Other disclosures
(55) Derivative financial instruments
Merck uses derivative financial instruments (hereinafter “derivatives”) exclusively to hedge and reduce risks from currency and interest rate positions. Merck uses marketable forward exchange contracts, options and interest rate swaps as hedging instruments. Depending on the nature of the hedged item, changes in the fair values of derivatives are recorded in the income statement either in the operating result or in the financial result. The strategy to hedge interest rate and foreign exchange rate fluctuations arising from forecast transactions and transactions already recognized in the balance sheet is set by a Merck Group risk committee, which meets on a regular basis. Extensive guidelines regulate the use of derivatives. There is a ban on speculation. Derivative transactions are subject to continuous risk management procedures. Trading, settlement and control functions are strictly separated. Derivatives are only entered into with banks that have a good credit rating. Related default risks are continuously monitored.
The following derivatives were held as of the balance sheet date:
Show table
| Nominal volume | Fair value | |||
|---|---|---|---|---|
| € million | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
| Cash flow hedge | 10,041.8 | 4,073.5 | 313.4 | 82.2 |
| Interest | 650.0 | 650.0 | – 99.9 | – 39.9 |
| Currency | 9,391.8 | 3,423.5 | 413.3 | 122.1 |
| Fair value hedge | – | – | – | – |
| Interest | – | – | – | – |
| Currency | – | – | – | – |
| No hedge accounting | 3,682.6 | 2,042.5 | 9.4 | 5.3 |
| Interest | – | – | – | – |
| Currency | 3,682.6 | 2,042.5 | 9.4 | 5.3 |
| 13,724.4 | 6,116.0 | 322.8 | 87.5 | |
The nominal volume corresponds to the total of all nominal values of currency hedges (translated at the closing rate into euros) as well as all the nominal values of interest rate hedges. The fair value results from the actuarial valuation of the derivatives on the basis of quoted prices or current market data as of the balance sheet date provided by a recognized information service and the application of a discount for own credit risk or counterparty credit risk. Any offsetting effects from hedged items are not taken into account in the derivatives’ fair value. The maturities of the derivatives (nominal volume) were as follows as of the balance sheet date:
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| € million | Remaining maturity less than 1 year | Remaining maturity more than 1 year |
Total Dec. 31, 2014 |
Remaining maturity less than 1 year | Remaining maturity more than 1 year |
Total Dec. 31, 2013 |
|---|---|---|---|---|---|---|
| Foreign exchange contracts | 11,942.6 | 433.9 | 12,376.5 | 3,763.2 | 1,244.9 | 5,008.1 |
| Currency options | 653.1 | 44.8 | 697.9 | 297.2 | 160.7 | 457.9 |
| Interest rate swaps | 100.0 | 550.0 | 650.0 | – | 650.0 | 650.0 |
| 12,695.7 | 1,028.7 | 13,724.4 | 4,060.4 | 2,055.6 | 6,116.0 |
Currency hedging serves to economically protect the company from the foreign exchange risks of the following types of transaction:
- Forecast transactions in non-functional currency, the expected probability of which within the next 36 months is very high,
- Off-balance sheet firm purchase commitments of the next 36 months in non-functional currency,
- Intragroup financing in non-functional currency as well as
- Receivables and liabilities in non-functional currency
Exchange rate fluctuations of mainly the following currencies against the euro were hedged:
Show table| Nominal volume € million | Dec. 31, 2014 | Dec. 31, 2013 |
|---|---|---|
| USD | 10,233.5 | 3,219.9 |
| JPY | 920.8 | 465.2 |
| CHF | 431.2 | 603.4 |
| GBP | 383.6 | 347.3 |
| TWD | 255.5 | 215.3 |
Forecast transactions and firm purchase commitments in non-functional currency are hedged using forward exchange transactions and currency options which are due within the next 36 months. Overall, forecast transactions and firm purchase commitments in non-functional currency were hedged in the amount of € 9,044.6 million (2013: € 1,318.2 million). One of the major components is the hedge entered into in 2014 in relation to the expected U.S. dollar-denominated purchase price payment for the proposed acquisition of the Sigma-Aldrich Corporation, USA.
All hedging transactions for forecast transactions and firm purchase commitments in non-functional currency represent cash flow hedges.
Intragroup financing as well as receivables and payables in non-functional currency are hedged exclusively and fully using forward exchange contracts. Overall, balance sheet items amounting to € 4,029.8 million (2013: € 4,147.9 million) were hedged. In this context, the hedging transactions are largely purely economic hedges for which hedge accounting is not applied.
Interest hedges serve to economically protect the company from the interest rate risks from the forecast and highly probable refinancing of a bond maturing in 2015 as well as from an existing variable interest private placement.
The planned refinancing was hedged to fix the interest rate level using forward started payer interest rate swaps with a nominal volume of € 550.0 million and interest payments from 2015 to 2022. The existing variable interest private placement was hedged using a payer interest rate swap with a nominal volume of € 100.0 million and interest payments until 2015. All interest hedging relationships represented cash flow hedges.
Overall, income of € 411.7 million (2013: € 125.5 million) from the fair value measurement of derivatives designated as cash flow hedges was recognized in equity in 2014. € 43.0 million was transferred from equity and recognized as income (2013: € 26.5 million recognized as income). In 2014, no ineffectiveness resulted from hedge accounting.
(56) Management of financial risks
Market fluctuations with respect to foreign exchange and interest rates represent significant profit and cash flow risks for Merck. Merck aggregates these Group-wide risks and steers them centrally also by using derivatives. Merck uses scenario analyses to estimate existing risks of foreign exchange and interest rate fluctuations. Merck is not subject to any material risk concentration from financial transactions. The Report on Risks and Opportunities included in the Group Management Report provides further information on the management of financial risks.
Foreign exchange risks
Owing to its international business focus, Merck is exposed to foreign exchange-related transaction risks within the scope of both ordinary business and financing activities. Different strategies are used to limit or eliminate these risks. Foreign exchange risks from recognized transactions are eliminated as far as possible through the use of forward exchange contracts. Foreign exchange risks arising from forecast transactions are analyzed regularly and reduced if necessary through forward exchange contracts or currency options by applying the hedge accounting rules.
The following table presents the net exposure of the Merck Group in relation to exchange rate fluctuations of the major currencies against the euro:
Show table
| € million | CHF | CNY | JPY | TWD | USD |
|---|---|---|---|---|---|
| Net exposure Dec. 31, 2014 | – 246.6 | 355.8 | 121.6 | 260.0 | 753.0 |
| Net exposure Dec. 31, 2013 | – 233.0 | 251.4 | 107.9 | 169.0 | 690.4 |
Net exposure per currency consists of the following components:
- Balance sheet items in the respective currency, unless such currency corresponds to the functional currency of a company;
- forecast cash flows for the next twelve months in the respective currency; and
- derivatives used to hedge the abovementioned balance sheet items and forecast cash flows for the next twelve months.
