Fresenius SE & Co. KGaA — Call Transcript 2018

May 3, 2018

Conference Call – Q1/18 Results

Bad Homburg, 3 May 2018

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.

Strong start to the year despite very tough prior-year comp

Fresenius Group: Current Topics (1/2)

• Fresenius terminated merger agreement with Akorn, due to Akorn's failure to fulfill several closing conditions
• Akorn filed a lawsuit against Fresenius in Delaware, USA, for consummation of the merger agreement
• Fresenius filed a counterclaim on April 30, 2018
• Strategic rationale for expanding product offering in North America was and remains valid

HES

• EU Commission (EC) suspended decision to withdraw HES from the market in Europe
• Several Member States raised concerns on draft decision of EC due to lack of full consideration of all medical & technical arguments
• The procedure has now been referred back to PRAC for further consideration
• Kabi's FY/18 outlook still considers meaningful risk adjustment

Fresenius Group: Current Topics (2/2)

Pricing Environment North America

• Strong Q1/18 financial performance of Fresenius Kabi NA
• Continued low single-digit price decline for base business in 2018
• Nothing 'out of the ordinary' in generic injectables market

Helios

• Preparatory measures for minimum nursing staff levels
• Clustering and digitalization efficiencies will have a more mid-term effect

Biosimilars

• Improving political environment:
• − France aims to have 80% biosimilars penetration by 2022
• − US: All biosimilars of reference product will now be eligible for pass-through status as part of the 340b program

Financial Review Q1/18

Fresenius Group: Q1/18 Profit and Loss Statement

€m	Q1/18	Δ YoY cc
Sales	8,121	7%1
EBIT	1,054	-5%/3%2
EBIT (excl. biosimilars)	1,089	-2%/6%2
Net interest	-146	-1%
Income taxes	-191	32%
Net income	450	7%
Net income (excl. biosimilars)	476	12%

1 Growth rate adjusted for IFRS 15 adoption 2 Excluding VA agreement

All figures before special items (i.e., expenses related to (i) the Akorn transaction, and (ii) the re-valuation of Sound Physicians' share-based payment program caused by its announced divestiture) All growth rates in constant currency (cc) Net income attributable to shareholders of Fresenius SE & Co. KGaA

For a detailed overview of special items please see the reconciliation table on slide 25.

Fresenius Group: Q1/18 Business Segment Growth

¹ Growth rates adjusted for IFRS 15 adoption 2 Excl. VA agreement

³ Excl. biosimilars

⁴ Helios Spain only consolidated for two months in Q1/17

⁵ Excl. biosimilars: -2%

All figures before special items

For a detailed overview special items please see the reconciliation table on slide 25.

Fresenius Kabi: Q1/18 Regional Highlights (1/2)

North America

• 10% organic sales growth
• 32 Kabi-marketed IV drugs currently designated in shortage (vs. 24 at Q4/17)
• 3 product launches YTD; confirm 15+ target
• Confirm FY/18 outlook: Mid-single-digit organic sales growth

Europe

• 3% organic sales growth
• Enteral nutrition continues to drive growth
• Confirm FY/18 outlook: Low to mid-single-digit organic sales growth

Fresenius Kabi: Q1/18 Regional Highlights (2/2)

Emerging Markets

China

• 16% organic sales growth
• New tender rules:
• − Introduction of new tender policy expected to be completed mid 2018
• − Expectation for FY/18 unchanged low to mid single-digit price decline and continued double-digit volume growth

Asia-Pacific ex China: 13% organic sales growth

Latin America/Africa: 10% organic sales growth

Total Emerging Markets

Confirm FY/18 outlook: likely double-digit organic sales growth

Fresenius Kabi: Q1/18 EBIT Growth

€m	Q1/18	Δ YoY cc
North America	222	8%
Margin	37.6%	-50 bps
Europe	85	8%
Margin	15.3%	60 bps
Asia-Pacific/Latin America/Africa	87	12%
Margin	19.1%	-40 bps
Corporate and Corporate R&D	-126	-45%
Total EBIT1	268	-2%
Margin1	16.7%	-280 bps
Total EBIT excl. Biosimilars1	303	10%
Margin1	18.9%	-60 bps

Margin growth at actual rates ¹ Before special items

For a detailed overview of special items please see the reconciliation table on slides 25.

