UpdateMerck Group sales to grow at ‘moderate pace’ in 2013, 2014

07 March 2013 11:26  [Source: ICIS news]

(adds outlook and further financial detail throughout)

LONDON (ICIS)--Merck Group expects its sales to grow organically at a moderate pace in both 2013 and 2014, the Germany-based chemical producer said on Thursday.

The company added it was unlikely any major new technology introductions in its chemical businesses or any major new product launches in the pharmaceutical business would happen in either year.

“On a reported basis, a stronger euro may lead to negative currency effects in comparison to 2012,” Merck Group added.

“At group level, EBITDA [earnings before interest, tax, depreciation and amortisation] pre one-time items will increase faster than sales as a result of net cost savings realised from the group-wide restructuring program,” the company said.

Merck Group added that, with one-time costs peaking in 2012, this should lead to a significant increase in net income in 2013 and 2014.

In the fourth quarter of 2012, Merck Group’s net income more than doubled to €271.8m ($353.0m) from €132.9m in the same period in 2011, boosted by operational performance and one-off positive effects on income tax.

Fourth-quarter sales rose 7.4% to €2.71bn as a result of 5.6% organic growth and 1.8% from changes in foreign exchange rates. The company’s total revenues rose by 8% year on year to €2.83bn in the fourth quarter, while EBITDA pre one-time items was up by 16.1% at €789.8m.

For the full year of 2012, the company’s net income slipped by 6.6% year on year to €566.7m, weighed by one-time items, including impairments, of €664m, while total revenue was up by 8.7% at €11.2bn. Full-year sales grew by 8.4% to €10.7bn “reflecting a 4.5% organic increase, 3.6% growth based on changes in foreign exchange rates and 0.3% growth due to acquisitions.”

The group’s EBITDA pre one-time items was up by 8.9% at €2.96bn, or 27.6% of sales in 2012 with all divisions contributing to the increase.

During 2012, Merck Group realised around €115m in net savings as a result of the restructuring initiative “Fit for 2018.” The majority of savings, around €100m, were achieved in its Merck Serono pharmaceuticals business.

“Two-thirds of the restructuring costs of €504m incurred in 2012 were reported in the Merck Serono division,” it added.

($1 = €0.77)

By: Franco Capaldo
+44 (0)20 8652 3214

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