Segment Reporting of the Merck Group

Sales

1,395.5

1,349.1

2,740.4

2,685.4

117.6

113.4

233.8

220.3

Royalty, license and commission income

84.4

101.4

166.7

171.9

0.7

0.5

1.1

1.2

Total revenues

1,479.9

1,450.5

2,907.1

2,857.3

118.3

113.9

234.9

221.5

Gross margin

1,186.9

1,218.8

2,408.5

2,405.3

79.6

78.4

161.7

151.3

Marketing and selling expenses

–366.9

–379.0

–718.6

–701.2

–56.8

–63.1

–117.4

–119.8

Royalty, license and commission expenses

–112.9

–113.1

–219.2

–230.0

–0.3

–0.5

–0.7

–0.7

Administration expenses

–65.3

–69.0

–127.8

–131.3

–5.9

–6.0

–11.9

–11.9

Other operating expenses and income

–224.5

–54.8

–272.5

–119.9

–0.4

–7.2

–1.9

–9.8

Research and development

–301.3

–296.1

–606.9

–600.6

–5.8

–6.1

–10.7

–10.9

Operating result

–146.6

163.6

1.8

341.6

9.3

–5.4

17.0

–3.9

Exceptional items

5.8

–

6.8

–

–

–

–

–

Earnings before interest and tax (EBIT)

–140.8

163.6

8.5

341.6

9.3

–5.4

17.0

–3.9

Net operating assets*

–

–

9,622.0

10,359.7

–

–

315.3

310.8

Segment liabilities*

–

–

–1,136.5

–1,268.9

–

–

–78.8

–86.4

Capital spending on property, plant and equipment

51.1

61.9

96.0

108.0

1.3

0.9

1.9

2.3

Investments in intangible assets

6.5

11.8

11.6

23.3

5.6

0.5

5.8

0.7

Depreciation and amortization

–211.5

–188.5

–410.9

–370.3

–2.6

–3.3

–5.3

–6.1

Impairment losses

–266.2

–

–316.7

–17.2

–0.8

–

–0.8

–

Net cash flows from operating activities

141.1

328.9

481.8

575.0

3.1

3.4

16.9

2.2

Net cash flows from investing activities

14.0

–71.4

211.5

–126.1

–6.3

–2.3

–7.1

–3.6

Free cash flow

155.1

257.5

693.3

448.9

–3.2

1.1

9.8

–1.4

Underlying free cash flow

149.8

257.5

423.0

448.9

–3.2

1.1

9.8

–1.4

FCR in %

10.1

17.8

14.5

15.7

–2.7

1.0

4.2

–0.6

ROS in %

–9.9

11.3

0.1

12.0

7.9

–4.8

7.3

–1.8

Pharmaceuticals

€ million

Q2
2011

Q2
2010

Jan.–June
2011

Jan.–June
2010

Sales

1,513.1

1,462.5

2,974.3

2,905.6

Royalty, license and commission income

85.1

101.9

167.7

173.1

Total revenues

1,598.2

1,564.4

3,142.0

3,078.7

Gross margin

1,266.5

1,297.2

2,570.2

2,556.6

Marketing and selling expenses

–423.7

–442.1

–836.0

–821.1

Royalty, license and commission expenses

–113.2

–113.6

–219.9

–230.6

Administration expenses

–71.3

–75.0

–139.8

–143.3

Other operating expenses and income

–224.9

–62.0

–274.4

–129.7

Research and development

–307.1

–302.2

–617.6

–611.5

Operating result

–137.3

158.2

18.8

337.7

Exceptional items

5.8

–

6.8

–

Earnings before interest and tax (EBIT)

