SHariNG exPerTiSe. CreaTiNG vaLue

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M A G A Z I N : T H E M A L O R E M I P S U M

D A S U N T E R N E H M E N | K O N Z E R N L A G E B E R I C H T | K O N Z E R N A B S C H L U S S | L O R E M I P S U M

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F ive-year Overv iew

2006€ million

2007€ million

2008€ million

2009€ million

2010€ million

Sales 3,321.4 3,572.9 3,786.4 4,028.2 4,422.8

Cost of Goods Sold 1,781.2 1,898.3 2,029.6 2,151.4 2,341.7

Functional expenses 1,205.0 1,297.1 1,366.2 1,432.3 1,595.9

Selling expenses 904.4 972.9 1,031.2 1,091.1 1,218.9

General and administrative expenses 194.8 207.9 204.7 202.1 221.6

research & Development expenses 105.8 116.2 130.3 139.1 155.4

Interim profit 335.2 377.6 390.6 444.5 485.2

operating profit 305.5 348.7 345.7 410.6 456.2

profit before taxes 243.4 283.0 268.8 336.1 389.6

Consolidated Annual Net profit 181.8 217.7 185.1 239.6 277.4

eBItDA 490.7 535.9 545.8 620.5 700.5

Assets 3,025.3 3,332.1 3,708.0 3,975.1 4,686.1

intangible assets (incl. Goodwill) 113.4 124.3 157.1 167.9 218.6

Property, Plant and equipment 1,312.1 1,435.8 1,698.7 1,926.8 2,305.0

inventories 645.9 709.7 726.7 708.5 780.0

Trade accounts receivable 672.7 738.0 767.6 790.1 933.5

equity 1,088.0 1,255.3 1,389.7 1,620.0 1,984.0

liabilities 1,937.3 2,076.8 2,318.3 2,355.1 2,702.0

Pension Obligations 440.9 456.9 470.4 491.8 513.3

Financial Liabilities 798.7 895.7 1,094.5 1,006.4 1,233.4

Trade accounts Payable 159.7 177.4 179.2 210.3 216.8

Investments in property, plant and equipment and Intangible Assets 293.8 349.4 471.0 454.8 575.4

Depreciation and Amortization of property, plant and equipment and Intangible Assets 181.4 182.9 197.8 208.6 238.2

personnel expenditure 1,210.1 1,271.4 1,339.8 1,424.9 1,581.7

employees (annual average) 33,127 35,810 37,601 38,512 40,316

B. Braun is one of the world’s leading providers of healthcare solutions. Through its Hospital Care, aesculap, Out Patient Market, and B. Braun avitum Divisions, the company supplies medical products and services to hospitals, physicians in private practice, and the homecare market.

B. Braun project manager Cristina Molina (pictured), at the Pharmaceu-ticals Center of excellence, is overseeing the development of the new LiFe Nutrition production facility in Melsungen, Germany.

C O MPa N y P rO F i L e

Annual Report 2010

SHariNG e xPerT iSe . Cre aT iNG vaLue .

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B. BrauN aT a GLaNCe

Key figures

income structure

2010 2009 Change in %

Gross Margin (in %) 47.1 46.6

Net Margin after Taxes (in %) 6.3 5.9

eBiTDa (in € million) 700.5 620.5 12.9

eBiTDa Margin (in %) 15.8 15.4

equity ratio (in %) 42.3 40.8

equity ratio including Loans from Shareholders (in %) 43.3 41.8

Net Financial Debt (in € million) 1,183.5 945.7 25.1

Net Financial Debt/eBiTDa 1.7 1.5 10.8

investments in Property, Plant and equipment and intangible assets (in € million) 575.4 454.8 26.5

Depreciation and amortization of Property, Plant and equipment and intangible assets (in € million) 238.2 208.6 14.2

Personnel expenditure (in € million) 1,581.7 1,424.9 11.0

employees (annual average) 41,666 39,504 5.5

2010 2009 Change

€ million % € million % in %

Sales 4,422.8 100.0 4,028.2 100.0 9.8

Cost of Goods Sold 2,341.7 52.9 2,151.4 53.4 8.8

Gross profit 2,081.1 47.1 1,876.8 46.6 10.9

Selling expenses 1,218.9 27.6 1,091.1 27.1 11.7


research and Development expenses 155.4 3.5 139.1 3.5 11.7

Interim profit 485.2 11.0 444.5 11.0 9.1

Other Operating income and expenses – 29.0 – 0.7 – 34.0 – 0.8 14.5


Net Financial income (Loss) – 66.6 – 1.5 – 74.5 – 1.8 10.6


income Taxes 112.3 2.5 96.5 2.4 16.3


Sales

totAl € 4.423 mIll IoN

Sales by region | IN € mIll IoN

europe & africa 1,692

North america 940

Germany 878

asia & australia 616

Latin america 296


Sales by division | IN € mIll IoN

Hospital Care 2,087B. Braun avitum 475

Other 26

aesculap 1,281

OPM 555

employees

employees by region

Germany

10,67211,251

asia & australia

8,2659,243

Latin america

2,924 3,023

North america

5,486 5,486

europe & africa( without Germany)

12,157 12,663

DeC 31, 2009 totAl: 39.504 DeC 31, 2010 totAl: 41.666

12,000

9,000

6,000

3,000

(without Germany)

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JUNe Medical training on the island of the Gods: B. Braun Medical indonesia begins operations at the asia Pacific Surgical Training Center in Bali.

Manufacturing begins in Switzerland: The new facility in Crissier will manufacture approximately 12 million empty bags for clinical nutrition annually.

ApRIl B. Braun is named Germany’s “Top engineering employer 2010.”

The new B. Braun office in Havana opens for business. B. Braun Medical international S.L., Havana, Cuba was established by the Spanish holding company B. Braun Medical international SL , rubí, Spain.

JANUARy The number of B. Braun employees reaches an unprecedented 40,000.

DeCemBeR The Supervisory Board elects Dr. Heinz-walter Große to succeed Prof. Dr. h.c. Ludwig Georg Braun, who will retire on March 31, 2011. Otto-Philipp Braun and Dr. annette Beller are appointed to the Management Board.

oC toBeR B. Braun’s Czech subsidiary creates a new meeting place: a café in the “House of Medicine” in Prague. The café was designed by renowned Czech architect eva Jiřičná.

mAy The B. Braun Group and its employees around the world donate € 230,000 to help build a hospital in earthquake-ravaged Haiti.

a new factory for surgical instruments is opened in radzyń Podlaski, Poland.

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2006€ million

2007€ million

2008€ million

2009€ million

2010€ million

Sales 3,321.4 3,572.9 3,786.4 4,028.2 4,422.8






Interim profit 335.2 377.6 390.6 444.5 485.2




eBItDA 490.7 535.9 545.8 620.5 700.5

Assets 3,025.3 3,332.1 3,708.0 3,975.1 4,686.1



inventories 645.9 709.7 726.7 708.5 780.0


equity 1,088.0 1,255.3 1,389.7 1,620.0 1,984.0

liabilities 1,937.3 2,076.8 2,318.3 2,355.1 2,702.0











Annual Report 2010


1M A N A G E M E N T b o A r d | j o u r N A l | G r o u p M A N A G E M E N T r E p o r T | C o N s o l i d A T E d F i N A N C i A l s T A T E M E N T s

He altHc are systems around tHe world are facing ma jor

cHallenges , one of wHicH is ma x imizing benef i t s wHile

mainta ining re a sonable cost le v el s . b . br aun is mak ing

a ma jor contribut ion towards tHis goal tHrougH con-

t inual improv ement s in tHe outcomes of our tHer apies

and tHe eff ic iencies of our processes – botH internally

and in tHe inpat ient and outpat ient tre atment se t t ings .

our ongoing close coll abor at ion witH rese arcHers ,

cl inic ians and pat ient s Help s us op t imize medic al pro-

cedures and improv e tHe qual i t y of l ife f or tHose we

serv e . we sHare our e xpert ise e v eryday to cre ate l a st-

ing value .

Sharing e xpert iSe . Cre at ing value .


Key performance indicators

income structure

2010 2009 Change in %












employees (as of December 31, 2010) 41,666 39,504 5.5

2010 2009 Change


Sales 4,422.8 100.0 4,028.2 100.0 9.8


Gross profit 2,081.1 47.1 1,876.8 46.6 10.9




Interim profit 485.2 11.0 444.5 11.0 9.1





income Taxes 112.3 2.5 96.5 2.4 16.3


Sales




North america 940

Germany 878


Latin america 296




Other 26

aesculap 1,281

OPM 555

employees

employees by region

Germany

10,67211,251

asia & australia

8,2659,243

Latin america

2,924 3,023

North america

5,486 5,486

europe & africa( excluding Germany)

12,157 12,663

DeC 31, 2009 totAl: 39,504 DeC 31, 2010 totAl: 41,666

12,000

9,000

6,000

3,000

(excluding Germany)

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The new B. Braun office in Havana opens for business. B. Braun Medical international S.L., Havana, Cuba is established by the Spanish holding company B. Braun Medical international SL , rubí, Spain.

JANUARy The number of B. Braun employees surpasses 40,000 for the first time.

DeCemBeR The Supervisory Board elects Dr. Heinz-walter Große to succeed Prof. Dr. h. c. Ludwig Georg Braun, who will retire on March 31, 2011. Otto-Philipp Braun and Dr. annette Beller are appointed to the Management Board.



a new factory for surgical instruments in radzyń Podlaski, Poland begins operation.

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M A G A Z I N : T H E M A L O R E M I P S U M

D A S U N T E R N E H M E N | K O N Z E R N L A G E B E R I C H T | K O N Z E R N A B S C H L U S S | L O R E M I P S U M



income structure

2010 2009 Change in %













2010 2009 Change


Sales 4,422.8 100.0 4,028.2 100.0 9.8


Gross profit 2,081.1 47.1 1,876.8 46.6 10.9




Interim profit 485.2 11.0 444.5 11.0 9.1





income Taxes 112.3 2.5 96.5 2.4 16.3


Sales




North america 940

Germany 878


Latin america 296




Other 26

aesculap 1,281

OPM 555

employees

employees by region

Germany

10,67211,251

asia & australia

8,2659,243

Latin america

2,924 3,023

North america

5,486 5,486


12,157 12,663


12,000

9,000

6,000

3,000

(excluding Germany)

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2

C ontent S

Foreword 4

ManageMent Board 6

ManageMent Board

Seizing opportunit ieS , helping people 8

MoBile and independent 14

the SourCe oF l iFe 20

allergy in the knee 26

journal

3

group�ManageMent�report Consolidated�F inanCial�stateMents

Consolidated�stateMent�oF�inCoMe�(loss)� 66

Consolidated�stateMent�oF�F inanCial�posit ion�� 67

notes� 71

independent�auditors’�report� 131

Ma jor�sHareHoldings� 132

superVisory�Board�report� 136

glossary� �138

iMprint� 140

at�a�gl anCe� 34

tHe�B .�Braun�group� 35

eConoMiC�enVironMent� 42

Business�and�earnings�perForManCe� 44

FinanCial�posit ion�and�assets� 50

personnel�report� 54

risk�and�opportunit ies�report� 57

suBsequent�e Vents� 60

outlook� 60

4

p r o F. �d r . �H . C . �l u d w i g �g e o r g�B r a u n , �C H a i r M a n�o F � t H e �M a n a g e M e n t �B o a r d


F o r E W o r d

“ The primary re a son f or our ongoing suc cess is ThaT, in incre a sing

numbers , cus Tomers around T he worl d rec ognize T he value of our

inno vaT i v e , h igh- qua l i T y produc T s . T hus , we rem a in T rue To our

moT To of grow T h T hrough new and improv ed produc T s .”Dear Reader,

B. Braun maintained its successful growth trend in 2010. Fortunately, the aftershocks following the crisis of 2009 were markedly weaker than anticipated and only impacted us in the area of capital goods. The success of the reporting year is reflected in sales growth of 9.8 percent, which exceeded our original expectation. This was attributable in part to stronger currencies in Asia, Latin America and the United States Dollar. Profit before taxes increased by 15.9 percent last year, a particularly satisfactory amount given our high level of capital investment.

The primary reason for our ongoing success is that, in increasing numbers, customers around the world recognize the value of our innovative, high-quality products. Thus, we remain true to our motto of growth through new and improved products.

The Journal section of this annual report features a number of examples of how our innovations are improving the quality of life for many people, from innovative knee joint implants that prevent allergic reactions in patients to a cooperative effort with government authorities in India to provide care for dialysis patients who cannot afford continuous treatment.

As such, we are living up to our guiding principle of “Sharing Expertise” every day. Together with experts from a wide range of fields, we are constantly expanding and consolidating our knowledge and sharing it with customers, business partners and clinicians. We are confident that we will conti-nue to remain on the fast track in all of our business areas. We are, therefore, significantly expan-ding our manufacturing capacity.

The year 2010 was again characterized by record levels of capital investment, which, at € 575 million, exceeded depreciation by approximately € 337 million. This investment reaffirms our commitment to meet the increasing global demand for hospital products in the future.

We are pleased that, despite a considerable increase in total assets, the company‘s equity ratio grew to 42 percent and even exceeds 43 percent when loans from shareholders are taken into account. However, we are not only investing in development and production. Additionally and most importantly, we are investing in our employees, whose know-how and dedication ensure our company’s success. To meet the challenges of the future, we increased our workforce last year to a total of 41,666 employees world-wide as of December 31, 2010.

foreword

Ensuring succEss

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P r o f. D r . h . c . L u D w i g g e o r g B r a u n , c h a i r m a n o f t h e m a n a g e m e n t B o a r D


F o r E W o r d

“ The primary re a son f or our ongoing suc cess is ThaT, in incre a sing

numbers , cus Tomers around T he worl d rec ognize T he value of our

inno vaT i v e , h igh- qua l i T y produc T s . T hus , we rem a in T rue To our

moT To of grow T h T hrough new and improv ed produc T s .”

We offer vocational training and continuing education programs to meet the ongoing demand for skilled employees and to preserve the high level of education of our employees now and in the future. Being a highly attractive employer is very important to us. This is evident in new initiatives to provide employees with a better work-life balance. These initiatives have been extremely well received. We are pleased that, in collaboration with employee representatives, we were able to implement of a number of creative ideas in also this area.

I have had the pleasure of leading the company for more than 40 years. The time has now come to hand the reins over to a new generation. In Heinz-Walter Große we have appointed a first-class successor from within our own ranks to take over as Chairman of the Management Board. I hand over this responsibility with great optimism. The Management Board can continue its successful work on a strong foundation. I would like to extend my heartfelt thanks to all the employees, customers and suppliers who have accompanied me throughout my career for their continuous support and outstanding cooperation.

To those who follow me, I wish them the success that comes through hard work and dedication.

Yours sincerely,

Prof. Dr. h. c. Ludwig Georg BraunChairman of the Management Board of B. Braun Melsungen AG

4

P r o f. D r . h . c . L u D w i g g e o r g B r a u n , c h a i r m a n o f t h e m a n a g e m e n t B o a r D


F o r E W o r d

“ tHe primary re a son f or our ongoing suc cess is tHat, in incre a sing

numbers , cus tomers around tHe worl d rec ognize tHe value of our

inno vat i v e , H igH- qua l i t y produc t s . t Hus , we rem a in t rue to our

mot to of grow tH t HrougH new and improv ed produc t s .”

6

ManageMent �Board

proF. dr. h.C. ludWiG GEorG brAuN

ChAirMAN oF ThE MANAGEMENT

boArd

dr. rEr. pol. hEiNz-WAlTEr GrossE

ViCE ChAirMAN oF ThE MANAGEMENT

boArd, F iNANCE ANd huMAN rEsourCEs


dr. rEr. NAT. WolFGANG FEllEr

b. brAuN AV iTuM diV is ioN

proF. dr. MEd. hANNs-pETEr KNAEbEl

ChAirMAN oF ThE MANAGEMENT

boArd oF AEsCulAp AG, AEsCulAp

diV isioN

dr. rEr. NAT. MEiNrAd luGAN

hospiTAl CArE ANd opM

diV isioNs

CAroll h. NEubAuEr, ll.M.

ChiEF EXECuTiVE oFFiCEr , b . brAuN

oF AMEriCA , NorTh AMEriCAN

rEGioN

8

seizing opportunities, Helping people

india is a c oun t ry of booming grow t H r at e s a nd t re-

mendous cH a l l enge s . b . br aun wa n t s to se ize m a rk e t

o p p o r t u ni t i e s a nd Hel p p e o p l e wi t H c Hro ni c k id ne y

d isorders at el e v en ne w dia ly s is cen t ers .

10

in�recent�decades,�india�has�risen�from�a�crisis-ridden�devel-oping�country�to�a�world�economic�power�at�a�dizzying�rate.�its�1.2 billion�people�are�driving�economic�progress�forward�at�an�impressive�pace,�and�in�some�sectors�such�as�it,�india�has�long�been�in�the�international�premier�league,�thanks�to�its�very�highly�educated�workforce.�B.�Braun�has�had�a�presence�in�india�since�1994.�“as�a�provider�of�comprehen-sive�solutions,�we�are�highly�regarded�by�our�indian�custom-ers�and�are�one�of�the�market�leaders�in�medical�products�and�services,”�says�krishna�Chellappa,�Business�unit�Head�of�B.�Braun�Medical�india.

increasing�prosperity�has�produced�many�positive�conse-quences�for�the�country�and�its,�by�international�standards,�very�young�population.�at�the�same�time,�however,�india�faces�enormous�challenges,�which�become�evident�to�visitors�very�quickly.�poverty�is�rampant�in�many�cities�and�rural�areas,�and�in�the�country’s�larger�cities�one�third�of�the�pop-ulation�lives�in�slums.�other�problems�include�water�short-ages,�agricultural�crises,�skyrocketing�energy�demand,�a�lack�of�hygiene,�and�pollution,�as�well�as�deficiencies�in�infrastruc-ture,�education�and�healthcare�systems.

the�state-organized�healthcare�system�strives�to�provide�primary�healthcare�nationwide.�although�the�situation�has�improved�in�recent�decades,�the�central�government�is�still�a�long�way�from�achieving�this�objective.�a�large�percentage�of�hospitals�and�pharmacies�are�run�and�financed�by�not-for-profit�charitable�organizations.�private�hospitals�offer�very�high�medical�standards,�but�they�are�an�option�only�for�the�wealthy.�“as�a�company�focused�on�sustainability,�it�became�clear�to�us�from�the�outset�that�we�had�to�act�in�a�socially�

responsible�fashion�in�india.�together�with�representatives�of�the�state�of�andhra�pradesh,�we�came�to�the�conclusion�that�we�could�help�most�effectively�by�establishing�dialysis�centers,”�says�krishna�Chellappa.

some�background:�treatment�at�a�hospital�or�clinic�is�nor-mally�free�for�the�poorest�as�part�of�the�primary�healthcare�provision�of�the�state.�However,�patients�must�pay�out-of-pocket�for�outpatient�care�provided�by�private�practice�phy-sicians.�and�of�course,�many,�the�chronically�ill�in�particular,�cannot�afford�the�treatment�and�healthcare�services�that�they�require.�it�may�appear�paradoxical�at�first,�but�even�the�very�poor�in�india�are�suffering�from�the�so-called�“dis-eases�of�affluence”�such�as�obesity,�high�blood�pressure�and�diabetes,�as�a�result�of�changes�in�lifestyle�and�eating�habits.�the�number�of�patients�with�chronic�kidney�disor-ders�is�also�increasing�at�a�rapid�rate.�in�the�state�of�andhra�pradesh�alone,�some�3,500�of�its�80 million�residents�rely�upon�regular�dialysis.�the�dialysis�process�removes�metabolic�toxins�and�excess�water�from�the�blood.�there�are�two�prob-lems,�however:�patients�cannot�afford�hemodialysis,�which�must�be�performed�at�least�twice�a�week,�and�the�medical�facilities�are�in�many�cases�not�sufficiently�equipped.�this�prompted�B.�Braun�to�establish�a�public-private�partnership�with�the�government�of�andhra�pradesh.�acquiring,�expand-ing�and�operating�dialysis�centers�(eleven�thus�far)�with�a�staff�of�approximately�90�within�state-run�hospitals�means�tangible�help�at�the�highest�level.�More�centers�in�other�parts�of�india�are�being�planned.

the�company�offers�extensive�experience,�as�the�B.�Braun�avitum�division�already�operates�a�network�of�more�than�

t He c o mpa n y o f f er s e x t ens i v e e x p erien c e , a s t He b . br aun av i t um

d i v is io n a l re a dy o p er at e s a ne t wo rk o f m o re t H a n 15 0 d i a ly s is

c en t er s in euro p e , a s i a a nd s o u t H a f ric a . p H y s ic i a ns a nd nur s in g

s ta f f at t He se c en t er s enH a n c e pat ien t s ’ q ua l i t y o f l i f e u t i l i z in g

t He l at e s t med ic a l t e c Hn o l o gy.


“as�a�CoMpany�FoCused�on�sustainaBil it y,�i t�BeCaMe�Clear�to�us�FroM�tHe�outset�tHat�we�Had�to�aC t�in�a�soCially�respon-

siBle�FasHion�in�india .�togetHer�witH�representatiVes�oF�tHe�state�oF�andHra�pradesH,�we�CaMe�to�tHe�ConClusion�tHat�

we�Could�Help�Most�eFFeC tiVely�By�estaBlisHing�dialysis�Centers .”

k r i s H n a�C H e l l a p pa , �B u s i n e s s �u n i t �H e a d�o F �B . �B r a u n�M e d i C a l � i n d i a .

s E i z i N G o p p o r T u N i T i E s , h E l p i N G p E o p l E

12

“people Here are del igHted tHat tHe y c an recei v e fa s t, free tre atment

in t His way. i t is a n emot ion a l m at t er , a nd we a re v ery awa re of t He

deep sense of gr at i tude tHat is felt. i t is gre at mot i vat ion f or us .”

d r . �r a H u l �M e d a k k a r , H e a d�o F �o p e r at i o n s �at �B . �B r a u n�M e d i C a l � i n d i a


150 dialysis�centers�in�europe,�asia�and�south�africa.�physicians�and�nursing�staff�at�these�centers�enhance�patients’�quality�of�life�utilizing�the�latest�medical�technology.

in�these�new�centers�in�india,�the�B.�Braun�dialog�hemodi-alysis�machines�help�to�alleviate�the�suffering�of�thousands�of�patients,�with�more�than�100,000 treatments�per�year.�the�gratitude�with�which�these�centers�have�been�welcomed�is�evident�from�the�full�treatment�and�waiting�rooms.�How-ever,�efficient�management�means�that�patients’�waiting�times�are�kept�to�a�minimum.�a�friendly�environment,�air-condi-tioned�rooms�and�flat�screen�televisions�all�help�make�their�stay�as�comfortable�as�possible.�“people�here�are�delighted�that�they�can�receive�fast,�free�treatment�in�this�way.�it�is�an�emotional�matter,�and�we�are�very�aware�of�the�deep�sense�of�gratitude�that�is�felt.�it�is�great�motivation�for�us,”�says�dr.�rahul�Medakkar,�Head�of�operations�at�B.�Braun�Medical�india.�He�adds:�“the�quality�of�care�at�the�dialysis�centers�is�first-rate,�as�patients�benefit�from�our�latest�innovations.”�one�of�those�innovations�is�the�adimea�control�system,�which�precisely�measures�each�individual�patient’s�dialysis�dose�and�verifies�it�over�the�course�of�the�treatment.�another�is�the�latest�generation�of�filters,�Xevonta,�which�was�only�recently�introduced�to�the�market.�B.�Braun�is�setting�a�new�benchmark�with�this�filter,�which�acts�as�an�artificial�kidney�during�dia-lysis.�thanks�to�the�newly�developed�high-tech�filter�membrane�amembris,�this�high-performance�premium�dialyzer�delivers�highly�efficient�treatment�for�patients.�these�innovations�are�produced�in�radeberg,�saxony�near�dresden,�germany.�For�years,�B.�Braun�has�developed�and�produced�hollow-fiber�membranes,�sterile�filters�and�dialyzers�

at�this�location,�together�with�its�ascalon�and�saxonia�sub-sidiaries,�with�great�success.�Manufacturing�capacity�at�the�saxonia�facility�was�significantly�expanded�in�2010,�through�a�capital�investment�of�15 million.�the�eyes�of�rene�strubel,�Head�of�production�at�saxonia�Medical�gmbH,�light�up�as�he�talks�about�the�fruit�of�his�labors:�“we�have�made�tre-mendous�progress�through�our�ongoing�research�and�devel-opment�and�close�cooperation�with�physicians�and�patients,”�he�explains.�“today,�dialysis�is�a�highly�tolerable�and�safe�treatment.”�the�result�is�a�noticeable�improvement�in�quality�of�life�for�patients�all�around�the�globe –�in�germany�just�as�in�india.

s E i z i N G o p p o r T u N i T i E s , h E l p i N G p E o p l E

mobile and independent

incontinence is a widespre ad condit ion, ye t tHe subjec t

remains taboo. tHe onse t of incont inence ini t ially

posed a Huge pHysic al cHallenge f or pe tr a str ansk y,

bu t sHe is now en joy ing l if e to t He f ul l e s t ag a in ,

tHank s in part to single-use c atHe ters from b . br aun.


16

“what�am�i�supposed�to�do�now?”�was�the�plaintive�question�petra�posed�to�her�doctor�when�medical�diagnosis�confirmed�her�suspicion�that�she�is�incontinent,�meaning�that�she�can�no�longer�voluntarily�control�her�urine�flow.�it�all�began�six�years�ago,�when�petra,�42,�experienced�mild�back�pain.�“i�had�occasional�twinges�here�and�there,�just�like�so�many�people,”�she�recalls.�But�the�pain�got�worse,�and�a�suspected�case�of�lumbago�was�followed�by�a�severely�herniated�disc.�

then�came�the�shock:�“out�of�the�blue,�i�completely�wet�myself�on�the�way�home�from�work.�i�was�so�embarrassed�that�i�wanted�to�crawl�into�a�hole.”�embarrassment,�loss�of�confi-dence�and�withdrawal�are�often�side-effects�of�incontinence.�and�petra’s�case�is�far�from�unique:�in�germany�alone,�approx-imately�five�million�people�–�mainly�older�men�and�women�–�suffer�from�urinary�incontinence,�requiring�treatment�or�care.�However,�young�people�can�also�suffer�from�temporary�or�permanent�incontinence,�particularly�women�who�have�been�through�pregnancy.�there�are�many�possible�causes,�and�medical�diagnosis�is�necessary.�in�petra’s�case,�the�causes�have�not�yet�been�fully�determined.�Creeping�para�lysis�causes�permanent�loss�of�urinary�control�and�spontaneous�draining�of�the�bladder.�“the�only�thing�we�know�for�cer-tain,”�she�says�casually,�“is�that�the�control�mechanism�on�the�pipe�is�faulty,”�using�an�analogy�from�her�husband’s�profession�as�a�heating�engineer.�today,�she�can�look�back�at�some�involuntary�episodes�and�laugh,�but�getting�to�this�point�has�been�a�long�road.�“the�biggest�problem�was�me,”�she�admits,�“because�i�no�longer�felt�like�a�valuable,�attrac-tive�woman.”�she�was�especially�concerned�about�social�inter-action�and�how�family,�friends,�and�co-workers�would�react.�Her�husband�was�completely�and�fully�supportive,�but�she�had�

negative�experiences�in�other�surroundings.�rumors�circu-lated�at�work,�and�some�of�her�co-workers�whispered�behind�her�back.�after�six�months,�she�decided�to�confront�the�matter�head-on:�“i�explained�to�everyone�that�i�had�nothing�contagious�and�nothing�that�anyone�should�be�repulsed�by.”�petra�stransky�has�learned�to�live�with�her�illness�and�to�accept�herself.�psychotherapy�helped,�which�gave�her�a�new�outlook�on�life:�“in�the�old�days,�i�used�to�race�through�life,�but�now�i�have�a�new�awareness�that�i�wouldn’t�want�to�change.”

like�millions�of�other�patients,�this�active�young�woman�regained�nearly�the�same�quality�of�life�today�as�prior�to�the�incontinence,�thanks�in�part�to�the�products�of�B.�Braun’s�opM�division.�its�wide�product�range,�for�example�the�urine�catheter�brand�actreen�®,�offers�the�ideal�solution�for�every�type�of�incontinence.�urinary�incontinence�is�frequently�caused�by�a�neurological�disorder –�in�some�cases�the�solu-tion�is�medical�treatment�aimed�at�putting�the�bladder�into�full�retention�to�prevent�the�recurrence�of�incontinence.�these�patients�will�then�require�the�assistance�of�a�catheter�to�pass�urine.�For�many�people�affected�by�urinary�dysfunction,�the�solution�is�“intermittent�catheterization.”�this�involves�patients�catheterizing�themselves�four�to�six�times�per�day,�giving�them�control�over�their�bladder�and�renewed�self-confidence.�doing�away�with�indwelling�urethral�catheters�or�bulky�external�appliances�goes�a�long�way�in�boosting�a�patient’s�morale�and�self�esteem.�in�addition,�since�the�bladder�is�being�drained�effectively�and�completely,�urinary�tract�infections�cease�to�be�a�problem�and�the�kidneys�are�pro-tected.�the�physically�and�mentally�disabled�can�also�use�this�disposable�catheter,�as�people�in�wheelchairs�have�

in addit ion to tHe HigHes t medic al qual i t y, e a se of use and c omf ort

f or e v eryday appl ic at ion are part icul arly important f or produc t s

tHat are used to tre at inc ont inence .


What are the most frequent causes of neurogenic urinary dysfunction?Urinary dysfunction is common in patients with neurological diseases such as multiple sclerosis or spinal cord trauma. This dysfunction is often accompanied by urinary retention and can lead to infection.

What is the most effective treat-ment for urinary retention?The most effective treatment for uri-nary retention of a bladder affected by neurological disease is intermittent catheterization, which is a procedure to empty the bladder through a single-use sterile catheter in regular intervals (5 – 6 times per 24 hours). This treat-ment is performed by the patients themselves. If paralysis prevents self-treatment, they can be assisted by caregivers. If repeated catheterization does not achieve continence and, if the various medical tests indicate an overactive bladder, an anticholinergic

pharmacological treatment can be added as a muscle relaxant.

Do you recommend certain prod-ucts, for example from B. Braun, to treat patients suffering from this condition and to improve their everyday lives?The Actreen ® Lite Mini catheter is perfectly suited for female intermit-tent catheterization. It is a pre-lubri-cated ready-to-use catheter, 9 cm length. The discrete packaging and the ease of grip, even where there is reduced manual dexterity, ensure “no-touch” catheterization. Men with urinary retention will appreciate the easy opening of Actreen ® Lite Cath, the ability to connect the product to all urine bags available on the market, and the “no-touch” system during catheterization. The eyelet openings on the packaging allow paralyzed men to remain in-dependent during catheterization.

How is this self-catheterization taught to patients? Is it easy for patients to perform?Patients are taught the technique of intermittent self-catheterization by a team of trained nurses. We explain their anatomy and the procedure to the patients. We then demonstrate how it should be performed and try to make the situation as easy as pos-sible for the patient. Eighty percent of patients learn the technique within 24 hours. Some patients may take a little longer, but very few give up.

