Fresenius : with good start to 2021 despite ongoing COVID-19 impact

Press Release

May 6, 2021

Matthias Link

Senior Vice President Corporate Communications

Fresenius SE & Co. KGaA

Else-Kröner-Straße 1

61352 Bad Homburg

Germany

1. [phone] F [phone] [e-mail] www.fresenius.com

Fresenius with good start to 2021 despite ongoing COVID-19 impact

• Guidance for 2021 confirmed
• Fresenius Medical Care delivers solid first quarter
• Fresenius Kabi shows strong performance in Emerging Markets whilst headwinds continue to impact North American business
• Helios Germany continues to be compensated by government for foregone elective treatments; Helios Spain delivers significant sales and earnings growth given recovery of treatment activity
• Fresenius Vamed continues to suffer from COVID-19 related project delays; technical high-end service business remains robust
• Preparation of Group-wide initiatives to improve efficiency and profitability progressing

If no timeframe is specified, information refers to Q1/2021.

In Q1/2021 no special items incurred.

	Q1/21		Growth
	Growth	in constant currency
Sales	€9.0 billion	-2%	3%
EBIT1	€1,006 million	-11%	-6%
Net income1,2	€435 million	-6%	-2%

1. Before special items
2. Net income attributable to shareholders of Fresenius SE & Co. KGaA

For a detailed overview of special items please see the reconciliation table on page 18.

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Stephan Sturm, CEO of Fresenius, said: "In view of the adversity and uncertainties that COVID-19 continues to bring, we are satisfied with our start in 2021. We achieved continued organic growth, although the pandemic had a lesser impact on the prior-year quarter. That makes me optimistic that we can reach our targets. The progress being made with vaccinations worldwide is another reason for confidence, even though it is too early to sound the all-clear. In the coming months, we will still be dealing with the pandemic's many and wide-ranging effects. As before, we will do this with full responsibility for the patients entrusted to us. At the same time, we are moving ahead with our planning for cost and efficiency measures. These measures will create a strong foundation for accelerated and sustainable growth against the backdrop of long-term growth trends supporting our core businesses. Growth that contributes to ever better medicine for ever more people."

COVID-19 assumptions for guidance FY/21

Q1/21 was characterized by a regionally varying development of the COVID-19 pandemic. Given continued high infection numbers as well as an increasing number of virus mutations, large-scale constraints of public and private life have been re-enacted in various countries. Vaccination programs are progressing worldwide at, however, varying pace.

COVID-19 will continue to impact Fresenius' operations in 2021. Current burdens and constraints caused by COVID-19 are expected to recede only in H2/21. The expected improvement in the Group's relevant business environment from H2/21 is heavily dependent on continuously increasing levels of vaccination coverage in Fresenius' relevant markets. These assumptions are subject to considerable uncertainty.

A deterioration of the situation requiring further containment measures in one or more of Fresenius' major markets, although becoming somewhat less likely does remain a risk. Any resulting significant and direct impact on the health care sector without any appropriate compensation is not reflected in the Group's FY/21 guidance.

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FY/21 Group guidance confirmed

For FY/21, Fresenius continues to project sales growth1 in a low-to-midsingle-digit percentage range and at least broadly stable net income2,3 year-over-year, both in constant currency. Implicitly, net income2 for the Group excluding Fresenius Medical Care is expected to grow in a mid-to-highsingle-digit percentage range in constant currency.

Fresenius projects net debt/EBITDA4 to be around the top-end of the self-imposed target corridor of 3.0x to 3.5x by the end of FY/21.

To sustainably enhance profitability, Fresenius is preparing group-wide strategic efficiency initiatives. These initiatives are expected to consist of operational excellence and cost-saving measures, targeted strengthening of future growth areas and portfolio optimizations. They are targeted to result in cost savings of at least €100 million p.a. after tax and minority interest in 2023 with some further potential to increase thereafter. Achieving these sustainable efficiencies will require significant up-front expenses. On average for the years 2021 to 2023, those expenses are expected to be in the order of magnitude of €100 million p.a. after tax and minority interest. They will be classified as special items.

