Bad Homburg v. d. H., March 2009
I am delighted to inform you that 2008 was another successful year for Fresenius Medical Care. This is the twelfth year of our existence and we again achieved record sales and earnings. Our company continued to grow in a difficult business environment and we were able to reach our ambitious targets. The field in which we work is not as dependent on the overall economic environment as other sectors. However, we too had to make some fundamental changes and master a number of challenges in these volatile economic conditions.
I think you will see that 2008 proved to be an extremely challenging yet successful year for Fresenius Medical Care. Last year, we were able to demonstrate once again that our company’s business model is a robust, profitable, and sustainable one that, even in turbulent times, is able to generate continuous growth, with a worldwide increase in patients of 6 % per year. But one thing has become apparent: in order to continue our past performance, we now have to make an even greater effort.
Here I would like to extend my heartfelt thanks and appreciation to all of our employees around the world with the highest credit they deserve. Our performance in 2008 was not a foregone conclusion; it reflects the dedication and extraordinary efforts of our staff to help promote our company. Of course, my compliments also go to my colleagues on the Management Board and the members of the Supervisory Board. I would like to thank them sincerely for the constructive collaboration and mutual trust.
Please allow me to take a brief look at our results in the last financial year. In 2008, we augmented our revenue by 9 % to $10.6 billion. For the first time in our history, we surpassed the $10 billion mark. This significant revenue increase was due to a strong organic growth of 7 %. As in the previous years, our net income grew at an even higher rate than our revenue to $818 million, up 14 %. As we have done every year in the past, we would like to share our success with you, our shareholders. Therefore, we will propose a dividend increase of around 7 % at the Annual General Meeting, raising it to €0.58 per ordinary share. This would be the twelfth consecutive rise and would mean that we have increased our dividend every year throughout our company’s history.
Our share held its own in a very difficult environment. Although this was not reflected in its absolute price, it performed extremely well in relative terms. With a price drop of just 9 %, the development of our share was among the best in the DAX index, keeping in mind that many international stock indexes, such as the DAX and Dow Jones, were down more than 40 % in 2008.
As a vertically integrated supplier with a clear focus on chronic kidney failure, we expanded both our products and services portfolio in 2008. Our goal remained steadfast to further improve the living conditions of our patients and we kept our sights set firmly on our strategy for 2010.
In 2008, we continued to invest in the research and development of new products, expanded our product spectrum, and extended existing production capacities to ensure the future growth of our company and to take advantage of opportunities. We reached another milestone last year in production, with some 80,000,000 dialyzers and fiber bundles being produced worldwide.
In addition to very strong organic growth, selective acquisitions will continue to play a key role in our company’s strategy. These should further strengthen our global presence, particularly in our dialysis care segment, that is to say, our worldwide dialysis clinic network.
In the future, one of the biggest challenges we will face is adapting to changing reimbursement models in dialysis. Here, in particular, we need to find and pursue innovative paths. Starting in January 2011, a new lump-sum reimbursement system for dialysis will be introduced in our largest market, the u.s. Our company will doubtlessly be ideally equipped for this change.
Not only opportunities, but also new risks will nonetheless arise and we will face them as we have in the past.
We have set ourselves ambitious goals again for 2009. We intend to boost sales to more than $11.1 billion and achieve a net income of $850 million to $890 million.
I believe that 2009 will be another successful year for Fresenius Medical Care. This is based on my confidence in our long-term strategy, in our strong operating business, in our innovativeness, and in the fact that we have the courage and possibilities to take new paths.
I would like to express my gratitude and appreciation again to you, the shareholders of Fresenius Medical Care, for your support and your trust in us.
In the following pages of the corporate report, you can read more about how important confidence is for us, how instrumental it is for our company’s success, and how it continues to motivate us to achieve outstanding performance.
Yours sincerely,
Dr. Ben J. Lipps
Chief Executive Officer
