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News Release
March 1, 2007
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Merck KGaA Confirms Record 2006 Results, Announces Serono Preliminary Figures for 2006
- Proposed 2006 Dividend: EUR 0.90/share plus bonus of EUR 0.15/share
- Merck sees positive outlook for 2007
Darmstadt, March 1, 2007 – Merck KGaA today announced that all key preliminary figures for 2006, which were published on January 18, have been confirmed and are now final. Group sales for 2006 rose 8.5% to EUR 6.3 billion while profit after tax jumped 49% to EUR 1 billion.
Key Figures:
| Merck Group (Mio EUR) | Q4/2006 | Q4/2005 | (+/- %) | FY/2006 | FY/2005 | (+/- %) |
| | | | | | |
| Sales * | 1,625.3 | 1,491.1 | 9.0 | 6,258.6 | 5,768.2 | 8.5 |
| Operating Result | 303.3 | 191.7 | 58.2 | 1,105.4 | 883.3 | 25.1 |
| Exceptionals | - 111.1 | - 50.3 | 120.8 | 219.4 | 72.3 | 203.6 |
| EBIT | 192.2 | 141.4 | 35.9 | 1,324.8 | 955.6 | 38.6 |
| Profit After Tax | 130.6 | 113.6 | 15.0 | 1,001.3 | 672.7 | 48.8 |
| Net Profit After Minorities | 129.5 | 109.5 | 18.2 | 983.1 | 658.9 | 49.2 |
| Earnings Per Share (euro) * | 0.67 | 0.56 | 19.6 | 5.07 | 3.40 | 49.1 |
* Figures have been adjusted.
Merck’s balance sheet at the end of 2006 was the strongest in the company’s long history. This outcome was due to good business performance by all divisions, exceptional items totaling EUR 219 million, improved financial results due to lower interest payments, and a lower underlying tax rate. Total assets increased to EUR 8,102 million on December 31, 2006, from EUR 7,281 million the year before.
As a result of this strong performance, Merck’s Executive Board will propose at the Annual General Meeting of Shareholders on April 27 that the company pay a dividend of 90 cents per share. In addition, the Executive Board will propose a bonus dividend of 15 cents to reflect the non-recurring exceptional gains reaped during 2006. The dividend for 2005 was 85 cents.
“The year 2006 was another record year for Merck, allowing us to increase our dividend and setting us on a new course for the future,” said Dr. Michael Roemer, Chairman of the Executive Board of Merck KGaA. “And, based on Merck’s recent news flow and our pipeline of innovative products in both Pharmaceuticals and Chemicals, the future looks bright.”
Summary of Recent Pharma Pipeline News
- The Phase III CRYSTAL study of Erbitux® for first-line treatment of metastatic colorectal cancer met its primary endpoint.
- The Phase III diet study of Phenoptin® for phenyketonuria (PKU) met all pre-specified endpoints.
- Completion of patient enrollment for the CLARITY Phase III clinical trial of oral cladribine for the treatment of multiple sclerosis.
- Launch of easypod®, the first electronic growth hormone injection device.
- Application submitted for approval of Erbitux in Japan for the treatment of colorectal cancer.
- First patient enrolled in the Phase III START trial of Stimuvax® for the treatment of non-small cell lung cancer.
The new Merck Serono division – a combination of the former Serono Group and Merck’s former Ethicals division – currently has 31 projects in development and is expected to invest about EUR 1 billion in research and development during 2007.
Chemicals
The Chemicals Business Sector, which contributed 33% (EUR 2.1 billion) of total sales and 58% (EUR 641 million) of the operating result during 2006, remains an integral part of the Merck Group. This sector concentrates on high value specialty markets, most notably liquid crystals where it is the clear leader in a growing market. Innovation and a high investment in R&D have paid off.
The Liquid Crystals division sales rose 21% to EUR 892 million in 2006 and the operating result soared 40% to EUR 486 million. The Performance & Life Science Chemicals division grew in line with the market with sales increasing 4.5% to EUR 1.2 billion in 2006 while the operating result was up 6.4% to EUR 155 million.
Serono Preliminary Results
Merck KGaA today also announced preliminary fourth quarter and full year results for the period ended December 31, 2006 for the Serono Group. These are results of Serono only.
“Serono experienced significant operating margin and revenue growth during 2006, leading to a strong bottom line performance,” said Elmar Schnee, Chief Executive Officer of Merck Serono S.A. “The record sales for Q4 demonstrate that our employees have kept their focus on delivering results during this period of transition.”
Preliminary Key Figures for Serono:
| (US$ million) | Q4/2006 | Q4/2005 | (+/- %) | FY/2006 | FY/2005 | (+/- %) |
| Total Revenues | 739.2 | 669.9 | 10.4 | 2,804.9 | 2,586.4 | 8.5 |
| Operating Result | 134.0 | 164.2 | - 18.4 | 736.6 | - 126.2 | -- |
| Profit Before Tax | 137.4 | 166.8 | - 17.7 | 766.6 | - 72.4 | -- |
| Tax | 58.3 | - 22.6 | -- | - 31.0 | - 32.9 | - 5.6 |
| Net Profit After Minorities | 195.7 | 144.1 | 35.8 | 735.4 | - 106.1 | -- |
Total revenues consist of product sales plus royalty income. Product sales were up 6.8% to $2,498 million in the year and up 8.5% to $656 million in the quarter. Royalty income increased 24% to $307 million in 2006, and grew 28% to $84 million in the fourth quarter.
Rebif® sales were up 14% to $1,452 million in 2006 and increased by 16% to $388 million in the fourth quarter. In 2006, Rebif sales in the US gained 26% to $493 million for the full year, and were up 19% to $136 million in the fourth quarter. Outside the US, sales increased by 9.0% to $959 million and by 14% to $253 million in the fourth quarter.
Sales of Raptiva® more than doubled to $70 million in 2006 and increased by 84% during the fourth quarter compared to the prior year. In 2006, sales of Gonal-f® decreased by 2.5% to $533 million and by 1.2% to $132 million in the fourth quarter. Saizen® sales increased by 1.2% to $209 million during the year and were $55 million during the fourth quarter. Serostim® sales increased to $72 million for the full year and 12% to $19 million during the fourth quarter.
As announced on February 23, Merck now holds 99.1% of the actually issued voting rights of Merck Serono S.A. The squeeze out of the remaining shares, leading to 100% ownership, will begin shortly. Serono’s final financial results for 2006 will be published in the second quarter.
Outlook
On a stand-alone basis and excluding its Generics division Merck expects this year a high single-digit growth of sales and a comfortable double-digit increase of the EBIT before Exceptionals. For Serono on a stand-alone basis Merck expects the same.
Notes to Editors:
- The full Annual Report in English and German is available as an online version and for download on the company website www.financialreports.merck.de .
- A Press Conference will be held at 10 a.m. today at Merck Headquarters in Darmstadt and can be viewed live on the Merck website. A Conference Call for media and analysts will be held at 3 p.m.
Merck KGaA stock symbols:
Reuters: MRCG, Bloomberg: MRK GY, Frankfurt Stock Exchange: ISIN: DE 000 659 9905 - WKN: 659 990 |
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Merck is a global pharmaceutical and chemical company with sales of EUR 6.3 billion in 2006, a history that began in 1668, and a future shaped about 35,000 employees (including Merck Serono) in 56 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 free shareholders own the remaining approximately 30%. In 1917 the U.S. subsidiary Merck & Co. was expropriated and has been an independent company ever since. |