MOSCOW (
MRC) -- Merck (Darmstadt, Germany) reported higher second-quarter operating profit and revenue, and raised its full-year forecast, said
Chemweek.
However, net income was down 9.1% year-on-year (YOY), to EUR312 million (USD347.3 million). EBIT rose 9.8%, to EUR550 million and Ebitda was 26.6% higher YOY at EUR1.07 billion. The Ebitda margin rose from 27.9%, to 30.4%. Sales were 18.2% higher at EUR3.8 billion, reflecting the recently acquired Sigma-Aldrich.
The company achieved all of its second-quarter plans, says Stefan Oschmann, CEO. "Strong demand for our products and dynamic market developments gave our health-care and life-science businesses additional tailwinds," he says. Health-care performance led to the lifting of Merck’s full-year forecast, he says. Merck now expects group sales to increase to EUR14.9-15.1 billion, up from previous forecasts of EUR14.8-15.0 billion. Merck is also raising its Ebitda pre-exceptionals forecast to EUR4.25-4.40 billion from earlier forecasts of EUR4.10-4.30 billion. The performance materials business, a leading producer of liquid crystals, expects a moderate decline in sales. Ebitda pre-exceptionals should reach EUR1.10-1.15 billion.
The health-care business reported an increase of 16.1% in Ebitda pre-exceptionals, to EUR557 million. This included organic growth as well as a gain of about EUR30 million from the sale of a minority interest held by the Merck Venture Fund. Despite strong organic growth of 7.3% in the health-care business, currency effects caused a 2.7% reduction in sales, to EUR1.8 billion. Sales in the life-science segment rose to EUR1.4 billion, 85% up YOY, reflecting the addition of Sigma-Aldrich. Ebitda pre-exceptionals more than doubled, to EUR417 million.
Net sales of the performance materials business declined organically by 4.7% on the back of destocking by display customers. The SARC Hitech business of Sigma-Aldrich, which has been integrated into the performance materials sector, added 3.1% to sales, which overall declined 3.5%, to EUR621 million. Ebitda pre-exceptionals was down from EUR295 million in the second quarter of 2015, to EUR273 million in the latest quarter. The Ebitda margin pre-exceptionals, however, was an impressive 44.1%.
The display materials business faced an organic decrease in sales due to continued volume declines of mature liquid crystal technologies as well as destocking by customers, a development that will extend into the second half of the year. Merck’s objective is to expand its market and technology leadership in liquid crystals beyond displays. The company has just announced plans to build a liquid crystal window modules plant, which should begin production in 2017. A EUR30-million OLED production unit at Darmstadt is due to be commissioned next month.
MRC