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Fresenius Kabi

Our business reported strong growth once again in 2012. All regions contributed to this excellent development, in particular the emerging markets and North America. We also completed the acquisition of Fenwal Holdings, Inc., creating a global market leader in transfusion technology.

Fresenius Kabi


  2012 US$ in millions 2011 US$ in millions Change
1 Net income attributable to the parent company of the respective business segment
Sales 4,539 3,964 15%
EBIT 934 803 16%
Net income1 444 354 25%
Operating cash flow 596 462 29%
Capital expenditure/acquisitions 1,153 188 --
R & D expenses 194 162 20%
Employees (December 31) 30,214 24,106 25%

  2012 US$ in millions 2011 US$ in millions Change
1 Net income attributable to the parent company of the respective business segment
Sales 4,539 3,964 15%
EBIT 934 803 16%
Net income1 444 354 25%
Operating cash flow 596 462 29%
Capital expenditure/acquisitions 1,153 188 --
R & D expenses 194 162 20%
Employees (December 31) 30,214 24,106 25%

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 chronically and critically ill patient care: emergency cases, surgery, intensive care, hospital wards, and outpatient care. In transfusion technology, we offer products used by blood banks and blood donation centers to make blood products.

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. Transfusion technology provides products used in the collection and processing of whole blood as well as in transfusion medicine.

BUSINESS DEVELOPMENT

In 2012, sales at Fresenius Kabi increased by 15% to €4,539 million (2011: €3,964 million) and achieved excellent organic growth of 9%. Acquisitions contributed 1%. Currency translation had a positive effect of 5%.

Sales by region were as follows:

€ in millions 2012 2011 Change
Europe 1,953 1,826 7%
North America 1,236 1,002 23%
Asia-Pacific 863 702 23%
Latin America/Africa 487 434 12%
Total 4,539 3,964 15%

€ in millions 2012 2011 Change
Europe 1,953 1,826 7%
North America 1,236 1,002 23%
Asia-Pacific 863 702 23%
Latin America/Africa 487 434 12%
Total 4,539 3,964 15%

In North America we achieved organic sales growth of 11% compared to a strong 2011. The growth was mainly due to product launches and continuing supply constraints in the injectable drug market. Organic sales growth in Europe reached a strong 6%, in Asia-Pacific 13%, and in Latin America/Africa 14%.

Sales by product segment were as follows:

€ in millions 2012 2011 Organic growth
Infusion therapy 1,010 895 10%
IV drugs 1,701 1,438 12%
Clinical nutrition 1,314 1,154 10%
Medical devices/Transfusion technology 514 477 -1%
Total 4,539 3,964 9%

€ in millions 2012 2011 Organic growth
Infusion therapy 1,010 895 10%
IV drugs 1,701 1,438 12%
Clinical nutrition 1,314 1,154 10%
Medical devices/Transfusion technology 514 477 -1%
Total 4,539 3,964 9%

We exceeded the excellent 2011 earnings development: EBIT grew by 16% to €934 million (2011: €803 million). EBIT growth was due to very good business development in North America as well as in the emerging markets. The EBIT margin increased to 20.6% (2011: 20.3%).

All regions contributed to the EBIT growth:

€ in millions 2012 2011 Change
Europe 390 385 1%
EBIT margin 20.0% 21.1%  
North America 500 368 36%
EBIT margin 40.5% 36.7%  
Asia-Pacific/Latin America/Africa 286 232 23%
EBIT margin 21.2% 20.4%  
Administrative and corporate R & D expenses -242 -182 -33%
EBIT 934 803 16%
EBIT margin 20.6% 20.3%  

€ in millions 2012 2011 Change
Europe 390 385 1%
EBIT margin 20.0% 21.1%  
North America 500 368 36%
EBIT margin 40.5% 36.7%  
Asia-Pacific/Latin America/Africa 286 232 23%
EBIT margin 21.2% 20.4%  
Administrative and corporate R & D expenses -242 -182 -33%
EBIT 934 803 16%
EBIT margin 20.6% 20.3%  

Fresenius Kabi’s net income1 increased by excellent 25% to €444 million (2011: €354 million).

