Fresenius SE & Co. KGaA („Fresenius") has successfully completed the purchase of Fresenius Medical Care AG & Co. KGaA („FME") ordinary shares, as announced on November 16, 2011.

Fresenius purchased 3,500,000 FME ordinary shares. The total transaction volume was approximately €184 million.

As of February 29, 2012, Fresenius owns 94,380,382 FME ordinary shares, representing a voting interest of 31.4%. The intention of the share purchase is to preserve a voting interest in FME above 30% in anticipation of stock option exercises over the coming years.

Fresenius' position as general partner of FME requires ownership of at least 25% of FME's share capital.

Fresenius today announced changes to the company's Management Board. The Supervisory Board of Fresenius Management SE has appointed Rice Powell and Mats Henriksson as new Management Board members, effective January 1, 2013. On the same date, Rice Powell, 56, will succeed Dr. Ben Lipps, 71, as CEO of Fresenius Medical Care, and Mats Henriksson, 44, will succeed Rainer Baule, 63, as CEO of Fresenius Kabi.

Dr. Ben Lipps and Rainer Baule, who will both retire from the Management Board at the end of 2012, have been instrumental to the dynamic growth of the Group.

Dr. Ben Lipps played key roles in the acquisition of the dialysis services provider National Medical Care and the formation of Fresenius Medical Care in 1996 and was appointed CEO in 1999. Under his leadership, Fresenius Medical Care has more than tripled sales while significantly expanding its position as the world's largest provider of dialysis services and products. In recognition of his extraordinary achievements and unique expertise, Dr. Ben Lipps has been appointed Honorary Chairman of the Supervisory Boards of Fresenius Medical Care AG & Co. KGaA and Fresenius Medical Care Management AG, effective January 1, 2013.

Rainer Baule took over as CEO of Fresenius Kabi in 2001, when the company faced major challenges. During his tenure, Fresenius Kabi has more than tripled sales and significantly increased profitability. He has played a key role in the highly successful expansion of the company's international operations. Today, Fresenius Kabi ranks among the global leaders in the fields of generic I.V. drugs, infusion therapies and clinical nutrition.

Rice Powell, who currently serves as CEO of Fresenius Medical Care North America, joined Fresenius Medical Care in 1997 and has been a member of the Fresenius Medical Care Management Board since 2004, from January 1, 2010 as Deputy Chairman. He has more than 30 years of experience in the health care industry. From 1978 to 1996 he held various management positions, among others at Baxter International Inc. and Biogen Inc. Under his leadership, Fresenius Medical Care has significantly expanded its market-leading position in North America and successfully managed the implementation of the new bundled reimbursement system in the U.S.

Mats Henriksson joined Fresenius Kabi in 1999 as a member of the company's Management Board, and has served as President of the Asia Pacific region since 2001. Under his leadership, Fresenius Kabi has seen exceptional growth in this region and now enjoys leading market positions in most Asian countries. Before joining the company, Mats Henriksson held several positions in controlling and finance at Pharmacia & Upjohn.

Ulf Mark Schneider, CEO of Fresenius, said: "Rice Powell and Mats Henriksson have outstanding track records in delivering excellent results for Fresenius Medical Care and Fresenius Kabi over many years. Both bring extensive leadership and industry experience to their new positions. I have worked closely with them for a long time and am very confident they will help us to seize the exciting growth opportunities ahead of us. At the same time, I would like to express my deep gratitude for Dr. Ben Lipps' and Rainer Baule's enormous contributions to our company's success over the last decades."

Dr. Gerd Krick, Chairman of the Fresenius Supervisory Board, stated: "We are pleased to appoint Rice Powell and Mats Henriksson to the Fresenius Management Board. Building on their expertise and leadership abilities, both will continue the extremely successful work of Dr. Ben Lipps and Rainer Baule as CEOs of Fresenius Medical Care and Fresenius Kabi. We were able to fill both Management Board positions from within our own ranks, which demonstrates the stability and strength of our management team and will ensure a smooth transition of leadership.''

Fresenius today announced its intention to sell €500 million of senior unsecured notes. The senior notes will have a maturity of 7 years. Proceeds are intended to be used for acquisitions, including the acquisition of the Damp Group, refinancing of short-term debt, and general corporate purposes.

Fresenius Finance B.V, a wholly owned subsidiary of Fresenius SE & Co. KGaA, will issue and offer the senior notes through a private placement to institutional investors.

Fresenius has applied to the Luxembourg Stock Exchange to admit the senior notes to trading on its regulated market.

Fresenius successfully placed €500 million of senior unsecured notes. Proceeds are intended to be used for acquisitions, including the acquisition of the Damp Group, refinancing of short-term debt, and general corporate purposes.

The senior notes have a coupon of 4.250%, a maturity of seven years and were issued at par.

The transaction was well received by investors and substantially oversubscribed.

The senior notes were issued by Fresenius Finance B.V., a wholly owned subsidiary of Fresenius SE & Co. KGaA, and offered through a private placement to institutional investors.

Fresenius has applied to the Luxembourg Stock Exchange to admit the senior notes to trading on its regulated market.

Q1/2012:

• Sales¹ €4.4 billion (+13% at actual rates, +10% in constant currency)
• EBIT €661 million (15% at actual rates, +12% in constant currency)
• Net income² €200 million (+18% at actual rates, +15% in constant currency)

The preliminary financial results, announced on April 26, 2012, remain unchanged.

 

Group outlook³ 2012 raised

Based on the Group's excellent financial results in the first quarter of 2012, Fresenius raises its guidance. For 2012, Fresenius now expects net income² growth of 12% to 15% in constant currency. Previously, the Company expected net income growth of 8% to 11%. Sales¹ growth of 10% to 13% in constant currency is now projected at the upper end of the targeted range.

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

The net debt/EBITDA ratio is projected to be ≤3.0 at year end.

¹ Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment of -€39 million in Q1 2011 and of -€161 million for the full year 2011 solely relate to Fresenius Medical Care North America.

² Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain of €30 million at Fresenius Medical Care; 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights.

³ Before effects of the announced Rhön-Klinikum AG acquisition

 

Sales growth of 10% in constant currency

Group sales increased by 13% (10% in constant currency) to €4,419 million (Q1 2011¹: €3,923 million). Organic sales growth was 5%. Acquisitions contributed a further 5%. Currency translation had a positive effect of 3%. This is mainly attributable to the strengthening of the U.S. dollar against the euro by 4% in the first quarter of 2012 compared to the first quarter of 2011.

Sales in the business segments developed as follows:

Organic sales growth in North America was 2%, in Europe 5%. Organic sales growth was again strong in Asia-Pacific with 11% and in Latin America with 18%. Sales in Africa were impacted by the political unrest in the Middle East and North Africa.

¹ Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment of -€39 million in Q1 2011 and of -€161 million for the full year 2011 solely relate to Fresenius Medical Care North America.

 

Excellent earnings growth

Group EBITDA grew by 14% (11% in constant currency) to €838 million (Q1 2011: €737 million). Group EBIT increased by 15% (12% in constant currency) to €661 million (Q1 2011: €575 million). The EBIT margin improved by 30 basis points to 15.0% (Q1 2011: 14.7%).

Group net interest was -€147 million (Q1 2011: -€135 million). Lower average interest rates were more than offset by incremental debt due to acquisition financing and currency translation effects.

The Group tax rate¹ slightly decreased to 30.4% (Q1 2011: 30.7%).

