Summary Second Quarter 2012:

Net revenue: $3,428 million, +9%

Operating income (EBIT): $589 million, +16%

Net income^*: $289 million, +11%
Earnings per ordinary share: $0.95, +10%

Earnings excluding investment gain:

Net income^*: $276 million, +6%

Earnings per ordinary share: $0.91, +5%

Summary First Half 2012:

Net revenue: $6,677 million, +9%

Operating income (EBIT): $1,092 million, +14%

Net income^*: $660 million, +37%

Earnings per ordinary share: $2.17, +36%

Earnings excluding investment gain:

Net income^*: $520 million, +8%

Earnings per ordinary share: $1.71, +7%


* Attributable to shareholders of Fresenius Medical Care AG & Co. KGaA


Fresenius Medical Care AG & Co. KGaA, the world's largest provider of dialysis products and services, today announced its results for the second quarter and first half of 2012.


Second Quarter 2012

Revenue

Net revenue for the second quarter of 2012 increased by 9% to $3,428 million (+13% at constant currency) compared to the second quarter of 2011. Organic revenue growth worldwide was 4%. Dialysis services revenue grew by 13% to $2,605 million (+16% at constant currency) and dialysis product revenue decreased by 1% to $823 million and increased by +6% at constant currency.

North America revenue for the second quarter of 2012 increased by 14% to $2,249 million. Dialysis services revenue grew by 15% to $2,043 million with a same market growth of 4%. Average revenue per treatment for U.S. clinics increased to $351 in the second quarter of 2012 compared to $348 for the corresponding quarter in 2011. Dialysis product revenue increased by 3% to $206 million mainly as a result of higher sales of hemodialysis products.

International revenue increased by 1% to $1,171 million (+ 11% at constant currency). Organic revenue growth was 6%. Dialysis services revenue increased by 5% to $562 million (+16% at constant currency). Dialysis product revenue decreased by 3% to $609 million and increased by 6% at constant currency, mainly driven by higher sales of dialysis machines and dialyzers.

Earnings

Operating income (EBIT) for the second quarter of 2012 increased by 16% to $589 million compared to $510 million in the second quarter of 2011. This resulted in an operating margin of 17.2% for the second quarter of 2012 compared to 16.2% for the corresponding quarter in 2011.

In North America, the operating margin increased from 17.7% to 19.2%. Average costs per treatment for U.S. clinics decreased by $3 to $280 in the second quarter of 2012 as compared to $283 in the second quarter of 2011.

In the International segment, the operating margin increased from 17.5% to 17.7%.

Net interest expense for the second quarter of 2012 was $104 million, compared to $75 million in the second quarter of 2011. This development was mainly attributable to the higher level of financial debt as a result of the issuance of various tranches of senior notes over the course of 2011 and 2012.

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the second quarter of 2012 was $289 million, an increase of 11% compared to the corresponding quarter of 2011. This includes a non-taxable investment gain of $13 million related to the acquisition of Liberty Dialysis Holdings, Inc., including its 51% stake in Renal Advantage Partners, LLC (RAI). The gain is a result of measuring the 49% equity interest in RAI held by the company at its fair value at the time of the Liberty acquisition and represents an adjustment to the amount recorded in the first quarter of 2012 as part of the continuing finalization of the Liberty purchase accounting. Excluding this investment gain net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA increased by 6% to $276 million.

Income tax expense was $172 million for the second quarter of 2012 compared to $149 million in the second quarter of 2011, reflecting effective tax rates of 34.6% and 34.2%, respectively. Excluding the investment gain the effective tax rate was 35.5%.

Earnings per ordinary share (EPS) for the second quarter 2012 was $0.95 and $0.91 if excluding the investment gain. This represents an increase compared to the second quarter of 2011 of 10% and of 5%, respectively. The weighted average number of ordinary shares outstanding for the second quarter of 2012 was approximately 300.4 million shares, compared to 298.6 million shares for the second quarter of 2011. The increase in shares outstanding resulted from stock option exercises in the past 12 months.

Cash flow

In the second quarter of 2012, the company generated $451 million in cash from operations, an increase of 45% compared to the corresponding figure last year and representing 13.2% of revenue. The cash flow generation was supported by a favorable development of days sales outstanding.

A total of $151 million was spent for capital expenditures, net of disposals. Free cash flow before acquisitions was $300 million compared to $194 million in the second quarter of 2011. A total of $6 million in cash was generated from divestitures, net of acquisitions. Free cash flow after acquisitions and divestitures was $306 million, compared to minus $590 million in the second quarter of 2011.


First Half 2012:

Revenue and Earnings

Net revenue for the first half of 2012 increased by 9% to $6,677 million (+12% at constant currencies) compared to the first half of 2011. Organic revenue growth was 4% in the first half of 2012.

Operating income (EBIT) for the first half of 2012 increased by 14% to $1,092 million compared to $955 million in the first half of 2011. The operating income margin increased to 16.4% for the first half of 2012 as compared to 15.6% in the same period in 2011.

Net interest expense for the first half of 2012 was $203 million compared to $146 million in the same period of 2011.

For the first half of 2012, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA was $660 million, up by 37% from the first half of 2011. This includes a non-taxable investment gain of $140 million related to the acquisition of Liberty Dialysis Holdings, Inc., including its 51% stake in Renal Advantage Partners, LLC (RAI). The gain is a result of measuring the 49% equity interest in RAI held by the company at its fair value at the time of the Liberty acquisition. Excluding this investment gain net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA increased by 8% to $520 million.

Income tax expense for the first half of 2012 was $309 million compared to $273 million in the same period in 2011, reflecting effective tax rates of 30.1% and 33.8%, respectively. Excluding the investment gain the effective tax rate was 34.8%.

In the first half of 2012, earnings per ordinary share rose by 36% to $2.17 and by 7% to $1.71 if excluding the investment gain. The weighted average number of ordinary shares outstanding during the first half of 2012 was approximately 300.3 million.

Cash Flow

Cash from operations during the first half of 2012 was $932 million compared to $487 million for the same period in 2011, representing 14% of revenue.

A total of $274 million in cash was spent for capital expenditures, net of disposals. Free cash flow before acquisitions for the first half of 2012 was $658 million compared to $256 million in the same period in 2011. A total of $1,520 million in cash was spent for acquisitions, net of divestitures. Free cash flow after acquisitions and divestitures was minus $862 million compared to minus $866 million in the first half of last year.

Please refer to the attachments for a complete overview on the second quarter and first half of 2012.

Patients – Clinics – Treatments

As of June 30, 2012, Fresenius Medical Care treated 256,456 patients worldwide, which represents a 14% increase compared to the previous year's figure. North America provided dialysis treatments for 164,058 patients, an increase of 17%. Including 28 clinics managed by Fresenius Medical Care North America, the number of patients in North America was 166,282. The International segment provided dialysis treatment to 92,398 patients, an increase of 7% over the prior year's figure.

As of June 30, 2012, the company operated a total of 3,123 clinics worldwide, which represents a 10% increase compared to the previous year's figure. The number of clinics is comprised of 2,046 clinics in North America (2,074 including managed clinics), and 1,077 clinics in the International segment, representing an increase of 12% and 6%, respectively.

During the first half of 2012, Fresenius Medical Care delivered approximately 18.89 million dialysis treatments worldwide. This represents an increase of 14%, compared to last year's figure. North America accounted for 11.89 million treatments, an increase of 12%. The International segment delivered 7.0 million treatments, an increase of 18%.

Employees

As of June 30, 2012, Fresenius Medical Care had 84,194 employees (full-time equivalents) worldwide, compared to 79,159 employees at the end of 2011. This increase of more than 5,000 employees is due to overall growth in the company's business and acquisitions including Liberty Dialysis Holdings, Inc.

Debt/EBITDA ratio

The ratio of debt to earnings before interest, taxes, depreciation and amortization (EBITDA) increased from 2.77 at the end of the second quarter of 2011 to 2.92 at the end of the second quarter of 2012. The debt/EBITDA ratio at the end of 2011 was 2.69.

Rating

Moody's affirmed the company's corporate credit as ‘Ba1' with a ‘stable' outlook, and Fitch rates the company's corporate credit as ‘BB+' with a ‘stable' outlook. Standard & Poor's placed the company's corporate credit on review as ‘BB+' with a possible downgrade from "stable" to "negative".

For further information on Fresenius Medical Care's credit ratings, maturity profiles and credit instruments, please visit our website at www.fmc-ag.com / Investor Relations/ Credit Relations.

Sales and earnings outlook for 2012 confirmed

For the full year 2012, the company confirms its sales and earnings outlook.

The company expects revenue to grow to around $14 billion in 2012.^*

Net income is expected to grow to around $1.3 billion and net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to grow to around $1.14 billion^*. This does not include the investment gain in the amount of $140 million in the first half of 2012.

