Fresenius SE & Co. KGaA — Call Transcript 2019

May 2, 2019

Conference Call – Q1/19 Results

Bad Homburg, 02 May 2019

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.

Q1/19 Highlights

• Solid start to the year; growth investments on track
• Fresenius Kabi with continued good growth in Q1/19
• Helios Germany stabilized; Helios Spain with continued dynamic growth
• Fresenius Medical Care with strong financial performance supported by agreements that materialized earlier than planned
• Fresenius Medical Care closes NxStage transaction
• Group guidance confirmed despite expected earnings dilution from NxStage

Fresenius Kabi: Off to a good start to the year

IV Generics in North America

• Tough prior-year comp
• More competition for selected molecules
• 36 Kabi-marketed IV drugs currently designated in shortage vs. 37 at Q4/18
• 4 new product launches YTD; on track to meet expectation of ~15 launches
• Stable prices in our base product portfolio

Biosimilars

• Earlier than expected EU launch of Idacio® (Adalimumab) imminent
• Preparations for launch in individual EU countries well underway
• Small sales contribution from Idacio® expected in 2019

Clinical Nutrition

• Excellent growth of parenteral nutrition especially in China
• Enteral Nutrition growth mainly driven by Latin America and Europe

Transfusion/Cell Technology business

• Good progress of carve out
• Evaluation of all potential options

Fresenius Helios: Update

Helios Germany

Attractive employer for nurses

• Ca. 600 additional nurses hired in Q1/19
• Benign impact on P&L in 2019: all incremental nurses (net) placed in 2019 will be fully reimbursed

Collective labor agreements in line with expectations

• 2019 2020: Agreed salary increase of +2.5% p.a. with doctors' union Marburger Bund
• Agreed salary increase with labor union (nurses) ver.di of 3% for 2019, 2.5% starting 1 Jan 2020 and from 1 Nov 2020 by a further 1%

New business models

• Prevention 2.0
• Roll-out of occupational risk prevention

Acquisition of two ORP companies

• New service offerings
• Complementary to existing ORP network

Clínica Medellin, Colombia

• Closing of transaction on April 25
• Annual sales of ~€50 million

Financial Review Q1/19

Fresenius Group: Q1/19 Key Financials

€m	Q1/191	IFRS 16 effect	special items	Q1/19 reported	cc2 Δ YoY
Sales	8,517	-22	-	8,495	5%
EBIT	1,111	19	-15	1,115	2%
Net interest	-133	-48	-3	-184	6%
Income taxes	-229	8	4	-217	16%
Net income3	465	-8	-4	453	0%
Balance sheet total	59,316	5,669	-	64,985
Operating Cashflow	118	171	-	289

¹ Before special items, adjusted for IFRS 16 effect

² On a comparable basis: Q1/18 adjusted for divestitures of Care Coordination activities at FMC

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

For a detailed overview of special items and adjustments please see the reconciliation tables on slides 25-34.

Fresenius Group: Q1/19 Business Segment Growth

1 On a comparable basis: Q1/18 adjusted for divestitures of Care Coordination activities at FMC; Q1/19 adjusted for IFRS 16 effect.

All figures before special items

For a detailed overview of special items and adjustments please see the reconciliation tables on slides 25-34.

Fresenius Kabi: Q1/19 Regional Highlights (1/2)

North America

• -2% organic growth
• Tough prior-year comp
• Easing of shortage tailwinds
• Continued significant launch activity
• Confirm FY/19 outlook: Low to mid-single-digit organic sales growth

Europe

• 3% organic growth
• Enteral nutrition with dynamic growth momentum
• Launch of biosimilar Idacio® (Adalimumab) imminent
• Confirm FY/19 outlook: Low to mid-single-digit organic sales growth

Fresenius Kabi: Q1/19 Regional Highlights (2/2)

Emerging Markets

China:

• 13% organic sales growth

Asia-Pacific ex China:

• 8% organic sales growth
• Very positive momentum

Latin America/Africa:

