As part of its 10-year anniversary, Fresenius Medical Care, the worldwide dialysis market leader, will donate € 150,000 to charitable organizations that aid dialysis patients. The German National Kidney Association (Bundesverband Niere e.V.) will receive € 50,000 while similar organizations in North America and the Asia-Pacific region will obtain the remaining € 100,000. The Company consciously decided against celebrating the occasion with receptions and parties. The approximately 18,000 members of the German National Kidney Association are dedicated to improving the lives of patients with chronic kidney disease. The Association will use the funds donated by Fresenius Medical Care for its self-help, prevention and information programs as well as to assist those affected by kidney disease.

Fresenius Medical Care looks back on ten years of successful growth. In 1996, Fresenius acquired the largest dialysis clinic operator in the world, National Medical Care, and merged the company with its own dialysis equipment division to create the new company. Fresenius used the opportunity to take a major step into the market for dialysis care. Since then, both revenue and the number of employees have more than doubled, the number of dialysis clinics has more than tripled and the Company was added to Germany's benchmark DAX 30 index in 1999.

Today, Fresenius Medical Care is the leading provider of dialysis services treating about 161,433 patients in its 2,085 own clinics worldwide. Fresenius Medical Care also is the undisputed leader in the dialysis products. When it comes to the two key products for hemodialysis, the Company has created an even wider gap to its competitors – nearly every other new dialysis machine and nearly every other new dialyzer is a Fresenius Medical Care product.

The Company remains on the path for growth. Fresenius Medical Care plans on increasing sales by 2010 to $ 11.5 billion. This growth will be attained both organically and through attractive acquisitions that further strengthen its network of dialysis clinics. The Company's unique vertical structure will also aid its expansion as its innovative products are combined with its patient care services. Furthermore, a new initiative will create horizontal growth by combining the Company's product technology, its treatment expertise and its abilities as a care provider into new "Pharma-Tech" therapies utilizing proven drugs.

# # #

Fresenius Medical Care is the world's largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1,400,000 individuals worldwide. Through its network of 2,085 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 161,433 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products). Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS-p).

For more information about Fresenius Medical Care visit the website: www.fmc-ag.com.

The Fresenius Health Care Group will donate cash and goods worth more than $1.1 million to victims of the tsunami in Southeast Asia.

Dr. Ulf M. Schneider, Chairman of the Management Board of Fresenius AG: "We are deeply moved by the suffering caused by the disaster in Asia. To offer swift and unbureaucratic assistance, we have organized an immediate-aid package that includes cash donations, life-saving medical supplies and construction assistance for medical facilities. Our subsidiaries in the region are in close contact with local aid agencies and will handle some of the donations directly."

Fresenius Medical Care will donate $500,000 and Fresenius Kabi will give € 500,000 for aid work in the affected region. A major part will be used to provide financial support to various aid agencies in India, Indonesia, Sri Lanka and Thailand. Furthermore, Fresenius will donate vital medical supplies to hospitals in the region and life-saving products and services for patients with kidney failure.

Fresenius employees have also voluntarily collected donations in many countries including one fund-raising program in India where colleagues agreed to donate a day's pay to victims in the disaster region.

Fresenius Biotech and the US Company Enzon Pharmaceuticals, Inc. today announced the recruitment of the first North American patient for a phase II study for approval of ATG-Fresenius S. The polyclonal antibody suppresses the immune reaction against transplanted organs to reduce the risk of rejection. It is already marketed in over 60 countries. The entry of the first patient into the clinical study is an important milestone to introduce this successful product in the North American market. The cooperation partner Enzon is responsible for the clinical development and approval in the U.S., Fresenius Biotech will manufacture and deliver ATG-Fresenius S.

Enzon and Fresenius Biotech also announced today that the US Food and Drug Administration (FDA) granted Fast Track Status in the approval process for the use of ATG-Fresenius S in lung transplantation. The Fast Track process provides a particularly close working relationship with the FDA in order to accelerate the development and approval of pharmaceuticals that are appropriate to treat critically ill patients where adequate therapeutic modalities are not available. A phase III study using ATG-Fresenius S in renal transplant patients is currently being prepared.

Fresenius Biotech signed a cooperation contract with Enzon Pharmaceuticals in 2003 for the U.S. approval of ATG-Fresenius S. This product is expected to be introduced to the U.S. market in 2007.

