Fresenius Medical Care Corporation (FMS)

FMS 
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FRESENIUS MED ADS (FMS)

Q1 2010 Earnings Call

May 4, 2010 9:30 am ET

Executives

Oliver Maier - SVP of IR

Ben Lipps - Chairman & CEO

Mike Brosnan - CFO

Analysts

Lisa Clive - Sanford Bernstein

Kevin Ellich - RBC Capital Markets

Ilan Chaitowitz - Redburn Partners

Martin Wales - UBS

Julie Simmonds - Piper Jaffray

Tom Jones - Berenberg Bank

Andreas Dirnagl - Stephens

Kevin Ellich - RBC Capital Markets

Presentation

Operator

Good day and welcome to the Fresenius Medical Care earnings release of first quarter 2010 results conference call. At this time, I’d like to hand the conference over Mr. Oliver Maier. Please go ahead, sir.

Oliver Maier

Thank you so much Marian. Good afternoon and good morning, everybody. I would like to welcome you to our first quarter results conference call. I’m joined today by Ben Lipps, our Chairman and CEO and Ben will address our strategic priorities and give you a general business update. Our Chief Financial Officer, Mike Brosnan will then discusses our first quarter results in greater detail and addresses our growth outlook for the full-year.

We will use slides for the presentation today, which has been posted on our website and link that will sent to you separately by e-mail. I would like to remind to you that our comments today will be gathering to our Safe Harbor statement, which means to the course of our presentation today, we make certain forward-looking statements and actual results could vary materially. We will use non-GAAP financial measures to help you understand our underlying business performance although the measures reconciliations are provided in our investor news.

So with that, I would like to turn the call over to Ben. Ben, the floor is yours.

Ben Lipps

Thank you, Oliver. Ladies and gentlemen, a very warm welcome like to extend that to our Board members, our employees and associates around the world and those who are joining us on the Internet. As Oliver said, I'll cover basically the business update and Mike will cover the financials, and then we'll open it for questions-and-answers.

Turning now to page four, before I start, I’d like to say we’re pleased with the good start to the year. It was a very good quarter. We’re on track for achieving our targets, our guidance for the year and I’d like to also emphasis that we continued to have excellent quality in both our products and our services and I’d like to thank the Board and all of our employees for their extra effort and making sure that we continue to provide the best quality products and services for use on the patients with dialysis.

Now as I moving into some numbers, we’ve recorded revenues of $2.8 billion for the first quarter that was a constant currency growth of 10% excellent constant currency growth, 13% actual currency and an 8% organic. We’re pleased with that as continued for the last few quarter.

I’d also like to say that we had, as Mike will show you very strong underlying operating performance that we were able to digest currency devaluation in Venezuela and still end up with a 7% increase in net income. So all-in-all, we’re quite pleased with the start to the year.

Turning now to page five, let’s look at the revenue by region. We saw excellent revenue growth in all the regions, North America turned in $1.96 billion at a very strong revenue growth at 10% in an actual, organic of 8% that continues to the excellent track record that we saw last year.

North America accounts were about 68% of our revenue on a global basis and if you turn to international, we had a very strong quarter international revenue growth $922 million. We had constant currency growth of 8%, again significantly above the market and our organic growth in international was 6% again excellent.

Now looking at Europe, which is about two-thirds of the international, we had a 15% revenue growth in actual currency, 7% in constant currency. Asia Pacific turned in a very good 9% constant currency and the leader in terms of constant currency growth was Latin America at 11%. So to sum it up each of the regions performed very well with respect to revenue growth and we’re quite pleased with the start to the year.

Turning now to page six, let’s talk about the dialysis services on a global basis. We saw very strong organic growth of 9% on a global basis. North America achieved revenue growth in the services of 12%, again a high watermark and also 9% organically. If you look at international, we continue to rise quite strongly in actual currency at 19% and returned in 9% for constant currency revenue growth.

That was led by Europe, which turned in a 12% constant currency growth and so both of the regions ended very well with respect to growth. We now have 2580 clinics that we either manage for and we operate and we’re very close to treating 200,000 patients in our clinics, I think 199,000. So we’re off to again a very good start in services business both internationally and in North America.

Turning now to page seven, I’d like to talk a little about quality. I think anyone who is listing our calls over the years know that we have a very strong and absolute commitment of quality in both products and services and I’m proud of the fact that we continue to provide in both EMEA and in North America over 95% of the time we provide the treatment that physicians prescribe and really that’s quite accomplishment we continued now for number of years.

Read the rest of this transcript for free on seekingalpha.com