FMS Fresenius Medical Care AG

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

 

Pursuant to Rule 13a-16 or 15d-16 of the

Securities Exchange Act of 1934

 

For the month of August 2023

 

Commission file number: 001-32749

 

FRESENIUS MEDICAL CARE AG & Co. KGaA

(Translation of registrant's name into English)

 

Else-Kröner Strasse 1

61346 Bad Homburg

Germany

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F x                           Form 40-F ¨

 

 

 

On August 2, 2023, Fresenius Medical Care AG & Co. KGaA (the “Company”) issued a Press Release announcing its second quarter results for the period ending June 30, 2023. A copy of the Press Release is furnished as Exhibit 99.1 and the corresponding financial figures as Exhibit 99.2.

 

The attached Press Release contains non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles. To supplement the Company’s second quarter 2023 consolidated financial results presented in accordance with International Financial Reporting Standards, or IFRS® Accounting Standards, we have used non-GAAP financial measures, including (a) EBITDA, or operating income excluding interest, taxes, depreciation and amortization, (b) free cash flow, (c) net leverage ratio (ratio of net debt to adjusted EBITDA) and (d) results presented in constant currency and as adjusted for special items identified in the Press Release and associated tables. These non-GAAP measures are provided to enhance the user’s overall understanding of our current financial performance and our prospects for the future. In addition, because we have historically reported certain non-GAAP financial measures in our financial results, we believe the inclusion of these non-IFRS® financial measures provides consistency and comparability in our financial reporting to prior periods for which these non-GAAP financial measures were previously reported. These non-GAAP financial measures should not be used as a substitute for or be considered superior to GAAP financial measures. Reconciliation of the non-GAAP financial measures to the most comparable IFRS® financial measures are included in the attached Financial Statements. As the reconciliation of amounts stated in Constant Currency is inherent in the disclosure included in the Press Release, we believe that a separate reconciliation would not provide any additional benefit.

 

The Exhibits attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.

 

EXHIBITS

 

The following exhibits are being furnished with this Report:

 

Exhibit 99.1

Press release issued on August 2, 2023.

 

Exhibit 99.2

Complete overview of the second quarter 2023 and first six months 2023.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

DATE: August 2, 2023

 

	Fresenius Medical Care AG & Co. KGaA,
	a partnership limited by shares, represented by:
	fresenius medical care management ag, its
	General Partner
	By:	/s/ Helen Giza
	Name:	Helen Giza
	Title:	Chief Executive Officer, Chair of the Management Board of the General Partner and Acting Chief Financial Officer

 

	By:	/s/ Dr. Katarzyna Mazur-Hofsäß
	Name:	Dr. Katarzyna Mazur-Hofsäß
	Title:	CEO Care Enablement and member of the Management Board of the General Partner

 

 

 

Exhibit 99.1

 

 

 

Press Release

Media contact Leif Heussen T +49 6172 608-4030 leif.heussen@fresenius.com   Contact for analysts and investors Dr. Dominik Heger T +49 6172 609-2601 dominik.heger@fmc-ag.com   www.freseniusmedicalcare.com

 

August 2, 2023

 

Fresenius Medical Care successfully executes strategic plan and narrows guidance range due to strong operational performance in the first half of 2023

 

-

Organic growth accelerated in the second quarter in Care Enablement and Care Delivery including sequentially stable treatment volumes in the U.S.

 

-

Execution on turnaround plan translates into visible productivity improvements in Care Delivery achieving a Q2 margin at the lower end of the 2025 target margin band

 

-

Savings resulting from FME25 transformation program fully on track

 

-

Successful execution on portfolio optimization strategy

 

-

Legal form conversion to a German Stock Corporation approved by shareholders

 

-

FY 2023 operating income guidance range narrowed

 

Helen Giza, Chief Executive Officer of Fresenius Medical Care, said: “The second quarter makes evident that the execution against our strategic plan is fully on track. We are executing on our portfolio optimization, continuing to deliver on our FME25 program and are accelerating our turnaround activities. As expected, we have seen a stabilization of the labor market and of the inflationary environment. Our measures to increase productivity, supported by the targeted clinic closures, are driving a positive development. This gives us the confidence to narrow our operating income guidance range to the upper part for the year.”

