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Fresenius Medical Care AG & Co. KGaA (Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, announced an agreement with Abu Dhabi Health Services Co. PJSC (SEHA) for the management of its dialysis facilities in the emirate of Abu Dhabi. SEHA is a public provider of health care services in the United Arab Emirates. Both parties announced their signing of a non-binding memorandum of understanding on the deal in September 2010.
The 10-year agreement is effective as of March 27, 2011. Fresenius Medical Care will manage SEHA's six dialysis clinics in the emirate and treat a total of approximately 600 patients. A further 260-patient dialysis facility is currently under construction. Clinic physicians and nursing staff remain employees of SEHA. Both parties have agreed not to disclose financial details of the transaction.

"This agreement enables Fresenius Medical Care to expand its presence in a key Middle Eastern market," said Dr. Emanuele Gatti, the company's global chief strategist and CEO for Europe, Latin America, the Middle East and Africa. "As a vertically integrated dialysis company, we are the right partner for successful, long-term cooperation to improve the quality of dialysis patients' lives in Abu Dhabi. At the same time, the contract is an excellent basis for further growth of our company in this region."

Saif Bader Al Qubaisi, managing director and chairman of SEHA, commented: "Our goal is to provide world-class health care services for the citizens of Abu Dhabi. We are confident that the management partnership in our medical facilities will achieve the same outstanding quality treatment provided by Fresenius Medical Care's own dialysis clinics."

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Summary First Quarter 2011
 

• Net revenue: $3,036 million, +5%
• Operating income (EBIT): $445 million, +5%
• Net income*: $221 million, +5%
• Earnings per share: $0.73, +4%

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

Fresenius Medical Care AG & Co. KGaA (the company or Fresenius Medical Care; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced its results for the full year and fourth quarter of 2010.

Revenue

Net revenue for the first quarter of 2011 increased by 5% to $3,036 million (+5% at constant currency) compared to the first quarter of 2010. Organic revenue growth worldwide was 3%. Dialysis services revenue grew by 5% to $2,285 million (+5% at constant currency) and dialysis product revenue increased by 6% to $751 million (+5% at constant currency).

North America revenue increased by 1% to $1,977 million including the impact of the new Medicare end-stage renal disease prospective payment system in the United States. Organic revenue growth was 1%. Dialysis services revenue grew by 1% to $1,782 million with a same market growth of 4%. Average revenue per treatment for U.S. clinics decreased to $348 in the first quarter of 2011 compared to $355 for the corresponding quarter in 2010 reflecting the targeted implementation of the new prospective payment system. Dialysis product revenue decreased by 2% to $195 million mainly due to lower pricing of renal drugs, partially offset by higher sales of dialysis products.

International revenue increased by 14% to $1,055 million. Based on constant currency, revenue grew by 13%. Organic revenue growth was 6%. Dialysis services revenue was $503 million, an increase of 23% (+21% at constant currency). Dialysis product revenue increased by 8% to $552 million and increased by 6% at constant currency, mainly driven by higher sales of peritoneal dialysis products, dialyzers, bloodlines, and products for acute care treatments.
 

Earnings

Operating income (EBIT) for the first quarter of 2011 increased by 5% to $445 million compared to $425 million in the first quarter of 2010. This resulted in an operating margin of 14.7% for the first quarter of 2011 compared to 14.8% for the corresponding quarter in 2010.

In North America, the operating margin increased from 15.7% to 15.8%. The margin development was mainly influenced by the favorable development of pharmaceutical costs and the negative effects of the implementation of the new Medicare end-stage renal disease prospective payment system in the United States.

In the International segment, the operating margin decreased from 16.4% to 16.2%.

Net interest expense for the first quarter of 2011 was $72 million, compared to $67 million in the first quarter of 2010. This development was mainly attributable to a higher debt level.

Income tax expense was $124 million for the first quarter of 2011 compared to $128 million in the first quarter of 2010 and reflecting effective tax rates of 33.3% and 35.6%, respectively.

Net income attributable to FMC AG & Co. KGaA for the first quarter of 2011 was $221 million, an increase of 5%, compared to the corresponding quarter of 2010.

Earnings per share (EPS) for the first quarter of 2011 rose by 4% to $0.73 per ordinary share compared to $0.70 for the first quarter of 2010. The weighted average number of shares outstanding for the first quarter of 2011 was approximately 302.3 million shares, compared to 299.6 million shares for the first quarter of 2010. The increase in shares outstanding resulted from stock option exercises in the past 12 months.

Cash Flow

In the first quarter of 2011, the company generated $175 million in cash from operations, representing approximately 6% of revenue. The cash flow generation was supported by increased earnings and negatively influenced by an unfavorable development of DSOs, primarily related to the introduction of the new Medicare end-stage renal disease prospective payment system in the United States, and raised inventory levels.

