Fresenius Se & Co. Kgaa · XETR:FRE

Fresenius Se & Co. Kgaa — Fresenius — FY2005 Earnings Presentation

45 slides from Fresenius Se & Co. Kgaa's earnings presentation, Feb 22, 2006

1. Slide 1: 2005 – An Outstanding Year

   2005 – An Outstanding Year Analyst Meeting February 22, 2006 1

2. Slide 2: Agenda

   Agenda I. Business Update - Fresenius Group - Dividend Proposal - Fresenius Kabi - Fresenius ProServe - Fresenius Biotech II. Financial Year 2005 III. Outlook 2006 © Fresenius AG | 2

3. Slide 3: 2005 – An Outstanding Year

   2005 – An Outstanding Year Important strategic steps and Excellent financial results © Fresenius AG | 3

4. Slide 4: Important Strategic Steps to Ensure Continued Growth

   Important Strategic Steps to Ensure Continued Growth Fresenius Medical Care: ƒ Strengthen leading position in dialysis Agreement to acquire Renal Care Group Fresenius Medical Care: ƒ Improved liquidity of ordinary shares Transformation into KGaA and ƒ Retain management control conversion of preferen

5. Slide 5: Fresenius Group: Excellent Financial Performance

   Fresenius Group: Excellent Financial Performance Sales EBIT Net income FY 2005 7,889 €m 969 €m 222 €m Growth at constant +8% + 14 % + 31 % currency rates Growth at actual +8% + 15 % + 32 % currency rates © Fresenius AG | 5

6. Slide 6: Business Segments: Growth in All Business Segments

   Business Segments: Growth in All Business Segments Fresenius Fresenius Fresenius Medical Care Kabi ProServe Sales 6,772 US$m 1,681 €m 809 €m Growth +9% + 13 % + 5 % organic EBIT 939 US$m 234 €m 20 €m Growth + 10 % + 33 % + 122 % ƒ Fresenius Medical Care - Europe and US are key growth and margin driv

7. Slide 7: Fresenius Group: Strong Track Record of Growth

   Fresenius Group: Strong Track Record of Growth Sales EBIT €m €m 10,000 1,200 7,889 1,000 969 8,000 800 6,000 % % : 17 : 23 GR GR 600 4,000 CA CA 400 1,895 2,000 200 152 0 0 1996 2005 1996 2005 1996-2000 German GAAP © Fresenius AG | 7

8. Slide 8: 13th Consecutive Dividend Increase Proposed

   Fresenius AG: 13th Consecutive Dividend Increase Proposed ƒ Continue profit-driven € 1.60 1.51 dividend strategy 1.38 1.40 1.26 1.17 ƒ Proposed dividend: 1.20 0.96 1.06 1.00 € 1.48 per ordinary share 0.80 € 1.51 per preference share 0.80 0.57 0.56 0.60 0.50 ƒ ~ 10 % increase per share 0.40 0.20 ƒ To

9. Slide 9: Fresenius Kabi

   Fresenius Kabi ¥ Fresenius © Fresenius AG | 9

10. Slide 10: Fresenius Kabi: An Outstanding Year 2005

    Fresenius Kabi: An Outstanding Year 2005 ƒ Strong increase in sales – in all product segments and regions ƒ Excellent earnings performance driven by sales and production efficiencies, cost discipline and accretive acquisitions ƒ Two key strategic acquisitions successfully closed ƒ Integration of Lab

11. Slide 11: Fresenius Kabi: Sales FY 2005

    Fresenius Kabi: Sales FY 2005 €m 2005 2004 Organic Growth Total Sales 1,681 1,491 7% By Product Segment: Infusion Therapy 895 759 7% Clinical Nutrition 674 624 8% Transfusion Technology 112 108 1% © Fresenius AG | 11

