Fresenius Medical Care AG (FMS) 2008 Q4 法說會逐字稿

Okay, everybody, I think everybody's been back and technically we are back online. I apologize for the delay.

Thank you very much, good afternoon. Thanks for joining Fresenius Medical Care's Q4 full year 2008 analyst presentation. As normal I have the easiest part up here actually for the next hour and a half. I just have to introduce you to the safe harbor statement.

This presentation includes certain forward-looking statements. Actual results could differ materially from those included in the forward looking statements due to various risk factors and uncertainties. All these risk factors and uncertainties are described in detail in the Company's filing, filed with the SEC and the Deutsche Boerse.

With that, I think (inaudible) introduced Fresenius Medical Care already. With us is Ben Lipps, the CEO of Fresenius Medical Care, and Larry Rosen our CFO and they will give you an update on the achievements for 2008 and on the, actually, good outlook for 2009. Ben, the floor is yours.

All that was not recorded then, right? Okay, I'll tell you what, we'll do a new introduction then.

Again, welcome, glad all you folks could join us today, and a warm welcome to all of our employees and position associates around the world, management board, and those who have joined us on the Internet. I will cover the business update, Larry will cover the financials, and then we'll go back to questions and answers at the end of the program.

Yes, let me say before I start, this was a very interesting and difficult year, we ended up with significant headwinds at the end of the year in terms of currency fluctuations. Basically also in terms of pharmaceutical costs, but I'm really proud to say that the team did an excellent job, we had another record year and we're also going to propose our 12th consecutive dividend increase. We saw our organic growth grow through the year as the Heparin issues basically were tackled and put behind us. We ended up with a very strong organic growth of 9% in the fourth quarter.

Now through the year, in the last two years we've been expanding our production facilities and also our De Novo clinics, and I'll talk a little more about that when we look at the different segments of our business. But the reason for that was to be prepared to continue the growth that we see as we go forward into 2009 and 2010. Strengthen our renal pharmaceutical business with the agreement with Galenica, we're excited, we're actually in the process then of delivering excellent iron products both in the International region and also in North America.

So I'm very enthusiastic about 2009 and 2010, we continue to see very strong interest in our high quality products and services and we have the capacity both in the clinics now, and also in the production plants to meet those demands. And if you also look at the pipeline in the renal products area, we have a number of new products coming out in '09 and '10 in both hemodialysis and in peritoneal dialysis which I'll cover later. So we're very enthusiastic about 2009, and 2008 was clearly a difficult but very successful year.

And you can see on the next slide here, we accomplished our targets, Larry will talk more about them later. We had 9% growth in top line $10.6 billion, organic growth for the year on average was 7%, again that's at our high range of our guidance which is usually 6% to 9%, and net income of course, which you've seen in the announcements the $818 million, again up 14%. So -- and we also had a 13% earnings per share increase which because of stock options exercised in the last year, we ended up with a few more shares.

Turning now to looking at the revenues around the world, we -- and looking by region, North America delivered $7 billion worth of revenue this year, a 5% growth. Again, that accelerated during the year as the EPO administration situation basically stabilized, and I'll talk a little bit about that. One of the very exciting things about the US operations is we have a very unique group of coalition members who work for the betterment of, basically, the patients and this is something that we've developed with the, basically our partners here who are the other LBOs, the medium-sized dialysis clinics, the drug manufacturers, the device manufacturers, the physicians and the nurses. So we have a very strong coalition in the US that works together to solve basically our inner discipline issues, come out with one particular voice for the renal patients, and then that is why we were successful last year in accomplishing essentially an increase in reimbursement, and also getting a number of things that we arranged through the government. That Group is still very active, and we're very interested in participating and supporting the new administration with some of their goals, and you'll hear about those later in the year. So the US, then, has really come together, all players in the renal space, and are doing an excellent job of working together.

Looking at International now, we had $3.6 billion in sales, excellent growth, 18%. Again we had a little tailwind in terms of the currency at the beginning of the year, about 5%, and we ended up with some acquisitions about 1%. So we ended up with a very strong organic growth in the International of 12%.

And Europe is the major portion of that, 70% of the revenue, they too had an excellent year at an organic growth rate at 12%. So again -- and of course, we saw for the first time we passed the $600 million revenue in Asia Pacific and touched very close to the $500 million revenue in Latin America, so each of the regions in the International grew double-digit in constant currency. A very strong year in the International region.

If you look by segment you'll see that we're pretty stable at about 27%, 26% of our revenue in Products and the other is in Services. And this is not a particularly bad mix, this has been the way we've designed this, and I'll talk a little bit about how we use the service in Latin America and some other countries as we go along. So we're basically quite pleased with the year, and quite pleased with the performance of all other regions within the company.

Let's now look at Dialysis Services, we had a 6% constant currency growth in Services, again that was led by the 18% constant currency growth in International, and primarily as I mentioned, Europe had an 18% growth, Latin America, higher, 22%, Asia Pacific about 10%. Now our focus has been in the International area, I'll show you the number of De Novos we've been building at a 10% rate. So we've been expanding very rapidly our international service business and this is an excellent platform then for the future because all of our other products, the Renal Pharma, the products go through that particular network of clinics and so this just gives us the long term stability and the ability to actually innovate new therapies which are good for the patients, and we get better outcomes such as online hemodiafiltration. So this has been one of our strong investments this year, and it's paying off now and in the future. We treat about 185,000 patients, 186,000 patients and we have about 2,400 clinics. So that's the footprint we have today, and as I've said, we're very confident we've got the, basically the capability then to continue to grow.

Let's look at the Dialysis Products, again a very strong year. We've had 11% constant currency growth, clearly above the market. The US had a 15% growth for the year. Now again let me break that out because we are including our Renal Pharma business in the products. And the reason for that is that we envision over time that the actual equipment will be used to deliver some of the Renal Pharma drugs, and at the same time, we're offering the Renal Pharma to all of our customers, just like we do our machines and all of our other products. So this is clearly a situation where our intention is to help the industry around the world, in terms of being able to, basically depend on one very qualified and supportive source. So if you look at North America, the actual hemodialysis business grew in the 6% to 7% range which is still double the market. and I think this year we ended up with a higher water mark of about 95% machine base in the US sales. So we clearly are doing quite well but you are running out of headroom in terms of essentially, basically, what else to sell in the Products area.

Our dialyzers continue to 7% to 10% range. and the rest is the, basically the Renal Pharma which grew by 115%, so we passed the $100 million mark in terms of Renal Pharma in the US this year.

