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• First quarter performance in line with full year guidance
• North America influenced by sequestration and rebasing impact
• International influenced by currency and delayed product sales
• On track to achieve full year guidance
• Accelerated medical and quality initiatives

First quarter 2014 key figures

Net revenue: $3,564 Million, +3%
Operating income (EBIT): $445 million, -10%
Net income*: $205 million, -9%
Basic earnings per ordinary share: $0.68, -7%

*attributable to shareholders of Fresenius Medical Care AG & Co. KGaA

"We can look back on a first quarter that was in line with our guidance for the full year," said Rice Powell, chief executive officer of Fresenius Medical Care. "Based on our quarterly results, and on the continuous efforts we are making to increase profitability, we are able to confirm our full-year guidance. Moreover, by capitalizing on market opportunities in our core dialysis business and expanding in business areas like care coordination for dialysis, Fresenius Medical Care is well placed to meet the company's ambitious long-term targets."

First quarter 2014 key figures

Revenue

Net revenue for the first quarter of 2014 increased by 3% to $3,564 million (+4% at constant currency) compared to the first quarter of 2013. Organic revenue growth worldwide was 3%. Dialysis services revenue grew by 4% to $2,782 million (+5% at constant currency) and dialysis product revenue decreased by 1% to $782 million (flat at constant currency) compared to the first quarter of 2013.

North America revenue for the first quarter of 2014 increased by 5% to $2,393 million. Organic revenue growth was 4%. Dialysis services revenue grew by 5% to $2,201 million with a same store treatment growth of 3.3%. Dialysis product revenue increased by 5% to $192 million.

International revenue decreased by 1% to $1,161 million (+4% at constant currency). Organic revenue growth was 3%. Dialysis services revenue increased by 1% to $581 million (+8% at constant currency). Dialysis product revenue decreased by 2% to $580 million (-1% at constant currency).

Earnings

Operating income (EBIT) for the first quarter of 2014 decreased by 10% to $445 million compared to $493 million in the first quarter of 2013. Operating income for North America for the first quarter of 2014 decreased by 8% to $336 million compared to $366 million in the first quarter of 2013. In the International segment, operating income for the first quarter of 2014 decreased by 6% to $180 million compared to $192 million in the first quarter of 2013.

Net interest expense for the first quarter of 2014 was $96 million, compared to $104 million in the first quarter of 2013.

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the first quarter of 2014 was $205 million, a decrease of 9% compared to the corresponding number of $225 million for the first quarter of 2013.

Income tax expense was $102 million for the first quarter of 2014 which translates into an effective tax rate of 29.1%. This compares to income tax expense of $129 million and a tax rate of 33.2% for the first quarter of 2013.

Basic earnings per ordinary share (EPS) for the first quarter of 2014 was $0.68, a decrease of 7% compared to the corresponding number for the first quarter of 2013. The weighted average number of shares outstanding for the first quarter of 2014 was approximately 301.5 million shares, compared to 306.7 million shares for the first quarter of 2013. The decrease in shares outstanding resulted from last year`s share buy-back program, partially offset by stock option exercises in the past twelve months.

Cash flow

In the first quarter of 2014, the company generated $112 million in net cash provided by operating activities, a decrease of 64% compared to the corresponding figure of last year and representing 3% of revenue.

A total of $197 million was spent for capital expenditures, net of disposals. Free cash flow was -$85 million compared to $169 million in the first quarter of 2013.

A total of $135 million in cash was spent for acquisitions and investments, net of divestitures. Free cash flow after investing activities was -$220 million, compared to $98 million in the first quarter of 2013.

Employees

As of March 31, 2014, Fresenius Medical Care had 91,542 employees (full-time equivalents) worldwide, compared to 86,855 employees at the end of March 2013. This increase of more than 4,500 employees was attributable to our continued organic growth as well as to acquisitions.

Balance sheet structure

The company´s total assets were $23,423 million (Dec. 31, 2013: $23,120 million), an increase of 1%. Current assets increased by 3% to $6,497 million (Dec. 31, 2013: $6,287 million). Non-current assets were $16,926 million (Dec. 31, 2013: $16,833 million), an increase of 1%. Total equity increased by 2% to $9,680 million (Dec. 31, 2013: $9,485 million). The equity ratio was 41%, unchanged compared to the ratio at the end of 2013. Total debt was $8,609 million (Dec. 31, 2013: $8,417 million). As of March 31, 2014, the debt/EBITDA ratio was 2.9 (Dec. 31, 2013: 2.8).

Changes in management board

On March 12, 2014, the company announced the resignations of Prof. Emanuele Gatti and Dr. Rainer Runte, both effective March 31, 2014, from the general partner's management board. Dr. Gatti's position on the management board and duties relating to Europe, Middle East and Africa have been assumed by Mr. Wehner, effective April 1, 2014, while Latin America region management duties have been assumed by Mr. John Anderson who reports directly to CEO Mr. Powell. Until such time as a permanent successor to Dr. Runte is named, Mr. David Kembel, chief compliance officer for Fresenius Medical Care North America, has assumed Dr. Runte's responsibilities for Global Compliance on an interim basis, and CEO Mr. Powell, as the chairman of the management board, has assumed Dr. Runte's remaining responsibilities, until the search for a General Counsel is complete.

