NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN

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Fresenius intends to issue a total of €750 million of senior unsecured notes with maturities of 5 and 7 years as a further step to fund the announced acquisition of hospitals from Rhön Klinikum AG.

Fresenius Finance B.V., a wholly owned subsidiary of Fresenius SE & Co. KGaA, will issue and offer the senior notes through a private placement to institutional investors.

Fresenius will apply to the Luxembourg Stock Exchange to admit the senior notes to trading on its regulated market.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN

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Fresenius successfully placed €750 million of senior unsecured notes.

The 300 million tranche due 2019 has a coupon of 2.375% and was issued at a price of 99.647%. The yield of 2.45% represents a spread of 118 basis points over the 5-year swap rate. The €450 million tranche due 2021 has a coupon of 3.00% and was issued at a price of 98.751%. The yield of 3.20% represents a spread of 150 basis points over the 7-year swap rate, virtually identical with Fresenius‘ last comparable issue from January 2013.

Fresenius Finance B.V., a wholly owned subsidiary of Fresenius SE & Co. KGaA, issued and offered the senior notes through a private placement to institutional investors.

Fresenius has applied to the Luxembourg Stock Exchange to admit the senior notes to trading on its regulated market.

Fresenius Helios is moving to meet the conditions set by the German antitrust authority for the acquisition of 40 hospitals and 13 outpatient facilities from Rhön-Klinikum AG. The company expects to close the major part of the transaction in the first quarter of 2014, following antitrust approval within the scheduled review period.

The German antitrust authority required that three Rhön-Klinikum hospitals – in Boizenburg, Cuxhaven and Waltershausen-Friedrichroda – be excluded from the acquisition due to their geographical proximity to existing HELIOS facilities. They will remain with Rhön-Klinikum AG. Based on the authority's market assessment for the Leipzig region, HELIOS is selling two hospitals in Borna and Zwenkau, which are close to two hospitals in Leipzig that Fresenius Helios is acquiring from Rhön-Klinikum. The Borna and Zwenkau hospitals are purchased by HCM SE, a healthcare management company. Annual sales of these five hospitals are approximately €160 million.

Fresenius still expects the acquisition to be accretive to earnings per share in the first 12 months after closing, excluding one-time costs¹. The acquisition is expected to be clearly accretive from the second year onwards, including one-time costs.

¹ One-time costs are approximately €80 million before tax.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN

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Fresenius intends to issue €200 million of senior unsecured notes with a maturity of 10 years. Following the successful placement of €750 million senior notes in early January 2014 this is another step to fund the announced acquisition of hospitals from Rhön Klinikum AG.

Fresenius Finance B.V., a wholly owned subsidiary of Fresenius SE & Co. KGaA, will issue and offer the senior notes through a private placement with institutional investors.

Fresenius has applied to the Luxembourg Stock Exchange to admit the senior notes to trading on its regulated market.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN

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Fresenius successfully placed €300 million of senior unsecured notes with a maturity of 10 years. The offering was upsized from the previously announced €200 million.

The notes have a coupon of 4.00% and were issued at par.

The offering was very well received by investors and substantially oversubscribed.

Fresenius Finance B.V., a wholly owned subsidiary of Fresenius SE & Co. KGaA, offered the senior notes through a private placement with institutional investors as well as in public offerings in Luxembourg and Germany.

Fresenius has applied to the Luxembourg Stock Exchange to admit the senior notes to trading on its regulated market.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN

 

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Fresenius has placed additional 4.00% senior notes due 2024 in a nominal amount of €150 million. The additional notes were placed at a price of 102%, resulting in a yield to maturity of 3.758%.

The proceeds will be used to partially fund the announced acquisition of hospitals from Rhön-Klinikum AG.

Fresenius Finance B.V., a wholly owned subsidiary of Fresenius SE & Co. KGaA, offered the additional senior notes through a private placement to institutional investors.

Fresenius will apply to have the additional notes admitted to trading on the regulated market of the Luxembourg Stock Exchange.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN

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Fresenius intends to issue US$300 million of senior unsecured notes with a maturity of 7 years.

Following the successful placement of € 1.2 billion €-denominated senior notes in January and February 2014, this is another step to fund the announced acquisition of hospitals from Rhön-Klinikum AG. The issuance of US$-denominated bonds should further diversify Fresenius' investor base.

