Successful 2008 / Financial targets fully met or exceeded

Positive outlook for 2009

(PresseBox) ( Bad Homburg, )
- Sales € 12.3 billion, +9 % at actual rates, +13 % in constant currency
- Adjusted EBIT € 1.7 billion, +7 % at actual rates, +11 % in constant currency
- Adjusted net income € 450 million, +10 % at actual rates, +13 % in constant currency
- Sales and earnings growth across all business segments
- Continued excellent growth in Q4/08
- Long-term acquisition financing of APP Pharmaceuticals successfully finalized
- 16th consecutive dividend increase
- Substantial sales and earnings growth expected for 2009

The Group's US GAAP annual financial results as of December 31, 2008 include special items relating to the acquisition of APP Pharmaceuticals. The single-largest of those items is the full depreciation of acquired in-process R&D activities, leading to a non-cash charge of € 272 million. Under IFRS, acquired in-process R&D is capitalized and amortized over the expected life of the developed products. IFRS and US GAAP financial statements therefore differ significantly. The IFRS approach has been adopted by US GAAP as from 2009.

Adjusted earnings represent the Group's business operations in the reporting period. Including special items, EBIT is € 1,477 million and net income is € 270 million (see reconciliation on page 4). Under IFRS, EBIT is € 1,760 million and net income is € 529 million.

Dividend increase proposed

Based on the excellent financial results the Management Board will propose to the Supervisory Board a dividend increase of 6 % to € 0.70 per ordinary share (2007: € 0.66) and € 0.71 per preference share (2007: € 0.67). The total dividend distribution increases by 10 % to € 113.6 million.

Positive outlook for 2009: Substantial sales and earnings growth expected

For 2009, Fresenius projects further improvements in its financial results: Group sales are expected to grow by more than 10 % in constant currency. Organic growth is projected to be in a 6 to 8 % range. Adjusted net income (before special items) is expected to increase by aproximately 10 % in constant currency. The special items relate to the mark-to-market accounting of both the mandatory exchangeable bond (MEB) and the contingent value right (CVR) and are not cash relevant.

The Group plans to invest € 700 to 750 million in property, plant and equipment (2008: € 764 million).

Sales growth of 13 % in constant currency

Group sales increased by 13 % in constant currency and by 9 % at actual rates to € 12,336 million (2007: € 11,358 million). Organic sales growth was 8 %. Acquisitions contributed a further 5 %, mainly driven by the consolidation of APP as from September 1, 2008. Currency translation had a negative impact of 4 %. This is mainly attributable to the average US dollar rate depreciating 7 % against the Euro.

Strong earnings growth

Adjusted Group EBITDA increased by 12 % in constant currency and by 9 % at actual rates to € 2,203 million (2007: € 2,030 million). Adjusted Group operating income (EBIT) grew by 11 % in constant currency and by 7 % at actual rates to € 1,727 million (2007: € 1,609 million). The Group's adjusted EBIT margin was 14.0 % (2007: 14.2 %). Adjusted Group EBIT includes a € 8 million non-cash charge related to the amortization of acquired intangible assets. Group EBIT (including special items) was € 1,477 million.

Group net interest was € -431 million (2007: € -368 million). Lower average interest rates on liabilities of Fresenius Medical Care and currency translation effects had a positive impact. This was offset by incremental debt relating to the acquisitions of APP Pharmaceuticals and Dabur Pharma.

The adjusted Group tax rate was 34.1 % (2007: 36.1 %). The Group tax rate including special items was 39.5 %.

Minority interest increased to € 404 million (2007: € 383 million), of which 93 % was attributable to the minority interest in Fresenius Medical Care.

Adjusted Group net income grew by 13 % in constant currency and by 10 % at actual rates to € 450 million (2007: € 410 million). Adjusted earnings per ordinary share increased to € 2.85 and adjusted earnings per preference share increased to € 2.86 (2007: ordinary share € 2.64, preference share € 2.65). This represents an increase of 11 % for both share classes in constant currency.

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