After a strong third quarter, Fresenius expects to achieve excellent fourth quarter earnings growth in 2011. In particular, Fresenius Kabi and Fresenius Helios have continued to perform strongly.

Therefore, Fresenius improves its 2011 earnings outlook slightly and now expects to achieve constant currency net income¹ growth of approximately 18%. Fresenius previously improved its earnings outlook of 15% to 18% constant currency growth to the upper half of this range on November 2, 2011.

Sales growth in constant currency is expected to just reach the targeted c. 6% as current sales at Fresenius Medical Care and Fresenius Vamed remain slightly below expectations. Fresenius Kabi and Fresenius Helios continued to see excellent sales growth and are fully on track to achieve their guidance.

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

• Sales €14.2 billion,
  +15% at actual rates, +13% in constant currency
• Adjusted EBIT €2.1 billion, +19% at actual rates,
  +17% in constant currency
• Adjusted net income¹ €514 million,
  +14% at actual rates, +14% in constant currency

 

• Excellent sales and earnings growth in all business segments
• All financial targets met or exceeded
• EBIT exceeds the €2 billion mark for the first time
• Strong cash flow supports rapid de-leveraging
• 17th consecutive dividend increase proposed 

Ulf Mark Schneider, CEO of Fresenius SE: "Fresenius took full advantage of its business opportunities in the past year. Despite a challenging macroeconomic environment, we have met or even exceeded our earnings guidance for 2009. Our comprehensive and well-diversified portfolio of products and services as well as our global presence proved to be valuable assets. Based on these outstanding results, we will propose the 17th consecutive increase in dividends to our shareholders. We will continue to pursue our long-term strategy which is based on sustainable, profitable growth."

Dividend increase proposed
Based on the excellent financial results the Management Board will propose to the Supervisory Board a dividend increase of 7% to €0.75 per ordinary share (2008: €0.70) and €0.76 per preference share (2008: €0.71). The total dividend distribution is expected to be €122 million.

Positive outlook for 2010
For 2010, Fresenius projects further improvements in its financial results: Sales growth in constant currency is projected to be in a 7 to 9% range. Adjusted net income¹ is expected to increase by 8 to 10% 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 improve further and reach a level below 3.0.

Sales growth of 13% in constant currency
Group sales increased by 13% in constant currency and by 15% at actual rates to €14,164 million (2008: €12,336 million). Organic sales growth was 8%. Acquisitions contributed a further 5%. Currency translation had a positive impact of 2%.

Sales growth in the business segments was as follows:

In Europe sales grew by 11% in constant currency with organic sales growth contributing 7%. In North America sales grew by 16% in constant currency, mainly due to the consolidation of APP Pharmaceuticals from September 2008. Organic growth was 8%. Strong organic growth rates were achieved in the emerging markets, reaching 9% in Asia-Pacific and 12% in Latin America.

¹ Net income attributable to Fresenius SE; 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.


Group net income growth of 14% in constant currency
Group EBITDA increased by 17% in constant currency and by 19% at actual rates to €2,616 million (2008 adjusted: €2,203 million). Group operating income (EBIT) grew by 17% in constant currency and by 19% at actual rates to €2,054 million (2008 adjusted: €1,727 million). Group EBIT exceeded the €2 billion mark for the first time. The Group's EBIT margin increased to 14.5% (2008 adjusted: 14.0%).

Group net interest was -€580 million (2008: -€431 million). Lower average interest rates on liabilities of Fresenius Medical Care were more than offset by incremental debt related mainly to the acquisition of APP Pharmaceuticals.

The other financial result was -€31 million and includes valuation changes of the fair redemption value of the Mandatory Exchangeable Bonds (MEB) of -€37 million and the Contingent Value Rights (CVR) of €6 million. Both are non-cash items.

The adjusted Group tax¹ rate was 31.4% (2008 adjusted: 33.4%). This decrease was largely driven by the revaluation of a tax claim at Fresenius Medical Care in Q2 2009.

Non-controlling interest increased to €497 million (2008: €413 million), of which 93% was attributable to the minority interest in Fresenius Medical Care.

Adjusted Group net income² grew both in constant currency and at actual rates by 14% to €514 million (2008 adjusted: €450 million). Adjusted earnings per ordinary share increased to €3.18 and adjusted earnings per preference share increased to €3.19 (2008 adjusted: ordinary share €2.85, preference share €2.86). This represents an increase of 12% for both share classes. 

¹ 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. 
² Net income attributable to Fresenius SE; 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.


The Group's US GAAP financial results as of December 31, 2009 and as of December 31, 2008 include 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. Those special items are recognized in the financial result of the "Corporate/Other" segment. Adjusted earnings represent the Group's business operations in the reporting period. In addition, the Group's US GAAP financial statements as of December 31, 2008 include several special items related to the acquisition of APP Pharmaceuticals. Please see page 14 of this Investor News for the reconciliation to earnings according to US GAAP.

Net income¹ (including special items) was €494 million or €3.06 per ordinary share and €3.07 per preference share.

Continued investments in growth
The Fresenius Group spent €671 million on property, plant and equipment (2008: €764 million). This was below the initially projected range of €700 to 750 million due to the cautious investment policy pursued by the business segments. At 4.7% of sales, capital expenditures returned to our target range of approx. 5%. Acquisition spending was €260 million (2008: €3,853 million, primarily due to the acquisition of APP Pharmaceuticals).

Excellent cash flow development
Operating cash flow increased by 45% to €1,553 million (2008: €1,074 million), driven by strong earnings growth and tight working capital management. The cash flow margin improved to 11.0% (2008: 8.7%). Net capital expenditure was €662 million (2008: €736 million). Cash flow before acquisitions and dividends increased 2.6-fold to €891 million (2008: €338 million). Free cash flow after acquisitions and dividends was €389 million (2008: -€2,864 million).

Solid balance sheet structure
The Fresenius Group's total assets grew by 2% to €20,882 million (December 31, 2008: €20,544 million). In constant currency, the increase was 3%. Current assets increased by 6% to €5,363 million (December 31, 2008: €5,078 million). Non-current assets were virtually unchanged from previous year's level at €15,519 million (December 31, 2008: €15,466 million).

Total shareholders' equity increased by 10% to €7,652 million (December 31, 2008: €6,943 million). The equity ratio (including non-controlling interest) improved to 36.6% (December 31, 2008: 33.8%).

Group debt decreased by 6% to €8,299 million (December 31, 2008: €8,787 million).

As of December 31, 2009, the net debt/EBITDA ratio was 3.0 and improved significantly from 3.6 at December 31, 2008 (pro forma the acquisition of APP Pharmaceuticals and excluding special items). With that, the 2010 target range of 2.5 to 3.0 has been reached one year ahead of time.

Given the progress in de-leveraging and improved conditions in the debt capital markets since the acquisition of APP, Fresenius has launched an amendment request to its 2008 syndicated credit agreement with the aim to reduce its average cost of debt and to gain enhanced flexibility for further growth. 

¹ Net income attributable to Fresenius SE.

Number of employees increased
As of December 31, 2009, Fresenius increased the number of its employees by 7% to 130,510 (December 31, 2008: 122,217). The increase was mainly driven by Fresenius Medical Care and by Fresenius Helios' acquisition of five acute care clinics.

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.

On April 22, 2009, the European Commission granted Fresenius Biotech the approval for Removab (catumaxomab) for the treatment of malignant ascites. Removab was launched in Germany in May 2009. Market launch is in preparation in other European countries. As of December 31, 2009, Fresenius Biotech achieved Removab sales of more than €1.6 million.

Fresenius Biotech's EBIT was -€44 million (2008: -€47 million). For 2010, Fresenius Biotech expects an EBIT between -€35 and -40 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, 2009, Fresenius Medical Care was treating 195,651 patients in 2,553 dialysis clinics.

• Excellent organic sales growth of 8%
• 2010 outlook: Sales of more than US$12 billon and net income¹ of US$950 to 980 million expected

Fresenius Medical Care achieved sales growth of 6% to US$11,247 million (2008: US$10,612 million). Excellent organic growth accounted for 8%, net acquisitions contributed a further 1%. Currency translation effects had a negative impact of 3%.

Sales in dialysis care increased by 8% to US$8,350 million (2008: US$7,737 million). Dialysis products sales grew by 1% at actual rates and 6% in constant currency to US$2,897 million (2008: US$2,875 million).

In North America sales increased by 9% to US$7,612 million (2008: US$7,005 million). Dialysis services revenue increased by 9% to US$6,794 million. Average revenue per treatment for the U.S. clinics increased to US$357 in the fourth quarter of 2009 compared to US$335 for the same quarter in 2008 and US$348 for the third quarter of 2009. This development was principally attributable to reimbursement increases and increased utilization of pharmaceuticals. Sales in dialysis products improved by 8% to US$818 million.

Sales outside North America ("International" segment) grew by 1% at actual rates and 9% in constant currency to US$3,635 million (2008: US$3,607 million). Sales in dialysis care increased by 4% (14% in constant currency) to US$1,556 million. Dialysis products sales decreased by 2% (increase by 6% in constant currency) to US$2,079 million.

EBIT rose by 5% to US$1,756 million (2008: US$1,672 million) resulting in an EBIT margin of 15.6% (2008: 15.8%). This was mainly due to higher personnel expenses, cost increases for pharmaceuticals, and the launch of a generic product for the phosphate binder PhosLo^® by a competitor in the United States. These effects were partially offset by an increase in revenue per treatment, the strong development in dialysis products, and successful cost control measures.

Net income¹ increased by 9% to US$891 million (2008: US$818 million).

For 2010, Fresenius Medical Care expects to achieve revenue of more than US$12 billion. Net income¹ is expected to be between US$950 and 980 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 out-patient environments. The company also is a leading provider of medical devices and transfusion technology products.

• Strong organic sales growth of 8%
• EBIT margin increased to 19.7%
• 2010 outlook: Organic sales growth between 7 and 9% and EBIT margin between 18 and 19% expected

Fresenius Kabi increased sales by 24% at actual rates and 26% in constant currency to €3,086 million (2008: €2,495 million). Organic sales growth was 8%. Net acquisitions contributed a further 18%. Currency translation had a net negative impact of 2%. The depreciation of currencies in Great Britain, Poland and Mexico against the euro was only partially offset by the strengthening of the Chinese yuan.

In Europe, sales reached €1,566 million (2008: €1,499 million), driven by 5% organic growth. In North America, sales increased to €728 million (2008: €336 million) primarily due to the full-year consolidation of APP Pharmaceuticals. In the Asia-Pacific region, Fresenius Kabi achieved organic sales growth of 15% to €482 million (2008: €381 million). Sales in Latin America and Africa increased to €310 million (2008: €279 million), and organic growth was 13%.

EBIT grew by 37% to €607 million (2008: €443 million). EBIT includes a €26 million non-cash charge related to the amortization of APP Pharmaceuticals' intangible assets. The EBIT margin increased to 19.7% (2008: 17.8%). Net interest grew to -€302 million (2008: -€145 million), driven by the APP acquisition financing. Net income1 was at previous year's level of €200 million.

Sales at APP Pharmaceuticals increased by 14% to US$889 million. APP Pharmaceuticals achieved significant sales growth of 18% in its product portfolio excluding Heparin in the fourth quarter, taking full year 2009 sales growth to 8%. Adjusted EBITDA¹ reached US$347 million. EBIT was US$273 million. EBIT includes a US$37 million non-cash charge related to the amortization of acquisition-related intangible assets. The EBIT margin was 30.7%. APP Pharmaceuticals received seven drug approvals from the U.S. Food and Drug Administration (FDA) in fiscal year 2009.

Operating cash flow of Fresenius Kabi nearly doubled to €397 million (2008: €205 million). This was primarily achieved through tight working capital management. Given only moderate growth in capital expenditures, cash flow before acquisitions and dividends more than tripled to €272 million (2008: €83 million).

Fresenius Kabi targets organic sales growth between 7 and 9% for 2010. Furthermore, Fresenius Kabi forecasts an EBIT margin in a range between 18 and 19%. Whilst still at an excellent level, the slightly reduced margin guidance reflects delayed IV drug market launches, lower Heparin product sales and the expectation of further increased price competition in the US IV generics market. For the mid-term, Fresenius Kabi expects organic sales growth of 7 to 10 % p.a. 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.


Fresenius Helios
Fresenius Helios is one of the largest private hospital operators in Germany. The HELIOS Kliniken Group owns 61 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 in-patients, and operates a total of more than 18,500 beds.

• Excellent sales and earnings growth
• 2010 outlook: Organic sales growth of 3 to 5% and EBIT in a range between €220 and 230 million expected

Fresenius Helios increased sales by 14% to €2,416 million (2008: €2,123 million). Organic growth was at a strong 7%, to a large degree driven by an increase in hospital admissions. Net acquisitions contributed 7% to overall sales growth.

EBIT grew by 17% to €205 million (2008: €175 million) due to the excellent business operations of the established clinics. The EBIT margin reached 8.5% (2008: 8.2%). Net income¹ improved by 34% to €107 million (2008: €80 million).

At HELIOS' established clinics, sales rose by 7% to €2,253 million. EBIT increased by 22% to €213 million. The EBIT margin improved to 9.5% (2008: 8.2%). The newly acquired clinics (consolidation <1 year) achieved sales of €163 million and an EBIT of €-8 million, in line with our expectations.

For 2010, Fresenius Helios expects to achieve organic sales growth of 3 to 5%. EBIT is projected to increase in a range between €220 and 230 million. 

¹ Net income attributable to HELIOS Kliniken GmbH.


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

• Record sales, EBIT and net income
• Order intake and order backlog at new all-time highs
• Outlook 2010: Sales and EBIT growth between 5% and 10% expected

Fresenius Vamed achieved excellent sales and earnings growth and new all-time highs for order intake and order backlog.

Sales increased by 18% to €618 million (2008: €524 million). Organic sales growth was 15%. The clinics in the Czech Republic acquired from Fresenius Helios contributed 3%. Sales in the project business rose by 25% to €420 million (2008: €336 million). Sales in the service business increased by 5%2 to €198 million (2008: €188 million).

EBIT grew by 20% to €36 million (2008: €30 million). The EBIT margin improved slightly to 5.8% (2008: 5.7%). Net income¹ rose by 4% to €27 million (2008: €26 million).

The excellent development of order intake and order backlog continued: Order intake in the project business increased by 27% to €539 million (2008: €425 million). In the fourth quarter of 2009, order intake was €226 million, including turn-key contracts for three clinics in Austria. Furthermore, VAMED received an order to deliver medical supplies to the Ukraine with an order volume of approximately €100 million. Order backlog increased by 19% to €679 million (December 31, 2008: €571 million).

