Fresenius Medical Care Reports Third Quarter and Nine Months 2005 Results; Outlook for 2005 Confirmed.BAD HOMBURG Bad Hom·burg A city of west-central Germany at the foot of the Taunus Mountains near Frankfurt. It is a famous spa and resort. Population: 53,200. , Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). -- Fresenius Fresenius may mean:
Excellent Third Quarter 2005: Net Revenue $ 1,717 million + 9% Operating Income (EBIT) $ 237 million + 11% Net Income $ 116 million + 14% Excluding one-time costs Operating Income (EBIT) $ 244 million + 14% Net Income $ 120 million + 18% Fresenius Medical Care Fresenius Medical Care is a German company specializing in the production of medical supplies, primarily to facilitate or aid renal dialysis. It is 37%-owned by the health care company Fresenius SE. AG ("the Company") (Frankfurt Stock Exchange Frankfurt Stock Exchange The largest of Germany's eight securities exchanges, operated by Deutsche Borse AS. : FME FME Formal Methods Europe FME Faculty of Mechanical Engineering (Brno University of Technology, Czech Republic) FME Feature Manipulation Engine FME Facultat de Matemàtiques I Estadística , FME3) (NYSE NYSE See: New York Stock Exchange : FMS FMS - Flexible Manufacturing System (factory automation). , FMS-p), the world's largest provider of Dialysis dialysis (dīăl`ĭsĭs), in chemistry, transfer of solute (dissolved solids) across a semipermeable membrane. Strictly speaking, dialysis refers only to the transfer of the solute; transfer of the solvent is called osmosis. Products and Services, today announced the final results for the third quarter and nine months of 2005. Third Quarter 2005: Revenue Total revenue for the third quarter 2005 increased by 9% (8% at constant currency) to $1,717 million. The total organic growth rate worldwide was 7%. Dialysis Care revenue grew by 9% to $1,247 million (8% at constant currency) in the third quarter of 2005. Dialysis Product revenue increased by 10% to $470 million (9% at constant currency) in the same period. North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. revenue increased by 8% to $1,168 million. Dialysis Care revenue increased by 7% to $1,037 million. Average revenue per treatment for the U.S. clinics increased by 2.5% to $299 in the third quarter 2005, as compared to $291 for the same quarter in 2004. Same-store treatment growth was 3.0% (U.S. operations). Dialysis Product revenue increased by 16% to $131 million led by strong sales of our 2008K hemodialysis hemodialysis /he·mo·di·al·y·sis/ (-di-al´i-sis) removal of certain elements from the blood by virtue of the difference in rates of their diffusion through a semipermeable membrane while being circulated outside the body; the process machines and dialyzers. International revenue was $549 million, an increase of 12% as compared to the third quarter of 2004, or 10% adjusted for currency. Dialysis Care revenue reached $210 million, an increase of 20% (17% at constant currency). Dialysis Products revenue increased by 8% to $338 million (6% at constant currency). Earnings Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). ) increased by 11% to $237 million. Operating income in the third quarter 2005 includes $7 million of one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. costs related to the transformation of Fresenius Medical Care's legal form into a Kommanditgesellschaft auf Aktien Kommanditgesellschaft auf Aktien – abbreviated KGaA – is a German corporate designation standing for 'Association limited by shares'. Some of the shares in the company are owned by partners with unlimited liability, and some shareholders own capital stock without (KGaA KGaA Kommanditgesellschaft Auf Aktien (German: Limited partnership on shares; business entity) ). As previously announced, the Company expects one-time costs for the full year 2005 to be approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $10 million for the transformation. This amount includes the one-time costs in the third quarter 2005. Excluding one-time costs, the operating income for the third quarter 2005 increased by 14% to $244 million. This very good performance resulted in an operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of 14.2% compared to 13.6% for the same quarter in 2004. Compared with the third quarter 2004, the operating margin in North America increased by 40 basis points to 14.3%. In our International segment, the operating margin increased by 130 basis points to 15.9%. The strong operational performance in the International segment