Fresenius Medical Care AG & Co. (FMS)
Q1 2011 Earnings Call
May 4, 2011 9:15 AM ET
Oliver Maier – IR
Ben Lipps – Chairman and CEO
Mike Brosnan – CFO
Rice Powell – CEO, North America and Deputy Chairman
Chaitowitz – Redburn Partners
Ilan Chaitowitz – Redburn Partners
Edward Ridley – Merrill Lynch
Unidentified Company Representative
Lisa Clive – Sanford Bernstein
Martin Wales – UBS
Ryan Halsted – Wells Fargo
Jones Tom – Berenberg Bank
Holger Blum – Deutsche Bank
Kevin Ellich – Piper Jaffray
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Thank you. I would like to welcome all of you to Fresenius Medical Care First Quarter 2011 Conference Call. A warm welcome also to everybody up there on the web. We very much appreciate your continued interest in our company.
With us here today are Ben Lipps, our Chief Executive Officer and Chairman of the Management Board of Fresenius Medical Care; Mike Brosnan, our Chief Financial Officer and Rice Powell, our Deputy Chairman and CEO for Fresenius Medical Care, North America.
Let me start our presentation by mentioning our cautionary language mentioned in our Safe Harbor statement at the end of the presentation. For further details concerning risks and uncertainties, please refer to our filings including our SEC filings. Additionally, please be reminded that any non US-GAAP measures that we might use are being reconciled to the most comparable GAAP financial measure at the end of the presentation and in the material provided.
With that now it’s my sincere pleasure to turn it over to Ben. Ben, the floor is yours.
Thank you, Oliver. Ladies and gentlemen let me exchange you a warm welcome to you, our board, all of our employees, associates and people who have joined us on the internet. In terms of the agenda I’ll cover the business update, Mike will talk about the financials then Mike and I are ready to answer questions at the end of the presentation.
Turning now to chart 4, we are very pleased with our successful first quarter, we’ve seen strong operating performance despite implementation challenges posed to us with the Medicare perspective payment listed in the US. Our operating performance in North America has continued to develop favorably and we have continued to see a good treatment growth in our steps (ph) for growth. In international we continue to expand our credit network and we’ve seen significant expansion in certain countries, we also have seen excellent revenue growth in the international sector. Again, I would like to thank the dedicated staff worldwide with the management board for their continued dedication to provide the highest quality products and patient care in our center, our revenue was 3.36 billion, a 5% increase in both constant currency and actual currency. Net income also grew by 5%. With this we will be raising our guidance for 2011 and Mike will talk about that later on in the presentation.
Turning now to chart 5, we’ll look the – little closer look at the regions in terms of revenue growth, we saw a very solid revenue growth in Asia-Pacific at 30%, Latin America plus 12% constant currency and Europe at 9% growth in constant currency, North America had revenues of about $2 billion again growing at about 1% reflecting the changes in reimbursement. International had revenues of 1.55 billion, growing at 13% constant currency and today Europe, the Middle East and Africa represent about 22% of our business. Asia has continued to grow, it represents about 8% of our total revenue Latin America continues at about 5% of our total revenue.
Turning now to chart 6, you can see our dialysis services, we had strong global growth, it was driven by the 21% constant currency in international reflecting our acquisition program combined with excellent organic growth in international of 5%. We also continue to see good same market growth at 3.7% in the US or in North America and international 5.6% which gave us a very respectable and strong 4.3% growth on a global basis.
Looking at the clinics today we provide dialysis care to around 217,000 patients in 2,800 clinics, 1,850 of them are in the US accounting to manage clinics and about 950 are in international area with 500 being in Europe, 200 Latin America and Asia-Pacific has about 245 clinics at this point of time in Asia-Pacific. So, you can see that we continue to grow in the international area as well as North America in terms of the clinics and I will talk a little bit more about our De Novo later, but we continue to execute our plans in terms of expansion of our service network on a global basis.
Turning now to slide 7, as I have mentioned we’ve got a fair commitment to products, quality and service quality, I would like to go through this chart, has a lot of numbers it, but I think there are some very important contributions to quality as shown in our commitments to quality on this chart. We continue to provide, deliver treatments at the prescribed therapy in 96% to 97% of the time that we operate in our clinics and that’s really quite phenomenal, it increases each year by a certain basis points.
Now, looking at our AMEA management in the US as you know the bundle is focused on the 10 to 12 grams per deciliter, we’ve made significant improvements, we’re now about 73% of our patients fall in that range. I would like to point out that in international we still focus on between 10 and 13 and there we have about in the AMEA area we have about 77% of our patients in the 10 to 13. So, we’re going to end up overtime having a couple of different standards here that we’ll look at on a global basis. Again, in terms of nutrition you can see that we are making progress in both areas in terms – as measured by up human when we look at our subject, our progress in the bone mineral metabolism area in the prostate, you can see that we are making progress in the US at about 62% of patients are below 5.5 and in international and AMEA, we have 76%. I think what you will find overtime is that reflects our dedication to online with that filtration which has better serving capacity for prostate then normal hot box (ph).
Looking at the catheters, we’ve had a major program in the US in the catheters, reducing catheters you can see that the growth in North America have essentially continued to improve that we now have 76% of our patients from time zero that do not have catheters, again in Europe you can see that we have over 82% and if you look at after 90 days, you can see that we essentially are 80% and Europe is at 86%.
Hospitalization, we are pretty much the same in both regions, again less than 10, and I think we are pretty much at the benchmark. Now, in the future we will be talking about the Asia-pacific quality to, I thought I would give you just a couple pieces of information it will start to show up on our next quarter report. Interestingly, we are very close to hemoglobin with the international area and Asia-Pacific, very close in terms of nutrition. The one area that Asia-Pacific stands out in they have 94% of the patients without catheters and they have hospitalization days that are only about days per year, so I think it is an indication that clearly all of our effort on catheters around the world is saying a lot and now we have a new benchmarks to look at peers from the Asia-Pacific area. So, looking forward to presenting their solid metric mixed up, in next quarterly presentation.