The following table presents the effect of exchange rate fluctuations in the key currencies versus the euro on net income and Group equity:
Show table
|
€ million Dec. 31, 2014 |
CHF | CNY | JPY | TWD | USD | |
|---|---|---|---|---|---|---|
| Exchange rate +10 % (Appreciation vs. EUR) | Consolidated income statement | 0.0 | 0.0 | 0.1 | 0.0 | 0.0 |
| Total equity | 0.0 | 0.0 | – 14.2 | – 10.8 | 844.1 | |
| Exchange rate -10 % (Depreciation vs. EUR) | Consolidated income statement | 0.0 | 0.0 | 32.1 | 0.0 | 0.0 |
| Total equity | 0.0 | 0.0 | 9.2 | 9.1 | – 681.7 | |
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|
€ million Dec. 31, 2013 |
CHF | CNY | JPY | TWD | USD | |
|---|---|---|---|---|---|---|
| Exchange rate +10 % (Appreciation vs. EUR) | Consolidated income statement | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Total equity | 0.0 | 0.0 | – 26.3 | – 9.8 | – 94.4 | |
| Exchange rate -10 % (Depreciation vs. EUR) | Consolidated income statement | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Total equity | 0.0 | 0.0 | 19.0 | 6.7 | 69.8 | |
In addition to the previously described transaction risks, the Merck Group is also exposed to currency translation risks since many Merck companies are located outside the eurozone. The financial statements of these companies are translated into euros. Exchange rate differences in the assets and liabilities of these companies resulting from currency translation are recognized directly in Group equity.
Interest rate risks
The Merck Group’s exposure to interest rate changes comprises the following:
Show table
| € million | 2014 | 2013 |
|---|---|---|
| Short-term or variable interest rate monetary deposits | 5,131.9 | 3,236.3 |
| Short-term or variable interest rate monetary borrowings | – 2,169.0 | – 403.3 |
| Net interest rate exposure | 2,962.9 | 2,833.0 |
The effects of a parallel shift in the yield curve by +100 or –100 basis points on the income statement as well as on equity relative to all variable interest rate balance sheet items, all available-for-sale securities as well as all derivatives with a hedging relationship are presented in the following table:
| € million | 2014 | 2013 | ||
|---|---|---|---|---|
| Change in market interest rate | +100 basis points | – 100 basis points | +100 basis points | – 100 basis points |
| thereof in the consolidated income statement | 21.3 | – 1.3 | 11.6 | – 2.4 |
| thereof recognized in equity | 40.5 | – 22.9 | 33.4 | – 38.9 |
The scenario calculations assumed that the interest rate cannot fall below 0 %.
Share price risks
The shares in publicly listed companies amounting to € 1.3 million (2013: € 5.0 million) are generally exposed to a market value risk. A 10 % change in the value of the stock market would impact equity by € 0.1 million (2013: € 0.5 million). This change in value would be recognized in profit or loss at the time of disposal.
Liquidity risks
The liquidity risk, meaning the risk that Merck cannot meet its payment obligations resulting from financial liabilities, is limited by establishing the required financial flexibility and by effective cash management. Apart from cash and cash equivalents of € 5,077.9 million (2013 € 3,391.3 million), Merck had at its disposal a multi-currency revolving credit facility of € 2 billion with a term running until 2019 and one extension option of one year as well as bilateral credit facilities and various bank credit lines of € 11,748.0 million (2013: € 267.2 million), mainly intended for the expected purchase price payment for the proposed acquisition of the Sigma-Aldrich Corporation, USA. There were no indications that the availability of credit facilities already extended was restricted. Moreover, a commercial paper program with a volume of € 2 billion and a debt issuance program with a volume of € 15 billion were available. Information on bonds issued by the Merck Group can be found in Note [44].
Liquidity risks are monitored and reported to management on a regular basis. No liens or similar forms of collateral are provided for financial liabilities of the Merck Group. The loan agreements do not contain any financial covenants.
Trade payables amounting to € 1,539.4 million (2013: € 1,364.1 million) had a remaining term of less than one year. With respect to liabilities from operating derivatives amounting to € 35.4 million (2013: € 2.1 million), € 29.0 million (2013: € 1.5 million) was short-term. Out of other financial liabilities amounting to € 696.1 million (2013: € 581.1 million), € 692.9 million (2013: € 578.9 million) was due within one year.
The following tables present the contractual cash flows such as repayments and interest on financial liabilities and derivative financial instruments with a negative fair value:
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|
Cash flows < one year |
Cash flows 1 – 5 years |
Cash flows > 5 years |
|||||
|---|---|---|---|---|---|---|---|
|
€ million as of Dec. 31, 2014 |
Carrying amount | Interest | Repayment | Interest | Repayment | Interest | Repayment |
| Bonds and commercial paper | 4,624.2 | 170.9 | 1,450.0 | 442.3 | 342.1 | 197.6 | 2,850.0 |
| Liabilities to banks | 267.4 | 5.1 | 67.4 | 2.8 | 200.0 | – | – |
| Liabilities to related parties | 501.4 | 1.6 | 501.4 | – | – | – | – |
|
Loans from third parties and other financial liabilities |
84.5 | 5.8 | 18.6 | 11.8 | 61.6 | – | 4.3 |
| Liabilities from derivatives (financial transactions) | 153.0 | 2.5 | 36.0 | 63.7 | 17.3 | 40.7 | – |
| Financing leasing liabilities | 6.5 | 0.2 | 2.8 | 0.2 | 3.7 | – | – |
| 5,637.0 | 186.1 | 2,076.2 | 520.8 | 624.7 | 238.3 | 2,854.3 | |
Show table
|
Cash flows < one year |
Cash flows 1 – 5 years |
Cash flows > 5 years |
|||||
|---|---|---|---|---|---|---|---|
|
€ million as of Dec. 31, 2013 |
Carrying amount | Interest | Repayment | Interest | Repayment | Interest | Repayment |
| Bonds and commercial paper | 3,142.7 | 127.8 | – | 333.8 | 1,722.1 | 124.5 | 1,420.0 |
| Liabilities to banks | 42.2 | 4.7 | 42.2 | – | – | – | – |
| Liabilities to related parties | 361.9 | 0.2 | 361.9 | – | – | – | – |
|
Loans from third parties and other financial liabilities |
84.0 | 6.0 | 24.0 | 11.1 | 56.0 | – | 4.0 |
| Liabilities from derivatives (financial transactions) | 59.4 | 2.4 | 10.0 | 27.6 | 9.5 | 14.7 | – |
| Financing leasing liabilities | 7.7 | 0.4 | 2.3 | 0.1 | 5.0 | – | 0.4 |
| 3,697.9 | 141.5 | 440.4 | 372.6 | 1,792.6 | 139.2 | 1,424.4 | |
Credit risks
Merck is only subject to a relatively low credit risk, meaning the unexpected loss of payment funds or income. On the one hand, financial contracts are only entered into with banks and industrial companies with good credit ratings and on the other hand, due to the broad-based business structure of the Merck Group, there is no particularly high concentration of credit risks with respect to either customers or individual countries. The credit risk from financial contracts is monitored daily on the basis of rating information as well as market information on credit default swap rates. In the case of derivative transactions, credit risk is taken into account in the fair value determination by means of a discount (so-called credit valuation adjustments and debit valuation adjustments).
