Numerous peritoneal dialysis (PD) products of Fresenius Medical Care are now certified by Nordic Ecolabel, making it the first health care company in the world to receive this designation for its medical products. The license covers nearly all disposable products made of PVC-free Material Biofine®, developed by Fresenius Medical Care. The products include bags for PD solutions as well as accessories for PD machines, offered in many European countries.
Nordic Ecolabel is the official Ecolabel in the Scandinavian countries of Denmark, Finland, Iceland, Norway and Sweden and signals the environmental impact of a product or service. As one of the most popular Ecolabels worldwide, it has been awarded to products and services in 66 categories so far. It is also known as "Swan" by most Scandinavians because of its logo, a stylized white swan across a green background. According to the Nordic Ecolabelling Board (NMN), which awards the Ecolabel, two-thirds of Scandinavians are familiar with Nordic Ecolabel and its significance.
Nordic Ecolabelled PD products must meet strict criteria. They must, among other things, not contain PVC and substances that are toxic or resist degradation (persistent), which are deposited in organisms (bioaccumulative) or disrupt the endocrine system (endocrine disrupters). Furthermore, the manufacturing process needs to adhere to state of the art quality standards.
"We developed Biofine® because an important concern of our company is to preserve nature and to save natural resources," said Dr. Emanuele Gatti, Chief Executive Officer of Fresenius Medical Care for the regions Europe, Latin America, Middle East and Africa. "Our Biofine® technology is unique and therefore we are pleased to be the first health care company ever to offer medical products with the Nordic Ecolabel. This is another building block in our extensive environmental program. Our products are environmentally friendly and innovative. They offer the best quality of care for the benefit of patients."
For more information about the Nordic Ecolabel and the certification of Fresenius Medical Care's PD products visit www.svanen.nu/eng.
Fresenius Medical Care is the world's largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1,600,000 individuals worldwide. Through its network of 2,349 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 181,937 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS/P)
For more information about Fresenius Medical Care visit the Company's website at www.fmc-ag.com.
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including changes in business, economic and competitive conditions, regulatory reforms, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. KGaA's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this release.
With a market share of approximately 14% Excelsior is the largest dialysis service provider in Taiwan treating over 6,500 hemodialysis patients in 90 clinics. The transaction is expected to add about $84 million to the consolidated revenues and to be accretive to the Company's earnings for 2007. The purchase price for the 51% equity interest in Excelsior will be $38 million. The acquisition will be subject to the approval of the Taiwan government Investment Committee.
At the end of 2005 there were nearly 45,000 End Stage Renal Disease (ESRD) patients in Taiwan. The country has experienced approximately 6% growth in patients in recent years with a prevalence rate (patients per one million population) of over 1,900 – the second-highest worldwide.
After the closing of the acquisition, Fresenius Medical Care's share in the number of treated patients in Taiwan will increase from 4% to approximately 18%. Through the transaction, Fresenius Medical Care will become the leading dialysis provider in the Asia-Pacific region and will provide dialysis services to more than 10,000 patients.
Ben Lipps, Chief Executive Officer of Fresenius Medical Care, commented: "We are very pleased to further expand our strong product and services base business in Asia. We now have achieved leadership in products and services in all of our key global regions."
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About Jiate Excelsior Co. Ltd.
Jiate Excelsior Co. Ltd. ("Excelsior") was established in 1998 with the headquarters in Taipei and is wholly owned by Enfield Medical Co. Ltd. Excelsior is the largest dialysis provider in Taiwan treating more than 6,500 patients at the end of 2006 in approximately 90 dialysis centers. The company operates and manages dialysis units in hospitals as well as stand-alone clinics. Excelsior has a market share of approximately 14% in Taiwan.
About Fresenius Medical Care
Fresenius Medical Care is the world's largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1,400,000 individuals worldwide. Through its network of 2,085 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 161,433 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS-p).
For more information about Fresenius Medical Care visit the website: www.fmc-ag.com.
Fresenius Medical Care is expanding the dialyzer production capacity at the St. Wendel (Germany) production facility by 40%. A total of € 36 million will be invested including associated investment in additional production capacity for proprietary Helixone fibers. The new production line for FX-Class dialyzers is expected to start operating in spring 2008 and will increase the annual capacity for single-use dialyzers from 25 million to 35 million.