A total of $113 million was spent for capital expenditures, net of disposals. Free cash flow before acquisitions was $62 million compared to $250 million in the first quarter of 2010. A total of $339 million in cash was spent for acquisitions and investments, net of divestitures. Approximately $300 million of the expenditures was a minority investment in Renal Advantage Partners LLC, the parent company of Renal Advantage, Inc. Additionally, we have entered into agreements to provide renal products, pharmaceutical supplies and other services to Renal Advantage and Liberty Dialysis Inc.

Free cash flow after acquisitions, investments and divestitures was -$277 million, compared to $168 million in the first quarter of 2010.


Please refer to the appendix for a complete overview on the first quarter of 2011.

Patients – Clinics – Treatments

As of March 31, 2011, Fresenius Medical Care treated 216,942 patients worldwide, which represents a 9% increase compared to the previous year's figure. North America provided dialysis treatments for 138,392 patients, an increase of 4%. Including 21 clinics managed by Fresenius Medical Care North America, the number of patients in North America was 139,887. The International segment served 78,550 patients, an increase of 20% over the prior year's figure.

As of March 31, 2011, the company operated a total of 2,769 clinics worldwide, which represents an 8% increase compared to the previous year's figure. The number of clinics is comprised of 1,823 clinics in North America (1,844 including managed clinics), and 946 clinics in the International segment, representing an increase of 3% and 19%, respectively.

During the first quarter of 2011, Fresenius Medical Care delivered approximately 8.17 million dialysis treatments worldwide. This represents an increase of 9%, compared to last year's figure. North America accounted for 5.24 million treatments, an increase of 4%. The International segment delivered 2.93 million treatments, an increase of 19%.

Employees
 

As of March 31, 2011, Fresenius Medical Care had 74,844 employees (full-time equivalents) worldwide, compared to 73,452 employees at the end of 2010. This increase of more than 1,300 employees is due to overall growth in the company's business and acquisitions.

Debt/EBITDA Ratio

The ratio of debt to Earnings before interest, taxes, depreciation and amortization (EBITDA) increased from 2.30 at the end of the first quarter of 2010 to 2.55 at the end of the first quarter of 2011. The debt/EBITDA ratio at the end of 2010 was 2.38.

Rating

 

Standard & Poor's Ratings Services continues to rate the company's corporate credit as ‘BB' with a ‘positive' outlook. Moody's continues to rate the company's corporate credit as ‘Ba1' with a ‘stable' outlook, and Fitch continues to rate the company's corporate credit as ‘BB' with a ‘positive' outlook.

For further information on Fresenius Medical Care's credit ratings, maturity profiles and credit instruments, please visit our website at www.fmc-ag.com / Investor Relations / Credit Relations.


Issuance of Senior Notes

In Feb. 2011 Fresenius Medical Care issued $-denominated and €-denominated senior unsecured notes due 2021 in the respective principal amounts of $650 million and €300 million. The coupon for the $ senior notes is 5.75%, while the coupon for the € senior notes is 5.25%. The net proceeds amounted to approximately $1,035 million.

Acquisition of dialysis service business from Euromedic

On Jan. 4, 2011, Fresenius Medical Care announced the signing of a purchase agreement to acquire International Dialysis Centers (IDC), Euromedic's dialysis service business for a purchase price of €485 million. Fresenius Medical Care is thus expanding its activities in the dialysis care market, especially in Eastern Europe, where IDC treats over 8,200 hemodialysis patients. The transaction remains subject to necessary regulatory approvals by the relevant anti-trust authorities and is expected to close in the second quarter of 2011. Upon completion, the acquired operations will add approximately $180 million in annual revenue and are expected to be accretive to earnings in the first year after closing of the transaction.


Outlook for 2011 raised

Based on the strong financial results in the first quarter of 2011 and the elimination of the so-called "transition adjustment" imposed on dialysis facilities (as part of the new Medicare end-stage renal disease prospective payment system) in the United States, the company raises its outlook for the full year 2011.

Revenue is now expected to grow to above $13 billion. Previously, the company expected revenue between $12.8 billion and $13.0 billion.

Net income attributable to FMC AG & Co. KGaA is now expected between $1.070 billion and $1.090 billion. Previously, the company expected net income between $1.035 billion and $1.055 billion.

For 2011, the company still expects to spend around 5% of revenue on capital expenditures and approximately $1.2 billion on acquisitions. The debt/EBITDA ratio is expected to be below or equal to 2.8 by the end of 2011, likewise unchanged from the previous guidance.

"We are pleased to report a successful first quarter of 2011 with strong operational performance – despite the expected implementation challenges posed by the new Medicare end-stage renal disease prospective payment system in the United States", said Ben Lipps, chief executive officer of Fresenius Medical Care. "We would again like to express our appreciation to the Centers for Medicare & Medicaid Services (CMS) and the Administration for making this correction, and for their willingness in the past years to work with the entire kidney care community in the process of establishing the new reimbursement system, helping to improve the quality of life of all dialysis patient covered by Medicare."

Conference Call

Fresenius Medical Care will hold a conference call to discuss the results of the first quarter of 2011 on Wednesday, May 4, 2011, at 3:30 p.m. CEDT / 9:30 a.m. EDT. The Company invites investors to view the live webcast of the call at the Company's website www.fmc-ag.com in the "Investor Relations" section. A replay will be available shortly after the call.

