Fresenius SE & Co. KGaA — Call Transcript 2017

Nov 2, 2017

Conference Call – Q3/17 Results

Bad Homburg, 2 November 2017

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.

Fresenius Group: Q3/17 Highlights

Ongoing strong sales growth

• Continued healthy earnings growth
• Group guidance confirmed
• Strong Cashflow

Strategic position further strengthened

Fresenius Kabi: Update on Acquisition Projects

• •FTC review: Disposal process fully on track
• •Closing targeted for end of 2017
• •Q3 performance below expectations
• •Achievement of 2018 expectation challenging
• • Strategic rationale unchanged: Deal offers offensive and defensive merits
• • Pre-closing integration preparation progressing well

BIOSIMILARS

• •Consolidated since 1st September 2017
• • Product pipeline: All studies remain well on track
• •Filing for Adalimumab imminent
• •Regulatory environment further improving

Fresenius Kabi: Update on US Generic IV Drug Market

Unchanged pricing environment in 2017

• • Injectables are fundamentally different from solids; beware of 'read-across'
• • Last five years annual ASP erosion across Fresenius Kabi's US injectables portfolio in low single-digits1
• •Same magnitude in Q1-Q3/17 and FY17e
• • Healthy volume growth more than offsets price decline

Part of the solution to manage health care expenses

• • Generic drugs represent 89% of US prescriptions but just 26% of costs 2
• • ASP of a sterile Fresenius Kabi injectable drug sold in the US approx. US\$5

Convinced of sustainable growth opportunities in US IV drug market

• • US\$250 million expansion of pharmaceutical manufacturing site in Melrose Park, IL
• • Creation of state-of-the-art operations campus
• • Breadth and depth of product offering as key success factor

1 IMS Health data2 Association for Accessible Medicines, 2017

Financial Review Q3/2017

Fresenius Group: Q3/17 Key Financials

All figures consistent with scope of original guidance: before acquisition-related expenses, before expenditures for further development of biosimilars business All growth rates in constant currency (cc) Net income attributable to shareholders of Fresenius SE & Co. KGaA

Fresenius Group: Q3 & Q1-3/17 Profit and Loss Statement

€ m	/ Q 3 1 7	∆ Y Y o c c	/ Q 1- 3 1 7	∆ Y Y o c c
l S a e s	8 2 9 7 ,	1 5 %	2 5 1 9 1 ,	1 6 %
( d d ) 1 E B I T j t a s e u	1, 1 4 3	1 1 %	3 5 3 6 ,	1 6 %
2 E B I T	1, 1 2 9	9 %	3 2 2 5 ,	1 % 5
2 i N t t t e n e r e s	8 1 5 -	% 1 4 -	8 4 4 -	2 % 1 -
2 I t n c o m e a x e s	2 6 6 -	% 7 -	8 5 5 -	6 % 1 -
1, 3 i ( d j d ) N t t e n c o m e a u s e	2 3 4	% 1 4	3 3 9 1,	2 0 %
3 i N t e n c o m e	3 9 6	7 %	1, 3 0 3	1 7 %

Consistent with scope of original guidance: before acquisition-related expenses, before expenditures for further development of biosimilars business

Before acquisition-related expenses

Net income attributable to shareholders of Fresenius SE & Co. KGaA

Fresenius Group: Q3/17 Business Segment Growth

1 Growth rate consistent with scope of original guidance: before acquisition-related expenses, before expenditures for further development of biosimilars business

Fresenius Kabi: Q3/17 Regional Highlights (1/2)

North America

• •7% organic sales growth
• • 20 Kabi-marketed IV drugs currently designated in shortage (vs. 17 at Q2/17)
• • 6 product launches YTD; confirm 10+ target
• • Confirm FY/17 outlook: Mid-single-digit organic sales growth

Europe

• •4% organic sales growth
• • Positive development in virtually all product segments
• • Confirm FY/17 outlook: Low to mid-single-digit organic sales growth

Fresenius Kabi: Q3/17 Regional Highlights (2/2)

Emerging Markets

China

• •12% organic sales growth
• • New tender rules:
• 21 of 31 provinces have concluded a tender process; introduction of new tender policy now expected to be completed early 2018
• Expectation for FY/17 unchanged low to mid single-digit price impact and continued double-digit volume growth

