Fresenius

Fiscal year 2013:

  • Sales: €20.3 billion (+5% at actual rates, +8% in constant currency)
  • EBIT1: €3,045 million (-1% at actual rates, +1% in constant currency)
  • Net income2: €1,051 million (+12% at actual rates, +14 % in constant currency)
  • 14% dividend increase to €1.25 per share proposed


2014 Group outlook3:

  • Sales growth of 12% to 15% in constant currency
  • Net income4 growth of 2% to 5% in constant currency

2017 Targets:

  • Group sales: approx. €30 billion
  • Group net income: between €1.4 and €1.5 billion

12013 before Fenwal integration costs (€54 million); 2012 before one-time effects
2Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2013 before Fenwal integration costs (€40 million); 2012 before one-time effects
3includes contributions from the acquisition of hospitals from Rhön-Klinikum AG.
4Net 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 (vast majority of ~€65 million in total); 2013 before Fenwal integration costs (€40 million)

 
Ulf Mark Schneider, CEO of Fresenius, said: "2013 was a year of significant achievements. We exceeded 20 billion euros in sales and 1 billion euros in earnings for the first time. The acquisition of 40 hospitals from Rhön-Klinikum AG is a key milestone for us. Looking ahead, we see significant growth opportunities in both industrial and in developing countries. We will pursue them with ambitious strategies, operational excellence and financial prudence."

21st consecutive dividend increase proposed
Based on the strong financial results, the Management Board will propose to the Supervisory Board a dividend increase of 14 % to €1.25 per share (2012: €1.10). The total dividend distribution is expected to be €225 million.

Positive Group outlook for 20141
For 2014, Fresenius projects sales growth of 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 (vast majority of ~€65 million in total); 2013 before Fenwal integration costs (€40 million)

 
New stretch targets for 2017
For 2017, Group sales are expected to reach approx. € 30 billion. Group net income is expected to be between € 1.4 and 1.5 billion. 

Group sales exceeds €20 billion for the first time
Group sales increased by 5% (constant currency: 8%) to €20,331 million (2012: €19,290 million. Organic sales growth was 4%. Acquisitions contributed 5%. Divestitures reduced sales growth by 1%. Currency translation had a negative effect of 3%.

Sales of the business segments developed as follows:


Group sales by region developed as follows:


Organic sales growth was 4% in North America and 3% in Europe. In Latin America (13%) and Africa (23%) organic sales growth was particularly strong. In Asia-Pacific organic sales growth was 4%.

Net income1 growth of 14% in constant currency at top end of guidance
Group EBITDA increased by 1% (3% in constant currency) to €3,888 million (2012: €3,851 million). In constant currency, Group EBIT2 increased by 1% to €3,045 million (2012: €3,075 million). EBIT was impacted by lower reimbursement rates for Medicare dialysis patients and special items at Fresenius Kabi. The EBIT margin of 15.0% (2012: 15.9%) was also impacted by the first-time consolidation of Fenwal.

Group net interest decreased to -€584 million (2012: -€666 million), although this figure includes €14 million one-time costs resulting from the early redemption of the Senior Notes originally due in 2016.

The Group tax rate2 improved to 27.8% (2012: 29.1%).

Noncontrolling interest was €727 million (2012: €769 million), of which 94% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income1 increased by 12% (14% in constant currency) to €1,051 million (2012: €938 million). Earnings per share1 increased by 8% to €5.88 (2012: €5.42). The average number of shares outstanding was 178,672,652 (2012: 172,977,633).

1Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2013 before Fenwal integration costs (€40 million); 2012 before one-time effects
22013 before Fenwal integration costs (€54 million); 2012 before one-time effects

Group net income attributable to shareholders of Fresenius SE & Co. KGaA including Fenwal integration costs was €1,011 million or €5.66 per share.

Continued investment in growth
The Fresenius Group spent €1,073 million on property, plant and equipment (2012: €1,007 million). Acquisition spending was €2,754 million (2012: €3,172 million) including advances of €2.18 billion for the acquisition of hospitals and outpatient facilities from Rhön-Klinikum AG.

Strong 11.4% operating cash flow margin
Operating cash flow was €2,320 million (2012: €2,438 million). The decrease relates primarily to a one-time payment by Fresenius Medical Care regarding the amendment of the supply agreement for the iron product Venofer in North America and to currency. In 2012, the cash flow was positively influenced by extraordinary payments on trade accounts receivable. The cash flow margin reached 11.4% (2012: 12.6%). Net capital expenditure increased to €1,047 million (2012: €952 million). Free cash flow before acquisitions and dividends was €1,273 million (2012: €1,486 million). Free cash flow after acquisitions and dividends was -€1,774 million (2012: -€1,259 million).

Solid balance sheet structure
The Group's total assets were €32,758 million (Dec. 31, 2012: €30,664 million), a constant currency increase of 11%. The increase primarily relates to the €2.18 billion advances as stated above. Current assets decreased by 2% (+3% in constant currency) to €7,972 million (Dec. 31, 2012: €8,113 million). Non-current assets were €24,786 million (Dec. 31, 2012: €22,551 million), a constant currency increase of 13%.

Total shareholders' equity increased by 4% (9% in constant currency) to €13,260 million (Dec. 31, 2012: €12,758 million). The equity ratio was 40.5% (Dec. 31, 2012: 41.6%).

Group debt was €12,804 million (Dec. 31, 2012: €11,028 million). Net debt was €11,940 million (Dec. 31, 2012: €10,143 million). As of December 31, 2013, the net debt/EBITDA ratio was 2.511 (Dec. 31, 2012: 2.562).


1Excluding the advances for the acquisition of hospitals of Rhön-Klinikum AG; before Fenwal integration costs
2Pro forma including Damp Group, Liberty Dialysis Holdings, Inc. and Fenwal; before one-time costs (non-financing expenses) related to the takeover offer to Rhön-Klinikum AG shareholders, and one-time costs at Fresenius Medical Care.


Number of employees increases
As of December 31, 2013, the Fresenius Group increased the number of its employees by 5% to 178,337 (Dec. 31, 2012: 169,324).


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, 2013, Fresenius Medical Care was treating 270,122 patients in 3,250 dialysis clinics.


