Fresenius today announced its intention to issue Senior Unsecured Notes through its subsidiary Fresenius Finance B.V., subject to market conditions. The offering is currently anticipated to be €125 million in principal amount. Proceeds of the Notes offering will be used to repay short-term debt of the company.

The Notes are being offered in a private placement and there will be no public offering of the Notes.


About Fresenius SE
Fresenius is a health care group with international operations, providing products and services for dialysis, hospital and outpatient medical care. In 2008, group sales were approx. € 12.3 billion. On March 31, 2009 the Fresenius Group had 126,849 employees worldwide.

Fresenius today announced that it has successfully placed a tap to its 2006 Senior Notes by its subsidiary, Fresenius Finance B.V. An aggregate principal amount of € 150 million was issued at a price of 92.0 % and a coupon of 5.5 %, resulting in a yield to maturity of 7.0 %. The Notes will mature in 2016 and are callable by the issuer from 2011.

The Notes have been offered in a private placement to institutional investors only. The transaction was well received and substantially oversubscribed.

With the issuance, Fresenius has taken advantage of the currently favorable market environment. The Company will use the proceeds to repay short-term debt. Accordingly, its debt maturity profile will improve.

The Company expects to close and settle the offering of the Notes on June 8, 2009, subject to customary closing conditions. The new Notes are expected to be listed on the Luxembourg Stock Exchange and will increase trading liquidity under the existing 2006 Notes.

About Fresenius SE
Fresenius is a health care group with international operations, providing products and services for dialysis, hospital and outpatient medical care. In 2008, group sales were approx. € 12.3 billion. On March 31, 2009 the Fresenius Group had 126,849 employees worldwide.

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

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

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

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

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

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

Sales growth in the business segments was as follows:

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

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

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

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

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

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

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

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


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

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

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

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

 

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

 

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

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

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

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

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

 

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

 

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

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

Fresenius Biotech's EBIT was € -22 million in H1 2009 (H1 2008: € -20 million). For 2009, Fresenius Biotech expects its EBIT to reach € -40 million to € -45 million. The previous guidance foresaw an EBIT of € -40 million to € -50 million.


The Business Segments

Fresenius Medical Care
Fresenius Medical Care is the world's leading provider of services and products for patients with chronic kidney failure. As of June 30, 2009, Fresenius Medical Care was treating 190,081 patients in 2,471 dialysis clinics.

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

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

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

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

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

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

For further information, please see Fresenius Medical Care's Investor News at www.fmc-ag.com.
 
* Net income attributable to Fresenius Medical Care AG & Co. KGaA


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

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

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

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

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

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

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

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

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

^* Net income attributable to Fresenius Kabi AG
^** Non-GAAP financial measures - Adjusted EBITDA is a defined term in the indenture governing the Contingent Value Rights (CVRs), however it is not a recognized term under GAAP.


Fresenius Helios
Fresenius Helios is one of the largest private hospital operators in Germany. The HELIOS Kliniken Group owns 62 hospitals, including five maximum care hospitals in Berlin-Buch, Erfurt, Krefeld, Schwerin and Wuppertal. HELIOS treats about 600,000 in-patients per year at its clinics and operates a total of more than 18,000 beds.

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

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

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

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

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

^* Net income attributable to HELIOS Kliniken GmbH


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

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

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

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

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

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

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

^* Net income attributable to VAMED AG


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

 

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

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

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

Group outlook for 2009 fully confirmed

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

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

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

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

Sales growth in the business segments was as follows:

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

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

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

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

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

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

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

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

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

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

 

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

 

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

 

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

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

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

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

 

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

 

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

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

Fresenius Biotech's EBIT was € -32 million in the first three quarters of 2009 (Q1-3/2008: € -32 million). For 2009, Fresenius Biotech expects its EBIT to reach € -40 million to € -45 million.


The Business Segments

Fresenius Medical Care
Fresenius Medical Care is the world's leading provider of services and products for patients with chronic kidney failure. As of September 30, 2009, Fresenius Medical Care was treating 192,804 patients in 2,509 dialysis clinics.

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

^* Net income attributable to Fresenius Kabi AG
^** Non-GAAP financial measures - Adjusted EBITDA is a defined term in the indenture governing the Contingent Value Rights (CVRs), however it is not a recognized term under GAAP.

Fresenius Helios
Fresenius Helios is one of the largest private hospital operators in Germany. The HELIOS Kliniken Group owns 62 hospitals, including five maximum care hospitals in Berlin-Buch, Erfurt, Krefeld, Schwerin and Wuppertal. HELIOS treats about 600,000 in-patients per year at its clinics and operates a total of more than 18,000 beds.

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

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

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

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

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

^* Net income attributable to HELIOS Kliniken GmbH


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

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

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

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

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

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

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

^* Net income attributable to VAMED AG


Analyst Conference
As part of the publication of the results of the first three quarters of 2009 a conference call will be held on November 3, 2009 at 2.00 p.m. CET (8.00 a.m. EST). All investors are cordially invited to follow the conference call in a live broadcast on our website www.fresenius.com at Investor Relations / Presentations. Following the call, a recording will be available.