The expansion plan at Fresenius Medical Care's major European dialyzer production facility in St. Wendel (Germany) follows recent significant expansion projects at the Company's facilities in Ogden (Utah, U.S.) and Buzen (Japan). As a result of these two expansion projects, the total annual capacity is expected to increase by about 11 million dialyzers worldwide.
Dr. Ben Lipps, Chief Executive Officer of Fresenius Medical Care, commented: "The continued expansion of our global production network is in response to the strong increase in global demand for Fresenius Medical Care's single-use dialyzers and other innovative products to treat patients with chronic kidney disease. Furthermore, the investment at the St. Wendel plant demonstrates our strong commitment to our home country Germany and to our more than 1,500 employees, who have built up tremendous proprietary expertise for cost-effective production of high-quality, innovative and successful dialysis products."
In hemodialysis, the dialyzer acts as an artificial kidney, providing the vital functions of the natural organ: Blood flows through as many as 20,000 nearly hair-fine tubes (capillaries) in a plastic housing. The Helixone capillaries are made from Polysulfone, a special polymer with very good filtering capabilities and excellent biocompatibility. Toxins as well as excess water are filtered from the blood through pores in the capillaries and removed with dialysis fluid (dialysate).
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Helixone and Fresenius Polysulfone are registered trade marks of Fresenius Medical Care.
Fresenius Medical Care is the world's largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1,400,000 individuals worldwide. Through its network of 2,085 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 161,433 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS-p).
For more information about Fresenius Medical Care visit the website: www.fmc-ag.com.
Fresenius Medical Care today announced the submission of a supplemental New Drug Application (sNDA) with the U.S. Food & Drug Administration (FDA) to allow the Company's proprietary phosphate binder, PhosLo to be labeled for use by patients diagnosed with Stage 4 chronic kidney disease (CKD). The U.S. National Kidney Foundation divides kidney disease into five stages depending on the glomerular filtration rate (GFR) which ranges from more than 90 ml/min in healthy kidneys (Stage 1) to less than 15 ml/min (Stage 5) where dialysis or a kidney transplant is needed. Persons with CKD Stage 4 have advanced kidney damage with a severe decrease in the GFR to 15-29 ml/min, i.e. the filtration rate is significantly lower compared to average healthy kidneys. It is likely someone with Stage 4 CKD will need dialysis or a kidney transplant in the near future. There are approximately 400,000 patients with Stage 4 CKD in the U.S.
The submission of the sNDA is based on data from the "Effect of Calcium Acetate on Phosphorus Levels in Patients with Advanced Chronic Kidney Disease" (EPIC) study. The study, which was presented at the International Society of Nephrology meeting in Copenhagen, Denmark, October 13, 2006, was a prospective, multi-center, randomized, double-blind, placebo-controlled study designed to evaluate the efficacy and safety of PhosLo in 110 Stage 4 CKD patients. The study achieved its primary endpoint of superior control of serum phosphorus levels (p=0.0003), the calcium-phosphorus product (p=0.001) and serum parathyroid hormone (PTH) (p=0.001) versus placebo.
Dr. Ben Lipps, Chief Executive Officer of Fresenius Medical Care, commented: "We are pleased with the outcome of the EPIC study, which has resulted in the FDA submission. When the application is granted, PhosLo will provide nephrologists another therapeutic option that will allow them to start treatment of hyperphosphatemia earlier."
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PhosLo is a registered trademark of Fresenius Medical Care.
About Hyperphosphatemia
Hyperphosphatemia is an electrolyte disturbance in which there is an abnormally elevated level of phosphate in the blood. Often, calcium levels are lowered (hypocalcemia) due to precipitation of phosphate with the calcium in tissues. It is associated with secondary hyperparathyroidism and commonly seen in chronic renal failure. High phosphate levels can be avoided with phosphate binders and dietary restriction of phosphate.
About PhosLo
PhosLo is an oral prescription calcium acetate phosphate binder currently indicated for the control of elevated phosphorous levels in patients with end stage renal disease (ESRD). PhosLo is administered orally, and when given with food, it combines with dietary phosphate to form insoluble calcium phosphate complexes that are eliminated from the body, thereby reducing phosphorus absorption, helping to prevent excess blood phosphorus levels. Patients should have serum calcium levels closely monitored and their dose of PhosLo adjusted or terminated to bring levels to normal. PhosLo is contraindicated in patients with hypercalcemia. No other calcium supplements should be given concurrently with PhosLo. PhosLo is well tolerated and has an excellent safety profile. Nausea, hypercalcemia, and pruritus (itching) have occasionally been reported during PhosLo therapy.