Enzon Pharmaceuticals is a biopharmaceutical company dedicated to the discovery, development and commercialization of therapeutics to treat life-threatening diseases. Further information can be found on the Company's website www.enzon.com

Fresenius Biotech GmbH is a subsidiary of the health care company Fresenius. Fresenius Biotech is committed to the development and marketing of biopharmaceutics in the areas of oncology, immunology and regenerative medicine.
 

Fresenius Kabi AG, a subsidiary of Fresenius AG, today announced an agreement to acquire Labesfal – Laboratório de Especialidades Farmacêuticas Almiro S.A. The company is headquartered in Campo de Besteiros in central Portugal and offers intravenously administered drugs (I.V. drugs) for the domestic market. This acquisition will significantly expand the I.V. drug portfolio of Fresenius Kabi, the European market leader in infusion and nutrition therapy. Fresenius Kabi plans to introduce Labesfal's products throughout Europe. The acquisition is an important step in the company's growth strategy. "We have announced in the past that we intend to expand the I.V. drug business of Fresenius Kabi. The purchase of Labesfal offers excellent growth opportunities in this attractive market segment," said Dr. Ulf M. Schneider, Chairman of the Management Board of Fresenius AG.

Privately-owned Labesfal ranks among the 10 most successful companies in Portugal. In 2004, the company achieved sales of € 56 million and employed approximately 320 people. The acquisition will be accretive to Fresenius Kabi's earnings in the first year and will lead to a further improvement in the EBIT margin of the company. Labesfal holds an excellent position on the Portuguese hospital market with a comprehensive product portfolio of generic I.V. drugs such as antibiotics, analgesics and local anesthetics as well as for treating gastrointestinal diseases.

Labesfal's state-of-the-art production site in Campo de Besteiros has adequate capacity for international expansion. For 2005, Fresenius Kabi plans to establish a competence center for the production of I.V. drugs at this location. The company has significant know-how in the production of sterile infusion solutions.

Fresenius Kabi is a leader in the development, production and distribution of infusion therapy products for hospitals. Labesfal is an excellent fit in this segment. Fresenius Kabi plans to use its existing sales and marketing network to introduce Labesfal's I.V. drug products to the European market. The products are expected to receive European regulatory approval within the next two years. Fresenius Kabi estimates the market size of the European hospital market for the I.V. drugs portfolio of Labesfal at € 1.2 billion*.

The former owner of Labesfal, Joaquim Coimbra, will become Chairman of the newly-created advisory board of the company. The management team will include current Labesfal management and local Fresenius Kabi executives.

The acquisition requires the approval of Portuguese antitrust authorities.

* Source: Fresenius Kabi Internal Research

 

Bad Homburg, Germany - January 24, 2005 -- Fresenius Medical Care AG (Frankfurt Stock Exchange: FME, FME3) (NYSE: FMS, FMS_p), the world's largest provider of dialysis products and services, today announced that it has renewed its long-term collaborative agreement with Kawasumi Laboratories, Inc. relating to the production, distribution and further enhanced marketing activities of Fresenius Polysulfone dialyzers.

With this renewal Fresenius Medical Care and Kawasumi Laboratories intensify their long-term relationship which dates back to 1990 when the joint venture Fresenius Kawasumi was founded. With the renewed agreement, both companies aim to further expand the market share of dialyzers by utilizing their efficient manufacturing technologies as well as strong domestic sales network. Fresenius Polysulfone dialyzers have a market share of 16% at the end of 2004 in the Japanese market. The ownership ratio of the Fresenius Kawasumi joint venture remains unchanged: Fresenius Medical Care holding 70%, Kawasumi Laboratories holding 30%.

Roberto Fusté, Chief Executive Officer for the Asia-Pacific region, commented: "I am very pleased that both, Fresenius Medical Care and Kawasumi Laboratories will continue to provide the most advanced and biocompatible dialyzers to the Japanese renal market. Together we will demonstrate our position as one of the leading providers for high-quality dialyzers."

Background information Japan:
With approximately 250,000 patients Japan is the biggest dialysis market in Asia-Pacific. The patient growth rate is at around 4% p.a. In addition to its dialysis product business Fresenius Medical Care, through NephroCare Japan, also provides consulting services for dialysis centers. Private companies are currently not allowed to operate dialysis clinics in Japan. Japan accounts for approximately 37% of the revenue in the Asia-Pacific region today.

