Fiscal year 2011:

• Sales €16.5 billion (+3% at actual rates, +6% in constant currency) 
• EBIT €2,563 million (+6% at actual rates, +9% in constant currency) 
• Net income¹ €770 million (+17% at actual rates, +18% in constant currency)

 

• Dividend increase by 10% to €0.95 per share proposed 
• Positive Group outlook 2012: 
  - Sales growth of 10% to 13% in constant currency
  - Net income¹ growth of 8% to 11% in constant currency

• 2012 sales and earnings growth in all business segments expected: 
  - Fresenius Medical Care: Sales of around US$14 billion; 
     Net income² of around US$1.14 billion 
  - Fresenius Kabi: Organic sales growth of 4% to 6%;
     EBIT margin of 19.5% to 20% 
  - Fresenius Helios: Organic sales growth of 3% to 5%, 
    EBIT of €310 million to €320 million 
  - Fresenius Vamed: Sales and EBIT growth of 5% to 10%

Ulf Mark Schneider, CEO of Fresenius, commented: "2011 was another highly successful year for Fresenius. Our group net income increased by 18% in constant currency after 23% growth in 2010. Based on these strong results we will propose the 19th consecutive dividend increase to our shareholders. We also strengthened our position as a leading global health care group with significant acquisitions in our dialysis and hospital businesses. Looking ahead, we continue to see exciting opportunities for organic and acquired growth in all of our business segments. We therefore enter 2012 full of confidence."

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 and occurred for the last time in 2011.

² Net income attributable to Fresenius Medical Care AG & Co. KGaA

 

19^th consecutive dividend increase proposed

Based on the strong financial results, the Management Board will propose to the Supervisory Board a dividend increase of 10% to €0.95 per ordinary share (2010: €0.86). The total dividend distribution is expected to be €155 million.

 

Positive Group outlook 2012

For 2012, Fresenius projects sales growth of 10% to 13%¹ in constant currency. Net income² is expected to increase by 8% to 11% in constant currency. This implies a 2010 through 2012 3-year CAGR (compounded annual growth rate) of 8% to 9% for sales and 16% to 17% for net income.

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.

 

Sales growth of 6% in constant currency

Group sales increased by 3% (6% in constant currency) to €16,522 million (2010: €15,972 million). Organic sales growth was 4%. Acquisitions contributed a further 2%. Currency translation had a negative effect of 3%. This is mainly attributable to the average USD/EUR rate in 2011 decreasing 5% compared to 2010.

¹ Based on adjusted 2011 sales of €16,361 million due to a U.S. GAAP accounting change at Fresenius Medical Care

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 and occurred for the last time in 2011.

 

Sales in the business segments developed as follows:

Sales in North America were €6,762 million (2010: €7,020 million). Organic sales growth of 1% was affected by the implementation of the new Medicare end-stage renal disease prospective payment system. In Europe organic sales growth was 3% compared to strong prior year's sales. Organic sales growth reached 16% in Asia-Pacific, 13% in Latin America and 16% in Africa.

 

Excellent earnings growth

Group EBITDA grew by 6% (8% in constant currency) to €3,237 million (2010: €3,057 million). Group EBIT increased by 6% (9% in constant currency) to €2,563 million (2010: €2,418 million). The EBIT margin improved by 40 basis points to 15.5% (2010: 15.1%).

Group net interest was -€531 million (2010: -€566 million). Lower average interest rates for debt as well as currency translation had a positive effect.

The other financial result was -€100 million and includes valuation changes of the fair redemption value of the Mandatory Exchangeable Bonds (MEB) of -€105 million and the Contingent Value Rights (CVR) of €5 million. Both are non-cash items. As the CVR were delisted in March 2011, the earnings effect relates solely to Q1 2011. As the MEB came to maturity on August 14, 2011, no further effect on earnings occured after Q3 2011. Upon maturity, the bonds were mandatorily exchanged into ordinary shares of Fresenius Medical Care AG & Co. KGaA.

In Q4/2011 Fresenius SE & Co. KGaA acquired approximately 1.4 million ordinary shares of Fresenius Medical Care AG & Co. KGaA. Therefore, as of December 31, 2011, Fresenius' shareholding of Fresenius Medical Care's ordinary share capital amounted to 30.7%.

The Group tax rate¹ decreased to 30.7% inter alia due to tax-free joint-venture income and one-time effects (2010: 32.9%).

Noncontrolling interest increased to €638 million (2010: €583 million), of which 92% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income² increased by 17% (18% in constant currency) to €770 million (2010: €660 million). Earnings per share increased by 16% to €4.73 (2010: €4.08).

Group net income³ (including special items) reached €690 million or €4.24 per share.

A reconciliation to adjusted earnings according to U.S. GAAP can be found on page 16 of this Investor News.

 

Continued investments in growth

The Fresenius Group spent €783 million on property, plant and equipment (2010: €758 million). Acquisition spending was €1,612 million (2010: €644 million). This is primarily due to Fresenius Medical Care's acquisitions of Euromedic's international dialysis service business (International Dialysis Centers), the minority stake in Renal Advantage, Inc. as well as the acquisition of American Access Care. In addition, the acquisition of Katholisches Klinikum Duisburg by Fresenius Helios was completed as of December 31, 2011.

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 and occurred for the last time in 2011.

³ Net income attributable to Fresenius SE & Co. KGaA

 

Cash flow development

Operating cash flow was €1,689 million (2010: €1,911 million), reflecting increased working capital requirements due to business expansion. The cash flow margin was 10.2% (2010: 12.0%). Net capital expenditure was €758 million (2010: €733 million). Free cash flow before acquisitions and dividends was €931 million (2010: €1,178 million). Given the substantial acquisition spending free cash flow after acquisitions and dividends was -€748 million (2010¹: €345 million).

 

Solid balance sheet structure

The Group's total assets increased by 12% to €26,321 million (Dec. 31, 2010: €23,577 million). In constant currency the increase was 10%. Current assets increased by 11% (10% in constant currency) to €7,151 million (Dec. 31, 2010: €6,435 million). Non-current assets increased by 12% (10% in constant currency) to €19,170 million (Dec. 31, 2010: €17,142 million).

Total shareholders' equity increased by 20% (19% in constant currency) to €10,577 million (Dec. 31, 2010: €8,844 million) mainly due to strong earnings growth as well as the maturity of the MEB. The equity ratio improved to 40.2% (Dec. 31, 2010: 37.5%).

Group debt grew by 12% (9% in constant currency) to €9,799 million (Dec. 31, 2010: €8,784 million) primarily resulting from acquisition financing. Net debt increased by 14% (12% in constant currency) to €9,164 million (Dec. 31, 2010: €8,015 million).

As of December 31, 2011, the net debt/EBITDA ratio was 2.83 (Dec. 31, 2010: 2.62) and therefore within the projected range of 2.5 to 3.0.

Number of employees increased

As of December 31, 2011, Fresenius Group increased the number of its employees by 9% to 149,351 (Dec. 31, 2010: 137,552).

¹ Does not include a €100 million cash out for a short-term bank deposit by Fresenius Medical Care in 2010.

 

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.

Sales increased by 20% to €30.7 million (2010: €25.5 million). ATG Fresenius S sales increased by 18% to €26.7 million (2010: €22.7 million). Removab sales grew by 43% to €4.0 million (2010: €2.8 million). Fresenius Biotech's EBIT was -€30 million (2010: -€32 million).

In Q4 2011, Fresenius Biotech entered into a long-term distribution agreement with Astellas Pharma, a global leader in transplant medicine, for ATG Fresenius S in the Chinese market.

For 2012, Fresenius Biotech expects 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 December 31, 2011, Fresenius Medical Care was treating 233,156 patients in 2,898 dialysis clinics.

• EBIT margin improvement to 16.2% 
• Acquisitions in the U.S. and in Europe strengthen dialysis business 
•  Outlook 2012: Sales growth of 11% to around US$ 14 billion;
  net income¹ growth to around US$1.14 billion

Fresenius Medical Care achieved sales growth of 6% to US$12,795 million (2010: US$12,053 million). Organic sales growth was 2%. Acquisitions contributed further 3%. Currency translation had an effect of 1%.

Sales in dialysis services increased by 5% to US$9,507 million (2010: US$9,070 million). Dialysis product sales grew by 10% to US$3,288 million (2010: US$2,983 million).

In North America sales were US$8,150 million (2010: US$8,130 million). Dialysis services sales were US$7,337 million (2010: US$7,303 million). Average revenue per treatment for U.S. clinics was US$348 in 2011 compared to US$356 in 2010 reflecting the implementation of the new Medicare prospective payment system. Dialysis product sales decreased by 2% to US$813 million (2010: US$827 million) as increased sales of hemodialysis and peritoneal dialysis products could not entirely offset lower pricing of renal drugs.

Sales outside North America ("International" segment) grew by 18% to US$4,628 million (2010: US$3,923 million). Sales in dialysis services increased by 23% to US$2,170 million. Dialysis product sales increased by 14% to US$2,458 million. The growth was mainly driven by higher sales of peritoneal dialysis products, dialyzers, dialysis machines and acute care products.

EBIT increased by 8% to US$2,075 million (2010: US$1,924 million). The EBIT margin improved to 16.2% (2010: 16.0%), mainly due to the EBIT margin improvement in North America, increasing by 60 basis points to 17.6% (2010: 17.0%). This increase was mainly influenced by the development of pharmaceutical costs. In the International segment the EBIT margin improved to 17.4% (2010: 17.3%).

Net income increased by 9% to US$1,071 million (2010: US$979 million).

In 2011, Fresenius Medical Care considerably strengthened its business through acquisitions especially in North America and Europe: the acquisition of American Access Care, as well as the acquisition of International Dialysis Centers, the international dialysis service business of Euromedic. In addition Fresenius Medical Care has announced a merger agreement with Liberty Dialysis Holdings, Inc., the holding company for Liberty Dialysis and Renal Advantage. Closing is expected in Q1 2012.

In January 2012, Fresenius Medical Care placed three tranches of U.S. Dollar and Euro-denominated senior unsecured notes. Proceeds amounting to approximately US$1.81 billion are intended to be used for acquisitions, including the acquisition of Liberty Dialysis Holdings, Inc., to refinance debt and for general corporate purposes.

For 2012, Fresenius Medical Care expects sales to grow to around US$14 billion. This takes into account a change in U.S. GAAP in the presentation of U.S. dialysis service sales which will be shown net of the provision for bad debt. Based on the comparable 2011 sales of US$12,571 million the sales outlook represents an increase of 11% and between 13% and 15% based on constant currencies.

