Quirónsalud, Spain’s largest private hospital group and part of Fresenius Helios, has acquired CediMed, a leading medical diagnostics group in Colombia. CediMed operates seven centrally located centers in Medellin, a major city of 2.5 million people. The company offers a comprehensive range of state-of-the-art diagnostic imaging and laboratory services. The total investment is about €40 million.

Following Quirónsalud's entry into Colombia in 2019, this is another step in strengthening the company’s presence in Latin America’s growing and consolidating healthcare services markets. Fresenius Helios expects the transaction to close in the next few months, pending antitrust clearance.

• Strong organic sales growth across all business segments
• Growth investments proceeding according to plan
• Fresenius Kabi’s excellent Emerging Markets growth partially offsets softer development in North America
• Fresenius Helios showing excellent organic sales growth across all regions
• Fresenius Medical Care with record growth in home dialysis in North America

¹ Adjusted for IFRS 16 effect
² Q3/18 and Q1-3/18 before special items and adjusted for divestitures of Care Coordination activities at Fresenius Medical Care (FMC)
³ Net income attributable to shareholders of Fresenius SE & Co. KGaA

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.

Stephan Sturm, CEO of Fresenius, said: “Our businesses developed solidly in the third quarter, keeping Fresenius on track to deliver the results that we promised earlier this year. We posted strong organic growth across all four business segments. Our investments in future growth are proceeding as planned; whilst they will weigh on earnings this year, they are exactly what is needed to ensure that our company remains efficient and successful. These investments reflect our commitment to provide a growing number of people with highquality, affordable healthcare – tomorrow and beyond.”

Group guidance for 2019 confirmed
Based on the Group’s solid Q1-3/19 results and good prospects for the remainder of the year, Fresenius confirms its 2019 Group sales and earnings guidance. Fresenius projects sales growth¹ of 4% to 7% in constant currency. Net income^2,3 growth is expected to be ~0% in constant currency. The guidance for 2019 includes the sales and dilutive earnings contributions of the NxStage acquisition.

Fresenius expects net debt/EBITDA⁴ at year-end to be around the upper-end of the original self-imposed target corridor of 2.5x to 3.0x. This includes the NxStage acquisition which is increasing the net debt/EBITDA ratio in 2019 by ~30 basis points and excludes IFRS 16 effects.

Due to the adoption of the IFRS 16 accounting standard (“IFRS 16 effect”), Fresenius’ self-imposed target corridor has shifted to 3.0x to 3.5x net debt/EBITDA on a reported basis.

¹ On a comparable basis: FY/18 base: €33,009 million; FY/18 adjusted for divestitures of Care Coordination activities at FMC; FY/19: adjusted for IFRS 16 effect
² Net income attributable to shareholders of Fresenius SE & Co. KGaA
³ On a comparable basis: FY/18 base: €1,872 million; FY/18 before special items and adjusted for divestitures of Care Coordination activities at FMC; FY/19: before special items (transaction-related expenses, revaluations of biosimilars contingent liabilities, gain related to divestitures of Care Coordination activities at FMC, expenses associated with the cost optimization program at FMC), adjusted for IFRS 16 effect
⁴ Both net debt and EBITDA calculated at expected annual average exchange rates; excluding further potential acquisitions

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.

Increased number of employees
As of September 30, 2019, the number of employees was 292,635 (Dec. 31, 2018: 276,750).

6% sales growth¹ in constant currency
Group sales were €8,842 million including an IFRS 16 effect of -€35 million. Group sales¹ on a comparable basis increased by 8% (6% in constant currency) to €8,877 million (Q3/18: €8,185 million). Organic sales growth was 5%. Acquisitions/divestitures contributed net 1% to growth.
In Q1-3/19, Group sales were €26,098 million including an IFRS 16 effect of -€75 million. Group sales1 on a comparable basis increased by 8% (6% in constant currency) to €26,173 million (Q1-3/18: €24,179 million). Organic sales growth was 5%. Acquisitions/divestitures contributed net 1% to growth. Positive currency translation effects of 2% were mainly driven by the U.S. dollar strengthening against the euro.

Net income^2,3 growth in constant currency
Group EBITDA before special items was €1,763 million including an IFRS 16 effect of €237 million. Group EBITDA² on a comparable basis increased by 4% (2% in constant currency) to €1,526 million (Q3/18: €1,463 million).
In Q1-3/19, Group EBITDA before special items was €5,167 million including an IFRS 16 effect of €699 million. Group EBITDA² on a comparable basis increased by 3% (0% in constant currency) to €4,468 million (Q1-3/18: €4,352 million).

Group EBIT before special items was €1,153 million including an IFRS 16 effect of €23 million. Group EBIT² on a comparable basis increased by 2% (-1% in constant currency) to €1,130 million (Q3/18: €1,112 million). The EBIT margin² on a comparable basis was 12.7% (Q3/18: 13.6%). Reported Group EBIT⁴ was €1,129 million. Group EBIT was impacted by a negative effect from adjustments on accounts receivable in legal dispute of €84 million⁵ at Fresenius Medical Care, the reduction in patient attribution and a decreasing savings rate for ESCOs, based on recent reports under discussion for current and prior plan years as well as a softer development in North America at Fresenius Kabi. Moreover, investments to counter the regulatory headwinds at Helios Germany continued to weigh on the Group’s EBIT. These effects were partially offset by the remeasurement effect on the fair value of an investment in Humacyte, Inc. at Fresenius Medical Care.

¹ On a comparable basis: Q3/18 and Q1-3/18 adjusted for divestitures of Care Coordination activities at FMC;
  Q3/19 and Q1-3/19 adjusted for IFRS 16 effect
² On a comparable basis: Q3/19 and Q1-3/19 before special items and adjusted for IFRS 16 effect;
  Q3/18 and Q1-3/18 before special items and adjusted for divestitures of Care Coordination activities at FMC
³ Net income attributable to shareholders of Fresenius SE & Co. KGaA
⁴ After special items and including IFRS 16 effect
⁵ Please see footnote 5 on page 7 in the FMC section

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.

In Q1-3/19, Group EBIT before special items was €3,401 million including an IFRS 16 effect of €79 million. Group EBIT¹ on a comparable basis increased by 1% (-2% in constant currency) to €3,322 million (Q1-3/18: €3,297 million). The EBIT margin¹ on a comparable basis was 12.7% (Q1-3/18: 13.6%). Reported Group EBIT² was €3,362 million.

Group net interest before special items was -€171 million including an IFRS 16 effect of -€47 million. On a comparable basis, net interest  improved to -€124 million (Q3/18: -€141 million) mainly due to successful refinancing activities and lower interest rates. Reported Group net interest² was -€172 million.
In Q1-3/19, Group net interest before special items was -€532 million including an IFRS 16 effect of -€153 million. On a comparable basis, net interest¹ improved to -€379 million
(Q1-3/18: -€420 million). Reported Group net interest² was -€535 million.

The Group tax rate before special items and adopting IFRS 16 was 23.1% in both Q3/19 and Q1-3/19. Group tax rate¹ on a comparable basis was also 23.1% in both Q3/19 and Q1-3/19 (Q3/18: 21.3%; Q1-3/18: 21.9%).

Noncontrolling interest before special items was €310 million including an IFRS 16 effect of €11 million. Noncontrolling interest¹ on a comparable basis was €321 million (Q3/18:
€320 million).
In Q1-3/19, noncontrolling interest before special items was €834 million including an IFRS 16 effect of €31 million. Noncontrolling interest¹ on a comparable basis was €865 million (Q1-3/18: €880 million), of which 93% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income³ before special items was €445 million including an IFRS 16 effect of -€8 million. Group net income^1,3 on a comparable basis increased by 2% (0% in constant currency) to €453 million (Q3/18: €444 million). Reported Group net income^2,3 was €444 million.

¹ On a comparable basis: Q3/19 and Q1-3/19 before special items and adjusted for IFRS 16 effect;
Q3/18 and Q1-3/18 before special items and adjusted for divestitures of Care Coordination activities at FMC
² After special items and including IFRS 16 effect
³ Net income attributable to shareholders of Fresenius SE & Co. KGaA

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.

Earnings per share¹ before special items were €0.80 including an IFRS 16 effect of -€0.01. Earnings per share^1,2 on a comparable basis increased by 1% (0% in constant currency) to €0.81 (Q3/18: €0.80). Reported Earnings per share^1,3 were €0.80.
In Q1-3/19, Group net income¹ before special items was €1,373 million including an IFRS 16 effect of -€25 million. Group net income^1,2 on a comparable basis increased by 2% (0% in constant currency) to €1,398 million (Q1-3/18: €1,368 million). Reported Group net income^1,3 was €1,368 million. In Q1-3/19, Earnings per share¹ before special items were €2.47 including an IFRS 16 effect of -€0.04. Earnings per share^1,2 on a comparable basis increased by 2% (0% in constant currency) to €2.51 (Q1-3/18: €2.46). Reported Earnings per share^1,3 were €2.46.

Continued investment in growth
2019 is an investment year for the Fresenius Group. Fresenius is making good progress in all of its investment initiatives to secure long-term sustainable growth. Spending on property, plant and equipment was €586 million (Q3/18: €539 million). This corresponds to 7% of sales. In Q1-3/19, spending on property, plant and equipment was €1,592 million (Q1-3/18: €1,370 million), primarily for the modernization and expansion of dialysis clinics, production facilities as well as hospitals and day clinics. This corresponds to 6% of sales.

Total acquisition spending was €135 million (Q3/18: €490 million). In Q1-3/19, total acquisition spending was €2,292 million (Q1-3/18: €876 million), mainly for the acquisition of NxStage by Fresenius Medical Care.

Cash flow development
Group operating cash flow was €1,483 million including an IFRS 16 effect of €185 million. Adjusted for IFRS 16, Group operating cash flow was €1,298 million (Q3/18: €1,293 million) with a margin of 14.6% (Q3/18: 15.8%). Free cash flow before acquisitions and dividends adjusted for IFRS 16 was €722 million (Q3/18: €768 million). Free cash flow after acquisitions and dividends adjusted for IFRS 16 was €547 million (Q3/18: €230 million). The IFRS 16 effect amounts to €185 million respectively. Correspondingly, cash flow from financing activities decreased by €185 million.

¹ Net income attributable to shareholders of Fresenius SE & Co. KGaA
² On a comparable basis: Q3/19 and Q1-3/19 before special items and adjusted for IFRS 16 effect;
  Q3/18 and Q1-3/18 before special items and adjusted for divestitures of Care Coordination activities at FMC
³ After special items and including IFRS 16 effect

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.

In Q1-3/19, Group operating cash flow was €2,977 million including an IFRS 16 effect of €538 million. Adjusted for IFRS 16, Group operating cash flow was € 2,439 million
(Q1-3/18: €2,549 million) with a margin of 9.3% (Q1-3/18: 10.3%). With €850 million, free cash flow before acquisitions and dividends adjusted for IFRS 16 was below the previous year (Q1-3/18: €1,193 million) mainly due to increasing investments. Free cash flow after acquisitions and dividends adjusted for IFRS 16 was -€2,172 million (Q1-3/18: €1,172 million). The IFRS 16 effect amounts to €538 million, respectively. Correspondingly, cash flow from financing activities decreased by €538 million.