1 Net income attributable to the shareholders of Fresenius Kabi AG


ACQUISITIONS AND JOINT VENTURES

The acquisition of Fenwal Holdings, Inc. marks another major step in Fresenius Kabi’s growth strategy for medical devices. Fenwal is a leading provider of transfusion technology, producing and selling products for blood collection, separation, and processing.

Fresenius Kabi and Fenwal business activities perfectly complement each other: Fenwal holds an excellent position in the market for automated blood collection devices, while Fresenius Kabi is a major supplier of blood bags and filters used for manual blood collection.

Fenwal generated more than half of its 2012 sales in the United States, where its infrastructure will serve as a platform for further growth opportunities for Fresenius Kabi’s medical devices and transfusion technology products. At the same time, Fresenius Kabi’s international marketing and distribution network will expand Fenwal’s global product reach. As a result, we will be offering one of the most comprehensive product portfolios in transfusion technology on a global basis. Fenwal has been consolidated as of December 2012.

In 2012, we launched the joint venture Fresenius Kabi (Wuhan) Pharmaceutical Limited to expand our offering of oncological products in China. We own 70% of the shares in the joint venture, with the remaining 30% held by China’s Huangshi Lishizhen Medicine Group Wuhan Lishizhen Medicine Limited Company, which produces and sells oncological products in China.

The joint venture will establish both a research and development center and a manufacturing facility for oncological products in a technology park supported by the People’s Republic of China and the Province of Hubei. The initial investment of €25 million will be used to equip the 10,000 m2 building.

INFUSION THERAPY

Infusion solutions are used regularly in day-to-day medical care. They are used as carrier solution for intravenously administered drugs and to treat fluid loss or electrolyte deficiencies. Our products cover a broad range of infusion solutions in bags and in plastic or glass bottles.

We developed our containers in order to administer infusion solution safely and easily. To prevent injuries from needles when preparing treatments, we started introducing our non-PVC freeflex® bags with a needle-free injection port into European markets. The needle-free access of the freeflex® bags reduces preparation times, the risk of injury to clinic staff, and the risk of damaging the bag during preparation. A sterile membrane that seals automatically ensures that the bag remains free of germs, while also preventing the prepared solution from leaking.

Our artificial colloids used in blood volume therapy contain hydroxethyl starch (HES), which is based on maize starch and can be infused regardless of blood type. Our blood volume replacement solutions are used to maintain blood circulation and supply to organs.

In 2012, we introduced our product Volulyte® to additional markets, including Australia and Canada. This product is particularly developed for patients suffering from a major blood loss or needing blood volume replacement over an extended period of time.

Our medical devices for applying infusion therapies make us one of Europe’s market leaders. Our infusion pumps and disposables permit the safe, easy, and accurate application of IV drugs, infusion solutions, and blood volume replacements.

In transfusion technology, we signed an exclusive agreement for the global distribution rights of an analysis device to blood banks. This mobile device, developed by Sweden’s DiaSpect Medical AB, is used to rapidly determine the hemoglobin level in the blood, measuring it in just two seconds. The device provides an additional advantage, as the reagent-free cuvette that holds the blood is vastly superior in terms of shelf life and robustness to other cuvettes containing reagents.

In 2012, our Fresenius C.A.T.S. autotransfusion system (Continuous Autotransfusion System) proved to be successful again. We strengthened our position in growth markets, particularly in China and Russia. We now supply the system to more than 55 countries. The device is used for intra- and postoperative blood preparation to prepare and return the blood lost by a patient directly during an operation. Autotransfusion reduces the dependence on donor blood and consequently reduces the related risk of infection.

INTRAVENOUSLY ADMINISTERED DRUGS

Fresenius Kabi is one of the world’s top suppliers of generic IV drugs. In the United States, we are the second-largest supplier in this product segment. Our product portfolio is geared towards treatment of and care for chronically and critically ill patients.

