31. Supplementary information on capital management

The Fresenius Group has a solid financial profile. Capital management includes both equity and debt. A principal objective of Fresenius Group’s capital management is to optimize the weighted-average cost of capital. Further, it is sought to achieve a balanced mix of equity and debt. To secure growth on a long-term basis, a capital increase may also be considered in exceptional cases, for instance to finance a major acquisition.

Due to the Company’s diversification within the health care sector and the strong market positions of the business segments in global, growing and non-cyclical markets, predictable and sustainable cash flows are generated. They allow a reasonable proportion of debt, i. e. the employment of an extensive mix of financial instruments. Moreover, Fresenius Group’s customers are almost invariably of high credit quality.

Equity and debt have developed as follows:

Shareholders ’ equity


in million € December 31, 2009 December 31, 2008
Shareholders’ equity 7,652 6,943
Total assets 20,882 20,544
Equity ratio 36.64 % 33.80 %

in million € December 31, 2009 December 31, 2008
Shareholders’ equity 7,652 6,943
Total assets 20,882 20,544
Equity ratio 36.64 % 33.80 %

Fresenius SE is not subject to any capital requirements provided for in its Articles of Association. Fresenius SE has obligations to issue shares out of the Conditional Capital relating to the exercise of stock options and convertible bonds on the basis of the existing 1998, 2003 and 2008 stock option plans (see note 34, Stock options).

Debt


in million € December 31, 2009 December 31, 2008
Debt 8,299 8,787
Total assets 20,882 20,544
Debt ratio 39.74 % 42.77 %

in million € December 31, 2009 December 31, 2008
Debt 8,299 8,787
Total assets 20,882 20,544
Debt ratio 39.74 % 42.77 %

According to the definitions in the underlying agreements, the MEB and the CVR are not categorized as debt.

Assuring financial flexibility is the top priority in the Group’s financing strategy. This flexibility is achieved through a wide range of financing instruments and a high degree of diversification of the investors. Fresenius Group’s maturity profile displays a broad spread of maturities with a high proportion of medium and long-term financing. In the choice of financing instruments, market capacity, investor diversification, flexibility, credit conditions and the existing maturity profile are taken into account.

A key financial performance indicator for the Fresenius Group is the net debt / EBITDA ratio, which is measured on the basis of US GAAP figures. This ratio was 3.0 as of December 31, 2009. The aim is to reduce this further. To achieve this goal, Fresenius Group’s focus is primarily on earnings growth and sustained strong cash flows as well as debt reduction.

Fresenius Group’s financing strategy is reflected in its credit ratings. Fresenius is covered by the rating agencies Moody’s, Standard & Poor’s and Fitch.

The following table shows the company rating of Fresenius SE:

  Standard & Poor’s Moody’s Fitch
Company rating BB Ba1 BB
Outlook stable negative stable

  Standard & Poor’s Moody’s Fitch
Company rating BB Ba1 BB
Outlook stable negative stable

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