 

 

Key figures (IFRS®, unaudited)

 

		Q2 2023				Q2 2022				Growth				Growth				H1 2023				H1 2022				Growth				Growth
		EUR m				EUR m				yoy				yoy, cc				EUR m				EUR m				yoy				yoy, cc
Revenue			4,825				4,757				+1	%			+6	%			9,529				9,305				+2	%			+4	%
Operating income			357				341				+5	%			+5	%			618				688				-10	%			-11	%
excl. special items and PRF1			401				284				+41	%			+44	%			755				675				+12	%			+11	%
Net income2			140				147				-5	%			-4	%			227				305				-26	%			-26	%
excl. special items and PRF1			175				116				+51	%			+54	%			329				313				+5	%			+5	%
Basic EPS (EUR)			0.48				0.50				-5	%			-4	%			0.77				1.04				-26	%			-26	%
excl. special items and PRF1			0.59				0.39				+51	%			+54	%			1.12				1.07				+5	%			+4	%

 

yoy = year-on-year, cc = at constant currency, EPS = earnings per share

 

Successful execution against the strategic plan

 

Fresenius Medical Care has continuously advanced its structural change. At the beginning of the year the new operating model was implemented along with the corresponding new financial reporting. The simplification of the governance structure with the change of the legal form is thus the remaining structural adjustment to be realized. An important milestone has been achieved in this respect at the Extraordinary General Meeting on July 14, 2023, where 99.88% of the voting shareholders approved the conversion of Fresenius Medical Care from the legal form of a partnership limited by shares (Kommanditgesellschaft auf Aktien, KGaA) into a German stock corporation (Aktiengesellschaft, AG).

 

In parallel, the Company continuously executes on its operational efficiency and turnaround plans. In the second quarter, the FME25 transformation program delivered EUR 75 million of additional savings. Fresenius Medical Care is fully on track to achieve sustainable savings of EUR 250 to 300 million by year end 2023 and EUR 650 million by year end 2025.

 

¹ For FY 2022, special items included costs related to the FME25 program, the impact of the war in Ukraine, the impact of hyperinflation in Turkiye, the Humacyte investment remeasurement and the net gain related to InterWell Health. Additionally, the FY 2022 basis for the 2023 outlook was adjusted for U.S. Provider Relief Funding. For FY 2023, special items include costs related to the FME25 program, the Humacyte investment remeasurement, the costs associated with the legal form conversion and effects from legacy portfolio optimization. For further details please see the reconciliation attached to the Press Release.

² Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA

 

 

In addition to generating efficiencies and improving productivity, Fresenius Medical Care is advancing the optimization of its portfolio. The announced strategic divestments of clinic networks in Sub-Saharan Africa and Hungary demonstrate progress against the Company’s execution plan. The outlined examples are part of the overall portfolio optimization strategy to exit non-core and dilutive assets, against which Fresenius Medical Care executes. The resulting cash proceeds will be used towards deleveraging – in line with Fresenius Medical Care’s disciplined financial policy.

 

Earnings development excluding special items driven by FME25 savings and productivity improvements

 

Revenue increased by 1% to EUR 4,825 million in the second quarter (+6% at constant currency, +6% organic).

 

Care Delivery revenue increased by 1% to EUR 3,873 million (+6% at constant currency, +6% organic).

 

In Care Delivery U.S., revenue growth of 2% (+4% at constant currency, +4% organic) was mainly driven by organic growth, which was supported by a favorable impact from the value-based care business, reimbursement rate increases and a favorable payor mix. This was partially offset by a negative exchange rate effect. The annualization effect of COVID-19-related excess mortality in the late-stage CKD (Chronic Kidney Disease) and ESRD (End-Stage Renal Disease) population continues to weigh on same market treatment growth (-0.1%) – corresponding to the mid-point of the Company’s outlined expectations.

 

In Care Delivery International, revenue remained stable (+14% at constant currency, +15% organic). Organic growth, which was supported by the effect of hyperinflation in various markets, was offset by a negative exchange rate effect and the impact of closed or sold clinics. Despite the annualization effect of COVID-19-related excess mortality, same market treatment growth was positive at 0.9%.

 

Care Enablement revenue remained stable and amounted to EUR 1,325 million (+6% at constant currency, +6% organic). Higher sales of machines for chronic treatment, critical care products and home hemodialysis products as well as increased average sales prices were mostly offset by a negative exchange rate effect.

 

 

Within Inter-segment eliminations, revenue for products transferred between the operating segments at fair market value decreased by 3% to EUR 373 million (+3% at constant currency; Q2 2022: EUR 383 million).³

 

In the first half, revenue increased by 2% to EUR 9,529 million (+4% at constant currency, +4% organic). Care Delivery revenue increased by 2% to 7,628 million (+3% at constant currency, +4% organic), with both Care Delivery U.S. and Care Delivery International growing by 2% (U.S.: +1% at constant currency, +2% organic; International: +13% at constant currency, +14% organic). Care Enablement revenue increased by 2% to EUR 2,635 million (+5% at constant currency, +5% organic). Inter-segment eliminations decreased by 2% and amounted to EUR 734 million (stable at constant currency; H1 2022: EUR 750 million).