In 2010, Fresenius Vamed expects to achieve both sales and EBIT growth in a range between 5 and 10%. 

¹ Net income attributable to VAMED AG. 
² Adjusted for project orders carried-out for the Vienna General Hospital - university clinics (AKH), which were included in the service business in 2008, sales growth was 22%.


Analyst Meeting and Video Webcast
As part of the publication of the results for fiscal year 2009, an analyst meeting will be held at the Fresenius headquarters in Bad Homburg on February 24, 2010 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 €3.6 billion,
  +8% at actual rates, +10% in constant currency
• EBIT €500 million,
  +5% at actual rates, +7% in constant currency
• Net income¹ €119 million,
  8% at actual rates, +8% in constant currency

 

• Continued strong growth in all business segments
• Charges arising from the devaluation of the Venezuelan bolivar and the amendment of the syndicated credit agreement fully included in reported results
• Cash flow margin increases to 12%
• All business segments on track - 2010 outlook fully confirmed

Ulf Mark Schneider, CEO of Fresenius SE: "All our business segments made significant progress and achieved excellent results in the first quarter of 2010. We will continue to focus on revenue growth and our operating margin. Our first-quarter results give us full confidence in confirming our outlook for 2010. We expect Group net income to be at the upper end of our guidance."

Outlook for 2010 confirmed
Based on the Group's strong first-quarter financial results Fresenius confirms its positive outlook for 2010: Sales growth in constant currency is projected to be in a 7 to 9% range. Net income is expected to increase by 8 to 10% 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 improve further and reach a level below 3.0. 

¹ Net income attributable to Fresenius SE; 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 10% in constant currency
Group sales increased by 10% in constant currency and by 8% at actual rates to €3,643 million (Q1 2009: €3,373 million). Organic sales growth was 9%. Acquisitions contributed a further 1%. Currency translation had a negative impact of 2%.

Sales growth in the business segments was as follows:

In Europe, sales grew by 10% in constant currency with organic sales growth contributing 9%. In North America, sales grew by 11% in constant currency. Organic growth was 9%. The organic growth rates in the emerging markets reached 4% in Asia-Pacific and 13% in Latin America. The low organic growth in Asia-Pacific is due to the volatility of the project business of Fresenius Vamed.

 

Continued strong earnings growth
Group EBITDA increased by 8% in constant currency and by 6% at actual rates to €649 million (Q1 2009: €613 million). Group EBIT grew by 7% in constant currency and by 5% at actual rates to €500 million (Q1 2009: €477 million). The EBIT margin was 13.7% (Q1 2009: 14.1%). At Fresenius Medical Care, the EBIT margin was impacted by the devaluation of the Venezuelan bolivar and related charges. As expected, Fresenius Kabi's EBIT margin was lower than in the first quarter of 2009 mainly due to delayed IV drug product launches and continued price competition in the U.S. market. The Group EBIT margin is expected to improve over the course of the year.

Group net interest improved slightly to -€143 million (Q1 2009: -€145 million). Net interest includes one-time charges in a low single-digit million-euro range related to the reduction and renegotiation of the 2008 syndicated credit agreement.

The other financial result was -€51 million and includes valuation changes of the fair redemption value of the Mandatory Exchangeable Bonds (MEB) of -€69 million and the Contingent Value Rights (CVR) of €18 million. Both are non-cash items.

The adjusted Group tax¹ rate was 33.3% (Q1 2009 adjusted: 32.2%). The increase is attributable, among others, to the charges in Venezuela which are not tax deductible. The adjusted Group tax rate is expected to decrease over the course of the year.

Noncontrolling interest increased to €119 million (Q1 2009: €115 million), of which 93% was attributable to the minority interest in Fresenius Medical Care.

Group net income² grew both in constant currency and at actual rates by 8% to €119 million (Q1 20092: €110 million). Earnings per ordinary share² and earnings per preference share² increased both to €0.74 (Q1 20092: ordinary share €0.68, preference share €0.68). This represents an increase of 8% for both share classes.

Net income³ (including special items) was €88 million, or €0.54 per ordinary share and €0.54 per preference 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; 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.

 

Continued investments in growth
The Fresenius Group spent €124 million in Q1 2010 on property, plant and equipment (Q1 2009: €128 million). Acquisition spending was €81 million (Q1 2009: €112 million).

 

Excellent cash flow development
Operating cash flow increased significantly to €438 million (Q1 2009: €182 million), driven by strong earnings growth and tight working capital management. The cash flow margin improved to 12.0% (Q1 2009: 5.4%). Net capital expenditure was only €130 million (Q1 2009: €147 million). Cash flow before acquisitions and dividends significantly improved to €308 million (Q1 2009: €35 million). Free cash flow after acquisitions and dividends was €218 million (Q1 2009: -€62 million).

 

Solid balance sheet structure
The Fresenius Group's total assets grew by 6% to €22,048 million (December 31, 2009: €20,882 million). In constant currency, the increase was 1%. Current assets increased by 4% in constant currency and by 8% at actual rates to €5,795 million (December 31, 2009: €5,363 million). Non-current assets were at €16,253 million, an increase of 5% (December 31, 2009: €15,519 million).

Total shareholders' equity increased by 7% to €8,182 million (December 31, 2009: €7,652 million). The equity ratio (including noncontrolling interest) improved to 37.1% (December 31, 2009: 36.6%).

Group debt grew by 2% to €8,500 million (December 31, 2009: €8,299 million). In constant currency, Group debt decreased by 2%. In Q1 2010, Fresenius considerably improved the terms of its 2008 syndicated credit agreement. Pursuant to the amended agreement, the interest rate of the approximately US$1.2 billion term loan B (new term loan C) will be reduced by one-third. The new applicable interest rate will consist of the relevant money market rate (LIBOR and EURIBOR) subject to a 1.50% floor (formerly 3.25%), plus a 3.00% margin (formerly 3.50%). One-time charges related to the amendment slightly impacted Fresenius' results for the first quarter of 2010. Fresenius expects a positive contribution from the amendment for the full fiscal year.

The net debt/EBITDA ratio remained unchanged at 3.0 as of March 31, 2010 (December 31, 2009: 3.0). In constant currency, the net debt/EBITDA continued to improve.

 

Number of employees increased
As of March 31, 2010, Fresenius employed 132,246 people (December 31, 2009: 130,510). This is an increase of 1%.

 

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 approximately €0.8 million with the trifunctional antibody Removab (catumaxomab) in the first quarter of 2010. Market launches in other European countries are in preparation.

Fresenius Biotech's EBIT was -€8 million (Q1 2009: -€10 million). For 2010, Fresenius Biotech confirms its guidance of an EBIT between -€35 and -40 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, 2010, Fresenius Medical Care was treating 198,774 patients in 2,580 dialysis clinics.

• High organic sales growth of 8%
• 2010 outlook fully confirmed

Fresenius Medical Care achieved sales growth of 13% to US$2,882 million (Q1 2009: US$2,560 million). Organic growth accounted for 8%, acquisitions contributed 2% and currency translation contributed a further 3%.

Sales in dialysis care increased by 13% to US$2,171 million (Q1 2009: US$1,923 million). Dialysis product sales grew by 12% at actual rates and 5% in constant currency to US$711 million (Q1 2009: US$636 million).

In North America, sales increased by 10% to US$1,960 million (Q1 2009: US$1,774 million). Dialysis services revenue increased by 12% to US$1,760 million. Average revenue per treatment for U.S. clinics increased to US$355 in the first quarter of 2010 compared to US$338 for the corresponding quarter in 2009. This development was attributable principally to reimbursement increases and increased utilization of pharmaceuticals. Sales in dialysis products improved by 1% to US$200 million.

Sales outside North America ("International" segment) grew by 17% at actual rates and by 8% in constant currency to US$922 million (Q1 2009: US$786 million). Sales in dialysis care increased by 19% (9% in constant currency) to US$411 million. Dialysis product sales improved by 16% (7% in constant currency) to US$511 million.

EBIT increased by 7% to US$423 million (Q1 2009: US$396 million) resulting in an EBIT margin of 14.7% (Q1 2009: 15.5%). In North America, the EBIT margin increased to 15.6% (Q1 2009: 15.3%). The margin development was favorably influenced by an increase in revenue per treatment and cost-containment measures.

In the International segment, the EBIT margin was 16.4% (Q1 2009: 18.7%). The EBIT margin was impacted by the devaluation of the Venezuelan bolivar and related charges.

Net income¹ increased by 7% to US$211 million (Q1 2009: US$198 million).

For 2010, Fresenius Medical Care expects to achieve revenue of more than US$12 billion. Net income¹ is expected to be between US$950 and 980 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 also is a leading provider of medical devices and transfusion technology products.

• High organic sales growth of 9%
• 2010 outlook fully confirmed

Sales increased by 11% to €800 million (Q1 2009: €722 million). Organic sales growth was 9%. Acquisitions contributed 1%. Currency translation had a positive impact of 1%.

In Europe, sales reached €409 million (Q1 2009: €376 million), driven by 6% organic growth. In North America, sales increased to €179 million (Q1 2009: €168 million). Organic growth was 11%. In the Asia-Pacific region, Fresenius Kabi achieved organic sales growth of 14% to €128 million (Q1 2009: €111 million). Sales in Latin America and Africa increased to €84 million (Q1 2009: €67 million), and organic growth was 7%.

EBIT grew by 5% to €145 million (Q1 2009: €138 million). The EBIT margin was 18.1% (Q1 2009: 19.1%). As expected, the EBIT margin decreased mainly due to delayed IV drug product launches and continued price competition in the U.S. market. Net interest improved slightly to -€74 million (Q1 2009: -€79 million). Net income¹ grew by 21% to €46 million (Q1 2009: €38 million).

Sales at APP Pharmaceuticals increased by 12% to US$216 million (Q1 2009: US$192 million). APP Pharmaceuticals achieved significant sales growth of 14% in its product portfolio excluding heparin. Adjusted EBITDA² reached US$72 million (Q1 2009: US$81 million). EBIT was US$55 million (Q1 2009: US$61 million). The EBIT margin was 25.6%.

Operating cash flow of Fresenius Kabi increased significantly to €74 million (Q1 2009: €40 million). The cash flow margin improved to 9.3% (Q1 2009: 5.5%). Cash flow before acquisitions and dividends was strong at €42 million (Q1 2009: €3 million).

Fresenius Kabi fully confirms its outlook for 2010: The company targets organic sales growth between 7 and 9% for 2010. Furthermore, Fresenius Kabi forecasts an EBIT margin between 18 and 19%.

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. The HELIOS Kliniken Group owns 61 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.

• Continued high organic sales growth of 6%
• 2010 outlook fully confirmed

Sales increased by 5% to €608 million (Q1 2009: €577 million). Organic growth was again strong and achieved 6%. This was driven by an increase in hospital admissions. Divestitures reduced sales growth by 1%.

EBIT grew by 18% to €52 million (Q1 2009: €44 million). The EBIT margin improved to 8.6% (Q1 2009: 7.6%). Net income increased by 40% to €28 million (Q1 2009: €20 million).

Fresenius Helios fully confirms its outlook for 2010. The company expects to achieve organic sales growth of 3 to 5%. EBIT is projected to be between €220 and 230 million.

¹ Net income attributable to HELIOS Kliniken GmbH.


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

• Order intake nearly tripled - order backlog at new all-time high
• Outlook 2010 fully confirmed

Sales increased by 34 % to €156 million (Q1 2009: €116 million). This excellent increase was fully achieved by organic growth. Sales in the project business rose by 50% to €102 million (Q1 2009: €68 million). Sales in the service business increased by 13% to €54 million (Q1 2009: €48 million).

EBIT increased by 75% to €7 million (Q1 2009: €4 million). The EBIT margin improved to 4.5% (Q1 2009: 3.4%). Net income rose by 50% to €6 million (Q1 2009: €4 million).

The excellent development of order intake and order backlog continued: Order intake in the project business nearly tripled to €260 million (Q1 2009: €88 million). This includes two turnkey contracts, for a hospital in Austria with an order volume of €102 million, and for a hospital with a cancer clinic in Gabon with an order volume of €43 million. Order backlog increased to a new all-time high of €838 million (December 31, 2009: €679 million, +23%).

Fresenius Vamed fully confirms the outlook for 2010 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 2010, a conference call will be held on May 4, 2010 at 2.00 p.m. CEDT (8.00 a.m. EDT). All investors are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com see Investor Relations / Presentations. Following the call, a recording of the conference will be available on our website.

Based on preliminary results, Fresenius Group earnings for the first half of 2010 were substantially ahead of expectations. Group net income¹ increased by 23% in constant currency to €302 million (H1 2009: €240 million).

The earnings development was mainly driven by Fresenius Kabi, especially in North America, where new product launches and strong demand due to drug shortages contributed to growth.

Fresenius Kabi also expects to achieve attractive growth in the second half of 2010, albeit more in line with the initial 2010 guidance. In addition, Fresenius Kabi plans to invest in further efficiency improvements in Europe, resulting in expected one-time expenses of approximately €10 million to €20 million pre-tax in the second half of 2010.

Based on the Group's financial results in the first half and including the planned one-time expenses, Fresenius now expects net income¹ to increase by 10% to 15% in constant currency in 2010. Previously, the Company expected net income to increase by 8% to 10% in constant currency.

The detailed financial results for the first half of 2010 will be announced on August 3, 2010, as originally scheduled. 

¹ Net income attributable to Fresenius SE; 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 €7.7 billion,
  +11% at actual rates, +10% in constant currency
• EBIT €1.1 billion,
  +14% at actual rates, +12% in constant currency
• Net income¹ €302 million,
  +26% at actual rates, +23% in constant currency

 

• Continued strong growth in all business segments
• Fresenius Kabi significantly exceeds expectations, primarily in North America
• All business segments raise or fully confirm 2010 guidance
• 2010 Group earnings outlook¹ raised

Group net income¹ of €302 million, announced on July 27, 2010, on a preliminary basis, remained unchanged.

Ulf Mark Schneider, CEO of Fresenius SE: "Our continued focus on revenue growth and the Group's operating margin proved to be successful. All business segments achieved excellent financial results. Fresenius Kabi significantly exceeded our expectations, primarily due to the successful sales and earnings development of APP Pharmaceuticals in North America. We are very confident about our prospects for the second half of 2010 and raise our earnings outlook for the Group."