  • Targets achieved for fiscal year 2013
  • Further expansion of global franchise and new record sales
  • Outlook 2014: sales approx. US$15.2 billion; net income in the range of US$1.0 to 1.05 billion

Sales increased by 6% to US$14,610 million (2012: US$13,800 million). Organic sales growth was 5%. Acquisitions contributed 2%, while divestitures reduced sales growth by 1%.

Sales in dialysis services increased by 6% (7% in constant currency) to US$11,130 million (2012: US$10,492 million). Dialysis product sales grew by 5% (5% in constant currency) to US$3,480 million (2012: US$3,308 million).

In North America sales grew by 6% to US$9,606 million (2012: US$9,031 million). Dialysis services sales grew by 7% to US$8,772 million (2012: US$8,230 million). Dialysis product sales increased by 4% to US$834 million (2012: US$801 million).

Sales outside North America ("International" segment) grew by 5% (6% in constant currency) to US$4,970 million (2012: US$4,740 million). Sales in dialysis services increased by 4% to US$2,358 million (2012: US$2,262 million). Dialysis product sales grew by 5% to US$2,612 million (2012: US$2,478 million)

EBIT decreased by 3% to US$2,256 million (20121: US$2,329 million). EBIT was impacted by lower reimbursement rates for Medicare dialysis patients.

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA was US$1,110 million (2012: US$1,1183 million). Net income for Q4 2013 was US$349 million, an increase of 7% compared to Q4 2012.

The operating cash flow of US$2,035 million remained nearly unchanged compared to previous year's level (2012: US$2,039 million) despite a US$100 million one-time payment regarding the amendment of the supply agreement for the iron product Venofer in North America. The cash flow margin was to 13.9% (2012: 14.8%).

For 2014, Fresenius Medical Care expects sales to grow to approx. 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 1.05 billion. 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 US$60 million generated from this program are not included in the outlook for 2014.


12012 adjusted for other one-time costs of US$110 million related to the amendment of the agreement for Venofer and a donation to the American Society of Nephrology.
2Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA; 2012 adjusted for a non-taxable investment gain of US$140 million and other one-time costs of US$71 million.
32012 adjusted for a non-taxable investment gain of US$140 million and other one-time costs of US$71 million

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


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.


  • 5% organic sales growth, at upper the end of guidance, EBIT margin fully in line with guidance
  • Outlook 2014: Organic sales growth of 3 to 7%; EBIT margin of 16 to 18%

Sales increased by 10% (14% in constant currency) to €4,996 million (2012:€4,539 million). Organic sales growth was 5%. Acquisitions contributed 10% sales growth, while divestitures reduced sales growth by 1%. Currency translation had a negative effect of 4%.

Sales in Europe grew by 5% (organic growth: 2%) to €2,053 million (2012: €1,953 million). Sales in North America increased by 23% to €1,522 million (2012: €1,236 million), primarily driven by the consolidation of Fenwal. Organic sales growth was 5%. In Asia-Pacific sales increased by 7% (organic growth: 6%) to €927 million (2012: €863 million). Sales in Latin America/Africa increased by 1% (organic growth: 9%) to €494 million (2012: €487 million).

EBIT1 was €926 million (2012: €934 million), an increase of 1% in constant currency. EBIT includes charges of €31 million to meet FDA requirements at the Grand Island, USA, and Kalyani, India, plants. In addition, EBIT was impacted by restrictions on the use of our blood volume substitutes and material price cuts in China. The EBIT margin was 18.5% (2012: 20.6%). Excluding Fenwal, the EBIT margin was 19.8%.''

Net income2 increased by 10% to €487 million (2012: €444 million).

Fresenius Kabi's operating cash flow was €488 million (2012: €596 million). 2012 cash flow was positively influenced by extraordinary payments on trade accounts receivable. The cash flow margin was 9.8% (2012: 13.1%). Cash flow before acquisitions und dividends was €177 million (2012: €357 million).

The integration of Fenwal progressed as planned with related integration costs of €54 million pre-tax in 2013. These costs are reported in the Group Corporate/Other segment.

For 2014, Fresenius Kabi expects organic sales growth of 3 to 7% and an EBIT margin of 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 and the 2013 price cuts in China.


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

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

Fresenius Helios
Fresenius Helios is Germany's largest hospital operator. HELIOS owns 72 hospitals, thereof 50 acute care clinics including six maximum care hospitals in Berlin-Buch, Duisburg, Erfurt, Krefeld, Schwerin and Wuppertal and 22 post-acute care clinics. HELIOS treats more than 2.9 million patients per year, thereof more than 780,000 inpatients, and operates more than 23,000 beds.


  • Completion of Rhön-Klinikum hospital acquisition expected end of February
  • EBIT at the upper end of guidance; margin up 140 bps to 11.5%
  • Outlook 2014: organic sales growth of 3 to 5%; EBIT of €390 to €410 million (excluding acquired hospitals)

Sales increased by 6% to €3,393 million (2012: €3,200 million). Organic sales growth was 3%, while acquisitions contributed 4%. Divestitures reduced sales growth by 1%.

EBIT grew by 21% to €390 million (2012: €322 million). The EBIT margin increased to 11.5% (2012: 10.1%).

Net income1 increased by 35% to €275 million (2012: €203 million).

Sales of the established hospitals grew by 3% to €3,275 million. EBIT improved by 19% to €386 million. The EBIT margin increased to 11.8% (2012: 10.1%). Sales of the newly acquired hospitals (consolidation ≤1 year) were €118 million, EBIT was €4 million.

On February 20, 2014, Fresenius Helios received antitrust approval to acquire 40 hospitals and 13 outpatient facilities from Rhön-Klinikum AG. The majority of the transaction is expected to be closed by the end of February. Approximately 70% of the acquired business will be consolidated as of January 1, 2014. For two hospitals, HSK Dr. Horst Schmidt Kliniken in Wiesbaden and Klinikum Salzgitter, the approval of municipal shareholders is still pending.

The acquisition will create cost synergies of approx. €85 million p.a. pre-tax from 2015 onwards. The vast majority of integration costs (total of approx. €80 million pre-tax) is expected to accrue in 2014.

The Company expects the acquisition to be accretive to earnings per share in 2014, excluding integration costs, and clearly accretive from 2015 onwards including integration costs.

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. The guidance reflects the divestiture of the HELIOS hospitals in Borna and Zwenkau.


