Total revenues of the Performance & Life Science Chemicals division increased 13% to a record EUR 346 million with all three subdivisions and all regions showing improvement, indicating that the division has made a full recovery from last year’s financial crisis. Sales by the Pigments subdivision were especially high compared to last year as demand in both the automotive and cosmetics industries improved.
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Performance & Life Science Chemicals | Key figures – Q1 |
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EUR million |
1st quarter |
1st quarter |
Change |
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Total revenues |
345.6 |
305.0 |
13.3 |
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Gross margin |
190.2 |
146.4 |
29.9 |
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Research and development |
–14.3 |
–14.0 |
1.9 |
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Operating result |
54.9 |
24.5 |
124.2 |
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Exceptional items |
– |
1.2 |
– |
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Free cash flow |
22.7 |
–7.2 |
– |
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Underlying free cash flow |
22.7 |
–7.2 |
– |
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ROS in % |
15.9 |
8.0 |
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Production capacity is again being fully utilized and inventory adjustments have declined, leading to a gross margin of EUR 190 million, which is a 30% increase over the year-ago quarter. The division’s investment in research and development was similar to the year-ago quarter at EUR 14 million. Like Merck’s other divisions, Performance & Life Science Chemicals is a leader in its specialty areas as it continuously produces innovative products with the customer in mind.
Performance & Life Science Chemicals | Sales by Region – Q1
For example, Merck’s new foodproof® test kits can quickly detect pathogens, genetically modified organisms (GMOs) and spoilage bacteria. The new Merckoquant® test strips provide quick and reliable results of food, water and environmental analysis. These tests, along with many others such as the Singlepath® and Duopath® kits that are designed like easy-to-use pregnancy tests, represent the world’s largest collection of test kits for the food and beverage industry.
Also of interest from this division is Merck’s new anti-aging cosmetic ingredient RonaCare® Cyclopeptide, which mimics the natural regeneration processes of the skin.
The division broke ground at Merck’s headquarters in Darmstadt for a EUR 30 million production plant for pharmaceutical raw materials. Its new materials research center, also in Darmstadt, is scheduled to open later this year.
With revenues and the gross margin increasing more than expenses, the division’s operating result more than doubled to EUR 55 million in the first quarter of 2010 compared to EUR 25 million in the year-ago quarter. The division’s free cash flow improved considerably in the first quarter, rising to EUR 23 million from EUR –7.2 million in the year-ago quarter. The ROS rose to 15.9% from 8.0%.
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