Annual Report 2014 Annual Report 2014
Menu

Segment Reporting

(51) Information by division/country and region

Information by division

Show table
  Merck Serono1 Consumer Health1 Performance Materials Merck Millipore Corporate and Other Group
€ million 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013
                         
Sales 5,783.3 5,688.4 766.1 742.1 2,059.6 1,642.1 2,682.5 2,627.5 11,291.5 10,700.1
Royalty, license and commission income 191.7 372.0 2.7 2.9 0.9 2.3 14.0 17.8 209.3 395.0
Total revenues 5,975.0 6,060.4 768.8 745.0 2,060.5 1,644.4 2,696.5 2,645.3 11,500.8 11,095.1
Cost of sales2 – 1,119.7 – 1,024.4 – 250.7 – 243.0 – 983.2 – 617.1 – 1,168.7 – 1,152.3 – 4.1 – 4.9 – 3,526.4 – 3,041.7
(of which: amortization of intangible assets)2 (–) (–) (–) (–) (– 46.4) (– 1.2) (– 47.6) (– 48.0) (–) (–) (– 94.0) (– 49.2)
Gross profit2 4,855.3 5,036.0 518.1 502.0 1,077.3 1,027.3 1,527.8 1,493.0 – 4.1 – 4.9 7,974.4 8,053.4
Marketing and selling expenses2 – 1,780.2 – 1,813.6 – 303.1 – 287.2 – 177.8 – 151.6 – 844.1 – 835.2 0.3 – 1.0 – 3,104.9 – 3,088.5
(of which: amortization of intangible assets)2 (– 552.8) (– 596.7) (– 2.7) (– 2.4) (– 11.7) (– 11.1) (– 151.8) (– 151.9) (–) (–) (– 719.0) (– 762.0)
Royalty, license and commission expenses – 518.3 – 547.3 – 2.6 – 2.4 – 1.1 – 1.3 – 15.6 – 16.1 0.1 0.1 – 537.5 – 567.0
Administration expenses – 219.7 – 202.5 – 27.2 – 26.9 – 56.1 – 27.8 – 110.4 – 99.2 – 195.2 – 206.0 – 608.6 – 562.4
Research and development costs2 – 1,343.7 – 1,178.1 – 22.3 – 21.8 – 170.6 – 145.4 – 162.6 – 159.8 – 4.5 – 1.6 – 1,703.7 – 1,506.6
(of which: amortization of intangible assets)2 (– 1.0) (–) (–) (–) (– 2.8) (– 2.3) (–) (–) (–) (–) (– 3.8) (– 2.3)
Other operating expenses and income – 36.9 – 501.4 – 13.0 – 1.5 – 60.2 – 47.9 – 105.9 – 120.7 – 41.7 – 46.6 – 257.7 – 718.1
Operating result (EBIT) 956.5 793.1 149.9 162.1 611.5 653.3 289.2 262.0 – 245.1 – 259.7 1,762.0 1,610.8
Depreciation and amortization 739.2 797.4 10.0 8.6 190.0 107.7 308.1 309.2 14.3 15.0 1,261.6 1,237.9
Impairment losses 90.3 196.4 0.5 0.3 2.7 9.3 1.6 18.8 5.1 0.8 100.2 225.6
Reversals of impairment losses – 0.3 –0.6 – 4.5 –0.2 –0.3 –0.1 –0.9 – 5.1
EBITDA 1,786.0 1,786.6 160.4 171.0 803.6 765.8 598.9 589.8 – 226.0 – 244.0 3,122.9 3,069.2
One-time items 44.9 68.5 9.0 1.4 91.2 13.9 59.7 53.0 60.0 47.3 264.8 184.1
EBITDA pre one-time items (segment result) 1,830.9 1,855.1 169.4 172.4 894.8 779.7 658.6 642.8 – 166.0 – 196.7 3,387.7 3,253.3
EBITDA margin pre one-time items (in % of sales) 31.7 32.6 22.1 23.2 43.4 47.5 24.6 24.5 30.0 30.4
Net operating assets 5,623.6 6,811.9 417.4 414.3 3,348.6 1,044.7 6,196.3 5,987.1 126.1 36.0 15,712.0 14,294.0
Segment liabilities – 2,394.4 – 1,358.0 – 113.5 – 74.5 – 355.4 – 155.9 – 434.6 – 391.9 – 56.5 – 64.8 – 3,354.4 – 2,045.1
Investments in property, plant and equipment3 215.0 151.3 10.2 3.7 91.5 66.5 130.6 112.6 33.6 72.9 480.9 407.0
Investments in intangible assets3 111.5 80.6 2.6 0.4 7.5 6.7 6.5 10.3 15.2 11.6 143.3 109.6
Net cash flows from operating activities 2,120.3 1,739.8 167.0 146.2 900.4 828.4 580.0 557.5 – 1,062.2 – 1,046.4 2,705.5 2,225.5
Business free cash flow 1,577.2 1,787.1 124.0 172.5 699.6 787.8 419.0 493.8 – 214.7 – 281.2 2,605.1 2,960.0
1
Previous year’s figures have been adjusted, see Note “Information on Segment Reporting”.
2
The disclosure of amortization of intangible assets (excluding software) has been changed. See Note “Accounting and measurement principles”.
3
According to the consolidated cash flow statement.

