Management Report Operations and Business Environment Corporate Performance Criteria, Goals and Strategy 
CORPORATE PERFORMANCE CRITERIA, GOALS AND STRATEGY
The Management Board controls the business segments by setting strategic and operative targets and through various financial ratios. In line with our growth strategy, organic growth is a key indicator. Operating income (EBIT — earnings before interest and taxes) is another useful yardstick for measuring the profitability of the business segments.
The Management Board believes that, in addition to operating income, EBITDA (earnings before interest and taxes, depreciation, and amortization) is a good indicator of the business segments’ ability to achieve positive financial results and to service their financial commitments. The operating cash flow contributions of our business segments are controlled on the basis of days sales outstanding (DSO) and inventory turnover (SOI).
A key performance indicator at the Group level is the net debt/EBITDA ratio.
Financing is a central Group function over which the business segments have no control. The financial targets for the business segments therefore exclude both interest payments resulting from financing activities and tax expenses.
At Group level we use return on operating assets (ROOA) and return on invested capital (ROIC) as benchmarks for evaluating our business segments and their contribution to the value of the Group. The Group’s ROIC improved from 7.4 % in 2006 to 8.4 %. The same improvement applies to ROOA, which was 11.4 % in 2007 (2006: 10.4 %). The substantial improvement in these ratios compared to 2006 was mainly driven by the good earnings growth in all business segments. For the future we expect to achieve a continuing improvement in ROIC and ROOA.
The summary below shows ROIC and ROOA by business segment:
| ROIC |
ROOA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| in % | 2007 | 2006 | 2007 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fresenius Medical Care | 8.4 | 7.4 | 12.5 | 11.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fresenius Kabi | 14.0 | 13.3 | 17.7 | 17.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fresenius Helios | 5.0 | 5.0 | 5.6 | 5.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fresenius Vamed* | - | - | 22.8 | 22.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Group | 8.4 | 7.4 | 11.4 | 10.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| *ROIC: Invested capital is negative due to prepayments and cash and cash equivalents. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Strategy and goals
The key elements of Fresenius Group’s strategy and goals are:
- To expand our market position: Fresenius’ goal is to ensure the long-term future of the Company as a leading international provider of products and services in the health care industry and grow its market share. Fresenius Medical Care is the largest dialysis company in the world with an especially strong market position in the United States. Future opportunities in dialysis will arise from international expansion in dialysis care and in renal pharmaceuticals. Fresenius Kabi is the European market leader in infusion therapy and clinical nutrition. To strengthen this position, more products in its portfolio will be rolled out to growth markets. Further market share is also anticipated from the launch of new products in the field of intravenously administered generic drugs and new medical devices for infusion therapy and clinical nutrition. Fresenius Helios is in a strong position to take advantage of the further growth opportunities offered by the continuing privatization process in the German hospital market. Fresenius Vamed will be further strengthening its position as a specialist provider of engineering and services to hospitals and other health care facilities.
