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Fresenius Kabi

Our business grew once again in all regions and product segments. In North America, we even exceeded the strong 2010 results. In the emerging markets, we again achieved high growth rates. We have introduced products all over the world and increased our global market presence.

Key data of Fresenius Kabi

  2011 € in millions 2010 € in millions Change
1 Net income attributable to Fresenius Kabi AG
Sales 3,964 3,672 8%
EBIT 803 737 9%
Net income1 354 294 20%
Operating cash flow 462 567 -19%
Capital expenditure/acquisitions 188 205 -8%
R & D expenses 162 143 13%
Employees (December 31) 24,106 22,851 5%

  2011 € in millions 2010 € in millions Change
1 Net income attributable to Fresenius Kabi AG
Sales 3,964 3,672 8%
EBIT 803 737 9%
Net income1 354 294 20%
Operating cash flow 462 567 -19%
Capital expenditure/acquisitions 188 205 -8%
R & D expenses 162 143 13%
Employees (December 31) 24,106 22,851 5%

Fresenius Kabi specializes in the therapy and care of chronically and critically ill patients, providing intravenously administered generic drugs (IV drugs), infusion therapies, clinical nutrition, and related medical devices. Our products cover the full range of patient care: emergency cases, surgery, intensive care, hospital wards, and outpatient care.

Our portfolio of IV drugs includes anesthetics, analgesics, anti-infectives, and drugs for the treatment of oncological and other critical diseases. For infusion therapy, we provide blood volume replacement products and infusion solutions. In the area of clinical nutrition, we are one of the few companies worldwide that offer both parenteral and enteral nutrition products. To administer our products, we supply infusion pumps, infusion management systems, nutrition pumps, and disposables. For transfusion technology, we offer a range of products used by blood banks and blood donation units to produce blood products.

BUSINESS DEVELOPMENT

In 2011, Fresenius Kabi increased sales by 8% to €3,964 million (2010: €3,672 million) and achieved excellent organic growth of 9%. Currency translation had a negative effect of 1%.

The sales by region were as follows:

€ in millions 2011 2010 Change
Europe 1,826 1,702 7%
North America 1,002 975 3%
Asia-Pacific 702 593 18%
Latin America/Africa 434 402 8%
Total 3,964 3,672 8%

€ in millions 2011 2010 Change
Europe 1,826 1,702 7%
North America 1,002 975 3%
Asia-Pacific 702 593 18%
Latin America/Africa 434 402 8%
Total 3,964 3,672 8%

In North America we achieved organic sales growth of 7% compared to a strong 2010. The growth was mainly due to product launches and continuing drug shortages in the injectable drug market. Organic sales growth in Europe reached a strong 6%, in Asia-Pacific 18%, and in Latin America/Africa 10%. China is our third largest market after the United States and Germany. We have continuously achieved double-digit organic growth rates in China for years.

Sales by product segment were as follows:

€ in millions 2011 2010 Organic growth
Infusion therapy 895 843 4%
IV drugs 1,438 1,328 12%
Clinical nutrition 1,154 1,062 9%
Medical devices/Transfusion technology 477 439 8%
Total 3,964 3,672 9%

€ in millions 2011 2010 Organic growth
Infusion therapy 895 843 4%
IV drugs 1,438 1,328 12%
Clinical nutrition 1,154 1,062 9%
Medical devices/Transfusion technology 477 439 8%
Total 3,964 3,672 9%

We improved the excellent earnings development from last year: EBIT grew by 9% to €803 million (2010: €737 million). EBIT growth is due to very good business development in all regions. The EBIT margin increased to 20.3% (2010: 20.1%).

All regions contributed to the EBIT growth:

€ in millions 2011 2010 Change
Europe 385 359 7%
EBIT margin 21.1% 21.1%  
North America 368 335 10%
EBIT margin 36.7% 34.4%  
Asia-Pacific/Latin America/Africa 232 183 27%
EBIT margin 20.4% 18.4%  
Administrative and corporate R & D expenses -182 -140 -30%
EBIT 803 737 9%
EBIT margin 20.3% 20.1%  

€ in millions 2011 2010 Change
Europe 385 359 7%
EBIT margin 21.1% 21.1%  
North America 368 335 10%
EBIT margin 36.7% 34.4%  
Asia-Pacific/Latin America/Africa 232 183 27%
EBIT margin 20.4% 18.4%  
Administrative and corporate R & D expenses -182 -140 -30%
EBIT 803 737 9%
EBIT margin 20.3% 20.1%  

Fresenius Kabi’s net income1 increased by 20% to €354 million (2010: €294 million).


