to our continued organic growth.
Recent events: 6008 CAREsystem
In May 2016, Fresenius Medical Care launched the 6008 CAREsystem, a new
innovative hemodialysis therapy system enabling better care for chronic
patients. To enable significantly reduced complexity in therapy delivery,
the system uses a new, all-in-one disposable with completely pre-connected
bloodlines for all treatment modalities. More than 150,000 treatments have
already been performed with the system.
Outlook 2016 confirmed
Based on the positive business development in the first half of 2016,
Fresenius Medical Care confirms its full year outlook 2016. The company
expects a currency-adjusted revenue growth between +7% and +10% for 2016.
Net income attributable to shareholders of Fresenius Medical Care AG & Co.
KGaA is expected to increase by +15% to +20% over the previous year.
Conference call
Fresenius Medical Care will hold a conference call to discuss the results
of the second quarter/first half 2016 on Tuesday, August 2, 2016 at 3.30
p.m. CEDT/ 9.30 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" 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 3,504 dialysis clinics, Fresenius Medical Care provides dialysis
treatments for 301,548 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.
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01.08.2016 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.
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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.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
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488443 01.08.2016
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