Q1-3/2012:

• Sales¹ €14.1 billion (+18% at actual rates, +12% in constant currency)
• EBIT² €2.2 billion (+19% at actual rates, +13% in constant currency)
• Net income³ €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

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."

¹ 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.

² Adjusted for one-time costs of €7 million (non-financing expenses) related to the offer to the shareholders of RHÖN-KLINIKUM AG.

³ 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.

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 sales¹ to increase by 12% to 14% and net income² 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.).

Continued strong sales growth

Group sales increased by 18% (12% in constant currency) to €14,100 million (Q1-3 2011¹: €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.

¹ 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.

² Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain (€34 million) and potential 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.

Strong earnings growth

Group EBITDA¹ grew by 19% (13% in constant currency) to €2,786 million (Q1-3 2011: €2,344 million). Group EBIT¹ 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 rate² 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 income³ 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 income⁴ 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). 

¹ Adjusted for one-time costs of €7 million (non-financing expenses) related to the offer to the shareholders of RHÖN-KLINIKUM AG.

² 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.

³ 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.

⁴ 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 ratio¹ was 2.53 (Dec. 31, 2011: 2.83). At identical exchange rates for net debt and EBITDA, the ratio was also 2.53.

¹ 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 2011¹: 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%.

¹ 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.² 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.

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 billion¹. 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 Investor News at www.fmc-ag.com.

¹ 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 income¹ 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%.

¹ 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 income¹ 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".

¹ 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 now expects to grow both sales and EBIT at the upper end of the targeted range of 5% to 10%.

¹ Net income attributable to shareholders of VAMED AG

Analyst Conference Call

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 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 is planning to refinance the revolving facility and Term Loan A of its 2008 syndicated credit agreement, which will become due in September 2013 through a forward start bank deal. The syndication is expected to close late December 2012, while funding of the deal is only projected for June 2013. This will allow Fresenius to take advantage of the currently favorable financing conditions in the debt market.

The intended refinancing of the credit agreement is part of the Group's ongoing liability management to reduce interest expenses and to improve the maturity profile, and is likely to involve the exercise of a redemption option for the Senior Notes due 2016.

Potential one-time expenses related to the planned refinancing are fully included in Fresenius Group's earnings outlook which was confirmed end of October. For 2012, Fresenius expects net income* to increase by 14% to 16% in constant currency.

*Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain (€34 million) and potential 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.

HELIOS Kliniken GmbH, a subsidiary of Fresenius, further strengthens its position as the largest private hospital operator in the German state of North-Rhine Westphalia. The company has agreed to acquire a 194-bed hospital close to the company's maximum care hospital in Wuppertal. The two hospitals already co-operate in the field of specialist care. Following the acquisition, HELIOS will operate a network of 19 clinics in North-Rhine Westphalia, including the maximum care hospitals in Duisburg, Krefeld and Wuppertal.

The acquired hospital employs about 500 people and had sales of €20 million in 2011. HELIOS plans to invest at least €8 million in the hospital's modernization by the end of 2017.

The acquisition is still subject to the approval of the anti-trust authorities. The parties agreed not to disclose the purchase price. HELIOS expects to close the transaction in the first quarter of 2013.

Fresenius Kabi has successfully closed the acquisition of Fenwal Holdings, Inc., a leading U.S.-based provider of transfusion technology products for blood collection, separation and processing. The Fenwal acquisition was announced on July 20, 2012, and the closing now follows completion of the review by the antitrust authorities. Fenwal will be consolidated as of December 1, 2012.

For the fiscal year 2011, Fenwal reported sales of US$614 million and an adjusted EBITDA of US$90 million.

Fresenius expects one-time integration costs of approx. €100 million. Cost synergies should reach approx. €60 million annually in the medium term.

Fresenius Kabi fully confirms its 2015 outlook, which was raised on August 1, 2012. The company expects sales of approx. €6 billion and EBIT of >€1.1 billion at current exchange rates. Previously, Fresenius Kabi had targeted sales of approx. €5.5 billion and EBIT of >€1 billion.

Fresenius has decided to focus on its four established business segments Fresenius Medical Care, Fresenius Kabi, Fresenius Helios and Fresenius Vamed, which offer significant growth opportunities. The Fresenius Biotech subsidiary will be discontinued.

