Merck Consumer Health Turnaround on Track

DARMSTADT, Germany

Merck’s Consumer Health division has made substantial progress in driving the turnaround of the business, raising profitability levels to those of other global over-the-counter (OTC) industry leaders. Based on its third-quarter earnings (published on November 14, 2013), the profit margin, or EBITDA pre one-time items as a percentage of sales, was at 18.4 percent, significantly higher than the 14.2 percent in September 2011. The improvement was mainly due to a strong focus on strategic brands such as Bion^®, Nasivin^®, Femibion^® and Kytta^®, and better allocation of resources in key markets. For the first nine months, EBITDA pre one-time items grew by 22% to € 58 million, compared with the year-earlier period, resulting in a raised profit forecast to € 73-77 million for 2013.

“Given the impressive year-to-date performance of our Consumer Health division, we can now look at how to further support organic growth of our strong consumer brands, particularly in emerging markets where they have significant potential,” said Stefan Oschmann, Member of the Merck Executive Board with responsibility for the Merck Serono and Consumer Health divisions.

Over the course of the last two years, Consumer Health has heavily focused on establishing the new regional operating model with clear lines of accountability, an infusion of new talent into key leadership roles and the diverting of resources away from unprofitable ventures towards key brands and markets. The company is pursuing a strategy aimed at developing at least three strong brands generating a minimum of 3% total share per key market, focusing on 20 strategic investment markets.

“The current results confirm that our focus on building strong global and regional brands, developing a robust innovation pipeline and driving growth particularly in emerging markets is delivering consistent results for the business,” said Udit Batra, CEO and President of the Consumer Health division.

The strong profit development is mirrored by strong top line results for the third quarter in 2013, headlined by organic sales growth of 14.6% (countered by a negative foreign exchange impact of 7.6%) to € 131 million. Year-to-date sales rose by 7.6% organically (countered by a negative foreign exchange impact of 4.3%) to € 363 million. These results firmly establish the Consumer Health division as Merck’s fastest growing division in the current fiscal year.

About the Merck Consumer Health Division

Brands of the Consumer Health division of Merck, such as Bion, Nasivin, Femibion, Kytta, Seven Seas, Sangobion, and Sedalmerck, are innovative leaders in key markets, backed by science and trusted by consumers. Consumer Health is a division of the Merck Group with global headquarters in Darmstadt, Germany.

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About Merck Group

Merck is a leading pharmaceutical, chemical and life science company with total revenues of € 11.2 billion in 2012, a history that began in 1668, and a future shaped by approximately 38,000 employees in 66 countries. Its success is characterized by innovations from entrepreneurial employees. Merck’s operating activities come under the umbrella of Merck KGaA, in which the Merck family holds an approximately 70% interest and shareholders own the remaining approximately 30%. In 1917 the U.S. subsidiary Merck & Co. was expropriated and has been an independent company ever since.