Fresenius SE & Co. KGaA

Earnings Release • Aug 2, 2016

Conference Call – Q2/2016 Results

August 2, 2016 Bad Homburg

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: Q2/16 Highlights

Fresenius Group: Key Financials Q2/16

Constant currency growth rates 2015 EBIT before special items Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2015 before special items

Fresenius Group: Profit and Loss Statement

€m	Q2/2016	Growth Q2 YoY constant rates	H1/2016	Growth H1 YoY constant rates
Sales	7,092	5%	14,006	6%
EBIT1	1,051	11%	2,010	11%
Net interest	-139	14%	-291	11%
Income taxes1	-262	-15%	-491	-12%
Net income2	393	15%	755	18%

1 2015 before special items

² Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2015 before special items

Fresenius Group: Key Financials Q2/16

Sales, EBIT FMC in US\$ 2015 EBIT before special items

Fresenius Kabi (1/2)

North America

• Gradual easing of IV drug shortages; 17 Kabi-marketed products currently designated in shortage vs. 20 at the end of Q1/16
• New product launches expected to be backend loaded in FY/16; confirm top end of 6 to 10 target range for FY/16
• Increase outlook: Low single-digit growth for FY/16 (previous: roughly flat)

Europe

• Ongoing lower contract manufacturing sales volume expected
• Confirm FY/16 outlook of low to mid single-digit organic sales growth

Fresenius Kabi (2/2)

Emerging Markets

• China: 8% organic sales growth in Q2; new tender rules: slower progress than anticipated; continued double-digit volume growth
• Asia Pacific ex China: Accelerating growth, 8% organic sales growth in Q2
• Latin America/Africa standing out with 22% organic sales growth
• Increase outlook: Likely low double-digit organic growth for FY/16 (previous: mid to high single-digit)

Fresenius Kabi: EBIT Growth

	Q2/2016	Growth Q2 YoY	H1/2016	Growth H1 YoY
€m		constant rates		constant rates
Europe	85	-3%	163	-3%
Margin	15.9%	-110 bps	15.6%	-90 bps
North America	220	0%	453	13%
Margin	43.1%	210 bps	41.7%	240 bps
Asia-Pacific/Latin	82	31%	151	23%
America/Africa
Margin	19.1%	360 bps	18.6%	300 bps
Corporate and Corporate R&D	-80	-19%	-151	-17%
Total EBIT	307	1%	616	10%
Margin	20.8%	40 bps	20.9%	140 bps

2015 before special items

Margin growth at actual rates

Fresenius Helios

• Excellent organic sales growth (+6%) in Q2 driven by admission increase
• Further sequential margin expansion (60 bps) reflects continued operational improvements
• Acquisition of 500-bed Niederberg hospital closed; consolidated as of May 1, 2016; €69 m sales in FY/15
• On track to meet FY/16 outlook

1 Organic sales growth

€m	Q2/2016	Growth Q2 YoY	H1/2016	Growth H1 YoY
Total sales	1,477	7%	2,912	5%
EBIT Established clinic portfolio	173	8%	332	8%
Margin	11.8%	20 bps	11.5%	40 bps
Acquisitions / Divestitures (consolidation / deconsolidation <1 yr) Margin	0 - %	0% - bps	0 - %	0% - bps
Total EBIT Margin	173 11.7%	8% 10 bps	332 11.4%	8% 30 bps

2015 before special items

Fresenius Vamed

• Organic sales growth (+1%) in Q2 reflects typical quarterly fluctuations of project business
• Continued strong order intake in Q2/16
• On track to meet FY/16 outlook

€m	Q2/ 2016	Growth	H1/ 2016	Growth
Project business	110	-10%	195	-3%
Service business	144	8%	277	6%
Total sales	254	0%	472	2%
Total EBIT	9	0%	16	0%
Order intake1	228	148%	465	64%

¹ Project business only

² versus December 31, 2015

Cash Flow Development

	Operating CF		Capex (net)		Free Cash Flow1
€m	Q2/2016	LTM Margin	Q2/2016	LTM Margin	Q2/2016	LTM Margin
	211	15.0%	-58	-5.1%	153	9.9%
	164	10.8%	-65	-5.1%	99	5.7%3
	19	8.7%	-2	-0.7%	17	8.0%
Corporate/Other	-3	n.a.	0	n.a.	-3	n.a.
Excl. FMC	391	13.3%2	-125	-4.8%	266	8.5%2
Group	996	12.1%	-348	-5.5%	648	6.6%