Noncontrolling interest increased to €158 million (Q1 2011: €135 million), of which 93% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income² increased by 18% (15% in constant currency) to €200 million (Q1 2011: €170 million). Earnings per share increased by 17% to €1.23 (Q1 2011: €1.05).

Group net income³ including the non-taxable investment gain at Fresenius Medical Care was €230 million or €1.41 per share. This is a non-cash item.

 

Continued investment in growth

The Fresenius Group spent €151 million on property, plant and equipment (Q1 2011: €136 million). Acquisition spending was €1,927 million (Q1 2011: €311 million). This is primarily due to the completion of Fresenius Medical Care's acquisition of Liberty Dialysis Holdings, Inc. as well as of the acquisition of Damp Group by Fresenius Helios.

 

Strong operating cash flow development

Operating cash flow increased to €538 million (Q1 2011: €278 million), mainly driven by strong earnings growth and tight working capital management. The cash flow margin was 12.2% (Q1 2011: 7.1%). Net capital expenditure was €152 million (Q1 2011: €147 million). Free cash flow before acquisitions and dividends was €386 million (Q1 2011: €131 million). Free cash flow after acquisitions and dividends was -€1,096 million (Q1 2011: -€133 million).

¹ Adjusted for the non-taxable investment gain at Fresenius Medical Care; 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds

² Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain of €30 million at Fresenius Medical Care; 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights.

³ Net income attributable to shareholders of Fresenius SE & Co. KGaA

 

Solid balance sheet structure

The Group's total assets increased by 8% (10% in constant currency) to €28,542 million (Dec. 31, 2011: €26,321 million). Current assets grew by 7% (9% in constant currency) to €7,682 million (Dec. 31, 2011: €7,151 million). Non-current assets increased by 9% (11% in constant currency) to €20,860 million (Dec. 31, 2011: €19,170 million).

Total shareholders' equity increased by 2% (4% in constant currency) to €10,829 million (Dec. 31, 2011: €10,577 million). The equity ratio was 37.9% (Dec. 31, 2011: 40.2%).

Group debt grew by 17% (19% in constant currency) to €11,459 million (Dec. 31, 2011: €9,799 million), primarily resulting from acquisition financing. Net debt increased by 16% (18% in constant currency) to €10,604 million (Dec. 31, 2011: €9,164 million).

In March 2012, Fresenius successfully placed €500 million of senior unsecured notes. Proceeds are used for acquisitions, including the acquisition of the Damp Group, refinancing of short-term debt, and general corporate purposes. The senior notes have a coupon of 4.250%, a maturity of seven years and were issued at par. The transaction was well received by investors and substantially oversubscribed.

As of March 31, 2012, the net debt/EBITDA ratio¹ was 3.01 (Dec. 31, 2011: 2.83). At identical exchange rates for net debt and EBITDA, the ratio was 2.95.

 

Number of employees increases

As of March 31, 2012, Fresenius Group increased the number of its employees by 7% to 160,249 (Dec. 31, 2011: 149,351).

¹ Pro forma including Damp Group and Liberty Dialysis Holdings, Inc.

 

Fresenius Biotech

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

Fresenius Biotech's sales increased by 11% to €8.1 million compared to €7.3 million in the first quarter of 2011. Sales with the trifunctional antibody Removab grew by 38% to €1.1 million (Q1 2011: €0.8 million). Sales of the immunosuppressive agent ATG Fresenius S increased by 8% to €7.0 million (Q1 2011: €6.5 million).

Fresenius Biotech's EBIT was -€6 million (Q1 2011: -€7 million).

For 2012, Fresenius Biotech continues to expect an EBIT of -€25 million to -€30 million.

 

Business Segments

Fresenius Medical Care

Fresenius Medical Care is the world's leading provider of services and products for patients with chronic kidney failure. As of March 31, 2012, Fresenius Medical Care was treating 253,041 patients in 3,119 dialysis clinics.

• Strong start into 2012 - EBIT margin improvement to 15.5%
• Acquisition of Liberty Dialysis Holdings, Inc. closed
• 2012 outlook confirmed

Sales increased by 9% to US$3,249 million (Q1 2011¹: US$2,984 million). Organic sales growth was 3%. Acquisitions contributed a further 7%. Currency translation had a negative effect of 1%.

Sales in dialysis services increased by 11% to US$2,478 million (Q1 2011: US$2,233 million). Dialysis product sales grew by 3% to US$771 million (Q1 2011: US$751 million).

In North America sales grew 9% to US$2,105 million (Q1 2011: US$1,925 million). Dialysis services sales grew by 11% to US$1,918 million (Q1 2011: US$1,730 million). Average revenue per treatment for U.S. clinics increased to US$353 in the first quarter of 2012 compared to US$348 in the first quarter of 2011. Dialysis product sales decreased by 4% to US$187 million (Q1 2011: US$195 million) mainly as a result of lower pricing of renal pharmaceuticals.

Sales outside North America ("International" segment) grew by 8% to US$1,136 million (Q1 2011: US$1,055 million). Sales in dialysis services increased by 11% to US$560 million (Q1 2011: US$503 million). Dialysis product sales increased by 4% to US$576 million (Q1 2011: US$552 million). The growth was mainly driven by higher sales of dialysis machines.

EBIT increased by 13% to US$503 million (Q1 2011: US$445 million). The EBIT margin improved to 15.5% (Q1 2011: 14.9%).

The EBIT margin in North America improved by 30 basis points to 16.5% (Q1 2011: 16.2%). The increase in Medicare rates and the growth of the expanded services contributed favorably to this development. In the International segment the EBIT margin improved to 17.2% (Q1 2011: 16.2%).

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the first quarter of 2012 was US$370 million, an increase of 68% compared to the corresponding quarter of 2011. This includes a non-taxable investment gain of US$127 million related to the acquisition of Liberty Dialysis Holdings, Inc. (Liberty), including its 51% stake in Renal Advantage Partners, LLC (RAI). The gain is a result of measuring the 49% equity interest in RAI held by the company at its fair value at the time of the Liberty acquisition and is subject to the finalization of the Liberty purchase accounting. Excluding this investment gain, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA increased by 10% to US$244 million (Q1 2011: US$221 million).

Fresenius Medical Care has closed the acquisition of Liberty Dialysis Holdings, Inc., the holding company of Liberty Dialysis and Renal Advantage effective February 28, 2012. The closing followed the completion of the review of the transaction and issuance of a consent decree by the United States' Federal Trade Commission. In connection with the consent decree, Fresenius Medical Care completed the sale of 44 clinics to Dialysis Newco, Inc. The acquisition of Liberty Dialysis Holdings, Inc. is expected to add annual sales of around US$700 million and 201 clinics to Fresenius Medical Care's network for an investment, net of proceeds from divestiture, of approximately US$1.5 billion.

Fresenius Medical Care confirms its sales and earnings outlook for 2012. The company expects sales to grow to around US$14 billion. Net income is expected to grow to around US$1.3 billion and net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to grow to around US$1.14 billion. This does not include the investment gain of approximately US$127 million in the first quarter of 2012.

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

¹ Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment amounts to -US$ 52 million in Q1 2011; the 2011 sales adjustment amounts to -US$224 million.

² Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA – adjusted for a non-taxable investment gain of US$127 million in the first quarter 2012.

 

Fresenius Kabi

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

• Excellent organic sales growth across all regions
• 2012 outlook raised

Sales increased by 14% to €1,092 million (Q1 2011: €960 million). Organic sales growth of 11% was driven by all regions. Currency translation had an effect of 2%. Acquisitions contributed 1%.