For 2012, the company expects to spend around $700 million on capital expenditures and around $1.8 billion on acquisitions. The debt/EBITDA ratio is expected to be below 3.0 by the end of 2012.

Ben Lipps, chief executive officer of Fresenius Medical Care, commented: "We achieved a very good operating performance in the second quarter of 2012. We are very pleased with the progress we and our clinical associates are achieving to improve global patient care outcomes, notably in anemia and nutrition management and the continued reduction in hospital days. North America is progressing well with its integration of the Liberty acquisition. Revenue growth in both North America and International was double digit in constant currency and despite the difficult global economic environment, we have improved cash collection, which also reflects the dedication of our staff and credibility we have with payers. In summary, we are affirming our guidance for the full year 2012 and expect another record year for the company."

Conference call

Fresenius Medical Care will hold a conference call to discuss the results of the second quarter and first half of 2012 on Wednesday, August 1, 2012, at 3:30 p.m. CEDT / 9:30 a.m. EDT. The company invites investors to view the live webcast of the call at the company's website www.fmc-ag.com in the "Investor Relations" section. A replay will be available shortly after the call.

^*Outlook includes a +/- 0-2% deviation from the respective number.

H1/2012:

•  Sales*: €9.2 billion (+17% at actual rates, +12% in constant currency)
• EBIT**: €1.4 billion (+19% at actual rates, +14% in constant currency)
• Net income***: €434 million (+20% at actual rates, +15% in constant currency)

• Continued strong growth in all business segments
• Group sales and net income3 at all-time high in Q2/2012
• Cash flow margin increases to 12.3%

*Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment of -€77 million in H1 2011 and of -€161 million for the full year 2011 solely relates to Fresenius Medical Care North America.
**Adjusted for one-time costs of €7 million in Q2 2012 related to the offer to the shareholders of RHÖN-KLINIKUM AG.
***Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain of €34 million at Fresenius Medical Care and for one-time costs of €26 million in Q2 2012 related to the offer to the shareholders of RHÖN-KLINIKUM AG. 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights.

Ulf Mark Schneider, CEO of Fresenius, said: "Our strong growth trend continues and we posted record sales and earnings in the first half. The recently announced acquisition of Fenwal is a significant growth opportunity and will make us a worldwide leader in transfusion technology. We will focus on swiftly integrating this business and maintaining operational excellence in the Group. Commercial prudence will continue to guide us in assessing future acquisition opportunities."

Group outlook 2012 fully confirmed
Based on the Group's financial results in the first half of 2012, Fresenius confirms its guidance, which was raised in June 2012. For 2012, Fresenius expects sales* to increase by 12% to 14% and net income** to increase by 14% to 16%, both in constant currency.

The Group plans to invest ~5% of sales in property, plant and equipment.

The net debt/EBITDA ratio is projected to be <3.0 at year-end (including the acquisition of Fenwal Holdings, Inc.).

*Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment of -€77 million in H1 2011 and of -€161 million for the full year 2011 solely relates to Fresenius Medical Care North America.
**Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain of €34 million at Fresenius Medical Care and one-time costs related to the offer to the shareholders of RHÖN-KLINIKUM AG. 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights.

 

Sales growth of 12% in constant currency
Group sales increased by 17% (12% in constant currency) to €9,236 million (H1 20111: €7,927 million). Organic sales growth was 5%. Acquisitions contributed a further 7%. Currency translation had a positive effect of 5%. This is mainly attributable to the strengthening of the U.S. dollar against the euro by 7% in the first half of 2012 compared to the first half of 2011.

Sales in the business segments developed as follows:

 

Organic sales growth in North America was 3%, and in Europe 5%. Organic sales growth was again strong in Asia-Pacific with 10% and in Latin America with 19%. The sales decrease in Africa was due to the volatility in Fresenius Vamed's project business.



*Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment of -€77 million in H1 2011 and of -€161 million for the full year 2011 solely relates to Fresenius Medical Care North America.

Excellent earnings growth
Group EBITDA* grew by 18% (13% in constant currency) to €1,806 million (H1 2011: €1,526 million). Group EBIT1 increased by 19% (14% in constant currency) to €1,440 million (H1 2011: €1,207 million). The EBIT* margin improved by 40 basis points to 15.6% (H1 2011: 15.2%).

Group net interest was -€313 million (H1 2011: -€276 million). Lower average interest rates were more than offset by incremental debt due to acquisition financing and currency translation effects.

The other financial result of -€29 million includes one-time costs for the offer to the shareholders of RHÖN-KLINIKUM AG, primarily related to financing commitments.

The Group tax rate** slightly improved to 30.8% (H1 2011: 30.9%).

Noncontrolling interest increased to €346 million (H1 2011: €280 million), of which 93% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income*** increased by 20% (15% in constant currency) to €434 million (H1 2011: €363 million). Earnings per share increased by 16% to €2.58 (H1 2011: €2.23). The average number of shares grew to approx. 168 million in H1 2012, primarily due to the May 2012 capital increase. 

Group net income**** was €442 million or €2.63 per share (including the non-taxable investment gain at Fresenius Medical Care, which is a non-cash item, and one-time costs related to the offer to the shareholders of RHÖN-KLINIKUM AG).

*Adjusted for one-time costs of €7 million in Q2 2012 related to the offer to the shareholders of RHÖN-KLINIKUM AG.
**Adjusted for the non-taxable investment gain at Fresenius Medical Care and for one-time costs of €36 million in Q2 2012 related to the offer to the shareholders of RHÖN-KLINIKUM AG. 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds.
***Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain of €34 million at Fresenius Medical Care and for one-time costs of €26 million in Q2 2012 related to the offer to the shareholders of RHÖN-KLINIKUM AG. 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights.
****Net income attributable to shareholders of Fresenius SE & Co. KGaA

 

Continued investment in growth
The Fresenius Group spent €388 million on property, plant and equipment (H1 2011: €286 million). Acquisition spending was €2,097 million (H1 2011: €857 million). This relates primarily to Fresenius Medical Care's acquisition of Liberty Dialysis Holdings, Inc. as well as to the acquisition of Damp Group by Fresenius Helios.

Excellent operating cash flow development
Operating cash flow increased to €1,136 million (H1 2011: €650 million). This was mainly driven by strong earnings growth and tight working capital management, especially regarding trade accounts receivable. The cash flow margin improved to 12.3% (H1 2011: 8.2%). Net capital expenditure was €358 million (H1 2011: €292 million). Free cash flow before acquisitions and dividends was €778 million (H1 2011: €358 million). Free cash flow after acquisitions and dividends was -€1,154 million (H1 2011: -€791 million).

Solid balance sheet structure
The Group's total assets increased by 17% (15% in constant currency) to €30,758 million (Dec. 31, 2011: €26,321 million). Current assets grew by 25% (24% in constant currency) to €8,967 million (Dec. 31, 2011: €7,151 million). This includes the proceeds of the capital increase which were invested in short-term instruments. Non-current assets increased by 14% (12% in constant currency) to €21,791 million (Dec. 31, 2011: €19,170 million), mainly due to the recent acquisitions.

Total shareholders' equity increased by 16% (14% in constant currency) to €12,224 million, mainly due to the capital increase (Dec. 31, 2011: €10,577 million). The equity ratio was 39.7% (Dec. 31, 2011: 40.2%).

Group debt grew by 23% (21% in constant currency) to €12,035 million (Dec. 31, 2011: €9,799 million), primarily resulting from acquisition financing. Net debt increased by 10% (8% in constant currency) to €10,068 million (Dec. 31, 2011: €9,164 million). Net debt comprises the proceeds of the capital increase.

As of June 30, 2012, the net debt/EBITDA ratio* was 2.75 (Dec. 31, 2011: 2.83). At identical exchange rates for net debt and EBITDA, the ratio was 2.65.

*Pro forma including Damp Group and Liberty Dialysis Holdings, Inc., adjusted for one-time costs of €7 million in Q2 2012 related to the offer to the shareholders of RHÖN-KLINIKUM AG.

Number of employees increases
As of June 30, 2012, the Fresenius Group increased the number of its employees by 8% to 161,685 (Dec. 31, 2011: 149,351), mainly due to acquisitions.

Fresenius Biotech
Fresenius Biotech develops innovative therapies with trifunctional antibodies for the treatment of cancer. In the field of polyclonal antibodies, Fresenius Biotech has successfully marketed ATG-Fresenius S for many years. ATG-Fresenius S is an immunosuppressive agent used to prevent and treat graft rejection following organ transplantation.

Fresenius Biotech's sales increased by 14% to €16.6 million compared to €14.6 million in the first half of 2011. Removab sales grew by 17% to €2.1 million (H1 2011: €1.8 million). ATG Fresenius S sales increased by 13% to €14.5 million (H1 2011: €12.8 million). Fresenius Biotech's EBIT was -€11 million (H1 2011: -€13 million).

