After setting new records for sales and earnings last year, Fresenius is expecting further increases in fiscal 2013. At the Annual General Meeting in Frankfurt today, Ulf Mark Schneider, CEO of Fresenius, confirmed the global health care group's goal of exceeding €20 billion in sales this year. Additionally, net income is forecast to exceed €1 billion – a target that had originally been set for 2014.

*Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2013 adjusted for one-time integration costs of Fenwal, Inc.

Fresenius SE & Co. KGaA shareholders voted with a majority of 99.99% at the Annual General Meeting to approve the 20th consecutive dividend increase proposed by the general partner and the Supervisory Board. Shareholders will receive €1.10 per common share (2011: €0.95), a substantial 16% increase that reflects the new dividend policy of aligning growth in the dividend with the growth in earnings per share before special items. The company is hereby maintaining a payout ratio in the 20 to 25% range

The shareholders, with a majority of 91%, approved a new Authorized Capital in the amount of €40.32 million. The previous Authorized Capital in the amount of €26.52 million was cancelled; the company had utilized part of the original authorization of €40.32 million, approved in 2011, in a capital increase in May 2012. With a majority of 99%, shareholders approved a new stock-option program and a corresponding Conditional Capital.

Shareholder majorities of 99.91% and 98.70% approved the actions of the Management and Supervisory Boards, respectively, in 2012.

At the Annual General Meeting, 73.63% of the subscribed capital was represented.

The Catalonian Online Hemodiafiltration Survival Study (ESHOL) published in February 2013 confirms Fresenius Medical Care's conviction that every patient should be given the chance to benefit from hemodiafiltration (HDF) therapy with high volumes of substitution fluid (HighVolumeHDF). The primary outcome of the study was that HighVolumeHDF therapy significantly improves patient survival compared with conventional dialysis treatment. At this year's ERA-EDTA Congress, held in Istanbul, Turkey from May 18 to 21, HighVolumeHDF was the main focus of Fresenius Medical Care's activities.

Results of the Catalonian HDF study, recently published in the Journal of the American Society of Nephrology, were presented at Fresenius Medical Care's Scientific Lunch Symposium by the lead study investigator, Dr. Francisco Maduell of Barcelona, Spain. With 906 patients from 27 centers in Spain's Catalonia region, this is the largest study to date on HDF. The main finding of this randomized controlled trial is a 30% reduced risk of all-cause mortality for patients treated with HDF and large volumes of substitution (HighVolumeHDF) compared with patients treated with conventional hemodialysis. The large number of participants – more than 1,000 – at the symposium underlined the nephrology community's keen interest in the symposium's subject, "Emerging Concept: High Volume Matters in Hemodiafiltration (HighVolumeHDF)."

Professor Bernard Canaud, Chairman of Fresenius Medical Care's EMEALA (Europe, Middle East, Africa, Latin America) Medical Board, summarized the symposium, stating that "HighVolumeHDF significantly improves patient survival and quality of life versus standard hemodialysis and should therefore be the standard in cardioprotective hemodialysis for all patients."

These latest findings confirm the longstanding conviction of Fresenius Medical Care that HighVolumeHDF is the most efficient and cardioprotective therapy for dialysis patients with end-stage renal failure. That is why Fresenius Medical Care has been developing products for cardioprotective hemodialysis for years, leading to the CorDiax product line and the Online Purification Cascade for best water quality. This comprehensive approach, presented at the booth and the therapy forum, perfectly supports the application of HighVolumeHDF in daily clinical practice. The 5008 CorDiax and 5008S CorDiax therapy systems include a new feature for achieving high substitution volumes, the AutoSub plus. This is an intelligent automatic regulation system to maximize the substitution volume for the individual patient while avoiding the risk of filter blockage. The 5008 CorDiax and 5008S CorDiax therapy systems therefore facilitate HighVolumeHDF in a very simple and safe manner, making HighVolumeHDF therapy feasible for all patients.

Fresenius Medical Care's strong commitment to research and innovation was also evidenced by the 44 abstracts of original scientific research accepted for presentation at the congress. These contributions, in the form of scientific posters and oral presentations, spanned multiple research categories, from stem cell research through all stages of chronic and acute kidney disease. The categories with the most Fresenius Medical Care research contributions were:

• Extracorporeal dialysis – techniques and adequacy (9 posters & 1 oral presentation)
• Epidemiology (7 posters)
• CKD-Mineral & Bone Disorder (3 posters & 3 oral presentations)

Three of the abstracts were considered among the best 10 contributions received, and were given special recognition by the ERA-EDTA.

Fresenius has sold Fresenius Biotech to the Fuhrer family, owners of Neopharm, Israel's second-largest pharmaceutical company. The transaction was closed June 28 and includes both products Removab and ATG-Fresenius S.