Fresenius Medical Care is the world's largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1,400,000 individuals worldwide. Through its network of 2,085 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 161,433 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS-p).
For more information about Fresenius Medical Care visit the website: www.fmc-ag.com.
Fresenius Medical Care, the world's leading renal therapy company, today announced that is has agreed with Amgen Europe (Amgen) to establish a joint research project aimed at further improving treatment outcomes for kidney patients in Europe.
In the scope of the joint research agreement, Fresenius Medical Care and Amgen will facilitate a working group of European scientific experts in the renal field. The working group will analyze practices in the treatment of chronic kidney disease (CKD) and will publish their findings for improved therapeutic options.
The working group will be led by renowned independent scientists in the field of nephrology, who will lead the analysis process. Both Amgen and Fresenius Medical Care will engage renowned consultants in the field of nephrology who will help lead the analysis process and develop additional research questions.
The focus of the first research efforts will be on anemia and bone mineral disease affecting patients with kidney failure.
Dr. Ben Lipps, Chief Executive Officer of Fresenius Medical Care, commented: "We are pleased to partner with Amgen in this European initiative. This agreement is a pure research project designed to pool both companies' expertise in the field and analyze data available. This is yet another step in our long-term growth strategy to further enhance our renal drug initiative. Our objective is to assist further improvements in patient medical outcomes with our customers and our own network of clinics."
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Fresenius Medical Care is the world's largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1,400,000 individuals worldwide. Through its network of 2,085 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 161,433 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS-p).
For more information about Fresenius Medical Care visit the website: www.fmc-ag.com.
About Amgen
Amgen discovers, develops and delivers innovative human therapeutics. A biotechnology pioneer since 1980, Amgen was one of the first companies to realize the new science's promise by bringing safe and effective medicines from lab, to manufacturing plant, to patient. Amgen therapeutics have changed the practice of medicine, helping millions of people around the world in the fight against cancer, kidney disease, rheumatoid arthritis, and other serious illnesses. With a broad and deep pipeline of potential new medicines, Amgen remains committed to advancing science to dramatically improve people's lives.
For more information about Amgen visit the Company's website at www.amgen.com.
Fresenius Medical Care, the world's leading renal therapy company, today announced that it has entered into a new agreement with Amgen Europe (Amgen) for Aranesp (darbepoetin alfa).
Under the agreement, Fresenius Medical Care will devote efforts to assist Amgen in disseminating scientific information regarding the treatment of anemia to nephrologists and other dialysis experts. Amgen and its representatives are and will remain solely responsible for the product. The new agreement runs for three years.
Patients with chronic kidney disease on dialysis and not on dialysis often suffer from complications such as anaemia, which occurs when failing kidneys no longer produce sufficient erythropoietin, a hormone that stimulates the production of oxygen-carrying red blood cells. Aranesp is a novel recombinant erythropoiesis stimulating protein (ESP) that stimulates erythropoiesis to produce red blood cells. Aranesp has a proven tolerability and proven efficacy, across all stages of chronic kidney disease.
Dr. Ben Lipps, Chief Executive Officer of Fresenius Medical Care, commented: "We are pleased to partner with Amgen on an expanded scale to further improve medical outcomes for dialysis patients in Europe. Amgen and Fresenius Medical Care are well known for their commitment to developing and establishing new therapies for the benefit of patients with endstage renal disease. Furthermore, this agreement clearly advances our renal drug initiatives and emphasizes the position of both companies as leaders in nephrology innovation."
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Aranesp is a trademark of Amgen Inc.
Aranesp Summary of Product Characteristics. European Medicines Agency.
www.emea.eu.int/humandocs/Humans/EPAR/aranesp/aranesp.htm (Accessed 28th November 2006)
Fresenius Medical Care is the world's largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1,400,000 individuals worldwide. Through its network of 2,085 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 161,433 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS-p).
For more information about Fresenius Medical Care visit the website: www.fmc-ag.com.