In Europe sales grew by 8% (organic growth: 8%) to €487 million (Q1 2011: €449 million). Sales in North America increased by 15% (organic growth: 10%) to €292 million (Q1 2011: €254 million). Organic sales growth was driven by new product launches and continued competitor supply constraints. In Asia-Pacific sales increased by 28% (organic growth: 20%) to €199 million (Q1 2011: €156 million). Sales in Latin America and Africa increased by 13% (organic growth: 15%) to €114 million (Q1 2011: €101 million).

EBIT grew by 9% to €215 million (Q1 2011: €197 million). EBIT growth was in particular driven by the emerging markets and North America. The EBIT margin was 19.7% (Q1 2011: 20.5%).

Net income¹ increased by 13% to €98 million (Q1 2011: €87 million).

Based on the excellent financial results in the first quarter of 2012, Fresenius Kabi raises its outlook for 2012 and now forecasts organic sales growth of 6% to 8%. Previously, organic sales growth of 4% to 6% was expected. An EBIT margin of 19.5% to 20% is now projected at the upper end of the targeted range.

Fresenius Kabi will host a Capital Market Day on June 12, 2012 in Bad Homburg to provide an update on the company's strategy and growth prospects.

¹ Net income attributable to shareholders of Fresenius Kabi AG

 

Fresenius Helios

Fresenius Helios is the largest private hospital operator in Germany. HELIOS owns 75 hospitals, including six maximum care hospitals in Berlin-Buch, Duisburg, Erfurt, Krefeld, Schwerin and Wuppertal. HELIOS treats more than 2.7 million patients per year, thereof more than 750,000 inpatients, and operates more than 23,000 beds.

• Strong organic sales growth of 5%
• Acquisition of Damp Group successfully completed
• 2012 earnings outlook raised

Sales increased by 11% to €717 million (Q1 2011: €648 million). This was driven by strong organic sales growth of 5%. Acquisitions contributed 6% to overall sales growth.

EBIT grew by 17% to €68 million (Q1 2011: €58 million). The EBIT margin improved by 50 basis points to 9.5% (Q1 2011: 9.0%).

Net income increased by 24% to €41 million (Q1 2011: €33 million).

Sales at the established hospitals grew by 5% to €676 million. EBIT improved by 24% to €72 million. The EBIT margin increased to excellent 10.7% (Q1 2011: 9.0%). Sales of the acquired hospitals (consolidation < 1 year) were €41 million, and, as expected, EBIT was -€4 million. Restructuring of these hospitals is fully on track.

As of March 31, 2012, HELIOS fully consolidates Damp Group. Damp Group was among the ten largest private hospital operators in Germany. Damp Group's 2010 sales were €427 million (without Damp hospital Wismar, divested in the first quarter of 2012).

Based on the excellent financial results in the first quarter of 2012, Fresenius Helios raises its EBIT outlook for 2012. The company now projects EBIT to increase to the upper end of the targeted range of €310 million to €320 million. Fresenius Helios continues to expect organic sales growth of 3% to 5%.

¹ Net income attributable to shareholders of HELIOS Kliniken GmbH

 

Fresenius Vamed

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

 

• Sales and EBIT fully in line with expectations
• Good order intake of €104 million
• 2012 outlook confirmed

Sales increased to €142 million (Q1 2011: €140 million). Sales in the project business were €77 million (Q1 2011: €84 million). Sales in the service business increased by 16% to €65 million (Q1 2011: €56 million).

 
EBIT was €5 million (Q1 2011: €5 million). The EBIT margin reached 3.5% (Q1 2011: 3.6%). Net income remained at previous year's level of €4 million.

In Q1 2012, Fresenius Vamed had a good order intake of €104 million (Q1 2011: €127 million). Order backlog increased to €872 million as of March 31, 2012 (Dec. 31, 2011: €845 million).

Fresenius Vamed confirms its 2012 outlook and expects sales and EBIT growth of 5% to 10%.

¹ Net income attributable to shareholders of VAMED AG

 

Analyst Conference Call

As part of the publication of the results for the first quarter of 2012, a conference call will be held on May 3, 2012 at 2 p.m. CET (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 Investor Relations, Presentations. Following the call, a replay of the conference call will be available on our website.

Fresenius resolved today to issue 13.8 million new ordinary shares from authorized capital excluding subscription rights. The new shares will be placed with institutional investors through an accelerated bookbuilt offering. There will be no public offering.

The capital increase is the first component of the financing for the planned acquisition of RHÖN-KLINIKUM AG. On April 26, 2012, Fresenius had announced its intention to make a voluntary public takeover offer of €22.50 per share in cash. The Company also stated it intends to finance the acquisition through a syndicated loan, a bond issue and equity instruments.

The Else Kröner-Fresenius-Foundation has informed Fresenius that it will participate in the capital increase with an amount of at least €90 million.

Fresenius is confident it can successfully complete the voluntary takeover under the announced terms. However, even if the offer is not successful, the Group's net debt/EBITDA ratio following the capital increase will be at the lower end of the 2.5 to 3.0 target range and will therefore provide for an optimal capital structure. Fresenius has a proven track record of responsible capital management and continues to view equity as a scarce and precious resource.

After issuance of the new shares, the total number of outstanding ordinary shares of Fresenius SE & Co. KGaA will increase from currently 163,366,002 to 177,166,002.

The new shares will have full dividend entitlement for the fiscal year 2012. They will not be entitled to the proposed dividend for the fiscal year 2011, to be paid on May 14, 2012.

Deutsche Bank, J.P. Morgan and Société Générale are Joint Global Coordinators and Joint Bookrunners of the offering.

Capital Increase Data

• Issuer: Fresenius SE & Co. KGaA
• Transaction Structure: Capital increase without subscription rights
• Offering: 13.8 million new ordinary shares
• Placement of Shares: Private placement to institutional investors
• Stock Exchanges: Regulated Market Frankfurt (Prime Standard), Munich, Düsseldorf
• Joint Global Coordinators
  Joint Bookrunner: Deutsche Bank, J.P. Morgan and Société Générale

Fresenius successfully placed 13.8 million new ordinary shares today. Based on the issue price of €73.50 per share, gross proceeds to the company amount to €1,014.3 million.

The new shares have full dividend entitlement for the fiscal year 2012. They are not entitled to the proposed dividend for the fiscal year 2011, to be paid on May 14, 2012.

The capital increase is the first component of the financing for the planned acquisition of RHÖN-KLINIKUM AG. On April 26, 2012, Fresenius had announced its intention to make a voluntary public takeover offer of €22.50 per share in cash. The Company also stated it intends to finance the acquisition through a syndicated loan, a bond issue and equity instruments.

Given the capital increase, the total number of outstanding ordinary shares of Fresenius SE & Co. KGaA will increase from currently 163,366,002 to 177,166,002.

Deutsche Bank, J.P. Morgan and Société Générale acted as Joint Global Coordinators and Joint Bookrunners for the offering. Unicredit, Commerzbank and DZ Bank were Co-Bookrunners.

Fresenius sees excellent prospects for further sales and earnings growth in the coming years at its Fresenius Kabi business segment, whose management is updating analysts and investors on the company's operations, strategy and growth opportunities during a Capital Market Day at Group headquarters in Bad Homburg.

In the first months of 2012, Fresenius Kabi has recorded substantial organic growth across all regions and product segments, exceeding earlier expectations. Particularly in the U.S., revenue growth has been materially stronger than initially projected mainly due to ongoing IV drug shortages, including Propofol, which may continue well into the third quarter.