In December 2012, Fresenius had announced to focus on its four established business segments Fresenius Medical Care, Fresenius Kabi, Fresenius Helios and Fresenius Vamed, which offer significant growth opportunities.

Ulf Mark Schneider, CEO of Fresenius, said: "The divestiture underlines our strong commitment to focused growth in our four core business segments. We are delighted that our biotechnology business will be in the capable hands of Neopharm, a company with entrepreneurial vision and an outstanding track record in the healthcare field."

David Fuhrer, Chairman and CEO of Neopharm, said: "The acquisition represents a cornerstone in our strategic objective to transform Neopharm Group into a multinational fully-integrated bio-pharmaceutical company. Our objective is to establish Fresenius Biotech as an independent, rapidly-growing, innovative global player which is committed to bring hope to patients suffering from rare, life-threatening diseases."

The parties agreed not to disclose financial details of the transaction. The sale of Fresenius Biotech will have a positive effect on Group earnings starting July 2013.

Fresenius Kabi received a Warning Letter, dated July 1, from the U.S. Food and Drug Administration (FDA) related to an inspection of its oncolytic API plant in Kalyani, India in January 2013. As a precautionary measure, production at the plant had been put on hold in January 2013. Fresenius previously informed about this inspection in February 2013.

The Warning Letter observations are related to GMP non-conformities regarding manufacturing, documentation practices and data integrity. Many of the data integrity items cited in the Warning Letter were self-identified by Fresenius Kabi post-inspection and shared with the FDA.

The company has made significant progress in remedying the issues cited in the Warning Letter. Based on a detailed remediation action plan submitted to the FDA, Fresenius Kabi has begun the process of restarting manufacture at the facility.

The company takes this matter very seriously and intends to comprehensively respond in a timely manner to the Warning Letter. Fresenius Kabi fully confirms its 2013 guidance which includes expected one-time charges to remediate the issues.

Second Quarter 2013 Key Figures:

Net revenue $3,613 million  +5%

Operating income (EBIT) $544 million  -8%

Adjusted operating income (EBIT) $555 million  -2%

Net income¹ $263 million  -9%

Adjusted net income¹ $272 million  +2%

Earnings per ordinary share $0.86  -10%

Adjusted earnings per ordinary share $0.89  +2%

First Half 2013 Key Figures:

Net revenue $7,076 million  +6%

Operating income (EBIT) $1,038 million  -5%

Adjusted operating income (EBIT) $1,049 million  -3%

Net income¹ $488 million  -26%

Adjusted net income¹ $498 million  -3%

Earnings per ordinary share $1.59  -27%

Adjusted earnings per ordinary share $1.62  -4%

1 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 second quarter and first half of 2013.

Second Quarter 2013

Revenue

Net revenue for the second quarter of 2013 increased by 5% to $3,613 million (+6% at constant currency) compared to the second quarter of 2012. Organic revenue growth worldwide was 5%. Dialysis services revenue grew by 5% to $2,743 million (+6% at constant currency) and dialysis product revenue increased by 6% to $870 million (+5% at constant currency).

North America revenue for the second quarter of 2013 increased by 6% to $2,375 million. Organic revenue growth was 5%. Dialysis services revenue grew by 6% to $2,157 million with a same store treatment growth of 4%. Dialysis product revenue increased by 6% to $218 million.

International revenue increased by 5% to $1,228 million (+6% at constant currency). Organic revenue growth was 5%. Dialysis services revenue increased by 4% to $586 million (+7% at constant currency). Dialysis product revenue increased by 5% to $642 million (+5% at constant currency).

Earnings

Operating income (EBIT) for the second quarter of 2013 decreased by 8% to $544 million compared to $589 million in the second quarter of 2012. The operating income for North America for the second quarter of 2013 decreased by 9% to $394 million compared to $431 million in the second quarter of 2012. In the International segment, the operating income for the second quarter of 2013 increased by 1% to $209 million compared to $207 million in the second quarter of 2012.
 

Adjusted for special items related to the acquisition of Liberty Dialysis Holdings Inc. and the impact from the budget cuts in the U.S. (sequestration) that were effectively introduced in April 2013, the operating income for the second quarter of 2013 decreased by 2% to $555 million compared to $568 million in the second quarter of 2012.

Net interest expense for the second quarter of 2013 was $103 million, compared to $104 million in the second quarter of 2012.

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the second quarter of 2013 was $263 million, a decrease of 9% compared to the corresponding number of $289 million for the second quarter of 2012. Adjusted for the net of tax effects of the special items mentioned above, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the second quarter of 2013 increased by 2% to $272 million compared to $266 million for the second quarter of 2012.

Income tax expense was $144 million for the second quarter of 2013 which translates into an effective tax rate of 32.6%. This compares to income tax expense of $172 million and a tax rate of 34.6% for the second quarter of 2012. Adjusted for the special items mentioned above, the tax rate for the second quarter of 2013 was 32.1% as compared to 34.4% for the second quarter of 2012.

