Darmstadt, Germany, May 19, 2015 – Merck KGaA, Darmstadt, Germany, a leading company for innovative, top-quality high-tech products in healthcare, life science and performance materials, announced today that it generated strong sales growth in the first quarter of 2015. EBITDA pre exceptionals also rose in the year-on-year comparison.

“We are pleased that all three business sectors grew despite a challenging environment,” said Karl-Ludwig Kley, CEO of Merck KGaA, Darmstadt, Germany. “We continue to expect slight organic sales growth for the full year as well.”

Group net sales rose by 15.7% to € 3.0 billion in the first quarter of 2015 (Q1 2014: € 2.6 billion). Organically, sales grew by 1.3%. Reported sales also reflect not only noticeably positive currency effects of 8.9%, but also portfolio effects due to the integration of AZ Electronic Materials (AZ) amounting to 5.5%. All three business sectors of Merck KGaA, Darmstadt, Germany posted sales increases. From a geographic perspective, organic sales growth was mainly driven by the Asia-Pacific and Latin America regions.

EBITDA pre exceptionals, the key earnings indicator of the Group, rose by 5.7% to € 853 million thanks to good operational performance and a favorable currency environment (Q1 2014: € 807 million). Higher research and development spending, mainly relating to the intensification of immuno-oncology research, dampened EBITDA pre exceptionals. Higher marketing and selling expenses as well as the absence of royalty and license income that had already expired in the second quarter of 2014, also had a negative impact on EBITDA pre exceptionals. Group EBIT rose by 2.5% to
€ 480 million.
Net income declined in the first quarter of 2015 by -13.4% to
€ 282 million (Q1 2014: € 325 million). This figure was lowered by the financing costs incurred in advance of the planned acquisition of Sigma-Aldrich.

Taking into account the share split in 2014, earnings per share pre exceptionals amounted to € 1.12 in the first quarter of 2015 (Q1 2014: € 1.15).

Net financial debt declined to € 78 million as of March 31, 2015; in mid-2014, it had temporarily risen to € 2.2 billion owing to the acquisition of AZ. The rapid and substantial reduction of debt is evidence of the company’s strong internal financing capacity in the run-up to the planned acquisition of Sigma-Aldrich. The Group had 39,842 employees worldwide on March 31, 2015.

Healthcare starts a year of investments
The Healthcare business sector generated organic sales growth of 0.3% in the first quarter of 2015. Including positive foreign exchange effects of 7.1%, net sales rose overall by 7.4% to € 1.7 billion (Q1 2014: € 1.6 billion). In the first quarter of 2015, organic growth was driven in particular by products to treat diabetes (Glucophage), cardiovascular diseases (Concor) and infertility, as well as by the brand Neurobion, which is marketed by the Consumer Health business. These increases more than offset the decline in sales of Rebif, the top-selling product. From a geographic perspective, organic growth was mainly driven by the Latin America and Asia-Pacific regions.

Rebif, which is used to treat relapsing forms of multiple sclerosis, saw a sharp -15.9% decrease in organic sales in the first quarter of 2015 owing to strong competition from oral formulations. Amid currency tailwinds of 9.5%, Rebif sales amounted to € 430 million. Sales of the cancer drug Erbitux declined organically by -5.9% to € 205 million. Following a very strong year-earlier quarter, the company achieved slight organic sales growth of 1.7% with the fertility drug Gonal-f. Including positive foreign exchange effects, sales rose to € 164 million.

Higher spending on research and development, particularly to finance immuno-oncology projects, as well as the absence of royalty and license income and the sales declines with respect to Rebif outweighed the positive currency effects. Consequently, EBITDA pre exceptionals of the Healthcare business sector decreased by -3.8% to € 461 million in the first quarter of 2015.

“In 2015, we plan to invest heavily in immuno-oncology and together with Pfizer we want to build a strong position in this emerging research area. A Phase III clinical trial of avelumab in non-small-cell lung cancer was recently initiated. Up to five further trials that could be pivotal for product registrations are to start this year, also in gastric and bladder cancer,” said Kley.