Solid balance sheet structure
The Group’s total assets were €66,759 million including an IFRS 16 effect of €5,667 million. Adjusted for IFRS 16, Group total assets¹ increased by 8% (5% in constant currency) to €61,092 million (Dec. 31, 2018: €56,703 million). Current assets¹ increased by 3% (1% in constant currency) to €15,180 million (Dec. 31, 2018: €14,790 million). Non-current assets¹ increased by 10% (7% in constant currency) to €45,912 million (Dec. 31, 2018: € 41,913 million).

Total shareholders’ equity was €26,696 million including an IFRS 16 effect of -€232 million. Adjusted for IFRS 16, total shareholders’ equity increased by 8% (4% in constant currency) to €26,928 million (Dec. 31, 2018: €25,008 million). The equity ratio was 40.0%. Adjusted for IFRS 16, the equity ratio was 44.1% (Dec. 31, 2018: 44.1%).

Group debt was €27,013 million including an IFRS 16 effect of €5,899 million. Adjusted for IFRS 16, Group debt  increased by 11% to €21,114 million (10% in constant currency) (Dec. 31, 2018: € 18,984 million). Group net debt was €25,414 million including an IFRS 16 effect of €5,899 million. Adjusted for IFRS 16, Group net debt increased by 20% (18% in constant currency) to € 19,515 million (Dec. 31, 2018: € 16,275 million) mainly due to the acquisition of NxStage by Fresenius Medical Care.

As of September 30, 2019, the net debt/EBITDA ratio was 3.13x^1,2,3,4 (Dec. 31, 2018: 2.71x^2,4). Including the IFRS 16 effect, the reported net debt/EBITDA ratio was to 3.55x^2,3,4.

¹ Adjusted for IFRS 16 effect
² At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures
³ Including acquisition of NxStage
⁴ Before special items

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.

Business Segments

Fresenius Medical Care (Figures 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 September 30, 2019, Fresenius Medical Care was treating 342,488 patients in 4,003 dialysis clinics. Along with its core business, the company provides related medical services in the field of Care Coordination.

• 5% sales^1,2 growth in constant currency
• Record growth in home dialysis in North America; improved earnings growth despite negative effect from ESCO effect
• FY/19 outlook confirmed

Adjusted for the contribution from the divested Care Coordination activities, the IFRS 16 effect and the contribution from NxStage, sales of Fresenius Medical Care increased by 8% (5% at constant currency) to €4,375 million (Q3/18: €4,051 million). Organic sales growth was 5%. Positive currency translation effects of 3% were mainly related to the U.S. dollar strengthening against the euro. In Q1-3/19, sales adjusted for the contribution from the divested Care Coordination activities, the IFRS 16 effect and the contribution from NxStage increased by 9% (5% at constant currency) to €12,784 million (Q1-3/18: €11,731 million). Organic sales growth was 5%.

EBIT⁴ increased by 1% (-3% in constant currency) to €599 million (Q3/18: €592 million). The EBIT margin decreased to 13.7% (Q3/18: 14.6%). EBIT development was impacted by a negative effect from adjustments on accounts receivable in legal dispute of € 84 million⁵ paired with the reduction in patient attribution and a decreasing savings rate for ESCOs, based on recent reports under discussion for current and prior plan years. These effects were partially offset by the remeasurement effect on the fair value of an investment in Humacyte, Inc.
In Q1-3/19, EBIT⁴ decreased by 1% (-5% in constant currency) to €1,641 million (Q1-3/18: €1,656 million). The EBIT margin decreased to 12.8% (Q1-3/18: 14.1%).

¹ On an adjusted basis: before special items (transaction-related expenses, gain related to divestitures of Care Coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effect, excluding effects from NxStage transaction
² Q3/18 and Q1-3/18 before special items and adjusted for divestitures of Care Coordination activities
³ Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
⁴ Q3/18 and Q1-3/18 before special items items and after adjustments
  Q3/19 and Q1-3/19 before special items (transaction-related expenses, gain related to divestitures of Care Coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effect, excluding effects from NxStage transaction
⁵ This adjustment results from a material weakness in FMC`s internal controls over financial reporting regarding accounts receivable and revenue recognition specific to fee-for-service in legal dispute. FMC does not expect a restatement of its financial statements previously filed with the SEC. FMC is taking steps to remediate the control weakness.

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.

Net income^1,2 increased by 6% (2% in constant currency) to €363 million (Q3/18: €343 million). In Q1-3/19, net income^1,2 increased by 2% (-3% in constant currency) to €961 million (Q1-3/18: €946 million).
Operating cash flow was €715 million³ (Q3/18: €753 million) with a margin of 16.3% (Q3/18: 18.6%). In Q1-3/19, operating cash flow was €1,350⁴ million  (Q1-3/18: €1,364 million) with a margin of 10.6% (Q1-3/18: 11.1%).

For FY/19, Fresenius Medical Care expects adjusted sales to grow by 3% to 7%^5,6 in constant currency. Adjusted net income² is expected to develop in the range of -2% to +2%^5,7 in constant currency.

For further information on the IFRS 16 reconciliation of Fresenius Medical Care, please see page 18 of the PDF document.
For further information, please see Fresenius Medical Care’s press release at www.freseniusmedicalcare.com.

¹ Q3/18 and Q1-3/18 before special items and after adjustments; Q3/19 and Q1-3/19 before special items (transaction-related expenses, gain related to divestitures of care coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effect, excluding effects from NxStage transaction
² Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
³  €868 million including an IFRS 16 effect of €153 million
⁴  €1,796 million including an IFRS 16 effect of €446 million
⁵  FY/18 before special items, adjusted for divestitures of Care Coordination activities; FY/19 before special items (transaction-related expenses, gain related to divestitures of care coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effects, excluding effects from NxStage transaction
⁶ FY/18 base: €16,026 million
⁷ FY/18 base: €1,341 million

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 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.

• 5% organic sales growth and 1% EBIT¹ growth in constant currency
• Excellent Emerging Markets growth partially offsets softer development in North America
• FY/19 outlook confirmed

Sales of Fresenius Kabi increased by 7% (5% in constant currency) to €1,761 million (Q3/18: €1,650 million). Organic sales growth was 5%. In Q1-3/19, sales increased by 6% (5% in constant currency) to €5,153 million (Q1-3/18: €4,857 million). Organic sales growth was 4%. Positive currency translation effects of 1% were mainly related to the U.S. dollar strengthening against the euro.  

Sales in North America of €619 million remained at previous year’s level (organic growth: 4%; Q3/18: €620 million). In Q1-3/19, sales in North America increased by 3% (organic growth:-3%) to €1,815 million (Q1-3/18: €1,760 million). Intensifying competition on selected molecules, a further easing of tailwinds from drug shortages as well as a shift in clinical practice towards non-opiods in the hospital-based pain management weighed on the sales development.

Sales in Europe grew by 5% (organic growth: 4%) to €564 million (Q3/18: €538 million). In Q1-3/19, sales in Europe increased by 3% (organic growth: 3%) to €1,709 million
(Q1-3/18: €1,658 million).

Sales in Asia-Pacific increased by 20% (organic growth: 18%) to €406 million (Q3/18: €337 million). In Q1-3/19, sales in Asia-Pacific increased by 16% (organic growth: 15%) to €1,121 million (Q1-3/18: €964 million).

Sales in Latin America/Africa increased by 11% (organic growth: 16%) to €172 million (Q3/18: €155 million). In Q1-3/19, sales in Latin America/Africa increased by 7% (organic growth: 16%) to €508 million (Q1-3/18: €475 million).

EBIT¹ increased by 3% (1% in constant currency) to €306 million (Q3/18: €297 million) with an EBIT margin of 17.4% (Q3/18: 18.0%). In Q1-3/19, EBIT¹ increased by 7% (4% in constant currency) to €917 million (Q1-3/18: €854 million) with an EBIT margin of 17.8% (Q1-3/18: 17.6%).

Net income^1,2 increased by 3% (0% in constant currency) to €204 million (Q3/18: €199 million). In Q1-3/19, net income1,2 increased by 12% (8% in constant currency) to €618 million (Q1-3/18: €554 million).

Operating cash flow³ was €362 million (Q3/18: €366 million). The cash flow margin was 20.6% (Q3/18: 22.2%). In Q1-3/19, operating cash flow³ was €695 million (Q1-3/18: €820 million). The cash flow margin was 13.5% (Q1-3/18: 16.9%).

Fresenius Kabi confirms its outlook for FY/19 and expects organic sales growth⁴ of 3% to 6% and EBIT growth⁵ in constant currency of 3% to 6%.

For further information on the IFRS 16 reconciliation of Fresenius Kabi, please see page 18 of the PDF document.

¹ On a comparable basis: before special items and adjusted for IFRS 16 effect
² Net income attributable to shareholders of Fresenius SE & Co. KGaA
³ Adjusted for IFRS 16 effect (operating cash flow after special items)
⁴ On a comparable basis: FY/18 base: €6,544 million; FY/19 before special items (transaction-related expenses,
  revaluations of biosimilars contingent liabilities) and adjusted for IFRS 16 effect
⁵ On a comparable basis: FY/18 base: €1,139 million; FY/18 before special items; FY/19 before special items
  (transaction-related expenses, revaluations of biosimilars contingent liabilities) and adjusted for IFRS 16 effect.

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 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 treats approximately 5.3 million patients annually. Quirónsalud operates 50 hospitals, 62 outpatient centers and around 300 occupational risk prevention centers, and treats approximately 13.3 million patients annually.

• Strong organic sales growth of 6%
• Helios Spain with excellent organic sales growth of 9%; effect from summer break not as pronounced as last year
• FY/19 outlook confirmed

Sales of Fresenius Helios increased by 7% (organic growth: 6%) to €2,230 million (Q3/18: €2,088 million). In Q1-3/19, sales increased by 2% (5% ; organic growth: 5%) to €6,890 million (Q1-3/18: €6,762 million).

Sales of Helios Germany increased by 5% (organic growth: 5%) to €1,474 million (Q3/18: €1,410 million). Organic sales growth was positively influenced by pricing effects and admissions growth. The reclassification of nursing staff funding from other income to sales contributed about 1% to growth. In Q1-3/19, sales of Helios Germany decreased by 1% (increased by 4%1; organic growth: 4%) to €4,465 million (Q1-3/18: €4,531 million).

Sales of Helios Spain increased by 12% (organic growth: 9%) to €757 million (Q3/18: €678 million). In Q1-3/19, sales of Helios Spain increased by 9% (organic growth: 7%) to €2,425 million (Q1-3/18: €2,231 million).

¹ Adjusted for the post-acute care business transferred to Fresenius Vamed as of July 1, 2018
² Adjusted for IFRS 16 effect
³ Net income attributable to shareholders of Fresenius SE & Co. KGaA

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.

EBIT¹ of Fresenius Helios decreased by 10% to €183 million (Q3/18: €204 million) with an EBIT margin of 8.2% (Q3/18: 9.8%). In Q1-3/19, EBIT¹ of Fresenius Helios decreased by 7% (-5% ) to €723 million (Q1-3/18: €775 million) with an EBIT margin of 10.5% (Q1-3/18: 11.5%).

