Fresenius Medical Care (FME) Q3 2021 earnings summary

Executive summary

• Q3 revenue was €4.44B, up 1% reported and at constant currency; 9M revenue was €12.97B, down 4% reported but up 2% at constant currency.

• COVID-19-related impacts reduced 9M net income attributable to shareholders by €262M; renewed Delta-variant excess mortality and inflation prompted expectations for the lower end of 2021 revenue and net income guidance ranges.

Financial highlights

• Q3 operating income fell 20% to €505M; operating margin was 11.4% vs. 14.3% YoY. Net income attributable to shareholders fell 23% to €273M; basic EPS was €0.93 vs. €1.21.

• 9M operating income fell 24% to €1.40B; operating margin was 10.8% vs. 13.7%. Net income attributable to shareholders fell 25% to €741M; basic EPS was €2.53 vs. €3.35.

• Q3 gross profit declined 7% to €1.27B and gross margin fell to 28.5% from 30.8%; 9M gross profit fell 10% to €3.76B and gross margin was 29.0% vs. 30.9%.

• Excluding FME25 costs, Q3 operating income was €510M and net income €277M; 9M operating income was €1.42B and net income €751M.

Outlook and guidance

• 2021 guidance, at constant currency and excluding Special Items, remains revenue growth in the low-to-mid single digits and operating income decline in the mid-teens to low-twenties range.

• 2021 net income growth guidance is a high-teens to mid-twenties decline; ROIC guidance is at least 5.0%. Expectations include COVID-19 impacts and are now at the lower end of revenue and net income ranges.

• 2021 capital expenditure guidance is €0.9B–€1.1B; acquisitions and investments, excluding debt securities, are expected at €0.5B–€0.7B.