Fresenius Shares
Overall 2007 was a good year for the stock markets, and especially for German equities. The Fresenius ordinary share did much better than the benchmark index MDAX, while the Fresenius preference share performed in line with the MDAX. Over the last three years, both share classes have outperformed the MDAX, with the Fresenius ordinary share increasing by 125% and the Fresenius preference share by 148%. Over the same period the MDAX gained 84%.
STOCK MARKETS
After a good year for the stock market in 2006, the positive trend on the international equity markets continued in the first half of 2007. In June the DAX moved above the 8,000 mark for the first time since 2000 to reach an all-time high of 8,106 points on June 16, 2007. At the end of May the MDAX topped 11,000 points for the first time ever and touched its high for the year of 11,378 points on July 9, 2007. The price gains in the first half of the year were driven both by the above-average growth dynamic of corporate earnings, good economic data and buoyant merger and acquisition activity as well as by the optimism prevailing in the market. Price corrections midway through the year then brought the upward trend to a halt. Triggers were sharply increased oil prices and the upheavals resulting from the US subprime mortgage crisis. These caused considerable uncertainty in capital markets in the second half of the year. Many investors withdrew their capital from the capital market and from stocks respectively to minimize risk, leading to high volatility in individual stocks and indices. In the following months the DAX lost up to 10%, down to 7,270 points. The MDAX lost 21%, falling to 9,042 points. Both indices managed to recover by the end of 2007, with the DAX closing the year at 8,067 points and the MDAX at 9,865 points. For the full year the DAX’s performance was 22%, while the MDAX gained 5%. Of the European blue chip indices, the DAX was the best performer, while Portugal’s PS120 (+16%), Norway’s OBX (+14%), Spain’s IBEX (+7%) and the EuroStoxx 50 (+7%) beat the MDAX. The European Dow Jones STOXX 600 Index, which comprises Europe’s 600 largest companies, closed the year at 365 points, at the same level as at the end of 2006. In this index the best performing sectors were Chemicals (+27%), Automobiles (+25%) and Basic Resources (+24%), while Banks (-9%), Travel/Leisure (-10%) and Insurance (-10%) were the three worst performers. The leading US indices also posted gains. The S&P 500 closed 2007 with an increase of 4%, while the Dow Jones Industrial Average was up 6%.
FRESENIUS SHARES
In 2007, the ordinary share rose 11% and the preference share 5%. Both share classes exceeded the European Dow Jones Stoxx Healthcare Index (-5%). The ordinary share outperformed the MDAX and the German Prime Pharma & Healthcare Index (+10%). Despite the excellent operating performance and the positive outlook, the Fresenius shares were unable to decouple from the general market trend. Discussions over a possible change in the EPO dosage in dialysis also affected the performance of the shares.
The price of the ordinary share fell to € 50.17 on January 22, 2007, its low for the year, but recovered to close at € 56.00 at the end of 2007. The ordinary share reached its high for the year of € 63.35 on April 16, 2007. The preference share touched its low for the year of € 50.70 on October 30, 2007 and its high for the year of € 63.12 on April 13, 2007. It closed the year at € 56.90.
Fresenius SE’s market capitalization rose 9% to € 8.8 billion as of December 31, 2007.
The average Xetra daily trading volume in the Fresenius shares increased substantially in 2007. This can also be seen as evidence that the share split, carried out at the beginning of 2007, succeeded in increasing the attractiveness and liquidity of the two share classes.| Average trading volume 2007 |
Average trading volume 2006 |
Change in % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ordinary share |
70,574 | 61,169 | 15 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preference share | 534,660 | 363,570 | 47 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prior-year figures adjusted for the share split in February 2007
SHARE SPLIT AND CAPITAL INCREASE FROM COMPANY FUNDS
The reorganization of subscribed capital (share split), with a capital increase from company funds approved by the Extraordinary General Meeting in December 2006, was carried out on February 2, 2007. The shareholders of Fresenius SE received two additional shares for each ordinary or preference share previously held.