 

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

• Sales € 11.4 billion, + 5 % at actual rates, + 10 % in constant currency
• EBIT € 1.6 billion, + 11 % at actual rates, + 17 % in constant currency
• Net income € 410 million, + 24 % at actual rates, + 28 % in constant currency

• All financial targets met or exceeded
• Double-digit EBIT growth in all business segments
• Strengthened market position through targeted acquisitions
• 15^th consecutive dividend increase

Dividend increase of ~15 % per share proposed
Based on the excellent financial results the Management Board will propose to the Supervisory Board a dividend increase of ~15 % to € 0.66 per ordinary share (2006: € 0.57) and € 0.67 per preference share (2006: € 0.58). The corresponding total dividend distribution amounts to € 103.2 million (2006: € 88.8 million).

 

Positive outlook for 2008: Substantial sales and earnings growth expected
For 2008, Fresenius Group projects further improvements in its financial results: Group sales are expected to grow by 8 to 10 % in constant currency. Net income is expected to increase by 10 to 15 % in constant currency. All business segments are expected to contribute to this growth.

Investments in property, plant and equipment and in intangible assets are planned to increase from € 705 million in 2007 to ~€ 750 million.

 

Strong sales growth across all business segments and regions
Group sales increased by 10 % in constant currency and by 5 % at actual rates to € 11,358 million (2006: € 10,777 million). Organic sales growth was 6 %. Acquisitions contributed a further 6 %. Divestitures reduced sales growth by 2 %. Currency translation had a negative impact of 5 %. This is mainly attributable to the average US dollar rate depreciating 9 % against the Euro.

Sales growth in the business segments was affected as follows:

In Europe sales grew by 7 % in constant currency with organic sales growth contributing 5 %. In North America sales grew by 10 % in constant currency due to the full-year Renal Care Group consolidation and an organic growth rate of 5 %.

Strong growth rates were achieved in the emerging markets with organic growth of 9 % in Asia-Pacific, 10 % in Latin America and 26 % in Africa.

 

Excellent earnings growth and strong margin improvement
Group EBITDA increased by 15 % in constant currency and by 10 % at actual rates to € 2,030 million (2006: € 1,843 million). Group operating income (EBIT) grew by 17 % in constant currency and by 11 % at actual rates to € 1,609 million (2006: € 1,444 million). The Group's EBIT margin improved by 80 basis points to 14.2 % (2006: 13.4 %).

Group net interest was € -368 million (2006: € -395 million, including one-time expenses of € 30 million for the early refinancing of Group debt).

The tax rate was 36.1 % (2006: 39.5 %; adjusted for the tax expense related to the divestiture of US dialysis clinics: 37.2 %).

Minority interest increased to € 383 million (2006: € 305 million), of which 92 % was attributable to the minority interest in Fresenius Medical Care.

Group net income grew strongly by 28 % in constant currency and by 24 % at actual rates to € 410 million (2006: € 330 million, including one-time expenses of € 22 million). Earnings per ordinary share were € 2.64 and earnings per preference share were € 2.65 (2006 adjusted for the February 2007 share split: ordinary share € 2.15, preference share € 2.16). This represents an increase of 23 % for both share classes.

 

Investments in property, plant and equipment at high level
Fresenius Group spent € 705 million for property, plant and equipment and intangible assets (2006: € 600 million). The increase is mainly attributable to the business segments Fresenius Medical Care and Fresenius Helios. Acquisition spending was € 613 million (2006: € 3,714 million). All business segments strengthened their market position through targeted acquisitions.

 

Strong cash flow
Operating cash flow increased by 23 % to € 1,296 million (2006: € 1,052 million). Key driver was the strong increase in earnings. Cash flow margin was 11.4 % (2006: 9.8 %). Cash flow before acquisitions and dividends increased by 31 % to € 630 million (2006: € 481 million). Free cash flow after acquisitions (€ 392 million) and dividends (€ 205 million) was € 33 million (2006: € -2,909 million).

 

Solid balance sheet structure: Leverage ratio improved
Fresenius Group's total assets increased by 8 % in constant currency and by 2 % at actual rates to € 15,324 million (December 31, 2006: € 15,024 million). Current assets increased by 5 % to € 4,291 million (December 31, 2006: € 4,106 million). Non-current assets were € 11,033 million (December 31, 2006: € 10,918 million).

Shareholders' equity including minority interest grew by 6 % to € 6,059 million (December 31, 2006: € 5,728 million). The equity ratio (including minority interest) was 39.5 % (December 31, 2006: 38.1 %).

Group debt decreased by 3 % at actual rates to € 5,699 million (December 31, 2006: € 5,872 million). In constant currency, Group debt increased by 3%. The net debt/EBITDA ratio improved to 2.6, well below the level of 3.0 as of December 31, 2006.