was positively impacted by better production efficiencies, sales of higher margin products, favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. environment in major dialysis service countries and foreign currency gains. Net interest expense decreased by 8% to $42 million for the third quarter of 2005. This positive development was mainly attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to a lower debt level in combination with lower average interest rates. Income tax expense was $79 million in the third quarter of 2005, compared to $67 million in the third quarter of 2004, reflecting effective tax rates of 40.3% and 39.8%, respectively. Net income in the third quarter 2005 was $116 million, an increase of 14%. Excluding one-time costs, net income increased by 18%. Earnings per share (EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ) in the third quarter of 2005 rose by 13% to $1.19 per ordinary share ($0.40 per ADS), compared to $1.06 ($0.35 per ADS) in the third quarter of 2004. The weighted average number of shares outstanding during the third quarter of 2005 was approximately 96.8 million. Cash Flow In the third quarter of 2005, the Company generated $202 million in net cash from operations, which is 11.8% of revenue - at the high end of our target. A total of $65 million (net of disposals) was used for capital expenditures. Free Cash Flow before acquisitions was $137 million for the third quarter of 2005. Days Sales Outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). (DSO See CSO. ) in the third quarter of 2005 were reduced by 1 day compared to the second quarter of 2005 as a result of strong cash collection efforts, especially in North America. A total of $34 million in cash was used for acquisitions. Nine Months ended September September: see month. 30, 2005: Earnings and Revenue For the nine months ended September 30, 2005 net income was $339 million, up 16% from the same period in 2004. Excluding one-time costs, net income increased by 17%. Net revenue for the nine months 2005 was $4,999 million, up 9% compared to the same period in 2004. Adjusted for currency, net revenue rose 8%. Operating income (EBIT) increased by 11% to $695 million. Operating income for the nine months ended September 30, 2005 includes $8 million of one-time costs related to the transformation of Fresenius Medical Care's legal form into KGaA. Excluding one-time costs, operating income increased by 13% to $703 million resulting in an operating margin of 14.1% as compared to 13.6% in the same period in 2004. Net interest expenses for the nine months ended September 30, 2005 decreased by 8% to $127 million. Income tax expense was $227 million for the nine months compared to $193 million in the same period in 2004. This reflects an effective tax rate of 40.0% for 2005. In the nine months ended September 30, 2005 earnings per ordinary share rose by 15% to $3.50 ($1.17 per ADS). Cash Flow Cash from operations for nine months of 2005 was $470 million compared to $560 million in the same period of 2004. This reduction was mainly due to higher income tax payments in North America, fluctuations in collections of other receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed and a slower rate of DSO improvement this year. A total of $162 million was used for capital expenditures, net of disposals. Free Cash Flow before acquisitions for the nine months of 2005 was $308 million as compared to $417 million in the same period of 2004. Net cash used for acquisitions was $86 million in the nine months ended September 30, 2005. For a complete overview of the third quarter and nine months of 2005, please refer to the appendix appendix, small, worm-shaped blind tube, about 3 in. (7.6 cm) long and 1-4 in. to 1 in. (.64–2.54 cm) thick, projecting from the cecum (part of the large intestine) on the right side of the lower abdominal cavity. . Patients - Clinics - Treatments As of the end of the third quarter in 2005, Fresenius Medical Care served approximately 130,400 patients worldwide, which represents an increase in patients of 6%. North America provided dialysis treatments for more than 88,800 patients (+4%) and the International segment served approximately 41,600 patients (+11%). As of September 30, 2005, the Company operated a total of 1,670 clinics worldwide, comprised of 1,155 clinics (+2%) in North America and 515 clinics (+11%) in the International segment. Fresenius Medical Care delivered approximately 14.66 million treatments in the nine months ended September 30, 2005, which