Turning to International, very strong 10% constant currency growth, again driven by the Products, although within the International region we also have $100 million worth of basically Pharma revenue. And we had machine sales, very strong machine sales, 15%, gaining market share and again that's primarily driven by the new 5008 machine that we introduced two years ago in the International area. And so dialyzers again growing quite strongly, and that's the reason we expanded the actual capacity for dialyzers around the world the last couple of years. So, again, the Products area has done very well for the year.

Looking at the region real quickly, not a whole lot has changed. Basically we ended up with a 10% constant currency growth because the dollar basically strengthened against the euro and a number of other currencies which Larry will talk about. We clearly saw a 6% growth in actual revenue, but if you look at it in constant currency, it's around 10%. We also had a high watermark of 9% organic and I wanted to point that out. That was one of our best, it's absolutely at the top. We're usually we're looking between 6% and 9% and this is currently at the top.

If you look at North America for the first time, they had an 8% organic growth. Again what you'll see here is everything starting to click together, and the EPO discussion's over, and so we essentially are back on track, and of course as we grow the Renal Pharma business and some of these things they add clearly to the business.

International,12% organic growth, very similar to what they performed all year. So fourth quarter was a very good sales quarter for us. We certainly had some headwinds from currency and some cost but clearly the revenue and the demand for the products continued very strongly.

Looking at services, fourth quarter was again one of our best quarters as far as Service revenue. The US came in at 7%, which clearly is a high watermark for them, and International came in at 18%, continuing the trend that they set for the whole year. So we clearly exceeded our expectations in the US which was 5% to 6% for the quarter, and that brought us basically to the 4%, where we were in the 1% to 2% starting the year because of Heparin. So again the Services around the world did very well in the fourth quarter and we leave fourth quarter and move in into the rest of the year, we're still really quite optimistic about some of the things. I'll talk here in terms of revenue per treatment.

Now this is a little more metrics, I show this each time. I'll try to go through it in reasonably quick detail. This just gives you a view in terms of how we look at the business. Starting first with organic growth, we had 8% organic growth in the service business for the quarter. If you look at, basically, International had 18% growth, it was 10% same market growth, 7% constant currency growth, in terms of revenue per treatment. So we're continuing to see in the International area, we -- the team was able to achieve reimbursement increases in 11 of the 32 countries we operate in, and again a very spectacular revenue per treatment increase. Now that also reflects some of the good work that they're doing in Portugal where we've moved into the bundle starting in April, and that's really a trend that we're interested long term, and that is providing more and more services which we do better than probably most Groups. And we can clearly pass on that benefit to the patients and to the providers.

North America had a 3% growth in same market, pretty much at the market, but they also had a 3% growth in revenue per treatment. Again I'll talk a little bit about that on the next slide, but that was an excellent accomplishment on the part of the North America team.

If you go down to De Novos, we had a record build of De Novos this year as Larry will show you on our cash -- on our CapEx -- but it was planned and we built 129 De Novos, in the US 81, and that's up from 51 the year before, and in International we built 48 De Novos and that's up from 29. Now we will probably, as Larry talks about our guidance for next year, we're at a point now where we've got enough, basically, clinics in the right positions, so we will probably slow back then to about $100 million less in terms of CapEx in 2009, but we've got what we need to accomplish the growth.

And basically, if you also look at the growth in terms of clinics, it averages out we were building clinics at the range of about 10% in International, we have over 700 clinics in North America, about 5%. So you can see that we basically have added a large number of clinics this year from the De Novo standpoint.

Now this is one of the slides that you've seen now for a long time. The only good part about this slide, I don't have any EPO on the slide, okay? And so what I want to show you here is we had a target to grow 2%, basically the fourth quarter of 2007 to the fourth quarter of 2008. And the reason we did quarter -- year-end to year-end is because we had all the activities going on with respect to EPO administration, and our target was to grow by 2% in North America year-over-year. We exceeded that target, we actually grew at 3%, and that is all commercial, basically commercial activity. So because EPO was flat and we received no Medicare increase in 2008. So we're quite pleased with essentially the results, and what the team accomplished this year, and we're basically back to where, I think, the EPO is behind us, and so we're not talking about basically, anything other than normal projections going forward.

Now our target for next year is based on the average of the year, because we believe now you'll see here our average for the year only increased by 1% because of the, basically the EPO effect. But next year we believe that's behind us and our target would be to grow by 2% average for 2008 to average 2009. And again we get a little Medicare assistance next year because we got an increase from Medicare, but basically it's pretty much the same activity that we've been handling for the last few years, and the team's doing an excellent job.

Now part of the reason I'm comfortable about that is many of our commercial payers, which clearly it's always -- we treat them as customers, we would much rather be basically a partner with then than basically an antagonist. And so a lot of our commercial payers have adopted the concept that the government has been discussing, and finally became part of the July bill, and that is to go to some sort of bundled program on a longer term contract. So we've been successful, as I think the other large LDOs have, because it basically creates a more predictable revenue per treatment, and at the same time we're interested in helping them be as successful as they can, and also without compromising patient care. So again, that's where we are in the US as far as revenue per treatment. A very successful year on part of the team, I think I probably won't have to talk about EPO, except as it affects quality.

Now let's -- the next chart is our quality chart, again I think everyone knows that we, like the other providers in the US and around the world have a clear and absolute commitment to quality. I'm excited the fact that I think the governments understand that now, all of our customers that buy our products, the other -- Devidas, the other large [chains] in the US, we are clearly sharing information to make sure that we get the best quality for the patients. So this is all about everybody pulling together for quality.

Now, I think you can see that on here we're certainly at a Kt/V of 1.2; that's our target, how much therapy we give relative to what the doctor prescribes. Both in International and in the US we continue at 95%. Probably never do any better than that. That's really excellent.

The next thing I'd like to point out is essentially albumin. In the US we're pretty well flat at about 80%, due to all the various restrictive ordinances, laws, nothing will happen until we can get into some sort of comprehensive bundle where we can actually manage this. In the International area where you don't have those restrictions you can see much better outcomes at 85%.

And that's really -- in the US it will stay that way, and you can see in the International area we're making good progress. Some of our hemodiafiltration work shows even better. So we're always in the internationally approving metric.

Now, the next metric is hemoglobin. We put it in the range at 10 to 13; I started that last time. That's because there clearly are financial restrictions at 13, and I think everybody agrees below 10 is really not what you want to offer the patients. So I've tried to get a consensus.

