• Sales: € 7.064 billion, + 5 % in constant currency, - 6 % at actual exchange rates
• EBIT: € 781 million, + 5 % in constant currency, - 7 % at actual exchange rates
• Net income: € 115 million, - 2 % in constant currency, - 14 % at actual exchange rates;
  € 147 million before one-time expenses, + 22 % in constant currency, + 10 % at actual exchange rates
• Dividend: 8 % increase to € 1.23 per ordinary share and € 1.26 per preference share
• Strong sales and earnings performance of Fresenius Medical Care and Fresenius Kabi
• Fresenius Group's results were impacted by € 34 million (before tax) of one-time expenses at Fresenius ProServe.
• Fresenius ProServe: Reorganization programs and operating result on track
• Operating cash flow and free cash flow at record levels

Fresenius Group business performance in 2003 was very positive, but significantly impacted by exchange rate fluctuations. Sales were up 5 % in constant currency, but down 6 % at actual exchange rates. The good earnings performance in 2003 was supported by the very strong contributions of the Group's two largest business segments Fresenius Medical Care and Fresenius Kabi. The good development was burdened by one-time expenses at Fresenius ProServe. Operating income (EBIT) rose 5 % in constant currency, but fell 7 % at actual exchange rates. Net income decreased 2 % in constant currency and 14 % at actual exchange rates. Excluding one-time expenses at Fresenius ProServe, net income would have increased 22 % in constant currency and 10 % at actual exchange rates.

Dividend
The Managing Board will propose an 8 % dividend increase to the Supervisory Board. For the fiscal year 2003, a dividend of € 1.23 (2002: € 1.14) for each ordinary share and € 1.26 (2002: € 1.17) for each preference share should be paid. This is the 11th consecutive year of dividend increase. The proposal reflects the excellent cash flow performance and our confidence in the future earnings development of the Group. Total dividend distribution will be € 51.0 million (2002: € 47.3 million).

Group outlook for the full year 2004
Despite continued cost-saving pressure in the healthcare sector, particularly in the western markets, the Group anticipates a positive performance for the full year 2004. The Company expects a mid single-digit percent increase in 2004 sales, at constant currency. Net income is expected to grow in the range of 25 to 30 % at constant currency. Good sales performance, further improvement of the cost structures and positive effects of Fresenius ProServe's profit improvement programs will contribute to the growth in net income. We expect sales and earnings to increase in all segments. For the year 2004 Fresenius plans a total capital expenditure of about € 300 million. Expected acquisition spending will be € 120 million.

Sales
In 2003 Group sales increased 5 % in constant currency. Organic growth was 3 %, while acquisitions contributed 2 % to the increase in sales. Sales were € 7,064 million, down 6 % on last year's figure of € 7,507 million. This decline is mainly due to the US dollar which weakened by almost 20 % against the euro. Currency translation effects had an 11 % negative impact on sales.

Group sales were greatest in North America with 50 % and in Europe with 38 % of total sales, followed by Asia-Pacific with 7 %. Sales in Latin America and other regions accounted for 5 %. The highest regional growth rate was in Latin America, despite the difficult economic situation in many counties in this region. Due to project delays at Fresenius ProServe, Asia-Pacific sales in constant currency were on previous year's level. The outbreak of the respiratory illness SARS temporarily restrained our business activities in that region. We expect that Asia-Pacific and Latin America continue to offer above-average growth potential for Fresenius in the future.

Sales contribution of the three business segments:

Fresenius Medical Care's lower share of Group sales is mainly due to currency translation.

Earnings
Currency translation effects also had an impact on Group earnings. In constant currency, earnings before interest, income taxes, depreciation and amortization (EBITDA) was up 4 % compared to 2002. At actual rates, it was down 6 % to € 1,106 million (2002: € 1,178 million). Group EBIT increased 5 % in constant currency, but decreased 7 % at actual exchange rates to € 781 million (2002: € 837 million).

Group net interest expense improved by 14 % to € 249 million, compared to € 291 million last year. The reduction was mainly attributable to positive USD/EUR currency translation effects, as a high proportion of bank liabilities are in US dollars.

The effective tax rate for the full year 2003 was 41.9%. The increase compared to previous year's rate of 37.0 % is mainly due to the one-time expenses at Fresenius ProServe that are partially not tax-deductible.
Minority interests decreased to € 194 million (2002: € 210 million), solely due to currency translation. 96 % of minority interests relate to Fresenius Medical Care.

At actual exchange rates, Group net income was € 115 million, down 14 % from € 134 million achieved in 2002. Excluding the effect of one-time expenses, Group net income would have increased 22 % in constant currency and 10 % at actual exchange rates.

Earnings per ordinary share were € 2.79, down from € 3.25 in 2002. Earnings per preference share were € 2.82 (2002: € 3.28).

Capital expenditure and acquisitions
Fresenius spent € 430 million in 2003 on capital expenditure and acquisitions (2002: € 507 million). This reduction was in line with Company planning.

Investments for capital expenditure decreased € 38 million to € 339 million and acquisitions fell to € 91 million (2002: € 130 million). Capital expenditure accounted for 79 % of investments in 2003, and acquisitions for 21 %.

Acquisitions related mainly to the purchase of dialysis clinics by Fresenius Medical Care. Capital expenditure was mainly used to expand and modernize existing dialysis clinics. We also invested to further expand and optimize production plants at Fresenius Kabi, and in the modernization and in medical technical equipment in clinics managed by Fresenius ProServe.

47 % of the Group investments were made in Europe, 44 % in North America and 9 % in other regions.

Cash flow
Group cash flow was at record levels: operating cash flow and free cash flow exceeded even previous year's record figures. Operating cash flow increased 11 % to € 776 million (2002: € 697 million), mainly due to improved receivables management and cash inflows derived from hedged inter-company financing. Free cash flow before acquisitions and dividends increased 19 % to € 454 million (2002: € 382 million). This increase was due to our strong operating cash flow, while net investment remained almost unchanged. Free cash flow after acquisitions and dividends was € 269 million, a significant increase of 65 % over the previous year's € 163 million.

Asset and Capital Structure
Total assets were down 6 % from 31 December 2002 to € 8,347 million (31.12.2002: 8,915 million). This decline is entirely due to currency translation. In constant currency, total assets would have increased 4 %.

Shareholders' equity (including minority interests) was € 3,214 million, down 5 % from € 3,369 million as of 31 December 2002. The reduction was due to currency translation; in constant currency, there would have been an 8 % increase. The equity ratio including minority interests rose from 37.8 % as of 31 December 2002 to 38.5 % at the end of 2003.