 

Number of employees increased
As of December 31, 2007, Fresenius increased the number of its employees by 9 % to 114,181 (December 31, 2006: 104,872). The increase is mainly attributable to the business segments Fresenius Medical Care and Fresenius Helios.

 

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.

Following the successful completion of the phase II/III study with Removab^® in the indication malignant ascites, Fresenius Biotech dispatched the marketing authorization application to the European Medicines Agency (EMEA) in December 2007. The company applies for the EU authorization of Removab^® for the intraperitoneal treatment of malignant ascites in patients with epithelial cancers where no standard therapy is available or no longer feasible. EMEA started the scientific evaluation of the dossier at the end of January 2008. In additional phase II studies Fresenius Biotech is focusing on the use of Removab^® for solid tumors in the indications ovarian cancer and gastric cancer.

For the future marketing of Removab^® in the USA and Japan, Fresenius Biotech is in discussions with potential partners.

Phase II studies with the antibody Rexomun® (ertumaxumab) in the indication breast cancer are ongoing.

In 2007, Fresenius Biotech's operating income (EBIT) was € -50 million (2006: € -45 million). For 2008, Fresenius Biotech expects an EBIT of approximately € -50 million.

The Business Segments

Fresenius Medical Care
Fresenius Medical Care is the world's leading provider of services and products for patients with chronic kidney failure. As of December 31, 2007, Fresenius Medical Care was serving 173,863 patients in 2,238 dialysis clinics.

• Sales increased by 14 % to US$ 9.7 billion
• Net income well above guidance
• Outlook 2008: Sales growth of more than 7 % and net income growth of 12 to 15 % expected

In 2007, Fresenius Medical Care achieved excellent sales growth of 14 % to US$ 9,720 million (2006: US$ 8,499 million). This was mainly driven by organic growth of 6 % and by the full-year consolidation of Renal Care Group. Sales in dialysis care increased by 13 % to US$ 7,213 million (2006: US$ 6,377 million). In dialysis products, sales grew by 18 % to US$ 2,507 million (2006: US$ 2,122 million).

In North America sales increased by 11 % to US$ 6,663 million (2006: US$ 6,025 million). Sales outside North America ("International" segment) grew by 24 % (in constant currency: 15 %) to US$ 3,057 million (2006: US$ 2,474 million). Strong sales growth in constant currency was achieved in Europe (+9 %), Latin America (+14 %), and the Asia-Pacific region (+40 %).

EBIT rose by 20 % to US$ 1,580 million (2006: US$ 1,318 million). The EBIT margin was 16.3 % (2006: 15.5 %). Net income increased by 34 % to US$ 717 million (2006: US$ 537 million, including one-time expenses of US$ 37 million).

In November 2007, Fresenius Medical Care announced the acquisition of Renal Solutions, Inc. (RSI). With the RSI transaction, Fresenius Medical Care is acquiring a key technology for the expansion of home hemodialysis.

For 2008, Fresenius Medical Care expects to achieve revenue of more than US$ 10.4 billion, an increase of more than 7 %. Net income is expected to be between US$ 805 million and US$ 825 million, an increase of 12 % to 15 %.

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

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

• Sales exceed 2 billion euros for the first time
• Targeted acquisitions strengthen market position
• Outlook 2008: Strong sales growth and EBIT margin of around 16.5 %

Fresenius Kabi increased sales by 7 % to € 2,030 million (2006: € 1,893 million). The company achieved excellent organic growth of 8 %, at the upper end of the guidance of 6 to 8 %. Acquisitions contributed 1 % to sales. Currency translation effects had a negative impact of 2 %. This was mainly due to the depreciation of currencies in South Africa, China, Mexico and Canada.

Organic sales growth in Europe (excluding Germany) was 5 %. In Germany organic sales growth was 2 %. In the Asia-Pacific region Fresenius Kabi achieved significant organic sales growth of 22 %. Organic sales growth in Latin America was 9 % and in other regions 10 %.

Fresenius Kabi continued its excellent earnings growth in 2007. EBIT grew by 14 % to € 332 million (2006: € 291 million). The EBIT margin improved by 100 basis points to 16.4 % (2006: 15.4 %). Fresenius Kabi reported strong growth in net income of 28 % to € 183 million (2006: € 143 million, including one-time expenses for early debt refinancing of € 11 million).

In the fourth quarter of 2007, Fresenius Kabi announced acquisitions to strengthen its business activities especially in the fields of clinical nutrition and intravenously administered generic drugs (I.V. drugs). Fresenius Kabi acquired from Nestlé S.A. the enteral nutrition businesses in France (Novartis Nutrition) and in Spain (Nestlé España). In addition, Fresenius Kabi acquired the Chilean company Laboratorio Sanderson S.A. and the Italian company Ribbon S.r.L. Aggregate sales of the three acquired businesses was about € 128 million in 2007.