About Amgen
Amgen discovers, develops and delivers innovative human therapeutics. A biotechnology pioneer since 1980, Amgen was one of the first companies to realize the new science's promise by bringing safe and effective medicines from lab, to manufacturing plant, to patient. Amgen therapeutics have changed the practice of medicine, helping millions of people around the world in the fight against cancer, kidney disease, rheumatoid arthritis, and other serious illnesses. With a broad and deep pipeline of potential new medicines, Amgen remains committed to advancing science to dramatically improve people's lives.
For more information about Amgen visit the Company's website at www.amgen.com.
Summary Full Year 2006:
The Company exceeded its financial targets, achieved record earnings and proposes its 10th consecutive annual dividend increase.
Net revenue : $ 8,499 million, + 26%
Operating income (EBIT): $ 1,318 million, + 40%
Net income: $ 537 million, + 18%
Excluding SFAS 123(R) and one-time items
Operating income (EBIT): $ 1,329 million, + 38%
Net income: $ 584 million, + 24%
Dividend proposal
Ordinary share: € 1.41, + 15%
Preference share: € 1.47, + 14%
Fresenius Medical Care AG & Co. KGaA ("the Company"), the world's largest provider of Dialysis Products and Services, today announced its results for the fourth quarter and full year of 2006.
Please note, the result of operations of Renal Care Group (RCG) are consolidated from April 1, 2006 onward.
Fourth Quarter 2006:
Revenue
Net revenue for the fourth quarter 2006 compared to the fourth quarter 2005 increased by 33% (31% at constant currency) to $2,352 million. Organic revenue growth worldwide was 11%. Dialysis Services revenue grew by 39% to $1,749 million (38% at constant currency) in the fourth quarter of 2006. Dialysis Product revenue increased by 17% to $603 million (12% at constant currency) in the same period.
North America revenue increased by 39% to $1,658 million. Dialysis Services revenue increased by 44% to $1,505 million. Average revenue per treatment for the U.S. clinics increased by 9% to $328 in the fourth quarter 2006 compared to $302 for the same quarter in 2005. Dialysis Product revenue increased by 5% to $153 million led by strong sales of our 2008K hemodialysis machines. Excluding the effects of the RCG acquisition and related divestitures, the Dialysis Product revenue increased by 13% compared to last year.
International revenue was $694 million, an increase of 20% (14% at constant currency) compared to the fourth quarter of 2005. Dialysis Services revenue reached $244 million, an increase of 17% (13% at constant currency). Dialysis Product revenue increased by 22% to $450 million (15% at constant currency), led by strong sales of machines (both the 4008 and 5008 series), dialyzers and peritoneal dialysis products.
Earnings
Operating income (EBIT) increased by 45% to $354 million. Operating income for the fourth quarter 2006 includes $29 million of costs related to the change of accounting principles for stock options (SFAS 123R), restructuring costs and in-process R&D.
Excluding these costs, operating income for the fourth quarter 2006 increased by 48% to $383 million resulting in an operating margin of 16.3%. For the fourth quarter 2005 the operating margin was 14.6%.
Compared with the fourth quarter 2005, the operating margin excluding one-time items in North America increased by 260 basis points to 17.1% due to the consolidation of RCG, an increase in the revenue per treatment and strong demand for dialysis products. In the International segment, the operating margin increased from an already high level by 30 basis points to 17.7%. The continued strong operational performance in the International segment was driven by increased product sales in all regions and positively impacted by production efficiencies and reimbursement increases in key countries in Europe and Latin America.
Net interest expense for the fourth quarter 2006 was $96 million compared to $46 million in the same quarter of 2005. This increase is entirely attributable to the debt financing for the RCG acquisition.
Income tax expense was $99 million for the fourth quarter of 2006 compared to $82 million in the fourth quarter of 2005, reflecting effective tax rates of 38.5% and 41.3%, respectively.
Net income for the fourth quarter 2006 was $152 million, an increase of 32%. Excluding one-time costs and SFAS 123(R), the net income increased on a comparable basis by 35% to $172 million.
Earnings per share (EPS) for the fourth quarter of 2006 rose by 31% to $1.55 per ordinary share ($0.52 per American Depositary Share (ADS)) compared to $1.18 ($0.39 per ADS) for the fourth quarter of 2005. The weighted average number of shares outstanding for the fourth quarter of 2006 was approximately 98.3 million shares compared to 97.6 million shares for the fourth quarter of 2005. The increase in shares outstanding results from stock option exercises in 2006.