Fresenius US Finance II, Inc., a wholly owned subsidiary of Fresenius SE & Co. KGaA, will issue and offer the senior notes through a private placement with institutional investors.

Fresenius will apply to the Luxembourg Stock Exchange to admit the senior notes to trading on its regulated market.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN

 

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Fresenius successfully placed US$300 million of senior unsecured notes with a maturity of 7 years.

The notes have a coupon of 4.250% and were issued at par.

The transaction was very well received by investors and substantially oversubscribed.

Fresenius US Finance II, Inc., a wholly owned subsidiary of Fresenius SE & Co. KGaA, offered the senior notes through a private placement to institutional investors.

Fresenius will apply to the Luxembourg Stock Exchange to admit the senior notes to trading on its regulated market.

Fresenius Helios has received antitrust approval for the acquisition of 40 hospitals and 13 outpatient facilities from Rhön-Klinikum AG. Approximately 70% of the acquired business will be consolidated as of January 1, 2014.

Fresenius Helios will close the majority of the transaction by the end of February. For two hospitals, HSK Dr. Horst Schmidt Kliniken in Wiesbaden and Klinikum Salzgitter, the approval of municipal shareholders is still pending.

With the acquisition, Fresenius Helios strengthens its position as Europe's largest hospital operator and aims to develop innovative, integrated care offerings across Germany.

Fiscal year 2013:

• Sales €20.3 billion (+5% at actual rates, +8% in constant currency)
• EBIT¹ €3,045 million (-1% at actual rates, +1% in constant currency)
• Net income² €1,051 million (+12% at actual rates, +14 % in constant currency)
• 14% dividend increase to €1.25 per share proposed

2014 Group outlook³:

• Sales growth of 12% to 15% in constant currency
• Net income⁴ growth of 2% to 5% in constant currency

2017 Targets:

• Group sales: approx. €30 billion
• Group net income: between €1.4 and €1.5 billion

Ulf Mark Schneider, CEO of Fresenius, said: "2013 was a year of significant achievements. We exceeded 20 billion euros in sales and 1 billion euros in earnings for the first time. The acquisition of 40 hospitals from Rhön-Klinikum AG is a key milestone for us. Looking ahead, we see significant growth opportunities in both industrial and in developing countries. We will pursue them with ambitious strategies, operational excellence and financial prudence."

¹ 2013 before Fenwal integration costs (€54 million); 2012 before one-time effects
² Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2013 before Fenwal integration costs (€40 million); 2012 before one-time effects
³ includes contributions from the acquisition of hospitals from Rhön-Klinikum AG.
⁴ Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2014 before integration costs for Fenwal (€30-40 million) and the hospitals acquired from Rhön-Klinikum AG (vast majority of ~€65 million in total); 2013 before Fenwal integration costs (€40 million Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2014 before integration costs for Fenwal (€30-40 million) and the hospitals acquired from Rhön-Klinikum AG (vast majority of ~€65 million in total); 2013 before Fenwal integration costs (€40 million)

21^st consecutive dividend increase proposed
Based on the strong financial results, the Management Board will propose to the Supervisory Board a dividend increase of 14 % to €1.25 per share (2012: €1.10). The total dividend distribution is expected to be €225 million.

Positive Group outlook for 2014¹
For 2014, Fresenius projects sales growth of 12% to 15% in constant currency. Net income² is expected to increase by 2% to 5% in constant currency. The earnings forecast primarily reflects lower reimbursement rates for Medicare dialysis patients and substantial uncertainties regarding the IV drug shortage situation in the U.S. market.

The net debt/EBITDA ratio is expected to be in the range of 3.0 to 3.25.

New stretch targets for 2017
For 2017, Group sales are expected to reach approx. € 30 billion. Group net income is expected to be between € 1.4 and 1.5 billion.

¹ Includes contributions from the acquisition of hospitals from Rhön-Klinikum AG.
² Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2014 before integration costs for Fenwal (€30-40 million) and the hospitals acquired from Rhön-Klinikum AG (vast majority of ~€65 million in total); 2013 before Fenwal integration costs (€40 million)

Group sales exceeds €20 billion for the first time
Group sales increased by 5% (constant currency: 8%) to €20,331 million (2012: €19,290 million. Organic sales growth was 4%. Acquisitions contributed 5%. Divestitures reduced sales growth by 1%. Currency translation had a negative effect of 3%.

