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Fresenius SE & Co. KGaA

Investor Presentation • Nov 28, 2016

166_ip_2016-11-28_dae6e83d-78e7-49cc-9d9d-e0f3a724f57c.pdf

Investor Presentation

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A Leading Global Health Care Group

Bank of America Merrill Lynch – Leveraged Finance Conference 2016 November 29, 2016 – Boca Raton

Safe Harbor Statement

This presentation 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 contained in this presentation.

Agenda

  • 1 Company Overview
  • 2 Business Segments
  • Fresenius Kabi
  • Fresenius Vamed
  • Fresenius Helios
  • 3 Acquisition of Quirónsalud
  • 4 Financial Overview
  • 5 Financing Facilities and Debt Structure
  • 6 Summary and Outlook

Company Overview

Fresenius Group: A Global Leader in Health Care Products and Services

  • Sales €28.6 bn, net income1 €2.6 bn in LTM September 30, 2016
  • Strong and well-diversified portfolio
  • Leading market positions
  • Global presence
  • Long-term opportunities in growing, non-cyclical markets

1 – Net income incl. attributable to non-controlling interest, 2015 before special items

Fresenius Group: Strong and Balanced Health Care Portfolio

  • 1 LTM September 30, 2016
  • 2– 2015 before special items
  • 3 Based on market capitalization of FSE as of November 15, 2016
  • 4 Based on consolidated market capitalization of FSE and FME as of November 15, 2016 and consolidated net debt as of Sept 30, 2016
  • 5 Held by Fresenius ProServe GmbH, a wholly owned subsidiary of FSE
  • 6 Based on market capitalization of FME as of November 15, 2016

Fresenius Group: Financial Results

2 – Incl. attributable to non-controlling interest

3 – 2011 sales were adjusted by -€161 m according to a U.S. GAAP accounting change. This solely relates to Fresenius Medical Care North America

Fresenius Group: Sustainable Organic Sales Growth

Fresenius Group: Sustainable Organic Sales Growth in all Business Segments

1 – LTM September 30, 2016

2 – Due to project delays in Russia and Ukraine

Fresenius Group: Key Financials Q1-Q3/2016

1 – 2015 before special items

2 – Incl. attributable to non-controlling interest, 2015 before special items

Business Segments

Fresenius Kabi: A Worldwide Leading Hospital Supplier

  • Comprehensive product portfolio for critically and chronically ill patients:
  • Generic I.V. Drugs
  • Clinical Nutrition
  • Infusion Therapy
  • Medical Devices / Transfusion Technology
  • Global addressable market: >€33 bn
  • Leading market positions
  • Focus on organic growth driven by geographic product rollout and robust product pipeline
  • Aim to expand the business through selective acquisitions

LTM Sept 30, 2016 Sales by Region

Fresenius Kabi: Strong Growth Track Record & High Profitability

1 – Before special items

2 – LTM September 30, 2016

Fresenius Kabi: Key Figures Q1-Q3/2016

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1 – 6% organic growth, 0% acquisitions, -2% divestitures, -3% currency effects

2 – 2015 before special items

3 – Net income attributable to shareholders of Fresenius Kabi AG, 2015 before special items

Fresenius Vamed: A Leading Global Specialist in Hospital Projects and Services

  • Specialized in project development, building hospital infrastructure and providing hospital services (technical services and operational management)
  • Track record:

  • 760 health care projects in 78 countries successfully completed

  • Services provided to > 550 hospitals and 135,000 beds globally
  • Continuous demand for hospital infrastructure and operating efficiency; key markets: Europe, Asia-Pacific, Africa

LTM Sept 30, 2016 Sales by Business

Fresenius Helios: Leading Hospital Operator in Germany

  • German Acute Care Hospital Market: ~€91 bn1, thereof 18% privatized
  • ~ 6% share in German Acute Care Hospital Market
  • High-quality medical care
  • Solid organic growth based on growing number of admissions and reimbursement rate increases
  • Strong track record in hospital operations and acquisitions: targeting 12 − 15% EBIT margin within 6 years per individual clinic location
  • Negligible bad debt ratio due to comprehensive insurance coverage of German population

Largest Network with 112 Hospitals2

1 – German Federal Statistical Office 2015; total costs, gross of the German hospitals less academic research and teaching

