Chemicals business sector

The Chemicals business sector’s two divisions are Liquid Crystals and Performance & Life Science Chemicals. In addition, second-quarter transaction and integration costs for the Millipore Corporation are included under a new division named Merck MilliporE. Merck completed the purchase of the U.S.-based life-science company Millipore on July 14, 2010. As of the third quarter, the new acquisition will be combined with most of the Performance & Life Science Chemicals division to form the Merck Millipore division. The new Performance Materials division will consist of two business units, Liquid Crystals and Pigments.

During the second quarter, the Chemicals business sector generated 29% of the Group’s total revenues but 51% of the operating result due to the highly profitable nature of the products from both divisions, especially Liquid Crystals.

The Chemicals business sector’s second-quarter total revenues jumped 32% to EUR 644 million on surging demand, particularly for liquid crystals, plus a positive currency effect of 9.5%. For the first half of 2010, revenues were up 33% to EUR 1,228 million. The second-quarter gross margin improved by 79% to EUR 394 million as production costs declined. The business sector’s second-quarter operating result more than doubled to EUR 166 million compared to an unusually low EUR 70 million in the year-ago quarter. The half-year operating result more than tripled to EUR 333 million compared to a very low level of EUR 107 million in the year-ago period when the sector was impacted by the financial crisis of 2009.

On July 7, the German Chemical Industry Association (VCI) revised its forecast for 2010 and now expects German chemical production to increase by 8.5% and sales of German chemicals to rise by 10%.