Asia-Pacific ex China: 12% organic sales growth

Latin America/Africa: 8% organic sales growth

Total Emerging Markets

Confirm FY/17 outlook: at least 10% organic sales growth

Fresenius Kabi: Q3 & Q1-3/17 EBIT Growth

€ m	/ Q 3 1 7	∆ Y Y o c c	/ Q 1- 3 1 7	∆ Y Y o c c
h N A i t o m e c a r r M i a r g n	2 0 3 3 0 % 7.	3 % 0 b -1 7 p s	6 5 9 3 8. 0 %	4 % 0 0 b -1 p s
E o p e u r M i a r g n	8 0 1 4 9 %	5 % 1 0 b p s	2 4 4 1 4 9 %	3 % -2 0 b p s
f / A i P i i L t i s a a c c a n - / f A i A i m e r c a r c a M i a g n r	0 0 1 2 1. 1 %	% 1 1 b 1 0 p s	2 2 7 1 9 5 %	3 % 1 b 1 0 p s
C d C & t t R D o r p o r a e a n o r p o r a e	0 0 1 -	% 4 -	2 0 7 -	% 5 -
1 l T E B I T t o a 1 M i a g n r	8 3 2 1 8. 1 %	6 % b -5 0 p s	9 0 5 1 9 0 %	6 % b -4 0 p s
2 l d j d T t t E B I T o a a e u s 2 M i a g n r	2 9 7 1 9 0 %	% 1 1 b 4 0 p s	9 9 1 1 9 3 %	% 7 b -1 0 p s

Margin growth at actual rates

Before acquisition-related expenses

Consistent with scope of original guidance: before acquisition-related expenses,

before expenditures for further development of biosimilars business

Fresenius Helios: Q3 & Q1-Q3/17 Highlights

Helios Kliniken

• •Organic growth in line with expectations
• • Ongoing favorable reimbursement environment: 2018 DRG inflator set at 2.97%
• •Roll-out of new brand image

Quirónsalud

• •Soft summer quarter as expected
• • Solid YoY growth:
• 10% sales growth in Q1-Q3/17
• EBIT growth exceeds sales growth

Fresenius Helios: Q3 & Q1-3/17 Key Financials

€ m	Q 3 / 1 7	∆ Y Y o	Q 1- 3 / 1 7	∆ Y Y o
l l T t o a s a e s	2 1 6 6 ,	% 4 7	6 2 2 4 ,	% 4 7
h f l l k T H i K i i e r e o e o s n e n	1, 5 2 4	4 %	4 5 6 2 ,	4 %
ó h f l d 1 T Q i e e o n s a r u r u	6 4 2	--	1, 8 6 0	--
l T E B I T t o a M i a r g n	2 3 2 0. % 1 7	3 3 % 2 0 b -1 p s	7 6 9 2. 0 % 1	5 2 % 0 b 4 p s
h f l l k T H i K i i e r e o e o s n e n M i a r g n	9 0 1 1 2. 5 %	9 % 6 0 b p s	9 5 4 1 2. 0 %	8 % 4 0 b p s
ó f 1 h Q i l d T e e o n r u r s a u M i a r g n	2 4 6. 5 %	-- --	2 2 0 1 1. 8 %	-- --

1Consolidated since 1 February 2017

Fresenius Vamed: Q3 & Q1-Q3/17 Highlights

• • 1% organic sales growth YTD reflects typical quarterly fluctuations of project business
• • Continued strong order intake; new projects in Germany, Zambia and Equatorial Guinea
• • Two acquisitions to strengthen service business

€ m	Q 3 / 1 7	∆ Y Y o	Q 3 / 1- 1 7	∆ Y Y o
P j t r o e c b i s n e s s u	1 1 7	0 % 1 -	3 0 1	% 7 -
S i e r v c e b i u s n e s s	1 5 0	9 %	4 4 7	8 %
l l T t o a s a e s	2 6 7	0 %	8 7 4	% 1
l T E B I T t o a	1 5	0 %	3 2	3 %
d k 1 O i t r e r n a e	2 8 5	3 6 %	6 9 7	3 %
O d r e r 1 b k l a c o g			2, 3 4 5	2 2 0 %

