Segment Reporting of the Merck Group

Sales

1,374.9

1,305.9

4,115.3

3,991.3

132.5

124.7

366.4

344.9

Royalty, license and commission income

93.9

87.6

260.6

259.5

0.3

0.3

1.3

1.5

Total revenues

1,468.8

1,393.5

4,375.9

4,250.7

132.8

125.0

367.7

346.4

Gross margin

1,225.1

1,199.8

3,633.7

3,605.1

90.7

86.3

252.4

237.5

Marketing and selling expenses

–343.8

–345.6

–1,062.3

–1,046.8

–56.9

–55.5

–174.3

–175.3

Royalty, license and commission expenses

–128.2

–110.4

–347.4

–340.4

–1.4

–0.3

–2.1

–1.0

Administration expenses

–65.2

–66.9

–193.0

–198.2

–5.6

–6.9

–17.5

–18.8

Other operating expenses and income

–52.6

–39.4

–325.1

–159.3

–3.2

–0.9

–5.1

–10.7

Research and development

–297.1

–279.6

–904.0

–880.2

–5.8

–5.5

–16.5

–16.4

Operating result

174.3

209.5

176.1

551.1

16.7

16.2

33.7

12.3

Exceptional items

–

–

6.8

–

–

–

–

–

Earnings before interest and tax (EBIT)

174.3

209.5

182.9

551.1

16.7

16.2

33.7

12.3

Net operating assets*

–

–

9,379.8

10,359.7

–

–

325.7

310.8

Segment liabilities*

–

–

–1,212.4

–1,268.9

–

–

–83.4

–86.4

Capital spending on property, plant and equipment

44.3

53.8

140.3

161.8

1.1

1.1

3.0

3.4

Investments in intangible assets

5.7

11.9

17.3

35.3

0.2

0.2

5.9

1.0

Depreciation and amortization

–213.6

–194.2

–624.5

–564.5

–2.7

–2.8

–8.0

–8.8

Impairment losses

–3.5

–0.8

–320.2

–18.0

–

–

–0.8

–

Net cash flows from operating activities

420.5

471.7

902.3

1,046.8

5.4

8.6

22.2

10.8

Net cash flows from investing activities

–38.8

–61.3

172.7

–187.5

–1.3

–0.9

–8.4

–4.5

Free cash flow

381.7

410.4

1,075.0

859.3

4.0

7.7

13.8

6.3

Underlying free cash flow

381.8

410.4

804.7

859.3

4.0

7.7

13.8

6.3

FCR in %

26.0

29.5

18.4

20.2

3.0

6.1

3.8

1.8

ROS in %

11.9

15.0

4.0

13.0

12.6

13.0

9.2

3.5

Pharmaceuticals

€ million

Q3
2011

Q3
2010

Jan.–Sep.
2011

Jan.–Sep.
2010

Sales

1,507.4

1,430.6

4,481.7

4,336.2

Royalty, license and commission income

94.2

87.8

261.9

261.0

Total revenues

1,601.6

1,518.4

4,743.6

4,597.1

Gross margin

1,315.9

1,286.0

3,886.1

3,842.6

Marketing and selling expenses

–400.6

–401.1

–1,236.7

–1,222.1

Royalty, license and commission expenses

–129.6

–110.7

–349.5

–341.3

Administration expenses

–70.8

–73.7

–210.5

–217.0

Other operating expenses and income

–55.8

–40.3

–330.2

–170.0

Research and development

–303.0

–285.1

–920.5

–896.6

Operating result

191.0

225.7

209.8

563.4

Exceptional items

–

–

6.8

–

Earnings before interest and tax (EBIT)