1Net income attributable to shareholders of HELIOS Kliniken GmbH

Fresenius Helios guidance excluding integration costs for the hospitals acquired from Rhön-Klinikum AG (total of approx. €80 million before tax and approx. €65 million after tax; vast majority in 2014). These costs will be reported in the Group Corporate/Other segment, see Group guidance

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


  • €1 billion sales target met one year earlier than expected
  • 13% increase in order intake
  • Outlook 2014: Organic sales growth of 5% to 10% and EBIT growth of 5% to 10%

Sales increased by 21% to €1,020 million (2012: €846 million). Organic sales growth was 13%, acquisitions contributed 8%. Sales in the project business increased by 15% to €583 million (2012: €506 million). Sales in the service business grew by 29% to €437 million (2012: €340 million).

EBIT grew by 8% to €55 million (2012: €51 million). The EBIT margin reached 5.4% (2012: 6.0%).

Net income1 was €37 million (2012: €35 million).

Order intake increased by 13% to €744 million (2012: €657 million), reaching a new all-time high. As of December 31, 2013, order backlog increased to a new record of €1,139 million (Dec. 31, 2012: €987 million).

In 2014, Fresenius Vamed 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


Press Conference

As part of the publication of the results for fiscal year 2013, a press conference will be held at the Fresenius headquarters in Bad Homburg on February 25, 2014 at 10.00 a.m. CET. You are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius.com (see Press / Audio-Video-Service). Following the meeting, a replay will be available on our website.

Fresenius is a global health care group, providing products and services for dialysis, hospital and outpatient medical care. In 2013, Group sales were €20.3 billion. On December 31, 2013, the Fresenius Group had 178,337 employees worldwide.

For more information visit the Company's website at www.fresenius.com.

This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.

Fresenius SE & Co. KGaA
Registered Office: Bad Homburg, Germany
Commercial Register: Amtsgericht Bad Homburg, HRB 11852
Chairman of the Supervisory Board: Dr. Gerd Krick

General Partner: Fresenius Management SE
Registered Office: Bad Homburg, Germany
Commercial Register: Amtsgericht Bad Homburg, HRB 11673
Management Board: Dr. Ulf M. Schneider (Chairman), Dr. Francesco De Meo, Dr. Jürgen Götz, Mats Henriksson, Rice Powell, Stephan Sturm, Dr. Ernst Wastler
Chairman of the Supervisory Board: Dr. Gerd Krick

Fresenius will propose a three-for-one stock split to its Annual General Shareholder Meeting (AGM) on May 16, 2014. Under this proposal, the subscribed capital and the number of shares will be tripled. This will be accomplished by issuing new shares through the conversion of capital reserves from company funds. Every shareholder will receive two additional shares for each share held. The share price can be expected to adjust itself without affecting the overall value for shareholders.

Ulf Mark Schneider, CEO of Fresenius, said: "Our share price has more than tripled in the past 5 years and is above €100. The proposed three-for-one stock split reflects our confidence in the long-term growth prospects and financial strength of Fresenius. With the stock split, we would like to promote trading activity and increase the stock's attractiveness for a broader group of investors."

The AGM agenda will be published on April 2, 2014. In accordance with the proposed stock split, the Company also proposes to adjust the existing authorized capital and the conditional capitals as well as the authorization to buy back shares.

The subscribed capital of Fresenius SE & Co. KGaA currently amounts to €179,808,205, divided into 179,808,205 ordinary shares.

Fresenius is a global health care group, providing products and services for dialysis, hospital and outpatient medical care. In 2013, Group sales were €20.3 billion. On December 31, 2013, the Fresenius Group had 178,337 employees worldwide.

For more information visit the Company's website at www.fresenius.com.

This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.

Fresenius SE & Co. KGaA
Registered Office: Bad Homburg, Germany
Commercial Register: Amtsgericht Bad Homburg, HRB 11852
Chairman of the Supervisory Board: Dr. Gerd Krick

General Partner: Fresenius Management SE
Registered Office: Bad Homburg, Germany
Commercial Register: Amtsgericht Bad Homburg, HRB 11673
Management Board: Dr. Ulf M. Schneider (Chairman), Dr. Francesco De Meo, Dr. Jürgen Götz, Mats Henriksson, Rice Powell, Stephan Sturm, Dr. Ernst Wastler
Chairman of the Supervisory Board: Dr. Gerd Krick

Fresenius intends to issue €375 million equity-neutral convertible bonds due 2019. Next to the issuance of at least €300 million Euro Notes (Schuldscheindarlehen)*, launched on February 26, 2014, this is the final funding step for the acquisition of hospitals from Rhön-Klinikum AG.

The convertible bonds offer investors participation in the performance of Fresenius shares. Concurrently with the bond issuance, Fresenius will purchase call options** on its shares to fully hedge its exposure under the bonds' conversion rights. Therefore, the instrument will not result in the issuance of new shares at maturity. This innovative structure allows Fresenius to further diversify its funding sources.

The bonds will be issued at par. The coupon will be determined via an accelerated bookbuilding process in a range from 0.10% to 0.90%. The conversion price is 35% above Fresenius' reference share price. Such reference price will be determined as the arithmetic average of Fresenius' daily volume-weighted average XETRA share prices over a period of ten consecutive XETRA trading days, starting on March 19, 2014.

The bonds will be offered through an international private placement solely to qualified investors outside the United States. The placement will be executed via an accelerated bookbuilding over the course of today. The initial conversion price is expected to be determined after market close on April 1, 2014, once the reference share price has been determined. Settlement and closing are expected on March 24, 2014.

Fresenius intends to apply for the bonds to be included in the Open Market (Freiverkehr) segment of the Frankfurt Stock Exchange.

Credit Suisse Securities (Europe) Limited is acting as Sole Global Coordinator for the offering and together with Société Générale and UniCredit Bank AG as Joint Bookrunners. Fresenius will purchase the call options from Credit Suisse.

*thereof €200 million to refinance maturing Schuldscheindarlehen
**cash-settled; any increase of Fresenius' share price above the conversion price would be offset by a corresponding value increase of the call options; dilution of Fresenius' share capital through issuance of new shares in connection with this transaction is ruled out.

Fresenius is a global health care group, providing products and services for dialysis, hospitals, and outpatient medical care. In 2013, Group sales were €20.3 billion. On December 31, 2013, the Fresenius Group had 178,337 employees worldwide.

For more information visit the Company's website at www.fresenius.com.