Net income is expected to grow to around US$1.3 billion and net income attributable to Fresenius Medical Care AG & Co. KGaA is expected to grow to around US$1.14 billion with operating margin forecasted to increase to approximately 16.9%.

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 year 2011 – All targets exceeded, further EBIT margin increase
  to 20.3%
• Strong organic sales growth of 9%; 15% growth in emerging markets
• Outlook 2012: Organic sales growth of 4% to 6% on top of strong 2011 base;
  EBIT margin of 19.5% to 20%; increased mid-term guidance

Fresenius Kabi achieved 8% sales growth to €3,964 million compared to the strong previous year (2010: €3,672 million). Organic sales growth was 9%. Currency translation had a negative effect of 1%. Fresenius Kabi achieved quarterly record sales of €1,014 million in Q4 2011.

In Europe sales grew by 7% to €1,826 million (2010: €1,702 million), driven by organic growth of 6%. In North America sales increased by 3% to €1,002 million (2010: €975 million). Organic growth was 7%. In Asia-Pacific sales increased by 18% to €702 million (2010: €593 million), with excellent organic sales growth of 18%. Sales in Latin America and Africa increased by 8% to €434 million (2010: €402 million), with organic sales growth contributing 10%.

EBIT grew by 9% to €803 million (2010: €737 million). The EBIT margin improved to 20.3% (2010: 20.1%). Strong EBIT growth was achieved in all regions.

Net interest remained at previous year's level of -€278 million (2010: -€279 million).

Net income¹ increased by 20% to €354 million (2010: €294 million).

Fresenius Kabi achieved outstanding growth in 2010 and 2011. In 2012, organic sales growth is expected at 4% to 6%, implying a 2010 through 2012 3-year CAGR (compounded annual growth rate) well in the 7% to 10% mid-term guidance range. Fresenius Kabi expects an EBIT margin of 19.5% to 20% and a further increase in earnings.

For the mid-term, Fresenius Kabi slightly increases its EBIT margin target range from 18% to 20% to 18% to 21%. Fresenius Kabi confirms its mid-term annual organic sales growth guidance of 7% to 10%.

Fresenius Kabi plans to host a Capital Market Day on June 12, 2012 in Bad Homburg providing an update on the strategy and growth prospects of the company.

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

¹ Net income attributable to Fresenius Kabi AG

 

Fresenius Helios

Fresenius Helios is one of the largest private hospital operators in Germany. HELIOS owns 65 hospitals, including six maximum care hospitals in Berlin-Buch, Duisburg, Erfurt, Krefeld, Schwerin and Wuppertal. HELIOS treats more than 2 million patients per year, thereof approximately 700,000 inpatients, and operates more than 20,000 beds.

• 4% organic sales growth – 2011 outlook fully achieved
• EBIT of €270 million at the upper end of already increased guidance -
  EBIT margin increase by 80 basis points to 10.1%
• Outlook 2012: Organic sales growth of 3% to 5%,
  EBIT of €310 million to €320 million; new mid-term guidance

Sales increased by 6% to €2,665 million (2010: €2,520 million), mainly driven by organic sales growth of 4%. Acquisitions contributed 2% to overall sales growth.

EBIT grew by 15% to €270 million (2010: €235 million). The EBIT margin improved by 80 basis points to 10.1% (2010: 9.3%).

Net income¹ increased by 24% to €163 million (2010: €131 million).

The established clinics increased sales by 4% to €2,613 million. EBIT improved by 17% to €276 million. The EBIT margin was at strong 10.6%. The acquired clinics (consolidation < 1 year) achieved sales of €52 million and an EBIT of -€6 million. Restructuring of these hospitals is fully on track.

As of December 31, 2011, HELIOS fully consolidates Katholisches Klinikum Duisburg hospital (KKD). KKD operates a maximum care hospital with 1,034 beds and achieved sales of approximately €134 million in 2010.

HELIOS anticipates closing of the Damp Group acquisition at the end of the first or at the beginning of the second quarter 2012, as the Wismar Hospital was divested in the mean time to secure antitrust clearance.

For 2012, Fresenius Helios expects to achieve organic sales growth of 3% to 5%. EBIT is projected to increase to between €310 million and €320 million.

As a new mid-term goal, Fresenius Helios now targets sales of €4 billion to €4.25 billion (incl. Damp) by 2015 (before: €3.5 billion), driven by organic 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.

• Continued sales and EBIT growth even after exceptional 2010 results and the unrest in the Middle East/North Africa region 
• Sales in Q4 2011 for the first time above €250 million 
•  Outlook 2012: Sales and EBIT growth of 5% to 10%

Fresenius Vamed's sales were €737 million (2010: €713 million). Despite the strong 2010 base and the unrest in the Middle East/North Africa region sales grew by 3%. Sales in the project business increased slightly by 1% to €494 million (2010: €487 million). Sales in the service business grew by 8% to €243 million (2010: €226 million).

EBIT grew to €44 million (2010: €41 million). The EBIT margin improved by 20 basis points to 6.0% (2010: 5.8%). Net income¹ increased to €34 million (2010: €30 million).

In Q4 2011, Fresenius Vamed achieved a record order intake of €269 million. New orders include a contract for the construction of phase 2 of the Central Hospital in Libreville, Gabon, with an order volume of €109 million. In 2011, the order intake of €604 million was slightly below the exceptional 2010 level of €625 million. Order backlog was at a new all-time high of €845 million as of December 31, 2011 (Dec. 31, 2010: €801 million).

In 2012, Fresenius Vamed expects to achieve sales and EBIT growth of 5% to 10%.

As a challenging 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 2011, an analyst meeting will be held at the Fresenius headquarters in Bad Homburg on February 21, 2012 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.

Q1/2012:

• Sales¹ €4.4 billion (+13% at actual rates, +10% in constant currency)
• EBIT €661 million (15% at actual rates, +12% in constant currency)
• Net income² €200 million (+18% at actual rates, +15% in constant currency)

The preliminary financial results, announced on April 26, 2012, remain unchanged.

 

Group outlook³ 2012 raised

Based on the Group's excellent financial results in the first quarter of 2012, Fresenius raises its guidance. For 2012, Fresenius now expects net income² growth of 12% to 15% in constant currency. Previously, the Company expected net income growth of 8% to 11%. Sales¹ growth of 10% to 13% in constant currency is now projected at the upper end of the targeted range.

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.

¹ Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment of -€39 million in Q1 2011 and of -€161 million for the full year 2011 solely relate to Fresenius Medical Care North America.

² Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain of €30 million at Fresenius Medical Care; 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights.

³ Before effects of the announced Rhön-Klinikum AG acquisition

 

Sales growth of 10% in constant currency

Group sales increased by 13% (10% in constant currency) to €4,419 million (Q1 2011¹: €3,923 million). Organic sales growth was 5%. Acquisitions contributed a further 5%. Currency translation had a positive effect of 3%. This is mainly attributable to the strengthening of the U.S. dollar against the euro by 4% in the first quarter of 2012 compared to the first quarter of 2011.

Sales in the business segments developed as follows:

Organic sales growth in North America was 2%, in Europe 5%. Organic sales growth was again strong in Asia-Pacific with 11% and in Latin America with 18%. Sales in Africa were impacted by the political unrest in the Middle East and North Africa.

¹ Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment of -€39 million in Q1 2011 and of -€161 million for the full year 2011 solely relate to Fresenius Medical Care North America.

 

Excellent earnings growth

Group EBITDA grew by 14% (11% in constant currency) to €838 million (Q1 2011: €737 million). Group EBIT increased by 15% (12% in constant currency) to €661 million (Q1 2011: €575 million). The EBIT margin improved by 30 basis points to 15.0% (Q1 2011: 14.7%).

Group net interest was -€147 million (Q1 2011: -€135 million). Lower average interest rates were more than offset by incremental debt due to acquisition financing and currency translation effects.

The Group tax rate¹ slightly decreased to 30.4% (Q1 2011: 30.7%).

Noncontrolling interest increased to €158 million (Q1 2011: €135 million), of which 93% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income² increased by 18% (15% in constant currency) to €200 million (Q1 2011: €170 million). Earnings per share increased by 17% to €1.23 (Q1 2011: €1.05).

Group net income³ including the non-taxable investment gain at Fresenius Medical Care was €230 million or €1.41 per share. This is a non-cash item.

 

Continued investment in growth

The Fresenius Group spent €151 million on property, plant and equipment (Q1 2011: €136 million). Acquisition spending was €1,927 million (Q1 2011: €311 million). This is primarily due to the completion of Fresenius Medical Care's acquisition of Liberty Dialysis Holdings, Inc. as well as of the acquisition of Damp Group by Fresenius Helios.

 

Strong operating cash flow development

Operating cash flow increased to €538 million (Q1 2011: €278 million), mainly driven by strong earnings growth and tight working capital management. The cash flow margin was 12.2% (Q1 2011: 7.1%). Net capital expenditure was €152 million (Q1 2011: €147 million). Free cash flow before acquisitions and dividends was €386 million (Q1 2011: €131 million). Free cash flow after acquisitions and dividends was -€1,096 million (Q1 2011: -€133 million).

¹ Adjusted for the non-taxable investment gain at Fresenius Medical Care; 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds

² Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain of €30 million at Fresenius Medical Care; 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights.

³ Net income attributable to shareholders of Fresenius SE & Co. KGaA

 

Solid balance sheet structure

The Group's total assets increased by 8% (10% in constant currency) to €28,542 million (Dec. 31, 2011: €26,321 million). Current assets grew by 7% (9% in constant currency) to €7,682 million (Dec. 31, 2011: €7,151 million). Non-current assets increased by 9% (11% in constant currency) to €20,860 million (Dec. 31, 2011: €19,170 million).

Total shareholders' equity increased by 2% (4% in constant currency) to €10,829 million (Dec. 31, 2011: €10,577 million). The equity ratio was 37.9% (Dec. 31, 2011: 40.2%).

Group debt grew by 17% (19% in constant currency) to €11,459 million (Dec. 31, 2011: €9,799 million), primarily resulting from acquisition financing. Net debt increased by 16% (18% in constant currency) to €10,604 million (Dec. 31, 2011: €9,164 million).

In March 2012, Fresenius successfully placed €500 million of senior unsecured notes. Proceeds are used for acquisitions, including the acquisition of the Damp Group, refinancing of short-term debt, and general corporate purposes. The senior notes have a coupon of 4.250%, a maturity of seven years and were issued at par. The transaction was well received by investors and substantially oversubscribed.