191.0

225.7

216.6

563.4

Net operating assets*

–

–

9,705.5

10,670.5

Segment liabilities*

–

–

–1,295.8

–1,355.3

Capital spending on property, plant and equipment

45.4

54.9

143.4

165.2

Investments in intangible assets

5.8

12.2

23.2

36.2

Depreciation and amortization

–216.3

–196.9

–632.4

–573.3

Impairment losses

–3.5

–0.8

–320.9

–18.0

Net cash flows from operating activities

425.9

480.4

924.6

1,057.6

Net cash flows from investing activities

–40.1

–62.3

164.3

–192.0

Free cash flow

385.7

418.1

1,088.9

865.6

Underlying free cash flow

385.8

418.1

818.6

865.6

FCR in %

24.1

27.5

17.3

18.8

ROS in %

11.9

14.9

4.4

12.3

Sales

586.7

557.1

1,778.2

1,027.4

340.1

359.3

1,121.5

1,109.0

Royalty, license and commission income

1.6

1.9

5.1

5.6

1.5

1.1

2.3

5.6

Total revenues

588.3

559.0

1,783.2

1,033.0

341.7

360.4

1,123.8

1,114.5

Gross margin

340.3

290.6

1,026.3

545.1

195.7

241.5

658.5

733.5

Marketing and selling expenses

–150.8

–136.7

–444.1

–258.2

–33.3

–34.6

–99.7

–99.0

Royalty, license and commission expenses

–3.7

–3.2

–10.7

–6.2

–0.6

–1.9

–3.5

–7.8

Administration expenses

–26.9

–26.2

–80.6

–48.3

–8.9

–10.6

–26.6

–30.6

Other operating expenses and income

–24.4

–33.8

–81.2

–94.6

–5.3

–11.2

–31.3

–49.5

Research and development

–33.7

–30.0

–98.2

–43.3

–34.3

–33.4

–100.9

–94.7

Operating result

53.1

13.2

171.4

47.0

112.9

148.7

386.0

447.6

Exceptional items

–

–

–

–

–0.1

–

157.3

–

Earnings before interest and tax (EBIT)

53.1

13.2

171.4

47.0

112.8

148.7

543.3

447.6

Net operating assets**

–

–

6,397.0

6,435.7

–

–

1,253.7

1,289.8

Segment liabilities**

–

–

–323.0

–361.4

–

–

–159.7

–166.8

Capital spending on property, plant and equipment

22.2

22.3

64.4

42.4

18.0

20.9

43.8

46.1

Investments in intangible assets

5.4

2.0

8.1

4.1

–

0.7

1.3

2.3

Depreciation and amortization

–70.1

–69.3

–210.7

–92.5

–25.2

–25.5

–77.1

–72.5

Impairment losses

–

–1.6

–2.0

–1.6

–

–

–9.4

–16.4

Net cash flows from operating activities

126.9

29.9

283.1

95.5

171.3

184.0

455.3

468.0

Net cash flows from investing activities

–100.4

–4,861.8

–146.0

–4,886.7

–17.8

–25.2

150.7

–49.5

Free cash flow

26.6

–4,831.9

137.1

–4,791.2

153.5

158.9

606.0

418.5

Underlying free cash flow

101.9

101.8

228.8

142.6

153.5

165.4

405.1

425.0

FCR in %

17.3

18.2

12.8

13.8

44.9

45.9

36.0

38.1

ROS in %

9.0

2.4

9.6

4.5

33.0

41.2

34.3

40.2

Chemicals

€ million

Q3
2011

Q3
2010

Jan.–Sep.
2011

Jan.–Sep.
2010

Sales

926.8

916.4

2,899.7

2,136.4

Royalty, license and commission income

3.1

3.0

7.4

11.1

Total revenues

929.9

919.4

2,907.1

2,147.5

Gross margin

535.9

532.1

1,684.8

1,278.6

Marketing and selling expenses

–184.1

–171.3

–543.9

–357.2

Royalty, license and commission expenses

–4.3

–5.1

–14.2

–14.0

Administration expenses

–35.8

–36.8

–107.2

–78.9

Other operating expenses and income

–29.7

–45.0

–112.5

–144.1

Research and development

–68.0

–63.5

–199.1

–138.0

Operating result

166.0

161.8

557.4

494.6

Exceptional items

–0.1

–

157.3

–

Earnings before interest and tax (EBIT)