12. Slide 12: Fresenius Kabi: Excellent EBIT Performance

    Fresenius Kabi: Excellent EBIT Performance €m 2005 2004 Change EBIT 234 176 33 % EBIT margin 13.9 % 11.8 % Net income 111 79 41 % EBIT by Region: Europe 216 172 26 % EBIT margin 17.6 % 15.5 % International 74 55 35 % EBIT margin 16.2 % 14.6 % Corporate and Corporate R&D - 56 - 51 10 % © Fresenius AG

13. Slide 13: Fresenius Kabi: Initiatives for Continued Growth

    Fresenius Kabi: Initiatives for Continued Growth ƒ Focus on organic growth and on selective acquisitions to expand regional presence and product portfolio ƒ Achieve international product roll-out in medical devices and generic I.V. drugs – benefit from market access and established hospital distribu

14. Slide 14: Fresenius Kabi: 2006 Financial Outlook

    Fresenius Kabi: 2006 Financial Outlook Revenue growth ~ 10 % at constant currency EBIT margin 14.5 – 15.0 % © Fresenius AG | 14

15. Slide 15: Fresenius ProServe

    ¥ Fresenius resenius

16. Slide 16: Fresenius ProServe: Renewed Strategic Focus

    Fresenius ProServe: Renewed Strategic Focus ƒ Acquisition of HELIOS closed on December 22, 2005 ƒ Integration of WKA into the HELIOS Group fully on track ƒ WKA clinics already integrated into HELIOS´regional structure ƒ Review of processes and medical portfolio ongoing ƒ Integration of administrativ

17. Slide 17: HELIOS: Key Figures FY 2005

    HELIOS: Key Figures FY 2005 €m 2005 2004 Change US-GAAP IFRS IFRS Sales 1,200 1,161 3% 1,200 (IFRS) EBIT 105 95 13 % 107 (IFRS) EBIT margin 8.8 % 8.2 % Net income 67 66 5% 69 (IFRS) © Fresenius AG | 17

18. Slide 18: Fresenius ProServe: Key Figures FY 2005

    Fresenius ProServe: Key Figures FY 2005 €m 2005 2004 Growth Sales 809 813 5 % (organic) - Hospital Management (WKA) 350 343 2% - Hospital Engineering + Services (VAMED) 377 352 7% - Pharmaceutical Engineering + Services (Pharmaplan) 82 79 4% - Others (sold/closed in 2004) 0 39 - EBIT 20 9 122 % Net

19. Slide 19: Fresenius ProServe: 2006 Financial Outlook

    Fresenius ProServe: 2006 Financial Outlook Organic revenue Based on 2005 sales incl. HELIOS of 2,009 €m 1-3% growth EBIT 140 - 150 €m © Fresenius AG | 19

20. Slide 20: Fresenius Biotech

    ¥ Fresenius Fresenius Biotech LO ee

21. Slide 21: Fresenius Biotech: Project Portfolio

    Fresenius Biotech: Project Portfolio Phase of development Commer- Pre- R&D Phase I Phase II Phase III cialization Project Clinical & Phase IV ATG ATG SCT Study ATG USA Malignant Ascites (removab®) Ovarian Cancer (removab®) Peritoneal Carcinoma (removab®) Breast Cancer (rexomun™ ) NSCLC (removab®) Pl

22. Slide 22: Fresenius Biotech: 2005 / 2006 EBIT Results

    Fresenius Biotech: 2005 / 2006 EBIT Results EBIT 2005 -40.6 €m EBIT 2006 Outlook -45 to -50 €m © Fresenius AG | 22

23. Slide 23: Fresenius Group: Long-term Growth Strategy

    Fresenius Group: Long-term Growth Strategy ƒ Focus on sustainable organic sales growth supported by demographics and strong demand for life-saving / life-sustaining products and services ƒ Target additional growth through selective acquisitions to strengthen regional presence and product portfolio ƒ

24. Slide 24: Group Financials FY 2005

    Group Financials FY 2005 24

25. Slide 25: Fresenius Group: 2005 – New Records Achieved

    Fresenius Group: 2005 – New Records Achieved Target Result Revenue growth at constant currency 6–9% 8% Net income growth > 25 % 31 % at constant currency Capital expenditure ~ 350 €m 353 €m ! Net Debt / EBITDA 2.5 2.3 © Fresenius AG | 25