Earnings per ordinary share (EPS) for the second quarter of 2013 was $0.86, a decrease of 10% compared to the corresponding number for the second quarter of 2012. Adjusted for the special items mentioned above, EPS for the second quarter of 2013 increased by 2% to $0.89 compared to $0.88 for the second quarter of 2012. The weighted average number of shares outstanding for the second quarter of 2013 was approximately 306.3 million shares, compared to 304.4 million shares for the second quarter of 2012. The increase in shares outstanding mainly resulted from stock option exercises in the past twelve months, partially offset by the effect of the share buy-back program.

Cash flow
 

In the second quarter of 2013, the company generated $525 million in cash from operations, an increase of 16% compared to the corresponding figure of last year and representing 14.5% of revenue.
 

A total of $173 million was spent for capital expenditures, net of disposals. Free cash flow before acquisitions was $352 million (representing 9.8% of revenue) compared to $300 million in the second quarter of 2012.
 

A total of $13 million in cash was spent for acquisitions and investments, net of divestitures. Free cash flow after acquisitions and divestitures was $339 million, compared to $306 million in the second quarter of 2012.

First Half 2013:

Revenue and Earnings

Net revenue for the first half of 2013 increased by 6% to $7,076 million (+6% at constant currencies) compared to the first half of 2012. Organic revenue growth was 5% in the first half of 2013.

Operating income (EBIT) for the first half of 2013 decreased by 5% to $1,038 million compared to $1,092 million in the first half of 2012. Adjusted for special items related to the acquisition of Liberty Dialysis Holdings Inc. and the impact from sequestration the operating income for the first half of 2013 decreased by 3% to $1,049 million compared to $1,078 million for the first half of 2012.

Net interest expense for the first half of 2013 was $207 million compared to $203 million in the same period of 2012.
 

For the first half of 2013, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA was $488 million, down by 26% from the corresponding number of $660 million for the first half of 2012. Adjusted for the net of tax effects of the special items mentioned above, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the first half of 2013 decreased by 3% to $498 million compared to $514 million for the first half of 2012.

Income tax expense for the first half of 2013 was $273 million which translates into an effective tax rate of 32.8%. This compares to income tax expense of $309 million and a tax rate of 30.1% for the first half of 2012. Adjusted for the special items mentioned above, the tax rate for the first half of 2013 was 32.6% as compared to 33.8% for the first half of 2012.
 

In the first half of 2013, earnings per ordinary share decreased by 27% to $1.59 compared to $2.17 for the first half of 2012. Adjusted for the special items mentioned above, EPS for the first half of 2013 decreased by 4% to $1.62 compared to $1.69 for the first half of 2012. The weighted average number of shares outstanding during the first half of 2013 was approximately 306.5 million.

Cash Flow

Cash from operations during the first half of 2013 was $841 million compared to $932 million for the same period in 2012, representing 11.9% of revenue.
 

A total of $319 million in cash was spent for capital expenditures, net of disposals. Free cash flow before acquisitions for the first half of 2013 was $522 million compared to $658 million in the same period in 2012. A total of $84 million in cash was spent for acquisitions, net of divestitures. Free cash flow after acquisitions and divestitures was $438 million compared to minus $862 million in the first half of last year.

Please refer to the attachments for a complete overview of the results for the second quarter and first half of 2013.

Patients – Clinics – Treatments
 

As of June 30, 2013, Fresenius Medical Care treated 264,290 patients worldwide, which represents an increase of 3% compared to the previous year's figure. North America provided dialysis treatments for 168,160 patients, an increase of 3% compared to the corresponding number for 2012. The International segment provided dialysis treatments for 96,130 patients, an increase of 4% over the prior year's figure.
 

As of June 30, 2013, the company operated a total of 3,212 clinics worldwide, an increase of 3% compared to the corresponding number for 2012. The number of clinics is comprised of 2,104 clinics in North America (+3%) and 1,108 clinics in the International segment (+3%).
 

During the first half of 2013, Fresenius Medical Care delivered approximately 19.7 million dialysis treatments worldwide. This represents an increase of 5% compared to the previous year's figure. North America accounted for 12.5 million treatments, an increase of 5%. The International segment delivered 7.2 million treatments, an increase of 3%.

Employees
 

As of June 30, 2013, Fresenius Medical Care had 87,944 employees (full-time equivalents) worldwide, compared to 86,153 employees at the end of 2012.

Debt/EBITDA ratio
 

The ratio of debt to earnings before interest, taxes, depreciation and amortization (EBITDA) decreased from 2.92 at the end of the second quarter of 2012 to 2.91 at the end of the second quarter of 2013.