For 2012, Fresenius Biotech continues to expect an EBIT of -€25 million to -€30 million.

Business Segments

Fresenius Medical Care
Fresenius Medical Care is the world's leading provider of services and products for patients with chronic kidney failure. As of June 30, 2012, Fresenius Medical Care was treating 256,456 patients in 3,123 dialysis clinics.

 

• Excellent constant currency sales growth of 12% (North America +12%, International +11%)
• 2012 outlook confirmed

 
Sales increased by 9% to US$6,677 million (H1 2011*: US$6,121 million). Organic sales growth was 4%. Acquisitions contributed a further 8%. Currency translation had a negative effect of 3%.

Sales in dialysis services increased by 12% to US$5,082 million (H1 2011: US$4,538 million). Dialysis product sales grew by 1% to US$1,594 million (H1 2011: US$1,584 million).

In North America sales grew 12% to US$4,353 million (H1 2011: US$3,896 million). Dialysis services sales grew by 13% to US$3,960 million (H1 2011: US$3,501 million). Average revenue per treatment for U.S. clinics increased to US$351 in the second quarter of 2012 compared to US$348 for the corresponding quarter in 2011. Dialysis product sales were US$393 million (H1 2011: US$395 million). Higher sales of hemodialysis products were offset by lower sales of renal pharmaceuticals.

Sales outside North America ("International" segment) grew by 4% to US$2,307 million (H1 2011: US$2,218 million). Sales in dialysis services increased by 8% to US$1,122 million (H1 2011: US$1,037 million). Dialysis product sales of US$1,185 million remained close to the previous year's level of US$1,181 million at actual rates. In constant currency, dialysis product sales grew by 7%, mainly driven by higher sales of dialysis machines and dialyzers.

EBIT increased by 14% to US$1,092 million (H1 2011: US$955 million). The EBIT margin increased to 16.4% (H1 2011: 15.6%).

The EBIT margin in North America increased to 17.9% (H1 2011: 17.0%). In the International segment the EBIT margin improved to 17.4% (H1 2011: 16.9%).

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the first half of 2012 was US$660 million, an increase of 37% compared to the corresponding period of 2011. This includes a non-taxable investment gain of US$140 million related to the acquisition of Liberty Dialysis Holdings, Inc. (Liberty), including its 51% stake in Renal Advantage Partners, LLC (RAI). The gain is a result of measuring the 49% equity interest in RAI held by the company at its fair value at the time of the Liberty acquisition. The second quarter includes an additional gain of US$13 million to the amount recorded in the first quarter of 2012 due to an adjustment of the fair value reported in Q1/2012. Excluding this investment gain, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA increased by 8% to US$520 million (H1 2011: US$481 million).

Fresenius Medical Care confirms its sales and earnings outlook for 2012. The company expects sales to grow to around US$14 billion***. Net income is expected to grow to around US$1.3 billion and net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to grow to around US$1.14 billion***. This does not include the investment gain in the amount of US$140 million in the first half of 2012.

For further information, please see Fresenius Medical Care's Press Release at www.fmc-ag.com.

*Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment amounts to -US$109 million in H1 2011; the 2011 sales adjustment amounts to -US$224 million.
**Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA – adjusted for a non-taxable investment gain of US$140 million in the first half of 2012.
***Outlook includes a +/- 0-2% deviation from the respective number.

 


Fresenius Kabi
Fresenius Kabi offers infusion therapies, intravenously administered generic drugs and clinical nutrition for seriously and chronically ill patients in the hospital and outpatient environments.

• Strong organic sales growth of 9%
• 2012 outlook fully confirmed

Sales increased by 13% to €2,234 million (H1 2011: €1,971 million). Organic sales growth was 9%. Currency translation had an effect of 3%. Acquisitions contributed 1%.

In Europe sales grew by 7% (organic growth: 6%) to €974 million (H1 2011: €909 million). Sales in North America increased by 17% to €609 million (H1 2011: €519 million). Strong organic growth of 9% was supported by continued competitor supply constraints and new product launches. In Asia-Pacific sales increased by 25% (organic growth: 15%) to €415 million (H1 2011: €332 million). Sales in Latin America and Africa increased by 12% (organic growth: 14%) to €236 million (H1 2011: €211 million).

EBIT grew by 10% to €452 million (H1 2011: €411 million). EBIT growth was driven particularly by excellent earnings growth in North America and the emerging markets. The EBIT margin was 20.2% (H1 2011: 20.9%).

Net income* increased by 16% to €210 million (H1 2011: €181 million).

Fresenius Kabi's operating cash flow increased by 40% to €288 million (H1 2011: €205 million). The cash flow margin was excellent at 12.9% (H1 2011: 10.4%). Cash flow before acquisitions and dividends improved to €199 million (H1 2011: €124 million). The strong increase was also favorably influenced by extraordinary payments of trade accounts receivable.

On July 20, 2012, Fresenius Kabi announced that it has signed a definitive agreement to acquire Fenwal Holdings, Inc., a leading U.S.-based provider of transfusion technology products for blood collection, separation, and processing, from TPG and Maverick Capital. In 2011, Fenwal had sales of US$614 million with an adjusted EBITDA of US$90 million.
The acquisition marks another major step in Fresenius Kabi's growth strategy. The company had announced previously that expanding its medical devices/transfusion technology segment is a priority.

Fresenius Kabi raises its guidance announced at the Capital Market Day. With the closing of the acquisition, Fresenius Kabi targets sales of approx. €6 billion by 2015 and EBIT of >€1.1 billion. Previously, the company targeted sales of approx. €5.5 billion and EBIT of >€1 billion.

Fresenius Kabi fully confirms its outlook for 2012. The company targets organic sales growth of between 7% and 9%. Furthermore, Fresenius Kabi forecasts an EBIT margin of between 20% to 20.5%.

*Net income attributable to shareholders of Fresenius Kabi AG
**at current exchange rates

Fresenius Helios
Fresenius Helios is one of the largest private hospital operators in Germany. HELIOS owns 73 hospitals, including six maximum care hospitals in Berlin-Buch, Duisburg, Erfurt, Krefeld, Schwerin and Wuppertal. HELIOS treats more than 2.7 million patients per year, thereof more than 750,000 inpatients, and operates more than 23,000 beds.

 

• Strong organic sales growth of 5.4%
• 2012 outlook fully confirmed

Sales increased by 19% to €1,540 million (H1 2011: €1,293 million). Organic sales growth was 5.4%. Acquisitions contributed 14%.

EBIT grew by 23% to €151 million (H1 2011: €123 million). The EBIT margin improved by 30 basis points to 9.8% (H1 2011: 9.5%).

Net income* increased by 28% to €92 million (H1 2011: €72 million).

Sales of the established hospitals grew by 5% to €1,359 million. EBIT improved by 31% to €162 million. The EBIT margin increased to 11.9% (H1 2011: 9.6%) driven by excellent operating results and a one-time gain. Sales of the acquired hospitals (consolidation <1 year) were €181 million. As expected, EBIT was -€11 million. Restructuring of these hospitals is on track.

Fresenius remains convinced of the merits of combining RHÖN-KLINIKUM with HELIOS, and continues to assess its options.

Fresenius Helios fully confirms its outlook for 2012. The company projects organic sales growth of 3% to 5% and EBIT to increase to the upper end of the targeted range of €310 million to €320 million.

One-time costs relating to the offer to the shareholders of RHÖN-KLINIKUM AG are included in the segment "Corporate/Other".

*Net income attributable to shareholders of HELIOS Kliniken GmbH

 

Fresenius Vamed
Fresenius Vamed offers engineering and services for hospitals and other health care facilities.

• Sales and EBIT fully in line with expectations
• 2012 outlook fully confirmed

Sales increased by 6% to €333 million (H1 2011: €313 million). Sales in the project business were €184 million (H1 2011: €202 million). Sales in the service business increased by 34% to €149 million (H1 2011: €111 million).

EBIT was €13 million (H1 2011: €12 million). The EBIT margin reached 3.9% (H1 2011: 3.8%). Net income* remained at previous year's level of €9 million.

In H1 2012, the order intake was €156 million (H1 2011: €164 million). In Q2 2012, Fresenius Vamed received additional supply contracts for medical-technical equipment in China with an order volume of €18 million. The order intake also includes a turnkey contract for the construction of an additional building for the San Fernando General Hospital in the Republic of Trinidad and Tobago. The order volume is approx. €14 million. Order backlog was €816 million as of June 30, 2012 (Dec. 31, 2011: €845 million).

Fresenius Vamed fully confirms its 2012 outlook. The company expects sales and EBIT growth of 5% to 10%.