1Project business only

2Versus December 31, 2016

Fresenius Group: Q3/17 & LTM Cash Flow

	O p e r a	C C ( ) C i F F t t n g a p e x n e r e e a s				1 h l F o w
€ m	/ Q 3 1 7	L T M M i a g n r	/ Q 3 1 7	L T M M i a g n r	/ Q 3 1 7	L T M M i a g n r
	2 2 4 5	2 1 5 6 %	9 6 -	6 0 % -	1 4 9	9 6 %
	2 6 5	9 % 5	1 0 2 -	1 % 5 -	1 5 4	3 % 4 4
	3 5	1 0 %	3 -	0 6 % -	3 2	0 4 %
/ h C O t t o p o a e e r r r	0 1 -	n a	4 -	n a	1 4 -	n a
l. E F M C x c	5 2 6	4 1 1 7 %	2 0 5 -	5 2 % -	3 2 1	4 6 5 %
	3 8 1, 1	1 2 5 %	3 4 1 -	0 5 % -	0 7 7	7 5 %

1Before acquisitions and dividends

2Including the cash prepayment of €45 million for biosimilars business (LTM: 16.3% operating cashflow margin excl. cash prepayment biosimilars)

3Understated: 4.9% excluding €37 million of capex commitments from acquisitions

4 Margin incl. FMC dividend

Fresenius Group: 2017 Financial Outlook by Business Segment

€m ( ex ce p	he ise d ) t o t ta te rw s		/ 6 F Y 1 B a s e	/ F Y 1 7 e P i r e v o u s	Q 3 / 1- 1 7 l A t c u a	/ F Y 1 7 e N e w
		S l h ( ) t a e s g r o w o r g	6 0 0 7 ,	% % 5 7 –	% 7
		h ( ) E B I T t g o c c r w	1, 1 7 1	1 6 % 8 % –	2 7 %
		S l h ( ) t a e s g r o w o r g	3 8 3 5 4 ,	3 3 % 5 % –	3 4 %
		l ( d ) S t a e s e p o e r r	3 5 8 4 3 ,	4 8 6 b n ~	b 6 4 n
		E B I T	3 6 8 3	5 1, 0 2 0 1, 0 7 0 –	7 6 9
		l h ( ) S t a e s g o o g r w r	1, 1 6 0	5 % 1 0 % –	1 %
		h E B I T t g r o w	6 9	% 0 % 5 1 –	3 %

1Before acquisition-related expenses of ~€50 million; before expected expenditures for further development of biosimilars business of ~€60 million

2Consistent with scope of original guidance: before acquisition-related expenses, before expenditures for further development of biosimilars business

3Helios Kliniken Germany, excluding Quirónsalud

4Thereof Quirónsalud (11 months consolidated): ~€2.5bn

5 Thereof Quirónsalud (11 months consolidated): €300 to €320m

Fresenius Group: 2017 Financial Guidance

€m ( he ise d ) t o t ta te ex ce p rw s		/ 6 F Y 1 B a s e	/ F Y 1 7 e i P r e v o u s	Q 3 / 1- 1 7 l A t c u a	/ F Y 1 7 e N e w
	l S a e s h ( ) t g o c c r w	2 9 4 7 1 ,	1 5 % 1 7 % –	1 6 %
	1 N i t e n c o m e h ( ) t g r o w c c	1, 5 6 0	2 1 9 % 2 1 % –	3 2 0 %

1 Net income attributable to shareholders of Fresenius SE &Co.KGaA

2 Before acquisition-related expenses of ~€50 million; before expected expenditures for further development of biosimilars business of ~€60 million 3 Consistent with scope of original guidance: before acquisition-related expenses, before expenditures for further development of biosimilars business

Attachments

Fresenius Group: Financial Results by Business Segment

€ m			Q 3 / 1 7	∆ Y Y o
		l S a e s	4 3 3 6 ,	3 %
		E B I T	6 0 8	0 %
		l S a e s	1, 5 6 2	3 %
		1 E B I T	2 8 3	% 1
		S l a e s	2 6 6 1 ,	% 4 7
	E B I T	2 3 2	3 3 %
	l S a e s	2 6 7	0 %
		E B I T	1 5	0 %