As a result, Fresenius Kabi raises its outlook for 2012. The company now expects organic sales growth of 7% to 9% and an EBIT margin between 20% and 20.5%. Previously, Fresenius Kabi projected organic sales growth of 6% to 8% and an EBIT margin at the upper end of a 19.5% to 20% range.

With ongoing strong growth in all Group business segments and Fresenius Kabi exceeding previous forecasts, Fresenius is raising its guidance for 2012. Fresenius Group now expects net income* to increase by 14% to 16% and sales** by 12% to 14%, both in constant currency and before effects of the announced Rhön-Klinikum AG acquisition. Previously, the Company projected net income growth of 12% to 15% and sales growth at the upper end of a 10% to 13% range, both in constant currency.

Fresenius Kabi specializes in the therapy and care of chronically and critically ill patients, providing intravenously administered generic drugs (IV drugs), infusion therapies, clinical nutrition, and related medical devices. Fresenius Kabi is the market leader in infusion therapy and clinical nutrition in Europe and holds leading positions in important countries of Latin America and the Asia-Pacific region. Within IV generic drugs, Fresenius Kabi is among the leading suppliers in the U.S. market. The company has more than 24,000 employees worldwide and a global network of 59 sales organizations as well as 61 production sites and compounding centers.

"Fresenius Kabi is showing strong growth across all regions and product segments and continues to build its global market presence. We are absolutely delighted with the progress the company is making," said Ulf Mark Schneider, CEO of Fresenius. "Fresenius Kabi is a major growth driver for us, clearly delivering above-market growth. The company will continue to benefit from two major global trends, the outstanding growth in emerging market healthcare spending and the increasing demand for high-quality IV generic drugs in light of numerous patent expirations and healthcare budget constraints in the Western world.''

In 2011, Fresenius Kabi posted sales of €3.96 billion and EBIT of €803 million, with both figures having more than doubled in the past five years. The compounded annual growth rate (CAGR) was 16% for sales and 23% for EBIT.

By 2015, the company expects sales to increase to approx. €5.5 billion and EBIT to reach more than €1 billion driven by rising demand for high-quality medical care in emerging markets, the continuing growth of generics, ongoing market consolidation, and demographic change in the industrialized countries.

In the key markets of Latin America and the Asia-Pacific region, Fresenius Kabi's strong local presence includes its own production, sales and marketing operations. China, where the company was active as early as 1982, has become Fresenius Kabi's third-largest market. The company today achieves 29% of total sales outside of Europe and North America – a share expected to reach 35% to 40% by 2015.

In established markets, meanwhile, the company projects continued strong growth of 5% to 7% annually, exceeding overall market growth. Due to its leading positions in many different product segments, combined with the high quality and availability of its products, Fresenius Kabi is a reliable partner for its customers. Expanding the product portfolio, and rolling it out into markets where only part of the overall product offering is now available, are key elements of Fresenius Kabi's growth strategy.

"We offer high-quality, affordable products for the therapy and care of critically and chronically ill patients," said Rainer Baule, CEO of Fresenius Kabi. "In our core therapeutic areas we can draw upon one of the most comprehensive product portfolios as well as a global network of marketing, sales and production sites. A high level of vertical integration and technological leadership in many areas provide us a highly competitive cost position, in turn leading to strong market positions. Fresenius Kabi is excellently positioned for further profitable growth.''

The Capital Market Day will be webcast on the Internet, starting at 9 a.m. CEST tomorrow (June 12, 2012). The webcast is available live at www.fresenius.com/Investor Relations/Presentations. A replay will be available shortly after the event.

* Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain of €30 million at Fresenius Medical Care; 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights.

** Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment of -€161 million for the full year 2011 solely relates to Fresenius Medical Care North America.

(Financial statements according to U.S. GAAP)

H1/2012:

• Sales¹             €9.2 billion (+17% at actual rates, +12% in constant currency)
• EBIT²             €1.4 billion (+19% at actual rates, +14% in constant currency)
• Net income³  €434 million (+20% at actual rates, +15% in constant currency)

• Continued strong growth in all business segments
• Group sales and net income³ at all-time high in Q2/2012
• Cash flow margin increases to 12.3%

Ulf Mark Schneider, CEO of Fresenius, said: "Our strong growth trend continues and we posted record sales and earnings in the first half. The recently announced acquisition of Fenwal is a significant growth opportunity and will make us a worldwide leader in transfusion technology. We will focus on swiftly integrating this business and maintaining operational excellence in the Group. Commercial prudence will continue to guide us in assessing future acquisition opportunities."

¹ Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment of -€77 million in H1 2011 and of -€161 million for the full year 2011 solely relates to Fresenius Medical Care North America.² Adjusted for one-time costs of €7 million in Q2 2012 related to the offer to the shareholders of RHÖN-KLINIKUM AG.³ Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain of €34 million at Fresenius Medical Care and for one-time costs of €26 million in Q2 2012 related to the offer to the shareholders of RHÖN-KLINIKUM AG. 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights.

 

Group outlook 2012 fully confirmed
Based on the Group's financial results in the first half of 2012, Fresenius confirms its guidance, which was raised in June 2012. For 2012, Fresenius expects sales¹ to increase by 12% to 14% and net income² to increase by 14% to 16%, both in constant currency.

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

The net debt/EBITDA ratio is projected to be <3.0 at year-end (including the acquisition of Fenwal Holdings, Inc.).

Sales growth of 12% in constant currency
Group sales increased by 17% (12% in constant currency) to €9,236 million (H1 2011¹: €7,927 million). Organic sales growth was 5%. Acquisitions contributed a further 7%. Currency translation had a positive effect of 5%. This is mainly attributable to the strengthening of the U.S. dollar against the euro by 7% in the first half of 2012 compared to the first half of 2011.

Sales in the business segments developed as follows:

Organic sales growth in North America was 3%, and in Europe 5%. Organic sales growth was again strong in Asia-Pacific with 10% and in Latin America with 19%. The sales decrease in Africa was due to the volatility in Fresenius Vamed's project business.

¹ Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment of -€77 million in H1 2011 and of -€161 million for the full year 2011 solely relates to Fresenius Medical Care North America.

² Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain of €34 million at Fresenius Medical Care and one-time costs related to the offer to the shareholders of RHÖN-KLINIKUM AG. 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights. 

Excellent earnings growth

Group EBITDA¹ grew by 18% (13% in constant currency) to €1,806 million (H1 2011: €1,526 million). Group EBIT¹ increased by 19% (14% in constant currency) to €1,440 million (H1 2011: €1,207 million). The EBIT margin improved by 40 basis points to 15.6% (H1 2011: 15.2%).

Group net interest was -€313 million (H1 2011: -€276 million). Lower average interest rates were more than offset by incremental debt due to acquisition financing and currency translation effects.

The other financial result of -€29 million includes one-time costs for the offer to the shareholders of RHÖN-KLINIKUM AG, primarily related to financing commitments.

The Group tax rate² slightly improved to 30.8% (H1 2011: 30.9%).

Noncontrolling interest increased to €346 million (H1 2011: €280 million), of which 93% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income³ increased by 20% (15% in constant currency) to €434 million (H1 2011: €363 million). Earnings per share increased by 16% to €2.58 (H1 2011: €2.23). The average number of shares grew to approx. 168 million in H1 2012, primarily due to the May 2012 capital increase.

A reconciliation to adjusted earnings according to U.S. GAAP can be found on page 14 of the Investor News.