“ �soMe�pat ient s �May �take �a � l i t t le � longer ,� �

Bu t �V ery �Few�gi V e �up.”dr . Gu y EGoN , ph y s i C A l MEd iC iNE ANd rEhAb i l i TAT ioN AT T hE C EN T rE dE l’A rChE iN l E M ANs , F r ANCE

M o b i l E A N d i N d E p E N d E N T

18

mastered�the�technique�despite�paraplegia,�spinal�deformity,�old�age�and�blindness.�actreen®�products�offer�many�advan-tages�to�patients�and�caregivers�and�its�catheters�are�easy�to�use.�the�user�friendly�packaging�design�is�easy�to�open,�even�for�wheelchair-bound�patients�with�limited�dexterity.�pre-lubrication�makes�actreen®�comfortable�and�hygienic�to�use,�with�no�drips�or�mess�from�watery�coatings,�like�with�some�competitor�catheters.�it�is�very�important�for�patients�to�be�able�to�perform�the�procedure�quickly�and�easily.�thanks�to�these�features,�all�actreen�®�catheter�products�are�com-pletely�ready�to�use.�

the�actreen®�product�line�is�developed�and�produced�at�the�B.�Braun�Center�of�excellence�(Coe)�near�paris,�France.�these�Centers�of�excellence,�which�can�be�found�all�over�the�globe,�bring�together�research,�development,�production,�distribution�and�strategic�marketing�for�particular�thera-peutic�areas�(such�as�urology).�innovative�technologies�are�thereby�more�quickly�identified�and�developed.�B.�Braun�integrates�the�knowledge�of�external�experts�at�all�stages�of�the�innovation�process,�for�example,�through�a�network�of�highly�respected�physicians.�“efficient�processes�are�essential�to�achieving�optimal�results.�our�team�works�as�a�very�close�unit�to�achieve�this�across�the�entire�value�chain,�from�product�specifications�defined�by�marketing�to�devel-opment,�production�and�then�sales,”�explains�remi�Collin,�director�of�research�&�development�at�Coe�urology�B.�Braun�Medical�sas,�France.�this�approach�fits�perfectly�with�B.�Braun’s�guiding�principle:�sharing�expertise.�one�such�example�of�this�approach�is�B.�Braun’s�ongoing�collaboration�with�dr.�egon�at�the�Centre�de�l’arche�in�leMans,�France�(see�interview) –�where�B.�Braun�conducts�focus�groups�with�patients�and�

professionals�to�design�a�catheter�suitable�for�all�types�of�patients.�it�is�this�close�partnership�that�led�to�the�successful�market�launch�of�actreen®�lite�Cath�and�our�newest�catheter,�actreen®�lite�Mini,�which�is�specifically�designed�for�women.�

in�addition�to�these�urinary�catheters�and�the�actreen�®�glys�Cath,�the�actreen�®�product�range�also�includes�the�actreen�®�glys�set,�with�an�integrated�collection�bag�attached�to�the�catheter�to�hold�the�urine.�this�makes�it�easier�for�patients�who�cannot�drain�the�urine�directly�into�a�toilet.�new�users�need�to�be�educated�in�how�to�use�the�products�properly,�to�minimize�any�risk�of�injury�or�infection.�However,�intermit-tent�catheters�become�a�normal�part�of�the�daily�routine�very�quickly.�petra�stransky�greatly�appreciates�these�bene-fits:�“i�could�now�insert�the�catheter�blind-folded;�all�the�hand�movements�have�become�second-nature.”�the�compact�bag�system�gives�her�mobility�and�independence.�“i�am�doing�really�well�despite�my�incontinence,”�she�says�with�a�smile.


“ in tHe old days , i used to r ace tHrougH l ife , but now i Hav e a new

awareness tHat i wouldn’ t want to cHange .”

p e t r a �s t r a n s k y, � pat i e n t

M o b i l E A N d i N d E p E N d E N T

20

M A N A G E M E N T b o A r d | j o u r N A l | G r o u p M A N A G E M E N T r E p o r T | C o N s o l i d A T E d F i N A N C i A l s T A T E M E N T s

tHe source of life

pa ren t er a l nu t ri t ion pl ay s a n e ssen t ia l pa rt in m a n y

pat ient s’ tre atment. witH i t s new l ife nutrit ion pl ant,

b . br aun’s Hospi tal c are di v is ion is s trengtHening

i t s p o s i t ion a s a suppl ier of inno vat i v e nu t ri t ion

solut ions .

22

you�are�what�you�eat –�a�well-balanced�diet�is�essential�to�human�health�and�quality�of�life.�Clinical�nutrition�comes�to�the�rescue�of�patients�who�are�unable�to�eat�or�are�no�longer�able�to�eat�sufficiently.�For�these�people,�it�is�an�essential�prerequisite�in�treating�their�condition�or�maintaining�their�health.�B.�Braun’s�Hospital�Care�division�is�one�of�the�leading�providers�of�clinical�nutrition�products�and�the�company�is�expanding�its�activities�in�this�area.�Clinical�nutrition�can�be�usefully�employed�in�many�different�scenarios:�following�serious�operations,�to�treat�a�number�of�chronic�illnesses,�for�premature�babies�or�for�intensive-care�patients.�it�can�also�prevent�nutritional�deficiencies�or�significantly�improve�a�patient’s�nutritional�status.�studies�have�shown�that�an�astonishingly�high�percentage�of�hospitalized�patients�show�nutritional�deficiencies –�in�some�cases,�more�than�50 percent.�

“Clinical�nutrition�plays�a�valuable�role�in�providing�adequate�treatment�in�intensive�care�and�in�many�other�therapeutic�areas.�quality�standards�for�existing�solutions�are�already�extremely�high –�and,�of�course,�those�of�us�who�work�in�clinical�medicine�are�thankful�for�every�additional�helpful�inno-vation,”�says�prof.�dr.�alastair�Forbes,�professor�of�gastro-enterology�and�Clinical�nutrition�at�university�College�london.�the�objective�of�any�nutritional�regimen�is�to�ensure�that�the�body�is�supplied�with�all�of�the�essential�nutrients.�if�it�is�not�possible�to�feed�the�patient�by�mouth�(orally)�or�via�a�gastric�or�intestinal�tube�(enterally),�parenteral�nutrition�is�required,�with�nutrients�being�administered�by�infusion�and�thereby�bypassing�the�digestive�tract.�the�choice,�quantity�and�admin-istration�method�of�the�nutrients�must�be�precisely�adapted�to�the�individual�needs�of�the�patient.�while�these�can�be�administered�in�a�hospital,�this�can�often�be�done�at�home.�the�service�company�B.�Braun�travacare�offers�patients�high-

quality�administration�of�enteral�and�parenteral�nutrition�in�a�home�setting.�this�includes�providing�family�members�and�caregivers�professional�assistance�with�important�issues,�such�as�the�correct�administration�and�dosage�of�the�infusion�solu-tions.�administering�B.�Braun’s�products�could�not�be�any�simpler.�the�product�range�includes�efficient�nutrition�solu-tions�for�safe,�need-based�treatment�of�patients�suffering�from�a�variety�of�diseases.�in�addition�to�glass�bottles,�we�also�offer�safe�and�easy-to-use�bags�made�of�state-of-the-art�polymers.�three�different�types�of�bags�are�used�in�parenteral�nutrition.�there�are�single-chamber�bags,�which�have�one�chamber�to�hold�a�combination�of�nutrients�that�are�compatible�for�the�storage�life�of�the�product.�then�there�are�bags�with�two�or�three�chambers.�each�of�these�contains�different�combinations�of�nutrients�that�must�be�isolated�during�storage.�the�cham-bers�are�separated�by�peel�seams,�which�are�opened�by�applying�pressure.�Combining�the�contents�is�thus�quick�and�easy.�the�nutriflex®�2-chamber�bag,�for�example,�allows�for�flexible�administration.�it�contains�amino�acids,�carbohy-drates�and�electrolytes,�thereby�providing�the�patient�with�essential�nutritional�requirements.�different�varieties�are�available�to�suit�individual�needs.�a�very�precise�dosage�of�lipids�can�easily�be�added�to�the�bag.�the�nutriflex®�lipid�3-chamber�bag�contains�a�lipid�component�and�offers�stan-dardized�complete�nutrition�with�a�well-balanced�nutrient�ratio�and�is�also�available�in�different�varieties.�Compounding�is�available�for�patients�suffering�from�impaired�metabolic�and�organ�functions�who�therefore�have�special�nutritional�requirements.�For�these�patients,�we�create�individualized,�all-in-one�mixtures.�B.�Braun�is�already�a�very�successful�developer,�manufacturer�and�global�distributor�of�innovative�nutrition�solutions.�to�further�expand�its�position,�the�compa-ny�has�invested�heavily�in�its�german�manufacturing�facility�

t H e �n e w�l i F e �n u t r i t i o n �p l a n t �C a n�p r o d u C e �s e V e r a l �M i l l i o n�s i n g l e �a n d�M u lt i - C H a M B e r �B a g s�

p e r �y e a r .


“ in addit ion to s tate-of-tHe-art tecHnologies and processes , tHis

l arge-sc ale projec t c ombines our l ates t f indings in tHe are a of

cHemic al and analy t ic al advancement s , a s well a s f ormul at ion,

processing and pack aging de v elopment s .”

r a l F �H a r a n d , �V i C e �p r e s i d e n t �p r o d u C t �d e V e l o p M e n t �C o e �p H a r M a C e u t i C a l s �at �B . �B r a u n

T h E s o u r C E o F l i F E

24

“our goal is to make tHese sopHis t ic ated sys tems work toge tHer witH

ge ar-l ike precision to guar antee tHe HigHes t possible degree of eff i-

c ienc y – and we are well on tHe way to acHie v ing tHis goal .”

t H o M a s�g ä B l e r , �V i C e �p r e s i d e n t �g l o B a l �p r o C e s s �e n g i n e e r i n g�a n d�H e a d�o F � t H e � l i F e �n u t r i t i o n�p r o j e C t


drinking�water�must�be�completely�desalinated�and�then�distilled.�this�highly�purified�water�is�stored�in�a�huge�tank�and�later�used�for�mixing�and�filling�numerous�different�infusion�solutions.�

Monitoring�is�a�top�priority�in�liFe�nutrition.�the�most�up-to-date�analytical�processes�and�optical�monitoring�utilizing�a�multitude�of�cameras –�during�the�printing�process,�for�instance –�ensure�perfect�quality.�and�even�though�filling�is�carried�out�under�almost�sterile�conditions,�the�containers�undergo�fully�automatic�sterilization.�as�a�result,�water –�the�source�of�life –�can,�with�the�proper�added�ingredients,�become�the�“source�of�survival.”�with�the�help�of�clinical�nutrition,�many�people�have�regained�their�health�or�at�the�very�least�improved�their�quality�of�life�and�therefore�greatly�appreciate�the�value�of�these�product�innovations.

T h E s o u r C E o F l i F E

over�the�past�two�years�-�approximately�€�164�million�have�been�invested�in�the�new�liFe�nutrition�plant�in�Melsungen.�this�capital�investment�ensures�that�we�can�meet�the�grow-ing�global�demand�for�high-quality�nutrition�solutions�in�the�coming�years.�the�manufacturing�and�laboratory�facilities�employ�270 people,�80�of�these�positions�were�newly�created.�the�liFe�(leading�infusion�Factory�europe)�facility�began�operation�in�april�2005.�the�new�liFe�nutrition�facility�will�likewise�set�new�standards.�“in�addition�to�state-of-the-art�technologies�and�processes,�this�large-scale�project�combines�our�latest�findings�in�the�area�of�chemical�and�analytical�advancements,�as�well�as�formulation,�processing�and�pack-aging�developments,”�explains�ralf�Harand,�Vice�president�product�development�Coe�pharmaceuticals�at�B.�Braun.�From�the�initial�weighing�of�raw�materials�to�the�packaging�of�finished�goods,�the�entire�production�process�is�linked�via�it�systems.�the�result�not�only�allows�the�processes�to�be�precisely�managed,�but�represent,�quite�simply,�pure�efficiency.�as�an�example,�the�electronic�manufacturing�documentation�saves�several�hundred�thousand�pieces�of�paper�every�year.�“our�goal�is�to�make�these�sophisticated�systems�work�together�with�gear-like�precision�to�guarantee�the�highest�possible�degree�of�efficiency –�and�we�are�well�on�the�way�to�achieving�this�goal,”�says�thomas�gäbler,�Vice�president�global�process�engineering�and�Head�of�the�liFe�nutrition�project.�anyone�who�visits�the�new�operations�feels�as�if�they�have�been�transported�to�a�fascinating�high-tech�world –�the�degree�of�automation�is�extremely�high.�one�may,�for�instance,�come�upon�driverless�transport�systems�that�automatically�weigh�the�ingredients�of�the�infusion�solutions.�the�manufacturing�process�begins�with�the�pro-duction�of�highly�purified�water,�which�means�that�the�

allergy in tHe knee

f or pat ient s suffering from cHronic knee pa in , repl acing

t He k nee j o in t wi t H a n imp l a n t m ay m a k e sense . bu t

pat ient s frequently e xperience an allergic re ac t ion to

tHe me tall ic material s contained in tHe prostHesis . an

innovative coating pioneered by b . braun offers a solution.


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around�the�world,�the�daily�lives�of�millions�of�people�are�made�unbearable�by�searing,�stabbing�knee�pain.�Veronika�wolber�knows�this�type�of�pain�all�too�well.�the�58-year�old�has�endured�tremendous�suffering –�and�unfortunately�she�is�not�alone.�For�over�20 years,�Veronika�worked�as�a�wait-ress�in�her�native�Black�Forest.�“every�day�you�end�up�walk-ing�miles�through�the�restaurant.�and,�if�you’re�a�bit�on�the�heavy�side�like�me,�that�puts�a�big�strain�on�the�joints,”�says�Veronika�wolber.�

despite�finding�more�sedentary�work�assembling�stationery�supplies�and�two�operations�on�her�left�knee,�she�did�not�get�the�relief�she�had�hoped�for.�“My�knee�was�still�swollen�and�excruciatingly�painful;�all�i�could�do�was�limp,”�says�the�mother�of�three�grown�children.�and�the�idea�of�bowling�–�her�favorite�pastime�–�was�nearly�unthinkable.�

in�2004,�she�opted�for�an�artificial�knee�joint.�this�is�not�an�unusual�operation�for�doctors�these�days.�in�germany�alone,�more�than�170,000 knee�joints�are�implanted�every�year.�after�two�weeks�in�the�hospital,�rehabilitation�exercises�and�physical�therapy,�everything�went�smoothly�for�Veronika�wolber�at�first.�But�her�joy�over�making�this�successful�fresh�start�was�short-lived.�after�nine�months,�the�pain�returned�with�the�same�intensity.�

doctors�were�puzzled�over�what�the�cause�may�be.�neverthe-less,�they�wasted�no�time�and�soon�implanted�a�new�joint.�But�that�was�by�no�means�the�end�of�the�story.�after�only�a�year,�the�unpleasant�scenario�repeated�itself –�and�in�2006�Veronika�wolber�received�knee�joint�number�three.�and�this�despite�the�fact�that�a�high-quality�knee�implant�usually�

lasts�10��–�15 years.�once�again,�it�did�not�take�long�before�the�excruciating�pain�returned.�it�was�only�after�a�conversation�with�a�nurse�she�had�befriended�that�she�began�to�wonder�if�her�years�of�discomfort�might�be�related�to�a�long�suspected�allergy�to�metal.�“i�always�got�a�skin�rash�when�i�wore�metal�jewelry.�and�of�course,�prostheses�are�made�of�metal,”�says��Veronika��wolber,�with�a�bitter�smile.�unfazed�by�this�informa-tion,�the�doctors�implanted�knee�joint�number�four�a�year�later�–�again�without�taking�any�precautions�against�an�allergic�reaction.�this�devastating�cycle�would�have�probably�contin-ued�if�dr.�oliver�datz,�Head�of�surgery�at�ortenau�Hospital�in�wolfach,�germany�had�not�finally�shed�some�light�on�the�mystery.�tests�revealed�that�Veronika�wolber�is�allergic�to�the�metals�nickel,�chromium�and�cobalt.

and�this�is�anything�but�a�rarity.�in�germany,�approximately�12 percent�of�the�population�is�hypersensitive�to�nickel,�just�under�5 percent�to�cobalt�and�chromium.�Free�metal�ions�can�trigger�allergic�reactions�in�some�people,�leading�to�skin�reactions,�hematoma,�swelling,�healing�problems�and�repeated�pain.�given�the�growing�number�of�implant�patients,�the�issue�of�biocompatibility –�i.��e.�biological�tolerance�of�the�materials�utilized –�is�becoming�an�increasingly�significant�factor.�and�as�the�number�of�patients�with�hypersensitivity�to�metals�is�also�increasing,�allergy�testing�should�be�a�fundamental�com-ponent�of�any�therapeutic�advice�provided�prior�to�implanta-tion�of�the�prosthesis.

dr.�Friedrich�thielemann,�director�of�the�Hospital�for�emer-gency�and�reconstructive�surgery�in�Villingen-schwenningen,�germany�took�over�the�“wolber�case”�and�in�july�2009�implanted�knee�joint�number�five.�But�he�did�not�repeat�the�

in addit ion to tHe ant i-allergic effec t, tHe new surface reduces we ar

by 6 0 percent compared to tradit ional surfaces . tHis me ans tHat all

pat ient s witH knee impl ant s – regardless of wHe tHer or not tHe y are

intoler ant to me tal– c an be a ssured a safe and long-term solut ion .


“ i�always�got�a�skin�rasH�wHen�i�wore�Metal�jewelry.�and�oF�Course,�prostHeses�are�Made�oF�Metal .”

V e r o n i k a �w o l B e r , � pat i e n t , � i n �C o n s u ltat i o n�w i t H �d r . � F r i e d r i C H �t H i e l e M a n n

A l l E r G y i N T h E K N E E

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“unt il now, doc tors sougHt to pre v ent an allergic re ac t ion by apply ing

a single-l ayered c oat ing to impl ant s . but tHis c an we ar off tHrougH

mecHanic al s tress . tHe new sys tem offers a gre ater degree of protec-

t ion agains t allergic re ac t ions .”

d r . � F r i e d r i C H �t H i e l e M a n n , �d i r e C t o r �o F � t H e �H o s p i ta l � F o r �e M e r g e n C y �a n d�r e C o n s t r u C t i V e �s u r g e r y � i n �V i l l i n g e n -s C H w e n n i n g e n , �g e r M a n y


mistakes�of�his�predecessors.�quite�the�contrary –�he�pro-ceeded�with�caution�and�relied�on�an�innovative�product�from�B.�Braun:�an�implant�with�a�multi-layer�anti-allergy�coating.�“until�now,�doctors�sought�to�prevent�an�allergic�reaction�by�applying�a�single-layered�coating�to�implants.�But�this�can�wear�off�through�mechanical�stress.�the�new�system�offers�a�greater�degree�of�protection�against�allergic�reactions,”�dr.�thielemann�affirms.�this�state-of-the-art�coating�method,�called�“as�allergy�solution,”�which�was�developed�by�B.�Braun’s�aesculap�division�in�tuttlingen,�germany,�is�designed�to�offer�optimal�prevention�in�knee�prostheses.�it�is�comprised�of�a�total�of�seven�layers,�with�an�adhesive�layer�to�ensure�the�implant�bonds�to�the�subsequent�layers.�

“the�challenge�was�to�equip�the�knee�joint�components�with�a�non-abrasive�layer�that�acts�as�a�barrier�to�prevent�contact�allergens�from�escaping.�the�result�of�our�research�was�a�unique�multi-layer�coating�system�produced�using�a�special�vacuum�arc�vapor�deposition�process,”�explains�dr. thomas�weik,�Head�of�Materials�and�Biomaterials�development�at�aesculap.�the�top�layer�consists�of�zirconium�nitride,�a�highly�biocompatible�metal�that�is�extremely�resistant�to�wear�and�tear.�using�sophisticated�thin-layer�manufacturing�processes�and�exhaustive�materials�testing�and�research�methods,�the�aesculap�team�successfully�brought�the�“allergy�solution”�layer�to�market.�

the�benefits�are�obvious.�in�addition�to�the�anti-allergic�effect,�the�new�surface�reduces�wear�by�60 percent�compared�to�traditional�surfaces.�this�means�that�all�patients�with�knee�implants –�regardless�of�whether�or�not�they�are�intolerant�to�metal –�can�be�assured�a�safe�and�long-term�solution.�

and�for�most,�relief�comes�quickly.�“if�the�doctors�had�used�the�opportunities�modern�medical�technology�presents�at�an�earlier�stage,�i�would�have�been�spared�a�lot�of�suffering,”�concludes�Veronika�wolber.�she�can�now�look�to�the�future�with�complete�confidence.�and�that�means,�of�course,�that�she�can�again�enjoy�her�weekly�bowling�sessions.

A l l E r G y i N T h E K N E E

At A gl A nc e 34

t he B . Br Aun group 35

ec onomic en v ironmen t 42

Bus ine s s A nd e A rnings perf orm A nc e 4 4

f in A nc iA l p os i t ion A nd A s se t s 5 0

per s onnel rep or t 5 4

r isk A nd opp or t uni t ie s rep or t 57

suBsequen t e v en t s 6 0

ou t look 6 0

group mAnAgement report

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group mAnAgement report

At a glance

the B. Braun group achieved adequate increases in sales and profits in fiscal year 2010. As a global provider of healthcare solutions, we were less affected by fluctuations in the global economy and are benefiting greatly from the continuing boom in the healthcare markets of emerging economies. the european and American healthcare markets, however, have been affected by cuts in public spend-ing budgets. to some extent, this leads to decreasing demand for capital goods, but more so to increased pressure on pricing. We see ourselves as partners with our customers. our aim is to jointly improve therapies and procedures and develop solutions for clinicians and patients. thanks to our skilled employ-ees, modern production processes and transparent corporate culture, we have created an environ-ment for exceptional ideas and innovative products.

over the past few years we have made substantial investments, first and foremost to modernize and expand production in germany and elsewhere in europe. the investment program we began in 2010 is focused on expanding production in developing and emerging markets. Worth € 1.6 billion, it is aimed at adapting our production sites to country and regional requirements and improving supply on the local level. As usual, we will proceed with caution and not assume any unmanageable risks. We monitor and analyze changes in the healthcare system with great care. our positive performance last year confirms that B. Braun is on the right long-term track as a family-owned business. We are confident we will continue to expand our position as a leading provider to healthcare markets.

2010 2009

sales (in € million) 4,422.8 4,028.2

net margin after taxes (in %) 6.3 5.9

eBit including income from investments (in € million) 462.2 411.9

eBitdA (in € million) 700.5 620.5

eBitdA margin (in %) 15.8 15.4


the B. Braun group

service portfolioB. Braun develops, manufactures, and markets medical products and services and is one of the world’s leading suppliers of equipment to the healthcare industry. hospitals, physician practices, pharmacies, nursing and emergency services, as well as homecare are our focus. the product range includes iv solutions, syringe pumps, accessories for iv therapy, intensive care and anesthesia, as well as surgical instruments, sutures, hip and knee endoprostheses, equipment and accessories for dialysis, and wound care products. in all, B. Braun offers over 30,000 products, 95 percent of which are manufactured by the company. B. Braun’s expanded portfolio includes consulting and other services, making it a service provider that works closely with its customers to determine the best solution for each and every patient, thereby making a significant contribution to medical advancements.

The Hospital Care division

the hospital care division supplies hospitals with such products as iv sets and accessories, iv and injection solutions, peripheral iv catheters, clinical nutrition, as well as pumps and associated sys-tems. in addition, the division offers an extensive range of disposable medical and wound drainage products, as well as pharmaceuticals and products for drug admixture and regional anesthesia. With its portfolio of iv therapy products and the preceding drug admixture processes, hospital care provides hospitals with a unique product system offering, focusing on continually improving efficiency, safety, and documentation of hospital procedures.

hospital care is the worldwide market leader for iv sets and accessories, as well as regional anesthesia. the division is also the european market leader in automated infusion systems, peripheral iv catheters, and standard iv solutions. the us, eastern europe, and emerging economies offer above-average growth opportunities. the division is growing organically and through selected strategic acquisitions. in 2010, we expanded our product portfolio by acquiring a thai manufacturer of elastomeric pumps. in romania, we purchased the remaining non-controlling interest in a manufacturer of standard iv solutions. having obtained approval for 170 pharma products over a one-year period, we have more than doubled the number of new approvals compared to the prior year. We achieved our target of providing dehp-free iv sets to all markets. our successful space infusion pump system is now available in additional Asian and latin American countries. We are continually adding components to the existing space infusion system, including WlAn features, complex multi-functional applications, and a system to treat stress-induced hyperglycemia in critically ill patients. hospital care offers an excellent example of how we are living up to our intent to improve the safety of patients and healthcare professionals by offering new products and by making clinical processes more efficient.

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The Aesculap division

Based in tuttlingen (Baden-Württemberg, germany), Aesculap sees its role as a global partner in surgery and interventional cardiology. the division, which has been a part of the B. Braun group for over 30 years, focuses on developing and marketing products and services for surgical and interven-tional procedures in operative medicine. Aesculap views itself as the global market leader in surgical instruments and as a leading provider of sterilization containers. in the fields of neurosurgery and wound closure, Aesculap is a major global supplier. the main focus of innovation in surgical sutures is in cardiothoracic and abdominal wall closures. our new product, novosyn ®, a mid-term absorb-able suture, completes our offering in this area. the division’s product range also includes implants, sterile container systems, and power systems. We advise hospitals on instrument management con-cepts, helping them optimize their stock of instruments and maintain its value. demographic trends are producing a steady rise in the number of patients with degenerative knee and hip conditions, for which Aesculap offers complete implant solutions. in conjunction with our navigation system orthopilot ®, patients who undergo orthopedic procedures are assured the best possible safety and quality. Aesculap also offers special products for traumatology and spinal and vascular surgery. our new quintex ® disc system for degenerative conditions of the cervical spine is just one of the many innovations in this field.

thanks to its high innovative capability and the close cooperation it maintains with surgeons around the world, Aesculap has been posting dynamic growth for years. in 2010, the division adapted its new development process in order to be able to identify and design products suitable for healthcare professionals and patients even more quickly. An advisory-based marketing approach has been imple-mented to strengthen the close relationship with customers and promote growth in both europe and other parts of the world. the division sees opportunities in the expanding eastern european and Asian markets, particularly the Bric countries. in may 2010, a new instrument manufacturing facility began operation in poland (radzyń podlaski).

The out patient Market (opM) division

the focus of the out patient market (opm) division is on meeting the needs of patients outside the hospital setting and of long-term patients. our customers include physicians in private practice, outpatient and inpatient care services, and pharmacies. Adopting a holistic approach to consulting and care giving, the division strives to provide patients with a combination of high-quality and cost-effective healthcare. the key areas on which it focuses are the transfer of patients from one setting of care to another, outpatient iv therapy, diabetes, skin and wound management, stoma and inconti-nence care, disinfection, and hygiene. in addition to these products, opm offers a broad range of out-patient services. A major objective is the transfer of knowledge across all areas, for example when transferring parenterally-fed patients from inpatient to outpatient care (transcare). our experienced employees relieve patients, hospitals, private practice physicians, and care services of administrative tasks and ensure that treatment progress is optimized. our product innovations in outpatient care are aimed at improving therapies and increasing patients’ quality of life.


T H E b . b r A u N G r o u p

in urology, opm has started to introduce ready-to-use catheters (Actreen ®). these can be removed from their packaging without the risk of contamination and are pre-lubricated to ensure quick, easy, and pain-free use. in wound care, negative pressure wound therapy (vacuum-assisted wound care) offers an option in the future to improve the treatment of chronic wounds, as the vacuum speeds up healing. We have expanded our global sales network by establishing new opm sales offices in hong kong and china.

The b. braun Avitum division

B. Braun Avitum Ag is one of only a few full-range suppliers in the field of extracorporeal blood treat-ment worldwide. the division provides dialysis centers with all of the products and services necessary for the blood cleansing processes involved in dialysis and apheresis. hemodialysis products and sys-tems are the division’s core business. With global demand for our products growing, it has become necessary to expand capacity in the B. Braun Avitum division. our new facility in melsungen, germany for the manufacture of infusion pumps and dialysis machines is now in operation.

the division has a network of 168 dialysis centers (previous year: 157) in europe, Asia and south Africa. physicians and nursing staff are available in our clinics to assist and advise dialysis patients with chronic kidney and metabolic disorders, offering them the chance for a better quality of life. in 2010, we completed our first dialysis center in russia (kaliningrad). We also treated patients in india for the first time, under a public-private partnership, which gives over 1,000 patients without health insurance access to life-saving dialysis treatment.

Aesculap Academygroundbreaking developments in medical technology, sophisticated new treatment methods, and the increasing demands on hospital and quality management require a high level of ongoing professional development. B. Braun’s Aesculap Academy allows physicians, surgeons, other medical staff, and hos-pital managers to add to their knowledge as part of lifelong learning in the medical field. since 1995, the Aesculap Academy, based in tuttlingen and Berlin (both in germany) and operating in 30 locations around the world, has been internationally recognized as a major forum for professional development and training in the field of medicine. in 2010, 67,000 medical experts around the world took advan-tage of the courses offered at the Aesculap Academy. its core business focuses on skills training in anesthesia and the entire range of surgical and interventional medical disciplines, as well as special training programs for hospital employees and personnel in private practices. in addition, the Aesculap Academy has positioned itself as a partner to medical companies and develops opinion-forming forums on current issues, such as error avoidance in operating rooms, procurement management in hospitals, and political issues. the expansion of the Aesculap Academy’s global network enhances its importance as an authoritative partner for knowledge transfer in medical matters. the Aesculap Academy has a particularly strong presence in Asia and europe, and centers are planned for china, malaysia, spain, and, for the south American continent, in Brazil.

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Management and control of the companyin addition to its own business operations, B. Braun melsungen Ag performs centralized functions for the group. the company is wholly family-owned and is not listed on any stock exchange. the company’s statutory agents include the management Board, the supervisory Board, and the Annual shareholders’ meeting. the management Board is comprised of six members, each with specific indi-vidual responsibilities, while jointly responsible for the company’s performance. the supervisory Board consists of twelve members, half of whom are elected by the Annual shareholders’ meeting and half by the company’s employees. committees have been established to support the work of supervisory Board. the personnel committee is responsible for such matters as the management Board members’ employment contracts and compensation. the Audit committee monitors the internal audit systems, the accounting process, and the auditing of financial statements.

the supervisory Board appointed prof. dr. hanns-peter knaebel (Aesculap division) as an ordinary member of the management Board of B. Braun melsungen Ag as of march 25, 2010. prof. dr. hanns-peter knaebel succeeded prof. dr. dr. dr. h. c. michael ungethüm one year earlier and was initially appointed as a deputy member of the management Board. dr. Wolfgang feller (B. Braun Avitum division) will be reappointed effective April 1, 2011 to march 31, 2013 as an ordinary member of the management Board. in december 2010, the supervisory Board elected dr. heinz-Walter große to succeed prof. dr. h.c. ludwig georg Braun, who will retire as chairman of the management Board of B. Braun melsungen Ag on march 31, 2011. the supervisory Board also appointed dr. Annette Beller and otto philipp Braun as deputy members of the management Board and extended the mandate of caroll h. neubauer (north America region) to 2016. As of April 1, 2011, dr. heinz-Walter große, in addi-tion to serving as chairman of the management Board, will also be responsible for human resources and legal Affairs. dr. Annette Beller succeeds dr. heinz-Walter große as head of finance effective April 1, 2011. otto philipp Braun will assume responsibility for the iberian peninsula and latin America effective April 1, 2011, becoming the first member of the sixth generation of the family to enter the management Board of B. Braun melsungen Ag.

B. Braun’s commitment to the principles of responsible corporate governance and control is reflected in its adherence to recognized standards. the ultimate objective is the long-term success of B. Braun as a family-owned company. the rules governing how we conduct ourselves toward customers have been defined in our code of conduct since 1996. in concrete terms, our responsible approach to corporate governance is reflected in our integration of quality and environmental oversight, our use of key performance indicators to manage the group in a forward-looking manner, an accounting system based on international standards, and our close monitoring of all significant potential risks.

organizational structure and locationsthe B. Braun group is headquartered in melsungen, germany. in addition to being the center for the group’s management, it is also the base for those central areas that perform group-wide functions. in particular, these include group-wide accounting and controlling, international human resources, it and logistics, the legal and tax department, and the group treasury. our research and development activities are assigned to centers of excellence (coes) in which research, development, and production


activities for specific product groups are brought together. the company’s operations are organized into four divisions – hospital care, Aesculap, out patient market, and B. Braun Avitum. its main centers of excellence are in melsungen (germany), penang (malaysia), Allentown (pennsylvania, us), tuttlingen (germany), Boulogne (france), rubí (spain), and sempach (switzerland). other major manu-facturing sites are located in irvine (california, us), são gonçalo (Brazil), nowy tomyśl (poland), hanoi (vietnam), Budapest (hungary), and suzhou (china). through its subsidiaries and holdings, B. Braun operates in 56 countries. the B. Braun group includes 189 (previous year: 187) consolidated compa-nies plus 3 (previous year: 3) jointly owned companies in which we do not have a majority. 17 (previ-ous year: 12) holdings are consolidated using the equity method of accounting. detailed information on major shareholdings and the locations of each company can be found in the tables on pages 132 to 135.