Contact

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Q1 2011:

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

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

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

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

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

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

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

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

Sales growth in the business segments was as follows:



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



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

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

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

The Group tax rate* was 30.7% (Q1 2010: 33.2%). The prior year was impacted by non-tax deductible charges related to the devaluation of the Venezuelan Bolivar.
Noncontrolling interest increased to €135 million (Q1 2010: €120 million), of which 93% was attributable to the noncontrolling interest in Fresenius Medical Care.

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

Group net income*** (including special items) reached €128 million or €0.79 per ordinary share.

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

Continued investments in growth
The Fresenius Group spent €136 million on property, plant and equipment (Q1 2010: €124 million). Acquisition spending was €311 million (Q1 2010: €81 million), mainly due to acquisitions at Fresenius Medical Care.

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

Solid balance sheet structure
The Group's total assets were €23,572 million (Dec. 31, 2010: €23,577 million). In constant currency, the increase was 4%. Current assets increased by 6% (9% in constant currency) to €6,808 million (Dec. 31, 2010: €6,435 million). Non-current assets were €16,764 million (Dec. 31, 20010: €17,142 million). In constant currency, the increase was 2%.

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

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

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

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

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

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

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

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

In the first quarter of 2011, Fresenius Biotech's EBIT was -€7 million (Q1 2010: -€8 million). For 2011, Fresenius Biotech expects an EBIT of about -€30 million.


Business Segments

Fresenius Medical Care
Fresenius Medical Care is the world's leading provider of services and products for patients with chronic kidney failure. As of March 31, 2011, Fresenius Medical Care was treating 216,942 patients in 2,769 dialysis clinics.

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

*Net income attributable to Fresenius Kabi AG


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

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

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

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

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

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

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

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

*Net income attributable to HELIOS Kliniken GmbH


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

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

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

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

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

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

*Net income attributable to VAMED AG

Conference Call and Audio Webcast
As part of the publication of the results for the first quarter of 2011, a conference call will be held on May 4, 2011 at 2.00 p.m. CET (8.00 a.m. EST). You are cordially invited to follow the conference in a live broadcast over the Internet at www.fresenius.com, see Press, Audio/Video Service. Following the meeting, a recording of the conference will be available as video-on-demand.

Contact

Head of Corporate Communications
T +49 (0) 6172 608-96008
pr-fre@fresenius.com

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Fresenius Medical Care, the world's largest provider of products and services for individuals undergoing dialysis because of chronic kidney failure, anticipates a substantial increase in revenue and earnings for 2011. At the annual general meeting in Frankfurt/Main, Germany, today, Dr. Ben Lipps, the company's Chief Executive Officer, confirmed Fresenius Medical Care's full-year outlook, which was raised this month. The company expects revenues of over US$13 billion and net income* between US$1.07 billion and US$1.09 billion in 2011.

"Fresenius Medical Care is well positioned for future growth in the dialysis market," Lipps told shareholders. "We will continue to shape the future of the market and retain our leadership position. Making quality the priority, we will grow internationally, expand our product and service offerings and continue to innovate. Fresenius Medical Care will remain the world's leading renal therapy company."

Shareholders approved the 14th consecutive dividend increase with a large majority of 99.98%. The dividend will increase to €0.65 from €0.61 per ordinary share and to €0.67 from €0.63 per preference share.

As a result of the shareholder vote, the company's supervisory board shall continue to include Dr. Gerd Krick as Chairman as well as Professor Bernd Fahrholz, William P. Johnston, Dr. Dieter Schenk and Walter L. Weisman. Rolf A. Classon, Chairman of Hill-Rom Holdings Inc., was elected as a new member of the supervisory board. Shareholders also endorsed the management board's proposal to amend the supervisory board's remuneration system. In addition to the existing fixed remuneration, a variable, performance-related remuneration component based on the company's long-term performance will be introduced. This is in line with recommendations contained in the German Corporate Governance Code.

With a further majority of 98.86%, shareholders also approved cancellation of the previous conditional capital for servicing expired stock options and subscription rights for employees. The creation of new conditional capital to provide for the company's 2011 stock option program was also approved. For a period of five years, stockholders endorsed Fresenius Medical Care's repurchase of up to 10 percent of its registered share capital for use in the company's interest.

Shareholders approved the actions taken and decisions made by the supervisory board and the management board with a majority of more than 99%.

At the annual general meeting, 78.84% of the subscribed capital was represented. Only ordinary-share holders were entitled to vote.

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

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After record results in 2010, Fresenius expects another outstanding year in 2011. At the company's annual general meeting held today in Frankfurt am Main, Ulf Mark Schneider, CEO of Fresenius, fully confirmed the Group outlook raised in early May following an excellent start into the current fiscal year: Sales are expected to increase by 7% to 8% in constant currency. Net income* is expected to increase by 12% to 16% in constant currency. Schneider also confirmed the Group's mid-term net income target of more than €1 billion in 2014. "This is an ambitious goal. Based on €660 million in net income in 2010, we have to accomplish compounded annual net income growth of 11% over the next four years," Schneider said.