As of March 31, 2012, the net debt/EBITDA ratio¹ was 3.01 (Dec. 31, 2011: 2.83). At identical exchange rates for net debt and EBITDA, the ratio was 2.95.

 

Number of employees increases

As of March 31, 2012, Fresenius Group increased the number of its employees by 7% to 160,249 (Dec. 31, 2011: 149,351).

¹ Pro forma including Damp Group and Liberty Dialysis Holdings, Inc.

 

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 11% to €8.1 million compared to €7.3 million in the first quarter of 2011. Sales with the trifunctional antibody Removab grew by 38% to €1.1 million (Q1 2011: €0.8 million). Sales of the immunosuppressive agent ATG Fresenius S increased by 8% to €7.0 million (Q1 2011: €6.5 million).

Fresenius Biotech's EBIT was -€6 million (Q1 2011: -€7 million).

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

 

Business Segments

Fresenius Medical Care

Fresenius Medical Care is the world's leading provider of services and products for patients with chronic kidney failure. As of March 31, 2012, Fresenius Medical Care was treating 253,041 patients in 3,119 dialysis clinics.

• Strong start into 2012 - EBIT margin improvement to 15.5%
• Acquisition of Liberty Dialysis Holdings, Inc. closed
• 2012 outlook confirmed

Sales increased by 9% to US$3,249 million (Q1 2011¹: US$2,984 million). Organic sales growth was 3%. Acquisitions contributed a further 7%. Currency translation had a negative effect of 1%.

Sales in dialysis services increased by 11% to US$2,478 million (Q1 2011: US$2,233 million). Dialysis product sales grew by 3% to US$771 million (Q1 2011: US$751 million).

In North America sales grew 9% to US$2,105 million (Q1 2011: US$1,925 million). Dialysis services sales grew by 11% to US$1,918 million (Q1 2011: US$1,730 million). Average revenue per treatment for U.S. clinics increased to US$353 in the first quarter of 2012 compared to US$348 in the first quarter of 2011. Dialysis product sales decreased by 4% to US$187 million (Q1 2011: US$195 million) mainly as a result of lower pricing of renal pharmaceuticals.

Sales outside North America ("International" segment) grew by 8% to US$1,136 million (Q1 2011: US$1,055 million). Sales in dialysis services increased by 11% to US$560 million (Q1 2011: US$503 million). Dialysis product sales increased by 4% to US$576 million (Q1 2011: US$552 million). The growth was mainly driven by higher sales of dialysis machines.

EBIT increased by 13% to US$503 million (Q1 2011: US$445 million). The EBIT margin improved to 15.5% (Q1 2011: 14.9%).

The EBIT margin in North America improved by 30 basis points to 16.5% (Q1 2011: 16.2%). The increase in Medicare rates and the growth of the expanded services contributed favorably to this development. In the International segment the EBIT margin improved to 17.2% (Q1 2011: 16.2%).

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the first quarter of 2012 was US$370 million, an increase of 68% compared to the corresponding quarter of 2011. This includes a non-taxable investment gain of US$127 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 and is subject to the finalization of the Liberty purchase accounting. Excluding this investment gain, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA increased by 10% to US$244 million (Q1 2011: US$221 million).

Fresenius Medical Care has closed the acquisition of Liberty Dialysis Holdings, Inc., the holding company of Liberty Dialysis and Renal Advantage effective February 28, 2012. The closing followed the completion of the review of the transaction and issuance of a consent decree by the United States' Federal Trade Commission. In connection with the consent decree, Fresenius Medical Care completed the sale of 44 clinics to Dialysis Newco, Inc. The acquisition of Liberty Dialysis Holdings, Inc. is expected to add annual sales of around US$700 million and 201 clinics to Fresenius Medical Care's network for an investment, net of proceeds from divestiture, of approximately US$1.5 billion.

Fresenius Medical Care confirms its sales and earnings outlook for 2012. The company expects sales to grow to around US$14 billion. Net income is expected to grow to around US$1.3 billion and net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to grow to around US$1.14 billion. This does not include the investment gain of approximately US$127 million in the first quarter of 2012.

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

¹ Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment amounts to -US$ 52 million in Q1 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$127 million in the first quarter 2012.

 

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 across all regions
• 2012 outlook raised

Sales increased by 14% to €1,092 million (Q1 2011: €960 million). Organic sales growth of 11% was driven by all regions. Currency translation had an effect of 2%. Acquisitions contributed 1%.

In Europe sales grew by 8% (organic growth: 8%) to €487 million (Q1 2011: €449 million). Sales in North America increased by 15% (organic growth: 10%) to €292 million (Q1 2011: €254 million). Organic sales growth was driven by new product launches and continued competitor supply constraints. In Asia-Pacific sales increased by 28% (organic growth: 20%) to €199 million (Q1 2011: €156 million). Sales in Latin America and Africa increased by 13% (organic growth: 15%) to €114 million (Q1 2011: €101 million).

EBIT grew by 9% to €215 million (Q1 2011: €197 million). EBIT growth was in particular driven by the emerging markets and North America. The EBIT margin was 19.7% (Q1 2011: 20.5%).

Net income¹ increased by 13% to €98 million (Q1 2011: €87 million).

Based on the excellent financial results in the first quarter of 2012, Fresenius Kabi raises its outlook for 2012 and now forecasts organic sales growth of 6% to 8%. Previously, organic sales growth of 4% to 6% was expected. An EBIT margin of 19.5% to 20% is now projected at the upper end of the targeted range.

Fresenius Kabi will host a Capital Market Day on June 12, 2012 in Bad Homburg to provide an update on the company's strategy and growth prospects.

¹ Net income attributable to shareholders of Fresenius Kabi AG

 

Fresenius Helios

Fresenius Helios is the largest private hospital operator in Germany. HELIOS owns 75 hospitals, including six maximum care hospitals in Berlin-Buch, Duisburg, Erfurt, Krefeld, Schwerin and Wuppertal. HELIOS treats more than 2.7 million patients per year, thereof more than 750,000 inpatients, and operates more than 23,000 beds.

• Strong organic sales growth of 5%
• Acquisition of Damp Group successfully completed
• 2012 earnings outlook raised

Sales increased by 11% to €717 million (Q1 2011: €648 million). This was driven by strong organic sales growth of 5%. Acquisitions contributed 6% to overall sales growth.

EBIT grew by 17% to €68 million (Q1 2011: €58 million). The EBIT margin improved by 50 basis points to 9.5% (Q1 2011: 9.0%).

Net income increased by 24% to €41 million (Q1 2011: €33 million).

Sales at the established hospitals grew by 5% to €676 million. EBIT improved by 24% to €72 million. The EBIT margin increased to excellent 10.7% (Q1 2011: 9.0%). Sales of the acquired hospitals (consolidation < 1 year) were €41 million, and, as expected, EBIT was -€4 million. Restructuring of these hospitals is fully on track.

As of March 31, 2012, HELIOS fully consolidates Damp Group. Damp Group was among the ten largest private hospital operators in Germany. Damp Group's 2010 sales were €427 million (without Damp hospital Wismar, divested in the first quarter of 2012).

Based on the excellent financial results in the first quarter of 2012, Fresenius Helios raises its EBIT outlook for 2012. The company now projects EBIT to increase to the upper end of the targeted range of €310 million to €320 million. Fresenius Helios continues to expect organic sales growth of 3% to 5%.

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.

 

• Sales and EBIT fully in line with expectations
• Good order intake of €104 million
• 2012 outlook confirmed

Sales increased to €142 million (Q1 2011: €140 million). Sales in the project business were €77 million (Q1 2011: €84 million). Sales in the service business increased by 16% to €65 million (Q1 2011: €56 million).

 
EBIT was €5 million (Q1 2011: €5 million). The EBIT margin reached 3.5% (Q1 2011: 3.6%). Net income remained at previous year's level of €4 million.

In Q1 2012, Fresenius Vamed had a good order intake of €104 million (Q1 2011: €127 million). Order backlog increased to €872 million as of March 31, 2012 (Dec. 31, 2011: €845 million).

Fresenius Vamed confirms its 2012 outlook and expects sales and EBIT growth 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 quarter of 2012, a conference call will be held on May 3, 2012 at 2 p.m. CET (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 sees excellent prospects for further sales and earnings growth in the coming years at its Fresenius Kabi business segment, whose management is updating analysts and investors on the company's operations, strategy and growth opportunities during a Capital Market Day at Group headquarters in Bad Homburg.

In the first months of 2012, Fresenius Kabi has recorded substantial organic growth across all regions and product segments, exceeding earlier expectations. Particularly in the U.S., revenue growth has been materially stronger than initially projected mainly due to ongoing IV drug shortages, including Propofol, which may continue well into the third quarter.

As a result, Fresenius Kabi raises its outlook for 2012. The company now expects organic sales growth of 7% to 9% and an EBIT margin between 20% and 20.5%. Previously, Fresenius Kabi projected organic sales growth of 6% to 8% and an EBIT margin at the upper end of a 19.5% to 20% range.

With ongoing strong growth in all Group business segments and Fresenius Kabi exceeding previous forecasts, Fresenius is raising its guidance for 2012. Fresenius Group now expects net income* to increase by 14% to 16% and sales** by 12% to 14%, both in constant currency and before effects of the announced Rhön-Klinikum AG acquisition. Previously, the Company projected net income growth of 12% to 15% and sales growth at the upper end of a 10% to 13% range, both in constant currency.

Fresenius Kabi specializes in the therapy and care of chronically and critically ill patients, providing intravenously administered generic drugs (IV drugs), infusion therapies, clinical nutrition, and related medical devices. Fresenius Kabi is the market leader in infusion therapy and clinical nutrition in Europe and holds leading positions in important countries of Latin America and the Asia-Pacific region. Within IV generic drugs, Fresenius Kabi is among the leading suppliers in the U.S. market. The company has more than 24,000 employees worldwide and a global network of 59 sales organizations as well as 61 production sites and compounding centers.

"Fresenius Kabi is showing strong growth across all regions and product segments and continues to build its global market presence. We are absolutely delighted with the progress the company is making," said Ulf Mark Schneider, CEO of Fresenius. "Fresenius Kabi is a major growth driver for us, clearly delivering above-market growth. The company will continue to benefit from two major global trends, the outstanding growth in emerging market healthcare spending and the increasing demand for high-quality IV generic drugs in light of numerous patent expirations and healthcare budget constraints in the Western world.''

In 2011, Fresenius Kabi posted sales of €3.96 billion and EBIT of €803 million, with both figures having more than doubled in the past five years. The compounded annual growth rate (CAGR) was 16% for sales and 23% for EBIT.

