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25.02.2003 – 11:19

Fresenius Medical Care AG & Co. KGaA

Fresenius Medical Care reports Fourth Quarter and Full-Year 2002 results

    Bad Homburg (ots)


    
    Fresenius Medical Care reports Fourth Quarter and Full-Year 2002
results
    
    Summary:
    
    - Net income of $ 302 million after minorities and before
        extraordinary item
    
    - Full-Year Free Cash Flow at record level of $ 349 million
    
    - Outstanding success by achieving definite agreement in
        fraudulent conveyance case and confirming adequacy of accrued
        reserve (see Press Release Feb. 12, 2003)
    
    - Implementation of the UltraCare program continues to show its
        fundamental strategic value while fourth quarter 2002
        EBIT-margin has improved in North America
    
    - Refinancing of the senior credit agreement completed
    
    - Dividend increase proposed for the sixth consecutive time
    
    The results in the year 2002 are based on the new accounting
standards on Goodwill and Other Intangible Assets (FAS 142) which
came into effect January 1, 2002. In order to facilitate a
year-over-year comparison, goodwill adjusted key figures for the
full-year 2001 and the fourth quarter 2001 are provided in the
appendix.Bad Homburg, Germany - February 25, 2003 -- Fresenius
Medical Care AG ("the Company") (Frankfurt Stock Exchange: FME, FME3)
(NYSE: FMS, FMS_p), the world's largest provider of Dialysis Products
and Services, today announced the results for the fourth quarter and
the full-year 2002.
    
    OPERATIONS
    
    Fourth Quarter 2002:
    
    Total revenue for the fourth quarter 2002 increased 7% (8% at
constant currency) to $ 1,358 million. Same store revenue growth at
constant exchange rates was 7%. Dialysis Care revenue grew by 6% to $
974 million (+9% at constant currency) in the fourth quarter of 2002.
External Dialysis Product revenue increased by 9% to $ 384 million
(+5% at constant currency) in the same period.
    
    North America:
    
    Revenue rose 7% to $ 979 million, compared to $ 918 million in the
same period last year. Dialysis Care revenue increased by 7% to $ 861
million. Same store treatment growth was 4%. The average revenue per
treatment increased to $286 in the fourth quarter (Q3 2002: $282).
Dialysis Product revenue, including sales to company-owned clinics,
increased 2.4% to $ 197 million. Product sales to the available
external market grew by 9.2%.
    
    International:
    
    Revenue was $ 378 million, up 11 % adjusted for currency. Dialysis
Care revenue reached $ 113 million in the fourth quarter 2002 (+20%
constant currency). Dialysis Products revenue, including sales to
company-owned dialysis clinics, increased 10% to $ 292 million (6%
constant currency).
    
    Earnings before interest and taxes (EBIT) increased to $ 184
million resulting in an operating margin of 13.6%. The operating
margin remained within the targeted range as the Company completed
its 2002 rollout of the UltraCare™ dialysis treatment concept,
including Fresenius Polysulfone high-flux single-use dialyzers, in
North America.
    
    Fresenius Medical Care AG reports a 36% increase in net income
after minorities to $ 82 million for the fourth quarter 2002.
    
    Earnings per share (EPS) in the fourth quarter 2002 rose 36% to $
0.85 per ordinary share ($ 0.28 per ADS), compared to $ 0.62 ($ 0.21
per ADS) in the fourth quarter of 2001. The weighted average number
of shares outstanding during the fourth quarter of 2002 was
approximately 96.2 million, compared to 96.1 million in the same
period of 2001.
    
    In the fourth quarter of 2002, the Company generated $ 155 million
in cash from operations. A total of $ 45 million (net of disposals)
was spent for capital expenditures, resulting in record fourth
quarter Free Cash Flow before acquisitions of $ 110 million. A total
of $ 7 million in cash was spent for acquisitions. Free Cash Flow
after acquisitions was $ 103 million. In the fourth quarter of 2001,
Free Cash Flow after acquisitions was $ 50 million.
    
    Full-year 2002:
    
    Net revenue grew by 5% to $ 5.08 billion. Adjusted for currency,
net revenue rose 6% compared to 2001. Earnings before interest and
taxes (EBIT) increased 8% to $ 695 million resulting in an operating
margin of 13.7%. In the full-year of 2002, net income after
minorities and before extraordinary item was $ 302 million, up 23%
from the same period in 2001. The extraordinary item covers the cost
of $12 million for the redemption of the entire US$ 360 million
aggregate amount outstanding of its 9% Trust Preferred Securities due
2006 (see Investor News January 16, 2002).
    
    In the full-year 2002, earnings per ordinary share before
extraordinary item rose 23% to $ 3.12. Earnings per ordinary ADS
before extraordinary item for the full-year of 2002 were $ 1.04.
    