Group net income⁴ was €442 million or €2.63 per share (including the non-taxable investment gain at Fresenius Medical Care, which is a non-cash item, and one-time costs related to the offer to the shareholders of RHÖN-KLINIKUM AG).

¹ Adjusted for one-time costs of €7 million in Q2 2012 related to the offer to the shareholders of RHÖN-KLINIKUM AG.² Adjusted for the non-taxable investment gain at Fresenius Medical Care and for one-time costs of €36 million in Q2 2012 related to the offer to the shareholders of RHÖN-KLINIKUM AG. 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds.³ Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain of €34 million at Fresenius Medical Care and for one-time costs of €26 million in Q2 2012 related to the offer to the shareholders of RHÖN-KLINIKUM AG. 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights.⁴ Net income attributable to shareholders of Fresenius SE & Co. KGaA

Continued investment in growth
The Fresenius Group spent €388 million on property, plant and equipment (H1 2011: €286 million). Acquisition spending was €2,097 million (H1 2011: €857 million). This relates primarily to Fresenius Medical Care's acquisition of Liberty Dialysis Holdings, Inc. as well as to the acquisition of Damp Group by Fresenius Helios.

Excellent operating cash flow development
Operating cash flow increased to €1,136 million (H1 2011: €650 million). This was mainly driven by strong earnings growth and tight working capital management, especially regarding trade accounts receivable. The cash flow margin improved to 12.3% (H1 2011: 8.2%). Net capital expenditure was €358 million (H1 2011: €292 million). Free cash flow before acquisitions and dividends was €778 million (H1 2011: €358 million). Free cash flow after acquisitions and dividends was -€1,154 million (H1 2011: -€791 million).

Solid balance sheet structure
The Group's total assets increased by 17% (15% in constant currency) to €30,758 million (Dec. 31, 2011: €26,321 million). Current assets grew by 25% (24% in constant currency) to €8,967 million (Dec. 31, 2011: €7,151 million). This includes the proceeds of the capital increase which were invested in short-term instruments. Non-current assets increased by 14% (12% in constant currency) to €21,791 million (Dec. 31, 2011: €19,170 million), mainly due to the recent acquisitions.

Total shareholders' equity increased by 16% (14% in constant currency) to €12,224 million, mainly due to the capital increase (Dec. 31, 2011: €10,577 million). The equity ratio was 39.7% (Dec. 31, 2011: 40.2%).

Group debt grew by 23% (21% in constant currency) to €12,035 million (Dec. 31, 2011: €9,799 million), primarily resulting from acquisition financing. Net debt increased by 10% (8% in constant currency) to €10,068 million (Dec. 31, 2011: €9,164 million). Net debt comprises the proceeds of the capital increase.

As of June 30, 2012, the net debt/EBITDA ratio¹ was 2.75 (Dec. 31, 2011: 2.83). At identical exchange rates for net debt and EBITDA, the ratio was 2.65.

¹ Pro forma including Damp Group and Liberty Dialysis Holdings, Inc., adjusted for one-time costs of €7 million in Q2 2012 related to the offer to the shareholders of RHÖN-KLINIKUM AG.

Number of employees increases

As of June 30, 2012, the Fresenius Group increased the number of its employees by 8% to 161,685 (Dec. 31, 2011: 149,351), mainly due to acquisitions.

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

Fresenius Biotech's sales increased by 14% to €16.6 million compared to €14.6 million in the first half of 2011. Removab sales grew by 17% to €2.1 million (H1 2011: €1.8 million). ATG Fresenius S sales increased by 13% to €14.5 million (H1 2011: €12.8 million). Fresenius Biotech's EBIT was -€11 million (H1 2011: -€13 million).

For 2012, Fresenius Biotech continues to expect an EBIT of -€25 million to -€30 million.

Business Segments

Fresenius Medical Care
Fresenius Medical Care is the world's leading provider of services and products for patients with chronic kidney failure. As of June 30, 2012, Fresenius Medical Care was treating 256,456 patients in 3,123 dialysis clinics.

• Excellent constant currency sales growth of 12% (North America +12%, International +11%)
• 2012 outlook confirmed

Sales increased by 9% to US$6,677 million (H1 2011¹: US$6,121 million). Organic sales growth was 4%. Acquisitions contributed a further 8%. Currency translation had a negative effect of 3%.

Sales in dialysis services increased by 12% to US$5,082 million (H1 2011: US$4,538 million). Dialysis product sales grew by 1% to US$1,594 million (H1 2011: US$1,584 million).

In North America sales grew 12% to US$4,353 million (H1 2011: US$3,896 million). Dialysis services sales grew by 13% to US$3,960 million (H1 2011: US$3,501 million). Average revenue per treatment for U.S. clinics increased to US$351 in the second quarter of 2012 compared to US$348 for the corresponding quarter in 2011. Dialysis product sales were US$393 million (H1 2011: US$395 million). Higher sales of hemodialysis products were offset by lower sales of renal pharmaceuticals.

Sales outside North America ("International" segment) grew by 4% to US$2,307 million (H1 2011: US$2,218 million). Sales in dialysis services increased by 8% to US$1,122 million (H1 2011: US$1,037 million). Dialysis product sales of US$1,185 million remained close to the previous year's level of US$1,181 million at actual rates. In constant currency, dialysis product sales grew by 7%, mainly driven by higher sales of dialysis machines and dialyzers.

EBIT increased by 14% to US$1,092 million (H1 2011: US$955 million). The EBIT margin increased to 16.4% (H1 2011: 15.6%).

The EBIT margin in North America increased to 17.9% (H1 2011: 17.0%). In the International segment the EBIT margin improved to 17.4% (H1 2011: 16.9%).

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the first half of 2012 was US$660 million, an increase of 37% compared to the corresponding period of 2011. This includes a non-taxable investment gain of US$140 million related to the acquisition of Liberty Dialysis Holdings, Inc. (Liberty), including its 51% stake in Renal Advantage Partners, LLC (RAI). The gain is a result of measuring the 49% equity interest in RAI held by the company at its fair value at the time of the Liberty acquisition. The second quarter includes an additional gain of US$13 million to the amount recorded in the first quarter of 2012 due to an adjustment of the fair value reported in Q1/2012. Excluding this investment gain, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA increased by 8% to US$520 million (H1 2011: US$481 million).

Fresenius Medical Care confirms its sales and earnings outlook for 2012. The company expects sales to grow to around US$14 billion³. Net income is expected to grow to around US$1.3 billion and net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to grow to around US$1.14 billion³. This does not include the investment gain in the amount of US$140 million in the first half of 2012.

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

¹ Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment amounts to -US$109 million in H1 2011; the 2011 sales adjustment amounts to -US$224 million.² Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA – adjusted for a non-taxable investment gain of US$140 million in the first half of 2012.³ Outlook includes a +/- 0-2% deviation from the respective number.

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.

• Strong organic sales growth of 9%
• 2012 outlook fully confirmed

Sales increased by 13% to €2,234 million (H1 2011: €1,971 million). Organic sales growth was 9%. Currency translation had an effect of 3%. Acquisitions contributed 1%.

In Europe sales grew by 7% (organic growth: 6%) to €974 million (H1 2011: €909 million). Sales in North America increased by 17% to €609 million (H1 2011: €519 million). Strong organic growth of 9% was supported by continued competitor supply constraints and new product launches. In Asia-Pacific sales increased by 25% (organic growth: 15%) to €415 million (H1 2011: €332 million). Sales in Latin America and Africa increased by 12% (organic growth: 14%) to €236 million (H1 2011: €211 million).