By 2015, the company expects sales to increase to approx. €5.5 billion and EBIT to reach more than €1 billion driven by rising demand for high-quality medical care in emerging markets, the continuing growth of generics, ongoing market consolidation, and demographic change in the industrialized countries.

In the key markets of Latin America and the Asia-Pacific region, Fresenius Kabi's strong local presence includes its own production, sales and marketing operations. China, where the company was active as early as 1982, has become Fresenius Kabi's third-largest market. The company today achieves 29% of total sales outside of Europe and North America – a share expected to reach 35% to 40% by 2015.

In established markets, meanwhile, the company projects continued strong growth of 5% to 7% annually, exceeding overall market growth. Due to its leading positions in many different product segments, combined with the high quality and availability of its products, Fresenius Kabi is a reliable partner for its customers. Expanding the product portfolio, and rolling it out into markets where only part of the overall product offering is now available, are key elements of Fresenius Kabi's growth strategy.

"We offer high-quality, affordable products for the therapy and care of critically and chronically ill patients," said Rainer Baule, CEO of Fresenius Kabi. "In our core therapeutic areas we can draw upon one of the most comprehensive product portfolios as well as a global network of marketing, sales and production sites. A high level of vertical integration and technological leadership in many areas provide us a highly competitive cost position, in turn leading to strong market positions. Fresenius Kabi is excellently positioned for further profitable growth.''

The Capital Market Day will be webcast on the Internet, starting at 9 a.m. CEST tomorrow (June 12, 2012). The webcast is available live at www.fresenius.com/Investor Relations/Presentations. A replay will be available shortly after the event.

* Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain of €30 million at Fresenius Medical Care; 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights.

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

(Financial statements according to U.S. GAAP)

H1/2012:

• Sales¹             €9.2 billion (+17% at actual rates, +12% in constant currency)
• EBIT²             €1.4 billion (+19% at actual rates, +14% in constant currency)
• Net income³  €434 million (+20% at actual rates, +15% in constant currency)

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

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

¹ Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment of -€77 million in H1 2011 and of -€161 million for the full year 2011 solely relates to Fresenius Medical Care North America.² Adjusted for one-time costs of €7 million in Q2 2012 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 €26 million in Q2 2012 related to the offer to the shareholders of RHÖN-KLINIKUM AG. 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights.

 

Group outlook 2012 fully confirmed
Based on the Group's financial results in the first half of 2012, Fresenius confirms its guidance, which was raised in June 2012. For 2012, Fresenius expects 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.).

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

Sales in the business segments developed as follows:

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

¹ Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment of -€77 million in H1 2011 and of -€161 million for the full year 2011 solely relates to Fresenius Medical Care North America.

² Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain of €34 million at Fresenius Medical Care and one-time costs related to the offer to the shareholders of RHÖN-KLINIKUM AG. 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights. 

Excellent earnings growth

Group EBITDA¹ grew by 18% (13% in constant currency) to €1,806 million (H1 2011: €1,526 million). Group EBIT¹ increased by 19% (14% in constant currency) to €1,440 million (H1 2011: €1,207 million). The EBIT margin improved by 40 basis points to 15.6% (H1 2011: 15.2%).

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

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

The Group tax rate² slightly improved to 30.8% (H1 2011: 30.9%).

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

Group net income³ increased by 20% (15% in constant currency) to €434 million (H1 2011: €363 million). Earnings per share increased by 16% to €2.58 (H1 2011: €2.23). The average number of shares grew to approx. 168 million in H1 2012, primarily due to the May 2012 capital increase.

A reconciliation to adjusted earnings according to U.S. GAAP can be found on page 14 of the Investor News.

Group net income⁴ was €442 million or €2.63 per share (including the non-taxable investment gain at Fresenius Medical Care, which is a non-cash item, and one-time costs related to the offer to the shareholders of RHÖN-KLINIKUM AG).

¹ Adjusted for one-time costs of €7 million in Q2 2012 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 €36 million in Q2 2012 related to the offer to the shareholders of RHÖN-KLINIKUM AG. 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds.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 €26 million in Q2 2012 related to the offer to the shareholders of RHÖN-KLINIKUM AG. 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights.⁴ Net income attributable to shareholders of Fresenius SE & Co. KGaA

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

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

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

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

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

As of June 30, 2012, the net debt/EBITDA ratio¹ was 2.75 (Dec. 31, 2011: 2.83). At identical exchange rates for net debt and EBITDA, the ratio was 2.65.

¹ Pro forma including Damp Group and Liberty Dialysis Holdings, Inc., adjusted for one-time costs of €7 million in Q2 2012 related to the offer to the shareholders of RHÖN-KLINIKUM AG.

Number of employees increases

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

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

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

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

Business Segments

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

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

Sales increased by 9% to US$6,677 million (H1 2011¹: US$6,121 million). Organic sales growth was 4%. Acquisitions contributed a further 8%. Currency translation had a negative effect of 3%.

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

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

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

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

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

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

Fresenius Medical Care confirms its sales and earnings outlook for 2012. The company expects sales to grow to around US$14 billion³. Net income is expected to grow to around US$1.3 billion and net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to grow to around US$1.14 billion³. This does not include the investment gain in the amount of US$140 million in the first half of 2012.

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

¹ Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment amounts to -US$109 million in H1 2011; the 2011 sales adjustment amounts to -US$224 million.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 half of 2012.³ Outlook includes a +/- 0-2% deviation from the respective number.

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

The company is also a leading supplier of medical devices and transfusion technology products.

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

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

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

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

Net income¹ increased by 16% to €210 million (H1 2011: €181 million).

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

On July 20, 2012, Fresenius Kabi announced that it has signed a definitive agreement to acquire Fenwal Holdings, Inc., a leading U.S.-based provider of transfusion technology products for blood collection, separation, and processing, from TPG and Maverick Capital. In 2011, Fenwal had sales of US$614 million with an adjusted EBITDA of US$90 million.

The acquisition marks another major step in Fresenius Kabi's growth strategy. The company had announced previously that expanding its medical devices/transfusion technology segment is a priority.

Fresenius Kabi raises its guidance² announced at the Capital Market Day. With the closing of the acquisition, Fresenius Kabi targets sales of approx. €6 billion by 2015 and EBIT of >€1.1 billion. Previously, the company targeted sales of approx. €5.5 billion and EBIT of >€1 billion.

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

¹ Net income attributable to shareholders of Fresenius Kabi AG² at current exchange rates

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

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

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

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

Net income¹ increased by 28% to €92 million (H1 2011: €72 million).

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

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

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

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

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.

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

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

EBIT was €13 million (H1 2011: €12 million). The EBIT margin reached 3.9% (H1 2011: 3.8%). Net income¹ remained at previous year's level of €9 million.

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

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

¹ Net income attributable to shareholders of VAMED AG

Analyst Conference Call
As part of the publication of the results for the first half of 2012, a conference call will be held on August 1, 2012 at 2 p.m. CEST (8 a.m. EDT). All 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 posted substantial organic growth across all regions and product areas during the first half of this year. The company is well on track for further strong growth in the second half. Demand in the United States is expected to remain high supported by ongoing IV drug shortages, particularly of Propofol. Supply constraints of a competitor for this anesthetic are now expected to last well into the fourth quarter.

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

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

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

 

 

 

 

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

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

 

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.

• 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.

 

• Sales €4.0 billion,
  +9% at actual rates, +7% in constant currency
• EBIT €575 million,
  +15% at actual rates, +13% in constant currency
• Net income¹ €170 million,
  +43% at actual rates, +39% in constant currency

• Group raises 2011 outlook for sales and earnings¹ growth
• Fresenius Medical Care and Fresenius Kabi raise 2011 outlook
• Fresenius Helios narrows earnings guidance to upper half of range
• Fresenius Vamed fully confirms guidance

 

Ulf Mark Schneider, CEO of Fresenius, commented: „After record results in 2010, we are pleased to report strong sales and earnings growth for the first quarter of 2011. All of our business segments had an excellent start. We have seen particularly strong growth at Fresenius Kabi in North America, where we continue to benefit from successful product launches and supply constraints in the injectable drugs market. Based on Fresenius Kabi's prospects, Fresenius Medical Care's successful implementation of the ESRD prospective payment system in the United States and Fresenius Helios' strong earnings development, we raise our Group's sales and earnings guidance for 2011."

For 2011, Fresenius Group now expects sales growth of 7% to 8% and net income¹ growth of 12% to 16%, both in constant currency. Previously, the company expected sales growth of ≥7% and net income growth of 8% to 12%, both in constant currency.

The Group plans to invest approximately 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.

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.


Strong organic sales growth
Group sales increased by 9% (7% in constant currency) to €3,962 million (Q1 2010: €3,643 million). Organic sales growth was 6%. Acquisitions contributed a further 1%. Currency translation had a positive effect of 2%.

Sales growth in the business segments was as follows:

Organic sales growth was 5% in North America and 2% in Europe. Prior year sales in Europe were positively influenced by Fresenius Vamed's large medical supply contract to the Ukraine. Organic sales growth reached 13% in Latin America, 18% in Asia-Pacific and 28% in Africa.

 

Excellent earnings growth
Group EBITDA increased by 13% (12% in constant currency) to €737 million (Q1 2010: €650 million). Group EBIT increased by 15% (13% in constant currency) to €575 million (Q1 2010: €501 million). The EBIT margin increased to 14.5% (Q1 2010: 13.8%).

Group net interest improved to -€135 million (Q1 2010: -€143 million).

The other financial result was -€62 million and includes valuation changes of the fair redemption value of the Mandatory Exchangeable Bonds (MEB) of -€67 million and the Contingent Value Rights (CVR) of €5 million. Both are non-cash items. The CVR were delisted in March 2011. The MEB will come to maturity in August 2011.

The Group tax rate¹ was 30.7% (Q1 2010: 33.2%). The prior year was impacted by non-tax deductible charges related to the devaluation of the Venezuelan Bolivar.

Noncontrolling interest increased to €135 million (Q1 2010: €120 million), of which 93% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income² increased by 43% (39% in constant currency) to €170 million (Q1 2010: €119 million). Earnings per ordinary share increased by 41% to €1.05. A reconciliation to adjusted earnings according to U.S. GAAP can be found on page 14 of the PDF-File.

Group net income³ (including special items) reached €128 million or €0.79 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 €136 million on property, plant and equipment (Q1 2010: €124 million). Acquisition spending was €311 million (Q1 2010: €81 million), mainly due to acquisitions at Fresenius Medical Care.

