Merck generates record sales and continues to grow profitably in 2016

Merck finished 2016 with record figures and continued to grow profitably. Major strategic advances were made in all three business sectors. Performance Materials remained robust in a difficult market environment.

The Modular Innovation Center. Source: Merck Group -

“2016 was a successful year for Merck. With its four strong businesses, Performance Materials showed robustness in a challenging market environment. We maintained our strategically important market leadership in display materials and purposefully drove new technologies forward,” said Stefan Oschmann, Chairman of the Executive Board and CEO of Merck.

EBITDA climbed 23.7% to EUR 4.5 billion

Net sales of the Merck Group increased sharply by 17.0% to EUR 15.0 billion in 2016 (2015: EUR 12.8 billion). All regions contributed to organic sales growth of 3.2%. The purchase of Sigma-Aldrich was responsible for an acquisition-related sales increase of 16.4%. By contrast, negative exchange rate effects, which were mainly attributable to Latin American currencies, lowered Group sales by -2.6%. The operating result (EBIT) rose by 34.6% to EUR 2.5 billion (2015: EUR 1.8 billion). EBITDA pre exceptionals, the company’s key earnings indicator, climbed 23.7% to EUR 4.5 billion. Thanks to the Healthcare and Life Science business sectors, this figure was considerably higher than in the previous year (2015: EUR 3.6 billion).

Group sales rose in the fourth quarter of 2016

In the fourth quarter of 2016, group sales rose by 10.6% to EUR 3.8 billion (Q4 2015: EUR 3.5 billion). This was driven not only by organic growth attributable to Healthcare and Life Science, but also by strong acquisition-related sales growth from the purchase of Sigma-Aldrich. EBITDA pre exceptionals grew by 15.1% to EUR 1.1 billion in the fourth quarter of 2016 (Q4 2015: EUR 933 million). Earnings per share pre exceptionalsincreased significantly by 26.5% in the fourth quarter of 2016 to EUR 1.43 (Q4 2015: EUR 1.13).

EBITDA of Performance Materials fell by -2.3%

Net sales by the Performance Materials business sector declined in 2016 by -1.8% to EUR 2.5 billion (2015: EUR 2.6 billion). This was mainly due to the -4.7% organic decrease in sales. Acquisition-related growth of 2.7% from the SAFC Hitech business of Sigma-Aldrich acquired in 2015 and exchange rate effects of 0.2% could only partly offset this. EBITDA pre exceptionals of Performance Materials fell by -2.3% to EUR 1.1 billion (2015: EUR  1.1 billion).

Stable EBITDA pre exceptionals forecast for 2017

For the Group, Merck expects slight to moderate organic sales growth in 2017 in comparison with the previous year. EBITDA pre exceptionals of the Merck Group should remain about stable compared with 2016; this encompasses a slightly positive or negative percentage fluctuation around the previous year’s level.

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