–131.5

158.2

25.6

337.7

Net operating assets*

–

–

9,937.3

10,670.5

Segment liabilities*

–

–

–1,215.3

–1,355.3

Capital spending on property, plant and equipment

52.4

62.9

97.9

110.3

Investments in intangible assets

12.2

12.3

17.4

24.1

Depreciation and amortization

–214.1

–191.8

–416.2

–376.4

Impairment losses

–267.0

–

–317.5

–17.2

Net cash flows from operating activities

144.2

332.3

498.7

577.2

Net cash flows from investing activities

7.8

–73.7

204.4

–129.7

Free cash flow

151.9

258.6

703.1

447.5

Underlying free cash flow

146.6

258.6

432.8

447.5

FCR in %

9.2

16.5

13.8

14.5

ROS in %

–8.6

10.1

0.6

11.0

Sales

583.1

242.1

1,191.5

470.3

373.5

398.3

781.4

749.7

Royalty, license and commission income

0.6

2.3

3.5

3.7

–

1.0

0.8

4.5

Total revenues

583.7

244.4

1,195.0

474.0

373.5

399.2

782.2

754.1

Gross margin

329.8

127.6

686.0

254.5

198.7

266.0

462.9

491.9

Marketing and selling expenses

–147.2

–63.8

–293.3

–121.5

–33.8

–33.9

–66.4

–64.4

Royalty, license and commission expenses

–3.9

–1.3

–7.0

–3.1

–1.3

–2.4

–2.9

–5.9

Administration expenses

–25.5

–11.6

–53.7

–22.0

–9.0

–10.7

–17.7

–20.0

Other operating expenses and income

–29.7

–46.0

–56.8

–60.8

–10.9

–20.0

–26.0

–38.3

Research and development

–31.9

–6.5

–64.5

–13.3

–30.1

–30.0

–66.5

–61.3

Operating result

46.3

–1.4

118.2

33.8

104.3

167.5

273.1

299.0

Exceptional items

–

–

–

–

0.4

–

157.4

–

Earnings before interest and tax (EBIT)

46.3

–1.4

118.2

33.8

104.7

167.5

430.6

299.0

Net operating assets**

–

–

6,134.4

6,435.7

–

–

1,258.3

1,289.8

Segment liabilities**

–

–

–304.1

–361.4

–

–

–144.4

–166.8

Capital spending on property, plant and equipment

26.3

12.2

42.3

20.1

12.5

16.0

25.8

25.2

Investments in intangible assets

1.7

1.4

2.7

2.1

0.5

0.9

1.3

1.5

Depreciation and amortization

–68.7

–11.5

–140.7

–23.2

–24.9

–23.6

–51.9

–47.0

Impairment losses

–2.0

–

–2.0

–

–9.4

–7.4

–9.4

–16.4

Net cash flows from operating activities

90.6

35.7

156.1

65.7

167.1

168.4

284.0

283.9

Net cash flows from investing activities

–31.5

–14.5

–45.6

–24.9

–13.1

–15.5

168.5

–24.4

Free cash flow

59.1

21.2

110.5

40.7

153.9

152.9

452.5

259.6

Underlying free cash flow

69.1

21.2

126.9

40.7

154.0

152.9

251.6

259.6

FCR in %

11.8

8.7

10.6

8.6

41.2

38.3

32.2

34.4

ROS in %

7.9

–0.6

9.9

7.1

27.9

41.9

34.9

39.6

Chemicals

€ million

Q2
2011

Q2
2010

Jan.–June
2011

Jan.–June
2010

Sales

956.5

640.3

1,972.9

1,220.0

Royalty, license and commission income

0.7

3.3

4.3

8.2

Total revenues

957.2

643.6

1,977.1

1,228.1

Gross margin

528.4

393.5

1,148.9

746.4

Marketing and selling expenses

–181.0

–97.8

–359.8

–185.9

Royalty, license and commission expenses

–5.3

–3.7

–9.9

–8.9

Administration expenses

–34.5

–22.3

–71.4

–42.0

Other operating expenses and income

–40.6

–66.1

–82.8

–99.1

Research and development

–62.0

–36.5

–131.0

–74.5

Operating result

150.6

166.0

391.4

332.8

Exceptional items

0.4

–

157.4

–

Earnings before interest and tax (EBIT)