Sales of the business segments developed as follows:

 

Group sales by region developed as follows:

 

Organic sales growth was 4% in North America and 3% in Europe. In Latin America (13%) and Africa (23%) organic sales growth was particularly strong. In Asia-Pacific organic sales growth was 4%.

Net income¹ growth of 14% in constant currency at top end of guidance
Group EBITDA² increased by 1% (3% in constant currency) to €3,888 million (2012: €3,851 million). In constant currency, Group EBIT² increased by 1% to €3,045 million (2012: €3,075 million). EBIT was impacted by lower reimbursement rates for Medicare dialysis patients and special items at Fresenius Kabi. The EBIT margin of 15.0% (2012: 15.9%) was also impacted by the first-time consolidation of Fenwal.

Group net interest decreased to -€584 million (2012: -€666 million), although this figure includes €14 million one-time costs resulting from the early redemption of the Senior Notes originally due in 2016.

The Group tax rate² improved to 27.8% (2012: 29.1%).

Noncontrolling interest was €727 million (2012: €769 million), of which 94% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income¹ increased by 12% (14% in constant currency) to €1,051 million (2012: €938 million). Earnings per share1 increased by 8% to €5.88 (2012: €5.42). The average number of shares outstanding was 178,672,652 (2012: 172,977,633).

A reconciliation to earnings according to U.S. GAAP can be found on page 16 of the Investor News.

Group net income attributable to shareholders of Fresenius SE & Co. KGaA including Fenwal integration costs was €1,011 million or €5.66 per share.

¹ Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2013 before Fenwal integration costs (€40 million); 2012 before one-time effects
² 2013 before Fenwal integration costs (€54 million); 2012 before one-time effects

Continued investment in growth
The Fresenius Group spent €1,073 million on property, plant and equipment (2012: €1,007 million). Acquisition spending was €2,754 million (2012: €3,172 million) including advances of €2.18 billion for the acquisition of hospitals and outpatient facilities from Rhön-Klinikum AG.

Strong 11.4% operating cash flow margin
Operating cash flow was €2,320 million (2012: €2,438 million). The decrease relates primarily to a one-time payment by Fresenius Medical Care regarding the amendment of the supply agreement for the iron product Venofer in North America and to currency. In 2012, the cash flow was positively influenced by extraordinary payments on trade accounts receivable. The cash flow margin reached 11.4% (2012: 12.6%). Net capital expenditure increased to €1,047 million (2012: €952 million). Free cash flow before acquisitions and dividends was €1,273 million (2012: €1,486 million). Free cash flow after acquisitions and dividends was -€1,774 million (2012: -€1,259 million).

Solid balance sheet structure
The Group's total assets were €32,758 million (Dec. 31, 2012: €30,664 million), a constant currency increase of 11%. The increase primarily relates to the €2.18 billion advances as stated above. Current assets decreased by 2% (+3% in constant currency) to €7,972 million (Dec. 31, 2012: €8,113 million). Non-current assets were €24,786 million (Dec. 31, 2012: €22,551 million), a constant currency increase of 13%.

Total shareholders' equity increased by 4% (9% in constant currency) to €13,260 million (Dec. 31, 2012: €12,758 million). The equity ratio was 40.5% (Dec. 31, 2012: 41.6%).

Group debt was €12,804 million (Dec. 31, 2012: €11,028 million). Net debt was €11,940 million (Dec. 31, 2012: €10,143 million). As of December 31, 2013, the net debt/EBITDA ratio was 2.51¹ (Dec. 31, 2012: 2.56²).

Number of employees increases
As of December 31, 2013, the Fresenius Group increased the number of its employees by 5% to 178,337 (Dec. 31, 2012: 169,324).

¹ Excluding the advances for the acquisition of hospitals of Rhön-Klinikum AG; before Fenwal integration costs² Pro forma including Damp Group, Liberty Dialysis Holdings, Inc. and Fenwal; before one-time costs (non-financing expenses) related to the takeover offer to Rhön-Klinikum AG shareholders, and one-time costs at Fresenius Medical Care.

 

Business Segments

Fresenius Medical Care

Fresenius Medical Care is the world's leading provider of services and products for patients with chronic kidney failure. As of December 31, 2013, Fresenius Medical Care was treating 270,122 patients in 3,250 dialysis clinics.

• Targets achieved for fiscal year 2013
• Further expansion of global franchise and new record sales
• Outlook 2014: sales approx. US$15.2 billion; net income in the range of US$1.0 to 1.05 billion

Sales increased by 6% to US$14,610 million (2012: US$13,800 million). Organic sales growth was 5%. Acquisitions contributed 2%, while divestitures reduced sales growth by 1%.