represents an increase of 5% year over year. North America accounted for 10.04 million treatments (+4%) and the International segment for 4.63 million treatments (+7%). Renal renal /re·nal/ (re´n'l) pertaining to the kidney. re·nal adj. Of or in the region of the kidneys. Renal Relating to the kidney. Care Group Acquisition Shareholders of Renal Care Group, Inc. (NYSE: RCI RCI Royal Caribbean International RCI Radio Canada International RCI Rehabilitation Council of India RCI Residential Communities Initiative RCI Roof Consultants Institute RCI Remote Control Interface RCI Residential, Commercial, Industrial ) voted overwhelmingly at its special meeting on August 24, 2005, to adopt the merger agreement under which Fresenius Medical Care AG will acquire Renal Care Group, Inc. for $48.00 per common share. The transaction remains subject to other customary closing conditions, including the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of the waiting period under the Hart-Scott Rodino Rodino may refer to:
The antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade. Improvements Act. The Company and Renal Care Group are in the process of responding to the Federal Trade Commission's (FTC FTC See Federal Trade Commission (FTC). ) request for additional information related to the acquisition. The Company is still working toward closing the transaction by the end of 2005. However, our ability to complete the acquisition is dependent upon the FTC's review process and it is possible that the closing date could move into early 2006. Change of the Legal Form to a KGaA and the Conversion of Preference Shares into Ordinary Shares Ordinary and preference shareholders of Fresenius Medical Care approved by an overwhelming majority the proposed transformation of the Company's legal form into a partnership limited by shares (Kommanditgesellschaft auf Aktien - "KGaA") as well as the plan for a voluntary exchange offer to convert the Company's preference shares into ordinary shares. At the Extraordinary General Meeting (EGM EGM Electronic Gaming Machine EGM Electronic Gaming Monthly EGM Extraordinary General Meeting EGM Expert Group Meeting EGM Estudio General de Medios (Spanish: General Means Study) EGM Emergency General Meeting ) on August 30, 2005, the transformation was approved by nearly 91% of the represented ordinary share capital, and the conversion was approved by nearly 94% of the represented ordinary share capital. At the Separate Meeting of Preference Shareholders, which was held immediately following the EGM, the preference share conversion proposal was approved by nearly 85% of the represented preference share capital. On October October: see month. 10, 2005 Fresenius Medical Care announced that the Company has been named in certain civil actions by a small number of shareholders contesting the resolutions of the EGM. The Company believes that these actions are without merit and it will defend vigorously vig·or·ous adj. 1. Strong, energetic, and active in mind or body; robust. See Synonyms at healthy. 2. Marked by or done with force and energy. See Synonyms at active. the resolutions adopted by the EGM in an appropriate way. As a result of the acceptance of these capital structure changes by the majority of the shareholders and the scope of the lawsuits, Fresenius Medical Care will continue its preparation to accomplish these value-enhancing transactions with determination. Additional information related to the anticipated change of the legal form and the planned conversion of preference shares into ordinary shares can be accessed on the website of Fresenius Medical Care at www.fmc-ag.com or www.fmc-ag.de. Form F-4 can be accessed at the Securities and Exchange Commission's website at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. . Outlook 2005 - Confirmed For the full year 2005, the Company reconfirms its outlook and expects top-line revenue growth at constant currency between 6% and 9% and net income growth between 12% and 15%. The Company expects to achieve the upper end of the net income guidance. This guidance does not take into effect the impact of the Renal Care Group acquisition or the one-time costs for the full year 2005 in connection with the transformation of the Company's legal form, nor the conversion of the preference shares into ordinary shares. Furthermore, the Company now expects capital expenditures of about $250-300 million and spending on acquisitions of about $125-175 million. Previously, the Company anticipated capital expenditures of about $350-400 million and spending on acquisitions of about $200-250 million. Ben Lipps Lipps may refer to:
 r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and North America, with solid performance from
our Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and Asia Pacific regions, contributed to our excellent
third quarter and nine months financial results, and exceeded
expectations. As a result we now expect net income for the year to be at
the upper end of our guidance for 2005. Our financial performance shows
the continued strength of our business segments worldwide. We have
clearly maintained our operational focus while advancing our three major
initiatives - the acquisition of Renal Care Group, the corporate
structure transformation, and the movement towards one share class,
resulting from the preference share conversion offer."Video Webcast Fresenius Medical Care will hold an analyst meeting at its headquarters in Bad Homburg, Germany, to discuss the results of the third quarter and nine months on November November: see month. 3, 2005 at 2.45pm CET CET abbr. Central European Time CET Central European Time CET n abbr (= Central European Time) → hora de Europa central CET abbr / 8.45am EST EST electroshock therapy. EST abbr. electroshock therapy . The Company invites investors to view the live video webcast of the meeting at the Company's website www.fmc-ag.com in the "Investor Relations Investor relations The process by which the corporation communicates with its investors. " section. A replay will be available shortly after the meeting. Fresenius Medical Care AG is the world's largest, integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure Chronic Kidney Failure Definition Chronic kidney failure occurs when disease or disorder damages the kidneys so that they are no longer capable of adequately removing fluids and wastes from the body or of maintaining the proper level of certain , a condition that affects more than 1,300,000 individuals worldwide. Through its network of approximately 1,670 dialysis clinics in North America, Europe, Latin America, Asia-Pacific The term Asia-Pacific generally applies to littoral East Asia, Southeast Asia and Australasia near the Pacific Ocean, plus the states in the ocean itself (Oceania). and Africa, Fresenius Medical Care provides dialysis treatment to approximately 130,400 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products Disposable products are items that are not intended by the manufacturer to be reused more than once or a few times as compared to more permanent serviceable and reusable items. Some products that have disposable versions are:
This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including changes in business, economic and competitive conditions, regulatory reforms Regulatory Reform concerns improvements to the quality of government regulation. At the international level, the "OECD Regulatory Reform Programme is aimed at helping governments improve regulatory quality -- that is, reforming regulations that raise unnecessary obstacles to , foreign exchange rate fluctuations, uncertainties in litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG does not undertake any responsibility to update the forward-looking statements in this release.
Fresenius Medical Care AG Three Months Ended
Statement of Earnings September 30,
----------------------------------- ----------------------- ----------
(in US-$ thousands, except 2005 2004 % Change
share and per share data)
(unaudited)
Net revenue
Dialysis Care 1,246,949 1,148,863 8.5%
Dialysis Products 469,810 427,755 9.8%
Total net revenue 1,716,759 1,576,618 8.9%
Cost of revenue 1,124,189 1,059,501 6.1%
Gross profit 592,570 517,117 14.6%
Selling, general and administrative 341,889 291,294 17.4%
Research and development 13,705 11,767 16.5%
Operating income (EBIT) 236,976 214,056 10.7%
Interest income (5,320) (4,188) 27.0%
Interest expense 47,154 49,525 -4.8%
Interest expense, net 41,834 45,337 -7.7%
Earnings before income taxes
and minority interest 195,142 168,719 15.7%
Income tax expense 78,639 67,126 17.2%
Minority interest 558 (539) -203.5%
Net income 115,945 102,132 13.5%
Operating income (EBIT) 236,976 214,056 10.7%
Depreciation and amortization 61,971 57,540 7.7%
EBITDA 298,947 271,596 10.1%
Total bad debt expenses 37,068 31,839
Earnings per Ordinary share $1.19 $1.06 12.9%
Earnings per Ordinary ADS $0.40 $0.35 12.9%
Earnings per Preference share $1.21 $1.07 12.7%
Earnings per Preference ADS $0.40 $0.36 12.7%
Weighted average number
of shares