¹ Before acquisitions and dividends

² Margin incl. FMC dividend

³ Understated: 6.6% excluding €55 million of capex commitments from acquisitions

Fresenius Group: 2016 Financial Outlook by Business Segment

		Old	New
	Sales growth organic	low single-digit	3% – 5%
	EBIT constant currency	roughly flat	3% – 5%
	Sales growth organic	3% – 5%	unchanged
	EBIT	€670 – 700 m	unchanged
	Sales growth organic	5% – 10%	unchanged
	EBIT growth	5% – 10%	unchanged

Fresenius Group: 2016 Financial Guidance

	2015	2016
	Actual	Old	New
Sales growth	€27.6 bn	6% – 8%	unchanged
constant currency
Net income1 growth	€1,423 m	8% – 12%	11% – 14%
constant currency

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

Attachments

Financial results by business segment

	Q2/2016	Growth Q2 YoY
Sales	US\$4,420 m	5%
EBIT	US\$641 m	17%
Sales	€1,476 m	-4%
EBIT1	€307 m	-2%
Sales	€1,477 m	7%
EBIT1	€173 m	8%
Sales	€254 m	0%
EBIT	€9 m	0%

12015 before special items

Fresenius Group: Overview – Calculation of Noncontrolling Interest

€m	H1/2016	FY/2015
Earnings before tax and noncontrolling interest	1,719	3,262
Taxes	-491	-965
Noncontrolling interest, thereof	-473	-939
Fresenius Medical Care net income not attributable to Fresenius (Q2/16: ~69%)	-322	-641
Noncontrolling interest holders in Fresenius Medical Care (H1/16: US\$145 m according to Fresenius Medical Care's Financial Statements)	-130	-256
Noncontrolling interest holders in Fresenius Kabi (-€17 m), Fresenius Helios (-€1 m), Fresenius Vamed (-€1 m) and due to Fresenius Vamed's 23% external ownership (-€2 m)	-21	-42
Net income attributable to Fresenius SE & Co. KGaA	755	1,358

€m	Q2/2016	LTM Margin	Q2/2015	LTM Margin	Growth YoY
Operating Cash Flow	996	12.1%	720	11.9%	38.3%
Capex (net)	-348	-5.5%	-332	-5.4%	-4.8%
Free Cash Flow (before acquisitions and dividends)	648	6.6%	388	6.5%	67.0%
Acquisitions (net)	-68		-61
Dividends	-545		-476
Free Cash Flow (after acquisitions and dividends)	35	3.1%	-149	0.1%	123.5%

		Operating CF Capex (net)		Free Cash Flow1
€m	H1/2016	LTM Margin	H1/2016	LTM Margin	H1/2016	LTM Margin
	335	15.0%	-125	-5.1%	210	9.9%
	230	10.8%	-102	-5.1%	128	5.7%3
	1	8.7%	-4	-0.7%	-3	8.0%
Corporate/Other	-4	n.a.	-3	n.a.	-7	n.a.
Excl. FMC	562	13.3%2	-234	-4.8%	328	8.5%2
Group	1,330	12.1%	-680	-5.5%	650	6.6%

¹ Before acquisitions and dividends

² Margin incl. FMC dividend

³ Understated: 6.6% excluding €55 million of capex commitments from acquisitions

Fresenius Group: Leverage Ratio

¹ Pro forma acquisitions; before special items

² Adjusted due to debt issuance cost restatement (U.S. GAAP standard ASU 2015-03)

³ Pro forma excluding advances made for the acquisition of hospitals from Rhön-Klinikum AG; before special items

⁴ Before special items

⁵ 2015 before special items

At annual average FX rates for both EBITDA and net debt

Fresenius Kabi: Organic Sales Growth by Product Segment

Total sales	1,476	3%	2,946	6%
Medical Devices/ Transfusion Technology	261	6%	506	4%
Clinical Nutrition	392	6%	770	6%
Infusion Therapy	217	8%	419	6%
IV Drugs	606	-2%	1,251	7%
€m	Q2/2016	Organic Growth	H1/2016	Organic Growth

