Development of other major items in the statement of income

Group gross profit increased to € 4,636 million, exceeding the € 3,928 million in 2008 by 18 % (17 % in constant currency). We improved the gross margin to 32.7 % (2008: 31.8 %). The cost of sales rose 13 % to € 9,528 million (2008: € 8,408 million; including special items of € 35 million from the inventory step-up due to market price accounting related to the APP acquisition). Cost of sales as a percentage of Group sales sank from 68.2 % in 2008 to 67.3 %. Selling, general, administrative expenses consisted primarily of personnel costs, marketing and distribution costs, and depreciation and amortization. These expenses rose by 19 % to € 2,342 million in 2009 (2008: € 1,972 million, including special items of € 57 million from the currency gain on US dollar intercompany loans). Their ratio as a percentage of Group sales was 16.5 % (2008: 16.0 %). Depreciation and amortization was € 562 million (2008: € 476 million excluding special items, € 783 million including special items consisting of amortization of € 272 million on acquired in-process R & D and the valuation step-up in inventories of € 35 million). Their ratio as a percentage of sales was 4.0 % in 2009 (2008: 3.9 % before special items relating to the APP acquisition).

The chart above shows the earnings structure in 2009.

Group net interest was € -580 million, an increase of € 149 million versus € -431 million in 2008. Lower average interest rates on liabilities at Fresenius Medical Care were more than offset by incremental debt especially relating to the APP Pharmaceuticals acquisition.

The other financial result of € -31 million includes the valuation changes of the fair redemption value of the Mandatory Exchangeable Bonds (MEB) of € -37 million and the Contingent Value Rights (CVR) of € 6 million. Both are non-cash items.

The adjusted Group tax rate (adjusted for the effects of the mark-to-market accounting of the Mandatory Exchangeable Bonds and the Contingent Value Rights) was 31.4 % (2008: 33.4 %, adjusted for special items relating to the APP acquisition). The decline is largely due to the revaluation of a tax claim at Fresenius Medical Care in the second quarter of 2009.

Noncontrolling interest rose to € 497 million from € 413 million in 2008 mainly due to the good earnings performance at Fresenius Medical Care. Of this, 93 % was attributable to the noncontrolling interest in Fresenius Medical Care.

The table below shows the profit margin progress:

in % 2009 1 2008 2
1 2009 return on sales adjusted for the effects of the mark-to-market accounting of the Mandatory Exchangeable Bonds (MEB) and Contingent Value Rights (CVR).
2 2008 adjusted for special items relating to the APP acquisition.
EBITDA margin 18.5 17.9
EBIT margin 14.5 14.0
Return on sales (before taxes and noncontrolling interest), adjusted 10.4 10.5

in % 2009 1 2008 2
1 2009 return on sales adjusted for the effects of the mark-to-market accounting of the Mandatory Exchangeable Bonds (MEB) and Contingent Value Rights (CVR).
2 2008 adjusted for special items relating to the APP acquisition.
EBITDA margin 18.5 17.9
EBIT margin 14.5 14.0
Return on sales (before taxes and noncontrolling interest), adjusted 10.4 10.5

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