Fresenius Group Overview

Financing Strategy & Targets

Ensure financial flexibility and optimizing the cost of capital are the main objectives in Fresenius’s financing strategy.

We employ a balanced mix of equity and debt to optimize the average cost of capital. We ensure financial flexibility by using a broad spectrum of financing instruments. Our financing profile is characterized by a wide spread of maturities up to 2032.

Sufficient financial cushion is assured for the Fresenius Group by unused syndicated and bilateral credit lines. In addition, Fresenius SE & Co. KGaA and Fresenius Medical Care AG & Co. KGaA maintain commercial paper programs. The Fresenius Medical Care receivable securitization program offers additional financing options.

In present capital market conditions, we optimize our cost of capital if we hold the net debt/EBITDA ratio within a range of 3.0 to 3.5x (after adoption of IFRS 16). As of December 31, 2019, the net debt/EBITDA ratio was 3.61x1,2,3 (December 31, 2018: 2.711,3). Fresenius expects year-end 2020 net debt/EBITDA ratio4 to be around the upper-end of the self-imposed target corridor of 3.0 to 3.5x. The adoption of IFRS 16 technically increases the leverage ratio by roughly 50 basis points. Hence, Fresenius increased the self-imposed target corridor from 2.5 to 3.0x net debt to EBITDA to a ratio of 3.0 to 3.5x, based on this effect.

In line with the Group’s structure, financing for Fresenius Medical Care and for the rest of the Fresenius Group is conducted separately. There are no joint financing facilities and no mutual guarantees.

1 At LTM average exchange rates for both net debt and EBITDA, pro forma closed acquisitions/divestitures
2 Including effects from NxStage transaction
3 Before special items
4 Both net debt and EBITDA including IFRS 16 effect and calculated at expected annual average exchange rates; excluding further potential acquisitions


 

Net debt/EBITDA

1 At actual FX rates from 2001 to 2010 and at average FX rates from 2011 onwards, for both Net Debt and EBITDA; before special items; pro forma closed acquisitions/divestitures

2 Pro forma excluding advances made for the acquisition of hospitals from Rhön-Klinikum AG

3 Both net debt and EBITDA including IFRS 16 effect and calculated at expected annual average exchange rates; excluding further potential acquisitions

4 Including acquisition of NxStage; adjusted for IFRS 16 effect