• Sales: € 7.27 billion, + 8 % constant currency, + 3 % at actual exchange rates
• EBIT: € 845 million, + 15 % constant currency, + 8 % at actual exchange rates
• Net Income: € 168 million, + 55 % constant currency, + 46 % at actual exchange rates
• Strong sales and earnings growth at Fresenius Medical Care
• Excellent business development and significantly improved EBIT margin at Fresenius Kabi
• Fresenius ProServe within expectations
• Strong sales and earnings growth expected for 2005

Dividend increase proposed
2004 was a very successful year for Fresenius. Based on the Group's excellent financial results, the Management Board will propose to the Supervisory Board a 10 % dividend increase to € 1.35 per ordinary share (2003: € 1.23) and € 1.38 per preference share (2003: € 1.26). This will mark the 12th consecutive year of a dividend increase. The total dividend distribution will be € 55.9 million (2003: € 51.0 million).

Positive Group outlook for 2005
For 2005, Fresenius expects a constant currency sales increase of 6 to 9 %. Net income is projected to grow by 15 to 20 % in constant currency. All business segments are expected to contribute to this increase.

Fresenius is planning to invest in growth in 2005: Investments in property, plant and equipment and intangible assets are projected to increase to approximately € 400 - 450 million; acquisition spending is planned to grow to about € 400 million.

Strong organic sales growth
In 2004, Group sales increased 8 % in constant currency. Organic growth was 6 %, while acquisitions contributed 2 % to the increase in sales. Currency translation effects had an impact of -5 %. At actual exchange rates, sales were € 7,271 million, 3 % above last year's figure of € 7,064 million.

In Europe, sales increased 4 % despite cost cutting measures in the health care sector and price pressure in Germany. North America performed strongly with sales growing 9 % in constant currency. Asia-Pacific, Latin America and Africa achieved double-digit constant currency growth rates.




Excellent earnings growth
Fresenius achieved excellent earnings growth rates: EBITDA rose 11 % in constant currency and 5 % at actual exchange rates to € 1,160 million (2003: € 1,106 million). EBIT rose 15 % in constant currency and 8 % at actual exchange rates to € 845 million (2003: € 781 million). The EBIT margin improved from 11.1 % in 2003 to 11.6 % in 2004.

Net interest expense continued to improve to € -209 million, € 40 million below last year's € -249 million due to a lower debt level as well as enhanced terms. Currency translation effects also had a favorable impact of € 11 million.

In 2004, the tax rate decreased to 39.8 %. The tax rate of 41.9 % in 2003 was mainly due to one-time expenses at Fresenius ProServe.

Minority interests rose to € 215 million (2003: € 194 million). Minority shareholders in Fresenius Medical Care account for 95 % of minority interests.

Net income rose 55 % in constant currency and 46 % at actual exchange rates to € 168 million (2003: € 115 million). Operating income growth at Fresenius Medical Care and Fresenius Kabi was the key driver of this increase. In addition, lower one-time expenses at Fresenius ProServe as well as lower Group interest expenses had a positive impact. Excluding the one-time expenses at Fresenius ProServe in 2003 and 2004 Group net income increased 25 % in constant currency and 18 % at actual exchange rates.

Earnings per ordinary share were € 4.08 from € 2.79 in 2003. Earnings per preference share were € 4.11 (2003: € 2.82). This is an increase of 46 %.

Investments on target
In 2004, Fresenius invested € 421 million (2003: € 430 million). Investments for property, plant and equipment and intangible assets decreased to € 308 million (2003: € 339 million) and acquisitions increased to € 113 million (2003: € 91 million).
44 % of the total investments were made both in Europe and North America, 7 % in the Asia-Pacific region and 5 % in Latin America and Africa.

Record cash flow
Operating and free cash flow reached new records in 2004: Operating cash flow rose 10 % to € 851 million (2003: € 776 million), mainly due to Group net income growth and improved working capital management. The operating cash flow margin rose to 11.7 % of sales up from 11.0 % in 2003, an increase of 70 basis points. Free cash flow before acquisitions and dividends increased 24 % to € 565 million (2003: € 454 million). After acquisitions and dividends free cash flow rose 31 % to € 353 million (2003: € 269 million) despite increased spending on acquisitions (€ -90 million, net) and dividends (€ -122 million).