Ordinary shares 70,000,000 70,000,000
Preference shares 26,797,112 26,247,417
Percentages of revenue
Cost of revenue 65.5% 67.2%
Gross profit 34.5% 32.8%
Selling, general and administrative 19.9% 18.5%
Research and development 0.8% 0.7%
Operating income (EBIT) 13.8% 13.6%
Interest expense, net 2.4% 2.9%
Earnings before income taxes
and minority interest 11.4% 10.7%
Income tax expense 4.6% 4.3%
Minority interest 0.0% 0.0%
Net income 6.8% 6.5%
EBITDA 17.4% 17.2%
----------------------------------- ----------- ----------- ----------
Fresenius Medical Care AG Nine Months Ended
Statement of Earnings September 30,
------------------------------------ ----------------------- ---------
(in US-$ thousands, except 2005 2004 % Change
share and per share data)
(unaudited)
Net revenue
Dialysis Care 3,610,057 3,334,011 8.3%
Dialysis Products 1,389,392 1,253,965 10.8%
Total net revenue 4,999,449 4,587,976 9.0%
Cost of revenue 3,280,887 3,063,759 7.1%
Gross profit 1,718,562 1,524,217 12.8%
Selling, general and administrative 983,402 861,126 14.2%
Research and development 40,096 38,169 5.0%
Operating income (EBIT) 695,064 624,922 11.2%
Interest income (11,274) (9,908) 13.8%
Interest expense 138,035 147,267 -6.3%
Interest expense, net 126,761 137,359 -7.7%
Earnings before income taxes
and minority interest 568,303 487,563 16.6%
Income tax expense 227,156 193,388 17.5%
Minority interest 1,727 367 370.6%
Net income 339,420 293,808 15.5%
Operating income (EBIT) 695,064 624,922 11.2%
Depreciation and amortization 183,299 171,367 7.0%
EBITDA 878,363 796,289 10.3%
Total bad debt expenses 102,066 94,528
Earnings per Ordinary share $3.50 $3.04 15.4%
Earnings per Ordinary ADS $1.17 $1.01 15.4%
Earnings per Preference share $3.56 $3.09 15.1%
Earnings per Preference ADS $1.19 $1.03 15.1%
Weighted average number
of shares
Ordinary shares 70,000,000 70,000,000
Preference shares 26,421,404 26,231,287
Percentages of revenue
Cost of revenue 65.6% 66.8%
Gross profit 34.4% 33.2%
Selling, general and administrative 19.7% 18.8%
Research and development 0.8% 0.8%
Operating income (EBIT) 13.9% 13.6%
Interest expense, net 2.5% 3.0%
Earnings before income taxes
and minority interest 11.4% 10.6%
Income tax expense 4.5% 4.2%
Minority interest 0.0% 0.0%
Net income 6.8% 6.4%
EBITDA 17.6% 17.4%
------------------------------------ ----------- ----------- ---------
Fresenius Medical
Care AG Three Months Six Months
Segment and Other Ended Ended
Information September 30, September 30,
----------------- ------------------ ------------------------ --------
(in US-$ million) % %
2005 2004(a) Change 2005 2004(a) Change
(unaudited)
Net revenue
North America 1,168 1,086 7.5% 3,383 3,149 7.4%
International 549 491 11.9% 1,616 1,439 12.3%
Total net revenue 1,717 1,577 8.9% 4,999 4,588 9.0%
Operating income
(EBIT)
North America 167 151 11.2% 471 433 8.7%
International 87 71 21.4% 261 218 20.0%
Corporate (17) (8) 113.5% (37) (26) 41.9%
Total operating
income (EBIT) 237 214 10.7% 695 625 11.2%
Operating income
(EBIT)
in percentage of
revenue
North America 14.3% 13.9% 13.9% 13.8%
International 15.9% 14.6% 16.2% 15.1%
Total 13.8% 13.6% 13.9% 13.6%
Employees
Full-time
equivalents
(Sep. 30 compared
to Dec. 31) 47,030 44,526
----------------- -------- --------- ---------------- ------- --------
(a) The management responsibility for the Mexican business has been
transferred from the segment International to the segment North
America starting January 1, 2005. 2004 segment information has been
restated accordingly.
Reconciliation of non US-GAAP
financial measures to the most
directly comparable US-GAAP Three Months Ended Nine Months Ended
financial measures September 30, September 30,
------------------------------ ---------------------------------------
(in US-$ million) 2005 2004(a) 2005 2004(a)
(unaudited)
Segment information North
America
Net revenue 1,168 1,086 3,383 3,149
Costs of revenue and research
and development 823 777 2,405 2,268
Selling, general and
administrative 178 158 507 447
Costs of revenue and operating
expenses 1,001 935 2,912 2,715
Operating income (EBIT) 167 151 471 434
Annualized EBITDA
Operating income (EBIT) last
twelve months 922 833
Depreciation and amortization
last twelve months 245 228
Non-cash charges 8 14
Annualized EBITDA 1,175 1,075
------------------------------ --------- ------------------- ---------
(a) The management responsibility for the Mexican business has been
transferred from the segment International to the segment North
America starting January 1, 2005. 2004 segment information has been
restated accordingly.
