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Fresenius Medical Care AG & Co. KGaA

Fresenius Medical Care AG reports Fourth Quarter and Full Year Results 2003

Bad Homburg, Germany (ots)

Summary Full Year 2003: 
   Company met or exceeded financial targets for 2003 and will   
   propose 7th consecutive dividend increase
Net Revenues            $ 5,528 million       +   9%
   Operating income (EBIT) $   757 million       +   9%
   Net income              $   331 million       +  14%
   Operating Cash Flow     $   754 million       +  37%
   Free Cash Flow          $   478 million       +  37%
   Dividend Proposal 
   (Ordinary Share)        EUR 1.02              +   8%
   (Preference Share)      EUR 1.08              +   8%
Fresenius Medical Care AG (Frankfurt Stock Exchange: FME, FME3)
(NYSE: FMS, FMS-p), the world's largest provider of Dialysis Products
and Services, today announced the results for the fourth quarter and
the full year of 2003.
Ben Lipps, Chief Executive Officer of Fresenius Medical Care,
commented: "We have accomplished or even slightly exceeded our
targets for 2003. Our results for the year 2003 improved in key
financial metrics and showed a strong performance of our operations.
We achieved another record operating and free cash flow for 2003 and
we are confident that our global strategy is on the right track. We
ended the year with a strong momentum, which we believe is a good
foundation to look optimistically toward 2004 and beyond."
OPERATIONS
Fourth Quarter 2003:
   Fresenius Medical Care AG reports a 15% increase in net income to 
   $ 94.5 million for the fourth quarter 2003
Total revenue for the fourth quarter 2003 increased 7% (+2% at
constant currency) to $ 1,452 million. Dialysis Care revenue grew by
7% to $ 1,038 million (+4% at constant currency) in the fourth
quarter of 2003. Dialysis Product revenue (including internal sales)
increased by 13% to $ 551 million (+3% at constant currency) in the
same period. The internal sales increased to $ 136 million after $
105 million in the fourth quarter of 2002.
North America:
Revenue rose 1% to $ 993 million, compared to $ 979 million in the
same period last year. Dialysis Care revenue in the US increased by
3% to $ 887 million. Same store treatment growth improved again in
the fourth quarter to 4.1%. Excluding Puerto Rico the North American
same store treatment growth was 4.3% in the fourth quarter of 2003.
The average revenue per treatment was at $ 280 in the fourth quarter
of 2003 (Q3 2003: $ 279). North American Dialysis Product revenue,
including sales to company-owned clinics, increased 5% to $ 207
million.
International:
Revenue was $ 459 million, up 21% (+5% at constant currency).
Dialysis Care revenue reached $ 151 million in the fourth quarter
2003, up 34% (+15% at constant currency). Same store treatment growth
in the fourth quarter was very strong at 7%. Dialysis Products
revenue, including sales to company-owned dialysis clinics, increased
18% to $ 345 million (3% at constant currency).
Operating Income (EBIT) increased 13% to $ 208 million resulting
in an operating margin of 14.3% (Q4 2002: 13.6%). The increase of 70
basis points was mainly due to increased treatments and efficiency
improvements in North America and reimbursement increases in Italy,
Portugal and Venezuela but partially offset by the impacts from the
changes in the distribution network in Asia-Pacific and increased
cost of revenue due to the strengthening of the Euro. Sequentially,
in the fourth quarter the margin in North America increased by 60
basis points to 14.6%. In our International segment it increased by
30 basis points to 15.8% compared to the prior quarter.
Earnings per share (EPS) in the fourth quarter 2003 rose 15% to $
0.98 per ordinary share ($ 0.33 per ADS), compared to $ 0.85 ($ 0.28
per ADS) in the fourth quarter of 2002. The weighted average number
of shares outstanding during the fourth quarter of 2003 was
approximately 96.2 million.
In the fourth quarter of 2003, the Company generated $ 251 million
in cash from operations. The company benefited from the roll-over of
certain hedged inter-company financing transactions in the amount of
$ 104 million in the fourth quarter of 2003. A total of $ 147 million
(net of disposals) was spent for capital expenditures. The capital
expenditures were higher in the fourth quarter since the company used
the high operating cash flow as an opportunity for an early lease
buyout refinancing of $ 66 million for the Ogden production plant in
North America. Including this re-financing transaction the Free Cash
Flow before acquisitions for the fourth quarter 2003 was $ 104
million compared to fourth quarter of 2002 with $ 110 million. A
total of $ 13 million in cash was spent for acquisitions. Free Cash
Flow after acquisitions was $ 91 million compared to $ 103 million in
the fourth quarter of 2002.
Full Year 2003:
   For a complete overview of the full year 2003 please refer to the
   appendix.
For the full year 2003, net income was $ 331 million, up 14% from
the same period in 2002.
In accordance with the US-GAAP Accounting Standard SFAS 145, the
loss from the early redemption of the Trust Preferred Securities in
the first quarter of 2002 of $ 12 million after taxes ($ 20 million
before taxes) had to be reclassified from extraordinary loss to
