Fresenius SE KGaA : Strong start into the year – Double-digit earnings growth in constant currency – Fresenius confirms Group guidance for 2016

For a detailed overview of special items please see the reconciliation table on page 13 of the pfd file.

Q1/2016:

• Sales: €6.9 billion (+7%, +7% in constant currency)
• EBIT: €959 million (+13%, +11% in constant currency)
• Net income: €362 million (+24%, +23% in constant currency)

Ulf Mark Schneider, CEO of Fresenius, said: 'We have seen a strong start into 2016, reflected in our double-digit earnings growth. All business segments and regions have contributed to this success, demonstrating yet again enormous consistency in our sales and earnings development. We remain fully on track to achieve our 2016 and mid-term targets.'

Group guidance for 2016 confirmed
Fresenius confirms its guidance for 2016. Sales are expected to increase by 6% to 8% in constant currency. Net income, is expected to grow by 8% to 12% in constant currency.

The net debt/EBITDA ratio is expected to be approximately 2.5 at the end of 2016.

7% sales growth in constant currency
Group sales increased by 7% (7% in constant currency) to €6,914 million (Q1/2015: €6,483 million). Organic sales growth was 7%. Acquisitions contributed 1% and divestitures reduced sales by 1%.

Group sales by region:

23% net income growth in constant currency
Group EBITDA increased by 11% (10% in constant currency) to €1,237 million (Q1/2015: €1,115 million). Group EBIT increased by 13% (11% in constant currency) to €959 million (Q1/2015: €851 million). The EBIT margin increased to 13.9% (Q1/2015: 13.1%).

Group net interest decreased to -€152 million (Q1/2015: -€165 million), mainly due to more favorable financing terms and lower net debt.

The Group tax rate (before special items) decreased to 28.4% (Q1/2015: 30.2%), mainly due to a lower tax rate at Fresenius Medical Care.

Noncontrolling interest increased to €216 million (Q1/2015: €187 million), of which 95% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income, increased by 24% (23% in constant currency) to €362 million (Q1/2015: €292 million). Earnings per share increased by 22% (22% in constant currency) to €0.66 (Q1/2015: €0.54).

Continued investment in growth
Spending on property, plant and equipment was €313 million (Q1/2015: €273 million), primarily for the modernization and expansion of dialysis clinics, production facilities and hospitals. Total acquisition spending was €204 million (Q1/2015: €104 million).

Cash flow development
Operating cash flow decreased by 37% to €334 million (Q1/2015: €531 million) with a margin of 4.8% (Q1/2015: 8.2%). The decrease was mainly due to an adjustment in invoicing within the quarter and the timing of cash payroll payments at Fresenius Medical Care North America. Fresenius Medical Care expects that these effects will have no meaningful impact on the full year 2016 cash flow.

Free cash flow before acquisitions and dividends decreased to €2 million (Q1/2015: €258 million). Free cash flow after acquisitions and dividends was -€241 million (Q1/2015: €256 million).

Solid balance sheet structure
The Group's total assets decreased by 1% (increased 1% in constant currency) to €42,445 million (Dec. 31, 2015: €42,959 million). Current assets grew by 1% (3% in constant currency) to €10,584 million (Dec. 31, 2015: €10,479 million). Non-current assets decreased by 2% (increased 1% in constant currency) to €31,861 million (Dec. 31, 2015: € 32,480 million).

Total shareholders' equity was virtually unchanged at €18,009 million (Dec. 31, 2015: €18,003 million). In constant currency, it increased by 3%. The equity ratio increased to 42.4% (Dec. 31, 2015: 41.9%).

Group debt decreased by 1% (increased 1% in constant currency) to €14,549 million (Dec. 31, 2015: € 14,769 million). As of March 31, 2016, the net debt/EBITDA ratio was 2.67 (Dec. 31, 2015: 2.681).

Business Segments

Fresenius Medical Care
Fresenius Medical Care is the world's largest provider of products and services for individuals with renal diseases. As of March 31, 2016, Fresenius Medical Care was treating 294,043 patients in 3,432 dialysis clinics. Along with its core business, the company seeks to expand the range of medical services in the field of care coordination.

• 9% sales growth in constant currency
• Strong sales and EBIT growth in North America
• 2016 outlook confirmed

Sales increased by 6% (9% in constant currency) to US$4,205 million (Q1/2015: US$3,960 million). Organic sales growth was 7%. Acquisitions contributed 2%. Currency translation effects reduced sales by 3%.

Health Care services sales (dialysis services and care coordination) increased by 7% (9% in constant currency) to US$3,414 million (Q1/2015: US$3,182 million). Dialysis product sales increased by 2% (6% in constant currency) to US$791 million (Q1/2015: US$778 million).

In North America, sales increased by 10% to US$3,044 million (Q1/2015: US$2,771 million). Health Care services sales grew by 10% to US$2,832 million (Q1/2015: US$2,571 million). Dialysis product sales increased by 6% to US$212 million (Q1/2015: US$200 million).

Sales outside North America decreased by 2% (increased by 7% in constant currency) to US$1,158 million (Q1/2015: US$1,180 million). Health Care services sales decreased by 5% (increased by 6% in constant currency) to US$582 million (Q1/2015: US$611 million). Dialysis product sales increased by 1% (8% in constant currency) to US$576 million (Q1/2015: US$569 million).