 

Operating income increased by 5% to EUR 357 million (+5% at constant currency), resulting in a margin of 7.4% (Q2 2022: 7.2%). Operating income excluding special items and U.S. Provider Relief Funding (PRF)¹ increased by 41% to EUR 401 million (+44% at constant currency), resulting in a margin of 8.3% (Q2 2022: 6.0%).

 

Operating income in Care Delivery decreased by 11% to EUR 384 million (-10% at constant currency), resulting in a margin of 9.9% (Q2 2022: 11.3%). Operating income excluding special items and PRF¹ increased by 40% to EUR 402 million (+42% at constant currency), resulting in a margin of 10.4% (Q2 2022: 7.5%). This was mainly driven by business growth, lower personnel expenses resulting from improved productivity, and savings from the FME25 program.

 

Operating income in Care Enablement amounted to EUR 2 million (Q2 2022: EUR -11 million), resulting in a margin of 0.1% (Q2 2022: -0.8%). Operating income excluding special items increased by 533% to EUR 19 million (+601% at constant currency), resulting in a margin of 1.4% (Q2 2022: 0.2%). The improvement compared to the previous year’s quarter was mainly driven by increased volumes, improved pricing and savings from the FME25 program. These effects were partially offset by inflationary cost increases and a negative impact from foreign currency transaction.

 

³ The Company transfers products between segments at fair market value. The associated internal revenues and expenses and any remaining internally generated profit or loss for the product transfers are recorded within the operating segments initially, are eliminated upon consolidation and are included within “Inter-segment eliminations”.

 

 

Operating income for Corporate amounted to EUR -25 million (Q2 2022: EUR -84 million). Excluding special items, operating income amounted to EUR -16 million (Q2 2022: EUR -9 million).

 

In the first half, operating income decreased by 10% to EUR 618 million (-11% at constant currency), resulting in a margin of 6.5% (H1 2022: 7.4%). Excluding special items and PRF¹, operating income increased by 12% to EUR 755 million (+11% at constant currency), resulting in a margin of 7.9% (H1 2022: 7.2%). In Care Delivery, operating income declined by 8% to EUR 669 million (-10% at constant currency), resulting in a margin of 8.8% (H1 2022: 9.8%). In Care Enablement, operating income decreased to EUR -23 million (H1 2022: EUR 59 million), resulting in a margin of -0.9% (H1 2022: 2.3%). Operating income for Corporate amounted to EUR -15 million (H1 2022: -94 million).

 

Net income² decreased by 5% to EUR 140 million (-4% at constant currency). Excluding special items and PRF¹, net income² increased by 51% to EUR 175 million (+54% at constant currency).

 

In the first half, net income² declined by 26% to EUR 227 million (-26% at constant currency). Excluding special items and PRF¹, net income² increased by 5% to EUR 329 million (+5% at constant currency).

 

Basic earnings per share (EPS) decreased by 5% to EUR 0.48 (-4% at constant currency). EPS excluding special items and PRF¹ increased by 51% to EUR 0.59 (+54% at constant currency).

 

In the first half, EPS declined by 26% to EUR 0.77 (-26% at constant currency). Excluding special items and PRF¹, EPS increased by 5% to EUR 1.12 (+4% at constant currency).

 

Strong cash flow development

 

In the second quarter, Fresenius Medical Care generated EUR 1,007 million of operating cash flow (Q2 2022: EUR 751 million), resulting in a margin of 20.9% (Q2 2022: 15.8%). The increase was mainly driven by the recoupment of advanced payments during 2022, which had been received in the U.S. under the Medicare Accelerated and Advance Payment Program in 2020, as well as by seasonality of invoicing.

 

In the first half, operating cashflow amounted to EUR 1,150 million (H1 2022: EUR 910 million), resulting in a margin of 12.1% (H1 2022: 9.8%).

 

 

Free cash flow⁴ amounted to EUR 852 million in the second quarter (Q2 2022: EUR 582 million), resulting in a margin of 17.7% (Q2 2022: 12.2%). In the first half, Fresenius Medical Care generated free cash flow of EUR 854 million (H1 2022: EUR 581 million), resulting in a margin of 9.0% (H1 2022: 6.2%).

 

Outlook

 

The Company continues to expect for 2023 revenue to grow at a low to mid-single digit percentage rate (2022 basis: EUR 19,398 million).

 

Based on the earnings development for the first half of the year, Fresenius Medical Care narrows its operating income target range for 2023. The Company now expects operating income to remain flat or decline by up to a low-single digit percentage rate (2022 basis: EUR 1,540 million; previous target: remain flat or decline by up to a high-single digit percentage rate)⁵.

 

The Company’s target to achieve an operating income margin of 10 to 14% by 2025 remains unchanged.

 

Patients, clinics and employees

 

As of June 30, 2023, Fresenius Medical Care treated 344,086 patients in 4,050 dialysis clinics worldwide and had 124,295 employees (headcount) globally, compared to 130,448 employees as of June 30, 2022.

