Fresenius Vamed

In 2009, we achieved new optimum values: the order intake as well as the order backlog climbed to a new all-time high. This provides an excellent basis for further growth. Sales and EBIT also achieved outstanding growth rates.

Key figures of Fresenius Vamed

  • Engineering and Services for hospitals and other health care facilities
in million € 2009 2008 Change
1 Net income attributable to the parent company of the respective business segment.
Sales 618 524 18 %
EBIT 36 30 20 %
Net income 1 27 26 4 %
Operating cash flow 29 27 7 %
Capital expenditure / acquisitions 7 39 - 82 %
Order Intake 539 425 27 %
Employees (December 31) 2,849 2,802 2 %

in million € 2009 2008 Change
1 Net income attributable to the parent company of the respective business segment.
Sales 618 524 18 %
EBIT 36 30 20 %
Net income 1 27 26 4 %
Operating cash flow 29 27 7 %
Capital expenditure / acquisitions 7 39 - 82 %
Order Intake 539 425 27 %
Employees (December 31) 2,849 2,802 2 %

Fresenius Vamed specializes in international projects and services for hospitals and other health care facilities. Our portfolio ranges along the entire value chain in the health care area: from consulting, project development, planning, and turnkey construction, via maintenance, to administrative management and total operational management. This entire competency enables us to support health care facilities efficiently and successfully at each level of their life cycle. The company is also a pioneer in public-private partnership (PPP) models for hospitals in Central Europe.

VAMED is one of the world’s leading providers of a full line of services for the health care industry. Meanwhile, we hold a unique position with our comprehensive range of services. We have completed approximately 500 projects in over 50 countries.

BUSINESS DEVELOPMENT

In 2009, Fresenius Vamed achieved excellent sales growth of 18 % to € 618 million (2008: € 524 million). The organic sales growth was 15 %.

The table shows the sales development by activity:

in million € 2009 2008 Change
1 Adjusted for project orders carried-out for the Vienna General Hospital-university clinics (AKH) which were included in the service business in 2008, sales growth was 22 %.
Project business 420 336 25 %
Service business 198 188 5 % 1

in million € 2009 2008 Change
1 Adjusted for project orders carried-out for the Vienna General Hospital-university clinics (AKH) which were included in the service business in 2008, sales growth was 22 %.
Project business 420 336 25 %
Service business 198 188 5 % 1

In 2009, the strongest region was Europe with 75 % of total sales. Africa and Asia-Pacific contributed 14 % and 11 %, respectively.

In addition, VAMED was responsible for revenues of € 490 million from management contracts in 2009. The related fees are included in VAMED ’s financial statements.

Order intake and order backlog for projects developed excellently and achieved a new all-time high.

in million € 2009 2008 Change
Order intake 539 425 27 %
Order backlog (December 31) 679 571 19 %

in million € 2009 2008 Change
Order intake 539 425 27 %
Order backlog (December 31) 679 571 19 %

Earnings performance at Fresenius Vamed was very positive. EBIT rose by 20 % to € 36 million (2008: € 30 million). The EBIT margin was 5.8 % (2008: 5.7 %), slightly higher than in prior year.

Since the business is not capital intensive, Fresenius Vamed achieved an excellent return on equity (ROE) before taxes of 22.0 % (2008: 22.2 %).

Net income1 was € 27 million, an increase of 4 % (2008: € 26 million).

PROJECT BUSINESS

The project business comprises the consulting, project development, planning, turnkey construction, and financing management of projects. VAMED responds flexibly to clients’ local needs, providing custom-tailored solutions, all from one source. VAMED also carries out projects in cooperation with partners. Among public clients in particular there is growing interest in public-private partnerships (PPPs). With these business models, hospitals or other health care facilities are planned, constructed, financed, and operated by public and private partners together through a joint project company.

Our project business was again very successful in 2009. The following highlights some of our main projects in the respective target markets:

EUROPE

We achieved a major success in Germany, winning our first large-scale project engineering contract in Germany for the construction of a new wing at a hospital in Cologne-Merheim. A special feature of this contract is that we will be carrying out the construction work while the hospital is still operating. In addition, consulting, planning and project management contracts for various hospitals round off our successful business acquisition activities in Germany.

In VAMED ’s home market, Austria, the focus was on the development of further PPP projects and holistic realization models. Additional project assignments were successfully executed within the framework of existing private-public partnerships. The two projects begun in 2008 – the construction of a 150-bed post-acute care clinic in Schruns, Vorarlberg, and a post-acute care center in Gmundnerberg, Upper Austria – are proceeding according to plan, and will begin operating in 2010. VAMED has been responsible for the planning as well as the execution of the projects and will also be assuming the total operational management when they are completed.

In Russia, work continued according to plan on the turnkey construction of a 300-bed hospital in Krasnodar. It is due to be completed in 2012. Our coverage of the markets in Turkmenistan, Azerbaijan, Kazakhstan, and Uzbekistan was continued intensively in 2009. We won three contracts for the supply of medical equipment in Turkmenistan and a planning contract in Azerbaijan. In Ukraine, we won a large-scale contract for the supply of medical equipment to improve infrastructure in rural areas. The contract will be processed in 2010. The university clinic center ‘Blue Hospital’ in Bosnia- Herzegovina was successfully completed.

AFRICA

In Gabon, VAMED won a major contract worth over € 80 million. Work started on the turnkey construction of the specialist hospital for cancer diseases in Angondje, which will take about two years. Other extension projects begun in 2008 at the central hospital in Libreville were continued according to the time schedule and on budget.

In Nigeria, we have already handed over to our clients 12 of the 14 total university clinics we are modernizing. The other towo hospitals are due to be handed over by the end of 2010.