Quality and environmental managementAs a developer and manufacturer of medical and pharmaceutical products, B. Braun operates in highly regulated markets. therefore, the quality and environmental management system we implement must comply with the most stringent statutory and regulatory requirements. in addition, we have established our own standards in the fields of environmental protection, health and safety in the workplace, which we subject to regular internal audits. By paying close attention to customers’ needs, we have identified and standardized key processes to ensure uniformly high standards of quality. All procedures, products, and it-related documentation are subject to an ongoing improvement review process, which considers environmental sustainability and productivity. As a member of the german chemical industries Association (verband der chemischen industrie, vci), B. Braun adheres to the Association’s guidelines on “responsible care” and takes responsibility for improving the protection of the environ-ment, as well as health and safety in the workplace under the global “responsible care” initiative.

eleven B. Braun group locations in europe are en iso 14001-certified. in addition, environmental management in tuttlingen and glandorf (both in germany) has received certification under the eu’s eco-management and Audit scheme (emAs). our occupational health and safety management sys-tem at our locations in germany (melsungen and tuttlingen), france, spain, and switzerland is certified complying with the international ohsAs 18001 standard. the european dialysis centers within our B. Braun Avitum division have received en iso 9001 and “good dialysis practice” certification.

our medical products conform to the essential requirements of the european council directive on medical devices and the german medical devices Act (medizinproduktegesetz, mpg). in the us, we adhere to the guidelines in title 21 of the code of federal regulations, which details the requirements of the fdA (food and drug Administration) for pharmaceuticals and medical products. in addition, all of our divisions comply with the specific requirements of, for example, iso or eco-audit directives and a large number of national laws and regulations.

Group strategyin february 2010, we updated our group strategy for the period 2010 to 2014. the targets established for the previous period were fully met or exceeded.


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the group strategy preserves the key elements of the previous strategy. We are confident that a growth strategy based primarily on our own innovativeness and funding will ensure that the B. Braun group can sustain its success. We established an annual sales growth target of between 5 and 6 percent. our target for the eBitdA margin is an increase to 17 – 18 percent of sales within the new time period covered by the strategy. maintaining the B. Braun group’s independence is of central impor-tance. the next generation of the B. Braun family has reaffirmed that we will remain a privately-held family company and will not pursue a public offering on any stock exchange. our product offerings are organized into core business areas of the healthcare market and specific focus business areas for individual sectors of the healthcare market. our goal is that the core business areas within each division have a significant global market share. We select the specific focus business areas based on regional market characteristics.

the B. Braun group’s strategy remains founded on the three pillars of innovation, efficiency, and sustainability. innovation, in this context, refers not only to the development of new products, but also to the implementation of innovative manufacturing processes, methods, sales concepts, and service offerings. our extensive investment activities underscore our intention to maintain our posi-tion as one of the leading healthcare companies in the future. given the ongoing cost pressure anticipated in the healthcare sector and restrictions on financial resources, efficiency improvements have become absolutely essential. As our divisional organization is structured into centers of excellence, we are able to respond rapidly and supply the markets with high-quality products and services. Additionally, we aim to continually improve the benefits to our customers. As a full-range supplier of integrated systems and products, B. Braun provides its customers with added value. our central areas and optimized production structures will ensure we continue to improve our own efficiency. We also intend to further shorten our working capital cycle, and thus group-wide projects related to inventory and receivables management, as well as lean management, have been initi-ated. in all that we do, we focus on the creation of sustainable value. We are well aware of our responsibilities to our customers – that is to say, to patients and to those who use our products – as well as to our employees and, ultimately, to society at large, and take them into account in our decisions, whether on day-to-day business or strategy. We will continue to maintain our financing policy. While still seizing the opportunities presented by the market, we will not enter into any financing arrangements, which expose us to any unusual risks.

management of our company is subject to the highest ethical standards and strict adherence of the law. for us, corporate governance and compliance are not only a legal requirement, but a self-evident precondition to doing business on a sustainable basis. We, therefore, require all employees to conduct themselves impeccably from a legal and ethical perspective. We consider compliance with national and international regulations on product registration, production validation, and product safety to be a duty set in stone.

Corporate social responsibilityActing sustainably is part of the B. Braun group’s business philosophy. B. Braun sees itself as a mem-ber of society and assumes responsibility as such. in addition to regional promotion of art, culture, and sport, the main areas we support are knowledge and science. in terms of universities, this takes the form of sponsored chairs, such as at kassel university and charité Berlin. We also offer scholar-


ship programs, such as the Braun medical trust foundation in india. We have a long tradition in sym-posia and workshops for medical staff and care personnel. When it comes to promoting knowledge, we start with the very young: for example, with B. Braun children’s and Youth Weeks. entitled “new researchers needed”, they were held for the third time in 2010. We also operate a children’s uni-versity in tuttlingen, germany. this year for the first time, we awarded the Young people’s research prize. the topic, “the human miracle”, was aimed at senior grade students in the north hesse regions of schwalm-eder and Waldeck-frankenburg. the Aesculap environmental school prize was awarded for the 19th time in 2010.

offering children prospects is something that B. Braun takes very seriously. B. Braun for children, a global umbrella project we started many years ago, provides an opportunity for our subsidiaries to help improve the situation of local children and for our employees to put their social commitment into action. in 2010, we provided further support to existing initiatives and created new initiatives around the globe. in tokyo, Japan, for example, the first workshop on “physical and mental develop-ment of babies” took place. in helping mothers to strengthen their bond with their child, it aims to promote healthy development in children.

in living up to our guiding principle of “sharing expertise”, B. Braun also makes its knowledge avail-able to the needy in places such as kenya. public health provision in this African state is poor. in order to improve the situation, B. Braun and german technical cooperation (deutsche gesellschaft für technische Zusammenarbeit gmbh, gtZ) founded a public-private partnership under the “devel-oppp.de” program of the german federal ministry for economic cooperation and development (BmZ). its aim is to train care staff in the use of modern medical equipment and products, thereby improving healthcare provision. A school healthcare program is also being established to promote health awareness in the population and prevent highly infectious illnesses. it will raise hygiene standards and teach children the importance, for example, of washing their hands correctly. if we want to give young people prospects, we also need to ensure that they receive sound vocational training. this is where another project in Africa comes in. in Burkina faso, B. Braun has financed the foundation of a vocational training center in melsungen’s sister city koudougou, where young people can train to be hairdressers, bricklayers, mechanics, and carpenters in a dual system, as in germany. kouilbi Yameogo, the project manager, is a former metalworking apprentice at B. Braun in melsungen, germany.

Aside from long-term programs, B. Braun also seeks to provide help in instances of very acute need. to help the victims of the haiti earthquake, the company organized a global donation campaign – the first of its kind – within the group, followed by another campaign for the victims of the cata-strophic floods in pakistan. B. Braun’s group management doubled the amount of donations collected by employees. As a result, € 230,000 was donated to fund the construction of the hospital “centre de santé Avec lits de Bainet” in haiti, a hospital project run by the emergency aid agency “diakonie katastrophenhilfe.” the donations collected for pakistan will also be used to fund the reconstruction of healthcare centers.

shAre, our sustainability magazine, was published for the third time last year and describes further examples of our commitments throughout the world within the community and society as a whole.


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economic environment

Economic performance

Global economy

the recovery in the global economy, which had begun at the end of 2009, continued in 2010. global output returned to its level prior to the financial and economic crisis. this trend was supported by expansive monetary and fiscal policies in many countries, low interest rates, and expanding production in emerging markets. in 2010, global output grew 5.0 percent year-on-year. gross domestic product growth rates varied greatly from country to country. emerging markets proved to be the growth engines, with an average rate of 7.1 percent, compared with 3.0 percent from industrial countries. growth in global trade, at 12.0 percent in 2010, was almost back to its pre-crisis level.

Economic performance by region

economic output in the eurozone rose 1.8 percent year-on year. Although economic recovery was still moderate in the first half of the year, it improved up as the year progressed. germany’s good per-formance was a key contributor here, whereas growth rates in spain and italy were below-average, and greek gross domestic product decreased further in the first half of 2010. the unemployment rate in the eurozone was up year-on-year, with higher unemployment figures in portugal, spain, ireland, and greece accounting for two-thirds of the increase. With many countries having to increase taxes and cut social security benefits to reduce their high budget deficits, consumption and investment demand may be compromised.

the economic crisis left fewer traces in germany than had been feared. With the global economy recovering, exports climbed and during the course of 2010, domestic demand strengthened further. its gross domestic product rose 3.6 percent in 2010. the german labor market was stable, with average annual unemployment at 7.7 percent (previous year: 8.2 percent) and down to 7.2 percent in december 2010.

eastern european states recovered fairly well from the previous year’s slump in economic output, although performance varied sharply from country to country. poland reported the region’s strongest growth at 3.4 percent, whereas romania and latvia saw further decreases in gross domestic product.

russia’s recovery from the decline in economic output was slow in comparison with other Bric members. Although the rise in the oil price had a positive impact, exports and domestic demand remained weak. in 2010, economic output grew 3.7 percent year-on-year.

the us economy started to improve during 2010, with output for the whole year rising to 2.8 per-cent. despite a rise in unemployment and private households saving more, output was boosted by private consumption.


latin American countries achieved growth of 5.9 percent in 2010. despite this growth, inflation remained fairly constant. Brazil’s growth was characterized by strong domestic demand, with foreign trade providing only a fairly small impetus. in 2010, economic output is expected to have grown by 7.5 percent year-on-year. the government is planning major investments in infrastructure to boost and stabilize growth.

Asian emerging markets reported strong economic performances, with growth at 7.1 percent in 2010. china’s gross domestic product grew 10.3 percent year-on-year in 2010. Although state support measures were reduced, growth is being driven more and more by private investment and exports. india achieved growth of 9.7 percent on the back of a strong domestic market. indonesia’s economy grew 6.1 percent in 2010.

Japan posted economic growth of 4.3 percent in 2010, after two consecutive years of decline. this was the result of stronger consumer demand and a sharp rise in exports, particularly to its Asian neighbors. despite this recovery, Japan’s capacity was still underutilized and its debt rose to a record of nearly 200 percent of gross domestic product.

performance of the healthcare marketthe performance of the global healthcare market varied by region. in line with overall economic performance, the stronger recovery by Asian and latin American countries was the dominant theme here too. this was due to the great resilience of emerging market economies during the financial and economic crisis. Another factor is that these regions still have a lot of catching-up to do with regards to healthcare. the picture in europe and north America was different, with growth stagnating. overall, however, sales growth was higher than the previous year. the trend in earnings is more problematic. prices came under considerable pressure from a combination of massive cost cuts in healthcare systems and compulsory discounts, and this is continuing to hurt providers’ earnings. rising commodity prices and higher receivables mean providers in the healthcare market are under further pressure. some european countries saw a sharp rise in receivables dso (days sales out-standing), but we do not expect there to be defaults. the increasing bureaucratization in approval processes is more time-consuming and increases the time to market for new products.

E C o N o M i C E N v i r o N M E N T

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Business and earnings performance

overall assessment by the Management boardBusiness for the B. Braun group was satisfactory in 2010. A further increase in sales and earnings means we maintained our growth trend, to which all divisions contributed. We achieved important milestones in our capacity expansion plans and made preparations for our second investment pro-gram. We benefited from the good recovery in emerging markets and currency gains. the Asia/pacific region proved to be the group’s growth engine. the established european and us markets are suffer-ing from government spending cuts. thanks, however, to the unique breadth of our product portfolio and efficient processes, we achieved acceptable increases here as well. the B. Braun group is in good, stable financial condition. the increase in our equity ratio ensures B. Braun’s independence and is the natural basis for progress and growth.

salesin fiscal year 2010, sales at the B. Braun group rose 9.8 percent to € 4,422.8 million (previous year: € 4,028.2 million). currency gains had a positive impact on our sales growth. currency-adjusted, the increase was 5.2 percent. the core business areas grew by 10.5 percent to € 2,411.3 million (pre vious year: € 2,182.9 million). this was a slightly stronger performance than that of the spe-cific focus business areas where sales improved by 9.0 percent to € 2,011.5 million (previous year: € 1,845.3 million). our hospital care and Aesculap divisions were the biggest contributors to sales growth.

the Asia/pacific (+ 25.9 percent) and latin America (+16.5 percent) regions were also highly dynamic. in the usA, sales increased by 10.0 percent. growth in established markets in europe (+ 7.2 percent), particularly in our home market of germany (+ 3.2 percent), was moderate.

Group sales | iN € bill ioN

2006

3.32

2010

4.42

2009

4.03

2008

3.79

2007

3.57

5.0

4.0

3.0

2.0

1.0


b u s i N E s s A N d E A r N i N G s p E r F o r M A N C E

performance in the Hospital Care division

sales in the hospital care division climbed 9.6 percent to € 2,086.7 million (previous year: € 1,903.8 million). currency gains played a part in this performance, as virtually all key currencies in hospital care made gains against the euro. We increased sales of products from the core business areas by 9.8 percent to € 1,307.7 million (previous year: € 1,190.8 million). sales in the specific focus business area rose by 9.3 percent to € 779.1 million (previous year: € 712.9 million).

growth in large volume iv solutions and standard iv sets was low due to capacity issues. demand for our space products (infusomat ® space and perfusor ® space) was highly encouraging, while sales of the old pump generation fell, as expected. in parenteral nutrition, both multi-chamber systems (nutriflex ®) and single-chamber solutions (in particular lipofundin ®) recorded healthy increases. other contributors were iv catheters (introcan safety ® and vasofix safety ®), needles and sets for regional anesthesia, as well as injectable medicines (in particular propofol- ®lipuro and duplex ®). europe performed well overall, except for southern europe where government measures triggered, to some extent, drastic price reductions in the pharmaceutical sector. Business growth in our home market of germany was satisfactory. in eastern europe, russia and poland made considerable improvements. But once again, the Asia/pacific region and, in particular china, india, and Australia contributed greatly to the division’s growth.

performance in the Aesculap division

the Aesculap division posted record growth in sales, totaling € 1,281.1 million (previous year: € 1,153.2 million), an 11.1 percent increase year-on-year. sales in the core business areas increased by 12.6 percent to € 484.7 million (previous year: € 430.5 million). sales of € 796.4 million (previous

sales by division | iN € Mill ioN

2008 2009 2010

hospital care

2,0871,904

1,765

Aesculap

1,2811,1531,098

opm

555526496

B. Braun Avitum

475421403

2,500

2,000

1,500

1,000

500

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year: € 722.7 million) were achieved in the specific focus business area, an increase of 10.2 percent. the drug-eluting balloon catheter product sequent ® please continued its success story. the success of the drug-eluting balloon catheter product sequent ® please continued. sales of vena cava filters and single-use elastomeric pumps also continued to grow. in our surgery business, endoscopic single-use instruments (Adtec ®) and our sterilcontainer™ systems were the main contributors to growth. in orthopedics, sales of knee systems and novocart 3d, a product for treating articular cartilage dam-age, were encouraging. sutures also contributed to the division’s good performance. the spinal implant business segment showed particularly dynamic growth. the strong performers in europe were germany, italy, and spain, while france remained on a par with last year. As expected, greece per-formed weakly. however, Aesculap achieved excellent sales growth in the us, russia, and Asia (in particular china). performance in latin America was also positive.

performance in the out patient Market (opM) division

With sales growing 5.5 percent, the opm division posted sales of € 554.6 million in the reporting year (previous year: € 525.8 million). core business areas posted sales growth of 7.5 percent, out-performing the specific focus business areas (+ 0.7 percent). the core business areas generated sales of € 398.8 million (previous year: € 371.1 million). the specific focus business areas improved only slightly over the previous year (€ 154.7 million), posting sales of € 155.8 million. skin and wound management posted above-average sales growth, with the prontosan ® product family being a major contributor. due to high inventories from 2009 (anti-pandemic measures regarding h1n1 flu), the hygiene management product area was unable to repeat the previous year’s outstanding performance. the areas of incontinence (Actreen ® catheter) and urology achieved satisfactory sales growth. Within urology, products for irrigation therapy (uro-tainer ®) posted encouraging sales growth. due to the default of a supplier, urine drainage bags and closed urine systems (ureofix ®) performed weaker than expected.

the us posted a sharp increase in sales, contributing more than half the division’s growth. currency gains had a positive effect on this development. european markets, in particular france, spain, and germany, are key to the opm division. With year-end business hit by the increase on August 1, 2010 in the discount that manufacturers are obliged to give statutory health insurance companies on new drugs, the important german market was unable to improve whole-year sales. france also remained at the previous year’s level, whereas italy and spain grew. sales growth in eastern europe and russia was also dynamic.

performance in the b. braun Avitum division

sales in the B. Braun Avitum division increased by 12.9 percent to € 474.8 million (previous year: € 420.5 million), with performance benefiting from a recovery in eastern european currencies, in particular those of the czech republic and poland. sales in the core business areas increased by 15.5 percent to € 220.1 million (previous year: € 190.6 million). the specific focus business areas achieved sales of € 254.5 million (previous year: € 230.0 million), an increase of 10.7 percent. dis-posables and concentrates for dialysis posted strong growth, as did sales of dialyzers (diacap ®). sales of dialysis machines gained momentum over the year and performed well. our dialysis clinics


continued to post healthy organic growth. the centers in poland, south Africa, and the czech republic were the biggest contributors. As to disposable and machine business, Asia (in particular china), the middle east, and europe are the key markets.

development of functional expensesfunctional expenses rose 11.4 percent to € 1,595.9 million (previous year: € 1,432.3 million). selling expenses increased by 11.7 percent to € 1,218.9 million (previous year: € 1,091.1 million). general and administrative expenses rose 9.7 percent to € 221.6 million (previous year: € 202.1 million). We implemented another increase in spending on research and development, which rose 11.7 percent year-on-year to € 155.4 million (previous year: € 139.1 million).

research and developmentWithin the B. Braun group, research and development activities are carried out at various centers of excellence (coes), at which research, development, production, and marketing activities for specific product groups are brought together, providing a forum for close collaboration.

good nutrition can also accelerate the healing process in seriously ill patients. one focus of the activities of the hospital care division is therefore on clinical nutrition. the division is focusing on preparations for fdA approval for the us market, and product and process development for single-chamber and three-chamber systems. our intention in infusion therapy is to enhance the safety of clinicians and patients, and we are working with hospitals to improve processes. We will expand our leadership of the market using closed systems, functional coatings, and other innovations in materials. in the iv access segment, the focus of development is on completing the safety portfolio for peripheral iv cath-eters, venipuncture sets for short-term infusion, and single-use injection and syringe needles. in automated infusion systems, we are working on linking infusion data with biofeedback information in order to ensure better patient care and more efficient clinical processes. us customers in particular require WlAn data communication and special forms of therapy, for which we provide solutions. in


Functional expenses | iN € Mill ioN

2007

1,297

208

973

116

2008

1,031

1,366

205130

2009

1,091

1,432

202139

2006

904

1,205

106195

1,219

1,596

222155

2010

research and development expenses

general and Administrative expenses

selling expenses

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regional anesthesia, we are developing new ergonomic spinal needles with a prism for easier identifi-cation of fluid flashback (pencan ® and spinocan ®) and stimulation needles with ultrasound marking (stimuplex ® ultra).

With demographic trends creating a greater need for joint replacements, the spotlight has fallen on the treatment of degenerative conditions. the Aesculap division is responding to this trend through improvements and innovations in spinal implants (hydrolift ® and quintex ®) and knee endoprostheses. its focus here is on adapting implants and prostheses to best suit the patient’s circumstances and on product longevity. operations are therefore less traumatic on patients, and the results are signif-icantly better. A new aneurysm clip is being added to our neurosurgical portfolio. the biologizing of medicine will determine how illnesses and injuries are treated in the future. intelligently intercon-necting traditional medical technology and modern biological forms of therapy will offer opportunities to patients. our subsidiary tetec, for example, is conducting research into regenerative biomaterials.

the opm division has added another product to the Actreen ® catheter family, namely a ready-to-use, single-use catheter for women (Actreen ® lite mini). in wound care, we are developing silicone-coated adhesives to minimize trauma and pain when bandages are changed (e. g. Askina ® dressil). our innovative wound cleansing system prontosan ® provides optimum wound healing. prontoderm ® Wipes are time-saving and cost-effective single-use wet wipes for mre decolonization of bed-ridden patients.

the focus of the B. Braun Avitum division is on further developing the existing product portfolio. Apart from technical product enhancements, its main activity is intelligent data management. intercon-necting individual components makes documentation and evaluation of therapeutic data easier and increases the efficiency and quality of dialysis treatment. this is a key milestone on the way to con-cepts such as telemedicine and e-health.

other operating income and expensesthe balance of other operating income and expenses improved by € 5.0 million to € – 29.0 million (previous year: € – 34.0 million). however, currency effects in the reporting year amounted to € – 6.2 million (previous year: € 2.7 million). the use of hedge accounting as of January 1, 2010 means that income and expenses from currency hedging transactions which have been concluded in the reporting year but must be allocated to cash flows of subsequent periods are no longer to be shown under other operating income and expenses, but directly in equity (other comprehensive income). As of december 31, 2010, income recognized directly in equity amounted to € 4.4 million. if the cash flows are realized, positions previously recognized in equity are recognized in the statement of income.

Net financial income (loss)the improvement in net financial income (loss) by € 7.9 million to € – 66.6 million (previous year: € – 74.5 million) is largely due to lower interest expenses. overall interest expenses (excluding the interest element of pension provisions) were reduced by 9.4 percent to € 48.4 million (previous year: € 53.4 million). this was the result of lower interest rates and the capitalization of interest expenses (€ 0.6 million) relating to investment projects. in addition, the interest portion of pension provisions,


at € 28.8 million (previous year: € 28.8 million), remained on a par with the previous year. higher pension provisions were offset by a reduction in the discount rate to 4.7 percent (previous year: 5.1 percent).

statement of value addedvalue added came in € 218.9 million higher than in the previous year at € 2,041.3 million (previous year: € 1,822.4 million). the majority of value added (63.1 percent compared with 63.7 percent in 2009) was passed on to employees in the form of wages and salaries. federal, state, and local gov-ernment received social security contributions and income tax totaling € 355.6 million (previous year: € 319.0 million) or 17.4 percent of value added (previous year: 17.5 percent). lenders received € 47.3 million or 2.3 percent (previous year: € 50.9 million or 2.8 percent). An amount of € 241.1 million or 11.8 percent of value added (previous year: € 199.6 million or 10.9 percent) was retained within the group, providing the basis for our capital investment plans.

value added | iN € Mill ioN

sales

changes in inventories

business performance

depreciation & Amortization

material costs

other costs

value Added

Wages and salaries

social security contributions

pension payments

lenders

income taxes

shareholders

retained profit

4,423

71

4,494

239

1,641

573

2,041

1,290

243

78

47

112

30

241


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Earnings performancethe gross margin was increased by 0.5 points to 47.1 percent (previous year: 46.6 percent), boosting gross profit by 10.9 percent to € 2,081.1 million (previous year: € 1,876.8 million). eBit (including income from investments) was up 12.2 percent to € 462.2 million (previous year: € 411.9 million). due to lower interest expenses, profit before taxes rose 15.9 percent to € 389.6 million (previous year: € 336.1 million). income tax expenses were € 112.3 million (previous year: € 96.5 million). At 28.8 per-cent (previous year: 28.7 percent), the tax rate remained on a par with the previous year. consolidated annual net profit increased by 15.8 percent to € 277.4 million in 2010 (previous year: € 239.6 million).

eBitdA improved 12.9 percent to € 700.5 million (previous year: € 620.5 million). With the increase in the eBitdA margin to 15.8 percent (previous year: 15.4 percent), we are closing in on our target of 17.0 to 18.0 percent.

financial position and assets

investmentsgrowing demand for B. Braun products means we need to expand our manufacturing capacity. under our two investment programs, existing production facilities will be expanded and new production facilities constructed. the investment program begun in 2007, which is worth approximately € 1.4 bil-lion, was largely completed in the reporting year and will end in 2011. Additions to fixed assets and intangible assets amounted to € 575.4 million (previous year: € 454.8 million). this was offset by depreciation and amortization of € 238.2 million (previous year: € 208.6 million). We successfully completed expansion of the manufacturing facility for empty bags for parenteral nutrition at our crissier (switzerland) site and expanded dialyzer production capacity in radeberg and Berggießhübel (both in germany).

EbiTdA | iN € Mill ioN

2006

491

2010

700

2009

620

2008

546

2007

536

800

600

400

200


expansion of capacity for infusion pumps, clinical nutrition, and dialysis machines at our melsungen site (germany) is almost complete. capacity expansion for production of ecoflac ® in rubí (spain) will be completed in march 2011 upon validation. the expansion and restructuring of the penang site (malaysia) is taking shape, and completion of the first phase is anticipated in 2011, with the project as a whole running until 2014. We signed off on a further investment program of € 1.6 billion back in december 2009. Aimed at expanding production capacity of our core product lines, its regional priorities are malaysia, the us, and germany. the main focus in the us is on expanding the factory for the new container generation at the irvine site (california). in germany, we will complete the construction work for the life nutrition (clinical nutrition) factory and begin constructing the forg-ing, container, and power systems production facilities in tuttlingen. We will also commence expand-ing manufacturing capacity for dialysis solutions in glandorf. Based on current estimates, the second investment program is anticipated to last around four years, with funding coming from operating cash flow.

Cash flowAs of fiscal year 2010, we have restructured the cash flow statement. interest expenses were previously shown as cash flow from financing activities and therefore funded by free cash flow. since the restructuring, we now show interest expenses under operating activities. this affects operating and free cash flow. last year’s figures have been restated accordingly in this report. We believe the restructuring enhances the meaningfulness of the consolidated statement of cash flows as interest expenses derive from operating activities and represent a fixed commitment. free cash flow now reflects the actual amount of cash available.

F i N A N C i A l p o s i T i o N A N d A s s E T s

800

600

400

200

investments / depreciation and Amortization | iN € Mill ioN

2006

294

181

2010

575

238

2009

455

209

2008

471

198

2007

349

183

iNvEsTMENTs dEprECiAT ioN ANd AMorTizAT ioN

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operating cash flow was € 389.3 million (previous year: € 571.2 million), € 181.9 million lower than in the previous year. operating cash flow was reduced by an increase in working capital, including in particular a rise in receivables, and increased by higher operating profit and lower interest pay-ments. cash outflows1 from investing activities were € 557.4 million (previous year: € 443.3 million). our extensive investing activities caused cash outflows of € 168.1 million (previous year: € 128.0 million). loans were increased to raise funds. overall, there was a net increase in borrowing of € 181.6 million in 2010, compared with a net decrease in borrowing of € 106.8 million in the previous year. cash and cash equivalents at year-end were down 29.5 percent at € 34.4 million (previous year: € 48.8 million).

structure of the statement of Financial positionAs of december 31, 2010, total assets at the B. Braun group had risen to € 4,686.1 million (previ-ous year: € 3,975.1 million). A rise of 17.9 percent, this reflects the increase in working capital and the fact that investments were much higher than depreciation and amortization.

on the assets side, non-current assets rose by 20.9 percent to € 2,733.6 million (previous year: € 2,261.7 million). ongoing investment in capacity expansion caused a 19.6 percent increase in prop-erty, plant and equipment to € 2,305.0 million (previous year: € 1,926.8 million). intangible assets (including goodwill) grew by € 50.7 million to € 218.6 million (previous year: € 167.9 million).

inventories increased 10.1 percent to € 780.0 million (previous year: € 708.5 million). Adjusted for currency effects, the rise was 5.0 percent. the fourth quarter was strong in sales, but caused work-ing capital for trade receivables to increase by 18.2 percent to € 933.5 million (previous year: € 790.1 million). most of the increase in receivables related to italy, portugal, and spain. the strained budgetary situation in these countries is now impacting the payment behavior of public sector healthcare purchasers.

on the liabilities side of the statement of financial position, there was a significant increase in total equity, up 22.5 percent to € 1,984.0 million (previous year: € 1,620.0 million). At 42.3 percent (previ-ous year: 40.8 percent), our equity ratio has continued to improve and is closing in on our target of 45 percent. provisions for pensions and similar obligations increased 4.4 percent to € 513.3 million (previous year: € 491.8 million).

our extensive investing activities and higher working capital meant that financial debt had to be increased. financial liabilities rose by € 227.0 million to € 1,233.4 million (previous year: € 1,006.4 million), € 21.9 million of which is related to currency translation effects. trade accounts payable changed minimally, edging up 3.1 percent to € 216.8 million (previous year: € 210.3 million).

1 The difference between additions to property, plant and equipment and the cash outflow from investing activities was due to the timing of pay-ments for investments and currency translation effects.


structure of statement of Financial position: Assets | iN € Mill ioN

3,708

2008

357

157

1,699

727

768

3,975

2009

381

168

1,927

709

790

4,686

2010

448

219

2,305

934

780

other Assets

trade Accounts receivable

inventories

property, plant and equipment

intangible Assets

structure of statement of Financial position: liabilities | iN € Mill ioN

2010

4,686

1,984

1,233

217

513

2009

647

1,620

1,006

492

210

3,9753,708

2008

574

1,390

1,095

470179

739 other liabilities

trade Accounts payable

pension obligations

financial liabilities

equity

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Financing

Financing strategy

B. Braun’s financing strategy ensures that all B. Braun companies are able to meet their financial obligations at all times. the objective is to optimize financing costs while keeping risk to a minimum, in order to ensure sustainable growth.

At no time did the financial market crisis endanger the B. Braun group. As such, we believe our financial strategy is on the right course and see no need to alter it. debt financing activities are conducted only with banks considered reliable. the range of measures includes syndicated and bilateral credit lines, promissory notes, and an asset-backed securities (ABs) program. At year-end, B. Braun had unutilized committed long-term credit lines totaling € 417.2 million (previous year: € 530.0 million). We exceeded all of the obligatory financial performance indicators agreed with our banks.

Financial management

the B. Braun group has a central treasury department based in melsungen, germany. it implements the financial strategy approved by the management Board, thereby managing the liquidity and financial risks for the group as a whole. Although group treasury generally carries out external financing transactions, owing to legal restrictions it may be necessary in exceptional cases for subsidiaries to find local solutions. to limit the group-wide financing requirement and optimize the allocation of capital within the group, cash pooling is used to extent the law allows.

Financing measures

the main funding measures undertaken in the reporting year included two promotional loans for € 25 million and € 55 million from the european investment Bank (eiB). Both loans are repayable at the end of their six-year term.

our asset-backed securities (ABs) program could be refinanced only partly and for a limited period of time via the commercial paper market during the reporting year. however, use of a back-up liquidity line ensured that the program could be refinanced at all times.

personnel report

Number of employeesin order to put our strategy into effect, we need skilled and motivated employees. We achieve this by offering vocational training and continuing education programs, family-friendly working arrange-ments and by dealing with one another in an open and fair manner. performance is rewarded by means of a performance-related remuneration system and opportunities for individual professional development. At year-end, B. Braun had 41,666 employees (previous year: 39,504), a 5.5 percent increase year-on-year.


in europe excluding germany, the workforce grew 3.9 percent to 12,391 (previous year: 11,930). this increase was mainly due to the acquisition of a company in france, the opening of new dialysis centers in romania and spain, as well as the expansion of both our sales force in russia and our manufacturing facility in spain. new hirings in laboratories and production in germany increased the number of german employees by 5.4 percent to 11,251 (previous year: 10,672). in Asia/pacific, B. Braun employees totaled 9,243 (previous year: 8,265), up 11.8 percent. most of this increase came from the expansion of our sales force in china, the opening of new dialysis centers in india, expansion of manufacturing in malaysia, and the acquisition of a company in thailand. the number of employees in north America remained constant at 5,486, but increased in latin America by 3.4 percent to 3,023 (previous year: 2,924). the biggest changes occurred in Argentina, Brazil, and colombia. in Africa, employee numbers rose 19.8 percent to 272 (previous year: 227).

location retentionthe location retention agreements in melsungen, Berlin, and tuttlingen (germany) have proved an effective means of securing employment and improving competitiveness. the agreements also pro-vide for training under overtime conditions. new agreements to safeguard the viability of locations have been in place in melsungen since october 1, 2009, and Berlin since January, 1, 2009, with both agreements in effect for five years. during this period, each employee may be asked to work up to 104 additional hours per year so that the company can react flexibly and cost-effectively to market requirements. employees share in the company’s success in relation to the net profit achieved. no redundancy lay-offs are allowed for the term of the agreements. the location retention agreement in tuttlingen, which was concluded on January 1, 2006, ended as scheduled on december 31, 2010. effective January 1, 2011, we have concluded a new agreement on comparable terms for a five-year term.

profit-sharing pay-outs depend on the number of hours worked by the individual employee and for fiscal year 2010 was capped at € 1,230.

We received recognition from the german federal ministry of labor and social Affairs and the “initiative for employment” (initiative für Beschäftigung!) in the “create employment – compa-nies demonstrate responsibility” competition. the ministry cited B. Braun’s success in opening up prospects for employees even in economically challenging times, which meant we not only kept employees loyal to the company over the long term, but also helped them obtain qualifications and develop professionally. B. Braun joined the “initiative for employment” in november 2010.

b. braun Global job MarketB. Braun’s global Job market has set a new international standard in recruitment. this online tool gives applicants access to all open positions in the B. Braun group. the subsequent application pro-cess is electronic, with personal data and documents stored and updated in the candidate center. this provides both, staffing specialists and managers – initially starting in germany – with parallel access to application documents and speeds up the decision-making process on hirings. the inte-grated candidate center enables human resources to identify suitable candidates directly, without having to advertise across a variety of job markets beforehand. filling open positions becomes con-siderably faster as a result.

