• 01.1
  Our Year 2008
• 01.2
  Management Board
• 01.3
  Report of the Supervisory Board
• 01.4
  Capital Market and Stock

01.4

Capital Market and Stock

SHARE DEVELOPMENT

Against the background of the difficult business environment and the increasing uncertainty on the financial markets - especially on the stock markets - Fresenius Medical Care’s share developed positively in 2008. While some of the world’s leading stock indexes fell by more than 40 %, Fresenius Medical Care’s ordinary share did relatively well, with the price decreasing only moderately.

The price of the ordinary share fell by 9 %, closing the year at €33.31. With this performance, it was among the leading shares in the German DAX index (- 40 %) The share also fared very well in comparison with the closer reference group, the healthcare sector. For instance, the value of the Dow Jones euro STOXX Healthcare index, consisting of Europe’s leading and largest companies in the industry, decreased by 19 % last year. Fresenius Medical Care’s ordinary share reached its year-high on January 9, 2008 and its year-low on March 19, 2008. Many investors still view Fresenius Medical Care’s share as being a defensive share. This is reflected by the low fluctuation intensity of our share. The range in which the share was traded in 2008 was very narrow, with the difference between the lowest and highest price being only 24 %. Daily fluctuations, too, were lower in terms of percentage points than the average on the DAX index.

The price of preference shares normally parallels that of the ordinary shares. However, since the large majority of preference shareholders took advantage of the offer to convert their preference shares into ordinary shares in February 2006, the number of outstanding preferences shares, and thus the volume of shares traded, has been very low. As a result, any further statements on the price development would be speculative.

At the beginning of the year, Fresenius Medical Care’s share fell victim to the sharp downswing on the stock markets. During this period, some investors sold shares in a panic. Investors all over world resorted to alternative kinds of investments. As the year progressed, our share then showed a very stable development. The subsiding debate about medically adequate treatment of anemia in dialysis patients in the U.S. with so-called erythropoesis stimulating agents (ESA), such as epo, had a favorable impact on the development of our share. The discussion had a detrimental effect on the share price development in the previous year, as reimbursement of ESA accounted for a significant portion of Fresenius Medical Care’s North American sales. Furthermore, the share price was influenced by conjecture about a change in the reimbursement structure for dialysis treatment in the U.S., which was then passed by lawmakers. Many investors regard the new system of bundling, the lump-sum reimbursement, as being a good opportunity for Fresenius Medical Care’s business model, but have difficulties making an exact assessment. The new reimbursement system will be implemented as of 2011. Beforehand, however, the legislators have to specify a number of details. (See also the section „New Reimbursement Models“). In a market environment increasingly marked by uncertainty, our constant revenue and profit development in the course of 2008 also contributed to stabilizing the share price.

The appreciation of the euro against the U.S. dollar again played an important role in the development of the share price. A strong euro constitutes a financial advantage for Fresenius Medical Care, as we maintain our financial accounting in U.S. dollars and so our operating results achieved in euros are higher. However, compared to other companies which do their accounting in euros, a strong euro tends to be unfavorable for us, because when our results are converted from dollars to euros their value is lower if the euro is strong. Our shares are traded on the New York Stock Exchange (NYSE) in the form of American Depositary shares (ADS) and quoted in U.S. dollars. Each ordinary or preference share corresponds to one Fresenius Medical Care ordinary or preference share. The development of the ADS is generally tied to the development of the ordinary and preference shares, taking into account the development of the euro-U.S. dollar exchange rate. At the end of 2008, the price of the ADS ordinary share was $47.18, 11 % lower than at the beginning of the year. At December 31, 2008, Fresenius Medical Care’s market capitalization was €9.92 million (2007: €10.88 million). The average trading volume of our shares was 1.49 million per trading day (2007: 1.68 million). The trading volume of preference shares was 1,697 per trading day. Thus, the liquidity of the ordinary shares was significantly higher.

In 2008, our ordinary share improved significantly in the rankings published by the German Stock Exchange, which serve as a basis for deciding which companies are in the DAX index. The lists are drawn up monthly based on the volume of stocks traded and the market capitalization (related to free float). In terms of market capitalization, Fresenius Medical Care moved from 25th place at the beginning of the year to 17th place in December 2008. As regards stock market trading volume, we went down one position and are now in 31st place. The index weight increased from 0.86 % to 1.41 %. As a result, our position in the DAX improved considerably last year.