German drugmaker Merck KGaA (MKGAY.PK) Tuesday reported higher profit for the first quarter, with all four divisions contributing to organic sales growth, adding that it wants to achieve its goals for 2014 one year earlier in 2013 itself.
Karl-Ludwig Kley, Chairman of the Executive Board of Merck, said, "Merck got off to a solid and profitable start in 2013 with all four divisions contributing to our organic sales growth. In addition, we are making excellent progress on our 'Fit for 2018' program...we expect that by the end of the year, EBITDA pre should exceed € 3 billion."
Net income for the quarter increased to 266.0 million euros ($346 million) from 172.7 million euros in the previous year. The prior-year figure had been adjusted.
The latest results included one-time items totaling 47 million euros, including 42 million euros related to the "Fit for 2018" efficiency program.
Earnings Before Income, Tax, Depreciation and Amortization, or EBITDA, pre one-time items, a key performance indicator for the company, was 801 million euros, equivalent to 30.1 pecent of sales. Merck noted that the 30 percent mark was exceeded for the first time.
Total revenues rose to 2.761 billion euros from 2.645 billion euros last year, fuelled by organic growth of 5.6 percent.
After deducting royalty, license and commission income from revenues, sales advanced 3.8 percent to 2.660 billion euros. Organic sales growth was 5.0 percent, accompanied by a 1.4 percent decline from currency impact.
Division-wise, Merck Serono's revenues increased 3.5 percent to 1.548 billion euros, reflecting organic growth of 4.9 percent and a 1.4 percent adverse impact from changes in foreign exchange rates. All four geographic regions contributed to the organic sales growth of 4 percent with Europe accounting for the highest proportion.
Merck's largest single product, multiple sclerosis drug Rebif grew sales by 6.0 percent organically to 454 million euros due to price increases in the U.S. as well as improved sales in Europe. Sales of cancer treatment Erbitux rose 6.6 percent organically to 222 million euros.
The Consumer Health division reported sales growth of close to 8 percent at 116 million euros, reflecting organic growth of 9.3 percent.
Sales climbed 9 percent to 421 million euros in the Performance Materials division, driven by higher sales volumes of liquid crystal materials.
Merck Millipore's sales rose 2.5 percent to 669 million euros, led by the Process Solutions business unit.
Merck said the "Fit for 2018" program is progressing faster than planned. For 2013, Merck now assumes to achieve further savings of around 165 million euros compared to 2012.
Adjusted earnings per share are estimated to be 8.50 - 9.00 euros and adjusted EBITDA is expected in the range of 3.1 billion euros to 3.2 billion euros. Sales are anticipated in the range between 10.7 billion euros and 10.9 billion euros.
The stock closed up 0.4 percent on Monday at 122.65 euros.
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