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By optimizing the application process in terms of both, speed and less administrative procedures for candidates and our company, e-recruitment is an ideal complement to global job searches and enhances B. Braun’s international standing as an attractive employer.

vocational trainingvocational training is a fixed component of B. Braun’s future-oriented personnel policy. it must be enduringly flexible to cope with the ever-changing challenges it faces. our aim is to enable new employees to obtain qualifications within the company environment. We provide courses that com-bine practical work with theoretical training and promote individual responsibility.

last year 214 (previous year: 189) trainees successfully completed their training at our german locations. of these, 90 percent were subsequently hired full-time, with jobs being offered to all those wanting to continue to work for B. Braun. in the reporting year, 225 (previous year: 223) new trainees were hired. We maintained the number of trainees at a high level, even during the financial and economic crisis.

At present, 699 (previous year: 682) young people are training with us in germany. this represents a 2.5 percent year-on-year increase in the total number of trainees. overall, 87 (previous year: 78) trainees are enrolled in our program which combines vocational training with university studies.

Continuing educationB. Braun’s continuing education programs are tailored specifically to our company, enabling participants to get to know our culture and management model, put guidelines into practice and follow our group strategy. the core components are training courses for product use, professional skills, methodology and social skills, with a focus on communication, conflict resolution and negotiation conduct.

Another priority is the development and support of managers around the world. our “fit for leading” program teaches management basics. our “Advanced leaders” program draws on the experiences of our managers, helping them reflect on their conduct as managers and promoting mutual training. the main topics covered include conversation techniques, conflict management, the use of management tools such as objective-setting and employee evaluation, as well as the design of change-management processes. We also offer individual programs to develop expertise in specific functional areas.

All continuing education is offered through our B. Braun Business school. Both Asia and Brazil imple-mented the B. Braun Business school in 2010 as a web-based training tool. this means that employees learn interactively at their computer, rather than physically attending courses. the tool provides prod-uct training for distribution and marketing, as well as a virtual library, a learning forum, and online courses in social skills, which are supported by videos. the advantage for our employees is that they themselves can decide when and what they need and they require no previous knowledge to use the system.


overseas employee assignmentsthe number of employees on international assignment increased to 183 in 2010 (previous year: 162), a year-on-year increase of 13 percent. this enhances international knowledge transfer, which is a substantial contributor to the B. Braun group’s competitiveness and innovativeness. Apart from germany, the main locations for overseas assignments are the us, malaysia, vietnam, and the uk. A globally valid guideline has been implemented to coordinate and support employees on interna-tional assignments, ensuring they receive equal treatment.

performance-related remunerationB. Braun’s incentive scheme has made participation in the company’s financial performance available to its managers throughout the world since 2000. the initial program ran until 2009 and, due to the high level of acceptance internationally, was extended in the reporting year to 2015. over the next five years, up to 750,000 profit-sharing rights can be issued to members of the management Board and qualified managers. purchase of profit-sharing rights is voluntary, and their value depends on the development of the group’s equity. profit-sharing rights that have been bought can be sold after a period of five years. in 2010, 80,217 (previous year: 69,123) profit-sharing rights were issued. of the 130 (previous year: 133) qualified managers, 63 percent (previous year: 59 percent) invested in B. Braun profit-sharing rights worth € 5.0 million (previous year: € 3.6 million). in total, 672,861 profit-sharing rights (previous year: 638,110) have been issued.

Thank you to our employeesthanks to the inventiveness, enthusiasm, and commitment of our employees, the B. Braun group enjoyed a healthy performance in 2010, with increases in both, sales and net profit. We would like to express our sincere thanks for the contributions made by our highly skilled employees, of whom we are very proud. We would also like to thank the employee representatives and trade unions for their cooperation, which is always fair and constructive.

risk and opportunities report

risk management and controllingAll key strategic and operational decisions at B. Braun are made taking into account the associated risks and opportunities. We have a fundamentally cautious corporate strategy and avoid any uncontrollable potential risks. risk management and controlling are key management tasks and an essential part of group management. the B. Braun group’s comprehensive risk management ensures that different risks can be identified, documented, assessed, monitored, and controlled. risks result-ing directly from business operations are quickly identified and assessed in monthly reports using our systematic controlling processes, which extend throughout the group in all business areas, companies, and regions. We also identify and control risks that do not result directly from business operations. the divisional and group risk committees assess these risks and document appropriate countermeasures, and our risk management is completed by internal auditing as well as the annual audit of financial statements.

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having its own captive reinsurance company, revium rückversicherung Ag, brings B. Braun much greater independence from the insurance market. the captive gives B. Braun direct access to the global insurance market. revium’s results were still negatively affected by a product liability claim dating back to 2008. the provisions set aside were increased again. A feasibility study was commis-sioned during the reporting year to investigate the possibility of transferring part of the B. Braun group’s global property insurance program to the captive with effect from January 1, 2012. the B. Braun group’s premium for the international liability insurance program increased slightly as of January 1, 2011. however, this increase was attributable solely to the group’s higher sales. during the reporting year, B. Braun adopted an organizational guideline on the handling of potential prod-uct liability claims aimed at standardizing the treatment of losses. improving process efficiency and transparency will have a positive impact on the risk management system of revium rückversi-cherung Ag.

risk position

Economic risk

the effects of the financial and economic crisis are now reaching the healthcare market. price pressure is intensifying in the healthcare market because of compulsory discounts aimed at redressing public deficits, which in some countries are enormous. some countries are also greatly extending payment periods. As such, the economic risks have increased in relation to disposable goods for the us and the european markets. there is generally also a dependence on economic trends where patients have to pay for healthcare services themselves. the capital goods produced by B. Braun are cyclical. increased formalization of the international product approval process is also evident, which entails higher costs for B. Braun. longer processing times and more extensive requirements in terms of documentation and study submissions can delay and drive up the cost of product launches.

procurement market risk

procurement market risk is the threat of a shortage or increase in the cost of raw materials and supplies necessary for production, including energy. B. Braun has, where possible, secured the sup-ply of materials necessary for production through long-term contracts. procurement strategies for products to be purchased are reviewed on an ongoing basis and adjusted to market requirements. We regularly analyze potential procurement risk, and ideally reduce it by identifying alternative suppliers. We regard the general risks in relation to supply as low, but the price risks as relatively high.

risk of interactions and side effects

We counter the risk of interactions and side effects in infusion therapy, drug admixture, and ortho-pedics using highly developed quality management systems at our manufacturing facilities. these are modeled on international standards and assure that all regulatory requirements are observed. regular reviews of our quality management systems utilizing internal and external audits, together with ongoing employee training, complement our quality management. there are no risks arising from ongoing legal actions that could jeopardize the company’s continued existence.


Financial risk

B. Braun operates internationally and is therefore exposed to currency risk, which it hedges using marketable financial instruments. during the reporting year, we changed our hedging strategy to a layered hedging approach. under this strategy, we achieve coverage of average prices for the period of our hedging horizon and reduce the effects of currency translation on the group’s net profit. trad-ing and management of derivative financial instruments are regulated by internal guidelines and are subject to continuous risk control. By derivatives, we refer only to marketable hedging instruments taken out with banks that have to date proven to be reliable partners. payer swaps are at times used for variable-rate bank loans to minimize interest rate risk.

there is also the risk of a possible deterioration in the payment performance of our customers or pub-lic sector purchasers. limited financing options can have a negative impact on liquidity and therefore on our customers’ ability to pay. there is also a risk that our suppliers’ liquidity position could remain strained as a result of the financial crisis and, in the worst case, threaten their viability.

opportunities for b. braunin addition to risk, B. Braun regularly identifies and assesses opportunities for the company. oppor-tunities can generally arise from the refinement of medical standards, or the launch of new products. through close dialog with the users of our products and thanks to the research and development activities at our centers of excellence (coes), we will continue to respond rapidly to opportunities and in addition create new sales potential. capacity expansion enables us to participate in the growing demand for healthcare and medical technology products, and new, highly innovative produc-tion processes are continuing to improve our competitiveness. from a regional perspective, Asia, latin America, and russia offer the greatest growth opportunities. Because we adopted an interna-tionalized approach at a very early stage, we already operate in many of these markets through our own subsidiaries and are able to seize sales opportunities as they arise. the planned capital invest-ments in this regard will help secure B. Braun’s future.

overall statement on the Group’s risk and opportunity situationfrom today’s viewpoint, no risks or dependencies are identifiable that could threaten the viability of the B. Braun group for the foreseeable future. As far as possible and appropriate, we have insured ourselves against liability risks and natural hazards as well as other risks. despite high liability cover, it is not feasible to fully cover every potential risk related to product liability. however, in general, we are confident that the continuing market risk will not have a negative effect on the B. Braun group’s performance. offsetting these market risks are significant opportunities that may enable successful performance on the part of the company.

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subsequent events

no events occurred between the end of the fiscal year and the date on which the consolidated financial statements were compiled that could have a material influence on the results of opera-tions, financial position or net assets for 2010.

outlook

Forward-looking statementsthe following remarks on economic and company performance are forward-looking statements. Actual results may therefore be materially different (positively or negatively) from the expectations of future developments.

Group strategyin the group strategy carried forward for the period to 2014, we have reaffirmed our core principles and defined new growth targets. B. Braun’s sales and profits continued to grow throughout the financial crisis, and therefore no significant changes in strategy are necessary.

Economic outlook2

global economic output is expected to rise by 4.4 percent in the coming year, with growth in industrialized countries lagging behind the rate in emerging economies. global trade is set to grow by 7.1 percent, and it is expected that the upturn will stabilize and that growth will be buoyed by demand for consumer and capital goods. there are mounting tensions on the international currency front. in particular, the us regards the chinese renminbi as undervalued. there is a tendency for countries to seek to strengthen the competitiveness of their own economy by means of currency depreciation or devaluation and protectionist measures. this may have negative consequences for global trade, as might the expansive monetary policy being pursued in the us, which could produce higher inflation. further risks include the rising unemployment in many countries and the weak real estate market.

According to the imf’s forecasts for 2011, europe is set for a two-track performance. Whereas eco-nomic growth should remain relatively strong in northern countries, the peripheral countries are likely to perform more sluggishly. the main cause here is a weak consumer climate, which lacks stimulus because of budget consolidation in public finances. the imf expects europe’s economic output to grow by 1.5 percent in 2011.

the dihk (Association of german chambers of industry and commerce) estimates that the german economy will grow by 3.0 percent in 2011, which signifies a minor loss of momentum. consumer spending and investment in capital goods are both expected to rise, but a slight cooling off in global economic growth will have a negative impact on german exports. labor market trends are expected to remain positive in 2011, and so the effects of the end to government economic stimulus packages should be balanced out by greater private purchasing power.

2 source: international Monetary Fund: World Economic outlook, october 2010 and World Economic outlook update, january 2011.


eastern europe is expected to deliver stable economic performance in 2011. the imf is forecasting 3.6 percent economic growth. romania and croatia are set to experience sluggish growth, whereas poland, latvia and estonia are expected to enjoy relatively high growth rates of 3.0 to 3.5 percent. some countries (such as poland) will benefit from the normalization of world trade and the fact that they experienced little economic upheaval during the financial crisis.

Analysts anticipate russian gross domestic product will grow by 4.5 percent. the country is expected to benefit from rising commodity prices and influx of capital. lending is also expected to return to normal, which may provide further growth stimulus. this will also be supported by higher wages and lower unemployment. nevertheless, this performance will be heavily dependent on commodity prices and investor confidence in russian politics and business.

the us economy is expected grow at a faster rate in 2011 than in 2010, an estimated 3.0 percent. the country’s expansive monetary policy and extremely low interest rates should boost investment demand. however, high unemployment and massive household deleveraging are likely to result in a decline in consumer spending. this is expected to result in soft growth.

latin America is forecast to post stable growth once again in 2011, although economic output is expected to expand at a slightly slower pace of 4.3 percent, compared to 5.9 percent in 2010. rates of 4.5 percent and 4.0 percent, respectively, are predicted for Brazil and Argentina. trade relations between latin American countries should have a stabilizing effect.

the imf expects the emerging and developing countries of Asia to experience 8.4 percent growth in 2011, based on strong domestic demand and higher exports. growth rates will vary from country to country, but will essentially be high. china is the greatest growth driver in Asia, followed by india. economists are forecasting that chinese growth will soften slightly from 10.3 percent to 9.6 percent this year. this will be driven by tougher lending requirements, efforts to cool the real estate market, and the end of government economic packages. private and public demand will be the key drivers of growth. india’s gross domestic product is forecast to increase by 8.4 percent in 2011, while the imf is expecting growth of 6.2 percent for indonesia.

outlook for the healthcare marketthe global healthcare market will continue to perform well in the future, although with consider-able regional variation. growth rates in the established markets of industrialized countries (partic-ularly in europe and the us) will be lower than in emerging countries. cardiac and circulatory diseases and degenerative conditions such as osteoarthritis, osteoporosis and spinal problems will increase as a result of the ageing population. it is expected that drug eluting stents will increasingly replace conventional products for the treatment of vascular diseases. Advancements being made in minimally invasive surgery technology is making it possible for this approach to be adopted for many other surgical interventions. the use of minimally invasive surgery tends to reduce the length of hospital stays and post-operative complications. the need for efficient therapeutic solutions will drive demand for minimally invasive instruments either to replace or to supplement existing equip-

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ment. the dialysis market in western industrialized nations will also grow at a moderate pace. over-all, the us and european healthcare markets will be shaped by price regulations, such as compulsory discounts and new taxes to help balance government budgets. companies that use new diagnosis and treatment procedures and develop integrated system solutions to realize savings within the healthcare system will enjoy particular competitive advantages.

the patient protection and Affordable care Act is of central importance to the future of the us market. Approximately 46 million people in the us are currently without health insurance. the introduction of a mandatory healthcare insurance should see an additional 32 million Americans covered by 2019. this is expected to boost demand for healthcare products and services. however, some us courts have ruled that mandatory healthcare insurance is unconstitutional. We are still awaiting a final ruling by the supreme court. in addition, there is a movement underway to improve the quality of the us healthcare system and, at the same time, to cut costs, signifying that price pressure could intensify further.

the healthcare markets of emerging and developing countries in Asia and latin America, as well as russia, will enjoy strong growth, spurred on by growing segments of the population of these regions gaining access to medical care. surgery, dialysis, iv therapy, and orthopedics will all be strong beneficiaries from this trend. however, manufacturers in emerging and developing countries will also grow in significance as a result, and in the medium term they can be expected to gradually offer acceptable quality at low prices.

business and earnings outlookWe anticipate group sales will increase by 6 percent in fiscal year 2011. We are well-equipped to cope with increasing demand thanks to our expanded capacities. however, long-term growth will depend on the implementation and timely completion of the current investment projects. risks from macroeconomic trends remain. the large public debt in europe (particularly italy, spain, and portugal) and the us could have a negative impact on the healthcare markets. our growth forecasts assume that we will achieve modest growth in the established us and european markets and strong sales growth in the Bric countries. the emphasis here is on iv therapy, surgery, and wound care. on the earnings side, we anticipate a further improvement in eBitdA with the assistance of group-wide cost management, the optimization of working capital, and expanded capacity. however, profits could be impacted by start-up costs for new factories and increased expenditures for clinical studies.

All in all, we believe it is highly likely that the B. Braun group will deliver sales and earnings growth in line with the stated targets over the next few years. in the event of payment defaults by govern-mental healthcare systems and far-reaching cuts in healthcare budgets, however, growth rates could be lower. nevertheless, we consider such a scenario to be less likely.

Expected financial and asset positionin the future, B. Braun will continue to pursue the solid fiscal policies of recent years. the basis for the future financing of the group remains a target equity ratio of approximately 45 percent com-bined with a cautious dividend policy. there is no major refinancing requirement for fiscal year 2011. the planned capital investments over the next few years will be funded by operating cash flow;


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there may exist only a small requirement for short-term working capital funding by borrowing. there will certainly be no need to significantly increase debt. systematic use of our group-wide cash pooling system will enable us to continue to ensure optimum cash allocation within the group in the future. in addition, the group-wide projects related to inventory and receivables management will have a lasting effect on limiting our financing requirements.

overall statement on the outlook for the GroupWe are confident that the B. Braun group will continue to enjoy positive growth in the years to come. our close relationship with customers, sound fiscal management, innovative capabilities, and pro-duction efficiency, together with our highly skilled employees, will continue to pave the way for B. Braun’s future success.

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C ons ol idat ed s tat emen t of inC ome (los s) 6 6

C ons ol idat ed s tat emen t of C omprehens i v e inC ome (los s) 6 6

C ons ol idat ed s tat emen t of f in a nC ia l p os i t ion 67

C ons ol idat ed s tat emen t of C h a nge s in equi t y 6 8

C ons ol idat ed s tat emen t of C a sh f low s 70

not e s 71

aC C oun t ing p ol iC ie s 82

not e s to t he C ons ol idat ed s tat emen t of inC ome (los s) 89

not e s to t he C ons ol idat ed s tat emen t of f in a nC ia l p os i t ion 97

a ddi t ion a l inf orm at ion 122

not e s to t he C ons ol idat ed s tat emen t of C a sh f low s 129

independen t audi tor s ’ rep or t 131

m a jor sh a rehol d ings 132

Consol idated f inanCial statements

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Consol idated statement of inCome ( loss )

Consol idated statement of Comprehens ive inCome ( loss )

Notes

2010€ ’000

2009€ ’000

sales 1) 4,422,813 4,028,249

Cost of goods sold 2) – 2,341,680 – 2,151,436

Gross Profit 2,081,133 1,876,813

selling expenses 3) – 1,218,889 – 1,091,096

general and administrative expenses – 221,641 – 202,051

research and development expenses 4) – 155,406 – 139,139

Interim Profit 485,197 444,527

other operating income 5) 231,873 191,556

other operating expenses 6) – 260,895 – 225,515

Operating Profit 456,175 410,568

profit from financial investments/equity method 7) 3,902 1,400

financial income 4,606 6,389

financial expenses – 77,192 – 82,234

net financial income (loss) 8) – 72,586 – 75,845

other financial income (loss) 9) 2,127 – 43

Profit before Taxes 389,618 336,080

income taxes 10) – 112,255 – 96,505

Consolidated Annual Net Profit 277,363 239,575

attributable to: B. Braun melsungen ag shareholders 257,452 220,422

non-controlling interests 19,911 19,153

277,363 239,575

earnings per share (in €) for B. Braun melsungen ag shareholders (diluted and undiluted) 11) 13.27 11.36

2010€ ’000

2009€ ’000

Consolidated Annual Net Profit 277,363 239,575

Changes in fair value of securities – 14 54

Changes in fair value of financial derivatives 3,551 – 599

Changes due to Currency translation 131,214 11,351

Changes Recognized Directly in Equity (after Taxes) 134,751 10,806

Comprehensive Income over the Period 412,114 250,381

attributable to: B. Braun melsungen ag shareholders 374,997 231,087

non-controlling interests 37,117 19,294

67M A N A G E M E N T b O A R D | j O u R N A l | G R O u P M A N A G E M E N T R E P O R T | C O N s O l I D A T E D F I N A N C I A l s T A T E M E N T s

C O N s O l I D A T E D s T A T E M E N T O F I N C O M E ( l O s s )

C O N s O l I D A T E D s T A T E M E N T O F C O M P R E h E N s I v E I N C O M E ( l O s s )

C O N s O l I D A T E D s T A T E M E N T O F F I N A N C I A l P O s I T I O N

Consol idated statement of f inanCial pos i t ion

Notes

Dec. 31, 2010€ ’000

Dec. 31, 2009€ ’000

Assets Non-current Assets intangible assets 14) 16) 218,642 167,940property, plant and equipment 15) 16) 2,305,032 1,926,755financial investments/equity method 17) 28,545 21,446other financial investments 17) 22,009 17,343 of which financial assets (22,009) (17,343)trade accounts receivable 18) 5,159 2,456other assets 19) 49,398 33,033 of which financial assets (45,672) (30,278)income tax receivable 2,990 4,143deferred tax assets 101,814 88,590 2,733,589 2,261,706Current Assets inventories 20) 780,022 708,533trade receivables 18) 928,384 787,654other assets 19) 159,047 128,623 of which financial assets (86,965) (62,178)income tax receivable 50,663 39,878Cash and Cash equivalents 21) 34,369 48,756 1,952,485 1,713,444Total Assets 4,686,074 3,975,150Equity subscribed Capital 22) 600,000 400,000Capital reserves and retained earnings 23) 1,227,315 1,205,710effects of foreign Currency translation 1,873 – 112,291Equity Attributable to b. braun Melsungen AG shareholders 1,829,188 1,493,419non-controlling interests 24) 154,839 126,617Total Equity 1,984,027 1,620,036liabilities Non-current liabilities provisions for pensions and similar obligations 25) 513,328 491,840other provisions 26) 76,719 63,545financial liabilities 27) 791,961 700,667trade accounts payable 29) 1,059 1,174other liabilities 29) 10,712 9,017 of which financial liabilities (6,016) (6,705)deferred tax liabilities 79,525 59,224 1,473,304 1,325,467Current liabilities other provisions 26) 31,754 50,236financial liabilities 27) 441,488 305,740trade accounts payable 29) 215,698 209,139other liabilities 29) 471,685 418,186 of which financial liabilities (180,071) (172,176)Current income tax liabilities 68,118 46,346 1,228,743 1,029,647Total liabilities 2,702,047 2,355,114Total Equity and liabilities 4,686,074 3,975,150

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Consol idated statement of Changes in equity

see Notes 22 – 24

subscribed Capital

€ ’000

Capital Reserves

€ ’000

Retained Earnings

€ ’000

Other Reserves

€ ’000

Treasury stock

€ ’000

Total

€ ’000

Non- controlling

Interests

€ ’000

Equity

€ ’000

january 1, 2009 400,000 10,226 1,022,195 – 123,906 – 29,800 1,278,715 111,040 1,389,755

dividend of B. Braun melsungen ag 0 0 – 16,000 0 0 – 16,000 0 – 16,000

retirement of treasury stock – 29,800 0 29,800

Consolidated annual net profit 0 0 220,422 0 0 220,422 19,153 239,575

Changes recognized directly in Equity (after Taxes)

Changes in fair value of securities 0 0 0 32 0 32 22 54

Changes in fair value of financial derivatives 0 0 0 – 359 0 – 359 – 240 – 599

Changes due to Currency translation 0 0 0 10,992 0 10,992 359 11,351

Comprehensive Income over the Period 0 0 220,422 10,665 0 231,087 19,294 250,381

other Changes 0 0 – 383 0 0 – 383 – 3,717 – 4,100

December 31, 2009/january 1, 2010 400,000 10,226 1,196,434 – 113,241 0 1,493,419 126,617 1,620,036

effect of a Change in accounting policies (ias 8) from january 1, 2010 0 0 – 13,845 0 0 – 13,845 0 – 13,845


increase in subscribed Capital 200,000 0 – 200,000 0 0 0 0 0



Changes in fair value of securities 0 0 0 – 22 0 – 22 8 – 14

Changes in fair value of financial derivatives 0 0 0 3,403 0 3,403 148 3,551

Changes due to Currency translation 0 0 0 114,164 0 114,164 17,050 131,214


other Changes 0 0 – 1,383 0 0 – 1,383 – 8,895 – 10,278

December 31, 2010 600,000 10,226 1,214,658 4,304 0 1,829,188 154,839 1,984,027


C O N s O l I D A T E D s T A T E M E N T O F C h A N G E s I N E q u I T y

see Notes 22 – 24

subscribed Capital

€ ’000

Capital Reserves

€ ’000

Retained Earnings

€ ’000

Other Reserves

€ ’000

Treasury stock

€ ’000

Total

€ ’000

Non- controlling

Interests

€ ’000

Equity

€ ’000

january 1, 2009 400,000 10,226 1,022,195 – 123,906 – 29,800 1,278,715 111,040 1,389,755


retirement of treasury stock – 29,800 0 29,800



Changes in fair value of securities 0 0 0 32 0 32 22 54

Changes in fair value of financial derivatives 0 0 0 – 359 0 – 359 – 240 – 599

Changes due to Currency translation 0 0 0 10,992 0 10,992 359 11,351


other Changes 0 0 – 383 0 0 – 383 – 3,717 – 4,100

December 31, 2009/january 1, 2010 400,000 10,226 1,196,434 – 113,241 0 1,493,419 126,617 1,620,036

effect of a Change in accounting policies (ias 8) from january 1, 2010 0 0 – 13,845 0 0 – 13,845 0 – 13,845


increase in subscribed Capital 200,000 0 – 200,000 0 0 0 0 0



Changes in fair value of securities 0 0 0 – 22 0 – 22 8 – 14

Changes in fair value of financial derivatives 0 0 0 3,403 0 3,403 148 3,551

Changes due to Currency translation 0 0 0 114,164 0 114,164 17,050 131,214


other Changes 0 0 – 1,383 0 0 – 1,383 – 8,895 – 10,278

December 31, 2010 600,000 10,226 1,214,658 4,304 0 1,829,188 154,839 1,984,027

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Consol idated statement of Cash flows

Notes

2010€ ’000

2009€ ’000

operating profit 456,175 410,568

income tax paid – 90,289 – 96,330

depreciation of property, plant and equipment and intangible assets (net of appreciation) 238,220 208,561

Change in non-current provisions 26,211 27,379

interest received and other financial income 5,328 5,538

interest paid and other financial expenditure – 43,688 – 47,749

other non-cash income and expenses – 30,467 – 34,679

gain/loss on the disposal of property, plant and equipment and intangible assets 1,525 1,954

Gross Cash Flow 34) 563,015 475,242

Change in inventories – 29,805 23,960

Change in receivables and other assets – 143,540 – 16,185

Change in liabilities, Current provision and other liabilities (excluding financial liabilities) – 337 88,196

Cash Flow from Operating Activities 34) 389,333 571,213

investments in property, plant and equipment and intangible assets – 549,748 – 444,909

investments in financial assets – 10,413 – 4,496

acquisitions of subsidiaries, net of Cash acquired – 12,290 – 4,010

proceeds from sale of subsidiaries and holdings 911 28

proceeds from sale of property, plant and equipment intangible assets and other financial assets 10,732 9,691

dividends received 3,403 433

Cash Flow from Investing Activities 35) – 557,405 – 443,263

Free Cash Flow – 168,072 127,950

dividends paid to B. Braun melsungen ag shareholders – 24,000 – 16,000

dividends paid to non-controlling interests – 6,235 – 18,708

Capital Contributions by non-controlling interests 986 1,184

deposits and repayments for profit-sharing rights 3,198 4,689

loans 324,611 235,534

loan repayments – 143,052 – 342,336

Cash Flow from Financing Activities 36) 155,508 – 135,637

Change in Cash and Cash Equivalents from business Operations – 12,564 – 7,687

Cash and Cash equivalents at the start of the year 48,756 53,288

exchange gains (losses) on Cash and Cash equivalents – 1,823 3,155

Cash and Cash Equivalents at year End 37) 34,369 48,756

for the first time, interest received and paid are reported under gross cash flow to provide improved transpar-ency of the group’s financial position. the comparative figures have been adjusted accordingly.


C O N s O l I D A T E D s T A T E M E N T O F C A s h F l O w s | N O T E s

notes

General Information

the consolidated financial statements of B. Braun melsungen ag as of december 31, 2010 have been prepared in compliance with section 315a (3) of the german Commercial Code (hgB) according to the international financial reporting standards (ifrs) applicable as of the reporting date published by the international account-ing standards Board (iasB), london, as well as the interpretations issued by the international financial report-ing interpretations Committee (ifriC) as stipulated by the eu, and have been published in the online edition of the german federal gazette (Bundesanzeiger).

B. Braun melsungen ag is a globally engaged family owned company headquartered in melsungen, germany. the company’s address is Carl-Braun-straße 1, 34212 melsungen, germany.

B. Braun holding gmbh & Co. Kg is the parent company of B. Braun melsungen ag as defined in section 290 (1) hgB, and as the chief parent company is required to produce consolidated financial statements that include the consolidated financial statements of B. Braun melsungen ag.

B. Braun melsungen ag and its subsidiaries manufacture, market, and sell a broad array of healthcare products and services for intensive care units, anesthesia and emergency care, extracorporeal blood treatment, and surgical core procedures. the major manufacturing facilities are located in the eu, switzerland, the usa, Brazil, vietnam and malaysia. the company distributes its products via a worldwide network of subsidiaries and associated companies.

the management Board of B. Braun melsungen ag approved the consolidated financial statements for submission to the company’s supervisory Board on march 8, 2011.

the consolidated financial statements have been prepared based on historical costs, except for available-for-sale financial assets and financial assets/liabilities including derivative financial instruments measured at fair value through profit and loss. unless otherwise indicated, the accounting policies were used consistently for all periods referred to in this report.

in the statement of financial position, the distinction is made between current and non-current assets and liabilities. the statement of income is presented using the cost-of-sales method. using this format, net sales are compared to expenses incurred to generate these sales, classified by the expense categories Cost of goods sold, selling, general and administrative, and research and development. to improve the informational content of the consolidated statement of financial position and consolidated statement of income, further details on individual entries have been provided in the notes to the consolidated financial statements. the consolidated financial statements have been prepared in euro. unless otherwise stated, all figures are presented in thousands of euro (€ ‘000).

the financial statements of B. Braun melsungen ag and its subsidiaries included in the consolidated financial statements have been prepared using standardized group accounting policies.

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New and amended International Financial Reporting standards and Interpretations whose application is mandatory for fiscal years beginning january, 1 2010 (IAs 8.28) IFRs 2 share-based Payment the iasB’s amendment to ifrs 2 clarifies the accounting for group cash-settled share-based payment trans-actions in cases where the reporting company receives goods or services, but the payment obligation does not lie with the company itself, but with its parent or another group company. this provision is not relevant to B. Braun’s consolidated financial statements.

IFRs 3 business Combinations and IAs 27 Consolidated and separate Financial statementsifrs 3 (amended), Business Combinations, and ias 27 (amended), Consolidated and separate financial statements, were amended significantly with regard to business combinations, divestitures, and acquisitions of non-con-trolling interests. the amendments affect both accounting and measurement, and may result in greater earnings volatility in the periods following an acquisition. the amendments to ifrs 3 relate in particular to the determina-tion of acquisition costs (directly attributable incidental acquisition costs are generally expensed immediately), the accounting procedure for the residual goodwill (the choice of applying either the “full goodwill model” or the previous partial goodwill model), the procedure for gradual acquisitions (reporting the revaluation of the “old” tranches as profits or losses), and in some areas the recognition and measurement of identifiable assets and liabilities. the amendments to ias 27 lead in particular to changes in relation to transactions with owners of non-controlling interests (mandatory application of the economic entity approach, i.e. reporting as an equity transaction) and consolidated losses attributable to non-controlling interests in the consolidated financial statements. furthermore, future retained interests in transitional consolidations must always be remeasured at fair value and recognized through profit or loss. the standard has been applied, but has had no material impact on B. Braun’s consolidated financial statements.

Amendment to IAs 39 Financial Instrumentsin its amendments to ias 39, financial instruments: recognition and measurement, the iasB emphasizes that inflation risks may only be hedged if payments are directly linked to an inflation index. the amendments also state that one-sided risks cannot generally be hedged effectively by designating an option in its entirety. depending on the type and scope of future hedging transactions, this may have an effect on B. Braun melsungen ag’s consolidated financial statements in the future. the amendments do not currently have any impact.

IFRIC 12 service Concession ArrangementsifriC 12 discusses how obligations and rights resulting from service concessions should be recognized and measured by the operator of the concession. the interpretation applies only to those concessions under which state infrastructure works are outsourced to private companies. this provision is not relevant to B. Braun’s consolidated financial statements.

IFRIC 15 Agreements for the Construction of Real EstateifriC 15 defines the accounting procedure for sales and associated expenses of companies that construct and sell real estate, whether directly or via sub-contractors. this provision is not relevant to B. Braun’s consolidated financial statements.