The company is in talks with several parties about a sale of Fresenius Biotech, while simultaneously assessing the equally viable option of continuing the immunosuppressive drug ATG-Fresenius S within the Fresenius group. ATG-Fresenius S has been well established in the hospital market for decades, and is consistently profitable. Fresenius will divest the trifunctional antibody Removab (catumaxomab) business. The final decision on how to proceed will be made in the first quarter of 2013.

In the first nine months of 2012, Fresenius Biotech's sales increased by 15% to €26 million. ATG-Fresenius S sales grew by 14% to €22.5 million. Removab sales rose by 22% to €3.3 million. Fresenius Biotech's EBIT was -€15 million (Q1-3 2011: -€19 million). For the full year 2012, an EBIT of about -€25 million is expected. Withdrawing from Removab will have a positive effect on Group earnings starting in 2013.

Fresenius Biotech received the only Europe-wide approval to date for a monoclonal antibody developed in Germany when the European Commission approved Removab in 2009 for treating malignant ascites. The company subsequently obtained reimbursement approvals for Removab from the national health care systems of several European countries, providing the opportunity to expand marketing of the drug.

With ATG-Fresenius S, Fresenius Biotech offers a polyclonal antibody that has been used since 1981, for both organ and stem-cell transplantation.

Fresenius will focus on the attractive growth opportunities of its four core business segments, which have grown strongly over the last years and offer outstanding prospects. Between 2001 and 2011, Group sales increased from €7.3 billion to €16.5 billion, and Group net income from €93 million to €770 million. For the full year 2012, Fresenius expects sales¹ of more than €19 billion, corresponding to an increase of 12% to 14% in constant currency. Net income² is forecast to exceed €900 million, an increase of 14% to 16% in constant currency.

About malignant ascites

Malignant ascites can be caused by various kinds of tumors. The peritoneal spread of tumor cells leads to an accumulation of fluid in the peritoneal cavity and is associated with an unfavorable prognosis for the patient. The most common method of treatment is paracentesis, which generally must be repeated at intervals of one to two weeks and can lead to complications such as infections or elevated losses of fluids and proteins. Removab® destroys the peritoneal cancer cells and thus directly attacks the cause of malignant ascites.

¹ 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.

² Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain (€34 million) and potential 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.

Fresenius Kabi has signed an agreement to sell its subsidiary Calea France SAS to The Linde Group. Calea is active in the French homecare market and focuses on respiratory therapy, which is not a core business of Fresenius Kabi.

Ulf Mark Schneider, CEO of Fresenus, said: "Calea is a successful business and will be a great fit in a global respiratory homecare organization. The divestiture underlines our strong commitment to focused growth in our four core business segments, where prospects for further expansion are bright."

In 2011, Calea France had sales of €28 million. The transaction is expected to be completed at the start of 2013.

Fresenius successfully agreed the refinancing of the revolving facilities and Term Loan A of its 2008 syndicated credit agreement. The financing, structured as a Delayed Draw Syndicated Credit Agreement, was very well received in the bank market and substantially oversubscribed. Fresenius was therefore able to significantly increase the originally targeted transaction volume and to improve the pricing.

The company entered into a €2.25 billion syndicated credit agreement, comprised of 5-year revolving facilities (US$300 million and €600 million) and a 5-year Term Loan A (US$1.0 billion and €650 million).

Proceeds will be used to refinance the company's existing revolving facilities and Term Loan A, both maturing in September 2013, as well as for general corporate purposes. The refinancing through a Delayed Draw Syndicated Credit Agreement allows Fresenius to take advantage of the currently favorable financing conditions in the bank market. Funding of the transaction is projected for June 2013.

Going forward, the refinancing of the credit agreement will considerably reduce Group interest expenses.

The change of Fresenius SE's legal form into a KGaA¹ in combination with the conversion of all preference shares into ordinary shares was registered today with the commercial register and thereby became effective. The Company operates from now on as Fresenius SE & Co. KGaA. All shareholders of the former Fresenius SE are now ordinary shareholders of Fresenius SE & Co. KGaA.