Fresenius Kabi expects to continue its positive financial performance in 2008. The company targets sales growth in constant currency of 12 to 15 %. Organic growth is expected to contribute 7 % to this target. Strong growth is anticipated in particular from the Asia-Pacific and Latin America regions. Further, Fresenius Kabi forecasts an EBIT margin of around 16.5 %. It is anticipated that the recent acquisitions will initially contribute to Fresenius Kabi's EBIT at a margin below par, also due to amortization of intangible assets. Adjusted for the recent acquisitions, Fresenius Kabi's EBIT margin is expected to progress into the range of 16.5 to 17 %.

 

Fresenius ProServe
As from January 1, 2008, the former business segment Fresenius ProServe has been replaced by the two business segments Fresenius Helios and Fresenius Vamed. These two businesses had previously made up the business segment Fresenius ProServe. The financial results of Fresenius Helios and Fresenius Vamed are already presented separately on the following pages for the full-year 2007.

The financial performance at Fresenius ProServe was as follows:

Sales grew by 5 % to € 2,268 million (2006: € 2,155 million). Organic growth was 3 %. EBIT increased by 18 % to € 181 million (2006: € 154 million). The EBIT margin improved to 8.0 % (2006: 7.1 %).

Organic sales growth guidance of 2 - 3 % and EBIT projection of > € 170 million was fully achieved.

The subsidiaries Pharmaplan and Pharmatec were divested and deconsolidated as from January 1, 2007, and June 30, 2007, respectively.

 

Fresenius Helios
Fresenius Helios is one of the largest private hospital operators in Germany. The HELIOS Kliniken Group owns 60 hospitals, including five maximum care hospitals in Erfurt, Berlin-Buch, Wuppertal, Schwerin and Krefeld. HELIOS treats about 500,000 inpatients per year at its clinics and has a total of approximately 17,200 beds.

• Sales and earnings substantially increased
• Expansion in the German hospital market continued
• Outlook 2008: Sales of more than 2 billion euros expected

Fresenius Helios increased sales by 10 % to € 1,841 million (2006: € 1,673 million), and achieved very good organic growth of 3 %. Acquisitions contributed 9 %, divestitures reduced sales growth by 2 %.

EBIT increased by 17 % to € 155 million (2006: € 133 million). The EBIT margin improved by 50 basis points to 8.4 %. Fresenius Helios achieved this very good result despite a number of external negative factors: the increase in value-added tax, wage tariff increases, and the 0.5 % budget cut for the stabilization of public health costs all affected earnings. Net income improved by 8 % to € 64 million (2006: € 59 million).

In the fourth quarter of 2007, Fresenius Helios acquired 74.9 % of Krefeld Municipal Hospitals (Krefeld and Hüls). Both hospitals together have approximately 3,300 employees and achieved sales of about € 175 million in 2006. The hospitals are consolidated in the Group's balance sheet as of December 31, 2007.

The outlook for the full year 2008 remains very positive. Fresenius Helios expects to achieve sales of more than € 2,050 million. EBIT is projected to increase to € 160 to 170 million, despite the initially negative contribution of the Krefeld Municipal Hospitals.

 

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

• Order intake and order backlog at all-time high
• Acquisition in the service business for hospitals
• Outlook 2008: Sales and EBIT growth of 5 – 10 % expected

Fresenius Vamed achieved sales growth of 4 % to € 408 million (2006: € 392 million). The project business generated sales of € 259 million (2006: € 249 million), sales in the service business was € 149 million (2006: € 143 million), an increase of 4 % in each segment.

EBIT was € 26 million (2006: € 23 million). The EBIT margin improved to 6.4 % (2006: 5.9 %). Net income increased by 15 % to € 23 million (2006: € 20 million).

Order intake in the project business grew by 17 % to € 395 million (2006: € 337 million). In the fourth quarter of 2007, order intake rose by 70 % compared to the same quarter of the previous year and reached € 173 million. Order backlog as of December 31, 2007, was € 510 million (December 31, 2006: € 387 million).

In February 2008, Fresenius Vamed announced that it had signed an agreement to acquire the hospital planning, consulting and service company HERMED in Germany. Both regionally and strategically, HERMED fits perfectly to the business of VAMED. VAMED concentrates on larger hospitals whereas HERMED focuses on smaller and medium-sized health care facilities. HERMED achieved sales of around € 12 million in 2007.

In 2008, Fresenius Vamed expects to achieve sales growth and an increase in EBIT of 5 to 10 %.

 

Analyst Meeting and Video Webcast
As part of the publication of the results for fiscal year 2007, an analyst meeting will be held at the Fresenius headquarters in Bad Homburg on February 20, 2008 at 1:30 p.m. CET (7.30 a.m. EST). All investors are cordially invited to follow the conference in a live broadcast over the Internet at www.fresenius.com / Investor Relations / Presentations. Following the meeting, a recording of the conference will be available as video-on-demand.