26. Slide 26: Currency Development

    Currency Development US$ / € 1.40 YE 1.3621 1.35 1.30 Ø 1.2439 Ø 1.2442 1.25 YE 1.1797 1.20 1.15 2004 2005 © Fresenius AG | 26

27. Slide 27: Fresenius Group: Sales Growth Analysis FY 2005

    Fresenius Group: Sales Growth Analysis FY 2005 -1% +2% Organic Growth: + 7 % Fresenius Medical Care 7% 8% + 7 % Fresenius Kabi + 5 % Fresenius ProServe Organic Acquisi- Divesti- FX Reported Growth tions tures © Fresenius AG | 27

28. Slide 28: Fresenius Group: Profit and Loss Statement

    Fresenius Group: Profit and Loss Statement €m 2005 2004 Change Change actual constant rates rates Sales 7,889 7,271 +8 % +8 % 7 % organic growth significantly stronger increase EBIT 969 845 +15 % +14 % than sales lower debt levels and interest Interest result -203 -209 +3 % +3 % rates favorable end

29. Slide 29: Fresenius Group: Cash Flow

    Fresenius Group: Cash Flow €m 2005 2004 Change Cash flow 789 718 10 % strong net income growth influenced by FME tax Change in Working capital -9 133 payment Operating Cash flow 780 851 -8 % Capex (net) -331 -286 -16 % Cash flow 449 565 -21 % (before acquisitions and dividends) Acquisitions (net) -1

30. Slide 30: Fresenius Group: Capex and Acquisitions

    Fresenius Group: Capex and Acquisitions Capex and Acquisitions Capex by Business Segment €m 2,247 Fresenius Kabi , 1600 ƒ PPE/ 22 % intangible assets , 1400 Fresenius ProServe ƒ Acquisitions // Fresenius Medical Care 3% , 1200 ƒ HELIOS 72 % Corporate 3% 1000 800 Capex by Region 600 400 North America

31. Slide 31: Fresenius Group: Solid Balance Sheet Structure

    Fresenius Group: Solid Balance Sheet Structure Assets Equity + Liabilities Equity + Minority 44 % 41 % interests Non-current assets 70 % 66 % 30% 33% Debt Receivables 16 % 19 % 26% 26% Other Other 14 % 15 % YE 05 YE 04 YE 05 YE 04 B/S total (€m) 11,594 8,188 11,594 8,188 © Fresenius AG | 31

32. Slide 32: Fresenius Group: Debt and Interest Ratios

    Fresenius Group: Debt and Interest Ratios YE 2005 YE 2004 Net debt / EBITDA 4.0 Debt (€m) 3,502 2,735 3.5 3.2 Net debt (€m) 3,250 2,595 3.0 3.0 2.7 Target: Net debt/EBITDA 2.3 2.2 < 3.0 2.5 2.4 2.3 2.3 2.2 2.1 EBITDA/Interest 6.3 5.6 2.0 YE01 YE02 YE03 YE04 31.3.05 30.6.05 30.9.05 YE 05 YE06* YE 08*

33. Slide 33: Fresenius Group: 2005 Key Figures According to IFRS

    Fresenius Group: 2005 Key Figures According to IFRS in €m 2005 2005 US GAAP IFRS Sales 7,889 7,889 EBIT 969 967 Interest result -203 -203 Net income 222 222 Operating Cash flow 780 784 Balance sheet total 11,594 11,602 © Fresenius AG | 33

34. Slide 34: Impact of Acquisition / Financing Related One-time Expenses and Accounting Change in 2006

    Fresenius Group: Impact of Acquisition / Financing Related One-time expenses and Accounting Change in 2006 Group Financial Statements (€m) EBIT Interest Net income Renal Care Group integration costs -40 -9 Accounting change – stock options SFAS 123R -14 -7 Early redemption costs Fresenius 2003 Bond