Long-term revenue target

On April, 4 Fresenius Medical Care announced its long-term financial target for 2020. Based on revenue of $14.6 billion in fiscal year 2013, the company has set its ambitious revenue guidance for 2020 at $28 billion. This represents a cumulative average growth rate of around 10% per annum (CAGR) between 2015 and 2020 and a near doubling of revenue compared to 2013. Over the same period the company expects a high single digit increase in net income and EPS.

Fresenius Medical Care's world-leading position in the dialysis industry has been built on its vision and capabilities in developing innovations that shape the future of treatment for patients. Fresenius Medical Care will continue to develop innovative products focused on quality outcomes for the patient while expanding the company's dialysis products and services around the world. In addition to strong growth in the underlying business of dialysis products and services, Fresenius Medical Care sees significant potential in a business area it began developing some years ago and now calls Care Coordination. Care Coordination is an extension of the company's renal care for its patients and currently includes e.g. vascular care, laboratory and pharmacy businesses. By further integrating those services in the US into the existing core business and thereby creating a high-performance renal network including risk based models and by the development of chronic care centers in the International segment, the company expects a significant improvement of patient care outcomes. Fresenius Medical Care plans to build this business segment and expects revenue from Care Coordination to grow from 3% of total revenue in 2013 to about 18% in 2020.

Outlook

The company expects revenue to be at around $15.2 billion in 2014, translating into a growth rate of around 4%.

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to be between $1.0 billion and $1.05 billion in 2014. The company initiated a global efficiency program designed to enhance the company's performance over a multi-year period. Potential cost savings before income taxes of up to $60 million generated from this program are not included in the outlook for 2014.

For 2014, the company expects to spend around $900 million on capital expenditures and around $400 million on acquisitions. The debt/EBITDA ratio is expected to be equal to or below 3.0 by the end of 2014.

Conference Call

Fresenius Medical Care will hold a conference call to discuss the results of the first quarter 2014 on Tuesday, May 6, 2014, at 3.30 p.m. CEDT/ 9.30 a.m. EDT. The company invites investors to follow 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.

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Q1/2014:

• Sales: €5.2 billion (+7% at actual rates, +11% in constant currency)
• EBIT¹: €643 million (-8% at actual rates, -6% in constant currency)
• Net income²: €228 million (+2% at actual rates, +3% in constant currency)

Ulf Mark Schneider, CEO of Fresenius, said: "The moderate start into the year was expected. We are therefore fully on track to achieve our growth targets for 2014. The integration of the hospitals acquired from Rhön-Klinikum AG is progressing well. Our expansion in fast-growing emerging markets continues unabated."

¹2014 before Fenwal integration costs (€1 million) and book gain from the divestment of two HELIOS hospitals (€22 million); 2013 before Fenwal integration costs (€7 million)
²Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2014 before Fenwal integration costs (€1 million) and book gain from the divestment of two HELIOS hospitals (€21 million); including these effects, net income attributable to shareholders of Fresenius SE & Co. KGaA increased by 13% (+14% in constant currency) to €248 million. 2013 before Fenwal integration costs (€5 million)


Group outlook 2014¹ fully confirmed
Fresenius fully confirms its guidance for 2014. Sales are expected to increase by 12% to 15% in constant currency. Net income² is expected to increase by 2% to 5% in constant currency. The earnings forecast primarily reflects lower reimbursement rates for Medicare dialysis patients and substantial uncertainties regarding the IV drug shortage situation in the U.S. market.

The net debt/EBITDA ratio is expected to be in the range of 3.0 to 3.25.

¹Includes contributions from the acquisition of hospitals from Rhön-Klinikum AG
²Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2014 before integration costs for Fenwal (€30-40 million) and the hospitals acquired from Rhön-Klinikum AG and net of book gain from the divestment of two HELIOS hospitals (€21 million); 2013 before Fenwal integration costs (€40 million)

11% sales growth in constant currency
Group sales increased by 7% (11% in constant currency) to €5,212 million (Q1/2013: €4,890 million). Organic sales growth was 2%. Acquisitions contributed 9%. Divestitures had a marginal effect on sales growth.

Sales of the business segments developed as follows:

Organic sales growth was 3% in North America and 2% in Europe. In Asia-Pacific organic sales growth was 2% impacted by a slow start in China for Fresenius Medical Care and Fresenius Kabi. In Latin America organic sales growth was 8%. In Africa, the decline in sales is mainly due to fluctuations in the project business at Fresenius Vamed.

Adverse currency translation effects weighed on Group sales in all regions, particularly in Latin America (-21%), Asia-Pacific (-7%), Africa (-7%) and North America (-4%).

Group net income in line with guidance
Group EBITDA¹ decreased by 3% (-1% in constant currency) to €867 million (Q1/2013: €898 million). Group EBIT¹  decreased by 8% (-6% in constant currency) to €643 million (Q1/2013: €696 million). This decrease is mainly attributable to the year-over-year comparison of issues at Fresenius Medical Care and Fresenius Kabi which occurred in 2013. The EBIT margin was 12.3% (Q1/2013: 14.2%).