Bank loans, Eurobonds, Commercial Paper and trust preferred securities were € 3,023 million as of 31 December 2003 (31.12.2002: € 3,283 million). Total debt, including liabilities from the receivables securitization program of Fresenius Medical Care was reduced from € 3,707 million (31.12.2002) to € 3,148 million as of 31 December 2003, mainly due to currency translation. The strong free cash flow led to a reduction in debt of € 283 million.

The key ratio of net debt/EBITDA improved significantly to 2.7 as of 31 December 2003 (31.12.2002: 3.0). The Group is well on track to achieve its target of 2.5 in 2005.

Employees
As of 31 December 2003, Fresenius had 66,264 employees worldwide, an increase in headcount of 2,626, or 4 %, compared to 31 December 2002.

Fresenius Biotech
Fresenius Biotech develops innovative therapies with trifunctional antibodies for the treatment of cancer and cell therapies used to treat end-stage HIV infection. In the field of polyclonal antibodies, since many years Fresenius Biotech successfully applies the immune suppressive agent ATG Fresenius S, used for suppression following organ transplantations.

The results of the following studies are expected during 2004:

• Phase I study using removab® in non-small cell lung cancer
• Phase I study using removab® in peritoneal cancer
• Phase I study using rexomun in breast cancer
• A first study to clarify if treatment with genetically modified T-helper cells generally works in treating HIV. Approval for production of these cells has been obtained.

In the year 2003 EBIT of Fresenius Biotech was € -19 million. Fresenius Biotech expects 2004 an EBIT at around € -29 million; this will depend largely on the planned expenses for clinical trials. A lower EBIT loss can be expected if milestones of clinical studies are not achieved and projects are no longer pursued.

The Business Segments

Fresenius Medical Care

Fresenius Medical Care AG is the world's leading provider of products and services for patients with chronic kidney failure. As of 31 December 2003, Fresenius Medical Care treated around 119,250 patients in 1,560 dialysis clinics, corresponding to an 6 % increase year over year.

Fresenius Medical Care's 2003 sales increased by 9 % to US$ 5,528 million (2002: US$ 5,084 million). In constant currency, the increase was 5 %.

Fresenius Medical Care made around 70 % of its sales in North America and roughly 30 % in the international business, which showed particularly good growth rates in 2003 despite the crisis in Iraq and the difficult economic climate in Latin America. Major growth drivers were the strong development in European and Latin American operations.

Sales of dialysis products increased 13 % to US$ 1,549 million. Sales of dialysis services were up 7 % to US$ 3,978 million. Sales of dialysis services are driven by the number of treatments, which increased 9 % in 2003. Fresenius Medical Care carried out 17.8 million dialysis treatments in 2003.

Fresenius Medical Care improved EBIT by 9 % to US$ 757 million (2002: US$ 695 million). This increase is mainly due to the extremely positive development of our US operations. Net income increased 14 % to US$ 331 million.
Fresenius Medical Care forecasts currency-adjusted mid single-digit growth in sales and high single-digit to low double-digit growth in net income for 2004. The company expects for 2004 capital expenditure of around 250 Mio US$ and an acquisition spending of around 100 Mio US$.
For further information, please see Press Release Fresenius Medical Care.

Fresenius Kabi

Fresenius Kabi focuses on nutrition and infusion therapy for seriously ill patients, in both hospital and ambulatory care environments, and on infusion and transfusion technology.

 
*The previous year's figures were adjusted for Fresenius HemoCare (transfusion and infusion technology) whose activities have been re-assigned to Fresenius Kabi since 1 January 2003.

Fresenius Kabi's sales were € 1,463 million, up 2 % from previous year's sales of € 1,441 million. Fresenius Kabi achieved very good organic growth of 7 %. In addition to the solid growth in Europe, double-digit growth rates in Latin America and Asia-Pacific contributed to this success. Currency translation reduced sales by 4 % and disinvestments by 1 %.
Fresenius Kabi achieved a 3 % increase in hospital business sales, to € 1,171 million (2002: € 1,137 million). Ambulatory Care had sales of € 292 million; down 4 % on the previous year (2002: € 304 million). All regions achieved good organic growth in sales. Despite the respiratory illness SARS, which limited business operations in Asia-Pacific in the first half of the year, Fresenius Kabi had a growth of 12 % in that region. Internal growth in Latin America was 27 %. Although the European healthcare markets show increasing pressure on cost savings, the Company achieved good organic growth here of 4 %.

Fresenius Kabi's EBIT rose 52 % in 2003 to € 147 million, a significant improvement on pervious year's figure of € 97 million. In addition to good developments in its operating business, the cost reduction measures showed positive effects.

Fresenius Kabi expects further sales and earnings increases for 2004: while mid single-digit growth rates are projected for sales, the EBIT margin is expected to rise from 10 % to about 11 %. For the regions Asia-Pacific and Latin America Fresenius Kabi sees above-average perspectives for future growth.

Fresenius ProServe

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

Fresenius ProServe increased sales by 6 % to € 742 million (2002: € 701 million). The consolidation of acquired hospitals (including the Klinikum Rhein-Sieg in Siegburg, Germany) accounted for an 11 % increase, while the project business showed a 5 % decrease. Orders on hand for Fresenius ProServe's project business increased slightly, to € 435 million (31.12.2002: € 424 million), whereas order entry was down 15 %, to € 278 million (2002: € 327 million), mainly due to the general investment caution in the pharma industry.

As expected, Fresenius ProServe reported a € 19 million EBIT loss for 2003 (2002: € 24 million profit). This figure includes € 34 million before tax of one-time expenses for measures to cut costs and improve profitability at Wittgensteiner Kliniken AG (WKA) as well as reorganization measures in the Healthcare Project and Pharma Industry businesses. By reducing staffing levels, optimizing processes and costs, and closing locations, Fresenius ProServe is adjusting its fixed cost structure to better reflect market conditions. The current bed utilization rate in the year 2003 of 79 % in German hospitals was clearly below the previous year's level of 85 %.

Fresenius ProServe's primary mid-term goal is to increase efficiency at WKA and to improve operating margins. It also plans to more closely link acute hospitals and post-acute clinics and, at the same time, to make individual hospitals more competitive through specialization. Outside of Germany the focus will be on strengthening the hospital project business.

Fresenius ProServe expects 2004 sales to grow by around 10 %. EBIT in 2004 is expected to be around € 25 million, before the announced 2004 one-time expenses of € 8 million at WKA.

Fresenius announces that its Supervisory Board unanimously appointed with immediate effect Dr. Ben Lipps a member of the Management Board of Fresenius AG in its March 16, 2004 meeting. Dr. Lipps will continue in his role as Chairman of the Management Board and CEO of Fresenius Medical Care AG.

