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Financing

Fresenius meets its financing needs through a combination of operating cash flows generated in the business segments and short-, mid-, and long-term debt. In addition to bank loans, important financing instruments include the issuance of Senior Notes, Euro Notes, a commercial paper program, and a receivables securitization program.

Fresenius issued capital in May 2012. The new shares were placed with institutional investors through an accelerated bookbuilt offering. A total of 13.8 million new ordinary shares were issued at a price of €73.50 per share. The new shares have full dividend entitlement for fiscal year 2012. The capital increase was intended to provide part of the financing required to acquire RHÖN-KLINIKUM AG, which never happened as one of the conditions of the public takeover offer was not met. The funds were used to finance the acquisition of Fenwal Holdings, Inc.

In 2012, the Group’s financing activities mainly involved the refinancing of existing and maturing financing instruments and the long-term financing for acquisitions and general corporate purposes.

  • In January 2012, Fresenius Medical Care issued Senior Notes: The Senior Notes issued by FMC Finance VIII S.A. in the principal amount of €250 million bear a 5.25% coupon and are due in 2019. The bonds issued by Fresenius Medical Care US Finance II, Inc. in the principal amount of US$800 million are due in 2019 and in the principal amount of US$700 million are due in 2022. The bonds in the principal amount of US$800 million bear a 5.625% coupon. The Senior Notes in the principal amount of US$700 million bear a 5.875% coupon. Net proceeds were used for acquisitions, to repay indebtedness, and for general corporate purposes.
  • In March 2012, Fresenius Finance B.V. placed Senior Notes in the principal amount of €500 million with a 4.25% coupon. The Senior Notes were issued at par and are due in 2019. Net proceeds were used for acquisitions, to refinance short-term indebtedness, and for general corporate purposes.
  • In April 2012, Fresenius SE & Co. KGaA issued Euro Notes (Schuldscheindarlehen) in the principal amount of €400 million. Proceeds were used to refinance the tranches of the Euro Notes of Fresenius Finance B.V., which were due in April and July 2012, and for general corporate purposes.
  • In October 2012, Fresenius Medical Care entered into a new syndicated credit agreement. The credit agreement is for a total sum of US$3.85 billion and has a term of 5 years. It comprises revolving facilities for approximately US$1.25 billion and a US$2.6 billion term loan. Proceeds from the credit facilities were used to refinance the company’s existing credit facilities, which otherwise would have matured on March 31, 2013, and for general corporate purposes.
  • In December 2012, Fresenius SE & Co. KGaA agreed on the refinancing of the revolving facilities and Term Loan A of its 2008 syndicated credit agreement. The financing was structured as a Delayed Draw Syndicated Credit Agreement. Fresenius entered into a €2.25 billion syndicated credit agreement, comprised of 5-year revolving facilities (US$300 million and €600 million) and a 5-year Term Loan A (US$1.0 billion and €650 million). Proceeds will be used to refinance the Company’s existing revolving facilities and the Term Loan A, which both mature in September 2013, as well as for general corporate purposes. Funding of the transaction is projected for June 2013.
    This is also accompanied by the exercise of the call option for the 5.5% Senior Notes issued in 2006 and due 2016. The notes with an aggregate principal amount of €650 million were fully redeemed on February 7, 2013 at a price of 100.916% plus accrued and unpaid interest.

The year 2013 financing activities are part of the Group’s ongoing liability management to reduce interest expenses and to improve the maturity profile, as well as for the refinancing of existing facilities. The graph below shows the maturity profile of the Group. In line with this goal, Fresenius placed €500 million of Senior Notes in January 2013. The notes have a coupon of 2.875%, a maturity of 7 years, and were issued at par. The proceeds have been used to refinance the senior notes due at the end of January 2013.

Fresenius SE & Co. KGaA has a commercial paper program under which up to €500 million in short-term notes can be issued. No commercial papers were outstanding as of December 31, 2012 and December 31, 2011.

FINANCIAL POSITION – FIVE-YEAR OVERVIEW


€ in millions 2012 2011 2010 2009 2008
1 Trade accounts receivable and inventories, less trade accounts payable and payments received on accounts
Operating cash flow 2,438 1,689 1,911 1,553 1,074
as % of sales 12.6 10.3 12.0 11.0 8.7
Working capital1 4,470 4,067 3,577 3,088 2,937
as % of sales 23.2 24.9 22.4 21.8 23.8
Investments in property, plant and equipment, net 952 758 733 662 736
Cash flow before acquisitions and dividends 1,486 931 1,178 891 338
as % of sales 7.7 5.7 7.4 6.3 2.7

€ in millions 2012 2011 2010 2009 2008
1 Trade accounts receivable and inventories, less trade accounts payable and payments received on accounts
Operating cash flow 2,438 1,689 1,911 1,553 1,074
as % of sales 12.6 10.3 12.0 11.0 8.7
Working capital1 4,470 4,067 3,577 3,088 2,937
as % of sales 23.2 24.9 22.4 21.8 23.8
Investments in property, plant and equipment, net 952 758 733 662 736
Cash flow before acquisitions and dividends 1,486 931 1,178 891 338
as % of sales 7.7 5.7 7.4 6.3 2.7

The Fresenius Group has drawn about €4.1 billion of bilateral and syndicated credit lines. In addition, the Group had approximately €2.1 billion in unused credit lines as of December 31, 2012 (including committed credit lines of €1.6 billion) available. These credit facilities are generally used for covering working capital needs and are – with the exception of the syndicated credit agreements of Fresenius SE & Co. KGaA and Fresenius Medical Care − usually unsecured.

As of December 31, 2012, both Fresenius SE & Co. KGaA and Fresenius Medical Care AG & Co. KGaA, including all subsidiaries, complied with the covenants under all the credit agreements.

Detailed information on the Fresenius Group’s financing can be found in the Notes. Further information on financing requirements in 2013 is included in the outlook.

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