Solid balance sheet
Total assets decreased 2 % to € 8,188 million (December 31, 2003: € 8,347 million). In constant currency, assets grew by 2 %. Current assets were € 2,755 million (December 31, 2003: € 2,744 million). In constant currency, current assets rose 3 %, primarily driven by the induction of Fresenius Medical Care's receivables securitization program.

Group debt decreased € 413 million to € 2,735 million as of December 31, 2004 (€ 2,824 million in constant currency) compared to € 3,148 million as of December 31, 2003. These figures include liabilities related to the receivables securitization program.

The key ratio net debt/EBITDA improved significantly to 2.2 on December 31, 2004, as a consequence of both EBITDA growth and debt reduction on the back of the excellent cash flow development (December 31, 2003: 2.7).

Shareholders' equity including minority interests rose 4 % to € 3,347 million compared to € 3,214 million on December 31, 2003 (constant currency: +9 %). The equity ratio including minority interests improved to 40.9 % (December 31, 2003: 38.5 %).

Number of employees slightly increased
As of December 31, 2004, Fresenius had 68,494 employees worldwide, an increase of 3 % (December 31, 2003: 66,264).

Fresenius Biotech
Fresenius Biotech develops innovative therapies with trifunctional antibodies for the treatment of cancer as well as cell therapies for the treatment of the immune system. 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 suppress graft rejection following an organ transplantation.

In cancer therapy, final results are available of a phase I study to determine dosage, safety and tolerability of the antibody removab® in peritoneal carcinomatosis as well as from a phase I study for the treatment of breast cancer using the antibody rexomun®. The clinical results of the final reports will be published at the 41st ASCO (American Society of Clinical Oncology) Annual Meeting in May 2005. Based on the encouraging results Fresenius Biotech is planning a phase II study for the treatment of breast cancer and a phase II study for the treatment of gastric cancer.

Preliminary results are available for a phase I/II cell therapy study that investigated the treatment of patients with end-stage HIV infection. The results show that the therapy is well tolerated and safe. The clinical development program is planned to continue in the current year.

In 2004, Fresenius Biotech's EBIT was € -28 million (2003: € -19 million). The EBIT development was within our expectations and is a result of the increased research and development spending. For 2005, Fresenius Biotech‘s EBIT is expected to be in the range of € -35 million to € -40 million, largely due to the expanded clinical study program.

The business segments

Fresenius Medical Care
Fresenius Medical Care is the world's largest provider of products and services for patients with chronic kidney failure. As of December 31, 2004, Fresenius Medical Care treated about 124,400 patients (+4 %) in 1,610 dialysis clinics (+3 %), the number of treatments rose by 5 % to about 18.8 million.

• Strong growth in sales and earnings
• Excellent sales development in dialysis care in North America and in dialysis products and dialysis care in the international segment
• Outlook for 2005: significant growth in sales and earnings

Fresenius Medical Care achieved excellent sales growth in 2004 of 13 % to $ 6,228 million (2003: $ 5.528 million). In constant currency, sales rose 10 %. Organic sales growth was 6 %.

In North America, the company's biggest market, Fresenius Medical Care posted exceptionally good performance as sales rose 9 % to $ 4,216 million (2003: $ 3,855 million). Dialysis care sales grew 11 % to $ 3,795 million. Fresenius Medical Care performed about 12.9 million dialysis treatments in 2004, 4 % more than in the previous year. Sales of dialysis products (including sales to our own dialysis clinics) increased 1 % to $ 793 million.

Sales outside North America (the "International" segment) rose 20 % (constant currency: 11 %) to $ 2,012 million (2003: $ 1,673 million). Sales of dialysis products (including sales to our own dialysis clinics) increased 16 % to $ 1,450 million. Dialysis care sales grew 28 % to $ 706 million. In the international segment, Fresenius Medical Care operates 480 dialysis clinics. The Company performed 5.9 million dialysis treatments (+8 %).