We supply our generic IV drugs in approx. 145 countries. Our strong growth can be attributed to new product introductions and continuous internationalization of our product portfolio. In 2012, there were again supply constraints at our competitors in the United States. Our broad product portfolio and ability to deliver once again made a major contribution to the supply of IV drugs in the United States. As one example, we again shipped the anesthetic Propofol (Propoven) from our European facilities to the United States to prevent supply constraints.

We are one of the global leaders in IV anesthetics and IV analgesics. Our Propofol is the globally leading IV anesthetic. In the area of IV analgesics, we improved our marketing of IV Paracetamol in Europe, being able now to supply it to Italy and Spain as well.

We launched a large number of oncological IV drugs and improved the international distribution of this product portfolio. Examples include the successful introduction of Cytarabine, Carboplatin, and Doxetaxel to a number of countries in Europe. We also launched the oral oncological products Bicalutamide and Anastrozole both to countries in Europe, such as Austria, Russia, and Hungary, as well as to the Philippines. Furthermore, we successfully introduced the ready-to-use version of our chemotherapy product Oxaliplatin Kabi in the United States.

In 2012, we introduced our products to treat infectious diseases to additional countries. For example, the anti-infection drugs Meropenem and Imipenem/Cilastatin were launched in the U.S. market. In Vietnam and Chile, we began distributing the antibiotic Piperacillin/Tazobactam, which is already well established in Europe.

We offer a comprehensive product portfolio for treating critical illnesses in the United States, and remain the market leader with our high-molecular Heparin. In 2012, we launched additional products to the U.S. market, including Benztropine Mesylate, Levetiracetam, and Tranexamic Acid. These products were acquired from Nexus Pharmaceuticals, Inc. in order to expand our product range. In addition, we signed a licensing agreement with InnoPharma, Inc. to distribute Acetylcysteine as a solution for oral or inhalable application.

Products we prepare in our compounding centers include patient-specific oncological drugs. In the last year, the demand for individually prepared drugs for oncological treatments continued to grow. We started construction of a new compounding center in Australia. Our new production facility, approx. 35 km north of Sydney, will measure 8,500 m2 and replace the current compounding center. We also built a new Canadian compounding center southwest of Toronto. This production facility specializes in preparing patient-specific antibiotics and pain therapies.

CLINICAL NUTRITION

Clinical nutrition serves to supply patients who are unable to eat any or sufficient normal food. According to a survey, approx. 20 million people in Europe are at risk of malnutrition. This implies challenges for the economy: malnutrition-related costs to the national health care systems in the European Union are estimated at approx. €120 billion annually1.

Fresenius Kabi has played a leading role in clinical nutrition for years. Our products contribute to improving patients’ quality of life while supporting the therapy.

Our 3-chamber bags have become firmly established in the market for parenteral nutrition. In 2012, we introduced our SmofKabiven® 3-chamber bags into additional markets, including countries in the Asia-Pacific and the Latin America regions.

We are one of the few companies that produce patient-specific formulas in parenteral compounding around the world. In addition, we provide hospital pharmacies with the PreparePlus® PN database. With this database it is possible to verify within minutes whether or not a prescribed formula is compatible and stable. This means, the various components in a patient-specific product must not react to each other and the formula must remain stable over a defined period of time. If this is not the case, PreparePlus® PN proposes formula adjustments. All results in the database are derived from real stability tests carried out in laboratories. In a first step, the software was introduced in Germany and Sweden in 2012.

Malnourished patients with a functioning gastro-intestinal tract may receive enteral nutritional therapy. Here, our portfolio includes a full range of sip and tube feed products.

To maintain and develop our leading position in enteral nutrition, internationalizing our products portfolio is of great importance. Therefore, in 2012, we established our own organization in Poland to supply enteral nutrition products to outpatients.

We have introduced the new Fresubin® 2 kcal tube feed in many European countries. This new product is particularly well suited as clinical nutrition in intensive care or for dialysis patients.

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

Please see the Management Report for the 2013 financial outlook of Fresenius Kabi.

1 Source: Ljungqvist O., Clinical Nutrition 2010, 29:149-150.


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