• 18% organic sales growth
• Continued strong growth expected

Total Emerging Markets

Confirm FY/19 outlook: Likely double-digit organic sales growth

Fresenius Kabi: Q1/19 EBIT Growth

€m	Q1/19	Δ YoY cc
North America	245	3%
Margin	39.3%	170 bps
Europe	87	2%
Margin	15.2%	-10 bps
Asia-Pacific/Latin America/Africa	104	18%
Margin	20.6%	150 bps
Corporate and Corporate R&D	-133	-4%
Total EBIT1	303	7%
Margin1	17.8%	110 bps

1 On a comparable basis: before special items and adjusted for IFRS 16 effects

Margin growth at actual rates For a detailed overview of special items and adjustments please see the reconciliation tables on slides 25-34.

Fresenius Helios: Q1/19 Highlights

Helios Germany

• Stabilized development with 2% organic sales growth on a tough prior-year quarter
• Good progress with preparatory structural activities

Helios Spain

• Outstanding organic sales growth of 9%
• Positive Easter effect

Fresenius Helios: Q1/19 Key Financials

€m	Q1/19	Δ YoY
Total sales	2,311	-1%/4%1
Thereof Helios Germany	1,485	-6%/1%1
Thereof Helios Spain	826	9%
Total EBIT2 Margin	266 11.5%	-4%/-3%1 -40 bps
Thereof Helios Germany Margin	149 10.0%	-16%/-14%1 -120 bps
Thereof Helios Spain Margin	119 14.4%	16% +80 bps
Thereof Corporate	-2	0%

¹ Adjusted for the post-acute care business transferred to Fresenius Vamed as of July 1, 2018

² Adjusted for IFRS 16 effect

Fresenius Vamed: Q1/19 Highlights

• Both Project and Service business contributing to the excellent organic sales growth of 31%
• Stronger collaboration between business segments contributing nicely to sales growth
• Order backlog at all-time high of €2,698 m; strong foundation for future growth

€m	Q1/19	Δ YoY
Total sales Thereof organic sales	440	77% 31%1
Project business	108	17%
Service business	332	111% 41%1
EBIT2 Total	11	83% 17%1
Order intake3	383	47%
Order backlog3	2,698	11%4

¹ Without German post-acute care business acquired from Fresenius Helios as of July 1, 2018

• 2 Adjusted for IFRS 16 effect
• ³ Project business only
• ⁴ Versus December 31, 2018

Fresenius Group: Q1/19 Cash Flow

	Operating CF1		Capex	(net)	Free Cash Flow1,2
€m	Q1/19	LTM Margin	Q1/19	LTM Margin	Q1/19	LTM Margin
	132	14.2%	-140	-8.9%	-8	5.3%
	91	6.1%	-88	-5.1%	3	1.0%3
	-23	6.7%	-6	-1.8%	-29	4.9%
Corporate/Other	-17	n.a.	-24	n.a.	-41	n.a.
Excl. FMC	183	9.7%4	-258	-6.7%	-75	3.0%4
	118	10.7%	-457	-6.3%	-339	4.4%

¹ Adjusted for IFRS 16 effects

² Before acquisitions and dividends

³ Understated: 1.3% excluding €27 million of capex commitments from acquisitions

4 Margin incl. FMC dividend

Fresenius Group: 2019 Financial Outlook by Business Segment

€m (except	otherwise stated)		FY/18 Base	FY/19e1
		Sales growth (org)	6,544	3% - 6%
		EBIT growth (cc)	1,1392	3% - 6%
		Sales growth (org)	8,993	2% - 5%
	EBIT growth	1,052	-5% to -2%
		Sales growth (org)	1,688	~10%
		EBIT growth	110	15% - 20%

¹ Excluding transaction-related expenses, revaluations of biosimilars contingent liabilities, adjusted for IFRS 16 effects ² Before special items

For a detailed overview of adjustments and special items please see the reconciliation tables on slides 25-34.