"Ben Lipps has built our dialysis business in the United States from small beginnings to a key Fresenius revenue and earnings contributor", commented Dr. Ulf M. Schneider, Chairman of the Management Board of Fresenius AG. "With his energy, his exceptional dedication and more than 35 years experience in dialysis Ben Lipps will continue to expand Fresenius Medical Care's leadership position. I am very pleased that he will also bring his extensive experience and strategic initiatives to the Management Board of Fresenius AG."

Dr. Lipps joined Fresenius USA in 1985 and held several senior executive positions with the company. He has been a member of the Management Board of Fresenius Medical Care since the company was founded in 1996 and was appointed Chairman in 1999.

The Management Board of Fresenius AG now includes the following members:

• Dr. Ulf M. Schneider, Chairman
• Rainer Baule, CEO Fresenius Kabi
• Rainer Hohmann, CEO Fresenius ProServe
• Dr. Ben Lipps, CEO Fresenius Medical Care
• Udo Werlé, CFO and Labor Relations Director

Fresenius today announced that it has received Orphan Drug Designation from the European Commission for the trifunctional antibody removab® to treat patients with ovarian cancer. The Orphan Drug Designation entitles Fresenius to up to 10 years market exclusivity in the EU for removab® for the treatment of ovarian cancer upon marketing approval.

Fresenius in September 2003 successfully completed a phase I/II study using the trifunctional antibody removab® for the treatment of malignant ascites in ovarian cancer. The antibody proved to be well-tolerated and demonstrated first significant effects regarding tumor cell reduction.

Based on the encouraging results of the phase I/II study, a clinical phase Ila study for the treatment of ovarian cancer should begin shortly. The primary objective of this study is to determine an optimized dosing as well as to further examine its efficacy. The final report is expected by the end of 2005.


Background information

Orphan Drug
"Orphan Drugs" are medicinal products used for rare, life-threatening diseases or chronically debilitating condition where no other or no sufficient effective treatment exists. Additional benefits include regulatory assistance as well as advice on the conduct of clinical trials from the EMEA (European Agency for the Evaluation of Medicinal Products).

Fresenius Biotech
Fresenius Biotech GmbH is a company of the Fresenius Group, focused on the development and marketing of biopharmaceuticals in the fields of oncology, immunology and regenerative medicine.

Fresenius
Fresenius is a global health care group providing products and services for dialysis, the hospital and the medical care of patients at home. In 2003 Group sales amounted to € 7.1 billion. Fresenius had 66,264 employees worldwide on December 31, 2003

Summary First Quarter 2004:

• Net Revenue: $1,459 million, + 12%
• Operating income (EBIT): $198 million, + 17%
• Net income: $91 million, + 30%
• Operating Cash Flow: $171 million, + 37%
• Free Cash Flow: $130 million, + 55%

Bad Homburg, Germany - May 06, 2004 -- 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 first quarter 2004.

Revenue

Total revenue for the first quarter 2004 increased 12% (8% at constant currency) to $ 1,459 million. Dialysis Care revenue grew by 12% to $ 1,058 million (10% at constant currency) in the first quarter of 2004. Dialysis Product revenue (including internal sales) increased 13% to $ 527 million (4% at constant currency) in the same period. The internal sales increased to $ 126 million after $ 110 million in the first quarter of 2003.

North America revenue increased 7% to $ 996 million, compared to $ 929 million in the same period last year. Dialysis Care revenue increased by 9% to $ 898 million. The average revenue per treatment increased to $ 286 in the first quarter 2004 (Q1 2003: $ 278). Dialysis Product revenue, including sales to company-owned clinics, was flat at $ 191 million.

International revenue was $ 463 million, up 25% from the first quarter of 2003, an increase of 10% adjusted for currency. Dialysis Care revenue reached $ 160 million, an increase of 33% (17% at constant currency). Dialysis Products revenue, including sales to company-owned dialysis clinics, increased 22% to $ 336 million (7% at constant currency).

Earnings

Operating income (EBIT) increased 17% to $ 198 million resulting in an operating margin of 13.6% (Q1 2003: 13.0%). The increase of 60 basis points was mainly due to increased treatments and efficiency improvements in North America and an overall improved situation in Latin America. Compared to the first quarter 2003 the margin in North America increased by 40 basis points to 13.6%. In our International segment it increased by 100 basis points to 15.3% compared to the first quarter in the previous year.

Group net interest expenses decreased by 13% to $ 47 million, compared to $ 54 million last year. This positive development was mainly attributable to a lower debt level and the conversion of a portion of debt from fixed into variable interest rates.

Income tax expense was $ 60 million versus $ 45 million in the first quarter 2003, reflecting an effective tax rate of 39.4% compared to 38.7% in the first quarter of last year.

Net income in the first quarter 2004 was $ 91 million, an increase of 30%.

Earnings per share (EPS) in the first quarter 2004 rose 30% to $ 0.94 per ordinary share ($ 0.31 per ADS), compared to $ 0.72 ($ 0.24 per ADS) in the first quarter of 2003. The weighted average number of shares outstanding during the first quarter of 2004 was approximately 96.2 million.

Cash Flow

In the first quarter of 2004, the Company generated $ 171 million in net cash from operations. This performance was ahead of expectations and the net cash from operations represented nearly 12% of total revenue.

A total of $ 41 million (net of disposals) was spent for capital expenditures, resulting in a Free Cash Flow before acquisitions of $ 130 million compared to the first quarter of 2003 with $ 84 million. This repeated exceptional performance was again driven by further improvements in working capital management. The company reduced the days sales outstanding (DSO) again by another 3 days to 86 days in the first quarter. North America as well as the International region contributed to this very good development.

A total of $ 42 million in cash was spent for acquisitions. The Free Cash Flow after acquisitions increased therefore by 57% to $ 88 million compared to $ 56 million last year.

Patients - Clinics - Treatments

At the end of the first quarter 2004, Fresenius Medical Care served about 120,700 patients worldwide which represents an increase of 6%. North America cared for ~83,200 patients (+4%) and the International segment for ~37,500 patients (+10%).

As of March 31, 2004, the Company operated a total of 1,575 clinics worldwide (1,115 clinics/+2% in North America and 460 clinics/+12% International).

Fresenius Medical Care AG performed approximately 4.6 million treatments, which represents an increase of 8% year over year. North America accounted for 3.2 million treatments (+6%) and the International segment for 1.4 million (+12%).


Outlook 2004

For the year 2004, the Company reconfirms its outlook for the top-line and expects revenue growth at constant currencies in the mid-single digit range.
Net income growth is now expected to be at the high end of our original guidance - which is in the low double digit range.

