• 9% revenue increase supported by growth in all regions
• Positive earnings growth despite negative impact from COVID-19 pandemic 
• Solid cash-flow development
• Financial targets for FY2020 confirmed

Rice Powell, Chief Executive Officer of Fresenius Medical Care, said: “In these unprecedented times, it is our first and foremost priority to maintain the continuity and high quality of care. For months now, our employees have been working tirelessly to ensure that our patients receive their life-saving dialysis treatments. I cannot thank them enough. We appreciate the financial commitment that the U.S. administration has given in April to support healthcare providers. The strong revenue growth in the first quarter shows that the underlying business development remains intact and that our business model is resilient. In a global pandemic that is redefining priorities in other areas of the healthcare system, dialysis remains essential for millions of patients worldwide.”
 

Fresenius Medical Care’s contribution in the fight against COVID-19
In order to ensure the continuity and high quality of care for dialysis patients during the COVID-19 pandemic and support its employees around the globe, Fresenius Medical Care has taken wide-ranging measures at a very early stage. The focus is on reducing the risk of infection in dialysis clinics for patients and employees.
 
Despite countries’ lockdown efforts to contain the COVID-19 pandemic, Fresenius Medical Care did not experience any major disruptions in its manufacturing facilities. As of today, all manufacturing plants worldwide are in operation and supply chains remain intact.

Costs in respect to the COVID-19 pandemic have been incurred for additional measures, like personal protective equipment, dedicated capacities for isolated treatments, additional personnel expense, patient transportation as well as increased distribution logistic costs.

Under the CARES Act (Coronavirus Aid, Relief, and Economic Security Act), the U.S. government initiated significant financial support for the health sector. This is intended, for example, to compensate for the increased costs for healthcare providers as a result of the COVID-19 pandemic and the corresponding protective measures. While Fresenius Medical Care had to adsorb a sizable negative impact in Q1, there is no benefit from the CARES Act included in the reported results.

In the U.S., Fresenius Medical Care is cooperating with other dialysis providers, to create isolation clinics and dedicated shifts for patients who are or may be infected with COVID-19. A critical aim of this collaboration is to keep dialysis patients out of the hospital whenever possible, freeing up limited hospital resources. In doing so, Fresenius Medical Care not only fulfils its responsibility towards patients, employees and families, but also makes an important contribution to the healthcare system and society as a whole.
 

Key figures (IFRS)

2020 targets confirmed: mid to high single digit growth rates
On the basis of the guidance given in February, which excludes the impact from the COVID-19 pandemic, Fresenius Medical Care expects both revenue and net income to grow at a mid to high single digit rate in 2020. These targets are in constant currency, exclude special items³  and are based on the adjusted results 2019 including the effects of the operations of the NxStage acquisition and the IFRS 16 implementation.

Patients, Clinics and Employees
As of March 31, 2020, Fresenius Medical Care treated 348,703 patients in 4,002 dialysis clinics worldwide. At the end of the first quarter, the Company had 121,403 employees (full-time equivalents) worldwide, compared to 118,308 employees as of March 31, 2019.
 

Strong revenue growth in the first quarter
Revenue increased by 9% to EUR 4,488 million (+7% at constant currency), with organic growth of 4%. Health Care Services revenue rose by 8% to EUR 3,595 million (+7% at constant currency), driven by growth in same market treatments, contributions from acquisitions and an increase in dialysis days. Health Care Products revenue grew by 10% and amounted to EUR 893 million (+9% at constant currency). This increase was mainly due to higher sales of products for acute care treatments, renal pharmaceuticals and bloodlines partially offset by lower sales of dialysis machines.

Operating income increased by 3% to EUR 555 million (+1% at constant currency), mainly driven by a favorable impact from higher treatment volume and lower costs for pharmaceuticals. The operating income margin amounted to 12.4% (Q1 2019: 13.0%). The decrease in margin was largely due to the unfavorable COVID-19 pandemic effect and the prior year reduction of a contingent consideration liability related to Xenios.
 
Despite the negative impact from the COVID-19 pandemic net income¹ grew by 4% to EUR 283 million (+2% at constant currency) and declined on an adjusted basis by only 1% (-3% at constant currency). On the defined basis of the 2020 targets - excluding the negative impact from the COVID-19 pandemic - net income growth in the first quarter is at the top end of the target range for 2020.
 
