DGAP-News: Fresenius Medical Care AG&Co. KGaA: Fresenius Medical Care Reports Strong Second Quarter and Half Year Results; confirms Outlook for 2011 and plans to acquire Liberty Dialysis as well as American Access Care

DGAP-News: Fresenius Medical Care AG&Co. KGaA / Key word(s): Half
Year Results
Fresenius Medical Care AG&Co. KGaA: Fresenius Medical Care Reports
Strong Second Quarter and Half Year Results; confirms Outlook for 2011
and plans to acquire Liberty Dialysis as well as American Access Care

02.08.2011 / 07:15

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Contact: Fresenius Medical Care AG&Co. KGaA
Oliver Maier Else-Kröner-Str.1
Phone: + 49 6172 609 2601 61352 Bad Homburg
Fax: + 49 6172 609 2301 Germany
www.fmc-ag.com
North America:
Terry L. Morris
Phone: + 1 800 948 2538
Fax: + 1 615 345 5605

E-mail: ir@fmc-ag.com August 2, 2011

Investor News

Fresenius Medical Care Reports Strong Second Quarter and Half Year Results;
confirms Outlook for 2011 and plans to acquire Liberty Dialysis as well as
American Access Care

2nd Quarter 2011 Summary:

Net revenue                                             $3,194       +8%

                                                       million

Operating income (EBIT)                            $510 million      +9%

Net income attributable to Fresenius Medical Care  $261 million      +5%

AG&Co. KGaA

Earnings per share                                       $0.86       +4%

First Half 2011 Summary:

Net revenue                                             $6,230       +7%

                                                       million

Operating income (EBIT)                            $955 million      +7%

Net income attributable to Fresenius Medical Care  $481 million      +5%

AG&Co. KGaA

Earnings per share                                       $1.59       +4%

Bad Homburg, Germany – Fresenius Medical Care AG&Co. KGaA (–the company–
or –Fresenius Medical Care–; Frankfurt Stock Exchange: FME / New York Stock
Exchange: FMS), the world–s largest provider of dialysis products and
services, today announced its results for the second quarter and first half
of 2011.

2nd Quarter 2011:

Revenue

Net revenue for the second quarter of 2011 increased by 8% to $3,194
million (+5% at constant currency) compared to the second quarter of 2010.
Organic revenue growth worldwide was 3%. Dialysis services revenue grew by
6% to $2,362 million (+4% at constant currency) and dialysis product
revenue increased by 15% to $832 million (+7% at constant currency).

North America revenue for the second quarter of 2011 was at the same level
as the corresponding quarter last year at $2,027 million including the
impact of the new Medicare end-stage renal disease prospective payment
system in the United States. Dialysis services revenue grew by 1% to $1,828
million with a same market growth of 3%. Average revenue per treatment for
U.S. clinics decreased to $348 in the second quarter of 2011 compared to
$356 for the corresponding quarter in 2010 reflecting the targeted
implementation of the new prospective payment system. Dialysis product
revenue decreased by 5% to $199 million, as increased sales of dialysis
products could not entirely offset lower pricing of renal drugs.

International revenue increased by 26% to $1,163 million(+15% at constant
currency). Organic revenue growth was 8%. Dialysis services revenue
increased by 31% to $534 million (+20% at constant currency). Dialysis
product revenue increased by 23% to $629 million and increased by 11% at
constant currency, mainly driven by higher sales of peritoneal dialysis
products, dialyzers, products for acute care treatments and dialysis
machines.
Earnings

Operating income (EBIT) for the second quarter of 2011 increased by 9% to
$510 million compared to $467 million in the second quarter of 2010. This
resulted in an operating margin of 16.0% for the second quarter of 2011
compared to 15.8% for the corresponding quarter in 2010.

In North America, the operating margin increased from 16.4% in the second
quarter of 2010 to 17.2% in the second quarter of 2011. This increase was
mainly favorably influenced by the development of pharmaceutical costs and
higher income from the joint venture with Vifor Pharma. Average costs per
treatment for U.S. clinics decreased to $283 in the second quarter of 2011
compared to $292 for the corresponding quarter in 2010.

In the International segment, the operating margin decreased from 18.8% to
17.5% mainly due to unfavorable currency effects.

Net interest expense for the second quarter of 2011 was $75 million
compared to $68 million in the second quarter of 2010. This development was
mainly attributable to a higher debt level.

Income tax expense was $149 million for the second quarter of 2011 compared
to $129 million in the second quarter of 2010. The effective tax rate
increased to 34.2% from 32.4% mainly as a result of the positive effect in
the second quarter of 2010 of the release of a $10 million valuation
allowance.

Net income attributable to Fresenius Medical Care AG&Co. KGaA for the
second quarter of 2011 was $261 million, an increase of 5% compared to the
corresponding quarter of 2010. Net income increased by 10% if adjusted by
the positive tax effect in the second quarter of 2010.