 

Cash flow development
Operating cash flow was €278 million (Q1 2010: €438 million). Strong earnings growth was more than offset by increased DSOs (days sales outstanding), primarily related to the introduction of the new Medicare end-stage renal disease prospective payment system in the U.S. dialysis service business, and raised inventory levels. The cash flow margin was 7.0% (Q1 2010: 12.0%). Net capital expenditure increased to €147 million (Q1 2010: €130 million). Free cash flow before acquisitions and dividends was €131 million (Q1 2010: €308 million). Free cash flow after acquisitions and dividends was -€133 million (Q1 2010: €218 million).

 

Solid balance sheet structure
The Group's total assets were €23,572 million (Dec. 31, 2010: €23,577 million). In constant currency, the increase was 4%. Current assets increased by 6% (9% in constant currency) to €6,808 million (Dec. 31, 2010: €6,435 million). Non-current assets were €16,764 million (Dec. 31, 2010: €17,142 million). In constant currency, the increase was 2%.

Total shareholders' equity decreased by 1% to €8,788 million (Dec. 31, 2010: €8,844 million). In constant currency, the increase was 4%. The equity ratio was 37.3% (Dec. 31, 2010: 37.5%).

Group debt remained almost unchanged (4% growth in constant currency) at €8,823 million (Dec. 31, 2010: €8,784 million). Net debt decreased by 1% to €7,929 million (Dec. 31, 2010: €8,015 million). In constant currency, net debt increased by 3%.

The net debt/EBITDA ratio improved to 2.52 as of March 31, 2011 (Dec. 31, 2010: 2.62).

 

Number of employees increased
As of March 31, 2011, Fresenius Group increased the number of its employees by 2% to 140,111 (Dec. 31, 2010: 137,552).

 

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 sales increased by 16% to €7.3 million in the first quarter of 2011 (Q1 2010: € 6.3 million). The immunosuppressive agent ATG contributed €6.5 million and the trifunctional antibody Removab (catumaxomab) €0.8 million to sales.

In March 2011, Fresenius Biotech received Paul-Ehrlich-Institut approval to use a polyclonal antibody in stem cell transplantations. As a result, ATG-Fresenius S now can be used in the indication "prophylaxis of graft-versus-host disease (GVHD) for unrelated stem cell transplant donors in adults".

In addition, reimbursement negotiations for Removab in Italy were successfully concluded.

In the first quarter of 2011, Fresenius Biotech's EBIT was -€7 million (Q1 2010: -€8 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 March 31, 2011, Fresenius Medical Care was treating 216,942 patients in 2,769 dialysis clinics.

• Strong start into the year – despite the impact of the new Medicare prospective payment system in the U.S.
• Outlook 2011 raised: Sales above US$13 billion and net income¹ of US$1,070 million to US$1,090 million

Fresenius Medical Care achieved sales growth of 5% to US$3,036 million (Q1 2010: US$2,882 million). Organic growth was 3%, acquisitions contributed a further 2%.

Sales in dialysis service increased by 5% to US$2,285 million (Q1 2010: US$2,171 million). Dialysis product sales grew by 6% to US$751 million (Q1 2010: US$711 million).

In North America, sales increased by 1% to US$1,977 million (Q1 2010: US$1,960 million). Dialysis services sales increased by 1% to US$1,782 million. Average sales per treatment for U.S. clinics decreased to US$348 in the first quarter of 2011 compared to US$355 for the corresponding quarter in 2010 as a result of the implementation of the new Medicare end-stage renal disease prospective payment system. Dialysis product sales were US$195 million (Q1 2010: US$200 million).

Sales outside North America ("International" segment) grew by 14% to US$1,055 million (Q1 2010: US$922 million). Sales in dialysis services increased by 23% to US$503 million. Dialysis product sales increased by 8% to US$552 million, mainly driven by higher sales of peritoneal dialysis products, dialyzers, bloodlines and products for acute care treatments.

EBIT increased by 5% to US$445 million (Q1 2010: US$425 million) resulting in an EBIT margin of 14.7% (Q1 2010: 14.8%).

In North America, the EBIT margin increased to 15.8% (Q1 2010: 15.7%). The favorable development of pharmaceutical costs, was largely offset by the effects of the implementation of the new Medicare end-stage renal disease prospective payment system in the U.S.

In the International segment, the EBIT margin was 16.2% (Q1 2010: 16.4%).

Net income¹ increased by 5% to US$221 million (Q1 2010: US$211 million).

On March 8, 2011, Fresenius Medical Care announced the acquisition of all assets of Hema Metrics LLC related to its Crit-Line^® system. Based on its strong dialysis product business and sales organization, Fresenius Medical Care intends to establish this technology as the standard of care for fluid and anemia management in the North American market.

Based on the strong financial results in the first quarter of 2011 and the elimination of the "transition adjustment" imposed on dialysis facilities (as part of the new Medicare end-stage renal disease prospective payment system) in the U.S., the company raises its outlook for the full year 2011. Fresenius Medical Care now projects sales of more than US$13 billion. Previously, the company expected sales between US$12.8 billion and US$13.0 billion. Net income¹ is now expected between US$1,070 million and US$1,090 million. Previously, Fresenius Medical Care expected net income between US$1,035 million and US$1,055 million.


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 first quarter – Outstanding organic sales growth of 16%
• Outlook 2011 raised: Organic sales growth >5% on top of challenging 2010 base - EBIT margin between 19% and 20%

Fresenius Kabi had a very successful start into 2011. Strong sales and earnings growth was mainly driven by continued high demand in North America. Product launches as well as continued supply constraints in the injectable drug market which had expanded in March 2010 had a positive effect. Moreover, Fresenius Kabi achieved excellent organic sales growth of 10% outside of North America.

Sales increased by 20% to €960 million (Q1 2010: €800 million). Organic growth was excellent and increased by 16%. Acquisitions contributed 1%. Currency translation had a positive effect of 3%, mainly attributable to the strength of the currencies in China, Brazil and Australia against the Euro.

In Europe, sales grew by 10% to €449 million (Q1 2010: €409 million), driven by strong organic growth of 8%. In North America, sales increased by 42% to €254 million (Q1 2010: €179 million). Organic sales growth was an exceptional 39%. In Asia-Pacific, Fresenius Kabi achieved sales growth of 22% to €156 million (Q1 2010: €128 million), driven by organic sales growth of 16%. Sales in Latin America and Africa increased by 20% to €101 million (Q1 2010: €84 million) with organic sales growth contributing 13%.

EBIT grew by 36% to €197 million (Q1 2010: €145 million). The EBIT margin improved significantly to 20.5% (Q1 2010: 18.1%), driven by the strong development in North America.

Net interest improved to -€68 million (Q1 2010: -€74 million).

Net income¹ increased by 89% to €87 million (Q1 2010: €46 million).

Fresenius Kabi's operating cash flow was €67 million (Q1 2010: €74 million). The cash flow margin was 7.0% (Q1 2010: 9.3%). Cash flow before acquisitions and dividends was €22 million (Q1 2010: €42 million).

Fresenius Kabi raises its outlook for 2011 and forecasts organic sales growth of >5%. Previously, organic sales growth of approximately 5% was expected. Furthermore, Fresenius Kabi expects an EBIT margin of 19% to 20% with net income¹ surpassing 2010 earnings. Previously, an EBIT margin of >19% was projected.


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

¹ Net income attributable to Fresenius Kabi AG


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 approximately 600,000 inpatients, and operates a total of more than 18,500 beds.

• Strong organic sales growth of 5% continued
• Excellent earnings growth – EBIT margin improved to 9.0%
• Outlook 2011 – EBIT guidance narrowed to upper half of range

Sales increased by 7% to €648 million (Q1 2010: €608 million). Organic sales growth was 5%, mainly driven by an increase in hospital admissions. Acquisitions contributed 2% to overall sales growth, due to the consolidation of St. Marienberg hospital in Helmstedt/Lower Saxony with 267 beds.

EBIT grew by 12% to €58 million (Q1 2010: €52 million). The EBIT margin improved to 9.0% (Q1 2010: 8.6%).

The established clinics increased sales by 5% to €639 million. EBIT improved by 12% to €58 million. The EBIT margin was at 9.1%.

Net income¹ increased by 18% to €33 million (Q1 2010: €28 million).

In the first quarter of 2011, Fresenius Helios announced the acquisition of the municipal hospital in Rottweil, southwestern Germany. The 264-bed acute care clinic has approximately 600 employees and generated sales of approximately €31 million in 2009. The acquisition has been already approved by the German anti-trust authorities. Helios expects to close the transaction in the third quarter of 2011.

Fresenius Helios fully confirms its outlook for 2011. The company expects organic sales growth of 3% to 5%. EBIT is projected to increase to €250 million to €260 million; the company expects to achieve the upper half of this range.

¹ Net income attributable to HELIOS Kliniken GmbH


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

• €842 million order backlog – new all-time high
• Sales and earnings fully in line with our expectations
• Outlook 2011 fully confirmed

Fresenius Vamed's sales reached €140 million (Q1 2010: €156 million). Sales in the project business were €84 million (Q1 2010: €102 million). Prior year sales included a substantial medical supply contract with the Ukraine. Sales in the service business increased by 4% to €56 million (Q1 2010: €54 million).

Fresenius Vamed achieved an EBIT of €5 million (Q1 2010: €7 million). The EBIT margin was 3.6%. Net income¹ was €4 million (Q1 2010: €6 million).

As of March 31, 2011, order backlog increased by 5% to a new all-time high of €842 million (Dec. 31, 2010: €801 million), driven by strong order intake of €127 million (Q1 2010: €260 million). Order intake includes a €67 million project to build a private health care facility in the Ukraine and a €29 million medical equipment contract for the National Cancer Institute in Malaysia.

Fresenius Vamed fully confirms its 2011 outlook and expects to achieve both sales and EBIT growth between 5% and 10%.

¹ Net income attributable to VAMED AG


 

Analyst Meeting and Audio Webcast
As part of the publication of the results for the first quarter of 2011, a conference call will be held on May 4, 2011 at 2.00 p.m. CET (8.00 a.m. EST). All investors are cordially invited to follow the conference call in a live broadcast via the Internet at www.fresenius.com, Investor Relations, Presentations. Following the call, a replay of the conference call will be available on our website.
 