Before acquisition-related expenses

Fresenius Group: Calculation of Noncontrolling Interest

i i b b l i N F S E & C K G A t t t t t e n c o m e a a e o e s e n s o a r u r u	1, 3 2 9	1, 1 1 8
l l h l d b ( ), N i i i F i K i -€ 2 9 t t t o n c o n o n g n e e s o e s n e s e n s a m r r r r u F i H l i ( -€ 8 ), d d F i V d 's 2 3 % t r e s e n u s e o s m a n u e o r e s e n u s a m e l h i ( -€ 6 ) t e x e r n a o w n e r s p m	-4 3	3 4 -
l l h l d d l N t i i t t i F i M i C o n c o n o n g n e e s o e s n e s e n s e c a a e r r r r u r	9 9 1 -	9 1 5 -
d l b b l F i M i C i i t t t t t t e s e n s e c a a e n e n c o m e n o a a e o r u r r u F i ( Q 1- 3 / 1 7 6 9 % ) r e s e n u s : ~	-6 1 2	5 3 9 -
l l h f N i i t t t, t o n c o n o n g n e e s e e o r r r	8 5 4 -	7 6 8 -
T a x e s	8 5 5 -	3 9 7 -
b f d l l E i i i t t t t a n n g s e o e a a n n o n c o n o n g n e e s r r x r r	3 0 3 8 ,	2 6 2 5 ,
€ m	Q 3 / 1- 1 7	Q 3 / 6 1- 1

Before acquisition-related expenses

Fresenius Group: Cash Flow

€ m	Q 3 / 1 7	L T M M i a r g n	Q 3 / 6 1	L T M M i a r g n	∆ Y Y o
i h l O t C F p e r a n g a s o w	3 8 1, 1	2 % 1 5	9 0 4	9 % 1 1	2 % 1
C ( ) t a p e x n e	4 3 1 -	5 0 % -	3 8 3 -	5 5 % -	1 3 % -
h l F C F e e a s o r w ( be fo d d de ds ) is i t io iv i re a cq u ns a n n	0 7 7	% 7 5	5 5 7	6 % 4	2 % 7
( ) A i i t i t c q s o n s n e u	2 2 7 -		0 4 -
d d D i i e n v s	6 8 -		5 8 -
C h l F F r e e a s o w ( f is i io d d iv i de ds ) te t a r a cq u ns a n n	4 1 2	1 4 4 % -	4 5 9	3 0 %	1 0 0 % -

Fresenius Group: Leverage Ratio

Before special items; pro forma acquisitions At annual average FX rates for both EBITDA and net debt

1Pro forma excluding advances made for the acquisition of hospitals from Rhön-Klinikum AG

Pro forma acquisitions of Akorn, Inc. and Fresenius Kabi's biosimilars business; before acquisition-related expenses of ~€50 million; excluding further potential acquisitions

Fresenius Kabi: Organic Sales Growth by Product Segment

l l T t o a s a e s	6 2 1, 5	% 7	6 4 7 4 ,	% 7
d l / M i D i e c a e v c e s f h l T i T a n s s o n e c n o o g r u y	2 6 6	0 %	8 0 4	3 %
l l C i i N i i t t n c a u r o n	2 4 7	0 % 1	2 1, 5 4	9 %
f h I i T n u s o n e r a p y	2 2 1	% 4	6 6 7	6 %
I V D g s r u	8 6 4	9 %	2 0 3 0 ,	8 %
€ m	Q 3 / 1 7	∆ Y Y o i o r g a n c	Q 3 / 1- 1 7	∆ Y Y o i o r g a n c

Fresenius Kabi: Organic Sales Growth by Regions

€ m	/ Q 3 1 7	∆ Y Y o i o g a n c r	/ Q 1- 3 1 7	∆ Y Y o i o g a n c r
E o p e u r	5 3 8	4 %	1, 6 3 5	5 %
h N A i t o r m e r c a	5 4 9	7 %	1, 7 3 6	6 %
f / A i P i i L i t s a a c c a n - f i / i A A m e r c a r c a	4 7 5	1 0 %	1, 3 9 3	1 0 %
f A i P i i s a- a c c	3 2 1	2 % 1	8 9 4	% 1 1
/ f L i A i A i t a n m e c a c a r r	1 6 3	8 %	4 9 9	1 0 %
l l T t o a s a e s	1, 5 6 2	7 %	4 7 6 4 ,	7 %

Fresenius Helios: Performance Indicators

	Q 3 / 1- 1 7	Q 3 / 6 1- 1	∆ Y Y o
1 f h l N i t o o o s p a s l A i i t e e n c u c a r c c s - l i i P t- t o s a c u e c a r e c n c s -	1 1 1 8 8 2 3	2 1 1 8 8 2 4	% 1 - 0 % % -4
1 f b d N o o e s A l i i t c u e c a r e c n c s - l P t- t i i o s a c u e c a r e c n c s -	3 4 4 9 2 , 2 9, 4 0 0 0 9 2 5,	3 4 7 0 6 , 2 9, 6 1 8 0 8 8 5,	1 % - -1 % 0 %
d A i i m s s o n s ( ) A t i t i t c u e c a r e n p a e n -	9 3 3, 9 0 5	9 2 3, 3 1 4	% 1
O c c p a n c u y P t- t o s a c u e c a r e -	8 3 %	8 3 %
l h f ( d ) A t t e a g e e n g o s a a s v r y y 2 A t c u e c a r e - P t- t o s a c e c a e u r -	6. 2 2 5. 9	6. 4 2 6. 1

1 October 31, 2017; December 31, 2016

2 German average (2016): 7.3

Reconciliation Q3/17

The table below shows the adjustments and the reconciliation from net income according to guidance, i.e. before acquisition-related expenses and before expenditures for further development of biosimilars business to net income according to IFRS.

