PresseBox
Press release BoxID: 170337 (Fresenius AG (SE))
  • Fresenius AG (SE)
  • Else-Kröner-Straße 1
  • 61352 Bad Homburg
  • http://www.fresenius.de
  • Contact person
  • Silke Schmiedel
  • +49 (6172) 608-2302

Q1 2008: Successful start into 2008

(PresseBox) (Bad Homburg v.d.H, ) - Sales € 2.8 billion, +1 % at actual rates, +8 % in constant currency
- EBIT € 377 million, -1 % at actual rates, +7 % in constant currency
- Net income € 100 million, +8 % at actual rates, +13 % in constant currency
- Excellent growth in constant currency
- Currency impact based on translational effects
- Significant progress in generic I.V. drug strategy
- All business segments fully on track - Guidance for 2008 confirmed

Outlook for 2008 confirmed

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

Sales growth of 8 % in constant currency

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

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

Excellent net income growth

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

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

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

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

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

Substantial investments in growth

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

Sustainable cash flow development

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

Solid balance sheet

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

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

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

Number of employees increased

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

Fresenius Biotech

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

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

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

The Business Segments

Fresenius Medical Care

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

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

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

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

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

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

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

Fresenius Kabi

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

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

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

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

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

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

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

Fresenius Helios

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

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

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

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

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

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

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

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

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

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

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

Analyst Conference Call and Audio Webcast

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