 

Annual report
The annual report 2007 will be available from March 11, 2008 at www.fresenius.com / Investor Relations / Financial reports.

Fresenius Kabi, a business segment of health care group Fresenius, continues its growth strategy in intravenously administered drugs (i.v. drugs). The company today announced the acquisition of 73.3 % of the share capital of the Indian company Dabur Pharma Ltd. for a price of INR 8,782 million (€ 139 million) or INR 76.50 per share in cash. In accordance with Indian regulations, Fresenius Kabi also announced a public offer to acquire up to a further 20 % shareholding for a price of INR 76.50 per share in cash. Fresenius Kabi has entered into an agreement with a third party to secure the participation of 2.4 % of Dabur Pharma's share capital in the public offer.

Dabur Pharma, headquartered in New Delhi, is one of the leading suppliers of generic drugs and active pharmaceutical ingredients (API) to treat cancer. The company holds a substantial number of drug registrations in Asia, Europe and the US. Dabur Pharma is also one of the few manufacturers worldwide to hold international registrations for all steps within the manufacturing process of cytostatic agents. The company operates two production facilities in India and one in Great Britain as well as a research and development center equipped in accordance with European and US standards near New Delhi.

The acquisition significantly expands Fresenus Kabi's i.v. drug portfolio and secures its supply of high quality APIs for cytostatics. With the acquisition of Dabur Pharma, Fresenius Kabi will also broaden its offering of patient-specific oncology therapies. In future, Dabur Pharma will supply Fresenius Kabi's compounding centres in Europe, Asia-Pacific and Latin America where patient-specific formulations of i.v. drugs and parenteral nutrition are being prepared for cancer patients.

Dabur Pharma is listed on the Bombay Stock Exchange and on the National Stock Exchange of India. The company achieved sales of more than € 41 million with generic oncology drugs and APIs in fiscal year 2006/2007 (April 1, 2006 to March 31, 2007) and employs about 960 people. Dabur Pharma pursues an international growth strategy and will benefit from Fresenius Kabi's international sales and marketing organization going forward. In addition, Dabur Pharma will continue to be focused on expanding its research and development.

The acquisition will be entirely debt-financed from funds that have already been procured. The transaction is expected to be accretive to Fresenius Group's Cash EPS in 2 - 3 years.

Closing of the transaction is subject to completion of the public offer process in line with local regulations as well as relevant approvals required under Indian law. This is expected to occur at the beginning of Q3 2008.


Conference Call
A conference call to inform about the acquisition will be held on April 21, 2008 at 4.00 p.m. CEDT. All investors are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com / Investor Relations / Presentations. A replay of the call will be available on our website shortly after the call.

• Sales € 2.8 billion, +1 % at actual rates, +8 % in constant currency
• EBIT € 377 million, -1 % at actual rates, +7 % in constant currency
• Net income € 100 million, +8 % at actual rates, +13 % in constant currency

• Excellent growth in constant currency
• Currency impact based on translational effects
• Significant progress in generic I.V. drug strategy
• All business segments fully on track - Guidance for 2008 confirmed

Outlook for 2008 confirmed
Based on the Group's strong first quarter financial results Fresenius fully confirms its positive outlook for 2008: Group sales are expected to grow by 8 to 10 % in constant currency. Net income is expected to increase by 10 to 15 % in constant currency. All business segments are expected to contribute to this growth.

 

Sales growth of 8 % in constant currency
Group sales increased by 8 % in constant currency and by 1 % at actual rates to € 2,798 million (Q1 2007: € 2,767 million). Organic sales growth was 5 %. Acquisitions contributed a further 4 %. Divestitures reduced sales growth by 1 %. Currency translation had a negative impact of 7 %. This is mainly attributable to the average US dollar/Euro rate depreciating 14 % from Q1 2007.

Sales growth in the business segments was as follows:

In Europe sales grew by 13 % in constant currency with organic sales growth contributing 6 %. In North America sales grew by 1 % in constant currency. Organic growth was 2 %. Strong growth rates were achieved in the emerging markets with organic growth of 11 % in Asia-Pacific and 16 % in Latin America.

Excellent net income growth
Group EBITDA increased by 8 % in constant currency and by 1 % at actual rates to € 483 million (Q1 2007: € 479 million). Group operating income (EBIT) grew by 7 % in constant currency and decreased by 1 % at actual rates to € 377 million (Q1 2007: € 380 million). The Group's EBIT margin was 13.5 % (Q1 2007: 13.7 %).

Group net interest decreased to € -84 million (Q1 2007: € -95 million). This is mainly attributable to lower average interest rates at Fresenius Medical Care and currency translation effects.

The Group tax rate was 35.2 % (Q1 2007: 36.1 %).

Minority interest increased slightly to € 90 million (Q1 2007: € 89 million), of which 92 % was attributable to the minority interest in Fresenius Medical Care.