 

Earnings outlook for 2010 raised
Based on the Group's excellent financial results in the first half, Fresenius now expects net income¹ to increase by 10% to 15% in constant currency in 2010. Previously, the Company expected net income to increase by 8% to 10% in constant currency. Fresenius fully confirms its sales guidance of 7% to 9% in constant currency.

The improved earnings outlook already includes expected one-time expenses of €10 million to €20 million pre-tax which Fresenius Kabi plans to invest in further efficiency improvements in Europe in the second half of 2010.

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

The net debt/EBITDA ratio is expected to reach a level below 3.0.

¹ Net income attributable to Fresenius SE; 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 of 9%
Group sales increased by 11% at actual rates and by 10% in constant currency to €7,686 million (H1 2009: €6,895 million). Organic sales growth was 9%. Acquisitions contributed a further 1%. Currency translation had a positive effect of 1%.

Sales growth in the business segments was as follows:

In Europe, sales grew by 9% in constant currency with organic sales growth contributing 8%. In North America, sales grew by 11% in constant currency. Organic sales growth was 10%. Organic growth rates in the emerging markets reached 4% in Asia-Pacific and 12% in Latin America. Organic sales growth in Asia-Pacific was impacted by the volatility of Fresenius Vamed's project business.

 

 

Excellent earnings growth
Group EBITDA increased by 13% at actual rates and by 11% in constant currency to €1,425 million (H1 2009: €1,260 million). Group EBIT improved by 14% at actual rates and by 12% in constant currency to €1,118 million (H1 2009: €985 million). The EBIT margin increased to 14.5% (H1 2009: 14.3%). The excellent growth was mainly driven by Fresenius Kabi, especially in North America. In the first quarter of 2010, EBIT was impacted by the devaluation of the Venezuelan bolivar and related charges at Fresenius Medical Care.

Group net interest improved to -€281 million (H1 2009: -€294 million).

The other financial result was -€96 million and includes valuation changes of the fair redemption value of the Mandatory Exchangeable Bonds (MEB) of -€117 million and the Contingent Value Rights (CVR) of €21 million. Both are non-cash items.

The Group tax rate¹ was 32.0% (H1 20091: 30.5%). The tax rate in the first half of 2009 was influenced by a revaluation of a tax claim at Fresenius Medical Care.

Noncontrolling interest increased to €267 million (H1 2009: €240 million), of which 94% was attributable to the minority interest in Fresenius Medical Care.

Group net income² increased by 26% at actual rates and by 23% in constant currency to €302 million (H1 20092: €240 million). Earnings per ordinary share increased to €1.86 and earnings per preference share to €1.87 (H1 2009: ordinary share €1.49; preference share €1.50). This represents an increase of 26% for both share classes.

Net income³ (including special items) was €240 million, or €1.48 per ordinary share and €1.49 per preference 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; 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.

 

Continued investments in growth
The Fresenius Group spent €320 million on property, plant and equipment (H1 2009: €283 million). Acquisition spending was €151 million (H1 2009: €156 million).

 

Strong cash flow
Operating cash flow increased by 34% to €805 million (H1 2009: €600 million), mainly driven by strong earnings growth and tight working capital management. The cash flow margin improved to 10.5% (H1 2009: 8.7%). Net capital expenditure was €320 million (H1 2009: €292 million). Free cash flow before acquisitions and dividends improved by 57% to €485 million (H1 2009: €308 million). Free cash flow after acquisitions and dividends1 was €58 million (H1 2009: -€76 million).

 

Solid balance sheet structure
The Fresenius Group's total assets grew by 14% to €23,907 million (Dec. 31, 2009: €20,882 million). In constant currency, the increase was 4%. Current assets increased by 21% at actual rates and by 11% in constant currency to €6,474 million (Dec. 31, 2009: €5,363 million). Non-current assets grew by 12% at actual rates and by 1% in constant currency to €17,433 million (Dec. 31, 2009: €15,519 million). The change at actual rates is mainly attributable to the 15% strengthening of the U.S. dollar against the euro since year-end 2009.

Total shareholders' equity increased by 13% at actual rates to €8,635 million (Dec. 31, 2009: €7,652 million). In constant currency, total shareholders' equity remained close to previous year's level. The equity ratio was 36.1% (Dec. 31, 2009: 36.6%).

Group debt grew by 13% at actual rates to €9,387 million (Dec. 31, 2009: €8,299 million). In constant currency, Group debt increased by 2%.

For the net debt/EBITDA leverage calculation, net debt is translated at the currency spot rates as of June 30, whereas EBITDA is translated at the average exchange rates of the last twelve months. Due to the strengthening of the U.S. dollar against the euro, the net debt/EBITDA ratio increased to 3.16 as of June 30, 2010 (Dec. 31, 2009: 3.01). At identical exchange rates for net debt and EBITDA, the ratio further improved to 2.92.

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

 

Number of employees increased
As of June 30, 2010, Fresenius employed 133,197 people (Dec. 31, 2009: 130,510). This is an increase of 2%.

 

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 approximately €1.4 million with the trifunctional antibody Removab (catumaxomab) in the first half of 2010. Preparations for market launches in other European countries are ongoing.

Fresenius Biotech's EBIT was -€15 million (H1 2009: -€22 million). For 2010, Fresenius Biotech confirms its guidance of an EBIT between -€35 million and -€40 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, 2010, Fresenius Medical Care was treating 202,414 patients in 2,599 dialysis clinics.

• High organic sales growth of 7%
• 2010 outlook fully confirmed

Fresenius Medical Care achieved sales growth of 9% to US$5,828 million (H1 2009: US$5,323 million). Organic growth was 7%, acquisitions contributed 1% and currency translation contributed a further 1%.

Sales in dialysis care increased by 11% at actual rates and by 10% in constant currency to US$4,395 million (H1 2009: US$3,977 million). Dialysis product sales grew by 6% at actual rates and 4% in constant currency to US$1,433 million (H1 2009: US$1,346 million).

In North America, sales increased by 9% to US$3,986 million (H1 2009: US$3,650 million). Dialysis services revenue increased by 10% to US$3,578 million. Average revenue per treatment for U.S. clinics increased to US$356 in the second quarter of 2010 compared to US$344 for the same quarter in 2009 and US$355 in the first quarter of 2010. This development was principally attributable to reimbursement increases and increased utilization of pharmaceuticals. Sales in dialysis products improved by 3% to US$408 million in the first half of 2010.

Sales outside North America ("International" segment) grew by 10% at actual rates and by 6% in constant currency to US$1,842 million (H1 2009: US$1,673 million). Sales in dialysis care increased by 13% (9% in constant currency) to US$817 million. Dialysis product sales improved by 8% (4% in constant currency) to US$1,025 million.

EBIT increased by 9% to US$888 million (H1 2009: US$813 million) resulting in an EBIT margin of 15.2% (H1 2009: 15.3%).

In North America, EBIT margin increased to 16.0% (H1 2009: 15.6%). Margin development was favorably influenced by an increase in revenue per treatment as well as the effect of economies of scale from revenue growth.

In the International segment, EBIT margin was 17.6% (H1 2009: 18.0%). EBIT margin was positively influenced by the effect of economies of scale from revenue growth, favorable foreign exchange rate effects and lower bad debt expenses. It was impacted by the devaluation of the Venezuelan bolivar and related charges as well as higher depreciation expenses as a result of the expansion of production capacities.

Net income¹ increased by 10% to US$459 million (H1 2009: US$419 million).

In the second quarter of 2010, Fresenius Medical Care announced that it has signed an agreement to acquire Asia Renal Care Ltd. Asia Renal Care operates more than 100 clinics throughout Asia treating about 6,200 patients. The acquisition of Asia Renal Care will strengthen Fresenius Medical Care's leading market position in the Asia-Pacific region. Furthermore, Fresenius Medical Care acquired an operator of dialysis clinics in Russia's Krasnodar region. KNC currently treats around 1,000 patients in five dialysis clinics. By acquiring KNC, Fresenius Medical Care intends to strengthen its position in the Russian Federation's growing dialysis services market.

For the full year 2010, Fresenius Medical Care confirms its outlook. Revenue is expected to grow to more than US$12 billion. Net income¹ is expected to be between US$950 million and US$980 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 also is a leading provider of medical devices and transfusion technology products.

• Strong organic sales growth of 11% - EBIT margin at 19.9%
• Excellent development especially in North America
• 2010 EBIT margin outlook raised - Sales growth expected at upper end of range

Sales increased by 16% to €1,745 million (H1 2009: €1,500 million). Organic sales growth was 11%. Acquisitions contributed 1%. Currency translation had a positive effect of 4%. This was mainly attributable to the strengthening of the currencies in Brazil, Australia and South Africa against the euro.

In Europe, sales reached €836 million (H1 2009: €772 million), driven by 5% organic growth. In North America, sales increased to €445 million (H1 2009: €347 million). Organic sales growth was 26%. In the Asia-Pacific region, Fresenius Kabi achieved organic sales growth of 12% to €279 million (H1 2009: €235 million). Sales in Latin America and Africa increased to €185 million (H1 2009: €146 million), organic sales growth was 7%.

EBIT grew by 20% to €347 million (H1 2009: €290 million). The EBIT margin improved to 19.9% (H1 2009: 19.3%). The EBIT increase is mainly driven by the excellent development in North America where new product launches and strong demand due to drug shortages had a positive effect.

Net interest improved to -€141 million (H1 2009: -€157 million). Net income¹ increased by 60% to €136 million (H1 2009: €85 million).

Sales at APP Pharmaceuticals (APP) increased by 28% to US$521 million (H1 2009: US$408 million). Adjusted EBITDA² grew by 9% to US$186 million (H1 2009: US$171 million). EBIT increased by 17% to US$151 million (H1 2009: US$129 million). The EBIT margin was 29.0%. In addition to the reported APP earnings, Fresenius Kabi generated EBIT contributions from imported IV drugs distributed by APP in North America.

The number of APP's 2010 product approvals from the FDA (U.S. Food and Drug Administration) has increased to four in the first half of 2010, following only one approval in the first quarter of 2010. In addition, Fresenius Kabi Oncology received three approvals from the FDA in the first half of 2010.

Operating cash flow of Fresenius Kabi increased by 14% to €189 million (H1 2009: €166 million). The cash flow margin was 10.8% (H1 2009: 11.1%). Cash flow before acquisitions and dividends grew by 13% to €124 million (H1 2009: €110 million).

Fresenius Kabi raises its EBIT margin outlook for 2010 and forecasts a margin between 18.5% and 19.0%. The previous guidance was 18% to 19%. The raised guidance already includes expected one-time expenses of €10 million to €20 million pre-tax which Fresenius Kabi plans to invest in further efficiency improvements in Europe in the second half of 2010. Organic sales growth is projected to reach the upper end of the announced range of 7% to 9%.

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 61 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.

• Continued high organic sales growth of 6%
• 2010 sales and EBIT expected at upper end of range

Sales increased by 5% to €608 million (Q1 2009: €577 million). Organic growth was again strong and achieved 6%. This was driven by an increase in hospital admissions. Divestitures reduced sales growth by 1%.

Sales increased by 5% to €1,223 million (H1 2009: €1,164 million). Organic growth was again strong and achieved 6%. This was mainly driven by an increase in hospital admissions. The divestiture of one acute care hospital as of January 1, 2010 impacted sales growth by 1%.

EBIT grew by 10% to €110 million (H1 2009: €100 million). The EBIT margin improved to 9.0% (H1 2009: 8.6%). Net income¹ increased by 17% to €62 million (H1 2009: €53 million).

Fresenius Helios fully confirms its outlook for 2010. The company projects organic sales growth of 3% to 5% and EBIT to be between €220 million and €230 million. For both metrics, the company expects to achieve the upper end of the respective range.

HELIOS conducted a patient survey in 2009 and received feedback from more than 67,000 patients. The results were published in the second quarter of 2010. Overall satisfaction and the willingness to recommend the HELIOS hospitals to others were 95%. The feedback confirms the high quality of both medical staff (95% positive feedback) and nursing staff (94% positive feedback) at the HELIOS clinics. 

¹ Net income attributable to HELIOS Kliniken GmbH.


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

• Order intake more than doubled - Order backlog near all-time high
• 2010 sales and EBIT expected at upper end of range

Sales increased by 37% to €338 million (H1 2009: €247 million). Organic sales growth reached 36%. Sales in the project business rose by 53% to €230 million (H1 2009: €150 million). Sales in the service business increased by 11% to €108 million (H1 2009: €97 million).

EBIT increased to €15 million (H1 2009: €9 million). The EBIT margin improved to 4.4% (H1 2009: 3.6%). Net income¹ rose to €12 million (H1 2009: €8 million).

The excellent development of order intake and order backlog continued. Order intake in the project business more than doubled to €328 million (H1 2009: €156 million). Fresenius Vamed received a turnkey contract for the construction of the examination and therapy center (U/B West) for the University Hospital in Cologne/Germany with an order volume of €62 million. Following the completion of the project, Fresenius Vamed will be responsible for the service management of the center for a period of 25 years. The order intake also includes the supply of medical-technical equipment to the King Hamad general hospital in Bahrain with an order volume of €52 million. Order backlog increased to €768 million (Dec. 31, 2009: €679 million, +13%).

Fresenius Vamed fully confirms its outlook for 2010 and expects to grow both sales and EBIT at the upper end of the targeted range of 5% to 10%. 

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 2010, a conference call will be held on August 3, 2010 at 2.00 p.m. CEDT (8.00 a.m. EDT). All investors are cordially invited to follow the conference call in a live broadcast over 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 €11.8 billion,
  +13% at actual rates, +10% in constant currency
• EBIT €1.8 billion,
  +19% at actual rates, +15% in constant currency
• Net income¹ €495 million,
  +35% at actual rates, +30% in constant currency

• Strong sales and earnings growth in all business segments
• Group EBIT margin reaches 15%
• Net debt/EBITDA ratio improved to 2.7
• All business segments raise or fully confirm 2010 guidance
• 2010 Group outlook¹ raised

 

Ulf Mark Schneider, CEO of Fresenius SE: "All business segments continued their strong first-half sales and earnings growth and achieved excellent results in the third quarter. We are particularly pleased with the development of our 2008 acquisition APP Pharmaceuticals and expect the company to be accretive to Group EPS in 2010. The Group's EBIT margin for the first three quarters increased to 15%. We are on track to reach our mid-term 15% stretch EBIT margin target for the full year 2010."

 

Outlook for 2010 raised
Based on the Group's excellent financial results in the first three quarters, Fresenius now expects net income¹ to increase by ~20% in constant currency in 2010. Previously, the Company expected net income¹ to increase by 10% to 15% in constant currency. Sales in constant currency are now projected to increase by 8% to 9%. The previous guidance was 7% to 9% in constant currency.