 

⁴ Net cash provided by / used in operating activities, after capital expenditures, before acquisitions, investments, and dividends

⁵ Revenue and operating income, as referred to in the outlook, are both on a constant currency basis and excluding special items. Special items will be provided as separate KPI (“Revenue excluding special items”, “Operating income excluding special items”) to capture effects that are unusual in nature and have not been foreseeable or not foreseeable in size or impact at the time of giving guidance. These items are excluded to ensure comparability of the figures presented with the Company’s financial targets which have been defined excluding special items.
For FY 2022, special items included costs related to the FME25 program, the impact of the war in Ukraine, the impact of hyperinflation in Turkiye, the Humacyte investment remeasurement, and the net gain related to InterWell Health. Additionally, the basis (FY 2022) for the 2023 outlook was adjusted for Provider Relief Funding. For FY 2023, special items include costs related to the FME25 program, the Humacyte investment remeasurement, the costs associated with the legal form conversion and effects from legacy portfolio optimization. For further details please see the reconciliation attached to the Press Release.

 

 

Conference call

 

Fresenius Medical Care will host a conference call to discuss the results of the second quarter and first half of 2023 on August 2, 2023 at 3:30 p.m. CEST / 9:30 a.m. EDT. Details will be available on the Fresenius Medical Care website in the “Investors” section. A replay will be available shortly after the call.

 

Please refer to our statement of earnings included at the end of this news and to the attachments as separate PDF files for a complete overview of the results of the second quarter and first half of 2023. Our 6-K disclosure provides more details.

 

Fresenius Medical Care is the world's leading provider of products and services for individuals with renal diseases of which around 3.9 million patients worldwide regularly undergo dialysis treatment. Through its network of 4,050 dialysis clinics, Fresenius Medical Care provides dialysis treatments for approximately 344,000 patients around the globe. Fresenius Medical Care is also the leading provider of dialysis products such as dialysis machines or dialyzers. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME) and on the New York Stock Exchange (FMS).

 

For more information visit the Company’s website at www.freseniusmedicalcare.com.

 

Disclaimer:

 

This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to various factors, including, but not limited to, changes in business, economic and competitive conditions, legal changes, regulatory approvals, impacts related to COVID-19, results of clinical studies, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. KGaA's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this release.

 

Implementation of measures as presented herein may be subject to information and consultation procedures with works councils and other employee representative bodies, as per local laws and practice. Consultation procedures may lead to changes on proposed measures.

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 99.2 

 

 

 

Fresenius Medical Care AG & Co. KGaA

 

COMPLETE OVERVIEW OF THE SECOND QUARTER AND FIRST HALF YEAR 2023

 

August 2, 2023

 

 

Investor Relations

 

phone: +49 6172 609 2525

 

email: ir@fmc-ag.com

 

Content:
Statement of earnings	page 2
Segment information	page 3
Balance sheet	page 4
Cash flow	page 5
Revenue development by segment	page 6
Key metrics	page 7
Reconciliation results excl. special items	page 8
Outlook 2023	page 9

 

Disclaimer

 

This release contains forward-looking statements 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, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. KGaA's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this release.

 

Rounding adjustments applied to individual numbers and percentages may result in these figures differing immaterially from their absolute values. Furthermore, totals and subtotals in tables may differ slightly from unrounded figures due to rounding in accordance with commercial rounding conventions.

 

 

Copyright by Fresenius Medical Care AG & Co. KGaA

 

 

 

 

Statement of earnings                  

 

