Fresenius Group Overview

July 30, 2020

Solid H1 results in light of significant contributions to combat COVID-19 – Accelerated earnings growth expected in H2 – New FY/20 guidance incorporates estimated COVID-19 effects

  • Fresenius Medical Care with very strong earnings growth and exceptional cash flow development in Q2
  • Fresenius Kabi impacted by fewer elective procedures and easing extra demand for COVID 19 related products in Europe and the U.S.; only gradual recovery in China
  • Fresenius Helios seeing gradual return of elective procedures; Helios Germany supported by law to ease financial burden on hospitals; COVID-19 related reimbursement at Helios Spain with remaining uncertainties
  • Fresenius Vamed heavily impacted by COVID-19 related project delays and lack of post-acute care treatments

If no timeframe is specified, information refers to Q2/2020; 2020 and 2019 according to IFRS 16

1 Before special items
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA

For a detailed overview of special items please see the reconciliation tables on pages 17-19 of the PDF document.

Stephan Sturm, CEO of Fresenius, said: ”Particularly during the COVID-19 pandemic, Fresenius continues to make many important contributions to the provision of high-quality, affordable healthcare. In this way, we are standing with our patients around the world – and fulfilling our social responsibility. Despite the extra effort and restrictions – in particular in our hospital business – we achieved a very solid second quarter. Special credit for this should go to the tremendous dedication of our more than 300,000 employees. Fresenius stands on a broad, strong foundation, whose resilience is being proved more than ever right now. Even with all the current uncertainties, we expect increasingly dynamic earnings development in the coming quarters. I therefore remain confident that 2020 will be another successful year for Fresenius.”
 

New FY/20 Group guidance incorporating estimated COVID-19 impact
Fresenius’ business model has proven resilient amid the pandemic, although COVID-19 effects have impacted the Company’s operations and will continue to do so in H2/20.

Against this backdrop and based on the Group’s solid underlying business development in H1/20 and the Company’s expectation of improved profitability and hence accelerated earnings growth in H2, Fresenius now expects for FY/20, including estimated COVID-19 effects, constant currency sales growth1 of 3% to 6% and constant currency net income growth2,3 of - 4% to +1%. This replaces the original guidance, excluding COVID-19 effects, projecting constant currency sales growth1 of 4% to 7% and constant currency net income growth of 1% to 5%2,3.

The new guidance assumes only regional or local COVID-19 outbreaks rather than a widespread second COVID-19 wave triggering lock-downs in the Group’s relevant markets.

Fresenius now, including estimated COVID-19 effects, projects net debt/EBITDA  to be around the top-end of the self-imposed target corridor of 3.0x to 3.5x by the end of FY/20.


Virtual Annual General Meeting
Fresenius has postponed its Annual General Meeting to August 28, 2020. The Group’s dividend proposal remains unchanged at €0.84 per share.

1 FY/19 base: €35,409 million
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA
3 FY/19 base: €1,879 million; before special items (transaction-related expenses, revaluations of biosimilars contingent purchase price liabilities, gain related to divestitures of Care Coordination activities at FMC, expenses associated with the cost optimization program at FMC); FY/20: before special items
4 At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures; excluding further potential acquisitions; before special items

For a detailed overview of special items please see the reconciliation tables on pages 17-19 of the PDF document.
 

2% sales growth in constant currency
Group sales increased by 2% (2% in constant currency) to €8,920 million in Q2/20 (Q2/19: €8,761 million). Organic sales growth was 2%. Acquisitions/divestitures contributed net 0% to growth. Currency translation had no significant effect. Excluding estimated COVID-19 effects1, Group sales growth would have been 6% to 7%. In H1/20, Group sales increased by 5% (5% in constant currency) to €18,055 million (H1/19: €17,256 million). Organic sales growth was 3%. Acquisitions/divestitures contributed net 2% to growth. Currency translation had no significant effect. Excluding estimated COVID-19 effects1, Group sales growth would have been 7% to 8% in H1/20.