Earnings per share (EPS) for the second quarter of 2011 rose by 4% to $0.86
per ordinary share compared to $0.83 for the second quarter of 2010. The
weighted average number of shares outstanding for the second quarter of
2011 was approximately 302.5 million shares compared to 300.0 million
shares for the second quarter of 2010. The increase in shares outstanding
resulted from stock option exercises in the past 12 months.

Cash flow

In the second quarter of 2011, the company generated $311 million in cash
from operations, accomplishing the targeted 10% of revenue. The cash flow
generation was supported by increased earnings and negatively influenced by
an unfavorable development of days sales outstanding (DSO) and raised
inventory levels.

A total of $117 million in cash was spent for capital expenditures, net of
disposals. Free cash flow before acquisitions was $194 million compared to
$175 million in the second quarter of 2010. A total of $784 million in cash
was spent for acquisitions and investments, net of divestitures.

Free cash flow after acquisitions, investments and divestitures was -$590
million compared to -$26 million in the second quarter of 2010. This
reflects the cash outflow related to the closing of the acquisition of
Euromedic–s dialysis service business.

First Half 2011:

Revenue and Earnings

Net revenue for the first half of 2011 increased by 7% to $6,230 million
(+5% at constant currencies) compared to the first half of 2010. Organic
revenue growth was 3% in the first half of 2011.

Operating income (EBIT) for the first half of 2011 increased by 7% to $955
million compared to $892 million in the first half of 2010. The operating
income margin remained constant at 15.3% for the first half of 2011 as
compared to the same period in 2010.

Net interest expense for the first half of 2011 was $146 million compared
to $135 million in the same period of 2010.

Income tax expense for the first half of 2011 was $273 million compared to
$257 million in the same period in 2010, reflecting effective tax rates of
33.8% and 33.9%, respectively.

For thefirst half of 2011, net income attributable to Fresenius Medical
Care AG&Co. KGaA was $481 million, up by 5% from the first half of 2010.

In the first half of 2011, earnings per ordinary share rose by 4% to $1.59.
The weighted average number of shares outstanding during the first half of
2011 was approximately 302.4 million.

Cash Flow

Cash from operations during the first half of 2011 was $487 million
compared to $643 million for the same period in 2010, representing
approximately 8% of revenue.

A total of $231 million in cash was spent for capital expenditures, net of
disposals. Free cash flow before acquisitions for the first half of 2011
was $256 million compared to $425 million in the same period in 2010. A
total of $1,122 million in cash was spent for acquisitions, net of
divestitures. Free cash flow after acquisitions and divestitures was -$866
million compared to $142 million in the first half of last year.

Please refer to the attachments for a complete overview on the second
quarter and first half of 2011 and the reconciliation of non-GAAP financial
measures included in this release to the most comparable GAAP financial
measures.

Patients – Clinics – Treatments

As of June 30, 2011, Fresenius Medical Care treated 225,909 patients
worldwide, which represents a 12% increase compared to the previous year–s
figure. North America provided dialysis treatments for 139,906 patients, an
increase of 4%. Including 23 clinics managed by Fresenius Medical Care
North America, the number of patients in North America was 141,420. The
International segment provided dialysis treatments to 86,003 patients, an
increase of 28% over the prior year–s figure.

As of June 30, 2011, the company operated a total of 2,838 clinics
worldwide, which represents a 10% increase compared to the previous year–s
figure. The number of clinics is comprised of 1,826 clinics in North
America (1,849 including managed clinics), and 1,012 clinics in the
International segment, representing an increase of 2% and 26%,
respectively.

During the first half of 2011, Fresenius Medical Care delivered
approximately 16.56 million dialysis treatments worldwide. This represents
an increase of 9% compared to last year–s figure. North America accounted
for 10.62 million treatments, an increase of 4%. The International segment
delivered 5.94 million treatments, an increase of 18%.

Employees

As of June 30, 2011, Fresenius Medical Care had 77,081 employees (full-time
equivalents) worldwide compared to 73,452 employees at the end of 2010.
This increase of more than 3,600 employees is due to overall growth in the
company–s business and acquisitions.

Debt/EBITDA ratio

The ratio of debt to Earnings before interest, taxes, depreciation and
amortization (EBITDA) increased from 2.46 at the end of the second quarter
of 2010 to 2.77 at the end of the second quarter of 2011. The debt/EBITDA
ratio at the end of 2010 was 2.38.

Rating

Standard&Poor–s Ratings Services rates the company–s corporate credit as
–BB– with a –positive– outlook. Moody–s rates the company–s corporate
credit as –Ba1– with a –stable– outlook, and Fitch rates the company–s
corporate credit as –BB– with a –positive– outlook. For further information
on Fresenius Medical Care–s credit ratings, maturity profiles and credit
instruments, please visit our website at www.fmc-ag.com / Investor
Relations / Credit Relations.

Acquisition of Euromedic–s dialysis service business completed

On July 1, 2011, Fresenius Medical Care announced that it has completed the
acquisition of Euromedic–s dialysis service business effective June 30,
2011. This follows final regulatory approvals by the relevant antitrust
authorities except Portugal, where the review by the relevant antitrust
authority is still ongoing.

Acquisition of Liberty Dialysis Holdings, Inc.