The earnings outlook already includes expected one-time expenses of €18 million to €20 million pre-tax which Fresenius Kabi plans to invest in further efficiency improvements outside of North America in 2010, of which €8 million are included in the third-quarter results.

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

The net debt/EBITDA ratio is expected to reach a level below 3.0.

¹ Net income attributable to Fresenius SE; 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 sales growth
Group sales increased by 13% at actual rates and by 10% in constant currency to €11,821 million (Q1-3/2009: €10,429 million). Organic sales growth was 9%. Acquisitions contributed a further 1%. Currency translation had a positive effect of 3%.

Sales growth in the business segments was as follows.

In Europe, sales grew by 8% in constant currency, with organic sales growth contributing 7%. In North America, sales grew by 11% in constant currency. Organic sales growth was 10%. Organic growth rates in the emerging markets reached 11% in Latin America and 7% in Asia-Pacific. Organic sales growth in Asia-Pacific was impacted by the volatility of Fresenius Vamed's project business.

 

Excellent earnings growth
Group EBITDA increased by 17% at actual rates and by 13% in constant currency to €2,244 million (Q1-3/2009: €1,911 million). Group EBIT increased by 19% at actual rates and by 15% in constant currency to €1,776 million (Q1-3/2009: €1,496 million). The EBIT margin increased by 70 basis points to 15.0% (Q1-3/2009: 14.3%). All business segments contributed to the excellent earnings growth.

Group net interest improved to -€424 million (Q1-3/2009: -€439 million).

The other financial result was -€98 million and includes valuation changes of the fair redemption value of the Mandatory Exchangeable Bonds (MEB) of -€131 million and the Contingent Value Rights (CVR) of €33 million. Both are non-cash items.

The Group tax rate¹ was 32.2% (Q1-3/2009: 30.8%). The tax rate in the first three quarters of 2009 was influenced by a revaluation of a tax claim at Fresenius Medical Care.

Noncontrolling interest increased to €421 million (Q1-3/2009: €363 million), of which 94% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income² increased by 35% at actual rates and by 30% in constant currency to €495 million (Q1-3/2009: €368 million). Earnings per ordinary share increased to €3.06 and earnings per preference share to €3.07 (Q1-3/2009: ordinary share €2.28; preference share €2.29). This represents an increase of 34% for both share classes.

Net income³ (including special items) grew to €435 million, or €2.69 per ordinary share and €2.70 per preference 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; 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. 

 

Continued investments in growth
The Fresenius Group spent €494 million on property, plant and equipment (Q1-3/2009: €442 million). Acquisition spending was €223 million (Q1-3/2009: €186 million).

 

Strong cash flow
Operating cash flow increased by 20% to €1,346 million (Q1-3/2009: €1,120 million), mainly driven by strong earnings growth and tight working capital management. The cash flow margin improved to 11.4% (Q1-3/2009: 10.7%). Net capital expenditure was €491 million (Q1-3/2009: €446 million). Free cash flow before acquisitions and dividends improved by 27% to €855 million (Q1-3/2009: €674 million). Free cash flow after acquisitions and dividends¹ was €348 million (Q1-3/2009: €251 million).

 

Solid balance sheet structure
The Fresenius Group's total assets grew by 9% to €22,734 million (Dec. 31, 2009: €20,882 million). In constant currency, the increase was 5%. Current assets increased by 19% at actual rates and by 15% in constant currency to €6,392 million (Dec. 31, 2009: €5,363 million). Non-current assets grew by 5% at actual rates and by 1% in constant currency to €16,342 million (Dec. 31, 2009: €15,519 million).

Total shareholders' equity increased by 11% at actual rates to €8,521 million (Dec. 31, 2009: €7,652 million). In constant currency, total shareholders' equity grew by 6%. The equity ratio improved by 90 basis points to 37.5% (Dec. 31, 2009: 36.6%).

Group debt grew by 4% at actual rates to €8,615 million (Dec. 31, 2009: €8,299 million). In constant currency, Group debt remained close to the previous year's level. Net debt increased by 1% to €7,955 million (Dec. 31, 2009: €7,879 million). At constant currency, net debt was reduced by 3%.

Due to the strong earnings growth and cash flow development, the net debt/EBITDA ratio improved to 2.70 as of September 30, 2010 (Dec. 31, 2009: 3.01). For the net debt/EBITDA leverage calculation, net debt is translated at the currency spot rates as of September 30, whereas EBITDA is translated at the average exchange rates of the last twelve months. At identical exchange rates for net debt and EBITDA, the ratio was at 2.71. Within only two years, Fresenius has strongly improved its leverage ratio. In Q3 2008, immediately following the acquisition of APP Pharmaceuticals, the ratio was 3.7.

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

 

Number of employees increased
As of September 30, 2010, Fresenius employed 136,458 people (Dec. 31, 2009: 130,510). This is an increase of 5%.

 

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 approximately €2.1 million with the trifunctional antibody Removab (catumaxomab) in the first three quarters of 2010. As of October 8, 2010, the French Ministry of Health has included Removab in the list of drugs authorized for hospital use. The listing ensures reimbursement of this innovative antibody indicated for the treatment of malignant ascites in hospitals.

In October, Removab was awarded with this year's Galenus von Pergamon Prize in the "Specialist Care" category. The prize honors research and innovative drug development in Germany.

In the first three quarters of 2010, Fresenius Biotech's EBIT was -€21 million (Q1-3/2009: -€32 million). For 2010, Fresenius Biotech confirms its guidance of an EBIT between -€35 million and -€40 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 September 30, 2010, Fresenius Medical Care was treating 210,191 patients in 2,716 dialysis clinics. 

• Continued excellent sales and earnings growth - EBIT margin increased to 15.6%
• 2010 sales outlook fully confirmed - Earnings outlook improved

Fresenius Medical Care achieved sales growth of 8% to US$8,886 million (Q1-3/2009: US$8,212 million). Organic growth was 6% and acquisitions contributed 2%.

Sales in dialysis care increased by 10% at actual rates and by 9% in constant currency to US$6,716 million (Q1-3/2009: US$6,124 million). Dialysis product sales grew by 4% at actual rates and 3% in constant currency to US$2,170 million (Q1-3/2009: US$2,088 million).

In North America, sales increased by 8% to US$6,058 million (Q1-3/2009: US$5,600 million). Dialysis services revenue increased by 9% to US$5,441 million. Average revenue per treatment for U.S. clinics increased to US$359 in Q3 2010 compared to US$348 for the same quarter in 2009 and US$356 in Q2 2010. This development was principally attributable to reimbursement increases. Sales in dialysis products improved by 2% to US$617 million.

Sales outside North America ("International" segment) grew by 8% at actual rates and by 7% in constant currency to US$2,828 million (Q1-3/2009: US$2,612 million). Sales in dialysis care increased by 13% (12% in constant currency) to US$1,275 million. Dialysis product sales improved by 5% (4% in constant currency) to US$1,553 million.

EBIT increased by 10% to US$1,385 million (Q1-3/2009: US$1,265 million) resulting in an EBIT margin of 15.6% (Q1-3/2009: 15.4%).

In North America, EBIT margin increased to 16.7% (Q1-3/2009: 16.0%). Margin development was favorably influenced by an increase in revenue per treatment as well as the effect of economies of scale.

In the International segment, EBIT margin was 17.0% (Q1-3/2009: 17.5%). EBIT margin was impacted by the devaluation of the Venezuelan bolivar and related charges and by lower gross profit margins of acquired clinics in Europe and Asia-Pacific. It was positively influenced by the effect of economies of scale and favorable currency effects.

Net income¹ increased by 10% to US$707 million (Q1-3/2009: US$645 million).

On August 26, 2010, Fresenius Medical Care announced that it has signed an agreement to acquire Gambro's worldwide peritoneal dialysis business. Fresenius Medical Care is taking advantage of this opportunity to expand its activities in the homecare market, especially in Europe and Asia-Pacific. Completion of the acquisition is still subject to regulatory approvals by the relevant antitrust authorities as well as works council consultations in some jurisdictions.

Based on the strong operational performance in the first three quarters of 2010, Fresenius Medical Care improves its outlook for the full year 2010 and now expects net income¹ to be between US$960 million and US$980 million. Previously, net income was expected in the range of US$950 million to US$980 million. Revenue is still expected to grow to more than US$12 billion.

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 increased to 20.5%
• Excellent development in all regions - Continued strong growth in North America in Q3
• 2010 outlook raised

Sales increased by 20% to €2,723 million (Q1-3/2009: €2,274 million). Organic sales growth was strong at 13%. Acquisitions contributed 1%. Currency translation had a positive effect of 6%. This was mainly attributable to the strengthening of the currencies in North America, Brazil and Australia against the euro.

In Europe, sales reached €1,264 million (Q1-3/2009: €1,159 million), driven by 6% organic growth. In North America, sales increased to €730 million (Q1-3/ 2009: €527 million). Organic sales growth was 31%. In the Asia-Pacific region, Fresenius Kabi achieved organic sales growth of 12% to €436 million (Q1-3/2009: €361 million). Sales in Latin America and Africa increased to €293 million (Q1-3/2009: €227 million), organic sales growth was 10%.

EBIT grew by 26% to €557 million (Q1-3/2009: €441 million). The EBIT margin improved to 20.5% (Q1-3/2009: 19.4%). The EBIT increase was mainly driven by the excellent development in North America, where new product launches and strong demand due to drug shortages continued to have a positive effect. The EBIT includes €8 million for investments in efficiency improvements outside of North America.

Net interest improved to -€212 million (Q1-3/2009: -€231 million). Net income¹ increased by 68% to €228 million (Q1-3/2009: €136 million).

APP Pharmaceuticals (APP) achieved excellent sales growth of 35% to US$853 million (Q1-3/2009: US$632 million). Adjusted EBITDA² grew by 30% to US$339 million (Q1-3/2009: US$260 million). EBIT increased by 43% to US$284 million (Q1-3/2009: US$198 million). The EBIT margin improved to 33.3% (Q1-3/2009: 31.3%). In addition to the reported APP earnings, Fresenius Kabi generated EBIT contributions from imported IV drugs distributed by APP in North America.

The number of APP's 2010 product approvals from the FDA (U.S. Food and Drug Administration) has increased to six, following four approvals in the first half of 2010. In addition, Fresenius Kabi Oncology received three approvals from the FDA in 2010.

Due to the strong results of APP Pharmaceuticals, Fresenius expects the acquisition to be accretive to Group earnings per share in 2010.

Operating cash flow of Fresenius Kabi increased by 22% to €378 million (Q1-3/2009: €311 million). The cash flow margin was 13.9% (Q1-3/2009: 13.7%). Cash flow before acquisitions and dividends grew by 21% to €272 million (Q1-3/2009: €224 million).

Based on the excellent development in North America, Fresenius Kabi raises its outlook for 2010 and forecasts organic sales growth of ~12%. Previously, organic sales growth was expected at the upper end of the announced 7% to 9% range. The EBIT margin is now projected to reach ~20%. Previously, an EBIT margin between 18.5% and 19% was projected. The guidance already includes expected one-time expenses of €18 million to €20 million pre-tax which Fresenius Kabi plans to invest in further efficiency improvements outside North America in 2010.

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 61 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.

• EBIT margin increases by 70 basis points to 9.3%
• 2010 sales outlook fully confirmed - EBIT outlook increased

Sales increased by 4% to €1,840 million (Q1-3/2009: €1,768 million). Organic growth was 5%. This was mainly driven by an increase in hospital admissions. The divestiture of one acute care hospital as of January 1, 2010 impacted sales growth by 1%.

EBIT grew by 13% to €172 million (Q1-3/2009: €152 million). The EBIT margin improved to 9.3% (Q1-3/2009: 8.6%). Net income¹ increased by 20% to €98 million (Q1-3/2009: €82 million).

Fresenius Helios fully confirms its sales outlook and raises its EBIT outlook for 2010. The company expects to achieve organic sales growth at the upper end of the targeted 3% to 5% range. EBIT is now projected to reach €230 million to €235 million. Previously, the company expected to reach the upper end of the announced €220 million to €230 million range.

¹ Net income attributable to HELIOS Kliniken GmbH. 

 

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

• Excellent organic sales growth of 31% - Strong EBIT growth
• 2010 outlook increased

Sales increased by 32% to €517 million (Q1-3/2009: €393 million). Organic sales growth reached 31%. Sales in the project business rose by 44% to €351 million (Q1-3/2009: €244 million). Sales in the service business increased by 11% to €166 million (Q1-3/2009: €149 million).

EBIT increased to €24 million (Q1-3/2009: €15 million). The EBIT margin improved to 4.6% (Q1-3/2009: 3.8%). Net income¹ rose to €18 million (Q1-3/2009: €13 million).

The excellent development of order intake and order backlog continued. Order intake in the project business increased by 34% to €418 million (Q1-3/2009: €313 million). Fresenius Vamed received a turnkey contract for the construction of the general hospital in Bijeljina, Bosnia Herzegovina, with a total order volume of €36 million. Furthermore, the company will deliver medical technical equipment to China and Turkmenistan with a total order volume of €22 million. Order backlog increased by 8% to €736 million (Dec. 31, 2009: €679 million).

Fresenius Vamed increases its outlook for 2010 and expects to grow both sales and EBIT by more than 10%. Previously, the company expected to grow both sales and EBIT at the upper end of the targeted range of 5% to 10%. 

¹ Net income attributable to VAMED AG. 

 

Analyst Meeting and Audio Webcast
As part of the publication of the results for the first three quarters of 2010, a conference call will be held on November 2, 2010 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.

 

Quarterly financial report
The report on the first three quarters of 2010 and the third quarter of 2010 will be published on November 5, 2010 (U.S. GAAP) and on November 12, 2010 (IFRS) on our website www.fresenius.com, Investor Relations/Financial Reports.  

• Sales € 12.3 billion, +9 % at actual rates,
  +13 % in constant currency
• Adjusted EBIT € 1.7 billion, +7 % at actual rates,
  +11 % in constant currency
• Adjusted net income € 450 million, +10 % at actual rates,
  +13 % in constant currency

 

• Sales and earnings growth across all business segments
• Continued excellent growth in Q4/08
• Long-term acquisition financing of APP Pharmaceuticals successfully finalized
• 16th consecutive dividend increase
• Substantial sales and earnings growth expected for 2009 

 

The Group's US GAAP annual financial results as of December 31, 2008 include special items relating to the acquisition of APP Pharmaceuticals. The single-largest of those items is the full depreciation of acquired in-process R&D activities, leading to a non-cash charge of € 272 million. Under IFRS, acquired in-process R&D is capitalized and amortized over the expected life of the developed products. IFRS and US GAAP financial statements therefore differ significantly. The IFRS approach has been adopted by US GAAP as from 2009.