37 KB

Information by country and region

Show table
  Europe thereof Germany thereof France thereof Switzerland North America thereof USA Emerging Markets Rest of World Group
€ million 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013
                                     
Sales by customer location 4,014.6 3,984.6 845.2 825.4 648.3 677.0 149.3 159.0 2,152.2 2,078.0 2,009.9 1,916.8 4,250.2 3,795.6 874.5 841.9 11,291.5 10,700.1
Sales by company location 4,520.1 4,457.5 1,592.0 1,570.8 779.1 790.8 182.5 188.6 2,142.3 2,072.7 2,022.3 1,933.1 3,909.9 3,467.1 719.2 702.8 11,291.5 10,700.1
Total revenues 4,674.1 4,686.6 1,618.0 1,596.8 840.1 812.5 247.5 364.5 2,142.9 2,077.1 2,022.9 1,937.5 3,957.0 3,622.3 726.8 709.1 11,500.8 11,095.1
Intangible assets 7,966.3 7,572.4 448.9 398.0 269.2 278.0 4,151.4 4,692.3 2,522.5 2,214.8 2,522.3 2,214.5 745.7 46.5 161.0 33.5 11,395.5 9,867.2
Property, plant and equipment 2,163.1 2,075.2 1,032.8 997.5 205.4 183.6 498.2 508.0 416.2 341.6 415.1 340.4 295.4 169.3 115.7 61.1 2,990.4 2,647.2
Research and development costs1 – 1,550.7 – 1,359.7 – 816.0 – 851.3 – 56.9 – 56.4 – 604.8 – 411.4 – 90.4 – 92.5 – 88.7 – 94.7 – 47.2 – 36.6 – 15.4 – 17.8 – 1,703.7 – 1,506.6
Number of employees 20,537 20,013 11,191 10,868 2,943 2,946 1,347 1,232 5,092 4,911 4,939 4,754 12,176 11,688 1,834 1,542 39,639 38,154
1
The disclosure of amortization of intangible assets (excluding software) has been changed. See Note “Accounting and measurement principles”.

31 KB

(52) Information on Segment Reporting

Segmentation was performed in accordance with the organizational and reporting structure of the Merck Group that applied during 2014.

Within the Merck Serono division, Merck focuses on specialist therapeutic areas and markets innovative prescription drugs of chemical and biotechnological origin. The Consumer Health division comprises Merck’s business with high-quality over-the-counter products for preventive health care and self-treatment of minor ailments. The Performance Materials division consists of the Liquid Crystals, Pigments & Cosmetics and Advanced Technologies business units as well as the businesses of the AZ Electronic Materials Group, which were added in 2014. The Merck Millipore division offers solutions to research and analytical laboratories in the pharmaceutical/biotechnology industry or in academic institutions, and customers manufacturing large- and small-molecule drugs. The fields of activity of the individual divisions are described in detail in the sections about the divisions in the Group management report.