Ulf Mark Schneider, CEO of Fresenius, commented: "I am very pleased that we successfully completed the share conversion and the change of legal form. This is an important step for Fresenius and its shareholders. The conversion significantly simplifies our share structure, increases trading liquidity, and improves our financial flexibility by facilitating access to equity capital markets. The new capital structure supports our corporate strategy and its focus on sustainable and profitable growth."

The ordinary shares of Fresenius SE & Co. KGaA will commence trading on January 31, 2011 (ISIN DE0005785604 / Sec ID no. 578560; ticker symbols FRE GR (Bloomberg), FREG.DE (Reuters)). According to the index regulation of Deutsche Börse AG, the new ordinary shares will be included in the German DAX30 index (Deutscher Aktienindex).

The registration of the change of the legal form at the commercial register was finally cleared following a court settlement of pending disputes initiated by minority shareholders.

¹ Kommanditgesellschaft auf Aktien - partnership limited by shares

• Sales €16.0 billion,
  +13% at actual rates, +8% in constant currency
• EBIT €2.4 billion,
  +18% at actual rates, +13% in constant currency
• Net income¹ €660 million,
  +28% at actual rates, +23% in constant currency

• Excellent sales and earnings growth in all business segments
• "15/15" mid-term goal exceeded (€15 billion in sales, EBIT margin of 15%)
• 15% dividend increase proposed
• Positive outlook for 2011: Sales growth ≥7%, net income¹ growth 8% to 12% (both in constant currency)
• New mid-term stretch goal: Group net income >€1 billion in 2014

Ulf Mark Schneider, CEO of Fresenius, commented: "2010 was another outstanding year for Fresenius. Our Group achieved record sales and earnings and double-digit earnings growth in all four business segments. We even exceeded our challenging "15/15" mid-term target – Group sales of €15 billion and an EBIT margin of 15% by 2010 – despite the most severe economic slowdown in postwar history. The global demand for high-quality and innovative health care products and services continues to increase. We see further significant growth potential for all our business segments and target Group net income of more than €1 billion in 2014."

 

18th consecutive dividend increase proposed
Based on the excellent financial results, the Management Board will propose to the Supervisory Board a dividend increase of 15% to €0.86 per ordinary share (2009: €0.75). The total dividend distribution is expected to be €140 million.

 

Positive outlook for 2011
Fresenius projects sales growth of ≥7% in constant currency. Net income¹ is expected to increase by 8% to 12% in constant currency. This will result in a 2010/2011 compounded annual net income growth rate of 15% to 17%.

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

The net debt/EBITDA ratio is expected to stay in the range of 2.5 to 3.0.

Strong sales growth in all business segments and regions
Group sales increased by 13% at actual rates and by 8% in constant currency to €15,972 million (2009: €14,164 million). Organic sales growth was 7%. Acquisitions contributed a further 1%. Currency translation had a positive effect of 5%.

Sales growth in the business segments was as follows:

In North America, sales grew by 9% in constant currency. Organic sales growth was 8%. In Europe, sales grew by 7% in constant currency, with organic sales growth contributing 6%. Organic sales growth reached 11% in Latin America and 7% in Asia-Pacific, where the growth rate was impacted by Fresenius Vamed's large prior-year medical supply contracts.

¹ Net income attributable to Fresenius SE & Co. KGaA; adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds (MEB) and the Contingent Value Rights (CVR) related to the acquisition of APP Pharmaceuticals. Both are non-cash items.


Excellent earnings growth and strong margin improvement
Group EBITDA increased by 17% at actual rates and by 12% in constant currency to €3,057 million (2009: €2,616 million). Group EBIT increased by 18% at actual rates and by 13% in constant currency to €2,418 million (2009: €2,054 million). The EBIT margin increased to 15.1% (2009: 14.5%). All business segments achieved double-digit earnings growth.
Despite a substantial negative currency effect, Group net interest improved to -€566 million (2009: -€580 million).

The other financial result was -€66 million and includes valuation changes of the fair redemption value of the Mandatory Exchangeable Bonds (MEB) of -€98 million and the Contingent Value Rights (CVR) of €32 million. Both are non-cash items.

The Group tax rate¹ was 32.9% (2009: 31.4%). The tax rate in 2009 was influenced by the revaluation of a tax claim at Fresenius Medical Care.