Adjusted earnings represent the Group's business operations in the reporting period. Including special items, EBIT is € 1,477 million and net income is € 270 million (see reconciliation on page 4). Under IFRS, EBIT is € 1,760 million and net income is € 529 million.

 

Dividend increase proposed
Based on the excellent financial results the Management Board will propose to the Supervisory Board a dividend increase of 6 % to € 0.70 per ordinary share (2007: € 0.66) and € 0.71 per preference share (2007: € 0.67). The total dividend distribution increases by 10 % to € 113.6 million.

 

Positive outlook for 2009: Substantial sales and earnings growth expected
For 2009, Fresenius projects further improvements in its financial results: Group sales are expected to grow by more than 10 % in constant currency. Organic growth is projected to be in a 6 to 8 % range. Adjusted net income (before special items) is expected to increase by aproximately 10 % in constant currency. The special items relate to the mark-to-market accounting of both the mandatory exchangeable bond (MEB) and the contingent value right (CVR) and are not cash relevant.

The Group plans to invest € 700 to 750 million in property, plant and equipment (2008: € 764 million).

 

Sales growth of 13 % in constant currency
Group sales increased by 13 % in constant currency and by 9 % at actual rates to € 12,336 million (2007: € 11,358 million). Organic sales growth was 8 %. Acquisitions contributed a further 5 %, mainly driven by the consolidation of APP as from September 1, 2008. Currency translation had a negative impact of 4 %. This is mainly attributable to the average US dollar rate depreciating 7 % against the Euro.

Sales growth in the business segments was as follows:

In Europe sales grew by 15 % in constant currency with organic sales growth of 9 %. In North America constant currency growth was 9 % with organic growth contributing 5 %. The increase in constant currency is mainly due to the first-time consolidation of APP Pharmaceuticals. Strong organic growth rates were achieved in the emerging markets, reaching 17 % in Asia-Pacific and 18 % in Latin America.

 

 

Strong earnings growth
Adjusted Group EBITDA increased by 12 % in constant currency and by 9 % at actual rates to € 2,203 million (2007: € 2,030 million). Adjusted Group operating income (EBIT) grew by 11 % in constant currency and by 7 % at actual rates to € 1,727 million (2007: € 1,609 million). The Group's adjusted EBIT margin was 14.0 % (2007: 14.2 %). Adjusted Group EBIT includes a € 8 million non-cash charge related to the amortization of acquired intangible assets. Group EBIT (including special items) was € 1,477 million.

Group net interest was € -431 million (2007: € -368 million). Lower average interest rates on liabilities of Fresenius Medical Care and currency translation effects had a positive impact. This was offset by incremental debt relating to the acquisitions of APP Pharmaceuticals and Dabur Pharma.

The adjusted Group tax rate was 34.1 % (2007: 36.1 %). The Group tax rate including special items was 39.5 %.

Minority interest increased to € 404 million (2007: € 383 million), of which 93 % was attributable to the minority interest in Fresenius Medical Care.

Adjusted Group net income grew by 13 % in constant currency and by 10 % at actual rates to € 450 million (2007: € 410 million). Adjusted earnings per ordinary share increased to € 2.85 and adjusted earnings per preference share increased to € 2.86 (2007: ordinary share € 2.64, preference share € 2.65). This represents an increase of 11 % for both share classes in constant currency.

 

Reconciliation to adjusted earnings
The table reconciles 2008 adjusted Group EBIT and adjusted Group net income to earnings according to US GAAP:

^* The special items are included in the "Corporate/Other" segment. 
^** In addition, € 73 million transaction-related financing expenses have been capitalized and will be depreciated over the life of the respective facilities.

According to US GAAP rules valid until year-end 2008, acquired in-process R&D activities have to be fully depreciated at the closing of an acquisition.

The inventory step-up reflects the excess of fair value over book value of acquired semi-finished and finished products. The amount is amortized in line with the sale of the respective products.

The foreign exchange gain arises, inter alia, from US-Dollar strength increasing the value of US$-denominated inter-company loans to Fresenius Kabi Pharmaceuticals Holdings, Inc.

Both the Mandatory Exchangeable Bonds and the Contingent Value Rights are viewed as liabilities and therefore recognized with their fair redemption value. Valuation changes will lead to gains or expenses on a quarterly basis until maturity of the instruments.

One-time financing expenses include commitment and funding fees for the by now refinanced bridge facility as well as the full depreciation of financing costs related to APP's Syndicated Facility from 2007.

Group net income (including special items) was € 270 million or € 1.71 per ordinary share and € 1.72 per preference share.

 

Continued investments in growth
Fresenius Group spent € 764 million for property, plant and equipment (2007: € 700 million). The increase reflects the substantial organic growth opportunities in the markets the Group is operating in. Acquisition spending was € 3,853 million (2007: € 618 million), primarily due to the acquisition of APP Pharmaceuticals.

 

Sustainable cash flow development
Operating cash flow of € 1,074 million was below previous year's € 1,296 million mainly due to an increase of inventories and trade accounts receivables. The cash flow margin reached 8.7 % (2007: 11.4 %). Due to the lower operating cash flow and increased net capital expenditure of € 736 million (2007: € 662 million), cash flow before acquisitions and dividends decreased to € 338 million (2007: € 634 million). Dividends of € 245 million were financed out of cash flow. Acquisitions were financed through new debt and equity.

 

Balance sheet impacted by APP acquisition
Fresenius Group's total assets increased by 31 % in constant currency and by 34 % at actual rates to € 20,544 million (December 31, 2007: € 15,324 million). The increase in total assets was mainly driven by the acquisition of APP Pharmaceuticals. Current assets increased by 18 % in constant currency as well as at actual rates to € 5,078 million (December 31, 2007: € 4,291 million). Non-current assets grew by 36 % in constant currency and by 40 % at actual rates to € 15,466 million (December 31, 2007: € 11,033 million).

Shareholders' equity including minority interest increased by 12 % in constant currency and by 15 % at actual rates to € 6,943 million (December 31, 2007: € 6,059 million). The equity ratio (including minority interest) was 33.8 % (December 31, 2007: 39.5 %).

Group debt increased to € 8,787 million (December 31, 2007: € 5,699 million), mainly due to the acquisition of APP Pharmaceuticals. As of December 31, 2008, the net debt/EBITDA ratio was 3.6 (December 31, 2007: 2.6), pro forma the acquisition of APP Pharmaceuticals and excluding special items. In constant currency, the net debt/EBITDA ratio was 3.5.

The long-term acquisition financing of APP Pharmaceuticals was successfully completed in January 2009. Fresenius issued US$ 800 million unsecured Senior Notes by its subsidiary Fresenius U.S. Finance II, Inc., consisting of a Euro tranche and a US dollar tranche. Both tranches will mature in 2015. Proceeds of the Notes offering were primarily used to replace the bridge facility of US$ 650 million drawn in September 2008 to finance the acquisition of APP Pharmaceuticals.

 

Number of employees increased
As of December 31, 2008, Fresenius increased the number of its employees by 7 % to 122,217 (December 31, 2007: 114,181). The increase was mainly driven by Fresenius Medical Care and Fresenius Kabi due to the acquisitions of APP Pharmaceuticals and Dabur Pharma.

 

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 has received a positive recommendation from EMEA's Committee for Human Medicinal Products (CHMP) for its antibody Removab® in the indication malignant ascites. Fresenius Biotech dispatched the marketing authorization application to the European Medicines Agency (EMEA) in December 2007. The approval by the European Commission is expected within a few months from the issue of the CHMP opinion. The decision will apply in all EU member states. Fresenius Biotech is prepared to launch the product shortly after approval.

Fresenius Biotech's EBIT was € -47 million in 2008 (2007: € -50 million). For 2009, Fresenius Biotech expects an EBIT of € -40 million to € -50 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, 2008, Fresenius Medical Care was treating 184,086 patients in 2,388 dialysis clinics. 

• High organic sales growth of 7 % achieved
• Net income increased by 14 %
• Outlook 2009: Sales of more than US$ 11.1 billon and net income of US$ 850 to 890 million expected

Fresenius Medical Care achieved very good sales growth of 9 % to US$ 10,612 million (2007: US$ 9,720 million). Organic growth was 7 %. Currency translation effects had a positive impact of 1 %. Sales in dialysis care increased by 7 % to US$ 7,737 million (2007: US$ 7,213 million). In dialysis products sales grew by 15 % to US$ 2,875 million (2007: US$ 2,507 million).

In North America sales increased by 5 % to US$ 7,005 million (2007: US$ 6,663 million). Dialysis services revenue increased by 4 % to US$ 6,247 million. Average revenue per treatment for the U.S. clinics increased by 3 % to US$ 335 in the fourth quarter 2008 compared to US$ 325 for the same quarter in 2007. The improvement in the revenue per treatment was primarily due to increased commercial revenue rates. Sales outside North America ("International" segment) grew by 18 % (13 % in constant currency) to US$ 3,607 million (2007: US$ 3,057 million).

EBIT rose by 6 % to US$ 1,672 million (2007: US$ 1,580 million) resulting in an EBIT margin of 15.8 % (2007: 16.3 %). The margin reduction mainly reflected higher personnel expenses, and other operating and material costs, as well as lower utilization levels and reduced reimbursement rates for EPO and increased costs for the anticoagulant Heparin in North America. The margins were also influenced by a stronger growth of the dialysis services business in International coupled with start-up costs for new clinics and unfavorable currency effects. Both segments experienced higher depreciation expense in 2008 compared to 2007 as a result of the expansion of production capacities. These effects were partially offset by increases in commercial payor revenue rates, higher volumes of products sold and other operational improvements. Net income increased by 14 % to US$ 818 million (2007: US$ 717 million).

For the full year 2009, Fresenius Medical Care expects to achieve revenue of more than US$ 11.1 billion, which is more than 8 % growth in constant currency. Net income is expected to be between US$ 850 million and US$ 890 million in 2009.

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

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

• Excellent organic sales growth of 9 %
• Outlook 2009: Sales growth of 25 - 30 % at constant currency and EBIT margin of 19.5 to 20.5 % (based on the US$/€ exchange rate from early 2009) expected 

Fresenius Kabi increased sales by 23 % to € 2,495 million (2007: € 2,030 million). Organic sales growth was excellent at 9 %. Net acquisitions contributed a further 16 % to sales. This includes the acquisitions of APP Pharmaceuticals and Dabur Pharma which were both consolidated as from September 1, 2008. Currency translation effects had a negative impact of 2 %. This was mainly due to the depreciation of currencies in Great Britain, South Africa and Korea against the euro.

Organic sales growth in Europe increased by 5 % to € 1,499 million. In the Asia-Pacific region Fresenius Kabi achieved high organic sales growth of 21 % to € 381 million. Organic sales in Latin America and Africa increased by 13 % to € 279 million. Sales in North America were € 336 million.

EBIT grew by 33 % to € 443 million (2007: € 332 million). EBIT includes a € 8 million non-cash charge related to the amortization of APP intangible assets. The EBIT margin increased to 17.8 % (2007: 16.4 %). The EBIT-margin prior to any acquisition effects was 16.6 %. Net income grew by 9 % to € 200 million (2007: € 183 million).

APP Pharmaceuticals has also achieved its 2008 guidance. Sales increased by 20% to US$ 777 million (2007: US$ 647 million). Adjusted EBITDA* was US$ 317 million (2007: US$ 253 million). The integration of APP Pharmaceuticals is proceeding according to plan.

Through the acquisition of APP Pharmaceuticals, Fresenius Kabi expects to achieve revenue synergies as from 2010 by introducing selected Kabi products to the U.S., with initial focus on parenteral nutrition, and launching selected APP I.V. drugs outside the U.S. Fresenius Kabi expects to achieve € 50 to 70 million incremental annual sales by 2013.

Fresenius Kabi expects to continue its positive financial performance. For 2009, the company targets sales growth in constant currency of 25 to 30 %. Further, Fresenius Kabi forecasts an EBIT margin in the range of 19.5 to 20.5 %. Translation effects may impact Fresenius Kabi's margin as APP provides a significant earnings contribution from the US$ area. This guidance is based on the US$/€ exchange rate from early 2009.

For the mid-term, Fresenius Kabi expects organic sales growth of 8 to 10 % p.a. EBIT margin is expected to be in the 19 to 21 % range.

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

* 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. The HELIOS Kliniken Group owns 62 hospitals, including five maximum care hospitals in Berlin-Buch, Erfurt, Krefeld, Schwerin and Wuppertal. HELIOS treats about 600,000 in-patients per year at its clinics and operates a total of more than 18,000 beds.

• Excellent sales and earnings growth continued
• Market position in German hospital market further expanded
• Outlook 2009: Sales of >€ 2.3 billion and EBIT in a € 180 - 200 million range expected

Fresenius Helios increased sales by 15 % to € 2,123 million (2007: € 1,841 million). Net acquisitions contributed 10 % to overall sales growth, mainly the HELIOS clinic in Krefeld. Organic growth was at a strong 5 %, driven by a significant increase in hospital admissions.

EBIT grew by 13 % to € 175 million (2007: € 155 million) due to the excellent business operations of the established clinics. The EBIT margin reached 8.2 % (2007: 8.4 %). Net income improved by 25 % to € 80 million (2007: € 64 million).

At HELIOS' established clinics, sales rose by 5 % to € 1,921 million. EBIT improved by 18 % to € 181 million. The EBIT margin increased to 9.4 % (2007: 8.4 %). The acquired clinics (consolidation <1 year) achieved sales of € 202 million and an EBIT of € -6 million.

The Mariahilf hospital in Hamburg was consolidated as from August 1, 2008. In February 2009, HELIOS successfully closed the acquisition of three hospitals in the Mansfeld-Südharz county of Saxony-Anhalt and two hospitals in the Northeim county of Lower Saxony announced in December 2008. Together, the five clinics generated total revenues of approximately € 136 million in 2007.

The outlook for the full year 2009 remains very positive. Fresenius Helios expects to achieve sales of more than € 2.3 billion. EBIT is projected to increase to € 180 to 200 million.

For 2010, Fresenius Helios projects sales of € 2.5 billion.