Group net income grew by 13 % in constant currency and by 8 % at actual rates to € 100 million (Q1 2007: € 93 million). Earnings per ordinary share and per preference share were € 0.64 (Q1 2007: ordinary share € 0.60, preference share € 0.60). This represents an increase of 7 % for both share classes.

 

Substantial investments in growth
Fresenius Group spent € 155 million for property, plant and equipment and intangible assets (Q1 2007: € 140 million). Acquisition spending was € 215 million (Q1 2007: € 155 million).

 

Sustainable cash flow development
Operating cash flow was € 278 million (Q1 2007: € 287 million). The cash flow margin was 9.9 % (Q1 2007: 10.4 %). Given increased net capital expenditure of € 162 million (Q1 2007: € 132 million), cash flow before acquisitions and dividends was € 116 million (Q1 2007: € 155 million). Free cash flow after net acquisitions (€ 158 million) and dividends (€ 5 million) was € -47 million (Q1 2007: € 88 million).

 

Solid balance sheet
Fresenius Group's total assets increased by 3 % in constant currency and decreased by 1 % at actual rates to € 15,149 million (December 31, 2007: € 15,324 million). Current assets increased by 4 % in constant currency and by 1 % at actual rates to € 4,319 million (December 31, 2007: € 4,291 million). Non-current assets were € 10,830 million (December 31, 2007: € 11,033 million).

Shareholders' equity including minority interest increased by 3 % in constant currency and decreased by 1 % at actual rates to € 5,988 million (December 31, 2007: € 6,059 million). The equity ratio (including minority interest) was 39.5 % (December 31, 2007: 39.5 %).

Group debt decreased by 2 % at actual rates to € 5,598 million (December 31, 2007: € 5,699 million). In constant currency, Group debt increased by 2 %. As of March 31, 2008, the net debt/EBITDA ratio was 2.6 (December 31, 2007: 2.6).

 

Number of employees increased
As of March 31, 2008, Fresenius increased the number of its employees by 2 % to 116,203 (December 31, 2007: 114,181). The growth was mainly atttributable to Fresenius Kabi and Fresenius Medical Care.

 

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.

Studies with the antibodies Removab^® and Rexomun^® in various indications are ongoing in Europe and the US.

Fresenius Biotech's EBIT was € -9 million (Q1 2007: € -11 million). For 2008, Fresenius Biotech expects an EBIT of approximately € -50 million.


The Business Segments

Fresenius Medical Care
Fresenius Medical Care is the world's leading provider of services and products for patients with chronic kidney failure. As of March 31, 2008, Fresenius Medical Care was treating 177,059 patients in 2,297 dialysis clinics.

• Strong start into the year - in line with expectations
• Outlook 2008 fully confirmed

Fresenius Medical Care achieved sales growth of 8 % to US$ 2,512 million (Q1 2007: US$ 2,321 million). Organic growth was 5 %. Currency translation effects had a positive impact of 4 %. Sales in dialysis care increased by 5 % to US$ 1,844 million (Q1 2007: US$ 1,760 million). In dialysis products, sales grew by 19 % to US$ 667 million (Q1 2007: US$ 560 million).

In North America sales increased by 2 % to US$ 1,668 million (Q1 2007: US$ 1,637 million). Dialysis services revenue increased by 1 % (3 % adjusted for the divestiture of the perfusion business in spring 2007) to US$ 1,495 million. Average revenue per treatment in the US was US$ 326 in the first quarter (Q4 2007: US$ 325), based on an increase in underlying reimbursement rates and an increase in EPO utiliziation. Sales outside North America ("International" segment) grew by 23 % (10 % in constant currency) to US$ 844 million (Q1 2007: US$ 684 million). Strong sales growth in constant currency was achieved in Europe (+11 %) and Latin America (+14 %).

EBIT rose by 7 % to US$ 389 million (Q1 2007: US$ 365 million) resulting in an EBIT margin of 15.5 % (Q1 2007: 15.7 %). This reflects the increased expenditures for corporate research and development activitites and the expansion in the International dialysis services business. The EBIT margin in North America increased by 60 basis points to 16.4 %, supported by improved underlying reimbursement rates, dialysis services cost containment and a continued strong performance of renal products and PhosLo. In the International segment, the EBIT margin decreased by 60 basis points to 17.0 % mainly due to the growth in the dialysis care business through an increased number of De Novo clinics and associated start-up costs.

Net income increased by 16 % to US$ 186 million (Q1 2007: US$ 160 million).

For 2008, Fresenius Medical Care fully confirms its outlook and expects to achieve revenue of more than US$ 10.4 billion, an increase of more than 7 %. Net income is expected to be between US$ 805 million and US$ 825 million, an increase of 12 % to 15 %.

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

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

• Excellent sales growth of 15 % in constant currency
• Outlook 2008 fully confirmed

Fresenius Kabi increased sales by 15 % in constant currency and by 13 % at actual rates to € 545 million (Q1 2007: € 483 million). Organic growth was excellent at 8 %. Net acquisitions contributed a further 7 % to sales. Currency translation effects had a negative impact of 2 %. This was mainly due to the depreciation of currencies in Great Britain, South Africa and China.