IFRIC 16 hedges of a Net Investment in a Foreign OperationifriC 16 clarifies that, in hedge accounting for the purposes of hedging exchange rate risk, only the risk from exchange rate fluctuations between the functional currency of foreign commercial operations and the functional


N O T E s

currency of a parent company may be the subject of a hedge, not the currency in which the consolidated financial statements are presented. the provisions governing the amount to be taken from the foreign currency translation reserve and recognized in the statement of income on disposal of a foreign commercial operation were also specified. depending on the type and scope of future hedging transactions, this may have an effect on the B. Braun melsungen group’s consolidated financial statements in the future. the amendments do not currently have any impact.

IFRIC 17 Distributions of Non-cash Assets to OwnersifriC 17 defines the treatment of non-cash dividends to shareholders. B. Braun has not distributed any non-cash dividends to its owners in the past and has no plans to do so in the future. this provision is therefore not relevant to B. Braun’s consolidated financial statements.

IFRIC 18 Transfer of Assets from CustomersifriC 18 applies in cases where a company receives an item of property, plant and equipment from a customer in order to connect the customer to a network or provide the customer with ongoing access to a supply of goods or services (such as a supply of electricity, gas, or water). this provision is not currently relevant to B. Braun’s consolidated financial statements.

New and amended International Financial Reporting standards and Interpretations that have already been published but whose application is not yet mandatory for companies whose financial year ends on December 31, 2010 (IAs 8.30)

Adopted by the Eu

IAs 24 (rev. 2009) Related Party DisclosuresiasB released a revised version of ias 24, related party disclosures, on november 4, 2009. the amendment to ias 24 in particular comprehensively revised the definition of related parties and made adjustments to the definition of transactions subject to disclosure. the revised standard will first be applicable in fiscal years beginning on or after january 1, 2011. the application of the new rules will be retrospective. B. Braun’s consolidated financial statements will not be affected by the new rules.

Amendment to IAs 32 Classification of Rights Issuesthe amendment to ias 32 published in october 2009 governs the accounting treatment of rights issues, options, or warrants on a fixed number of own shares in any other than the functional currency. previously, such rights were treated as derivative liabilities. such rights will now be classified as shareholders’ equity under certain conditions. the amendment will first be applicable in fiscal years beginning on or after february 1, 2010. the amended standard is not currently relevant to the consolidated financial statements of the B. Braun group.

Amendments to IFRIC 14, IAs 19 Prepayments of a Minimum Funding Requirementthe amendment to ifriC 14 allows a company to recognize as an asset the economic benefit arising from an early payment of contributions that reduces future contributions relating to a minimum funding requirement. the amendments are to be applied from the beginning of the earliest comparison period presented in the first financial statements for which this interpretation is valid. adjustments resulting from the application of the amendments are to be included under retained earnings in the opening statement of financial position for the comparison period. earlier voluntary application of the amendments before the date for mandatory application (january 1, 2011) is permitted. B. Braun’s consolidated financial statements will not be affected by the new rules.

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IFRIC 19 Extinguishing Financial liabilities with Equity InstrumentsifriC 19 governs the accounting treatment of debtors where the terms of a financial liability are renegotiated to allow them to fully or partially extinguish the financial liability by issuing equity instruments (debt for equity swaps), and the creditor is an independent third party.

ias 39.41 stipulates that the difference between the carrying amount of an extinguished liability and the con-sideration paid must be recognized in profit or loss. ifriC 19 now also clarifies that equity instruments issued by the debtor in order to fully or partially extinguish the financial liability must be viewed as part of the con-sideration paid. the equity instruments are to be measured at fair value at the time of initial recognition. if fair value cannot be reliably determined, they are to be measured at the fair value of the fully or partially ex-tinguished liability. the equity instruments issued may no longer be measured at the carrying amount of the fully or partially extinguished financial liability. when only part of the financial liability is extinguished, the debtor must determine whether the terms of the remaining liability are substantially different to the terms of the original liability; this may require it to account for the extinguishment of the old remaining liability and the recognition of a new financial liability in accordance with ias 39.40. the interpretation is to be applied retrospectively (first mandatory for fiscal years beginning on or after july 1, 2010), where fair values can still be determined and earlier application is permitted. this provision is not currently relevant to B. Braun’s consolidated financial statements.

Eu adoption pending

Amendments to IFRs 7 Transfers of Financial Assetsthe amendment to ifrs 7 concerns the required disclosures relating to the transfer of financial assets. even where a financial asset is derecognized in its entirety, comprehensive disclosures are now required on any possible rights and obligations that were retained or transferred as part of the transaction. in addition to a description of the rights and obligations (qualitative disclosures), a host of quantitative disclosures such as the maximum loss risk, date and amount of payments, etc. is also required. as the amendment merely results in an extension of the disclosures, it will have no impact on the net assets, financial position and results of operations of the group.

IFRs 9 Financial Instruments: Classification and Measurementthe iasB is issuing the new ifrs 9 standard in three parts. two parts have thus far been published. the first part fundamentally changes the classification and measurement of financial assets. ifrs 9 provides for just two categories to which financial assets must be assigned upon initial recognition: measurement at fair value and measurement at amortized cost. the standard provides for retrospective application to all existing financial assets, and the new regulations determine that the categorization will be determined by the situation on the date of initial application of the standards. in addition, there are concessions in the form of a variety of transitional arrangements. the second part of ifrs 9 deals with financial liability accounting. with the ex-ception of the rules for financial liabilities voluntarily measured at fair value (fair value option), the provisions of ias 39 were carried over unchanged to ifrs 9. in accordance with iasB rules, ifrs 9 must be applied to fiscal years beginning on or after january 1, 2013. earlier application is permitted. it is not yet known when it will be adopted by the eu. the application of the parts of the standard issued to date are not expected to have an impact on the net assets, financial position and results of operations of the B. Braun group.


Amendment to IAs 12 Deferred Tax: Recovery of underlying Assetsthe amendments to ias 12 consist of a supplement to an exception for investment properties held as financial investments and measured at fair value in accordance with ias 40, and for investment properties held as financial investments that are initially recognized in connection with the acquisition of a subsidiary, where these are sub-sequently to be measured at fair value. the exception stipulates that deferred tax assets and liabilities relating to the assets in question must be measured based on the tax consequences of a sale, unless the reporting com-pany provides unequivocal evidence that it will recover the entire carrying amount of the asset through use. the amended version must be applied retrospectively for fiscal years beginning on or after january 1, 2012 and earlier voluntary application is permitted. Current evidence indicates that the amendment will have no impact on the net assets, financial position and results of operations of the B. Braun group.

as part of the ongoing ifrs improvements project, certain passages were also redrafted to improve clarity and amendments were made that have an impact on accounting, recognition and measurement.

Critical Assumptions and Estimates for Accounting Policies

the preparation of financial statements in accordance with ifrs requires management to make assumptions and estimates that have an effect on the reported amounts and their related statements. while management makes these estimates to the best of its knowledge and abilities based on current events and measures, there is a possibility that actual results may differ. estimates are necessary in particular when:

– assessing the need for and the amount of write-downs and other value adjustments;– measuring pension obligations;– recognizing and measuring provisions;– establishing inventory provisions;– evaluating the probability of realizing deferred tax assets;– Calculating the value in use of cash-generating units (Cgu) for impairment testing.

the group’s management determines the expected useful life of intangible assets and property, plant and equipment, and therefore their depreciation or amortization, based on estimates. these assumptions can change materially, for example as a result of technological innovations or changes in the competitive environment. should their actual useful life be shorter than the estimate, management adjusts the amount of depreciation or amortization. assets that are technologically outdated or no longer useable under the current business strategy are fully or partially written off.

the net present value of pension obligations depends on a number of factors, which are based on actuarial assumptions. the estimates made to determine the net expense (income) for pensions include the projected long-term rate of return on plan assets and the discount rate. any change in such assumptions will have an effect on the carrying amount of the pension provisions. obligations from defined benefit pension plans, as well as pension expenses for the following year, are determined based on the parameters outlined under note 25.

the recognition and measurement of other provisions is performed on the basis of estimates of the probability of a future outflow of resources, as well as experience and known circumstances as of the reporting date. the actual liability may differ from the amounts of the provisions created.

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the estimate of inventory provisions is based on the projected net realizable value (i. e. the estimated selling price, less the estimated cost of completion and the estimated costs necessary to make the sale). actual sales and actual costs incurred may differ from these estimates.

deferred tax assets are only recognized to the extent that it is probable that taxable profit will be available in the future. the actual taxable profits in future periods may differ from the estimates made on the date such deferred tax assets are capitalized.

goodwill is tested for impairment annually on the basis of a three-year operational plan and based on projected specific annual growth rates for the subsequent period. an increase or decrease in the projected annual growth rates would alter the estimated fair value of a given cash-generating unit.

the method used to calculate intercompany profits in inventories was changed in the reporting year. B. Braun is confident that this change will provide more relevant information on the group’s net assets, financial position and results of operations. the change has led to a net reduction of € 13.8 million in equity (€ 19.1 million, less deferred taxes of € 5.3 million), a reduction of € 19.1 million in inventories, and an increase of € 5.3 million in deferred tax assets. the statement of income was not affected by the change. retroactive adjustments to com-parison periods were not possible for system-related reasons.

scope of Consolidation

in addition to B. Braun melsungen ag, the consolidated financial statements include 35 german and 154 foreign subsidiaries in which B. Braun melsungen ag either holds a direct or indirect majority of voting rights or has control over financial and business management.

subsidiaries are included in the consolidated financial statements effective on the day control is assumed by the group. Consolidation is discontinued as of the day on which such control ends.

the change in the number of group companies as of december 31, 2010 and 2009 respectively is shown below:

2010 2009

included as of december 31 of previous year 187 188

Companies included for the first time 8 7

Company Consolidations discontinued – 2 – 1

Business Combinations – 3 – 7

Companies now Consolidated using the equity method due to the sale of shares – 1 0

Included as of December 31 of Reporting year 189 187


the impact of the newly acquired companies on the statement of financial position at the time of initial con-solidation and on the principal items in the statement of income for fiscal year 2010 is shown below:

Carrying amount

€ ’000

Fair value

€ ’000

non-current assets 8,361 8,361

Current assets 5,625 5,625

Acquired Assets 13,986 13,986

non-current provisions and liabilities 2,701 2,701

Current provisions and liabilities 3,801 3,801

Acquired liabilities 6,502 6,502

Net Assets Acquired 7,484 7,484

non-controlling interests 0 0

Prorated Net Assets 7,484 7,484

Badwill – 588

Acquisition Costs 6,896

of which non-controlling interests 0

Cash and Cash equivalents acquired 188

Cash Flow for business Acquisitions 6,708

sales 13,299

operating profit 2,354

profit after tax 1,582

acquisitions were mainly conducted to secure supply of components for suture production.

acquisitions in the reporting year contributed no assets that had not previously been recognized. goodwill was valued at € 4.3 million before translation differences, of which € 3.2 million resulted from at-equity consolidation.

to secure the group’s existing business relating to the manufacture and distribution of elastomeric infusion pumps, all material tangible assets of the infusion pump business of medpro international ltd., Chonburi/thailand, were acquired on october 30, 2010 as part of an asset deal. the associated intangible assets were acquired from medpro Corporation pte. ltd., singapore. Business operations will be continued by the group’s subsidiary B. Braun medical production ltd. thailand. the acquisition costs totaled € 26.9 million. the fair value of the tangible assets acquired (property, plant and equipment, inventories) as of the date of acquisition was € 2.8 million, while the fair value of intangible assets (patents, customer contracts) was € 23.6 million. goodwill of € 0.5 million stems from synergy effects expected from the company’s integration into the group. the asset deal increased group sales by € 0.5 million. the impact on the consolidated annual net profit was not materially significant.

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these changes did not adversely impact the comparability of the financial statements with those of the preceding year.

holdings in three joint ventures and 17 associated companies are recognized in the consolidated financial statements as of the reporting date. two associated companies were not measured using the equity method on materiality grounds.

the complete list of shareholdings belonging to the group, and to B. Braun melsungen ag, is provided in the notes to the consolidated financial statements.

the following companies are included in the consolidated financial statements of B. Braun melsungen ag:

– B. Braun facility services gmbh & Co. Kg, melsungen,– invitec gmbh & Co. Kg, duisburg,– mat adsorption technologies gmbh & Co. Kg, elsenfeld.

they meet the conditions of section 264b of the german Commercial Code (hgB) and are thus exempted from the requirement to compile notes and a management report.

the following companies meet the conditions of section 264 (3) hgB and are thus also exempted from the requirement to compile notes and a management report:

– aesculap ag, tuttlingen– aesculap akademie gmbh, tuttlingen,– aesculap international gmbh, tuttlingen,– ascalon gesellschaft für innovation in der medizintechnik gmbh, Berggießhübel,– avitum transcare germany gmbh, melsungen,– B. Braun medical ag, melsungen,– B. Braun avitum ag, melsungen,– B. Braun surgical gmbh, melsungen,– B. Braun petzold gmbh, melsungen,– B. Braun nordamerika verwaltungsgesellschaft mbh, melsungen,– B. Braun international gmbh, melsungen,– B. Braun travaCare gmbh, hallbergmoos,– B. Braun vetCare gmbh, tuttlingen,– Bibliomed medizinische verlagsgesellschaft mbh, melsungen,– Coachit gmbh, Kassel,– paul müller technische produkte gmbh, melsungen,– pns professional nutrition services gmbh, melsungen,– saxonia medical gmbh, radeberg,– transcare gesundheitsservice gmbh, melsungen.

the companies listed above exercise their right to the exemptions.


Principles of Consolidation

a) subsidiariessubsidiaries, i. e. companies in which B. Braun melsungen ag directly or indirectly holds more than half of the voting rights or otherwise controls their financial and business management, are included in the scope of con-solidation. for the purpose of determining whether B. Braun melsungen ag controls another company in this manner, the existence and consequences of potential voting rights that may be exercised or converted on the reporting date are taken into consideration.

subsidiaries are initially consolidated on the first day on which B. Braun melsungen ag assumes control of the acquired company; they are excluded from consolidation once B. Braun melsungen ag forfeits such control. the acquisition of subsidiaries is recognized utilizing the purchase method. the cost of acquiring a subsidiary is calculated based on payments of cash and cash equivalents, together with the fair value of assets transferred, shares issued, and/or liabilities assumed when initial control is gained. acquisition costs that exceed the pro-portionate acquired share of the fair value of the subsidiary’s net assets are recognized as goodwill.

assets, debts, and contingent liabilities identifiable upon a merger of companies are valued on initial consolidation at the fair values attributable to them, regardless of the size of any non-controlling interests.

goodwill generated by the acquisition of non-controlling interests in fully consolidated companies is offset against retained earnings. where assets and liabilities are measured at fair value for the gradual acquisition of companies fully consolidated for the first time, the revaluation of the “old” tranches is recognized through profit or loss.

intercompany receivables and payables, as well as expenditure and income are offset against each other. un-realized gains on transactions between companies within the group are eliminated in full; unrealized losses are eliminated insofar as the resulting costs of acquisition or manufacture do not exceed the recoverable amount of the underlying asset. the recoverable amount is the higher of an asset’s fair value less costs to sell or its value in use.

subsidiary companies’ accounting policies are, where necessary, adapted to those used to produce the consolidated financial statements.

b) associated Companiesassociated companies are those companies over which the group has significant influence but not control, generally accompanied by a holding of between 20 percent and 50 percent of the voting rights. investments in associates are accounted for using the equity method and are initially recognized at cost. the group’s invest-ment in associated companies includes goodwill identified on acquisition (net of any accumulated impairments).

the group’s share of associated companies’ post-acquisition profits or losses is recognized in the statement of income, and its share of post-acquisition changes in retained earnings is recognized in the group’s retained earnings. the cumulative post-acquisition changes are adjusted against the carrying amount of the investment. when the group’s share of losses in an associated company equals or exceeds its interest in the associated company, including any other unsecured receivables, the group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the associated company.

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unrealized gains from transactions between the group and its associated companies are, where material, eliminated to the extent of the group’s share in the associated company. unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. accounting and measure-ment policies of associated companies are changed where necessary to ensure consistency with the policies adopted by the group.

c) joint venturesthe group’s interests in jointly controlled entities are recognized using proportionate consolidation. the group combines its share of the joint ventures’ individual income and expenses, assets and liabilities, and cash flows on a line-by-line basis with the corresponding items in the group’s financial statements. the group recognizes only that portion of gains or losses on the sale of assets to the joint venture that it is attributable to the other partners in the ventures. the group does not recognize its share of gains or losses from the joint venture that result from the group’s purchase of assets from the joint venture until it resells the assets to an independent third party. losses on intercompany transactions are treated similarly unless the assets transferred are impaired.

d) owners of non-controlling intereststransactions with owners of non-controlling interests are treated in the same way as transactions with parties within the group. sales of shares to owners of non-controlling interests result in gains or losses being recognized in the consolidated financial statements. reciprocally, purchases of shares from owners of non-controlling interests result in the recognition of goodwill equivalent to the difference between the purchase price and the proportional carrying amount of the subsidiary’s net assets.

Foreign Currency Translation

a) functional and reporting currencyitems included in the financial statements of each of the group’s subsidiaries are stated using the currency of the primary economic environment in which the company operates (functional currency).

the consolidated financial statements are stated in euro, that being the group’s functional and reporting currency.

b) transactions and balancesforeign currency transactions are translated into the functional currency using the prevailing exchange rate on the date of the transaction. foreign exchange gains and losses resulting from the settlement of such trans-actions and from the translation of monetary assets and liabilities denominated in foreign currencies at the exchange rates prevailing on the reporting date are recognized in the statement of income.

translation differences on monetary items, such as equities classified as available-for-sale financial assets, where fair value changes are directly recognized in equity, are reported as part of the gain or loss from fair value measurement. translation differences on non-monetary items, where fair value changes are directly recognized in equity, are included in the revaluation reserve in equity.


c) subsidiariesall items in the statements of income and statements of financial position of all group subsidiaries that are in a currency other than the group reporting currency are translated into the reporting currency as follows:

– assets and liabilities are translated at the closing rate on the reporting date;– income and expenses are translated at average exchange rates;– all resulting exchange differences are recognized as a separate component of equity

(Changes due to Currency translation).

goodwill and fair value adjustments arising on the acquisition of foreign companies are treated as assets and liabilities of the foreign company and translated at the closing rate.

upon the sale of a foreign business operation, currency differences formerly recognized in equity are taken to the statement of income as gains or losses on disposal.

Comparison of selected Currencies

Closing Mid-rate on Reporting Date Average Annual Rate

IsO Code Dec. 31, 2010 Dec. 31, 2009 + – in %

Dec. 31, 2010 Dec. 31, 2009 + – in %

1 eur = usd 1.336 1.441 – 7.3 1.327 1.393 – 4.8

1 eur = gBp 0.861 0.888 – 3.1 0.858 0.891 – 3.7

1 eur = Chf 1.250 1.484 – 15.7 1.382 1.510 – 8.5

1 eur = myr 4.095 4.933 – 17.0 4.273 4.904 – 12.9

1 eur = jpy 108.650 133.160 – 18.4 116.455 130.232 – 10.6

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accounting policiesIntangible Assets

a) goodwillgoodwill represents the excess of the cost of an acquisition over the fair value of the net identifiable assets and liabilities of the acquired company on the date of the acquisition. goodwill on acquisitions of subsidiaries is included in intangible assets. goodwill on acquisitions of associates is included in investments in associates. goodwill is tested annually for impairment and is carried at cost less accumulated impairment losses. write-downs of goodwill are reported under other operating expenses. write-ups in value are not permitted. gains and losses on the sale of companies include the carrying amount of the goodwill relating to the company sold.

b) development Coststhe B. Braun group invests a significant portion of its financial assets in research and development. in addition to internal research and development activities, the group maintains numerous cooperative relationships with third parties.

development expenses are defined as costs related to applying research findings or specialized knowledge for planning production and the manufacturing process before production or use has commenced. development expenses are capitalized as intangible assets where it is regarded as likely that the project will be commercially successful, technically feasible and the costs can be reliably measured. other development costs that do not meet these criteria are expensed as they occur. development costs that have previously been expensed are not capitalized in subsequent years. Capitalized development costs are shown as self-created intangible assets. please see c) below regarding the useful life, amortization method, and review of residual carrying amounts.

c) other intangible assetsacquired intangible assets are recognized at acquisition cost, and self-created intangible assets where future economic benefit is likely to flow to the group and the costs of the asset can be reliably measured are recog-nized at manufacturing cost. this includes all costs directly related to the manufacturing process, as well as appropriate portions of relevant overhead costs. intangible assets with finite useful lives are written off on a scheduled straight-line basis over a period of four to eight years.

residual carrying amounts and expected useful lives are reviewed at each reporting date and adjusted if necessary.

a write-down is taken at the reporting date if the recoverable amount of an intangible asset falls below its carrying amount.

amortization on other intangible assets is allocated to the functional areas that benefit from their use. write-ups to a maximum of amortized acquisition or manufacturing cost are shown under other operating income.

Besides goodwill, the group did not own any intangible assets with indefinite useful lives in the reporting periods presented.

Impairment of Non-financial Assets

intangible assets that have an indefinite useful life are not subject to scheduled amortization; they are tested annually for impairment. assets that are subject to scheduled amortization are reviewed for impairment when-ever events or changes in circumstances indicate that the carrying amount may not be recoverable. an impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. for the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). with the exception of goodwill, non-financial assets that have been subject to an impairment loss in the past are reviewed at each reporting date to see if a write-up is required.


A C C O u N T I N G P O l I C I E s

Property, Plant and Equipment

tangible assets that are utilized during the ordinary course of business for more than one year are recognized at their acquisition or manufacturing cost less straight-line depreciation. the latter includes all costs directly related to the manufacturing process and appropriate portions of relevant overhead costs. the useful lives applied correspond to the expected useful lives within the group.

the following useful lives are the basis for depreciation applied to property, plant and equipment:

Buildings 25 to 50 years

technical plant and machinery* 5 to 20 years

vehicles 6 years

operating and office equipment 4 to 20 years

* Operating a single shift

land is not depreciated.

acquisition and manufacturing costs that are incurred at a later point are recognized as part of the asset or as a separate asset only when it is likely that the future economic benefits associated with the asset will flow to the group and that the cost of the asset can be reliably measured. all other repairs and maintenance are reported as expense in the statement of income of the fiscal year in which they occur.

residual carrying amounts and expected useful lives are reviewed at each reporting date and adjusted if necessary.

a write-down is taken at the reporting date if the recoverable amount of an item of property, plant and equip-ment falls below its carrying amount.

depreciation on property, plant and equipment is allocated to the functional areas that benefit from their use. write-ups to a maximum of amortized acquisition or manufacturing cost are shown under other operating income. gains and losses from disposals of property, plant and equipment are taken to profit and loss.

government grants are recognized at fair value if receipt of the grant and the group’s compliance with any conditions associated with the grant are highly likely.

Borrowing costs directly attributable to the acquisition, construction, or production of a qualifying asset are recognized as part of its acquisition or manufacturing cost.

Finance leasing

leasing contracts for intangible assets and property, plant and equipment, where the group carries the sub-stantial risks and rewards of ownership of the leased asset, are classified as finance leases. at commencement of the lease term, finance leases are recognized as an asset at the lower of the fair value of the asset or the net present value of the minimum lease payments. each leasing payment is apportioned between the finance charge and the reduction of the outstanding liability so as to produce a constant periodic rate of interest on the leasing liability. this liability is reported under financial liabilities without recognizing the interest payments. the interest portion of the leasing payment is recognized as expense through the statement of income. assets held under finance leases are depreciated over the useful life of the asset. if there is no reasonable certainty that the group will obtain ownership of an asset at the end of the lease, the asset is depreciated in full over the shorter of the lease term or the useful life of the asset.

84

Financial Investments Recognized using the Equity Method of Accounting and Other Financial Investments

investments in holdings with at-equity accounting are recognized initially at acquisition cost and in subsequent periods at the amortized pro-rata net assets. the carrying amounts are increased or decreased annually by the associate’s share of the net profit or loss, distributions, and any other changes in equity. goodwill is included in the valuation of the holding rather than being separately identified. there is no scheduled amortization of goodwill. holdings accounted for using the equity method are written down when the recoverable amount falls below the carrying amount of the holding.

Categories of Financial Assets

financial assets are classified using the following categories:

– financial assets at fair value through profit and loss,– loans and receivables,– held-to-maturity financial assets,– available-for-sale financial assets.

the categorization depends on the purpose for which the assets were acquired. management determines the categorization of financial assets at initial recognition and re-evaluates this categorization on each reporting date.

a) financial assets at fair value through profit and lossfinancial assets are measured at fair value through profit and loss if the financial asset is either held for trading or designated as being measured at fair value.

a financial asset is classified as held for trading if it has been acquired principally for the purpose of earning profits from short-term price changes, or is a derivative that has not been designated as a hedging instrument.

to date, the group has not exercised the option of designating financial assets upon initial recognition as financial assets at fair value through profit and loss.


b) loans and receivablesloans and receivables with fixed or determinable payments that are not quoted on an active market are categorized as loans and receivables. loans and receivables are measured using the effective interest method at amortized cost less any impairments. with the exception of current receivables, where the interest rate effect is insignificant, interest income is recognized using the effective interest method.

c) held-to-maturity financial assetsBills of exchange and debt instruments with fixed or determinable payments and fixed maturities, which the group has the intention and ability to hold to maturity, are categorized as “held-to-maturity investments.” held-to-maturity investments are measured at amortized cost using the effective interest method less im-pairments.

d) available-for-sale financial assetslisted shares and redeemable bonds held by the group that are traded on an active market are recognized at fair value as available-for-sale financial assets. investments in unlisted shares held by the group that are not traded on an active market are also recognized at fair value as available-for-sale financial assets. gains and losses arising from changes in fair value are included directly in the revaluation reserve (equity) rather than in other income. exceptions are impairment losses, interest calculated using the effective interest method, and gains and losses from foreign currency translation of monetary items, which are recognized in the statement of income. if a financial asset is disposed of or is acknowledged to have an impairment, its accumulated gains and losses recognized in the revaluation reserve for financial investments up to that point are reclassified as profits or losses.

dividends from equity instruments classified as available-for-sale financial assets are recognized in the statement of income as soon as the group has acquired a right to the dividend.

Impairment of Financial Assets

with the exception of financial assets measured at fair value through profit and loss, financial assets are exam-ined at each reporting date for the presence of any indications of impairment. financial assets are considered impaired if, following one or more events that occurred after the initial recognition of the asset, there is objective evidence that the estimated future cash flows of the investment have changed adversely.

in the case of listed and unlisted equity investments that were categorized as available-for-sale, any significant or prolonged reduction in the fair value of the assets below their acquisition cost must be regarded as objective evidence of impairment.

for all other financial assets, the following may be objective evidence of impairment:

– either the issuer or the counterparty is facing significant financial difficulties– default or delinquency in payments of interest or principal– a high probability that the debtor will enter bankruptcy or financial reorganization


86

for some classes of financial assets, such as trade receivables, asset values for which no impairment has been determined on an individual basis are tested for impairment on a portfolio basis. objective evidence of impair-ment on a portfolio of receivables is based on the past experience of the group regarding payments received, an increase in the frequency of payment defaults within the portfolio over the average borrowing period, and observable changes in the national or local economic environment with which the defaults can be linked.

in the case of financial assets valued at amortized cost, the impairment loss corresponds to the difference between the carrying amount of the asset and the net present value of expected future cash flows determined on the basis of the original effective interest rate on the asset.

an impairment leads to a direct reduction in the carrying amount of all the relevant financial assets, with the exception of trade receivables, whose carrying amount is reduced through a valuation adjustment account. if a trade receivables item is considered to be irrecoverable, it is written off against the valuation adjustment account. Changes in the carrying amount of the valuation adjustment account are recognized in the statement of income.

in the event that a financial asset, classified as available-for-sale, is considered to be impaired, gains and losses previously recognized in the revaluation reserve (equity) are reclassified to the statement of income in the period in which the impairment occurred.

if the level of impairment of a financial asset that is not an available-for-sale equity instrument decreases in a subsequent reporting period, and if the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment is reversed through the statement of income. no higher value may be imputed than that which would have arisen as amortized cost if no impairment loss had been recognized.

in the case of equity instruments classified as available-for-sale, any impairments recognized in the past are not reversed. any increase in the fair value after an impairment was recognized is recorded in the revaluation reserve (equity).

Inventories

under ias 2 (inventories), those assets that are held for sale during the ordinary course of business (finished products and merchandise), those that are in the production process for sale during the ordinary course of business (work in progress), and those that are consumed in the production process or performance of services (raw materials and supplies) are to be listed as inventories. inventories are measured at the lower of cost and net realizable value, which is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale, applying the weighted average cost formula.

in addition to direct expenses, manufacturing costs include allocated raw material and production overheads and depreciation related to production plant and equipment. allocated costs related to pensions and voluntary social contributions made by the company are also included. administrative expenses are included in the costs if they relate to manufacturing.

Provisions for Pensions and similar Obligations

provisions for pensions and similar obligations are calculated using the projected unit credit method in accordance with ias 19, taking into account future pay and pension increases and staffing fluctuations. they are valued on the basis of expert opinion.


the interest portion of the pension expenses is offset against the expected return on plan assets.

any excess of plan assets over the pension obligations is recognized as an asset only if it represents the net present value of the economic benefits to the company plus any past service cost and actuarial gains and losses not yet recognized.

Other Provisions

provisions are recognized when a present legal or constructive obligation has arisen for the group as a result of a past event, an outflow of resources to settle the obligation is likely, and the amount can be estimated reliably. if a number of obligations of a similar type exist, the provisions are recognized at the most probable value for the population of events.

provisions are established for onerous contracts if the expected benefit from the contractual claim is less than the expected costs to settle the obligation.

provisions due after more than one year are measured at discounted present value.

provisions are released against the expense items for which they were created. where additions to provisions are recognized under other operating expenses, the release of these amounts is shown under the corresponding other operating income item.

Financial liabilities

financial liabilities are initially recognized at fair value less transaction costs. in subsequent periods, they are measured at amortized cost. any difference between the amount disbursed (less transaction costs) and the repayment amount is spread across the term of the loan using the effective interest method and recognized in the statement of income.

liabilities from loans are recognized as current liabilities unless the group has the unconditional right to defer repayment of the liability to at least 12 months after the reporting date.

liabilities

financial liabilities comprise trade accounts payable and other liabilities. liabilities are initially recognized at fair value.

Current liabilities are recognized at the repayable amount. non-current liabilities that are not the underlying transaction in permissible hedge accounting are recognized at amortized cost.

accruals are recognized under other liabilities.

Derivative Financial Instruments

derivative financial instruments are initially measured at their fair value on the day that the contract is entered into. they are subsequently measured at their fair value as of each reporting date. the method of recording gains and losses depends on whether the derivative financial instruments in question have been designated as hedging instruments and, if so, on the nature of the hedged item. B. Braun melsungen ag designates derivative financial instruments as a hedge against the risk of changes in fair values of assets or liabilities carried in the statement of financial position (fair value hedge) or the risk of fluctuating payment flows in connection with an expected future transaction that is highly likely to occur (cash flow hedge). on entering into a transaction,


88

the group documents the hedge relationship between the hedging instrument and the underlying transaction, the aim of its risk management, and the underlying strategy at the time of opening. in addition, the assessment of whether the derivatives employed effectively compensate for the changes in the fair values or cash flows of the underlying transactions is documented at the time the hedging relationship is created and subsequently on an ongoing basis. the fair values of the various derivative financial instruments used for hedging purposes are recognized under other assets/liabilities. movement in the valuation reserve for cash flow hedges is shown in the consolidated statement of changes in equity. the full fair value of derivative financial instruments designated as hedge instruments is shown as a non-current asset or liability if the residual term of the hedged underlying transaction is more than 12 months after the reporting date, and as a non-current asset or liability if it is shorter than that. derivative financial instruments held for trading are recognized as current assets or liabilities.

when a hedging transaction designated as a cash flow hedge expires, is sold, or the designation is deliberately reversed, or no longer meets the criteria to be accounted for as a hedging transaction, gains or losses accu-mulated in equity up to that point remain in equity and are only taken to the statement of income when the future transaction originally hedged occurs and is recognized in the statement of income. if the future trans-action is no longer expected to occur, gains or losses accumulated in equity must be recognized in the statement of income immediately.

Certain derivative financial instruments are not eligible for hedge accounting, as explained under note 32.

Deferred Taxes

deferred taxes are recognized using the liability method for all temporary differences between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. if deferred tax arises from the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss, however, it is not recognized. deferred taxes are measured using tax rates and laws that have been enacted or substantially enacted as of the reporting date and are expected to apply when the related deferred tax assets are realized or the deferred tax liabilities are settled.

deferred tax assets stem primarily from temporary differences between the tax bases of individual companies and the financial statements set forth using ifrs, and from consolidation. deferred tax assets stemming from losses carried forward and tax credits are recognized to the extent that it is likely that future taxable income will be available against which the losses carried forward can be utilized.

deferred tax liabilities arising from temporary differences in connection with investments in subsidiaries and associates are recognized except where the timing of the reversal of the temporary differences can be con-trolled by the group and it is likely that the temporary differences will not be reversed in the foreseeable future. please also see note 10 taxes on income.