Rating
 

Standard & Poor's rates the company's corporate credit as ‘BB+', with a ‘positive' outlook. Moody's rates the company's corporate credit as ‘Ba1' with a ‘stable' outlook. During the second quarter, Fitch has raised the outlook from ‘stable' to ‘positive'. Fitch continues to rate the company's corporate credit as ‘BB+'.

Share buy-back program
 

Fresenius Medical Care has started the share buy-back program on May 20, 2013. The company intends to repurchase ordinary shares with an aggregate value of up to €385 million (approximately $500 million). The program is expected to run into the third quarter of 2013. As of June 30, 2013, around 3.58 million shares were repurchased in the amount of approximately €190 million (~$249 million).

Conversion of preference shares
 

At the annual general meeting and in a separate meeting of preference shareholders the shareholders approved the mandatory conversion of all preference shares into ordinary shares on a 1:1 basis. This conversion was finalized on June 28, 2013.

Guidance for 2013 confirmed
 

The company expects revenue to grow to more than $14.6 billion in 2013, translating into a growth rate of more than 6%.
 

In April 2013 budget cuts in the U.S. (sequestration) were effectively introduced. We do not assume that these measurements will be revised this year. Therefore the net income guidance range has been confirmed and has been substantiated for the potential impact from sequestration on our business performance. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to be between $1.1 billion and $1.15 billion in 2013.
 

For 2013, the company expects to spend around $700 million on capital expenditures and around $500 million on acquisitions. The debt/EBITDA ratio is expected to be equal or below 3.0 by the end of 2013.
 

Rice Powell, chief executive officer of Fresenius Medical Care, commented: "Our second quarter results show a mixed picture. On the one hand, we have seen an accelerated growth of our business while on the other hand we were faced with the general budget cuts in the U.S. which affected our operating income performance. Nevertheless, we were able to show an earnings increase in the second quarter on an adjusted basis. To stay ahead of our competition given the challenging environment, we are rigorously focusing on our company-wide Global Efficiency Program that we initiated at the beginning of the year."

Conference Call
 

Fresenius Medical Care will hold a conference call to discuss the results of the second quarter and first half of 2013 on Tuesday, July 30, 2013, at 3.30 p.m. CEDT / 9.30 a.m. EDT. The company invites investors to follow 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.

H1/2013:

• Sales*: €10.0 billion (+8% at actual rates, +9% in constant currency)
• EBIT: €1.4 billion (+1% at actual rates, +2% in constant currency)
• Net income**: €482 million (+11% at actual rates, +12% in constant currency)

Ulf Mark Schneider, CEO of Fresenius, said: "The first-half results underline that our broad geographic presence and well-diversified business contribute to the company's success in a challenging environment. We are expanding our footprint in fast-growing emerging markets and work on promising growth initiatives. We remain highly confident of our company's growth prospects and raise 2013 Group earnings guidance."

2013 Group earnings guidance raised
Based on the Group's positive growth prospects for the second half of 2013, Fresenius raises its full-year earnings guidance. The company now expects net income** to increase by 11% to 14% in constant currency. Previously, Fresenius expected net income growth of 7% to 12% in constant currency. The company fully confirms its sales guidance. Sales are expected to increase by 7% to 10% in constant currency.

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

The net debt/EBITDA ratio is projected to be at the lower end of the targeted range of 2.5 to 3.0 by the end of 2013.

Sales growth of 9% in constant currency
Group sales increased by 8% (9% in constant currency) to €9,987 million (H1/2012: €9,236 million). Organic sales growth was 5%. Acquisitions contributed 5%. Divestitures reduced sales growth by 1%. Sales in the business segments developed as follows:

Organic sales growth was 5% in North America and 2% in Europe. In Latin America (13%) and Africa (30%) organic sales growth was particularly strong. In Asia-Pacific organic sales growth was 7%.

Group EBITDA* grew by 3% (4% in constant currency) to €1,860 million (H1/2012: €1,806 million). Group EBIT* increased by 1% (2% in constant currency) to €1,448 million (H1/2012: €1,440 million). The EBIT margin of 14.5% (H1/2012: 15.6%) was impacted by a margin reduction at Fresenius Medical Care as well as the first-time consolidation of Fenwal. However, Q2/2013 margin of 14.8% already showed a distinct improvement over Q1/2013 (14.2%).

Group net interest remained at last year's level of -€313 million, including €14 million one-time costs resulting from the early redemption of the Senior Notes originally due 2016.

The Group tax rate* improved to 28.5% (H1/2012: 30.8%).

Noncontrolling interest was €330 million (H1/2012: €346 million), of which 94% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income** increased by 11% (12% in constant currency) to €482 million (H1/2012: €434 million). Earnings per share** increased by 5% to €2.70 (H1/2012: €2.58).

