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Home  > Markets & companies  > Raw materials market  > Merck finishes record year 2015 stronger

Monday, 14 October 2019
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Markets & companies, Raw materials market

Merck finishes record year 2015 stronger

Wednesday, 9 March 2016

Merck reported record results for 2015, emerging stronger from the transformation process that started in 2007.

Karl-Ludwig Kley, Chairman of the Executive Board. Source: Merck

Karl-Ludwig Kley, Chairman of the Executive Board. Source: Merck

Net sales and EBITDA pre exceptionals were higher than ever before in Merck’s history of nearly 350 years.

An eventful and very successful year

"2015 was not only an eventful, but above all a very successful year for Merck. We again achieved profitable growth. By acquiring Sigma-Aldrich, we successfully completed the portfolio realignment of recent years. Research advances and future-oriented investments form the foundation for future success. And our new bold and vibrant branding shows what makes Merck unique,” said Karl-Ludwig Kley, Chairman of the Executive Board.

Net sales rise by 13.0 %

Net sales of the Merck Group rose sharply by 13.0% to EUR 12.8 billion in 2015 (2014: EUR 11.4 billion). The acquisitions of AZ Electronic Materials (AZ) and Sigma-Aldrich were responsible for 4.3% of the sales growth. Organically, Merck increased sales by 2.6% over 2014. Favorable exchange rate effects, primarily thanks to the strength of the U.S. dollar, contributed 6.2% to sales growth.

EBITDA reaches new record level

The operating result (EBIT) rose by 4.6% to EUR 1.8 billion (2014: EUR 1.8 billion). EBITDA pre exceptionals, the key financial indicator used to steer operating business, climbed significantly by 7.1% to EUR 3.6 billion (2014: EUR 3.4 billion) thanks to the Life Science and Performance Materials business sectors.

Performance Materials benefits from business with innovative products

In 2015, net sales of the Performance Materials business sector rose sharply by 24.1% to EUR 2.6 billion (2014: EUR 2.1 billion). Apart from a significantly positive currency effect of 13.1%, revenues from acquired businesses also contributed considerably to sales growth, accounting for 10.4% of the increase. These acquisition-related sales effects were largely attributable to the integration of AZ, which was acquired in 2014. In addition, the first-time consolidation in mid-November of the SAFC Hitech business of Sigma-Aldrich contributed around EUR 10 million to the sales increase in the Performance Materials business sector. Organically, net sales were at the previous year’s level, with growth of 0.6%.

Stable year for the Pigments & Functional Materials business unit

The Display Materials business unit, which was established at the beginning of 2015, saw a strong increase in sales driven by currency and acquisitions and solidified its global market leadership position. The increases in sales volumes of innovative technologies overcompensated for the decline in sales volumes for older liquid crystal technologies. For the Pigments & Functional Materials business unit, 2015 was a stable business year with sales at the previous year’s level. The Integrated Circuit Materials business unit, which includes the former AZ business with materials used to manufacture integrated circuits as well as the Sigma-Aldrich Hitech business acquired in November 2015, recorded slight organic sales growth. Within the Performance Materials business sector, the highest growth rates were achieved by the Advanced Technologies business unit. Its emerging OLED materials business showed a particularly dynamic development. In June 2015, Merck laid the cornerstone for a new OLED materials production unit in Darmstadt, involving an investment of around EUR 30 million.

EBITDA pre exceptionals of Performance Materials soared by 26.5% to EUR 1.1 billion (2014: EUR 0.9 billion), driven by currency effects, the integration of AZ, as well as good volume developments.

2016 guidance: Merck expects slight organic sales growth

In 2016, Merck expects slight organic sales growth. Additionally, owing to the acquisition of Sigma-Aldrich, the company expects a positive portfolio effect on sales in the low double-digit percentage range. For 2016, owing to the expected operating performance and the acquisition of Sigma-Aldrich, Merck forecasts a low double-digit percentage increase in EBITDA pre exceptionals over 2015.

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