Fresenius Group: 2019 Financial Guidance

€m (except otherwise stated)		Base1 FY/18	FY/192
	Sales growth (cc)	33,009	3% - 6%
	Net income3 growth (cc)	1,872	~0%

¹ Before special items and after adjustments

² Excluding transaction-related expenses, expenses associated with the cost optimization program at FMC, revaluations of biosimilars contingent liabilities, including operating results of NxStage, adjusted for IFRS 16 effects

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

For a detailed overview of adjustments and special items please see the reconciliation tables on slides 25-34.

Attachments

Fresenius Group: Noncontrolling Interest

Net income attributable to Fresenius SE & Co. KGaA	465	451
Noncontrolling interest holders in Fresenius Kabi (-€11 m), Fresenius Helios (-€4 m) and due to Fresenius Vamed's 23% external ownership (-€1 m)	-16	-12
Noncontrolling interest holders in Fresenius Medical Care	-57	-51
Fresenius Medical Care net income not attributable to Fresenius (FY/18: ~69%)	-211	-207
Noncontrolling interest, thereof	-284	-270
Taxes	-229	-190
Earnings before tax and noncontrolling interest	978	911
€m	Q1/19	Q1/18

On a comparable basis: before special items and adjusted for IFRS16 effects

For a detailed overview of special items please see the reconciliation tables on slides 25-34.

€m	Q1/19	LTM Margin	Δ YoY
Operating Cash Flow1	118	10.7%	-50%
Capex (net)	-457	-6.3%	-17%
Free Cash Flow1	-339	4.4%	-119%
(before acquisitions and dividends)
Acquisitions (net)	-1,900	-3.2%	--
Dividends	-43	-2.7%	4%
Free Cash Flow1 (after acquisitions and dividends)	-2,282	-1.5%	--

¹ Adjusted for IFRS 16 effects

Fresenius Group: Leverage Ratio

Before special items; pro forma closed acquisitions/divestitures 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 acquisition of NxStage; without potential unannounced acquisitions; adjusted for IFRS 16 effects (comparable to guidance from February 20, 2019)

³ Excluding proceeds from divestitures of Care Coordination activities

⁴ Calculated at expected annual average exchange rates, for both net debt and EBITDA; including acquisition of NxStage; without potential unannounced acquisitions; adjusted for IFRS 16 effects (comparable to updated guidance from May 2, 2019)

Fresenius Kabi: Q1/19 Organic Sales Growth by Regions

€m	Q1/19	Δ YoY organic
North America	623	-2%
Europe	573	3%
Asia-Pacific/Latin America/Africa	505	13%
Asia-Pacific	341	11%
Latin America/Africa	164	18%
Total sales	1,701	4%

€m	Q1/19	Δ YoY organic
IV Drugs	745	-1%
Infusion Therapy	207	5%
Clinical Nutrition	453	8%
Medical Devices/ Transfusion Technology	296	12%
Total sales	1,701	4%

	Q1/19	FY/18	Δ
No. of hospitals Germany - Acute care hospitals	86 83	86 83	0% 0%
No. of hospitals Spain (Hospitals)	47	47	0%
No. of beds Germany - Acute care hospitals	29,405 28,878	29,329 28,802	0% 0%
No. of beds Spain (Hospitals)	6,906	7,019	-2%
Admissions Germany (acute care)	312,302	1,218,199
Admissions Spain (including outpatients)	3,704,104	13,318,066

Fresenius Group: Reconciliation

€m	Q1/19	Q1/18	growth rate	growth rate (cc)
Sales reported	8,495	8,121	5%	2%
Divestitures of Care Coordination activities (Q1/2018) at FMC (Fresenius Medical Care)	-	-251
IFRS 16 effect	22	-
Sales on a comparable basis	8,517	7,870	8%	5%
EBIT reported (after special items)	1,115	1,036	8%	4%
Transaction costs Akorn	2	5
Revaluations of biosimilars contingent liabilities	-7	-
Transaction costs Care Coordination activities	-	13
Transaction costs NxStage	16	-
Expenses associated with the cost optimization program at FMC	4	-
EBIT (before special items)	1,130	1,054	7%	3%
Divestitures of Care Coordination activities at FMC (Q1/2018)	-	-4
IFRS 16 effect	-19	-
EBIT on a comparable basis	1,111	1,050	6%	2%
Net interest reported (after special items)	-184	-152	-21%	-18%
Bridge Financing Costs Akorn	-	3
Revaluations of biosimilars contingent liabilities	3	-
Net interest (before special items)	-181	-149	-21%	-18%
Divestitures of Care Coordination activities at FMC (Q1/2018)	-	10
IFRS 16 effect	48	-
Net interest on a comparable basis	-133	-139	4%	6%