N O T E s T O T h E C O N s O l I D A T E D s T A T E M E N T

O F I N C O M E ( l O s s )

notes to the Consolidated statement of income (loss)1 sales

sales include the fair value received for the sale of goods and services excluding sales tax, rebates, and discounts, and after eliminating intercompany sales. sales are reported as follows:

sales resulting from the sale of products are recognized when the main risks and rewards associated with owner-ship have been transferred to the buyer and the collection of the associated receivable can be assumed with sufficient likelihood.

estimates for sales reductions are based on experience. adjustments are made if required by a change in con-ditions. no significant returns were recorded in the reporting period.

sales resulting from the sale of services are recognized in the fiscal year during which the service is performed using the percentage of completion basis.

the following chart shows sales trends by division, region, and by type

sales by Division 2010€ ’000

%

2009€ ’000

%

+ – in %

hospital Care 2,086,696 47.2 1,903,799 47.3 9.6

aesculap 1,281,071 29.0 1,153,213 28.6 11.1

opm 554,613 12.5 525,791 13.1 5.5

B. Braun avitum 474,768 10.7 420,519 10.4 12.9

other sales 25,665 0.6 24,927 0.6 3.0

4,422,813 100.0 4,028,249 100.0 9.8

sales by Region 2010€ ’000

%

2009€ ’000

%

+ – in %

germany 878,450 19.9 851,215 21.1 3.2

europe & africa 1,691,987 38.2 1,578,657 39.2 7.2

north america 940,145 21.3 854,846 21.2 10.0

latin america 295,751 6.7 253,957 6.3 16.5asia & australia 616,480 13.9 489,574 12.2 25.9

4,422,813 100.0 4,028,249 100.0 9.8

sales by Type 2010€ ’000

%

2009€ ’000

%

+ – in %

sales of products 4,022,452 90.9 3,666,558 91.0 9.7

sales of services 400,361 9.1 361,691 9.0 10.7

4,422,813 100.0 4,028,249 100.0 9.8

90

2 Cost of Goods sold

Cost of goods sold includes the manufacturing costs of goods sold and the purchasing costs of merchandise sold. in addition to direct costs such as material, personnel and energy costs, manufacturing costs contain production-related overhead expenses including depreciation of property, plant and equipment. Cost of goods sold also in-cludes inventory write-downs.

3 selling Expenses

selling expenses include expenditures for marketing, sales organizations, and logistics. this category also con-tains the expenses related to customer training and consulting on technical product use.

4 Research and Development Expenses

research and development expenses include costs for research, as well as for product and process development including expenditures for external services. all research costs are expensed at the time they are incurred.

development costs are capitalized where all the conditions for capitalization under ias 38 are met.

5 Other Operating Income

2010€ ’000

2009€ ’000

Currency translation gains 184,753 158,337

additional income 9,058 9,355

derivative financial instruments 8,573 582

income from other periods 5,535 4,960

proceeds from appreciation of Current financial assets 2,423 2,011

proceeds from the disposal of assets 1,837 1,930

proceeds from the release of provisions 1,551 593

other income 18,143 13,788

231,873 191,556

Currency translation gains on receivables and payables denominated in foreign currencies mainly comprise gains from currency fluctuations between transaction and payment dates, gains resulting from translation at the exchange rate prevailing on the reporting date, and gains resulting from hedge accounting.

additional income primarily includes cost reimbursements from third parties and income from cafeteria sales.

Changes in the fair value of forward foreign exchange contracts and currency options that are not designated for hedge accounting are reported under derivative financial instruments. financial assets/liabilities measured at fair value through profit and loss are shown in the statement of financial position under other assets/liabilities.

other operating income includes income-related and other grants from the public sector. income-related grants are recognized in the period in which the corresponding expenses occur. they amounted to € 1.7 million (pre-vious year: € 2.2 million). grants of € 1.6 million (previous year: € 2.1 million) were recognized through profit and loss in the reporting year. the grants were predominantly made to support structurally weak areas in germany.


other income includes numerous types of income; however their individual valuations are not materially significant.

6 Other Operating Expenses

2010€ ’000

2009€ ’000

Currency translation losses 198,588 147,330

losses from impairment of Current financial assets 8,566 11,176

additions to provisions 7,376 9,750

losses on the disposal of assets 2,546 3,654

expenses from other periods 4,089 2,814

derivative financial instruments 92 9,710

other expenses 39,638 41,081

260,895 225,515

Currency translation losses on receivables and payables denominated in foreign currencies mainly comprise losses from currency fluctuations between transaction and payment dates, losses resulting from translation at the exchange rate prevailing on the reporting date, and losses resulting from hedge accounting.

losses from impairment of current financial assets refer to value adjustments to trade receivables.

Changes in the fair value of forward foreign exchange contracts and currency options that are not designated for hedge accounting are reported under derivative financial instruments. financial assets/liabilities measured at fair value through profit and loss are shown in the statement of financial position under other assets/liabilities.

other expenses include numerous types of expenses; however their individual valuations are not materially significant.

7 Financial Investments Recognized using the Equity Method of Accounting

net income from investments recognized using the equity method of accounting breaks down as follows:

2010€ ’000

2009€ ’000

income from financial investments recognized using the equity method 4,307 2,819

expenses from financial investments recognized using the equity method – 405 – 1,419

3,902 1,400



92

8 Net Financial Income

2010€ ’000

2009€ ’000

interest and similar income 4,606 6,389

interest and similar expenses – 48,414 – 53,396

of which to affiliated Companies (2,596) (1,343)

interest expenses for pension provisions, net of expected income from plan assets – 28,778 – 28,838

– 72,586 – 75,845

of which financial assets and liabilities at fair value:

interest income from discounting 281 191

accrued interest expense – 5,455 – 6,763

interest and other similar expenses comprise mainly interest expense on financial liabilities. expenses resulting from accruing interest to non-current other provisions are also recognized here.

9 Other Net Financial Income

2010€ ’000

2009€ ’000

income from joint ventures (excluding income from financial investments recognized using the equity method) 2,099 5

net gains and losses on:

– available-for-sale financial assets 28 – 48

2,127 – 43

interest on derivative financial instruments is shown under interest expense.

10 Taxes on Income

income tax includes corporation tax and trade income tax for german companies as well as comparable income-related taxes for companies in other countries. they are calculated on the basis of the tax regulations applicable to the individual company. deferred taxes stem from temporary differences between the tax base of the individual companies and the con-solidated statement of financial position. they are measured using the liability method based on the application of anticipated future tax rates for the individual countries as of the realization date. generally, these are based on the regulations in effect as of the reporting date. deferred tax assets are offset only if the company has the legal right to settle current tax assets and current tax liabilities on a net basis and they are levied by the same tax authority.

expenses resulting from taxes on income including deferred taxes are as follows:

2010€ ’000

2009€ ’000

actual income taxes 99,548 98,139

deferred taxes resulting from temporary differences 10,533 – 4,661

deferred taxes resulting from losses Carried forward 2,174 3,027

112,255 96,505


deferred tax assets and deferred tax liabilities apply to differences stemming from recognition and measurement in the following items in the statement of financial position:

Dec. 31, 2010 Dec. 31, 2009

Assets € ’000

liabilities € ’000

Assets € ’000


intangible assets 3,175 14,419 3,255 10,624

property, plant and equipment 3,458 110,333 2,467 93,246

financial investments 267 634 226 397

inventories 48,577 5,426 35,761 3,897

trade accounts receivable 6,807 7,488 8,662 4,676

pension provisions 34,135 272 33,041 293

other provisions 14,596 1,921 15,223 1,289

liabilities 21,886 1,443 24,058 16,851

other 11 8,491 0 5

132,912 150,427 122,693 131,278

of which non-current 53,459 135,641 48,853 121,463

net Balance – 70,902 – 70,902 – 72,054 – 72,054

62,010 79,525 50,639 59,224

valuation allowance on deferred tax assets from temporary differences – 58 – – 164 –

deferred taxes on tax Credits 29,133 – 19,060 –

losses Carried forward (net, after valuation allowances) 10,729 – 19,055 –

101,814 79,525 88,590 59,224

the amount of temporary differences related to holdings in subsidiaries and associated companies, as well as interests in joint ventures for which according to ias 12.39 no deferred tax liabilities were recognized, is € 6.8 million (previous year: € 11.1 million).

existing but not recognized tax losses carried forward can be utilized as follows:

Dec. 31, 2010€ ’000

Dec. 31, 2009€ ’000

within one year 0 375

within two years 550 373

within three years 6,620 1,057

within four years 3,080 3,827

within five years or longer 3,954 2,991

14,204 8,623

Can be Carried forward indefinitely 9,261 8,846

23,465 17,469

deferred tax assets for which utilization depends on future taxable profits in excess of the profits arising from the reversal of existing taxable temporary differences and where the company has incurred past losses amounted to € 5.3 million (previous year: € 4.8 million). recognition of these deferred tax assets is based on relevant fore-casting, which justifies the expectation they will be utilized.



94

deferred taxes of € 6.2 million (previous year: € 409,000) were recognized directly in equity. these are attributable to changes in the fair value of securities (€ 6,000), changes in the fair value of derivative financial instruments (€ 940,000) and a change in the measurement method in accordance with ias 8 (€ 5.2 million).

the tax expense calculated using B. Braun melsungen ag’s tax rate of 27.4 percent can be reconciled to the actual tax expense as follows:

2010€ ’000

2009€ ’000

tax rate of B. Braun melsungen ag 27.4 % 27.4 %

profit before tax 389,618 336,080

expected income tax at parent Company's tax rate – 106,911 – 92,086

differences due to other tax rates – 6,782 – 6,155

Changes to deferred tax assets and liabilities due to Changes in tax rates 796 – 7

tax reductions due to tax-exempt income 10,298 11,966

tax increases due to non-deductible expenses – 9,244 – 9,053

addition/deduction of trade tax and similar foreign tax items – 1,591 – 1,366

final withholding tax on profit distributions – 749 – 314

tax Credits 2,632 4,639

tax expense relating to previous periods – 2,739 – 4,556

Change to valuation allowances on deferred tax assets 9 493

profit (loss) of financial investments recognized using the equity method 712 266

other tax effects 1,314 – 332

Actual Tax Expense – 112,255 – 96,505

effective tax rate 28.8 % 28.7 %

11 Earnings per share

earnings per share are calculated according to ias 33 by dividing the consolidated annual net profit less non-controlling interests by the number of shares in issue. the number of shares entitled to receive dividends re-mained unchanged at 19,404,000 during the fiscal year. there were no outstanding shares as of december 31, 2010 or december 31, 2009 that could have diluted the earnings per share. earnings per share were € 13.27 (previous year: € 11.36).

the dividend paid in 2010 and 2009 for the preceding fiscal years amounted to € 24 million (€ 1.24 per share) and € 16 million (€ 0.82 per share) respectively. the management Board and supervisory Board are proposing a dividend of € 1.24 per share for fiscal year 2010. the proposed dividend must be ratified by the annual share-holders’ meeting on march 24, 2011. this dividend liability is not included in the consolidated financial statements.


12 Other Notes to the Consolidated statement of Income

Material coststhe following material costs are included in the cost of goods sold.

2010€ ’000

2009€ ’000

expenses for raw materials and goods purchased 1,592,717 1,436,709

in 2010, expenses related to inventory impairments recognized in cost of goods sold were € 10.8 million (pre-vious year: € 13.9 million) and a write-up (increase in net realizable value) of € 3.1 million (previous year: € 11.0 million) was recognized.

Payments under operating leases

2010€ ’000

2009€ ’000

68,661 66,928

payments under operating leases include € 1.1 million (previous year: € 821,000) of payments under sub-leases. leasing expenditure is predominantly allocated to cost of goods sold.

Personnel Expenditures / Employeesthe following personnel expenditures are recognized in the statement of income:

Personnel Expenditures 2010€ ’000

2009€ ’000

wages and salaries 1,288,877 1,160,629

social security payments 243,413 222,542

welfare and pension expense 49,382 41,778

1,581,672 1,424,949

Employees by Function (Average for the year, including Temporary Employees)

production 24,406 23,251

marketing and sales 9,414 9,007

research and development 1,211 1,127

technical and administration 5,285 5,127

40,316 38,512

of which part-time 1,926 1,829

of which in proportionately Consolidated Companies 5 5

personnel expenditures do not include interest accruing to pension provisions, which is recognized under net interest income.



96

the average headcount is prorated based on the date of first consolidation or final consolidation, as appropriate. employees of joint venture companies are included in the total according to the percentage of ownership.

in regard to first-time consolidated companies, an annual average of 235 employees was reported for 2010, compared to 40 for 2009.

13 Total Auditor’s Fee

the following fees were recognized as expense for services provided worldwide by the auditor pricewater-houseCoopers in 2010:

2010€ ’000

2009€ ’000

audit fees 3,760 3,421

of which pricewaterhouseCoopers ag, germany 983 873

other Certification services 52 552


tax advisory services 1,084 1,020


other services 652 386


5,548 5,379

of which pricewaterhouseCoopers ag, germany 1,749 1,711

the audit fee includes all fees paid and outstanding to pricewaterhouseCoopers plus reimbursable expenses for the group audit and the audit of the annual financial statements of B. Braun melsungen ag. fees for certification services mainly relate to certifications performed as part of acquisitions and divestitures, the examination of internal control systems, particularly it systems, and expenses related to statutory or judicial requirements. the item tax advisory services mainly relates to fees for advice on completing tax returns, checking tax demands, support for company audits or other enquiries conducted by the tax authorities and tax advice in connection with transfer pricing.



O F F I N A N C I A l P O s I T I O N

notes to the Consolidated statement of financial position 14 Intangible Assets

the B. Braun group capitalized € 12.2 million (previous year: € 7.6 million) of development costs during the year under review. all the prerequisites for capitalization were met.

goodwill is allocated to cash-generating units (Cgus) for the purpose of impairment testing. each of these cash-generating units represents the group’s investment by country of operation and primary reporting segment.

Cost of Acquisition or Manufacture

Acquired Goodwill

€ ’000

licenses, Trademarks and Other

similar Rights

€ ’000

self- created

Intangible Assets

€ ’000

Advance Payments

€ ’000

Total

€ ’000

january 1, 2009 56,942 224,823 12,940 7,476 302,181

foreign Currency translation – 931 – 985 – 279 0 – 2,195

additions to scope of Consolidation 3,761 21 0 0 3,782

additions 1,437 10,607 7,618 8,146 27,808

transfers 0 6,486 – 964 – 1,516 4,006

disposals 0 – 14,945 0 – 499 – 15,444

December 31, 2009 / january 1, 2010 61,209 226,007 19,315 13,607 320,138

foreign Currency translation 1,257 9,660 1,448 2 12,367

additions to scope of Consolidation 0 170 0 0 170

additions 600 31,379 13,285 19,945 65,209

transfers 451 7,184 0 – 5,768 1,867

disposals 0 – 2,858 0 – 9 – 2,867

December 31, 2010 63,517 271,542 34,048 27,777 396,884

accumulated amortization 2010 624 174,838 2,780 0 178,242

accumulated amortization 2009 602 149,763 1,833 0 152,198

Carrying Amounts December 31, 2010 62,893 96,704 31,268 27,777 218,642

Carrying Amounts December 31, 2009 60,607 76,244 17,482 13,607 167,940

amortization in the fiscal year 0 20,902 817 0 21,719

of which unscheduled 0 87 0 0 87

98

a summary of the distribution of goodwill by cash-generating unit and the assumptions for their impairment testing are listed below:

hospital Care

€ ’000

Aesculap

€ ’000

OPM

€ ’000

b. braun Avitum € ’000

Total

€ ’000

Dec. 31, 2009

Carrying amount of goodwill 19,883 5,125 18,756 16,843 60,607

annual growth rate 2.4 % 2.1 % 2.0 % 2.3 %

discount rate 10.0 % 9.9 % 9.6 % 10.8 %

Dec. 31, 2010

Carrying amount of goodwill 21,333 5,128 18,756 17,675 62,892

annual growth rate 3.1 % 2.8 % 2.6 % 3.1 %

discount rate 7.2 % 7.3 % 7.2 % 7.6 %

the recoverable amount of a Cgu is determined by calculating its value in use. these calculations are based on projected cash flow derived from the three-year forecast approved by management.

management has determined the budgeted gross margin based on past trends and expectations about future market trends. the weighted average growth rates largely correspond to the predictions from industrial reports. the discount rates used are pre-tax rates and reflect the specific risks of the relevant cash-generating units.

if the actual future gross margin had been 10 % less than the gross margin estimated by management on december 31, 2010, no impairment of goodwill would have occurred. the same holds true if the discount rate that was used to calculate the dCf had been 10 % higher than management’s estimates.


15 Property, Plant and Equipment

on the reporting date, no unfulfilled conditions or potential liabilities existed, which would have required modification of the statement of financial position.

Borrowing costs of € 551,000 were capitalized in the year under review (previous year: € 22,000). an interest rate of 4.0 percent was applied to the calculations.

in the statement of financial position, government asset-related grants for investments in the amount of € 2.6 million (previous year: € 1.9 million) have been deducted from the carrying amounts of the relevant assets. the current carrying amount of property, plant and equipment purchased with government grants is € 49.4 million (previous year: € 30.6 million).

Cost of Acquisition or Manufacture

land and buildings

€ ’000

Technical Plant and

Machinery

€ ’000

Other Plant, Operating and Office Equipment

€ ’000

Advance Payments and Assets under Construction

€ ’000

Total

€ ’000

january 1, 2009 892,059 1,470,061 504,059 284,091 3,150,270

foreign Currency translation 290 648 4,068 – 2,555 2,451

additions to scope of Consolidation 293 1,970 322 17 2,602

additions 29,496 89,750 43,993 263,718 426,957

transfers 90,680 83,010 30,488 – 208,184 – 4,006

subsequent Capitalization 0 0 0 0 0

disposals – 8,685 – 52,301 – 45,768 – 127 – 106,881

December 31, 2009 / january 1, 2010 1,004,133 1,593,138 537,162 336,960 3,471,393

foreign Currency translation 32,960 95,498 27,116 14,549 170,123

additions to scope of Consolidation 1,971 8,898 1,379 215 12,463

additions 72,040 105,743 54,852 277,527 510,162

transfers 78,097 86,365 18,701 – 185,032 – 1,869

disposals – 2,085 – 53,225 – 27,349 – 5 – 82,664

December 31, 2010 1,187,116 1,836,417 611,861 444,214 4,079,608

accumulated depreciation 2010 344,192 1,034,308 396,076 0 1,774,576

accumulated depreciation 2009 302,591 904,023 338,024 0 1,544,638

Carrying Amounts December 31, 2010 842,924 802,109 215,785 444,214 2,305,032

Carrying Amounts December 31, 2009 701,542 689,115 199,138 336,960 1,926,755

depreciation in the fiscal year 32,646 122,430 62,131 0 217,207

of which unscheduled 420 75 8 0 503



100

16 Finance leasing

intangible assets and property, plant and equipment include the following amounts for which the group is lessee under a finance lease:

Dec. 31, 2010€ ’000

Dec. 31, 2009€ ’000

licenses, trademarks and other similar rights 573 514

accumulated amortization – 74 – 56

Buildings 136,121 134,121

accumulated depreciation – 32,501 – 29,989

technical plant and machinery 15,925 12,163


other plant, operating and office equipment 13,193 10,700


Net Carrying Amount 115,659 113,511

the obligations of the group under finance leasing agreements are secured by property liens on the leased assets.

the minimum lease payments for liabilities under finance leasing agreements have the following maturities:

the two largest finance leasing agreements relate to the real estate for the hospital Care division‘s life facility (carrying amount € 37.3 million), and the aesculap division‘s Benchmark factory (carrying amount € 19.1 million).

Dec. 31, 2010 Dec. 31, 2009

Nominal value

€ ’000

Discount

€ ’000

NPv

€ ’000

Nominal value

€ ’000

Discount

€ ’000

NPv

€ ’000

less than one year 12,581 5,034 7,547 11,716 5,028 6,688

Between one and five years 41,980 16,535 25,445 41,080 16,847 24,233

over five years 73,098 14,895 58,203 81,323 17,725 63,598

127,659 36,464 91,195 134,119 39,600 94,519


17 Financial Investments Recognized using the Equity Method of Accounting and Other Financial Investments

the group’s holdings in its major associated companies are as follows:

Country €

Assets € ’000


sales € ’000

Profit (loss) € ’000

holding in %

2009

Babolat vs france 73,514 30,934 86,134 5,508 27.9

schölly fiberoptic gmbh germany 29,697 10,800 39,901 2,260 27.9

B. Braun avitum ireland ltd. ireland 1,653 1,016 438 – 2,667 47.0

104,864 42,750 126,473 5,101

2010

Babolat vs france 85,293 35,094 104,532 8,239 27.9

schölly fiberoptic gmbh germany 31,639 10,975 53,634 4,000 27.9

B. Braun avitum ireland ltd. ireland 2,658 2,792 1,315 – 771 47.0

119,590 48,861 159,481 11,468

as of december 31, 2010, the goodwill of holdings in associated companies totaled € 3.7 million (previous year: € 500,000).



102

the following amounts represent the 50 percent share of the group in assets, liabilities, sales, and profit in joint ventures:

Dec. 31, 2010€ ’000

Dec. 31, 2009€ ’000

Assets

non-current assets 1,626 1,582

Current assets 3,149 1,700

4,775 3,282

liabilities

non-current provisions and liabilities 175 77

Current provisions and liabilities 3,221 1,957

3,396 2,034

Net Assets 1,379 1,248

2010€ ’000

2009€ ’000

sales 8,616 8,054

operating profit 150 156

profit after tax 135 111

Cost of Acquisition

Financial Investments

(Equity Method)

€ ’000

Other holdings

€ ’000

loans to Companies

in which the Group holds an Interest

€ ’000

Non-current Financial Assets

€ ’000

Other loans

€ ’000

Total

€ ’000

january 1, 2009 23,935 10,858 87 832 1,671 37,383

foreign Currency translation 0 0 0 0 10 10

additions to scope of Consolidation 7 0 0 0 265 272

removed from scope of Consolidation – 2,439 – 5,548 0 0 0 – 7,987

additions 942 6,277 0 7 3,870 11,096

disposals 0 – 72 – 87 0 – 727 – 886

fair value adjustments 0 0 0 58 – 138 – 80

December 31, 2009 / january 1, 2010 22,445 11,515 0 897 4,951 39,808

foreign Currency translation 0 0 0 0 30 30

additions to scope of Consolidation 0 0 0 0 200 200

removed from scope of Consolidation 0 – 12,420 0 0 0 – 12,420

additions 7,099 18,684 0 25 30 25,838

disposals 0 – 878 0 – 12 – 1,029 – 1,919

fair value adjustments 0 0 0 0 36 36

December 31, 2010 29,544 16,901 0 910 4,218 51,573

accumulated depreciation 2010 999 0 0 0 20 1,019

accumulated depreciation 2009 999 0 0 0 20 1,019

Carrying Amounts December 31, 2010 28,545 16,901 0 910 4,198 50,554

Carrying Amounts December 31, 2009 21,446 11,515 0 897 4,931 38,789

depreciation in the fiscal year 0 0 0 0 0 0


18 Trade Receivables

age analysis of trade receivables

a) non-impaired trade receivables

a significant proportion of the non-impaired and overdue trade receivables are attributable to receivables from social security providers, government or government-sponsored companies. the increase in receivables more than 180 days overdue is primarily attributable to receivables from state-run hospitals in italy, spain, and portugal.

b) trade receivables for which specific impairments have been established

with regard to receivables that are neither impaired nor in arrears, there were no indications as of the reporting date that the debtors in question are not able to meet their payment obligations.

Total Not yet due

Overdue up to 30 days

Overdue 31 – 60 days



Overdue more than 180 days

Dec. 31, 2009

trade receivables 762,563 525,588 72,219 34,816 29,210 53,363 47,367

Dec. 31, 2010


Total Not yet due

Overdue up to 30 days




Overdue more than 180 days

Dec. 31, 2009


impairment provisions – 29,634 – 2,178 – 1,164 – 829 – 729 – 2,017 – 22,717

Carrying Amount 27,547 5,984 1,279 493 493 844 18,454

Dec. 31, 2010

trade receivables 47,627 12,715 2,255 1,035 800 4,207 26,615

impairment provisions – 29,247 – 2,734 – 1,626 – 600 – 487 – 2,264 – 21,536

Carrying Amount 18,380 9,981 629 435 313 1,943 5,079



104

impairments on trade receivables have changed as follows:

2010€ ’000

2009€ ’000

amount of impairment provisions as of january 1 33,412 30,901

Currency translation 2,292 365

additions 10,995 11,667

utilizations – 7,417 – 7,315

releases – 5,859 – 2,206

Amount of Impairment Provisions as of December 31 33,423 33,412

of which specific 29,247 29,634

of which general 4,176 3,778

the total amount of additions consists of specific and general provisions for impairment.

the following table shows expenses for the complete derecognition of trade receivables and income from pay-ments received against previously derecognized trade receivables:

2010€ ’000

2009€ ’000

expenses for Complete derecognition of trade receivables 5,813 5,212

income from receivables previously derecognized 35 26

fair value of collateral received totaled € 3.8 million (previous year: € 5.4 million). the collateral is mainly pay-ment guarantees, with terms extending to december 2011.

with regard to trade receivables, there is no concentration with respect to individual customers, currencies, or geographic attributes. the largest receivable from a single customer is equivalent to approximately 0.6 percent of all trade receivables reported.

as of december 31, 2010, B. Braun group companies had sold receivables worth € 70.8 million under an asset-backed securities (aBs) program with a maximum volume of € 100 million (previous year: € 71.3 million). the basis for this transaction is the transfer of trade receivables of individual B. Braun subsidiaries to a special purpose entity within the framework of an undisclosed assignment. the special purpose entity (spe) is not consolidated because under ias 27.12 ff, B. Braun neither holds a stake in it nor is able to control its management or finances in order to benefit from its activities. nor is consolidation mandatory under siC-12, as B. Braun does not bear the majority of the spe’s risks and rewards. the requirements for a receivables transfer according to ias 39.15 ff are met, since the receivables are transferred according to ias 39.18 a). verification in accordance with ias 39.20 shows that substantially all risks and rewards were neither transferred nor retained. the prevailing opinion is that B. Braun has retained control over the receivables because they were transferred in an undisclosed assign-ment and B. Braun will continue to service those receivables in the future. therefore, according to ias 39.30, B. Braun’s continuing involvement must be recognized. this includes, firstly, the maximum amount that B. Braun could conceivably have to pay back under the senior and third-ranking default guarantee assumed (€ 1.6 million, previous year: € 1.6 million). secondly, the maximum expected interest payments until payment is received for the carrying amount of the receivables transferred are recognized in the statement of financial position (€ 483,000, previous year: € 414,000). the fair value of the guarantee/interest payments to be assumed has been estimated at € 169,000 (previous year: € 126,000), taken through the statement of income and recognized under other liabilities.


19 Other Assets

Dec. 31, 2010 Dec. 31, 2009

Residual Term < 1 year

€ ’000

Residual Term > 1 year

€ ’000

Residual Term < 1 year

€ ’000

Residual Term > 1 year

€ ’000

other tax receivables 40,740 0 37,460 0

receivables from social security providers 1,791 379 1,792 1,277

receivables from employees 4,677 128 3,968 176

advance payments 7,764 0 4,435 0

accruals and deferrals 17,110 3,219 18,790 1,302

72,082 3,726 66,445 2,755

receivables from derivative financial instruments 10,945 20 1,209 17

available-for-sale securities 4,488 0 3,934 0

held for trading securities 11,035 0 8,039 0

held-to-maturity securities 87 0 0 0

other receivables and assets 60,410 45,652 48,996 30,261

86,965 45,672 62,178 30,278

159,047 49,398 128,623 33,033

other receivables mainly comprise loans granted and receivables under leasing agreements.

with regard to other receivables, there were no indications as of the reporting date that the debtors in question will not be able to meet their payment obligations. no material amounts of receivables were overdue or impaired as of the reporting date.

20 Inventories

Dec. 31, 2010€ ’000

Dec. 31, 2009€ ’000

raw materials and supplies 193,062 162,143

provisions – 10,654 – 11,681

Raw Materials and supplies – Net 182,408 150,462

work in progress 144,157 130,698

provisions – 9,987 – 9,388

work in Progress – Net 134,170 121,310

finished products, goods 524,068 494,219

provisions – 60,624 – 57,458

Finished Products, Goods – Net 463,444 436,761

780,022 708,533

as of december 31, 2010, inventories of € 350.0 million (previous year: € 242.3 million) were recognized at net realizable value.

at the end of the fiscal year, the carrying value of inventories pledged as collateral for liabilities was € 9.1 million (previous year: € 9.3 million).



106

21 Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, demand deposits, other short-term highly liquid financial assets with residual maturities of three months or less that are subject to no more than insignificant fluctuations in value, and bank overdraft facilities. in the statement of financial position, utilized bank overdraft facilities are shown under current financial liabilities as amounts due to banks.

Changes in cash and cash equivalents are shown in the Consolidated statement of Cash flows.

22 subscribed Capital

the subscribed capital of B. Braun melsungen ag, which amounted to € 400 million, was increased to € 600 million on april 15, 2010 by converting other retained earnings of € 200 million. this capital increase from retained earnings was performed in accordance with section 207 (2) clause 2 of the german stock Corporation act (aktien gesetz) without the issue of new shares. the subscribed capital of B. Braun melsungen ag consists of 19,404,000 bearer shares without nominal value. each share without nominal value represents a calculated share of € 30.92 of the subscribed capital.

the management Board is authorized, with the consent of the supervisory Board, to increase the subscribed capital by € 100 million by issuing new bearer shares for cash on one or more occasions before december 31, 2013 (authorized capital).

23 Capital Reserves and Retained Earnings

the capital reserve includes the premium from previous capital increases of B. Braun melsungen ag.

retained earnings include past earnings of consolidated companies where these were not distributed, and the consolidated annual net profit, net of the share attributable to non-controlling interests. the statutory reserve included in retained earnings amounts to € 29.4 million.

Changes in Other Provisions

Cash Flow hedge

Reserve

€ ’000

Market value of available-

for-sale securities

€ ’000

Reserve for Currency Translation Differences

€ ’000

Total

€ ’000

january 1, 2009 – 648 25 – 123,283 – 123,906


Changes in fair value of securities 0 32 0 32

Changes in fair value of financial derivatives – 359 0 0 – 359

Changes due to Currency Translation 0 0 10,992 10,992

Total – 359 32 10,992 10,665

December 31, 2009 / january 1, 2010 – 1,007 57 – 112,291 – 113,241


Changes in Fair value of securities 0 – 22 0 – 22

Changes in fair value of financial derivatives 3,403 0 0 3,403

Changes due to Currency translation 0 0 114,164 114,164

Total 3,403 – 22 114,164 117,545

December 31, 2010 2,396 35 1,873 4,304


Changes in the other equity capital components are shown in the statement of Changes in equity.

Claims of shareholders to dividend payments are reported as liabilities in the period in which the corresponding resolution is passed.

24 Non-controlling interests

non-controlling interests relate to third-party interests in the equity of consolidated subsidiaries. they exist in particular at almo-erzeugnisse e. Busch gmbh, Bad arolsen, germany, B. Braun holding ag, emmenbrücke, switzerland, and B. Braun austria ges.m.b.h., maria enzersdorf, austria.

25 Provisions for Pensions and similar Obligations

a) pension obligations

Dec. 31, 2010€ ’000

Dec. 31, 2009€ ’000

provisions for pension obligations 512,563 484,835

Provisions for similar Obligations 765 7,005

513,328 491,840

payments of € 32.6 million are expected in 2011. of this, € 10.7 million relates to contributions to external plans and € 21.9 million to benefits that will be paid to beneficiaries directly by the employer.

the group’s pension obligations relate to commitments under defined contribution and defined benefit plans. for defined contribution plans, the group has no further payment obligations once the contributions have been paid. they are recognized as an operating expense in the amount of the contributions paid. in fiscal 2009, this amount was € 17.7 million (previous year: € 14.8 million).

in addition, the group makes contributions to statutory basic provision plans for employees in many countries (including germany). however, since this covers various forms of social security benefit, no precise statement can be made with regard to the part that solely relates to retirement payments. these expenses are shown under social security contributions, under note 12 personnel expenditures/employees.

employees’ claims under defined benefit plans are based on legal or contractual provisions.

defined benefit plans based on legal regulations consist primarily of benefit obligations outside germany at the time of employment termination and are fulfilled in the form of a capital sum. the benefit amount depends mainly on employees’ length of service and final salaries.

in germany, benefit obligations stemming from contractual provisions primarily consist of annuity payments made in the event of disability, death, or an employee reaching the defined age limit. the main pension plans for employees in germany who joined the company in 1992 or later have a modular form. employees who joined the company before 1992, with a small number of exceptions, received commitments linked to their final salaries. in other countries, benefit obligations from contractual provisions mainly consist of annuities based on length of service and salary.