• Sales €8.0 billion,
  +4% at actual rates, +6% in constant currency
• EBIT €1,207 million,
  +8% at actual rates, +11% in constant currency
• Net income¹ €363 million,
  +20% at actual rates, +22% in constant currency

 

• Group earnings¹ outlook raised to 15% – 18% 
• Fresenius Medical Care fully confirms guidance
• Fresenius Kabi posts excellent growth, raises sales and earnings guidance
• Fresenius Helios raises earnings guidance
• Fresenius Vamed revises guidance due to project delays

 

Ulf Mark Schneider, CEO of Fresenius, commented: „Fresenius achieved excellent financial results in the first half. We are very pleased with Fresenius Kabi's growth in North America and in emerging markets, in particular in China. Based on the results of the first half of 2011, we raise our 2011 earnings guidance. Fresenius Medical Care's significant M&A activity this year shows that our Group's double-barreled growth strategy combining organic growth and acquisitions remains fully intact."

 

Group outlook 2011
Fresenius now expects 2011 net income¹ to increase by 15% to 18% in constant currency. Previously, the Company expected net income¹ growth of 12% to 16% in constant currency. Fresenius confirms its sales guidance. Sales are expected to increase by 7% to 8% in constant currency.

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

In 2011, the net debt/EBITDA ratio is expected to stay in the range of 2.5 to 3.0. Also for calendar year 2012, Fresenius Medical Care's announced and entirely debt-financed acquisitions are not expected to cause Group leverage to exceed that target range.

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.

 

Strong organic sales growth
Group sales increased by 4% (6% in constant currency) to €8,004 million (H1 2010: €7,686 million). Organic sales growth was 5%. Acquisitions contributed a further 1%. Currency translation had a negative effect of 2%. This is mainly attributable to the average U.S. dollar rate decreasing 5% against the euro in the first half of 2011.

Sales growth in the business segments was as follows:

Organic sales growth was 3% in both, North America and Europe. Prior year sales in Europe were positively influenced by Fresenius Vamed's large medical supply contract to the Ukraine. Organic sales growth reached 15% in Latin America, 19% in Asia-Pacific and 23% in Africa.

 

Continued strong earnings growth
Group EBITDA grew by 7% (10% in constant currency) to €1,526 million (H1 2010: €1,428 million). Group EBIT increased by 8% (11% in constant currency) to €1,207 million (H1 2010: €1,121 million). The EBIT margin improved by 50 basis points to 15.1% (H1 2010: 14.6%).

Group net interest was -€276 million (H1 2010: -€281 million).

The other financial result was -€151 million and includes valuation changes of the fair redemption value of the Mandatory Exchangeable Bonds (MEB) of -€156 million and the Contingent Value Rights (CVR) of €5 million. Both are non-cash items. As the CVR were delisted in March 2011, the effect relates solely to the first quarter of 2011. The MEB will come to maturity on August 14, 2011.

The Group tax rate¹ was 30.9% (H1 2010: 31.9%).

Noncontrolling interest increased to €280 million (H1 2010: €270 million), of which 93% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income² increased by 20% (22% in constant currency) to €363 million (H1 2010: €302 million). Earnings per ordinary share increased by 20% to €2.23.

Group net income³ (including special items) reached €257 million or €1.58 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 €286 million on property, plant and equipment (H1 2010: €320 million). Acquisition spending was €857 million (H1 2010: €151 million), mainly due to the acquisitions of Euromedic's dialysis service business as well as a minority stake in Renal Advantage, Inc., both by Fresenius Medical Care.

 

Cash flow development
Operating cash flow was €650 million (H1 2010: €805 million). Strong earnings growth was more than offset by increased DSOs (days sales outstanding), primarily related to the introduction of the new Medicare end-stage renal disease prospective payment system in the U.S. dialysis service business, and raised inventory levels. The cash flow margin was 8.1% (H1 2010: 10.5%). Net capital expenditure was €292 million (H1 2010: €320 million). Free cash flow before acquisitions and dividends was €358 million (H1 2010: €485 million). Free cash flow after acquisitions and dividends was -€791 million (H1 2010¹: €58 million).

 

Solid balance sheet structure
The Group's total assets increased slightly to €23,909 million (Dec. 31, 2010: €23,577 million). In constant currency, the increase was 6%. Current assets increased by 5% (9% in constant currency) to €6,752 million (Dec. 31, 2010: €6,435 million). Non-current assets were €17,157 million (Dec. 31, 20010: €17,142 million). In constant currency, the increase was 5%.

Total shareholders' equity decreased by 2% to €8,704 million (Dec. 31, 2010: €8,844 million). In constant currency, however, shareholders' equity increased by 4%. The equity ratio was 36.4% (Dec. 31, 2010: 37.5%).

Group debt grew by 3% (8% in constant currency) to €9,012 million (Dec. 31, 2010: €8,784 million) primarily resulting from acquisition financing. Net debt increased by 5% (10% in constant currency) to €8,404 million (Dec. 31, 2010: €8,015 million).

The net debt/EBITDA ratio increased slightly to 2.66 as of June 30, 2011 (Dec. 31, 2010: 2.62).

¹ Does not include a €100 million cash out for a short-term bank deposit by Fresenius Medical Care in Q2 2010.

 

Number of employees increased
As of June 30, 2011, Fresenius Group increased the number of its employees by 4% to 142,933 (Dec. 31, 2010: 137,552).

 

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 sales increased by 11% to €14.6 million in the first half of 2011 (H1 2010: €13.1 million). ATG sales increased by 9% to €12.8 million and Removab sales by 29% to €1.8 million.

In the second quarter of 2011, Fresenius Biotech received approval from the Austrian Federal Office for Safety in Health Care for the use of ATG-Fresenius S in stem cell transplantations. Austria is the fifth country to approve the immunosuppressive agent in this indication, following Germany, Portugal, Argentina and Thailand.

In June 2011, the Italian Medicines Agency, AIFA, has added Fresenius Biotech's trifunctional antibody Removab to its list of reimbursable medications.

In July 2011, the European Medicines Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP) recommended a variation of the existing approval of Removab. The infusion time of currently 6 hours can now be reduced to 3 hours, which facilitates the use of Removab in an out-patient setting. Moreover, the CHMP recommendation allows marketing of follow-up results for the pivotal study in patients with malignant ascites showing that the 1-year survival rate in Removab-treated patients was more than four times higher than in the control group (11.4% Removab group vs. 2.6% control group).

In the first half of 2011, Fresenius Biotech's EBIT was -€13 million (H1 2010: -€15 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 June 30, 2011, Fresenius Medical Care was treating 225,909 patients in 2,838 dialysis clinics.

 

• Acquisitions with a total annual sales volume of more than US$1 billion
• 2011 outlook fully confirmed

Fresenius Medical Care achieved sales growth of 7% to US$6,230 million (H1 2010: US$5,828 million). Organic sales growth was 3%, acquisitions contributed a further 2%.

Sales in dialysis services increased by 6% to US$4,647 million (H1 2010: US$4,395 million). Dialysis product sales grew by 10% to US$1,583 million (H1 2010: US$1,433 million).

In North America sales were US$4,005 million (H1 2010: US$3,986 million). Dialysis services sales increased by 1% to US$3,610 million. Average sales per treatment for U.S. clinics was US$348 in the second quarter of 2011 compared to US$356 for the corresponding quarter in 2010. This is a result of the targeted implementation of the new Medicare end-stage renal disease prospective payment system. Dialysis product sales decreased to US$395 million (H1 2010: US$408 million) as increased sales of dialysis products could not entirely offset lower pricing of renal drugs.

Sales outside North America ("International" segment) grew by 20% to US$2,218 million (H1 2010: US$1,842 million). Sales in dialysis services increased by 27% to US$1,037 million. Dialysis product sales increased by 15% to US$1,181 million.

EBIT increased by 7% to US$955 million (H1 2010: US$892 million). The EBIT margin of 15.3% remained at previous year's level.

In North America, the EBIT margin increased to 16.5% (H1 2010: 16.1%). This increase was mainly favorably influenced by the development of pharmaceutical costs and higher income from the joint venture with Vifor Pharma.

In the International segment, the EBIT margin was 16.9% (H1 2010: 17.6%), primarily driven by unfavorable currency effects.

Net income¹ increased by 5% to US$481 million (H1 2010: US$459 million).

Acquisition of Liberty Dialysis Holdings, Inc.: Fresenius Medical Care has executed a merger agreement with Liberty Dialysis Holdings, Inc., the holding company for Liberty Dialysis and Renal Advantage. The investment including assumed debt will be approximately US$1.7 billion. In addition, Fresenius Medical Care previously invested approximately US$300 million in Renal Advantage. The transaction is expected to close in early 2012. Liberty Dialysis Holdings, Inc., has annual sales of approximately US$1 billion and operates approximately 260 dialysis clinics. Fresenius Medical Care anticipates that facilities may need to be divested to secure regulatory clearance of the transaction.

Acquisition of American Access Care Holdings, LLC: Fresenius Medical Care has executed an agreement to acquire the U.S. based company American Access Care Holdings, LLC (AAC) for US$385 million. AAC operates 28 freestanding out-patient interventional radiology centers primarily dedicated to serving the vascular access needs of dialysis patients. The transaction is expected to close in the fourth quarter of 2011. On completion, the acquired operations would add approximately US$175 million in annual sales.

Both acquisitions will be financed from cash flow and debt and are expected to be accretive to earnings in the first year after closing of the transactions. Both transactions remain subject to clearance under the Hart–Scott–Rodino Antitrust Improvements Act.

Fresenius Medical Care fully confirms the outlook for 2011. The company projects sales of more than US$13 billion. Net income1 is expected between US$1,070 million and US$1,090 million.

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.

• Strong organic sales growth of 13%, EBIT margin increase to 20.9%
• 2011 outlook raised – Organic sales growth ~8% on challenging 2010 base - EBIT margin ~20%

Fresenius Kabi achieved excellent financial results. Growth in North America was driven by new product launches as well as continued supply constraints in the injectable drug market. Ongoing high demand from emerging markets contributed strongly to Fresenius Kabi's excellent organic sales growth.

Sales increased both organically and at actual rates by 13% to €1,971 million (H1 2010: €1,745 million). Acquisitions contributed 1%. Currency translation had a negative effect of 1%. U.S. dollar weakness was largely offset by the strength of the currencies in Switzerland, Brazil and Australia against the euro.

In Europe, sales grew by 9% to €909 million (H1 2010: €836 million), driven by organic sales growth of 7%. In North America, sales increased by 17% to €519 million (H1 2010: €445 million) with excellent organic sales growth of 22%. In Asia-Pacific, all-organic growth of 19% drove sales to €332 million (H1 2010: €279 million). Sales in Latin America and Africa increased by 14% to €211 million (H1 2010: €185 million) with organic sales growth contributing 12%.