Reconciliation of
non US-GAAP
financial
measures to the
most directly
comparable US- Three Months Nine Months
GAAP financial Ended Ended
measures September 30, September 30,
------------------ ----------------- ------------------------ --------
(in US-$ million) % %
2005 2004 Change 2005 2004 Change
(unaudited)
Operating income
(EBIT) 237 214 11% 695 625 11%
One-time costs for
transformation of
legal form 7 0 8 0
Operating income
(EBIT)
excluding one-time
costs 244 214 14% 703 625 13%
Net income 116 102 14% 339 294 16%
One-time costs for
transformation of
legal form 4 0 5 0
Net income
excluding one-time
costs 120 102 18% 344 294 17%
------------------ --------- ------- ----------------- ------ --------
These non US-GAAP financial measures are provided to assist readers in
evaluation of Fresenius Medical Care's underlying operating
performance before this non-recurring item.
Fresenius Medical Care AG September 30, December 31,
Balance Sheet (unaudited)
------------------------------------------ ------------- -------------
(in US-$ million) 2005 2004
Assets
Current assets 2,526 2,446
Intangible assets 4,051 4,047
Other non-current assets 1,392 1,469
Total assets 7,969 7,962
Shareholders' equity and liabilities
Current liabilities 1,658 1,938
Long-term liabilities 2,481 2,389
Shareholders' equity 3,830 3,635
Total shareholders' equity and liabilities 7,969 7,962
Equity/assets ratio: 48% 46%
Debt
Short-term borrowings 177 419
Short-term borrowings from related parties 5 6
Current portion of long-term debt and
capital lease obligations 118 230
Long-term debt and capital lease
obligations, less current portion 757 545
Trust Preferred Securities 1,205 1,279
Total debt 2,262 2,479
------------------------------------------ ------------- -------------
Fresenius Medical Care AG
Cash Flow Statement 2005 2004
--------------------------------------------------- --------- --------
Nine Months Ended September 30,
(in US-$ million)
(unaudited)
Operating activities
Net income 339 294
Depreciation / amortization 183 171
Change in working capital and other non-cash items (52) 95
Cash Flow from operating activities 470 560
Investing activities
Purchases of property, plant and equipment (175) (156)
Proceeds from sale of property, plant and equipment 13 13
Capital expenditures, net (162) (143)
Free Cash Flow 308 417
Acquisitions, net of cash acquired (86) (74)
Free Cash Flow after investing activities 222 343
Financing activities
Change in accounts receivable securitization
program (222) (91)
Change in intercompany debt 0 (23)
Change in other debt 112 (97)
Proceeds from exercise of stock options 49 2
Dividends paid (137) (122)
Cash Flow from financing activities (198) (331)
Effects of exchange rates on cash (3) (2)
Net increase in cash 21 10
Cash at beginning of period 59 48
Cash at end of period 80 58
--------------------------------------------------- --------- --------
Fresenius Medical Care AG
Quarterly Performance Scorecard - Revenue
------------------------------------ ---------- ---------------- -----
Three months ended September 30, 2005 cc 2004(a) cc
(in US-$ thousands, except per-
treatment revenue)
North America
Net revenue 1,168,116 1,086,322
Growth year-over-year 7.5% 10.5%
Dialysis Care 1,036,568 973,131
Growth year-over-year 6.5% 11.3%
U.S. per treatment 299 291
Per treatment 296 290
Sequential growth 1.5% 0.9%
Growth year-over-year 2.0% 4.3%
Dialysis Products
incl. internal sales 224,343 205,188
less internal sales (92,795) (91,997)
External sales 131,548 113,191
Dialysis Products
incl. internal sales 224,343 205,188
Growth year-over-year 9.3% 3.7%
External sales 131,548 113,191
Growth year-over-year 16.2% 3.5%
International
Net revenue 548,642 490,295
Growth year-over-year 11.9% 9.8% 15.1% 7.3%
Dialysis Care 210,381 175,732
Growth year-over-year 19.7% 16.5% 22.0% 14.0%
Per treatment 130 126 120 112
Sequential growth -0.2% -2.4%
Growth year-over-year 8.4% 5.5% 16.0% 8.4%
Dialysis Products
incl. internal sales 390,211 350,282
less internal sales (51,950) (35,719)
External sales 338,261 314,563
Dialysis Products
incl. internal sales 390,211 350,282
Growth year-over-year 11.4% 9.6% 12.1% 4.3%
External sales 338,261 314,563
Growth year-over-year 7.5% 6.1% 11.6% 3.9%
------------------------------------ ---------- ---------------- -----
cc = at constant exchange rates
(a) The management responsibility of the Mexican business has been
transferred from the segment International to the segment North
America starting January 1, 2005. 2004 segment information has
been restated accordingly.