108

retirement benefits in germany are financed by pension provisions. abroad, existing retirement obligations are partly financed through external pension funds. the liability recognized in the statement of financial position for defined benefit pension plans is the net present value of the defined benefit obligation (dBo) at the reporting date, allowing for future increases, less the fair value of external plan assets at the reporting date, and adjusted for accumulated unrecognized actuarial gains and losses and past-service costs. the defined benefit obligation is calculated using the projected unit credit method. the interest rate used to determine the net present value is usually the yield on prime corporate bonds of similar maturity.

actuarial gains and losses outside the corridor (a maximum of 10 percent of the total obligation and 10 percent of the plan assets) are spread over the active employees’ average remaining working lives and recognized through profit and loss.

past-service costs are amortized on a straight-line basis over the vesting period.

the amount of pension provisions in the statement of financial position is derived as follows:

Dec. 31, 2010€ ’000

Dec. 31, 2009€ ’000

net present value of funded pension obligations 236,917 202,541

fair value of external plan assets – 184,651 – 163,268

Excess Cover/shortfall 52,266 39,273

net present value of unfunded pension obligations 565,443 514,330

unrealized actuarial gains (+) / losses (–) – 103,838 – 68,761

unrecognized past-service Costs – 1,308 – 1,004

effect of asset value limitation 0 997

Pension Provision (Net) 512,563 484,835

of which assets 3,491 3,763

of which liabilities 516,054 488,598

the change in pension provisions in 2010 and 2009 was as follows:

2010€ ’000

2009€ ’000

pension provision (net) as of january 1 484,835 464,082

foreign Currency translation 1,414 331

Changes in scope of Consolidation 306 0

transfers 5,563 0

payments – 33,173 – 29,647

pension expense 53,618 50,069

Pension Provision (Net) as of December 31 512,563 484,835


pension expenses included in the statement of income consist of the following:

2010€ ’000

2009€ ’000

Current service Cost 23,591 18,868

interest expense 37,228 36,569

expected income on plan assets – 8,450 – 7,731

amortization of actuarial gains and losses 1,515 1,337

amortization of past service Costs 123 47

expense (+) / income (–) from plan settlements and Curtailments 681 0

effect of asset value limitation – 1,070 979

Pension Expense on Defined benefit Plans 53,618 50,069

pension expense on defined Contribution plans 17,664 14,757

Pension Expense 71,282 64,826

Current service costs, expenses from plan settlements and curtailments, amortized actuarial gains or losses, and past-service costs are included in staff costs; the accrual of interest on the expected pension obligations less the expected return on external plan assets is included under interest expense.

experience adjustments to actuarial gains and losses were as follows:

2010€ ’000

2009€ ’000

2008€ ’000

2007€ ’000

2006€ ’000

experience gains (+) / losses (–) on pension obligations 1,863 3,345 – 2,996 – 5,889 – 1,138

experience gains (+) / losses (–) on plan assets 4,781 4,849 – 23,776 – 4,179 300

pension benefit obligations and assets are reconciled as follows:

Dec. 31, 2010€ ’000

Dec. 31, 2009€ ’000

net present value of obligation at start of year 716,871 635,906

Current service Costs 23,591 18,868

interest expense 37,228 36,569

employee Contributions 2,539 2,504

actuarial gain (+) / loss (–) 39,441 53,508

Currency effects 23,200 – 918

total Benefits paid – 31,362 – 29,549

past service Costs 223 – 17

effect of Changes to the scope of Consolidation 306 0

effect of transfers 6,834 0

effect of plan settlements – 15,609 0

effect of plan Curtailments – 902 0

Net Present value of Obligation at End of year 802,360 716,871



110

effect of plan settlements relates primarily to a change of the pension scheme in switzerland.

Dec. 31, 2010€ ’000

Dec. 31, 2009€ ’000

market value of plan assets at start of year 163,268 148,860

expected return on external plan assets 8,450 7,731

Currency effects 18,141 – 774


employer Contributions 11,369 10,941

employee Contributions 2,539 2,504

fund payments – 9,558 – 10,843

effect of Changes to the scope of Consolidation and transfers 1,270 0

effect of plan settlements – 15,609 0

Market value of Plan Assets at End of year 184,651 163,268

the following table shows the actual return on external plan assets:

Dec. 31, 2010€ ’000

Dec. 31, 2009€ ’000

expected return on external plan assets 8,450 7,731


Actual Return on External Plan Assets 13,231 12,580

the plan assets consist of the following:

Dec. 31, 2010%

Dec. 31, 2009%

equities and similar securities 33 31

Bonds and other fixed-income securities 6 5

real estate 1 1

other assets 60 63

100 100

the calculation of pension obligations was based on the following assumptions:

Dec. 31, 2010%

Dec. 31, 2009%

discount rate 4.7 5.1

future salary increases 2.9 2.9

future pension increases 1.8 1.8


pension expense was calculated using the following assumptions:

Dec. 31, 2010%

Dec. 31, 2009%

discount rate 5.1 5.7

future salary increases 2.9 3.1

future pension increases 1.8 2.0

expected return on external plan assets 5.0 5.1

the percentages shown are weighted average assumptions. for the euro zone, a uniform discount rate of 5.0 percent (previous year: 5.25 percent) was applied to determine the pension liability.

the heubeck mortality tables 2005 g served as the basis for measuring german pension obligations, based on age and gender-specific fluctuation probabilities. the pension obligations of foreign subsidiaries are assessed on the standard basis for the country in question.

the expected long-term return on external plan assets is determined for each asset class based on capital market surveys and yield forecasts. 60 percent of plan assets fall into the “other assets” category, primarily insurance policies. the published or anticipated returns of the insurance companies in question were used to determine the anticipated long-term return on those plan assets.

the pension obligations and plan assets performed as follows:

2010€ million

2009€ million

2008€ million

2007€ million

2006€ million

net present value of unfunded pension obligations 565.5 514.3 450.5 463.3 469.9

net present value of funded pension obligations 236.9 202.5 185.5 173.3 188.4

plan assets – 184.7 – 163.2 – 148.9 – 153.7 – 157.1

Funding status 617.7 553.6 487.1 482.9 501.2

b) termination Benefits Benefits upon termination of employment are payable if an employee is laid off prior to the normal retirement date or if an employee voluntarily agrees to a redundancy payment. the group recognizes termination benefits when there is a proven obligation to either terminate the employment of a current employee in accordance with a detailed formal plan that cannot be rescinded or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits coming due more than 12 months after the reporting date are recognized at net present value.



112

26 Other Provisions

the major categories of provisions changed as follows:

Other Non-current Provisions

Personnel Expenditures

€ ’000

uncertain liabilities

€ ’000

Other

€ ’000

Total

€ ’000

january 1, 2009 40,687 10,331 3,664 54,682

foreign Currency translation – 127 1,235 7 1,115

utilization – 1,633 – 1,889 – 205 – 3,727

release – 71 – 1,975 – 164 – 2,210

additions 7,067 4,968 1,650 13,685

December 31, 2009 / january 1, 2010 45,923 12,670 4,952 63,545

foreign Currency translation 446 878 133 1,457

transfers 958 0 4,610 5,568

utilization – 3,790 – 1,103 – 2,071 – 6,964

release – 157 – 634 – 278 – 1,069

additions 7,907 3,043 3,232 14,182

December 31, 2010 51,287 14,854 10,578 76,719

Other Current Provisions

Personnel Expenditures

€ ’000

warranties

€ ’000

uncertain liabilities

€ ’000

Other

€ ’000

Total

€ ’000

january 1, 2009 5,443 4,593 14,977 19,819 44,832

foreign Currency translation 613 – 41 – 407 547 712

Changes in scope of Consolidation 0 0 0 28 28

utilization – 1,904 – 1,994 – 1,884 – 15,542 – 21,324

release – 2,332 0 – 296 – 250 – 2,878

additions 6,793 2,575 1,011 18,487 28,866

December 31, 2009 / january 1, 2010 8,613 5,133 13,401 23,089 50,236

foreign Currency translation 0 150 792 317 1,259

transfers – 5,338 0 0 – 4,610 – 9,948

Changes in scope of Consolidation 0 0 0 0 0

utilization – 3,257 – 2,312 – 11,259 – 14,583 – 31,411

release – 18 – 133 – 742 – 891 – 1,784

additions 1,120 2,828 3,387 16,067 23,402

December 31, 2010 1,120 5,666 5,579 19,389 31,754

a total of € 5.8 million was transferred in the reporting year due to changes in maturities.

non-current provisions for personnel expenditures primarily consist of provisions for partial retirement plans and anniversary payments.


provisions of usd 14.7 million for uncertain liabilities relating to the ongoing investigation by the us department of justice into alleged improper marketing and pricing practices were utilized in the reporting year. the provision related to this risk was also increased by usd 2.0 million.

other provisions mainly consist of provisions for other obligations in the area of staffing and social services, guarantees, possible losses from contracts, legal and consulting fees, and a number of identifiable individual risks. this item also includes actuarial provisions and provisions for not yet settled insurance claims of revium rückversicherung ag, melsungen.

27 Financial liabilities

Dec. 31, 2010€ ’000

Dec. 31, 2009€ ’000

Non-current liabilities

profit participation rights 63,308 46,006

liabilities to Banks 604,517 545,267

liabilities under finance leases 45,438 47,213

liabilities under finance leases with affiliated Companies 38,199 40,301

liabilities under loans from non-banks 40,499 21,210

other financial liabilities 0 670

791,961 700,667

Current liabilities

profit participation rights 4,048 2,709

liabilities to Banks 343,020 223,506

liabilities under finance leases 5,456 5,030

liabilities under finance leaseswith affiliated Companies 2,102 1,975

liabilities under loans from non-banks 63,349 68,684

liabilities under Bills of exchange 13,894 80

other financial liabilities 9,619 3,756

441,488 305,740

Total Financial liabilities 1,233,449 1,006,407

other financial liabilities include € 4.1 million of advance payments received for orders (previous year: € 3.9 million).

term structure of financial liabilities:

Dec. 31, 2010€ ’000

Dec. 31, 2009€ ’000

due within one year 441,488 305,740

due within one to five years 571,109 562,498

due in over five years 220,852 138,169

1,233,449 1,006,407



114

under the B. Braun incentive plan, B. Braun melsungen ag offers a series of profit participation rights, which may be acquired by eligible managers on a voluntary basis. with the issuance of profit participation rights, the company grants employees profit-sharing rights in the form of participation in the profit and losses of B. Braun melsungen ag in return for their investment of capital. each profit participation right has a ten-year term. interest on the rights is linked to the dividends paid to share-holders in B. Braun melsungen ag, and the repayment amount is linked to the group’s equity.

as an incentive for the investment made by employees, the company offers an entitlement bonus of 25 percent in the form of additionally assigned participation rights. the entitlement bonus is paid to employees two years after their investment. the additional participation rights are recognized in the corresponding periods through profit and loss.

as of december 31, 2010, a total of 672,861 rights had been issued. their years of issue are as follows:

year of Issue Number

2001 32,950

2002 49,625

2003 62,001

2004 59,973

2005 72,451

2006 72,127

2007 80,467

2008 93,927

2009 69,123

2010 80,217

672,861

together with several subsidiaries, B. Braun melsungen ag has entered into a syndicated loan facility of € 400 million with 15 banks. the loan may be utilized by the borrowers as a revolving credit in eur, or alternatively in usd, Chf, gBp, or jpy. the loan bears a variable interest rate based on euribor and libor for the currency in question. in addition, the loan agreement allows for an adjustment to the interest margin depending on the B. Braun group’s level of debt. the amount of the loan will decline to € 381 million in on may 31, 2011 and to € 335 million in the final year. the term of the loan expires on may 31, 2013.

aesculap ag also entered into a loan with a development bank in 2009. the loan consists of two tranches total-ing usd 80 million. Both tranches are to be repaid upon maturity in 2016 and have a fixed interest rate. the purpose of the loan is to refinance certain research and development projects, expand existing production facilities and construct a new laboratory in germany. B. Braun melsungen ag is a guarantor under this loan.


as of december 31, 2010, the group had unutilized credit lines totaling € 861.9 million (previous year: € 982.7 million).

loans from non-banks are unsecured. interest rates on eur loans are between 0.30 percent for overnight loans and 5.50 percent per annum for non-current loans, depending on the length of the interest-rate lock-in period.

the carrying amounts of the interest-bearing liabilities are as follows for the currencies below

Dec. 31, 2010€ ’000

Dec. 31, 2009€ ’000

eur 910,236 763,419

usd 211,723 139,692

other 111,490 103,296

1,233,449 1,006,407

liabilities from finance leasing are recognized at the net present value of the leasing payments. these are secured by property liens on leased property. of the other liabilities, € 13.2 million (previous year: € 11.3 million) are covered by property liens.

liabilities related to loans from non-banks include loans from B. Braun melsungen ag shareholders in the amount of € 45.7 million (previous year: € 41.0 million).

the carrying amount of financial assets used as collateral for liabilities or contingent liabilities was € 31,000 (previous year: € 573,000). the collateral provided was assigned receivables.



116

the following table shows the contractually agreed upon (undiscounted) interest and repayments on financial liabilities, other financial liabilities, and derivative financial instruments with negative fair value:

Dec. 31, 2009 Cash Outflows within one year

Cash Outflows within one to two years

Cash Outflows within two to five years

Cash Outflows within five to ten years

Cash Outflows after ten years

Carrying Amounts € ’000

Interest € ’000

Repayments € ’000

Interest € ’000


Interest € ’000


Interest € ’000


Interest € ’000


profit participation rights 48,715 140 2,709 132 2,466 336 13,479 259 30,061 0 0

liabilities to Banks 768,773 31,679 223,506 24,276 32,303 40,006 474,352 2,050 35,604 0 3,008

liabilities under finance leases 52,243 2,437 5,030 2,243 4,517 5,581 10,435 5,918 13,788 1,986 18,473

liabilities under finance leases to associated Companies 42,276 2,596 1,945 2,469 2,102 6,562 7,152 7,529 15,327 2,291 15,720

liabilities from Borrowing from non-banks 89,894 2,733 68,684 1,053 65 1,832 10,175 522 10,516 13 454

liabilities from aBs transactions and other financial liabilities 32,146 0 32,146 0 0 0 0 0 0 0 0

trade accounts payable 210,313 10 209,139 0 835 0 339 0 0 0 0

liabilities from derivative financial instruments 9,923 998 226,076 249 0 0 0 0 0 0 0

Dec. 31, 2010


liabilities to Banks 947,537 51,331 343,020 25,857 271,614 21,437 226,851 2,038 106,052 0 0



liabilities from Borrowing from non-banks 103,848 2,951 63,349 1,616 5,261 3,442 16,104 1,025 18,248 1 886




all instruments held at december 31, 2010 and for which payments had already been contractually agreed upon are included. amounts in foreign currency were each translated at the reporting date. the variable interest pay-ments arising from the financial instruments were calculated using the last interest rates fixed before december 31, 2010. financial liabilities that can be repaid at any time are always assigned to the earliest possible period.


the following table shows the contractually agreed upon (undiscounted) interest and repayments on financial liabilities, other financial liabilities, and derivative financial instruments with negative fair value:

Dec. 31, 2009 Cash Outflows within one year

Cash Outflows within one to two years

Cash Outflows within two to five years

Cash Outflows within five to ten years

Cash Outflows after ten years

Carrying Amounts € ’000

Interest € ’000


Interest € ’000


Interest € ’000


Interest € ’000


Interest € ’000



liabilities to Banks 768,773 31,679 223,506 24,276 32,303 40,006 474,352 2,050 35,604 0 3,008



liabilities from Borrowing from non-banks 89,894 2,733 68,684 1,053 65 1,832 10,175 522 10,516 13 454




Dec. 31, 2010


liabilities to Banks 947,537 51,331 343,020 25,857 271,614 21,437 226,851 2,038 106,052 0 0



liabilities from Borrowing from non-banks 103,848 2,951 63,349 1,616 5,261 3,442 16,104 1,025 18,248 1 886




all instruments held at december 31, 2010 and for which payments had already been contractually agreed upon are included. amounts in foreign currency were each translated at the reporting date. the variable interest pay-ments arising from the financial instruments were calculated using the last interest rates fixed before december 31, 2010. financial liabilities that can be repaid at any time are always assigned to the earliest possible period.



118

28 Additional Disclosures on Financial Instruments

Carrying amount and fair value by measurement category

Category under

IAs 39

Carrying amount

Dec. 31, 2010

€ ’000

Fair value

Dec. 31, 2010

€ ’000

Carrying amount

Dec. 31, 2009

€ ’000

Fair value

Dec. 31, 2009

€ ’000

Assets

trade receivables lar 933,543 933,543 790,110 790,110

other receivables lar 110,260 110,260 84,188 84,188

held-to-maturity financial assets htm 87 87 0 0

available-for-sale financial assets afs 5,398 5,398 4,831 4,831

other interests afs 16,901 n, a, 11,515 n, a,

financial assets held for trading fahft 11,035 11,035 8,039 8,039

derivatives not in a hedge fahft 10,965 10,965 1,226 1,226

Cash and Cash equivalents lar 34,369 34,369 48,756 48,756

liabilities

profit participation rights flaC 67,356 67,356 48,715 48,715

liabilities to Banks flaC 947,537 969,617 768,773 777,250

liabilities under finance leases n. a. 91,195 93,982 94,519 97,214

liabilities under Borrowings from non-banks flaC 103,848 104,692 89,894 89,709

other financial liabilities flaC 19,460 19,460 559 559

trade accounts payable flaC 216,757 216,757 210,313 210,313

other liabilities flaC 179,768 179,768 168,958 168,958

derivatives not in a hedge flhft 3,069 3,069 7,294 7,294

derivatives in a hedge n. a. 3,250 3,250 2,629 2,629

summary by IAs 39 Measurement Category:

loans and receivables lar 1,078,172 1,078,172 923,054 923,054

held-to-maturity financial assets htm 87 0 0 0

available-for-sale financial assets afs 22,299 5,398 16,346 4,831

financial assets held for trading fahft 22,000 22,000 9,265 9,265

financial liabilities measured at amortized Cost flaC 1,534,726 1,557,650 1,287,212 1,295,504

financial liabilities held for trading flhft 3,069 3,069 7,294 7,294

laR loans and receivables | htM held-to-maturity investments | Afs available-for-sale financial assets | FAhfT financial assets held for trading

FlAC financial liabilities measured at amortised cost | FlhfT financial liabilities held for trading


the available-for-sale financial assets comprise:

Equities and similar securities Dec. 31, 2010€ ’000

Dec. 31, 2009€ ’000

listed securities 5,398 4,831

of which non-current 910 897

these are reported under other financial investments and other financial assets. no available-for-sale financial assets were impaired in 2010 or 2009.

other receivables include other receivables and other financial assets in the amount of € 113.8 million and other advances in the amount of € 4.2 million.

the maximum credit risk for each category of financial assets corresponds to its carrying amount.

Cash and cash equivalents, trade receivables, and other receivables have predominantly short residual terms, thus their carrying amounts are close to fair value as of the reporting date.

the fair values of other non-current liabilities and held-to-maturity financial investments with residual terms of over one year correspond to the net present values of the payments associated with the assets, taking account of the current interest rate parameters in each case, which reflect market-based changes in terms and in expec-tations.

trade accounts payable and other liabilities regularly have short residual terms; the values reported on the statement of financial position are close to fair value.

the fair values of amounts due to banks and other lenders, borrower’s note loans, and other financial liabilities are calculated as the net present value of the payments associated with the liabilities, based on the relevant yield curve in each case.

to date, the group has not exercised the option of designating financial assets and liabilities upon initial recog-nition as financial liabilities measured at fair value through profit and loss.



120

the table below shows financial instruments where subsequent measurement is at fair value. these are catego-rized into levels 1 to 3, depending on the extent to which fair value can be measured:

– level 1 – measurement at fair value based on (unadjusted) quoted prices on active markets for identical financial assets or liabilities.

– level 2 – measurement at fair value based on parameters, which are not quoted prices for assets or liabilities as in level 1, but which are either directly derived from them (i.e., as prices) or indirectly derived from them (i.e., derived from prices).

– level 3 – measurement at fair value using models that include parameters not based on observable market data to value assets and liabilities.

level 1 € ’000

level 2 € ’000

level 3 € ’000

Total € ’000

Dec. 31, 2009

financial assets measured at fair value

through profit and loss

derivative financial assets 0 1,226 0 1,226

available-for-sale financial assets securities 4,831 0 0 4,831



derivative financial liabilities (no hedge) 0 – 7,294 0 – 7,294

derivative financial liabilities (hedging) 0 – 2,629 0 – 2,629

4,831 – 8,697 0 – 3,866

Dec. 31, 2010



derivative financial assets 0 10,965 0 10,965

available-for-sale financial assets securities 5,398 0 0 5,398



derivative financial liabilities (no hedge) 0 – 3,069 0 – 3,069

derivative financial liabilities (hedging) 0 – 3,250 0 – 3,250

5,398 4,646 0 10,044

there were no moves between levels 1 and 2 in the period under review.


29 Trade Accounts Payable and Other liabilities

Dec. 31, 2010€ ’000

Dec. 31, 2009€ ’000

Non-current liabilities

trade accounts payables 1,059 1,174

liabilities to social security providers 610 300

liabilities to employees, management and shareholders 3,892 1,855

deferred income and accruals 194 157

4,696 2,312

other liabilities 6,016 6,705

subtotal Other liabilities 10,712 9,017

Current liabilities

trade accounts payables 215,698 209,139

liabilities to social security providers 21,822 20,191

liabilities to employees, management and shareholders 190,649 172,680

deferred income and accruals 8,790 6,028

other tax liabilities 70,353 47,111

291,614 246,010

liabilities from derivative financial instruments 6,319 9,923

other liabilities 173,752 162,253

180,071 172,176

subtotal Other liabilities 471,685 418,186

Total liabilities 699,154 637,516

the group has designated payer interest rate swaps (“pay fix – receive variable”) as cash flow hedges in order to hedge the variable interest payments on a nominal credit volume of € 30 million. Changes in the cash flows of the underlying transaction resulting from changes in the reference interest rate are compensated for by the changes in the cash flows of the interest rate swap. the hedging measures are designed to hedge the cash flow from bank liabilities against an increase in the reference interest rate. Credit risks are not covered through the hedge. the related cash flows are likely to occur through fiscal year 2013. the effectiveness of hedges was measured prospectively and retrospectively using the dollar offset method. all hedges were effective in the fiscal year. the effective portion of changes in the fair value of designated interest rate swaps is recognized in equity and amounts to a total of € 255,000 (previous year: € – 484,000). the ineffective portion of changes in value is recognized directly in the statement of income under net financial income and is € – 40,000 (previous year: € 154,000). amounts accrued under equity are transferred to the statement of income as income or ex-pense in the period in which the hedged underlying transaction is recognized in the statement of income.

in 2009, a hedge on a payer interest rate swap with a nominal credit volume of € 10 million was unwound and the cumulative loss was retained in equity until the originally hedged transaction occurs. at that time, the loss is transferred to the statement of income using the effective interest rate method. in 2010, an expense of € – 143,000 (previous year: € – 35,000) was transferred from equity to the statement of income from the hedge unwound.

other liabilities mainly include remaining payments related to company acquisitions, liabilities from aBs trans-actions, bonus obligations, and liabilities related to outstanding invoices.



122

additional information30 Contingent liabilities

liabilities result exclusively from obligations to third parties and consist of:

Dec. 31, 2010€ ’000

Dec. 31, 2009€ ’000

uncertain liabilities 680 3,195

guarantees 4,710 3,953

warranties 22,997 32,003

Contractual performance guarantees 32,932 27,173

Collateral for third-party liabilities 0 5

61,319 66,329

all cases relate to potential future obligations, which may arise upon the occurrence of corresponding events and entirely are uncertain as of the reporting date.

31 Other Financial liabilities

the group leases numerous office buildings and warehouses under non-terminable operating lease agreements. these agreements have varying terms and conditions, escalation clauses, and renewal options.

future minimum lease payments expected in connection with non-terminable sub-leases on the reporting date, amount to € 8.7 million (previous year: € 7.8 million).

the group also leases manufacturing facilities and machinery under terminable operating lease agreements. leasing liabilities in relation to moveable assets at the life facility are € 15.2 million annually until 2011, € 8.7 million in 2012, € 3.2 million until 2014, and € 2.8 million in 2015.

the minimum payments of non-discounted future lease payments under operating lease and rental agreements are due as follows:

Dec. 31, 2010€ ’000

Dec. 31, 2009€ ’000

Obligations under Rental and leasing Agreements



due in over five years 29,731 34,170

185,965 195,020

obligations from the acquisition of intangible assets 0 12

obligations from the acquisition of property, plant and equipment 128,418 27,478

Total 314,383 222,510


A D D I T I O N A l I N F O R M A T I O N

some group companies enter into sale and leaseback agreements with B. Braun holding gmbh & Co. Kg as part of their operating activities. these agreements are intended to finance sales, not to realize gains in advance.

the portion of total liabilities under rental and lease agreements accounted for by liabilities under sale and leaseback agreements is provided in the table below:

Dec. 31, 2010€ ’000

Dec. 31, 2009€ ’000

obligations under sale and leaseback agreements



due in over five years 0 0

11,116 16,761

during the normal course of business, B. Braun is subject to potential obligations stemming from lawsuits and enforced claims. estimates of possible future liabilities of this kind are uncertain. B. Braun anticipates no material negative consequences for the economic or financial situation of the group.

32 Financial Risk Management

financial risk factorsthe group’s activities expose it to a variety of financial risks. these include currency, interest rate, credit, and liquidity risks. the group’s policy strives to minimize these risks via systematic risk management, which involves the use of derivative financial instruments.

risk management is performed centrally by group treasury in accordance with policies approved by the manage-ment Board. group treasury identifies, measures, and hedges financial risks in close cooperation with the group’s operating units. the management Board provides written principles for group-wide risk management together with written policies covering specific areas such as foreign exchange, interest rate, and credit risk and the use of derivative and non-derivative financial instruments.

a) market riskforeign exchange riskthe group operates internationally and is therefore exposed to currency risk arising from fluctuations in the exchange rates between various foreign currencies, primarily the us dollar. Currency risks arise from expected future transactions, and assets and liabilities reported in the statement of financial position. risk arises when future transactions or assets or liabilities recognized in the statement of financial position are denominated in a currency that is not the functional currency of the company. the group uses forward contracts to hedge against such risks resulting from expected future transactions and in relation to assets and liabilities reported in the statement of financial position.

the group’s risk management policy is to hedge up to 60 percent of the net cash flow in usd, Chf, gBp, and jpy expected over the next fiscal year on a continuous basis.

124

if the euro had gained or lost 10 percent against the us dollar as of december 31, 2010, profit before taxes – with all other variables remaining constant – would have been approximately € 11.8 million higher or lower for the full year (previous year: € 15.3 million). this would mainly have been attributable to gains/losses from foreign currency translation relating to us dollar-based loans and trade receivables. the remaining components of equity would have been approximately € 31.7 million higher or lower (previous year: € 25.7 million).

interest rate riskthe group’s interest rate risk stems from non-current interest-bearing liabilities. as the group has no significant interest-bearing assets, changes in market interest rates affect its income and operating cash flow primarily via their impact on its interest-bearing liabilities. the liabilities with variable interest rates expose the group to cash flow interest rate risk. fair value interest rate risk arises from fixed-interest liabilities. group policy is to maintain approximately 50 percent of its borrowings in fixed-rate instruments.

the group hedges its cash flow interest rate risk using interest rate swaps. under these interest rate swaps, the group agrees with other parties to exchange, at specified intervals, the difference between fixed and variable interest rates derived from the agreed principal amounts. interest rate swaps of this nature have the economic effect of converting variable-rate into fixed-rate loans. in addition, the group borrows at variable rates and swaps these into fixed rates.

if market interest rates had been 100 basis points higher or lower as of december 31, 2010, profit before taxes – with all other variables remaining constant – would have been approximately € 4.1 million lower or higher for the full year (previous year: € 0.2 million). this would have been mainly attributable to higher or lower in-terest expense for variable-rate interest-bearing financial liabilities. the other components of equity would have changed only slightly.

b) Credit riskthe group has no significant concentrations of credit risk related to trade receivables. it has organizational guidelines that ensure that products are sold only to customers with a good payment history. derivatives contracts and investment transactions are only entered into with financial institutions that have excellent credit ratings.

c) liquidity riskprudent liquidity risk management includes maintaining sufficient reserves of cash, as well as ensuring the availability of funding through an adequate amount of committed credit facilities. due to the dynamic nature of the environment in which the group operates, group treasury aims to maintain the necessary flexibility in funding by ensuring sufficient unutilized credit lines are available.

Capital risk managementthe group’s capital management seeks to ensure continuation as a thriving, independent family-run company, in order to guarantee that shareholders continue to receive dividends and other interested parties receive the amounts owed them, as well as maintaining an optimal equity structure to reduce the cost of capital.

as in 2009, the strategy of the group in 2010 was to significantly exceed the equity ratio by at least 25 percent that was agreed upon under the terms of the syndicated loan.



the equity ratio as of december 31, 2010 and december 31, 2009, as calculated in the manner prescribed in the syndicated loan agreement, was as follows:

2010€ ’000

2009€ ’000

equity 1,984,027 1,620,036

goodwill acquired after december 31, 2005 – 56,732 – 54,447

adjusted net equity 1,927,295 1,565,589

total assets 4,686,074 3,975,150

Equity Ratio in % 41.1 39.4

derivative financial instrumentsfair value of financial derivatives is calculated using valuation models. the fair value of interest rate swaps is calculated from the net present value of estimated future cash flows using the relevant yield curve on the reporting date. the fair value of forward foreign exchange contracts is calculated based on forward exchange rates on the reporting date.

for non-current liabilities, stock exchange prices or otC prices for similar instruments are used. other valuation models such as the dCf method are used to determine the fair value of the remaining financial instruments.

Changes in the fair value of derivative financial instruments that represent economically effective hedges under the group strategy are recognized through profit and loss, unless they are used in hedge accounting. in these cases, any fair value changes are recognized directly in equity. the fair value changes in hedging instruments more or less match the fair value changes in the hedged underlying transactions.

the fair values of forward foreign exchange contracts are based on current european Central Bank reference exchange rates, adjusted for forward premiums or discounts. Currency options are valued based on quoted market prices or recognized option pricing models. market values of interest rate hedging instruments are calculated using discounted forecast future cash flows. market rates are applied for the remaining term of the derivatives in question.

Nominal volume Residual Term > 1 year Fair value

Dec. 31, 2010T€

Dec. 31, 2009T€

Dec. 31, 2010T€

Dec. 31, 2009T€

Dec. 31, 2010T€

Dec. 31, 2009T€

forward

foreign exchange

Contracts 524,266 337,401 312 702 6,961 – 4,293

Currency options 62,452 60,825 0 60,825 – 2,771 – 3,964

embedded derivatives 7,600 7,800 0 0 379 – 440

594,318 406,026 312 61,527 4,569 – 8,697

depending on the fair value on the reporting date, derivative financial instruments are included under other assets (if fair value is positive) or other liabilities (if fair value is negative).

126

derivative financial instruments held for trading are recognized as current assets or liabilities. the total fair value of a derivative hedging instrument is classified as a non-current asset/liability if the residual term of the hedged instrument is more than 12 months; otherwise, it is classified as a current asset/liability.

see note 29 regarding cash flow hedges recognized under other liabilities.

the group designates forward foreign exchange contracts to hedge future foreign currency income and payments from the operating business of the B. Braun group that are not denominated in the functional currency and are expected to arise with high probability. the purpose of the hedges is to reduce the volatility of foreign exchange income and payments (and their measurement) with respect to foreign exchange risk. the effectiveness of hedges is measured prospectively using the critical terms match method and retrospectively using the dollar-offset method.

as of december 31, 2010, the group had designated forward foreign exchange contracts with a net fair value of € 4.4 million (previous year: € 0) as cash flow hedges. all hedges were effective within the range specified under ias 39.

gains of € 8.4 million and losses of € 1.6 million (previous year: € 0 in both instances) arising from changes in the fair values of foreign exchange derivatives in connection with cash flow hedges were recognized in equity in fiscal year 2010. gains of € 2.2 million and losses of € 7.2 million (previous year: € 0 in both instances) recog-nized in equity were transferred to other operating income or other operating expenses during the fiscal year. as of the reporting date, the hedging measures had no ineffective portions. B. Braun expects gains of € 6.0 million and losses of € 1.6 million recognized in equity to be transferred to the statement of income within the next twelve months.