Fresenius anticipates particularly strong growth due to rising demand for health care in emerging markets: "In the Asia-Pacific and Latin American regions, Fresenius maintains an extensive production and distribution network that ensures our competitiveness. Our goal is to increase sales by more than €1 billion to more than €3 billion in 2013."

At the annual general meeting, a 99.99% majority of Fresenius SE & Co. KGaA's shareholders approved the 18th consecutive dividend increase proposed by the general partner and the supervisory board. Shareholders will receive €0.86 per share (2009: €0.75). This is an increase of 15%.

In addition, with a majority of over 96%, shareholders approved a resolution on the cancellation of existing Authorized Capitals I to V and the creation of new Authorized Capital I of up to €40.32 million.

A shareholder majority of over 99% approved the actions of both the management and supervisory boards for the 2010 fiscal year.

At the annual general meeting, 76% of the subscribed capital was represented.

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

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Fresenius Biotech has received approval from the Austrian Federal Office for Safety in Health Care for the use of a polyclonal antibody in stem cell transplantations (SCT). The preparation - ATG-Fresenius S - can be used in the indication "conditioning prior to SCT for prevention of graft-versus-host disease (GVHD) after SCT". The approval is based on proof of significantly fewer GVHD complications following administration of ATG-Fresenius S. Austria is now the fifth country to approve the preparation in this indication, after Germany, Argentina, Portugal and Thailand.

According to the approval, ATG-Fresenius S may be used to treat adult patients with malignant hematologic diseases who undergo SCT involving HLA-compatible, unrelated donors. In such cases, ATG-Fresenius S is administered in combination with standard GVHD prophylaxis. The approval is based on results of a prospective, randomized, multi-center study of HLA-compatible unrelated SCT with 201 patients. The study compared the efficacy and tolerability of ATG-Fresenius S in combination with standard GVHD prophylaxis versus standard GVHD prophylaxis alone. One-year data were published in October 2009 in "The Lancet Oncology" medical journal (Finke et al.)*.

New long-term data were published in April 2011 in the "Blood" medical journal (Socie et al.)**. With regard to acute GVHD grade III-IV, study results showed a significantly reduced incidence of 11.7% vs. 25.5% (p=0.0392) in ATG-Fresenius S and non-ATG-Fresenius S groups, respectively. The extensive chronic GVHD rate was significantly lower in ATG-Fresenius S patients, compared with the control group (12.2% vs. 45%; p<0.0001). The probability of survival without systemic immunosuppression therapy was three times higher in the ATG-Fresenius S group. Relapse of underlying malignant disease, mortality and overall survival were comparable between both groups.

*Finke et al., Standard graft-versus-host disease prophylaxis with or without anti-T-cell globulin in haematopoietic cell transplantation from matched unrelated donors: a randomised, open-label, multicentre phase 3 trial, Lancet Oncology, 2009;10:855-864
**Socie et al., Chronic graft-versus-host disease: long-term results from a randomized trial on GvHD prophylaxis with or without anti-T-cell globulin ATG-fresenius, Blood, published April 5, 2011, 10.1182/Blood-2011-01-329821

About ATG-Fresenius S
ATG-Fresenius S is a polyclonal antibody that is used for GVHD prophylaxis shortly before stem cell transplantation is performed. The preparation's mode of action, which mainly targets activated T-cells, includes complement-mediated cytolysis and apoptotic induction of T-cells and antigen-presenting cells.
ATG-Fresenius S prevents the adhesion of T-cells to the endothelium, minimizes T-cell infiltration and blocks numerous signal transmission paths within the immune system. Furthermore, ATG-Fresenius S has a propagating effect on regulatory cells. A direct anti-tumor effect is described in various hematologic tumors.
The polyclonal antibody ATG-Fresenius S was developed in Germany over 30 years ago for the treatment and prophylaxis of acute rejection reactions in the transplantation of solid organs. ATG-Fresenius S has been approved for use in these indications worldwide in more than 45 countries.

About GVHD (graft-versus-host disease)
GVHD is a frequent complication of stem cell transplantation, which is associated with a high degree of morbidity and mortality. GVHD is an immunological reaction of the donor lymphocytes to the patient's foreign antigens. The following GVHD risk factors are known: the patient's age, the degree of kinship between the donor and the recipient, the type of preparation used for stem cell transplantation as well as the source of the graft. Several components contribute to GVHD's development, among others, tissue damage during preparations for stem cell transplantation, cytokine production and lymphocyte activation. Various immune cells (T-cells, antigen-presenting cells and natural killer cells) are involved in the GVHD mechanism. GVHD frequently causes severe organ and tissue damage, which can become chronic to some extent. GVHD can affect any organ or tissue; the skin, stomach, intestines, liver and the immune system are most frequently attacked. One of the strategies for GVHD reduction is T-cell depletion. ATG-Fresenius S depletes T-cells and consequently represents an important therapeutic advance in GVHD prevention.