Basic earnings per share (EPS) increased by 8% to EUR 0.95 (+5% at constant currency) driven by the earnings effects described above coupled with a decrease in the average weighted shares outstanding.


Solid cash-flow development
Fresenius Medical Care generated EUR 584 million of operating cash flow (Q1 2019: EUR 76 million) resulting in a margin of 13.0% (Q1 2019: 1.8%). The increase was largely driven by working capital improvement, including a positive effect from cash collections, timing of payments and change in year over year inventory levels. 
Free cash flow (net cash used in operating activities, after capital expenditures, before acquisitions and investments) amounted to EUR 304 million (Q1 2019: EUR -123 million), resulting in a margin of 6.8% (Q1 2019: -3.0%).

Regional developments
In North America, revenue increased by 10% to EUR 3,186 million (+7% at constant currency, +3% organic). Operating income grew by 24% to EUR 463 million (+21% at constant currency), resulting in a margin of 14.5 % (Q1 2019: 12.9%). Despite the negative impact from the COVID-19 pandemic, the operating income margin increased mainly due to lower costs for pharmaceuticals and gains from divestitures.

EMEA revenue increased by 4% to EUR 679 million (+4% at constant currency, +3% organic). Operating income decreased by 27% to EUR 101 million (-27% at constant currency), resulting in a margin of 14.9% (Q1 2019: 21.1%). The decrease in operating income margin was mainly due to the prior year reduction of a contingent consideration liability related to Xenios.

In Asia-Pacific, revenue grew by 4% to EUR 443 million (+3% at constant currency, +2% organic). Operating income decreased by 19% to EUR 77 million (-20% at constant currency), resulting in a margin of 17.3 % (Q1 2019: 22.1). The decrease in operating income margin was mainly due to impacts from unfavorable foreign currency transaction effects, lower product sales as well as expansion into in-center dialysis services.
 
Latin America revenue increased by 4% to EUR 168 million (+24% at constant currency, +17% organic). Operating income decreased by 40% to EUR 7 million (-40% at constant currency), resulting in a margin of 4.1% (Q1 2019: 7.1%). The decrease in operating income margin was mainly due to unfavorable foreign currency impacts.

 

¹ Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
² For a reconciliation of adjusted figures, please refer to the table at the end of the press release
³ 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.

 

Conference call
Fresenius Medical Care will host a conference call to discuss the results of the first quarter 2020 on May 6, 2020 at 3:30 p.m. CEDT (UTC +2) / 09:30 a.m. EDT (UTC -4). Details will be available on the company’s website www.freseniusmedicalcare.com in the “Investors” section. A replay will be available shortly after the call.

Please refer to our statement of earnings included at the end of this news and to the attachments as separate PDF-files for a complete overview of the results for the first quarter 2020. Our 6-K disclosure provides more details.
 

Fresenius Medical Care North America is making 150 additional dialysis machines available to U.S. hospitals for the emergency treatment of COVID-19 patients, under the company’s newly established National Intensive Renal Care Reserve. The reserve creates a pool of dialysis machines that can be sent to hospitals on short notice, and nearly doubles the volume of consumables available to perform treatments. The increased demand is a result of many COVID-19 patients requiring renal replacement therapy due to acute kidney injury, and not all hospitals having enough dialysis machines to treat them.

Fresenius Helios has developed a secure and highly effective process for purifying medical protective masks so they can be safely reused. It is being employed for FFP2- and FFP3-type masks, which help protect medical and care personnel who are treating COVID-19 patients. Going well beyond the safety standard set out by the Robert Koch Institute, Germany’s government agency responsible for disease control and prevention, the process allows the purified masks to be used by any staff member – not just the previous user. Starting immediately, Helios Germany’s hospitals can purify 8,000 masks daily using the process, which was developed with the support of Fresenius Vamed and Fresenius Medical Care. The company has chosen not to commercialize the process and is making complete information about it available online, free of charge.