Fresenius Group: Reconciliation

€m	Q1/19	Q1/18	growth rate	growth rate (cc)
Income taxes reported (after special items)	-217	-186	-17%	-12%
Transaction costs Akorn	-	-1
Bridge Financing Costs Akorn	-	-1
Revaluations of biosimilars contingent liabilities	1	-
Transaction costs NxStage	-4	-
Expenses associated with the cost optimization program at FMC	-1	-
Income taxes (before special items)	-221	-188	-18%	-13%
Divestitures of Care Coordination activities at FMC (Q1/2018)	-	-2
IFRS 16 effect	-8	-
Income taxes on a comparable basis	-229	-190	-21%	-16%
Noncontrolling interest reported (after special items)	-261	-258	-1%	4%
Transaction costs Care Coordination activities	-	-9
Transaction costs NxStage	-8	-
Expenses associated with the cost optimization program at FMC	-2	-
Noncontrolling interest (before special items)	-271	-267	-1%	3%
Divestitures of Care Coordination activities at FMC (Q1/2018)	-	-3
IFRS 16 effect	-13	-
Noncontrolling interest on a comparable basis	-284	-270	-5%	0%

Fresenius Group: Reconciliation

€m	Q1/19	Q1/18	growth rate	growth rate (cc)
	453	440	3%	0%
Transaction costs Akorn	2	4
Bridge Financing Costs Akorn	-	2
Revaluations of biosimilars contingent liabilities	-3	-
Transaction costs Care Coordination activities	-	4
Transaction costs NxStage	4	-
Expenses associated with the cost optimization program at FMC	1	-
Net income (before special items)	457	450	2%	-2%
Divestitures of Care Coordination activities at FMC (Q1/2018)	-	1
IFRS 16 effect	8	-
Net income on a comparable basis	465	451	3%	0%

Reconciliation according to Fresenius Medical Care

€m	Q1/19	Q1/18	growth rate	growth rate (cc)
Sales reported	4,133	3,976	4%	-1%
Divestitures of Care Coordination activities (Q1/2018)	-	-251
IFRS 16 effect	22	-
NxStage operations	-30	-
Sales adjusted	4,125	3,725	11%	6%
EBIT reported	537	497	8%	3%
Transaction costs Care Coordination activities	-	13
Divestitures of Care Coordination activities (Q1/2018)	-	-4
IFRS 16 effect	-17	-
NxStage operations	11	-
Transaction costs NxStage	16	-
Expenses associated with the cost optimization program	4	-
EBIT adjusted	551	506	9%	4%
Net income reported	271	279	-3%	-6%
Transaction costs Care Coordination activities	-	13
Divestitures of Care Coordination activities (Q1/2018)	-	4
IFRS 16 effect	18	-
NxStage operations	14	-
Transaction costs NxStage	12	-
Expenses associated with the cost optimization program	3	-
Net income adjusted	318	296	8%	3%

Reconciliation Fresenius Medical Care according to Fresenius Group

€m	Q1/19	Q1/18	growth rate	growth rate (cc)
Sales reported	4,133	3,976	4%	-1%
Divestitures of Care Coordination activities (Q1/2018)	-	-251
IFRS 16 effect	22	-
Sales on a comparable basis	4,155	3,725	12%	6%
EBIT reported (after special items)	537	497	8%	3%
Transaction costs Care Coordination activities	-	13
Transaction costs NxStage	16	-
Expenses associated with the cost optimization program	4	-
EBIT (before special items)	557	510	9%	4%
Divestitures of Care Coordination activities (Q1/2018)	-	-4
IFRS 16 effect	-17	-
EBIT on a comparable basis	540	506	7%	2%
Net income reported (after special items)	271	279	-3%	-6%
Transaction costs Care Coordination activities	-	13
Transaction costs NxStage	12	-
Expenses associated with the cost optimization program	3	-
Net income (before special items)	286	292	-2%	-6%
Divestitures of Care Coordination activities (Q1/2018)	-	4
IFRS 16 effect	18	-
Net income on a comparable basis	304	296	3%	-1%