Group net interest was -€138 million (Q1/2013: -€163 million). Improved financing terms as well as favorable currency effects contributed to the decrease. In addition, net interest in Q1/2013 included €14 million one-time costs resulting from the early redemption of a Senior Note.

The Group tax rate² improved to 26.3% (Q1/2013: 29.1%) due to a one-time effect at Fresenius Medical Care.

Noncontrolling interest was €144 million (Q1/2013: €154 million), of which 93% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income increased by 2% (3% in constant currency) to €228 million (Q1/2013: €224 million). Earnings per share3 increased by 1% to €1.27 (Q1/2013: €1.26).

Group net income³ attributable to shareholders of Fresenius SE & Co. KGaA including integration costs for Fenwal and a book gain from the divestment of two HELIOS hospitals increased by 13% (+14% in constant currency) to €248 million. Earnings per share³ increased by 12% (+13% in constant currency) to €1.38. There were no integration costs related to the newly acquired hospitals from Rhön-Klinikum AG in the first quarter.

A reconciliation to earnings according to U.S. GAAP can be found on page 14 of this Press Release.

¹2014 before Fenwal integration costs (€1 million) and book gain from the divestment of two HELIOS hospitals (€22 million); 2013 before Fenwal integration costs (€7 million)
²2014 before book gain from the divestment of two HELIOS hospitals; 2013 before Fenwal integration costs
³Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2014 before Fenwal integration costs (€1 million) and book gain from the divestment of two HELIOS hospitals (€21 million); 2013 before Fenwal integration costs (€5 million)

Continued investment in growth
The Fresenius Group spent €234 million on property, plant and equipment (Q1/2013: €179 million). Investments were mainly used for the equipment of new, and the expansion of existing dialysis clinics as well as the modernization and expansion of production facilities and hospitals.

Acquisition spending was €924 million (Q1/2013: €79 million), thereof €759 million as a further payment for the acquisition of hospitals from Rhön-Klinikum AG.

Cash flow development influenced by one-time items
Operating cash flow was €140 million (Q1/2013: €444 million) with a margin of 2.7% (Q1/2013: 9.1%). The decrease was mainly attributable to the payment for the W.R. Grace bankruptcy settlement of US$115 million¹, increased working capital at Fresenius Medical Care and Fresenius Kabi as well as a change from annual to monthly upfront payments to Fresenius Vamed for a technical management contract.

Net capital expenditure increased to €243 million (Q1/2013: €188 million). Free cash flow before acquisitions and dividends was -€103 million (Q1/2013: €256 million). Free cash flow after acquisitions and dividends was -€1,006 million (Q1/2013: 229 million).

¹see Annual Report 2013, page 150 f.

Solid balance sheet structure
The Group's total assets increased by 5% (at actual rates and in constant currency) to €34,284 million (Dec. 31, 2013: €32,758 million). This increase is mainly attributable to the first-time consolidation of hospitals acquired from Rhön-Klinikum AG. Current assets grew by 9% to €8,656 million (Dec. 31, 2013: €7,972 million). Non-current assets increased by 3% to €25,628 million (Dec. 31, 2013: €24,786 million).

Total shareholders' equity increased by 3% to €13,619 million (Dec. 31, 2013: €13,260 million). The equity ratio was 39.7% (Dec. 31, 2013: 40.5%).

Group debt was €13,769 million (Dec. 31, 2013: €12,804 million). Net debt was €12,940 million (Dec. 31, 2013: €11,940 million).

As of March 31, 2014, the net debt/EBITDA ratio was 3.21¹ (Dec. 31, 2013: 2.51²). The increase is mainly due to the acquisition of hospitals from Rhön-Klinikum AG.

¹Pro forma including acquired hospitals from Rhön-Klinikum AG; before Fenwal integration costs and book gain from the divestment of two HELIOS hospitals
²Pro forma excluding advances made for the acquisition of hospitals from Rhön-Klinikum AG; before Fenwal integration costs

Number of employees increases
As of March 31, 2014, the number of employees increased by 13% to 201,924 (Dec. 31, 2013: 178,337). This is almost entirely due to the acquisition of hospitals from Rhön-Klinikum AG.

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, 2014, Fresenius Medical Care was treating 270,570 patients in 3,263 dialysis clinics.

• Sales growth in line with full year guidance
• Earnings impacted by sequestration and rebasing in the United States
• 2014 guidance confirmed

Sales increased by 3% (4% in constant currency) to US$3,564 million (Q1/2013: US$3,464 million). Organic sales growth was 3%. Acquisitions contributed 1%. Adverse currency effects reduced sales by 1%.

Sales in dialysis services increased by 4% (5% in constant currency) to US$2,782 million (Q1/2013: US$2,678 million). Dialysis product sales decreased by 1% (0% in constant currency) to US$782 million (Q1/2013: US$786 million).

In North America sales grew by 5% to US$2,393 million (Q1/2013: US$2,287 million). Dialysis services sales increased by 5% to US$2,201 million (Q1/2013: US$2,104 million). Dialysis product sales grew by 5% to US$192 million (Q1 2013: US$183 million).