13% net income2,3 decline in constant currency
Group EBITDA increased by 3% (3% in constant currency) to €1,762 million (Q2/192: €1,703 million). In H1/20, Group EBITDA increased by 3% (2% in constant currency) to €3,517 million (H1/192: €3,404 million).

Group EBIT remained on prior year’s level (0% in constant currency) at €1,123 million (Q2/192: €1,118 million). Missing sales, COVID-19 related expenses as well as negative operating leverage in Helios Spain and Fresenius Vamed facilities weighed on EBIT. The anticipated EBIT decreases at Helios Spain and Fresenius Kabi were partially compensated by Fresenius Medical Care’s strong EBIT growth. The EBIT margin was 12.6% (Q2/192: 12.8%).
In H1/20, EBIT remained on prior year’s level (-1% in constant currency) at €2,248 million (H1/192: €2,248 million). The EBIT margin was 12.5% (H1/192: 13.0%). Following higher levels of investments, Fresenius sees higher levels of depreciation and amortization in 2020.

Group net interest before special items improved to -€167 million (Q2/19: - €180 million) mainly due to successful refinancing activities as well as lower interest rates. Reported Group net interest improved to -€167 million (Q2/19: -€179 million). In H1/20, Group net interest before special items improved to -€341 million (H1/19: -€361 million) while reported Group net interest improved to -€349 million (H1/19: -€363 million).

The Group tax rate before special items was 23.5% (Q2/19: 22.8%) while the reported Group tax rate was 23.4% (Q2/19: 22.7%). In H1/20, the Group tax rate before special items was 23.1% (H1/19: 23.1%) while the reported Group tax rate was 23.0% (H1/19: 23.0%).

1 For estimated COVID-19 effects in Q2/20 and H1/20 please see table on page 15.
2 Before special items
3 Net income attributable to shareholders of Fresenius SE & Co. KGaA

For a detailed overview of special items please see the reconciliation tables on pages 17-19 of the PDF document.
 

Noncontrolling interests before special items were €321 million (Q2/19: €253 million), of which 97% was attributable to the noncontrolling interests in Fresenius Medical Care. Reported Group noncontrolling interests were €321 million (Q2/19: €255 million). In H1/20, noncontrolling interests before special items were €592 million (H1/19: €524 million). Reported Group noncontrolling interests were €592 million (H1/19: €516 million).

Group net income1 before special items decreased by 13% (-13% in constant currency) to €410 million (Q2/19: €471 million). Excluding estimated COVID-19 effects2, net income growth before special items would have been 0% to 4%. Reported Group net income1 was €411 million (Q2/19: €471 million). COVID-19 effects meaningfully increased from Q1 as the entire second quarter was affected in virtually all geographies. In H1/20, Group net income1 before special items decreased by 6% (-6% in constant currency) to €875 million (H1/19: €928 million). Excluding estimated COVID-19 effects2, net income growth before special items would have been 3% to 7%. Reported Group net income1 was €870 million (H1/19: €924 million).

Earnings per share1 before special items decreased by 13% (-14% in constant currency) to €0.74 (Q2/19: €0.85). Reported earnings per share1 were €0.74 (Q2/19: €0.85). In H1/20, earnings per share1 before special items decreased by 6% (-7% in constant currency) to €1.57 (H1/19: €1.67). Reported earnings per share1 were €1.56 (H1/19: €1.66).

Continued investment in growth
Spending on property, plant and equipment was €474 million corresponding to 5% of sales (Q2/19: €565 million; 6% of sales). The investments in Q2/20 served primarily for the modernization and expansion of dialysis clinics, production facilities as well as hospitals, and day clinics. Despite the COVID-19 pandemic, Fresenius has been largely able to continue its investment programs, although there remains some uncertainty on the timing of projects for the remainder of the year. In H1/20, spending on property, plant and equipment was €1,021 million corresponding to 6% of sales (H1/19: €1,006 million; 6% of sales).