Fresenius Medical Care AG
Quarterly Performance Scorecard - Dialysis Care Volume
------------------------------------------------ ---------- ----------
Three months ended September 30, 2005 2004(a)
North America
Number of treatments 3,430,832 3,280,401
Treatments per day 43,422 41,521
Per day sequential growth 1.0% 0.3%
Per day year-over-year growth of which: 4.6% 4.0%
- Acquisitions 1.3% 1.3%
- Same store growth year-over-year 3.3% 3.3%
- Adjustment for closed/sold facilities, yield
and other 0.0% -0.6%
International
Number of treatments 1,619,803 1,466,439
Same store growth year-over-year 9.4% 3.5%
------------------------------------------------ ---------- ----------
Fresenius Medical Care AG
Quarterly Performance Scorecard - Expenses
------------------------------------------------ ---------- ----------
Three months ended September 30, 2005 2004(a)
North America
Costs of revenue and operating expenses
Percent of revenue 85.7% 86.1%
Selling, general and administrative
Percent of revenue 15.2% 14.5%
Bad debt expenses
Percent of revenue 3.0% 2.6%
Dialysis Care operating expenses/Treatment
(in US-$) 254 251
Sequential growth 0.4% 0.1%
Growth year-over-year 1.1% 3.9%
Total Group
Costs of revenue and operating expenses
Percent of revenue 86.2% 86.4%
Selling, general and administrative
Percent of revenue 19.9% 18.5%
Effective tax rate 40.3% 39.8%
------------------------------------------------ ---------- ----------
(a) The management responsibility for the Mexican business has been
transferred from the segment International to the segment North
America starting January 1, 2005. 2004 segment information has
been restated accordingly.
Fresenius Medical Care AG
Quarterly Performance Scorecard - Cash Flow/Investing Activities
------------------------------------------------ ---------- ----------
Three months ended September 30, 2005 2004(a)
(in US-$ thousands, except number of de novos)
Total Group
Operating Cash Flow 201,870 209,177
Percent of revenue 11.8% 13.3%
Free Cash Flow, before acquisitions 137,452 160,840
Percent of revenue 8.0% 10.2%
Acquisitions, net 34,195 22,035
Capital expenditures, net 64,418 48,336
Percent of revenue 3.8% 3.1%
Maintenance 35,197 28,593
Percent of revenue 2.1% 1.8%
Growth 29,221 19,743
Percent of revenue 1.7% 1.3%
Number of de novos 14 10
North America 6 5
International 8 5
------------------------------------------------ ---------- ----------
Fresenius Medical Care AG
Quarterly Performance Scorecard - Balance Sheet
------------------------------------------------ ---------- ----------
Three months ended September 30, 2005 2004(a)
Total Group
Debt (in US-$ million) 2,262 2,519
Debt/EBITDA 1.9 2.3
North America
Days sales outstanding 63 66
Sequential development -3.1% -4.3%
Year-over-year development -4.5% -9.6%
International
Days sales outstanding 122 124
Sequential development -0.8% 1.6%
Year-over-year development -1.6% -10.1%
------------------------------------------------ ---------- ----------
(a) The management responsibility for the Mexican business has been
transferred from the segment International to the segment North
America starting January 1, 2005. 2004 segment information has
been restated accordingly.
Fresenius Medical Care AG
Quarterly Performance Scorecard
---------------------------------------------------- -------- --------
Three months ended September 30, 2005 2004
Clinical Performance
North America
Urea reduction greater than or equal to 65% 90% 91%
Single Pool Kt/v greater than 1.2 93% 94%
Hemoglobin greater than or equal to 11g/dl 82% 81%
Albumin greater than or equal to 3.5 g/dl(a) 79% 80%
Hospitalization Days per Patient (12 months ending
Sep. 30,) 11.9 12.5
Demographics
North America
Average age (yr) 61 61
Average time on dialysis (yr) 3.4 3.4
Average body weight (kg) 77 76
Prevalence of diabetes 52% 52%
---------------------------------------------------- -------- --------
(a) International standard BCR CRM470
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