Fresenius Helios

Helios Germany

• Solid organic sales growth
• Additional "DRG catalogue effects", minimum nursing staff levels and lack of privatization opportunities impact financial performance

Helios Spain

• One additional month of consolidation in Q1/18
• Softer start to the year driven by a pronounced Easter effect
• Acceleration of organic growth expected in Q2

Fresenius Helios: Q1/18 Key Financials

€m	Q1/18	Δ YoY
Total sales	2,331	16%
Thereof Helios Germany	1,574	3%
Helios Spain1 Thereof	757	54%
Total EBIT Margin	278 11.9%	9% -70 bps
Thereof Helios Germany Margin	177 11.2%	-2% -60 bps
Helios Spain1 Thereof Margin	103 13.6%	39% -150 bps
Thereof Corporate	-2	--

¹ Consolidated since 1 February 2017

Fresenius Vamed

• Strong Q1/18: Organic sales growth of 9%
• Excellent order intake of €260m
• Order backlog at all-time high

€m	Q1/18	Δ YoY
Total sales	249	12%
Project business	92	19%
Service business	157	8%
Total EBIT	6	0%
Order intake1	260	18%
Order backlog1,2	2,391	11%

¹ Project business only ² Versus December 31, 2017

Fresenius Group: Cash Flow

	Operating CF		Capex	(net)	Free Cash Flow1
€m	Q1/18	LTM Margin	Q1/18	LTM Margin	Q1/18	LTM Margin
	226	16.4%	-96	-6.8%	130	9.6%
	97	7.2%	-65	-4.8%	32	2.4%2
	-42	3.5%	-2	-0.6%	-44	2.9%
Corporate/Other	0	n.a.	-10	n.a.	-10	n.a.
Excl. FMC	281	11.0%3	-173	-5.5%	108	5.5%3
	236	11.0%	-391	-5.3%	-155	5.7%

¹ Before acquisitions and dividends

² Understated: 2.9% excluding €45 million of capex commitments from acquisitions 3 Margin incl. FMC dividend

Fresenius Group: 2018 Financial Outlook by Business Segment

€m (except	otherwise stated)		FY/17 Base	Q1/18 Actual	FY/18e1	FY/181 New
		Sales growth (org)	6,358	9%	4% - 7%
		EBIT growth (cc)	1,1772	-2%6	-6 %2 -3% to
		EBIT growth (cc) excl. biosimilars	1,2373	10%6	5%3 ~2% -
		Sales growth (org)	8,6684	3%	6%5 3% -
		EBIT growth	1,0524	9%	7% - 10%
		Sales growth (org)	1,228	9%	5% - 10%
		EBIT growth	76	0%	5% - 10%

¹ Excluding effects of the Akorn, NxStage and Sound Physicians transactions

² Before special items (i.e., transaction-related effects); including expenditures for further development of biosimilars business

(€60 m in FY/17 and expected expenditures of ~€160 m in FY/18)

³ Before special items (i.e., transaction-related effects); excluding expenditures for further development of biosimilars business (€60 m in FY/17 and expected expenditures of ~€160 m in FY/18) 4 Helios Spain consolidated for 11 months

⁵ Organic growth reflects 11 months contribution of Helios Spain in 2018

⁶ Before special items (i.e., transaction-related effects)

For a detailed overview of special items please see the reconciliation table on slide 25.

Fresenius Group: 2018 Financial Guidance

€m (except otherwise stated)		FY/17 Base	Q1/18 Actual	FY/18e1	FY/181
	Sales growth (cc)	33,4002	7%8	5% - 8%
	Net income3 growth (cc)	1,8164	7%9	9%5 6% -
	Net income3 growth (cc) excl. Biosimilars	1,8596	12%9	13%7 ~10% -

¹ Excluding effects of the Akorn, NxStage and Sound Physicians transactions

² 2017 base adjusted for IFRS 15 adoption (deduction of €486 million at Fresenius Medical Care)

³ Net income attributable to shareholders of Fresenius SE & Co.KGaA

⁴ Before special items (before transaction-related effects, book gain from the U.S. tax reform and FCPA provision)

⁵ Before special items (i.e., transaction-related effects); including expenditures for further development of biosimilars business (€43 m after tax in FY/17 and expected expenditures of ~€120 m after tax in FY/18)

⁶ Adjusted net income: before transaction-related effects, expenditures for further development of biosimilars business, book gain from the U.S. tax reform and FCPA provision

⁷ Before special items (i.e., transaction-related effects); excluding expenditures for further development of biosimilars business (€43 m after tax in FY/17 and expected expenditures of

~€120 m after tax in FY/18) 8 Growth rate adjusted for IFRS 15 adoption (Q1/17 base: €8,223 million)

⁹ Before special items (i.e., transaction-related effects)

For a detailed overview of special item please see the reconciliation table on slide 25.