interest expense and income tax expense. Excluding the redemption
loss, net income for the full year of 2002 was $ 302 million. Net
revenue was $ 5,528 million, up 9% from the full year 2002. Currency
adjusted, net revenue rose 5% in 2003 compared to 2002. Operating
Income (EBIT) increased 9% to $ 757 million resulting in an operating
margin of 13.7%. For the full year 2003, earnings per ordinary share
rose 14% to $ 3.42. Earnings per ordinary ADS for the full year 2003
were $ 1.14.
Cash from operations during the full year 2003 was up 37% or $ 754
million compared to $ 550 million in the year 2002. A total of $ 276
million was spent for capital expenditures (net of disposals)
resulting in a Free Cash Flow before acquisitions for the full year
2003 of $ 478 million, an increase of 37% compared to $ 349 million
for the full year 2002. This exceptional Cash Flow performance was
driven by strong improvements in working capital management. The
company reduced the days sales outstanding (DSO) by 7 days to 89 days
in 2003, with strong contributions from North America as well as the
International region. In addition, cash flow for the fiscal year 2003
benefited from the roll-over of certain hedged inter-company
financing transactions in the amount of $ 132 million. Net cash used
for acquisitions was $ 92 million. Free Cash Flow after acquisitions
increased therefore 43% to $ 386 million.
As of December 31, 2003, the Company operated a total of 1,560
clinics worldwide (1,110 clinics/+3% in North America and 450
clinics/+13% International).
Fresenius Medical Care AG performed approximately 17.8 million
treatments, which represents an increase of 9% year over year. North
America accounted for 12.4 million treatments (+6%) and the
International segment for 5.5 million (+15%).
At the end of the fourth quarter 2003, Fresenius Medical Care
served about 119,250 patients worldwide which represents an increase
of 6%. North America cared for ~82,400 patients (+3%) and the
International segment for ~36,850 patients (+13%).
Dividends
The Company will continue to follow an earnings-driven dividend
policy. For the seventh consecutive year, shareholders can expect an
increased dividend for the fiscal year 2003. At the Annual General
Meeting on May 27, 2004 shareholders will be asked to approve a
dividend of EUR 1.02 per ordinary share (2002: EUR 0.94) and EUR 1.08
per preference share (2002: EUR 1.00). This is an increase of 8%
compared to 2002.
Management Board
Ben Lipps was reconfirmed as Chairman of the Management Board and
   Chief Executive Officer of Fresenius Medical Care AG.
Rainer Runte, who joined the Management Board in 2002 as a deputy
member, has been appointed to be a full member of the Management
Board responsible for Law and Compliance worldwide. In addition, Rice
Powell and Mats Wahlstrom have been appointed as new board members of
the Company's Management Board. Both will be responsible for North
America. All appointments are effective as of January 1st, 2004.
Rice Powell, age 48, has more than 25 years of experience in the
healthcare industry. Since 1997 Rice Powell has been the President of
Renal Products division of Fresenius Medical Care in North America
including the Extracorporal Therapy and Laboratory Services.
Mats Wahlstrom, age 49, also has nearly 20 years of experience in
the renal field. Since November 2002 Mats Wahlstrom has been the
President of Fresenius Medical Care's Medical Services division in
North America.
Ben Lipps, Chief Executive Officer of Fresenius Medical Care,
commented: "I am pleased with the breadth and experience of our
management board with more than 120 years of combined renal
experience. Mats and Rice also bring significant renal experience and
a history of accomplishments and I whole heartedly welcome them to
the Management Board. Clearly we intend to achieve our strategic
initiatives and objectives to ensure stakeholder value".
OUTLOOK 2004
For the year 2004, the Company expects revenue growth at constant
currencies in the mid-single digit and net income growth in the
high-single digit to low-double digit range. In 2004 the company
expects capital expenditures of about $ 250 million and spending on
acquisitions of about $ 100 million.
Fresenius Medical Care AG is the world's largest, integrated
provider of products and services for individuals undergoing dialysis
because of chronic kidney failure, a condition that affects more than
1,300,000 individuals worldwide. Through its network of approximately
1,560 dialysis clinics in North America, Europe, Latin America and
Asia-Pacific, Fresenius Medical Care provides Dialysis Treatment to
approximately 119,250 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.
For more information about Fresenius Medical Care, visit the
Company's website at http://www.fmc-ag.com.
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'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.
ots Original Text: Fresenius Medical Care AG
Internet: http://www.presseportal.de

Contact:

Fresenius Medical Care AG
Corporate Communications
Oliver Heieck
Phone: ++49-6172-6082101
Fax: ++49-6172-6082294
e-mail: pr-fmc@fmc-ag.de
www.fmc-ag.com

Original content of: Fresenius Medical Care AG & Co. KGaA, transmitted by news aktuell

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