Ben Lipps, Chief Executive Officer of Fresenius Medical Care, commented: "We clearly saw a strong operational performance the first quarter of 2004. Specifically, we were able to improve the profitability of our service and products business on a worldwide basis with focused initiatives based on our overall strategic plan. In addition, we achieved another outstanding performance in free cash flow during the first quarter of 2004. This was a good start into the year, which we believe is a good foundation to look optimistically at 2004 and beyond".

Statement of Earnings: see pdf-file

• Sales: € 1.72 billion, + 8 % in constant currency; - 1 % at actual exchange rates
• EBIT: € 197 million, + 12 % in constant currency; + 2 % at actual exchange rates
• Net income: € 39 million, + 17 % in constant currency; + 8 % at actual exchange rates

Fresenius Group business development in the first quarter 2004 was very positive but significantly impacted by exchange rate fluctuations: Sales rose 8 % in constant currency and decreased 1 % at actual exchange rates. EBIT rose 12 % in constant currency and 2 % at actual exchange rates. Net income increased 17 % in constant currency and 8 % at actual exchange rates. The Group's two largest business segments Fresenius Medical Care and Fresenius Kabi contributed strongly to this positive business development. Fresenius ProServe continued its profit improvement program at Wittgensteiner Kliniken (WKA) in the first quarter 2004.

Positive Group outlook for the full year 2004
The very strong first quarter results and the positive business development at Fresenius Medical Care and Fresenius Kabi reinforce our full-year outlook for the Group: Fresenius expects a mid single-digit percent increase in 2004 sales in constant currency. Net income is expected to grow in the range of 25 to 30 % in constant currency. We expect sales and earnings to increase in all business segments.

Sales
In the first quarter 2004, Group sales increased 8 % in constant currency. Organic growth contributed 6 % and acquisitions 2 %. Currency translation effects had a 9 % negative impact on sales. At actual exchange rates sales were € 1.72 billion, down 1 % on last year's figure of € 1.73 billion.

Sales in North America accounted for 48 % and Europe for 40 % of total sales, followed by Asia-Pacific with 7 %. Sales in Latin America and other regions contributed with 5 % to total sales. The highest regional growth rates were achieved in Asia-Pacific and Latin America. We expect that Asia-Pacific and Latin America will continue to offer above-average growth potential for Fresenius in the future.

Sales contribution of the three business segments:

Fresenius Medical Care's lower share of Group sales is mainly due to currency translation.

Earnings
Currency translation effects also impacted Group earnings: In constant currency earnings before interest, income taxes, depreciation and amortization (EBITDA) increased 8 % compared to the first quarter of 2003. At actual rates EBITDA decreased 1 % to € 269 million (Q1 2003: € 271 million). Group EBIT increased 12 % in constant currency and 2 % at actual exchange rates to € 197 million (Q1 2003: € 194 million).

Group net interest expense improved by 19 % to € -52 million compared to € -64 million last year. This positive development was attributable to a lower debt level, and the fact that Fresenius Medical Care converted a portion of its debt from fixed to variable interest rates. In addition, currency translation had a positive effect.

The effective tax rate for the first quarter 2004 was 40.0 % (Q1 2003: 39.2 %).

Minority interests increased to € 48 million (Q1 2003: € 43 million). 96 % of minority interests relate to Fresenius Medical Care.

At actual exchange rates Group net income was € 39 million, up 8 % from the first quarter 2003. In constant currency Group net income would have increased 17 %.

Earnings per ordinary share were € 0.94, an increase of 8 % from € 0.87 in the first quarter 2003. Earnings per preference share were € 0.95 (Q1 2003: € 0.88), an increase of 8 %.

Capital expenditure and acquisitions
Fresenius spent € 89 million in the first quarter 2004 on capital expenditure and acquisitions (Q1 2003: € 88 million). Of this amount € 48 million was spent on capital expenditure (Q1 2003: € 56 million) and € 41 million on acquisitions (Q1 2003: € 32 million).

Capital expenditure was mainly used to expand and modernize existing dialysis clinics at Fresenius Medical Care. We also invested in further expanding and optimizing production plants at Fresenius Kabi, and in modernizing and supplying medical technical equipment to Fresenius ProServe clinics.

Acquisitions related mainly to the purchase of dialysis clinics by Fresenius Medical Care. Fresenius Medical Care spent € 38 million on acquisitions in the first quarter 2004.

Europe accounted for 51 % of Group investments, North America for 43 % and other regions for 6 %.

Cash flow
Group operating cash flow and free cash flow again showed a strong performance. Operating cash flow increased 33 % to € 182 million (Q1 2003: € 137 million). This was mainly due to the positive change in working capital. Free cash flow before acquisitions and dividends increased 64 % to € 136 million (Q1 2003: € 83 million). This increase resulted from the strong operating cash flow, while net investments were down 15 % to € 46 million. Free cash flow after acquisitions and dividends was € 98 million, a significant increase of 72 % (Q1 2003: € 57 million).

Asset and capital structure
Total assets increased 5 % to € 8,757 million (December 31, 2003: € 8,347 million). In constant currency total assets would have increased 3 %. Total current assets were up 10 % to € 3,008 million (December 31, 2003: € 2,744 million). This resulted mainly from an increase in trade accounts receivable, since receivables from the Fresenius Medical Care receivable securitization program are stated in the balance sheet following an amendment of the program. In addition, business expansion had an impact.

This led to an increase in debt to € 3,155 million at actual rates and € 3,095 million in constant currency as of March 31, 2004 (December 31, 2003: € 3,023 million; debt including liabilities from the receivables securitization program of Fresenius Medical Care as at December 31, 2003: € 3,148 million).

The key ratio of net debt/EBITDA was 2.7 on March 31, 2004, the same as at the end of 2003.

Shareholders' equity (including minority interests) was € 3,360 million, up 5 % from € 3,214 million as at December 31, 2003. The equity ratio including minority interests slightly decreased from 38.5 % as at December 31, 2003 to 38.4 % at the end of the first quarter 2004.

Employees
As at March 31, 2004, Fresenius had 67,189 employees worldwide, an increase in headcount of 1 % compared to 66,264 employees as at December 31, 2003.

Fresenius Biotech
Fresenius Biotech develops innovative therapies with trifunctional antibodies for the treatment of cancer and cell therapies used to treat end-stage HIV infection. In the field of polyclonal antibodies, Fresenius Biotech has successfully marketed ATG Fresenius S for many years. This product is an immune suppressive agent used to prevent rejections following organ transplantations.

Fresenius Biotech continued its projects according to plan. In the field of trifunctional antibodies for cancer treatment, a phase Ila study for the treatment of ovarian cancer is starting up. The primary objective of this study is to determine an optimized dosage as well as to further examine its efficacy on refractory cancer patients. Some weeks ago Fresenius received Orphan Drug Designation from the European Commission for the trifunctional antibody removab® to treat patients with ovarian cancer.