CAPITAL STRUCTURE
Stock options on ordinary and preference shares under the
1998 and 2003 stock option plans were exercised to a small
extent in 2007. This increased the number of ordinary and
preference shares by 405,447 shares each. At the end of
2007, there were 77,582,385 bearer ordinary shares and 77,582,385 bearer preference shares outstanding. Further
information on the stock option plans can be found in the Notes of this Annual Report.
DIVIDEND
Based on the Group’s excellent financial results, we are pleased to increase the dividend for 2007. We are therefore continuing our earnings-linked dividend policy. We are proposing to our shareholders a dividend increase for the 15th consecutive year to € 0.66 (2006: € 0.57) per ordinary share and € 0.67 (2006: € 0.58) per preference share. This is an increase of approximately 15% per share. The total proposed dividend distribution will be € 103 million, equivalent to 25% of Group net income.
We have added a total return calculator as a new service on our website at www.fresenius.com/Investor Relations/ Shares/Share Price. You can use this calculator to determine the total return on your Fresenius shares including dividend payments.
SHAREHOLDER STRUCTURE
The Else Kröner-Fresenius Foundation is the largest shareholder of Fresenius SE with approximately 60% of the voting shares. According to Allianz Lebensversicherungs-AG the company holds between 5 and 10% of the voting shares. Further shareholding information can be found in the Notes.
At the beginning of 2007, we conducted a shareholder survey covering 82% of our subscribed capital. 97% of the ordinary shares and 67% of the preference shares were identified.
According to this survey, 204 institutional investors held about 70.0 million shares. This was split into 21.7 million ordinary shares and 48,3 million preference shares. 0.9 million ordinary shares and 3.3 million preference shares were identified as retail holdings. The top ten investors hold approximately 15% of the ordinary share capital and approximately 28% of the preference share capital.
The geographical distribution of the Fresenius shares became more international in 2007. Approximately 13% of the preference shares and approximately 9% of the ordinary shares are held by US investors (2006: 11% and 6%, respectively). Investors in Great Britain hold about 24% of the preference shares and about 9% of the ordinary shares (2006: 22% and 6%, respectively). The relative weight of German investors declined: approximately 17% of the preference shares and about 4% of the ordinary shares are held by German investors (2006: 23% and 7%, respectively).
INVESTOR RELATIONS
Our Investor Relations activities are aligned to the transparency rules of the German Corporate Governance Code. We pursue comprehensive, timely and open communication both with private and institutional investors and with financial analysts. The equal treatment of all market actors is very important to us in our day-to-day communication.
In 2007, we intensified our dialogue with the capital market in order to enable investors and analysts to make a fair assessment of Fresenius Group’s business situation and market conditions. In addition to the regular analyst meetings held two times each year and the quarterly conference calls, Fresenius also made presentations in important financial markets in Europe and in the United States. Regular contacts with institutional investors and analysts were further extended at eleven international investor conferences and numerous roadshows, as well as at one-on-one meetings with institutional investors and analysts. We also continued the dialogue with private investors. Here, the Internet is an important instrument. Our private shareholders can follow live web casts of the quarterly conference calls and download presentations of analysts meetings and conferences at www.fresenius.com/Investor Relations/Presentations. We intend to make further improvements to our communication with private shareholders, and welcome any suggestions you may care to make. We also plan to further extend the information content on our website in 2008.In 2007, we again received important commendations for the standard of our financial communications. In the competition for the best annual report conducted by the German business magazine manager magazin, which analyzed more than 200 annual reports published by German and European companies, we came second in the MDAX category and seventh in the overall ranking. In the Handelsblatt’s annual report test “Geschäftsberichte im Test”, we were placed fifth out of the 130 companies surveyed. We also received the Platinum Award in the category “Health Care-Equipment & Supplies” from the League of American Communications Professionals (LACP), USA. In the overall ranking for all categories, Fresenius achieved a very good 25th place. About 2,500 companies from 21 countries took part in this contest. In the Thomson Extel competition for the best investor relations work, we managed to climb 14 places this year and came fourth out of all the MDAX companies. In the Capital Investor Relations Prize, Fresenius was ranked 12th out of all the MDAX companies, an improvement of 13 places.