EBIT¹ of Helios Germany decreased by 9% to €130 million (Q3/18: €143 million) with an EBIT margin of 8.8% (Q3/18: 10.1%). Ongoing investments to counter regulatory headwinds continued to weigh on Helios Germany’s financial performance. In Q1-3/19, EBIT¹ of Helios Germany decreased by 11% (-9%2) to €433 million (Q1-3/18: €488 million) with an EBIT margin of 9.7% (Q1-3/18: 10.8%).

EBIT¹ of Helios Spain decreased by 5% to €56 million (Q3/18: €59 million) with an EBIT margin of 7.4% (Q3/18: 8.7%). EBIT was impacted by costs for temporary workers in order to cope with the higher than anticipated number of admissions. In Q1-3/19, EBIT¹ of Helios Spain increased by 5% to €300 million (Q1-3/18: €286 million) with an EBIT margin of 12.4% (Q1-3/18: 12.8%).

Net income^1,3 decreased by 12% to €113 million (Q3/18: €128 million). In Q1-3/19, net income^1,3 decreased by 9% to €472 million (Q1-3/18: €516 million).

Operating cash flow¹ increased to €183 million (Q3/18: €128 million) with a margin of 8.2% (Q3/18: 6.1%). In Q1-3/19, operating cash flow¹ increased to €471 million (Q1-3/18: €387 million) with a margin of 6.8% (Q1-3/18: 5.7%).

Fresenius Helios confirms its outlook for FY/19 and expects organic sales growth of 2% to 5% and negative EBIT1 growth of -5% to -2%.

For further information on the IFRS 16 reconciliation of Fresenius Helios, please see page 18 of the PDF document.

¹ Adjusted for IFRS 16 effect
² Adjusted for the post-acute care business transferred to Fresenius Vamed as of July 1, 2018
³ Net income attributable to shareholders of Fresenius SE & Co. KGaA

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.

 

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.

• Strong organic sales growth of 17%
• Integration of post-acute care business from Helios completed
• FY/19 outlook confirmed

Sales of Fresenius Vamed increased by 18% to €562 million (Q3/18: €476 million). Organic sales growth was 17%, acquisitions contributed 1% to growth.

Sales in the service business grew by 11% to €349 million (Q3/18: €315 million). Sales of the project business increased by 32% to €213 million (Q3/18: €161 million). In Q1-3/19, sales increased by 48% (28%¹) to €1,469 million (Q1-3/18: €991 million). Organic sales growth was 24%, acquisitions contributed 24% to growth. Both the service and the project business showed strong growth momentum.

EBIT² increased by 10% to €34 million (Q3/18: €31 million) with an EBIT margin of 6.0% (Q3/18: 6.5%). In Q1-3/19, EBIT² increased by 33% (0%1) to €65 million (Q1-3/18: €49 million) with an EBIT margin of 4.4% (Q1-3/18: 4.9%).

Net income^2,3 of €22 million remained at previous year’s level (Q3/18: €22 million). In Q1-3/19, net income^2,3 increased by 24% to €41 million (Q1-3/18: €33 million).

Order intake increased by 114% to €240 million (Q3/18: €112 million) and in Q1-3/19 by 30% to €738 million (Q1-3/18: €567 million). As of September 30, 2019, order backlog reached an all-time high at €2,711 million (Dec. 31, 2018: €2,420 million).

Operating cash flow² decreased to €27 million (Q3/18: €54 million) with a margin of 4.8% (Q3/18: 11.3%). In Q1-3/19, Operating cash flow² decreased to -€38 million (Q1-3/18:
-€2 million) with a margin of -2.6% (Q1-3/18: -0.2%) given timing of payments in the project business.

Fresenius Vamed confirms its outlook for FY/19 and expects organic sales growth of ~10% and EBIT growth² of 15% to 20%.

For further information on the IFRS 16 reconciliation of Fresenius Vamed, please see page 18 of the PDF document.

¹ Adjusted for German post-acute care business acquired from Fresenius Helios as of July 1, 2018
² Adjusted for IFRS 16 effect
³ Net income attributable to shareholders of VAMED AG

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-28 of the PDF document.
 
Conference Call
As part of the publication of the results for the third quarter / first three quarters of 2019, a conference call will be held on October 29, 2019 at 1:30 p.m. CET (8:30 a.m. EDT). You 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.

 

• Continued strong organic revenue growth across all regions
• Record growth in home dialysis in North America
• Improved earnings growth despite negative ESCO effect
• Cost optimization initiatives on track
• Outlook 2019 confirmed

Rice Powell, Chief Executive Officer of Fresenius Medical Care, said: “In the third quarter Fresenius Medical Care once again achieved stable, healthy growth. Our underlying business continues to develop according to plan and we are working successfully to provide even more patients with ever better and more individualized treatment options. In North America we have seen record growth in the number of home dialysis patients supported by the effective roll-out of the NxStage product range. In China we have launched the 4008A, our dialysis machine specially developed for emerging markets. Based on the company’s continuing organic revenue growth and accelerated earnings growth despite the unplanned negative effect of the ESCOs this year, we confirm our outlook for 2019.”

 

Record growth in home dialysis in North America
In the first seven months following the acquisition of NxStage Medical Inc., Fresenius Medical Care reported a record growth in home dialysis and now treats more than 25,000 patients at home in North America. From March through September 2019, the growth rate for home dialysis was nine times the rate of in-center dialysis. In addition to the NxStage acquisition, training facilities, education and distribution are important areas of investment as part of Fresenius Medical Care’s initiative to promote dialysis in the home setting. 

4008A dialysis machine launched in China
In September 2019, Fresenius Medical Care launched the 4008A dialysis machine in China, laying an important foundation for the further development of the world’s fastest-growing dialysis market. The 4008A is specifically designed to incorporate high-quality standards while reducing costs for health care systems, to meet the needs of emerging markets. Fresenius Medical Care is dedicated to contributing to the ‘Healthy China 2030’ initiative of the Chinese government, of which the development of professional dialysis centers is one element. Therefore, the company is focusing on expanding its production capacities, research and development activities, and on strengthening the services business. Fresenius Medical Care intends to build a network of around 100 renal facilities in China over the next five years.

Continued strong organic growth
Revenue in the third quarter 2019 increased by 9% (+6% at constant currency) compared to the previous year’s quarter and amounted to EUR 4,419 million. Organic growth remained strong at 5%. Adjusted for the effect of the IFRS 16 implementation and the contribution of NxStage, revenue increased by 8% (+5% at constant currency) to EUR 4,375 million.

Health Care Services revenue increased by 7% to EUR 3,492 million (+4% at constant currency), largely due to growth in same market treatments (volume growth), acquisitions, and an increase in dialysis days, partially offset by a revenue recognition adjustment for accounts receivable in legal dispute of EUR 84 million³ and the effect of closed or sold clinics. Health Care Products revenue grew by 16% to EUR 927 million (+13% at constant currency), mainly driven by higher sales of home hemodialysis products (supported by the effective roll-out of the NxStage product range), dialyzers as well as hemodialysis solutions and concentrates, partially offset by lower sales of machines. 

In the first nine months of 2019 revenue increased by 5% to EUR 12,897 million (+1% at constant currency). Adjusted for the effects of the NxStage acquisition, the implementation of IFRS 16 and the contribution of the divested company Sound Physicians in 2018, revenue rose by 9% (+5% at constant currency) and amounted to EUR 12,784 million. Overall organic growth amounted to 5% in the first nine months. Health Care Services revenue grew by 4% (stable at constant currency), while Health Care Products revenue increased by 10% (+8% at constant currency).

Improved earnings growth momentum
In the third quarter of 2019 total EBIT increased by 13% to EUR 595 million (+9% at constant currency), resulting in an operating income margin of 13.5% compared to 13.0% in the previous year’s quarter. The improved overall profitability was mainly driven by a prior-year accrual for an FCPA related charge, the remeasurement effect on the fair value of the investment in Humacyte, Inc. and higher utilization of oral based ancillaries with favorable margins. This was partially offset by higher personnel expenses, a revenue recognition adjustment for accounts receivable in legal dispute as well as the reduction in patient attribution and a decreasing savings rate for ESCOs, based on recent reports under discussion for current and prior plan years (“ESCO effect”). Adjusted EBIT grew by 1% to EUR 599 million (-3% at constant currency). For a detailed reconciliation, please refer to the table at the end of the press release. The adjusted operating income margin decreased from 14.6% to 13.7%. 

In the first nine months of 2019, EBIT decreased by 32% to EUR 1,653 million (-35% at constant currency). The most significant reason for the decline is the positive prior year EBIT increased as a consequence of the divestiture of Sound Physicians, Inc. On an adjusted basis, EBIT decreased by 1% (-5% at constant currency).

Net income² grew by 17% to EUR 333 million (+12% at constant currency) in the third quarter of 2019. Adjusted net income² increased by 6% (+2% at constant currency) mainly supported by lower interest expense. For details please refer to the table at the end of the press release.

In the first nine months of 2019, net income declined by 45% to EUR 857 million (-47% at constant currency). Also here the most significant reason for the decline is the positive prior year contribution from the divestiture of Sound Physicians, Inc. Net income grew on an adjusted basis by 2% (-3% at constant currency).

Based on approximately 301.4 million shares (weighted average number of shares outstanding), basic earnings per share (EPS) grew by 19% to EUR 1.10 (+14% at constant currency). On an adjusted basis, basic EPS amounted to EUR 1.21, representing an increase of 8% (+4% at constant currency). The development was supported by the current share buy-back program.

Negative ESCO effect – recent reports under discussion
The ESCO effect in Q3 2019 had a negative impact on revenue as well as on EBIT of EUR 46 million (EUR -44 million at constant currency). Net income was reduced due to this effect by EUR 33 million (EUR -31 million at constant currency).

In the first nine months of 2019, the ESCO effect on revenue as well as on EBIT was negative with EUR 87 million (EUR -82 million at constant currency) while net income was EUR 60 million (EUR -56 million at constant currency) lower due to this effect.

Healthy Dialysis Care growth across all segments
North America revenue, which represents 70% of total revenue, increased by 8% to EUR 3,073 million in the third quarter of 2019 (+3% at constant currency). Organic growth was 3%. Dialysis Care revenue grew by 8% to EUR 2,522 million (+4% at constant currency), mainly due to same market treatment growth (volume growth) of 3%, increases in organic revenue per treatment, contributions from acquisitions and an increase in dialysis days, partially offset by the revenue recognition adjustment for accounts receivable in legal dispute. At the same time, Care Coordination revenue decreased by 9% to EUR 273 million (-13% at constant currency) due to lower organic growth, including the ESCO effect, and the disposal of MedSpring Urgent Care Centers in the U.S., partially offset by contributions from acquisitions. This resulted in a Health Care Services revenue of EUR 2,795 million in total, representing an increase of 6% (+2% at constant currency).

In the U.S., the average revenue per treatment decreased by USD 9 to USD 347 (-3%) compared to the previous year’s quarter. The development was mainly attributable to a revenue recognition adjustment for accounts receivable in legal dispute.

Cost per treatment in the U.S., adjusted for the implementation of IFRS 16, increased from USD 290 in the previous year’s quarter to USD 292 in the third quarter of 2019 (+1%). This increase was largely driven by higher personnel expense and the impact from the acquisition of NxStage, partially offset by lower costs for health care supplies.