Now interestingly enough, if you now look at the hospitalization days and if you look at the hemoglobins above 11, which FMC has for at least five years on retrospective data, that says that if you drop below 11 you clearly start getting into additional hospital days. And this may be just a fluke but I wanted to point it out and we'll watch it.

But for the first time in a number of years you'll notice that our hospital days are now going up slightly. And we'll watch that. But again our data would say that that is absolutely related to the fact that we are probably not providing patients with the right amount of anemia. Now -- the right amount of EPO. Now that's again sitting here from 30,000 feet, but we have seen a correlation and it is showing up. And essentially we've also seen a slight drop in Europe. So we'll watch that number with you, and hopefully that will resonate with some other people.

Now, looking at the phosphate level, again it's a major issue in the US. It's one of the unmet needs. We're really excited about it because some of the programs we've got going, such as our phosphate kinetics modeling, is really showing some excellent improvement. And, of course, in Europe you've got again a good track record. But again in both areas we're not at the 85% that we should be.

So if you look at our quality, it's the best in the industry in the world. There are some interesting things showing up in EPO, and we're still working pretty hard in the phosphate area, and that's where we are at the end of the year 2008.

Okay. Now looking at the products for the fourth quarter, I won't spend too much time on it. Pretty much a repeat of what we've seen this year. Again, external in the 12% constant currency range because of the headwind of the currency.

You can see that we actually had -- our International Products business actually had a drop versus last year, but that's strictly currency. You can see that it too was growing in the high 8% per year range.

Again our machines continued to do very well last year in International dialyzers, and in the US pretty much the same, although I think at the end of the year in the US, we had such a strong year last year, that their base (inaudible) was slightly down in the 5% to 6% range in terms of the hemodialysis products, but we had a huge boost in the Pharma business as we entered into the Renal Pharma in the IV iron area.

Now, what are the drivers going forward 2009 and '10? Clearly what we're seeing is we've either leveled or we're starting to go back up on a worldwide basis in terms of patient growth. And for many years it was dropping, but now it looks like it's leveled and it's going back up.

That can be a combination of, really, certain countries deciding to support it, because they were there all the time, or clearly we're starting to see the effect of all the work in the CKD program that's now built up a huge base of patients in the Stage 3, Stage 4. We'll keep an eye on it as we go but the point is it's clearly around the world at the 6% range.

Again, as I mentioned, we are very excited about the fact that we've been able to, over time, get our message across to the providers so we expect to see the reimbursement stable based on quality outcomes.

Now, as far as new product launches, I think I talked about Renal Pharma. We clearly have expansion plans; we've put the clinics in place. We have a number of activities in that area, again with same market growth at 10% in the International. We clearly will continue that growth.

We also have a program in the US called the Demonstration Project. We and Devidas are both working with CMS and the government; they've extended the program. It's what we call integrated care, comprehensive care. Again, it's doing very well. I think I talked about it at the end of the third quarter. And we feel this is a model that we, basically working with Devidas, will be interested in expanding in the US and also making the new administration aware of the benefits for the patients, benefits for the payers, and clearly this is an interesting area that we'll be expanding this year. We have about 1,000 patients in it now. We'll move up to about 3,000 patients.

And finally, we've got some new product launches. We're launching the 5008S in International and this product, you know the 5008 -- I talked about it two years ago, it won the German Innovation Award -- the 5008S is basically designed just for hemodiafiltration. The guys have done an excellent job of optimizing that therapy, and that product is launching in International.

We've launched the Liberty Cycler in the US, again very well received, and so the focus on the US is basically bringing the Cycler.

We just had our T -- 2008T approved in the US by the FDA. Again our program is, once they're approved, you basically take a couple of years in your own clinics, work out all the -- what I call infant mortalities, that every time you develop a new product there's always -- it's never as reliable as the one that's been there operating for the last eight to 10 years.

So we have the new products in the machinery, in the PD area, and we're quite excited basically about those in 2010.

Now for the last slide, I think I'm getting very close, I want to talk about the dividend. We've had an earnings-driven dividend policy ever since we started Fresenius Medical Care in 1996, and essentially what I want to show you here, we did have a good year last year. Our dividend increase will be about 7%, EUR0.58 per ordinary share next year. And if you look at it over that same time period we had a net income growth of about 20% compounded and our dividend has been about 11%.

So we clearly have followed this policy for a number of years, and we're very pleased to recommend this additional dividend of payment to our shareholders in May, which we will. And we're proud to be able to offer that to our shareholders.

I think at this point that's the overview of the business for 2008, a little bit of projections going forward. I'd like to turn it over to Larry now who will brief you on the financial results and talk more specifically about the outlook for 2009. Larry?

Thanks, Ben, and good afternoon to all of you. From my side, thanks for joining the meeting today. I'm very happy to review our successful finish to an excellent year in 2008, and also outline our guidance for what we're sure is going to be another record year in 2009.

With that, let's review on the next slide our performance against all the guidance metrics for 2008.

Revenues. Ben already told you that we had $10.6 billion of revenues for the year. This represented an organic growth of 7%. We're very pleased about that and we saw the organic growth accelerate through the year so it was a really good trend on revenue.

Net income at $818 million was more toward the upper end of the range, despite some of the headwinds that Ben talked about, and that I'll talk about in some more detail, especially on the cost inflation side.

Bad debt to EBITDA we ended the year below $2.7 million. Our guidance was to be below $2.8 million., so we were really pleased about that. That stayed about constant as we invested a lot during the year in CapEx and acquisitions, particularly geared to growth. But our EBITDA increased very significantly, and that allowed us to reduce leverage and leverage ratios. So we're very pleased about that.

And our spending did come in at the guidance level of around $900 million combined. We were predicting $800 million to $1 billion, so we're pleased that we came in on target, both for CapEx and acquisitions.

Now let's take a look and go through in some detail the P&L for the full year. Ben talked quite a bit again about the revenues and all the factors influencing growth and Products and Services and the different geographic segments. I won't spend too much more time on that.

But I do want to spend some time talking about operating income. It was up in total 6% for the year. Margin was down 50 basis points. I mentioned we did have some headwind, and we did have headwind in both the US and the International segments.

In the US we had, in particular, increases in labor and personnel costs. In particular, agency costs for nurses went up in 2008. That's something we're managing through. We think it's going to relax a bit in 2009 and, of course, we're being proactive about that with our nursing institute that we're just starting up in the Philippines. So we hope that that's going to eventually reduce the increase in agency costs for nurses.