Fresenius Kabi: Organic Sales Growth by Regions

Total sales	1,476	3%	2,946	6%
Latin America/Africa	153	22%	281	21%
Asia-Pacific	277	8%	531	7%
North America	510	-6%	1,086	6%
Europe	536	2%	1,048	2%
€m	Q2/2016	Organic Growth	H1/2016	Organic Growth

Fresenius Helios: Strong Sales Growth

€m	Q2/2016	Growth Q2 YoY	H1/2016	Growth H1 YoY
Established clinic portfolio	1,465	6%	2,898	4%
Acquisitions (consolidation <1 yr)	12	n.a.	14	n.a.
Total Sales	1,477	7%	2,912	5%

2015 before special items

Fresenius Helios: Performance Indicators

	H1/2016	H1/2015	Change
No. of hospitals1	112	111	1%
- Acute care clinics	88	87	1%
- Post-acute care clinics	24	24	0%
No. of beds1	34,766	34,076	2%
- Acute care clinics	29,654	28,914	3%
- Post-acute care clinics	5,112	5,162	-1%
Admissions
- Acute care (inpatient)	618,444	597,820	3%
Occupancy
- Post-acute care	80%	81%
Average length of stay (days)
Acute care2 -	6.4	6.5
- Post-acute care	26.3	26.7

1 December 31, 2015

2 German average (2014): 7.4

Fresenius Helios: Acquisitions/Divestitures – Consolidation Effects

Acquisitions	Annualized sales
Diekholzen	~€8 m	consolidated as of April 1, 2015
Velbert/Niederberg	~€69 m (2015)	consolidated as of May 1, 2016

Fresenius Group: Key Figures According to IFRS

	H1/2016 U.S. GAAP	H1/2016 IFRS
Sales	14,006	14,218
EBIT	2,010	1,987
Net interest	-291	-291
Net income1	755	736
Operating cash flow	1,330	1,333
Balance sheet total	43,821	44,067

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

Fresenius Group: Confirming mid-term growth targets

2019:

€36 - 40 billion in sales €2.0 - 2.25 billion in net income

At comparable exchange rates

Includes small and mid-size acquisitions

EAT CAGR at mid-point of mid-term target: 10.5% (Previous implied EAT CAGR of mid-term target: 8.4%)

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

Reconciliation according to U.S. GAAP Q2 2016/ Q2 2015

The Group's U.S. GAAP financial results as of June 30, 2016 do not include special items, whereas the U.S. GAAP financial results as of June 30, 2015 include special items. Net income attributable to shareholders of Fresenius SE & Co.KGaA was adjusted for these special items. The table below shows the special items and the reconciliation from net income (before special items) to earnings according to U.S. GAAP.

	Q2/2015 before	efficiency program	integration costs for acquired Rhön	disposal gains from two HELIOS	Q2/2015 according to U.S. GAAP (incl.
€m	special items	KABI	hospitals	hospitals	special items)
Sales	6,946				6,946
EBIT	971	-30	-6	0	935
Interest result	-165				-165
Net income before taxes	806	-30	-6	0	770
Income taxes	-234	9	2		-223
Net income	572	-21	-4	0	547
Noncontrolling interest	-222				-222
Net income attributable
to shareholders of Fresenius SE & Co.
KGaA	350	-21	-4	0	325

The special items are reported in the Group Corporate/Other segment.

Reconciliation according to U.S. GAAP H1 2016/ H1 2015

The Group's U.S. GAAP financial results as of June 30, 2016 do not include special items, whereas the U.S. GAAP financial results as of June 30, 2015 include special items. Net income attributable to shareholders of Fresenius SE & Co.KGaA was adjusted for these special items. The table below shows the special items and the reconciliation from net income (before special items) to earnings according to U.S. GAAP.

€m	H1/2015 before special items	efficiency program KABI	integration costs for acquired Rhön hospitals	disposal gains from two HELIOS hospitals	H1/2015 according to U.S. GAAP (incl. special items)
Sales	13,429				13,429
EBIT Interest result	1,822 -330	-40	-8	34	1,808 -330
Net income before taxes Income taxes	1,429 -441	-40 12	-8 2	34	1,478 -427
Net income Noncontrolling interest	1,051 -409	-28	-6	34	1,051 -409
Net income attributable to shareholders of Fresenius SE & Co. KGaA	642	-28	-6	34	642

The special items are reported in the Group Corporate/Other segment.

Financial Calendar / Contact

Financial Calendar 2016

27.10.2016 Report on 3rd quarter 2016

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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