*Net income attributable to shareholders of VAMED AG

 

Analyst Conference Call
As part of the publication of the results for the first half of 2012, a conference call will be held on August 1, 2012 at 2 p.m. CEST (8 a.m. EDT). All journalists are cordially invited to follow the conference call in a live broadcast via the Internet at www.fresenius.com, see Investor Relations, Presentations. Following the call, a replay of the conference call will be available on our website.

Fresenius has decided not to submit a new takeover offer to the shareholders of RHÖN-KLINIKUM AG for the time being.

In recent weeks, Fresenius tried to find solutions to meet the strategic and financial targets of combining RHÖN-KLINIKUM AG and HELIOS with an equity stake in RHÖN-KLINIKUM AG of less than 90%. Unfortunately, there was no viable way to achieve this goal.

Ulf Mark Schneider, CEO of Fresenius, said: "A combination of RHÖN-KLINIKUM AG and HELIOS was the first-ever opportunity to build a country-wide integrated health care network. We regret that our public offer was blocked without providing a constructive alternative. All our investments must add value, with manageable risks. After thorough analysis, we have therefore reached the conclusion that a new offer cannot be justified. HELIOS' prospects are outstanding and it is well positioned to expand its leading position in the German hospital market."

Fresenius currently has a stake of 5% minus one share in RHÖN-KLINIKUM AG and plans to slightly increase its shareholding. This position will preserve the company's strategic options in the consolidating German hospital market.

Telephone Conference
A telephone conference will be held at 2 p.m. CEST on Monday, September 3, 2012. You are cordially invited to follow the conference call in a live broadcast via the Internet at www.fresenius.com, see Press, Audio/Video Service. Following the call, a replay will be available on our website.

Fresenius Kabi posted substantial organic growth across all regions and product areas during the first half of this year. The company is well on track for further strong growth in the second half. Demand in the United States is expected to remain high supported by ongoing IV drug shortages, particularly of Propofol. Supply constraints of a competitor for this anesthetic are now expected to last well into the fourth quarter.

As a result, Fresenius Kabi raises its outlook for 2012. The company now expects organic sales growth of approx. 9% and an EBIT margin of approx. 20.5%. Previously, Fresenius Kabi projected organic sales growth of 7% to 9% and an EBIT margin in the range of 20% to 20.5%.

Fresenius plans to invest the additional earnings contribution to reduce future interest expenses and optimize the maturity profile of the Group's financial liabilities.

Fresenius fully confirms its full-year guidance. For 2012, Fresenius expects net income ¹⁾ to increase by 14% to 16% in constant currency and sales growth ²⁾ in the range of 12% to 14% in constant currency.


¹⁾ Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain of €34 million at Fresenius Medical Care and for one-time costs related to the offer to the shareholders of RHÖN-KLINIKUM AG. 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights.

²⁾ Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment of -€161 million for the full year 2011 solely relates to Fresenius Medical Care North America.

Mit einem umfangreichen Programm zum Informieren und Mitmachen beteiligt sich der Gesundheitskonzern Fresenius am 14. September 2012 an der zweiten „Nacht der Ausbildung" in Bad Homburg. Von 17 bis 22 Uhr öffnet das Unternehmen für interessierte Schüler, Eltern und Lehrer die Türen der Konzernzentrale in der Else-Kröner-Str. 1 in Bad Homburg. Unter dem Motto „Ausbildung interaktiv" können sich die Besucher über die 19 an den Ausbildungsstandorten Bad Homburg und Friedberg angebotenen Ausbildungsberufe und dualen Studiengänge informieren.

An verschiedenen Informationsständen und in Kurzvorträgen erfahren die Besucher alles Wissenswerte über die vielfältigen Ausbildungsmöglichkeiten bei Fresenius und den Ablauf des Bewerbungsverfahrens. Potenzielle Bewerber sind eingeladen, ihre mitgebrachten Bewerbungen unverbindlich und anonym vor Ort auf Inhalt und Form überprüfen zu lassen. Wer sich gut informiert fühlt, kann sein Wissen bei einem Gewinnspiel „Rund um die Ausbildungsberufe" testen und attraktive Preise gewinnen.

Diese Angebote gibt es:

• Berufsorientierung mit "Azubi-Scouts": Auszubildende des Unternehmens stellen die Ausbildung bei Fresenius vor und unterstützen die Schulabgänger bei der Berufsorientierung.
• Bewerbungs-Check: Mitarbeiter der Personalabteilung prüfen die mitgebrachten Bewerbungsunterlagen und geben Tipps und Tricks rund um die Bewerbung. An Bewerbungsterminals können die Besucher das Erstellen einer Online-Bewerbung üben.
• Vorstellungsgespräche: Experten verraten den Besuchern, welche Fragen in einem Vorstellungsgespräch auf sie zukommen können und wie man sich auf diese gut vorbereitet.
• Versuche & Experimente: Wein und Gewitter im Glas – Experimente aus der Welt der Chemie
• Mitmach-Aktionen bei den gewerblich-technischen Ausbildungsberufen: Hier können die Schüler selbst ihr handwerkliches Geschick testen, etwa beim Löten oder beim Lösen von Knobelaufgaben aus Metall. Die Auszubildenden zeigen ihre Projekte und ihren Film über die Entstehung eines Werkstücks, und die Besucher können einen Blick auf die Arbeitsplätze in der Ausbildungswerkstatt werfen.
• Live-Vorführung der Dialysegeräte von Fresenius Medical Care: Die Besucher erfahren, wie eine Dialysemaschine funktioniert.
• Ernährungsberatung: Leben wir wirklich gesund? Ein Ernährungsberater von Fresenius Kabi erklärt, auf was bei einer gesunden Ernährung geachtet werden sollte.
• Rallye zu den Ausbildungsberufen und Glücksrad mit attraktiven Preisen: Mit etwas Glück können die Besucher tolle Preise gewinnen.
• Foto-Wettbewerb

Die Stadt Bad Homburg veranstaltet die „Nacht der Ausbildung" zum zweiten Mal zusammen mit den insgesamt 20 beteiligten Unternehmen. Ein kostenloser Shuttle-Bus fährt den gesamten Abend über im Viertelstunden-Takt die verschiedenen Ausbildungsbetriebe an.

Im gerade begonnenen Ausbildungsjahr 2012 bietet Fresenius an den Standorten Bad Homburg und Friedberg insgesamt zwölf verschiedene Ausbildungsberufe und sieben duale Studiengänge an. Erstmals bietet das Unternehmen die dualen Studiengänge Accounting und Controlling (in Kooperation mit der Dualen Hochschule Mannheim) und Spedition, Transport und Logistik (in Kooperation mit der Dualen Hochschule Heidenheim) an, so dass das Angebot bei den dualen Studiengängen noch breiter gefächert wurde.

Deutschlandweit bildet Fresenius mehr als 1.900 Auszubildende und dual Studierende aus. Die Bewerber haben die Auswahl zwischen über 40 Ausbildungsberufen und dualen Studiengängen im naturwissenschaftlichen, gewerblich-technischen, kaufmännischen, IT- und Logistik- sowie pflegerischen Bereich.

Weitere Informationen zur zweiten „Nacht der Ausbildung" in Bad Homburg finden Sie im beigefügten Informationsblatt sowie auf der Internet-Seite der Stadt Bad Homburg (www.nachtderausbildung-bad-homburg.de).

Fresenius Medical Care AG & Co. KGaA ("the company" or "Fresenius Medical Care"), the world's largest provider of dialysis products and services, today announced a change in its Management Board. The Supervisory Board of Fresenius Medical Care Management AG has appointed Ronald (Ron) Kuerbitz as a Management Board member, effective January 1, 2013. Mr. Kuerbitz will succeed Rice Powell as CEO of Fresenius Medical Care North America. This appointment is part of the company's succession plan to ensure a smooth transition of leadership in North America. Mr. Powell will assume the role of CEO, Fresenius Medical Care AG & Co. KGaA, and Chairman of the Management Board, effective January 1, 2013 as announced in March of 2012.

Ron Kuerbitz currently serves as Executive Vice President responsible for Market Development and Administration for Fresenius Medical Care North America. He joined Fresenius Medical Care in 1997 to lead its corporate development function and was later named as Fresenius Medical Care North America's General Counsel and Chief Administrative Officer. Mr. Kuerbitz has 20 years of experience in the health care field, having held positions in law, compliance, business development, government affairs and operations. Since 2011 Mr. Kuerbitz has served as Chairman of Kidney Care Partners in Washington D.C., a coalition of patient advocates, dialysis professionals, care providers and device and pharmaceutical manufacturers working together to improve the quality of care for individuals with chronic kidney disease. Mr. Kuerbitz is a graduate of Albion College and received his juris doctor degree from the Yale Law School.