Disclaimers:

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. None of Credit Suisse Securities (Europe) Limited, Société Générale and Unicredit Bank AG (the "Joint Bookrunners") or any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Issuer or any of its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America or to any US person. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy, shares or Bonds to any person in the United States of America (or to any US person), Australia, Canada, South Africa or Japan or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The Bonds referred to herein and the shares to be delivered upon conversion may not be offered or sold in the United States of America unless registered under the US Securities Act of 1933 (the "Securities Act") or offered in a transaction exempt from, or not subject to, the registration requirements of the Securities Act. Any public offering of securities to be made in the United States of America must be made by means of a prospectus that may be obtained from the issuer and that contains detailed information about the company and management, as well as financial statements. The offer and sale of the Bonds referred to herein and the shares to be delivered upon conversion have not been and will not be registered under the Securities Act or under the applicable securities laws of Australia, Canada, South Africa or Japan. Subject to certain exceptions, the Bonds referred to herein and the shares to be delivered upon exchange may not be offered or sold in Australia, Canada, South Africa or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada, South Africa or Japan. There will be no public offer of the Bonds or the shares to be delivered upon conversion in the United States of America, Australia, Canada, South Africa or Japan.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect the Issuer's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions. Forward-looking statements speak only as of the date they are made.

Each of the Issuer and the Joint Bookrunners and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward looking statement contained in this announcement whether as a result of new information, future developments or otherwise.

No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness. The information in this announcement is subject to change.

The date of admission of the Bonds to trading may be influenced by things such as market conditions. There is no guarantee that admission will occur and you should not base your financial decisions on the Issuer's intentions in relation to admission at this stage. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering making such investments should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the Bond offering. The value of shares can decrease as well as increase. Potential investors should consult a professional advisor as to the suitability of the Bond offering for the person concerned.

Credit Suisse Securities (Europe) Limited, Société Générale and Unicredit Bank AG, are acting exclusively for the Issuer and no one else in connection with the Bond offering. They will not regard any other person as their respective clients in relation to the Bond offering and will not be responsible to anyone other than the Issuer for providing the protections afforded to their respective clients, nor for providing advice in relation to the Bond offering, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

In connection with the Bond offering, the Joint Bookrunners and any of their affiliates, acting as investors for their own accounts, may subscribe for or purchase Bonds of the Issuer and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such Bonds and other securities of the Issuer or related investments in connection with this Bond offering or otherwise. The Joint Bookrunners do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.

Fresenius SE & Co. KGaA
Registered Office: Bad Homburg, Germany
Commercial Register: Amtsgericht Bad Homburg, HRB 11852
Chairman of the Supervisory Board: Dr. Gerd Krick

General Partner: Fresenius Management SE
Registered Office: Bad Homburg, Germany
Commercial Register: Amtsgericht Bad Homburg, HRB 11673
Management Board: Dr. Ulf M. Schneider (Chairman), Dr. Francesco De Meo, Dr. Jürgen Götz, Mats Henriksson, Rice Powell, Stephan Sturm, Dr. Ernst Wastler
Chairman of the Supervisory Board: Dr. Gerd Krick

Fresenius successfully placed €500 million equity-neutral convertible bonds due 2019. The innovative transaction was very well received by investors resulting in a substantial oversubscription. Due to the strong demand, the offering was upsized from the original target amount of €375 million.

Next to the issuance of at least €300 million Euro Notes (Schuldscheindarlehen)*, which are currently being marketed, this is the final funding step for the acquisition of hospitals from Rhön-Klinikum AG.

The bonds will be issued at par. The coupon was fixed at 0%, the initial conversion price will be set at 35% above Fresenius' reference share price**. Also including the expenses for the purchase of call options*** on Fresenius shares, the implied financing costs are well below those of the 2.375% Senior Notes issued in January 2014 with similar maturity.

The bonds were offered through an international private placement solely to qualified investors outside the United States. The initial conversion price is expected to be determined after market close on April 1, 2014, once the reference share price has been determined. Settlement and closing will take place on March 24, 2014.

Fresenius intends to apply for the bonds to be included in the Open Market (Freiverkehr) segment of the Frankfurt Stock Exchange.

Credit Suisse Securities (Europe) Limited is acting as Sole Global Coordinator for the offering and together with Société Générale and UniCredit Bank AG as Joint Bookrunners.

*thereof €200 million to refinance maturing Schuldscheindarlehen
**The reference price will be determined as the arithmetic average of Fresenius' daily volume-weighted average XETRA share prices over a period of ten consecutive XETRA trading days, starting on March 19, 2014.
***cash-settled; any increase of Fresenius' share price above the conversion price would be offset by a corresponding value increase of the call options; dilution of Fresenius' share capital through issuance of new shares in connection with this transaction is ruled out.

Fresenius is a global health care group, providing products and services for dialysis, hospitals, and outpatient medical care. In 2013, Group sales were €20.3 billion. On December 31, 2013, the Fresenius Group had 178,337 employees worldwide.

For more information visit the Company's website at www.fresenius.com.

Disclaimers:

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. None of Credit Suisse Securities (Europe) Limited, Société Générale and Unicredit Bank AG (the "Joint Bookrunners") or any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Issuer or any of its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America or to any US person. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy, shares or Bonds to any person in the United States of America (or to any US person), Australia, Canada, South Africa or Japan or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The Bonds referred to herein and the shares to be delivered upon conversion may not be offered or sold in the United States of America unless registered under the US Securities Act of 1933 (the "Securities Act") or offered in a transaction exempt from, or not subject to, the registration requirements of the Securities Act. Any public offering of securities to be made in the United States of America must be made by means of a prospectus that may be obtained from the issuer and that contains detailed information about the company and management, as well as financial statements. The offer and sale of the Bonds referred to herein and the shares to be delivered upon conversion have not been and will not be registered under the Securities Act or under the applicable securities laws of Australia, Canada, South Africa or Japan. Subject to certain exceptions, the Bonds referred to herein and the shares to be delivered upon exchange may not be offered or sold in Australia, Canada, South Africa or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada, South Africa or Japan. There will be no public offer of the Bonds or the shares to be delivered upon conversion in the United States of America, Australia, Canada, South Africa or Japan.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect the Issuer's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions. Forward-looking statements speak only as of the date they are made.