Sales outside North America ("International" segment) decreased by 1% (4% increase in constant currency) to US$1,161 million (Q1/2013: US$1,169 million) impacted inter alia by the reorganization of the distribution network in China. Sales in dialysis services increased by 1% (8% in constant currency) to US$581 million (Q1/2013: US$574 million). Dialysis product sales decreased by 2% (-1% in constant currency) to US$580 million (Q1/2013: US$595 million).

EBIT decreased by 10% to US$445 million (Q1/2013: US$493 million). The EBIT margin was 12.5% (Q1/2013: 14.2%). As expected, EBIT was impacted by sequestration and rebasing of Medicare's reimbursement rate in the United States.

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA decreased by 9% to US$205 million (Q1/2013: US$225 million).

Operating cash flow was US$112 million (Q1/2013: US$315 million) with a margin of 3.2% (Q1/2013: 9.1%). The decrease was mainly attributable to the payment for the W.R. Grace bankruptcy settlement of US$115 million and increased working capital.

Fresenius Medical Care confirms its outlook for 2014. Fresenius Medical Care expects sales to grow to approximately US$15.2 billion. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected in the range of US$1.0 to US$1.05 billion. The company has initiated a global efficiency program designed to enhance its performance over a multi-year period. Potential cost savings before income taxes of up to US$60 million generated from this program are not included in the outlook for 2014.

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

¹Net income attributable to shareholders of 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.
 

• EBIT margin of 16.6% in line with guidance
• Currency-adjusted sales increase
• 2014 guidance narrowed

Sales decreased by 4% (1% increase in constant currency) to €1,213 million (Q1/2013: €1,260 million). Organic sales growth was 1%. Adverse currency translation effects weighed on sales (-5%), mainly due to the weaker currencies in the United States, Brazil, Argentina and South Africa against the Euro.

Sales in Europe decreased by 3% (organic sales growth: -2%) to €500 million (Q1/2013: €517 million) mainly due to lower HES sales (blood volume substitutes) and changes in Fresenius Kabi's Russian distribution model. Sales in North America decreased by 5% (organic sales growth: 0%) to €382 million (Q1/2013: €401 million). Asia-Pacific sales were €222 million (organic sales growth: +3%;Q1/2013: €223 million) influenced by the 2013 price cut and the discontinuation of HES200 in China as well as delayed tenders in Australia and Vietnam. Sales in Latin America/Africa decreased by 8% (organic sales growth: + 11%) to €109 million (Q1/2013: €119 million).

EBIT¹ was €201 million (Q1/2013: €237 million), a decrease of 13% in constant currency. EBIT was impacted by lower HES sales and the 2013 price cuts in China. The EBIT margin of 16.6% (Q1/2013: 18.8%) was in line with expectations and our guidance range.

Net income² decreased by 11% to €106 million (Q1/2013: €119 million).

Fresenius Kabi's operating cash flow was €42 million (Q1/2013: €132 million) with a margin of 3.5% (Q1/2013: 10.5%), mainly due to temporarily higher working capital requirements. Cash flow before acquisitions and dividends was -€23 million (Q1/2013: €76 million).

Integration costs for Fenwal were €1 million (pre-tax). These costs are reported in the Group Corporate/Other segment. The vast majority of planned integration costs of €40-50 million are expected to accrue towards the end of 2014.

Fresenius Kabi narrows its 2014 outlook and now projects organic sales growth of 4% to 6% (previously: 3% to 7%) and an EBIT margin of 16.5% to 18% (previously: 16% to 18%). These ranges primarily reflect substantial uncertainties regarding the IV drug shortage situation in the U.S. market as well as full-year effects from the restrictions on the use of our blood volume substitutes.

Fresenius Kabi guidance excludes €40-50 million pre-tax Fenwal integration costs (€30-40 million after tax); see Group guidance

¹before Fenwal integration costs
²Net income attributable to shareholders of Fresenius Kabi AG; before Fenwal integration costs

Fresenius Helios
Fresenius Helios is Germany's largest hospital operator. HELIOS owns 109 hospitals, thereof 85 acute care clinics including six maximum care hospitals in Berlin-Buch, Duisburg, Erfurt, Krefeld, Schwerin and Wuppertal and 24 post-acute care clinics. HELIOS treats more than 4.2 million patients per year, thereof more than 1.2 million inpatients, and operates more than 33,000 beds.
 

• 4% organic sales growth fully in line with guidance
• Integration of new hospitals progresses as planned
• 2014 guidance fully confirmed

Sales increased by 46% to €1,227 million (Q1/2013: €841 million). The strong increase in sales is mainly due to the newly acquired hospitals from Rhön-Klinikum AG. Organic sales growth was 4%. The divestment of two HELIOS hospitals reduced sales growth by 2%.

EBIT¹ grew by 31% to €114 million (Q1/2013: €87 million). The EBIT margin was 9.3% (Q1/2013: 10.3%). The margin decline is due to the consolidation of the newly acquired hospitals from Rhön-Klinikum AG.

Net income² increased by 38% to €77 million (Q1/2013: €56 million).

Sales of the established hospitals grew by 4% to €857 million. EBIT improved by 4% to €88 million. The EBIT margin was unchanged at 10.3%.

