Ad-hoc | 14 October 2005 07:15

Fresenius AG: Fresenius continues profitable growth

Ad hoc announcement §15 WpHG Acquisitions Fresenius AG: Fresenius continues profitable growth Ad hoc announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. —————————————————————————— NOT FOR RELEASE / DISTRIBUTION IN THE UNITED STATES Fresenius continues profitable growth – Acquisition of HELIOS Kliniken builds Fresenius ProServe’s hospital management business – Acquisition of Clinico to develop Fresenius Kabi’s medical devices business – Committed financing – Excellent financial results in the 1st-3rd quarter of 2005 (preliminary); 2005 Group outlook – earnings guidance raised Acquisition of HELIOS Kliniken GmbH Fresenius has entered into an agreement to acquire HELIOS Kliniken GmbH, Fulda, Germany. Through the acquisition, Fresenius creates an excellent platform for further growth in the German acute care market. HELIOS is recognized for having medical quality standards of the highest level in the industry. With expected sales of approx. EUR 1.2 billion in 2005 the company ranks among the largest and financially most successful private hospital chains in Germany. The acquisition of HELIOS will establish Fresenius ProServe as one of the leading private hospital operators in Germany and create a strong third business segment within Fresenius Group. HELIOS Kliniken GmbH is one of the leading private German hospital operators in terms of revenue growth and profitability. Since 2002, the company posted a compounded annual growth rate of 28 % in sales. In 2004, HELIOS achieved revenues of EUR 1,161 million, operating income of EUR 95 million and net income of EUR 66 million. The company owns 24 hospitals with a total capacity of approx. 9,300 beds. HELIOS is the only hospital chain in Germany that operates four maximum-care hospitals with more than 1,000 beds each. The company has approx. 18,000 employees and performs about 330,000 inpatient and about 700,000 outpatient treatments annually. HELIOS enjoys an excellent reputation with medical experts and patients. The company implemented a comprehensive medical quality management system and is the first German hospital chain that sets quantitative medical targets. HELIOS’s experienced and acquisition-proven management team will continue to manage the company. All members of the HELIOS Management continue to be shareholders in the company. In the future, the hospitals of HELIOS and the Fresenius hospitals of the Wittgensteiner Group will operate under the leadership and brand of HELIOS. Both companies are highly complementary in terms of geographical fit and medical focus. The combined business will include 55 clinics with 2004 pro- forma revenues of approx. EUR 1.5 billion. The purchase price for 100 % of the HELIOS shares is EUR 1.5 billion plus EUR 100 million for the net cash position. Fresenius will acquire 94 % of the HELIOS shares, 6 % will continue to be held by the HELIOS management. The acquisition requires antitrust approval. Fresenius anticipates to close this transaction at the end of 2005. Acquisition of the business of Clinico GmbH Fresenius Kabi has entered into an agreement to acquire the business of Clinico GmbH, Bad Hersfeld, Germany. Clinico manufactures medical devices used for the application of infusion therapies and clinical nutrition, such as sterile disposables for the application of drugs, application systems for clinical nutrition as well as catheter systems. The company has a development center and a tool-making site in Germany as well as production plants in Poland and China with state-of-the-art production technologies. With the acquisition of Clinico, Fresenius Kabi extends its product portfolio and will distribute Clinico’s products through its existing sales and distribution organization. In addition, the company increases its development and production network for medical devices. Preliminary sales for the fiscal year 2004/05 (September 30) were about EUR 51 million, mainly achieved with industrial clients. Clinico has over 1,500 employees. The acquisition requires the approval of the German antitrust authority. Committed financing It is planned to finance the acquisitions through a capital increase in the amount of around EUR 800 million and a bond in the amount of around EUR 700 million. The capital increase from approved capital is planned to be completed in 2005 with a subscription right granted to shareholders. Deutsche Bank has committed to underwrite the total amount of the capital increase at customary market conditions. The details of the capital increase will be published in the coming weeks. Commitments for a EUR 700 million bridge financing have been received from Credit Suisse First Boston and Morgan Stanley, as the bond is planned to be issued in the first half of 2006. The Else Kröner-Fresenius- Foundation has notified us, that it will participate in the planned capital increase with an amount of EUR 100 million. In addition, the proceeds from the disposal of unused subscription rights will be fully invested. Allianz Lebensversicherungs-AG has notified us, that it will positively support the planned capital increase. Fresenius expects the 2005 acquisitions of Labesfal, Clinico and HELIOS to be slightly accretive to 2006 earnings per share and to be clearly accretive as from 2007. The financing mix of equity and debt is designed to keep Fresenius Group’s key credit ratios substantially unchanged. Excellent financial results in the 1st-3rd quarter 2005 (preliminary); 2005 Group outlook – earnings guidance raised Based on preliminary figures, Fresenius achieved excellent financial results in the first nine months of 2005. Group sales increased 7 % in constant currency. At actual rates, sales were EUR 5,717 million, an increase of 6 %. Earnings increased stronger than sales: Group EBIT rose 13 % in constant currency and 12 % at actual rates to EUR 702 million. Group net income grew by 28 % in constant currency and 27 % at actual rates to EUR 159 million. Based on these excellent preliminary Group figures, Fresenius raises its full- year earnings outlook (before the announced acquisitions): Net income is expected to grow at >25 % in constant currency. Previously, the Company expected 20 to 25 % net income growth. The projection for constant-currency sales growth remains at 6 to 9 %. The Management Board Bad Homburg v.d.H., October 14, 2005 Fresenius AG Else-Kröner-Straße 1 61352 Bad Homburg v.d.H. Deutschland ISIN: DE0005785638 (MDAX); DE0005785604 WKN: 578563; 578560 Listed: Amtlicher Markt in Düsseldorf, Frankfurt (Prime Standard) und München; Freiverkehr in Berlin-Bremen, Hamburg und Stuttgart End of ad hoc announcement (c)DGAP 14.10.2005 140715 Okt 05