Each of the Issuer and the Joint Bookrunners and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward looking statement contained in this announcement whether as a result of new information, future developments or otherwise.

No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness. The information in this announcement is subject to change.

The date of admission of the Bonds to trading may be influenced by things such as market conditions. There is no guarantee that admission will occur and you should not base your financial decisions on the Issuer's intentions in relation to admission at this stage. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering making such investments should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the Bond offering. The value of shares can decrease as well as increase. Potential investors should consult a professional advisor as to the suitability of the Bond offering for the person concerned.

Credit Suisse Securities (Europe) Limited, Société Générale and Unicredit Bank AG, are acting exclusively for the Issuer and no one else in connection with the Bond offering. They will not regard any other person as their respective clients in relation to the Bond offering and will not be responsible to anyone other than the Issuer for providing the protections afforded to their respective clients, nor for providing advice in relation to the Bond offering, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

In connection with the Bond offering, the Joint Bookrunners and any of their affiliates, acting as investors for their own accounts, may subscribe for or purchase Bonds of the Issuer and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such Bonds and other securities of the Issuer or related investments in connection with this Bond offering or otherwise. The Joint Bookrunners do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.

Fresenius SE & Co. KGaA
Registered Office: Bad Homburg, Germany
Commercial Register: Amtsgericht Bad Homburg, HRB 11852
Chairman of the Supervisory Board: Dr. Gerd Krick

General Partner: Fresenius Management SE
Registered Office: Bad Homburg, Germany
Commercial Register: Amtsgericht Bad Homburg, HRB 11673
Management Board: Dr. Ulf M. Schneider (Chairman), Dr. Francesco De Meo, Dr. Jürgen Götz, Mats Henriksson, Rice Powell, Stephan Sturm, Dr. Ernst Wastler
Chairman of the Supervisory Board: Dr. Gerd Krick

The initial conversion price of Fresenius' equity-neutral convertible bonds has been determined at €149.3786. This represents a 35% premium over the reference share price* of €110.65081.

Fresenius placed its €500 million equity-neutral convertible bonds due 2019 with a zero coupon on March 18, 2014.

*The reference share price has been determined as the arithmetic average of Fresenius' daily volume-weighted average XETRA share prices over a period of ten consecutive XETRA trading days, starting on March 19, 2014.

Fresenius is a global health care group, providing products and services for dialysis, hospitals, and outpatient medical care. In 2013, Group sales were €20.3 billion. On December 31, 2013, the Fresenius Group had 178,337 employees worldwide.

For more information visit the Company's website at www.fresenius.com.

Disclaimers:

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. None of Credit Suisse Securities (Europe) Limited, Société Générale and Unicredit Bank AG (the "Joint Bookrunners") or any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Issuer or any of its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America or to any US person. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy, shares or Bonds to any person in the United States of America (or to any US person), Australia, Canada, South Africa or Japan or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The Bonds referred to herein and the shares to be delivered upon conversion may not be offered or sold in the United States of America unless registered under the US Securities Act of 1933 (the "Securities Act") or offered in a transaction exempt from, or not subject to, the registration requirements of the Securities Act. Any public offering of securities to be made in the United States of America must be made by means of a prospectus that may be obtained from the issuer and that contains detailed information about the company and management, as well as financial statements. The offer and sale of the Bonds referred to herein and the shares to be delivered upon conversion have not been and will not be registered under the Securities Act or under the applicable securities laws of Australia, Canada, South Africa or Japan. Subject to certain exceptions, the Bonds referred to herein and the shares to be delivered upon exchange may not be offered or sold in Australia, Canada, South Africa or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada, South Africa or Japan. There will be no public offer of the Bonds or the shares to be delivered upon conversion in the United States of America, Australia, Canada, South Africa or Japan.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect the Issuer's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions. Forward-looking statements speak only as of the date they are made.

Each of the Issuer and the Joint Bookrunners and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward looking statement contained in this announcement whether as a result of new information, future developments or otherwise.

No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness. The information in this announcement is subject to change.

The date of admission of the Bonds to trading may be influenced by things such as market conditions. There is no guarantee that admission will occur and you should not base your financial decisions on the Issuer's intentions in relation to admission at this stage. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering making such investments should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the Bond offering. The value of shares can decrease as well as increase. Potential investors should consult a professional advisor as to the suitability of the Bond offering for the person concerned.

Credit Suisse Securities (Europe) Limited, Société Générale and Unicredit Bank AG, are acting exclusively for the Issuer and no one else in connection with the Bond offering. They will not regard any other person as their respective clients in relation to the Bond offering and will not be responsible to anyone other than the Issuer for providing the protections afforded to their respective clients, nor for providing advice in relation to the Bond offering, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

In connection with the Bond offering, the Joint Bookrunners and any of their affiliates, acting as investors for their own accounts, may subscribe for or purchase Bonds of the Issuer and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such Bonds and other securities of the Issuer or related investments in connection with this Bond offering or otherwise. The Joint Bookrunners do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.

Fresenius SE & Co. KGaA
Registered Office: Bad Homburg, Germany
Commercial Register: Amtsgericht Bad Homburg, HRB 11852
Chairman of the Supervisory Board: Dr. Gerd Krick

General Partner: Fresenius Management SE
Registered Office: Bad Homburg, Germany
Commercial Register: Amtsgericht Bad Homburg, HRB 11673
Management Board: Dr. Ulf M. Schneider (Chairman), Dr. Francesco De Meo, Dr. Jürgen Götz, Mats Henriksson, Rice Powell, Stephan Sturm, Dr. Ernst Wastler
Chairman of the Supervisory Board: Dr. Gerd Krick

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.

Fresenius is a global health care group, providing products and services for dialysis, hospital and outpatient medical care. In 2013, Group sales were €20.3 billion. On March 31, 2014, the Fresenius Group had 201,924 employees worldwide.

For more information visit the Company's website at www.fresenius.com.

This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.

Fresenius SE & Co. KGaA
Registered Office: Bad Homburg, Germany
Commercial Register: Amtsgericht Bad Homburg, HRB 11852
Chairman of the Supervisory Board: Dr. Gerd Krick

General Partner: Fresenius Management SE
Registered Office: Bad Homburg, Germany
Commercial Register: Amtsgericht Bad Homburg, HRB 11673
Management Board: Dr. Ulf M. Schneider (Chairman), Dr. Francesco De Meo, Dr. Jürgen Götz, Mats Henriksson, Rice Powell, Stephan Sturm, Dr. Ernst Wastler
Chairman of the Supervisory Board: Dr. Gerd Krick

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.