Sales of the acquired hospitals were €370 million, EBIT was €26 million.

In the first quarter, approximately 90% of the acquisition of hospitals from Rhön-Klinikum AG was closed. Approximately 70% of the acquired business was consolidated as of January 1, 2014, and approximately 20% as of March 1, 2014. For HSK Dr. Horst Schmidt Kliniken in Wiesbaden, the municipal shareholder approval is still pending. Fresenius Helios expects to close this part of the acquisition at the latest by the end of June.

The integration of the newly acquired hospitals is progressing as planned. The acquisition was EPS accretive in the first quarter. No integration costs accrued in the first quarter.

Fresenius Helios fully confirms its outlook for 2014. Fresenius Helios projects organic sales growth of 3 to 5%. EBIT (excluding the hospitals acquired from Rhön-Klinikum AG) is expected to increase to €390 to €410 million. Fresenius Helios will provide an outlook for all its hospitals (including HSK) with the announcement of Q2 results.

Fresenius Helios guidance before integration costs for the hospitals acquired from Rhön-Klinikum AG and net of book gain from the divestment of two HELIOS hospitals. The integration costs will be reported in the Group Corporate/Other segment, see Group guidance

¹2014 before book gain from the divestment of two HELIOS hospitals (€22 million)
²Net income attributable to shareholders of HELIOS Kliniken GmbH; 2014 before book gain from the divestment of two HELIOS hospitals (€21 million)

Fresenius Vamed
Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide.

• 24 % increase in order intake
• EBIT in line with guidance
• 2014 guidance fully confirmed

Sales increased by 4% to €191 million (Q1/2013: €184 million). Organic sales growth was -2%. Acquisitions contributed 6%, e.g. the acquisition of two hospitals in the Czech Republic in 2013. Sales in the project business decreased by 2% to €80 million (Q1/2013: €82 million). Sales in the service business grew by 9% to €111 million (Q1/2013: €102 million).

EBIT was €6 million (Q1/2013: €5 million) with a margin of 3.1% (Q1/2013: 2.7%).

Net income¹ increased to €4 million (Q1/2013: €3 million).

Order intake increased by 24% to €115 million (Q1/2013: €93 million). As of March 31, 2014, order backlog was €1,170 million (Dec. 31, 2013: €1,139 million).

Fresenius Vamed fully confirms its outlook for 2014 and expects to achieve organic sales growth of 5% to 10% and EBIT growth of 5% to 10%.

¹Net income attributable to shareholders of Vamed AG 

Analyst-/Investor Conference Call
As part of the publication of the results for the first quarter of 2014, a conference call will be held on May 6, 2014 at 2 p.m. CEST (8 a.m. EDT). All investors are cordially invited to follow the conference call in a live broadcast via the Internet at www.fresenius.com, see Press, Audio/Video-Service. Following the call, a replay of the conference call will be available on our website.

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Fresenius Kabi has entered into an agreement to acquire the privately held Brazilian pharmaceutical company Novafarma Indústria Farmacêutica Ltda. This transaction is part of Fresenius Kabi's strategy to expand its market presence and product portfolio in emerging markets.

Novafarma offers a comprehensive range of generic I.V. drugs, including antibiotics, analgesics and anesthetics, for the Brazilian hospital market. Founded in 1992, the company is headquartered in the state of Goiás, where it also operates a manufacturing facility and a research and development center. 2013 sales were approximately €34 million.

Fresenius Kabi entered the Brazilian market in 1977, and is one of the country's leading suppliers of clinical nutrition, infusion therapy and medical devices/transfusion technology. The acquisition significantly broadens Fresenius Kabi's generic I.V. drugs portfolio for the region, and creates an excellent platform for further growth in this product segment in other Latin American countries.

Brazil is the largest pharmaceutical market in Latin America, with 2013 sales of €14.5 billion¹. In recent years, this market has grown at high single-digit to low double-digit rates. This growth trend is expected to continue in the coming years².

"With this acquisition, we are building on our long-term market presence in Brazil and establishing a strong hub for the further expansion of our generic drug business in the Latin American region," said Mats Henriksson, CEO of Fresenius Kabi. "Novafarma's portfolio will enable us to provide patients and healthcare professionals with an extensive range of high quality and affordable I.V. generics."

Financial terms were not disclosed. The transaction is subject to antitrust approval in Brazil, and is expected to close in the second quarter of 2014.

¹IMS Health, 2013, IMS Market Prognosis 2013-2017 – Latin America - Brazil
²IMS Health, 2013, Global pharma market outlook

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Fresenius Medical Care, the world's largest provider of dialysis products and services, expects continued strong growth in the coming years. At today's Annual General Meeting in Frankfurt, Rice Powell, chief executive officer, confirmed the long-term targets announced in April. The company expects sales to almost double to about $28 billion in 2020 from $14.6 billion last year. This represents a cumulative average growth rate (CAGR) of about 10 percent annually between 2015 and 2020, with high-single-digit increases in net income and earnings per share over the same period.