"We are pleased to facilitate an orderly transition process with the appointment of Ron Kuerbitz as CEO for Fresenius Medical Care North America," said Ben Lipps, Chief Executive Officer of Fresenius Medical Care and Chairman of the Management Board. "Ron's successful record and his extensive management experience within Fresenius Medical Care and the health care field qualify him superbly for the position. The fact that this appointment has been filled internally reflects the strength and depth of our management team and will ensure a smooth transition going forward".

Ulf Mark Schneider, Chairman of the Supervisory Board of Fresenius Medical Care Management AG, said: "Ron has made outstanding contributions to the success of Fresenius Medical Care over the years. With his superb understanding of the strategic and regulatory opportunities and challenges ahead of us, Ron's leadership will ensure the continued success of the company. We are looking forward to working with him in his new role".

 

 

 

 

 

 

 

Die Verwendung der Fotos ist mit Bildnachweis in unabhängigen Medien wie Zeitungen und Zeitschriften sowie den von Presse und Rundfunk erstellten Internet-Seiten kostenlos. Jede anderweitige Nutzung bedarf der ausdrücklichen Zustimmung der Fresenius Konzern-Kommunikation.

 

From its origins in the laboratory of a Frankfurt pharmacy, Fresenius has grown over the past 100 years into a global health care group. As the company celebrates its centennial on October 1, 2012, Fresenius products and services are improving lives around the world.

A century after Dr. Eduard Fresenius established the pharmaceutical business that took his name, his entrepreneurial values and commitment to quality and innovation in the service of patients continue to shape Fresenius.

Dr. Fresenius started the pharmaceutical company on October 1, 1912, when he expanded the lab of his historic "Hirsch Pharmacy" into a small manufacturing operation specializing in infusion solutions and other products. Following the devastation of World War II, Dr. Fresenius was working to reorganize the businesses when he died suddenly in 1946, leaving the business to his 21-year-old foster daughter, Else Fernau. She later married Hans Kröner, and over the following decades the couple together developed the manufacturing operations into an international health care group.

A momentous step came in 1966, when the company started selling imported dialysis machines and dialyzers. Fresenius then launched its own dialysis machine in 1979 – the A2008, which became the world's top seller. Its market-leading position has since been expanded with successor models. In the early 1980s, Fresenius developed the first dialysis filters out of polysulfone, opening up a new era in the treatment of kidney disease, and in 1996 the company took the decisive step of becoming an integrated provider: Merging Fresenius' dialysis business segment with the U.S. dialysis provider National Medical Care created Fresenius Medical Care, the world's leading dialysis company, with a strong footprint in the U.S. In 2011, the company treated more than 140,000 dialysis patients in North America, and over 85 percent of all dialysis machines installed in U.S. dialysis clinics and centers were made by Fresenius Medical Care.

Major milestones have been achieved by the Group's other business segments, as well. In 1999, the merger of Pharmacia & Upjohn's international infusions business with Fresenius' pharmaceutical business segment created Fresenius Kabi, a leading global provider of infusion therapy, clinical nutrition, and I.V. generic drugs. Since the mid-1990s, Fresenius has offered planning, construction and management services for hospitals and other health care facilities. And, since its 2005 acquisition of HELIOS Kliniken, Fresenius has also been one of Germany's leading private hospital operators.

Fresenius, listed on the Frankfurt stock exchange since 1986, exceeded the level of 1 billion German marks (~€500 million) in sales in 1990. By the end of the 1990s, sales had again grown dramatically, to over €6 billion. Fresenius has in fact grown steadily since the 1990s, and successfully strengthened its global presence.

Over the last decade, few companies have matched Fresenius' dynamic, consistent growth: Between 2002 and 2011, sales more than doubled, operating profit (EBIT) more than tripled, and net income rose more than five-fold. During this period, the company expanded in established markets and in emerging market countries. In China, for example, Fresenius is among the leading providers of clinical nutrition, infusion therapy, and dialysis products.

All signs point to continued growth

With 2011 sales of about €16.5 billion, net income of some €770 million and more than 160,000 employees, about the half of them in Europe and a third in North America, Fresenius is one of the world's leading health care companies. Fresenius and Fresenius Medical Care shares are listed in Germany's benchmark DAX30 stock index.

Looking ahead, Fresenius is well positioned to benefit from demographic change, which will lead more patients in the industrialized nations to seek innovative treatments, and from increasing access to high-quality health care in developing countries. Both of these major global health care trends promise to significantly boost long-term demand for the company's products and services.

With its 100 years of experience and a century-long commitment to human health, Fresenius is excellently positioned to provide a steadily increasing number of patients around the world with high-quality, integrated health care.

Note to the media: An electronic press kit with texts, images and audio and video footage related to this press release can be found at www.fresenius.com/f100.

Third Quarter 2012 Summary:

 

 

Net revenue: $3,418 million, +7%
Operating income (EBIT): $568 million, +6%
Net income*: $270 million, -3%
Earnings per ordinary share: $0.88, -4%

Nine Months 2012 Summary

 

 

Net revenue: $10,095 million, +8%
Operating income (EBIT): $1,659 million, +11%
Net income*: 930 million, +22%
Earning per ordinary share: $3.05, +21%

Earnings excluding investment gain:

Net income*: $790 million, +4%
Earnings per ordinary share: $2.59, +3%

*Attributable to shareholders of Fresenius Medical Care AG & Co. KGaA

Fresenius Medical Care AG & Co. KGaA (the "company" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced its results for the third quarter and first nine months of 2012.

3rd Quarter of 2012

Revenue

Net revenue for the third quarter of 2012 increased by 7% to $3,418 million (+11% at constant currency) compared to the third quarter of 2011. Organic revenue growth worldwide was 4%. Dialysis services revenue grew by 10% to $2,605 million (+12% at constant currency) and dialysis product revenue decreased by 1% to $813 million and increased by 7% at constant currency.

North America revenue for the third quarter of 2012 increased by 13% to $2,249 million. Dialysis services revenue grew by 15% to $2,047 million with a same market treatment growth of 4%. Average revenue per treatment for U.S. clinics increased to $349 in the third quarter of 2012 compared to $345 for the corresponding quarter in 2011. Dialysis product revenue decreased by 1% to $202 million. After adjusting for the Liberty acquisition, dialysis product revenue increased by 2%.

International revenue decreased by 2% to $1,163 million and increased by 7% at constant currency. Organic revenue growth was 7%. Dialysis services revenue decreased by 4% to $558 million and increased by 6% at constant currency. Dialysis product revenue decreased by 1% to $605 million and increased by 9% at constant currency.

Earnings

Operating income (EBIT) for the third quarter of 2012 increased by 6% to $568 million compared to $534 million in the third quarter of 2011. This resulted in an operating margin of 16.6% for the third quarter of 2012 compared to 16.8% for the corresponding quarter in 2011.

In North America, the operating margin decreased from 18.8% to 18.7%. Average costs per treatment for U.S. clinics increased by $2 to $281 in the third quarter of 2012 as compared to $279 in the third quarter of 2011.

In the International segment, the operating margin decreased from 17.3% to 16.8%.

Net interest expense for the third quarter of 2012 was $108 million, compared to $68 million in the third quarter of 2011. This development was mainly attributable to the higher level of indebtedness as a result of the issuance of various tranches of senior notes over the course of 2011 and 2012 to finance dialysis clinic acquisitions.

Income tax expense was $153 million for the third quarter of 2012 compared to $163 million in the third quarter of 2011, reflecting effective tax rates of 33.3% and 35.0%, respectively.

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the third quarter of 2012 was $270 million, a decrease of 3% compared to the corresponding quarter of 2011.

Earnings per ordinary share (EPS) for the third quarter 2012 was $0.88 compared to $0.92 for the third quarter of 2011. The weighted average number of shares outstanding for the third quarter of 2012 was approximately 305.5 million shares, compared to 303.2 million shares for the third quarter of 2011. The increase in shares outstanding resulted from stock option exercises in the past 12 months.

Cash flow

In the third quarter of 2012, the company generated $535 million in cash from operations, an increase of 16% compared to the corresponding figure last year and representing 15.7% of revenue. The cash flow generation was supported by the favorable earnings development as well as the favorable development of working capital items including inventory.

A total of $164 million was spent for capital expenditures, net of disposals. Free cash flow before acquisitions was $371 million (representing 10.8% of revenue) compared to $313 million in the third quarter of 2011. A total of $37 million in cash was spent for acquisitions and investments, net of divestitures. Free cash flow after acquisitions and divestitures was $334 million, compared to $264 million in the third quarter of 2011.

Nine Months of 2012

Revenue and Earnings

Net revenue for the first nine months of 2012 increased by 8% to $10,095 million (+11% at constant currency) compared to the first nine months of 2011. Organic revenue growth was 4% in the first nine months of 2012.

Operating income (EBIT) for the first nine months of 2012 increased by 11% to $1,659 million compared to $1,488 million in the first nine months of 2011. The operating income margin increased to 16.4% for the first nine months of 2012 as compared to 16.0% in the same period in 2011.