Fresenius Medical Care significantly improved earnings in 2004. EBIT increased 13 % to $ 852 million (2003: $ 757 million), the operating margin was 13.7 %. On a comparable basis (excl. the new accounting regulation FIN 46R) the operating margin would have been 13.8 % (2003: 13.7 %). Net income increased 21 % to $ 402 million.

For the year 2005, Fresenius Medical Care expects currency-adjusted sales growth between 6 and 9 % and net income growth in the low double-digit range.
For further information please see Fresenius Medical Care's Investor News at www.fmc-ag.com

Fresenius Kabi
Fresenius Kabi offers infusion therapies and clinical nutrition for seriously and chronically ill patients in the hospital and out-patient environment. The company is also a leading provider of transfusion technology products.

• Profitability significantly increased; EBIT margin of 11.8 % achieved in 2004
• Good organic growth of 5 %; continued double-digit growth in developing markets
• Outlook for 2005: significant growth in earnings expected

Sales at Fresenius Kabi rose 2 % to € 1,491 million in 2004 (2003: € 1,463 million). The company achieved a good organic sales increase of 5 %. Currency translation reduced sales by 1 %, divestments by 2 %. Sales in Europe were impacted by a 6 % decrease in Germany due to cost cuts and price pressure in the health care sector. Outside of Germany, Fresenius Kabi showed an excellent performance in Europe with organic growth of 6 %. Outstanding sales growth was achieved in the Asia-Pacific and Latin America regions posting organic increases of 22 % and 11 %, respectively.

In 2004, Fresenius Kabi reached new records in earnings. EBIT rose 20 % to € 176 million (2003: € 147 million). Besides the good progress made in international markets, cost optimization and efficiency increases, especially in production, had a positive effect. The EBIT margin was 11.8 %, an increase of 180 basis points over 10.0 % of the previous year.

Fresenius Kabi foresees continued momentum for 2005. Sales are expected to increase by about 10 % in constant currency including the Labesfal acquisition. The Asia-Pacific and Latin America regions are projected to continue their growth pattern. In parallel, Fresenius Kabi expects further optimize its cost base. As a consequence of both developments, the company is confident to post yet another significant earnings growth in 2005. The EBIT margin including the Labesfal acquisition is projected to increase to ≥ 13 %.

Fresenius ProServe
Fresenius ProServe offers services for international health care systems, including hospital management, the planning and construction of hospitals and pharmaceutical and medical-technical production plants.

• Earnings within expectations
• Organic sales growth of 10 % achieved
• Strategic reorientation and clear focus on core activities
• Outlook for 2005: continued improvement in earnings

Fresenius ProServe simplified its organizational structure in 2004 and focused on three core activities: hospital management in Germany (Wittgensteiner Kliniken), hospital engineering and services (VAMED) and engineering and services for the pharmaceutical industry (Pharmaplan). The Company divested its nursing home activities and closed its international hospital management activities. Efforts to improve earnings at Wittgensteiner Kliniken were continued according to plan.

Fresenius ProServe increased sales in 2004 to € 813 million (2003: € 742 million). The increase in sales was solely achieved through organic growth and resulted from the positive development of the hospital engineering and services business.

EBIT at Fresenius ProServe was € 9 million (2003: € -19 million), including one-time expenses of € 8 million before taxes (2003: € 34 million). Excluding one-time expenses, Fresenius ProServe achieved an EBIT of € 17 million (2003: € 15 million).

Order intake at the project businesses of VAMED and Pharmaplan was € 244 million in 2004 (2003: € 278 million). This decrease is mainly due to delayed closing of contracts as well as a continued investment caution in the pharmaceutical industry.

Fresenius ProServe expects continued earnings improvement in 2005. Projected EBIT will be between € 20 million and € 25 million. Organic sales growth is expected to be in the range of 5 to 8 % resulting mainly from the hospital engineering and services business.


Video webcast
As part of the publication of our 2004 results, a press conference will be held on February 24, 2005 at 10 a.m. CET. We cordially invite you to follow the live video broadcast of the conference over the Internet at www.fresenius-ag.com. Following the conference, a recording of the conference will be available as video-on-demand.

Summary Full Year 2004:
The Company exceeded its financial targets, achieved record earnings and will propose the 8th consecutive dividend increase.

