(Source: Business Wire)

Fresenius Medical Care AG & Co. KGaA (NYSE:FMS)(FWB:FME):
Summary Third Quarter 2009:
Net revenue $ 2,889 million + 6 %
Operating income (EBIT) $ 451 million + 7 %
Net income attributable to Fresenius Medical Care AG & Co. KGaA $ 225 million + 9 %
Earnings per share $ 0.76 + 9 %
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Summary First Nine Months 2009:
Net revenue $ 8,212 million + 4 %
Operating income (EBIT) $ 1,265 million + 2 %
Net income attributable to Fresenius Medical Care AG & Co. KGaA $ 645 million + 7 %
Earnings per share $ 2.16 + 6 %
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Fresenius Medical Care AG & Co. KGaA ("the Company" or "FMC AG & Co.
KGaA"), the world's largest provider of dialysis products and services,
today announced its results for the third quarter and first nine months
of 2009.
Third Quarter 2009:
Revenue
Net revenue for the third quarter of 2009 increased by 6% to
$2,889million (10% at constant currency) compared to the third quarter
of 2008. Organic revenue growth worldwide was 8%. Dialysis Services
revenue grew by 8% to $2,147million (10% at constant currency) in the
third quarter of 2009. Dialysis Product revenue increased by 2% to
$742million (an increase of 8% at constant currency) in the same period.
North America revenue increased by 10% to $1,950 million. Organic
revenue growth was 8%. Dialysis Services revenue grew by 10% to $1,741
million. Average revenue per treatment for the U.S. clinics increased to
$348 in the third quarter of 2009 compared to $333 for the same quarter
in 2008 and $344 for the second quarter of 2009. This development was
mainly based on reimbursement increases and increased utilization of
pharmaceuticals. Dialysis Product revenue increased by 14% to $209
million and was led by pharmaceutical sales, especially of the newly
licensed intravenous iron products.
International revenue remained nearly unchanged at $939 million,
compared to the third quarter of 2008. Based on constant currency,
revenue grew by 9%. Organic revenue growth was 7%. Dialysis Services
revenue was $406 million, an increase of 2% (+12% at constant currency).
Dialysis Product revenue decreased by 2% to $533million. Product sales
grew by 6% based on constant currencies, led by increased pharmaceutical
sales and sales of dialyzers.
Earnings
Operating income (EBIT) increased by 7% to $451 million compared
to $422 million in the third quarter of 2008, resulting in an operating
margin of 15.6%, equal to the operating margin for the third quarter of
2008. Compared to the second quarter of 2009 this represents a 50 basis
points improvement. The third quarter operating margin was favorably
impacted by an increase in revenue per treatment, an excellent cost
management in the U.S. and a decrease in bad debt expenses. The
operating margin development was negatively influenced by increased
prices for pharmaceuticals, the impact of the launch of a generic
version of PhosLo® in the U.S. market and unfavorable
exchange rate effects in the International segment.
In North America, the operating margin was unchanged at 16.7%, as in the
third quarter of 2008. The margin was favorably impacted by an increase
in revenue per treatment, including commercial payor revenue, higher
utilization of EPO and Medicare reimbursement increases, an excellent
cost management in the U.S. and a decrease in bad debt expenses thanks
to higher cash collections on receivables. This was offset by cost
increases for pharmaceuticals related to both price and utilization, as
well as the impact of the launch of a generic version of PhosLo®
in the U.S. market and increased depreciation expense.
In the International segment, the operating margin increased by 60 basis
points to 16.7% due to lower production costs resulting from lower
prices for raw material and energy as well as economies of scale and
lower bad debt expenses, which was partially offset by unfavorable
foreign exchange rate effects.
Net interest expense for the third quarter of 2009 was
$75million compared to $87million in the same quarter of 2008, mainly
due to lower short-term interest rates.
Income tax expense was $131million for the third quarter of 2009
compared to $120million in the third quarter of 2008, reflecting
effective tax rates of 35.0% and 35.7%, respectively.
Net income attributable to FMC AG & Co. KGaA for the
third quarter of 2009 was $225million, an increase of 9%.
Earnings per share (EPS) for the third quarter of 2009 rose by 9%
to $0.76 per ordinary share compared to $0.69 for the third quarter of
2008. The weighted average number of shares outstanding for the third
quarter of 2009 was approximately 298.3million shares compared to
297.2million shares for the third quarter of 2008. The increase in
shares outstanding resulted from stock option exercises in the past
twelve months.
Cash Flow
In the third quarter of 2009, the Company generated $443 million in cash
from operations, an increase of 41% compared to the third quarter of
2008 and representing approximately 15% of revenue. The cash flow
performance was positively influenced by increased earnings and a
favorable development of the Days Sales Outstanding.
A total of $139 million was spent for capital expenditures, net
of disposals. Free Cash Flow before acquisitions was $304 million
compared to $155 million in the third quarter of 2008. A total of
$26million in cash was used for acquisitions net of divestitures. Free
Cash Flow after acquisitions and divestitures was $278 million
compared to $116 million in the third quarter of last year.
Nine Months Ended September 30, 2009:
Revenue and Earnings
Net revenue was $8,212 million, up 4% from the first nine months
of 2008. At constant currency, net revenue rose 9%. Organic growth was
8% in the first nine months of 2009.