Cash Flow
In the fourth quarter of 2006, the Company generated $443 million in cash from operations, representing 19% of revenue – clearly above our target. The strong cash flow generation was supported by increased earnings.
A total of $177 million was spent for capital expenditures, net of disposals. Free Cash Flow before acquisitions was $266 million compared to $65 million in the fourth quarter of 2005. A total of $118 million in cash was used for acquisitions.
Full Year 2006:
Earnings and Revenue
For the full year 2006, net income was $537 million, up 18% from 2005. Excluding costs related to the change of accounting principles for stock options (SFAS 123R) of $10 million and one-time items of $37 million, net income increased by 24% to $584 million. In the future, costs related to SFAS 123(R) will not be adjusted when comparing with 2007 figures.
Net revenue for 2006 was $8,499 million, up 26% from 2005. Adjusted for currency, net revenue rose by 25%. Organic growth was 10%.
Operating income (EBIT) increased by 40% to $1,318 million. Operating income for the full year 2006 includes expenses of $11 million as a result of restructuring and in-process R&D, transformation of legal form and the change of accounting principles for stock options, net of the gain from the clinic divestitures.
Excluding these items and the one-time costs for the transformation of the legal form in the prior year, operating income for 2006 increased by 38% to $1,329 million. This performance resulted in an operating margin of 15.6% compared to 14.2% for the year 2005.
Net interest expense for the full year 2006 was $351 million. The increase was the result of three quarters worth of additional interest expense and the write-off of deferred financing costs related to the 2003 senior credit facility of $15 million, both in conjunction with the financing of the RCG acquisition.
Income tax expense was $413 million for the full year compared to $309 million in 2005, reflecting tax rates of 42.8% and 40.3%, respectively. The tax rate was impacted by tax payments in connection with the gain on divestiture of dialysis clinics in the U.S. and by a tax audit in Germany. Excluding these impacts, the effective tax rate was 38.5%.
For the full year 2006, earnings per ordinary share rose by 17% to $5.47 ($1.82 per ADS). The weighted average number of shares outstanding during 2006 was approximately 98.1 million.
Cash Flow
Cash from operations during the full year 2006 was $908 million compared to $670 million for 2005 on a reported basis. On an adjusted basis, cash from operations was $1,106 million in 2006 compared to $805 million in 2005. The increase compared to prior the year was mainly due to increased earnings and further improvements in working capital efficiency.
A total of $450 million was used for capital expenditures, net of disposals. Free Cash Flow before acquisitions for 2006 was $458 million compared to $373 million in 2005. The underlying Free Cash Flow before acquisitions and one-time effects for 2006 was $656 million. A total of $159 million in cash was used for acquisitions other than the RCG acquisition in 2006.
For a complete overview on the fourth quarter and the full year of 2006 and the reconciliation of non-GAAP financial measures included in this release to the most comparable GAAP financial measures, please refer to the attachments.
Patients – Clinics – Treatments
As of December 31, 2006, Fresenius Medical Care treated 163,517 patients worldwide, which represents a 24% increase in patients compared to last year. North America provided dialysis treatments for 117,855 patients (up 32%). Including 33 managed clinics, the number of patients in North America was 119,883. The International segment served 45,662 patients (up 8%).
As of December 31, 2006, the Company operated a total of 2,108 clinics worldwide. This is comprised of 1,560 clinics in North America, an increase of 35%, and 548 clinics in the International segment, an increase of 5%.
Fresenius Medical Care delivered approximately 23.74 million dialysis treatments worldwide, which represents an increase of 20% year over year. North America accounted for 16.88 million treatments, an increase of 25%, and the International segment delivered 6.86 million treatments, an increase of 10% over last year.
Employees
As of December 31, 2006, Fresenius Medical Care employed 56,803 people (full-time equivalents) worldwide compared to 47,521 at the end of 2005. The increase of 9,282 employees is primarily due to the acquisition of Renal Care Group.
Dividends
The Company will continue to follow an earnings-driven dividend policy. For the tenth consecutive year, shareholders can expect to receive an increased annual dividend for the fiscal year 2006. At the Annual General Meeting to be held on May 15, 2007, shareholders will be asked to approve a dividend of €1.41 per ordinary share, an increase of 15% from 2005 (€1.23) and €1.47 per preference share, an increase of 14% from 2005 (€1.29).