• Net Revenue: $ 6,228 million, +13%
• Operating Income (EBIT): $ 852 million, +13%
• Net Income: $ 402 million, +21%
• Operating Cash Flow: $ 828 million, +10%
• Free Cash Flow: $ 567 million, + 19%
• Dividend Proposal: Ordinary Share: € 1.12, + 10% Preference Share: € 1.18, + 9%

Fresenius Medical Care AG ("the Company") (Frankfurt Stock Exchange: FME, FME3) (NYSE: FMS, FMS-p), the world's largest provider of Dialysis Products and Services, today announced the results for the fourth quarter and the full year of 2004.

Operations Fourth Quarter 2004

Revenue
Total revenue for the fourth quarter 2004 increased by 13% (10% at constant currency) to $ 1,640 million. The consolidation of businesses in accordance with a new accounting regulation (FIN 46R) contributed approx. 2% to the growth rate. Dialysis Care revenue grew by 12% to $ 1,167 million (11% at constant currency) in the fourth quarter of 2004. Organic revenue growth worldwide was 6%. Dialysis Product revenue increased by 14% to $ 473 million (8% at constant currency) in the same period.

North America revenue increased by 10% to $ 1,089 million, compared to $ 993 million in the same period last year. Dialysis Care revenue increased by 10% to $ 977 million. The average revenue per treatment increased to $ 290 in the fourth quarter 2004 (Q4 2003: $ 280). Dialysis Product revenue increased by 5% to $ 112 million.

International revenue was $ 551 million, up 20% from the fourth quarter of 2003, an increase of 11% adjusted for currency. Dialysis Care revenue reached $ 190 million, an increase of 26% (17% at constant currency). Dialysis Products revenue increased by 17% to $ 361 million (9% at constant currency).

Earnings
Operating income (EBIT) increased by 10% to $ 227 million resulting in an operating margin of 13.9%. The group operating margin was impacted mainly by price pressure in Japan as a result of bi-annual reimbursement rate reductions and the implementation of the new accounting rule FIN 46R.
On a comparable basis excluding FIN 46R, the operating margin in North America remained stable at 14.6% compared to the fourth quarter 2003. In the International segment the comparable margin was 14.9% in the fourth quarter of 2004.

Group net interest expenses decreased by 11% to $ 46 million, compared to $ 52 million last year. This positive development was mainly attributable to a lower debt level based on the strong Cash Flow generation in combination with lower interest rates.

Income tax expense was $ 72 million versus $ 61 million in the fourth quarter 2003, reflecting an effective tax rate of 39.8% compared to 39.0% in the fourth quarter of last year.

Net income in the fourth quarter 2004 was $ 108 million, an increase of 14%.

Earnings per share (EPS) in the fourth quarter 2004 rose correspondingly by 14% to $ 1.12 per ordinary share ($ 0.37 per ADS), compared to $ 0.98 ($ 0.33 per ADS) in the fourth quarter of 2003. The weighted average number of shares outstanding was approximately 96.3 million.

Cash Flow
In the fourth quarter of 2004, the Company generated $ 268 million in net cash from operations, representing about 16.3% of total revenue.

A total of $ 117 million (net of disposals) was spent for capital expenditures. This resulted in a Free Cash Flow before acquisitions of $ 151 million compared to $ 104 million in the fourth quarter of 2003. The high level of Free Cash Flow was supported by the increase in net income and improvements in working capital management. In addition, the days sales outstanding (DSO) were reduced by one day to 84 days in the fourth quarter compared to the third quarter 2004. Compared with the fourth quarter of the previous year DSO were reduced by 5 days.

A total of $ 31 million in cash was spent for acquisitions. The Free Cash Flow after acquisitions increased by 33% to $ 120 million compared to $ 91 million last year.

Operations Full Year 2004:

Earnings and revenue
For the full year 2004, net income was $ 402 million, up 21% from 2003. Net revenue was $ 6,228 million, up 13% from 2003. Currency adjusted, net revenue rose 10% in 2004 as compared to 2003. Operating income (EBIT) increased by 13% to $ 852 million resulting in an operating margin of 13.7%. On a comparable basis (excl. the new accounting regulation FIN 46R) the operating margin would have been 13.85% vs. 13.7% for the year 2003.

