Fresenius Vamed
Fresenius Vamed had a successful year in 2007 – with sales growth of 4% and EBIT
growth of 13%. Order intake and order backlog also developed strongly. This is a good
basis for further growth.
Fresenius VAMED specializes in international projects for hospitals and other health care facilities. In 2007, the company celebrated its 25th anniversary. Founded in 1982, VAMED has grown from a small project company to become one of the world’s leading providers of a full line of services for the health care industry. VAMED was originally established to construct the Vienna General Hospital and University Clinic (AKH) and equip it for operation. To assure the proper functioning of the technical installations, VAMED was also commissioned with the technical management of AKH in 1986. We still perform this function today. Meanwhile, we are well positioned with a comprehensive portfolio of services. We have completed approximately 450 projects in 47 countries. Our portfolio ranges from project development, planning and turnkey construction, via facility management, through to the total operational management of hospitals and other health care facilities. VAMED is also a pioneer in public-private partnership (PPP) models for hospitals in Central Europe.
Fresenius Vamed has the following structure:
BUSINESS DEVELOPMENT
In 2007, Fresenius Vamed increased sales by 4% to € 408 million (2006: € 392 million).
The table shows the sales development by activity:
| in million € |
2007 | 2006 | Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Project business | 259 | 249 | 4% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Service business | 149 | 143 | 4% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales in the project business and in the service business increased by 4% each. Sales in the project business rose to € 259 million and sales in the service business to € 149 million.
In 2007, Fresenius Vamed’s strongest sales regions were Europe (59%) and Africa (31%), followed by Asia-Pacific and Latin America (9% and 1%, respectively).
Order intake and order backlog for projects improved as follows:
| in million € |
2007 | 2006 | Change |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Order intake | 395 | 337 | 17% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Order backlog | 510 | 387 | 32% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In addition, VAMED is reponsible for revenues of approximately € 350 million from management contracts. The related fees are included in VAMED’s financial statements.
Earnings performance at Fresenius Vamed was very positive. In 2007, EBIT rose by 13% to € 26 million (2006: € 23 million), with a very good EBIT margin of 6.4%.
Since the individual areas of activity are not capital intensive, Fresenius Vamed’s return on equity (ROE) before taxes is very strong. In 2007, ROE improved to 22.9% (2006: 22.5%).
Fresenius Vamed’s net income was € 23 million, an increase of 15% (2006: € 20 million).
PROJECT BUSINESS
This part of our business comprises project management and consulting. This includes the planning, turnkey construction and financing management of projects. VAMED responds flexibly to clients’ local needs, providing custom-tailored solutions, all from one source. In some instances, we also carry out projects in cooperation with partners. Often, this cooperation takes the form of public private partnerships (PPPs) with the public sector.
Our project business was very successful in 2007. In Gabon, one of our key markets in Africa, VAMED received further follow-on contracts from the local government, including contracts for the turnkey construction of three regional hospitals. In Nigeria, the government approved contracts for the extension of six university clinics. The project was started in the first quarter of 2007. In Malaysia, the Prince Court Medical Center in Kuala Lumpur, which was built and equipped by VAMED, was opened. At the same time, VAMED was commissioned, jointly with the Vienna University of Medicine, with the overall operational management of the hospital. The PETRONAS’ Prince Court Medical Center is one of the most modern hospitals in Southeast Asia.
In Indonesia, together with several Austrian and Hungarian aid organizations, VAMED has built a 100-bed hospital with an integrated pediatric clinic in the Banda Aceh region, one of the areas hardest hit by the recent tsunami. When it opened in November 2007, the new Meuraxa hospital was celebrated as the single most important project in the whole post-tsunami reconstruction process. As the project’s chief initiator – providing our entire service package free of charge – we made an important contribution toward the project’s realization.
In China, a market where VAMED has already been operating successfully for many years, we completed another three medical equipment projects in 2007. We are also working on various joint venture projects in order to extend our business in turnkey projects.
In 2007, VAMED opened a branch office in Russia. This will now enable us to participate in the dynamic development of Russia’s health care sector directly from Moscow. With the 300-bed general hospital in Krasnodar, VAMED has won a large trend-setting turnkey project in Russia. The project was started in the second quarter of 2007.
In VAMED’S home market, Austria, the focus was on the development of further PPP projects. We also won additional project assignments within the framework of existing private public partnerships. More PPP projects are currently being developed in Central Europe. In partnership with the City of Vienna, we are working on an extremely large project in the area of thermal centers, resorts and health tourism that is due for completion by 2011. The Wien-Oberlaa thermal center is currently being expanded into a unique health and wellness center. Family and relaxation areas including 4,000 sqm of pools, a 3,000 sqm sauna area and extended health care areas will offer much greater variety than previously, making the Wien-Oberlaa thermal center the only facility of this size in a European city. The contract for this project is worth over € 100 million.
SERVICE BUSINESS
VAMED offers a full range of facility management services for health care facilities from consulting, planning and execution to total operational management. With this integrated portfolio of services we guarantee optimal operation of a facility over its entire life cycle, from the construction of the buildings to the end of primary use, modernization, or renewal. Modular in design, our service offering encompasses every aspect of technical, commercial and infrastructural facility management, ranging from building and equipment maintenance, medical technology management, waste management, energy management, cleaning of buildings and outdoor facilities, security services, up to technical management. In addition to facility management, VAMED also specializes in logistics for the health care industry. Our goal is to minimize logistics costs while assuring the required quality of care. We do this by optimizing the logistics processes within the individual functional areas – for example hospitals or medical centers – and by planning and structuring the project financing and, finally, by constructing and operating regional logistics centers.
In the field of hospital services, the partnership with AKH
in Vienna has been successfully continued. AKH comprises
35 clinics and institutes with a total of 2,200 beds. As well as
our ongoing technical management role, this partnership
also included a number of structural building projects. After
AKH, VAMED’s largest service contract at present is with the Charité University Hospital in Berlin. The consortium headed
by VAMED is responsible for the service area at Charité. The
approximately 2,000 employees of the State of Berlin and the
private partners within the Charité Facility Management
GmbH joint venture established for this purpose, carried out
their services to the customer’s complete satisfaction and
achieved all agreed targets. Innovative partnership models of
this type are getting of greater importance in our service
portfolio. We have concluded extensive new service contracts,
for example with VIVANTES clinics, seven church-administered
hospitals in Berlin, as well as with eleven clinics with
a total of about 3,000 beds in the Hannover region. All longterm
service contracts in Austria were continued.
In Gabon, VAMED continued to be responsible for the total operational management of three regional hospitals and for the technical management of a hospital in Libreville. In Libya, the Medical Center Tripoli, whose service contract was renewed in 2007, and a number of hospitals in Benghazi are important technical management reference projects. In the Middle East, we commissioned an important five-year project for the total operational management of the 450-bed Al Ain hospital in Abu Dhabi. Together with the PETRONAS hospital in Kuala Lumpur, Malaysia, this is the second international total operational management project for which VAMED is responsible jointly with the Vienna University of Medicine.