The Business Segments

Fresenius Medical Care

Fresenius Medical Care AG is the world's leading provider of products and services for patients with chronic kidney failure. As of March 31, 2004, Fresenius Medical Care treated around 120,700 patients in 1,575 dialysis clinics, corresponding to a 6 % increase year over year.

Fresenius Medical Care's first quarter 2004 sales increased by 12 % to US$ 1,459 million (Q1 2003: US$ 1,299 million). In constant currency the increase was 8 %.

Sales in its largest market North America (68 % of total sales) showed a very good 7 % growth in the first quarter 2004. Sales in the international business rose by 25 % at actual rates and by 10 % in constant currency.

Sales of dialysis products increased 13 % to US$ 401 million. Sales of dialysis services increased 12 % to US$ 1,058 million. Growth in dialysis services is mainly driven by the number of treatments, which increased 8 % in the first quarter 2004. Fresenius Medical Care carried out 4.6 million dialysis treatments in the first quarter 2004, thereof 3.2 million in North America (+ 6 %) and 1.4 million (+ 12 %) in the international business.

Fresenius Medical Care increased EBIT by 17 % to US$ 198 million (Q1 2003: US$ 169 million). This increase is based on the very positive development of Fresenius Medical Care's US operations as well as the strong performance of its international business. Net income increased 30 % to US$ 91 million in the first quarter 2004.

For the year 2004, Fresenius Medical Care confirms its outlook for the top-line and expects sales growth in constant currency in the mid-single digit range. Net income growth is now expected to be at the high end of Fresenius Medical Care's original guidance - which is in the low double digit range.

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

Fresenius Kabi

Fresenius Kabi focuses on nutrition and infusion therapy for critically and chronically ill patients, in both the hospital and ambulatory care environment, and on infusion and trans-fusion technology.

Fresenius Kabi's sales were € 362 million in the first quarter 2004, up 2 % from previous year's sales of € 355 million. Fresenius Kabi had a very good organic growth of 6 %. Latin America and Asia-Pacific achieved growth rates of 18 % each. Europe contributed with a growth of 2 %, despite -5 % in Germany. Besides increasing cost savings in health care and price pressure, the German market was marked by uncertainties about the new reimbursement regulations for the ambulatory area. Currency translation reduced sales by 2 % and disinvestments had an impact of -2 %. In the first quarter 2004, Fresenius Kabi sold the medical-technical equipment rental activities of a French subsidiary through a management buy-out.

Fresenius Kabi achieved a 5 % increase in hospital business sales, to € 298 million (Q1 2003: € 284 million). Ambulatory Care sales were € 64 million, down 10 % (Q1 2003: € 71 million). This was mainly caused by the disinvestment mentioned above.

Fresenius Kabi's EBIT rose 17 % in the first quarter 2004 to € 41 million, a significant improvement on previous year's figure of € 35 million. The EBIT margin increased to 11.3 %, continuing the positive earnings trend (Q1 2003: 9.9 %).

For the full year 2004, Fresenius Kabi sales are expected to increase by mid single-digit growth rates in constant currency. The EBIT margin is expected to increase to about 11 % (2003: 10 %).

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.

Fresenius ProServe increased sales in the first quarter 2004 by 20 % to € 199 million (Q1 2003: € 166 million). This sales increase is entirely based on organic growth. The strong increase in sales is mainly due to the positive development in the Health care Project business.

Order intake at Fresenius ProServe increased 6 % to € 70 million in the first quarter 2004 (Q1 2003: € 66 million). This increase was mainly driven by the Health care Project business. Order backlog slightly decreased to € 431 million compared to € 435 million at December 31, 2003.

Fresenius ProServe achieved an EBIT of € 1 million in the first quarter 2004 (Q1 2003: € 6 million). This figure includes € 1 million before tax of one-time expenses for measures to cut costs and improve profitability at Wittgensteiner Kliniken AG (WKA). By reducing staffing levels and optimizing processes and costs, Fresenius ProServe is adjusting its fixed cost structure to better reflect market conditions. The current bed utilization rate in WKA's German hospitals decreased in the first quarter 2004 to 78 % compared to the previous year's level of 79 %.

Fresenius ProServe expects 2004 sales to grow by around 10 %. Based on the weak first quarter earnings performance, it will be a challenge to achieve the full-year EBIT projection of € 25 million before the anticipated 2004 WKA one-time expenses of € 8 million.

Fresenius Kabi, a company of the Fresenius healthcare group, is continuing to expand its market position in South Africa. The European leader in infusion and nutrition therapy today announced that it has acquired Isotec Nutrition from Alliance Pharmaceuticals and the general manager of Isotec, who will continue to hold an executive position. Isotec Nutrition is specialized in compounding and sales of infusion solutions for parenteral (= via the vein) nutrition. Isotec already has a longstanding sales and marketing relationship with Fresenius Kabi South Africa. In 2003, Isotec Nutrition had sales of approx. 10 million €.

Fresenius Kabi is successfully operating in South Africa with its own subsidiary since March 1999 and is the market leader in the areas of parenteral nutrition, generic IV drugs and blood volume substitution. In 2000, Fresenius Kabi acquired Intramed, the leading supplier of standard infusion solutions in South Africa. In addition, Fresenius Kabi has successfully launched products of its enteral nutrition program.

With the acquisition of Isotec Nutrition, Fresenius Kabi further strengthens it's leading position in the field of parenteral nutrition in the South African market. Furthermore, the company completes its product range in the field of infusion and nutrition therapy and has a strong platform for future growth not only in South Africa, but in the whole southern part of the continent. With a population of approximately 200 million people, the southern part of Africa is an important international growth market for Fresenius Kabi.

Summary Second Quarter 2004:
Company raises guidance on following strong first half performance.

• Net Revenue: $ 1,552 million, +14%
• Operating Income (EBIT): $ 213 million, +16%
• Net income: $ 101 million, +27%
• Operating Cash Flow: $ 180 million, +3%
• Free Cash Flow: $ 126 million, -9%

Bad Homburg, Germany - August 04, 2004 -- 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 second quarter and the first six months of 2004.

Second Quarter 2004

Revenue
Total revenue for the second quarter 2004 increased 14% (12% at constant currency) to $ 1,552 million. The consolidation of the Cardio Vascular Resources and certain dialysis clinics in accordance with a new accounting regulation (FIN 46R) contributed approx. 2.6% to the growth rate. Dialysis Care revenue grew by 15% to $ 1,127 million (14% at constant currency) in the second quarter of 2004. Same store treatment growth worldwide was 4%. Dialysis Product revenue (including internal sales) increased 11% to $ 557 million (7% at constant currency) in the same period. The internal sales increased to $ 132 million after $ 116 million in the second quarter of 2003.

