Merck’s Good Performance Continues In Third Quater 2012 During Transformation
“Even in these tough economic times and while in the midst of our own business transformation, Merck is performing well operationally,” said Karl-Ludwig Kley, Chairman of the Executive Board of Merck. “We are especially pleased with the excellent results from our Merck Serono and performance materials divisions. We are on track to have a solid year of financial performance in 2012, while making our profitability levels more competitive with our peers.”
Merck’s third quarter of 2012 saw a continuation of solid business trends that the Group has seen throughout 2012. Total revenues rose 12.2% to € 2,841 million compared to € 2,532 million in the third quarter of 2011. Sales also grew by 11.8% to € 2,722 million in third quarter compared to € 2,434 million in the year-ago quarter. This performance reflected organic sales growth of 5.9%, a 5.7% positive benefit from foreign exchange rates and a 0.2% increase from acquisitions and divestments.
The key operational indicator of the Group, EBITDA pre one-time items, increased by 15.6% to € 754 million, or 27.7% of sales compared to € 653 million, or 26.8% of sales in the third quarter of 2011. This margin improvement reflects the stronger top-line growth and more efficient resource allocation throughout the Group.
The increase in one-time costs (including impairments) of € 98 million weighed on reported net income (profit after tax attributable to Merck shareholders) of € 185 million (Q3 2011: € 224 million) or earnings per share (EPS) of € 0.85 in the third quarter of 2012 (Q3 2011: € 1.03). However, adjusted for one-time costs, EPS pre one-time items increased 22.2% to € 1.98 (Q3 2011: € 1.62).
Merck’s strong operational performance in the third quarter of 2012 as well as effective working capital management generated a free cash flow of € 815 million, a 69% increase from the € 482 million reported in the year-ago quarter. As a result, Merck was able to reduce its net financial debt by 39% to € 2,127 million.
- Revenues grow 12%, EBITDA pre grows 16% on efficiency program
- Strong organic sales growth of 6%; sales in Emerging Markets surpass Europe
- Free cash flow increases by 69% - reduces net financial debt to € 2.1 billion
- Total revenue guidance raised, EBITDA pre guidance narrowed to the upper end of the previous range
At the end of the third quarter 2012, Merck had 39,545 employees worldwide, compared to 40,676 on December 31, 2011.
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