The credit risk with customers is continuously monitored by analyzing the age structure of trade accounts receivable. Merck continuously reviews and monitors open positions vis-à-vis all trading partners in the affected countries and takes risk-mitigating measures and accounts for impairments as necessary. On the reporting date, the theoretically maximum default risk corresponded to the carrying amounts.
(57) Other disclosures on financial instruments
The following table presents the reconciliation of the balance sheet items to categories of financial instruments pursuant to the disclosures required by IFRS 7 and provides information on the measurement of fair value:
Net gains and losses on financial instruments mainly include measurement results from currency translation, fair value adjustments, impairments and reversals of impairments as well as the recognition of premiums and discounts. Dividends and interest are not recognized in the net gains and losses on financial instruments, except for dividends and interest in the category “held for trading”. At Merck, the category “held for trading” only includes derivatives not in a hedging relationship.
The net gains and losses on financial instruments by category on the reporting date were as follows:
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| Net gains or losses | |||||
|---|---|---|---|---|---|
|
€ million 2014 |
Interest | Impairments | Reversals of impairment | Fair value adjustments | Disposal gains/losses |
| Financial instrument of the category | |||||
| Held for trading | – | – | – | – 90.8 | – |
| Held to maturity | 1.4 | – | – | – | – |
| Loans and receivables | 18.2 | – 41.9 | 41.8 | – | – |
| Available-for-sale | 10.0 | – 4.4 | – | – | 0.2 |
| Other liabilities | – 141.4 | – | – | – | – |
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| Net gains or losses | |||||
|---|---|---|---|---|---|
|
€ million 2013 |
Interest | Impairments | Reversals of impairment | Fair value adjustments | Disposal gains/losses |
| Financial instrument of the category | |||||
| Held for trading | – | – | – | 131.7 | – |
| Held to maturity | 2.5 | – | – | – | – |
| Loans and receivables | 10.3 | – 47.2 | 42.1 | – | – |
| Available-for-sale | 15.1 | – 4.1 | – | – | 1.6 |
| Other liabilities | – 163.3 | – | – | – | – |
In 2014, foreign exchange gains of € 53.3 million resulting from receivables and payables in operating business, their economic hedging, as well as hedging of forecast transactions in operating business were recorded (2013: gains of € 26.0 million). Foreign exchange losses of € – 13.0 million resulting from financial balance sheet items, their economic hedging as well as fair value fluctuations of option contracts to hedge forecast transactions were recorded (2013: losses of € – 4.3 million).
The fair value of financial assets and liabilities is based on the official market prices and market values quoted on the balance sheet date (Level 1 assets and liabilities) as well as mathematical calculation models with inputs observable in the market on the balance sheet date (Level 2 assets and liabilities). Level 1 assets comprise stocks and bonds and are classified as “available-for-sale”, Level 1 liabilities comprise issued bonds and are classified as “other liabilities”. Level 2 assets and liabilities are primarily liabilities to banks classified as “other liabilities”, interest-bearing securities classified as “available-for-sale” as well as derivatives with and without hedging relationships. The fair value of interest-bearing securities is determined by discounting future cash flows using market interest rates. The fair value measurement of forward exchange contracts and currency options uses spot and forward rates as well as foreign exchange volatilities applying recognized mathematical principles. The fair value of interest rate swaps is determined with standard market valuation models using interest rate curves available in the market.
Level 3 assets comprise investments in equity instruments classified as available-for-sale. These include interests in InfraServ GmbH & Co. Wiesbaden KG, Germany, which were acquired in the context of the acquisition of AZ Electronics Materials S.A. The fair values of these interests were determined using a discounted cash flow method where expected future cash flows from dividends are taken into account.
Counterparty credit risk is taken into consideration for all valuations. In the case of non-derivative financial instruments, such as other liabilities or interest-bearing securities, this is reflected using risk-adequate premiums on the discount rate, while discounts on market value (so-called credit valuation adjustments and debit valuation adjustments) are used for derivatives.
The fair value of available-for-sale investments in equity instruments with a carrying amount of € 66.9 million (2013: € 52.3 million) could not be reliably determined. They were measured at cost. There is no intention to sell these financial instruments.
The fair values of the financial instruments disclosed in the balance sheet and the fair values deviating substantially from the carrying amount were determined as follows:
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|
€ million as of Dec. 31, 2014 |
Assets | Liabilities |
|---|---|---|
| Fair value determined by official prices and quoted market values (Level 1) | 1,178.6 | 4,970.2 |
| thereof available-for-sale | 1,178.6 | – |
| thereof other liabilities | – | 4,970.2 |
| Fair value determined using inputs observable in the market (Level 2) | 1,470.1 | 1,053.8 |
| thereof available-for-sale | 958.9 | – |
| thereof derivatives with a hedging relationship | 470.7 | 157.3 |
| thereof derivatives without a hedging relationship | 40.5 | 31.1 |
| thereof other liabilities | – | 865.4 |
| Fair value determined using inputs unobservable in the market (Level 3) | 11.3 | – |
| thereof available-for-sale | 11.3 | – |
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|
€ million as of Dec. 31, 2013 |
Assets | Liabilities |
|---|---|---|
| Fair value determined by official prices and quoted market values (Level 1) | 1,396.5 | 3,414.3 |
| thereof available-for-sale | 1,396.5 | – |
| thereof other liabilities | – | 3,414.3 |
| Fair value determined using inputs observable in the market (Level 2) | 1,069.6 | 563.8 |
| thereof available-for-sale | 920.6 | – |
| thereof derivatives with a hedging relationship | 139.3 | 57.1 |
| thereof derivatives without a hedging relationship | 9.7 | 4.4 |
| thereof other liabilities | – | 502.3 |
| Fair value determined using inputs unobservable in the market (Level 3) | – | – |
The changes of financial assets allocated to Level 3 and measured at fair value were as follows:
Show table| € million | 2014 | 2013 |
|---|---|---|
| Net book value as of January 1 | – | – |
| Additions due to the acquisition of AZ Electronic Materials S.A. | 10.8 | – |
| Transfers into Level 3 out of Level 1 / Level 2 | – | – |
| Fair value changes | ||
| Gains (+) / losses (–) recognized in profit or loss | – | – |
| Gains (+) / losses (–) recognized in other comprehensive income | 0.5 | – |
| Sales | – | – |
| Transfers out of Level 3 into Level 1 / Level 2 | – | – |
| Net book value as of December 31 | 11.3 | – |
Gains and losses from Level 3 assets are reported in other comprehensive income in the consolidated statement of comprehensive income under the item “fair value adjustments” related to available-for-sale financial assets. If the discount factor used for fair value determination was higher by one percentage point, other comprehensive income would decrease by € 2.1 million.
Balance sheet netting is not possible at Merck. From an economic perspective, netting is only possible with derivatives. This possibility results from the framework agreements on derivatives trading which Merck enters into with commercial banks. Merck does not offset financial assets and financial liabilities in its balance sheet.