EARNINGS PER SHARE
In 2007, the Fresenius Group achieved earnings per ordinary share of € 2.64 and per preference share of € 2.65 (2006: € 2.15 per ordinary share and € 2.16 per preference share). This is an increase of 23%. Further details on earnings performance and earnings per share can be found in the Management Report and in the Notes.
ANALYST RECOMMENDATIONS
The recommendations published by financial analysts are an important guide for institutional as well as private investors when making investment decisions. According to our survey, we were rated with 18 “buy” recommendations and three “hold” recommendations as of February 20, 2008. This reflects analysts’ confidence in the long-term earnings power of the Fresenius Group and the potential both for our business and for our shares. The table below lists the banks which provide analyst coverage on Fresenius and their latest recommendations:
| ANALYST RECOMMENDATIONS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bankhaus Lampe | December 2007 | Hold | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bankhaus Metzler | November 2007 | Buy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cheuvreux | February 2008 | Outperform | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Citigroup | February 2008 | Buy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit Suisse | November 2007 | Buy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deutsche Bank | February 2008 | Buy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dresdner Bank | February 2008 | Buy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DZ Bank | February 2008 | Buy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Euromobiliare | February 2008 | Buy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goldman Sachs | January 2008 | Hold | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| JP Morgan | February 2008 | Overweight | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Landesbank Baden-Württemberg | November 2007 | Buy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lehman Brothers | February 2008 | Buy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Main First Bank | February 2008 | Buy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Merrill Lynch | February 2008 | Buy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NordLB | November 2007 | Hold | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Redburn Partners LLP | August 2007 | Buy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sal. Oppenheim | February 2008 | Buy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| UBS | February 2008 | Buy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| UniCredit | February 2008 | Buy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| WestLB | February 2008 | Add | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| KEY DATA OF THE FRESENIUS SHARES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Number of shares | 155,164,770 | 51,451,292 | 50,722,280 | 40,971,038 | 40,969,684 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ordinary shares | 77,582,385 | 25,725,646 | 25,361,140 | 20,485,519 | 20,484,842 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preference shares | 77,582,385 | 25,725,646 | 25,361,140 | 20,485,519 | 20,484,842 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock exchange quotation ordinary share1) (€) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| High | 63.35 | 51.324) | 36.384) | 27.834) | 22.834) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Low | 50.17 | 35.474) | 25.194) | 20.104) | 11.734) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Year-end quotation | 56.00 | 50.574) | 35.334) | 24.884) | 21.504) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock exchange quotation preference share1) (€) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| High | 63.12 | 55.324) | 39.834) | 24.094) | 19.184) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Low | 50.70 | 37.414) | 22.974) | 16.964) | 12.004) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Year-end quotation | 56.90 | 54.274) | 38.224) | 22.944) | 18.484) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Market capitalization2) (million €) | 8,759 | 8,091 | 5,596 | 2,939 | 2,437 |
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| Beta factor3) | 0.80 | 0.88 | 0.75 | 0.33 | 1.10 |
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| Total dividend distribution (million €) | 103.25) | 88.8 | 75.8 | 55.9 | 51.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Per share in € | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividend ordinary share | 0.665) | 0.57 | 0.494) | 0.454) | 0.414) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividend preference share | 0.675) | 0.58 | 0.504) | 0.464) | 0.424) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings per ordinary share | 2.64 | 2.154) | 1.764) | 1.364) | 0.934) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings per preference share | 2.65 | 2.164) | 1.774) | 1.374) | 0.944) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1) Final Xetra quotations on the Frankfurt Stock Exchange
2) Total number of ordinary and preference shares multiplied by the respective
Xetra year-end quotations on the Frankfurt Stock Exchange
3) Fresenius preference share (source: Bloomberg)
4) Adjusted for share split
5) Proposal
| FRESENIUS SHARE INFORMATIONS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Ordinary share |
Preference share |
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| Securities Identification no. | 578 560 | 578 563 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ticker symbol | FRE | FRE3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ISIN | DE0005785604 | DE0005785638 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bloomberg symbol | FRE GR | FRE3 GR | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reuters symbol | FREG.de | FREG_p.de | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Main trading location | Frankfurt/Xetra | Frankfurt/Xetra | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||