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At the 47th Annual Meeting of the American Society of Clinical Oncology (ASCO) in Chicago (June 3-7, 2011), Fresenius Biotech presented new data on the trifunctional antibody Removab® with 11 contributions.

Significant overall survival benefit in patients with higher relative lymphocyte count
Follow-up results for the pivotal study in patients with malignant ascites show a statistically significant benefit in overall survival for Removab®-treated patients (p=0.0219, HR=0.649). The six-month survival rate in Removab®-treated patients was more than four times higher compared to control patients (28.9% vs. 6.7%). A higher baseline-relative lymphocyte count (RLC) had a significant impact on overall survival. In patients with a RLC >13%, the six-month survival rate with Removab® was more than seven times higher than in control patients (37.0% vs. 5.2%), leading to a mean overall survival benefit of 131 days (p=0.0072, HR=0.518). The RLC was previously identified as a biomarker in an independent hypothesis-generating study.

Removab® improves quality of life in patients with malignant ascites
In addition to improving overall survival, Removab®-treated patients were shown to have an improved quality of life (QoL). Analysis of pivotal trial data using the EORTC QLQ-C30 questionnaire showed a significantly higher percentage of patients with improvement in QoL scores at day 30. This effect appeared consistently across multiple scores. While nearly all (97%) patients treated with Removab® at least maintained their QoL level ("Global QoL score"), 30% of patients in the control group had a rapid deterioration in QoL within the first 30 days.

Integrated safety analysis supports shorter infusion time
A shorter infusion time of 3 hours for Removab® is supported by new results from an integrated safety analysis. Based on this analysis, the safety profile of Removab® after a more tolerable and convenient 3-hour infusion was largely comparable to the currently approved 6-hour infusion time.

# # #

About Removab® (catumaxomab)
Removab®, with its trifunctional mode of action, represents the first antibody of a new generation. The therapeutic objective of Removab® is to generate a stronger immune response to cancer cells that are the main cause of ascites. Removab® binds to three different cell types simultaneously: One arm of the antibody binds to the EpCAM (epithelial cell adhesion molecule) antigen on carcinoma cells, another arm binds to CD3 on T cells. Thirdly, the intact Fc region of Removab® binds to Fc-gamma receptors on accessory cells (such as macrophages, monocytes, dendritic cells and natural killer cells). This simultaneous binding subsequently results in the mutual stimulation and activation of T cells and accessory cells, enabling the generation of a stronger immune response and destruction of cancer cells. Data from animal studies with trifunctional antibodies also suggest a potential long-lasting effect to prevent cancer recurrence. Removab® is under further development for new indications. Catumaxomab (Removab®) is a trifunctional antibody developed by TRION Pharma GmbH.

Removab® has been approved in the European Union since April 2009 for intraperitoneal treatment of malignant ascites in patients with EpCAM-positive carcinomas where standard therapy is not available or no longer feasible.
Fresenius Biotech is responsible for the clinical development and commercialization of Removab®.

For more information, please visit www.removab.com.

About the pivotal study
The study involved 258 patients with malignant ascites due to various carcinomas. Of those, 129 suffered from ovarian cancer, while another 129 had other types of cancer. Patients received paracentesis followed by four intraperitoneal infusions of Removab®, or paracentesis alone (control group). Details of the study results are published by Heiss et al, Int J Cancer 2010;127:2209–21

About Biomarker
A characteristic that is objectively measured and evaluated as an indicator of normal biological processes, a pathogenic process, or pharmacologic responses to a therapeutic intervention.

About relative lymphocyte count (RLC)
The relative lymphocyte count describes the percentage of lymphocytes among the total of leukocytes in the peripheral blood.

About epithelial cell-adhesion molecule (EpCAM)
EpCAM is a tumor-associated antigen expressed on the vast majority of epithelial tumors. EpCAM is expressed on tumor cells in the ascites fluid of patients with EpCAM-positive tumors.

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

About EORTC QLQ-C30
The EORTC QLQ-C30 is a quality of life questionnaire designed for use in a wide range of cancer patients. It is an accepted and valid measure of QoL in cancer patients. The EORTC QLQ-C30 has been translated into and validated in more than 80 different languages.

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The Italian Medicines Agency, AIFA, has added Fresenius Biotech's antibody Removab® to its list of reimbursable medications. As of June 25, 2011, use of Removab® for the treatment of malignant ascites in patients with EpCAM-positive carcinomas will be fully reimbursed. Removab® is a trifunctional monoclonal antibody approved throughout the European Union. It has been launched in Austria, France, Germany, Scandinavia and the UK.

"The positive decision concerning reimbursement is another step in the successful implementation of our European marketing strategy for Removab®," said Dr. Christian Schetter, CEO of Fresenius Biotech. "It enables patients in Italy to benefit from treatment with Removab® quickly and without bureaucratic hurdles."