"These are ambitious targets – no question," Rice Powell said in his speech to shareholders. "But with our unwavering focus on growth and efficiency, I am certain that we will meet the company's long-term goals. We are the global leaders in dialysis, and our company is continuing to shape the future of the dialysis industry. By expanding into dialysis-related medical services we will be able to better coordinate care, to the benefit of all our patients."

Rice Powell also confirmed the company's guidance for 2014. Fresenius Medical Care expects revenue to be at around $15.2 billion, translating into a growth rate of around 4%. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to be between $1.0 billion and $1.05 billion in 2014.

With a large majority of 99.85%, shareholders approved Fresenius Medical Care's 17th consecutive dividend increase. The dividend will be raised to €0.77 from €0.75 per ordinary share.

A shareholder majority of over 99% approved the actions of both the Management and Supervisory Boards in 2013.

At the annual general meeting, 74.28% of the subscribed capital was represented.

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A large majority of 99.48% Fresenius SE & Co. KGaA shareholders approved a three-for-one stock split at the company's Annual General Meeting in Frankfurt today. Every shareholder will receive two additional shares for each share held. The number of shares and the subscribed capital will be tripled. The share price is expected to adjust to this split with no impact on the overall value for shareholders.

"We are taking this step to promote trading activity in our shares," said Ulf Mark Schneider, CEO of Fresenius. "Our share price has more than tripled in just the last five years. A lower share price will make Fresenius' stock more accessible to a broad group of investors."

Schneider confirmed the Group's 2017 mid-term target of approximately €30 billion in sales and net income of €1.4 to €1.5 billion, and said: "Fresenius has the capability, ambition and commitment to reach these goals. The overall business environment for our company remains positive. Demand for healthcare is increasing both in the established industrialized nations and in emerging market countries."

Shareholders voted with a majority of 99.81% to approve the 21st consecutive dividend increase proposed by the general partner and the Supervisory Board. The dividend was raised by 14% to €1.25 per share (2012: €1.10). This increase is in line with the growth in earnings per share before special items, in accordance with the new dividend policy introduced last year.

Shareholder majorities of more than 98% approved the actions of the Management and Supervisory Boards, respectively, in 2013.

At the Annual General Meeting, 74.07% of the subscribed capital was represented.

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Fresenius Helios has completed the acquisition of HSK Dr. Horst Schmidt Kliniken in Wiesbaden after receiving municipal shareholder approval. HSK will be consolidated as of June 30, 2014. This marks the final step in HELIOS' transaction with Rhön-Klinikum AG announced in September 2013. Fresenius Helios now owns 110 hospitals.

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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, has entered into an agreement to invest approximately $600 million in Sound Inpatient Physicians, Inc. (www.soundphysicians.com) to become majority shareholder as part of a recapitalization of Sound, alongside existing investor TowerBrook Capital Partners and Sound's senior leadership team. The transaction is subject to customary closing conditions and is expected to close within the next ten days.

Sound Physicians has grown rapidly to more than 1,000 physician partners providing care in over 100 hospitals and post-acute care centers across the United States. It has pioneered a consistent, patient-centered approach that relies on experienced physician leadership and a web-based workflow platform. The focus on consistent processes and standards supporting highly trained clinical experts positions Sound Physicians as the partner of choice for efficient and effective performance throughout the acute and post-acute episode of care.

"Fresenius Medical Care shares with Sound Physicians a long record of improving health outcomes for patients and reducing costs to the health care system," said Ron Kuerbitz, Chief Executive Officer of Fresenius Medical Care North America. "This investment in Sound's inpatient expertise is a significant step forward in our care coordination strategy and augments our network of 2,150 dialysis clinics, 53 vascular care centers, renal pharmacy and full service and specialty laboratories to help us better address the full spectrum of our patients' health care needs. We have a singular focus: improving the quality of life of every patient every day. We believe the doctors and nurses at Sound Physicians share this commitment and we are excited to partner with them to deliver better results to patients."

"We are excited to have Fresenius Medical Care as our new strategic partner," said Robert A. Bessler, MD, Sound's Chief Executive Officer. "They bring decades of experience in managing chronic disease for dialysis patients and have improved quality, patient satisfaction and reduced the overall cost of care for this population. Their values and business goals are closely aligned with Sound Physicians and our hospital partners. I look forward to benefiting from their leadership in advancing innovation and improvement in the acute episode of care in hospitals and post-acute arenas throughout the U.S."

The Company expects Sound Physicians to generate approximately $500 million in revenue in the next twelve months and expects the investment to be accretive to operating earnings within the first year after closing, subject to adjustment for transaction costs. It will fund the investment through available cash and committed credit facilities, supplemented by additional debt financing.

Fresenius Medical Care also disclosed that it has acquired MedSpring Urgent Care Centers (www.medspring.com), with operations in Illinois and Texas. MedSpring's 14 urgent care centers provide convenient, consistent, high-quality primary care and customer service every day.

"MedSpring's commitment to providing primary care to patients where and when they need it most is a critical component of a truly effective 21st century health care network," said Kuerbitz. "We look forward to working with them to help expand their existing footprint and continue to provide patients with a more complete set of health care options."