EBIT increased by 7% (8% in constant currency) to US$540 million (Q1/2015: US$504 million). The EBIT margin was 12.8% (Q1/2015: 12.7%).
Net income increased by 9% (8% in constant currency) to US$228 million (Q1/2015: US$210 million).

Operating cash flow decreased by 60% to US$180 million (Q1/2015: US$447 million). The cash flow margin was 4.3% (Q1/2015: 11.3%). The decrease was mainly due to an adjustment in invoicing within the quarter and the timing of cash payroll payments at Fresenius Medical Care North America. Fresenius Medical Care expects that these effects will have no meaningful impact on the full year 2016 cash flow.

Fresenius Medical Care confirms its outlook for 2016. The company expects sales to grow by 7% to 10% in constant currency and net income1 is expected to increase by 15% to 20% in 2016.

For further information, please see Fresenius Medical Care's Investor News at www.freseniusmedicalcare.com.

Fresenius Kabi
Fresenius Kabi offers intravenously administered generic drugs, clinical nutrition and infusion therapies for seriously and chronically ill patients in the hospital and outpatient environments. The company is also a leading supplier of medical devices and transfusion technology products.

• 10% organic sales growth in Q1
• 19% constant currency EBIT growth in Q1
• 2016 outlook confirmed

Sales increased by 5% (8% in constant currency) to €1,470 million (Q1/2015: €1,394 million). Organic sales growth was 10%. Divestitures and currency translation effects reduced sales by 2% and 3% respectively.

Sales in Europe decreased by 1% (increased organically by 1%) to €512 million (Q1/2015: €518 million), mainly due to the divestment of the German oncology compounding business in February 2015. Sales in North America increased by 22% (organic growth: 20%) to €567 million (Q1/2015: €473 million). North American sales growth was mainly driven by persisting IV drug shortages as well as new product launches. Adverse currency translation effects decreased sales in Asia-Pacific by 5% (increased organically by 7%) to €254 million (Q1/2015: €268 million) and in Latin America/Africa by 5% (increased organically by 21%) to €128 million (Q1/2015: €135 million).

EBIT increased by 20% (19% in constant currency) to €309 million (Q1/2015: €257 million). The EBIT margin improved to 21.0% (Q1/2015: 18.5%).

Net income increased by 28% (26% in constant currency) to €179 million (Q1/2015: €140 million).

Based on the excellent net income development operating cash flow increased by 49% to €124 million (Q1/2015: €83 million) with a margin of 8.4% (Q1/2015: 6.0%).

Fresenius Kabi confirms its outlook for 2016 and projects low single-digit organic sales growth. EBIT in constant currency is expected to be roughly flat compared with 2015.

Fresenius Helios
Fresenius Helios is Germany's largest hospital operator. HELIOS operates 111 hospitals, thereof 87 acute care clinics (including seven maximum care hospitals in Berlin-Buch, Duisburg, Erfurt, Krefeld, Schwerin, Wiesbaden and Wuppertal) and 24 post-acute care clinics. HELIOS treats more than 4.7 million patients per year, thereof approximately 1.3 million inpatients, and operates more than 34,000 beds.

• 3% organic sales growth
• 50 bps EBIT margin increase to 11.1%
• 2016 outlook confirmed

Sales increased by 3% to €1,435 million (Q1/2015: €1,391 million). Organic sales growth was 3%. Acquisitions and divestitures had no material effect.

EBIT grew by 8% to €159 million (Q1/2015: €147 million). The EBIT margin increased to 11.1% (Q1/2015: 10.6%).

Net income increased by 16% to €124 million (Q1/2015: €107 million).

Fresenius Helios confirms its outlook for 2016 and projects organic sales growth of 3% to 5%. EBIT is expected to increase to €670 to €700 million.

Fresenius Vamed
Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide. The portfolio ranges along the entire value chain: from project development, planning, and turnkey construction, via maintenance and technical management, to total operational management.

• Project and service business contributed equally to 6% organic sales growth
• Strong order intake of €237 million
• 2016 outlook confirmed

Sales increased by 5% (5% in constant currency) to €218 million (Q1/2015: €208 million). Organic sales growth was 6%. Sales in the project business increased by 6% to €85 million (Q1/2015: €80 million). Sales in the service business grew by 4% to €133 million (Q1/2015: €128 million).

EBIT remained unchanged with €7 million (Q1/2015: €7 million). The EBIT margin was 3.2% (Q1/2015: 3.4%).

Net income grew by 25% to €5 million (Q1/2015: €4 million).

Order intake increased to €237 million (Q1/2015: €192 million). As of March 31, 2016, order backlog grew to €1,803 million (December 31, 2015: €1,650 million).

Fresenius Vamed confirms its outlook for 2016 and expects organic sales growth in the range of 5% to 10% and EBIT growth of 5% to 10%.

Conference Call
As part of the publication of the results for Q1/2016, a conference call will be held on May 3, 2016 at 2 p.m. CEDT (8 a.m. EDT). All investors are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com/media. Following the call, a replay will be available on our website.

This release 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, e.g. 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 in this release.