Fresenius Medical Care (FME) Q2 2021 earnings summary

Executive summary

• Q2 revenue was €4.32bn, down 5% reported but up 2% at constant currency; operating income fell 35% and net income attributable to shareholders fell 38%.

• H1 revenue was €8.53bn, down 6% reported and up 2% at constant currency; operating income declined 26% and net income attributable to shareholders declined 26%.

• COVID-19 continued to weigh on treatments, costs and earnings; management confirmed FY2021 guidance, which includes anticipated COVID-19 effects and excludes special items.

Financial highlights

• Q2 gross profit was €1.284bn, down 9%; gross margin was 29.7% versus 31.0%. SG&A rose 17% to €830m, or 19.2% of revenue versus 15.6%.

• Q2 operating income was €424m, down 35% reported and 30% at constant currency; operating margin fell to 9.8% from 14.4%.

• Q2 net income attributable to shareholders was €219m, down 38% reported and 33% at constant currency; basic EPS was €0.75 versus €1.20.

• H1 gross profit was €2.491bn, down 11%; gross margin was 29.2% versus 31.0%. Operating margin declined to 10.5% from 13.4%; basic EPS was €1.60 versus €2.15.

• Excluding FME25 costs, Q2 operating income was €430m and net income €223m; H1 operating income was €907m and net income €474m.

Outlook and guidance

• FY2021 guidance was confirmed at constant currency and excluding special items: revenue growth low-to-mid single digits; operating income decline mid-teens to low twenties; net income decline high teens to mid-twenties.

• FY2021 ROIC guidance remains at least 5.0%; outlook includes anticipated COVID-19 effects, and growth comparisons use 2020 results excluding the Latin America impairment loss.

• Capital expenditures of €0.9bn–€1.1bn and acquisitions and investments, excluding debt securities, of €0.5bn–€0.7bn were anticipated for 2021.