North America revenue increased 10% to $ 1,052 million, compared to $ 955 million in the same period last year. Dialysis Care revenue increased by 12% to $ 948 million. The average revenue per treatment increased to $ 289 in the second quarter 2004 (Q2 2003: $ 275). Dialysis Product revenue, including sales to company-owned clinics, was up 2% at $ 199 million. Product sales to the available external market was flat as expected.

International revenue was $ 500 million, up 21% from the second quarter of 2003, an increase of 15% adjusted for currency. Dialysis Care revenue reached $ 179 million, an increase of 35% (28% at constant currency). Dialysis Products revenue, including sales to company-owned dialysis clinics, increased 16% to $ 358 million (9% at constant currency).

Earnings
Operating income (EBIT) increased 16% to $ 213 million resulting in an operating margin of 13.7% (Q2 2003: 13.5%). The increase of 20 basis points was mainly due to increased treatments and efficiency improvements in North America. Compared to the second quarter 2003 the margin in North America increased by 50 basis points to 14.0%. In our International segment the operating margin remained at 15.0% comparable to the second quarter in the previous year. This reflects a stable European business and improvements in Latin America which were offset mainly by price pressure in Japan as a result of bi-annual reimbursement rate reductions.

Group net interest expenses decreased by 14% to $ 45 million, compared to $ 53 million last year. This positive development was mainly attributable to a lower debt level and the conversion of a portion of debt from fixed into variable interest rates.

Income tax expense was $ 67 million versus $ 51 million in the second quarter 2003, reflecting an effective tax rate of 39.8% compared to 39.0% in the second quarter of last year.

Net income in the second quarter 2004 was $ 101 million, an increase of 27% and a quarterly record for the company.

Earnings per share (EPS) in the second quarter 2004 rose 27% to $ 1.04 per ordinary share ($ 0.35 per ADS), compared to $ 0.82 ($ 0.27 per ADS) in the second quarter of 2003. The weighted average number of shares outstanding during the second quarter of 2004 was approximately 96.2 million.

Cash Flow
In the second quarter of 2004, the Company generated $ 180 million in net cash from operations. This performance was ahead of expectations and the net cash from operations represented nearly 12% of total revenue.

A total of $ 54 million (net of disposals) was spent for capital expenditures. This resulted in a Free Cash Flow before acquisitions of $ 126 million compared to the second quarter of 2003 with $ 138 million. This high level of Free Cash Flow was primarily supported by the increase in net income. The days sales outstanding (DSO) remained unchanged at 86 days in the second quarter compared to the first quarter 2004. Compared with the second quarter of the previous year DSO are reduced by 7 days. North America as well as the International region contributed to this development.

A total of $ 10 million in cash was spent for acquisitions. The Free Cash Flow after acquisitions increased therefore by 7% to $ 116 million compared to $ 109 million last year.

First Half Year 2004:

Earnings and Revenue
In the first half of 2004, net income was $ 192 million, up 28% from the first half of 2003. Net revenue was $ 3,011 million, up 13% from the first half of 2003. Currency adjusted, net revenue rose 10% in the first half of 2004. Operating income (EBIT) increased 16% to $ 411 million resulting in an operating margin of 13.6%.

Group net interest expenses for the first six months 2004 decreased by 14% to $ 92 million, compared to $ 107 million last year. Income tax expense was $ 126 million in the first half of 2004 versus $ 96 million in the same period in 2003. This reflects an effective tax rate of 39.6% compared to 38.9% in the first half of last year.

In the first half of 2004, earnings per ordinary share rose 28% to $ 1.98. Earnings per ordinary ADS for the first half of 2004 were $ 0.66.

Cash Flow
Cash from operations during the first six months of 2004 was up 17% to $ 351 million compared to $ 300 million in the first six months of 2003. A total of $ 95 million was spent for capital expenditures (net of disposals). This resulted in a Free Cash Flow for the first half of 2004 of $ 256 million compared to $ 222 million in the first half of 2003. Net cash used for acquisitions was $ 52 million.

Patients - Clinics - Treatments
At the end of the second quarter 2004, Fresenius Medical Care served about 122,700 patients worldwide which represents an increase of 6%. North America provided dialysis treatments for ~84,700 patients (+5%) and the International segment for ~38,000 patients (+9%).

As of June 30, 2004, the Company operated a total of 1,590 clinics worldwide (1,125 clinics/+3% in North America and 465 clinics/+12% International).

Fresenius Medical Care AG performed approximately 9.2 million treatments in the first half 2004, which represents an increase of 7% year over year. North America accounted for 6.4 million treatments (+5%) and the International segment for 2.9 million (+11%).

Outlook 2004
Based on the strong performance in the first half of 2004 the company lifts its guidance for the full year 2004. After expecting a net revenue growth at constant currencies in the mid-single digit range the Company now expects the top-line to grow in the high single digits. After expecting a net income growth for 2004 in the low double digit range the Company now expects net income growth to be in the mid teens.

Ben Lipps, Chief Executive Officer of Fresenius Medical Care, commented: "Our operating fundamentals and our financial focus continues to translate into strong top line revenue growth and bottom line earnings after tax growth. We are particularly pleased with the results of Europe, North America and Latin America. In addition, we saw continued good performance in free cash flow for the first half of 2004. We also believe that our first half-year 2004 results and our global position in this exciting market, result in a solid foundation to look optimistically toward the full-year of 2004 and beyond".

Please note:
An analyst meeting will take place today at 3.15 pm CET. This meeting will be broadcasted live over the Internet in a listen only mode at www.fmc-ag.com.

First Half 2004: Fresenius raises sales and earnings outlook

• Sales: € 3.55 billion, +9 % in constant currency, +3 % at actual exchange rates
• EBIT: € 412 million, +13 % in constant currency, +6 % at actual exchange rates
• Net income: € 80 million, +21 % in constant currency, +14 % at actual exchange rates

Business continues to develop successfully

• Earnings performance improved.
• Cashflow of € 239 million at record level.
• Fresenius Medical Care and Fresenius Kabi with excellent sales and earnings performance.
• Weak market condition continues to affect Fresenius ProServe.
• Group outlook for 2004 raised.

Group outlook for 2004
Based on the excellent results at Fresenius Medical Care and Fresenius Kabi the Company raises its full-year outlook: Fresenius now expects a high-single digit percent increase in sales in constant currency. Previously, the Company expected a mid-single digit percent increase in sales. Net income is expected to grow approximately 30 % in constant currency. Previously, the Company expected net income to grow at 25-30 %. Sales and earnings growth is expected in all business segments.