Noncontrolling interest increased to €583 million (2009: €497 million), of which 93% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income² increased by 28% at actual rates and by 23% in constant currency to €660 million (2009: €514 million). Earnings per ordinary share increased by 28% to €4.08. A reconciliation to adjusted earnings according to U.S. GAAP can be found on page 14 of the PDF-File.

Net income³ (including special items) grew to €622 million or €3.85 per ordinary share.


¹ Adjusted for the effect of mark-to-market accounting of the Mandatory Exchangeable Bonds (MEB) related to the acquisition of APP Pharmaceuticals
² Net income attributable to Fresenius SE & Co. KGaA; adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds (MEB) and the Contingent Value Rights (CVR) related to the acquisition of APP Pharmaceuticals. Both are non-cash items.
³ Net income attributable to Fresenius SE & Co. KGaA


Continued investments in growth
The Fresenius Group spent €758 million on property, plant and equipment (2009: €671 million) or 4.7% of sales. Acquisition spending was €644 million (2009: €260 million), mainly due to acquisitions at Fresenius Medical Care.

 

Strong cash flow - 12% cash flow margin
Operating cash flow increased by 23% to €1,911 million (2009: €1,553 million), mainly driven by strong earnings growth. The cash flow margin improved to 12.0% (2009: 11.0%). Net capital expenditure was €733 million (2009: €662 million). Free cash flow before acquisitions and dividends increased by 32% to €1,178 million (2009: €891 million). Free cash flow after acquisitions and dividends was €345 million (2009: €389 million).

 

Solid balance sheet structure - Leverage ratio significantly improved
The Fresenius Group's total assets grew by 13% to €23,577 million (Dec. 31, 2009: €20,882 million). In constant currency, the increase was 7%. Current assets increased by 20% at actual rates and by 14% in constant currency to €6,435 million (Dec. 31, 2009: €5,363 million). Non-current assets grew by 10% at actual rates and by 5% in constant currency to €17,142 million (Dec. 31, 2009: €15,519 million).

Total shareholders' equity increased by 18% at actual rates and by 11% in constant currency to €8,844 million (Dec. 31, 2009: €7,491 million). The equity ratio improved to 37.5% (Dec. 31, 2009: 35.9%).

Group debt grew by 6% at actual rates and by 1% in constant currency to €8,784 million (Dec. 31, 2009: €8,299 million). Net debt increased by 2% to €8,015 million (Dec. 31, 2009: €7,879 million). At constant currency, net debt decreased by 3%.

Due to the strong earnings growth and cash flow development, the net debt/EBITDA ratio improved to 2.62 as of December 31, 2010 (Dec. 31, 2009: 3.01). At year-end 2008, following the acquisition of APP Pharmaceuticals, the ratio was 3.64.

 

Number of employees increased
As of December 31, 2010, Fresenius increased the number of its employees by 5% to 137,552 (Dec. 31, 2009: 130,510).


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 reported sales of €26 million in 2010. The immunosuppressive agent ATG contributed €23 million and the trifunctional antibody Removab (catumaxomab) €3 million to sales.

In January 2011, Fresenius Biotech announced a Removab distribution agreement with Swedish Orphan Biovitrum (Sobi). Under the seven-year agreement, Sobi will distribute Removab exclusively in Scandinavia, the Baltics and selected Balkan countries.

So far, Removab has been marketed primarily in Germany and Austria as well as in France.

In 2010, Fresenius Biotech's EBIT was -€32 million (2009: -€44 million). For 2011, Fresenius Biotech expects an EBIT of about -€30 million.


The 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 December 31, 2010, Fresenius Medical Care was treating 214,648 patients in 2,757 dialysis clinics.
 

• Excellent sales and earnings growth continued - EBIT margin increased to 16.0%
• Outlook 2011: Sales of US$12.8 billion to US$13 billion and net income¹ of US$1.035 billion to US$1.055 billion expected

Fresenius Medical Care achieved sales growth of 7% to US$12,053 million (2009: US$11,247 million). Organic growth was 6%, acquisitions contributed a further 1%. There was no meaningful currency translation effect.

Sales in dialysis care increased by 9% to US$9,070 million (2009: US$8,350 million). Dialysis product sales grew by 3% to US$2,983 million (2009: US$2,897 million).