We also had increases in pharmaceutical costs, the biggest ones of which were EPO and heparin, and to some extent those are continuing, even in the first quarter.

We did see increases also in rental or location costs, as well as energy and utility costs. It's hard to remember all the way back to the second quarter when we were thinking about inflation when oil was $140 a barrel and other energy utility costs were up. It seems like a long time ago but some of the influences of those cost increases flowed through to our costs even into the third and fourth quarter, and we still see some today.

In International, we are continuing to have a mix shift toward the service business and, in particular, new service business in emerging markets and we know that, until you get up to a certain scale level in those markets, they tend to be lower margin than old established markets where you have a good mix between Products and Services. So that's having some impact emerging although fully expected and anticipated.

And again, a lot of it is intentional. We're investing more in future growth. We've increased our R&D investment, in particular in International. In 2008 you saw the increase in De Novo start ups, and to some extent that flows into operating margins as you have relatively low margins when you just start up the De Novo and later on it becomes a quite profitable investment after 12, 18 months. In addition we saw, especially toward the end of the year, some FX losses, in particular in Asia Pacific. And the final factor was we had higher depreciation costs because of the investment, especially in new plant capacity, during 2007 and 2008.

So you can say a lot of it was intentional. A lot of it was geared toward investing for future growth. We're overall pleased with the margin. I'll show the long-term trend on the next page, and I think it still is quite a good performance and I think we're right on target with where we want to be.

Going to the non-operating areas, interest expense continued to do very well, although there are two main factors that influenced the decline in interest expense. One was the repayment of the trust deferred maturities early in the year, and the other was the reduction in variable interest rates that we saw throughout the year, especially going toward the second half of the year. So that led to quite a good comparison on interest.

Also on the tax rate we were below 37% for the year. and clearly benefiting from what [Stefan] talked about, the German tax reform that was implemented as of January 1 last year, and we saw increasing benefits from that throughout the year as we got more comfortable and experienced with it.

Finally, net income was up 14%, again toward the upper end of the 12% to 15% range of guidance that we have given, so also very consistent with our mid-term guidance of low to mid teens earnings growth on average on a year-by-year basis.

So all in all we were quite pleased with the performance in 2008.

Just taking a look on the next page at the Q4 performance. It was also a good quarter. We reported 6% revenue growth but this was 10% constant currency growth, and again represented a bit of an acceleration through the year.

The fourth quarter was our highest absolute EBIT quarter for the year and the second best margin quarter; the second quarter was 16.1%. But that's something we generally expect in Q4, we do expect it to be the seasonally best quarter. And we were down 70 basis points compared to last year.

Basically we had all the factors that I just talked about for the full year leading to the margin comparison, but in addition we had one more factor, and that was the implementation of new so-called conditions of coverage in the US clinics. These are new regulations for all operators of clinics, and the start up and the first implementation of those new conditions of coverage led to some higher costs. Those are continuing to some extent. We're still really in the initiation phase. They'll continue to some extent in the first quarter, and then I expect them to certainly level out in the following quarters.

Just taking a look at our a little bit longer margin development. I think it's useful to put the 2008 margins in the same -- in the perspective of where we've been in the last five years. And I think in that perspective we look quite good, especially considering the really exceptional performance that we had in 2007. And we know that there's going to be fluctuation from year to year 2007, '06, for that matter, '07 were exceptionally good years and I think 2008 we had some headwinds, as we talked about. I think things are going to level out over time. I think the important thing is that the operating business and the strategic direction of the business is really going in the right direction. We're achieving our strategic goals, we're geared for future growth, and I think the margin development is really okay with us.

Now let's turn to cash flow starting with our DSO development. We were flat in Q4, and we consider this a pretty good performance given the worldwide economic environment. Many of our payers are governments, especially for Services; Products are more toward private payers. And, of course, we have the private insurance payers in the US. Even governments can pay late sometimes. So we were very pleased, we paid a lot of attention to managing this and trying to keep it at least flat, or at worst flat. And we were able to do that in the global economic environment that we had in Q4. We were quite pleased with that performance.

Nevertheless we were off a few days for the year. We saw most of that increase in the first half. There were some technical reasons for that, as well as just some general slowdown in the first half, but again we flattened that out, and we think for 2009 that it will be at worst flat, potentially slightly reduced.

If we look at our cash flow performance now for the full year, we were just at our target of 10% of revenues with $1.016 billion of operating cash flow for the year. That was slightly down from 2007 and most of that difference is due to the DSO performance. We were up four days last year, in 2008, and we were down a couple of days in 2007, and so most of that almost $200 million difference is due to that.

On the spending levels, again this was totally in line with our plan and our guidance to have increased spending to invest for growth in the future in 2008. And so free cash flow ended the year at $125 million.

If we look at Q4 it's a little bit better in comparison. We, again with the flat DSO, we're just about up to the same level as 2007 at 11% of revenues, so a bit above our target. Spending was about in line with 2007, so we ended up with just a little better than breakeven cash flow for the quarter.

Now turning again to our debt ratio, debt to EBITDA, we made further progress in Q4 and were below 2.7. Right at the end of the year, our guidance was to be below 2.8.

Our debt, as you see on the left side, stayed pretty constant throughout the year, around $5.7 billion, and pretty constant with the end of 2007 level. But nevertheless the very significant increases in EBITDA helped this formula to improve all the way down to 2.69. Again, a level we're pretty comfortable with, even in the current economic environment.

We feel very good about our debt portfolio, our main maturities are coming in 2011 and later. We're financed at very attractive interest rates for the most part, and we're hedged to 75% fixed. So our interest rate risk is not very big in the short term, and we're very pleased generally with the status of our debt portfolio and balance sheet generally.

Now let me talk about an issue that has taken on increasing importance lately. And it's increasing because of our increasing size in many different markets around the world, but also because of extreme volatility, and that is exchange rate sensitivity.

Clearly our largest exposure continues to be translation exposure for the euro-US dollar. We have a lot of earnings in the euro zone, and when we translate those earnings to US dollars, that's our biggest single exposure, so -- but it's important to note that other exposures are becoming more important. In particular, weakness in the non-euro European currencies represents additional exposure and more than we've had in the past.

Also that's true with Asian currencies, as we continue to grow very quickly in Asia, and we see that as well. Interestingly, in Latin America, we do some exposure there, but not as much as in Asia or in the non-euro EMEA zone. In particular because we're so heavily weighted towards Services in Latin America and there we have, in particular, a very high local cost content.