"Every day, our associates succeed in delivering quality, cost-effective care our patients love, and it shows in our satisfaction scores where we receive 4.9 out of 5 stars," explained Jon Belsher, M.D., MedSpring's Chief Medical Officer. "We are excited about the potential to continue to improve patient care as part of the broader Fresenius Medical Care network."

Contact

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

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Fresenius today has sold its 5% stake in Rhön-Klinikum AG. Berenberg has acquired the approximately 6.9 million shares with the aim of placing them with institutional investors. The parties agreed not to disclose financial details of the transaction. Fresenius acquired the stake in 2012 as part of its takeover bid for Rhön-Klinikum AG.

Contact

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

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The stock split with capital increase from company funds approved by the Annual General Meeting in May will become effective on August 1, 2014, subject to entry in the commercial register. After close of trading, shareholders' deposits and the stock exchange listing will be converted. Trading at the new split-adjusted price is scheduled for August 4, 2014.

Every shareholder will receive two additional shares for each share held. With the stock split, Fresenius aims to promote trading activity and increase the stock's attractiveness for a broader group of investors.

Fresenius shares will continue to trade under ISIN DE0005785604.

Following the split, the subscribed capital of Fresenius SE & Co. KGaA will amount to € 540,511,632 divided into 540,511,632 ordinary shares.

For American Depositary Receipt (ADR) investors:
In conjunction with the stock split, Fresenius will also change the ratio of its American Depositary Receipts ("ADRs") which trade on OTCQX International Premier in the U.S. At present, 8 ADRs represent one underlying Fresenius share. This ratio will now change so that 4 ADRs represent one underlying share. The ratio change will come into effect on August 4, 2014.

Contact

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

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• Second quarter shows accelerated growth
• Improvement of underlying operating performance driven by both the North American as well as International segment
• Implemented further initiatives in the second quarter to expand the care coordination activities
• Company remains on track to achieve full year guidance

Second quarter 2014 key figures:

Net revenue: $3,835 million, +6%
Operating income (EBIT): $556 million, +2%
Net income¹: $234 million, -11%
Net income adjusted²: $252 million, -4%
Basic earnings per share: $0.77, -10%
Adjusted earnings per share²: $0.83, -3%


First half 2014 key figures:

Net revenue: $7,398 million, +5%
Operating income (EBIT): $1,001 million, -4%
Net income¹: $439 million, -10%
Net income adjusted²: $457 million, -6%
Basic earnings per share: $1.46, -9%
Adjusted earnings per share²: $1.52, -5% 

¹ attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
² adjusted for an unfavorable tax impact of USD 18 million in the second quarter of 2014

Rice Powell, chief executive officer of Fresenius Medical Care stated: "The second quarter showed sequentially enhanced revenue growth and improved strong operating performance. We expect the organic growth to continue in the second half of the year and are confident to meet our guidance for the full year as well as our cost savings target of up to $60 million before tax for 2014. With our recent acquisitions of Sound Physicians and MedSpring Urgent Care we made important steps in our strategy of expanding our service network to achieve excellent patient care in a more coordinated and integrated model."


Second quarter 2014

Revenue

Net revenue for the second quarter of 2014 increased by 6% to $3,835 million (+7% at constant currency) compared to the second quarter of 2013. Organic revenue growth worldwide was 5%. Dialysis services revenue grew by 7% to $2,949 million (+8% at constant currency) and dialysis product revenue increased by 2% to $886 million (+1% at constant currency) compared to the second quarter of 2013.

North America revenue for the second quarter of 2014 increased by 6% to $2,521 million. Organic revenue growth was 4%. Dialysis services revenue grew by 7% to $2,316 million with a same store treatment growth of 3.3%. Dialysis product revenue decreased by 6% to $205 million.

International revenue increased by 6% to $1,297 million (+7% at constant currency). Organic revenue growth was 5%. Dialysis services revenue increased by 8% to $633 million (+12% at constant currency). Dialysis product revenue increased by 3% to $664 million (+3% at constant currency).


Earnings

Operating income (EBIT) for the second quarter of 2014 increased by 2% to $556 million compared to $544 million in the second quarter of 2013. Operating income for North America increased by 3% in the second quarter of 2014 to $401 million compared to $391 million in the second quarter of 2013. In the International segment, operating income for the second quarter of 2014 increased by 11% to $243 million compared to $218 million in the second quarter of 2013.

Net interest expense for the second quarter of 2014 was $98 million, compared to $103 million in the second quarter of 2013.

Income tax expense was $177 million for the second quarter of 2014 which translates into an effective tax rate of 38.7%. This compares to income tax expense of $144 million and a tax rate of 32.6% for the second quarter of 2013. The tax rate in the second quarter of 2014 was influenced by a special tax impact which resulted in an expense of $18 million in the second quarter of 2014. On an adjusted basis the tax rate for the second quarter of 2014 was 34.8%. For the full year, the company expects a tax rate of around 34%.

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the second quarter of 2014 was $234 million, a decrease of 11% compared to the corresponding number of $263 million for the second quarter of 2013. On an adjusted basis net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the second quarter of 2014 was $252 million.