Sales in dialysis services increased by 6% (7% in constant currency) to US$11,130 million (2012: US$10,492 million). Dialysis product sales grew by 5% (5% in constant currency) to US$3,480 million (2012: US$3,308 million).

In North America sales grew by 6% to US$9,606 million (2012: US$9,031 million). Dialysis services sales grew by 7% to US$8,772 million (2012: US$8,230 million). Dialysis product sales increased by 4% to US$834 million (2012: US$801 million).

Sales outside North America ("International" segment) grew by 5% (6% in constant currency) to US$4,970 million (2012: US$4,740 million). Sales in dialysis services increased by 4% to US$2,358 million (2012: US$2,262 million). Dialysis product sales grew by 5% to US$2,612 million (2012: US$2,478 million).

EBIT decreased by 3% to US$2,256 million (2012¹: US$2,329 million). EBIT was impacted by lower reimbursement rates for Medicare dialysis patients.

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA was US$1,110 million (2012: US$1,118³ million). Net income for Q4 2013 was US$349 million, an increase of 7% compared to Q4 2012.

The operating cash flow of US$2,035 million remained nearly unchanged compared to previous year's level (2012: US$2,039 million) despite a US$100 million one-time payment regarding the amendment of the supply agreement for the iron product Venofer in North America. The cash flow margin was to 13.9% (2012: 14.8%).

For 2014, Fresenius Medical Care expects sales to grow to approx. US$15.2 billion. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected in the range of US$1.0 to 1.05 billion. The company initiated a global efficiency program designed to enhance the company's performance over a multi-year period. Potential cost savings before income taxes of up to US$60 million generated from this program are not included in the outlook for 2014.

For further information, please see Fresenius Medical Care's Investor News at www.fmc-ag.com.

¹ 2012 adjusted for other one-time costs of US$110 million related to the amendment of the agreement for Venofer and a donation to the American Society of Nephrology.
² Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA; 2012 adjusted for a non-taxable investment gain of US$140 million and other one-time costs of US$71 million.
³ 2012 adjusted for a non-taxable investment gain of US$140 million and other one-time costs of US$71 million

 

Fresenius Kabi

Fresenius Kabi offers infusion therapies, intravenously administered generic drugs and clinical nutrition 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.

• 5% organic sales growth, at upper the end of guidance, EBIT margin fully in line with guidance
• Outlook 2014: Organic sales growth of 3 to 7%; EBIT margin of 16 to 18%

Sales increased by 10% (14% in constant currency) to €4,996 million (2012:€4,539 million). Organic sales growth was 5%. Acquisitions contributed 10% sales growth, while divestitures reduced sales growth by 1%. Currency translation had a negative effect of 4%.

Sales in Europe grew by 5% (organic growth: 2%) to €2,053 million (2012: €1,953 million). Sales in North America increased by 23% to €1,522 million (2012: €1,236 million), primarily driven by the consolidation of Fenwal. Organic sales growth was 5%. In Asia-Pacific sales increased by 7% (organic growth: 6%) to €927 million (2012: €863 million). Sales in Latin America/Africa increased by 1% (organic growth: 9%) to €494 million (2012: €487 million).

EBIT¹ was €926 million (2012: €934 million), an increase of 1% in constant currency. EBIT includes charges of €31 million to meet FDA requirements at the Grand Island, USA, and Kalyani, India, plants. In addition, EBIT was impacted by restrictions on the use of our blood volume substitutes and material price cuts in China. The EBIT margin was 18.5% (2012: 20.6%). Excluding Fenwal, the EBIT margin was 19.8%.

Net income² increased by 10% to €487 million (2012: €444 million).

Fresenius Kabi's operating cash flow was €488 million (2012: €596 million). 2012 cash flow was positively influenced by extraordinary payments on trade accounts receivable. The cash flow margin was 9.8% (2012: 13.1%). Cash flow before acquisitions und dividends was €177 million (2012: €357 million).

The integration of Fenwal progressed as planned with related integration costs of €54 million pre-tax in 2013. These costs are reported in the Group Corporate/Other segment.

For 2014, Fresenius Kabi expects organic sales growth of 3 to 7% and an EBIT margin of 16 to 18%. These ranges primarily reflect substantial uncertainties regarding the IV drug shortage situation in the U.S. market as well as full-year effects from the restrictions on the use of our blood volume substitutes and the 2013 price cuts in China.