		Three months ended June 30,																Six months ended June 30,
in € million, except share data, unaudited		2023				2022				Change				Change at cc				2023				2022				Change				Change at cc
Total revenue			4,825				4,757				1.4	%			6.0	%			9,529				9,305				2.4	%			3.9	%
Costs of revenue			3,628				3,511				3.3	%			8.2	%			7,183				6,886				4.3	%			5.9	%
Selling, general and administrative expenses			775				758				2.3	%			5.7	%			1,557				1,548				0.6	%			1.2	%
Research and development expenses			57				55				3.2	%			4.2	%			113				105				7.5	%			7.1	%
Income from equity method investees			(48	)			(19	)			149.2	%			149.4	%			(76	)			(30	)			153.8	%			153.6	%
Other operating income			(76	)			(110	)			-31.3	%			-23.3	%			(193	)			(239	)			-19.2	%			-5.9	%
Other operating expense			132				221				-40.3	%			-29.2	%			327				347				-5.7	%			10.9	%
Operating income			357				341				4.7	%			5.5	%			618				688				-10.3	%			-11.4	%
Operating income excl. special items and PRF 1			401				284				41.3	%			43.5	%			755				675				11.9	%			11.0	%
Interest income			(24	)			(13	)			89.3	%			105.0	%			(36	)			(27	)			34.8	%			46.4	%
Interest expense			105				85				24.1	%			27.8	%			199				168				19.0	%			19.6	%
Interest expense, net			81				72				12.5	%			14.1	%			163				141				16.0	%			14.4	%
Income before income taxes			276				269				2.7	%			3.2	%			455				547				-17.0	%			-18.0	%
Income tax expense			81				63				28.9	%			29.1	%			126				130				-3.1	%			-4.3	%
Net income			195				206				-5.4	%			-4.8	%			329				417				-21.3	%			-22.2	%
Net income attributable to noncontrolling interests			55				59				-7.3	%			-6.2	%			102				112				-9.9	%			-11.1	%
Net income attributable to shareholders of FMC AG & Co. KGaA			140				147				-4.6	%			-4.2	%			227				305				-25.5	%			-26.4	%
Net income attributable to shareholders of FMC AG & Co. KGaA excl. special items and PRF 1			175				116				50.9	%			53.6	%			329				313				5.2	%			4.6	%
Operating income			357				341				4.7	%			5.5	%			618				688				-10.3	%			-11.4	%
Depreciation, amortization and impairment loss			434				422				2.7	%			5.8	%			872				842				3.6	%			3.8	%
EBITDA			791				763				3.6	%			5.7	%			1,490				1,530				-2.6	%			-3.0	%
Weighted average number of shares			293,413,449				293,145,413												293,413,449				293,076,643
Basic earnings per share		€	0.48			€	0.50				-4.7	%			-4.3	%		€	0.77			€	1.04				-25.6	%			-26.5	%
Basic earnings per ADS		€	0.24			€	0.25				-4.7	%			-4.3	%		€	0.39			€	0.52				-25.6	%			-26.5	%
In percent of revenue
Operating income margin			7.4	%			7.2	%											6.5	%			7.4	%
Operating income margin excl. special items and PRF 1			8.3	%			6.0	%											7.9	%			7.2	%
EBITDA margin			16.4	%			16.0	%											15.6	%			16.4	%

 

¹ For a reconciliation of special items, please refer to the table on page 8.

 

 

 

 

Segment information

 

		Three months ended June 30,																Six months ended June 30,
unaudited		2023				2022				Change				Change at cc				2023				2022				Change				Change at cc
Total
Revenue in € million			4,825				4,757				1.4	%			6.0	%			9,529				9,305				2.4	%			3.9	%
Operating income in € million			357				341				4.7	%			5.5	%			618				688				-10.3	%			-11.4	%
Operating income margin			7.4	%			7.2	%											6.5	%			7.4	%
Operating income in € million excl. special items and PRF 1			401				284				41.3	%			43.5	%			755				675				11.9	%			11.0	%
Operating income margin excl. special items and PRF 1			8.3	%			6.0	%											7.9	%			7.2	%
Days sales outstanding (DSO) 2																			68				68
Employees (headcount)																			124,295				130,448
Care Delivery segment
Revenue in € million			3,873				3,822				1.3	%			5.7	%			7,628				7,469				2.1	%			3.3	%
Operating income in € million			384				433				-11.3	%			-10.3	%			669				731				-8.5	%			-9.6	%
Operating income margin			9.9	%			11.3	%											8.8	%			9.8	%
Operating income in € million excl. special items and PRF 1			402				287				39.6	%			41.6	%			704				599				17.8	%			16.8	%
Operating income margin excl. special items and PRF 1			10.4	%			7.5	%											9.2	%			8.0	%
Days sales outstanding (DSO) 2																			61				60
Care Enablement segment
Revenue in € million			1,325				1,318				0.5	%			5.7	%			2,635				2,586				1.9	%			4.6	%
Operating income in € million			2				(11	)			n.a				n.a				(23	)			59				n.a				n.a
Operating income margin			0.1	%			-0.8	%											-0.9	%			2.3	%
Operating income in € million excl. special items and PRF 1			19				3				532.7	%			600.5	%			88				100				-11.7	%			-12.9	%
Operating income margin excl. special items and PRF 1			1.4	%			0.2	%											3.3	%			3.8	%
Days sales outstanding (DSO) 2																			97				100
Inter-segment eliminations 3
Revenue in € million			(373	)			(383	)			-2.9	%			2.5	%			(734	)			(750	)			-2.1	%			0.1	%
Operating income in € million			(4	)			3				n.a				n.a				(13	)			(8	)			91.4	%			89.8	%
Corporate
Operating income in € million			(25	)			(84	)			-69.8	%			-69.2	%			(15	)			(94	)			-84.0	%			-84.8	%
Operating income in € million excl. special items and PRF 1			(16	)			(9	)			79.2	%			92.4	%			(24	)			(16	)			50.6	%			45.6	%

 

¹ For a reconciliation of special items, please refer to the table on page 8.