Group net interest expenses for the full year 2004 decreased by 13% to $ 183 million, compared to $ 211 million last year. Income tax expense was $ 266 million for the full year 2004 versus $ 213 million in 2003. This reflects an effective tax rate of 39.7% compared to 39.0% for 2003.

For the full year of 2004, earnings per ordinary share rose 21% to $ 4.16. Earnings per ordinary ADS for 2004 were $ 1.39. The weighted average number of shares outstanding during 2004 was approximately 96.2 million.

Cash flow
Cash from operations during the full year 2004 was up 10% to $ 828 million compared to $ 754 million in 2003. A total of $ 261 million was spent for capital expenditures (net of disposals). This resulted in a record Free Cash Flow before acquisitions for 2004 of $ 567 million compared to $ 478 million in 2003. Net cash used for acquisitions was $ 104 million. The Free Cash Flow after acquisitions increased by 20% to $ 463 million compared to $ 386 million last year.

Patients - Clinics - Treatments
At the end of 2004, Fresenius Medical Care served about 124,400 patients worldwide which represents an increase of 4%. North America provided dialysis treatments for ~85,500 patients (+4%) and the International segment for ~38,900 patients (+6%).

As of December 31, 2004, the Company operated a total of 1,610 clinics worldwide (1,130 clinics/+2% in North America and 480 clinics/+7% International).

Fresenius Medical Care AG performed approximately 18.8 million treatments in 2004, which represents an increase of 5% year over year. North America accounted for 12.9 million treatments (+4%) and the International segment for 5.9 million (+8%).

Dividends:

The Company will continue to follow an earnings-driven dividend policy. For the eighth consecutive year, shareholders can expect an increased dividend for the fiscal year 2004. At the Annual General Meeting on May 24, 2005 shareholders will be asked to approve a dividend of € 1.12 per ordinary share (2003: € 1.02/+10%) and € 1.18 per preference share (2003: € 1.08/+9%).

Outlook 2005:

For the year 2005, the Company expects a revenue growth at constant currencies between six and nine percent and net income growth in the low double-digit range.

Furthermore, the Company expects capital expenditures of about $ 350-400 million and spending on acquisitions of about $ 200-250 million.

Ben Lipps, Chief Executive Officer of Fresenius Medical Care, commented: "Our results for the fourth quarter and the full year 2004 demonstrate solid operating fundamentals that translate into strong top line revenue growth and bottom line net income growth. We have accomplished record earnings in 2004. We are particularly pleased with the results of Europe, North America and Latin America. In addition, our Free Cash Flow performance was very strong. This accomplishment gives us the opportunity to increase investments going forward which will sustain our future growth."

Video Webcast
Fresenius Medical Care will hold a press conference at its headquarters in Bad Homburg, Germany, to discuss the results of the fourth quarter and the full year of 2004 on February 24, 2005 at 10 a. m. CET. You are cordially invited to listen to the live video webcast of the meeting at the Company's website www.fmc-ag.com. A replay will be available shortly after the meeting.

Fresenius Kabi, a subsidiary of Fresenius AG, will further expand its position in China by increasing its 65 % stake in the Beijing Fresenius Kabi Pharmaceutical Co., Ltd. (BFP) joint venture to 100 %. Fresenius Kabi will acquire a 35 % stake currently owned by pharmaceutical company Beijing Double Crane Pharmaceutical Co., Ltd.

BFP has about 330 employees and achieved revenue of € 37.4 million in 2004. The company, which was founded in 1994, produces infusion solutions as well as intravenously administered drugs and is one of the most successful Fresenius Kabi subsidiaries in the Asia-Pacific region. Two BFP products – blood-volume substitute HAES-steril and Propofol Fresenius – count among the top seven market launches in China by foreign companies in recent years.

In addition to BFP, Fresenius Kabi has been active in China with a second joint venture, the Sino Swed Pharmaceutical Co. Ltd. (SSPC), since 1999. SSPC had 2004 revenue of about € 56 million and employs about 840 people. The company produces infusion solutions for clinical nutrition. Fresenius Kabi is the market leader in this segment in China with a 24% market share. The SSPC plant in Wuxi in Southeast China has some of the highest quality standards for pharmaceutical production in the country.

Fresenius Kabi will also establish a holding company which will improve the coordination of the existing operations in China. This will strengthen Fresenius Kabi's Chinese activities and allow it to better react to the opportunities presented by a dynamically developing Chinese health care market. The new structure still requires the approval of Chinese authorities.