EBIT grew by 10% to €452 million (H1 2011: €411 million). EBIT growth was driven particularly by excellent earnings growth in North America and the emerging markets. The EBIT margin was 20.2% (H1 2011: 20.9%).

Net income¹ increased by 16% to €210 million (H1 2011: €181 million).

Fresenius Kabi's operating cash flow increased by 40% to €288 million (H1 2011: €205 million). The cash flow margin was excellent at 12.9% (H1 2011: 10.4%). Cash flow before acquisitions and dividends improved to €199 million (H1 2011: €124 million). The strong increase was also favorably influenced by extraordinary payments of trade accounts receivable.

On July 20, 2012, Fresenius Kabi announced that it has signed a definitive agreement to acquire Fenwal Holdings, Inc., a leading U.S.-based provider of transfusion technology products for blood collection, separation, and processing, from TPG and Maverick Capital. In 2011, Fenwal had sales of US$614 million with an adjusted EBITDA of US$90 million.

The acquisition marks another major step in Fresenius Kabi's growth strategy. The company had announced previously that expanding its medical devices/transfusion technology segment is a priority.

Fresenius Kabi raises its guidance² announced at the Capital Market Day. With the closing of the acquisition, Fresenius Kabi targets sales of approx. €6 billion by 2015 and EBIT of >€1.1 billion. Previously, the company targeted sales of approx. €5.5 billion and EBIT of >€1 billion.

Fresenius Kabi fully confirms its outlook for 2012. The company targets organic sales growth of between 7% and 9%. Furthermore, Fresenius Kabi forecasts an EBIT margin of between 20% to 20.5%.

¹ Net income attributable to shareholders of Fresenius Kabi AG² at current exchange rates

Fresenius Helios
Fresenius Helios is one of the largest private hospital operators in Germany. HELIOS owns 73 hospitals, including six maximum care hospitals in Berlin-Buch, Duisburg, Erfurt, Krefeld, Schwerin and Wuppertal. HELIOS treats more than 2.7 million patients per year, thereof more than 750,000 inpatients, and operates more than 23,000 beds.

• Strong organic sales growth of 5.4%
• 2012 outlook fully confirmed

Sales increased by 19% to €1,540 million (H1 2011: €1,293 million). Organic sales growth was 5.4%. Acquisitions contributed 14%.

EBIT grew by 23% to €151 million (H1 2011: €123 million). The EBIT margin improved by 30 basis points to 9.8% (H1 2011: 9.5%).

Net income¹ increased by 28% to €92 million (H1 2011: €72 million).

Sales of the established hospitals grew by 5% to €1,359 million. EBIT improved by 31% to €162 million. The EBIT margin increased to 11.9% (H1 2011: 9.6%) driven by excellent operating results and a one-time gain. Sales of the acquired hospitals (consolidation <1 year) were €181 million. As expected, EBIT was -€11 million. Restructuring of these hospitals is on track.

Fresenius remains convinced of the merits of combining RHÖN-KLINIKUM with HELIOS, and continues to assess its options.

Fresenius Helios fully confirms its outlook for 2012. The company projects organic sales growth of 3% to 5% and EBIT to increase to the upper end of the targeted range of €310 million to €320 million.

One-time costs relating to the offer to the shareholders of RHÖN-KLINIKUM AG are included in the segment "Corporate/Other".

¹ Net income attributable to shareholders of HELIOS Kliniken GmbH

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

• Sales and EBIT fully in line with expectations
• 2012 outlook fully confirmed

Sales increased by 6% to €333 million (H1 2011: €313 million). Sales in the project business were €184 million (H1 2011: €202 million). Sales in the service business increased by 34% to €149 million (H1 2011: €111 million).

EBIT was €13 million (H1 2011: €12 million). The EBIT margin reached 3.9% (H1 2011: 3.8%). Net income¹ remained at previous year's level of €9 million.

In H1 2012, the order intake was €156 million (H1 2011: €164 million). In Q2 2012, Fresenius Vamed received additional supply contracts for medical-technical equipment in China with an order volume of €18 million. The order intake also includes a turnkey contract for the construction of an additional building for the San Fernando General Hospital in the Republic of Trinidad and Tobago. The order volume is approx. €14 million. Order backlog was €816 million as of June 30, 2012 (Dec. 31, 2011: €845 million).

Fresenius Vamed fully confirms its 2012 outlook. The company expects sales and EBIT growth of 5% to 10%.

¹ Net income attributable to shareholders of VAMED AG

Analyst Conference Call
As part of the publication of the results for the first half of 2012, a conference call will be held on August 1, 2012 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 Investor Relations, Presentations. Following the call, a replay of the conference call will be available on our website.

Q1-3/2012:

• Sales¹ €14.1 billion (+18% at actual rates, +12% in constant currency)
• EBIT² €2.2 billion (+19% at actual rates, +13% in constant currency)
• Net income³ €682 million (+21% at actual rates, +15% in constant currency)

• Group earnings at new single-quarter all-time high of €248 million
• Excellent operating cash flow development - Cash flow margin increases to 12.8%
• Sales and earnings guidance fully confirmed

Ulf Mark Schneider, CEO of Fresenius, said: "Our third quarter results demonstrate continued business strength and solid fundamentals, particularly in light of the excellent comparable prior-year quarter. Fresenius Kabi and Fresenius Helios stood out with strong financial results. Our broad geographic coverage and diversified business provide stability as we continue on our profitable growth path."

¹ Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment of -€119 million in the first three quarters of 2011 and of -€161 million for the full year 2011 solely relates to Fresenius Medical Care North America.

² Adjusted for one-time costs of €7 million (non-financing expenses) related to the offer to the shareholders of RHÖN-KLINIKUM AG.

³ Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain of €34 million at Fresenius Medical Care and for one-time costs of €31 million related to the offer to the shareholders of RHÖN-KLINIKUM AG. 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights.

 

Group outlook 2012 fully confirmed

Based on the Group's financial results in the first three quarters of 2012, Fresenius confirms its guidance. For 2012, Fresenius expects sales¹ to increase by 12% to 14% and net income² to increase by 14% to 16%, both in constant currency.

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

The net debt/EBITDA ratio is projected to be <3.0 at year-end (including the acquisition of Fenwal Holdings, Inc.).

 

Continued strong sales growth

Group sales increased by 18% (12% in constant currency) to €14,100 million (Q1-3 2011¹: €11,970 million). Organic sales growth was 5%. Acquisitions contributed a further 8%. Divestitures reduced sales growth by 1%. Currency translation had a positive effect of 6%. This is mainly attributable to the strengthening of the U.S. dollar against the euro by 9% in the first three quarters of 2012 compared to the first three quarters of 2011.

Sales in the business segments developed as follows:

Organic sales growth in North America was 3%, and in Europe 5%. Organic sales growth was again strong in Asia-Pacific with 11% and in Latin America with 19%. The sales decrease in Africa was due to the volatility in Fresenius Vamed's project business.

¹ Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment of -€119 million in the first three quarters of 2011 and of -€161 million for the full year 2011 solely relates to Fresenius Medical Care North America.

² Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain (€34 million) and potential special charges (up to €17 million) at Fresenius Medical Care as well as for one-time costs (€31 million) related to the offer to the shareholders of RHÖN-KLINIKUM AG. 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights.

