Transcription of Conference Call – FY/18 Results - fresenius.de
1 Conference Call FY/18 Results Bad Homburg, 20 February 2019. Frankfurt stock exchange: FRE US ADR program: FSNUY Safe Harbor Statement This presentation contains forward-looking statements that are subject to various risks and uncertainties. Future Results could differ materially from those described in these forward-looking statements due to certain factors, changes in business, economic and competitive conditions, regulatory reforms, Results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. Fresenius does not undertake any responsibility to update the forward-looking statements contained in this presentation. FY/18 Results , 20 February 2019 Fresenius SE & Co. KGaA Investor Relations 2. Fresenius Group Delivered on FY/18 Group targets 26th consecutive dividend increase proposed Significant investments into medium-term growth in FY/18 and FY/19.
2 Fresenius Kabi expected to show continued growth in FY/19. Helios Germany impacted by regulatory changes and initiatives to secure medium-term growth; Helios Spain with continued dynamic growth Healthy growth targets for 2020 - 2023. FY/18 Results , 20 February 2019 Fresenius SE & Co. KGaA Investor Relations 3. Fresenius Kabi: Significant investments IV Generics ~US$350 million investment in Melrose Park, USA. Installation of state-of-the-art sterile pharmaceutical production, packaging technologies and related laboratories ~ US$120 million investment in Grand Island, USA, New production lines and other infrastructure improvements to foster automation and increase capacity Clinical Nutrition Infusion Solutions ~ 150 million investment in Enteral ~US$350 million investment in Wilson, USA Nutrition plant in Wuxi, China Construction of manufacturing facility on New building and production lines for enteral existing site nutrition products ~ 100 million investment in Emmer- Biosimilars Compascuum, Netherlands, Expected launch of Adalimumab in EU New production lines for enteral nutrition Further development of product pipeline products FY/18 Results , 20 February 2019 Fresenius SE & Co.
3 KGaA Investor Relations 4. Fresenius Kabi: US Generic IV Drug Market in FY/19. 2019 pricing environment expected to be Excellent competitive position - strong in line with recent years customer relationships and pipeline Key molecules to see more competition, FDA accelerated approvals of generics . however broadly unchanged pricing especially for drugs with limited number of environment in large base business approvals Healthy volume growth projected to more Excellent customer relationships and strong than offset price decline pipeline mitigate risk Continued low single-digit price decline for core Similar level of launches expected as in FY/18 . portfolio anticipated in 2019. FY/18 Results , 20 February 2019 Fresenius SE & Co. KGaA Investor Relations 5. Helios Germany: Improved visibility Active management of regulatory New business models challenges by adjusting structures Develop internationally scalable business models Clustering (to fulfill minimum number of New business areas for Germany ( video indications) consulting, occupational health).
4 Setting up regional centers Digitization for comprehensive cross-sector care Increased regional cooperation between clinics DRG change from 2020 onwards Being attractive for nurses We expect that the impact on FY/20 financials Central, regional and local recruiting measures is manageable Impact of minimum staffing levels on FY/19. financials benign Pflegetarifvertrag collective bargaining for nurses Profit from trend towards outpatient services Attractive network of ~125 MVZs (polyclinics). Leverage and scaling of outpatient services FY/18 Results , 20 February 2019 Fresenius SE & Co. KGaA Investor Relations 6. Helios Spain: Continued dynamic growth Growth projects Innovative projects Acquisition Cl nica Medellin, Colombia Proton Therapy Center Closing expected in Q1/19 First proton therapy center in Spain with a total investment of 40 million ~ 50 million investment Construction project is on track, equipment is already installed and under Acquisition in Huelva commissioning process Entrance into a new region Expected opening by the end of 2019.
5 Hospital Costa de la Luz, 15 million sales, 50 beds, 7 operating rooms Greenfield project in Torrej n 60 beds, 4 operating rooms, total investment of ~ 30 million Expected opening in 2021. Expansion Madrid hospital +50 additional beds and 2 additional ambulatory operating rooms Opening end of 2019 expected FY/18 Results , 20 February 2019 Fresenius SE & Co. KGaA Investor Relations 7. Fresenius Group: Portfolio alignment and cost savings to improve profitability and fuel growth trajectory Reshaping German hospital Cost optimization network to lead regulatory program on top of changes GEP II initiated Focus on process optimization Strategic review of and improved patient service apheresis business Evaluation of all potential options for Transfusion Further fostered and Cell Technology intra-Group services business Bolstered US business to capture even higher market share Allocating capital to higher-margin segments and business lines FY/18 Results , 20 February 2019 Fresenius SE & Co.