Follow-up results for the pivotal study, recently presented at the 47th Annual Meeting of the American Society of Clinical Oncology (ASCO), showed a statistically significant benefit in overall survival for Removab®-treated patients. After six months, nearly 30% of all patients treated with Removab® were still alive, which is a fourfold increase compared to the control group (around 7%). In addition, Removab®-treated patients were shown to have an improved quality of life.

###

About Removab® (catumaxomab)
Removab®, with its trifunctional mode of action, represents the first antibody of a new generation. The therapeutic objective of Removab® is to generate a stronger immune response to cancer cells that are the main cause of ascites. Removab® binds to three different cell types simultaneously: One arm of the antibody binds to the EpCAM (epithelial cell adhesion molecule) antigen on carcinoma cells, another arm binds to CD3 on T cells. Thirdly, the intact Fc region of Removab® binds to Fc receptors on accessory cells (such as macrophages, monocytes, dendritic cells and natural killer cells). This simultaneous binding subsequently results in the mutual stimulation and activation of T cells and accessory cells, enabling the generation of a stronger immune response and destruction of cancer cells. Data from animal studies with trifunctional antibodies also suggest a potential long-lasting effect to prevent cancer recurrence. Removab® is under further development for new indications. Catumaxomab (Removab®) is a trifunctional antibody developed by TRION Pharma GmbH.
Removab® has been approved in the European Union since April 2009 for intraperitoneal treatment of malignant ascites in patients with EpCAM-positive carcinomas where standard therapy is not available or no longer feasible.
Fresenius Biotech is responsible for the clinical development and commercialization of Removab®.
For more information, please visit www.removab.com.

About the pivotal study
The study involved 258 patients with malignant ascites due to various carcinomas. Of those, 129 suffered from ovarian cancer, while another 129 had other types of cancer. Patients received paracentesis followed by four intraperitoneal infusions of Removab®, or paracentesis alone (control group). Details of the study results are published by Heiss et al, Int J Cancer 2010;127:2209–21

About epithelial cell-adhesion molecule (EpCAM)
EpCAM is a tumor-associated antigen expressed on the vast majority of epithelial tumors. EpCAM is expressed on tumor cells in the ascites fluid of patients with EpCAM-positive tumors.

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

Contact

Head of Corporate Communications
T +49 (0) 6172 608-96008
pr-fre@fresenius.com

Documents

Text as PDF document (PDF, 24 KB)

Fresenius Medical Care AG & Co. KGaA ("the Company" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced that it has completed the acquisition of Euromedic's dialysis service business effective June 30, 2011. This follows final regulatory approvals by the relevant antitrust authorities.*

*Except Portugal, where the review by the relevant antitrust authority is still ongoing

Contact

Head of Corporate Communications
T +49 (0) 6172 608-96008
pr-fre@fresenius.com

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Summary Second Quarter 2011

Net revenue $3,194 million +8%
Operating income (EBIT) $510 million +9%
Net income* $261 million +5%
Earnings per share $0.86 +4%

Summary First Half 2011

Net revenue $6,230 million +7%
Operating income (EBIT) $955 million +7%
Net income* $481 million +5%
Earnings per share $1.59 +4%

Fresenius Medical Care AG & Co. KGaA ("the company" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced its results for the second quarter and first half of 2011.

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

Second Quarter 2011

Revenue

Net revenue for the second quarter of 2011 increased by 8% to $3,194 million (+5% at constant currency) compared to the second quarter of 2010. Organic revenue growth worldwide was 3%. Dialysis services revenue grew by 6% to $2,362 million (+4% at constant currency) and dialysis product revenue increased by 15% to $832 million (+7% at constant currency).

North America revenue for the second quarter of 2011 was at the same level as the corresponding quarter last year at $2,027 million including the impact of the new Medicare end-stage renal disease prospective payment system in the United States. Dialysis services revenue grew by 1% to $1,828 million with a same market growth of 3%. Average revenue per treatment for U.S. clinics decreased to $348 in the second quarter of 2011 compared to $356 for the corresponding quarter in 2010 reflecting the targeted implementation of the new prospective payment system. Dialysis product revenue decreased by 5% to $199 million, as increased sales of dialysis products could not entirely offset lower pricing of renal drugs.

International revenue increased by 26% to $1,163 million (+15% at constant currency). Organic revenue growth was 8%. Dialysis services revenue increased by 31% to $534 million (+20% at constant currency). Dialysis product revenue increased by 23% to $629 million and increased by 11% at constant currency, mainly driven by higher sales of peritoneal dialysis products, dialyzers, products for acute care treatments and dialysis machines.

Earnings

Operating income (EBIT) for the second quarter of 2011 increased by 9% to $510 million compared to $467 million in the second quarter of 2010. This resulted in an operating margin of 16.0% for the second quarter of 2011 compared to 15.8% for the corresponding quarter in 2010.

In North America, the operating margin increased from 16.4% in the second quarter of 2010 to 17.2% in the second quarter of 2011. This increase was mainly favorably influenced by the development of pharmaceutical costs and higher income from the joint venture with Vifor Pharma. Average costs per treatment for U.S. clinics decreased to $283 in the second quarter of 2011 compared to $292 for the corresponding quarter in 2010.