165.9

161.8

714.7

494.6

Net operating assets**

–

–

7,650.6

7,725.3

Segment liabilities**

–

–

–482.6

–528.2

Capital spending on property, plant and equipment

40.1

43.1

108.2

88.5

Investments in intangible assets

5.4

2.8

9.3

6.4

Depreciation and amortization

–95.3

–94.8

–287.8

–164.9

Impairment losses

–

–1.6

–11.5

–18.0

Net cash flows from operating activities

298.3

213.9

738.4

563.5

Net cash flows from investing activities

–118.2

–4,886.9

4.7

–4,936.2

Free cash flow

180.1

–4,673.0

743.1

–4,372.7

Underlying free cash flow

255.4

267.3

633.9

567.6

FCR in %

27.5

29.1

21.8

26.4

ROS in %

17.9

17.6

19.2

23.0

Sales

–

–

–

–

Royalty, license and commission income

–

–

–

–

Total revenues

–

–

–

–

Gross margin

–

–

–

–

Marketing and selling expenses

–1.5

–1.0

–2.4

–2.4

Royalty, license and commission expenses

–

–

–

–

Administration expenses

–17.9

–17.4

–58.0

–51.6

Other operating expenses and income

–4.3

–5.7

–14.6

–21.3

Research and development

–

–

–

–

Operating result

–23.8

–24.1

–73.8

–73.6

Exceptional items

–0.2

–

–17.5

–1.2

Earnings before interest and tax (EBIT)

–23.9

–24.1

–91.3

–74.8

Net operating assets*

–

–

17.8

74.7

Segment liabilities*

–

–

–18.9

–14.9

Capital spending on property, plant and equipment

–0.3

0.3

0.2

0.6

Investments in intangible assets

–0.3

1.6

3.3

4.9

Depreciation and amortization

–1.2

–1.2

–3.8

–2.3

Impairment losses

-

–

-0.4

–

Net cash flows from operating activities

–84.6

–136.2

–446.3

–318.1

Net cash flows from investing activities

–650.1

48.8

–917.6

1,384.8

Free cash flow

–84.3

–127.9

–451.9

–324.6

Underlying free cash flow

–125.1

–124.6

–492.7

–305.9

FCR in %

–

–

–

–

ROS in %

–

–

–

–

Merck Group

€ million

Q3
2011

Q3
2010

Jan.–Sep.
2011

Jan.–Sep.
2010

Sales

2,434.3

2,347.0

7,381.4

6,472.6

Royalty, license and commission income

97.3

90.8

269.3

272.1

Total revenues

2,531.6

2,437.8

7,650.7

6,744.7

Gross margin

1,851.8

1,818.2

5,570.9

5,121.2

Marketing and selling expenses

–586.3

–573.3

–1,782.9

–1,581.7

Royalty, license and commission expenses

–133.9

–115.8

–363.7

–355.3

Administration expenses

–124.5

–128.0

–375.7

–347.5

Other operating expenses and income

–89.8

–91.0

–457.3

–335.4

Research and development

–371.0

–348.6

–1,119.6

–1,034.6

Operating result

333.3

363.5

693.4

984.4

Exceptional items

–0.3

–

146.6

–1.2

Earnings before interest and tax (EBIT)

333.0

363.5

840.0

983.2

Net operating assets*

–

–

17,374.0

18,470.5

Segment liabilities*

–

–

–1,797.4

–1,898.4

Capital spending on property, plant and equipment

85.2

98.3

251.7

254.2

Investments in intangible assets

10.9

16.5

35.8

47.6

Depreciation and amortization

–312.7

–292.9

–924.1

–740.5

Impairment losses

–3.5

–2.4

–332.8

–36.0

Net cash flows from operating activities

639.6

558.0

1,216.7

1,302.9

Net cash flows from investing activities

–808.4

–4,900.5

–748.6

–3,743.4

Free cash flow

481.5

–4,382.9

1,380.1

–3,831.7

Underlying free cash flow

516.1

560.7

959.8

1,127.3

FCR in %

20.4

23.0

12.5

16.7

ROS in %

13.2

14.9

9.1

14.6