Acquisition in Taiwan
On January 9, 2007, the Company announced the acquisition of a 51% equity interest in Jiate Excelsior Co. Ltd. ("Excelsior") in Taiwan. The purchase price for the 51% equity interest in Excelsior was $38 million. The transaction is expected to add about $80 million to the consolidated revenues and to be accretive to the Company's earnings for 2007. Through the transaction, Fresenius Medical Care will become the leading dialysis provider in the Asia-Pacific region.
Outlook for 2007
For the full year 2007, the Company expects to achieve revenue of approximately $9.4 billion, an increase of 11%.
The net income is expected to be between $675 million and $695 million in 2007. This represents an increase of between 18% and 21% on an adjusted basis to 2006. On a reported basis, the net income would increase by 26% to 29%.
The Company expects spending on capital expenditures and acquisitions to be at approximately $650 million. The debt/EBITDA ratio is expected to fall below 3.0 by the end of 2007.
Ben Lipps, Chief Executive Officer of Fresenius Medical Care, commented: "Our excellent financial performance for the year reflects the strong demand for our products and services worldwide. We are pleased to have again delivered on our commitments in 2006 and are proposing to deliver our tenth consecutive dividend increase to our shareholders. With the successful integration of the Renal Care Group acquisition, expansion opportunities for patient care in Europe and Asia and the progress on our growth initiatives, we are confident as we look ahead."
Video Webcast
Fresenius Medical Care will hold a press conference at its headquarters in Bad Homburg, Germany, to discuss the results of the fourth quarter and the full year of 2006 on February 22, 2007, at 10:00 am CET. The Company cordially invites journalists to view the live video webcast of the meeting at this website. A replay will be available shortly after the meeting.
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Fresenius Medical Care is the world's largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects about 1,500,000 individuals worldwide. Through its network of 2,108 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 163,517 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS-p).
For more information about Fresenius Medical Care visit the Company's website at www.fmc-ag.com.
Fresenius Medical Care
Statement of Earnings
see pdf-file
Fresenius Medical Care AG & Co. KGaA today announced that it will propose a share split for both classes of shares (ordinary and preferred) in the ratio of 1:3 to the next General Shareholder Meeting on May 15, 2007.
The strong performance of the company in recent years has led to a sharp increase in the share price. The price per ordinary share is currently one of the highest in Germany's DAX index. A share split would significantly lower the price of the individual Fresenius Medical Care share. The proposed share split is intended to promote more trading activity in Fresenius Medical Care shares and to increase the shares' attractiveness for a broader group of investors.
Through a conversion of capital reserves, the subscribed capital of Fresenius Medical Care AG & Co. KGaA is first increased to €295.2 million. The subscribed capital is then divided into 291,449,373 ordinary shares and 3,711,435 preference shares. The new amount of the subscribed capital will then be €1.00 per share. After the share split, every holder of an ordinary share will hold three ordinary shares and every holder of a preference share will hold three preference shares. As a result of the share split, the price level will be reduced arithmetically without affecting the overall value for shareholders.
For American Depositary Share (ADS) Investors:
Fresenius Medical Care shares are traded on the New York Stock Exchange (NYSE) in (NYSE) in the form of ADSs. Currently, the ratio between the ordinary and preference ADS and the underlying ordinary and preference shares is 3:1, meaning that three Fresenius Medical Care ordinary or preference ADSs are the equivalent of one Fresenius Medical Care ordinary or preference share. Upon approval of the proposed share split and the registration with the commercial register, each Fresenius Medical Care ordinary or preference ADS will represent one Fresenius Medical Care ordinary or preference share.
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Fresenius Medical Care is the world's largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects about 1,500,000 individuals worldwide. Through its network of 2,108 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 163,517 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS-p).
For more information about Fresenius Medical Care visit the Company's website at www.fmc-ag.com.
Summary First Quarter 2007
- Net revenue : $ 2,321 million, + 33%
- Operating income (EBIT): $ 365 million, + 50%
- Net income: $ 160 million, + 38%
- Earnings per share: $ 1.63, + 37%
Fresenius Medical Care AG & Co. KGaA ("the Company"), the world's largest provider of Dialysis Products and Services, today announced its results for the first quarter of 2007.