Sales
Sales in the first half of 2004 rose 9 % in constant currency. Organic growth was 7 %, acquisitions contributed 2 %. Currency translation effects had a negative 6 % effect on sales. At actual exchange rates sales increased 3 % to € 3,553 million.

Sales in North America accounted for 48 % and Europe for 39 % of total sales, followed by Asia-Pacific with 7 %. Sales in Latin America and other regions accounted for 6 % of total sales. Very good regional growth rates of 19 % in constant currency were achieved in Asia-Pacific and Latin America. We expect that Asia-Pacific and Latin America will continue to offer above-average growth opportunities for Fresenius in the future.

Sales contribution of the three business segments:

Fresenius Medical Care's lower share of Group sales is due to currency translation effects.

Earnings
The Group was able to increase earnings despite negative currency translation effects: Using actual exchange rates, EBITDA rose 4 % to € 564 million (first half 2003: € 543 million). In constant currency, EBITDA rose 10 %. Group EBIT increased 13 % in constant currency and 6 % at actual exchange rates to € 412 million (first half 2003: € 390 million).

Net interest also improved to € -104 million in the first half of 2004 compared to
€ -125 million last year. This is due to a lower debt level as well as the conversion to a variable rate from a fixed interest rate on payments on some of Fresenius Medical Care's debt. Currency exchange rates also had a favorable impact.

The effective tax rate for the first half 2004 was 40.6 % (first half 2003: 39.2 %).

In the first half of 2004, minority interests increased to € 103 million compared to € 91 million in the first half of 2003. 96 % of minority interests were attributed to Fresenius Medical Care.

Net income rose 21 % in constant currency and 14 % at actual exchange rates, to € 80 million (first half 2003: € 70 million). The excellent operating performance of Fresenius Medical Care and Fresenius Kabi as well as significantly lower interest expenses resulted in the increase in net income despite higher taxes.

Earnings per ordinary share rose to € 1.95 (first half 2003: € 1.70). Earnings per preference share rose to € 1.97 (first half 2003: € 1.72). This represents an increase of 14 %.

Investments
In the first half, Fresenius invested € 172 million (first half 2003: € 157 million) including € 111 million on capital expenditures for property, plant and equipment and intangible assets (first half 2003: € 113 million) and € 61 million on acquisitions (first half 2003: € 44 million).

Capital expenditures at Fresenius Medical Care were mainly used to construct new dialysis clinics or expand and modernize existing clinics as well as maintain and expand production sites. Fresenius Kabi's production sites were expanded and optimized. The investments at Fresenius ProServe included the purchase of technical medical equipment as well as the modernization of hospitals and clinics, such as the construction of highly modern operating theatres in an orthopedic clinic.

Fresenius Medical Care spent € 49 million on acquisitions mainly to buy dialysis clinics. € 12 million was spent on acquisitions for Fresenius Kabi and Fresenius ProServe. Europe accounted for 45 % of Group investments, North America for 44 % and other regions for 11 %.

Cash flow
Operating cash flow and free cash flow reached new all-time highs in the first-half year: Operating cash flow rose 9 % to € 340 million (first half 2003: € 311 million) due to the positive development of Group net income. Free cash flow before acquisitions and dividends increased 15 % to € 239 million (first half 2003: € 208 million). Free cash flow after acquisitions and dividends rose 6 % to € 67 million (first half 2003: € 63 million). Cash used for acquisitions was € -53 million (net) and dividends were € -119 million.

Asset and capital structure
Total assets rose 5 % to € 8,792 million (December 31, 2003: € 8,347 million) or 3 % in constant currency. Total current assets increased 10 % to € 3,031 million (December 31, 2003: € 2,744 million). This increase was due mainly to an increase in trade accounts receivable (+14 %), since receivables from the Fresenius Medical Care receivable securitization program are stated in the balance sheet starting this year following an amendment of the program.

This change impacted also group debt. Debt was € 3,188 million at actual rates (constant currency: € 3,123 million) as of June 30, 2004. In comparison, debt at the end of 2003 including liabilities related to the receivable securitization program was € 3,148 million (excluding the securitization program: € 3,023 million).

The ratio of net debt/EBITDA remained unchanged from the end of 2003 at 2.7.

Shareholders' equity including minority interests was € 3,375 million, up 5 % from € 3,214 million on December 31, 2003. The equity ratio including minority interests was 38.4 % (December 31, 2003: 38.5 %).

Employees
Fresenius had 69,128 employees worldwide on June 30, 2004, an increase of 4 % over the 66,264 employees at the end of 2003.

Fresenius Biotech
Fresenius Biotech develops innovative therapies with trifunctional antibodies for the treatment of cancer as well as cell therapies used to treat end-stage HIV infection. 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 rejection following organ transplantations.

As expected, the first results from a phase I study using the trifunctional antibodies in non-small-cell lung cancer, breast cancer and peritoneal carcinomatosis are planned to be announced during the remainder of this year.

First intermediate results of a phase I/II study reviewing the treatment of patients with end-stage HIV infection will be available in early 2005. The study is expected to show whether the mode of action functions in treating humans.

Business Segments

Fresenius Medical Care

Fresenius Medical Care is the world's leading provider of products and services for patients with chronic kidney failure. As at June 30, 2004, Fresenius Medical Care treated about 122,700 patients (+6 %) in 1.590 dialysis clinics (+5 %).

• Excellent growth in sales (+13 %) and net income (+28 %)
• Number of dialysis treatments rose 7 %
• Full-year guidance raised

In the first half of 2004, Fresenius Medical Care achieved significant sales growth of 13 % to $ 3,011 million (first half 2003: $ 2,666 million), or 10 % in constant currency.

Fresenius Medical Care increased sales by strong 9 % in its key North American market which accounts for 68 % of sales. Outside North America (International segment) sales rose 23 %, or a strong 13 % increase in constant currency.

Sales of dialysis products at Fresenius Medical Care increased 11 % to $ 826 million. Sales of dialysis services grew 14 % to $ 2,185 million. Dialysis services sales are mainly determined by the number of treatments: In the first half of 2004, Fresenius Medical Care performed 9.2 million dialysis treatments, 7 % more than in the first half of 2003, including 6.3 million (+5 %) in North America and 2.9 million (+11 %) outside North America.

Fresenius Medical Care increased EBIT by 16 % to $ 411 million in the first half of 2004 from $ 353 million in the first half of 2003. Net income at Fresenius Medical Care increased 28 % in the first half to $ 192 million.