In North America, sales increased by 7% to US$8,130 million (2009: US$7,612 million). Dialysis services revenue increased by 7% to US$7,303 million. Average revenue per treatment for U.S. clinics decreased to US$355 in Q4 2010 compared to US$357 in Q4 2009. Increases in reimbursement were more than offset by reduced utilization of pharmaceuticals. Sales in dialysis products grew by 1% to US$827 million.

Sales outside North America ("International" segment) grew by 8% to US$3,923 million (2009: US$3,635 million). Sales in dialysis care increased by 14% to US$1,767 million. Dialysis product sales grew by 4% to US$2,156 million.

EBIT increased by 10% to US$1,924 million (2009: US$1,756 million) resulting in an excellent EBIT margin of 16.0% (2009: 15.6%).

In North America, the EBIT margin increased to 17.0% (2009: 16.4%) driven by an increase in revenue per treatment as well as the effect of economies of scale. In addition, the EBIT development benefitted from favorable pharmaceutical costs.

In the International segment, the EBIT margin was 17.3% (2009: 17.5%). EBIT margin was impacted by the devaluation of the Venezuelan bolivar and related charges as well as by lower gross profit margins of acquired. This was partially offset by economies of scale and favorable currency effects.

Net income¹ increased by 10% to US$979 million (2009: US$891 million).

In January 2011, Fresenius Medical Care announced the signing of a purchase agreement to acquire International Dialysis Centers (IDC), Euromedic International's dialysis service business. Fresenius Medical Care is taking advantage of this opportunity to expand its activities in the dialysis care market, especially in Eastern Europe, where IDC is the market leader. IDC currently treats over 8,200 hemodialysis patients and operates a total of 70 clinics in nine countries. On completion, the acquired operations will add approximately US$180 million in annual revenue. The purchase price was €485 million. The transaction remains subject to necessary regulatory approvals by the relevant anti-trust authorities and is expected to close in the second quarter of 2011. The transaction was financed through bonds issued in February 2011.

For 2011, Fresenius Medical Care expects revenue to grow to between US$12.8 billion to US$13 billion, corresponding to a growth rate of 6% to 8%. Net income¹ is expected to be between US$1.035 billion and US$1.055 billion, with operating margins forecast to increase by approximately 20 basis points.

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

¹ Net income attributable to Fresenius Medical Care AG & Co. KGaA


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.

• Excellent organic sales growth of 12% - EBIT margin increased to 20.1%
• Outlook 2011: Organic sales growth of ~5% on top of challenging 2010 base - EBIT margin >19%

Sales increased by 19% to €3,672 million (2009: €3,086 million). Excellent organic growth accounted for 12%, acquisitions contributed a further 1%. Currency translation had a positive effect of 6%, mainly attributable to the strength of the currencies in North America, Brazil and China against the Euro.

In Europe, sales reached €1,702 million (2009: €1,566 million), driven by 6% organic growth. In North America, sales increased to €975 million (2009: €728 million). Organic sales growth was an exceptional 26%. In the Asia-Pacific region, Fresenius Kabi achieved organic sales growth of 13% to €593 million (2009: €482 million). Sales in Latin America and Africa increased to €402 million (2009: €310 million), organic sales growth was 10%.

EBIT grew by 21% to €737 million (2009: €607 million). The EBIT margin improved to 20.1% (2009: 19.7%), driven by the strong development in North America, where product launches and competitors' supply constraints had a positive effect. EBIT includes €20 million for investments in efficiency improvements outside North America.

Net interest improved to -€279 million (2009: -€302 million).

Net income¹ increased by 47% to €294 million (2009: €200 million).

APP Pharmaceuticals (APP) achieved exceptional sales growth of 29% to US$1,143 million (2009: US$889 million). Adjusted EBITDA² grew by 34% to US$464 million (2009: US$345 million). EBIT increased by 43% to US$391 million (2009: US$273 million). The EBIT margin improved to 34.2% (2009: 30.7%). In addition to the reported APP earnings, Fresenius Kabi generated EBIT contributions from imported IV drugs distributed by APP in North America.

In 2010, APP received seven product approvals from the FDA (U.S. Food and Drug Administration). In addition, Fresenius Kabi Oncology received three FDA approvals.