² 2022 includes DSO as of December 31, 2022.

³ The Company transfers products between segments at fair market value. The associated internal revenues and expenses and any remaining internally generated profit or loss for the product transfers are recorded within the operating segments initially, are eliminated upon consolidation and are included within “Inter-segment eliminations”.

 

cc = constant currency. Changes in revenue, operating income and net income attributable to shareholders of FMC AG & Co. KGaA include the impact of changes in foreign currency exchange rates. We calculate and present these financial measures using both IFRS® Accounting Standards and at constant exchange rates to show changes in these metrics and other items without giving effect to period-to-period currency fluctuations. Under IFRS Accounting Standards, amounts received in local (non- euro) currency are translated into euro at the average exchange rate for the period presented. Once we translate the local currency for the constant currency, we then calculate the change, as a percentage, of the current period using the prior period exchange rates versus the prior period. The single quarter results are calculated as the variance between the current year-to-date results less the preceding quarter’s year-to-date which makes the single quarter subject to further foreign exchange fluctuation. This resulting percentage is a non-IFRS measure referring to a change as a percentage at constant currency. These currency-adjusted financial measures are identifiable by the designated term "Constant Currency".

 

 

 

 

Balance sheet      

 

		June 30,				December 31,
in € million, except for net leverage ratio, unaudited			2023				2022
Assets
Current assets			8,347				8,203
Goodwill and intangible assets			16,824				17,310
Right-of-use assets			3,977				4,187
Other non-current assets			5,812				6,054
Total assets			34,960				35,754
Liabilities and equity
Current liabilities			6,624				6,467
Non-current liabilities			13,406				13,838
Total equity			14,930				15,449
Total liabilities and equity			34,960				35,754
Equity/assets ratio			43	%			43	%
Debt and lease liabilities
Short-term debt from unrelated parties			901				665
Short-term debt from related parties			3				4
Current portion of long-term debt			701				694
Current portion of lease liabilities from unrelated parties			627				650
Current portion of lease liabilities from related parties			25				24
Long-term debt, less current portion			6,997				7,171
Lease liabilities from unrelated parties, less current portion			3,685				3,875
Lease liabilities from related parties, less current portion			126				130
Debt and lease liabilities included within liabilities directly associated with assets held for sale			12				—
Total debt and lease liabilities			13,077				13,213
Minus: Cash and cash equivalents1			(1,363	)			(1,274	)
Total net debt and lease liabilities			11,714				11,939
Reconciliation of annualized adjusted EBITDA and net leverage
ratio to the most directly comparable IFRS financial measures
Net income			805				895
Income tax expense			321				325
Interest income			(77	)			(68	)
Interest expense			392				360
Depreciation and amortization			1,700				1,718
Adjustments2			319				320
Annualized adjusted EBITDA			3,460				3,550
Net leverage ratio			3.4				3.4

 

¹ Includes cash and cash equivalents included within assets held for sale. 

² Acquisitions and divestitures made for the last twelve months with a purchase price above a €50 M threshold as defined in the Syndicated Credit Facility (2023: -€12 M; 2022: -€22 M), non-cash charges, primarily related to pension expense (2023: €51 M; 2022: €54 M), impairment loss (2023: €168 M; 2022: €120 M) and special items, including costs related to the FME25 Program (2023: €142 M; 2022: €155 M), Legal Form Conversion Costs (2023: €7 M), Legacy Portfolio Optimization (2023: €71 M), Net Gain Related to InterWell Health (2023: -€114 M; 2022: -€114 M), Humacyte Investment Remeasurement (2023: €10 M; 2022: €103 M), Hyperinflation in Turkiye (2023: -€1 M; 2022: €5 M) and the Impacts Related to the War in Ukraine (2023: -€3 M; 2022: €19 M).

 

 

 

 

Cash flow statement        

 

		Three months ended June 30,								Six months ended June 30,
in € million, unaudited			2023				2022				2023				2022
Operating activities
Net income			195				206				329				417
Depreciation, amortization and impairment loss			434				422				872				842
Change in trade accounts and other receivables from unrelated parties			326				177				(80	)			(56	)
Change in inventories			(22	)			(56	)			(111	)			(118	)
Change in other working capital and non-cash items			74				2				140				(175	)
Net cash provided by (used in) operating activities			1,007				751				1,150				910
In percent of revenue			20.9	%			15.8	%			12.1	%			9.8	%
Investing activities
Purchases of property, plant and equipment and capitalized development costs			(155	)			(172	)			(298	)			(334	)
Proceeds from sale of property, plant and equipment			0				3				2				5
Capital expenditures, net			(155	)			(169	)			(296	)			(329	)
Free cash flow			852				582				854				581
In percent of revenue			17.7	%			12.2	%			9.0	%			6.2	%
Acquisitions and investments, net of cash acquired, and purchases of intangible assets			(10	)			(24	)			(14	)			(61	)
Investments in debt securities			(17	)			(43	)			(63	)			(86	)
Proceeds from divestitures			13				26				25				40
Proceeds from sale of debt securities			36				13				51				27
Free cash flow after investing activities			874				554				853				501