The operations of Renal Care Group (RCG) are included in the Company's consolidated statements of income and cash flows from April 1, 2006, therefore, the current quarter's results are not directly comparable with the first quarter's results for 2006.
Revenue
Net revenue for the first quarter 2007 compared to the first quarter 2006 increased by 33% to $2,321 million (31% at constant currency). Organic revenue growth worldwide was 9%. Dialysis Services revenue grew by 38% to $1,760 million (37% at constant currency) in the first quarter of 2007. Dialysis Product revenue increased by 18% to $560 million (13% at constant currency) in the same period.
North America revenue increased by 37% to $1,637 million. Dialysis Services revenue increased by 40% to $1,483 million. Average revenue per treatment for the U.S. clinics increased by 6% to $329 in the first quarter 2007 compared to $310 for the same quarter in 2006. Dialysis Product revenue increased by 14% to $153 million led by strong sales of our 2008K hemodialysis machines and the phosphate binding drug PhosLo.
International revenue was $684 million, an increase of 24% (17% at constant currency) compared to the first quarter of 2006. Dialysis Services revenue reached $277 million, an increase of 30% (24% at constant currency). Dialysis Product revenue rose by 20% to $407 million (12% at constant currency), led by strong sales of dialyzers and peritoneal dialysis products.
Earnings
Operating income (EBIT) increased by 50% to $365 million compared to $244 in the first quarter 2006. This translates into an operating margin of 15.7%. For the first quarter 2006, the operating margin was 14.0%.
Compared with the first quarter 2006, the operating margin in North America increased by 200 basis points to 15.8%, due to the consolidation of RCG, revenue rate improvements, the new PhosLo business and higher product sales. In the International segment, the operating margin increased by 30 basis points to 17.6%. The continued strong operational performance in the International segment was driven by increased product sales in all regions.
Net interest expense for the first quarter 2007 was $95 million compared to $56 million in the same quarter of 2006. This increase is entirely attributable to the debt financing for the RCG acquisition.
Income tax expense was $103 million for the first quarter of 2007 compared to $71 million in the first quarter of 2006, reflecting effective tax rates of 38.0% and 37.9%, respectively.
Net income for the first quarter 2007 was $160 million, an increase of 38%. Net income increased by 28% when compared to the first quarter 2006 excluding one-time effects in 2006.
Earnings per share (EPS) for the first quarter of 2007 rose by 37% to $1.63 per ordinary share ($0.54 per American Depositary Share (ADS)) compared to $1.19 ($0.40 per ADS) for the first quarter of 2006. The weighted average number of shares outstanding for the first quarter of 2007 was approximately 98.4 million shares compared to 97.8 million shares for the first quarter of 2006. The increase in shares outstanding results from stock option exercises in 2006 and in the first quarter 2007.
Cash Flow
In the first quarter of 2007, the Company generated $283 million in cash from operations, representing 12% of revenue. The strong cash flow generation was primarily supported by increased earnings.
A total of $109 million was spent for capital expenditures, net of disposals. Free Cash Flow before acquisitions was $174 million compared to $97 million in the first quarter of 2006. A total of $90 million in cash was used for acquisitions. Free Cash Flow after acquisitions was $84 million compared to $87 million last year excluding the acquisition of Renal Care Group.
Please refer to the appendix for a complete overview on the first quarter of 2007.
Patients – Clinics – Treatments
As of March 31, 2007, Fresenius Medical Care treated 169,216 patients worldwide, which represents a 27% increase in patients compared to last year. North America provided dialysis treatments for 118,732 patients, an increase of 32%. Including 32 clinics managed by Fresenius Medical Care North America, the number of patients in North America was 120,603. The International segment served 50,484 patients, an increase of 17% over last year.
As of March 31, 2007, the Company operated a total of 2,194 clinics worldwide. This is comprised of 1,574 clinics in North America, an increase of 35%, and 620 clinics in the International segment, an increase of 16%.
Fresenius Medical Care delivered approximately 6.41 million dialysis treatments worldwide, which represents an increase of 28% year over year. North America accounted for 4.48 million treatments, an increase of 33%, and the International segment delivered 1.93 million treatments, an increase of 17% over last year.
