Fresenius Medical Care AG & Co. KGaA (NYSE:FMS)(FWB:FME): Fresenius Medical Care AG & Co. KGaA (“the Company” or “FMC AG & Co. KGaA”), the world’s largest provider of dialysis products and services, today announced its results for the third quarter and first nine months of 2009.
Third Quarter 2009:
Revenue
Net revenue for the third quarter of 2009 increased by 6% to $2,889 million (10% at constant currency) compared to the third quarter of 2008. Organic revenue growth worldwide was 8%. Dialysis Services revenue grew by 8% to $2,147 million (10% at constant currency) in the third quarter of 2009. Dialysis Product revenue increased by 2% to $742 million (an increase of 8% at constant currency) in the same period.
North America revenue increased by 10% to $1,950 million. Organic revenue growth was 8%. Dialysis Services revenue grew by 10% to $1,741 million. Average revenue per treatment for the U.S. clinics increased to $348 in the third quarter of 2009 compared to $333 for the same quarter in 2008 and $344 for the second quarter of 2009. This development was mainly based on reimbursement increases and increased utilization of pharmaceuticals. Dialysis Product revenue increased by 14% to $209 million and was led by pharmaceutical sales, especially of the newly licensed intravenous iron products.
International revenue remained nearly unchanged at $939 million, compared to the third quarter of 2008. Based on constant currency, revenue grew by 9%. Organic revenue growth was 7%. Dialysis Services revenue was $406 million, an increase of 2% (+12% at constant currency). Dialysis Product revenue decreased by 2% to $533 million. Product sales grew by 6% based on constant currencies, led by increased pharmaceutical sales and sales of dialyzers.
Earnings
Operating income (EBIT) increased by 7% to $451 million compared to $422 million in the third quarter of 2008, resulting in an operating margin of 15.6%, equal to the operating margin for the third quarter of 2008. Compared to the second quarter of 2009 this represents a 50 basis points improvement. The third quarter operating margin was favorably impacted by an increase in revenue per treatment, an excellent cost management in the U.S. and a decrease in bad debt expenses. The operating margin development was negatively influenced by increased prices for pharmaceuticals, the impact of the launch of a generic version of PhosLo® in the U.S. market and unfavorable exchange rate effects in the International segment.
In North America, the operating margin was unchanged at 16.7%, as in the third quarter of 2008. The margin was favorably impacted by an increase in revenue per treatment, including commercial payor revenue, higher utilization of EPO and Medicare reimbursement increases, an excellent cost management in the U.S. and a decrease in bad debt expenses thanks to higher cash collections on receivables. This was offset by cost increases for pharmaceuticals related to both price and utilization, as well as the impact of the launch of a generic version of PhosLo® in the U.S. market and increased depreciation expense.
In the International segment, the operating margin increased by 60 basis points to 16.7% due to lower production costs resulting from lower prices for raw material and energy as well as economies of scale and lower bad debt expenses, which was partially offset by unfavorable foreign exchange rate effects.