Attachments

Fresenius Group: Calculation of Noncontrolling Interest

€m	Q1/18	Q1/17
Earnings before tax and noncontrolling interest	908	1,059
Taxes	-191	-308
Noncontrolling interest, thereof	-267	-294
Fresenius Medical Care net income not attributable to Fresenius (Q1/18: ~69%)	-204	-212
Noncontrolling interest holders in Fresenius Medical Care	-51	-69
Noncontrolling interest holders in Fresenius Kabi (-€9 m), Fresenius Helios (-€2 m), and due to Fresenius Vamed's 23% external ownership (-€1m)	-12	-13
Net income attributable to Fresenius SE & Co. KGaA	450	457

Before special items

For a detailed overview of special items please see the reconciliation table on slide 25.

Fresenius Group: Cash Flow

€m	Q1/18	LTM Margin	Δ YoY
Operating Cash Flow	236	11.0%	-50%
Capex (net)	-391	-5.3%	-19%
Free Cash Flow (before acquisitions and dividends)	-155	5.7%	--
Acquisitions (net)	-189
Dividends	-45
Free Cash Flow (after acquisitions and dividends)	-389	1.3%	93%

Fresenius Group: Leverage Ratio

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

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

² Calculated at expected annual average exchange rates, for both net debt and EBITDA; excluding effects of the Akorn, NxStage and Sound Physicians transactions; excluding further potential acquisitions; at current IFRS rules

³ Excluding Akorn, NxStage and Sound Physicians transactions

Fresenius Kabi: Organic Sales Growth by Regions

Total sales	1,603	9%
Latin America/Africa	154	10%
Asia-Pacific	301	15%
Asia-Pacific/Latin America/Africa	455	13%
Europe	557	3%
North America	591	10%
€m	Q1/18	Δ YoY organic

Fresenius Kabi: Organic Sales Growth by Product Segment

Total sales	1,603	9%
Transfusion Technology
Medical Devices/	253	1%
Clinical Nutrition	435	14%
Infusion Therapy	236	11%
IV Drugs	679	8%
€m	Q1/18	Δ YoY organic

Fresenius Helios: Key Measures

	Q1/18	FY/17	Δ YoY
No. of hospitals Germany - Acute care clinics - Post-acute care clinics	111 88 23	111 88 23	0% 0% 0%
No. of hospitals Spain (Hospitals)	45	45	0%
No. of beds Germany - Acute care clinics - Post-acute care clinics No. of beds Spain (Hospitals)	34,668 29,496 5,172 6,688	34,610 29,438 5,172 6,652	0% 0% 0% 1%
Admissions Germany (acute care) Admissions Spain (including outpatients)	327,412 3,392,105	1,237,068 11,592,758

Reconciliation Q1/18

Consolidated results for Q1/2018 include special items related to the Akorn transaction. These are mainly transaction costs in the form of legal and consulting fees as well as costs of the financing commitment for the Akorn transaction. Moreover special items arose from the announced divestiture of Sound Physicians due to the initial increase in valuation of the Sound Physicians' share based payment program. The following presentation shows the corresponding reconciliation to the IFRS values. There were no special items in Q1/2017.

€m	Q1/2018 Before special items and before expenses for biosimilars business	Expenses for the further development of the biosimilars business	Before special items	Special items (transaction related effects Akorn)	Special items (transaction related effects Sound Physicians)	After special items (IFRS reported)
Sales	8,121		8,121			8,121
EBIT Net interest	1,089 -144	-35 -2	1,054 -146	-5 -3	-13	1,036 -149
Net income before taxes Income taxes	945 -202	-37 11	908 -191	-8 2	-13	887 -189
Net income Noncontrolling interest	743 -267	-26	717 -267	-6	-13 9	698 -258
Net income attributable to shareholders of Fresenius SE & Co. KGaA	476	-26	450	-6	-4	440

The transaction-related effects are reported in the Group Corporate/Other segment.

Financial Calendar / Contact

Financial Calendar

18 May 2018	Annual General Meeting
7/8 June 2018	Capital Markets Day
31 July	Results
2018	Q2/2018
30 October	Results
2018	Q3/2018

Please note that these dates could be subject to change.

Contact

Investor Relations Fresenius SE & Co. KGaA phone: +49 6172 608-2485 e-mail: ir-fre@fresenius.com For further information and current news: www.fresenius.com

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