Based on the strong performance in the first half of 2004 Fresenius Medical Care lifts its guidance for the full year 2004. After expecting a net revenue growth at constant currencies in the mid-single digit range Fresenius Medical Care now expects the top-line to grow in the high-single digits. After expecting a net income growth for 2004 in the low double digit range Fresenius Medical Care now expects net income growth to be in the mid teens.

For further information, please see Fresenius Medical Care's website: www.fmc-ag.com.  

Fresenius Kabi

Fresenius Kabi is a leading provider of nutrition and infusion therapy for critically and chronically ill patients in the hospital and ambulatory environment. In addition, the company offers products in the field of infusion and transfusion technology.

• EBIT increase of 20 %
• Excellent organic growth of 6 %
• Full-year margin forecast increased from 11.0 % to approximately 11.5 %
• Capital Market Day planned for December 8, 2004

Sales at Fresenius Kabi rose 3 % to € 738 million (first half 2003: € 718 million). Fresenius Kabi achieved excellent overall organic growth of 6 %. Latin America and Asia-Pacific performed exceptionally well, accounting for organic growth of 13 % and 21 % respectively. Pricing pressure and cost-cutting in the health care sector led to a 6 % decline in sales in Germany. Excluding Germany, Fresenius Kabi achieved organic revenue growth of 8 % in Europe. Currency exchange rates had an effect of -1 % on first-half sales. Divestments decreased sales by 2 %.

Fresenius Kabi's EBIT increased by 20 % to € 85 million in the first half of 2004. This result significantly exceeds last year's figure of € 71 million. The EBIT margin increased by 160 basis points from 9.9 % in the first half of 2003 to 11.5 %, continuing the positive earnings trend.

Based on the good first-half year results, Fresenius Kabi is raising its earnings outlook and now expects the EBIT margin to increase to approximately 11.5 % after predicting 11.0 % in February. Full-year sales at Fresenius Kabi in constant currency are expected to achieve an increase in the mid-single digit percentages.

A Capital Market Day is dated for December 8, 2004 to present in detail Fresenius Kabi's business and strategic direction.

Fresenius ProServe

Fresenius ProServe offers services to the international health care sector. The health care business includes hospital management as well as the planning and construction of hospitals. The pharma industry business focuses on the planning and the construction of pharmaceutical plants and medical technical production sites.

• Organic growth of 14 %
• Order intake increased
• Continued low bed utilization in Germany
• 2004 EBIT forecast lowered to € 15 to € 20 million before one-time expenses

First-half sales at Fresenius ProServe rose to € 383 million, an increase of 14 % compared to the first half of 2003 (€ 336 million) due entirely to organic growth. Sales growth came primarily from the positive development of the health care project business.

Order intake at Fresenius ProServe increased in the first half by 6 % to € 136 million (first half 2003: € 128 million). This increase grew out of projects both in the health care and the pharma industry business. The order backlog was € 438 million (December 31, 2003: € 435 million).

Fresenius ProServe achieved an EBIT before one-time expenses of € 6 million (first half 2003: € 10 million). Including one-time expenses of € 6 million (before tax), EBIT was € 0 million. The 79 % bed utilization rate at the German hospital business of WKA was below the 80 % in the first half of 2003. To adjust its fixed costs to market conditions, Fresenius ProServe is reducing staff and optimizing processes and costs.

The full-year EBIT target of € 25 million before one-time expenses is no longer achievable since first-half results of 2004 were below expectations and the bed utilization rate continues to remain weak. Fresenius ProServe now expects an EBIT between € 15 million and € 20 million before one-time expenses. One-time expenses are expected to be in the range of € 8 million. Sales at Fresenius ProServe are still expected to increase 10 % in 2004.

Please note:

An analyst meeting will take place today at 1.30 pm CET. This meeting will be broadcasted live over the Internet in a listen only mode at www.fresenius-ag.com.

Fresenius Kabi and the Australian pharmaceutical company Pharmatel Pty Ltd. have formed a joint venture to market infusion and nutrition therapy products in Australia. Fresenius Kabi holds a 25.1 % and Pharmatel a 74.9 % stake in the joint venture. Fresenius Kabi will increase its stake to 50.1 % until 2006. The new company, Pharmatel Fresenius Kabi Pty Ltd., was launched September 1, 2004 and sells products of Fresenius Kabi and of Pharmatel.
Pharmatel Pty Ltd., headquartered in Sydney, has a leading market position in Australia in the field of oncology compounding. It also specializes in gastrointestinal therapies including bowel lavage products for bowel cleansing prior to colonoscopy or surgery. The company had sales of approx. € 18 million in 2003 and employs 65 people. The current management team of Pharmatel will continue to hold executive positions within the joint venture.

"The joint venture with Pharmatel is a further step of our strategy to expand into growth markets. Its compounding facilities in Sydney and Melbourne are a perfect platform for Fresenius Kabi to enter the parenteral nutrition compounding market in Australia. Pharmatel has excellent relationships with hospitals, high local awareness and a very good reputation for customer service. It is our goal to become one of the leading hospital suppliers in Australia", Mats Henriksson, Member of the Management Board of Fresenius Kabi and responsible for the Region Asia Pacific, commented.

"By partnering with Fresenius Kabi, Pharmatel strengthens its middle and long term position in the Australian market", Pharmatel Chairman and Managing Director George Shortis said.

Fresenius AG today announces the retirement of Mr. Udo Werlé (60) after eleven successful years as Chief Financial Officer and Labor Relations Director of Fresenius AG, effective December 31, 2004. He will continue to be involved with the Group as a consultant.

After joining the Management Board of Fresenius AG in 1994, Udo Werlé was instrumental in the successful growth of the Group. He played a key role in the acquisition of the dialysis services company National Medical Care as well as the formation of Fresenius Medical Care in 1996. He also served on the Board of Management of Fresenius Medical Care AG as Chief Financial Officer from 1996 to 1997 and as Chief Executive Officer from 1998 to 1999.

The Supervisory Board of Fresenius AG unanimously appointed Mr. Stephan Sturm (41) as new Chief Financial Officer and Labor Relations Director beginning January 1, 2005.

Stephan Sturm began his career at McKinsey before entering the banking sector in 1991. In 1998 he joined Credit Suisse First Boston where he currently serves as Managing Director Investment Banking responsible for Germany and Austria. He also is a member of CSFB's European Management Committee.

"Mr. Werlé played a key role in the development of the Group for many years. We are very indebted to him for his contributions and wish him all the best for the future. I very much welcome Mr. Sturm as a new member of our Management Board and Chief Financial Officer and look forward to working together. His broad financial experience and familiarity with Fresenius and the health care industry will assure a seamless transition in this vital function," commented Dr. Ulf M. Schneider, Chairman of the Management Board of Fresenius AG.