Merck recently announced its financial results, reporting a net sales increased by 16.7 per cent to €4.4 billion, compared to the year-earlier quarter. EBITDA pre, the company’s most important earnings indicator, rose by 27.2 per cent to € 1.2 billion. The COVID-19 crisis, which has meanwhile become a pandemic, only had a moderate impact in the first quarter of 2020. However, the company expects the effects to amplify in the coming months and has also taken this into account in its forecast for fiscal 2020. For this year, Merck expects Group net sales of between € 16.8 billion and € 17.8 billion as well as EBITDA pre in a range of € 4.35 billion to € 4.85 billion.
“In recent weeks, many companies have throttled or even stopped their production activities for understandable reasons. Many parts of our business are essential, so we of course continued our operations. Patients, researchers and customers around the world rely on us. The good business results in the first quarter show that we have successfully mastered the crisis so far. With our three innovation-driven business sectors, we are also well positioned during economically difficult times. In 2018, we had already begun to adapt our indirect costs. Our products and solutions contribute to the global COVID-19 response in many ways. We are proud of this, and it is what drives us,” explained Stefan Oschmann, Chairman of the Executive Board and CEO of Merck. “We will continue to do everything we can to deal with the impact of COVID-19 in the best possible way. Our top priority will of course still be the safety and health of our employees as well as business continuity.”
In comparison with the year-earlier quarter, Group net sales increased by 16.7 per cent to € 4.4 billion in the first quarter. All business sectors contributed to this. Organically, Group sales grew by 7.6 per cent, driven by the Healthcare and Life Science business sectors. Foreign exchange effects accounted for 0.6 per cent. Owing to portfolio effects, Group sales increased by 8.4 per cent, primarily due to the acquisition of Versum Materials in autumn 2019.
EBITDA pre rose in the first quarter by 27.2 per cent and thus far more strongly than sales. Merck thus achieved profitable growth. The organic increase in EBITDA pre amounted to 14.5 per cent and was supported by positive foreign exchange effects of 2 per cent. The acquisitions of Versum Materials and Intermolecular improved EBITDA pre by 10.7 per cent. The operating result EBIT advanced by 89.0 per cent to € 716 million. Net income soared by more than 100 per cent to € 456 million. In the first quarter, earnings per share pre were € 1.50, an increase of 32.7 per cent over the year-earlier quarter. Merck had 57,451 employees worldwide on March 31, 2020.
MS medicine Mavenclad and products from General Medicine & Endocrinology drive organic sales growth of Healthcare
At € 1.7 billion, net sales of the Healthcare business sector increased in the first quarter by 14.9 per cent over the year-earlier quarter. Organic growth was 15.3 per cent, the foreign exchange impact was –0.4 per cent. The main drivers of organic growth were especially the medicine Mavenclad for the treatment of certain forms of multiple sclerosis (MS), as well as products from the General Medicine & Endocrinology (GM&E) franchise. Sales of Mavenclad rose to € 123 million, also due to marketing approval in the United States in late March 2019. Products from GM&E, including the diabetes treatment Glucophage and the cardiovascular medicine Concor, generated organic sales growth of 20.9 per cent, also due to advance effects in the course of the COVID-19 pandemic. By contrast, sales of the Fertility franchise declined organically by –3.5 per cent. Lower demand in China, caused by the impacts of the
COVID-19 pandemic, especially the lockdown there, were largely compensated for by positive developments in other regions.
In the first quarter, EBITDA pre of Healthcare amounted to € 472 million, an increase of 42.2 per cent over the year-earlier quarter.
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