 

Strong earnings growth

Group EBITDA¹ grew by 19% (13% in constant currency) to €2,786 million (Q1-3 2011: €2,344 million). Group EBIT¹ increased by 19% (13% in constant currency) to €2,224 million (Q1-3 2011: €1,862 million). The EBIT margin improved by 20 basis points to 15.8% (Q1-3 2011: 15.6%).

Group net interest was -€480 million (Q1-3 2011: -€401 million). Lower average interest rates were more than offset by incremental debt due to acquisition financing and currency translation effects.

The other financial result of -€37 million includes one-time costs for the offer to the shareholders of RHÖN-KLINIKUM AG, primarily related to financing commitments.

The Group tax rate² improved to 30.1% (Q1-3 2011: 30.9%).

Noncontrolling interest increased to €537 million (Q1-3 2011: €445 million), of which 93% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income³ increased by 21% (15% in constant currency) to €682 million (Q1-3 2011: €565 million). Earnings per share increased by 15% to €3.98 (Q1-3 2011: €3.47). The average number of shares grew to approx. 171 million in the first three quarters of 2012, primarily due to the May 2012 capital increase.

Group net income⁴ was €685 million or €4.00 per share (including the non-taxable investment gain at Fresenius Medical Care and one-time costs related to the offer to the shareholders of RHÖN-KLINIKUM AG). 

¹ Adjusted for one-time costs of €7 million (non-financing expenses) related to the offer to the shareholders of RHÖN-KLINIKUM AG.

² Adjusted for the non-taxable investment gain at Fresenius Medical Care and for one-time costs of €44 million related to the offer to the shareholders of RHÖN-KLINIKUM AG. 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds.

³ Net income attributable to shareholders of Fresenius SE & Co. KGaA – adjusted for a non-taxable investment gain of €34 million at Fresenius Medical Care and for one-time costs of €31 million related to the offer to the shareholders of RHÖN-KLINIKUM AG. 2011 adjusted for the effects of mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights.

⁴ Net income attributable to shareholders of Fresenius SE & Co. KGaA

 

Continued investment in growth

The Fresenius Group spent €611 million on property, plant and equipment (Q1-3 2011: €480 million). Acquisition spending was €2,192 million (Q1-3 2011: €908 million). This relates primarily to Fresenius Medical Care's acquisition of Liberty Dialysis Holdings, Inc. as well as to the acquisition of Damp Group by Fresenius Helios.

 

Excellent operating cash flow

Operating cash flow increased to €1,807 million (Q1-3 2011: €1,156 million). This was mainly driven by strong earnings growth and tight working capital management, especially regarding trade accounts receivable. The cash flow margin improved to 12.8% (Q1-3 2011: 9.7%). Net capital expenditure was €564 million (Q1-3 2011: €475 million). Free cash flow before acquisitions and dividends was €1,243 million (Q1-3 2011: €681 million). Free cash flow after acquisitions and dividends was -€823 million (Q1-3 2011: -€538 million).

 

Solid balance sheet structure

The Group's total assets increased by 15% (15% in constant currency) to €30,225 million (Dec. 31, 2011: €26,321 million). Current assets grew by 21% (20% in constant currency) to €8,621 million (Dec. 31, 2011: €7,151 million). This includes the proceeds of the capital increase which were invested in short-term instruments. Non-current assets increased by 13% (12% in constant currency) to €21,604 million (Dec. 31, 2011: €19,170 million), mainly due to the recent acquisitions.

Total shareholders' equity increased by 18% (18% in constant currency) to €12,532 million, mainly due to the capital increase (Dec. 31, 2011: €10,577 million). The equity ratio was 41.5% (Dec. 31, 2011: 40.2%).

Group debt grew by 16% (15% in constant currency) to €11,325 million (Dec. 31, 2011: €9,799 million), primarily resulting from acquisition financing. Net debt increased by 4% (4% in constant currency) to €9,556 million (Dec. 31, 2011: €9,164 million). Net debt comprises the proceeds of the capital increase.

As of September 30, 2012, the net debt/EBITDA ratio¹ was 2.53 (Dec. 31, 2011: 2.83). At identical exchange rates for net debt and EBITDA, the ratio was also 2.53.

¹ Pro forma including Damp Group and Liberty Dialysis Holdings, Inc., adjusted for one-time costs of €7 million (non-financing expenses) related to the offer to the shareholders of RHÖN-KLINIKUM AG.

 

Number of employees increases

As of September 30, 2012, the Fresenius Group increased the number of its employees by 9% to 163,463 (Dec. 31, 2011: 149,351), mainly due to acquisitions.

 

Fresenius Biotech

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

Fresenius Biotech's sales increased by 15% to €25.8 million compared to €22.4 million in the first three quarters of 2011. Removab sales grew by 22% to €3.3 million (Q1-3 2011: €2.7 million). ATG Fresenius S sales increased by 14% to €22.5 million (Q1-3 2011: €19.7 million). Fresenius Biotech's EBIT was -€15 million (Q1-3 2011: -€19 million).

In July 2012, ATG-Fresenius S was added to the list of reimbursable medications for stem cell transplantation. Besides Germany and Austria, ATG-Fresenius S can now be actively marketed in another relevant country for this additional indication.

For 2012, Fresenius Biotech now expects an EBIT of ~ -€25 million. Previously, the company expected an EBIT of -€25 million to -€30 million.

 

 

Business Segments

Fresenius Medical Care

Fresenius Medical Care is the world's leading provider of services and products for patients with chronic kidney failure. As of September 30, 2012, Fresenius Medical Care was treating 256,521 patients in 3,135 dialysis clinics.

• Strong operating cash flow margin of 14.5%
• Debt maturity profile improved – Syndicated loan successfully renewed

Sales increased by 8% to US$10,095 million (Q1-3 2011¹: US$9,306 million). Organic sales growth was 4%. Acquisitions contributed a further 8%. Divestitures reduced sales growth by 1%. Currency translation had a negative effect of 3%.

Sales in dialysis services increased by 11% (in constant currency: 13%) to US$7,688 million (Q1-3 2011: US$6,905 million). Dialysis product sales grew by 6% in constant currency to US$2,407 million (Q1-3 2011: US$2,401 million).

In North America sales grew 12% to US$6,602 million (Q1-3 2011: US$5,888 million). Dialysis services sales grew by 14% to US$6,007 million (Q1-3 2011: US$5,289 million). Average revenue per treatment for U.S. clinics increased to US$349 in the third quarter of 2012 (Q3 2011: US$345). Dialysis product sales were US$595 million (Q1-3 2011: US$599 million).

Sales outside North America ("International" segment) grew by 2% (in constant currency: 10%) to US$3,470 million (Q1-3 2011: US$3,405 million). Sales in dialysis services increased by 4% (in constant currency: 12%) to US$1,680 million (Q1-3 2011: US$1,616 million). Dialysis product sales of US$1,790 million remained close to the previous year's level of US$1,789 million at actual rates. In constant currency, dialysis product sales grew by 8%.

¹ Previous year's sales were adjusted according to a U.S. GAAP accounting change. The sales adjustment amounts to -US$167 million in Q1-3 2011; the 2011 sales adjustment amounts to -US$224 million.² Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA – adjusted for a non-taxable investment gain of US$140 million in the first three quarters of 2012.

EBIT increased by 11% to US$1,659 million (Q1-3 2011: US$1,488 million). The EBIT margin increased to 16.4% (Q1-3 2011: 16.0%).

The EBIT margin in North America increased to 18.2% (Q1-3 2011: 17.6%). In the International segment the EBIT margin improved to 17.2% (Q1-3 2011: 17.0%).