Total acquisition spending was €97 million (Q2/19: €234 million). In H1/20, total acquisition spending was €509 million, mainly for the acquisition of two hospitals in Colombia by Fresenius Helios in Q1/20 (H1/19: €2,157 million, mainly for the acquisition of NxStage by Fresenius Medical Care).

1 Net income attributable to shareholders of Fresenius SE & Co. KGaA
2 For estimated COVID-19 effects in Q2/20 and H1/20 please see table on page 15.

For a detailed overview of special items please see the reconciliation tables on pages 17-19 of the PDF document.


Cash flow development
Group operating cash flow increased to an exceptional €3,082 million (Q2/19: €1,205 million) with a margin of 34.6% (Q2/19: 13.8%). The increase was largely driven by Fresenius Medical Care due to U.S. federal government advance payments under the Coronavirus Aid, Relief and Economic Security Act (CARES Act), as well as positive contributions from Fresenius Kabi and Helios Germany. Free cash flow before acquisitions and dividends was €2,606 million (Q2/19: €649 million). Free cash flow after acquisitions and dividends was €2,374 million (Q2/19: -€255 million).

In H1/20, Group operating cash flow increased to €3,960 million (H1/19: €1,494 million) with a margin of 21.9% (H1/19: 8.7%). Free cash flow before acquisitions and dividends was €2,911 million (H1/19: €481 million). Free cash flow after acquisitions and dividends was €2,334 million (H1/19: -€2,366 million, driven by the acquisition of NxStage by Fresenius Medical Care).

Solid balance sheet structure
Group total assets increased by 4% (4% in constant currency) to €69,554 million (Dec. 31, 2019: €67,006 million). Current assets increased by 12% (14% in constant currency) to €17,153 million (Dec. 31, 2019: €15,264 million), mainly driven by the increase of cash and cash equivalents. Non-current assets increased by 1% (2% in constant currency) to €52,401 million (Dec. 31, 2019: €51,742 million).

Total shareholders’ equity increased by 3% (4% in constant currency) to €27,252 million (Dec. 31, 2019: €26,580 million). The equity ratio was 39.2%.

Group debt increased by 1% (1% in constant currency) to €27,487 million (Dec. 31, 2019: € 27,258 million). Group net debt decreased by 5% (-5% in constant currency) to € 24,414 million (Dec. 31, 2019: € 25,604 million), mainly driven by the exceptional cash flow development.

As of June 30, 2020, the net debt/EBITDA ratio decreased to 3.39x1,2 (Dec. 31, 2019: 3.61x1,2) mainly due to the exceptional free cash flow development, despite COVID-19 effects weighing on EBITDA.

Increased number of employees
As of June 30, 2020, the number of employees was 302,846 (Dec. 31, 2019: 294,134).

1 At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures
2 Before special items

For a detailed overview of special items please see the reconciliation tables on pages 17-19 of the PDF document.


Business Segments

Fresenius Medical Care (Financial data according to Fresenius Medical Care press release)
Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of June 30, 2020, Fresenius Medical Care was treating 347,683 patients in 4,036 dialysis clinics. Along with its core business, the company provides related medical services in the field of Care Coordination.

  • Solid sales growth continued and significant net income growth
  • Exceptional cash flow development
  • Guidance for FY/20 confirmed inclusive of anticipated COVID-19 effects

Fresenius Medical Care increased sales by 5% (5% in constant currency) to €4,557 million (Q2/19: €4,345 million). Organic sales growth was 4%. Acquisitions/divestitures contributed 1% in total. In H1/20, Fresenius Medical Care increased sales by 7% (6% in constant currency) to €9,045 million (H1/19: €8,478 million). Organic sales growth was 4%.

