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Q1/2012: Merck Total Revenues Increase 3.2% to € 2.6 Billion
Merck Serono and Merck Millipore divisions drive sales growth
17-05-2012: “Merck delivered a reasonable operating performance in the face of a difficult year-over-year comparison,” said Karl-Ludwig Kley, Chairman of the Executive Board of Merck. “During the first quarter, we kicked off our efficiency program and announced the first planned initiatives as part of this transformation. Our focus during 2012 will be to deliver a solid operational performance while bringing our cost structure more in line with our competitors and peers.”
The Merck Group’s first-quarter 2012 total revenues rose 3.2% to € 2,645 million compared to € 2,564 million in the first quarter of 2011. Sales for the Group increased 3.5% to € 2,564 million in first quarter compared to € 2,478 million in the year-ago quarter. This performance reflected organic sales growth of 1.2%, a 1.7% positive benefit from changes in foreign exchange rates and a 0.6% boost from acquisitions and divestments. The Group’s organic sales growth was entirely driven by the Merck Serono and Merck Millipore divisions during the quarter.
Gross profit declined 1.5% to € 1,896 million from € 1,925 million in the first quarter of 2011, resulting in a first-quarter gross profit margin of 74.0% of sales, compared to 77.7% in the first quarter of 2011.
The operating result (EBIT) fell to € 311 million (Q1 2011: € 530), mainly due to lower operational performance and a one-time capital gain of € 157 million generated from the divestment of the Crop BioScience business in the first quarter of 2011. EBITDA pre declined to € 675 million, or 26.3% of sales, in the first quarter of 2012 from € 737 million, or 29.7% of sales, in the year-ago quarter. The Group’s EBITDA pre in the first quarter of 2012 excluded € 30 million in one-time costs recorded under other operating expenses.
Merck’s financial result remained largely in line with last year, improving to € -65 million in the first quarter of 2012 compared to € -68 million in the year-ago quarter. Net financial debt as of March 31, 2012, declined to € 3,017 million from € 3,484 million at the end of 2011. This improvement reflects the ongoing good cash flow generation of the Group.
The Merck Group’s first-quarter 2012 profit before tax declined 47% to € 246 million compared to € 461 million in the year-ago quarter, which was inflated by the € 157 million gain on the divestment of the Crop BioScience business. The reported income tax ratio was 28.2% in the first quarter 2012, increasing from 25.4% in the first quarter of 2011.
Profit after tax declined 49% to € 177 million in the first quarter of 2012 from € 344 million in the first quarter of 2011. Net Profit after non-controlling interest fell 49% in the first quarter to € 174 million from € 341 million in the year-ago quarter. EPS pre one-time items (EPS adjusted by net of tax effect of one-time items and amortization of purchased intangible assets) declined to € 1.67 from € 1.91 due to the lower operational performance previously mentioned. The free cash flow of the Merck Group was € 420 million in the first quarter of 2012 compared to € 645 million in the year-ago period. The change is due primarily to last year’s divestment of the Crop BioScience business and receipt of the purchase price for Théramex.
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