General principles In all its business endeavors, Merck orients toward general principles. They help those responsible within the company to shape strategic plans and to make decisions. The structure of Merck KGaA with members of the Merck family as personally liable partners requires the Executive Board to pay special attention to the long-term development of value. Therefore, sustainability plays a special role at Merck. The objective is to align the long-term development of the company with the legitimate interests of shareholders, whose engagement in Merck is often of a shorter duration. That is why Merck’s business portfolio must always be balanced so that [...]

[...] our internal controlling processes and carried out in the operating units on the basis of the Group strategy. The divisions analyze and assess potential market opportunities as part of strategy and planning processes. In this connection, investment opportunities are examined and prioritized in terms of their potential value proposition to Merck in order to ensure an effective allocation of resources. Thereby, Merck selectively invests in growth markets to leverage the opportunities of dynamic development and customer proximity at a local level. If the occurrence of the identified opportunities is rated as likely, they are incorporated into the business plans and [...]

[...] potential business opportunities are also analyzed and discussed alongside risks. As part of its Group strategy, Merck actively pursues the opportunities that arise, investing selectively in, for example, growth markets. Furthermore, deviations from the macroeconomic conditions assumed in planning, such as economic growth and expected segment-specific developments, e.g. change in the demand for key products of the Merck Serono division, can lead to positive deviations from the planned results. Political and regulatory risks and opportunities As a global company, Merck faces political and regulatory changes in a large number of countries and markets. Risk of more [...]

[...] Board since September 2006, Chairman since April 2007 Responsibility for Group functions: Group Strategy; Group Communications; Group Legal & Compliance; Group Internal Auditing Matthias Zachert Member of the Executive Board Chief Financial Officer Born in 1967, university degree in business administration; Joined Merck in June 2011 as a Member of the Executive Board Responsibility for Group functions: Group Accounting & Subsidiaries; Group Controlling & Risk Management; Corporate Finance; Group Tax; Group Procurement; Group Insurance; Investor Relations Stefan Oschmann Member of the Executive Board CEO Pharmaceuticals Born in 1957, veterinarian; Joined [...]

[...] financial instruments In the area of financial risks and opportunities, Merck uses an active management strategy to reduce the effects of fluctuations in exchange and interest rates. The management of financial risks and opportunities by using derivatives in particular is regulated by extensive guidelines. Speculation is prohibited. Derivative transactions are subject to constant risk controls. A strict separation of functions between trading, settlement and control functions is ensured. Liquidity risks In order to ensure its continued existence, a company must be able to fulfill its commitments from operating and financial activities at all times. Merck therefore [...]