 

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

• Strong sales growth of 28 %
• Order intake at all-time high
• Outlook 2009: Sales and EBIT growth of 5 – 10 % expected

Fresenius Vamed achieved excellent sales growth of 28 % to € 524 million (2007: € 408 million). Acquisitions contributed 5 % whereas de-consolidations had a negative impact of 2 %. Organic sales growth was 25 %. Sales in the project business rose by 30 % to € 336 million (2007: € 259 million). Sales in the service business increased by 26 % to € 188 million (2007: € 149 million).

EBIT increased by 15 % to € 30 million (2007: € 26 million). The EBIT margin was 5.7 % (2007: 6.4 %). Net income increased by 13 % to € 26 million (2007: € 23 million).

Fresenius Vamed reported an excellent order intake and order backlog in 2008: Order intake in the project business increased by 8 % to an all-time high of € 425 million (2007: € 395 million). Order backlog increased by 12 % to € 571 million (December 31, 2007: € 510 million).

In 2009, Fresenius Vamed expects to achieve both sales and EBIT growth of 5 to 10 %.

For the mid-term, Fresenius Vamed expects to achieve organic sales growth of 5 – 10 % p.a. The EBIT margin is expected to be in a 5 to 6 % range.

 

Analyst Meeting and Video Webcast
As part of the publication of the results for fiscal year 2008, an analyst meeting will be held at the Fresenius headquarters in Bad Homburg on February 19, 2009 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.

 

Annual Report 2008
The report for the fiscal year 2008 will be published on March 18, 2009 on our website www.fresenius.com see Investor Relations / Financial Reports.

• Sales € 3.4 billion, +21 % at actual rates, +15 % in constant currency
• EBIT € 477 million, +27 % at actual rates, +20 % in constant currency
• Adjusted net income¹ € 110 million, +10 % at actual rates, +6 % in constant currency

• Strong sales and earnings growth
• Positive impact of currency translation
• All business segments fully on track - guidance for 2009 confirmed

 

Group outlook for 2009 confirmed
Based on the Group's strong first quarter financial results Fresenius fully confirms its positive outlook for 2009. Group sales are expected to grow by more than 10 % in constant currency. Organic growth is projected to be in a 6 to 8 % range. Adjusted net income¹ is expected to increase by approximately 10 % in constant currency.

Fresenius plans to invest € 700 to 750 million in property, plant and equipment (2008: € 764 million).

Strong sales growth across all business segments
Group sales increased by 15 % in constant currency and by 21 % at actual rates to € 3,373 million (Q1 2008: € 2,798 million). Organic sales growth was 8 %. Acquisitions contributed a further 7 %. Currency translation had a positive impact of 6 %. This is mainly attributable to the average US dollar rate improving 13 % against the euro.

Sales growth in the business segments was as follows:
 

In Europe sales grew by 12 % in constant currency with organic sales growth contributing 8 %. In North America sales grew by 18 % in constant currency. Organic growth was 7 %. The strong increase in constant currency sales is mainly due to the consolidation of APP Pharmaceuticals from September 2008. Acquisitions contributed 11 %. Strong organic growth rates were achieved in the emerging markets, reaching 16 % in Asia-Pacific and 14 % in Latin America. 
 

 

Strong earnings growth
Group EBITDA increased by 21 % in constant currency and by 27 % at actual rates to € 613 million (Q1 2008: € 483 million). Group operating income (EBIT) grew by 20 % in constant currency and by 27 % at actual rates to € 477 million (Q1 2008: € 377 million). The Group's EBIT margin was 14.1 % (Q1 2008: 13.5 %).

Group net interest was € -145 million (Q1 2008: € -84 million). Lower average interest rates on liabilities of Fresenius Medical Care were more than offset by incremental debt relating to the acquisitions of APP Pharmaceuticals and Dabur Pharma and currency translation effects.

The other financial result was € 77 million and includes valuation changes of the fair redemption value of both the Mandatory Exchangeable Bonds (MEB) and the Contingent Value Rights (CVR).

The Group tax rate was 33.4 % (Q1 2008: 35.2 %).

Noncontrolling interest increased to € 111 million (Q1 2008: € 90 million), of which 93 % was attributable to the noncontrolling interest in Fresenius Medical Care.

Adjusted net income¹ grew by 6 % in constant currency and by 10 % at actual rates to € 110 million (Q1 2008: € 100 million). Both adjusted earnings per ordinary share and adjusted earnings per preference share increased to € 0.68 (Q1 2008: ordinary share € 0.64, preference share € 0.64). This represents an increase of 3 % for both share classes in constant currency.

Reconciliation to net income according to US GAAP
The Group's US GAAP quarterly financial results as of March 31, 2009 include the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds (MEB) and the Contingent Value Rights (CVR) relating to the acquisition of APP Pharmaceuticals. Those special items are recognized in the financial result of the "Corporate/Other" segment. Adjusted earnings represent the Group's business operations in the reporting period.

The table reconciles adjusted net income to net income according to US GAAP in the first quarter of 2009:

Both the Mandatory Exchangeable Bonds and the Contingent Value Rights are viewed as liabilities and therefore recognized with their fair redemption value. Valuation changes will lead to gains or expenses on a quarterly basis until maturity of the instruments.

Net income² (including special items) was € 164 million or € 1.02 both per ordinary share and per preference share.

 

Continued investments in growth
Fresenius Group spent € 128 million for property, plant and equipment (Q1 2008: € 154 million). Acquisition spending was € 112 million (Q1 2008: € 216 million).

 

Cash flow development
Operating cash flow of € 182 million was below previous year's € 278 million mainly due to an increase of inventories. Net capital expenditure was € 147 million (Q1 2008: € 161 million). Cash flow before acquisitions and dividends was € 35 million (Q1 2008: € 117 million).

 

Balance sheet
Fresenius Group's total assets increased by 2 % in constant currency and by 5 % at actual rates to € 21,537 million (December 31, 2008: € 20,544 million). Current assets increased by 5 % in constant currency and by 7 % at actual rates to € 5,436 million (December 31, 2008: € 5,078 million). Non-current assets grew by 1 % in constant currency and by 4 % at actual rates to € 16,101 million (December 31, 2008: € 15,466 million).

Total shareholders' equity increased by 3 % in constant currency and by 6 % at actual rates to € 7,372 million (December 31, 2008: € 6,943 million). The equity ratio (including noncontrolling interest) improved to 34.2 % (December 31, 2008: 33.8 %).

Group debt increased by 2 % in constant currency and by 5 % at actual rates to € 9,199 million (December 31, 2008: € 8,787 million). The acquisition financing of APP Pharmaceuticals was successfully completed in January 2009. As of March 31, 2009, the net debt/EBITDA ratio (pro forma the acquisition of APP Pharmaceuticals and excluding special items) was 3.6 (December 31, 2008: 3.6).

 

Number of employees increased
As of March 31, 2009, Fresenius increased the number of its employees by 4 % to 126,849 (December 31, 2008: 122,217).

 

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.

On April 22, 2009, the European Commission granted Fresenius Biotech the approval for Removab (catumaxomab) for the treatment of malignant ascites with immediate effect. It is the first drug worldwide with a regulatory label for the treatment of malignant ascites and provides an important new therapy approach. The European Commission's decision will apply to all EU member states. Removab will initially be launched in Germany within the next few weeks and will subsequently be introduced in other European countries.

Fresenius Biotech's EBIT was € -10 million in the first quarter of 2009 (Q1 2008: € -9 million). For 2009, Fresenius Biotech confirms its guidance of an EBIT of € -40 million to € -50 million.

¹ Net income attributable to Fresenius SE; adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds (MEB) and the Contingent Value Rights (CVR) relating to the acquisition of APP Pharmaceuticals.

² Net income attributable to Fresenius SE.


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, 2009, Fresenius Medical Care was treating 187,476 patients in 2,448 dialysis clinics.

 

• Strong organic sales growth of 8 % achieved
• Outlook 2009 fully confirmed

Fresenius Medical Care achieved sales growth of 2 % to US$ 2,560 million (Q1 2008: US$ 2,512 million). Organic growth was 8 %. Currency translation effects had a negative impact of 6 %. Sales in dialysis services revenue increased by 4 % to US$ 1,923 million (Q1 2008: US$ 1,844 million). In dialysis products sales were US$ 637 million (Q1 2008: US$ 667 million). In constant currency, dialysis products sales increased by 8 %.

In North America sales increased by 6 % to US$ 1,774 million (Q1 2008: US$ 1,668 million). Dialysis services revenue grew by 5 % to US$ 1,577 million. Average revenue per treatment for the U.S. clinics was at US$ 338 in the first quarter of 2009 compared to US$ 326 for the first quarter of 2008 and 335 US$ for the fourth quarter of 2008. This development was based on an increase in underlying reimbursement rates and stable EPO utilization. Sales outside North America ("International" segment) were US$ 786 million (Q1 2008: US$ 844 million). In constant currency, sales growth was 11 %.

EBIT increased by 2 % to US$ 396 million (Q1 2008: US$ 389 million) resulting in an EBIT margin of 15.5 % (Q1 2008: 15.5 %). The margin development mainly reflects higher personnel expenses, increased pharmaceutical costs and the impact of one less dialysis day in the first quarter of 2009 compared to the first quarter of 2008. These effects were partially offset by increased dialysis treatment rates and sales of the newly licensed iron products. Net income^* increased by 7 % to US$ 198 million (Q1 2008: US$ 186 million).

Fresenius Medical Care fully confirms its outlook for 2009: the company expects to achieve revenue of more than US$ 11.1 billion, which is more than 8 % growth in constant currency. Net income* is expected to be between US$ 850 million and US$ 890 million in 2009.

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

^* 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 out-patient environments. The company is also a leading provider of medical devices and transfusion technology products.
 

• Strong sales and EBIT growth
• Outlook 2009 fully confirmed

Fresenius Kabi increased sales by 32 % to € 722 million (Q1 2008: € 545 million). Organic sales growth was 7 %. Net acquisitions contributed 28 % to sales. Currency translation had a net negative impact of 3 %. This was mainly due to the depreciation of currencies in Great Britain, Brazil and South Africa against the euro, whereas positive translation effects resulted from the strengthening of the Chinese yuan.

In Europe, sales reached € 376 million, driven by 5 % organic growth. In North America, sales increased from € 30 million in the first quarter of 2008 to € 168 million in the first quarter of 2009 due to the acquisition of APP Pharmaceuticals. Organic sales growth was 3 %. In the Asia-Pacific region Fresenius Kabi achieved organic sales growth of 10 % to € 111 million. Sales in Latin America and Africa increased to € 67 million, driven by 20 % organic growth.

EBIT grew by 59 % to € 138 million (Q1 2008: € 87 million). EBIT includes a € 7 million non-cash charge related to the amortization of APP intangible assets. The EBIT margin increased to 19.1 % (Q1 2008: 16.0 %). Net interest increased to € 79 million (Q1 2008: € 17 million) due to the acquisition financing. Net income* was € 38 million (Q1 2008: € 46 million).

Sales at APP Pharmaceuticals were US$ 192 million in the first quarter of 2009. Adjusted EBITDA^** was US$ 81 million and EBIT was US$ 61 million.

Fresenius Kabi fully confirms its outlook for 2009: the company targets sales growth in constant currency of 25 to 30 %. Further, Fresenius Kabi forecasts an EBIT margin in the range of 19.5 to 20.5 %. Currency translation effects may impact Fresenius Kabi's margin as APP provides a significant earnings contribution from the US$ area. This guidance is based on the US$/€ exchange rate from the beginning of 2009.

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

^* Net income attributable to Fresenius Kabi AG
^** 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. The HELIOS Kliniken Group owns 62 hospitals, including five maximum care hospitals in Berlin-Buch, Erfurt, Krefeld, Schwerin and Wuppertal. HELIOS treats about 600,000 in-patients per year at its clinics and operates a total of more than 18,000 beds. 

 

• Excellent sales and earnings growth
• Outlook 2009 fully confirmed

Fresenius Helios increased sales by 13 % to € 577 million (Q1 2008: € 509 million). Net acquisitions contributed 8 % to overall sales growth. Strong organic growth of 5 % on a like-for-like basis was again driven by a significant increase in patient numbers.

EBIT grew by 16 % to € 44 million (Q1 2008: € 38 million) due to the excellent business operations of the established clinics. The EBIT margin was 7.6 % (Q1 2008: 7.5 %). Net income^* improved by 33 % to € 20 million (Q1 2008: € 15 million).

At HELIOS' established clinics, sales rose by 5 % on a like-for-like basis to € 536 million. EBIT improved by 16 % to € 44 million. The EBIT margin increased to 8.2 % (Q1 2008: 7.5 %). The acquired clinics (consolidation <1 year) achieved sales of € 41 million and a marginally negative EBIT.

Fresenius Helios fully confirms its outlook for 2009: the company expects to achieve sales of more than € 2.3 billion. EBIT is projected to increase to € 180 to 200 million.

^* Net income attributable to HELIOS Kliniken GmbH

 

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

• Strong order backlog ensures further growth
• Outlook 2009 fully confirmed

Fresenius Vamed achieved strong sales growth of 57 % to € 116 million (Q1 2008: € 74 million). The clinics in the Czech Republic acquired from Fresenius Helios contributed 8 %. Organic sales growth was 49 %. Sales in the project business rose by 94 % to € 68 million (Q1 2008: € 35 million). Sales in the service business increased by 23 % to € 48 million (Q1 2008: € 39 million).

EBIT was € 4 million, unchanged from previous year. Significant sales growth driven by a strong project business in the first quarter of 2009 diluted the EBIT margin to 3.4 %
(Q1 2008: 5.4 %). Net income^* of € 4 million was also at previous year's level.

Fresenius Vamed reported an order intake of € 88 million (Q1 2008: € 125 million).

Order backlog increased by 4 % to € 592 million, close to its all-time high of € 595 million in the first quarter of 2008 (December 31, 2008: € 571 million).

Fresenius Vamed fully confirms the outlook for 2009 and expects to achieve both sales and EBIT growth of 5 to 10 %.

^* Net income attributable to VAMED AG


Analyst Conference Call and Audio Webcast
As part of the publication of the results for first quarter of 2009 a conference call will be held on April 30, 2009 at 2.00 p.m. CEDT (8.00 a.m. EDT). All investors are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com see Investor Relations / Presentations. Following the call, a recording will be available.

 

Quarterly financial report
The report for the first quarter 2009 will be published on May 12, 2009 (US GAAP) and on May 15, 2009 (IFRS) on our website www.fresenius.com see Investor Relations / Financial Reports.