Health Care Product revenue increased by 30% to EUR 278 million (+24% at constant currency, +10% organic) in the third quarter, driven by higher sales of home hemodialysis products supported by the effective roll-out of the NxStage product range, renal pharmaceuticals and dialyzers, partially offset by lower sales of machines, mainly as a result of changes in the accounting treatment for sale-leaseback transactions due to the IFRS 16 implementation. 

Total EBIT of the North America segment decreased by 9% to EUR 477 million (-13% at constant currency). The operating income margin further improved from 14.0% in the second quarter to 15.5% in the third quarter of 2019, but was 3.0 percentage points lower than in the third quarter of 2018. Dialysis operating income margin decreased by 1.3 percentage points to 17.9%. This was mainly due to higher personnel expense, a revenue recognition adjustment for accounts receivable in legal dispute, the negative impact from income attributable to a consent agreement on certain pharmaceuticals in the prior year, costs in connection with the cost optimization program and the integration and operational costs associated with NxStage. These effects were partially offset by the remeasurement effect on the fair value of the investment in Humacyte, Inc. and a favorable impact from higher utilization of oral based ancillaries with favorable margins. Care Coordination operating income margin decreased by 20.4 percentage points, mainly due to the ESCO effect, lower gains from divestitures of Care Coordination activities and unfavorable margins for oral based ancillaries, partially offset by higher volumes for vascular services.

In the first nine months of 2019, North America revenue increased by 5% to EUR 9,021 million (-1% at constant currency, +4 organic). On an adjusted basis, revenue grew by 10% (+4% at constant currency) from EUR 8,073 million to EUR 8,908 million. The operating income margin decreased from 25.3% to 14.2%. On an adjusted basis, operating income margin decreased from 16.5% to 14.4%.

As of September 30, 2019, Fresenius Medical Care was treating 209,633 patients (+4%) at 2,585 clinics (+4%) in North America. Dialysis treatments increased by 4% in the first nine months.

EMEA revenue increased by 10% to EUR 683 million (+9% at constant currency, +9% organic) compared to the previous year’s quarter, driven by a positive business development in both Health Care Services and Health Care Products. Health Care Services revenue grew by 9% (+8% at constant currency), as a result of growth in same market treatments, increases in organic revenue per treatment, contributions from acquisitions, and an increase in dialysis days, partially offset by the effect of closed or sold clinics. The 11% growth in Health Care Products revenue (+10% at constant currency) was mainly driven by an increase in dialysis product revenue of 11% (+10% at constant currency) due to higher sales of dialyzers, bloodlines as well as hemodialysis solutions and concentrates.

Non-dialysis product revenue grew by 14% compared to the previous year’s quarter (+14% at constant currency) and amounted to EUR 20 million.

EBIT of the EMEA segment grew by 14% to EUR 100 million (+14% at constant currency) in the third quarter of 2019. The operating income margin was 14.6%, representing an increase of 0.5 percentage points compared to the previous year’s quarter. This improvement was mainly driven by the impact from higher product sales and favorable foreign currency transaction effects, partially offset by higher bad debt expense and higher personnel expense in certain countries.

In the first nine months of 2019, EMEA revenue grew by 4% (+4% at constant currency, +4% organic) to EUR 1,984 million, while EBIT increased by 11% (+11% at constant currency) to EUR 334 million. The improved profitability was mainly driven by a reduction of a contingent consideration liability related to Xenios in the first quarter of 2019, a positive impact from acquisitions and a favorable outcome in a legal proceeding, partially offset by higher bad debt expense as well as higher personnel expense in certain countries.

As of September 30, 2019, Fresenius Medical Care was treating 66,259 patients (+3%) at its 784 dialysis clinics (+2%) in the EMEA region. Dialysis treatments increased by 3% in the first nine months.

Asia-Pacific revenue increased by 13% to EUR 475 million (9% at constant currency, +8% organic) in the third quarter, driven by a positive business development in both Health Care Services and Health Care Products. Due to growth in same market treatments, contributions from acquisitions, and an increase in dialysis days, partially offset by missing contributions from closed or sold clinics, Dialysis Care revenue grew by 13% to EUR 159 million (+7% at constant currency). Care Coordination revenue increased by 20% to EUR 64 million (+16% at constant currency), mainly driven by organic revenue growth and contributions from acquisitions. This resulted in a total Health Care Services revenue of EUR 223 million, representing an increase of 15% (+9% at constant currency) compared to the previous year’s quarter. Health Care Products revenue grew by 11% (+9% at constant currency), resulting from increased sales of dialyzers, bloodlines as well as hemodialysis solutions and concentrates, partially offset by lower sales of machines. 

EBIT of the Asia-Pacific segment grew strongly by 36% (+32% at constant currency) and amounted to EUR 90 million. The resulting operating income margin was 19.0%, representing an increase of 3.3 percentage points compared to the third quarter of 2018. This improved profitability was due to the impact of business growth and favorable foreign currency transaction effects, partially offset by an unfavorable mix effect from acquisitions with lower margins as well as higher start-up and operating costs in the Care Coordination business.

In the first nine months of 2019, Asia-Pacific revenue grew by 10% to EUR 1,360 million (+7% at constant currency, +7% organic). Operating income increased by 17% to EUR 254 million (+14% at constant currency).

As of September 30, 2019, Fresenius Medical Care was treating 32,239 patients (+3%) at its 401 clinics (+3%) in the Asia-Pacific region. Dialysis treatments increased by 5% in the first nine months.

Latin America revenue increased by 7% to EUR 182 million (+20% at constant currency). Organic growth amounted to 15%. Health Care Services revenue grew by 8% and amounted to EUR 131 million (+26% at constant currency). The increase at constant currency was a result of higher organic revenue per treatment, contributions from acquisitions, growth in same market treatments, and an increase in dialysis days.

Health Care Products revenue grew by 3% (+5% at constant currency), mainly driven by increased sales of hemodialysis solutions and concentrates as well as machines, partially offset by lower sales of dialyzers.

EBIT of the Latin America segment amounted to EUR 11 million (Q3 2018: EUR -1 million). The operating income margin was 5.8% (Q3 2018: -0.9%). This was mainly due to reimbursement rate increases that mitigated inflationary cost increases.

In the first nine months of 2019, Latin America revenue grew by 2% to EUR 516 million (+20% at constant currency). Operating income increased by 17% (stable at constant currency) to EUR 28 million, resulting in an improved operating income margin (5.4%) compared to the first nine months of 2018 (4.7%).

As of September 30, 2019, Fresenius Medical Care was treating 34,357 patients (+7%) at its 233 clinics (+3%) in the Latin America region. Dialysis treatments increased by 6% in the first nine months.

Net interest expense increased by 38% to EUR 105 million (+33% at constant currency) in the third quarter. The increase was primarily due to the IFRS 16 implementation, a higher debt level and interest income on the proceeds from the disposal of Sound Physicians in the comparable period, partially offset by the replacement of high interest bearing bonds repaid in 2018 by debt instruments at lower interest rates. 

Income tax expense decreased by 3% to EUR 98 million in the third quarter of 2019, which translates into an effective tax rate of 20.2% (Q3 2018: 22.7%). This improvement was largely driven by the prior year impacts from non-tax-deductible expenses, mainly related to the FCPA related charge, and U.S. ballot initiatives, partially offset by the favorable prior year effects of the U.S. tax reform.

Strong Cash-flow development
In the third quarter 2019 Fresenius Medical Care generated EUR 868 million of operating cash flow (Q3 2018: EUR 753 million). This corresponds to 19.7% of revenue (Q3 2018: 18.6%). The increase was largely driven by the IFRS 16 implementation leading to a reclassification of the repayment portion of rent to financing activities. As of September 30, 2019, the number of days sales outstanding (DSOs) improved to 73 (June 30, 2019: 77). Free cash flow (net cash used in operating activities, after capital expenditures, before acquisitions and investments) amounted to EUR 584 million (Q3 2018: EUR 496 million). Free cash flow was 13.2% of revenue (Q3 2018: 12.2%).

Outlook^4,5
For 2019, Fresenius Medical Care expects adjusted revenue to grow between 3% and 7% and adjusted net income² to develop in the range of -2% to 2%. The company previously pointed out that adjusted net income² is likely to be at the lower end of the range.

For 2020, Fresenius Medical Care expects adjusted revenue as well as adjusted net income to grow at a mid to high single digit rate.

To make the business performance in the respective periods comparable, these targets as well as the 2018 base are and will be adjusted for items such as: FCPA related charges, the IFRS 16 implementation, the contributions from Sound Physicians in the first half 2018, the gain (loss) related to divestitures of Care Coordination activities and expenses for the implementation of the cost optimization program. All effects from the acquisition of NxStage Medical Inc. are excluded from the targets for 2019 and 2020.

Number of employees increased
As of September 30, 2019, Fresenius Medical Care had 120,734 employees (full-time equivalents) worldwide, compared to 112,134 employees as of September 30, 2018. This increase of 8% was mainly attributable to the NxStage acquisition.

¹ For a detailed reconciliation, please refer to the table at the end of the press release
² Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
³ This adjustment results from a material weakness in our internal controls over financial reporting regarding accounts receivable and revenue recognition specific to fee-for-service in legal dispute. The company does not expect a restatement of its financial statements previously filed with the SEC. The Company is taking steps to remediate the control weakness.
⁴ Numbers at constant currency
⁵ Reported revenue 2018 of EUR 16,547 million adjusted for Sound H1 2018; reported net income 2018 of EUR 1,982 million adjusted for Sound H1 2018, the gain (loss) related to divestitures of Care Coordination activities and the 2018 FCPA related charge 

 

Conference call
Fresenius Medical Care will host a conference call to discuss the results of the third quarter today at 3:30 p.m. CEDT / 10:30 a.m. EDT. Details will be available on the company’s website. A replay will be available shortly after the call.

Please refer to our statement of earnings included at the end of the PDF-files for a complete overview of the results for the third quarter 2019.

Fresenius Medical Care, the world’s leading provider of dialysis products and services, announced today the appointment of Dr. Frank Maddux, 61, the company’s Global Chief Medical Officer, to the Management Board. He will start in his new position on January 1, 2020. 

Dr. Maddux was appointed Global Chief Medical Officer in March of this year with the goal of enhancing cooperation and the exchange of medical knowledge across the Fresenius Medical Care network, in order to ensure high-quality outcomes for patients worldwide. Now, by adding this position to the Management Board, Fresenius Medical Care is further underlining its commitment to applying clinical science at an ever-higher level. 

Dr. Maddux is a physician, IT entrepreneur and healthcare executive with more than 30 years of experience in healthcare. He has been with Fresenius Medical Care since 2009. Before his appointment as Global Chief Medical Officer, he served as Executive Vice President for Clinical & Scientific Affairs and Chief Medical Officer for Fresenius Medical Care North America, where he was responsible for the delivery of high-quality, value-based care for the largest integrated renal care network in the United States. His great expertise and research interests have focused on the quality of care for chronic kidney disease patients.

