Review of forecast against actual business developments Audited

At the beginning of 2013 we forecast moderate organic sales growth for the Merck Group driven by the good performance of the Merck Serono and Merck Millipore divisions. As we continued to focus on the implementation of our “Fit for 2018” transformation and growth program, we expected EBITDA pre one-time items to increase further as a result of realized net savings. We forecast a high free cash flow and expected bigger cash-outs for the restructuring cost, while for business free cash flow, Merck’s third financial key performance indicator, we expected a moderate decrease compared to 2012, as we had already delivered major working capital reductions in 2012 and as we planned an increase in investments in property, plant and equipment in 2013.

Based on the successful acceleration of our transformation process, which led to faster implementation of the cost-savings initiatives, we were able to announce in spring 2013 that we would deliver our mid-term financial targets for 2014 one year earlier than originally expected. The good operational development of our Consumer Health and Performance Materials divisions further contributed to this, which led to the fact that we further upgraded our view on the financial performance of Merck with the announcement of our third-quarter results.

When assessing the results of 2013 versus the original projections, it can be stated that we have achieved our strategic objectives of the “Fit for 2018” transformation and growth program to realize efficiencies and to deliver organic growth of the business in 2013. Merck’s actual business figures for 2013 confirmed our forecast. As forecast in the Annual Report for 2012, we achieved organic sales growth of 4.2% and we increased our EBITDA pre one-time items by € 288 million. Thereby, the Merck Serono and Merck Millipore divisions developed positively in line with the expected development. Sales and EBITDA pre one-time items of the Consumer Health division increased more than expected due to the strong development of core brands and the substantial progress in driving the turnaround of the business. A favorable Liquid Crystals mix and leaner Pigments & Cosmetics organization led to higher EBITDA pre one-time items of the Performance Materials division. Driven by the significant increase of EBITDA pre one-time items and further reduction of working capital, we exceeded our expectations and delivered business free cash flow at the previous year’s level for the Merck Group as well as the Merck Serono and Performance Materials divisions.