The following table presents the potential netting volume of the reported derivative financial assets and liabilities:
Show table| Potential netting volume | ||||||
|---|---|---|---|---|---|---|
|
€ million as of Dec. 31, 2014 |
Gross presentation | Netting | Net presentation | Due to master netting agreements | Due to financial collateral | Potential net amount |
| Derivative financial assets | 511.2 | – | 511.2 | 70.5 | – | 440.7 |
| Derivative financial liabilities | – 188.4 | – | – 188.4 | – 70.5 | – | – 117.9 |
| Potential netting volume | ||||||
|---|---|---|---|---|---|---|
|
€ million as of Dec. 31, 2013 |
Gross presentation | Netting | Net presentation | Due to master netting agreements | Due to financial collateral | Potential net amount |
| Derivative financial assets | 149.0 | – | 149.0 | 45.9 | – | 103.1 |
| Derivative financial liabilities | – 61.5 | – | – 61.5 | – 45.9 | – | – 15.6 |
(58) Capital management
The objective of capital management is to secure the financial flexibility in order to maintain long-term business operations and to realize strategic options. Maintaining a stable investment grade rating, ensuring liquidity, limiting financial risks as well as optimizing the costs of capital are the objectives of our financial policy and set important framework conditions for capital management. Traditionally, the capital market represents a major source of financing for Merck, for instance via bond issues. In addition, Merck has both a commercial paper program for short-term financing on the capital market as well as a multi-currency working capital credit facility of € 2 billion with a term running until 2019 and one extension option for one year.
The responsible committees decide on the capital structure of the balance sheet, the appropriation of net retained profit and the dividend level. In this context, net financial debt is one of the leading capital management indicators. It was as follows:
Show table| € million | Dec. 31, 2014 | Dec. 31, 2013 | Change |
|---|---|---|---|
| Financial liabilities | 5,637.0 | 3,697.9 | 1,939.1 |
| less: | |||
| Cash and cash equivalents | 2,878.5 | 980.8 | 1,897.7 |
| Current financial assets | 2,199.4 | 2,410.5 | – 211.1 |
| Net financial debt | 559.1 | 306.6 | 252.5 |
(59) Contingent liabilities
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| € million | Dec. 31, 2014 | thereof affiliates | Dec. 31, 2013 | thereof affiliates |
|---|---|---|---|---|
| Guarantees | 17.1 | – | 2.5 | – |
| Warranties | 0.5 | – | 0.9 | – |
| Other contingent liabilities | 54.3 | – | 32.9 | – |
Other contingent liabilities included, among other things, potential obligations from legal disputes, for which the probability of an outflow of resources did not suffice to recognize a provision as of the balance sheet date.
(60) Other financial obligations
Other financial obligations comprised the following:
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| € million | Dec. 31, 2014 | thereof affiliates | Dec. 31, 2013 | thereof affiliates |
|---|---|---|---|---|
| Obligation to purchase the entire share capital of Sigma-Aldrich Corporation | 13,975.0 | – | – | – |
| Obligation to purchase the entire share capital of AZ Electronic Materials S.A. | – | – | 1,876.5 | – |
| Obligations to acquire intangible assets | 1,494.8 | – | 2,000.2 | – |
| Obligations to acquire property, plant and equipment | 55.3 | – | 44.7 | – |
| Future operating lease payments | 199.7 | – | 172.0 | – |
| Long-term purchase commitments | 138.4 | – | 151.5 | – |
| Other financial obligations | 30.8 | – | 29.0 | – |
| 15,894.0 | – | 4,273.9 | – |
In connection with the offer to acquire Sigma-Aldrich Corporation, USA, which was announced by Merck on September 22, 2014, there is a contingent financial obligation in the amount of € 13,975.0 million (US$ 16,985.2 million; € / US$ exchange rate on December 31, 2014: 1.2154) to acquire the entire share capital of Sigma-Aldrich for a cash consideration.
If the merger agreement with Sigma-Aldrich is terminated, Merck will be obligated to pay Sigma-Aldrich a termination fee of € 768.8 million (US$ 934.4. million, €/US$ exchange rate on December 31, 2014: 1.2154).
Obligations to acquire intangible assets existed in particular within the scope of research and development collaborations. Here Merck has obligations to make milestone payments when its partner achieves certain objectives.
In the unlikely event that all contract partners achieve all milestones, Merck would be obligated to pay up to € 1,494.8 million (2013: € 2,000.2 million) for the acquisition of intangible assets.
Our expectations regarding the potential maturities of these obligations were as follows:
Show table
| € million | Dec. 31, 2014 | Dec. 31, 2013 |
|---|---|---|
| Obligations to acquire intangible assets | ||
| within one year | 61.2 | 56.8 |
| in 1 – 5 years | 390.2 | 508.4 |
| more than 5 years | 1,043.4 | 1,435.0 |
| 1,494.8 | 2,000.2 |
Other financial obligations were recognized at nominal value.
The maturities of liabilities from lease agreements were as follows:
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|
€ million Dec. 31, 2014 |
within 1 year | 1 – 5 years | more than 5 years | Total |
|---|---|---|---|---|
| Present value of future payments from finance leases | 2.8 | 3.7 | – | 6.5 |
| Interest component of finance leases | 0.2 | 0.2 | – | 0.4 |
| Future finance lease payments | 3.0 | 3.9 | – | 6.9 |
| Future operating lease payments | 83.7 | 108.7 | 7.3 | 199.7 |
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|
€ million Dec. 31, 2013 |
within 1 year | 1 – 5 years | more than 5 years | Total |
|---|---|---|---|---|
| Present value of future payments from finance leases | 2.3 | 5.0 | 0.4 | 7.7 |
| Interest component of finance leases | 0.4 | 0.1 | 0.1 | 0.6 |
| Future finance lease payments | 2.7 | 5.1 | 0.5 | 8.3 |
| Future operating lease payments | 64.9 | 103.0 | 4.1 | 172.0 |
Operating lease agreements related mainly to customary leasing arrangements to lease operating and office equipment. The payments resulting from operating lease agreements amounted to € 91.8 million (2013: € 104.0 million) and were recorded as an expense in the reporting period.
(61) Personnel expenses / Headcount
Personnel expenses comprised the following:
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| € million | 2014 | 2013 |
|---|---|---|
| Wages and salaries | 2,630.9 | 2,611.8 |
| Compulsory social security contributions and special financial assistance | 376.6 | 368.0 |
| Pension expenses | 157.4 | 146.6 |
| 3,164.9 | 3,126.4 |
As of December 31, 2014, the Merck Group had 39,639 employees (2013: 38,154). The average number of employees during the year was 38,930 (2013: 38,282).
The breakdown of personnel by function was as follows:
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| Average number of employees | 2014 | 2013 |
|---|---|---|
| Production | 10,176 | 9,985 |
| Logistics | 2,207 | 1,779 |
| Marketing and Sales | 12,113 | 12,214 |
| Administration | 6,342 | 5,106 |
| Research and Development | 4,738 | 4,433 |
| Infrastructure and Other | 3,354 | 4,765 |
| 38,930 | 38,282 |
In 2013 and 2014, Merck substantially increased transparency by assigning all positions to a standardized job profile. In this way, positions that were previously not assigned to specific functional areas were assigned according to function.
(62) Material costs
Material costs in 2014 amounted to € 1,516.8 million (2013: € 1,473.2 million) and were reported under cost of sales.