1 Net income attributable to Fresenius Kabi AG

INFUSION THERAPY

Whether for treating fluid loss or electrolyte deficiencies or as a carrier solution for intravenously administered drugs, infusion solutions are needed everyday in the hospital routine. Our product portfolio includes a comprehensive range of infusion solutions, offered in infusion bags and bottles. Our PVC-free bag freeflex® and the plastic bottle KabiPac® are characterized by their high application safety. Due to their sterile membrane, the two separate and visually easy to distinguish infusion and injection ports in both containers make the infusion solutions safe and easy to administer. They thereby help prevent possible mistakes in the use of the infusion and injection ports.

For blood volume replacement, we are the global market leader with our artificial colloids. Our products contain hydroxyethyl starch (HES), which is based on maize starch and can therefore be infused regardless of blood type. Our blood volume replacement solutions are also used during surgeries and for intensive medical care. With our innovative HES products, we have been active in the blood volume replacement market for decades, and have set standards for blood volume replacement as well as therapy. We sell our proven product Voluven® in more than 100 countries throughout the world, and in over half of these markets we are the leading supplier. In 2011, we strengthened our market leadership for colloid blood volume replacements. We successfully introduced our blood volume replacement solution Volulyte® in several new countries. Volulyte® is particularly developed for patients with high blood loss or who must be treated with volume replacement products for a longer period of time. To support scientific dialog on blood volume replacement therapy, we organized symposiums on the efficacy and safety of artificial colloids at internal and external conferences.

With regard to our medical devices for the application of infusion therapies, we continue to be successfull and remain one of the leading companies in Europe. Our infusion pumps and disposables ensure that the infusions and blood volume replacements are easy and safe to apply. Our business with volumetric infusion pumps and syringe pumps from the Agilia product group was particularly successful. This is partially due to our syringe pump Injectomat® TIVA Agilia , which we were able to launch in several new countries. This syringe pump is used to administer anesthesia during surgeries.

In the area of transfusion technology, we are one of the leading suppliers of blood bag systems and medical devices for collecting, processing, and transporting blood products, both in Europe and Latin America. We have introduced our new, portable sealer for blood bag tubes CompoSeal Mobilea II in several European countries. It is used in donating, processing, and storing blood and provides the possibility to safely, quickly, and easily seal filled blood bag systems. The sealer melts the plastic on the blood bag tubes with radio-frequency energy. The resulting weld seam allows the blood tubes to be easily detached from each other again afterwards.

In September, we opened a new production facility in Vietnam. It manufactures infusion solutions and liquid medications, primarily for the domestic market. With the new facility, we have almost doubled our manufacturing capacity in order to satisfy the growing demand for our products in the future. The investment costs totaled to approximately €20 million. The facility is operated by Fresenius Kabi Bidiphar JSC, our joint venture with the Vietnamese company Bidiphar. Fresenius Kabi Bidiphar JSC, where we are the majority shareholder, is market leader for standard solutions and holds a leading position for intravenously administered drugs in Vietnam.

INTRAVENOUSLY ADMINISTERED DRUGS

Fresenius Kabi is one of the world’s top five suppliers of generic IV drugs. Our product portfolio is geared towards treatment of and care for chronically and critically ill patients. We not only manufacture the drug, but also produce some of the active ingredients. We therefore have manufacturing competency along the entire value chain. This is crucial in terms of quality and price flexibility for us.

We successfully grew our business in 2011. New products and the continued internationalization of our existing product portfolio have contributed to this success. Supply constraints at competitors in the U.S. market continued. Based on our broad product portfolio, we were again able to contribute to a reliable IV drug supply in that market. Its manufacturing facilities were able to flexibly and quickly respond to market conditions. They were able to adjust their produced quantities to the growing demand.

We are one of the globally leading companies in the areas of generic IV anesthetics and IV analgesics. Our anesthetic Propofol is global market leader in the IV anesthetics segment. In the area of IV analgesics, we introduced the pain medication Paracetamol Kabi in Germany at the end of 2010. We also advanced the European marketing of this product as well as launched it on the Indian market. We successfully entered the market with the two IV analgesics Remifentanil and Cisatricurium. In addition, we introduced Clonidine Hydrochloride on the U.S. market, an analgesic which is mostly used in oncology.

We have been very successful with our product portfolio of IV oncology drugs. We significantly increased sales in Eastern Europe, e. g. in Poland and the Czech Republic. Immediately after patent expiration in Portugal and France, we introduced the cytostatic drug Topotecan Kabi, which is used to treat pulmonary carcinoma. Other IV oncology drugs for which we received approval and which were launched in many European countries include: Irinotecan Kabi, Paclitaxcel Kabi, and Oxaliplatin Kabi.