In the International segment, the operating margin decreased from 18.8% to 17.5% mainly due to unfavorable currency effects.

Net interest expense for the second quarter of 2011 was $75 million compared to $68 million in the second quarter of 2010. This development was mainly attributable to a higher debt level.

Income tax expense was $149 million for the second quarter of 2011 compared to $129 million in the second quarter of 2010. The effective tax rate increased to 34.2% from 32.4% mainly as a result of the positive effect in the second quarter of 2010 of the release of a $10 million valuation allowance.

Net income attributable to Fresenius Medical Care AG & Co. KGaA for the second quarter of 2011 was $261 million, an increase of 5% compared to the corresponding quarter of 2010. Net income increased by 10% if adjusted by the positive tax effect in the second quarter of 2010.

Earnings per share (EPS) for the second quarter of 2011 rose by 4% to $0.86 per ordinary share compared to $0.83 for the second quarter of 2010. The weighted average number of shares outstanding for the second quarter of 2011 was approximately 302.5 million shares compared to 300.0 million shares for the second quarter of 2010. The increase in shares outstanding resulted from stock option exercises in the past 12 months.

Cash Flow

In the second quarter of 2011, the company generated $311 million in cash from operations, accomplishing the targeted 10% of revenue. The cash flow generation was supported by increased earnings and negatively influenced by an unfavorable development of days sales outstanding (DSO) and raised inventory levels.

A total of $117 million in cash was spent for capital expenditures, net of disposals. Free cash flow before acquisitions was $194 million compared to $175 million in the second quarter of 2010. A total of $784 million in cash was spent for acquisitions and investments, net of divestitures.

Free cash flow after acquisitions, investments and divestitures was -$590 million compared to -$26 million in the second quarter of 2010. This reflects the cash outflow related to the closing of the acquisition of Euromedic´s dialysis service business.

First Half 2011

Revenue and Earnings

Net revenue for the first half of 2011 increased by 7% to $6,230 million (+5% at constant currencies) compared to the first half of 2010. Organic revenue growth was 3% in the first half of 2011.

Operating income (EBIT) for the first half of 2011 increased by 7% to $955 million compared to $892 million in the first half of 2010. The operating income margin remained constant at 15.3% for the first half of 2011 as compared to the same period in 2010.

Net interest expense for the first half of 2011 was $146 million compared to $135 million in the same period of 2010.

Income tax expense for the first half of 2011 was $273 million compared to $257 million in the same period in 2010, reflecting effective tax rates of 33.8% and 33.9%, respectively.

For the first half of 2011, net income attributable to Fresenius Medical Care AG & Co. KGaA was $481 million, up by 5% from the first half of 2010.

In the first half of 2011, earnings per ordinary share rose by 4% to $1.59. The weighted average number of shares outstanding during the first half of 2011 was approximately 302.4 million.

Cash flow

Cash from operations during the first half of 2011 was $487 million compared to $643 million for the same period in 2010, representing approximately 8% of revenue.

A total of $231 million in cash was spent for capital expenditures, net of disposals. Free cash flow before acquisitions for the first half of 2011 was $256 million compared to $425 million in the same period in 2010. A total of $1,122 million in cash was spent for acquisitions, net of divestitures. Free cash flow after acquisitions and divestitures was -$866 million compared to $142 million in the first half of last year.

Please refer to the attachments for a complete overview on the second quarter and first half of 2011.

Patients – Clinics – Treatments

As of June 30, 2011, Fresenius Medical Care treated 225,909 patients worldwide, which represents a 12% increase compared to the previous year's figure. North America provided dialysis treatments for 139,906 patients, an increase of 4%. Including 23 clinics managed by Fresenius Medical Care North America, the number of patients in North America was 141,420. The International segment provided dialysis treatments to 86,003 patients, an increase of 28% over the prior year's figure.

As of June 30, 2011, the company operated a total of 2,838 clinics worldwide, which represents a 10% increase compared to the previous year's figure. The number of clinics is comprised of 1,826 clinics in North America (1,849 including managed clinics), and 1,012 clinics in the International segment, representing an increase of 2% and 26%, respectively.

During the first half of 2011, Fresenius Medical Care delivered approximately 16.56 million dialysis treatments worldwide. This represents an increase of 9% compared to last year's figure. North America accounted for 10.62 million treatments, an increase of 4%. The International segment delivered 5.94 million treatments, an increase of 18%.

Employees

As of June 30, 2011, Fresenius Medical Care had 77,081 employees (full-time equivalents) worldwide compared to 73,452 employees at the end of 2010. This increase of more than 3,600 employees is due to overall growth in the company's business and acquisitions.

Debt/EBITDA Ratio

The ratio of debt to Earnings before interest, taxes, depreciation and amortization (EBITDA) increased from 2.46 at the end of the second quarter of 2010 to 2.77 at the end of the second quarter of 2011. The debt/EBITDA ratio at the end of 2010 was 2.38.