(63) Auditors‘ fees
The costs of the auditors (KPMG) of the financial statements of the Merck Group consisted of the following:
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| 2014 | 2013 | |||
|---|---|---|---|---|
| € million | Merck Group | thereof KPMG Germany | Merck Group | thereof KPMG Germany |
| Audits of financial statements | 5.4 | 1.6 | 5.2 | 1.5 |
| Other audit-related services | 0.6 | 0.5 | 0.4 | 0.2 |
| Tax consultancy services | 0.6 | 0.3 | 0.8 | 0.7 |
| Other services | 0.3 | 0.2 | 0.4 | 0.3 |
| 6.9 | 2.6 | 6.8 | 2.7 | |
(64) Corporate Governance
The Statement of Compliance in accordance with section 161 of the German Stock Corporation Act (Aktiengesetz) was published in the corporate governance section of our website www.merckgroup.com/investors/corporate governance in March 2014 and thus made permanently available.
(65) Companies opting for exemption under section 264 (3) HGB or section 264 HGB
The following companies, which have been consolidated in these financial statements, have opted for exemption:
Allergopharma GmbH & Co. KG, Reinbek
Allergopharma Verwaltungs GmbH, Darmstadt
Biochrom GmbH, Berlin
Chemische Fabrik Lehrte Dr. Andreas Kossel GmbH, Lehrte
Chemitra GmbH, Darmstadt
heipha Dr. Müller GmbH, Eppelheim
Litec-LLL GmbH, Greifswald
Merck Accounting Solutions & Services Europe GmbH, Darmstadt
Merck Chemicals GmbH, Schwalbach
Merck Consumer Health Holding GmbH, Darmstadt
Merck Export GmbH, Darmstadt
Merck Selbstmedikation GmbH, Darmstadt
Merck Serono GmbH, Darmstadt
Merck Versicherungsvermittlung GmbH, Darmstadt
(66) Related-party disclosures
Related parties in respect of the Merck Group are E. Merck KG as well as Emanuel-Merck-Vermögens-KG and E. Merck Beteiligungen KG. In principle, direct or indirect subsidiaries of Merck KGaA, associates of the Merck Group, jointly controlled companies where the Merck Group is involved, as well as pension funds that are classified as funded defined benefit plans in accordance with IAS 19 are also related parties within the meaning of IAS 24. Members of the Executive Board and the Supervisory Board of Merck KGaA, the Executive Board and the Board of Partners of E. Merck KG as well as close members of their families are also related parties.
As of December 31, 2014, there were liabilities by Merck Financial Services GmbH, Merck KGaA, and Merck & Cie, Altdorf, Switzerland, to E. Merck KG in the amount of € 926.9 million (2013: € 734.7 million) as well as by Merck Financial Services GmbH to Merck Capital Asset Management, Malta, and Merck Capital Asset Management Holding, Malta, amounting to € 0.1 million (2013: € 0.2 million) and € 0.0 million (2013: € 0.1 million), respectively. In addition, as of December 31, 2014, Merck KGaA had receivables from E. Merck Beteiligungen KG in the amount of € 76.5 million (2013: € 32.5 million). The balances result mainly from the profit transfers by Merck & Cie to E. Merck KG as well as the reciprocal profit transfers between Merck KGaA and E. Merck KG. They included financial payables of € 501.4 million (2013: € 361.9 million) which were subject to standard market interest rates. Neither collateral nor guarantees existed for any of the balances either in favor or to the disadvantage of Merck.
From January to December 2014, Merck KGaA performed services for E. Merck KG with a value of € 1.2 million (2013: € 1.2 million), for Emanuel-Merck-Vermögens-KG with a value of € 0.3 million (2013: € 0.4 million) and for E. Merck Beteiligungen KG with a value of € 0.3 million (2013: € 0.3 million). During the same period, E. Merck KG performed services for Merck KGaA with a value of € 0.5 million (2013: € 0.5 million).
Business transactions with major subsidiaries were eliminated during consolidation. Information on pension funds that are classified as funded defined benefit plans in accordance with IAS 19 can be found under Note [49]. There were no further material transactions with these pension funds.
From January to December 2014, there were no transactions between companies of the Merck Group and associates, as was the case in 2013. As in the previous year, companies of the Merck Group had no receivables or liabilities vis-à-vis associates as of December 31, 2014.
There were no material transactions such as, for example, the provision of services or the granting of loans, between companies of the Merck Group and members of the Executive Board or the Supervisory Board of Merck KGaA, the Executive Board or the Board of Partners of E. Merck KG or members of their immediate families.
(67) Executive Board and Supervisory Board compensation
The compensation of the Executive Board of Merck KGaA is paid by the general partner, E. Merck KG, and recorded as an expense in its income statement. For the period from January to December 2014 fixed salaries of € 5.3 million (2013: € 4.9 million), variable compensation of € 18.3 million (2013: € 17.6 million), and additional benefits of € 0.2 million (2013: € 0.2 million) were recorded for members of the Executive Board of Merck KGaA. Furthermore, additions to the provisions of E. Merck KG for the Long-Term Incentive Plan totaled € 12.7 million (2013: € 8.0 million), and additions to the pension provisions of E. Merck KG include current service costs of € 2.1 million (2013: € 2.5 million) for members of the Executive Board of Merck KGaA.
The compensation of the Supervisory Board amounting to € 882.1 thousand (2013: € 847.4 thousand) consisted of a fixed portion of € 823.6 thousand (2013: € 599.5 thousand), meeting attendance compensation of € 58.5 thousand (2013: € 45.7 thousand), as well as a variable portion of € 0.0 thousand (2013: € 202.2 thousand).
Further individualized information and details can be found in the Compensation Report.
(68) Information on preparation and approval
The Executive Board of Merck KGaA prepared the consolidated financial statements on February 18, 2015 and approved them for forwarding to the Supervisory Board. The Supervisory Board has the responsibility to examine the consolidated financial statements and to declare whether it approves them.
(69) Subsequent events
Subsequent to the balance sheet date, no events of special importance occurred that could have a material impact on the financial position and results of operations of the Merck Group.
(70) List of shareholdings
The shareholdings of Merck KGaA as of December 31, 2014 are presented in the following table.