In H1/2013, the weighted average number of shares outstanding was 178,306,694 (H1/2012: 167,986,059).

Group net income attributable to shareholders of Fresenius SE & Co. KGaA including one-time integration costs for Fenwal was €462 million or €2.59 per share.

Continued investment in growth
The Fresenius Group spent €425 million on property, plant and equipment (H1/2012: €388 million). Acquisition spending was €150 million (H1/2012: €2,097 million).

Cash flow development
Operating cash flow was €947 million (H1/2012: €1,136 million). The decrease relates primarily to a one-time payment by Fresenius Medical Care regarding the amendment of the supply agreement for the iron product Venofer in North America. In H1/2012, the operating cash flow was positively influenced by extraordinary payments on trade accounts receivable. The cash flow margin reached 9.5% (H1/2012: 12.3%). Net capital expenditure increased to €416 million (H1/2012: €358 million). Free cash flow before acquisitions and dividends was €531 million (H1/2012: €778 million). Free cash flow after acquisitions and dividends increased to €92 million (H1/2012: -€1,154 million).
 
Solid balance sheet structure
The Group's total assets increased by 1% (1% in constant currency) to €30,973 million (Dec. 31, 2012: €30,664 million). Current assets grew by 2% to €8,257 million (Dec. 31, 2012: €8,113 million). Non-current assets increased by 1% to €22,716 million (Dec. 31, 2012: €22,551 million).

Total shareholders' equity increased by 2% to €12,955 million (Dec. 31, 2012: €12,758 million). The equity ratio was 41.8% (Dec. 31, 2012: 41.6%).

Group debt was €11,204 million (Dec. 31, 2012: €11,028 million). Net debt was €10,362 million (Dec. 31, 2012: €10,143 million). As of June 30, 2013, the net debt/EBITDA ratio was 2.63*** (Dec. 31, 2012: 2.56****).

Number of employees increases
As of June 30, 2013, the Fresenius Group increased the number of its employees by 2% to 173,325 (Dec. 31, 2012: 169,324).

Fresenius Biotech
Fresenius Biotech's sales were €16.6 million (H1/2012: €16.6 million). The EBIT was
-€6 million (H1/2012: -€11 million).

With effect of 28 June 2013, Fresenius sold Fresenius Biotech to the Fuhrer family, owners of Neopharm, Israel's second-largest pharmaceutical company. The transaction resulted in a negligible book gain and will have a positive effect on Group earnings, as the projected H2/2013 EBIT loss of ~€10 million will now not materialize.

*2013 excluding one-time integration costs of Fenwal Holdings, Inc. ("Fenwal"). 2012 before one-time items.
**Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2013 excluding one-time integration costs of Fenwal. 2012 before one-time items.
***Pro forma including Fenwal; before one-time costs (non-financing expenses) related to the takeover offer to RHÖN-KLINIKUM AG shareholders, one-time costs at Fresenius Medical Care and one-time integration costs of Fenwal.
****Pro forma including Damp Group, Liberty Dialysis Holdings, Inc. and Fenwal; before one-time costs (non-financing expenses) related to the takeover offer to RHÖN-KLINIKUM AG shareholders, and one-time costs at Fresenius Medical Care.

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, 2013, Fresenius Medical Care was treating 264,290 patients in 3,212 dialysis clinics.

• Strong organic sales growth of 5%
• Excellent operating cash flow margin of 11.9%
• 2013 guidance confirmed

Sales increased by 6% (6% in constant currency) to US$7,076 million (H1/2012: US$6,677 million). Organic sales growth was 5%. Acquisitions contributed a further 3%. Divestitures reduced sales growth by 2%.

Sales in dialysis services increased by 7% (7% in constant currency) to US$5,421 million (H1/2012: US$5,082 million). Dialysis product sales grew by 4% (4% in constant currency) to US$1,655 million (H1/2012: US$1,594 million).

In North America, sales grew 7% to US$4,663 million (H1/2012: US$4,353 million). Dialysis services sales grew by 8% to US$4,261 million (H1/2012: US$3,960 million). Dialysis product sales increased by 2% to US$402 million (H1 2012: US$393 million).

Sales outside North America ("International" segment) grew by 4% (5% in constant currency) to US$2,397 million (H1/2012: US$2,307 million). Sales in dialysis services increased by 3% to US$1,161 million (H1/2012: US$1,122 million). Dialysis product sales grew by 4% to US$1,236 million (H1/2012: US$1,185 million).

EBIT decreased by 5% to US$1,038 million (H1/2012: US$1,092 million).

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA decreased by 6% to US$488 million (H1/2012*: US$520 million).

The operating cash flow was US$841 million (H1/2012: US$932 million). The reduction relates to an one-time payment regarding the amendment of the agreement for the iron product Venofer in North America (US$100 million). The cash flow margin was 11.9% (H1/2012: 14.0%).