Net interest expense for the first nine months of 2012 was $311 million compared to $214 million in the same period of 2011.

For the first nine months of 2012, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA was $930 million, up by 22% from the first nine months of 2011. This includes a non-taxable investment gain of $140 million related to the acquisition of Liberty Dialysis Holdings, Inc., including its 51% stake in Renal Advantage Partners, LLC (RAI). The gain is a result of measuring the 49% equity interest in RAI held by the company at its fair value at the time of the Liberty acquisition. Excluding this investment gain, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA increased by 4% to $790 million.

Income tax expense for the first nine months of 2012 was $462 million compared to $436 million in the same period in 2011, reflecting effective tax rates of 31.1% and 34.2%, respectively. Excluding the investment gain the effective tax rate for the first nine months of 2012 was 34.3%.

In the first nine months of 2012, earnings per ordinary share rose by 21% to $3.05 and by 3% to $2.59 if excluding the investment gain. The weighted average number of shares outstanding during the first nine months of 2012 was approximately 304.7 million compared to 302.7 million shares for the first nine months of 2011.

Cash Flow

Cash from operations during the first nine months of 2012 was $1,467 million compared to $950 million for the same period in 2011, representing 14.5% of revenue.

A total of $438 million in cash was spent for capital expenditures, net of disposals. Free cash flow before acquisitions for the first nine months of 2012 was $1,029 million compared to $570 million in the same period in 2011. A total of $1,557 million in cash was spent for acquisitions, net of divestitures. Free cash flow after acquisitions and divestitures was minus $528 million compared to minus $601 million in the first nine months of last year.

Please refer to the attachments for a complete overview on the third quarter and first nine months of 2012 and the reconciliation of non-GAAP financial measures included in this release to the most comparable GAAP financial measures.

Patients – Clinics – Treatments

As of September 30, 2012, Fresenius Medical Care treated 256,521 patients worldwide, which represents a 12% increase compared to the previous year's figure. North America provided dialysis treatments for 163,454 patients, an increase of 16%. Including 31 clinics managed by Fresenius Medical Care North America, the number of patients in North America was 165,754. The International segment provided dialysis treatment to 93,067 patients, an increase of 6% over the prior year's figure.

As of September 30, 2012, the company operated a total of 3,135 clinics worldwide, which represents a 9% increase compared to the previous year's figure. The number of clinics is comprised of 2,056 clinics in North America (2,087 including managed clinics), and 1,079 clinics in the International segment, representing an increase of 12% and 4%, respectively.

During the first nine months of 2012, Fresenius Medical Care delivered approximately 28.6 million dialysis treatments worldwide. This represents an increase of 12%, compared to last year's figure. North America accounted for 18.1 million treatments, an increase of 12%. The International segment delivered 10.5 million treatments, an increase of 13%.

Employees

As of September 30, 2012, Fresenius Medical Care had 85,368 employees (full-time equivalents) worldwide, compared to 79,159 employees at the end of 2011. This increase of more than 6,200 employees is due to overall growth in the company's business and acquisitions including Liberty Dialysis Holdings, Inc.

Debt/EBITDA ratio

The ratio of debt to earnings before interest, taxes, depreciation and amortization (EBITDA) increased from 2.55 at the end of the third quarter of 2011 to 2.81 at the end of the third quarter of 2012. The debt/EBITDA ratio at the end of the second quarter 2012 was 2.92.

Rating

During the third quarter of 2012, Standard & Poor's removed the company's ratings from review and affirmed the company's corporate credit as ‘BB+' with a ‘stable' outlook. Moody's rates the company's corporate credit as ‘Ba1' with a ‘stable' outlook, and Fitch rates the company's corporate credit as ‘BB+' with a ‘stable' outlook. For further information on Fresenius Medical Care's credit ratings, maturity profiles and credit instruments, please visit our website at www.fmc-ag.com / Investor Relations/ Credit Relations.

Successful Renewal of Credit Agreement

Fresenius Medical Care successfully renewed its syndicated credit agreement including a revolving facility and a long term loan. The refinancing of those facilities was well received in the bank market. The company entered into a $3.85 billion syndicated credit agreement, comprised of 5-year revolving facilities (including a $200 million U.S. Dollar facility, a €500 million Euro facility and a $ 400 million multi-currency facility) and a 5-year $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.

Sales and earnings outlook for 2012 confirmed

For the full year 2012, the company confirms its sales and earnings outlook.

The company expects revenue to grow to ~ $14 billion in 2012*. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to grow to ~ $1.14 billion*. This does neither include the investment gain in the amount of $140 million in the first nine months of 2012 nor does it consider charges of up to $70 million after tax mainly related to the intended renegotiation of the distribution, manufacturing and supply agreement for iron products in North America to reflect changes in the market and a donation to the American Society of Nephrology foundation to establish the Ben J. Lipps Research Fellowship Program.

*We define the ~ sign as a +/- 0-2% deviation from the respective numbers.

For 2012, the company expects to spend ~ $700 million on capital expenditures and ~ $1.8 billion on acquisitions. The debt/EBITDA ratio is expected to be below 3.0 by the end of 2012.

Ben Lipps, chief executive officer of Fresenius Medical Care, commented: "In light of the negative implications from the difficult economic environment and from currency fluctuations, we achieved good operating results with an excellent operating cash flow in the third quarter of 2012. In summary, we are confirming our guidance for the full year at the lower end of the previously indicated range. We anticipate some special collection efforts related to services performed in prior years and other initiatives in the fourth quarter that will help us to achieve our guidance. The integration progress of our latest acquisitions continues and we are very pleased with our Quality Improvement programs and patient outcomes continuing to improve in nutritional status and reduced hospital days. The CEO transition to Rice Powell continues on track with the appointment of Ron Kuerbitz as the new CEO for North America effective January 2013." 

 

Conference call

Fresenius Medical Care will hold a conference call to discuss the results of the third quarter and first nine months of 2012 on Wednesday, October 31, 2012, at 3:30 p.m. CET / 10:30 a.m. EDT. The company invites investors to view the live webcast of the call at the company's website www.fmc-ag.com in the "Investor Relations" section. A replay will be available shortly after the call.

Q1-3/2012:

• Sales*: €14.1 billion (+18% at actual rates, +12% in constant currency)
• EBIT**: €2.2 billion (+19% at actual rates, +13% in constant currency)
• Net income***: €682 million (+21% at actual rates, +15% in constant currency)
• Group earnings at new single-quarter all-time high of €248 million
• Excellent operating cash flow development - Cash flow margin increases to 12.8%
• Sales and earnings guidance fully confirmed

*Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment of -€119 million in the first three quarters of 2011 and of -€161 million for the full year 2011 solely relates to Fresenius Medical Care North America.
**Adjusted for one-time costs of €7 million (non-financing expenses) related to the offer to the shareholders of RHÖN-KLINIKUM AG.
***Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain of €34 million at Fresenius Medical Care and for one-time costs of €31 million related to the offer to the shareholders of RHÖN-KLINIKUM AG. 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights.

Ulf Mark Schneider, CEO of Fresenius, said: "Our third quarter results demonstrate continued business strength and solid fundamentals, particularly in light of the excellent comparable prior-year quarter. Fresenius Kabi and Fresenius Helios stood out with strong financial results. Our broad geographic coverage and diversified business provide stability as we continue on our profitable growth path."

Group outlook 2012 fully confirmed
Based on the Group's financial results in the first three quarters of 2012, Fresenius confirms its guidance. For 2012, Fresenius expects sales to increase by 12% to 14% and net income to increase by 14% to 16%, both in constant currency.

The Group plans to invest ~5% of sales in property, plant and equipment.

The net debt/EBITDA ratio is projected to be <3.0 at year-end (including the acquisition of Fenwal Holdings, Inc.).

*Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment of -€119 million in the first three quarters of 2011 and of -€161 million for the full year 2011 solely relates to Fresenius Medical Care North America.
**Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain (€34 million) and expected one-timepotential special charges (up to €17 million) at Fresenius Medical Care as well as for one-time costs (€31 million) related to the offer to the shareholders of RHÖN-KLINIKUM AG. 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights.

 

Continued strong sales growth
Group sales increased by 18% (12% in constant currency) to €14,100 million (Q1-3 2011*: €11,970 million). Organic sales growth was 5%. Acquisitions contributed a further 8%. Divestitures reduced sales growth by 1%. Currency translation had a positive effect of 6%. This is mainly attributable to the strengthening of the U.S. dollar against the euro by 9% in the first three quarters of 2012 compared to the first three quarters of 2011.

Sales in the business segments developed as follows:

Organic sales growth in North America was 3%, and in Europe 5%. Organic sales growth was again strong in Asia-Pacific with 11% and in Latin America with 19%. The sales decrease in Africa was due to the volatility in Fresenius Vamed's project business.


*Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment of -€119 million in the first three quarters of 2011 and of -€161 million for the full year 2011 solely relates to Fresenius Medical Care North America.

Strong earnings growth
Group EBITDA* grew by 19% (13% in constant currency) to €2,786 million (Q1-3 2011: €2,344 million). Group EBIT* increased by 19% (13% in constant currency) to €2,224 million (Q1-3 2011: €1,862 million). The EBIT margin improved by 20 basis points to 15.8% (Q1-3 2011: 15.6%).

Group net interest was -€480 million (Q1-3 2011: -€401 million). Lower average interest rates were more than offset by incremental debt due to acquisition financing and currency translation effects.

The other financial result of -€37 million includes one-time costs for the offer to the shareholders of RHÖN-KLINIKUM AG, primarily related to financing commitments.

The Group tax rate** improved to 30.1% (Q1-3 2011: 30.9%).

Noncontrolling interest increased to €537 million (Q1-3 2011: €445 million), of which 93% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income*** increased by 21% (15% in constant currency) to €682 million (Q1-3 2011: €565 million). Earnings per share increased by 15% to €3.98 (Q1-3 2011: €3.47). The average number of shares grew to approx. 171 million in the first three quarters of 2012, primarily due to the May 2012 capital increase.

Group net income**** was €685 million or €4.00 per share (including the non-taxable investment gain at Fresenius Medical Care and one-time costs related to the offer to the shareholders of RHÖN-KLINIKUM AG).

*Adjusted for one-time costs of €7 million (non-financing expenses) related to the offer to the shareholders of RHÖN-KLINIKUM AG.
**Adjusted for the non-taxable investment gain at Fresenius Medical Care and for one-time costs of €44 million related to the offer to the shareholders of RHÖN-KLINIKUM AG. 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds.
***Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain of €34 million at Fresenius Medical Care and for one-time costs of €31 million related to the offer to the shareholders of RHÖN-KLINIKUM AG. 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights.
****Net income attributable to shareholders of Fresenius SE & Co. KGaA

Continued investment in growth
The Fresenius Group spent €611 million on property, plant and equipment (Q1-3 2011: €480 million). Acquisition spending was €2,192 million (Q1-3 2011: €908 million). This relates primarily to Fresenius Medical Care's acquisition of Liberty Dialysis Holdings, Inc. as well as to the acquisition of Damp Group by Fresenius Helios.

Excellent operating cash flow
Operating cash flow increased to €1,807 million (Q1-3 2011: €1,156 million). This was mainly driven by strong earnings growth and tight working capital management, especially regarding trade accounts receivable. The cash flow margin improved to 12.8% (Q1-3 2011: 9.7%). Net capital expenditure was €564 million (Q1-3 2011: €475 million). Free cash flow before acquisitions and dividends was €1,243 million (Q1-3 2011: €681 million). Free cash flow after acquisitions and dividends was -€823 million (Q1-3 2011: -€538 million).

Solid balance sheet structure
The Group's total assets increased by 15% (15% in constant currency) to €30,225 million (Dec. 31, 2011: €26,321 million). Current assets grew by 21% (20% in constant currency) to €8,621 million (Dec. 31, 2011: €7,151 million). This includes the proceeds of the capital increase which were invested in short-term instruments. Non-current assets increased by 13% (12% in constant currency) to €21,604 million (Dec. 31, 2011: €19,170 million), mainly due to the recent acquisitions.

Total shareholders' equity increased by 18% (18% in constant currency) to €12,532 million, mainly due to the capital increase (Dec. 31, 2011: €10,577 million). The equity ratio was 41.5% (Dec. 31, 2011: 40.2%).

Group debt grew by 16% (15% in constant currency) to €11,325 million (Dec. 31, 2011: €9,799 million), primarily resulting from acquisition financing. Net debt increased by 4% (4% in constant currency) to €9,556 million (Dec. 31, 2011: €9,164 million). Net debt comprises the proceeds of the capital increase.

As of September 30, 2012, the net debt/EBITDA ratio* was 2.53 (Dec. 31, 2011: 2.83). At identical exchange rates for net debt and EBITDA, the ratio was also 2.53.

*Pro forma including Damp Group and Liberty Dialysis Holdings, Inc., adjusted for one-time costs of €7 million (non-financing expenses) related to the offer to the shareholders of RHÖN-KLINIKUM AG.

Number of employees increases
As of September 30, 2012, the Fresenius Group increased the number of its employees by 9% to 163,463 (Dec. 31, 2011: 149,351), mainly due to acquisitions.

Fresenius Biotech
Fresenius Biotech develops innovative therapies with trifunctional antibodies for the treatment of cancer. In the field of polyclonal antibodies, Fresenius Biotech has successfully marketed ATG-Fresenius S for many years. ATG-Fresenius S is an immunosuppressive agent used to prevent and treat graft rejection following organ transplantation.

Fresenius Biotech's sales increased by 15% to €25.8 million compared to €22.4 million in the first three quarters of 2011. Removab sales grew by 22% to €3.3 million (Q1-3 2011: €2.7 million). ATG Fresenius S sales increased by 14% to €22.5 million (Q1-3 2011: €19.7 million). Fresenius Biotech's EBIT was -€15 million (Q1-3 2011: -€19 million).

In July 2012, ATG-Fresenius S was added to the list of reimbursable medications for stem cell transplantation. Besides Germany and Austria, ATG-Fresenius S can now be actively marketed in another relevant country for this additional indication.

For 2012, Fresenius Biotech now expects an EBIT of ~ -€25 million. Previously, the company expected an EBIT of -€25 million to -€30 million.

Business Segments

Fresenius Medical Care
Fresenius Medical Care is the world's leading provider of services and products for patients with chronic kidney failure. As of September 30, 2012, Fresenius Medical Care was treating 256,521 patients in 3,135 dialysis clinics.

• Strong operating cash flow margin of 14.5%
• Debt maturity profile improved – Syndicated loan successfully renewed

Sales increased by 8% to US$10,095 million (Q1-3 2011*: US$9,306 million). Organic sales growth was 4%. Acquisitions contributed a further 8%. Divestitures reduced sales growth by 1%. Currency translation had a negative effect of 3%.
Sales in dialysis services increased by 11% (in constant currency: 13%) to US$7,688 million (Q1-3 2011: US$6,905 million). Dialysis product sales grew by 6% in constant currency to US$2,407 million (Q1-3 2011: US$2,401 million).

In North America sales grew 12% to US$6,602 million (Q1-3 2011: US$5,888 million). Dialysis services sales grew by 14% to US$6,007 million (Q1-3 2011: US$5,289 million). Average revenue per treatment for U.S. clinics increased to US$349 in the third quarter of 2012 (Q3 2011: US$345). Dialysis product sales were US$595 million (Q1-3 2011: US$599 million).

Sales outside North America ("International" segment) grew by 2% (in constant currency: 10%) to US$3,470 million (Q1-3 2011: US$3,405 million). Sales in dialysis services increased by 4% (in constant currency: 12%) to US$1,680 million (Q1-3 2011: US$1,616 million). Dialysis product sales of US$1,790 million remained close to the previous year's level of US$1,789 million at actual rates. In constant currency, dialysis product sales grew by 8%.

EBIT increased by 11% to US$1,659 million (Q1-3 2011: US$1,488 million). The EBIT margin increased to 16.4% (Q1-3 2011: 16.0%).

The EBIT margin in North America increased to 18.2% (Q1-3 2011: 17.6%). In the International segment the EBIT margin improved to 17.2% (Q1-3 2011: 17.0%).

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the first three quarters of 2012 was US$930 million, an increase of 22% compared to the corresponding period of 2011. This includes a non-taxable investment gain of US$140 million related to the acquisition of Liberty Dialysis Holdings, Inc. (Liberty), including its 51% stake in Renal Advantage Partners, LLC (RAI). The gain is a result of measuring the 49% equity interest in RAI held by the company at its fair value at the time of the Liberty acquisition. Excluding this investment gain, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA increased by 4% to US$790 million (Q1-3 2011: US$761 million).

The operating cash flow increased by 55% to US$1,467 million compared to US$950 million for the same period in 2011, supported by favorable development of working capital items. The cash flow margin improved to 14.5% (Q1-3 2011: 10.2%).

Fresenius Medical Care successfully renewed its syndicated credit agreement including a revolving facility and a long term loan. The refinancing of those facilities was well received in the market. The company entered into a US$3.85 billion syndicated credit agreement, comprised of 5-year revolving facilities (including a US$200 million U.S. dollar facility, a €500 million euro facility and a US$400 million multi-currency facility) and a 5-year 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.