Show table
| Country | Company | Registered office | Equity interest (%) |
thereof Merck KGaA (%) |
|---|---|---|---|---|
| I. Fully consolidated companies | ||||
| Germany | ||||
| Germany | Merck KGaA | Darmstadt | Parent company | |
| Germany | AB Allgemeine Pensions GmbH & Co. KG | Zossen | 100.00 | 100.00 |
| Germany | Allergopharma GmbH & Co. KG | Reinbek | 100.00 | |
| Germany | Allergopharma Verwaltungs GmbH | Darmstadt | 100.00 | 100.00 |
| Germany | AZ Electronic Materials (Germany) GmbH | Wiesbaden | 100.00 | |
| Germany | Biochrom GmbH | Berlin | 100.00 | |
| Germany | Chemische Fabrik Lehrte Dr. Andreas Kossel GmbH | Lehrte | 100.00 | 100.00 |
| Germany | Chemitra GmbH | Darmstadt | 100.00 | 100.00 |
| Germany | Emedia Export Company mbH | Gernsheim | 100.00 | |
| Germany | heipha Dr. Müller GmbH | Eppelheim | 100.00 | 100.00 |
| Germany | IHS - Intelligent Healthcare Solutions GmbH | Frankfurt/Main | 100.00 | |
| Germany | Litec-LLL GmbH | Greifswald | 100.00 | 100.00 |
| Germany | Merck 12. Allgemeine Beteiligungs-GmbH | Darmstadt | 100.00 | 100.00 |
| Germany | Merck 13. Allgemeine Beteiligungs-GmbH | Darmstadt | 100.00 | |
| Germany | Merck 15. Allgemeine Beteiligungs-GmbH | Darmstadt | 100.00 | |
| Germany | Merck Accounting Solutions & Services Europe GmbH | Darmstadt | 100.00 | 100.00 |
| Germany | Merck Chemicals GmbH | Schwalbach | 100.00 | |
| Germany | Merck China Chemicals Holding GmbH | Darmstadt | 100.00 | |
| Germany | Merck Consumer Health Holding GmbH | Darmstadt | 100.00 | 100.00 |
| Germany | Merck Export GmbH | Darmstadt | 100.00 | 100.00 |
| Germany | Merck Financial Services GmbH | Darmstadt | 100.00 | 100.00 |
| Germany | Merck Financial Trading GmbH | Gernsheim | 100.00 | 100.00 |
| Germany | Merck Holding GmbH | Gernsheim | 100.00 | 100.00 |
| Germany | Merck International GmbH | Darmstadt | 100.00 | 100.00 |
| Germany | Merck Internationale Beteiligungen GmbH | Darmstadt | 100.00 | |
| Germany | Merck Schuchardt OHG | Hohenbrunn | 100.00 | 100.00 |
| Germany | Merck Selbstmedikation GmbH | Darmstadt | 100.00 | |
| Germany | Merck Serono GmbH | Darmstadt | 100.00 | 100.00 |
| Germany | Merck Versicherungsvermittlung GmbH | Darmstadt | 100.00 | 100.00 |
| Germany | Merck Vierte Allgemeine Beteiligungsgesellschaft mbH | Gernsheim | 100.00 | |
| Other European countries | ||||
| Austria | Allergopharma Vertriebsgesellschaft m.b.H. | Vienna | 100.00 | |
| Austria | Merck Chemicals and Life Science GesmbH | Vienna | 100.00 | |
| Austria | Merck Gesellschaft mbH | Vienna | 100.00 | |
| Austria | Merck KGaA & Co. Werk Spittal | Spittal | 100.00 | 99.00 |
| Belgium | Merck Chemicals N.V./S.A. | Overijse | 100.00 | |
| Belgium | Merck Consumer Healthcare N.V.-S.A. | Overijse | 100.00 | |
| Belgium | Merck N.V.-S.A. | Overijse | 100.00 | |
| Bulgaria | Merck Bulgaria EAD | Sofia | 100.00 | |
| Croatia | Merck d.o.o. | Zagreb | 100.00 | |
| Czech Republic | Merck spol.s.r.o. | Prague | 100.00 | |
| Denmark | Merck A/S | Hellerup | 100.00 | |
| Denmark | Merck Life Science A/S | Hellerup | 100.00 | |
| Denmark | Survac ApS | Frederiksberg | 100.00 | 100.00 |
| Estonia | Merck Serono OÜ | Tallinn | 100.00 | |
| Finland | Merck OY | Espoo | 100.00 | |
| Finland | Millipore OY | Espoo | 100.00 | |
| France | AZ Electronic Materials France S.A.S. | Trosly-Breuil | 100.00 | |
| France | Laboratoire Médiflor S.A.S. | Lyon | 100.00 | |
| France | Merck Biodevelopment S.A.S. | Lyon | 100.00 | |
| France | Merck Chimie S.A.S. | Fontenay s/Bois | 100.00 | |
| France | Merck Médication Familiale S.A.S. | Lyon | 100.00 | |
| France | Merck S.A. | Lyon | 99.83 | |
| France | Merck Santé S.A.S. | Lyon | 100.00 | |
| France | Merck Serono S.A.S. | Lyon | 100.00 | |
| France | Millipore S.A.S. | Molsheim | 100.00 | |
| Greece | Merck A.E. | Maroussi, Athens | 100.00 | |
| Hungary | Merck Kft. | Budapest | 100.00 | |
| Ireland | Merck Millipore Ltd. | Carrigtwohill | 100.00 | |
| Ireland | Merck Serono (Ireland) Ltd. | Dublin | 100.00 | |
| Ireland | Millipore Cork | Carrigtwohill | 100.00 | |
| Ireland | Millipore Dublin International Finance Company | Dublin | 100.00 | |
| Italy | Allergopharma S.p.A. | Rome | 100.00 | |
| Italy | Istituto di Ricerche Biomediche Antoine Marxer RBM S.p.A. | Colleretto Giacosa | 100.00 | |
| Italy | Merck S.p.A. | Vimodrone | 100.00 | |
| Italy | Merck Serono S.p.A. | Rome | 99.74 | |
| Latvia | Merck Serono SIA | Riga | 100.00 | |
| Lithuania | Merck Serono, UAB | Vilnius | 100.00 | |
| Luxembourg | AZ Electronic Materials (Luxembourg) S.a.r.l. | Luxembourg | 100.00 | |
| Luxembourg | AZ Electronic Materials Group S.a.r.l. | Luxembourg | 100.00 | |
| Luxembourg | AZ Electronic Materials S.A. | Luxembourg | 100.00 | |
| Luxembourg | AZ Electronic Materials TopCo S.a.r.l. | Luxembourg | 100.00 | |
| Luxembourg | Merck Chemicals Holding S.a.r.l. | Luxembourg | 100.00 | |
| Luxembourg | Merck Finance S.a.r.l. | Luxembourg | 100.00 | |
| Luxembourg | Merck Holding S.a.r.l. | Luxembourg | 100.00 | |
| Luxembourg | Merck Re S.A. | Luxembourg | 100.00 | |
| Luxembourg | Merck-Finanz AG | Luxembourg | 100.00 | 100.00 |
| Luxembourg | Millilux S.a.r.l. | Luxembourg | 100.00 | |
| Luxembourg | Millipart S.a.r.l. | Luxembourg | 100.00 | |
| Luxembourg | Millipore International Holdings, S.a.r.l. | Luxembourg | 100.00 | |
| Luxembourg | Ridgefield Acquisition S.a.r.l. | Luxembourg | 100.00 | |
| Luxembourg | Ridgefield Holdco S.a.r.l. | Luxembourg | 100.00 | |
