Germany’s Merck swings to Q2 profit on efficiencies, resilient sales

06 August 2013 11:57  [Source: ICIS news]

Merck KGaA headquarters in Darmstadt, Germany. (Image provided by in Merck KGaA)LONDON (ICIS)--Merck Group’s second-quarter net income swung to a €316m ($421m) profit compared with a €63m loss during the same quarter in 2012 on the back of resilient sales and efficiency savings, the company said on Tuesday.

The second-quarter 2012 loss was due in part to a large number of one-off writedowns related to the company's 'Fit for 2018' efficiency savings scheme, according to Merck, but the company’s second-quarter 2013 performance was also an improvement compared with the January-to-March period this year, when the company posted €266m net income.

Sales were steady year on year at €2.74bn, and earnings before interest, taxes, depreciation and amortisation (EBITDA) pre one-time items was up by 11% to €826.4m, the company added.

Performance materials division revenues increased by 1.2% to €431m in spite of a 4.3% impact from currency exchange rate issues.

However, the company predicts an inventory build-up in the industry value chain for liquid crystals – which accounts for over 70% of division sales – meaning that results are for likely to be slightly weaker in the second half of the year.

Consumer health revenues fell by 4.5% year on year to €116m as a result of a slight dip in sales and a 3.5% negative currency impairment. The sales fall was due to weaker demand in Europe, the division’s key market.

Revenues for biopharma division Merck Serono decline by 1.5% to €1.62bn despite a 1.5% increase in sales. Sales growth was driven by a 5.2% expansion in emerging markets and a 13.5% increase in sales across the rest of the world excluding Europe, which declined by 2.7%.

Life sciences division Merck Millipore posted a 2.6% increase in revenues to €666m despite negative currency impacts.

The company predicted that it would be able to meet its earlier guidance for full-year 2013 performance.

“We can confirm our full-year guidance of €3.1bn-3.2bn EBITDA pre [one-time items] despite currency headwinds,” said Karl-Ludwig Kley, chairman of Merck’s executive board.

($1 = €0.75)

By: Tom Brown
+44 208 652 3214

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