Fresenius Helios has developed a secure and highly effective process for purifying medical protective masks so they can be safely reused. It is being employed for FFP2- and FFP3-type masks, which help protect medical and care personnel who are treating COVID-19 patients. Going well beyond the safety standard set out by the Robert Koch Institute, Germany’s government agency responsible for disease control and prevention, the process allows the purified masks to be used by any staff member – not just the previous user. Starting immediately, Helios Germany’s hospitals can purify 8,000 masks daily using the process, which was developed with the support of Fresenius Vamed and Fresenius Medical Care. The company has chosen not to commercialize the process and is making complete information about it available online, free of charge.

To obtain and secure important data for research into SARS-CoV 2, Fresenius Helios has established a multi-center COVID-19 register. Since back in February a team of Helios experts, supported by the Brandenburg Medical School outside of Berlin, has been gathering pseudonymized data on patients treated for COVID-19 in Germany. The goal is to develop insights and knowledge for the battle against the new virus. First research findings from the project, which is scheduled to last a year and is financed by Helios, are now being readied for publication.

To obtain and secure important data for research into SARS-CoV 2, Fresenius Helios has established a multi-center COVID-19 register. Since back in February a team of Helios experts, supported by the Brandenburg Medical School outside of Berlin, has been gathering pseudonymized data on patients treated for COVID-19 in Germany. The goal is to develop insights and knowledge for the battle against the new virus. First research findings from the project, which is scheduled to last a year and is financed by Helios, are now being readied for publication.

Fresenius Medical Care, the world’s leading provider of dialysis products and services, has released an advisory calling for clinical care principles on access to be upheld for patients with advanced chronic kidney disease if a surge in COVID-19 infections overwhelms the available supply of facilities, caregivers and ventilators.

The Global Medical Advisory on Apportioning Care outlines the company’s position on how care should be allotted during and after the pandemic and addresses the differing care standards being articulated by various healthcare systems, groups and governments. It stresses the company’s commitment to maintaining uninterrupted healthcare delivery for patients around the world who require renal replacement therapy during the pandemic.

The advisory recognizes that capacity issues may become overwhelming to healthcare systems during the pandemic. However, it calls on “all authorities to recognize the need to make critical equipment, supplies, facilities and care delivery available to patients with advanced kidney diseases that need lifesaving therapy at all times, including during this COVID-19 disease pandemic.”

Dr. Frank Maddux, Global Chief Medical Officer of Fresenius Medical Care and member of the company’s Management Board, said the company stands firmly behind the clinical principle that despite the strain on healthcare resources caused by the pandemic, patients with End Stage Kidney Disease requiring dialysis should be able to continue with their prescribed dialysis treatment frequency. Furthermore, dialysis access surgery or interventions needed by some patients are “not elective procedures and should be delivered in a timely manner” to prevent potential complications, he added.

The advisory asserts that patients needing renal replacement therapy during the pandemic should still be offered the appropriate treatment that has been agreed in consultation with their physicians. “These discussions may include mechanical ventilation, dialysis, continuous renal replacement therapies and any other extracorporeal support” advised by a patient’s care team, it states.

“People with advanced kidney disease come in varied degrees of health and functional status, but they all want to be productive and active members of their families and communities, and we are doing everything in our power to support their desire for individual choices on the level of care they receive,” said Dr. Maddux. “We want to avoid population-based decisions on care that may not be in the best interests of the individual person.”

Link to the Global Medical Advisory on Apportioning Care

• Production of critical drugs scaled up with priority supply for COVID 19 patients
• Commitment to price stability for essential drugs for COVID-19 patients during pandemic

Fresenius Kabi is responding to the significant increase in worldwide demand for essential drugs for the treatment of COVID-19 patients, especially medicines used for sedation such as Propofol and pain management drugs. The company is maximizing supply with all compatible manufacturing capacity now dedicated to these vital drugs. Fresenius Kabi has made significant, future-oriented investments in recent years into both automation and capacity in its manufacturing facilities; these are now enabling treatment for more patients worldwide.

Fresenius Kabi will continue to align its manufacturing capacities to the dynamically developing demand resulting from the COVID-19 pandemic.

Fresenius Kabi is dedicated to protecting its workforce in all aspects and has introduced increased safety measures for employees across the organization. These safeguards will also facilitate continued operations at its production sites. To ensure uninterrupted access to the company’s medicines, devices and technologies Fresenius Kabi is working closely with governments and public health authorities around the world.