| Malta | Merck Capital Holding Ltd. | Pietà | 100.00 | |
| Malta | Merck Capital Ltd. | Pietà | 100.00 | |
| Netherlands | Merck B.V. | Schiphol-Rijk | 100.00 | |
| Netherlands | Merck Chemicals B.V. | Amsterdam Zuidoost | 100.00 | |
| Netherlands | Serono Tri Holdings B.V. | Schiphol-Rijk | 100.00 | |
| Norway | Merck Life Science AS | Oslo | 100.00 | |
| Poland | Merck Sp.z o.o. | Warsaw | 100.00 | |
| Portugal | Merck, S.A. | Algés | 100.00 | |
| Romania | Merck Romania S.R.L. | Bucharest | 100.00 | |
| Russia | Merck LLC | Moscow | 100.00 | |
| Slovakia | Merck spol.s.r.o. | Bratislava | 100.00 | |
| Slovenia | Merck d.o.o. | Ljubljana | 100.00 | |
| Serbia | Merck d.o.o. Beograd | Belgrade | 100.00 | |
| Spain | Merck Chemicals and Life Science S.A. | Madrid | 100.00 | |
| Spain | Merck, S.L. | Madrid | 100.00 | |
| Sweden | Merck AB | Solna | 100.00 | |
| Sweden | Merck Chemicals and Life Science AB | Solna | 100.00 | |
| Switzerland | Allergopharma AG | Therwil | 100.00 | |
| Switzerland | Ares Trading SA | Aubonne | 100.00 | |
| Switzerland | AZ Electronic Materials (Schweiz) AG | Zurich | 100.00 | |
| Switzerland | Merck & Cie | Altdorf | 51.63 | 51.63 |
| Switzerland | Merck (Schweiz) AG | Zug | 100.00 | |
| Switzerland | Merck Biosciences AG | Läufelfingen | 100.00 | |
| Switzerland | Merck Serono SA | Coinsins | 100.00 | |
| Switzerland | Millipore AG | Zug | 100.00 | |
| Switzerland | SeroMer Holding SA | Chéserex | 100.00 | |
| Turkey | Merck Ilac Ecza ve Kimya Ticaret AS | Istanbul | 100.00 | |
| United Kingdom | AZ Electronic Materials (UK) Ltd. | Stockley Park | 100.00 | |
| United Kingdom | AZ Electronic Materials Services Ltd. | Stockley Park | 100.00 | |
| United Kingdom | Lamberts Healthcare Ltd. | Tunbridge Wells | 100.00 | |
| United Kingdom | Merck Chemicals Ltd. | Nottingham | 100.00 | |
| United Kingdom | Merck Consumer Health Care Ltd. | Hull | 100.00 | |
| United Kingdom | Merck Cross Border Trustees Ltd. | Hull | 100.00 | |
| United Kingdom | Merck Holding Ltd. | Feltham | 100.00 | |
| United Kingdom | Merck Investments Ltd. | Hull | 100.00 | |
| United Kingdom | Merck Ltd. | Hull | 100.00 | |
| United Kingdom | Merck Pension Trustees Ltd. | Hull | 100.00 | |
| United Kingdom | Merck Serono Europe Ltd. | London | 100.00 | |
| United Kingdom | Merck Serono Ltd. | Feltham | 100.00 | |
| United Kingdom | Millipore (U.K.) Ltd. | Feltham | 100.00 | |
| United Kingdom | Millipore UK Holdings LLP | London | 100.00 | |
| United Kingdom | Seven Seas Limited | Hull | 100.00 | |
| North America | ||||
| Canada | EMD Chemicals Canada Inc. | Toronto | 100.00 | |
| Canada | EMD Crop BioScience Canada Inc. | Toronto | 100.00 | |
| Canada | EMD Inc. | Mississauga | 100.00 | |
| Canada | Millipore (Canada) Ltd. | Toronto | 100.00 | |
| United States | Amnis Corp. | Seattle | 100.00 | |
| United States | AZ Electronic Materials Holdings U.S. Inc. | Wilmington | 100.00 | |
| United States | AZ Electronic Materials USA Corp. | Wilmington | 100.00 | |
| United States | EMD Accounting Solutions & Services America, Inc. | Quincy | 100.00 | |
| United States | EMD Holding Corp. | Rockland | 100.00 | |
| United States | EMD Millipore Corporation | Billerica | 100.00 | |
| United States | EMD Serono Holding Inc. | Rockland | 100.00 | |
| United States | EMD Serono Research & Development Institute, Inc. | Billerica | 100.00 | |
| United States | EMD Serono, Inc. | Rockland | 100.00 | |
| United States | Mario Finance Corp. | Wilmington | 100.00 | |
| United States | Millipore Asia Ltd. | Wilmington | 100.00 | |
| United States | Millipore Pacific Ltd. | Wilmington | 100.00 | |
| United States | Millipore UK Holdings I, LLC | Wilmington | 100.00 | |
| United States | Millipore UK Holdings II, LLC | Wilmington | 100.00 | |
| United States | Serono Laboratories Inc. | Rockland | 100.00 | |
| Emerging Markets | ||||
| Argentina | Merck Quimica Argentina S.A.I.C. | Buenos Aires | 100.00 | |
| Brazil | Merck S.A. | Rio de Janeiro | 100.00 | |
| Chile | Merck S.A. | Santiago de Chile | 100.00 | |
| China | AZ Electronic Materials (Hong Kong) Finance Ltd. | Hong Kong | 100.00 | |
| China | AZ Electronic Materials (Suzhou) Ltd. | Suzhou | 100.00 | |
| China | Beijing Skywing Technology Co., Ltd. | Beijing | 100.00 | |
| China | Merck Chemicals (Shanghai) Co., Ltd. | Shanghai | 100.00 | |
| China | Merck Display Materials (Shanghai) Co., Ltd. | Shanghai | 100.00 | |
| China | Merck Holding (China) Co., Ltd. | Shanghai | 100.00 | |
| China | Merck Ltd. | Hong Kong | 100.00 | |
| China | Merck Millipore Lab Equipment (Shanghai) Co., Ltd. | Shanghai | 100.00 | |
| China | Merck Performance Materials Hong Kong Ltd. | Hong Kong | 100.00 | |
| China | Merck Performance Materials Hong Kong Services Ltd. | Hong Kong | 100.00 | |
| China | Merck Pharmaceutical (HK) Ltd. | Hong Kong | 100.00 | |
| China | Merck Pharmaceutical Manufacturing (Jiangsu) Co., Ltd. | Nantong | 100.00 | |
| China | Merck Serono (Beijing) Pharmaceutical Distribution Co., Ltd. | Beijing | 100.00 | |
| China | Merck Serono (Beijing) Pharmaceutical R&D Co., Ltd. | Beijing | 100.00 | |
| China | Merck Serono Co., Ltd. | Beijing | 100.00 | |
| China | Millipore (Shanghai) Trading Co., Ltd. | Shanghai | 100.00 | |
| China | Millipore China Ltd. | Hong Kong | 100.00 | |
| China | Suzhou Taizhu Technology Development Co., Ltd. | Taicang | 100.00 | |
| Colombia | Merck S.A. | Bogotá | 100.00 | |
| Ecuador | Merck C.A. | Quito | 100.00 | |
| Guatemala | Merck, S.A. | Guatemala City | 100.00 | |
