Major highlights of 2014 include offer for Sigma-Aldrich, alliance with
Pfizer and integration of AZ Electronic Materials
Merck proposes a dividend increase of € 0.05 to € 1.00
Darmstadt, Germany, April 17, 2015 – Merck, a leading company for innovative, topquality
high-tech products in healthcare, life science and performance materials,
completed strategically important moves in 2014 to secure the future growth of the
company. At the 20th Annual General Meeting (AGM) being held today in Frankfurt am
Main, the company will propose to its shareholders a dividend increase of 5 cents or
5.3% to € 1.00 per share.
"We made a promise and we delivered on that promise," Karl-Ludwig Kley, Chairman
of Merck's Executive Board, told shareholders. "Today we are strongly positioned in
our three business sectors Healthcare, Life Science and Performance Materials. And
we are poised for further organic growth after having established not only strong
business sectors, but also innovation and growth platforms."
Merck completed its efficiency program and achieved savings of € 360 million in 2014.
At the same time, through its "Fit for 2018" transformation and growth program, the
company achieved three important milestones in order to secure sustainable, profitable
growth in the future. In 2014, Merck completed the acquisition of the high-tech material
manufacturer AZ Electronic Materials and agreed on the acquisition of the U.S. life
science company Sigma-Aldrich. In November 2014, the company formed a strategic
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immuno-oncology alliance with Pfizer in order to develop Merck's anti-PD-L1 antibody
avelumab.
Over the course of the year, the Merck share price rose by around 20%, thus achieving
the highest increase in value in the DAX 30, the German blue chip index. The share
price high of € 80.40 in 2014 was reached at the end of November. The upward trend
has continued in 2015, during which the share price has clearly exceeded the € 100
mark.
In March, Merck reported on the results of 2014, which saw sales growth of 5.5% to
€ 11.3 billion (2013: € 10.7 billion) driven by good organic growth. EBITDA pre onetime
items increased by 4.1% to € 3.4 billion (2013: € 3.3 billion), likewise due to good
operational performance and the acquisition of AZ Electronic Materials.
The proposed increase in the dividend to € 1.00 per share reflects the successful
development of Merck. The total dividend payment takes into account the 1:2 share
split in 2014 as well as the capital resources required for the company's further
transformation steps.
For 2015, Merck expects a slight increase in organic sales over the previous year amid
moderately positive foreign exchange effects. Due to the inclusion of AZ for a full fiscal
year, a slight positive portfolio effect is also expected. Owing to the expected operating
development and positive foreign exchange effects, Merck also forecasts a slight
increase in EBITDA pre one-time items and business free cash flow in 2015. "If the
acquisition of Sigma-Aldrich is completed by mid-2015 as planned, growth will be
higher," said Kley. "In this case, we expect double-digit growth rates in net sales.
EBITDA pre one-time items and business free cash flow would also increase sharply
compared with 2014."
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Merck will publish a detailed forecast with the announcement of the results of the first
quarter on May 19. This report will also for the first time reflect the new structure of the
company comprising the three business sectors Healthcare, Life Science and
Performance Materials.
All Merck news releases are distributed by e-mail at the same time they become available on
the Merck website. Please go to www.merckgroup.com/subscribe to register online, change
your selection or discontinue this service.
Merck is a leading company for innovative, top-quality high-tech products in healthcare, life science and
performance materials. The company has six businesses – Merck Serono, Consumer Health,
Allergopharma, Biosimilars, Merck Millipore and Performance Materials – and generated sales of € 11.3
billion in 2014. Around 39,000 employees work for Merck in 66 countries to improve the quality of life for
patients, to further the success of customers, and to help meet global challenges. Merck is the world's
oldest pharmaceutical and chemical company – since 1668, the company has stood for innovation,
business success and responsible entrepreneurship. Holding an approximately 70% interest, the founding
family remains the majority owner of the company to this day. Merck, Darmstadt, Germany holds the global
rights to the Merck name and brand. The only exceptions are Canada and the United States, where the
company operates as EMD Serono, EMD Millipore and EMD Performance Materials.
