Merck Finishes Year of Key Strategic Moves with Record Figures

Good operating business and acquisition of AZ boost sales (+5.5%) and EBITDA pre one-time items (+4.1%) to new record levels

11-Mar-2015 - Germany

Merck has successfully completed a year of strategically important moves and achieved its objectives.

“We strengthened all three of Merck’s business sectors: Healthcare, Life Science and Performance Materials. With the acquisition of AZ, the offer to acquire Sigma-Aldrich and the alliance with Pfizer in immuno-oncology, we have laid the foundations for future growth,” said Karl-Ludwig Kley, Chairman of the Executive Board of Merck, on Tuesday in Darmstadt. “These developments are the result of our long-term transformation and growth strategy. Merck is transforming into a highly specialized, global technology company with the goal to improve the lives of patients and customers.”

Total revenues of the Merck Group rose by 3.7% to € 11.5 billion in 2014 (2013: € 11.1 billion). Sales grew by 5.5% to € 11.3 billion (2013: € 10.7 billion). This was primarily the result of organic growth of 4.0% as well as acquisition-related increases of 3.3%, which were attributable to the acquisition of AZ. At the same time, foreign exchange effects lowered sales by -1.8%.

Merck markedly increased its operating result (EBIT) by 9.4% to € 1.8 billion (2013: € 1.6 billion). The key financial indicator used to steer operating business, EBITDA pre one-time items, climbed 4.1% to € 3.4 billion (2013: € 3.3 billion), also thanks to good operating performance and the acquisition of AZ. Solid growth and the good development of operating business also contributed significantly to offsetting sharply lower royalty, license and commission income, which fell by -47% to € 209 million (2013: € 395 million). Net income, i.e. profit after tax attributable to Merck shareholders, for 2014 was € 1,157 million (2013: € 1,202 million), representing a decline of -3.7%, as the previous year 2013 benefited from the one-time effect of a very low tax ratio of 13%.

Earnings per share pre one-time items advanced, taking into account the 1:2 share split in June 2014, by 4.8% to € 4.60 (2013: € 4.39). Merck will therefore propose to the Annual General Meeting an increase in the dividend by € 0.05 to € 1.00 per share.

Even though the purchase price payment for AZ amounting to around € 1.9 billion was financed, net financial debt rose by only € 252 million to € 559 million (2013: € 307 million). As of June 30, 2014, this figure had temporarily risen to € 2.2 billion. This renewed evidence of the Merck Group’s high internal financing power shows that Merck is well-prepared for the acquisition of Sigma-Aldrich. As of December 31, 2014, Merck had 39,639 employees worldwide (2013: 38,154).

https://www.chemeurope.com/en/news/152019/merck-finishes-year-of-key-strategic-moves-with-record-figures.html