Annual Report 2019

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• Fresenius Kabi

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In 2019, the excellent growth in the emerging markets was particularly note­worthy, partially offsetting the somewhat softer performance in North America. With organic sales growth of 4% and EBITEBIT (Earnings before Interest and Taxes)EBIT does include depreciation and write-ups on property, plant and equipment. EBIT is calculated by subtracting cost of sales, selling, general and administrative expenses, and research and development expenses from sales. growth in constant currency of 3%, we achieved our 2019 financial outlook.

Fresenius Kabi specializes in the therapy and care of chronically and critically ill people. The portfolio includes IV drugs, i.e., intravenously administered generic anesthetics, analgesics, anti-infectives, and drugs for the treatment of oncological and other critical diseases. We also develop biosimilarsbiosimilarsA biosimilar is a drug that is “similar” to another biologic drug already approved. focusing on oncology and autoimmune diseases, and we launched our first biosimilar product in Europe in 2019. Another product segment is clinical nutrition. In this segment, we are one of the few companies worldwide that offer both parenteral and enteral nutrition products. The infusion therapy portfolio includes infusion solutions and blood volume substitutes. In the medical devices / transfusion technology segment, we offer infusion and nutrition pumps, as well as consumables, for the administration of pharmaceuticals and clinical nutrition products. Moreover, our portfolio includes products used in the collection and processing of blood and cell components, as well as in transfusion medicine and cell therapy.

Business development

In 2019, Fresenius Kabi increased sales by 6% to € 6,919 million. Organic sales growth was 4%. Currency translation effects increased sales by 2%. This resulted from the appreciation of serveral currencies, mainly of the U.S. dollar against the euro.

In Europe, we achieved organic sales growth of 2% based on the good development of the clinical nutrition product segment. In North America, organic sales growth was – 2%. Intensifying competition on selected molecules, a further easing of tailwinds from drug shortages as well as a shift in clinical practice towards non-opioids in hospital-based pain management weighed on the sales development. In the emerging markets and developing countries, Fresenius Kabi achieved significant sales growth, especially with clinical nutrition products. Organic sales growth in Latin America was 15%. In Asia-Pacific, we achieved organic sales growth of 14%. EBIT ¹ improved by 5% to € 1,200 million. Currency translation effects increased EBIT ¹ by 2%.

Acquisitions / investments

In the United States, Fresenius Kabi continued its extensive investment program at its manufacturing sites. The aim of these investments is, among other things, to further increase the degree of modernization and automation and thus to make a significant contribution to the continuous increase in efficiency and to further raise our quality standards in these plants. In 2019, we made considerable progress with our investment program and continued to work on equipping our plants with state-of-the-art technologies for the manufacture of pharmaceutical products; the investment program will be continued over the coming years.

We opened our new research and development center for biosimilars in Eysins in the Swiss canton of Vaud. The new development center is an important step in expanding our capacity to develop new biosimilar products.

Due to the demand for enteral products in China, we are expanding our production capacity there. In 2019, we completed the planned expansion of the site at our plant in Wuxi to include additional production lines for our Easy Bag tube feed. This makes it possible for us to supply the local market with these products directly and efficiently. Fresenius Kabi is also building a new production building on the Wuxi Campus, where enteral nutrition products that have the status of Foods for Special Medical Purposes will be manufactured. At the same time, Fresenius Kabi is expanding its enteral nutrition research and development activities in Wuxi.

Product segments

In the segment of generic IV drugs, we have expanded our product portfolio to additional regional markets. There were more than 85 product launches of IV drugs worldwide. In the area of biosimilars ², we received marketing authorization from the European Commission in April for Idacio, an adalimumab biosimilar, for all indications of the reference medicine, and were subsequently able to launch our first biosimilar in Europe. In addition, the attending physicians and their patients can receive access to KabiCare, a program designed to train and support physicians and patients with information material on biosimilars, autoimmune diseases, and treatment with Idacio.

¹ On a comparable basis: before special items and adjusted for IFRS 16 effect

² For additional information on the biosimilars activities please see the Group Management Report.

For a detailed overview of special items please see the the Group Management Report.

In clinical nutrition, we successfully further expanded the market presence of our products for parenteral nutrition. With our three-chamber bags, we are the global leader in the multi-chamber bag product segment for parenteral nutrition. New products enable us to offer our customers a comprehensive range of therapies. In 2019, we started to launch our new product SmofKabiven Low Osmo Peripheral, for example, a three-chamber bag that provides patients with a time-­efficient energy delivery. We also achieved growth in enteral nutrition, particularly in the Asia-Pacific and Latin America regions. In 2019, we moved ahead with the internationalization of our product portfolio and launched our Fresubin sip and tube feed products in South Korea and Australia.

In infusion therapy, we worked on further expanding our infusion solutions business in the United States.

In the medical devices product segment, we launched our ProNeo product portfolio in Europe in 2019. The ProNeo portfolio includes a comprehensive range of transnasal feeding tubes and accessories that meet the specific requirements of enteral nutrition application in neonatal and pediatric wards. In the transfusion technology product segment, we have begun to introduce the Amicus Blue cell separator in Europe. This cell separator can also be used for extracorporeal photo­pheresis.