1. FY/20 base: €36,277 million
2. Net income attributable to shareholders of Fresenius SE & Co. KGaA
3. FY/20 base: €1,796 million, before special items; FY/21: before special items
4. At LTM average exchange rates for both net debt and EBITDA; pro forma closed acquisitions/divestitures; excluding further potential acquisitions; before special items

For a detailed overview of special items please see the reconciliation table on page 18.

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3% sales increase in constant currency

Group sales decreased by 2% (increased by 3% in constant currency) to €8,984 million (Q1/20: €9,135 million). Organic growth was 2%. Acquisitions/divestitures contributed net 1% to growth. Currency translation reduced sales growth by 5%. Excluding estimated COVID-19 effects1, Group sales growth would have been 4% to 5% in constant currency (Q1/20: 7% to 8%).

2% net income2,3 decrease in constant currency

Group EBITDA before special items and reported Group EBITDA decreased by 7% (-2% in constant currency) to €1,628 million (Q1/20: €1,755 million).

Group EBIT before special items and reported Group EBIT decreased by 11% (-6% in constant currency) to €1,006 million (Q1/20: €1,125 million). The constant currency decrease is primarily due to COVID-19 related headwinds. Both the EBIT margin before special items and the reported EBIT margin were 11.2% (Q1/20: 12.3%).

Group net interest before special items improved to -€137 million (Q1/202: -€174 million) mainly due to successful refinancing activities, lower interest rates as well as currency translation effects. Reported Group net interest also improved to -€137 million (Q1/20: -€182 million).

Both the Group tax rate before special items and the reported tax rate were 22.8% (Q1/20: 22.6%).

Both Noncontrolling interests before special items and reported noncontrolling interests were -€236 million (Q1/20: -€271 million) of which 95% were attributable to the noncontrolling interests in Fresenius Medical Care.

1. For estimated COVID-19 effects in Q1/21 and Q1/20 please see table on page 16.
2. Before special items
3. Net income attributable to shareholders of Fresenius SE & Co. KGaA

For a detailed overview of special items please see the reconciliation table on page 18.

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Group net income1 before special items decreased by 6% (-2% in constant currency) to €435 million (Q1/202: €465 million). The absolute negative COVID-19 effect was more pronounced in Q1/21 compared to the prior-year quarter. Excluding estimated COVID-19 effects3, Group net income1 before special items would have grown 0% to 4% in constant currency (Q1/20: 6% to 10%). Reported Group net income1 decreased to €435 million (Q1/20: €459 million).

Earnings per share1 before special items decreased by 6% (-2% in constant currency) to €0.78 (Q1/202: €0.83). Reported earnings per share1 were also €0.78 (Q1/20: €0.82).

Continued investment in growth

Spending on property, plant and equipment was €384 million corresponding to 4% of sales (Q1/20: €547 million; 6% of sales). These investments served primarily for the modernization and expansion of dialysis clinics, production facilities as well as hospitals and day clinics.

Total acquisition spending was €149 million (Q1/20: €412 million), mainly for the acquisition of dialysis clinics at Fresenius Medical Care.

Cash flow development

Group operating cash flow decreased to €652 million (Q1/20: €878 million) with a margin

of 7.3% (Q1/20: 9.6%), driven by a seasonal fluctuation in Fresenius Medical Care's invoicing and working capital movements in North America. Free cash flow before acquisitions and dividends decreased to €241 million (Q1/20: €305 million). Free cash flow after acquisitions and dividends increased to €117 million (Q1/20: -€40 million).

1. Net income attributable to shareholders of Fresenius SE & Co. KGaA
2. Before special items
3. For estimated COVID-19 effects in Q1/21 and Q1/20 please see table on page 16.

For a detailed overview of special items please see the reconciliation table on page 18.

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