Fresenius Medical Care expects revenue to grow to more than US$14.6 billion in 2013. In April 2013 general budget cuts in the U.S. (sequestration) were effectively introduced. The company does not assume that these will be revised this year. Therefore, the net income guidance range has been confirmed and has been substantiated for the potential impact from sequestration on the company's business performance. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to be between US$1.1 billion and US$1.15 billion in 2013.

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

*Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA; 2012 adjusted for a non-taxable investment gain of US$140 million.

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.

• Organic sales growth of 4% on the back of strong H1/12
• EBIT margin excluding Fenwal at the upper end of guidance
• 2013 guidance fully confirmed

Sales increased by 13% (14% in constant currency) to €2,519 million (H1/2012: €2,234 million). Organic sales growth was 4%. Acquisitions contributed 11%, while divestitures reduced sales growth by 1%.

Sales in Europe grew by 6% (organic growth: 2%) to €1,030 million (H1/2012: €974 million). Sales in North America increased by 29% to €784 million (H1/2012: €609 million), primarily driven by the consolidation of Fenwal. Organic growth was 6%.

In Asia-Pacific sales increased by 10% (organic growth: 6%) to €456 million (H1/2012: €415 million). Sales in Latin America/Africa increased by 6% (organic growth: 9%) to €249 million (H1/2012: €236 million). Growth in H1/2013 comes over an exceptionally strong H1/2012 base, posting 9% organic sales growth in North America, 6% in Europe, 15% in Asia-Pacific and 14% in Latin America/Africa.

EBIT* grew by 4% to €469 million (H1/2012: €452 million). EBIT includes one-time charges of €24 million to remediate manufacturing issues following FDA audits at the Grand Island, USA, and Kalyani, India, facilities. The EBIT margin was 18.6%. Excluding Fenwal, the EBIT margin of 19.8% (H1/2012: 20.2%) was at the upper end of the full-year guidance.

Net income** increased by 15% to €242 million (H1/2012: €210 million).

Fresenius Kabi's operating cash flow was €238 million (H1/2012: €288 million). Last year's operating cash flow was positively influenced by extraordinary payments on trade accounts receivable. The cash flow margin was 9.4% (H1/2012: 12.9%). Cash flow before acquisitions and dividends was €120 million (H1/2012: €199 million).

The integration of Fenwal progressed as planned with related one-time costs of €27 million pre-tax.

Fresenius Kabi fully confirms its outlook for 2013 and projects sales growth of 12% to 14% in constant currency. Organic sales growth is expected in the range of 3% to 5%.

The company projects an EBIT margin of 19% to 20% excluding Fenwal and of 18% to 19% including Fenwal. EBIT in constant currency is expected to exceed 2012 EBIT. The guidance includes expected one-time charges to remediate manufacturing issues following FDA audits at the Grand Island, USA, and Kalyani, India, facilities. It also includes a gain related to the sale of the respiratory homecare business in France.

Fresenius Kabi guidance excludes Fenwal integration costs (~€50 million pre tax); also see Group guidance.

*Excluding Fenwal integration costs.
**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 74 hospitals, thereof 51 acute care clinics including six maximum care hospitals in Berlin-Buch, Duisburg, Erfurt, Krefeld, Schwerin and Wuppertal and 23 post-acute care clinics. HELIOS treats more than 2.9 million patients per year, thereof more than 780,000 inpatients, and operates more than 23,000 beds.

• Strong organic sales growth of 5%
• EBIT margin up 80 basis points to 10.6%
• 2013 earnings guidance raised – EBIT between €370 million and €395 million

Sales increased by 11% to €1,695 million (H1/2012: €1,525 million). Organic sales growth was 5%, acquisitions contributed 7%. Divestitures reduced sales growth by 1%.

EBIT grew by 19% to €179 million (H1/2012: €150 million). The EBIT margin increased to 10.6% (H1/2012: 9.8%).

Net income** increased by 31% to €119 million (H1/2012: €91 million).

Sales of the established hospitals grew by 5% to €1,588 million. EBIT improved by 15% to €175 million. The EBIT margin increased to 11.0% (H1/2012: 10.0%). Sales of the acquired hospitals (consolidation <1 year) were €107 million, EBIT was €4 million.

Fresenius Helios raises its 2013 full-year guidance to reflect the additional funding for German hospitals that will have a positive effect starting in August, 2013. The company now projects EBIT of €370 million to €395 million. Previously, it expected to reach an EBIT of €360 million to €380 million. Fresenius Helios fully confirms its sales outlook and projects organic sales growth of 3% to 5%.

*Adjusted for post-acute care clinic Zihlschlacht transferred to Fresenius Vamed.
**Net income attributable to shareholders of HELIOS Kliniken GmbH.