33 Related Party Transactions

the B. Braun group purchases materials, supplies, and services from numerous suppliers around the world in the ordinary course of its business. these suppliers include companies in which the group holds a controlling interest and companies that have ties to members of B. Braun melsungen ag’s supervisory Board. Business transactions with such companies are conducted on normal market terms. from the perspective of the B. Braun group, these are not materially significant. the B. Braun group did not participate in any transactions significant for it or for the related parties that were in any way irregular, and does not intend to do so in the future.

the following transactions were completed with related parties:

2010€ ’000

2009€ ’000

sales

related Companies 9,748 10,713

of which B. Braun holding gmbh & Co. Kg (6,665)

of which holdings (3,083)

Key management personnel 0 69

9,748 10,782

Goods and services Purchased





55,253 53,151


outstanding balances from the purchase/sale of goods and services and from loans at the end of the year:

Dec. 31, 2010€ ’000

Dec. 31, 2009€ ’000

Outstanding Items from the sale of Goods and services


of which B. Braun holding gmbh & Co. Kg (334)

of which joint ventures (2,933)


valuation allowances 0 0


valuation allowances 0 0

4,494 1,914

procurement obligations 229 270

Outstanding Items from the Purchase of Goods and services and from loans



of which joint ventures (851)


Key management personnel 46,221 41,461

93,685 85,245

procurement obligations 1,096 1,563

Key management personnel are members of the management Board and supervisory Board of B. Braun melsungen ag. in addition to B. Braun holding gmbh & Co. Kg, the affiliated group includes joint ventures and companies controlled by key management personnel or their close family members. the names of associated companies and joint ventures are shown under major shareholdings of B. Braun melsungen ag.

the following items in the statement of financial position contain outstanding balances with affiliated people or companies:

– other assets– financial liabilities– other liabilities

the loans granted by related individuals are short-term. their interest rates are based on covered bond (pfand-brief) yields.

please see note 27 for details of leasing liabilities to related companies.

remuneration for members of the management Board consists of a fixed and a variable, performance-related component. they also receive pension commitments and benefits in kind. Benefits in kind consist mainly of the value assigned for the use of company cars under german tax laws.

in addition to the duties and performance of management Board members, the criteria for remuneration include the group’s financial position, results, and future projections.


128

the total remuneration of management Board members consists of the following:

2010€ ’000

2009€ ’000

fixed remuneration 2,359 2,250

variable remuneration 4,216 3,561

pension expense 530 390

Bonuses 219 210

other 245 97

7,569 6,508

of the total, € 410,000 was attributable to the Chairman of the management Board as fixed remuneration and € 1.6 million as variable remuneration from profit-sharing.

a total of € 15.0 million was allocated for pension obligations for current management Board members; profit-sharing bonus obligations to management Board members is reported under liabilities to employees, manage-ment and shareholders total € 4.0 million. a total of € 16.3 million has been allocated for pension obligations to former management Board members and their surviving dependants; current benefits total € 1.3 million. super-visory Board remuneration totaled € 532,000.

the remuneration of supervisory Board members is governed by the articles of incorporation and is approved at the annual shareholders’ meeting.

the group has not made any loans to current or former members of the management Board.

liabilities stemming from profit participation rights for management Board members were € 6.5 million (pre-vious year: € 6.1 million). see note 27 for detailed information on profit participation rights.

the members of the supervisory Board are listed on page 137 and the management Board on pages 6 / 7.


notes to the Consolidated statement of Cash flows

the consolidated statement of cash flows details changes in the B. Braun group’s cash and cash equivalents during the course of the fiscal year. in accordance with ias 7, cash flows are categorized as those from operating, investing, and financing activities. Cash flow from operating activities is calculated using the indirect method. interest paid and received has been reported under gross cash flow for the first time in the current reporting year. the previous year’s figures have been adjusted accordingly.

34 Gross Cash Flow from Operating Activities

the gross cash flow of € 563.0 million is the cash surplus from operating activities before any changes in working capital, an increase of € 87.8 million over the previous year. the change is due primarily to improved operating income of € 456.2 million, lower tax payments, and higher depreciation.

Cash flow from operating activities of € 389.3 million represents changes in current assets, current provisions, and liabilities (excluding financial liabilities). the increase in inventories and receivables and the reduction in current provisions and liabilities resulted in a significant outflow of € 173.7 million compared with the previous year; this was partly attributable to the high level of sales achieved in december. as a result, the cash flow from operating activities is € 181.9 million below the previous year’s level.

35 Cash Flow From Investing Activities

a total of € 572.4 million was spent in 2010 to purchase property, plant and equipment, intangibles and financial investments. this was offset by sales of property, plant and equipment (€ 11.6 million) and dividend income received (€ 3.4 million), resulting in a cash outflow from investing activities of € 557.4 million. this increase of € 114.1 million in cash outflow compared with the previous year is largely due to higher capital investments.

investments made during the year were not fully covered by cash flow from operations. the remaining free cash flow was € – 168.1 million (previous year: € 128.0 million).

additions to property, plant and equipment and intangible assets from finance leasing do not result in a cash flow and are therefore not included under investing activities. in the fiscal year, these additions totaled € 0.9 million (previous year: € 3.2 million).

36 Cash Flow from Financing Activities

in 2010, cash flow from financing activities amounted to € 155.5 million (previous year: € – 135.6 million). the net balance of proceeds from and repayments of loans was € 181.6 million (previous year: € – 106.8 million). dividend payments and capital contributions by non-controlling interests resulted in a cash outflow of € 29.2 million. the € 291.1 million change compared with the previous year is largely due to higher borrowing to finance investments.


O F C A s h F l O w s

130

37 Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, demand deposits, and other short-term highly liquid financial assets with residual maturities of three months or less that are subject to no more than insignificant fluctuations in value.

as of december 31, 2010, restrictions related to cash availability totaled € 540,000 (previous year: € 693,000). these restrictions related primarily to security deposits and collateral.

38 Events After the Reporting Date

no events occurred between the end of the fiscal year and the date on which the consolidated financial state-ments were compiled that could have a material effect on the results of operations, financial position, or net assets for 2010.


I N D E P E N D E N T A u D I T O R s ’ R E P O R T

independent auditors ’ report

we have audited the consolidated financial statements prepared by B. Braun melsungen ag, melsungen, germany, comprising the statement of financial position, statement of income (loss), statement of comprehensive income, statement of changes in equity, statement of cash flows, and notes to the consolidated financial statements, together with the group management report for the fiscal year from january 1 to december 31, 2010. the preparation of the consolidated financial statements and the group management report in accordance with ifrs as adopted by the eu, and the additional re-quirements of german commercial law pursuant to section 315a (1) of the german Commercial Code (hgB), is the responsibility of the management Board of the Company. our responsibility is to express an opinion on the consolidated financial statements and on the group management report based on our audit.

we conducted our audit of the consolidated financial statements in accordance with section 317 hgB and the german generally accepted standards for the audit of financial statements promulgated by the institut der wirtschaftsprüfer (idw). these standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position, and results of operations in the consolidated financial statements in accordance with the applicable financial reporting framework and in the group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the group and ex-pectations as to possible misstatements are taken into account in the determination of audit procedures. the effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated financial statements and the group management report are examined primarily on a test basis within the framework of the audit. the audit includes assessing the annual financial statements of those entities included in consolidation, determining the scope of consolidation, the accounting and consolidation principles used, and significant estimates made by the management Board, as well as evaluating the overall presentation of the consolidated financial statements and the group management report. we believe that our audit provides a reasonable basis for our opinion.

our audit has not led to any reservations.

in our opinion, based on the findings of our audit, the consolidated financial statements comply with ifrs as adopted by the eu and the additional requirements of german commercial law pursuant to section 315 a (1) hgB and provide a true and fair view of the net assets, financial position, and results of operations of the group in accordance with these requirements. the group management report is consistent with the consolidated financial statements and, as a whole, provides an appropriate view of the group’s position and appropriately presents the opportunities and risks of future development.

Kassel, germany, march 8, 2011

pricewaterhouseCoopersaktiengesellschaftwirtschaftsprüfungsgesellschaft

prof. dr. georg Kämpfer holger plaumgerman public auditor german public auditor

132

As of December 31, 2010

Company Name and location holdingin %1)

Equity€ ’000

sales€ ’000

Employees

Germany

aesCulap ag, tuttlingen2) 100.0 116,737 550,206 2,947

aesCulap international gmBh, tuttlingen2) 100.0 205,776 0 0

aesCulap suhl gmBh, suhl 100.0 3,935 9,253 127

almo-erzeugnisse e. Busch gmbh, Bad arolsen 60.0 23,777 59,044 356

asCalon gmbh, Berggießhübel2) 94.0 6,047 19,727 154

B. Braun avitum ag, melsungen2) 94.0 92,380 225,018 751

B. Braun facility services gmbh & Co. Kg, melsungen 100.0 108 13,503 80

B. Braun nordamerika verwaltungsgesellschaft mbh, melsungen2) 100.0 149,310 0 0

B. Braun surgical gmbh, melsungen2) 100.0 154,576 0 0

B. Braun travaCare gmbh, hallbergmoos2) 100.0 613 30,592 55

B. Braun vet Care gmbh, tuttlingen2) 100.0 372 16,265 13

saxonia medical gmbh, radeberg2) 94.0 3,988 51,501 412

transCare service gmbh, neuwied 55.0 1,571 9,550 99

Europe

aesCulap Chifa sp.Zo.o., nowy tomyśl/poland 98.8 55,366 122,448 1,469

aesCulap s.a.s. , Chaumont/france 100.0 10,269 10,910 114

avitum s.r.l., timisoara/romania 93.6 259 8,736 191

B. Braun adria d.o.o., Zagreb/Croatia 36.0 2,797 9,496 25

B. Braun austria ges. m.b.h., maria enzersdorf/austria 60.0 36,333 51,232 137

B. Braun austria ges. m.b.h., maria enzersdorf/austria 94.0 92,560 93 3

B. Braun avitum france s.a.s., Boulogne/france 94.0 7,864 12,228 18

B. Braun avitum hungary Zrt., Budapest/hungary 94.0 12,610 33,270 654

B. Braun avitum italy s.p.a., mirandola/italy 94.0 14,758 46,411 206

B. Braun avitum oy, loviisa/finland 94.0 1,934 10,339 35

B. Braun avitum poland sp.zo.o., nowy tomyśl/poland 95.9 – 3,787 26,511 404

B. Braun avitum russia ooo, st. petersburg/russia 94.0 2,419 10,034 32

B. Braun avitum s.r.o., Bratislava/slovak republic 93.7 – 912 9,389 157

B. Braun avitum s.r.o., prague/Czech republic 93.7 10,246 20,667 222

B. Braun avitum turkey sanayi ticaret anonim sirketi, ankara/turkey 75.2 3,105 8,356 13

B. Braun avitum uK ltd., sheffield/united Kingdom 94.0 642 20,652 194

major sharehold ings


M A j O R s h A R E h O l D I N G s



Equity€ ’000

sales€ ’000

Employees

B. Braun holding ag, sempach/switzerland 51.0 174,487 0 0

B. Braun hospicare ltd., Collooney, Co. sligo/republic of ireland 100.0 9,638 13,597 89

B. Braun medical aB, dander/sweden 100.0 3,256 34,319 45

B. Braun medical ag, sempach/switzerland 51.0 118,786 226,726 788

B. Braun medical a/s, frederiksberg/denmark 100.0 1,319 14,303 23

B. Braun medical a/s, vestskogen/norway 100.0 3,121 20,602 32

B. Braun medical B.v., oss/netherlands 100.0 6,759 54,135 145

B. Braun medical international s.l., rubi/spain 100.0 94,520 0 9

B. Braun medical Kft., Budapest/hungary 60.0 23,401 55,585 735

B. Braun medical lda., Barcarena/portugal 100.0 31,289 58,279 152

B. Braun medical llC, st. petersburg/russia 90.0 20,791 82,815 272

B. Braun medical ltd., dublin/republic of ireland 100.0 3,769 18,417 39

B. Braun medical ltd., sheffield/united Kingdom 100.0 17,793 98,382 416

B. Braun medical n.v./s.a., diegem/Belgium 100.0 2,516 30,177 69

B. Braun medical oy, helsinki/finland 100.0 3,842 30,499 46

B. Braun medical s.a., rubi/spain 100.0 234,372 201,479 1,054

B. Braun medical s.a.s., Boulogne/france 100.0 79,064 276,606 1,327

B. Braun medical s.r.l., timisoara/romania 61.9 1,434 11,876 79

B. Braun medical s.r.o., Bratislava/slovak republic 70.0 1,264 20,299 19

B. Braun medical s.r.o., prague/Czech republic 70.0 34,057 80,188 183

B. Braun medikal dis ticaret a.s., istanbul/turkey 100.0 5,445 13,414 64

B. Braun milano s.p.a., milan/italy 100.0 29,303 119,977 198

B. Braun sterilog (Birmingham) ltd., sheffield/united Kingdom 100.0 – 6,279 11,582 239

B. Braun sterilog (yorkshire) ltd., sheffield/united Kingdom 100.0 – 4,897 8,188 197

B. Braun surgical s.a., rubi/spain 100.0 78,008 148,523 761

B. Braun vetCare sa, rubi/spain 100.0 7,472 9,327 23

suturex & renodex s.a.s., sarlat/france 100.0 8,340 12,489 146

1) Effective stake | 2) Companies with profit and loss transfer agreements | 3) Consolidated using equity method | 4) Consolidated proportionately

134



Equity€ ’000

sales€ ’000

Employees

Americas

aesCulap inC., Center valley/usa 95.5 39,484 123,646 423

aesculap implant systems llC, Center valley/usa 95.5 – 4,495 37,171 132

B. Braun aesculap de méxico s.a. de C.v., méxico d. f./mexico 100.0 7,508 16,652 173

B. Braun interventional systems inc., Bethlehem/usa 95.5 16,470 24,605 34

B. Braun medical inc., Bethlehem/usa 95.5 136,851 668,641 4,409

B. Braun medical peru s.a., lima/peru 89.2 17,130 12,126 286

B. Braun medical s.a., Bogota/Colombia 100.0 12,865 26,327 221

B. Braun medical s.a., Buenos aires/argentina 100.0 9,808 25,068 355

B. Braun medical s.a., quito/ecuador 100.0 4,974 12,395 57

Braun medical spa, santiago de Chile/Chile 85.9 8,779 21,115 144

B. Braun of america inc., Bethlehem/usa 95.5 123,071 0 0

Caps inc., santa fe springs/usa 95.5 49,419 107,676 503

laboratorios B. Braun s.a., são gonçalo/Brazil 100.0 114,716 165,651 1,750

Asia and Australia

B. Braun aesCulap japan Co. ltd., tokyo/japan 100.0 55,790 121,056 484

B. Braun australia pty. ltd., Bella vista/australia 100.0 22,575 52,585 113

B. Braun avitum philippines inc., manila/philippines 100.0 2,677 8,652 100

B. Braun avitum (shanghai) trading Co. ltd., shanghai/China 94.0 5,120 32,249 65

B. Braun Korea Co. ltd., seoul/republic of Korea 100.0 17,108 47,885 117

B. Braun medical (h.K.) ltd., hong Kong/China 100.0 37,627 56,761 32

B. Braun avitum (m) sdn. ltd., mumbai/india 100.0 6,967 39,544 379

B. Braun medical industries sdn. Bhd., penang/malaysia 100.0 224,697 292,838 4,586

B. Braun medical (shanghai) international trading Co. ltd., shanghai/China 100.0 10,458 65,783 446

B. Braun medical supplies inc., manila/philippines 100.0 6,225 13,141 146

B. Braun medical supplies sdn. Bhd., petaling jaya/malaysia 100.0 21,437 38,832 147

B. Braun medical (suzhou) Company limited, suzhou/China 100.0 2,419 12,820 293

B. Braun singapore pte. ltd., singapore 100.0 9,268 12,016 41

B. Braun taiwan Co. ltd., taipei/taiwan 100.0 4,539 15,185 56

B. Braun (thailand) ltd., Bangkok/thailand 100.0 7,844 13,734 94

B. Braun vietnam Co. ltd., hanoi/vietnam 100.0 16,999 40,666 969

pt. B. Braun medical indonesia, jakarta/indonesia 100.0 20,837 37,637 353

major sharehold ings




Equity€ ’000

sales€ ’000

Employees

Africa

B. Braun avitum (pty) ltd., fourways/south africa 100.0 773 8,005 106

B. Braun medical (pty) ltd., fourways/south africa 100.0 8,515 27,531 132

Other holdings

Babolat vs, lyon/france3) 28.0 50,199 104,532 201

medical service und logistik gmbh, recklinghausen4) 50.0 877 30,765 5

schölly fiberoptic gmbh, denzlingen3) 28.0 20,883 52,952 253

the values correspond to the year-end financial statements established in accordance with ifrs. equity of foreign subsidiaries has been translated using the mid-rate on december 31, 2010, and sales figures have been translated using the average annual rate for 2010.

1) Effective stake | 2) Companies with profit and loss transfer agreements | 3) Consolidated using equity method | 4) Consolidated proportionately

M A j O R s h A R E h O l D I N G s

136

superv isory Board rep ort

the supervisory Board of B. Braun melsungen ag continued to perform its statutory duties and obligations in fiscal year 2010 in accordance with the applicable laws, articles of incorporation, and By-laws, and to advise and monitor management. at three ordinary meetings, the supervisory Board received reports from the management Board regard-ing the company’s current business performance, financial status, and significant investment plans. at its meeting on march 25, 2010, the supervisory Board proposed that the following be put to vote at the annual shareholders’ meeting: the issuance of profit participation rights to B. Braun group executives in accordance with the statute for profit partici-pation conditions approved by the super visory Board, an increase in subscribed capital, and the revision of the articles of incorporation. the supervisory Board also issued new By-laws at the meeting. at each of its meetings, the super-visory Board received detailed reports on the business per-formance of the company’s north american subsidiaries. other topics discussed by the supervisory Board included presen-tations of the divisional strategy of B. Braun avitum ag and the compliance management system for the B. Braun group, an overview of human resources at the B. Braun group, and the amendment to the management Board By-laws. the supervisory Board discussed and approved the 2011 targets, advised on statutory business matters requiring its approval, and accepted the risk report submitted by the management Board. a regular exchange of information and ideas took place between the Chairman of the supervisory Board and the Chairman of the management Board regarding significant business developments within the company and the group, and any pending decisions.

the supervisory Board once again conducted a voluntary self-assessment, which showed that it is efficiently organized and that cooperation between the supervisory Board and management Board functions very well. the newly formed audit Committee discussed the company’s current business performance, the accounting and auditing process and the compliance management system for the B. Braun group, inter-company requirements regarding derivatives transactions, and, in particular, B. Braun melsungen ag’s 2010 financial statements and consolidated financial statements of the group. the audit Committee reported on these topics at the

meetings of the supervisory Board and made its recommen-dations. the personnel Committee of the supervisory Board met four times in 2010. at its meeting on march 25, 2010, it recommended that the supervisory Board appoint prof. dr. hanns-peter Knaebel as ordinary member of the manage-ment Board, effective april 1, 2010. the supervisory Board approved this appointment at its meeting on march 25, 2010. at its meeting on july 20, 2010, the personnel Committee recommended that dr. wolfgang feller be reappointed as ordinary member of the management Board through march 31, 2013. the supervisory Board approved his reappointment on the same day. at its meetings on november 5 and december 8, 2010, the personnel Committee recommended that the supervisory Board appoint dr. heinz-walter große as Chairman of the management Board to a five-year term effective april 1, 2011, and mr. otto philipp Braun and dr. annette Beller as deputy members of the management Board for a three-year term. the reappointment of mr. Caroll h. neubauer as ordinary member of the management Board through august 31, 2016 was also recommended. the supervisory Board approved these appointments at its meeting on december 8, 2010.

B. Braun melsungen ag’s financial statements and manage-ment report for fiscal year 2010, the group’s consolidated financial statements, and the consolidated management report have been reviewed by the auditor appointed at the annual meeting on march 25, 2010, pricewaterhouseCoopers aktien-gesellschaft wirtschaftsprüfungsgesellschaft, Kassel, germany. the auditor raised no objections and issued an unqualified audit opinion. the auditor participated in the supervisory Board’s discussions on the financial statements and the group’s consolidated financial statements, and reported on the main findings of its audit. following its review of the financial statements, management report, proposal for the appropriation of B. Braun melsungen ag’s retained earnings, consolidated financial statements, and consolidated man-agement report, the supervisory Board concurred with the findings of the audit report and raised no objections. we there fore approve the financial statements presented by the management Board, which are hereby adopted in accordance with section 172 of the german stock Corporation act (aktg). the supervisory Board concurs with the proposals of the management Board concerning the utilization of retained


M ANFRED hERRE s *

director of manufacturing, avitum division, B. Braun melsungen ag, melsungen

DR . RER . NAT. jOAC h IM s ChNEl l

former vice Chairman of the management Board of B. Braun melsungen ag, melsungen

PE T ER hOhM ANN *

vice Chairman, Chairman of the workers’ Council of B. Braun melsungen ag, melsungen

EDElT R AuD Gl äNzER *

member of the managing Board of ig BCe, hanover

jus T us M Is ChE

Chairman, former member of the management Board of hoechst ag, Kelkheim

bA RbA R A bR AuN - lüD IC k E

Businesswoman, melsungen

s ON jA s I E wER T *

member of the workers’ Council of B. Braun melsungen ag, rotenburg/fulda

PROF. DR. MED. DR . ING . DR . h. C.

M IChAEl uNGE T hüM

former vice Chairman of the management Board of B. Braun melsungen ag

DR . RER . P Ol . AN TON Ius ENGbERD ING *

member of the executive Board of ig metall, head of Business management, frankfurt / main

Ek k EhA RD R I s T *

Chairman of the workers’ Council of aesculap ag,mahlstetten

PROF. DR . R ER . P Ol . T hOM A s RöDDER

tax advisor and Certified public accountant, partner, flick gocke schaumburg, Bonn

DR . h . C . AuGus T OE T k ER

partner, dr. august oetker Kg, Bielefeld

FROM l EF T

* elected by the employees

earnings. in accordance with section 312 of the german stock Corporation act (aktg) the management Board issued a report on the relationships with affiliated companies for fiscal year 2010. the supervisory Board examined this report and raised no objections. the auditor reviewed the report and issued the following audit opinion:

“having conducted our mandatory audit and analysis, we hereby confirm that 1. the information contained in the report is correct,2. payments made by the company for the legal transactions

detailed in the report were not unreasonably high.”

the supervisory Board concurs with the results of the auditor’s review and has raised no objections to the management Board’s conclusion. the supervisory Board would like to thank the management Board for the excellent and successful collaboration, and all employees of the B. Braun group for their contributions in the period under review.

melsungen, march 2011the supervisory Board

138

glossary

APhEREs Is

see “extracorporeal blood treatment.”

AssE T-bACkED sECuR I T IEs (Abs)

Bonds or notes secured by accounts receivable.

bR IC COuNTR IEs

BriC is the acronym for Brazil, russia, india, and China.

C AP T I vE

an insurance company owned by the group providing coverage for the group’s own risks.

CENTERs OF E xCEllENCE (COE )

Centers within the global B. Braun organization, incorporating research, development, manufacturing and marketing for specific product groups.

DEhP

abbreviation for di(2-ethylhexyl)phthalate. dehp is a plasticizer used in the manufacturing of articles made of pvC.

DIAlys Is

a blood cleansing process used in the treatment of kidney failure.

DIhk

abbreviation for the deutscher industrie- und handelskammertag (association of german Chambers of industry and Commerce). the dihK is the umbrella organization for the german Chambers of industry and Commerce and represents the interests of german trade and industry with respect to political decision-makers.

Eb I T

Key performance indicator. acronym for earnings Before interest and taxes.

Eb I TDA

Key performance indicator. acronym for earnings Before interest, taxes, depreciation and amortization.

Eb I TDA MARGIN

Key performance indicator. eBitda as a percentage of sales.

EMAs

abbreviation for eco management and audit scheme, also known as an eco-audit. emas was developed by the european union and consists of environmental management and an environmental audit for organizations that want to improve their environmental performance. EN IsO 9001

an international standard that establishes globally recognized requirements for quality management systems.

EN IsO 14001

an international environmental management standard that establishes globally recognized requirements for environmental management systems.

ENTER Al NuTR I T ION

supplying nutrients by sip- or tube-feeding via the gastrointestinal tract.

E x TR ACORPORE Al blOOD TRE ATMENT

Blood treatment taking place outside the body using an “artificial kidney” (dialysis machine) that is connected directly to the blood-stream.

FDA

abbreviation for the food & drug administration. the fda is the us agency that regulates the safety of food and health-related products.

hEMODIAlys Is

a special blood cleansing process that utilizes the principle of osmosis, i.e. the equalization of concentrations of small-molecule substances in two liquids separated by a semi-permeable membrane.

hyPERGlyCEMIA

a medical condition characterized by excessively high blood sugar.

IN TERvENT IONAl

interventional diagnosis and treatment procedures are intended to positively influence the progression of a condition through targeted intervention.


I v

abbreviation for intravenous. an application technique for the administration of a drug, fluid, or suspension into a vein. IMF

abbreviation for the international monetary fund. the imf is a united nations organization based in washington, dC in the usa.

MRPs

abbreviation for the multi- resistant pathogens. mrps are bacteria or viruses that do not respond to a vast number of antibiotics or antivirals.

OhsAs 18001

abbreviation for occupational health and safety assessment series. ohsas 18001 is a standard that establishes globally recognized requirements for occupational health and safety management systems.

OsTEOARThR I T Is

osteoarthritis is a condition in which inflammation spreads from the bones to a joint.

OsTEOPOROs Is

a common age-related bone disorder. Bone density decreases as the structure and substance of bones are damaged, which increases susceptibility to fractures.

PARENTER Al NuTR I T ION

supplying nutrients intravenously by bypassing the gastrointestinal tract.

Publ IC-PR I vATE PARTNERshIP

a cooperative arrangement between public institutions and private entities for the fulfillment of public duties (semi-privatization).

sTENT

a medical implant (vascular support) introduced into a blood vessel to keep it open and prevent occlusion.

T I T lE 21 OF ThE CODE OF FEDER Al REGul AT IONs

a section of the us law relating to food and drugs.

vC I

abbreviation for the verband der Chemischen industrie (german Chemical industry association). the vCi, based in frankfurt am main, germany represents the economic interests of german chemical companies.

wl AN

abbreviation for wireless local area network.

wORk ING C AP I TAl

Key performance indicator. inventories plus current trade accounts receivable less current trade accounts payable.

6



income structure

2010 2009 Change in %













2010 2009 Change


Sales 4,422.8 100.0 4,028.2 100.0 9.8


Gross profit 2,081.1 47.1 1,876.8 46.6 10.9




Interim profit 485.2 11.0 444.5 11.0 9.1





income Taxes 112.3 2.5 96.5 2.4 16.3


Sales




North america 940

Germany 878


Latin america 296




Other 26

aesculap 1,281

OPM 555

employees

employees by region

Germany

10,67211,251

asia & australia

8,2659,243

Latin america

2,924 3,023

North america

5,486 5,486


12,157 12,663


12,000

9,000

6,000

3,000

(excluding Germany)

HIG

Hl

IGH

tS

20

10

B.

BR

AU

N A

t A

Gl

AN

Ce

HiGHL iGHT S 2010












income structure

2010 2009 Change in %













2010 2009 Change


Sales 4,422.8 100.0 4,028.2 100.0 9.8


Gross profit 2,081.1 47.1 1,876.8 46.6 10.9




Interim profit 485.2 11.0 444.5 11.0 9.1





income Taxes 112.3 2.5 96.5 2.4 16.3


Sales




North america 940

Germany 878


Latin america 296




Other 26

aesculap 1,281

OPM 555

employees

employees by region

Germany

10,67211,251

asia & australia

8,2659,243

Latin america

2,924 3,023

North america

5,486 5,486


12,157 12,663


12,000

9,000

6,000

3,000

(excluding Germany)

HIG

Hl

IGH

tS

20

10

B.

BR

AU

N A

t A

Gl

AN

Ce

HiGHL iGHT S 2010










imprint

Publ ished by

B. Braun melsungen agWerkanlagen pfieffewieseneuropagebäude34212 melsungengermany

tel. +49 (0) 56 61-71- 0Fax +49 (0) 56 61-71-45 67

www.bbraun.de

For Further inFormat ion contac t

Dr. Bernadette tillmanns-estorfSenior vice presidentCorporate CommunicationsWerkanlagen pfieffewieseneuropagebäude34212 melsungengermany

tel. +49 (0) 56 61-71-38 01Fax +49 (0) 56 61-71-35 69

e-mail: [email protected]

discl a imer

the annual report is published in german

and english. in the event of a discrepancy,

the german version takes precedent.

9D A S U N T E R N E H M E N | K O N Z E R N L A G E B E R I C H T | K O N Z E R N A B S C H L U S S | L O R E M I P S U M


Key figures

income structure

2010 2009 Change in %












employees (annual average) 41,666 39,504 5.5

2010 2009 Change


Sales 4,422.8 100.0 4,028.2 100.0 9.8


Gross profit 2,081.1 47.1 1,876.8 46.6 10.9




Interim profit 485.2 11.0 444.5 11.0 9.1





income Taxes 112.3 2.5 96.5 2.4 16.3


Sales




North america 940

Germany 878


Latin america 296




Other 26

aesculap 1,281

OPM 555

employees

employees by region

Germany

10,67211,251

asia & australia

8,2659,243

Latin america

2,924 3,023

North america

5,486 5,486

europe & africa( without Germany)

12,157 12,663

DeC 31, 2009 totAl: 39.504 DeC 31, 2010 totAl: 41.666

12,000

9,000

6,000

3,000

(without Germany)

HIG

Hl

IGH

tS

20

10

B.

BR

AU

N A

t A

Gl

AN

Ce

HiGHL iGHT S 2010




The new B. Braun office in Havana opens for business. B. Braun Medical international S.L., Havana, Cuba was established by the Spanish holding company B. Braun Medical international SL , rubí, Spain.

JANUARy The number of B. Braun employees reaches an unprecedented 40,000.

DeCemBeR The Supervisory Board elects Dr. Heinz-walter Große to succeed Prof. Dr. h.c. Ludwig Georg Braun, who will retire on March 31, 2011. Otto-Philipp Braun and Dr. annette Beller are appointed to the Management Board.



a new factory for surgical instruments is opened in radzyń Podlaski, Poland.

B.

BR

AU

N

|

AN

NU

Al

Re

po

Rt

20

10

3 0 02 0103


2006€ million

2007€ million

2008€ million

2009€ million

2010€ million

Sales 3,321.4 3,572.9 3,786.4 4,028.2 4,422.8






Interim profit 335.2 377.6 390.6 444.5 485.2




eBItDA 490.7 535.9 545.8 620.5 700.5

Assets 3,025.3 3,332.1 3,708.0 3,975.1 4,686.1



inventories 645.9 709.7 726.7 708.5 780.0


equity 1,088.0 1,255.3 1,389.7 1,620.0 1,984.0

liabilities 1,937.3 2,076.8 2,318.3 2,355.1 2,702.0











Annual Report 2010


10

B.

BR

AU

N

|

AN

NU

Al

Re

po

Rt

20

10

3 0 02 0103


2006€ million

2007€ million

2008€ million

2009€ million

2010€ million

Sales 3,321.4 3,572.9 3,786.4 4,028.2 4,422.8






Interim profit 335.2 377.6 390.6 444.5 485.2




eBItDA 490.7 535.9 545.8 620.5 700.5

Assets 3,025.3 3,332.1 3,708.0 3,975.1 4,686.1



inventories 645.9 709.7 726.7 708.5 780.0


equity 1,088.0 1,255.3 1,389.7 1,620.0 1,984.0

liabilities 1,937.3 2,076.8 2,318.3 2,355.1 2,702.0











Annual Report 2010


Documents

SHariNG exPerTiSe. CreaTiNG vaLue