Basic earnings per share (EPS) for the second quarter of 2014 was $0.77, a decrease of 10% compared to the corresponding number for the second quarter of 2013. On an adjusted basis EPS for the second quarter of 2014 was $0.83. The weighted average number of shares outstanding for the second quarter of 2014 was approximately 301.8 million shares, compared to 306.3 million shares for the second quarter of 2013. The decrease in shares outstanding resulted from last year`s share buy-back program, partially offset by stock option exercises in the past twelve months.


Cash flow

In the second quarter of 2014, the company generated $449 million in net cash provided by operating activities, a decrease of 14% compared to the corresponding figure of last year and representing 12% of revenue.

A total of $218 million was spent for capital expenditures, net of disposals. Free cash flow was $231 million compared to $352 million in the second quarter of 2013.

A total of $297 million in cash was spent for acquisitions and investments, net of divestitures. Free cash flow after investing activities was -$66 million, compared to $339 million in the second quarter of 2013.


First half 2014

Revenue and earnings

Net revenue for the first half of 2014 increased by 5% to $7,398 million (+6% at constant currency) compared to the first half of 2013. Organic revenue growth worldwide was 4%.

Operating income (EBIT) for the first half of 2014 decreased by 4% to $1,001 million compared to $1,038 million in the first half of 2013.

Net interest expense for the first half of 2014 was $195 million compared to $207 million in the first half of 2013.

Income tax expense for the first half of 2014 was $278 million which translates into an effective tax rate of 34.5%. This compares to income tax expense of $273 million and a tax rate of 32.8% for the first half of 2013. On an adjusted basis the tax rate for the first half of 2014 was 32.3%. For the full year, the company expects a tax rate of around 34%.

For the first half of 2014, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA was $439 million, down by 10% from the corresponding number of $488 million for the first half of 2013. On an adjusted basis net income attributable to shareholders of Fresenius Medical Care AG&Co. KGaA for the first half of 2014 was $457 million.

In the first half of 2014 basic earnings per share (EPS) was $1.46, a decrease of 9% compared to the corresponding number for the first half of 2013. On an adjusted basis EPS for the first half of 2014 was $1.52. The weighted average number of shares outstanding during the first half of 2014 was approximately 301.6 million shares.


Cash flow

In the first half of 2014, the company generated $562 million in net cash provided by operating activities compared to $841 million for the same period in 2013, representing 8% of revenue.

A total of $415 million was spent for capital expenditures, net of disposals. Free cash flow for the first half of 2014 was $147 million compared to $522 million in the first half of 2013.

A total of $432 million in cash was spent for acquisitions and investments, net of divestitures. Free cash flow after investing activities was -$285 million, compared to $438 million in the first half of 2013.


Employees

As of June 30, 2014, Fresenius Medical Care had 94,401 employees (full-time equivalents) worldwide, compared to 87,944 employees at the end of June 2013. This increase of more than 6,400 employees was attributable to our continued organic growth as well as to acquisitions.


Balance sheet structure

The company´s total assets were $24,145 million (Dec. 31, 2013: $23,120 million), an increase of 4%. Current assets increased by 8% to $6,805 million (Dec. 31, 2013: $6,287 million). Non-current assets were $17,340 million (Dec. 31, 2013: $16,833 million), an increase of 3%. Total equity increased by 2% to $9,650 million (Dec. 31, 2013: $9,485 million). The equity ratio was 40% as compared to 41% at the end of 2013. Total debt was $9,139 million (Dec. 31, 2013: $8,417 million). As of June 30, 2014, the debt/EBITDA ratio was 3.1 (Dec. 31, 2013: 2.8).

Please refer to the attachments for a complete overview of the results for the second quarter and first half of 2014.


Strategic investments in Care Coordination

Fresenius Medical Care has entered into an agreement to invest approximately $600 million in Sound Inpatient Physicians Inc. to become majority shareholder in a network of more than 1,000 physician partners providing care in over 100 hospitals and post-acute care centers across the United States. The transaction of Sound Inpatient Physicians Inc. has been closed in July 2014.

Fresenius Medical Care also acquired MedSpring Urgent Care Centers, with operations in Illinois and Texas. MedSpring's 14 urgent care centers provide high-quality primary care and customer service.

Thereby the company executes on the strategy disclosed earlier this year to invest in care coordination around dialysis. The investment clearly advances the commitment to address the full spectrum of care for chronically ill patients.


Outlook

The company expects revenue to be at around $15.2 billion in 2014, translating into a growth rate of around 4%. This outlook excludes revenue of about $500 million from acquisitions.

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to be unchanged between $1.0 billion and $1.05 billion in 2014. The company initiated a global efficiency program designed to enhance the company's performance over a multi-year period. Potential cost savings before income taxes of up to $60 million generated from this program are not included in the outlook for 2014.

For 2014, the company expects to spend around $900 million on capital expenditures. Reflecting mainly the latest acquisitions the company now expects an acquisition spending of around $1.0 billion for fiscal year 2014 (previously $400 million). As a consequence the debt/EBITDA ratio is expected to be around 3.0 by the end of 2014.


Conference call

Fresenius Medical Care will hold a conference call to discuss the results of the second quarter and first half on Thursday, July 31, 2014, at 3.30 p.m. CEDT/ 9.30 a.m. EDT. The company invites investors to follow 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.