For reasons of sustainability, Merck generally follows a conservative financial policy. Apart from a solid balance sheet with transparent and healthy structures, this policy is reflected by the selection of financing sources, liquidity management, key financial indicators, dividend policy, and risk management.
Merck generates high business free cash flow and its return on capital employed is consistently improving. In the context of the Group-wide efficiency program currently underway, cash is being reserved with high priority to fund restructuring measures across all divisions and regions. Around € 800 million of one-time costs related to restructuring are planned to be incurred from 2012 to 2015. As of 2014, major acquisitions will again be on Merck’s agenda.
Moreover, cash is to be used for selective acquisitions in order to provide for future growth, for instance the planned takeover of AZ Electronic Materials (Performance Materials).
Lastly, Merck uses its cash for dividend payments to its shareholders. Merck’s dividend policy is aimed at a moderate long-term sustainable payout ratio of 35% to 40% based on net income before one-time items.