Organic sales growth in Europe (excluding Germany) was 6 %. In Germany organic sales growth was 1 %. In the Asia-Pacific region Fresenius Kabi again achieved significant organic sales growth of 28 %. Organic sales growth in Latin America was 10 % and in other regions 6 %.

EBIT grew by 13 % to € 87 million (Q1 2007: € 77 million). The EBIT margin was 16.0 % (Q1 2007: 15.9 %). Net income grew by 10 % to € 46 million (Q1 2007: € 42 million).

Fresenius Kabi fully confirms the outlook for 2008: The company targets sales growth in constant currency of 12 to 15 %. Organic growth is expected to contribute around 7 % to this target. Further, Fresenius Kabi forecasts an EBIT margin of around 16.5 %.

On April 20, 2008, Fresenius Kabi announced the acquisition of 73.3 % of the share capital of the Indian company Dabur Pharma Ltd. Dabur is a leading supplier of oncology generics. With this acquisition, Fresenius Kabi strengthens its position in I.V. drugs. Dabur achieved sales of more than € 41 million with generic oncology drugs and APIs in fiscal year 2006/2007 (April 1, 2006 to March 31, 2007).

 

Fresenius Helios
Fresenius Helios is one of the largest private hospital operators in Germany. The HELIOS Kliniken Group owns 60 hospitals, including five maximum care hospitals in Berlin-Buch, Erfurt, Krefeld, Schwerin and Wuppertal. HELIOS treats about 500,000 inpatients per year at its clinics and has a total of approximately 17,400 beds.

• Positive financial performance of established clinics; Krefeld and Hüls with expected negative earnings contribution
• Outlook 2008 fully confirmed

Fresenius Helios increased sales by 16 % to € 509 million (Q1 2007: € 439 million). Acquisitions contributed 11 % to overall sales growth. Organic growth was 4 %.

EBIT grew strongly by 19 % to € 38 million (Q1 2007: € 32 million) due to the very good financial performance of the established clinics. The first-time consolidation of HELIOS Klinikum Krefeld and the HELIOS Klinik Hüls had the expected negative impact on earnings. Nevertheless, the EBIT margin increased to 7.5 % (Q1 2007: 7.3 %). Net income improved by 36 % to € 15 million (Q1 2007: € 11 million).

Sales at the established clinics rose by 4 % to € 461 million. EBIT improved by 31 % to € 42 million. The EBIT margin was 9.1 % (Q1 2007: 7.3 %). The acquired clinics (consolidation < 1 year) achieved sales of € 48 million and an EBIT of € -4 million.

Fresenius Helios fully confirms its outlook for 2008: The company expects to achieve sales of more than € 2,050 million. EBIT is projected to increase to € 160 to 170 million, including the negative contribution of the clinics in Krefeld and Hüls.

 

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

• Sales and earnings performance fully in line with expectations
• Outlook 2008 fully confirmed

In the first quarter of 2008, Fresenius Vamed achieved sales growth of 1 % to € 74 million (Q1 2007: € 73 million). The project business generated sales of € 35 million (Q1 2007: € 37 million), sales in the service business were € 39 million (Q1 2007: € 36 million).

EBIT was € 4 million (Q1 2007: € 5 million). The EBIT margin was 5.4 % (Q1 2007: 6.8 %). Net income was € 4 million (Q1 2007: € 4 million).

Order intake in the project business grew strongly by 89 % to € 125 million (Q1 2007: € 66 million). This was driven by obtaining the order for the planning and construction of the Tauern Spa World in Kaprun/Austria of about € 80 million. Fresenius Vamed will be also responsible for the operational management of Tauern Spa World following the completion of the project. Order backlog as of March 31, 2008 reached a new all-time high of € 595 million, an increase of 17 % (December 31, 2007: € 510 million).

Fresenius Vamed fully confirms its outlook for 2008 and expects to grow both sales and EBIT by 5 to 10 %.

 

Analyst Conference Call and Audio Webcast
As part of the publication of the results for the first quarter of 2008, a conference call will be held on April 30, 2008 at 2.00 p.m. CEDT (8.00 a.m. EDT). All investors are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com/Investor Relations/Presentations. Following the call, a recording will be available.

 

Quarterly financial report
The report for the first quarter 2008 will be published on May 8, 2008 (US GAAP) and May 15, 2008 (IFRS) on our website www.fresenius.com/Investor Relations/Financial Reports.

Moody's has raised the corporate credit rating of Fresenius SE from Ba2 to Ba1. The ratings of the Senior Notes issued by the company's wholly-owned subsidiary Fresenius Finance B.V. also improved. The € 100 million Senior Notes due 2009 with a coupon of 7.5 %, the € 500 million Senior Notes due 2013 with a coupon of 5.0 % and the € 500 million Senior Notes due 2016 with a coupon of 5.5 % have been upgraded to Ba1 as well.