| India | Chemtreat Composites India Pvt. Ltd. | Sanpada New Mumbai | 100.00 | |
| India | Merck Ltd. | Mumbai | 51.80 | |
| India | Merck Specialities Pvt. Ltd. | Mumbai | 100.00 | |
| India | Millipore India Pvt. Ltd. | Bangalore | 100.00 | |
| Indonesia | P.T. Merck Chemicals and Life Sciences | Jakarta | 100.00 | |
| Indonesia | P.T. Merck Tbk. | Jakarta | 86.65 | |
| Israel | Inter-Lab Ltd. | Yavne | 100.00 | |
| Israel | InterPharm Industries Ltd. | Yavne | 100.00 | |
| Israel | InterPharm Laboratories Ltd. | Yavne | 100.00 | |
| Israel | Merck Serono Ltd. | Herzliya Pituach | 100.00 | |
| Malaysia | Merck Sdn Bhd | Petaling Jaya | 100.00 | |
| Mexico | Merck, S.A. de C.V. | Mexico City | 100.00 | |
| Pakistan | Merck (Pvt.) Ltd. | Karachi | 75.00 | 26.00 |
| Pakistan | Merck Pharmaceuticals (Pvt.) Ltd. | Karachi | 75.00 | |
| Pakistan | Merck Specialities (Pvt.) Ltd. | Karachi | 100.00 | |
| Panama | Mesofarma Corporation | Panama City | 100.00 | |
| Peru | Merck Peruana S.A. | Lima | 100.00 | |
| Philippines | Merck Inc. | Makati City | 100.00 | |
| Singapore | AZ Electronic Materials (Singapore) Pte. Ltd. | Singapore | 100.00 | |
| Singapore | Merck Pte. Ltd. | Singapore | 100.00 | |
| South Korea | AZ Chem Korea Ltd. | Seoul | 100.00 | |
| South Korea | AZ Electronic Materials (Korea) Ltd. | Seoul | 100.00 | |
| South Korea | Merck Advanced Technologies Ltd. | Pyeongtaek-si | 100.00 | |
| South Korea | Merck Ltd. | Seoul | 100.00 | |
| Taiwan | AZ Electronic Materials Taiwan Co. Ltd. | Taipei | 100.00 | 100.00 |
| Taiwan | AZ EM Taiwan Holding Co. Ltd. | Taipei | 100.00 | |
| Taiwan | Merck Display Technologies Ltd. | Taipei | 100.00 | |
| Taiwan | Merck Ltd. | Taipei | 100.00 | |
| Thailand | Merck Ltd. | Bangkok | 45.11 | |
| United Arab Emirates | Merck Serono Middle East FZ-LLC | Dubai | 100.00 | |
| Uruguay | ARES Trading Uruguay S.A. | Montevideo | 100.00 | |
| Venezuela | Merck S.A. | Caracas | 100.00 | |
| Venezuela | Representaciones MEPRO S.A. | Caracas | 100.00 | |
| Vietnam | Merck Vietnam Ltd. | Ho Chi Minh City | 100.00 | |
| Rest of the World | ||||
| Australia | Merck Pty. Ltd. | Bayswater | 100.00 | |
| Australia | Merck Serono Australia Pty. Ltd. | Sydney | 100.00 | |
| Egypt | Merck Ltd. | Cairo | 100.00 | |
| Japan | AZ Electronic Materials IP (Japan) KK | Tokyo | 100.00 | |
| Japan | AZ Electronic Materials Manufacturing (Japan) KK | Tokyo | 100.00 | |
| Japan | Merck Ltd. | Tokyo | 100.00 | 15.89 |
| Japan | Merck Performance Materials G.K. | Tokyo | 100.00 | |
| Japan | Merck Serono Co., Ltd. | Tokyo | 100.00 | |
| Mauritius | Millipore Mauritius Ltd. | CyberCity | 100.00 | |
| New Zealand | Merck Ltd. | Palmerston North | 100.00 | |
| South Africa | Merck (Pty) Ltd. | Halfway House | 100.00 | |
| South Africa | Merck Pharmaceutical Manufacturing (Pty) Ltd. | Wadeville | 100.00 | |
| Tunisia | Merck Promotion SARL | Tunis | 100.00 | |
| Tunisia | Merck SARL | Tunis | 100.00 | |
| II. Companies not consolidated due to secondary importance | ||||
| Germany | ||||
| Germany | AB Pensionsverwaltung GmbH | Zossen | 100.00 | 100.00 |
| Germany | Merck 14. Allgemeine Beteiligungs-GmbH | Darmstadt | 100.00 | |
| Germany | Merck 16. Allgemeine Beteiligungs-GmbH | Darmstadt | 100.00 | 100.00 |
| Germany | Merck 17. Allgemeine Beteiligungs-GmbH | Darmstadt | 100.00 | 100.00 |
| Germany | Merck 18. Allgemeine Beteiligungs-GmbH | Darmstadt | 100.00 | 100.00 |
| Germany | Merck 19. Allgemeine Beteiligungs-GmbH | Darmstadt | 100.00 | 100.00 |
| Germany | Merck 20. Allgemeine Beteiligungs-GmbH | Darmstadt | 100.00 | 100.00 |
| Germany | Merck 21. Allgemeine Beteiligungs-GmbH | Darmstadt | 100.00 | 100.00 |
| Germany | Merck Patent GmbH | Darmstadt | 100.00 | |
| Germany |
Merck Wohnungs- und Grundstücksverwaltungsgesellschaft mbH |
Darmstadt | 100.00 | 100.00 |
| Other European countries | ||||
| France | Gonnon S.A.S. | Lyon | 100.00 | |
| Netherlands | Merck Finance B.V. | Schiphol-Rijk | 100.00 | 100.00 |
| Netherlands | Merck Holding Netherlands B.V. | Schiphol-Rijk | 100.00 | 100.00 |
| Netherlands | Peer+ B.V. | Eindhoven | 100.00 | 100.00 |
| Portugal | Laquifa Laboratorios S.A. | Algés | 100.00 | |
| Switzerland | Asceneuron SA | Lausanne | 80.00 | |
| Switzerland | Calypso Biotech SA | Plan-les-Ouates | 75.00 | |
| Switzerland | Prexton Therapeutics SA | Plan-les-Ouates | 55.00 | |
| United Kingdom | Nature´s Best Health Products Ltd. | Tunbridge Wells | 100.00 | |
| North America | ||||
| United States | EMD Finance LLC | Wilmington | 100.00 | |
| United States | Mario II Finance Corp. | Wilmington | 100.00 | |
| United States | TocopheRx, Inc. | Groton | 65.78 | |
| Emerging Markets | ||||
| Dominican Republic | Merck Dominicana, S.R.L. | Santo Domingo | 100.00 | |
| Rest of the World | ||||
| Australia | Biochrom Australia Pty. Ltd. | Bayswater | 100.00 | |
| Morocco | Merck Maroc S.A.R.L. | Casablanca | 100.00 | |
| Nigeria | Merck Pharmaceutical and Life Sciences Ltd. | Lagos | 100.00 | |
| South Africa | Serono South Africa Ltd. | Johannesburg | 100.00 | |
| III. Associates not included at equity due to secondary importance | ||||
| Other European countries | ||||
| Switzerland | Vaximm AG | Basel | 24.66 | |
| Emerging Markets | ||||
| Israel | Neviah Genomics Ltd. | Yavne | 69.00 | 7.75 |
| Israel | QLight Nanotech Ltd. | Jerusalem | 47.73 | |
Darmstadt, February 18, 2015
Karl-Ludwig Kley
Kai Beckmann
Belén Garijo Lopez
Marcus Kuhnert
Stefan Oschmann
Bernd Reckmann