Rating

Standard & Poor's Ratings Services rates the company's corporate credit as ‘BB' with a ‘positive' outlook. Moody's rates the company's corporate credit as ‘Ba1' with a ‘stable' outlook, and Fitch rates the company's corporate credit as ‘BB' with a ‘positive' outlook. For further information on Fresenius Medical Care's credit ratings, maturity profiles and credit instruments, please visit our website at www.fmc-ag.com / Investor Relations / Credit Relations.

Acquisition of Euromedic's dialysis service business completed

On July 1, 2011, Fresenius Medical Care announced that it has completed the acquisition of Euromedic's dialysis service business effective June 30, 2011. This follows final regulatory approvals by the relevant antitrust authorities except Portugal, where the review by the relevant antitrust authority is still ongoing.

Acquisition of Liberty Dialysis Holdings, Inc.

Fresenius Medical Care has executed a merger agreement with Liberty Dialysis Holdings, Inc., the holding company for Liberty Dialysis and Renal Advantage. The investment, including assumed debt, will be approximately $1.7 billion. In addition, Fresenius Medical Care previously invested approximately $300 million in Renal Advantage. The merger is subject to clearance under the Hart–Scott–Rodino Antitrust Improvements Act and is expected to close in early 2012. Liberty Dialysis Holdings, Inc. has annual sales of approximately $1 billion and operates approximately 260 dialysis clinics. Fresenius Medical Care anticipates that facilities may need to be divested to secure regulatory clearance of the transaction. The transaction will be financed from cash flow from operations and debt and is expected to be accretive to earnings in the first year after closing of the transaction.

Rice Powell, chief executive officer of Fresenius Medical Care North America and deputy chairman of Fresenius Medical Care, commented: "We are very pleased with this agreement. Both companies, Liberty Dialysis and Fresenius Medical Care, have three key assets in common: a strong commitment to continuous quality improvement, dedicated and highly-motivated staff and excellent physician partners."

Mark Caputo, chief executive officer and president of Liberty Dialysis Holdings, Inc, commented: "This combination of Liberty's model of integrating physicians into the clinical and operational management of the facilities with Fresenius Medical Care's focus on technology and experience with integrated delivery systems clearly gives us an opportunity to create a superior platform for innovation in the delivery of services and products and will further enhance the lives of patients entrusted to our care and reduce costs for the healthcare system."

Acquisition of American Access Care

Fresenius Medical Care has executed an agreement to acquire the U.S. based company American Access Care Holdings, LLC (AAC) for $385 million. AAC operates 28 freestanding out-patient centers primarily dedicated to serving vascular access needs of dialysis patients. Fresenius Medical Care currently operates 13 vascular access centers. The transaction is subject to clearance under the Hart–Scott–Rodino Antitrust Improvements Act and is expected to close in the fourth quarter of 2011. On completion, the acquired operations would add approximately $175 million in annual revenue and are expected to be accretive to earnings in the first year after closing of the transaction. The transaction will be financed from cash flow from operations and debt.

The acquisition enables Fresenius Medical Care to achieve critical mass in its vascular access business and has strategic importance by virtue of the scale, resources and operational efficiency it brings to its vascular access operations, particularly when considering the U.S. Government's proposal to include the type of access and the frequency of access-related infections within the quality outcome component of the dialysis bundled reimbursement system by 2014.

Sales and earnings outlook for 2011 confirmed

For the full year 2011, the company confirms its sales and earnings outlook.

Revenue is expected to grow to above $13 billion.

Net income attributable to Fresenius Medical Care AG & Co. KGaA is expected to be between $1.070 billion and $1.090 billion.

For 2011, the company expects to spend around 5% of revenue on capital expenditures and approximately $1.9 billion on acquisitions. Previously the company expected to spend approximately $1.2 billion on acquisitions. The debt/EBITDA ratio is expected to be below 3.0 by the end of 2011 (previously below or equal to 2.8).

"Thanks to a consistent focus on quality, sustainable growth and expense control, we have maintained a strong operational performance this second quarter. We are particularly pleased with the success of our international region, given a persistently challenging business environment with the current debt crisis worldwide and the successful expansion of our clinic network in Asia-Pacific and Europe. North America continued to improve its operating margin and successfully cope with the challenges of the ongoing implementation of the new Medicare end-stage renal disease prospective payment system", said Dr. Ben Lipps, chief executive officer of Fresenius Medical Care. "Our acquisitions of Liberty Dialysis and American Access Care in the U.S. are important steps in our strategy of expanding our service network to achieve excellent patient care in a more cost effective integrated model."

Conference Call

Fresenius Medical Care will hold a conference call to discuss the results of the second quarter and first half of 2011 on Tuesday, August 2, 2011, at 3:30 p.m. CEDT / 9:30 a.m. EDT. The company invites investors to view the live webcast of the call at the company's website www.fmc-ag.com in the "Investor Relations" section. A replay will be available shortly after the call.