Stephan Sturm, Chairman of the Supervisory Board of Fresenius Medical Care Management AG, said: “As Global Chief Medical Officer, Dr. Frank Maddux enjoys an outstanding reputation both inside and outside of Fresenius Medical Care. With his proven medical competence and experience, which he can contribute, he will be a great addition to the company’s Management Board.” 

Rice Powell, Chief Executive Officer of Fresenius Medical Care and Chairman of the Management Board, said: “Dr. Frank Maddux will be key to our ability to drive value for our patients by pursuing new and evolving medical opportunities, such as a more-focused home therapies offering, regenerative medicine, and enhancing our Care Coordination business model throughout the world. We are fortunate to have a Global Chief Medical Officer as qualified and experienced as Dr. Maddux joining our Management Board.” 

Dr. Maddux said: “The well-being of our patients is our priority, and key to our company’s success. To continuously deliver on this global commitment, I am moved by the power of ideas, conceived by individuals, molded by collective intelligence and brought to life by investment in a higher purpose that is dedicated to improving the lives of people. I am proud of the importance that medical science has for Fresenius Medical Care.”

Fresenius will be included in the Dow Jones Sustainability Index Europe (DJSI Europe) for the first time as from 23 September 2019. The selected companies must demonstrate continuous improvement with regard to sustainability and are assessed by analysts from asset manager RobecoSAM.

Quirónsalud, Spain’s largest private hospital group and part of Fresenius Helios, has acquired Clínica Las Vegas and Clínica del Prado and further expanded its presence in the attractive private hospital market in Colombia. Clínica Las Vegas and Clínica del Prado are two centrally located hospitals in Medellín, a major city of 2.5 million people. The two facilities have a total of about 300 beds. The total investment for both hospitals is about €50 million.

Following Quirónsalud's entry into Peru in 2017 and the acquisition of Clínica Medellín this year, this is another step in strengthening the company’s presence in Latin America’s growing and consolidating hospital markets. Fresenius Helios expects both transactions to close in Q4 2019, pending anti-trust and regulatory clearance by the Colombian authorities.

Fresenius Medical Care, the world’s leading provider of dialysis products and services, has appointed Helen Giza (51) as Chief Financial Officer as of November 1, 2019. She will succeed Mike Brosnan who announced his retirement from the Company earlier this year after serving as CFO since January 2010.

Helen Giza has been Chief Integration and Divestiture Management Officer at Takeda Pharmaceuticals since 2018. Before joining the Takeda Corporate Executive Team, she served as Chief Financial Officer of Takeda’s U.S. business unit since 2008. Prior to that she held a number of key international finance and controlling positions, amongst others at TAP Pharmaceuticals and Abbott Laboratories. Helen Giza is a U.K. Chartered Certified Accountant and holds a Master of Business Administration from the Kellogg School of Management at Northwestern University in Evanston, Illinois, USA.

Stephan Sturm, Chairman of the Supervisory Board of Fresenius Medical Care Management AG, said: “Helen Giza is a very skilled financial executive with extensive management experience in the healthcare industry. She will be a great addition to our team and we are very pleased to welcome her to Fresenius Medical Care’s management board.”

Rice Powell, Chief Executive Officer of Fresenius Medical Care and Chairman of the Management Board, said: “We look forward to welcoming Helen to our team. Along with her international financial expertise, Helen brings great experience in the area of acquisitions and successful integration within the healthcare sector.”

Helen Giza said: “I am excited to be joining Fresenius Medical Care, the market leader in dialysis. This new role is a wonderful opportunity to be part of Fresenius Medical Care's continued success.”

• Underlying business development in line with expectation

• Continued strong organic revenue growth

• Healthy growth in the U.S. dialysis business

• Negative effect from ESCOs, based on recent reports for prior plan years

• Increasing earnings growth momentum expected

• Outlook 2019 confirmed

Rice Powell, Chief Executive Officer of Fresenius Medical Care, said: “We have delivered a solid second quarter with continued strong organic revenue growth. Net income in our underlying dialysis business developed in line with our expectations. We are confident to accelerate earnings growth over the second half of the year toward achieving our full-year targets. Due to ongoing delays in reconciliation of generated savings in the value-based ESCO pilot program and differing views with regard to the measurement mechanisms, it is prudent to adjust the rate of savings we applied to accrue revenues and earnings. While views differ on the magnitude of savings generated, it is clear that we have realized meaningful savings in the ESCO pilot as well as other value-based arrangements. We moved quickly and maintained tremendous focus since 2014. We are uniquely positioned with our vast experience to impact cost and quality of care in kidney disease. We remain committed to value-based care.”

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

Home dialysis strategy reinforced by President Trump’s Executive Order

Fresenius Medical Care continues to achieve an increase in the number of treatments being carried out in the home setting in North America. The investments in training facilities, education and distribution are important areas of investments this year. Concurrently, the company is investing around EUR 100 million in 2019 as part of the Cost Optimization Program to optimize its US services footprint. The company´s execution of its home strategy is additionally supported by the Executive Order on Advancing Kidney Health. Fresenius Medical Care has intensified its initiatives to promote home dialysis, improve access to transplants, and develop value-based care models for chronic kidney disease patients.

Continued strong organic growth

Revenue in the second quarter 2019 increased by 3% to EUR 4,345 million (stable at constant currency). Organic growth continued to be strong at 4%. Adjusted for the Q2 2018 revenue contribution from Sound Inpatient Physicians (“Sound”, divested effective end of Q2 2018) as well as the impact from the IFRS 16 implementation and the revenue contribution from NxStage, revenue increased by 8% (+5% at constant currency).

Health Care Services revenue increased by 2% to EUR 3,455 million ( 2% at constant currency). Growth was constrained by missing revenue from the divested Sound activities and closed or sold clinics. Growth in same market treatments (volume growth), acquisitions and increases in organic revenue per treatment had a positive impact. Health Care Products revenue increased by 7% to EUR 890 million (+6% at constant currency), mainly driven by higher sales of home hemodialysis products (supported by the acquisition of NxStage), products for acute care treatments, peritoneal dialysis products, and renal pharmaceuticals, partially offset by lower sales of machines as a result of changes in the accounting treatment for sale-leaseback transactions due to the IFRS 16 implementation and in EMEA lower sales of dialyzers.

In the first half 2019, revenue increased by 4% to EUR 8,478 million (-1% at constant currency). Excluding the effects from Sound, the IFRS 16 implementation and NxStage, revenue was up by 9% (+5% at constant currency). Organic growth was 5%. Health Care Services revenue grew by 3% (-2% at constant currency). Health Care Products revenue increased by 7% (+5% at constant currency).

In the second quarter 2019 total EBIT decreased by 63% to EUR 521 million (-65% at constant currency), resulting in an operating income margin of 12.0% (compared to 33.3% in the previous year). The strong result in the previous year was driven by the gain related to divestitures of Care Coordination activities. On an adjusted basis, EBIT decreased by 12% to EUR 491 million (-17% at constant currency) and operating income margin decreased from 14.1% to 11.5% driven by higher personnel expense and the reduction in patient attribution and a decreasing savings rate for ESCOs, based on recent reports for prior plan years (“ESCO effect”).

In the first half 2019, EBIT decreased by 44% to EUR 1,058 million (-47% at constant currency). Adjusted for the effects described above, EBIT decreased by 2% (-7% at constant currency).

Net income² decreased by 74% to EUR 254 million (-76% at constant currency) in the second quarter 2019. On an adjusted basis, net income2 decreased by 9% (-14% at constant currency).

Based on approximately 303.5 million shares (weighted average number of shares outstanding), basic earnings per share (EPS) decreased by 74% to EUR 0.84 ( 76% at constant currency). On an adjusted basis, basic EPS amounted to EUR 0.92, representing a decrease of 9% (-14% at constant currency).

Strong Dialysis Care Growth

In the second quarter 2019 North America revenue, which represents 70% of total revenue, increased by 3% to EUR 3,061 million (-3% at constant currency). Organic growth in North America was 4%. Health Care Services revenue increased by 1% to EUR 2,789 million (-5% at constant currency). Dialysis Care revenue increased by 13% (6% at constant currency) to EUR 2,511 million. The growth was mainly due to increases in same market treatments (volume growth), increases in organic revenue per treatment, and contributions from acquisitions, partially offset by the effect of closed or sold clinics. Same-market treatment growth in the US again accelerated and reached 4.1%. Care Coordination revenue decreased by 47% to EUR 278 million (-50% at constant currency), mainly due to the divestiture of Sound in the previous year.

In the U.S., the average revenue per treatment increased by USD 4 to 358 USD (+1%). The development was mainly attributable to higher utilization of oral based ancillaries and an increase in the ESRD PPS base rate, partially offset by lower revenue from commercial payors.

Cost per treatment in the U.S., adjusted for the implementation of IFRS 16, increased from USD 289 to USD 297. This increase was largely driven by higher personnel expense as well as increased costs for occupancy and health care supplies.

Health care product revenue increased by 29% to EUR 272 million (+21% at constant currency), driven by higher sales of home hemodialysis products supported by the NxStage acquisition, renal pharmaceuticals and peritoneal dialysis products, partially offset by lower sales of machines as a result of changes in the accounting treatment for sale-leaseback transactions due to the IFRS 16 implementation.

Total EBIT of the North America segment decreased by 67% to EUR 429 million (-68% at constant currency). The strong results in the previous year were mainly driven by the gain related to the divestiture of Care Coordination activities. The operating income margin sequentially improved from 12.9% in the first quarter 2019 to 14.0% in the second quarter of 2019. The dialysis operating income margin decreased period over period by 1.7 percentage points to 15.4%. This was driven by higher personnel expense, the integration and operational costs associated with NxStage and the prior year income attributable to a consent agreement on certain pharmaceuticals, partially offset by higher utilization of oral based ancillaries with favorable margins and a positive effect from the IFRS 16 implementation.

In the first half 2019, North America revenue increased by 4% to EUR 5,948 million (-3% at constant currency). Adjusted for the H1 2018 revenue contribution from Sound as well as the impact from IFRS 16 and NxStage, revenue grew by 12% (5% at constant currency). Mainly driven by the gain related to divestitures of Care Coordination activities in the previous year as well as higher personnel expenses, integration and operational costs associated with NxStage and the ESCO effect, partially offset by higher utilization of oral based ancillaries with favorable margins, the operating income margin decreased from 28.7% in the first half 2018 to 13.5% in the first half 2019.

As of the end of June 2019, the company was treating 208,019 patients (+4%) at its 2,583 clinics (+6%) in North America. Dialysis treatments increased by 4%.

In the second quarter 2019 EMEA revenue decreased by 1% to EUR 648 million (stable at constant currency), driven by a positive business development in Health Care Services, offset by lower sales of Health Care Products. Health Care Service revenue increased by 6% (+7% at constant currency) as a result of growth in same market treatments, contributions from acquisitions, and increases in organic revenue per treatment, partially offset by the effect of closed or sold clinics. Health Care Product revenue decreased by 7% (-7% at constant currency). Dialysis product revenue decreased by 7% (-7% at constant currency) due to lower sales of dialyzers, bloodlines, hemodialysis solutions and concentrates and machines mainly in North Africa and the Middle East.

Non-Dialysis product revenue decreased by 8% to EUR 17 million (-8% at constant currency) from EUR 18 million.