Fresenius is a global health care group, providing products and services for dialysis, hospital and outpatient medical care. In 2013, Group sales were €20.3 billion. On March 31, 2014, the Fresenius Group had 201,924 employees worldwide.

For more information visit the Company's website at www.fresenius.com.

This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.

Fresenius SE & Co. KGaA
Registered Office: Bad Homburg, Germany
Commercial Register: Amtsgericht Bad Homburg, HRB 11852
Chairman of the Supervisory Board: Dr. Gerd Krick

General Partner: Fresenius Management SE
Registered Office: Bad Homburg, Germany
Commercial Register: Amtsgericht Bad Homburg, HRB 11673
Management Board: Dr. Ulf M. Schneider (Chairman), Dr. Francesco De Meo, Dr. Jürgen Götz, Mats Henriksson, Rice Powell, Stephan Sturm, Dr. Ernst Wastler
Chairman of the Supervisory Board: Dr. Gerd Krick

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.

Fresenius is a global health care group, providing products and services for dialysis, hospital and outpatient medical care. In 2013, Group sales were €20.3 billion. On March 31, 2014, the Fresenius Group had 201,924 employees worldwide.

For more information visit the Company's website at www.fresenius.com.

This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.

Fresenius SE & Co. KGaA
Registered Office: Bad Homburg, Germany
Commercial Register: Amtsgericht Bad Homburg, HRB 11852
Chairman of the Supervisory Board: Dr. Gerd Krick

General Partner: Fresenius Management SE
Registered Office: Bad Homburg, Germany
Commercial Register: Amtsgericht Bad Homburg, HRB 11673
Management Board: Dr. Ulf M. Schneider (Chairman), Dr. Francesco De Meo, Dr. Jürgen Götz, Mats Henriksson, Rice Powell, Stephan Sturm, Dr. Ernst Wastler
Chairman of the Supervisory Board: Dr. Gerd Krick

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.

Fresenius is a global health care group, providing products and services for dialysis, hospital and outpatient medical care. In 2013, Group sales were €20.3 billion. On March 31, 2014, the Fresenius Group had 201,924 employees worldwide.

For more information visit the Company's website at www.fresenius.com.

This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.

Fresenius SE & Co. KGaA
Registered Office: Bad Homburg, Germany
Commercial Register: Amtsgericht Bad Homburg, HRB 11852
Chairman of the Supervisory Board: Dr. Gerd Krick

General Partner: Fresenius Management SE
Registered Office: Bad Homburg, Germany
Commercial Register: Amtsgericht Bad Homburg, HRB 11673
Management Board: Dr. Ulf M. Schneider (Chairman), Dr. Francesco De Meo, Dr. Jürgen Götz, Mats Henriksson, Rice Powell, Stephan Sturm, Dr. Ernst Wastler
Chairman of the Supervisory Board: Dr. Gerd Krick

H1/2014:

  • Sales: €10.7 billion (+7% at actual rates, +12% in constant currency)
  • EBIT1: €1,403 million (-3% at actual rates, 0% in constant currency)
  • Net income2: €487 million (+1% at actual rates, +3% in constant currency)

Ulf Mark Schneider, CEO of Fresenius, said: "All business segments showed marked improvement from the first quarter. The integration of the newly acquired hospitals is fully on track and we are pleased with their strong financial performance. Kabi saw growing business momentum in all key markets. Looking ahead, we expect growth to accelerate further across the Group in the second half of the year and fully confirm our 2014 earnings guidance."

12014 before integration costs (Fenwal: €3 million; acquired Rhön hospitals: €8 million) and disposal gains (two HELIOS hospitals: €22 million; Rhön stake: €35 million); 2013 before integration costs (Fenwal: €27 million)
2Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2014 before integration costs (Fenwal: €2 million; acquired Rhön hospitals: €6 million) and disposal gains (two HELIOS hospitals: €21 million; Rhön stake: €34 million); 2013 before integration costs (Fenwal: €20 million); including these effects, net income attributable to shareholders of Fresenius SE & Co. KGaA increased by 16% (+17% in constant currency) to €534 million

 
20141 Group sales outlook raised
Fresenius raises its sales outlook following acquisitions at Fresenius Medical Care, and now expects sales to increase by 14% to 16% in constant currency. Previously, the Company expected sales growth of 12% to 15%. Fresenius fully confirms its net income guidance, and continues to expect an increase of 2% to 5% in constant currency.

 
The net debt/EBITDA ratio is expected to be approximately 3.25 particularly reflecting Fresenius Medical Care's acquisitions (previously 3.00 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 (Fenwal; acquired Rhön hospitals) and disposal gains (two HELIOS hospitals; Rhön stake); 2013 before integration costs (Fenwal)

 
12% sales growth in constant currency
Group sales increased by 7% (12% in constant currency) to €10,733 million (H1/2013: €9,987 million). Organic sales growth was 3%. 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 first quarter in China for Fresenius Medical Care and Fresenius Kabi. In Latin America organic sales growth was 9%. 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 (-19%), Asia-Pacific (-7%), Africa (-7%) and North America (-5%).

Group net income in line with guidance
Group EBITDA1 was €1,854 million (H1/2013: €1,860 million) and increased by 3% in constant currency. Group EBIT1 decreased by 3% (0% in constant currency) to €1,403 million (H1/2013: €1,448 million). Besides currency headwinds, this development 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 13.1% (H1/2013: 14.5%). In Q2/2014, the EBIT margin increased sequentially by 150 bps to 13.8%.

Group net interest was -€283 million (H1/2013: -€313 million). Improved financing terms as well as favorable currency effects contributed to the decrease. In addition, H1/2013 net interest included €14 million one-time costs resulting from the early redemption of a Senior Note.

The Group tax rate2 was 29.6% and above the prior–year level (H1/2013: 28.5%). In Q2/2014, the Group tax rate was 32.4% due to a special tax effect at Fresenius Medical Care.

Noncontrolling interest was €301 million (H1/2013: €330 million), of which 94% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income3 increased by 1% (3% in constant currency) to €487 million (H1/2013: €482 million). Earnings per share3 were €2.71 (H1/2013: €2.70). Group net income3 excluding the special tax effect at Fresenius Medical Care increased by 2% (4% in constant currency).