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

• Excellent organic sales growth of 12% at upper end of guidance
• Largest single turnkey project order in company history received
• 2013 guidance fully confirmed

Sales increased by 21% to €421 million (H1/2012: €348 million). Organic sales growth was 12%, acquisitions contributed 9%. Sales in the project business increased by 13% to €208 million (H1/2012: €184 million). Sales in the service business grew by 30% to €213 million (H1/2012: €164 million).

EBIT was €15 million (H1/2012: €14 million). The EBIT margin reached 3.6% (H1/2012: 4.0%).

Net income** was €9 million (H1/2012: €10 million).

Order intake increased to €311 million (H1/2012: €156 million). Fresenius Vamed received the largest single order in its history for a turnkey construction of an acute-care hospital in Austria, with a total volume of €173 million. As of June 30, 2013, the company's order backlog was €1,089 million (Dec. 31, 2012: €987 million).

Fresenius Vamed fully confirms its outlook for 2013 and expects to achieve sales growth of 8% to 12%. EBIT growth is projected in the range of 5% to 10%.

*Adjusted for post-acute care clinic Zihlschlacht transferred from Fresenius Helios to Fresenius Vamed.
**Net income attributable to shareholders of Vamed AG.

 

Analyst-/Investor Conference Call
As part of the publication of the results for the first half of 2013, a conference call will be held on July 30, 2013 at 2 p.m. CEST (8 a.m. EDT). All investors 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 Kabi has formed a joint venture with PT Soho Global Health, a leading Indonesian pharmaceutical company, acquiring a 51 percent stake in its PT Ethica Industri Farmasi (EIP) subsidiary. This joint venture will focus on I.V. generic drugs and infusion solutions, and make Fresenius Kabi the market leader in I.V. generics in Indonesia.

Founded in 1946, EIP was the first manufacturer of injectable drugs in Indonesia. The company has a broad product portfolio and extensive experience and expertise in the production and marketing of generic drugs in the Indonesian market. EIP operates a production plant in Jakarta. The product portfolio of the future joint venture generated sales of more than €40 million last year.

Demand for health care in Indonesia has been growing steadily and is expected to accelerate in the coming years due to the implementation of a universal health care program, starting in 2014. As a result, almost the entire Indonesian population, about 245 million, is set to have access to modern health care by 2019*, with the country's pharmaceutical market expected to double to €7.1 billion by 2018**. The joint venture therefore provides an attractive platform for Fresenius Kabi's future growth in one of the fastest-growing emerging economies in Southeast Asia.

"Entering the joint venture brings us valuable local manufacturing capabilities and a strong market presence to provide patients and health care professionals in Indonesia with immediate access to high quality, affordable drugs," said Mats Henriksson, Chairman of the Management Board of Fresenius Kabi. "At the same time, we will establish a strong hub for further expanding our business in the Southeast Asian region. Our partner has many years of experience and a very good reputation serving the Indonesian health care market."

Tan Eng Liang, President Commissioner of PT Soho Global Health, said: "We are excited to be cooperating with Fresenius Kabi, because of the perfect fit between the companies. This joint venture gives us the possibility of strengthening our leading position in our home market as well as capturing the growth opportunities in the region in a fast and sustainable way. Together, we can boost the product pipeline with numerous launches in 2014 and beyond."

The parties agreed not to disclose the purchase price. Closing of the transaction is expected in the third quarter of 2013.

* Source: Ministry of Health, Republic of Indonesia, 2012

** IMS Market Prognosis Sep 2012, Dataview Date © IMS HEALTH

Fresenius Kabi received a Warning Letter, dated August 16, from the U.S. Food and Drug Administration (FDA) related to an April 2013 inspection of its Fenwal blood bag manufacturing plant in Maricao, Puerto Rico. Fresenius Kabi acquired Fenwal in December 2012.

The Warning Letter observations are primarily related to complaint-handling procedures, labeling issues, and filing of field alerts not in accordance with FDA regulations. The Warning Letter was not issued as a result of adverse events related to patient safety.

Following the inspection, Fresenius Kabi submitted a detailed remediation action plan to the FDA. The company has made significant progress in remedying the issues cited in the Warning Letter including improvements to its procedures and documentation. Production at the plant is continuing.

The company takes this matter very seriously and intends to respond in a timely and comprehensive manner to the Warning Letter. No material sales and earnings impact on Fresenius Kabi's business is expected. Fresenius Kabi fully confirms its 2013 guidance.

The first "Green Innovation Award" was awarded today by a joint initiative of European Dialysis and Transplant Nurses Association/European Renal Care Association (EDTNA/ERCA) and Fresenius Medical Care at the 42nd EDTNA/ERCA International Conference in Malmö, Sweden. This award pays tribute to innovative ideas, best practices, and procedures that contribute to the promotion and development of environmental protection in hemodialysis treatment.