		Q 3 / 1 7
€m	fo la d Be is i t io te re a cq n- re u fo d be ex p en se s an re d fo i tu ex p en re s r fu he de lo f t t o r r ve p m en b la bu io im i in es s rs s s	Ex d i tu p en re s fo fu he t r r r de lo f t o ve p m en b la bu io im i in es s rs s s	fo Be re is i t io ac q n u la d te re ex p en se s	Ac is i t io q n u la d te re ex p en se s	I F R S d te re p or
l S a e s	8, 2 9 7		8, 2 9 7		8, 2 9 7
E B I T i N t t t e n e r e s	3 1, 1 4 -1 8 5	-1 4	2 9 1, 1 -1 8 5	-1 5 -5	1, 1 1 4 -1 6 3
f N i b t t e n c o m e e o r e a x e s I t n c o m e a e s x	9 8 5 -2 7 0	-1 4 4	9 7 1 -2 6 6	-2 0 3	9 5 1 -2 6 3
i N t e n c o m e l l N t i i t t o n c o n r o n g n e r e s	7 1 5 -2 9 2	-1 0	7 0 5 -2 9 2	-1 7	6 8 8 -2 9 2
i i b b l N t t t t e n c o m e a r u a e h h l d f t o s a e o e s o r r i F S E & C K G A r e s e n u s o a	2 3 4	1 0 -	1 3 4	1 7 -	3 9 6

The acquisition-related expenses are reported in the Group Corporate/Other segment.

Reconciliation Q1-3/17

The table below shows the adjustments and the reconciliation from net income according to guidance, i.e. before acquisition-related expenses and before expenditures for further development of biosimilars business to net income according to IFRS.

	Q 3 / 1- 1 7
€m	Be fo is i io la d t te re a cq u n- re d be fo ex p en se an re s d i fo tu ex p en re s r fu he de lo f t t o r r ve p m en b la bu io im i in s rs s es s	d Ex i tu p en re s fo fu he t r r r de lo f t o ve p m en b la bu io im i in s rs s es s	fo Be re is i io t ac q u n la d te re ex p en se s	is i io Ac t q u n la d te re ex p en se s	I F R S d te re p or
S l a e s	2 9 5, 1 1		2 9 5, 1 1		2 9 5, 1 1
E B I T N i t t t e n e r e s	3, 3 6 5 -4 8 4	-1 4	3, 2 2 5 -4 8 4	-2 5 -8	3, 9 4 7 -4 9 2
i b f N t t e n c o m e e o e a e s r x I t n c o m e a x e s	3, 0 5 2 -8 9 5	-1 4 4	3, 0 3 8 -8 5 5	-3 3 7	3, 0 0 5 -8 8 4
i N t e n c o m e N l l i i t t t o n c o n r o n g n e r e s	2, 9 3 1 -8 5 4	0 -1	2, 8 3 1 -8 5 4	-2 6	2, 1 5 7 -8 5 4
i i b b l N t t t t e n c o m e a a e r u h h l d f t o s a r e o e r s o i S & C G F E K A r e s e n u s o a	3 3 9 1,	0 1 -	3 2 9 1,	2 6 -	3 0 3 1,

The acquisition-related expenses are reported in the Group Corporate/Other segment.

Financial Calendar / Contact

Financial Calendar

b 2 7 F 2 0 1 8 e r u a r y	l R F Y 2 0 1 7 t e s u s
3 M 2 0 1 8 a y	l / R Q 1 2 0 1 8 t e s s u
1 8 M 2 0 1 8 a y	l l A G M i t n n a e n e a e e n g u r
3 1 l 2 0 1 8 J u y	l Q 2 / 2 0 1 8 R t e s u s
3 0 O b 2 0 8 t 1 c o e r	l Q 3 / 2 0 8 R t 1 e s u s

Please note that these dates could be subject to change.

Contact

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