Management Report Results of Operations, Financial Position, Assets and Liabilities 
The Fresenius Group had an excellent year 2007. We again achieved record levels in sales and earnings, and improved profitability in all business segments. Capital expenditure on property, plant, and equipment was at a high level and assures further growth.
OPERATIONS AND BUSINESS ENVIRONMENT
GROUP STRUCTURE AND BUSINESS
Fresenius is an international health care group with products and services for dialysis, hospitals, and outpatient medical care. In addition, Fresenius focuses on hospital operations and offers engineering and services for hospitals and other health care facilities.
Fresenius AG was converted into a European Company (Societas Europaea) following the shareholder resolution of December 4, 2006. The change of legal form came into effect as from July 13, 2007, with its entry in the Commercial Register. Since then, Fresenius AG has been operating under the name Fresenius SE. After the successful expansion of the Group’s international business and the strong growth in recent years, the conversion into a European Company was a consistent step in the Company’s development. The SE is a modern legal form based on European law which will underline the Group’s international focus and facilitate an open and international corporate culture at Fresenius. The conversion did not lead to a liquidation of the Company or to the formation of a new legal entity. Since there was no change in its legal identity, the Company’s corporate structure and governance, and all shareholders’ stakes in the Company remained unchanged.
As of December 31, 2007, the operating business comprised the business segments Fresenius Medical Care, Fresenius Kabi, and Fresenius ProServe, all legally independent entities managed by the operating parent company, Fresenius SE. The corporate structure remained unchanged in 2007. As from January 1, 2008, the former Fresenius ProServe business segment has been replaced by two new business segments — Fresenius Helios and Fresenius Vamed which so far have formed Fresenius ProServe. This step underlines the growing importance of the hospital operations business (HELIOS) and the engineering and service business for hospitals (VAMED). The two business segments will now be run independently and be directly represented in Fresenius SE’s Management Board. The Fresenius Group is therefore now organized into four business segments: Fresenius Medical Care, Fresenius Kabi, Fresenius Helios and Fresenius Vamed.
- Fresenius Medical Care mainly focuses on dialysis care and manufactures and markets products for the treatment of patients with end stage renal disease (ESRD).
- Fresenius Kabi specializes in the production and sale of products for infusion therapy, clinical nutrition and transfusion technology.
- Fresenius Helios operates hospitals and had a network of 60 clinics, mainly in Germany, as of December 31, 2007.
- Fresenius Vamed provides engineering and services for hospitals and other health care facilities on an international basis.
- The segment Corporate/Other comprises the holding activities of Fresenius SE, the IT service provider Fresenius Netcare and Fresenius Biotech. Fresenius Biotech is active in research and development in the field of antibody therapies. Corporate/Other also includes the consolidation measures conducted between the business segments.