 

 

 

 

 

Revenue development by segment
																						Same market
														Change				Organic				treatment
in € million, unaudited		2023				2022				Change				at cc				growth				growth1
Three months ended June 30,
Total revenue			4,825				4,757				1.4	%			6.0	%			6.3	%
Care Delivery segment			3,873				3,822				1.3	%			5.7	%			6.2	%			0.3	%
Thereof: U.S.			3,120				3,066				1.7	%			3.7	%			4.0	%			-0.1	%
Thereof: International			753				756				-0.3	%			14.0	%			14.9	%			0.9	%
Care Enablement segment			1,325				1,318				0.5	%			5.7	%			5.7	%
Inter-segment eliminations			(373	)			(383	)			-2.9	%			2.5	%
Six months ended June 30,
Total revenue			9,529				9,305				2.4	%			3.9	%			4.4	%
Care Delivery segment			7,628				7,469				2.1	%			3.3	%			3.9	%			0.2	%
Thereof: U.S.			6,123				5,996				2.1	%			0.9	%			1.6	%			-0.1	%
Thereof: International			1,505				1,473				2.2	%			12.9	%			13.6	%			0.7	%
Care Enablement segment			2,635				2,586				1.9	%			4.6	%			4.6	%
Inter-segment eliminations			(734	)			(750	)			-2.1	%			0.1	%

 

¹ Same market treatment growth = organic growth less price effects                

 

Reconciliation of health care services and health care products revenue to new segments        

 

		2023																2022
		Care Delivery				Care Enablement				Inter- segment								Care Delivery				Care Enablement				Inter- segment
in € million, unaudited		segment				segment				eliminations				Total				segment				segment				eliminations				Total
Three months ended June 30,
Health care services revenue			3,829				—				—				3,829				3,782				—				—				3,782
Health care products revenue			44				952				—				996				40				935				—				975
Inter-segment revenue			—				373				(373	)			—				—				383				(383	)			—
Revenue			3,873				1,325				(373	)			4,825				3,822				1,318				(383	)			4,757
Six months ended June 30,
Health care services revenue			7,541				—				—				7,541				7,389				—				—				7,389
Health care products revenue			87				1,901				—				1,988				80				1,836				—				1,916
Inter-segment revenue			—				734				(734	)			—				—				750				(750	)			—
Revenue			7,628				2,635				(734	)			9,529				7,469				2,586				(750	)			9,305

 

 

 

 

Key metrics Care Delivery segment

 

		Six months ended June 30, 2023
						Growth												Growth								Growth
						in %				Net change								in %								in %
unaudited		Clinics				yoy				in clinics 1				Patients				yoy				Treatments				yoy
Total			4,050				-3	%			(66	)			344,086				0	%			25,812,988				0	%
Thereof: U.S.			2,634				-2	%			(37	)			206,692				0	%			15,525,016				0	%
Thereof: International			1,416				-4	%			(29	)			137,394				-1	%			10,287,972				-1	%

 

¹ Net change in clinics (acquired, de novo, combined, closed and sold) in comparison to December 31, 2022.

yoy = year-on-year

 

 

 

 

Reconciliation of non-IFRS financial measures to the most directly comparable IFRS financial measures for comparability with the Company´s outlook

 