Moody's has also upgraded the corporate credit rating of Fresenius Medical Care AG & Co. KGaA from Ba2 to Ba1 and has raised the ratings of its debt.

A stable outlook has been assigned to all ratings.

Moody's has based the upgrade on the continuous improvements in the operating performance of both companies, evidenced by increased levels of profitablity and cash flow generation driving a reduction of financial leverage.

Fresenius Kabi, a business segment of the health care group Fresenius, has signed definitive agreements to acquire APP Pharmaceuticals, Inc. APP is a leading manufacturer of intravenously administered generic drugs (I.V. generics) in North America. The company is listed on the NASDAQ Stock Market.

APP shareholders will receive a Cash Purchase Price of US$ 23.00 per share and a registered and tradeable Contingent Value Right (CVR) that could deliver up to US$ 6.00 per share, payable in 2011, if APP exceeds a cumulative adjusted EBITDA target for 2008 to 2010.

Based on the Cash Purchase Price, the transaction values the fully diluted equity capital of APP at approximately US$ 3.7 billion. Fresenius expects the acquisition to be neutral to EPS in the first year and clearly accretive from the second year onwards.

The acquisition is an important step in Fresenius Kabi's growth strategy. Through the acquisition of APP, Fresenius Kabi enters the U.S. pharmaceuticals market and achieves a leading position in the global I.V. generics market. This North American platform provides further attractive growth opportunities for Fresenius Kabi's existing product portfolio.
APP focuses on I.V. generics for hospital use and distributes its products in the U.S. and Canada. The company employs around 1,400 people and has state-of-the-art production facilities in Illinois, New York and Puerto Rico as well as a subsidiary in Toronto, Canada.

With a portfolio of more than 100 products, comprising drugs for oncology, intensive care, anaesthesia, analgesia as well as drugs for the treatment of infections, APP holds an important position in the North American hospital market. The company has a strong drug registration pipeline covering all of its product segments.

In 2007, APP achieved sales of US$ 647 million and an adjusted EBITDA of US$ 253 million. The company's latest published guidance for 2008 forcasts sales in a range of US$ 730 million to US$ 750 million and an adjusted EBITDA in a range of US$ 285 million to US$ 300 million.

As part of this transaction APP will merge with a U.S. subsidiary of Fresenius Kabi. The definitive agreements include a written consent and voting agreement with Dr. Patrick Soon-Shiong, APP's founder and shareholder of over 80 % of the outstanding stock. The transaction has been approved by APP's Board of Directors.

Following the closing of the transaction, Patrick Soon-Shiong will serve as a non-executive director on the Board of Fresenius Kabi's U.S. Holding company. In this role, he will continue to contribute to the company's strategic development.

Dr. Ulf Mark Schneider, Chairman of the Management Board of Fresenius SE commented: "APP is a fast-growing, highly profitable company and a strong management team that has an excellent market position in the U.S. Our firm very much shares APP's dedication to quality and medical excellence for the benefit of patients. The acquisition provides significant growth opportunities for Fresenius Kabi. With the APP platform, Fresenius Kabi will be able to market its product range in the U.S. Fresenius Kabi's international marketing and sales network will allow us to sell APP's products globally. We welcome APP employees to our team and very much look forward to serving the North American healthcare community."

Patrick Soon-Shiong said: "We are proud to have consistently provided injectable pharmaceutical products of the highest quality to patients in the acute care setting over the past decade. In Fresenius we have found a partner with the same commitment to quality and dedication to patient care. The combined company will allow for the rapid globalization of APP's portfolio with the same high levels of quality and patient commitment for which we have become known, while at the same time providing a more comprehensive and complementary offering of injectable pharmaceuticals, devices and delivery systems to customers worldwide."

It is planned to finance the acquisition with a mix of debt and equity, targeted to minimize the impact on Fresenius SE's credit ratings. However, given Fresenius' rapid progress in de-levering since 2006, the largest portion of the financing will consist of debt instruments.

Financing commitments for the total amount have been received from Deutsche Bank, Credit Suisse and JP Morgan. Details of the financing plan will be published in the coming weeks. Deutsche Bank acts as Global Coordinator of the financing and as sole M&A advisor to Fresenius.

The transaction is subject to certain closing conditions, including regulatory approvals, and approvals under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Fresenius anticipates closing the transaction at the end of 2008 or beginning of 2009.

Conference Call
A conference call to inform about the acquisition will be held today at 2.30 p.m. CEDT / 8.30 a.m. EDT. All investors are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com / Investor Relations / Presentations. A replay of the call will be available on our website shortly after the call.

EPS: before one-time transaction-related depreciation charges and assuming a 2008 closing.

Adjusted EBITDA: EBITDA before one-time expenses and stock-option expenses, as published by APP in Form 8-K, March 10, 2008, as of Dec 31, 2007.