And to some extent we're trying to do that or we're in the phase of transitioning for that in Eastern Europe as we in particular grow the Services business and the service network, we've grown dramatically in that area in the last couple of years, but will do more so in the future. And so we'll see that zone shift more and more to a less currency sensitive zone, as we have in Latin America, but so far we're not completely there and so we have, we do have some significant exposure. And of course the non-euro zone also includes the UK, where we've seen the pound be pretty weak recently. We also include in that zone Turkey, where the currency has been quite weak lately, so we do have significant sensitivity to several currencies.

However, I think it's very important to note that the underlying business is very strong and on target. We're meeting our strategic objectives, and there are a couple of places where exchange rates are developing favorably in some key markets. And notable markets here are Japan and China, and then, of course, with us it's always important to remember that our main stock price quote is in euros and a strong US dollar, as we have now, compared to the last couple of years is certainly favorable for the euro stock price valuation.

Now what I want to do here is give you a little more guidance, a little more feel for what the sensitivities are, and if you see -- what I wanted to do is give you an idea what a 10% appreciation or depreciation in various currency blocks mean, versus the US dollar, mean for our bottom line result.

In the past, if you look in the first line, under euro you see that EUR0.10 equals about 1.2% and basically the only guidance we've given in this area, the rule of thumb was that a EUR0.10 move up or down in the euro is going to give us about 1% difference on the bottom line, and that still holds true. So if you just convert that EUR0.10, which was only 6% or 7% to 10%, that translates now to 1.7%.

And you see then the Europe non-euro zone being the second biggest exposure, accounting for 1.3% versus the US dollar with a 10% appreciation or depreciation.

And in both, or in the non-euro zone as well as the Asia zone, you have two things going on different from the euro zone. You have both translation exposure and transaction exposure, because we're translating the earnings from those countries, but as well in many of those countries we are not producing products. And so we get a transaction exposure because we're shipping products made in the euro zone into those countries and we create a transaction risk.

So that's why the risk is a little bit out of proportion for the size and you can see the size of those blocks in terms of the amount of revenue that had in 2008. So the, China and Hong Kong only account for 1% of our sales, but a 10% move up or down will give us a 0.4% change in that income.

So hopefully this is helpful to you as you look at what currencies are doing, and see and think about what might be the impact on our bottom line.

So finally I want to come to the guidance for 2009. We're projecting more than $11.1 billion in revenue. This is over an 8% constant currency growth rate. Our net income, we're at $850 million to $890 million. This is about 4% to 9% growth but includes -- but it's certainly in line with our mid-term guidance when you consider currency impacts in 2009. If you just translate in euros, you certainly can get to around our mid-term guidance of low to mid-teens earnings growth based on this US dollar range of guidance and based on where the currencies currently are.

I also want to mention something that Stephan mentioned, just a word about Q1. Q1 is the seasonally weakest quarter typically for FMC. The main reason for that is that we have the fewest number of calendar days and therefore the fewest number of dialysis days in the quarter. Q1 of 2009, just because the way the calendar days fall, has one less day than usual.

In addition we have a, in particular, difficult currency comparison. In Q1 of 2008 the dollar was very weak, the euro was very strong and so it's probably going to be the most difficult currency comparison quarter for the year.

So with that, we could say about Q1 that it will be at or even slightly below in absolute terms, Q1 of 2008. However I want to assure you that that's fully considered in our guidance and we're fully comfortable with that trend.

On the leverage ratio again, we expect to be below $2.7 million for the end of the year, and CapEx and acquisitions, $550 million to $650 million on CapEx, and acquisitions in the $200 million to $300 million range. If you look at those two together in percent of revenues, it's 6.5% to 8.5%. So coming back to a more normalized level compared to last year where we had 8% to 10%. So again, still investing in growth and still seeing opportunities around the world, but not in such a dramatic way as we did in 2007.

So thank you very much for your attention and we'll be happy to answer any questions you may have.

Thank you, Larry, thank you, Ben, for the presentation. We start with the questions here in the audience and I think there's one over there.

Martin (inaudible) from (inaudible) [Carnegie]. Two questions please, could you give us some guidance for the sensitivity of the shift for the reimbursement rate from between public and private care? What a percentage shift would mean in terms of earnings?

And how much confidence do you have that COBRA will give you some resilience given the market outlook? How many people, what percentage of people who've been laid off really go for COBRA?

And the second question would be, how far are you with the negotiations on the comprehensive bundling services? Thanks.

I'll take those. Actually, as far as the shift in commercial revenues versus Medicare, if you look in, we'll show in the, basically the 20F, we actually went up 90 basis points in terms of commercial revenue. So as I showed you here, we're pretty comfortable at this point in time that we've not seen any activity that was essentially concerned with the unemployment in the US and people losing their insurance. So actually it's essentially up for the year. And we don't expect to see that either.

As far as COBRA, there's clearly -- that's available. We monitor that with our patients. We have a system where we keep track of their insurance and I think we've discussed in the public sector that there is a foundation, American Kidney Fund. that actually can assist the patients if they do not have the funds for secondary insurance or for COBRA. So this fund is very helpful in taking care of the patients.

So quite frankly, at this point in time we don't see the sensitivity to the unemployment rate. Again, if it, in a couple of years from now, if it stays in the mid-teens it might be different, but at this point in time we don't see that as an issue.

And on your comprehensive bundling?

I'm sorry, yes. The bundling again, the dialysis bundling, will start in 2011. The coalition is working very carefully with CMS to make sure that the actual payment rates in 2011 are essentially proper in terms of the numbers and that CMS is very helpful. So that part of the bundling will start in 2000 -- the ASRD bundle, as far as the comprehensive program, the demonstration project, we were very pleased that they extended it another year. It was due to essentially stop at the end of 2009, and CMS has extended it through 2010, also for Devidas.

So both of us have these programs and we believe it's the right way to go forward, but it's still too early to comment about how that will evolve into that system. But we're both expanding our programs this year and are interested in discussing them with the new Administration, which we're in the process of doing.

Holger.

Holger Blum, Deutsche Bank. Just two questions on disease management programs, how much do you expect an uplift here now? You indicated that going forward what would be the number we can think of in '09-'10?

And the same overall kind of guidance for your renal drugs, what revenues do you target this year, next year?