Employees
As of March 31, 2007, Fresenius Medical Care employed 59,076 people (full-time equivalents) worldwide compared to 56,803 employees at the end of 2006. The increase of 2,273 employees is primarily due to the acquisition of Jiate Excelsior Co. Ltd. in Taiwan (announced in January 2007) and continued organic growth in the U.S.
Debt/EBITDA ratio
The ratio of debt to Earnings before Interest, Taxes and Amortization (EBITDA) decreased from 3.81 at the end of first quarter of 2006 to 3.09 at the end of the first quarter 2007. At the end of 2006, the debt/EBITDA ratio was 3.23.
Rating
In the first quarter 2007, Standard & Poor's Ratings Services revised its outlook of the Company to stable from negative. At the same time, the ‘BB' long-term corporate credit ratings on Fresenius Medical Care were affirmed. Moody's upgraded Fresenius Medical Care Senior Secured Credit Facility from Ba2 to Ba1.
Fresenius Medical Care Proposes Share Split of 1:3
On March 21, 2007, the Company announced that it will propose a share split for both classes of shares (ordinary and preference) in the ratio of 1:3 at the next Annual General Meeting being held on May 15, 2007. If approved by the Shareholders, the Company expects the split to become effective in the third quarter of 2007.
Outlook for 2007 Confirmed
For the full year 2007, the Company confirms its outlook and expects to achieve revenue of approximately $9.4 billion. This represents an increase of 11%.
Net income is projected to be in the range of $675 million and $695 million in 2007. This represents an increase of between 18% and 21% on an adjusted basis as compared to 2006 after one-time effects. On a reported basis, this translates into an increase in net income of between 26% and 29%.
In addition, the Company expects spending on capital expenditures and acquisitions to be approximately $650 million in 2007. The debt/EBITDA ratio is projected to be below 3.0 by the end of 2007.
Ben Lipps, Chief Executive Officer of Fresenius Medical Care, commented: "We are pleased to again deliver exceptionally strong financial results for the first quarter of 2007. Our strong performance was driven by our continuous quality improvement initiatives at the local clinical level, by cost leadership at the regional level, and by our commitment to advance our strategic objectives at the corporate level. The advantages of being the world's only vertically-integrated dialysis provider are increasingly evident as we compete in the global marketplace."
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Fresenius Medical Care is the world's largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1,500,000 individuals worldwide. Through its network of 2,194 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 169,216 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS/P).
For more information about Fresenius Medical Care visit the Company's website at www.fmc-ag.com.
Fresenius Medical Care
Statement of Earnings see PDF-file
At the Annual General Meeting in Frankfurt, Germany, a large majority of Fresenius Medical Care's shareholders approved the Management and Supervisory Boards' proposal for a share split in the ratio of 1:3. The corresponding resolution was supported by far more than 99 per cent of the represented ordinary share capital. The share split will become effective upon the registration in the commercial register, which is expected in the third quarter of 2007.
After the share split, every holder of an ordinary share will hold three ordinary shares and every holder of a preference share will hold three preference shares. As a result of the share split, the share price will be reduced arithmetically to one third without affecting the overall value for shareholders. The share split is intended to promote trading activity in Fresenius Medical Care shares and to increase the shares' attractiveness for a broader group of investors. The strong performance of the Company in recent years has led to a sharp increase in the share price which is currently one of the highest in Germany's DAX index.
Through a conversion of capital reserves, the subscribed capital of Fresenius Medical Care AG & Co. KGaA is first increased to € 295.2 million. The subscribed capital is then divided into 291,449,373 ordinary shares and 3,720,522 preference shares. The new amount of the subscribed capital will then be € 1.00 per share.
In addition, shareholders of Fresenius Medical Care approved the tenth consecutive dividend increase. Ordinary shareholders will receive € 1.41 per share (prior year: € 1.23) and preference shareholders will receive € 1.47 (prior year: € 1.29). Shareholders discharged Management and Supervisory Board with a large majority of far more than 99 per cent.
At the Annual General Meeting, 74.24 per cent of the ordinary share capital and 5.33 per cent of the preference share capital was represented. Only ordinary shareholders were entitled to vote.
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Fresenius Medical Care is the world's largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1,500,000 individuals worldwide. Through its network of 2,194 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to 169,216 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS/P).
For more information about Fresenius Medical Care visit the Company's website at www.fmc-ag.com.