35. Slide 35: Fresenius Group: 2006 Financial Outlook

    Fresenius Group: 2006 Financial Outlook Target Revenue at constant currency ~ 10.5 €bn Revenue growth ~ 30 % Net income growth at constant currency > 30 % Earnings per share growth ~ 10 % at constant currency Capital expenditure 550 - 600 €m © Fresenius AG | 35

36. Slide 36: Attachments

    Attachments ¥ Fresenius 36

37. Slide 37: Fresenius Group: Sales Growth in Major Geographic Areas

    Fresenius Group: Sales Growth in Major Geographic Areas Growth Sales distribution 2005 2004 at constant €m €m currency Asia-Pacific Europe 3,032 2,802 8% 7 % Africa North America 3,746 3,478 8% 3% Latin America Asia-Pacific 557 547 0% 5% Europe 38 % Latin America 354 272 20 % Africa 200 172 16 % ƒ F

38. Slide 38: Kabi: Sales Growth in All Regions

    Fresenius Kabi: Sales Growth in All Regions Sales growth analysis: Regional Sales 2005 2004 Growth Organic Strong 7 % organic growth €m €m Growth in % yoy FY 2005 sales: 1,681 €m Germany 405 401 1% 1% -1 +5 Europe ex Germany 819 712 15 % 5% +2 Asia-Pacific 183 157 17 % 15 % + 13 Latin America 101 79

39. Slide 39: Fresenius Kabi: P & L

    Fresenius Kabi: P & L €m 2005 2004 Sales 1,681 1,491 Cost of goods sold -968 872 Gross profit 713 619 ƒ Production improvements % 42.4 41.5 ƒ Product mix SG&A -415 387 ƒ Cost discipline % 24.7 25.9 ƒ Leverage on existing structure R&D expenses 64 56 ƒ Increasing R&D initiatives % 3.8 3.8 EBIT 234 17

40. Slide 40: Fresenius Kabi: P & L (cont’d)

    Fresenius Kabi: P & L (cont’d) €m 2005 2004 EBIT 234 176 EBIT margin % 13.9 11.8 Net interest 51 46 ƒ Slightly higher interest rate due to acquisition spending Earnings before taxes and 183 130 minority interests Income taxes 65 44 Tax rate % 36 34 Minority interests 7 7 ƒ Joint venture in China Net

41. Slide 41: Fresenius Kabi: Cash Flow

    Fresenius Kabi: Cash Flow €m 2005 2004 Net income (incl. minority interests) 118 86 ƒ 37 % increase Depreciation / amortization 84 82 Working capital +35 +2 ƒ Positive DSO development Cash flow from operations 237 170 ƒ Strong cash generation Margin % 14.0 11.4 CAPEX, net 70 49 Free cash flow 167 12

42. Slide 42: Fresenius Kabi: Balance Sheet

    Fresenius Kabi: Balance Sheet €m YE YE 2005 2004 Accounts receivable 400 354 ƒ DSO (Dec 31, 05): 86 Inventories 278 243 ƒ SOI (Dec 31, 05): 114 Fixed assets 936 707 ƒ Goodwill (Dec 31, 05): 426 €m Other assets 253 214 Total assets 1,867 1,518 ƒ + 23 %; thereof 19 % due to acquisitions Debt 903 709 O

43. Slide 43: Fresenius ProServe: Pro-forma Key Figures incl. HELIOS

    Fresenius ProServe: Pro-forma Key Figures incl. HELIOS €m 2005 Sales 2,009 - Hospital Management (HELIOS + WKA) 1,550 - Hospital Engineering + Services (VAMED) 377 - Pharmaceutical Engineering + Services 82 (Pharmaplan) EBIT 125 © Fresenius AG | 43

44. Slide 44: Fresenius

    Fresenius This presentation 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,

45. Slide 45: Health Care Worldwide

    Health Care Worldwide Analyst Meeting February 22, 2006 45

Fresenius — FY2005 Earnings Presentation on 6ix