We launched several cytostatic drugs in the Asia-Pacific region. Pemetrexed, a therapeutic agent for patients with bronchial carcinoma, was introduced in India. We successfully launched Letrozole on the Philippine market to treat breast cancer. In Taiwan we introduced Bicalutamide, a drug used to treat prostate cancer.

In the United States we were one of the first generic drug providers to offer all three dosages of the cytostatic drug Gemcitabine. At the beginning of the year we entered into a manufacturing and distribution agreement with Teva Pharmaceuticals for Gemcitabine. This agreement enabled us to distribute the product during the 180 day marketing exclusivity, which Teva owned for it. In addition, we started the introduction of Letrozole in the United States.

We further internationalized our product portfolio for the treatment of infectious diseases. We launched the anti-infective drug Levofloxacin in Europe immediately after patent expiry. The product treats bacterial infections. In the U.S., we introduced Nafcilin as well as Piperacillin/Tazobactam.

In the area of products used to treat critical diseases, we feature a comprehensive product range in the U.S. and are the market leader for high-molecular Heparin. In 2011, we successfully introduced two additional dosages for this product, and also launched Metoprolol Tartrate. This drug is used for cardiovascular diseases such as dysrhythmic or cardiac infarction.

We also offer patient-specific IV drugs (compounding) for the treatment of critically and chronically ill patients. Our product portfolio also includes clinical nutrition products that help to improve the nutritional status of these patients. We offer medical devices used to administer the solutions as well as patient-specific drugs, which can also be used in outpatient care.

We are one of a few companies that have global compounding centers for the preparation of patient-specific IV drugs. In order to cover the growing local demand for customized oncology drugs, we opened our first compounding center for oncology products in Malaysia. Located close to the capital city of Kuala Lumpur, it provides state-of-the-art manufacturing technologies and highly qualified staff specifically trained for cytological compounding.

CLINICAL NUTRITION

Clinical nutrition serves to supply patients who are unable to eat any or sufficient normal food. This applies especially to patients in intensive care units, to the critically and chronically ill, and to those who are malnourished. The use of clinical nutrition products is steadily increasing. Weight loss and deficiencies in essential nutrients can result in higher complication rates, longer recovery periods, a diminished quality of life, and elevated mortality rates.

Our three-chamber bags are reference products for parenteral nutrition in hospitals. One bag ensures the simultaneous infusion of amino acids, lipids, glucose and electrolytes, and thus covers the complete daily required intake for these important nutrients. We are pioneering this market segment. We are, for example, the only suppliers of three-chamber bags on the Chinese market. The innovative bag design provides an impressively high level of safety and user friendliness in everyday hospital use. We are selling this product in 85 countries (2010: 70 countries).

In 2011, further SmofKabiven® market launches contributed to the growth in the three-chamber bag segment. SmofKabiven® contains, as a lipid component, our product SMOFlipid® and high levels of amino acids. It is also characterized by a balanced fatty acid profile and an optimized Omega-6 to Omega-3 fatty acid ratio. In 2011, we registered and introduced this product in additional countries, and are currently selling it in 36 countries.

Advanced tumor diseases are often accompanied by unwanted weight loss, which can have a negative effect on the success of chemotherapy. Especially as an additional nutritional supplement for the treatment of oncological and critically ill patients, we started introducing a small packing unit of SmofKabiven®. The small package is designed to provide handling advantages to this particular patient group.

In the field of enteral nutrition therapy, we offer a comprehensive range of sip and tube feed products. Enteral products are used, for instance, in geriatric, pediatric, and intensive care as well as in outpatient care. Enteral nutrition is acquiring growing importance in clinical routine and as a supportive component of the overall medical therapy process.

At the end of 2011, we introduced a new product for patients with heightened nutritional needs or suffering from dysphagia in France. Fresubin® Dessert Fruit is fruit-based and therefore provides an alternative to milk-based enteral products. Its puree-like consistency enables these patients to swallow it easily and in a controllable manner.

In the area of medical devices, our products are characterized by high user-friendliness and thereby significantly contribute to safe and effective administration of nutritional therapy. The increasing significance of clinical nutrition is also reflected in the growth of our medical devices business. For example, we successfully grew our business with nutrition pumps and application systems.

For further information, please see Fresenius Kabi’s website at www.fresenius-kabi.com.

Please see the Management Report for the 2012 financial outlook of Fresenius Kabi.

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