Fresenius Kabi guidance excludes €40-50 million pre-tax Fenwal integration costs (€30-40 million after tax); see Group guidance

¹ Before Fenwal integration costs
² Net income attributable to shareholders of Fresenius Kabi AG; before Fenwal integration costs

 

Fresenius Helios
Fresenius Helios is Germany's largest hospital operator. HELIOS owns 72 hospitals, thereof 50 acute care clinics including six maximum care hospitals in Berlin-Buch, Duisburg, Erfurt, Krefeld, Schwerin and Wuppertal and 22 post-acute care clinics. HELIOS treats more than 2.9 million patients per year, thereof more than 780,000 inpatients, and operates more than 23,000 beds.

• Completion of Rhön-Klinikum hospital acquisition expected end of February
• EBIT at the upper end of guidance; margin up 140 bps to 11.5%
• Outlook 2014: organic sales growth of 3 to 5%; EBIT of €390 to €410 million (excluding acquired hospitals)

Sales increased by 6% to €3,393 million (2012: €3,200 million). Organic sales growth was 3%, while acquisitions contributed 4%. Divestitures reduced sales growth by 1%.

EBIT grew by 21% to €390 million (2012: €322 million). The EBIT margin increased to 11.5% (2012: 10.1%).

Net income¹ increased by 35% to €275 million (2012: €203 million).

Sales of the established hospitals grew by 3% to €3,275 million. EBIT improved by 19% to €386 million. The EBIT margin increased to 11.8% (2012: 10.1%). Sales of the newly acquired hospitals (consolidation ≤1 year) were €118 million, EBIT was €4 million.

On February 20, 2014, Fresenius Helios received antitrust approval to acquire 40 hospitals and 13 outpatient facilities from Rhön-Klinikum AG. The majority of the transaction is expected to be closed by the end of February. Approximately 70% of the acquired business will be consolidated as of January 1, 2014. For two hospitals, HSK Dr. Horst Schmidt Kliniken in Wiesbaden and Klinikum Salzgitter, the approval of municipal shareholders is still pending.

The acquisition will create cost synergies of approx. €85 million p.a. pre-tax from 2015 onwards. The vast majority of integration costs (total of approx. €80 million pre-tax) is expected to accrue in 2014.

The Company expects the acquisition to be accretive to earnings per share in 2014, excluding integration costs, and clearly accretive from 2015 onwards including integration costs.

For 2014, Fresenius Helios projects organic sales growth of 3 to 5%. EBIT (excluding the hospitals acquired from Rhön-Klinikum AG) is expected to increase to €390 to 410 million. The guidance reflects the divestiture of the HELIOS hospitals in Borna and Zwenkau.

¹ Net income attributable to shareholders of HELIOS Kliniken GmbH

 

Fresenius Helios guidance excluding integration costs for the hospitals acquired from Rhön-Klinikum AG (total of approx. €80 million before tax and approx. €65 million after tax; vast majority in 2014). These costs will be reported in the Group Corporate/Other segment, see Group guidance

 

Fresenius Vamed
Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide.

• €1 billion sales target met one year earlier than expected
• 13% increase in order intake
• Outlook 2014: Organic sales growth of 5% to 10% and EBIT growth of 5% to 10%

Sales increased by 21% to €1,020 million (2012: €846 million). Organic sales growth was 13%, acquisitions contributed 8%. Sales in the project business increased by 15% to €583 million (2012: €506 million). Sales in the service business grew by 29% to €437 million (2012: €340 million).

EBIT grew by 8% to €55 million (2012: €51 million). The EBIT margin reached 5.4% (2012: 6.0%).

Net income¹ was €37 million (2012: €35 million).

Order intake increased by 13% to €744 million (2012: €657 million), reaching a new all-time high. As of December 31, 2013, order backlog increased to a new record of €1,139 million (Dec. 31, 2012: €987 million).

In 2014, Fresenius Vamed expects to achieve organic sales growth of 5% to 10% and EBIT growth of 5% to 10%.

¹ Net income attributable to shareholders of VAMED AG

 

Conference Call
As part of the publication of the results for fiscal year 2013, a conference call will be held on February 25, 2014 at 2.00 p.m. CET (8.00 a.m. EST). All investors are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com, see Investor Relations, Presentations. Following the call, a replay will be available on our website.