First half 2008: Strong financial results

(lifePR) ( Bad Homburg v.d.H, )
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- Sales € 5.7 billion, +2 % at actual rates, +9 % in constant currency
- EBIT € 781 million, +0 % at actual rates, +8 % in constant currency
- Net income € 212 million, +9 % at actual rates, +14 % in constant currency
- Excellent sales and earnings growth in constant currency
- Strong financial results in all business segments with high organic sales growth
- All business segments fully on track to achieve full-year guidance

Compared to the preliminary figures announced on July 17, 2008, Group EBIT improved by € 1 million to € 781 million and net income by € 1 million to € 212 million.

Outlook for 2008 confirmed

Based on the Group's excellent financial results in the first half 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 9 % in constant currency

Group sales increased by 9 % in constant currency and by 2 % at actual rates to € 5,710 million (H1 2007: € 5,592 million). Organic sales growth was 6 %. 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 rate depreciating 15 % against the euro in the first half of 2008 compared to previous year's period.

Strong earnings growth

Group EBITDA increased by 10 % in constant currency and by 2 % at actual rates to € 998 million (H1 2007: € 977 million). Group operating income (EBIT) grew by 8 % in constant currency to € 781 million (H1 2007: € 780 million). At actual rates EBIT was on previous year's level. The Group's EBIT margin was 13.7 % (H1 2007: 13.9 %).

Group net interest improved to € -167 million (H1 2007: € -185 million) mainly due to lower average interest rates of Fresenius Medical Care's debt and currency translation effects.

The Group tax rate was 34.9 % (H1 2007: 36.0 %).

Minority interest increased slightly to € 188 million (H1 2007: € 186 million), of which 93 % was attributable to the minority interest in Fresenius Medical Care.

Group net income grew by 14 % in constant currency and by 9 % at actual rates to € 212 million (H1 2007: € 195 million). Earnings per ordinary share increased to € 1.36 and earnings per preference share increased to € 1.37 (H1 2007: ordinary share € 1.26, preference share € 1.27). This represents an increase of 8 % for both share classes.

Continued investments in growth

Fresenius Group spent € 332 million for property, plant and equipment and intangible assets (H1 2007: € 302 million). Acquisition spending was € 292 million (H1 2007: € 223 million).

Sustainable cash flow development

Operating cash flow decreased to € 481 million (H1 2007: € 553 million) due to the higher working capital requirements. The cash flow margin was 8.4 % (H1 2007: 9.9 %). Cash flow before acquisitions and dividends was € 149 million (H1 2007: € 258 million) mainly due to net capital expenditure increasing to € 332 million (H1 2007: € 295 million). Free cash flow after net acquisitions (€ 224 million) and dividends (€ 218 million) was € -293 million (H1 2007: € -94 million).

Solid balance sheet

Fresenius Group's total assets increased by 5 % in constant currency and by 1 % at actual rates to € 15,491 million (December 31, 2007: € 15,324 million). Current assets increased by 8 % in constant currency and by 5 % at actual rates to € 4,505 million (December 31, 2007: € 4,291 million). Non-current assets were € 10,986 million (December 31, 2007: € 11,033 million).

Shareholders' equity including minority interest increased by 4 % in constant currency to € 6,073 million (December 31, 2007: € 6,059 million). The equity ratio (including minority interest) was 39.2 % (December 31, 2007: 39.5 %).

Group debt increased by 2 % at actual rates to € 5,805 million (December 31, 2007: € 5,699 million). In constant currency, Group debt increased by 5 %. As of June 30, 2008, the net debt/EBITDA ratio was 2.7 (December 31, 2007: 2.6).

Number of employees increased

As of June 30, 2008, Fresenius increased the number of its employees by 3 % to 117,453 (December 31, 2007: 114,181). The growth was mainly attributable to Fresenius Kabi and 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.

Orphan Drug Designation was achieved in Switzerland for the antibody Removab in the indications malignant ascites, gastric cancer and ovarian cancer. The Swiss Agency for therapeutic products (Swiss Medic) grants the Orphan Drug Designation to medicinal products used for rare, life-threatening or chronic diseases that affect no more than five in every 10,000 people in Switzerland and for which no sufficient effective treatment exists.

The registration process for Removab in Europe in the indication malignant ascites is proceeding according to plan. Fresenius Biotech dispatched the marketing authorization application to the European Medicines Agency (EMEA) in December 2007.

Fresenius Biotech's EBIT was € -20 million (H1 2007: € -20 million). For 2008, Fresenius Biotech expects an EBIT of approximately € -50 million.
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