• Sales € 6.9 billion, +21 % at actual rates, +15 % in constant currency
• EBIT € 985 million, +26 % at actual rates, +20 % in constant currency
• Adjusted net income¹ € 240 million, +13 % at actual rates, +10 % in constant currency

 

• Strongly improved Operating and Free Cash Flow
• Fresenius Medical Care and Fresenius Kabi confirm guidance for 2009, Fresenius Helios and Fresenius Vamed raise their outlook

 

Group outlook for 2009 confirmed
Based on the Group's strong H1 financial results, Fresenius fully confirms its positive outlook for 2009. Group sales are expected to grow by more than 10 % in constant currency. Organic growth is projected to be in a 6 to 8 % range. Adjusted net income1 is expected to increase by approximately 10 % in constant currency.

Fresenius plans to invest € 700 to 750 million in property, plant and equipment.

¹ Net income attributable to Fresenius SE; adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds (MEB) and the Contingent Value Rights (CVR) relating to the acquisition of APP Pharmaceuticals. These effects are not cash relevant.

Strong sales growth across all business segments
Group sales increased by 15 % in constant currency and by 21 % at actual rates to € 6,895 million (H1 2008: € 5,710 million). Organic sales growth was 8 %. Acquisitions contributed a further 7 %. Currency translation had a positive impact of 6 %. This is mainly attributable to the average US dollar rate improving 13 % against the euro.

Sales growth in the business segments was as follows:

In Europe sales grew by 11 % in constant currency with organic sales growth contributing 7 %. In North America sales grew by 21 % in constant currency, mainly due to the consolidation of APP Pharmaceuticals from September 2008. Strong organic growth rates were achieved in the emerging markets, reaching 14 % in both Asia-Pacific and Latin America.

 

Continued strong earnings growth
Group EBITDA increased by 21 % in constant currency and by 26 % at actual rates to € 1,260 million (H1 2008: € 998 million). Group operating income (EBIT) grew by 20 % in constant currency and by 26 % at actual rates to € 985 million (H1 2008: € 781 million). The Group's EBIT margin increased to 14.3 % (H1 2008: 13.7 %).

Group net interest was € -294 million (H1 2008: € -167 million). Lower average interest rates on liabilities of Fresenius Medical Care were more than offset by incremental debt relating to the acquisitions of APP Pharmaceuticals and Dabur Pharma and currency translation effects.

The other financial result was € 43 million and includes valuation changes of the fair redemption value of the Mandatory Exchangeable Bonds (MEB) of € 33 million and the Contingent Value Rights (CVR) of € 10 million. These effects are not cash relevant.

The adjusted Group tax rate¹ was 30.5 % (H1 2008: 34.2 %). This decrease was largely driven by the revaluation of a tax claim at Fresenius Medical Care.

Noncontrolling interest increased to € 240 million (H1 2008: € 192 million), of which 94 % was attributable to the noncontrolling interest in Fresenius Medical Care.

Adjusted net income² grew by 10 % in constant currency and by 13 % at actual rates to € 240 million (H1 2008: € 212 million). Adjusted earnings per ordinary share increased to € 1.49 and adjusted earnings per preference share increased to € 1.50 (H1 2008: ordinary share € 1.36, preference share € 1.37). This represents an increase of 7 % for both share classes in constant currency.

¹ Adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds (MEB) and the Contingent Value Rights (CVR) relating to the acquisition of APP Pharmaceuticals.
² Net income attributable to Fresenius SE; adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds (MEB) and the Contingent Value Rights (CVR) relating to the acquisition of APP Pharmaceuticals. These effects are not cash relevant.


Reconciliation to net income according to US GAAP
The Group's US GAAP financial results as of June 30, 2009 include the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds (MEB) and the Contingent Value Rights (CVR) relating to the acquisition of APP Pharmaceuticals. Those special items are recognized in the financial result of the "Corporate/Other" segment. Adjusted earnings represent the Group's business operations in the reporting period.

The table below reconciles adjusted net income to net income according to US GAAP in H1 and Q2 2009:

Both the Mandatory Exchangeable Bonds and the Contingent Value Rights are viewed as liabilities and therefore recognized with their fair redemption value. Valuation changes will lead to gains or expenses on a quarterly basis until maturity of the instruments.

Net income² (including special items) was € 274 million or € 1.69 per ordinary share and € 1.70 per preference share.

 

Continued investments in growth
Fresenius Group spent € 283 million for property, plant and equipment (H1 2008: € 332 million). Acquisition spending was € 156 million (H1 2008: € 292 million).

 

Operating cash flow increased by 25 %
Operating cash flow increased by 25 % to € 600 million (H1 2008: € 481 million), driven by strong earnings growth and tight working capital management. Net capital expenditure was € 292 million (H1 2008: € 332 million). Cash flow before acquisitions and dividends more than doubled to € 308 million.

¹ Net income attributable to Fresenius SE; adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds (MEB) and the Contingent Value Rights (CVR) relating to the acquisition of APP Pharmaceuticals. These effects are not cash relevant.
² Net income attributable to Fresenius SE.

Balance sheet
Fresenius Group's total assets increased by 2 % to € 20,953 million (December 31, 2008: € 20,544 million), there was no significant currency translation effect. Current assets increased by 6 % to € 5,400 million (December 31, 2008: € 5,078 million). Non-current assets grew by 1 % to € 15,553 million (December 31, 2008: € 15,466 million).

Total shareholders' equity increased by 3 % to € 7,169 million (December 31, 2008: € 6,943 million). The equity ratio (including noncontrolling interest) improved to 34.2 % (December 31, 2008: 33.8 %).
Group debt increased by 1 % to € 8,859 million (December 31, 2008: € 8,787 million).

As of June 30, 2009, the net debt/EBITDA ratio (pro forma the acquisition of APP Pharmaceuticals and excluding special items) improved to 3.4 (December 31, 2008: 3.6).

 

Number of employees increased
As of June 30, 2009, Fresenius increased the number of its employees by 4 % to 127,692 (December 31, 2008: 122,217).

 

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.

On April 22, 2009, the European Commission granted Fresenius Biotech the approval for Removab (catumaxomab) for the treatment of malignant ascites. Removab was launched in Germany in May 2009. Market launch is under way in other European countries.

Fresenius Biotech's EBIT was € -22 million in H1 2009 (H1 2008: € -20 million). For 2009, Fresenius Biotech expects its EBIT to reach € -40 million to € -45 million. The previous guidance foresaw an EBIT of € -40 million to € -50 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, 2009, Fresenius Medical Care was treating 190,081 patients in 2,471 dialysis clinics.

• Continued strong organic sales growth of 8 %
• Outlook 2009 fully confirmed

Fresenius Medical Care achieved sales growth of 3 % to US$ 5,323 million (H1 2008: US$ 5,177 million). Organic growth was 8 %. Currency translation effects had a negative impact of 6 %.

Dialysis services revenue grew by 6 % to US$ 3,977 million (H1 2008: US$ 3,769 million), an increase of 9 % in constant currency. Sales of dialysis products were US$ 1,346 million (H1 2008: US$ 1,408 million). In constant currency, dialysis products sales increased by 8 %.

In North America sales increased by 8 % to US$ 3,650 million (H1 2008: US$ 3,382 million). Dialysis services revenue grew by 7 % to US$ 3,254 million. Average revenue per treatment for the U.S. clinics was at US$ 344 in Q2 2009 compared to US$ 327 for Q2 2008 and 338 US$ for Q1 2009. This development was based on an increase in commercial payor revenue and slightly increased EPO utilization. Sales outside North America ("International" segment) were US$ 1,673 million (H1 2008: US$ 1,795 million). In constant currency, sales growth was 10 %.

EBIT was US$ 813 million, 1 % below the previous year's period partially due to currency translations effects (H1 2008: US$ 818 million), resulting in an EBIT margin of 15.3 % (H1 2008: 15.8 %). This development was primarily due to higher personnel expenses, increased pharmaceutical costs and the impact of the launch of a generic version of PhosLo^® in the U.S. market in October 2008. These effects were partially offset by a strong performance of the dialysis product business, increased commercial payor revenue as well as economies of scale from revenue growth. Net income* increased by 6 % to US$ 419 million (H1 2008: US$ 397 million).

Fresenius Medical Care fully confirms its outlook for 2009: the company expects to achieve revenue of more than US$ 11.1 billion, which is more than 8 % growth in constant currency. Net income* is expected to be between US$ 850 million and US$ 890 million in 2009.

For further information, please see Fresenius Medical Care's Investor News at www.fmc-ag.com.
 
* 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 out-patient environments. The company is also a leading provider of medical devices and transfusion technology products.

• Continued strong organic sales growth of 7 % (excl. APP and Dabur)
• EBIT margin increases to 19.3 %
• Outlook 2009 confirmed

Fresenius Kabi increased sales by 34 % to € 1,500 million (H1 2008: € 1,121 million). Organic sales growth was 7 % (excl. APP and Dabur as they were consolidated as of September 1, 2008). Net acquisitions contributed 29 % to sales. Currency translation had a net negative impact of 2 %. This was due to the depreciation of currencies e.g. in Great Britain and Brazil against the euro, whereas positive translation effects resulted from the strengthening of the Chinese yuan.

In Europe, sales reached € 772 million, driven by 5 % organic growth. In North America, sales increased to € 347 million (H1 2008: € 63 million) due to the acquisition of APP Pharmaceuticals. In the Asia-Pacific region Fresenius Kabi achieved sales of € 235 million. Organic sales growth was 11 %. Sales in Latin America and Africa increased to € 146 million, driven by 19 % organic growth.

EBIT grew by 60 % to € 290 million (H1 2008: € 181 million). EBIT includes a € 14 million non-cash charge related to the amortization of APP intangible assets. The EBIT margin increased to 19.3 % (H1 2008: 16.1 %). Net interest increased to € 157 million (H1 2008: € 34 million) due to the acquisition financing. Net income* was € 85 million (H1 2008: € 97 million).

Sales at APP Pharmaceuticals increased by 18 % to US$ 408 million in H1 2009. Adjusted EBITDA** increased by 31 % to US$ 171 million. EBIT grew by 51% to US$ 129 million. EBIT includes a US$ 18 million non-cash charge related to the amortization of intangible assets. The EBIT margin improved to 31.7 %.

Operating cash flow of Fresenius Kabi increased by 84 % to € 166 million (H1 2008: € 90 million), driven by tight working capital management. Given only moderate growth in capital expenditures, cash flow before acquisitions and dividends more than doubled to € 110 million (H1 2008: € 44 million).

Fresenius Kabi confirms its outlook for 2009: the company targets sales growth in constant currency of 25 to 30 %. Further, Fresenius Kabi forecasts an EBIT margin in the range of 19.5 to 20.5 %. Currency translation effects may impact Fresenius Kabi's margin as APP Pharmaceuticals provides a significant earnings contribution from the US$ area. This guidance is based on the US$/€ exchange rate from the beginning of 2009.

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

^* Net income attributable to Fresenius Kabi AG
^** 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. The HELIOS Kliniken Group owns 62 hospitals, including five maximum care hospitals in Berlin-Buch, Erfurt, Krefeld, Schwerin and Wuppertal. HELIOS treats about 600,000 in-patients per year at its clinics and operates a total of more than 18,000 beds.

• Continued high organic sales growth of 5 %
• 130 bps EBIT margin increase at established clinics to 9.3 %
• Sales outlook 2009 fully confirmed, EBIT guidance raised

Fresenius Helios increased sales by 12 % to € 1,164 million (H1 2008: € 1,040 million). Strong organic growth of 5 % was again driven by a significant increase in patient numbers. Net acquisitions contributed 7 % to overall sales growth.

EBIT grew by 20 % to € 100 million (H1 2008: € 83 million) due to the excellent business operations of the established clinics. The EBIT margin increased to 8.6 % (H1 2008: 8.0 %). Net income* improved by 43 % to € 53 million (H1 2008: € 37 million).

At HELIOS' established clinics, sales rose by 5 % to € 1,081 million. EBIT improved by 22 % to € 100 million. The EBIT margin increased to 9.3 % (H1 2008: 8.0 %). The acquired clinics (consolidation <1 year) achieved sales of € 83 million and a near break-even EBIT.

Fresenius Helios fully confirms its sales outlook and raises its EBIT outlook for 2009: the company expects to achieve sales of more than € 2.3 billion. EBIT is projected to reach € 190 to 200 million. The previous guidance was € 180 to 200 million.

^* Net income attributable to HELIOS Kliniken GmbH


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

• Excellent sales growth of 40 %
• Major order acquired in German project business
• Outlook 2009 raised

Fresenius Vamed achieved excellent sales growth of 40 % to € 247 million (H1 2008: € 177 million). Organic sales growth was 34 %. The clinics in the Czech Republic acquired from Fresenius Helios contributed 6 %. Sales in the project business rose by 52 % to € 150 million (H1 2008: € 99 million). Sales in the service business increased by 24 % to € 97 million (H1 2008: € 78 million).

EBIT was € 9 million, unchanged from previous year. Significant sales growth driven by a strong project business in H1 2009 diluted the EBIT margin to 3.6 % (H1 2008: 5.1 %). Net income* of € 8 million was € 1 million below previous year's level.

The excellent development of order intake and order backlog continued: Fresenius Vamed reported an order intake of € 156 million (H1 2008: € 170 million, including the ~€ 80 million order for the Tauern Spa World, Kaprun, Austria). In Q2 2009, Fresenius Vamed increased its order intake by 51 % to € 68 million (Q2 2008: € 45 million). The order backlog of € 577 million remained close to its all-time-high of € 595 million (December 31, 2008: € 571 million).

Fresenius Vamed was awarded a € 50 million order from the city of Cologne for the planning and turnkey construction of an extension to the maximum care hospital Cologne-Merheim. This is the largest project order the company has so far received in Germany. The project is scheduled to start in the third quarter 2009. The construction work will take approximately two years.

Fresenius Vamed raises its outlook for 2009 and expects to grow both sales and EBIT by approximately 10 %. Previously, both sales and EBIT were expected to grow by 5 to 10 %.

^* Net income attributable to VAMED AG


Analyst Conference Call and Audio Webcast
As part of the publication of the H1 results 2009 a conference call will be held on August 4, 2009 at 2.00 p.m. CEDT (8.00 a.m. EDT). All investors are cordially invited to follow the conference call in a live broadcast on our website www.fresenius.com at Investor Relations / Presentations. Following the call, a recording will be available.

 

Quarterly financial report
The H1 2009 report will be published on August 7, 2009 (US GAAP) and on August 14, 2009 (IFRS) on our website www.fresenius.com at Investor Relations / Financial Reports.