Group net income attributable to shareholders of Fresenius SE & Co. KGaA including integration costs for Fenwal and the acquired Rhön hospitals, as well as the disposal gains from two HELIOS hospitals and the Rhön-Klinikum stake increased by 16% (+17% in constant currency) to €534 million. Earnings per share increased by 15% (+16% in constant currency) to €2.97. A reconciliation to earnings according to U.S. GAAP can be found on page 14 in the PDF.

 
12014 before integration costs (Fenwal: €3 million; acquired Rhön hospitals: €8 million) and disposal gains (two HELIOS hospitals: €22 million; Rhön stake: €35 million); 2013 before integration costs (Fenwal: €27 million)
22014 before integration costs (Fenwal; acquired Rhön hospitals) and disposal gains (two HELIOS hospital; Rhön stake); 2013 before integration costs (Fenwal)
3Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2014 before integration costs (Fenwal: €2 million; acquired Rhön hospitals: €6 million) and disposal gains (two HELIOS hospitals: €21 million; Rhön stake: €34 million); 2013 before integration costs (Fenwal: €20 million)

 
Continued investment in growth
The Fresenius Group spent €522 million on property, plant and equipment (H1/2013: €425 million). The Company primarily invested in the modernization and expansion of production facilities and hospitals as well as in the equipment of new, and the expansion of existing dialysis clinics.

Total acquisition spending was €1,216 million (H1/2013: €150 million), including €756 million for the acquisition of hospitals from Rhön-Klinikum AG.
 
Strong cash flow in Q2
Operating cash flow was €750 million (H1/2013: €947 million) with a margin of 7.0% (H1/2013: 9.5%). 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 all in Q1/2014. In Q2/2014, the operating cash flow margin was 11.0%.

Net capital expenditure increased to €532 million (H1/2013: €416 million). Free cash flow before acquisitions and dividends was €218 million (H1/2013: €531 million). Free cash flow after acquisitions and dividends was -€1,275 million (H1/2013: 92 million).

 
1see Annual Report 2013, page 150 f.

 
Solid balance sheet structure
The Group's total assets increased by 8% (at actual rates and in constant currency) to €35,502 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 19% to €9,464 million (Dec. 31, 2013: €7,972 million). Non-current assets increased by 5% to €26,038 million (Dec. 31, 2013: €24,786 million).

Total shareholders' equity increased by 3% to €13,706 million (Dec. 31, 2013: €13,260 million). The equity ratio was 38.6% (Dec. 31, 2013: 40.5%).

Group debt was €14,527 million (Dec. 31, 2013: €12,804 million). Net debt was €13,457 million (Dec. 31, 2013: €11,940 million).

As of June 30, 2014, the net debt/EBITDA ratio was 3.39 (Dec. 31, 2013: 2.51 ). The increase is mainly due to the acquisition of hospitals from Rhön-Klinikum AG.

 
1Pro forma including acquired Rhön hospitals and excluding two HELIOS hospitals; before integration costs (Fenwal; acquired Rhön hospitals) and disposal gains (two HELIOS hospitals; Rhön stake)
2Pro forma excluding advances made for the acquisition of hospitals from Rhön-Klinikum AG; before integration costs (Fenwal)

 
Number of employees increases
As of June 30, 2014, the number of employees increased by 18% to 209,933 (Dec. 31, 2013: 178,337). This is mainly 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 June 30, 2014, Fresenius Medical Care was treating 280,942 patients in 3,335 dialysis clinics.

  • Second quarter shows accelerated growth and margin improvement
  • Net income impacted by US$ 18 million special tax effect
  • 2014 guidance confirmed

Sales increased by 5% (6% in constant currency) to US$7,398 million (H1/2013: US$7,076 million). Organic sales growth was 4%. Acquisitions contributed 2%. Adverse currency effects reduced sales by 1%.

Sales in dialysis services increased by 6% (7% in constant currency) to US$5,731 million (H1/2013: US$5,421 million). Dialysis product sales increased by 1% (1% in constant currency) to US$1,667 million (H1/2013: US$1,655 million).

In North America sales grew by 5% to US$4,914 million (H1/2013: US$4,663 million). Dialysis services sales increased by 6% to US$4,517 million (H1/2013: US$4,261 million). Dialysis product sales decreased by 1% to US$397 million (H1/2013: US$402 million).

Sales outside North America ("International" segment) increased by 3% (5% increase in constant currency) to US$2,458 million (H1/2013: US$2,397 million) impacted inter alia by the reorganization of the distribution network in China. Sales in dialysis services increased by 5% (10% in constant currency) to US$1,214 million (H1/2013: US$1,161 million). Dialysis product sales increased by 1% (1% in constant currency) to US$1,244 million (H1/2013: US$1,236 million).

EBIT decreased by 4% to US$1,001 million (H1/2013: US$1,038 million). The EBIT margin was 13.5% (H1/2013: 14.7%). EBIT was impacted by sequestration and rebasing of Medicare's reimbursement rate in the United States. In Q2/2014, EBIT increased by 2% to US$556. The EBIT margin increased sequentially by 200 bps to 14.5%.

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA decreased by 10% to US$439 million (H1/2013: US$488 million). Excluding a special tax effect at Fresenius Medical Care in Q2/2014, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA was US$457 million.

Operating cash flow was US$562 million (H1/2013: US$841 million). The decrease was mainly attributable to the payment for the W.R. Grace bankruptcy settlement of US$115 million and increased working capital in Q1/2014. The cash flow margin was 7.6% (H1/2013: 11.9%).

Fresenius Medical Care confirms its outlook for 2014. Fresenius Medical Care expects sales of approximately US$15.2 billion, translating into a growth rate of around 4%. This outlook excludes sales of about US$500 million from acquisitions. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to be unchanged between 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.


  • 4% organic sales growth and EBIT margin of 16.8% in Q2
  • €10 million adverse currency impact on EBIT in Q2
  • 13.8% cash flow margin in Q2
  • 2014 guidance fully confirmed

Sales decreased by 2% (+3% increase in constant currency) to €2,466 million (H1/2013: €2,519 million). Organic sales growth was 2% (Q2/2014: 4%). 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 1% (organic sales growth: +1%) to €1,024 million (H1/2013: €1,030 million). Sales in North America decreased by 5% (organic sales growth: 0%) to €747 million (H1/2013: €784 million). Asia-Pacific sales were €464 million (organic sales growth: +6%; H1/2013: €456 million). Sales in Latin America/Africa decreased by 7% (organic sales growth: +11%) to €231 million (H1/2013: €249 million).