In Ghana, the turnkey construction of five polyclinics is proceeding on time and on budget. VAMED was awarded the contract in 2008, and it will be completed in 2010 as planned.

In Libya, VAMED won a contract for the complete refurbishment of the existing 450-bed central hospital in Gharian.

ASIA-PACIFIC

Key markets for VAMED in Asia are Malaysia, Vietnam, and China, where VAMED has been operating successfully for many years. Existing contracts there were successfully completed. The contract for the supply of medical equipment to the hospital in Laibin, China, for instance, was executed to the client’s complete satisfaction. We also won two new contracts for the supply of medical equipment in China.

In Sri Lanka, we successfully completed our first contract for the supply of medical equipment to 20 hospitals. A follow-on contract in Sri Lanka, which is a new market for VAMED, is currently in the final stages of negotiation.

SERVICE BUSINESS

VAMED offers a full range of facility management services for health care facilities. Modular in design, our service offering encompasses every aspect of technical, commercial, and infrastructural facility management, ranging from building and equipment maintenance, medical technology management, waste management, energy management, security services, and the cleaning of buildings and outdoor facilities through to technical and operational management. With this integrated portfolio of services we guarantee optimal operation of a facility over its entire life cycle, from the construction of the buildings to the end of primary use, modernization, or renewal. In addition to facility and operational management, we also specialize in logistics for the health care industry. By optimizing the processes, logistics costs are minimized while still maintaining the necessary supply standards.

The following gives an overview of the relevant developments in the service business’s target markets:

EUROPE

In 2009, VAMED successfully continued its more than 20-year-old partnership with university clinic AKH in Vienna. In addition to VAMED’s technical management role, which we have been performing since 1986, this included a number of structural building projects. AKH is one of Europe’s largest hospitals and comprises 31 clinics and institutes with a total of about 2,100 beds. We also assumed the technical management of two hospitals in Lower Austria with a total of 1,230 beds. After AKH Vienna, this is the largest technical service contract ever awarded in Austria.

The PPP model in Oberndorf near Salzburg is already becoming a reference project for integrated health care before its completion. Here, VAMED was engaged to operate the existing acute care hospital, make structural improvements and extend it, and, with the construction of a new medical and post-acute care center, develop the site into an integrated health care facility.

In Germany, the service contract with the Charité University Clinic in Berlin was renewed for another two years until 2012. Charité CFM Facility Management GmbH, the consortium headed by VAMED, is responsible for all operations at Charité except the purely medical services. In 2009, the approximately 2,600 employees again successfully carried out their services under this contract, which is one of the largest service contracts in the hospital sector in Europe. The service contract with the university clinic in Hamburg-Eppendorf was also continued to the customer’s complete satisfaction. It was already renewed in 2008 and runs until 2013. A new cooperation was forged with the university clinic Schleswig-Holstein with the aim of improving the quality of IT-services and operating the IT-infrastructure more efficiently. The cooperation was initially approved for five years.

ASIA-PACIFIC

At the international level, VAMED scored a major success in Kazakhstan: we were awarded the contract for the total operational management of the National Research Center for Maternity and Child in Astana with about 500 beds. After the Prince Court Medical Center (PCMC) in Kuala Lumpur, Malaysia, and the Al Ain Hospital in Abu Dhabi, United Arab Emirates, this is the third hospital in our target markets in Asia where we are responsible for the total operational management. All three projects are being conducted in cooperation with the Vienna University of Medicine and are important reference projects for VAMED’s all-round competence internationally.

Through close market coverage, business in Thailand has also developed very positively for VAMED. We succeeded in winning a consulting contract for the Potalai Medical Spa and another for the Mahidol University in Bangkok. We were also awarded two contracts for technical services: one for the Ramathibodi University Clinic and one for the Queen Sirikit Hospital.

AFRICA

In Gabon, VAMED is responsible for the overall management of a total of seven regional hospitals and for the technical management of the Omar Bongo Ondimba Hospital in Libreville.

In Libya, the Medical Center Tripoli is one of the most important technical management reference projects. In 2009, VAMED was also engaged to implement a total hygiene concept at the center according to European standards.

VAMED VITALITY WORLD

As a result of the new health consciousness trend and desire for vitality, thermal and wellness centers are acquiring ever greater importance as health facilities. We are responding to this trend with our VAMED Vitality World thermal resorts and have been designing, constructing, and operating projects successfully for many years.

In partnership with the City of Vienna, the thermal center in Vienna-Oberlaa is currently being expanded into a unique health and wellness center. The contract for this project is worth over € 100 million. It is due to be completed by the end of 2010.

In 2009, we also continued to work successfully on the € 80 million Tauern SPA World thermal center project in Kaprun, Salzburg. For this exceptional spa project, VAMED was not only the developer but, as general contractor, was also responsible for building it and will also be operating it when it is completed, demonstrating its competence across the complete value chain.

In November 2009, we opened the St. Martins Thermal Center & Lodge in the Seewinkel Lake District in Austria after only 22 months’ construction. It combines, in unique fashion, the attractions of a health tourism facility with the natural splendor of the surrounding national park ‘Neusiedler See’ in Burgenland.

OUTLOOK

In Europe, the focus of VAMED ’s activities will be on holistic realization and PPP projects in 2010. As health centers have high value for preventive care, and health tourism is becoming increasingly popular, we see development potential in this segment as well. Outside Europe, the focus will be on customtailored solutions for hospitals along the VAMED value chain, and expansion in Latin America.

Further information on VAMED can be found on www.vamed.com

Please see here for the 2010 financial outlook of Fresenius Vamed.

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