    Fresenius Medical Care generated $ 550 million in cash from
operations during the full-year of 2002, an increase of 30% from the
previous year. Capital expenditures (net of disposals) were $ 201
million. Free Cash Flow for the full-year of 2002 was a record $ 349
million compared to $ 173 million in the previous year. Free Cash
Flow for the full-year significantly exceeded the full-year target of
$ 200 million set by the Company. This exceptional performance is
primarily driven by significant improvements in working capital
management, in particular accounts receivable collection, and by
moderate capital expenditure. Net cash used for acquisitions was $ 80
million.
    
    As of December 31, 2002, the Company operated a total of 1,480
clinics worldwide [1,080 clinics in North America and 400 clinics
International]. In the Full-year 2002, the Company opened 90 new
clinics (de novo's). Fresenius Medical Care AG performed
approximately 16.4 million treatments, which represents an increase
of 7% year over year. North America accounted for 11.6 million
treatments (+4%) and the International segment for 4.7 million
(+16%). At the end of the fourth quarter 2002, Fresenius Medical Care
treated about 112,200 patients worldwide, which represents an
increase of 6%. North America accounted for ~79,600 patients (+4%)
and the International segment for ~32,600 patients (+12%).
    
    Credit Agreement
    
    On February 21, 2003 the Company completed the refinancing of its
senior credit agreement, which was scheduled to mature on September
30, 2003. The amended and restated Credit Agreement provides up to $
1.5 billion through three credit facilities: a revolving credit
facility of up to $ 500 million and a term loan facility "Loan A" of
$ 500 million, both due on October 31, 2007.The third tranche, a term
loan facility "Loan B" for institutional investors of $ 500 million
will be due after seven years. All three tranches were significantly
over-subscribed.
    
    The Credit Agreement provides the Company with a solid and
reliable source of financing for the next years, with no significant
debt maturing before 2007. The terms and conditions of the new Credit
Agreement are fully reflected in the Company's reconfirmed outlook
for 2003.
    
    Dividends
    
    Consistent with prior years the Company will continue to follow an
earnings driven dividend policy. For the sixth year in a row,
Shareholders can expect an increasing dividend for the fiscal year
2002. The Managing Board will propose to the Supervisory Board for
the Fiscal Year 2002 a dividend of Euro 0.94 per ordinary share
(2001: Euro 0.85) and € 1.00 per preference share (2001: Euro
0.91) for shareholders approval at the Annual General Meeting on May
22, 2003.
    
    Outlook 2003
    
    For the year 2003, the Company reconfirms it's outlook and expects
mid single digit revenue growth before acquisitions (in constant
currency) and net income growth in the high single digit to low
double digits range.
    
    Ben Lipps, Chief Executive Officer of Fresenius Medical Care,
commented: "We are pleased to have achieved an operating margin
improvement in North America in the fourth quarter of 2002. We also
continued our momentum with strong fourth quarter cash flow
performance and record Free Cash Flow for the full-year. In North
America we completed our strategic objective of developing and
implementing a unique and differentiated dialysis therapy based on
Fresenius Medical Care's technology, which includes the
UltraCare™ NR a program that uses the latest technology of
single use high-fluxFresenius
    
    Polysulfone dialyzers. Making this program cost neutral was an
important milestone. We are well positioned in the United States
where the net patient growth rate currently is in the range of 4-5%,
and we believe this strategy provides for growth opportunities above
market and new opportunities for future margin expansion. We are also
positioned to succeed in a reimbursement environment that allows the
provider to share in the healthcare savings achieved. In
International, we continued to strengthen our position in both our
patient care and products business. In our worldwide products
business we achieved a growth rate of 6%, in constant currency, which
exceeds the market growth rate and is a clear sign that our product
technologies continue to be well received in the market place.
Finally, I would like to thank all our employees again for their
dedication to patient care and for their commitment to the Company's
vision and values."
    
    Fresenius Medical Care AG 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
1,200,000 individuals worldwide. Through its network of approximately
1,480 dialysis clinics in North America, Europe, Latin America and
Asia-Pacific, Fresenius Medical Care provides Dialysis Treatment to
approximately 112,200 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.
For more information about Fresenius Medical Care, visit the
Company's website at http://www.fmc-ag.com.
    
    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's reports
filed with the U.S. Securities and Exchange Commission. Fresenius
Medical Care AG does not undertake any responsibility to update the
forward-looking statements in this release.
    
ots Original Text: Fresenius Medical Care AG
Internet: http://www.presseportal.de
    
Press Contact:
February 25, 2003
Oliver Heieck, Corporate Communications
Tel.: +49-6172-6082101
Fax:  +49-6172-6082294
e-mail: pr-fmc@fmc-ag.de
www.fmc-ag.com

Original content of: Fresenius Medical Care AG & Co. KGaA, transmitted by news aktuell