Life Science starts with a solid first quarter
In the first quarter of 2015, the Life Science business sector posted moderate organic sales growth of 3.4%, which was primarily driven by the good business development of Process Solutions. Sales developed particularly well in North America. Including pronounced positive currency effects of 9.8% and the sale of the Discovery and Development Solutions business field, Life Science net sales rose by a total of 12.4% to € 738 million (Q1 2014: € 657 million).

The Process Solutions business area, which markets products and services for the pharmaceutical production value chain, generated organic sales growth of 5.4%. This was mainly driven by increasing demand from the biotech sector for single-use and purification solutions. With its broad range of products for researchers and scientific laboratories, the Lab Solutions business area recorded organic sales growth of 2.2%. The Bioscience business area, which primarily markets products and services for pharmaceutical and academic research laboratories, recorded organic sales growth of 0.5%.

Performance Materials benefits from a new liquid crystal generation and AZ
Net sales of the Performance Materials business sector, which comprises Merck KGaA, Darmstadt, Germany’s specialty chemicals business, soared by 53.4% to € 617 million in the first quarter of 2015 (Q1 2014: € 402 million). This was mainly attributable to the additional contribution to sales by the AZ acquisition (37.0%) as well as significant foreign exchange effects (14.8%). Sales also saw organic growth of 1.6%, to which all business units contributed.

The newly formed Display Materials business unit, consisting of Merck KGaA, Darmstadt, Germany’s successful liquid crystals business and the complementary AZ display materials business, benefited from energy-saving UB-FFS technology used in the liquid crystal displays of the latest mobile device generation. Yet the established liquid crystal technologies were also robust, benefiting from the demand for high-end televisions, for example ultra-HD sets with ever larger display diagonals. The renamed business unit Pigments & Functional Materials (formerly Pigments & Cosmetics) generated slight organic sales growth in the first quarter of 2015. Growth drivers were pigments for coating applications, mainly the Xirallic pigments, which are primarily used in automotive coatings. The Integrated Circuit (IC) Materials business unit includes the AZ business with materials used to manufacture integrated circuits. Compared with the year-earlier figures, IC materials posted a moderate organic increase in sales. Thanks to higher demand for OLED displays and LED phosphors, the Advanced Technologies business unit also generated organic growth.

Merck KGaA, Darmstadt, Germany confirms guidance for 2015
For 2015, the Group continues to expect slight organic sales growth and a slight portfolio effect due to the inclusion of AZ for a full fiscal year. This development will be supported by strong, positive foreign exchange effects. Overall, the company assumes an increase in net sales to between € 12.3 billion and € 12.5 billion in 2015. As of the first quarter of 2015, Merck KGaA, Darmstadt, Germany is disclosing commission income as part of net sales in order to better steer its business sectors. Yet this has no effect on the forecasts made. The Group anticipates EBITDA pre exceptionals of between € 3.45 billion and € 3.55 billion in 2015 despite higher R&D spending in the Healthcare business sector, the downturn in the development of Rebif in the United States and Europe, as well as the absence of royalty and license income. Business free cash flow of the Group is expected to lie between € 2.4 billion and € 2.5 billion in 2015.

Forecast for FY 2015 (without taking the planned Sigma-Aldrich acquisition
into account)
€ million
Net sales
EBITDA pre exceptionals
Business free cash flow
~ 12,300 – 12,500
~3,450 – 3,550
~2,400 – 2,500
Organic at the previous year’s level
~1,900 – 2,000
~ 1,500 – 1,550
Life Science
Moderate organic growth
~730 – 760
~ 450 – 480
Performance Materials
Slight organic increase, strong portfolio effect
~1,050 – 1,100
~ 850 – 900
Corporate and Other
~-330 – -280
~ -420 – -390

Group – Key figures
€ million
Q1 2015
Q1 2014
Change (in %)
Net sales
Operating result (EBIT)
Margin (% of sales)
Margin (% of sales)
EBITDA pre exceptionals
Margin (% of sales)
Earnings per share (€)
Earnings per share pre excpetionals (€)
Business free cash flow
Net income
€ million
March 31, 2015
Dec. 31, 2014
Net financial debt

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  • Merck KGaA, Darmstadt, Germany stock symbols
    Reuters: MRCG, Bloomberg: MRK GY, Dow Jones: MRK.DE
    Frankfurt Stock Exchange: ISIN: DE 000 659 9905 – WKN: 659 990