Okay, thanks, Holger. Again the demonstration project, we're about 1,000 patients in the program now. We will increase it to probably 3,000 patients this year and then beyond that it will depend on what sort of arrangements we work out in -- with the CMS and the government. That does because the margin is less on disease management than on the normal dialysis business. That probably has an impact in 2009 of 10 basis points to 15 basis points on the margin. But clearly long-term it's a very interesting program.

Now along the same lines in International, we have the ESRD bundle operating in Portugal and basically doing very well in terms of meeting the quality standards, we're getting close. I think it's been very successful. Manuel is sitting here nodding his head. Everything I see then in it is we're getting clear indication and following that program as we go forward. So we think this in the International, it's primarily in Portugal. In the US it's a demonstration project.

Now as far the Renal Pharma, I believe we're about 250 million sales this year, and we are targeting, it's 400 million in 2010. And I believe we're on target to reach that. I don't know the exact target for 2011 or 2009, but we said when we signed the iron deal, that we would be at about a 200 million run rate in the US. And of course in International we need to, country by country move into the program and that's going to take a little longer. But clearly it'll be in the range of a couple hundred million additional pharma sales I think in 2009.

Next question, Oliver.

Yes, just coming back to Martin's question about insurance coverage and so forth, just that I noticed that debt expenses are clearly going up apparently year-over-year so we have more than a 10% surge in those. Is this something we should worry about, that people cannot in the US pay, they could pay any longer and probably look at a higher run rate as you go forwards?

And secondly, Ben, I still try to understand why are you using the 2008T first in your own clinics. Are there any efficiency gains also associated with those? Is that standard, really standard procedure that you're testing the machine while -- in a couple of years whatever in your own clinics before releasing it to the broader market?

So let me answer the question on bad debt. It did pick up slightly in the US in Q4, but I think it's worth noting that both in Q4 and for the full year it stayed very close to the 2% level where it's been for a number of years. We did change our accruals slightly but what I want to impress is that there is no underlying trend in the US business that's indicating that we have a bad debt issue or that bad debt is going up. We've just gone through a bit more conservative accrual policy and I don't think there's any reason to conclude that there's any underlying trend going on.

With respect to introducing new machines, let me, that's one of the benefits of being vertically integrated, is the 5008, I think, (inaudible) we rented for a couple of years in our clinics. And then when you go to the open market, you're clearly at the same level of reliability of all your other machines that have been around for eight or nine years. And so in the US the K-machine, we measure it in terms of calls per months per 1,000 machines. In other words they can call up and talk about anything, but it has to go down as a complaint, and we're in the range of 10 to 15 calls per month per 1,000 machines. And so by running it in our own clinics for a couple of years, we'll get down in that range so that when it comes to the market, it's totally reliable, and everybody is very comfortable. So it takes about two years to bring a new machine to the market no matter where you develop it, and we usually do that within our own clinics because we clearly can get the data back very quickly.

Gianmarco.

Gianmarco Bonacina from Equita. Three quick questions, the first one is one the nurse costs, so if you can remind us what were the percentage of the total cost and what kind of inflation you are seeing currently?

The second question is if you can give us a little bit more detail on this new regulation for the US clinics, and also about what costs does this imply?

And the last question is, you mentioned headwind from energy costs. Is this because you had some hedges and when will we see some positive --?

I'll take a couple of those and Larry will take one of them. As far as the nursing, we've seen, I think if you look at our score card you can see that labor has gone up this year. And again, we had quite an inflationary spiral starting mid-year with everything in the US, increasing with the oil, based on the oil prices. And of course the easiest way for that to happen is the agencies raise their price immediately. And so you always use agencies, and that's why we're developing our own source through the Philippines. So we saw a disproportionate rise in the agency nursing staff.

Now that's starting to slow down a little bit. It's certainly not out of the system, it will take another six months because with the decreasing 401(k)s, and a lot of people losing their jobs, we're finding a number of nurses are coming back into the workforce. And our workforce, our times are very predictable, so they can basically come back and work one day a week or two days a week, whatever they want to. They don't have to worry about schedules.

So I think we're seeing that that will drop off. It will be about mid-year and we've got our own, we're going to be bringing our own nurses in this year. So I think that's -- we'll handle that.

Now the conditions of coverage which is, we have not had a change in conditions of coverage in the US for 25 years. But because I guess it was due, and what this is is, CMS inspects our clinics every two years, and they have a complete list they inspect to. And so this has been developed and it, you have to train the technicians. They have to pass a test, there are a whole bunch, about 60 things that you now have to do that we didn't do. Most of them, if they were important, we did them, but now it's part of the law and so we're doing them.

And as Larry said, that all started fourth quarter because they started inspecting to that, so we got some start-up costs. The guys are doing a great job. It will carry over into 2009 and eventually we'll become very efficient at it, but it's one of those things that basically CMS and the industry agreed, that's probably worth doing. It's just that when it's painful for at the time. So that the new conditions of coverage and it will be 25 years before we have a new one so, we'll get used to it.

On energy you have a couple of different effects, you have the diesel to run the trucks to deliver your products, and there you see the impact right away. You also have the utility costs, electricity costs usually to operate the clinics, and then the utilities to run our plants. And there it's a little more sticky. We're just starting now to see some impacts. In the plants we have, we don't have hedges, but we sometimes have one year contracts and so it takes a little while to really get the full impact of the energy cost decline that we've seen.

Okay, next question. Martin.

Martin Possienke, Equinet. Just maybe on the cost for treatment would increase quite dramatically in 2008, I guess mainly related to Heparin. The increase was 6% so maybe twice the rate of the revenue per treatment. So maybe you can speak about the Heparin issue, and how do you expect the cost for treatments to develop? And maybe also -- not so impolite as it seems to be, and how you can maybe solve the Heparin issue?

Let me take at least the first couple of parts of that question. If you look at the whole year, the cost inflation was, or the cost increase was, about 2% average year, so it's really -- the 6% was really only the fourth quarter. And there were a couple of special things that came together to make it a bigger than usual increase. And one was clearly again the start-up cost, the initiation costs for these new conditions of coverage. That was a significant issue in Q4. As well we had, we did have pharmaceutical cost increases. That was probably the second most important factor along with the labor cost increases.

We believe, for 2009, the year average we're again going to have about 1% to 2% increase in costs in the US and reasonably similar in the International arena.

I'll take just a little bit of discussion on the Heparin. In our program that we, in our guidance for next year, we built it in at the same -- basically we didn't assume that we would use less and we didn't assume the price would go down, so it's essentially there at the rate that it's running at this point.