EBIT decreased by 8% to EUR 96 million (-8% at constant currency). The operating income margin was 14.9% in the second quarter 2019, a decrease of 1.2% from the second quarter 2018, mainly driven by lower product sales, an unfavorable impact from an inventory revaluation, higher personnel expense in certain countries and unfavorable foreign currency transaction effects, partially offset by higher other income related to a favorable outcome in a legal proceeding, a favorable impact from acquisitions  and a positive effect from the IFRS 16 implementation.

In the first half 2019, EMEA revenue increased by 1% (+2% at constant currency) to EUR 1,301 million, while EBIT of EUR 235 million was up by 9% (+10% at constant currency). The improved profitability was mainly driven by a reduction of a contingent consideration liability related to Xenios in the first quarter of 2019.

As of the end of June 2019, the company was treating 65,871 patients (+4%) at its 783 dialysis clinics (+3%) in the EMEA region. Dialysis treatments increased by 4%.

In the second quarter 2019 Asia-Pacific revenue increased by 8% to EUR 458 million (+7% at constant currency), driven by a positive business development in both Health Care Services and Health Care Products. Organic growth was 7%. Health Care Services revenue increased by 10% to EUR 210 million (+7% at constant currency). Dialysis Care revenue increased by 8% to EUR 153 million (+4% at constant currency), mainly as a result of growth in same market treatments and contributions from acquisitions, partially offset by missing contributions from closed or sold clinics and a decrease in organic revenue per treatment. Care Coordination revenue increased by 16% to EUR 57 million (+15% at constant currency). The revenue growth was driven by contributions from acquisitions and organic revenue growth. Health Care Product revenue increased by 7% (+7% at constant currency) resulting from increased sales of dialyzers, products for acute care treatments, bloodlines, hemodialysis solutions and concentrates as well as machines.

An important area of investments of Fresenius Medical Care in 2019 is the expansion of production capacities and the ramp up of the dialysis services business in China to capture the growing demand in the country with the most dialysis patients worldwide. As part of the 2019 investment initiatives this impacts, as expected, the earnings growth in the region.

EBIT decreased by 11% (-12% at constant currency) to EUR 69 million. The resulting operating income margin was 15.1% (Q2 2018: 18.4%) due to an unfavorable impact from growth in lower margin businesses and unfavorable foreign currency transaction effects, partially offset by a positive effect from the IFRS 16 implementation.

In the first half 2019, Asia-Pacific revenue increased by 9% to EUR 886 million (+6% at constant currency). Operating income increased by 8% to EUR 164 million (+6% at constant currency).

As of the end of June 2019, the company was treating 31,845 patients (+4%) at its 399 clinics (+4%) in the Asia-Pacific region. Dialysis treatments increased by 4%.

In the second quarter 2019 Latin America revenue increased by 5% to EUR 172 million (+26% at constant currency). Organic growth was 24%. Health Care Services revenue increased by 2% to EUR 121 million (+28% at constant currency). The increase at constant currency was mainly a result of increases in organic revenue per treatment, contributions from acquisitions and growth in same market treatments, partially offset by the effect of closed or sold clinics.

Health Care Product revenue increased by 14% (20% at constant currency), mainly driven by increased sales of machines, peritoneal dialysis products, hemodialysis solutions and concentrates.

EBIT decreased by 47% to EUR 6 million (-81% at constant currency). The operating income margin was 3.4% (Q2 2018: 6.8%). The decline was mainly driven by hyperinflation in Argentina.

In the first half 2019, Latin America revenue was stable at EUR 334 million (an increase of 20% at constant currency). Operating income decreased by 32% (-49% at constant currency) to EUR 17 million. The operating income margin decreased from 6.8% to 3.4%, mainly driven by hyperinflation in Argentina.

As of the end of June 2019, the company was treating 33,815 patients (+7%) at its 231 clinics (-1%) in the Latin America region. Dialysis treatments increased by 5%.

Net interest expense increased in the second quarter by 35% to EUR 114 million (+30% at constant currency). The increase was primarily due to the IFRS 16 implementation and a higher debt level, partially offset by the replacement of high interest bearing senior notes repaid in 2018 by debt instruments at lower interest rates. Income tax expense significantly decreased by 65% to EUR 92 million for the second quarter of 2019, which translates into an effective tax rate of 22.7% (Q2 2018: 19.8%), driven by the prior year impacts from the gain related to the divestiture of Care Coordination activities as well as favorable implications of the US Tax Reform.

Strong cash-flow development

In the second quarter 2019 the company generated EUR 852 million of operating cash flow (Q2 2018: EUR 656 million). This corresponds to 19.6% of revenue (Q2 2018: 15.6%). The increase was largely driven by the IFRS 16 implementation leading to a reclassification of the repayment portion of rent to financing activities. The number of days sales outstanding (DSOs) improved to 77 days (June 30, 2018: 82 days). Free cash flow (net cash used in operating activities, after capital expenditures, before acquisitions and investments) amounted to EUR 559 million (Q2 2018: EUR 429 million). Free cash flow was 12.9% of revenue (Q2 2018: 10.2%).

Outlook confirmed^3,4

For 2019, Fresenius Medical Care expects adjusted revenue to grow between 3% and 7% and adjusted net income² to develop in the range of -2% to 2%.

For 2020, Fresenius Medical Care expects adjusted revenue as well as adjusted net income to grow at a mid to high single digit rate.
In order to make the business performance in the respective periods comparable these targets as well as the 2018 base are and will be adjusted for items such as: FCPA related charges, the IFRS 16 implementation, the contributions from Sound in the first half 2018, the gain (loss) related to divestitures of Care Coordination activities and expenses for the implementation of the cost optimization program. All effects from the acquisition of NxStage Medical Inc. are excluded from the targets for 2019 and 2020.

³ Numbers at constant currency
⁴ Reported revenue 2018 of EUR 16,547 million adjusted for Sound H1 2018; reported net income 2018 of EUR 1,982 million adjusted for Sound H1 2018, the gain (loss) related to divestitures of Care Coordination activities and the 2018 FCPA related charge

Number of employees increased

As of June 30, 2019, Fresenius Medical Care had 119,631 employees (full-time equivalents) worldwide, compared to 111,263 employees as of June 30, 2018. This increase of 8% was mainly attributable to the NxStage acquisition.

Conference call

Fresenius Medical Care will host a conference call to discuss the results of the second quarter today at 3:30 p.m. CEDT / 9:30 a.m. EDT. Details will be available on the company’s website. A replay will be available shortly after the call.

Please refer to the PDF for a complete overview of the results for the second quarter 2019.

• Good organic sales growth across all business segments
• Growth investments well on track
• Fresenius Kabi successfully launched first biosimilar in Europe; continued excellent growth in Emerging Markets
• Fresenius Helios showing strong organic sales growth in Germany and enters successfully Colombian hospital market
• Fresenius Medical Care’s strategy reinforced by U.S. government’s plans for changes of kidney disease care

If no timeframe is specified, information refers to Q2/2019

  ¹ Adjusted for IFRS 16 effect
  ² Q2/18 and H1/18 adjusted for divestitures of Care Coordination activities at Fresenius Medical Care (FMC)
  ³ Net income attributable to shareholders of Fresenius SE & Co. KGaA

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 of the PDF document.

Stephan Sturm, CEO of Fresenius, said: “We are reporting a good second quarter 2019, with healthy organic growth in all four business segments. Our investments in future growth are moving ahead according to plan, as we further strengthen the foundations for the long-term, successful development of Fresenius. So we are very confident about the second half and the coming years.”

Group sales growth guidance for 2019 raised
Based on the Group’s good H1/19 results and good prospects for the remainder of the year, Fresenius raises its 2019 Group sales growth guidance. Fresenius now projects sales growth¹ of 4% to 7% in constant currency. Previously, Fresenius expected sales growth¹ of 3% to 6% in constant currency. The company confirms its earnings guidance. Net income^2,3 growth is expected to be ~0% in constant currency. The guidance for 2019 includes the related sales and dilutive earnings contributions of the NxStage acquisition.

Fresenius expects net debt/EBITDA⁴ at year-end to be around the upper-end of the original self-imposed target corridor of 2.5x to 3.0x. This includes the NxStage acquisition which is increasing the net debt/EBITDA ratio in 2019 by ~30 basis points and excludes IFRS 16 effects.

Due to the adoption of the IFRS 16 accounting standard (“IFRS 16 effect”), Fresenius’ self-imposed target corridor has shifted to 3.0x to 3.5x net debt/EBITDA on a reported basis.

¹ On a comparable basis: FY/18 base: €33,009 million; FY/18 adjusted for divestitures of Care Coordination activities at FMC (H1/18); FY/19: adjusted for IFRS 16 effect
² Net income attributable to shareholders of Fresenius SE & Co. KGaA
³ On a comparable basis: FY/18 base: €1,872 million; FY/18 before special items and adjusted for divestitures of Care Coordination activities at FMC (H1/18); FY/19: before special items (transaction-related expenses, revaluations of biosimilars contingent liabilities, gain related to divestitures of Care Coordination activities at FMC, expenses associated with the cost optimization program at FMC), adjusted for IFRS 16 effect
⁴ Both net debt and EBITDA calculated at expected annual average exchange rates; excluding further potential acquisitions

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 of the PDF document.

6% sales growth¹ in constant currency
Group sales were €8,761 million including an IFRS 16 effect of -€18 million. Group sales¹ on a comparable basis increased by 8% (6% in constant currency) to €8,779 million (Q2/18: €8,124 million). Organic sales growth was 5%. Acquisitions/divestitures contributed net 1% to growth. In H1/19, Group sales were €17,256 million including an IFRS 16 effect of -€40 million. Group sales¹ on a comparable basis increased by 8% (6% in constant currency) to €17,296 million (H1/18: €15,994 million). Organic sales growth was 5%. Acquisitions/divestitures contributed net 1% to growth. Positive currency translation effects of 2% were mainly driven by the U.S. dollar strengthening against the euro.

Net income^2,3 growth in constant currency
Group EBITDA before special items was €1,703 million including an IFRS 16 effect of €242 million. Group EBITDA² on a comparable basis decreased by 2% (-5% in constant currency) to €1,461 million (Q2/18: €1,495 million). In H1/19, Group EBITDA before special items was €3,404 million including an IFRS 16 effect of €462 million. Group EBITDA² on a comparable basis increased by 2% (-1% in constant currency) to €2,942 million (H1/18: €2,889 million).

Group EBIT before special items was €1,118 million including an IFRS 16 effect of €37 million. Group EBIT² on a comparable basis decreased by 5% (-7% in constant currency) to €1,081 million (Q2/18: €1,135 million). The EBIT margin² on a comparable basis was 12.3% (Q2/18: 14.0%). A significant contributor was the reduction in patient attribution and a decreasing savings rate for ESCOs, based on recent reports for prior plan years (“ESCO effect”). Reported Group EBIT⁴ was €1,118 million. In H1/19, Group EBIT before special items was €2,248 million including an IFRS 16 effect of €56 million. Group EBIT² on a comparable basis remained at previous year’s level (-3% in constant currency) at €2,192 million (H1/18: €2,185 million). The EBIT margin² on a comparable basis was 12.7% (H1/18: 13.7%). Reported Group EBIT⁴ was €2,233 million.