Stephan Sturm, CEO of Fresenius, said: “The COVID-19 pandemic poses particular challenges for our society. As a healthcare company whose mission is to offer better and affordable medicine to ever more people, we have a special responsibility that we will live up to also during these testing times. Irrespective of demand beyond our ability to supply, we commit ourselves to keeping prices for essential drugs for COVID-19 patients stable during this pandemic. My special thanks go to our employees around the world. I am very grateful for their extraordinary commitment.”

Mats Henriksson, CEO of Fresenius Kabi, said: “Our purpose is to put lifesaving medicines and technologies in the hands of healthcare professionals and to find answers to the challenges they face. This purpose has never been more important than today. We do whatever is possible to further increase manufacturing output and the supply of urgently needed products. I am inspired by the dedication of our employees who are committed to maintaining the supply of our medicines to patients and their families.”

 

• Production of critical drugs scaled up with priority supply for COVID 19 patients
• Commitment to price stability for essential drugs for COVID-19 patients during pandemic

Fresenius Kabi is responding to the significant increase in worldwide demand for essential drugs for the treatment of COVID-19 patients, especially medicines used for sedation such as Propofol and pain management drugs. The company is maximizing supply with all compatible manufacturing capacity now dedicated to these vital drugs. Fresenius Kabi has made significant, future-oriented investments in recent years into both automation and capacity in its manufacturing facilities; these are now enabling treatment for more patients worldwide.

Fresenius Kabi will continue to align its manufacturing capacities to the dynamically developing demand resulting from the COVID-19 pandemic.

Fresenius Kabi is dedicated to protecting its workforce in all aspects and has introduced increased safety measures for employees across the organization. These safeguards will also facilitate continued operations at its production sites. To ensure uninterrupted access to the company’s medicines, devices and technologies Fresenius Kabi is working closely with governments and public health authorities around the world.

Stephan Sturm, CEO of Fresenius, said: “The COVID-19 pandemic poses particular challenges for our society. As a healthcare company whose mission is to offer better and affordable medicine to ever more people, we have a special responsibility that we will live up to also during these testing times. Irrespective of demand beyond our ability to supply, we commit ourselves to keeping prices for essential drugs for COVID-19 patients stable during this pandemic. My special thanks go to our employees around the world. I am very grateful for their extraordinary commitment.”

 

Mats Henriksson, CEO of Fresenius Kabi, said: “Our purpose is to put lifesaving medicines and technologies in the hands of healthcare professionals and to find answers to the challenges they face. This purpose has never been more important than today. We do whatever is possible to further increase manufacturing output and the supply of urgently needed products. I am inspired by the dedication of our employees who are committed to maintaining the supply of our medicines to patients and their families.”

Fresenius Medical Care North America has announced a collaboration with DaVita Inc. and other dialysis providers in response to COVID-19, which aims to support the broader kidney care community in the United States by offering isolation capacity for dialysis patients who are or may be COVID-19 positive.

Dialysis patients represent one of the most at-risk populations, particularly in the current difficult and rapidly evolving situation. To stay alive, they must receive treatment multiple days a week for three to four hours at a time. This presents a unique challenge for patients and their care teams when social distancing is required to reduce the risk of community spread and infection.

In this unprecedented time, Fresenius Medical Care North America is cooperating with DaVita Inc., U.S. Renal Care, American Renal Associates, Satellite Healthcare and other dialysis organizations. Together they are creating a nationwide contingency plan with a goal of helping to maintain continuity of care for dialysis patients by creating isolation cohort capacity that can be accessed by other dialysis providers.

A critical aim of this collaboration is to keep dialysis patients out of the hospital whenever possible, freeing up limited hospital resources. The companies are focused on ensuring there are enough nurses, social workers, dietitians, care technicians and available space to treat all dialysis patients, including those who are or may be infected with COVID-19, in a way that does not unnecessarily expose the hundreds of thousands of other patients who entrust them with their care.

Dialysis organizations have designated capacity in selected clinics across their national networks to create isolation units and shifts, which will treat patients who are or may be COVID-19 positive separately. This collaboration will help safeguard caregivers, conserve personal protective equipment and other important supplies, and create an environment that provides excess capacity for providers that may be overwhelmed by larger COVID-19 clusters.