Based on business performance in the third quarter of 2013, Merck is raising its forecast for EBITDA pre one-time items for the full year 2013 despite negative currency effects. In addition to moderate organic sales growth, the main reason for this is the accelerated implementation of the “Fit for 2018” savings measures.
For the fourth quarter, Merck expects negative effects from exchange rate movements, which will be at the level of the third quarter and primarily stem from the Japanese yen, Latin American currencies and the U.S. dollar.
For the Merck Serono division, Merck expects global organic growth, which should primarily be fueled by the Emerging Markets region. Health care cost-containment measures in Europe as well as continuing competitive pressure in the multiple sclerosis business in the United States will negatively impact sales growth. Royalty income will decline owing to the expiration of the patents for the third-party products Avonex® in May 2013 and Enbrel® in the fourth quarter.
Consumer Health is expected to see slight organic growth in the fourth quarter, which will be generated by the Emerging Markets region.
Based on business performance to date, Merck continues to forecast good consumer demand for products in which liquid crystals are used. In the fourth quarter, demand for liquid crystals could possibly weaken as a result of expected inventory consolidation in the display industry’s value chain. A low single-digit increase is projected for the global automotive industry, which is a key market for the products supplied by Pigments & Cosmetics.
For the Merck Millipore division, Merck continues to expect further organic sales growth of life science products owing to volume increases. Growth will be driven especially by the positive development of the Process Solutions business unit, which supplies pharmaceutical and biotechnology companies with products and services for the manufacture of medicines. It may be assumed that government budget spending cuts in the United States and Europe will lead to lower growth in the Bioscience business unit.
Based on these assumptions, Merck is expecting the following business performance for the full year 2013:
| XLS |
|
Guidance for FY 2013 | ||
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Merck divisions |
Sales |
EBITDA pre one-time items |
|
Merck Serono |
Moderate organic growth |
~ 1,900 – 2,000 |
|
Consumer Health |
Moderate organic growth |
~ 73 – 77 |
|
Performance Materials |
~ Stable |
~ 750 – 770 |
|
Merck Millipore |
Moderate organic growth |
~ 620 – 640 |
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Corporate and Other |
|
~ –210 |
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Merck Group |
|
€ billion |
|
Sales |
|
~ 10.7 – 10.9 |
|
EBITDA pre one-time items |
|
~ 3.2 – 3.25 |
|
EPS pre one-time items |
|
~ € 8.50 – 9.00 |
FX assumptions for FY 2013:
1 € = 1.33 US$
1 € = 1.23 CHF
1 € = 130 JPY