																																																												Results excl. special items
					Special items																											Special items																												and PRF
in € million,								Legal Form				Legacy Portfolio				Humacyte Investment								Results 2023												Humacyte Investment								Hyper-				Provider Relief				Sum of				Results 2022 excl. special
except share data,		Results			FME25			Conversion				Optimiza-				Remeasure-				Sum of				excl.special				Results				FME25				Remeasure-				Ukraine				inflation				Funding			special items					items								Change
unaudited		2023			Program			Costs				tion 1				ment				special items				items				2022				Program				ment				War2				in Turkiye				(PRF)				and PRF				and PRF				Change				at cc
Three months ended June 30,
Total revenue			4,825																		—				4,825				4,757																								—				4,757				1.4	%			6.0	%
EBITDA			791			14			5				11				4				34				825				763				21				75				2				6				(161	)			(57	)			706				16.8	%			19.4	%
Total operating income			357			25			5				10				4				44				401				341				21				75				2				6				(161	)			(57	)			284				41.3	%			43.5	%
Care Delivery segment			384			8			—				10				—				18				402				433				13				—				2				0				(161	)			(146	)			287				39.6	%			41.6	%
Care Enablement segment			2			17			—				0				—				17				19				(11	)			8				—				0				6				—				14				3				532.7	%			600.5	%
Inter-segment eliminations			(4	)		—			—				—				—				—				(4	)			3				—				—				—				—				—				—				3				n.a.				n.a.
Corporate			(25	)		0			5				—				4				9				(16	)			(84	)			—				75				—				—				—				75				(9	)			79.2	%			92.4	%
Interest expense, net			81																		—				81				72																								—				72				12.5	%			14.1	%
Income tax expense			81			5			1				2				1				9				90				63				6				20				—				—				(42	)			(16	)			47				94.9	%			97.4	%
Net income attributable to noncontrolling interests			55			—			—				0				—				—				55				59				—				—				—				—				(10	)			(10	)			49				10.5	%			12.0	%
Net income3			140			20			4				8				3				35				175				147				15				55				2				6				(109	)			(31	)			116				50.9	%			53.6	%
Basic earnings per share		€	0.48		€	0.07		€	0.01			€	0.02			€	0.01			€	0.11			€	0.59			€	0.50			€	0.05			€	0.19			€	0.01			€	0.02			€	(0.38	)		€	(0.11	)		€	0.39				50.7	%			53.5	%
Six months ended June 30,
Total revenue			9,529																		—				9,529				9,305																								—				9,305				2.4	%			3.9	%
EBITDA			1,490			36			7				71				(15	)			99				1,589				1,530				49				78				23				6				(177	)			(21	)			1,509				5.3	%			5.0	%
Total operating income			618			51			7				94				(15	)			137				755				688				57				78				23				6				(177	)			(13	)			675				11.9	%			11.0	%
Care Delivery segment			669			24			—				11				—				35				704				731				35				—				10				0				(177	)			(132	)			599				17.8	%			16.8	%
Care Enablement segment			(23	)		28			—				83				—				111				88				59				22				—				13				6				—				41				100				-11.7	%			-12.9	%
Inter-segment eliminations			(13	)		—			—				—				—				—				(13	)			(8	)			—				—				—				—				—				—				(8	)			91.4	%			89.8	%
Corporate			(15	)		(1	)		7				—				(15	)			(9	)			(24	)			(94	)			—				78				—				—				—				78				(16	)			50.6	%			45.6	%
Interest expense, net			163																		—				163				141																								—				141				16.0	%			14.4	%
Income tax expense			126			11			2				25				(4	)			34				160				130				17				21				3				—				(48	)			(7	)			123				31.1	%			30.1	%
Net income attributable to noncontrolling interests			102			—			—				1				—				1				103				112				—				—				—				—				(14	)			(14	)			98				3.7	%			2.5	%
Net income3			227			40			5				68				(11	)			102				329				305				40				57				20				6				(115	)			8				313				5.2	%			4.6	%
Basic earnings per share		€	0.77		€	0.14		€	0.02			€	0.23			€	(0.04	)		€	0.35			€	1.12			€	1.04			€	0.14			€	0.19			€	0.07			€	0.02			€	(0.39	)		€	0.03			€	1.07				5.1	%			4.5	%

 

¹ Costs mainly comprise the derecognition of capitalized development costs and the impairment of intangible assets (licenses and distribution rights) as well as termination costs (including certain contractual obligation expenses) related to a dialysis cycler development program which was discontinued in Q1 2023 and other expenses related to a divestiture agreed upon in Q2 2023.

² Bad debt expense in Russia and Ukraine and accruals for certain risks associated with allowances on inventories related to the Ukraine War.

³ Attributable to shareholders of FMC AG & Co. KGaA

 

 

 

 

Outlook 2023

 

				Outlook 2023
		Results 2022		(at Constant Currency)
Revenue1		€19,398 M		low to mid-single digit percentage rate growth
				flat to low-single digit percentage rate decline
Operating income1		€1,540 M		(initially: flat to high-single digit percentage rate decline)

 

¹ Outlook 2023 is based on the assumptions outlined in the earnings release for the fourth quarter and full year of 2022 and excludes special items. Special items include costs related to the FME25 program, Legal Form Conversion Costs, Legacy Portfolio Optimization, Humacyte Investment Remeasurement and other effects that are unusual in nature and have not been foreseeable or not foreseeable in size or impact at the time of giving guidance. The growth rates are based on the results 2022 excluding the costs related to the FME25 program (€204 M for operating income), Net Gain Related to InterWell Health ( -€56 M for operating income), Humacyte Investment Remeasurement (€103 M for operating income), Hyperinflation in Turkiye (€5 M for operating income) and the Impacts Related to the War in Ukraine (€49 M for operating income). Additionally, the results 2022 were adjusted for the Provider Relief Funding (-€277 M for operating income).

 

 

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