Group net interest before special items was -€180 million including an IFRS 16 effect of -€58 million. On a comparable basis, net interest² improved to -€122 million (Q2/18: -€140 million) mainly due to successful refinancing activities and lower interest rates. Reported Group net interest4 was -€179 million. In H1/19, Group net interest before special items was -€361 million including an IFRS 16 effect of -€106 million. On a comparable basis, net interest¹ improved to -€255 million (H1/18: -€279 million). Reported Group net interest³ was -€363 million.

¹ On a comparable basis: Q2/18 and H1/18 adjusted for divestitures of Care Coordination activities at FMC;
Q2/19 and H1/19 adjusted for IFRS 16 effect
² On a comparable basis: Q2/19 and H1/19 before special items and adjusted for IFRS 16 effect;
  Q2/18 and H1/18 adjusted for divestitures of Care Coordination activities at FMC
³ Net income attributable to shareholders of Fresenius SE & Co. KGaA
⁴ After special items and including IFRS 16 effect

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 of the PDF document.

The Group tax rate before special items and adopting IFRS 16 was 22.8%. Group tax rate¹ on a comparable basis was 22.8% (Q2/18: 23.3%). In H1/19, the Group tax rate before special items and adopting IFRS 16 was 23.1%. In H1/19, Group tax rate¹ on a comparable basis was 23.1% (H1/18: 22.1%).

Noncontrolling interest before special items was €253 million including an IFRS 16 effect of €7 million. Noncontrolling interest¹ on a comparable basis was €260 million (Q2/18:
€290 million). In H1/19, Noncontrolling interest before special items was €524 million including an IFRS 16 effect of €20 million. Noncontrolling interest¹ on a comparable basis was €544 million (H1/18: €560 million), of which 93% was attributable to the Noncontrolling interest in Fresenius Medical Care.

Group net income² before special items was €471 million including an IFRS 16 effect of -€9 million. Group net income^1,2 on a comparable basis increased by 1% (0% in constant currency) to €480 million (Q2/18: €473 million). Reported Group net income^2,3 was €471 million. Earnings per share² before special items were €0.85 including an IFRS 16 effect of -€0.01. Earnings per share^1,2 on a comparable basis increased by 1% (0% in constant currency) to €0.86 (Q2/18: €0.85). Reported Earnings per share^2,3 were €0.85.

In H1/19, Group net income² before special items was €928 million including an IFRS 16 effect of -€17 million. Group net income^1,2 on a comparable basis increased by 2% (0% in constant currency) to €945 million (H1/18: €924 million). Reported Group net income^2,3 was €924 million. In H1/19, Earnings per share² before special items were €1.67 including an IFRS 16 effect of -€0.03. Earnings per share^1,2 on a comparable basis increased by 2% (0% in constant currency) to €1.70 (H1/18: €1.66). Reported Earnings per share^2,3 were €1.66.

Continued investment in growth
2019 is an investment year for the Fresenius Group. Fresenius is making good progress in all of its investment initiatives to secure long-term sustainable growth. Spending on property, plant and equipment was €565 million (Q2/18: €451 million). This corresponds to 6% of sales. In H1/19, spending on property, plant and equipment was €1,006 million (H1/18: €831 million), primarily for the modernization and expansion of dialysis clinics, production facilities as well as hospitals and day clinics. This corresponds to 6% of sales.

Total acquisition spending was €234 million (Q2/18: €194 million) including the acquisition of Clínica Medellín in Colombia by Fresenius Helios, among others. In H1/19, total acquisition spending was €2,157 million (H1/18: €386 million), mainly for the acquisition of NxStage by Fresenius Medical Care.

¹ On a comparable basis: Q2/19 and H1/19 before special items and adjusted for IFRS 16 effect;
  Q2/18 and H1/18 adjusted for divestitures of Care Coordination activities at FMC
² Net income attributable to shareholders of Fresenius SE & Co. KGaA
³ After special items and including IFRS 16 effect

Cash flow development
Group operating cash flow was €1,205 million including an IFRS 16 effect of €182 million. On a comparable basis, Group operating cash flow was €1,023 million (Q2/18: €1,020 million) with a margin of 11.7% (Q2/18: 12.2%). Free cash flow before acquisitions and dividends adjusted for IFRS 16 was €467 million (Q2/18: €580 million). Free cash flow after acquisitions and dividends adjusted for IFRS 16 was -€437 million (Q2/18: €1,331 million). The IFRS 16 effect amounts to €182 million respectively. Correspondingly, cash flow from financing activities decreased by €182 million.

In H1/19, Group operating cash flow was €1,494 million including an IFRS 16 effect of €353 million. On a comparable basis, Group operating cash flow was €1,141 million (H1/18: €1,256 million) with a margin of 6.6% (H1/18: 7.6%). Free cash flow before acquisitions and dividends adjusted for IFRS 16 was €128 million (H1/18: €425 million) mainly due to increasing investments. Free cash flow after acquisitions and dividends adjusted for IFRS 16 was -€2,719 million (H1/18: €942 million). The IFRS 16 effect amounts to €353 million respectively. Correspondingly, cash flow from financing activities decreased by €353 million.
 

Solid balance sheet structure
The Group’s total assets were €64,929 million including an IFRS 16 effect of €5,587 million. Adjusted for IFRS 16, Group total assets¹ increased by 5% (4% in constant currency) to €59,342 million (Dec. 31, 2018: €56,703 million). Current assets¹ remained flat (remained flat in constant currency) to €14,851 million (Dec. 31, 2018: €14,790 million). Non-current assets¹ increased by 6% (6% in constant currency) to €44,491 million (Dec. 31, 2018: € 41,913 million).

Total shareholders’ equity was €25,382 million including an IFRS 16 effect of -€186 million. Adjusted for IFRS 16, total shareholders’ equity increased by 2% (2% in constant currency) to €25,568 million (Dec. 31, 2018: €25,008 million). The equity ratio was 39.1%. Adjusted for IFRS 16, the equity ratio was 43.1% (Dec. 31, 2018: 44.1%).

Group debt was €26,879 million including an IFRS 16 effect of €5,773 million. Adjusted for IFRS 16, Group debt  increased by 11% to €21,106 million (11% in constant currency) (Dec. 31, 2018: € 18,984 million). Group net debt was €25,416 million including an IFRS 16 effect of €5,773 million. Adjusted for IFRS 16, Group net debt increased by 21% (21% in constant currency) to € 19,643 million (Dec. 31, 2018: € 16,275 million) mainly due to the acquisition of NxStage by Fresenius Medical Care.

As of June 30, 2019, the net debt/EBITDA ratio increased to 3.21x^1,2,3,4  (December 31, 2018: 2.71x^2,4). Including the IFRS 16 effect, the reported net debt/EBITDA ratio increased to 3.64x^2,3,4.

¹ Adjusted for IFRS 16 effect
² At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures
³ Including acquisition of NxStage
⁴ Before special items

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32.

Increased number of employees 
As of June 30, 2019, the number of employees was 288,459 (Dec. 31, 2018: 276,750).

Business Segments

Fresenius Medical Care (Figures 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, 2019, Fresenius Medical Care was treating 339,550 patients in 3,996 dialysis clinics. Along with its core business, the company provides related medical services in the field of Care Coordination.

• 5% sales^1,2 growth in constant currency
• Underlying dialysis business development as expected; negative impact from ESCO adjustments for prior plan years
• FY/19 outlook confirmed

Adjusted for the Q2/18 contribution from the divested Care Coordination activities, the IFRS 16 effect and the contribution from NxStage, sales of Fresenius Medical Care increased by 8% (5% at constant currency) to €4,284 million (Q2/18: €3,956 million). Organic sales growth was 4%. Positive currency translation effects of 3% were mainly related to the U.S. dollar strengthening against the euro. In H1/19, sales adjusted for the H1/18 contribution from the divested Care Coordination activities, the IFRS 16 effect and the contribution from NxStage increased by 9% (5% at constant currency) to €8,409 million (H1/18: €7,680 million). Organic sales growth was 5%.

EBIT⁴ decreased by 12% (-17% in constant currency) to €491 million (Q2/19: €558 million) The EBIT margin⁴ decreased to 11.5% (Q2/18: 14.1%). A significant contributor was the reduction in patient attribution and a decreasing savings rate for ESCOs, based on recent reports for prior plan years (“ESCO effect”).

¹ On an adjusted basis: before special items (transaction-related expenses, gain related to divestitures of Care Coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effect, excluding effects from NxStage transaction
² Q2/18 and H1/18 adjusted for divestitures of Care Coordination activities
³ Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
⁴ Q2/18 and H1/18 before special items and after adjustments; Q2/19 and H1/19 before special items (transaction-related expenses, gain related to divestitures of Care Coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effect, excluding effects from NxStage transaction

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32.

In H1/19, EBIT⁶ decreased by 2% (-7% in constant currency) to €1,042 million (H1/18: €1,064 million). The EBIT margin⁴ decreased to 12.4% (H1/18: 13.9%).

Net income^1,2 decreased by 9% (-14% in constant currency) to €279 million (Q2/18: €308 million). A significant contributor was the ESCO effect. In H1/19, net income^1,2 decreased by 1% (-6% in constant currency) to €597 million (H1/18: €604 million).

Operating cash flow  was €700 million³ (Q2/18: €656 million) with a margin of 16.0% (Q2/18: 15.6%). In H1/19, operating cash flow was €635 million  (H1/18: €611 million) with a margin of 7.6% (H1/18: 7.5%).

For FY/19, Fresenius Medical Care expects adjusted sales to grow by 3% to 7%^5,6 in constant currency. Adjusted net income¹ is expected to develop in the range of -2% to +2%^5,7 in constant currency.

For further information on the IFRS 16 reconciliation of Fresenius Medical Care, please see page 18 in the PDF document.
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 Q2/18 and H1/18 before special items and after adjustments; Q2/19 and H1/19 before special items (transaction-related expenses, gain related to divestitures of care coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effect, excluding effects from NxStage transaction
³ €852 million including an IFRS 16 effect of €152 million
⁴ €928 million including an IFRS 16 effect of €293 million
⁵ FY/18 before special items, Q2/18 and H1/18 adjusted for divestitures of Care Coordination activities;
FY/19 before special items (transaction-related expenses, gain related to divestitures of care coordination activities, expenses associated with the cost optimization program), adjusted for IFRS 16 effects, excluding effects from NxStage transaction
⁶ FY/18 base: €16,026 million
⁷ FY/18 base: €1,341 million

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 in 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.

• 4% organic sales growth and 4% EBIT¹ growth in constant currency
• Excellent growth in Emerging Markets
• FY/19 outlook confirmed

Sales of Fresenius Kabi increased by 5% (5% in constant currency) to €1,691 million (Q2/18: €1,604 million). Organic sales growth was 4%. In H1/19, sales increased by 6% (4% in constant currency) to €3,392 million (H1/18: €3,207 million). Organic sales growth was 4%. Positive currency translation effects of 2% were mainly related to the U.S. dollar strengthening against the euro.  

Sales in North America increased by 4% (organic growth: -1%) to €573 million (Q2/18: €549 million). In H1/19, sales in North America increased by 5% (organic growth:
-1%) to €1,196 million (H1/18: €1,140 million). The anticipated easing of shortage situations, intensified competition in individual molecules, and a prescribing trend towards non-opioids pain management were the main headwinds.