Fresenius Medical Care confirms its sales and earnings outlook for 2012. The company expects sales to grow to ~ US$14 billion . Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to grow to ~ US$1.14 billion1. This does neither include the investment gain in the amount of US$140 million in the first three quarters of 2012 nor does it consider charges of up to US$70 million after tax mainly related to the intended renegotiation of the distribution, manufacturing and supply agreement for iron products in North America to reflect changes in the market and a donation to the American Society of Nephrology Foundation to establish the Ben J. Lipps Research Fellowship Program. These potential special charges translate into up to €17 million after tax for the Fresenius Group.

In summary, Fresenius Medical Care confirms its guidance for the full year at the lower end of the previously indicated range. The company anticipates some special collection efforts related to services performed in prior years and other initiatives in the fourth quarter that will help to achieve its guidance.

For further information, please see Fresenius Medical Care's Press Release at www.fmc-ag.com.

*Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment amounts to -US$167 million in Q1-3 2011; the 2011 sales adjustment amounts to -US$224 million.
**Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA – adjusted for a non-taxable investment gain of US$140 million in the first three quarters of 2012.
***Fresenius Medical Care defines the ~ sign as a +/- 0-2% deviation from the respective numbers.

Fresenius Kabi
Fresenius Kabi offers infusion therapies, intravenously administered generic drugs and clinical nutrition for seriously and chronically ill patients in the hospital and outpatient environments. The company is also a leading supplier of medical devices and transfusion technology products.

• Continued strong organic sales growth of 9%
• 2012 outlook fully confirmed

Sales increased by 14% to €3,363 million (Q1-3 2011: €2,950 million). Organic sales growth was 9%. Currency translation had an effect of 4%. Acquisitions contributed 1%.

In Europe sales grew by 7% (organic growth: 6%) to €1,449 million (Q1-3 2011: €1,360 million). Sales in North America increased by 21% to €910 million (Q1-3 2011: €755 million). Strong organic growth of 10% was supported mainly by continued competitor supply constraints as well as new product launches. In Asia-Pacific sales increased by 26% (organic growth: 15%) to €642 million (Q1-3 2011: €511 million). Sales in Latin America and Africa increased by 12% (organic growth: 14%) to €362 million (Q1-3 2011: €324 million).

EBIT grew by 14% to €700 million (Q1-3 2011: €613 million). EBIT growth was driven particularly by excellent earnings growth in North America and the emerging markets. The EBIT margin of 20.8% remained at the strong previous year's level.

Net income* increased by 22% to €330 million (Q1-3 2011: €271 million).

Fresenius Kabi's operating cash flow increased by 29% to €452 million (Q1-3 2011: €350 million). The strong increase was favorably influenced by extraordinary payments of trade accounts receivable. The cash flow margin was excellent at 13.4% (Q1-3 2011: 11.9%). Cash flow before acquisitions and dividends improved to €322 million (Q1-3 2011: €234 million).

Fresenius Kabi fully confirms its outlook for 2012, which was raised in September 2012. The company targets organic sales growth of approx. 9%. Furthermore, Fresenius Kabi forecasts an EBIT margin of approx. 20.5%.

*Net income attributable to shareholders of Fresenius Kabi AG

Fresenius Helios
Fresenius Helios is one of the largest private hospital operators in Germany. HELIOS owns 72 hospitals, including six maximum care hospitals in Berlin-Buch, Duisburg, Erfurt, Krefeld, Schwerin and Wuppertal. HELIOS treats more than 2.7 million patients per year, thereof more than 750,000 inpatients, and operates more than 23,000 beds.

• Excellent sales growth of 20%
• 2012 outlook fully confirmed

Sales increased by 20% to €2,347 million (Q1-3 2011: €1,950 million). Strong organic sales growth contributed 5%, acquisitions contributed 17% to sales growth. Divestitures reduced sales growth by 2%. In the third quarter of 2012, HELIOS' Swiss post-acute care clinic was sold to Fresenius Vamed and retrospectively deconsolidated as of January 1, 2012.

EBIT grew by 19% to €232 million (Q1-3 2011: €195 million). The EBIT margin was 9.9% (Q1-3 2011: 10.0%).

Net income* increased by 26% to €148 million (Q1-3 2011: €117 million).

Sales of the established hospitals grew by 5% to €2,023 million. EBIT improved by 21% to €235 million. The EBIT margin increased to 11.6% (Q1-3 2011: 10.2%) driven by excellent operating results and a one-time gain. Sales of the acquired hospitals (consolidation <1 year) were €324 million. As expected, EBIT was -€3 million. Restructuring of these hospitals is on track.

Fresenius Helios fully confirms its outlook for 2012. The company projects organic sales growth of 3% to 5% and EBIT to increase to the upper end of the targeted range of €310 million to €320 million.

One-time costs relating to the offer to the shareholders of RHÖN-KLINIKUM AG are included in the segment "Corporate/Other".

*Net income attributable to shareholders of HELIOS Kliniken GmbH

Fresenius Vamed
Fresenius Vamed offers engineering and services for hospitals and other health care facilities.

• Accelerated Q3 order intake of €166 million exceeds H1 order intake of €156 million
• Outlook improved - 2012 sales and EBIT now expected at upper end of range

Sales increased by 12% to €536 million (Q1-3 2011: €480 million). Acquisitions contributed 11% to sales growth. In the third quarter of 2012, HELIOS' Swiss post-acute care clinic was transferred to Fresenius Vamed and retrospectively consolidated as of January 1, 2012. Sales in the project business were €285 million (Q1-3 2011: €311 million). Sales in the service business increased to €251 million (Q1-3 2011: €169 million).

EBIT increased by 9% to €24 million (Q1-3 2011: €22 million). The EBIT margin reached 4.5% (Q1-3 2011: 4.6%). Net income* was €16 million (Q1-3 2011: €17 million).

The order intake was €322 million (Q1-3 2011: €335 million). In the third quarter of 2012, Fresenius Vamed again received supply contracts for medical-technical equipment in China with an order volume of €40 million. The order for the San Fernando General Hospital in the Republic of Trinidad and Tobago was extended by €65 million. In addition, Fresenius Vamed received an order for the reconstruction and expansion of an Austrian rheumatology clinic with a total volume of €37 million. Order backlog was €878 million as of September 30, 2012 (Dec. 31, 2011: €845 million).

Fresenius Vamed improves its outlook for 2012 and expects to grow both sales and EBIT at the upper end of the targeted range of 5% to 10%.

*Net income attributable to shareholders of VAMED AG

 

Conference Call and Audio Webcast
As part of the publication of the results for the first three quarters of 2012, a conference call will be held on October 31, 2012 at 2 p.m. CET (9 a.m. EDT). All journalists are cordially invited to follow the conference call in a live broadcast via the Internet at www.fresenius.com, see Press, Audio/Video Service. Following the call, a replay of the conference call will be available on our website.

Fresenius Medical Care reached a remarkable milestone today when the company, the world's largest provider of dialysis products and services, produced its 500,000th dialysis machine. The machine, from the multiple prize-winning 5008 series, came off the production line at the Schweinfurt, Germany plant and was donated to the Deutsche Nierenstiftung, a German non-profit organization for dialysis and kidney transplants.

"This landmark achievement testifies to our technological as well as to our commercial success," said Kent Wanzek, the Fresenius Medical Care Management Board member responsible for Global Manufacturing Operations. "Constant innovation is what has made us the world market leader in dialysis machines. As a vertically integrated provider of dialysis equipment and services, we strive for continuous improvements in quality at every step, to make dialysis as safe and easy as possible for patients, and to keep it affordable for everyone."

Emanuele Gatti, Fresenius Medical Care CEO for Europe, Africa and Latin America (EMEALA) and Global Chief Strategist, said: "Over more than three decades we have steadily improved our dialysis technology, which has allowed us to expand far beyond our home market in Germany. Today, our dialysis machines are in demand worldwide and helping patients in every region of the globe. It is our goal that every person requiring treatment will one day have access to it. We are happy to be donating this very special machine to the Deutsche Nierenstiftung as a sign of appreciation for their tremendous work."

In hemodialysis, essential functions normally performed by a healthy kidney are carried out by a dialysis machine, which pumps blood out of the patient's body, through a bloodline system and into a dialyzer, which acts as an artificial kidney or filter. There, a fluid known as dialysate transports the toxins and excess water filtered from the blood away from the body. The machine also pumps dialysis fluid into the dialyzer in a separate, circular stream flowing in the opposite direction, controls both streams, and introduces an anticoagulant medication such as heparin. To ensure safe, efficient treatment for the patient, the system also includes a variety of automated monitoring and control functions.

Fresenius Medical Care began developing its own dialyzers and dialysis machines in the mid-1970s, with serial production of the company's first dialysis machine starting in 1979. The first model, the A2008, became the world's best-seller, and successor models have enabled Fresenius Medical Care to maintain its market-leading position until this day. Fresenius Medical Care currently produces dialysis machines in Schweinfurt and at a sister plant in Walnut Creek, in the United States.