6 KGaA Investor Relations 8. Fresenius Group: Capital deployment centers on sustainable long-term value creation Re- Fuel organic growth with low-risk high- investments in return investments own business Short-term focus on small bolt-on Strategic acquisitions; long-term rigorous pursuit of acquisitions inorganic growth trajectory 26 years of consecutive dividend Dividends increases; CAGR of ~16%. Share buy Currently more attractive growth backs opportunities in operating investments FY/18 Results , 20 February 2019 Fresenius SE & Co. KGaA Investor Relations 9. Fresenius Group: Healthy Growth Targets 2020 - 2023. Growing Markets with High Marketing of existing Attractive markets Entry Barriers value chain Strengthening and Attractive Product Pipeline Market consolidation extension of value chain Entry into attractive Development of post- Synergies biosimilars business acute care business Strong Emerging Markets Greenfield investments Expansion of geographic Presence in Spain presence Further Internationalization FY/18 Results , 20 February 2019 Fresenius SE & Co.
7 KGaA Investor Relations 10. Financial Review FY/18 . FY/18 Results , 20 February 2019 Fresenius SE & Co. KGaA Investor Relations 11. Fresenius Group: Q4/18 & FY/18 Profit and Loss Statement m Q4/18 YoY cc FY/18 YoY cc Sales 8,835 7%1 33,530 6%1. EBIT 1,250 0% 4,561 -1%/1%2. EBIT (excl. biosimilars) 1,303 0% 4,727 1%/3%2. Net interest -129 12% -570 7%. Income taxes -253 17% -880 21%. Net income 504 5% 1,871 7%. Net income (excl. biosimilars) 542 6% 1,991 11%. 1 Growth rate adjusted for IFRS 15 adoption and divestitures of Care Coordination activities 2 Excluding VA agreement All growth rates in constant currency (cc). Net income attributable to shareholders of Fresenius SE & Co. KGaA. All figures before special items For a detailed overview of special items and adjustments please see the reconciliation tables on slides 51-58. FY/18 Results , 20 February 2019 Fresenius SE & Co. KGaA Investor Relations 12. Fresenius Group: Q4/18 Business Segment Growth Organic sales growth EBIT growth (cc).
8 +6% 12%2. +7% 6%/8%3. +4% -2%/2%4. +20% 39%/11%4. +6%1 0%2/0%2,3. 1 Growth rates adjusted for IFRS 15 adoption and divestitures of Care Coordination activities 2 EBIT reported 3 Excl. biosimilars 4 Adjusted for transfer of German post-acute care business from Helios to Vamed All figures before special items For a detailed overview of special items and adjustments please see the reconciliation tables on slides 51-58. FY/18 Results , 20 February 2019 Fresenius SE & Co. KGaA Investor Relations 13. Fresenius Kabi: Organic Sales Growth by Regions YoY YoY. m Q4/18 organic FY/18 organic North America 599 5% 2,359 8%. Europe 590 3% 2,248 3%. Asia-Pacific/Latin 498 15% 1,937 12%. America/Africa Asia-Pacific 336 13% 1,300 12%. Latin America/Africa 162 18% 637 13%. Total sales 1,687 7% 6,544 7%. FY/18 Results , 20 February 2019 Fresenius SE & Co. KGaA Investor Relations 14. Fresenius Kabi: Q4 & FY/18 EBIT Growth m Q4/18 YoY cc FY/18 YoY cc North America 216 9% 894 10%.
9 Margin 110 bps 70 bps Europe 97 -9% 355 3%. Margin -210 bps -10 bps Asia-Pacific/Latin America/Africa 116 22% 398 14%. Margin 140 bps 40 bps Corporate and Corporate R&D -144 -10% -508 -30%. Total EBIT1 285 6% 1,139 2%. Margin1 -20 bps -110 bps Total EBIT excl. Biosimilars1 338 8% 1,305 10%. Margin1 10 bps 40 bps Margin growth at actual rates 1 Before special items For a detailed overview of special items and adjustments please see the reconciliation tables on slides 51-58. FY/18 Results , 20 February 2019 Fresenius SE & Co. KGaA Investor Relations 15. Fresenius Kabi: Expected Organic Sales Growth 2019. North America Low to mid-single-digit growth Growth in 2019 mainly driven by new drug launches and further ramp-up of pre-filled syringe business More competition for key molecules;. broadly unchanged pricing environment in base business Continued significant launch activity in 2019. Europe Low to mid-single-digit growth Enteral nutrition with dynamic growth momentum Launch of biosimilar Adalimumab expected FY/18 Results , 20 February 2019 Fresenius SE & Co.
10 KGaA Investor Relations 16. Fresenius Kabi: Expected Organic Sales Growth 2019. Emerging Markets Likely double-digit growth China: Attractive growth prospects Growth particularly driven by Clinical Nutrition and IV drugs Asia-Pacific ex China: Very positive sentiment Latin America/Africa: Strong growth momentum expected Continued strong growth expected FY/18 Results , 20 February 2019 Fresenius SE & Co. KGaA Investor Relations 17. Fresenius Helios Helios Germany Helios Spain Organic sales growth of 3% in Q4/18 Strong sales growth of 8% in Q4/18. DRG price increases and better Results from Additional month of consolidation the negotiations with our payors offset contributed significantly to 17% sales decline in admissions growth in FY/18 . DRG catalogue effects, preparatory Excellent organic sales growth structural activities and vacancies for doctors and specialized nurses continue to 7% in Q4/18. weigh on earnings development 6% in FY/18 .