Okay, I know they have some questions lined up actually on the telephone lines, so I think at this point in time, operator, we can open up the lines for questions.

Thank you. (Operator Instructions).

We'll now take our first question from Tom Jones from JP Morgan.

Good afternoon. I was just wondering if you could just clarify one thing for me, and a follow up question after that? Just, Ben, on the US revenue per treatment, you talked about doing 2% growth in 2009 on the average of 2008. Well, the average of 2008, if my calculations are right, is about $330 per treatment which would give you an average 2% growth would get you to $337 by the end of 2009, which is only a relatively small -- just over 0.5% increase on where you were in Q4. Am I doing that right, or should we be assuming something is going on on the managed care side, because with the 1% increase in Medicare rates, you would expect a slightly better than 2% year-on-year increase given where you were in Q4?

Tom, with the average being $330 for 2008, we're saying the average will be $337 for 2009, not necessarily the year end. So if we start the year slightly below that, you'll end the year slightly above it to get to the average of around $337. That's where we think it will come out in 2009.

Okay.

Tom, one of the things -- the increase in Medicare is only on the composite rate, so it's 1% but I think Larry it doesn't translate to [1%], it's about 0.5%, so basically we're quite -- and none of that is to signal anything changing in the commercial area.

So would you say that the -- you made your comments about payer mix, but would you say the commercial pricing, you'd stick to your historic mid-ish single-digit year-on-year price growth in managed care as being the current pricing environment?

We're trying to signal that we don't see any major changes. We actually -- but we don't have the EPO effect, so we ought to look at it on year-over-year, rather than end of the year. So we don't -- we're not signaling any changes in the managed care environment next year.

Perfect. And the second question, Ken, on his call mentioned some issues about some backlogs in getting new clinics approved, particularly in Texas, and Texas is a fairly big market for you in the US. Are you seeing similar issues either in that state or any other that are limiting your ability to open clinics at the moment?

Yes, we're having the same issues that Devidas is having. I believe he commented that he had about 54 clinics waiting for certification. We're clearly in the same range, I think 48 or 50, and Texas appears to be the lead state, but clearly, all of them are six to eight months slower than it has been in the past for manpower reasons. So yes, we're all -- we all have a number of clinics that are basically waiting for certification.

Sure, and I assume you've baked in that slower approval into your guidance for 2009?

Yes, we have, and it hits in a couple of areas. Obviously, while you're waiting for approval, you need to dialyze patients just to keep --essentially you can't get approved unless you're actually dialyzing patients, so there's an additional cost to the De Novos, but yes, this was all baked in and we don't expect it to get any worse quite frankly, but it clearly is a fairly major backlog for both of us.

Cool, thanks.

Our next question comes from Kevin Ellich from RBC Capital Markets.

Good morning. Thanks for taking my questions. The first question that I have is, looking at your 2009 acquisition expenditure guidance, it looks to be a little bit higher than 2008. I was wondering if you could talk about your pipeline and where you see the biggest opportunities?

And Devidas also talked about how some of the privately bagged MDOs in the US are interested in selling. Have you been approached or asked to put in a bid yet?

We do see good opportunities for acquisitions both in the US and in several areas in the international markets. In addition, we see -- we haven't seen EBITDA multiples or valuations come dramatically down yet, but we've them seen slightly soften, and so we think doing acquisitions in this environment or how we think the environment might be in six or nine months, is potentially quite an attractive thing.

I think in terms of discussions or approaches that we may or may not have, with medium sized companies, I think we're generally talking to a lot of people in the markets, and I wouldn't want to comment on any specific discussions that we may or may not have had.

Okay, fair enough. And then maybe a question for Ben, with some of the upcoming alternatives to EPO such as [Zera] and [Afimax's] [hemotide], I was wondering what your opinion is of going to maybe a once a month EPO, if indeed that is approved since it's in phase three? Do you think nephrologists would be receptive to this, and how do you see it playing out?

Well, I'm certainly not an expert on EPO, but we've clearly looked at that a few years ago when we had the opportunity to have [Aranis] in the US for the renal dialysis market versus the EPO Alpha, and one of the things with the reimbursement situation where you essentially no longer get paid after three months above 13, it becomes really, from what we can tell, it becomes really dangerous to not titer. In fact, what we're doing now is we're taking hemoglobins every week and we're titering the actual -- the positions are titering the dose. So in that economic environment, I think it's very risky to bring and that's essentially why it's not come to the US.

Now if you don't have that upper limit, then obviously if there's a value to offering it once every two weeks or once a month, that certainly is open at that point.

I believe that as you go to the bundle, that might be less of a issue, but that's 2011-'12 and going forward. So we are very pleased. We think anemia management is pretty much solved. The only area is open is optimizing essentially the IV iron, but we have excellent results with the EPOs that are on the market around the world, and so we don't see that as a medical need at this point.

Thank you.

Our next question comes from Ilan Chaitowitz from Redburn Partners.

Hi, this is Ilan Chaitowitz from Redburn in London. A few questions. On the International business, you've had very robust growth in your revenue per treatment on an underlying basis, I make it about 6% revenue increase. Is that sustainable into 2009 and beyond, and can you give some insight into which countries are really driving that?

Second question relates to your new clinics, and we've seen a 5% increase in North America. Will that translate into 5% patient growth over 2009 in North America?

And the final question is relating to the corporate expenses. We've seen that jack up quite aggressively over 2008. Can you give us some sort of feel as to how that might end up, that line item, in 2009?

I'll take the first two, and let Larry handle the corporate expenses. Basically, I think we're just absolutely excited about the revenue per treatment growth that we've seen in the International, and again, it was driven by Portugal and a number of countries where we've got good relationships with the payers.

Clearly, I don't think we expect to continue to grow at that level. Again, we do expect that they will value the excellent outcomes that we provide them, but again, you have also the effect of the labor costs. So it's a balancing type of act if there clearly is a reduction in [raises] around the world, then clearly there'll be probably a, also we don't need the 7% growth in terms of revenue per treatment. So our target over time has been between 2% and 4% and the fact that it's 7%, it's just over-achievement.

As far as the North American patient growth, yes, we have built 5% of the clinics, but obviously they're not all operating yet as we've got a backlog of 50 of them waiting to operate. So I think that our target, and what we've built in the model is in the low threes in terms of percent growth, not 5% because those clinics are not available to us, and I think that's essentially probably not doable with respect to the growth rate in North America, which is about 3%, so we clearly have those waiting, but we don't expect to grow much more than the low threes.