Reported EBIT increased by 26% (24% in constant currency) to €656 million (Q2/19: €521 million). The reported EBIT margin was 14.4% (Q2/19: 12.0%). Based on a strong, underlying business performance, the increase in margin was largely due to the recovery of COVID-19 related negative effects experienced in Q1 as well as ongoing cost saving measures. EBIT on an adjusted basis increased by 27% (increased by 25% in constant currency) to €656 million (Q2/19: €517 million). The EBIT margin on an adjusted basis was 14.4% (Q2/19: 11.9%).

1 Before special items
2 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA

For a detailed overview of special items please see the reconciliation tables on pages 17-19 of the PDF document.

In H1/20, Reported EBIT increased by 14% (12% in constant currency) to €1,211 million (H1/19: €1,058 million). The reported EBIT margin was 13.4% (H1/19: 12.5%). EBIT on an adjusted basis increased by 13% (increased by 11% in constant currency) to €1,211 million (H1/19: €1,074 million). The EBIT margin on an adjusted basis was 13.4% (H1/19: 12.7%).

Reported net income1 grew by 38% (36% in constant currency) to €351 million (Q2/19: 254 million) and increased on an adjusted basis by 40% (38% in constant currency) to €351 million (Q2/19: €250 million). In H1/20, reported net income1 grew by 21% (18% in constant currency) to €634 million (H1/19: 525 million) and increased on an adjusted basis by 18% (16% in constant currency) to €634 million (H1/19: €536 million).

Operating cash flow was €2,319 million (Q2/19: €852 million) with a margin of 50.9% (Q2/19: 19.6%). The increase was largely driven by the U.S. federal government advance payments under the Coronavirus Aid, Relief and Economic Security Act (CARES Act). In H1/20, operating cash flow was €2,903 million (H1/19: €928 million) with a margin of 32.1% (H1/19: 10.9%).

On the basis of the neutral net impact of COVID-19 in the first six months, Fresenius Medical Care continues to expect both revenue2 and net income1,3 to grow at a mid to high single digit rate in 2020. These targets are inclusive of anticipated COVID-19 effects, in constant currency, exclude special items4 and are based on the adjusted results 2019 including the effects of the operations of the NxStage acquisition and the IFRS 16 implementation.

For further information, please see Fresenius Medical Care’s press release at www.freseniusmedicalcare.com.

1 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
2 FY/19 base: €17,477 million
3 FY/19 base: €1,236 million (FY/20: before special items)
4 Special items are effects that are unusual in nature and have not been foreseeable or not foreseeable in size or impact at the time of giving guidance.

For a detailed overview of special items please see the reconciliation tables on pages 17-19 of the PDF document.


Fresenius Kabi
Fresenius Kabi offers intravenously administered generic drugs, clinical nutrition and infusion therapies for seriously and chronically ill patients in the hospital and outpatient environments. The company is also a leading supplier of medical devices and transfusion technology products. In the biosimilars business, Fresenius Kabi develops products with a focus on oncology and autoimmune diseases. 

  • U.S. and European sales impacted by fewer elective procedures, only partially offset by extra demand for COVID-19 related products in April
  • Only gradual recovery of elective procedures in China; solid organic growth in all other Emerging Markets
  • EBIT decline despite positive COVID-19 effect given tough 2019 base
  • Strong operating cash flow in Q2
  • New FY/20 guidance incorporates estimated COVID-19 effects

Sales decreased by 1% (increased by 2% in constant currency) to €1,678 million (Q2/19: €1,691 million). Organic sales growth was 2%. Negative currency translation effects of 3% were mainly related to weakness of the Argentinian peso and the Brazilian real. Estimated COVID-19 effects had a moderate negative impact on sales growth. In H1/20, sales increased by 2% (4% in constant currency) to €3,467 million (H1/19: €3,392 million). Organic sales growth was 4%. Negative currency translation effects of 2% were mainly related to weakness of the Argentinian peso and the Brazilian real. Estimated COVID-19 effects had a slight negative impact on sales growth in H1/20.