Reconciliation Fresenius Kabi

€m	Q1/19	Q1/18	growth rate	growth rate (cc)
Sales reported	1,701	1,603	6%	4%
Transaction costs Akorn	2	5
Revaluations of biosimilars contingent liabilities	-7	-
EBIT (before special items)	304	268	13%	7%
IFRS 16 effect	-1	-
EBIT on a comparable basis	303	268	13%	7%
Transaction costs Akorn	2	4
Revaluations of biosimilars contingent liabilities	-3	-
Net income (before special items)	202	170	19%	12%
IFRS 16 effect	1	-
Net income on a comparable basis	203	170	19%	12%

Reconciliation Fresenius Helios

€m	Q1/19	Q1/18	growth rate
Sales reported	2,311	2,331	-1%
German post-acute care business transferred from Fresenius Helios to Fresenius Vamed	-	-110
Sales adjusted for German post-acute care business	2,311	2,221	4%
EBIT reported	268	278	-4%
IFRS 16 effect	-2	-
EBIT adjusted for IFRS 16 effect	266	278	-4%
German post-acute care business transferred from Fresenius Helios to Fresenius Vamed	-	-3
EBIT adjusted for IFRS 16 effect and German post acute care business	266	275	-3%

Reconciliation Fresenius Vamed

€m	Q1/19	Q1/18	growth rate
Sales reported	440	249	77%
German post-acute care business acquired from Fresenius Helios	-110	-
Sales adjusted for German post-acute care business	330	249	33%
EBIT reported	12	6	100%
IFRS 16 effect	-1	-
EBIT adjusted for IFRS 16 effect	11	6	83%
German post-acute care business acquired from Fresenius Helios	-4	-
EBIT adjusted for IFRS 16 effect and German post-acute care business	7	6	17%

IFRS 16 effect on Group P&L

€m	Q1/19 before special items adjusted for IFRS 16 effect	IFRS 16 effect	Q1/19 before special items according to IFRS 16
Sales	8,517	-22	8,495
EBITDA	1,481	220	1,701
Depreciation and amortization	-370	-201	-571
EBIT	1,111	19	1,130
Net interest	-133	-48	-181
Income taxes	-229	8	-221
Noncontrolling interest	-284	13	-271
Net income1	465	-8	457

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

IFRS 16 effect on Group Balance Sheet and Cash Flow

Balance Sheet €m	Q1/19 adjusted for IFRS 16 effect	IFRS 16 effect	Q1/19 according to IFRS 16
Right-of-use-assets	1901	5,669	5,859
Lease liabilities	4142	5,836	6,250
Equity	25,997	-167	25,830
Total assets	59,316	5,669	64,985

Cash Flow	Q1/19 adjusted for		Q1/19 according to
€m	IFRS 16 effect	IFRS 16 effect	IFRS 16
Operating cash flow	118	171	289
Cash flow before acquisitions and dividends	-339	171	-168
Free cash flow	-2,282	171	-2,111
Cash provided by/used for financing activities	1,083	-171	912

1 Reclassification from machinery, equipment and rental equipment under capital leases as of December 31, 2018

2 Reclassifications from Capital lease obligations and other liabilities as of December 31, 2018

Financial Calendar / Contact

Financial Calendar

17 May 2019	Annual General Meeting
30 July	Results
2019	Q2/19
29 October	Results
2019	Q3/19

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

Follow us on Twitter	www.twitter.com/fresenius_ir
and LinkedIn:	www.linkedin.com/company/fresenius-investor-relations