EBIT1 was €411 million (H1/2013: €469 million), a decrease of 9% in constant currency. Adverse currency translation effects particularly weighed on Q2 EBIT with -4% compared to -2% in Q1/2014. Besides currency headwinds, EBIT was impacted by lower HES sales and the 2013 price cuts in China. The EBIT margin of 16.7% was in line with expectations and our guidance range. Sequentially, EBIT margin improved by 20 bps to 16.8% in Q2/2014.

Net income2 decreased by 10% to €217 million (H1/2013: €242 million).

Fresenius Kabi's operating cash flow was €215 million (H1/2013: €238 million) with a margin of 8.7% (H1/2013: 9.4%), mainly due to temporarily higher working capital requirements. Cash flow improved from Q1 (€42 million) to Q2 (€173 million). Cash flow before acquisitions and dividends in H1/2014 was €73 million (H1/2013: €120 million).

Integration costs for Fenwal were €3 million (pre-tax) in H1/2014. 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 fully confirms its 2014 outlook and projects organic sales growth of 4% to 6% and an EBIT margin of 16.5% to 18%.

Fresenius Kabi guidance excludes €40-50 million pre-tax Fenwal integration costs (€30-40 million after tax); see Group guidance
 
1Before integration costs (Fenwal)
2Net income attributable to shareholders of Fresenius Kabi AG; before integration costs (Fenwal)

 
Fresenius Helios
Fresenius Helios is Germany's largest hospital operator. HELIOS owns 110 hospitals, thereof 86 acute care clinics including seven maximum care hospitals in Berlin-Buch, Duisburg, Erfurt, Krefeld, Schwerin, Wiesbaden 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 34,000 beds.

  • 3% organic sales growth fully in line with guidance
  • Acquired hospitals show positive margin development
  • New 2014 guidance: EBIT of €540-560 million for HELIOS including the acquired hospitals

Sales increased by 49% to €2,521 million (H1/2013: €1,695 million). The strong increase in sales is mainly due to the acquired hospitals from Rhön-Klinikum AG. The divestment of two HELIOS hospitals reduced sales growth by 2%. Organic sales growth was 3% in H1 and Q2.

EBIT1 grew by 40% to €250 million (H1/2013: €179 million). The EBIT margin was 9.9% (H1/2013: 10.6%). The margin decline is due to the consolidation of the newly acquired hospitals. The EBIT margin increased by 120 bps from 9.3% in Q1/2014 to 10.5% in Q2/2014.

Net income2 increased by 50% to €179 million (H1/2013: €119 million).

Sales of the established hospitals grew by 3% to €1,713 million. EBIT improved by 5% to €184 million. The EBIT margin increased to 10.7% (H1/2013: 10.6 %).

Sales of the acquired hospitals were €808 million, EBIT was €66 million and EBIT margin was 8.2%. Q2/2014 EBIT margin increased substantially to 9.1% (Q1/2014: 7.0%).

In Q1/2014, approximately 90% of the acquisition of hospitals from Rhön-Klinikum AG was completed. Approximately 70% of the acquired business was consolidated as of January 1, 2014, and approximately 20% as of March 1, 2014. The acquisition of HSK Dr. Horst Schmidt Kliniken in Wiesbaden is consolidated as of June 30, 2014. In addition, HELIOS acquired Rhön-Klinikum's 265-bed hospital in Cuxhaven with 2013 sales of approximately €40 million. The transaction is expected to be completed July 31, 2014.

The integration of the acquired hospitals is progressing as planned.

Fresenius Helios continues to project 2014 organic sales growth of 3 to 5%. The acquired hospitals are also expected to show 3 to 5% organic growth and to contribute sales of approximately €1.8 billion. EBIT for HELIOS including the acquired hospitals is expected to increase to €540-560 million.

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

12014 before integration costs (€8 million) and disposal gains (two HELIOS hospitals: €22 million; Rhön stake: €35 million)
2Net income attributable to shareholders of HELIOS Kliniken GmbH; 2014 before integration costs (€6 million) and disposal gains (two HELIOS hospitals: €21 million; Rhön stake: €34 million)

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


  • Continued strong order intake of €300 million
  • Results reflect typical quarterly fluctuations in the project business
  • 2014 guidance fully confirmed

Sales decreased by 5% to €398 million (H1/2013: €421 million). Organic sales growth was -8%. Acquisitions contributed 3%. Sales in the project business decreased by 17% to €173 million (H1/2013: €208 million) reflecting typical quarterly fluctuations. Sales in the service business grew by 6% to €225 million (H1/2013: €213 million).

EBIT was €15 million (H1/2013: €15 million) with a margin of 3.8% (H1/2013: 3.6%).

Net income1 increased to €10 million (H1/2013: €9 million).

Order intake was €300 million (H1/2013: €311 million). As of June 30, 2014, order backlog was €1,262 million (Dec. 31, 2013: €1,139 million).

Fresenius Vamed fully confirms its 2014 outlook 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 half of 2014, a conference call will be held on July 31, 2014 at 2 p.m. CEST (8 a.m. EDT). All journalists 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.

Fresenius is a global health care group, providing products and services for dialysis, hospital and outpatient medical care. In 2013, Group sales were €20.3 billion.

For more information visit the Company's website at www.fresenius.com.

This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of clinical trials, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.

Fresenius SE & Co. KGaA
Registered Office: Bad Homburg, Germany
Commercial Register: Amtsgericht Bad Homburg, HRB 11852
Chairman of the Supervisory Board: Dr. Gerd Krick

General Partner: Fresenius Management SE
Registered Office: Bad Homburg, Germany
Commercial Register: Amtsgericht Bad Homburg, HRB 11673
Management Board: Dr. Ulf M. Schneider (Chairman), Dr. Francesco De Meo, Dr. Jürgen Götz, Mats Henriksson, Rice Powell, Stephan Sturm, Dr. Ernst Wastler
Chairman of the Supervisory Board: Dr. Gerd Krick

Subscribe to Fresenius