Record results for Merck in 2013
Positive business performance in all four divisions
Merck reported strong full-year results for 2013 in spite of a 'challenging' market environment. Sales rose by 4.2% to €10.7bn and efficiency measures led to a record EBITDA of €3.25bn, an increase of 9.7%.
'We delivered on our promises in 2013 as well,' said Karl-Ludwig Kley, Chairman of the Merck Executive Board. 'We developed our business with innovative and highly specialised products and services further, expanding our presence in global growth markets.'
Kley added: 'The numbers reflect this development. Merck was never as profitable as it is today. Therefore, we expect to achieve slight organic growth in sales and constantly high earnings in 2014.'
All four divisions contributed to the increase in organic sales of the Merck Group.
Emerging markets, such as Latin America and Asia (excluding Japan), achieved strong organic growth of 9.3%, mainly driven by the Merck Serono biopharmaceutical division.
Merck was never as profitable as it is today
In Europe, organic sales growth of 1.4% was partially cancelled out by negative foreign exchange effects of 0.7%. Europe’s percentage contribution to Group sales thus remained unchanged at 37%.
Merck’s top-selling drug, Rebif, which is used to treat relapsing forms of multiple sclerosis, posted slight organic growth of 1.4% despite more intense competition. Owing to foreign exchange effects of 2.9%, however, Rebif sales decreased by 1.5% to €1.86bn.
The oncology drug Erbitux generated organic growth of 5.9%, driven mainly by its approval in head and neck cancer in Japan as well as good demand in emerging markets. Including an adverse foreign exchange impact of 6.5%, which was mainly attributable to the Japanese yen, sales declined slightly by €5m to €882m.
Sales of Gonal-f, a recombinant hormone used in the treatment of infertility, declined to €586m.
At €394m, sales in the Endocrinology franchise, which mainly consists of products to treat metabolic and growth disorders, decreased slightly by 1.3%.
The Consumer Health division, which manufactures and markets over-the-counter pharmaceuticals, reported a slight increase in sales in 2013 of 0.9% to €477m.
According to Kley, Merck's aim now is to 'ensure sustainable growth by means of innovations and compelling marketing of strategic brands in high-growth markets'.
As of 1 January, Neurobion, a vitamin B-based analgesic, and Floratil, a leading brand in the probiotic antidiarrheal segment in Brazil, were transferred from the Merck Serono division to the Consumer Health division. As a result, the division has become significantly larger and sales are expected to increase by approximately 55% to €742m.
Merck said the transfer of the two strong brands increases the division’s exposure in Emerging Markets and is an important step in the division’s journey towards developing a market share of at least 3% with three strategic brands in each of its key markets. The share of Consumer Health sales accounted for by Emerging Markets will increase from 28% to 51% as a result of this move.
Merck wants to ensure sustainable growth through innovation and compelling marketing of strategic brands in high-growth markets
The Merck Millipore division, which markets life science tools, generated strong organic sales growth of 5.5% in 2013 despite a 'challenging' market environment. Merck Millipore’s EBITDA rose by 4.6% to €643m.
Lab Solutions and Process Solutions, the two top-selling business units, contributed to the sales growth through price increases and higher volumes. Biochrom, a Berlin-based company acquired in 2012, contributed 0.5% to the sales increase.
Sales growth in the Merck Millipore Lab Solutions business unit, which manufactures products for research as well as analytical and clinical laboratories in a wide variety of industries, was mainly driven by price increases as well as higher demand for biomonitoring solutions, particularly from customers in the pharmaceutical industry as well as the Emerging Markets region.
The Process Solutions business unit, which supplies a range of products to pharmaceutical and biotechnology companies, generated the highest organic sales growth within the Merck Millipore division. This increase was driven by higher demand from the pharmaceutical industry for products used in biopharmaceutical manufacturing, especially in Asia and the US.
Going forward, Merck Millipore will concentrate on expanding and strategically aligning its portfolio, focusing on the key regions of North America, Asia and Latin America.
Merck expects stable sales in 2014 and to achieve the 2013 level of EBITDA.