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Cautionary Note Regarding Forward-Looking Statements
This communication may include "forward-looking statements." Statements that include words such as
"anticipate," "expect," "should," "would," "intend," "plan," "project," "seek," "believe," "will," and other words
of similar meaning in connection with future events or future operating or financial performance are often
used to identify forward-looking statements. All statements in this communication, other than those relating
to historical information or current conditions, are forward-looking statements. We intend these forwardlooking
statements to be covered by the safe harbor provisions for forward-looking statements in the
Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a
number of risks and uncertainties, many of which are beyond control of Merck KGaA, Darmstadt,
Germany, which could cause actual results to differ materially from such statements.
Risks and uncertainties relating to the proposed transaction with Sigma-Aldrich Corporation ("SigmaAldrich")
include, but are not limited to: the risk that regulatory or other approvals required for the
transaction are not obtained or are obtained subject to conditions that are not anticipated; competitive
responses to the transaction; litigation relating to the transaction; uncertainty of the expected financial
performance of the combined company following completion of the proposed transaction; the ability of
Merck KGaA, Darmstadt, Germany, to achieve the cost-savings and synergies contemplated by the
proposed transaction within the expected time frame; the ability of Merck KGaA, Darmstadt, Germany, to
promptly and effectively integrate the businesses of Sigma-Aldrich and Merck KGaA, Darmstadt, Germany;
the effects of the business combination of Merck KGaA, Darmstadt, Germany, and Sigma-Aldrich,
including the combined company's future financial condition, operating results, strategy and plans; the
implications of the proposed transaction on certain employee benefit plans of Merck KGaA, Darmstadt,
Germany, and Sigma-Aldrich; and disruption from the proposed transaction making it more difficult to
maintain relationships with customers, employees or suppliers.
Additional risks and uncertainties include, but are not limited to: the risks of more restrictive regulatory
requirements regarding drug pricing, reimbursement and approval; the risk of stricter regulations for the
manufacture, testing and marketing of products; the risk of destabilization of political systems and the
establishment of trade barriers; the risk of a changing marketing environment for multiple sclerosis
products in the European Union; the risk of greater competitive pressure due to biosimilars; the risks of
research and development; the risks of discontinuing development projects and regulatory approval of
developed medicines; the risk of a temporary ban on products/production facilities or of non-registration of
products due to non-compliance with quality standards; the risk of an import ban on products to the United
States due to an FDA warning letter; the risks of dependency on suppliers; risks due to product-related
crime and espionage; risks in relation to the use of financial instruments; liquidity risks;
counterparty risks; market risks; risks of impairment on balance sheet items; risks from pension
obligations; risks from product-related and patent law disputes; risks from antitrust law proceedings; risks
from drug pricing by the divested Generics Group; risks in human resources; risks from e-crime and cyber
attacks; risks due to failure of businesscritical information technology applications or to failure of data
center capacity; environmental and safety risks;
unanticipated contract or regulatory issues; a potential downgrade in the rating of the indebtedness of
Merck KGaA, Darmstadt, Germany, or Sigma-Aldrich; downward pressure on the common stock price of
Merck KGaA, Darmstadt, Germany, or Sigma-Aldrich and its impact on goodwill impairment evaluations;
the impact of future regulatory or legislative actions; and the risks and uncertainties detailed by SigmaAldrich
with respect to its business as described in its reports and documents filed with the U.S. Securities
and Exchange Commission (the "SEC").
The foregoing review of important factors should not be construed as exhaustive and should be read in
conjunction with the other cautionary statements that are included elsewhere, including the Report on
Risks and Opportunities Section of the most recent annual report and quarterly report of Merck KGaA,
Darmstadt, Germany, and the Risk Factors section of Sigma-Aldrich's most recent reports on Form 10-K
and Form 10-Q. Any forward-looking statements made in this communication are qualified in their entirety
by these cautionary statements, and there can be no assurance that the actual results or developments
anticipated by us will be realized or, even if substantially realized, that they will have the expected
consequences to, or effects on, us or our business or operations. Except to the extent required by
applicable law, we undertake no obligation to update publicly or revise any forward-looking statement,
whether as a result of new information, future developments or otherwise.