Sales in Europe grew by 2% (organic growth: 1%) to €572 million (Q2/18: €563 million). In H1/19, sales in Europe increased by 2% (organic growth: 2%) to €1,145 million (H1/18: €1,120 million).

Sales in Asia-Pacific increased by 15% (organic growth: 15%) to €374 million (Q2/18: €326 million). In H1/19, sales in Asia-Pacific increased by 14% (organic growth: 13%) to €715 million (H1/18: €627 million).

Sales in Latin America/Africa increased by 4% (organic growth: 13%) to €172 million (Q2/18: €166 million). In H1/19, sales in Latin America/Africa increased by 5% (organic growth: 15%) to €336 million (H1/18: €320 million).

EBIT¹ increased by 7% (4% in constant currency) to €308 million (Q2/18: €289 million) with an EBIT margin¹ of 18.2% (Q2/18: 18.0%). In H1/19, EBIT¹ increased by 10% (6% in constant currency) to €611 million (H1/18: €557 million) with an EBIT margin¹ of 18.0% (H1/18: 17.4%).

Net income^1,2 increased by 14% (12% in constant currency) to €211 million (Q2/18: €185 million). In H1/19, net income^1,2 increased by 17% (12% in constant currency) to €414 million (H1/18: €355 million).

Operating cash flow³ was €201 million (Q2/18: €228 million). The cash flow margin was 11.9% (Q2/18: 14.2%). In H1/19, operating cash flow³ was €333 million (H1/18: €454 million). The cash flow margin was 9.8% (H1/18: 14.2%).

Fresenius Kabi confirms its outlook for FY/19 and expects organic sales growth⁴ of 3% to 6% and EBIT growth⁵ in constant currency of 3% to 6%.

For further information on the IFRS 16 reconciliation of Fresenius Kabi, please see page 18 of the PDF document.

¹ On a comparable basis: before special items and adjusted for IFRS 16 effect
² Net income attributable to shareholders of Fresenius SE & Co. KGaA
³ Adjusted for IFRS 16 effect (operating cash flow after special items)
⁴ On a comparable basis: FY/18 base: €6,544 million; FY/19 before special items (acquisition-related expenses, revaluations of biosimilars contingent liabilities) and adjusted for IFRS 16 effect
⁵ On a comparable basis: FY/18 base: €1,139 million; FY/18 before special items; FY/19 before special items (acquisition-related expenses, revaluations of biosimilars contingent liabilities) and adjusted for IFRS 16 effect.

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 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 treats approximately 5.3 million patients annually. Quirónsalud operates 50 hospitals, 62 outpatient centers and around 300 occupational risk prevention centers, and treats approximately 13.3 million patients annually.

• Strong organic sales growth of 5%
• Helios Germany further stabilized; Helios Spain with solid growth despite Easter effect
• FY/19 outlook confirmed

Sales of Fresenius Helios remained at previous year’s level (increased by 6%¹ organic growth: 5%) to €2,349 million (Q2/18: €2,343 million). In H1/19, sales also remained at previous year’s level (increased by 5%¹; organic growth: 4%) to €4,660 million (H1/18: €4,674 million).

Sales of Helios Germany decreased by 3% (increased by 5%¹; organic growth: 5%) to €1,506 million (Q2/18: €1,547 million). Organic sales growth was positively influenced by pricing effects and a strong case mix. In H1/19, sales of Helios Germany decreased by 4% (increased by 3%¹; organic growth: 3%) to €2,991 million (H1/18: €3,121 million).

Sales of Helios Spain increased by 6% (organic growth: 4%) to €842 million (Q2/18: €796 million) despite the negative effect related to the Easter holidays. In H1/19, sales of Helios Spain increased by 7% (organic growth: 6%) to €1,668 million (H1/18: €1,553 million).

¹ Adjusted for the post-acute care business transferred to Fresenius Vamed as of July 1, 2018
² Adjusted for IFRS 16 effect
³ Net income attributable to shareholders of Fresenius SE & Co. KGaA

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 of the PDF document.

EBIT¹ of Fresenius Helios decreased by 6% (-4% ) to €274 million (Q2/18: €293 million) with an EBIT margin of 11.7% (Q2/18: 12.5%). In H1/19, EBIT¹ of Fresenius Helios decreased by 5% (-4%²) to €540 million (H1/18: €571 million) with an EBIT margin of 11.6% (H1/18: 12.2%).

EBIT¹ of Helios Germany decreased by 8% (-4%²) to €154 million (Q2/18: €168 million) with an EBIT margin of 10.2% (Q2/18: 10.9%). In H1/19, EBIT¹ of Helios Germany decreased by 12% (-10%²) to €303 million (H1/18: €345 million) with an EBIT margin of 10.1% (H1/18: 11.1%). Whilst EBIT and margin have further stabilized, investments for preparatory structural measures continue to weigh on Helios Germany’s financial performance.

Despite the negative Easter effect, EBIT¹ of Helios Spain increased by 1% to €125 million (Q2/18: €124 million) with an EBIT margin of 14.8% (Q2/18: 15.6%). In H1/19, EBIT¹ of Helios Spain increased by 7% to €244 million (H1/18: €227 million).

Net income^1,3 decreased by 7% to €183 million (Q2/18: €197 million). In H1/19, net income^1,3 also decreased by 7% to €359 million (H1/18: €388 million).

Operating cash flow¹ was €197 million (Q2/18: €162 million) with a margin of 8.4% (Q2/18: 6.9%). In H1/19, operating cash flow¹ was €288 million (H1/18: €259 million) with a margin of 6.2% (H1/18: 5.5%). The increase is mainly attributable to the decrease in days sales outstanding (DSO) at Helios Spain.

Fresenius Helios confirms its outlook for FY/19 and expects organic sales growth of 2% to 5% and an EBIT¹ growth of -5% to -2%.

For further information on the IFRS 16 reconciliation of Fresenius Helios, please see page 18.

¹ Adjusted for IFRS 16 effect
² Adjusted for the post-acute care business transferred to Fresenius Vamed as of July 1, 2018
³ Net income attributable to shareholders of Fresenius SE & Co. KGaA

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 of the PDF document.

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 strong organic sales growth of 27%
• Intensified collaboration with Fresenius Helios contributes to sales growth
• FY/19 outlook confirmed

Sales of Fresenius Vamed increased by 76% (31%¹) to €467 million (Q2/18: €266 million). Organic sales growth was 27%, acquisitions contributed 3%¹ to growth. Positive currency translation effects increased sales by 1%. Sales in the service business grew by 106% (35%¹) to €344 million (Q2/18: €167 million), supported by an intensified collaboration with Fresenius Helios. Sales of the project business increased by 24% to €123 million (Q2/18: €99 million). In H1/19, sales increased by 76% (32%¹) to €907 million (H1/18: €515 million). Organic sales growth was 29%, acquisitions contributed 3%¹ to growth. Both the service and the project business showed strong growth momentum.

EBIT² increased by 67% to €20 million (Q2/18: €12 million) with an EBIT margin of 4.3% (Q2/18: 4.5%). EBIT² additionally adjusted for the acquisition of Helios’ German post-acute care business was €8 million (-33% YoY) with an EBIT margin of 2.3% - the decrease was mainly driven by phasing effects in the project business. In H1/19, EBIT² increased by 72% to €31 million (H1/18: €18 million) with an EBIT margin of 3.4% (H1/18: 3.5%). EBIT² additionally adjusted for the acquisition of Helios’ German post-acute care business was €15 million (-17% YoY) with an EBIT margin of 2.2%.

Net income^2,3 increased by 86% to €13 million (Q2/18: €7 million). In H1/19, net income^2,3 increased by 73% to €19 million (H1/18: €11 million).

Order intake decreased by -41% to €115 million (Q2/18: €195 million) but increased by 9% to €498 million in H1/19 (H1/18: €455 million). As of June 30, 2019, order backlog was at €2,690 million (Dec 31, 2018: €2,420 million).

Operating cash flow² decreased to -€42 million (Q2/18: -€14 million) with a margin of -9.0% (Q2/18: -5.3%). In H1/19, Operating cash flow² decreased to -€65 million (H1/18:
-€56 million) with a margin of -7.2% (H1/18: -10.9%).

Fresenius Vamed confirms its outlook for FY/19 and expects organic sales growth of ~10% and EBIT growth² of 15% to 20%.

For further information on the IFRS 16 reconciliation of Fresenius Vamed, please see page 18 of the PDF document.

¹ Adjusted for German post-acute care business acquired from Fresenius Helios as of July 1, 2018
² Adjusted for IFRS 16 effect
³ Net income attributable to shareholders of VAMED AG

For a detailed overview of special items and adjustments please see the reconciliation tables on pages 20-32 of the PDF document.

Conference Call

As part of the publication of the results for the second quarter 2019, a conference call will be held on July 30, 2019 at 1:30 p.m. CEDT (7:30 a.m. EDT). You 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.

Fresenius Medical Care, the world’s largest provider of dialysis products and services, is pleased the U.S. administration’s plans for changing the way care is provided to people with kidney disease supports its existing strategy. The company has long worked on various initiatives to promote home dialysis, improve access to transplants, and develop new, value-based care models for chronic kidney disease patients. 

Rice Powell, CEO of Fresenius Medical Care, said: “We congratulate the Administration on today’s announcement and celebrate the proposed initiatives as a win for our patients and for the 30 million Americans living with kidney disease. We are committed to continuously improving the quality of life of patients affected by kidney disease and have already established initiatives to improve prevention, offer more flexible treatment options, introduce value-based care models and promote organ donation –in the United States and abroad. 

We share the U.S. Administration’s commitment to expanding access to home dialysis, transplantation and new models of value-based care for chronic kidney disease, and we see it as an endorsement of our initiatives. We invest constantly in innovation and will continue to do so in order to further develop the healthcare system. The proposed reimbursement models and new incentives will help foster further innovation and support a healthcare delivery system structure that is closely attuned to the needs of our patients. 

Our recent merger with NxStage, which makes the leading hemodialysis machine for home use, is just one piece of a focused effort to educate patients and physicians around the benefits of home treatment and provide industry leading solutions to enable them to do so. We are also investing in technologies for the future, including new innovations for remote patient monitoring and telehealth that, combined with predictive analytics and artificial intelligence, will make it easier to help patients between visits to a doctor and avoid unnecessary hospitalizations.

We welcome reimbursement reforms that facilitate investments in care models designed to improve outcomes and help reduce costs, two goals to which more use of home dialysis and transplants can equally contribute. We will carefully review the U.S. administration’s proposal and contribute to developing the framework that offers the best possible conditions and greatest benefit for patients.”

Fresenius Medical Care's Global Medical Office conducts research in various fields of prevention and the use of clinical data to develop optimal treatment paths while avoiding unnecessary and expensive complications.

The company is also active in the field of regenerative medicine, and is a pioneer in testing flat-rate and value-based reimbursement models. The End Stage Renal Disease Seamless Care Organizations (ESCOs) of Fresenius Medical Care, which were established in close cooperation with the U.S. Centers for Medicare & Medicaid Services (CMS), have already achieved improved treatment outcomes and cost savings.