Corporate expenses is yours, Larry.

Yes, I think there's a couple of factors. One is that we have indeed increased corporate expense. In particular, again, in investing for the future, one factor is the increase in the number and amounts spent for global R&D projects. Another was the acquisition we did in late '07 of RSI, again looking at [absorbents] as a technology, in particular for the home markets, that we think is really going to be a great product for that market and we're still in primarily the research and testing phase and expect to have some products out probably in 2010.

The third factor, is if you look at the whole year, certainly currency was a factor in terms of corporate costs. I think if you look at underlying corporate cost, we would not expect them to continue to increase at the rate that they did in 2008, but flatten out significantly more from this point forward.

Thanks. Can you give some insight as to what the weighting of euros is then in the corporate cost line items, so we can get a feel for the underlying growth rate?

I think if I understood the question correctly, what's the weighting of the euro, it is heavily weighted toward euro in terms of that line.

Thank you very much.

Our next question comes from Michael Juengling from Bank of America.

Yes, great. Thanks very much. I have two questions. Firstly, on the dialysis equipment, can you give us an indication what you're seeing with respect to the demand profile amongst the independents in the US, particularly with respect to the capital equipment machines?

And secondly, can you highlight what the single use dialyzers -- the penetration is in the US amongst the independents as well as at the end of Q4? Thank you.

Thanks Michael. Yes, we've not seen any slowdown anywhere in the world yet in terms of equipment, and again, as I mentioned a couple analysts calls before, five years ago we did see that, and again, these are valuable customers, they need the machines because they're growing, so we usually offer them some sort of bundle because they usually are people that are using our products, disposable products.

So during that time, you essentially still keep moving the machines, but you just arrange some sort of payment program for them that's conducive to whatever they need. Now again, we don't see that because obviously we've just not been that far into it and I don't expect to see too much of it either because -- and it won't have much impact on us because the machine business is less than 5% of our revenue, so it's not something that we worry about at nights, but it is important to maintain our market share with the machines because so many things are built on that machine going forward. So we are very protective of our market share in the machine area, which is growing in International and is at an all time high in North America.

Now as far as the -- basically the second question, you were -- could you repeat that one? I have a note here, but I can't read it.

Yes, I have it Ben, it's just a question about the penetration of single use dialyzers in the US at the end of Q4 with the independents?

Actually, I wrote the number down, but I couldn't remember the question, 65% is what the penetration is in the independent market, and it could have been 65 lots of things, but anyhow, that's where we are and we're quite pleased and I think again, I want to mention that -- and I didn't in the call, we've seen almost a 350 basis point improvement in our mortality over the last five years and again, I think it's really quite impressive. So I believe at the end of the day, we probably made the right move many years ago, but we do see it at about 65% in the independent market.

Thank you.

Next question comes from Lisa Bedell from Sanford Bernstein. Please go ahead.

Hi. Two questions both related to bundle pricing. The first is could you walk us through some areas where you see potential cost savings under bundle pricing?

And secondly, do you think your home dialysis patient population will change? I think in the past you've said that you may want to expand your home dialysis treatment, and if you could just talk through that opportunity a little bit.

Yes, when it comes to the bundle and where do we get the 2% administrative savings that will be imposed in 2011 if you join the bundle, we see that there's probably administrative activities that will get us the 2%.

Beyond that, we really have not identified or basically spent much time looking at where the savings are, and, again, at this point in time, we're in the process with CMS looking -- developing what is a fair reimbursement for the bundle, so you really can't comment about what you're going to do with the bundle until it gets priced, and I think that will happen sometime early 2010.

As far as what will the bundle do as far as home, again we see on home hemodialysis, and there's a number of papers showing up, it's really quite an imposition on the spouses and on the caregivers. I think a new paper's come out. So we see long term yes, there might be a market there, but we see really peritoneal dialysis has been accepted, it's just not efficient enough, and so we see an opportunity for peritoneal dialysis as being a preferred home therapy if we can use [absorbents] and get enough capacity in peritoneal. So our focus, 2010, 2011 is to see if we can come up with an improved peritoneal dialysis device that really gives adequate therapy to the patient.

Operator, (inaudible), are there any further questions?

There are no further questions at this time.

Great, thank you so much. I have one more from the Internet which might be one for Larry. Are FMC's clinic activities in Central Europe affected by the downturn of the economies, and will that reduce FMC's growth pipeline?

I would say generally we do not think about changing our overall strategy towards Central and Eastern Europe. We believe that medium and long term it is a very attractive market and many of the countries continue to be attractive even today.

I would say we will be somewhat more selective as we think about where to place new investments in the region, and if we see that countries are unable or completely unwilling to give a fair reimbursement, then clearly we might slow down investment in those countries and invest more in others that seem more attractive in the mid term, but overall, I think the strategy is completely intact. We do believe it's a very attractive region and we'll continue to invest there generally going forward.

Great. Thank you, Ben. Thank you, Larry. Are there any further questions here in the audience?

[Khan Anchoniman, ABBV]. I have a question concerning the demographics that were mentioned in the scorecard segment of the report. Are there any significant differences between the -- US dialyzers population and the international population if it concerns, for instance, prevalence of diabetes, age, weight and so on, and when I made another follow up on this, what are beyond diabetes, the most important underlying conditions, renal conditions for dialysis, one or two or three?

Yes, I think the US certainly leads in the prevalence of diabetes, so you can see that we've stabilized at about 53% of our patients are diabetic. They carry -- again, we're working very hard and we've made improvements, but the mortality is about 200 basis points higher, basically, for the diabetics.

Now we're doing foot checks and a number of things, but I do believe in the international, I have to look at it, I do believe we're starting to see in Europe an increase in diabetics and it's 20%, 35%, so it really is a common problem in both areas.

I think the other area that we're all focusing on is really malnutrition. This is one of the areas that quite frankly it's very, very important and that's why we always put out the -- basically the albumin levels because that defines malnutrition. So we think there's a lot of good things that could be done there if our hands were untied.

And finally, I think the age is a little -- about the same between the two, around the early sixties. might be slightly less in Europe, is that (inaudible) of about 50? Okay, so it's about -- so the age in the US is basically about 10 years more, on average.

Okay. Thank you very much everybody. That's going to close the presentation for Fresenius Medical Care for Q4 and the full year. Thanks for joining us today here in the audience and also on the web. Thank you very much. See you next time.

Thank you very much.

Thank you.