151.0

166.0

548.8

332.8

Net operating assets**

–

–

7,392.7

7,725.3

Segment liabilities**

–

–

–448.5

–528.2

Capital spending on property, plant and equipment

38.8

28.2

68.1

45.3

Investments in intangible assets

2.3

2.3

4.0

3.6

Depreciation and amortization

–93.6

–35.1

–192.5

–70.2

Impairment losses

–11.4

–7.4

–11.4

–16.4

Net cash flows from operating activities

257.6

204.0

440.1

349.6

Net cash flows from investing activities

–44.7

–30.0

122.9

–49.3

Free cash flow

213.0

174.0

563.0

300.3

Underlying free cash flow

223.1

174.0

378.5

300.3

FCR in %

23.3

27.0

19.1

24.5

ROS in %

15.7

25.8

19.8

27.1

Sales

–

–

–

–

Royalty, license and commission income

–

–

–

–

Total revenues

–

–

–

–

Gross margin

–

–

–

–

Marketing and selling expenses

–0.4

–0.3

–0.8

–1.4

Royalty, license and commission expenses

–

–

–

–

Administration expenses

–20.6

–17.9

–40.1

–34.2

Other operating expenses and income

–4.9

18.6

–10.3

–15.5

Research and development

–

–0.1

–

–

Operating result

–24.7

2.0

–50.1

–49.5

Exceptional items

–17.3

–1.2

–17.3

–1.2

Earnings before interest and tax (EBIT)

–42.0

0.8

–67.4

–50.7

Net operating assets*

–

–

59.8

74.7

Segment liabilities*

–

–

–16.5

–14.9

Capital spending on property, plant and equipment

0.4

0.1

0.5

0.3

Investments in intangible assets

1.2

2.4

3.6

3.3

Depreciation and amortization

–1.2

–0.5

–2.6

–1.1

Impairment losses

–0.4

–

–0.4

–

Net cash flows from operating activities

–109.6

–70.1

–361.7

–181.9

Net cash flows from investing activities

–7.5

–8.8

–267.5

1,336.0

Free cash flow

–111.7

–76.2

–367.6

–196.7

Underlying free cash flow

–111.7

–72.7

–367.6

–181.3

FCR in %

–

–

–

–

ROS in %

–

–

–

–

Merck Group

€ million

Q2
2011

Q2
2010

Jan.–June
2011

Jan.–June
2010

Sales

2,469.6

2,102.8

4,947.1

4,125.6

Royalty, license and commission income

85.8

105.2

172.0

181.3

Total revenues

2,555.4

2,208.0

5,119.1

4,306.9

Gross margin

1,795.0

1,690.8

3,719.1

3,303.0

Marketing and selling expenses

–605.1

–540.2

–1,196.6

–1,008.4

Royalty, license and commission expenses

–118.5

–117.3

–229.8

–239.5

Administration expenses

–126.4

–115.2

–251.3

–219.6

Other operating expenses and income

–270.4

–109.4

–367.5

–244.4

Research and development

–369.1

–338.8

–748.6

–686.0

Operating result

–11.4

326.2

360.1

621.0

Exceptional items

–11.1

–1.2

146.9

–1.2

Earnings before interest and tax (EBIT)

–22.5

325.0

507.0

619.8

Net operating assets*

–

–

17,389.8

18,470.5

Segment liabilities*

–

–

–1,680.3

–1,898.4

Capital spending on property, plant and equipment

91.6

91.2

166.5

155.9

Investments in intangible assets

15.6

17.0

24.9

31.0

Depreciation and amortization

–308.9

–227.4

–611.4

–447.6

Impairment losses

–278.8

–7.4

–329.3

–33.6

Net cash flows from operating activities

292.2

466.2

577.1

744.9

Net cash flows from investing activities

–44.4

–112.5

59.8

1,157.0

Free cash flow

253.2

356.4

898.5

551.2

Underlying free cash flow

258.1

359.9

443.7

566.5

FCR in %

10.1

16.3

8.7

13.2

ROS in %

–0.4

14.8

7.0

14.4