Sales in North America increased by 5% (organic growth: 3%) to €600 million (Q2/19: €573 million). In H1/20, sales in North America increased by 6% (organic growth: 4%) to €1,269 million (H1/19: €1,196 million). Sales in Europe decreased by 1% (organic growth: 1%) to €566 million (Q2/19: €572 million). In H1/20, sales in Europe increased by 5% (organic growth: 5%) to €1,197 million (H1/19: €1,145 million). In both regions, extra demand for COVID-19 related drugs and devices eased in April already and hence could not fully offset the effect of fewer elective procedures throughout Q2.

Sales in Asia-Pacific decreased by 6% (organic growth: -5%) to €351 million (Q2/19: €374 million). China saw only a slow recovery of elective procedures while other Asian markets showed a stable development. In H1/20, sales in Asia-Pacific decreased by 6% (organic growth: -6%) to €670 million (H1/19: €715 million).

Sales in Latin America/Africa decreased by 6% (organic growth increased by 17%) to €161 million (Q2/19: €172 million). In H1/20, sales in Latin America/Africa decreased by 1% (organic growth: 17%) to €331 million (H1/19: €336 million).

EBIT before special items decreased by 6% (-5% in constant currency) to €292 million (Q2/191: €309 million) with an EBIT margin of 17.4% (Q2/191:18.3%). Given product mix and cost savings, estimated COVID-19 effects had a moderate positive impact on EBIT growth. The decline is driven by a positive one-time effect in Q2/19 as Idacio development expenses had to be revalued when that biosimilar was launched in Europe. In H1/20, EBIT before special items decreased by 5% (-5% in constant currency) to €581 million (H1/191: €613 million) with an EBIT margin of 16.8% (H1/191: 18.1%). Estimated COVID-19 effects had an insignificant impact on EBIT growth in H1/20.

Net income1,2 decreased by 6% (-5% in constant currency) to €196 million (Q2/19: €209 million). In H1/20, net income1,2 decreased by 4% (-4% in constant currency) to €393 million (H1/19: €411 million).

Operating cash flow increased to €437 million (Q2/19: €215 million) with a margin of 26.0% (Q2/19: 12.7%), mainly driven by strong cash inflows and temporarily delayed tax payments. In H1/20, operating cash flow was €611 million (H1/19: €360 million) with a margin of 17.6% (H1/19: 10.6%).

Now including estimated COVID-19 effects, Fresenius Kabi projects for FY/20 organic sales  growth of 2% to 5% and an EBIT  development of -6% to -3% in constant currency. This replaces the original 2020 outlook, excluding COVID-19 effects, projecting organic sales3 growth of 3% to 6% and an EBIT4 development of -4% to 0% in constant currency.

1 Before special items
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA
3 FY/19 base: €6,919 million
4 FY/19 base: €1,205 million, before special items, FY/20: before special items

For a detailed overview of special items please see the reconciliation tables on pages 17-19 of the PDF document.


Fresenius Helios
Fresenius Helios is Europe's leading private hospital operator. The company comprises Helios Germany and Helios Spain (Quirónsalud). Helios Germany operates 86 hospitals, ~125 outpatient centers and 6 prevention centers. Quirónsalud operates 46 hospitals, 70 outpatient centers and around 300 occupational risk prevention centers. In addition, the company is active in Latin America with 6 hospitals and as a provider of medical diagnostics.  