EBIT grew by 18% to €411 million (H1 2010: €347 million). The EBIT margin improved to 20.9% (H1 2010: 19.9%), mainly attributable to the strong development in North America.

Net interest was -€143 million (H1 2010: -€141 million).

Net income¹ increased by 33% to €181 million (H1 2010: €136 million).

Fresenius Kabi's operating cash flow increased by 8% to €205 million (H1 2010: €189 million). The cash flow margin was 10.4% (H1 2010: 10.8%). Given increased capital expenditures, cash flow before acquisitions and dividends of €124 million remained unchanged from previous year's level.

In the second quarter of 2011, Fresenius Kabi announced the expansion of its Grand Island, New York, manufacturing facility. A total of US$38 million will be invested over the next two years, adding six additional production lines for I.V. drugs in order to secure the future growth of the business.

Fresenius Kabi further raises its outlook for 2011. The company now forecasts organic sales growth of ~8%. Previously, Fresenius Kabi targeted organic sales growth of >5%. The EBIT margin is now expected to be ~20% with net income clearly surpassing 2010 earnings. The previous guidance was 19% to 20%.

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

¹ Net income attributable to Fresenius Kabi AG.

 

Fresenius Helios
Fresenius Helios is one of the largest private hospital operators in Germany. Helios owns 64 hospitals, including five maximum care hospitals in Berlin-Buch, Erfurt, Krefeld, Schwerin and Wuppertal. Helios treats more than 2 million patients per year, thereof approximately 650,000 inpatients, and operates approximately 19,000 beds.

• Solid organic sales growth at 4%, 50 basis points EBIT margin increase to 9.5%
• 2011 earnings outlook raised – EBIT of ~€260 million expected

Sales increased by 6% to €1,293 million (H1 2010: €1,223 million), mainly driven by solid organic sales growth of 4%. Acquisitions contributed 2% to overall sales growth due to the consolidation of the St. Marienberg hospital in Helmstedt/Lower Saxony.

EBIT grew by 12% to €123 million (H1 2010: €110 million). The EBIT margin improved to 9.5% (H1 2010: 9.0%).

The established clinics increased sales by 4% to €1,276 million. EBIT improved by 13% to €124 million. The EBIT margin was 9.7%.

Net income¹ increased by 16% to €72 million (H1 2010: €62 million).

The acquisition of the municipal hospital in Rottweil, southwestern Germany, was successfully completed in the second quarter of 2011. The hospital was consolidated as from July 1, 2011.

Fresenius Helios raises its EBIT outlook to ~€260 million. Previously, the company expected to reach the upper half of a range from €250 million to €260 million. Fresenius Helios fully confirms its sales outlook and projects organic sales growth of 3% to 5%.

¹ Net income attributable to HELIOS Kliniken GmbH.

 

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

• Sales and EBIT in line with expectations for the first half of 2011 – order backlog close to all-time high
• 2011 outlook revised due to expected project delays in H2 – Sales and EBIT growth of 0% to 5% expected

Fresenius Vamed's sales reached €313 million (H1 2010: €338 million). Sales in the project business were €202 million (H1 2010: €230 million). Prior year sales included a substantial medical supply contract with the Ukraine. Sales in the service business increased by 3% to €111 million (H1 2010: €108 million).

EBIT was €12 million (H1 2010: €15 million). The EBIT margin was 3.8% (H1 2010: 4.4%). Net income1 was €9 million (H1 2010: €12 million).

Order backlog of €762 million as of June 30, 2011, remained close to its all-time high (Dec. 31, 2010: €801 million). Order intake of €164 million (H1 2010: €328 million) was impacted by the postponement of orders to the second half of 2011.

Fresenius Vamed revises its full-year guidance as a consequence of project delays in Middle East / North Africa due to the unrest in the region. The company now projects sales and EBIT growth of 0% to 5%. Previously, the company expected sales and EBIT growth between 5% and 10%. Fresenius Vamed expects a significant increase in order intake in the second half of 2011 and continued sales and earnings growth following the temporary project delays.

¹ Net income attributable to VAMED AG.

 

Analyst Meeting and Audio Webcast
As part of the publication of the results for the first half of 2011, a conference call will be held on August 2, 2011 at 2.00 p.m. CET (8.00 a.m. EST). All investors are cordially invited to follow the conference call in a live broadcast via the Internet at www.fresenius.com, Investor Relations, Presentations. Following the call, a replay of the conference call will be available on our website.

Q1-3 2011:

• Sales €12.1 billion, +2% at actual rates, +5% in constant currency
• EBIT €1,862 million, +5% at actual rates, +9% in constant currency
• Net income¹ €565 million, +14% at actual rates, +17% in constant currency
  
   
• Fresenius improves 2011 earnings¹ outlook of 15% to 18% constant currency growth to upper half of range
• Group earnings at single-quarter all-time high – €202 million net income¹, record 16% EBIT margin
• Fresenius Medical Care with further margin improvement and strong earnings growth
• Fresenius Kabi with 3% organic sales growth over outstanding Q3 2010
• Fresenius Helios continues expansion in the German hospital market - raises earnings guidance
• Fresenius Vamed with excellent order intake of €171 million in Q3
  
   

Ulf Mark Schneider, CEO of Fresenius, commented: "Fresenius had a very strong third quarter. With a Group EBIT margin of 16% and net income of €202 million we reached new all-time highs. We improve our 2011 earnings outlook and expect to achieve the upper half of our 15% to 18% target range. HELIOS' acquisitions of the private hospital chain Damp and the maximum care hospital in Duisburg significantly strengthen our presence in the German hospital market. This marks a further step in our growth strategy, which combines organic growth and acquisitions."

 

Group outlook 2011

Fresenius improves its 2011 earnings guidance and expects to achieve constant currency net income¹ growth in the upper half of the 15% to 18% range. Based on the sales growth of the first three quarters, Fresenius now expects to increase sales by c. 6% in constant currency.

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

In 2011, the net debt/EBITDA ratio is expected to stay in the range of 2.5 to 3.0. For calendar year 2012, Fresenius Medical Care's and Fresenius Helios' recently announced entirely debt and cash flow-financed acquisitions are not expected to cause Group leverage to exceed that target range.   

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.

 

Sales growth of 5% in constant currency

Group sales increased by 2% (5% in constant currency) to €12,089 million (Q1-3 2010: €11,821 million). Organic sales growth was 4%. Acquisitions contributed a further 1%. Currency translation had a negative effect of 3%. This is mainly attributable to the average USD/EUR rate in Q1-3 2011 decreasing 8% compared to Q1-3 2010.

Sales growth in the business segments was as follows:

Organic sales growth was 1% in North America, due to the implementation of the new Medicare end-stage renal disease prospective payment system as well as lower pricing of renal drugs. In Europe organic sales growth was 3%. Prior-year sales in Europe were positively influenced by Fresenius Vamed's large medical supply contract to the Ukraine. Organic sales growth reached 12% in Africa and 15% in both Latin America and Asia-Pacific.

 

Continued strong earnings growth

Group EBITDA grew by 4% (8% in constant currency) to €2,344 million (Q1-3 2010: €2,244 million). Group EBIT increased by 5% (9% in constant currency) to €1,862 million (Q1-3 2010: €1,776 million). The EBIT margin improved by 40 basis points to 15.4% (Q1-3 2010: 15.0%). In Q3 2011, the Group achieved a strong EBIT margin of 16.0%.

Group net interest was -€401 million (Q1-3 2010: -€424 million).

The other financial result was -€100 million and includes valuation changes of the fair redemption value of the Mandatory Exchangeable Bonds (MEB) of -€105 million and the Contingent Value Rights (CVR) of €5 million. Both are non-cash items. As the CVR were delisted in March 2011, the effect relates solely to Q1 2011. As the MEB came to maturity on August 14, 2011, no further effect will occur after Q3 2011. Upon maturity, the bonds were mandatorily exchanged into ordinary shares of Fresenius Medical Care AG & Co. KGaA. Fresenius' shareholding now amounts to 30.3% of Fresenius Medical Care's ordinary share capital.

The Group tax rate¹ was 30.9% (Q1-3 2010: 32.2%).

Noncontrolling interest increased to €445 million (Q1-3 2010: €421 million), of which 93% was attributable to the noncontrolling interest in Fresenius Medical Care. 

Group net income² increased by 14% (17% in constant currency) to €565 million (Q1-3 2010: €495 million). In Q3 2011, Group net income² reached a new all-time high of €202 million (Q3 2010: €193 million). In Q1-3 2011, earnings per share increased by 13% to €3.47.

A reconciliation to adjusted earnings according to U.S. GAAP can be found on page 15 of this Investor News.

Group net income³ (including special items) reached €485 million or €2.98 per 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 €480 million on property, plant and equipment (Q1-3 2010: €494 million). Acquisition spending was €908 million (Q1-3 2010: €223 million), mainly due to the acquisitions of Euromedic's dialysis service business as well as a minority stake in Renal Advantage, Inc., both by Fresenius Medical Care.

 

Cash flow development

Operating cash flow was €1,156 million (Q1-3 2010: €1,346 million). The strong earnings growth was offset by increased working capital requirements due to business expansion. The cash flow margin was 9.6% (Q1-3 2010: 11.4%). Net capital expenditure was €475 million (Q1-3 2010: €491 million). Free cash flow before acquisitions and dividends was €681 million (Q1-3 2010: €855 million). Free cash flow after acquisitions and dividends was -€538 million (Q1-3 2010¹: €348 million).

¹ Does not include a €100 million cash out for a short-term bank deposit by Fresenius Medical Care in 2010.

 

Solid balance sheet structure

The Group's total assets increased by 5% to €24,707 million (Dec. 31, 2010: €23,577 million). In constant currency, the increase was 6%. Current assets increased by 6% (8% in constant currency) to €6,836 million (Dec. 31, 2010: €6,435 million). Non-current assets increased by 4% (5% in constant currency) to €17,871 million (Dec. 31, 2010: €17,142 million).

Due to the maturity of the MEB, total shareholders' equity increased by 14% (16% in constant currency) to €10,049 million (Dec. 31, 2010: €8,844 million). The equity ratio improved to 40.7% (Dec. 31, 2010: 37.5%).

Group debt grew by 5% (also 5% in constant currency) to €9,181 million (Dec. 31, 2010: €8,784 million) primarily resulting from acquisition financing. Net debt increased by 6% (7% in constant currency) to €8,527 million (Dec. 31, 2010: €8,015 million).

