Fiscal year 2009

B. Braun sales pass €4 billion mark for the first time.

Melsungen. The B. Braun Group performed well in 2009, increasing sales by 6.4 percent to €4,028.2 million (previous year: €3,786.4 million). “This means that we have reached our target of over six percent growth and have passed the four billion mark for the first time in the Group’s history”, explained Prof. Dr. h. c. Ludwig Georg Braun at the Financials Press Conference on Friday, March 26, at the company’s headquarters in Melsungen. Pre-tax profits increased to €336.1 million (previous year: €268.8 million). “This marked increase means that we have exceeded our profit target as well”, added Braun.

All divisions contributed to growth, although Hospital Care and Out Patient Market proved to be the most dynamic. The company recorded substantial increases in sales in the Latin America (+17.1 percent) and Asia-Pacific (+13.9 percent) regions. However, North America also remained stable with growth of 8.9 percent. B. Braun recorded a moderate increase of 4.5 percent on the domestic German market.

“As a global healthcare provider, B. Braun is active in less cyclical markets”, explained Braun in reference to the worldwide financial and economic crisis. However, he added that the economic slowdown in 2009 – which affected some sectors severely – had also taken its toll on the healthcare industry. “Particularly with regard to medical capital goods, demand was muted in the first half of the year”. However, this area went on to stabilize in the second half of 2009. In addition, the consistently high demand for disposables throughout the year helped to sustain growth.

The Hospital Care division lifted its sales by 7.9 percent to €1,903.8 million (previous year: €1,764.7 million). The main drivers of growth were large-volume infusion solutions in Ecoflac plus containers and safety IV catheters (Introcan Safety and Vasofix Safety). Disproportionately high growth in sales was recorded by intravenous medication (e.g. Propofol) and syringes (Omnifix).

The Aesculap division recorded sales of €1,153.2 million, an increase of 5.0 percent year-on-year (previous year: €1,098.2 million). The financial and economic crisis also negatively impacted performance in the areas of capital goods and project business. However, business development in endoscopy and surgical instruments was more encouraging. The core business areas of suture material and access ports also contributed to sales growth, as did the launch of the drug-eluting balloon SeQuent Please.

The Out Patient Market division increased its sales by 6.1 percent to €525.8 million (previous year: €495.8 million). Here, sales were driven above all by products relating to hygiene management (Softa-Man and Softalind) and anesthesia (Propofol). However, the area of skin and wound care management and products from the fields of parenteral nutrition and stoma care also contributed to the division’s sales growth.

The B. Braun Avitum division increased its sales by 4.4 percent to €420.5 million (previous year: €402.7 million). Muted demand for capital goods as a result of the financial and economic crisis pushed down unit sales of dialysis machines. By contrast, sales of dialysis disposables remained stable in all regions, allowing the division to record healthy growth. A satisfactory rise in sales was recorded in the dialysis provider business.

Increase in R&D expenditure
Expenditure for Research & Development rose by 6.8 percent to €139.1 million (previous year: €130.3 million), which was equivalent to 3.5 percent of Group sales.

Continuing investments
The global €1.4 billion investment program launched in 2007 was continued in 2009. One of the main areas of investment in the reporting year was the Melsungen location, where work continued on two major projects with new facilities for parenteral nutrition solutions and for dialysis machines and infusion pumps. Current projects are scheduled for completion in 2010. The new central laboratory for research and quality assurance is already in operation.
Further investments are planned as of 2011 as part of a new €1.6 billion investment program. B. Braun will be investing in its Melsungen headquarters and in locations in the USA, Malaysia, Indonesia, Brazil and Argentina. Plans for Melsungen include a third L.I.F.E. factory and a new building for the Works Council and the company doctor. The investment program is to be financed solely from the cash flows generated over the next years.

Profit-sharing payments
Employees in Melsungen are now to receive a share of profits, as set out in the job security agreement for the investment in the L.I.F.E. infusion solutions production facility in Melsungen, which expired in October 2009. This is the last provision of the agreement to take effect. At the time of signing, the Works Council had negotiated with the company management that employees would work 520 hours of overtime spread over five years in return for job protection and a share of the profits at the end of the agreement term. The amount paid out to each employee is determined by the profits generated by the company during the agreement term and the number of hours overtime worked by the employee him or herself. “As we have done sterling work in the last five years, we are now in a position to pay employees in Melsungen up to €4,015, depending on how many hours overtime they have worked”, said Braun. This payment will be made available to employees as at April 30, 2010. In the meantime, another job security agreement has been signed for Melsungen, running until the end of 2014.

Increase in workforce worldwide
The international growth of the B. Braun Group is also reflected in the size of its workforce. As at December 31, 2009, B. Braun employed a total of 39,504 people worldwide (previous year: 38,462). This corresponds to an increase of 2.7 percent.
In Germany, the number of employees increased by 2.5 percent, mainly due to the expansion of R&D and production capacity at B. Braun Avitum AG. As at December 31, 2009, a total of 10,672 people were employed by B. Braun in Germany (previous year: 10,407). In the reporting year, 223 apprenticeships were filled by new trainees (previous year: 217). At present, there are a total of 682 trainees within the Group (previous year: 652), representing an increase of 4.6 percent year-on-year.

Outlook
B. Braun has no doubt that the Group is well positioned to withstand the challenges of the global economic climate and to continue participating in the growing healthcare market in the future. Prof. Braun: “Our sustainable strategy and solid financing provides us with a firm foundation, allowing us to achieve further growth with our innovation, high product quality, efficient production and exceptional customer orientation”.

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