Pharmaceuticals* | Operating result by division
In 2007, the Pharmaceuticals business sector nearly doubled its operating result to €417 million despite the additional amortization and write-downs in connection with the purchase price allocation and the Merck Serono integration costs. The business sector generated around 40% of the total operating result (excluding the segment Corporate and Other). Return on sales for the Pharmaceuticals business sector was 8.5% compared with 9.4% in 2006.
The Merck Serono division achieved an operating result of €357 million. The division booked charges of €548 million for the amortization of intangible assets that relate mainly to the purchase price allocation. The operating result of the division includes restructuring and integration costs of €154 million. Moreover, impairment charges, in particular of intangible assets, totaling €66 million are included. Return on sales was 8.0% in 2007 following 8.5% in 2006.
The operating result of the Consumer Health Care division grew by 9.4% to €60 million. Return on sales for the division was 14.2% compared with 13.6% in 2006.
Chemicals | Operating result by division
The Chemicals business sector achieved an operating result of €631 million, which was 1.6% lower than in 2006. The business sector thus generated 60% of the total operating result in 2007 (excluding the segment Corporate and Other). Return on sales for the Chemicals business sector was 29.3% compared with 30.4% in 2006.
At €487 million, the operating result of the Liquid Crystals division came in at the previous year’s level. ROS was 53.1% compared with 54.3% in 2006.
The Performance & Life Science Chemicals division achieved an operating result of €144 million, corresponding to a decline of 7.0%. The result was adversely affected especially by restructuring measures in the United States and Switzerland. Return on sales was 11.7% compared with 12.8% in 2006.
Exceptional items
Exceptional items amounted to €776 million in 2007. Within the scope of the Serono purchase price allocation, the measurement of the acquired inventories at fair value was €734 million higher. This amount was fully expensed in the income statement in 2007. Due to the non-recurring nature and size of this amount, it is disclosed under exceptional items. In addition, exceptional items include a loss of €12 million on the disposal of financial assets. Provisions of €38 million were set up for environmental protection measures. Income of €8 million was recognized from the release of provisions for earlier measures.