The net debt/EBITDA ratio increased slightly to 2.70 as of September 30, 2011 (Dec. 31, 2010: 2.62). 

 

Number of employees increased

As of September 30, 2011, Fresenius Group increased the number of its employees by 6% to 145,118 (Dec. 31, 2010: 137,552).

 

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.

Sales increased by 13% to €22.4 million (Q1-3 2010: €19.9 million). ATG sales increased by 11% to €19.7 million and Removab sales by 29% to €2.7 million.

In 2011, Removab was launched in the Benelux countries, Italy, Scandinavia and the UK. The trifunctional antibody has already been marketed in Austria and France since 2010 and was launched in Germany in 2009.

Fresenius Biotech's EBIT was -€19 million (Q1-3 2010: -€21 million). For 2011, Fresenius Biotech expects an EBIT of about -€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, 2011, Fresenius Medical Care was treating 228,239 patients in 2,874 dialysis clinics.

• Strong earnings growth and further margin improvement
• 2011 outlook confirmed

Fresenius Medical Care achieved sales growth of 7% to US$9,473 million (Q1-3 2010: US$8,886 million). Organic sales growth was 2%, acquisitions contributed a further 2%.

Sales in dialysis services increased by 5% to US$7,072 million (Q1-3 2010: US$6,716 million). Dialysis product sales grew by 11% to US$2,401 million (Q1-3 2010: US$2,170 million).

In North America sales were US$6,055 million (Q1-3 2010: US$6,058 million). Dialysis services sales were US$5,456 million (Q1-3 2010: US$5,441 million). Average sales per treatment for U.S. clinics was US$345 in Q3 2011 compared to US$359 in Q3 2010. This is a result of the implementation of the Medicare end-stage renal disease prospective payment system. Dialysis product sales decreased to US$599 million (Q1-3 2010: US$617 million) as increased sales of hemodialysis and peritoneal dialysis products could not entirely offset lower pricing of renal drugs.

Sales outside North America ("International" segment) grew by 20% to US$3,405 million (Q1-3 2010: US$2,828 million). Sales in dialysis services increased by 27% to US$1,616 million. Dialysis product sales increased by 15% to US$1,789 million.

EBIT increased by 7% to US$1,488 million (Q1-3 2010: US$1,385 million). The EBIT margin improved by 10 basis points to 15.7% (Q1-3 2010: 15.6%).

In North America the EBIT margin increased to 17.1% (Q1-3 2010: 16.7%). This increase was mainly favorably influenced by the development of pharmaceutical costs.

In the International segment the EBIT margin remained at the previous year's level of 17.0%.

Net income¹ increased by 8% to US$761 million (Q1-3 2010: US$707 million).

Fresenius Medical Care confirms the outlook for 2011. The company projects sales of more than US$13 billion. Net income¹ is expected between US$1,070 million and US$1,090 million.

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.

• Organic sales growth of 9%, strong EBIT margin of 20.8%
• 3% organic sales growth over outstanding Q3 2010
• 2011 outlook improved – Organic sales growth between 8% and 8.5%, EBIT margin ≥20%

Fresenius Kabi reported excellent financial results. In Q3 2011, Fresenius Kabi achieved 3% organic sales growth over previous year's outstanding quarter. Q3 2010 results were driven by significant supply constraints in the injectable drug market in North America.

In Q1-3 2011, sales increased by 8% to €2,950 million (Q1-3 2010: €2,723 million). Organic sales growth was 9%, acquisitions contributed 1%. Currency translation had a negative effect of 2%. This is mainly attributable to the U.S. dollar weakness against the euro.

In Europe sales grew by 8% to €1,360 million (Q1-3 2010: €1,264 million), driven by organic sales growth of 6%. In North America sales were impacted by currency translation and increased by 3% to €755 million (Q1-3 2010: €730 million). Organic sales growth was 10%. In Asia-Pacific sales increased by 17% to €511 million (Q1-3 2010: €436 million), with excellent organic sales growth of 18%. Sales in Latin America and Africa increased by 11% to €324 million (Q1-3 2010: €293 million), with organic sales growth contributing 11%.  

EBIT grew by 10% to €613 million (Q1-3 2010: €557 million). The EBIT margin improved to 20.8% (Q1-3 2010: 20.5%). EBIT growth was mainly attributable to the strong development in North America and the emerging markets.

Net interest remained at the previous year's level of -€212 million.

Net income¹ increased by 19% to €271 million (Q1-3 2010: €228 million).

Fresenius Kabi's operating cash flow was €350 million (Q1-3 2010: €378 million), resulting in a cash flow margin of 11.9% (Q1-3 2010: 13.9%). Given increased capital expenditures, cash flow before acquisitions and dividends was €234 million (Q1-3 2010: €272 million).

In September 2011, Fresenius Kabi expanded its production capacity in Asia and opened a new production facility in Vietnam. With the new plant Fresenius Kabi almost doubles its local manufacturing capacity for infusion solutions and liquid medications. Most of these products are intended for the Vietnamese market. Total investment amounted to approximately €20 million.

Fresenius Kabi improves its outlook for 2011. The company now forecasts organic sales growth between 8% and 8.5%. Previously, Fresenius Kabi projected organic sales growth of ~8%. The EBIT margin is now expected to be ≥20%. The previous guidance was ~20%.

Fresenius Kabi plans to host a Capital Market Day on June 12, 2012 in Bad Homburg providing an update on the strategy and growth prospects of the company.

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

¹ Net income attributable to Fresenius Kabi AG

 

Fresenius Helios

Fresenius Helios is one of the largest private hospital operators in Germany. HELIOS owns 64 hospitals, including five maximum care hospitals in Berlin-Buch, Erfurt, Krefeld, Schwerin and Wuppertal. HELIOS treats more than 2 million patients per year, thereof approximately 650,000 inpatients, and operates about 19,000 beds.

• Organic sales growth of 4%, EBIT margin increase to 10% 
• Expansion in the German hospital market – acquisition of Damp Group and Katholisches Klinikum Duisburg hospital
• 2011 EBIT outlook raised to €260 million to €270 million

Sales increased by 6% to €1,950 million (Q1-3 2010: €1,840 million), mainly driven by solid organic sales growth of 4%. Acquisitions contributed 2% to overall sales growth.

EBIT grew by 13% to €195 million (Q1-3 2010: €172 million). The EBIT margin improved by 70 basis points to 10.0% (Q1-3 2010: 9.3%).

Net income¹ increased by 19% to €117 million (Q1-3 2010: €98 million).

The established clinics increased sales by 4% to €1,916 million. EBIT improved by 16% to €199 million. The EBIT margin was 10.4%. The acquired clinics (consolidation < 1 year) achieved sales of €34 million and an EBIT of -€4 million. Restructuring of these hospitals is fully on track.

On October 12, HELIOS announced that it agreed to acquire 94.7% of the share capital in Damp Group. The acquisition of Damp is an excellent geographic fit with the HELIOS hospital network in the north and northeast of Germany.

Damp operates seven acute care hospitals and four post-acute care hospitals with a total of 4,112 beds (thereof 2,649 in acute care). In addition, Damp operates eight outpatient medical care centers, two nursing care facilities and a wellness resort. In 2010, Damp achieved sales of €487 million and operating profit (EBIT) of €21 million.

The acquisition is still subject to the approval of local and antitrust authorities. Due to the geographic proximity of the HELIOS hospital Schwerin, HELIOS has to divest the Damp hospital Wismar (505 beds, sales of approximately €60 million) to secure regulatory clearance of the transaction. HELIOS anticipates closing the transaction in the first half of 2012.

On October 31, HELIOS announced that it agreed to acquire 51% of the share capital in Katholisches Klinikum Duisburg hospital (KKD), North-Rhine Westphalia. KKD provides an excellent geographic and medical fit to the HELIOS network, as HELIOS already operates ten acute care hospitals in North-Rhine Westphalia including maximum care hospitals in Wuppertal and Krefeld.

KKD operates a maximum care hospital with four locations in Duisburg and a total of 1,034 beds as well as a rehabilitation clinic with 220 beds. KKD also operates two nursing care facilities. In 2010, KKD's hospitals achieved sales of approximately €134 million. HELIOS will consolidate the acute care hospitals into two locations and build two new hospitals. The total investments will be approximately €176 million, over five years. The acquisition is still subject to the approval of antitrust authorities. Closing of the transaction is anticipated in the first quarter of 2012.

The recent acquisitions are significant achievements in Fresenius Helios' growth strategy. As a result, a new mid-term sales guidance for Fresenius Helios will be provided in spring 2012. Currently, the company targets sales of €3.5 billion by 2015.

Fresenius Helios raises its earnings outlook and now projects EBIT of €260 million to €270 million. Previously, the company expected to reach an EBIT of ~€260 million. Fresenius Helios fully confirms its sales outlook and projects organic sales growth
of 3% to 5%.

¹ Net income attributable to HELIOS Kliniken GmbH

 

Fresenius Vamed

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

• Sales and EBIT in line with expectations
• Excellent order intake of €171 million in Q3
• 2011 outlook confirmed

Fresenius Vamed's sales reached €480 million (Q1-3 2010: €517 million). Sales in the project business were €311 million (Q1-3 2010: €351 million). Prior-year sales included a substantial medical supply contract with the Ukraine. In addition, current sales were impacted by the unrest in the Middle East / North Africa region. Sales in the service business increased by 2% to €169 million (Q1-3 2010: €166 million).

EBIT was €22 million (Q1-3 2010: €24 million). The EBIT margin of 4.6% was at previous year's level. Net income¹ was €17 million (Q1-3 2010: €18 million).

Order backlog was €775 million as of September 30, 2011 (Dec. 31, 2010: €801 million). In Q3 2011, Fresenius Vamed achieved an excellent order intake of €171 million. New orders include turnkey contracts for the construction of a general hospital in Sochi, Russia (total order volume €98 million) as well as for the reconstruction of a general hospital in Hesse, Germany (total order volume €42 million). The order intake in Q1-3 2011 was €335 million (Q1-3 2010: €418 million).

Fresenius Vamed confirms the 2011 outlook. The company projects sales and EBIT growth of 0% to 5%.

¹ Net income attributable to VAMED AG

 

Analyst Meeting and Audio Webcast

As part of the publication of the results for Q1-3 2011, a conference call will be held on November 2, 2011 at 2.00 p.m. CET (9.00 a.m. EDT). All investors are cordially invited to follow the conference call in a live broadcast via the Internet at www.fresenius.com, Investor Relations, Presentations. Following the call, a replay of the conference call will be available on our website.