Fresenius Kabi has achieved double-digit growth in the Chinese market for several years and is the fifth-largest international pharmaceutical company in the country. In 2004, revenue in China grew to € 97 million with organic growth of 25 %.

Fresenius AG today announced that Rainer Hohmann, Member of the Management Board of Fresenius AG, will leave the company by mutual agreement effective March 31, 2005. Rainer Hohmann is responsible for the Fresenius ProServe business segment.

The Supervisory Board of Fresenius AG has unanimously appointed Andreas Gaddum (49) as new member of the Management Board responsible for the Fresenius ProServe business segment. He will join Fresenius on or before August 1, 2005. Until then Dr. Ulf M. Schneider, Chairman of the Management Board of Fresenius AG, will oversee the Fresenius ProServe business segment on an interim basis.

Andreas Gaddum began his career at the Haniel Group where he served in a number of senior executive positions. In 2001, he joined the management of Eurest Deutschland GmbH where he is currently responsible for the segment Sales/New Business.

"We thank Rainer Hohmann for his contributions to the company, especially during the restructuring phase of Fresenius ProServe, and wish him all the best for the future. We very much welcome Andreas Gaddum as a new colleague on the Board. In Andreas Gaddum we have found an experienced manager to take the business to the next level," commented Dr. Ulf M. Schneider, Chairman of the Management Board of Fresenius AG.

The global growth consulting company, Frost & Sullivan, has presented Fresenius Kabi with the 2005 Competitive Strategy Leadership of the Year Award. In San Francisco, California, the company received the award for the successful implementation and execution of its growth strategy in the field of clinical nutrition.

Fresenius Kabi is the leader in infusion therapy and clinical nutrition in Europe as well as in its key countries in Asia Pacific and Latin America.
"The company has developed very successfully within the Fresenius Group over the past years. Between 2002 and 2004, the company's contribution to the Fresenius Group's net income climbed from 22 % to 47 %", says Frost & Sullivan research analyst Vanita Khetan. Between 2002 and 2004, the net income of Fresenius Kabi more than doubled from € 30 million to € 79 million.

Vanita Khetan: "The company has successfully positioned itself in clinical nutrition. This is a particularly important and growing area as patients in hospitals are frequently malnourished." A European Council's report confirms that approximately 30 % of patients in European hospitals are malnourished.

Nutrition program sets international standards
For therapeutic efficacy, sufficient and high quality clinical nutrition is essential. Malnourishment can lead to longer rehabilitation times and increased mortality rates.

Frost & Sullivan stated: "Fresenius Kabi has taken the initiative in the field of clinical nutrition. With its program "Good Nutrition Practice" the company sets new international standards in nutrition therapy. In collaboration with an international team of experts, Fresenius Kabi develops a series of measures aimed at identifying patients at risk, determining their nutritional needs and monitoring their nutritional status."

Since the 1960's, Fresenius Kabi has significantly influenced the development of clinical nutrition therapies and products. Today, Fresenius Kabi is the only company that offers infusion solutions for parenteral nutrition (nutrition via the vein) as well as products for enteral nutrition (via the gastro-intestinal tract) and the respective medical devices for their application on an international level.

A network of highly automated regional and supra-regional production plants enables the company to quickly fulfil customers' needs.


Growth strategy successfully executed
Fresenius Kabi's growth strategy is comprised of strong organic growth as well as growth via selective acquisitions selected to expand both its core business portfolio and its regional presence.

At the beginning of this year, the acquisition of the Portuguese company, Labesfal opened up further growth opportunities in the attractive intravenously administered drugs field. Also, Fresenius Kabi will further expand its position in China by increasing its 65 % stake in the Beijing Fresenius Kabi Pharmaceutical Co., Ltd. (BFP) joint venture to 100 %. "Fresenius Kabi has adopted a strong growth strategy to compete with other major companies. Overall, Fresenius Kabi has demonstrated excellent applications of competitive strategy leadership for market shares", says Frost & Sullivan. "This makes the company a worthy recipient of the 2005 World Clinical Nutrition Competitive Leadership of the Year Award."

Frost & Sullivan presents this Award each year to a company who has executed an innovative strategy to capture or solidify its market presence.