• Sales € 10.4 billion, +19 % at actual rates, +15 % in constant currency
• EBIT € 1.5 billion, +24 % at actual rates, +19 % in constant currency
• Adjusted net income¹ € 368 million, +14 % at actual rates,
  +12 % in constant currency

• Ongoing sales and earnings growth across all business segments
• Fresenius Medical Care improves guidance
• Fresenius Kabi confirms guidance - number of product approvals at APP Pharmaceuticals increased
• Fresenius Helios raises earnings guidance
• Fresenius Vamed confirms guidance
• Excellent cash flow results in significantly reduced leverage

 

Group outlook for 2009 fully confirmed

Based on the Group's strong financial results, Fresenius fully confirms its positive outlook for 2009. Group sales are expected to grow by more than 10 % in constant currency. Organic growth is projected to be in a 6 to 8 % range. Adjusted net income¹ is expected to increase by approximately 10 % in constant currency.

Fresenius plans to invest € 700 to 750 million in property, plant and equipment.

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

Strong sales growth across all business segments continued
Group sales increased by 15 % in constant currency and by 19 % at actual rates to € 10,429 million (Q1-3/2008: € 8,761 million). Organic sales growth was 8 % for the first three quarters and increased to 9 % in the third quarter. Acquisitions contributed a further 7 %. Currency translation had a positive impact of 4 %. This is mainly attributable to the average US dollar rate improving 10 % against the euro in the first three quarters of 2009.

Sales growth in the business segments was as follows:

In Europe sales grew by 11 % in constant currency with organic sales growth contributing 8 %. In North America sales grew by 20 % in constant currency, mainly due to the consolidation of APP Pharmaceuticals from September 2008. Strong organic growth rates were achieved in the emerging markets, reaching 13 % in Asia-Pacific and 12 % in Latin America.

 

Continued strong earnings growth
Group EBITDA increased by 19 % in constant currency and by 24 % at actual rates to € 1,911 million (Q1-3/2008 adjusted: € 1,546 million). Group operating income (EBIT) grew by 19 % in constant currency and by 24 % at actual rates to € 1,496 million (Q1-3/2008 adjusted: € 1,209 million). The Group's EBIT margin increased to 14.3 % (Q1-3/2008 adjusted: 13.8 %).

Group net interest was € -439 million (Q1-3/2008: € -271 million). Lower average interest rates on liabilities of Fresenius Medical Care were more than offset by incremental debt relating to the acquisitions of APP Pharmaceuticals and Dabur Pharma and currency translation effects.

The other financial result was € -30 million and includes valuation changes of the fair redemption value of the Mandatory Exchangeable Bonds (MEB) of € -3 million and the Contingent Value Rights (CVR) of € -27 million. Both are non-cash charges.

The adjusted Group tax rate¹ was 30.8 % (Q1-3/2008 adjusted: 34.2 %). This decrease was largely driven by the revaluation of a tax claim at Fresenius Medical Care in Q2 2009.

Noncontrolling interest increased to € 363 million (Q1-3/2008: € 293 million), of which 94 % was attributable to the noncontrolling interest in Fresenius Medical Care.

Adjusted net income² grew by 12 % in constant currency and by 14 % at actual rates to € 368 million (Q1-3/2008 adjusted: € 324 million). Adjusted earnings per ordinary share increased to € 2.28 and adjusted earnings per preference share increased to € 2.29 (Q1-3/2008 adjusted: ordinary share € 2.06, preference share € 2.07). This represents an increase of 11 % at actual rates and 9 % in constant currency for both share classes.

The Group's US GAAP financial results as of September 30, 2009 and as of September 30, 2008, include the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds (MEB) and the Contingent Value Rights (CVR) relating to the acquisition of APP Pharmaceuticals. Those special items are recognized in the financial result of the "Corporate/Other" segment. Adjusted earnings represent the Group's business operations in the reporting period. In the previous year's period, the Group's US GAAP financial statements include in addition several special items relating to the acquisition of APP Pharmaceuticals. Please see page 14 of the Investor News for the reconciliation to earnings according to US GAAP.

Net income³ (including special items) was € 339 million or € 2.10 per ordinary share and € 2.11 per preference share.

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

 

Continued investments in growth
Fresenius Group spent € 442 million for property, plant and equipment (Q1-3/2008: € 502 million). Acquisition spending was € 186 million (Q1-3/2008: € 3,760 million, mainly due to the acquisition of APP Pharmaceuticals).

 

Strong cash flow achieved
Operating cash flow increased by 52 % to € 1,120 million (Q1-3/2008: € 736 million), driven by strong earnings growth and tight working capital management. Net capital expenditure was € 446 million (Q1-3/2008: € 496 million). Cash flow before acquisitions and dividends nearly tripled to € 674 million (Q1-3/2008: € 240 million).

 

Balance sheet
Fresenius Group's total assets were € 20,632 million (December 31, 2008: € 20,544 million). In constant currency, total assets increased by 3 %. Current assets increased by 6 % to € 5,408 million (December 31, 2008: € 5,078 million). Non-current assets decreased by 2 % to € 15,224 million (December 31, 2008: € 15,466 million).

Total shareholders' equity increased by 4 % to € 7,237 million (December 31, 2008: € 6,943 million). The equity ratio (including noncontrolling interest) improved to 35.1 % (December 31, 2008: 33.8 %).

Group debt decreased by 4 % to € 8,476 million (December 31, 2008: € 8,787 million).

As of September 30, 2009, the net debt/EBITDA ratio was 3.1 and significantly improved from 3.6 at December 31, 2008 (pro forma the acquisition of APP Pharmaceuticals and excluding special items).

 

Number of employees increased
As of September 30, 2009, Fresenius increased the number of its employees by 6 % to 129,218 (December 31, 2008: 122,217).

 

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.

On April 22, 2009, the European Commission granted Fresenius Biotech the approval for Removab (catumaxomab) for the treatment of malignant ascites. Removab was launched in Germany in May 2009. Market launch is under way in other European countries. As of September 30, 2009, Fresenius Biotech achieved Removab sales of more than € 1 million.

Fresenius Biotech's EBIT was € -32 million in the first three quarters of 2009 (Q1-3/2008: € -32 million). For 2009, Fresenius Biotech expects its EBIT to reach € -40 million to € -45 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 September 30, 2009, Fresenius Medical Care was treating 192,804 patients in 2,509 dialysis clinics.

• Continued strong organic sales growth of 8 %
• Q3 EBIT margin improved to 15.6 (Q2 2009: 15.1 %)
• Improved guidance for 2009

Fresenius Medical Care achieved sales growth of 4 % to US$ 8,212 million (Q1-3/2008: US$ 7,890 million). Organic growth was 8 %. Currency translation effects had a negative impact of 5 %.

Dialysis services revenue grew by 6 % to US$ 6,124 million (Q1-3/2008: US$ 5,753 million), an increase of 9 % in constant currency. Sales of dialysis products were US$ 2,088 million (Q1-3/2008: US$ 2,137 million). In constant currency, dialysis products sales increased by 8 %.

In North America sales increased by 9 % to US$ 5,600 million (Q1-3/2008: US$ 5,153 million). Dialysis services revenue grew by 8 % to US$ 4,994 million. Average revenue per treatment for the U.S. clinics increased to US$ 348 in Q3 2009 compared to US$ 333 for Q3 2008 and 344 US$ for Q2 2009. This development was mainly based on reimbursement increases and increased utilization of pharmaceuticals. Sales outside North America ("International" segment) were US$ 2,612 million (Q1-3/2008: US$ 2,737 million). In constant currency, sales growth was 9 %.

EBIT increased by 2 % to US$ 1,265 million (Q1-3/2008: US$ 1,240 million), resulting in an EBIT margin of 15.4 % (Q1-3/2008: 15.7 %). This development was mainly due to higher personnel expenses, price increases for pharmaceuticals as well as the impact of the launch of a generic version of PhosLo^® in the U.S. market. These effects were partially offset by a strong performance of the dialysis product business, increased commercial payor revenue as well as the effect of cost control measures.

Net income^* increased by 7 % to US$ 645 million (Q1-3/2008: US$ 603 million).

For the full year of 2009, Fresenius Medical Care now expects to achieve revenue of around US$ 11.2 billion (previously US$ 11.1 billion), an increase of around 8 % in constant currency.

Net income^* is now expected to be between US$ 865 million and US$ 890 million in 2009. Previously, the company expected the net income to be in the range of US$ 850 million and US$ 890 million for the full year 2009.

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

^* 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 out-patient environments. The company is also a leading provider of medical devices and transfusion technology products.

• Organic sales growth accelerated to 8 %
• EBIT Margin increased to 19.4 %
• Outlook 2009 confirmed

Fresenius Kabi increased sales by 31 % to € 2,274 million (Q1-3/2008: € 1,734 million). Organic sales growth was 8 % in the first three quarters and increased to 9 % in the third quarter. Net acquisitions contributed 25 % to sales. Currency translation had a net negative impact of 2 %. This was mainly due to the depreciation of currencies in Great Britain and Brazil against the euro, whereas positive translation effects resulted from the strengthening of the Chinese yuan.

In Europe, sales reached € 1,159 million, driven by 5 % organic growth. In North America, sales increased to € 527 million (Q1-3/2008: € 134 million) due to the acquisition of APP Pharmaceuticals. In the Asia-Pacific region Fresenius Kabi achieved sales of € 361 million. Organic sales growth accelerated to 15 %. Sales in Latin America and Africa increased to € 227 million, driven by 16 % organic growth.

EBIT grew by 52 % to € 441 million (Q1-3/2008: € 290 million). EBIT includes a € 20 million non-cash charge related to the amortization of APP Pharmaceuticals' intangible assets. The EBIT margin increased to 19.4 % (Q1-3/2008: 16.7 %). Net interest grew to € 231 million (Q1-3/2008: € 64 million) due to the acquisition financing. Net income^* was € 136 million (Q1-3/2008: € 149 million).

Sales at APP Pharmaceuticals increased by 16 % to US$ 632 million. APP Pharmaceuticals achieved significant sales growth in the product portfolio excluding Heparin in Q3, leading to a sales growth of 4 % in the first three quarters 2009. Adjusted EBITDA^** grew by 20 % to US$ 260 million. EBIT was US$ 198 million. EBIT includes a US$ 27 million non-cash charge related to the amortization of intangible assets. The EBIT margin improved to 31.3 %. The number of product approvals from the FDA (Food and Drug Administration) has currently increased to seven, following only one approval in the first half of 2009.

Operating cash flow of Fresenius Kabi more than doubled to € 311 million (Q1-3/2008: € 144 million). This was primarily achieved through a tight working capital management. Given only moderate growth in capital expenditures, cash flow before acquisitions and dividends more than tripled to € 224 million (Q1-3/2008: € 69 million).

Fresenius Kabi confirms its outlook for 2009: the company targets sales growth in constant currency of 25 to 30 %. Further, Fresenius Kabi forecasts an EBIT margin in the range of 19.5 to 20.5 %. Currency translation effects may impact Fresenius Kabi's margin as APP Pharmaceuticals provides a significant earnings contribution from the US$ area. This guidance is based on the US$/€ exchange rate from the beginning of 2009.

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

^* Net income attributable to Fresenius Kabi AG
^** 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. The HELIOS Kliniken Group owns 62 hospitals, including five maximum care hospitals in Berlin-Buch, Erfurt, Krefeld, Schwerin and Wuppertal. HELIOS treats about 600,000 in-patients per year at its clinics and operates a total of more than 18,000 beds.

• Organic sales growth accelerated to 6 %
• Excellent earnings development at the established clinics
• Sales outlook 2009 confirmed, EBIT guidance raised

Fresenius Helios increased sales by 13 % to € 1,768 million (Q1-3/2008: € 1,568 million). Strong organic growth of 6 % was again driven by a significant increase in admissions. Net acquisitions contributed 7 % to overall sales growth.

EBIT grew by 20 % to € 152 million (Q1-3/2008: € 127 million) due to the excellent business operations of the established clinics. The EBIT margin increased to 8.6 % (Q1-3/2008: 8.1 %). Net income^* improved by 39 % to € 82 million (Q1-3/2008: € 59 million).

At HELIOS' established clinics, sales rose by 6 % to € 1,646 million. EBIT improved by 22 % to € 154 million. The EBIT margin increased to 9.4 % (Q1-3/2008: 8.1 %). The acquired clinics (consolidation <1 year) achieved sales of € 122 million and € -2 million EBIT.

Fresenius Helios confirms its sales outlook for 2009 and expects to achieve sales of more than € 2.3 billion. EBIT is now projected to reach more than € 200 million. The previous guidance was € 190 to 200 million.

^* Net income attributable to HELIOS Kliniken GmbH


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

• Sales increased by 36 %
• Order backlog at new all-time-high, strong order intake achieved in Q3
• Outlook 2009 fully confirmed

Fresenius Vamed achieved excellent sales growth of 36 % to € 393 million (Q1-3/2008: € 290 million). Organic sales growth was 29 %. The clinics in the Czech Republic acquired from Fresenius Helios contributed 7 %. Sales in the project business rose by 46 % to € 244 million (Q1-3/2008: € 167 million). Sales in the service business increased by 21 % to € 149 million (Q1-3/2008: € 123 million).

EBIT grew by 7 % to € 15 million (Q1-3/2008: € 14 million). Significant sales growth driven by a strong project business diluted the EBIT margin to 3.8 % (Q1-3/2008: 4.8 %). Net income* of € 13 million was € 1 million below previous year's level due to a decrease in interest income as a result of lower interest rates.

The excellent development of order intake and order backlog continued: Fresenius Vamed increased the order intake by 29 % to € 313 million (Q1-3/2008: € 242 million). In Q3 2009, Fresenius Vamed more than doubled its order intake to € 157 million (Q3 2008: € 72 million). Fresenius Vamed was awarded a >€ 80 million order for the turnkey construction of a general hospital in Gabon. The project is scheduled to start in the fourth quarter of 2009. The construction work will take approximately two years.

The order backlog reached the new all-time-high of € 640 million (December 31, 2008: € 571 million).

Fresenius Vamed fully confirms its outlook for 2009 and expects to grow both sales and EBIT by approximately 10 %.

^* Net income attributable to VAMED AG


Analyst Conference
As part of the publication of the results of the first three quarters of 2009 a conference call will be held on November 3, 2009 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 on our website www.fresenius.com at Investor Relations / Presentations. Following the call, a recording will be available.

 

Quarterly financial report
The report on the first three quarters of 2009 and the third quarter 2009 will be published on November 9, 2009 (US GAAP) and on November 13, 2009 (IFRS) on our website www.fresenius.com at Investor Relations / Financial Reports.