  • Law to ease financial burden on hospitals continues to mitigate COVID-19 related sales losses and cost increases in Germany
  • COVID-19 impact on Helios Spain significant, but less pronounced than feared; COVID-19 related reimbursement and compensation with remaining uncertainties
  • Gradual recovery of elective procedures in Germany and Spain since May
  • New FY/20 guidance incorporates COVID-19 effects

Sales decreased by 1% (-1% in constant currency) to €2,315 million (Q2/19: €2,349 million). Organic growth was -2%. In H1/20, Fresenius Helios increased sales by 3% (3% in constant currency) to €4,781 million (H1/19: €4,660 million). Organic growth was 1%. COVID-19 effects had a significant negative impact on organic sales growth in both, Q2/20 and H1/20. Fresenius sees a gradual recovery of elective procedures in Germany and Spain since May. All Helios hospitals established comprehensive hygiene and distance control concepts.

Sales of Helios Germany increased by 4% (organic growth: 4%) to €1,571 million (Q2/19: €1,506 million). In H1/20, Sales of Helios Germany increased by 6% (organic growth: 6%) to €3,174 million (H1/19: €2,991 million). Due to the law to ease the financial burden on hospitals, COVID-19 effects had a slight negative impact on organic sales growth in both, Q2/20 and H1/20.

Sales of Helios Spain decreased by 12% (-11% in constant currency) to €743 million (Q2/19: €842 million). Organic growth was -14%. In H1/20, sales of Helios Spain decreased by 4% (-3% in constant currency) to €1,606 million (H1/19: €1,668 million). Organic growth was -7%. COVID-19 effects had a significant negative impact on organic sales growth in both, Q2/20 and H1/20.

EBIT of Fresenius Helios decreased by 28% (-29% in constant currency) to €198 million (Q2/19: €276 million) with an EBIT margin of 8.6% (Q2/19: 11.7%). In H1/20, EBIT of Fresenius Helios decreased by 13% (-14% in constant currency) to €472 million (H1/19: €544 million) with an EBIT margin of 9.9% (H1/19: 11.7%). COVID-19 effects had a significant negative impact on EBIT growth in both, Q2/20 and H1/20.

EBIT of Helios Germany decreased by 5% to €147 million (Q2/19: €154 million) with an EBIT margin of 9.4% (Q2/19: 10.2%). The decline was mainly caused by higher costs to protect our patients and employees as well as missing sales not fully compensated under the law to ease the financial burden on hospitals. COVID-19 effects had a moderate negative impact on EBIT growth in Q2/20. In H1/20, EBIT of Helios Germany increased by 3% to €312 million (H1/19: €303 million) with an EBIT margin of 9.8% (H1/19: 10.1%). COVID-19 effects had a slight negative impact on EBIT growth in H1/20.

EBIT of Helios Spain decreased by 57% (-58% in constant currency) to €54 million (Q2/19: €127 million) with an EBIT margin of 7.3% (Q2/19: 15.1%). In H1/20, EBIT of Helios Spain decreased by 33% (-34% in constant currency) to €166 million (H1/19: €248 million) with an EBIT margin of 10.3% (H1/19: 14.9%). COVID-19 effects had a very significant negative impact on EBIT growth in both Q2/20 and H1/20 with uncompensated foregone elective procedures so far, and higher expenses amidst the comprehensive efforts to combat the pandemic. Despite remaining uncertainties with regard to COVID-19 related reimbursement and compensation, Q2/20 is likely to have marked the EBIT trough.

Net income1 decreased by 32% to €123 million (Q2/19: €181 million). In H1/20, net income decreased by 16% to €299 million (H1/19: €355 million).

Operating cash flow increased to €295 million (Q2/19: €208 million) with a margin of 12.7% (Q2/19: 8.9%), driven by phasing of payments under the German law to ease the financial burden on hospitals. In H1/20, operating cash flow increased to €440 million (H1/19: €311 million) with a margin of 9.2% (H1/19: 6.7%). Now including COVID-19 effects, Fresenius Helios expects for FY/20 organic sales  growth of 1% to 4% and EBIT  broadly stable over FY/19 in constant currency. This replaces the original 2020 outlook, excluding COVID-19 effects, projecting organic sales2 growth of 3% to 6% and EBIT3 growth of 3% to 7% in constant currency.