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the first three quarters of 2012 was US$930 million, an increase of 22% compared to the corresponding period of 2011. This includes a non-taxable investment gain of US$140 million related to the acquisition of Liberty Dialysis Holdings, Inc. (Liberty), including its 51% stake in Renal Advantage Partners, LLC (RAI). The gain is a result of measuring the 49% equity interest in RAI held by the company at its fair value at the time of the Liberty acquisition. Excluding this investment gain, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA increased by 4% to US$790 million (Q1-3 2011: US$761 million).

The operating cash flow increased by 55% to US$1,467 million compared to US$950 million for the same period in 2011, supported by favorable development of working capital items. The cash flow margin improved to 14.5% (Q1-3 2011: 10.2%).

Fresenius Medical Care successfully renewed its syndicated credit agreement including a revolving facility and a long term loan. The refinancing of those facilities was well received in the market. The company entered into a US$3.85 billion syndicated credit agreement, comprised of 5-year revolving facilities (including a US$200 million U.S. dollar facility, a €500 million euro facility and a US$400 million multi-currency facility) and a 5-year US$2.6 billion term loan. Proceeds from the credit facilities were used to refinance the company's existing credit facilities, which otherwise would have matured on March 31, 2013, and for general corporate purposes.

Fresenius Medical Care confirms its sales and earnings outlook for 2012. The company expects sales to grow to ~ US$14 billion¹. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to grow to ~ US$1.14 billion¹. This does neither include the investment gain in the amount of US$140 million in the first three quarters of 2012 nor does it consider charges of up to US$70 million after tax mainly related to the intended renegotiation of the distribution, manufacturing and supply agreement for iron products in North America to reflect changes in the market and a donation to the American Society of Nephrology Foundation to establish the Ben J. Lipps Research Fellowship Program. These potential special charges translate into up to €17 million after tax for the Fresenius Group.

In summary, Fresenius Medical Care confirms its guidance for the full year at the lower end of the previously indicated range. The company anticipates some special collection efforts related to services performed in prior years and other initiatives in the fourth quarter that will help to achieve its guidance.

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

¹ Fresenius Medical Care defines the ~ sign as a +/- 0-2% deviation from the respective numbers.

 

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.

• Continued strong organic sales growth of 9%
• 2012 outlook fully confirmed

Sales increased by 14% to €3,363 million (Q1-3 2011: €2,950 million). Organic sales growth was 9%. Currency translation had an effect of 4%. Acquisitions contributed 1%.

In Europe sales grew by 7% (organic growth: 6%) to €1,449 million (Q1-3 2011: €1,360 million). Sales in North America increased by 21% to €910 million (Q1-3 2011: €755 million). Strong organic growth of 10% was supported mainly by continued competitor supply constraints as well as new product launches. In Asia-Pacific sales increased by 26% (organic growth: 15%) to €642 million (Q1-3 2011: €511 million). Sales in Latin America and Africa increased by 12% (organic growth: 14%) to €362 million (Q1-3 2011: €324 million).

EBIT grew by 14% to €700 million (Q1-3 2011: €613 million). EBIT growth was driven particularly by excellent earnings growth in North America and the emerging markets. The EBIT margin of 20.8% remained at the strong previous year's level.

Net income¹ increased by 22% to €330 million (Q1-3 2011: €271 million).

Fresenius Kabi's operating cash flow increased by 29% to €452 million (Q1-3 2011: €350 million). The strong increase was favorably influenced by extraordinary payments of trade accounts receivable. The cash flow margin was excellent at 13.4% (Q1-3 2011: 11.9%). Cash flow before acquisitions and dividends improved to €322 million (Q1-3 2011: €234 million).

Fresenius Kabi fully confirms its outlook for 2012, which was raised in September 2012. The company targets organic sales growth of approx. 9%. Furthermore, Fresenius Kabi forecasts an EBIT margin of approx. 20.5%.

¹ Net income attributable to shareholders of Fresenius Kabi AG

 

Fresenius Helios

Fresenius Helios is one of the largest private hospital operators in Germany. HELIOS owns 72 hospitals, including six maximum care hospitals in Berlin-Buch, Duisburg, Erfurt, Krefeld, Schwerin and Wuppertal. HELIOS treats more than 2.7 million patients per year, thereof more than 750,000 inpatients, and operates more than 23,000 beds.

• Excellent sales growth of 20%
• 2012 outlook fully confirmed

 

Sales increased by 20% to €2,347 million (Q1-3 2011: €1,950 million). Strong organic sales growth contributed 5%, acquisitions contributed 17% to sales growth. Divestitures reduced sales growth by 2%. In the third quarter of 2012, HELIOS' Swiss post-acute care clinic was sold to Fresenius Vamed and retrospectively deconsolidated as of January 1, 2012.

EBIT grew by 19% to €232 million (Q1-3 2011: €195 million). The EBIT margin was 9.9% (Q1-3 2011: 10.0%).

Net income¹ increased by 26% to €148 million (Q1-3 2011: €117 million).

Sales of the established hospitals grew by 5% to €2,023 million. EBIT improved by 21% to €235 million. The EBIT margin increased to 11.6% (Q1-3 2011: 10.2%) driven by excellent operating results and a one-time gain. Sales of the acquired hospitals (consolidation <1 year) were €324 million. As expected, EBIT was -€3 million. Restructuring of these hospitals is on track.

Fresenius Helios fully confirms its outlook for 2012. The company projects organic sales growth of 3% to 5% and EBIT to increase to the upper end of the targeted range of €310 million to €320 million.

One-time costs relating to the offer to the shareholders of RHÖN-KLINIKUM AG are included in the segment "Corporate/Other".

¹ Net income attributable to shareholders of HELIOS Kliniken GmbH

 

Fresenius Vamed

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

• Accelerated Q3 order intake of €166 million exceeds H1 order intake of €156 million
• Outlook improved - 2012 sales and EBIT now expected at upper end of range

Sales increased by 12% to €536 million (Q1-3 2011: €480 million). Acquisitions contributed 11% to sales growth. In the third quarter of 2012, HELIOS' Swiss post-acute care clinic was transferred to Fresenius Vamed and retrospectively consolidated as of January 1, 2012. Sales in the project business were €285 million (Q1-3 2011: €311 million). Sales in the service business increased to €251 million (Q1-3 2011: €169 million).

EBIT increased by 9% to €24 million (Q1-3 2011: €22 million). The EBIT margin reached 4.5% (Q1-3 2011: 4.6%). Net income was €16 million (Q1-3 2011: €17 million).

The order intake was €322 million (Q1-3 2011: €335 million). In the third quarter of 2012, Fresenius Vamed again received supply contracts for medical-technical equipment in China with an order volume of €40 million. The order for the San Fernando General Hospital in the Republic of Trinidad and Tobago was extended by €65 million. In addition, Fresenius Vamed received an order for the reconstruction and expansion of an Austrian rheumatology clinic with a total volume of €37 million. Order backlog was €878 million as of September 30, 2012 (Dec. 31, 2011: €845 million).

Fresenius Vamed improves its outlook for 2012 and now expects to grow both sales and EBIT at the upper end of the targeted range of 5% to 10%.

¹ Net income attributable to shareholders of VAMED AG

 

Analyst Conference Call

As part of the publication of the results for the first three quarters of 2012, a conference call will be held on October 31, 2012 at 2 p.m. CET (9 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 Investor Relations, Presentations. Following the call, a replay of the conference call will be available on our website.