Operations and Business Environment - Fresenius Medical Care

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02. 2 Our Fiscal year 70 In North America, dialysis care services accounted for about 91% of our total revenue in the region. Our revenue in this area grew by 35 % to $ 5.46 billion. The revenue per treatment also increased significantly in the year under review. The average revenue per treatment in the U.S. was $ 321, $ 24 higher than in 2005. The main reason was a higher percentage of patients covered by private insurers. We receive a higher reimbursement rate per dialysis treatment from private insurers than from public health insurance plans. Furthermore, we were able to increase the reimbursement rate from private payers. Partially due to the RCG acquisition, we improved our revenue mix and again increased the percentage of revenue from private payors in 2006 – from 40 % to 42 %. At the end of 2006, we cared for nearly 118,000 patients compared with about 89,300 in 2005. As regards dialysis products, too, we can look back on an extremely successful business performance in North America. Organized in the Products and Hospital Group (PHG), this segment includes all products for hemodialysis and peritoneal dialysis as well as extracorporeal therapies and laboratory services in North America. Revenue from dialysis products rose to $ 561 million last year, up 7 % on 2005. This exceptional growth was achieved again due to the continued very high demand for our Optiflux series and 2008K dialysis machines, the latter having been designed specifically for the U.S. market. Excluding RCG and the clinics sold in connection with the acquisition, the revenue from dialysis products was 13 % higher than in the previous year. Revenue in the International segment contributes 29 % of Fresenius Medical Care’s total revenue, an increase of 13 % (currency-adjusted 12 %) to $ 2.47 billion. The segment International includes all business regions outside North America. The contribution of the individual regions in the International segment to overall revenue changed only marginally in 2006. Revenue from dialysis care services increased in the International segment by 12 % (currency-adjusted 12 %) to $ 913 million. Dialysis product revenue rose by 13 % (currency-adjusted 12 %) to $1.56 billion, mainly as a result of higher sales of 4008 and 5008 series dialysis machines as well as dialyzers. Revenue by Region $ in millions 2006 2005 Change North America Europe / Middle East / Africa Latin America Asia-Pacific Total 6,025 1,770 327 377 8,499 4,577 1,592 264 339 6,772 32 % 11 % 24 % 11 % 26 % Revenue by Region North America 71 % 4 % Latin America 4 % Asia-Pacific 21 % Europe / Middle East / Africa Fresenius Medical Care 2006
Europe, including the Middle East and Africa, is the largest region within the International segment and saw a revenue increase of 11% to $1.77 billion. Currencyadjusted growth was also 11%. As Fresenius Medical Care prepares financial statements in dollars but conducts much of its business in this region in euros, the effects of the currency exchange rates usually have an impact on growth rates. Last year, the exchange rates between the dollar and euro changed only slightly in favor of the euro, resulting in correspondingly similar growth rates. The region accounted for 21% of total revenue. For Fresenius Medical Care, 2006 was another year of positive growth in Europe. We were able to expand our position as the largest provider of dialysis products and dialysis care in the region. At the end of last year, we treated about 25,000 patients in 342 dialysis clinics, 10 % more than in the previous twelve-month period. In 2006, dialysis services revenue increased by 12 % over the previous year to $ 616 million. In constant currency, revenue also grew by 12 %. Revenue generated from dialysis products rose by 11% (10 % in constant currency), amounting to $1.15 billion. We grew above-average in Latin America. Revenue in our smallest business region grew by 24 % to $ 327 million and by 21% in constant currency. Our revenue in Latin America accounted for 4 % of our total revenue. Revenue with dialysis services increased by 18 % (currencyadjusted 17 %) to $ 217 million, contributing about two-thirds of the total Latin American revenue. Revenue from dialysis products rose by 37 % to $110 million (currency-adjusted 29 %). At the end of 2006, Fresenius Medical Care treated about 17,000 patients in 166 clinics. We also increased our revenue in the Asia-Pacific region. Overall revenue grew by 11% totaling $ 377 million. Constant currency growth was also 11%. This region accounted for 4 % of our total revenue. In 2006, dialysis product revenue rose by 14 % to $ 297 million, a 13 % increase when adjusted for currency effects. In dialysis care, revenue grew by 1% to about $ 80 million, or 5 % in constant currency terms. 71 Revenue by Segment $ in millions 2006 2005 Change North America Dialysis products Dialysis services Total International Dialysis products Dialysis services Total Worldwide Dialysis products Dialysis services Total 561 5,464 6,025 1,561 913 2,474 2,122 6,377 8,499 523 4,054 4,577 1,382 813 2,195 1,905 4,867 6,772 7 % 35 % 32 % 13 % 12 % 13 % 11 % 31 % 26 % Fresenius Medical Care 2006
Page 1 and 2: 02. 1-6 With more than 56,000 emplo
Page 3 and 4: Our Fiscal year 02. 1 02. 1 Operati
Page 5 and 6: Path 2: Acquisitions. We intend to
Page 7 and 8: In addition, our development depart
Page 9 and 10: on the basis of growing clinical ex
Page 11 and 12: Asia While Japan’s gross domestic
Page 13 and 14: dialysis and about 165,000 receive
Page 15 and 16: As in previous years, many healthca
Page 17 and 18: Dialysis machines constitute anothe
Page 19 and 20: Comparison of the Actual Business R
Page 21 and 22: The Management’s General Assessme
Page 23: In terms of dialysis products, we w
Page 27 and 28: egarding stock options and the incr
Page 29 and 30: Financing Detailed information on f
Page 31 and 32: of existing production facilities i
Page 33 and 34: The Group has no significant accrua
Page 35 and 36: is among our most important goals.
Page 37 and 38: departments enter into outline cont
Page 39 and 40: Quality and Environmental Managemen
Page 41 and 42: Clinical Databases Clinical databas
Page 43 and 44: In addition, we received regulatory
Page 45 and 46: combines RCG’s industry-leading s
Page 47 and 48: - In April 2006, new guidelines wer
Page 49 and 50: titative appraisals of the likeliho
Page 51 and 52: Risks in the Healthcare Industry Ri
Page 53 and 54: possibility of default. Please see
Page 55 and 56: to page 95 of the Consolidated Fina
Page 57 and 58: 02. 6 Outlook Business Policy Frese
Page 59 and 60: dialysis will remain the treatment
Page 61 and 62: Employees At this point, Fresenius

Operations and Business Environment - Fresenius Medical Care

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