1 Net income attributable to shareholders of Fresenius SE & Co. KGaA
2 FY/19 base: €9,234 million

3 FY/19 base: €1,025 million

 

Fresenius Vamed
Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide and is a leading post-acute care provider in Central Europe. The portfolio ranges along the entire value chain: from project development, planning, and turnkey construction, via maintenance and technical management to total operational management.

  • Very significant negative COVID-19 impact in line with expectations
  • COVID-19 related delays and cancellations of project orders and execution
  • Lack of post-acute care patients given COVID-19 related postponements of elective procedures and health authority issued closures of rehabilitation clinics
  • New FY/20 guidance incorporates estimated COVID-19 effects

Fresenius Vamed increased sales by 2% (1% in constant currency) to €475 million (Q2/19: €467 million). Organic sales growth was -1%. Acquisitions contributed 2% to growth. Estimated COVID-19 effects had a significant negative impact on organic growth in Q2/20. In H1/20, Fresenius Vamed increased sales by 7% (7% in constant currency) to €974 million (H1/19: €907 million). Organic sales growth was 5%. Acquisitions contributed 2% to growth. Estimated COVID-19 effects had a moderate negative impact on organic sales growth in H1/20.

Sales in the service business decreased by 4% to €329 million (Q2/19: €344 million). Sales in the project business increased by 19% to €146 million (Q2/19: €123 million), mainly driven by revenue recognition from existing projects, primarily in Germany and Austria, and intercompany projects with Fresenius Helios. In H1/20, sales in the service business grew by 1% to €686 million (H1/19: €676 million). Sales in the project business increased by 25% to €288 million (H1/19: €231 million).

EBIT decreased to -€13 million (Q2/19: €22 million) with an EBIT margin of -2.7% (Q2/19: 4.7%). Estimated COVID-19 effects had a very significant negative impact on EBIT. Capacities in the post-acute care clinics were left empty given a generally lower intake of elective surgery patients from acute-care hospitals as well as authority-instigated restrictions or even closures of individual facilities. In H1/20, EBIT decreased by 97% (-97% in constant currency) to €1 million (H1/19: €34 million) with an EBIT margin of 0.1% (H1/19: 3.7%). Estimated COVID-19 effects had a very significant negative impact on EBIT in H1/20.

Net income1 decreased to -€15 million (Q2/19: €12 million). In H1/20, net income1 decreased to -€8 million (H1/19: €18 million).

Order intake was €50 million in Q2/20 (Q2/19: €115 million) and €174 million in H1/20 (H1/19: €498 million). As of June 30, 2020, order backlog was at €2,745 million (December 31, 2019: €2,865 million). Order intake and order backlog were marked by COVID-19 related cancellations and project delays.

Operating cash flow increased to €28 million (Q2/19: -€35 million) with a margin of 5.9% (Q2/19: -7.5%), driven by timing of payments in the project business as well as some compensations payments from governmental authorities in the post-acute care business. In H1/20, operating cash flow increased to €8 million (H1/19: -€50 million) with a margin of 0.8% (H1/19: -5.5%).

Now including estimated COVID-19 effects, Fresenius Vamed expects for FY/20 an organic sales2 decline of ~10% and an EBIT3 decline of ~50% in constant currency. This replaces the original 2020 outlook, excluding COVID-19 effects, projecting organic sales2 growth of 4% to 7% and EBIT3 growth of 5% to 9% in constant currency.

1 Net income attributable to shareholders of VAMED AG
2 FY/19 base: €2,206 million
3 FY/19 base: €134 million

 
Conference Call
As part of the publication of the results for Q2/2020, a conference call will be held on July 30, 2020 at 1:30 p.m. CEDT (7:30 a.m. EDT). All investors are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com/media-calendar. Following the call, a replay will be available on our website.


For additional information on the performance indicators used please refer to our website www.fresenius.com/alternative-performance-measures.

This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.