2 – As of June 30, 2016

Fresenius Helios: Strong Growth Track Record & High Profitability

Sales€ million

7-yr CAGR 13%

EBITDA1 € million

1 – Before special items

2 – LTM September 30, 2016

Fresenius Helios: Key Figures Q1-Q3/2016

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1 – 4% organic growth, 1% acquisitions, 0% divestitures, 0% currency effects

2 – 2015 before special items

3 – Net income attributable to shareholders of HELIOS Kliniken GmbH, 2015 before special items

Acquisition of Quirónsalud

Acquisition Highlights

Strong management team with proven track recordand ongoing commitment to Fresenius

Combination forms powerful platform for knowledge & best practice transfer

Highly accretive from 2017 – leverage back to current levels after 1.5 years

New mid-term targets for Fresenius Group as part of its FY 2016 reporting

Excellent Reputation in the Spanish Hospital Market

Hospital Network With Clear Focus on Large Metropolitan Areas

Spanish Health Care Market – Key Facts

Total health care expenditure

Average length of stay

Hospital discharges

Hospital beds

Private Health Care System in Spain

NHS = National Health Care System; HIC = Health Insurance Companies

* Expectation: mid-term CAGR +1.5%

Structural Growth Drivers

Health care expenditure per capita in Spain below EU average

Close dovetailing of inpatient and outpatient care

Public – NHS (PPPs)

Expansion of existing facilities

Greenfield projects

Acquisition of private hospitals

Financial Outlook

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1 – based on mid-point of projected 2017 EBITDA range of €520 ‒ €550m

Financial Overview

Fresenius Group: Key Figures Q1-Q3/2016

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1 – 6% organic growth, 1% acquisitions, -1% divestitures, -1% currency effects

2 – 2015 before special items

3 – Net income incl. attributable to non-controlling interest, 2015 before special items

4 – As of December 31, 2015

Fresenius Group: Cash Flow Development Q1-Q3/2016

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1 – Before acquisitions and dividends

2 – Margin incl. FMC dividend

3 – Understated: 7.1% excluding €51 million of capex commitments from acquisitions

Fresenius Group: Proven Track Record of Deleveraging

Net Debt/EBITDA

  • 1 Pro forma acquisitions, before special items
  • 2 Before special items
  • 3 Adjusted due to debt issuance cost restatement (U.S. GAAP standard ASU 2015 03)
  • 4 Pro forma excluding advances made for the acquisition of hospitals from Rhoen-Klinikum AG, before special items
  • 5 At annual average FX rates for both EBITDA and net debt, excluding potential acquisitions

Fresenius Group: Capitalization – September 30, 2016

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2 – 2015 before special items; pro forma acquisitions

3 – Exchange rate as of as of Sept 30, 2016, except for market capitalization which uses exchange rate as of November 15, 2016

Fresenius Group excl. Fresenius Medical Care: Debt Maturity Profile 1September 30, 2016

1 - Based on utilization of major financing instruments

Summary and Outlook

Fresenius Medical Care: 2016 Financial Outlook confirmed

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  • 2016 net income growth outlook is based on current exchange rates
  • Savings from the global Efficiency Program are included
  • Acquisitions 2015/2016 are not included
  • Net income growth based on \$1,057 million in 2015 1
  • 1 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA (\$1,029 million), including GranuFlo®/NaturaLyte® agreement in principle (+\$37 million) and excluding acquisitions in 2015 of \$9 million

Fresenius Group: 2016 Financial Outlook by Business Segment

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Fresenius Group: 2016 Financial Guidance

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y		 €
1,
2
3
4
m		 1
1
%
1
%
4
–		 1
2
%
1
%
4
–

1- Net income attributable to shareholders of Fresenius SE &Co.KGaA; 2015 before special items

Aging Population and Increasing Healthcare Spending

• Aging population and higher incidence of chronic diseases World population age 60+ will reach >2bn by 2050 (WHO)

  • • Increasing health expenditure per capita, 2014 vs. 2004 – USA \$9,403 (+147%), China: \$420 (+592%), India: \$75 (+277%)1

  • • By 2022, one third of all global health expenditure will occur in Emerging Economies 21/3

  • 1 World Bank: Health expenditure per capita

  • 2 World Economic Forum: Health Systems Leapfrogging in Emerging Economies Project Paper (2014)
  • 3 WHO: Global status report on non communicable diseases

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