Operating income (EBIT) increased by 2% to $1,265million
compared to $1,240 million in the first nine months of 2008, resulting
in an operating margin of 15.4% compared to 15.7% for the first nine
months of 2008. This development was mainly due to higher personnel
expenses, price increases for pharmaceuticals including Heparin as well
as the impact of the launch of a generic version of PhosLo® in
the U.S. market. These effects were partially offset by a strong
performance of the dialysis product business, increased commercial payor
revenue as well as the effect of cost control measures.
Net interest expense for the first nine months of 2009 was $225
million compared to $252 million in the same period of 2008, mainly due
to lower short-term interest rates.
Income tax expense was $345 million in the first nine months of
2009 compared to $357million in the same period in 2008, reflecting
effective tax rates of 33.2% and 36.1%, respectively. Tax expense
was positively impacted by a non-recurring revaluation of a tax claim
recorded in the second quarter of 2009.
For the first nine months of 2009, net income attributable to FMC
AG & Co. KGaA was $645million, up 7% from the first nine months of 2008.
Earnings per ordinary share rose by 6% to $2.16. The weighted
average number of shares outstanding during the first nine months of
2009 was approximately 298.0million.
Cash Flow
Cash from operations during the first nine months of 2009 was
$880million compared to $716million for the same period in 2008,
representing approximately 11% of revenue. The cash flow generation
benefited from increased earnings and the favorable development of the
Days Sales Outstanding.
A total of $388million was spent for capital expenditures,
net of disposals. Free Cash Flow before acquisitions for the
first nine months of 2009 was $492 million compared to $223 million in
the same period in 2008. A total of $57 million in cash was used for acquisitions
net of divestitures. Free Cash Flow after acquisitions and
divestitures was $435 million compared to $93 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 2009 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, 2009, Fresenius Medical Care treated 192,804patients
worldwide, which represents a 6% increase compared to the same period
last year. North America provided dialysis treatments for
130,522patients, an increase of 4%. Including 31 clinics managed by
Fresenius Medical Care North America, the number of patients in North
America was 132,158. The International segment served 62,282patients,
an increase of 10% over last year.
As of September 30, 2009, the Company operated a total of 2,509 clinics
worldwide. This is comprised of 1,749clinics in North America (1,780
including managed clinics), an increase of 5%, and 760 clinics in the
International segment, an increase of 11%.
Fresenius Medical Care delivered approximately 21.84 million dialysis treatments
worldwide during the first nine months of 2009. This represents an
increase of 6% year over year. North America accounted for 14.75 million
treatments, an increase of 4%, and the International segment delivered
7.09 million treatments, an increase of 10% over last year.
Employees
As of September 30, 2009, Fresenius Medical Care had 67,245 employees
(full-time equivalents) worldwide compared to 63,990 employees as of
September 30, 2008. This increase of over 3,200 employees is due to the
overall growth in the Company's business.
Debt/EBITDA Ratio
The ratio of debt to Earnings before Interest, Taxes, Depreciation and
Amortization (EBITDA) decreased from 2.71 at the end of the third
quarter of 2008 to 2.62 at the end of the third quarter of 2009. At the
end of 2008, the debt/EBITDA ratio was 2.69.
Rating
In the third quarter of 2009, Standard & Poor's Rating Services
continued to rate the Company's corporate credit as BB' with a stable'
outlook. Moody's also affirmed its rating of the Company's corporate
credit as Ba1' with a stable' outlook. As in the previous quarter,
Fitch rates the Company's corporate credit as BB' while revising its
outlook from negative' to stable'. 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.
Outlook for 2009
For the full year of 2009, the Company now expects to achieve revenue
of around $11.2 billion (previously $11.1 billion), an increase of
around 8% in constant currency.
Net income attributable to FMC AG & Co. KGaA is now
expected to be between $865 million and $890 million in 2009. Previously
the Company expected the net income to be in the range of $850 million
and $890 million for the full year 2009.
In addition, the Company expects to spend $550 to $650 million on capital
expenditures and $200 to $250 million (previously $200 to $300
million) on acquisitions. The projected debt/EBITDA ratio has
been retained unchanged at below 2.7.
Ben Lipps, Chief Executive Officer of Fresenius Medical Care, said: "We
are very pleased with our results in the third quarter of 2009, which
reflects an excellent performance by all regions. While we maintained
our increased commitment to research and development, our sustained high
organic growth globally and good cost containment accounted for this
overall successful operating performance. The free cash flow for the
third quarter exceeded our expectations and resulted from excellent cash
collections in North America. Our strong performance in the quarter
provides the basis for us to improve our guidance for the full year
2009."
Conference Call
Fresenius Medical Care will hold a conference call to discuss the
results of the third quarter and the first nine months of 2009 on
Tuesday, November 03, 2009, at 3:30 pm CET / 9:30 am EST. The Company
invites investors to listen to 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 1,770,000
individuals worldwide. Through its network of 2,509 dialysis clinics in
North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius
Medical Care provides dialysis treatment to 192,804 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. Fresenius Medical Care is listed on the Frankfurt
Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS/P).
For more information about Fresenius Medical Care, visit the Company's
website at www.fmc-ag.com.
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.