Fresenius Medical Care has executed a merger agreement with Liberty
Dialysis Holdings, Inc., the holding company for Liberty Dialysis and Renal
Advantage. The investment, including assumed debt, will be approximately
$1.7 billion. In addition, Fresenius Medical Care previously invested
approximately $300 million in Renal Advantage. The merger is subject to
clearance under the Hart-Scott-Rodino Antitrust Improvements Act and is
expected to close in early 2012. Liberty Dialysis Holdings, Inc. has annual
sales of approximately $1 billion and operates approximately 260 dialysis
clinics. Fresenius Medical Care anticipates that facilities may need to be
divested to secure regulatory clearance of the transaction. The transaction
will be financed from cash flow from operations and debt and is expected to
be accretive to earnings in the first year after closing of the
transaction.

Rice Powell, chief executive officer of Fresenius Medical Care North
America and deputy chairman of Fresenius Medical Care, commented: –We are
very pleased with this agreement. Both companies, Liberty Dialysis and
Fresenius Medical Care, have three key assets in common: a strong
commitment to continuous quality improvement, dedicated and
highly-motivated staff and excellent physician partners.–

Mark Caputo, chief executive officer and president of Liberty Dialysis
Holdings, Inc, commented: –This combination of Liberty–s model of
integrating physicians into the clinical and operational management of the
facilities with Fresenius Medical Care–s focus on technology and experience
with integrated delivery systems clearly gives us an opportunity to create
a superior platform for innovation in the delivery of services and products
and will further enhance the lives of patients entrusted to our care and
reduce costs for the healthcare system.–

Acquisition of American Access Care

Fresenius Medical Care has executed an agreement to acquire the U.S. based
company American Access Care Holdings, LLC (AAC) for $385 million. AAC
operates 28 freestanding out-patient centers primarily dedicated to serving
vascular access needs of dialysis patients. Fresenius Medical Care
currently operates 13 vascular access centers. The transaction is subject
to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and is
expected to close in the fourth quarter of 2011. On completion, the
acquired operations would add approximately $175 million in annual revenue
and are expected to be accretive to earnings in the first year after
closing of the transaction. The transaction will be financed from cash flow
from operations and debt.

The acquisition enables Fresenius Medical Care to achieve critical mass in
its vascular access business and has strategic importance by virtue of the
scale, resources and operational efficiency it brings to its vascular
access operations, particularly when considering the U.S. Government–s
proposal to include the type of access and the frequency of access-related
infections within the quality outcome component of the dialysis bundled
reimbursement system by 2014.

Sales and earnings outlook for 2011 confirmed

For the full year 2011, the company confirms its sales and earnings
outlook.

Revenue is expected to grow to above $13 billion.

Net income attributable to Fresenius Medical Care AG&Co. KGaA is expected
to be between $1.070 billion and $1.090 billion.

For 2011, the company expects to spend around 5% of revenue on capital
expenditures and approximately $1.9 billion on acquisitions. Previously the
company expected to spend approximately $1.2 billion on acquisitions. The
debt/EBITDA ratio is expected to be below 3.0 by the end of 2011
(previously below or equal to 2.8).

–Thanks to a consistent focus on quality, sustainable growth and expense
control, we have maintained a strong operational performance this second
quarter. We are particularly pleased with the success of our international
region, given a persistently challenging business environment with the
current debt crisis worldwide and the successful expansion of our clinic
network in Asia-Pacific and Europe. North America continued to improve its
operating margin and successfully cope with the challenges of the ongoing
implementation of the new Medicare end-stage renal disease prospective
payment system–, said Dr. Ben Lipps, chief executive officer of Fresenius
Medical Care. –Our acquisitions of Liberty Dialysis and American Access
Care in the U.S. are important steps in our strategy of expanding our
service network to achieve excellent patient care in a more cost effective
integrated model.–
Conference call

Fresenius Medical Care will hold a conference call to discuss the results
of the second quarter and first half of 2011 on Tuesday, August 2, 2011, at
3:30 p.m. CEDT / 9:30 a.m. EDT. The company invites investors to view the
live webcast of the call at the company–s website www.fmc-ag.com in the
–Investor Relations– section. A replay will be available shortly after the
call.

The full version of this news is available on our website www.fmc-ag.com.

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 2 million
individuals worldwide. Through its network of 2,838 dialysis clinics in
North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius
Medical Care provides dialysis treatment to 225,909 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.

Disclaimer
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.

End of Corporate News

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02.08.2011 Dissemination of a Corporate News, transmitted by DGAP – a
company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

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Language: English
Company: Fresenius Medical Care AG&Co. KGaA
Else-Kröner-Straße 1
61352 Bad Homburg
Germany
Phone: +49 (0) 6172- 609 2525
Fax: +49 (0) 6172- 609 2301
E-mail: ir@fmc-ag.com
Internet: www.fmc-ag.de
ISIN: DE0005785802, DE0005785836,
WKN: 578580, 578583
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover,
München, Stuttgart; Terminbörse EUREX; NYSE

End of News DGAP News-Service
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