Report on Expected Developments

Based on business performance in the second quarter of 2013, Merck confirms its forecast for EBITDA pre one-time items for the full year 2013 despite negative foreign exchange effects.

Taking economic developments into consideration, Merck assumes moderate organic sales growth while the adverse impact of changes in exchange rates will most likely increase in the second half of the year in comparison with the year-earlier period. These effects will mainly result from the Japanese yen as well as Latin American currencies.

For the Merck Serono division, Merck expects global growth, which should primarily be fueled by the Emerging Markets region. Health care cost-containment measures in Europe as well as additional competitive pressure in the multiple sclerosis business in the United States will negatively impact sales growth.

For the market environment of Consumer Health, the current trend is anticipated to continue in the second half. A renewed weaker performance in Europe is expected, whereas Emerging Markets will maintain the current level of organic growth.

Merck forecasts continued strong consumer demand for liquid crystal products accompanied however by seasonally weaker demand. By contrast, the demand for liquid crystals will taper off as predicted as a consequence of the expected inventory consolidation among liquid crystal display manufacturers. A low single-digit increase is projected for the global automotive industry, which is a key market for the products supplied by the Pigments & Cosmetics business unit.

The life science products offered by the Merck Millipore division should continue to see solid sales growth due to volume increases. In particular, growth will be driven by the positive development of the Process Solutions business unit, which supplies products and services needed by pharmaceutical and biotechnology companies to develop and manufacture biopharmaceuticals. Government budget spending cuts in the United States and Europe are leading to lower growth in the Bioscience business unit.

Based on these assumptions, Merck is expecting for the full year 2013 the following business performance.

FX assumptions for FY 2013:

1 € = 1.30 US$
1 € = 1.23 CHF
1 € = 130 JPY