First prize went to a project from Saudi Arabia. In this pilot project, launched in 2011, overall water consumption was reduced by more than 50% mainly through the use of two reverse osmosis units for waste water. The second-place winner is a Spanish project that achieved significant savings in dialysate and water use by adjusting the dialysate flow to the blood flow rate. This use of technology improved treatment quality and optimized costs, while reducing the burden on the environment.

Eligible for participation were innovative green projects that provide transferrable, measurable and sustainable environmental benefits. An impartial jury, consisting of four experts on environmental matters related to dialysis, nominated the two winning projects, which were honored during a festive award ceremony at the EDTNA/ERCA conference.

Guido Giordana, Director of Business Operation Management NephroCare at Fresenius Medical Care, presented the award. "I feel personally honored to present the very first environmental award in renal care," he said. "Handing over this award, a personal wish comes true. I am happy to find the environmental impact of dialysis is gaining more and more attention, including at the point of care."

Jitka Pancirova, EDTNA/ERCA Executive Director, added: "It is of great importance to raise awareness for environmental protection within dialysis. With this we take the responsibility for our environment inherited through life-saving, resource-demanding dialysis treatment. Considering the increasing worldwide prevalence of End Stage Renal Disease, environmental protection is increasingly gaining importance and urgency in hemodialysis."

With the presentation of the "Green Innovation Award," both EDTNA/ERCA and Fresenius Medical Care are continuing their dedicated cooperation on environmental protection in dialysis, which started in 2009 with the "Go Green in Dialysis" initiative. This joint effort has already developed and published the "Environmental Guidelines for Dialysis," which help guide renal professionals to perform environmentally friendly treatments.

The acquisition will make Fresenius Helios the largest private hospital operator in Europe, with 117 hospitals across Germany and nearly €5.5 billion* in sales.

Fresenius Helios has signed a binding agreement to purchase the majority of Rhön-Klinikum AG's hospitals, acquiring 43 hospitals with a total of approximately 11,800 beds as well as 15 outpatient facilities. On the basis of 2013 pro forma financials, the acquisition is expected to add sales of approximately €2 billion and an EBITDA of approximately €250 million.

The University Hospital Giessen and Marburg, the hospitals in Bad Neustadt (including the Rhön-Klinikum AG headquarters), Bad Berka and Frankfurt/Oder will remain with Rhön-Klinikum AG.

The acquisition will enable Fresenius Helios to significantly expand its hospital operations. By extending its presence across the country, Fresenius Helios will bring the majority of the German population within an hour's drive of a HELIOS hospital. With that platform, Fresenius Helios aims to develop innovative, integrated care offerings.

Fresenius Helios and Rhön-Klinikum AG are planning to enter into a cooperation agreement covering Rhön-Klinikum AG's remaining hospitals. These hospitals will become part of a network offering innovative care models across Germany. Public, non-profit and other private hospitals are welcome to join this network.

Ulf Mark Schneider, CEO of Fresenius, said: "This compelling transaction provides a unique opportunity to create a nationwide hospital network and to establish Europe's largest private hospital operator. The clinics we are acquiring from Rhön-Klinikum are a perfect strategic and geographic fit with Helios' existing portfolio and will allow us to develop innovative approaches to health care. We are looking forward to working with the employees of the newly acquired clinics to advance our joint commitment to high-quality patient care."

"With the support of the Supervisory Board, we have made a ground-breaking and at the same time extraordinarily sustainable decision. Through its critical mass, the ‘new Rhön' is well positioned to deliver significant additional medical and economic growth," said Dr. Dr. Martin Siebert, CEO of Rhön-Klinikum AG. "We are starting from a stable earnings position and believe that this can be considerably increased. The ‘new Rhön' with its unique structure and offering will be even more attractive in the future."

The acquisition will create cost synergies – for instance, by bundling procurement – which will result in a potential 1 to 2% increase in the EBIT margin. Mid-term, Fresenius Helios expects the newly acquired hospital portfolio to reach the upper half of the 12-15% EBIT-margin range according to its hospital development plan.

The purchase price of €3.07 billion will be entirely debt-financed. Under the transaction, Fresenius will not assume any financial debt of Rhön-Klinikum AG. Group net debt/EBITDA is expected to temporarily exceed 3.0 in 2013** but remain below 3.5, before returning to the upper end of the 2.5 to 3.0 target range in 2014.

Fresenius expects one-time costs of approximately €80 million before tax. The Company expects the acquisition to be accretive to earnings per share in the first year after closing, excluding one-time costs, and clearly accretive from the second year onwards including one-time costs.

The acquisition is subject to antitrust approval as well as certain approvals of former municipal owners or current minority shareholders. The vast majority of the transaction is expected to close by the end of this year.

*Pro forma 2013
** Pro forma