The APP acquisition is clearly accretive to Group EPS in 2010, in line with our original 2008 expectations.

Operating cash flow of Fresenius Kabi increased by 43% to €567 million (2009: €397 million). The cash flow margin reached 15.4% (2009: 12.9%). Cash flow before acquisitions and dividends grew by 47% to €401 million (2009: €272 million).

Fresenius Kabi achieved outstanding growth in 2010. In 2011, organic sales growth is expected to grow by approximately 5%, taking the 2010/2011 compounded annual growth rate well into the 7 to 10% mid-term guidance range. Fresenius Kabi expects an EBIT margin of more than 19%. Net income for 2011 is expected to surpass 2010 earnings.

For the mid-term, Fresenius Kabi maintains its targets of 7% to 10% organic sales growth and an EBIT margin in the 18% to 20% range.


Special items relating to the acquisition of APP Pharmaceuticals are included in the segment "Corporate/Other".

¹ Net income attributable to Fresenius Kabi AG
² Non-GAAP financial measures - Adjusted EBITDA is a defined term in the indenture governing the Contingent Value Rights (CVRs), however it is not a recognized term under GAAP.



Fresenius Helios
Fresenius Helios is one of the largest private hospital operators in Germany. HELIOS Kliniken Group owns 63 hospitals, including five maximum care hospitals in Berlin-Buch, Erfurt, Krefeld, Schwerin and Wuppertal. HELIOS treats more than 2 million patients per year, thereof ~600,000 inpatients, and operates a total of more than 18,500 beds.

• Strong sales and earnings growth
• Outlook 2011: Organic sales growth of 3% to 5% and EBIT of €250 million to €260 million expected

Sales increased by 4% to €2,520 million (2009: €2,416 million). Organic growth was 5%, mainly driven by an increase in hospital admissions. The divestiture of one acute care hospital as of January 1, 2010 reduced sales growth by 1%.

EBIT grew by 15% to €235 million (2009: €205 million). The EBIT margin improved to 9.3% (2009: 8.5%). Net income¹ increased by 22% to €131 million (2009: €107 million).

As of January 1, 2011, HELIOS consolidates the hospital St. Marienberg in Lower Saxony. With 620 employees and 267 beds, the hospital treats about 12,000 inpatients annually. The hospital generated revenues of about €32 million in 2009.

The 2011 outlook remains positive: Fresenius Helios expects to achieve organic sales growth of 3% to 5%. EBIT is projected to increase to €250 million to €260 million.

As a new mid-term goal, Fresenius Helios targets sales of €3.5 billion by 2015, driven by both organic sales growth and acquisitions.


¹ Net income attributable to HELIOS Kliniken GmbH


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

• Strong sales and earnings growth - Order entry and order backlog with year-end record
• Outlook 2011: Sales and EBIT growth of 5% to 10% expected

Sales increased by 15% to €713 million (2009: €618 million). Organic sales growth reached 15%. Sales in the project business rose by 16% to €487 million (2009: €420 million). Sales in the service business increased by 14% to €226 million (2009: €198 million).

EBIT increased by 14% to €41 million (2009: €36 million). The EBIT margin was 5.8%, achieving the 2009 level. Net income rose to €30 million (2009: €27 million).

The excellent development of order intake and order backlog continued: Order intake in the project business increased by 16% to €625 million (2009: €539 million), reaching a new all-time high. In Q4 2010, order intake was €207 million. A €76 million order was received for a turn-key hospital construction in Gabon. Order backlog increased by 18% to a new year-end record of €801 million (Dec. 31, 2009: €679 million).

In 2011, Fresenius Vamed expects to achieve both sales and EBIT growth between 5% and 10%.

As a new mid-term stretch goal, Fresenius Vamed targets sales of €1 billion by 2014.

¹ Net income attributable to VAMED AG

Analyst Meeting and Audio Webcast
As part of the publication of the results for fiscal year 2010, an analyst meeting will be held at the Fresenius headquarters in Bad Homburg on February 23, 2011 at 1.30 p.m. CET (7.30 a.m. EST). All investors are cordially invited to follow the conference in a live broadcast over the Internet at www.fresenius.com see Investor Relations, Presentations. Following the meeting, a recording of the conference will be available as video-on-demand.