Corporate and Other includes assets and liabilities as well as income and expenses that are largely allocable to Group functions and thus cannot be directly allocated to the reportable segments presented; it serves the reconciliation to the Group numbers. The cash flows attributable to the financial result and income taxes are also presented under Corporate and Other.

Apart from sales, the success of a segment is mainly determined by EBITDA pre one-time items (segment result) and business free cash flow. EBITDA pre one-time items and business free cash flow are performance indicators not defined by International Financial Reporting Standards. However, they represent important variables used to steer the Merck Group. To permit a better understanding of operational performance, EBITDA pre one-time items excludes depreciation and amortization in addition to specific income and expenses of a one-time nature presented in the following. Among other things, business free cash flow is also used for internal target agreements and individual incentive plans.

Transfer prices for intragroup sales are determined on an arm’s-length basis.

The Emerging Markets region comprises Latin America and Asia with the exception of Japan. The Rest of World region comprises Japan, Africa and Australia/Oceania.

Neither in 2014 nor in 2013 did any single customer account for more than 10 % of Group sales.

The following table presents the reconciliation of EBITDA pre one-time items of all operating businesses to the profit before income tax of the Merck Group:


Show table
€ million 2014 2013
     
Total EBITDA pre one-time items of the operating businesses 3,553.7 3,450.0
Corporate and Other – 166.0 – 196.7
EBITDA pre one-time items of the Merck Group 3,387.7 3,253.3
Depreciation and amortization / impairment losses / reversals of impairments – 1,360.9 – 1,458.4
One-time items – 264.8 – 184.1
Operating result (EBIT) 1,762.0 1,610.8
Financial result – 205.0 – 222.2
Profit before income tax 1,557.0 1,388.6

29 KB

EBITDA pre one-time items of all operating businesses totaled € 3,553.7 million (2013: € 3,450.0 million). Taking into account the expenses and income of € – 166.0 million (2013: € –196.7 million) not allocable to the operating businesses which were reported under Corporate and Other, EBITDA pre one-time items of the Merck Group amounted to € 3,387.7 million (2013: € 3,253.3 million). This figure did not include depreciation, amortization, impairments and reversals of impairments or one-time items (excluding impairments and reversals of impairments). Consequently, the total operating result (EBIT) of the Merck Group amounted to € 1,762.0 million (2013: € 1,610.8 million).

One-time items comprised the following:


Show table
€ million 2014 2013
     
Integration costs / IT costs – 87.2 – 49.0
Acquisition-related one-time items – 85.0
Restructuring costs – 83.9 – 130.5
Gains / losses on the divestment of businesses 1.9 – 2.3
Other one-time items – 10.6 – 2.3
One-time items – 264.8 – 184.1
Impairment losses – 9.8 – 207.2
Reversals of impairments 4.5
One-time items (total) – 274.6 – 386.8

29 KB

Of the acquisition-related one-time items of € 85.0 million (2013: € 0.0 million), € 60.5 million related to the step-up of the acquired inventories of AZ Electronic Materials S.A. (AZ).

Additionally, this figure included acquisition costs of € 24.5 million for the acquisition of AZ and the planned acquisition of the Sigma-Aldrich Corporation, USA.

Business free cash flow was determined as follows:


Show table
€ million 2014 2013
     
EBITDA pre one-time items 3,387.7 3,253.3
Less investments in property, plant and equipment, software as well as
advance payments for intangible assets
– 527.5 – 446.2
Changes in inventories as reported in the balance sheet – 185.5 59.7
Changes in trade accounts receivable as reported in the balance sheet – 214.2 93.2
Adjustment first-time consolidation of AZ Electronic Materials S.A. 144.6
Business free cash flow 2,605.1 2,960.0

29 KB

The reconciliation of operating assets presented in the Segment Reporting to the total assets of the Merck Group was as follows:


Show table
€ million Dec. 31, 2014 Dec. 31, 2013
     
Assets 26,010.1 20,818.6
Monetary assets (cash and cash equivalents, current financial assets, loans and securities) – 5,563.1 – 3,539.3
Non-operating receivables, income tax receivables, deferred taxes and net defined benefit assets – 1,380.6 – 913.1
Assets held for sale – 27.1
Operating assets (gross) 19,066.4 16,339.1
Trade accounts payable – 1,539.4 – 1,364.1
Other operating liabilities – 1,815.0 – 681.0
Segment liabilities – 3,354.4 – 2,045.1
Operating assets (net) 15,712.0 14,294.0

29 KB

The operating assets (gross) of the Merck Group are determined by adjusting all assets totaling € 26,010.1 million (2013: € 20,818.6 million) for monetary assets totaling € 5,563.1 million (2013: € 3,539.3 million) as well as all other non-operating assets totaling € 1,380.6 million (2013: € 913.1 million). Furthermore, in 2013 assets held for sale of € 27.1 million were not included in operating assets. After deducting the reported segment liabilities which represented the operating liabilities totaling € 3,354.3 million (2013: € 2,045.1 million), the operating assets (net) of the Merck Group amounted to € 15,712.0 million (2013: € 14,294.0 million).

As of January 1, 2014, the two product groups Neurobion® (vitamin B-based analgesic) and Floratil® (a probiotic antidiarrheal) were transferred from the Merck Serono division to the Consumer Health division. This involved a transfer of goodwill in the amount of € 78.8 million, which had been allocated previously to the Merck Serono division. The transfer of the product groups resulted in the following adjustments of prior-year figures, taking into account the adjusted disclosure of amortization of intangible assets:


Show table
Merck Serono
€ million 2013 reported Product group transfer adjustments Disclosure change1 2013 adjusted
         
Sales 5,953.6 – 265.2 5,688.4
Royalty, license and commission income 372.2 – 0.2 372.0
Total revenues 6,325.8 – 265.4 6,060.4
Cost of sales1 – 1,106.1 81.7 – 1,024.4
(of which: amortization of intangible assets)1 (–) (–) (–) (–)
Gross profit1 5,219.7 – 183.7 5,036.0
Marketing and selling expenses1 – 1,288.7 71.8 – 596.7 – 1,813.6
(of which: amortization of intangible assets)1 (–) (–) (– 596.7) (– 596.7)
Royalty, license and commission expenses – 547.7 0.4 – 547.3
Administration expenses – 211.3 8.8 – 202.5
Research and development costs1 – 1,182.8 4.7 – 1,178.1
(of which: amortization of intangible assets)1 (–) (–) (–) (–)
Other operating expenses and income – 499.4 – 2.0 – 501.4
Operating result (EBIT) 893.0 – 99.9 793.1
Depreciation and amortization 797.4 797.4
Impairment losses 196.4 196.4
Reversals of impairment losses – 0.3 – 0.3
EBITDA 1,886.5 – 99.9 1,786.6
One-time items 68.5 68.5
EBITDA pre one-time items (Segment result) 1,955.0 – 99.9 1,855.1
EBITDA margin pre one-time items (% of sales) 32.8 – 0.2 32.6
Net operating assets 6,968.0 – 156.1 6,811.9
Segment liabilities – 1,358.0 – 1,358.0
Investments in property, plant and equipment2 151.3 151.3
Investments in intangible assets2 80.6 80.6
Net cash flows from operating activities 1,818.9 – 79.1 1,739.8
Business free cash flow 1,875.7 – 88.6 1,787.1
1
The disclosure of amortization of intangible assets (excluding software) has been changed. See Note “Accounting and measurement principles”.
2
According to the consolidated cash flow statement.

33 KB


Show table
Consumer Health
€ million 2013 reported Product group transfer adjustments Disclosure change1 2013 adjusted
         
Sales 476.9 265.2 742.1
Royalty, license and commission income 2.7 0.2 2.9
Total revenues 479.6 265.4 745.0
Cost of sales1 – 161.3 – 81.7 – 243.0
(of which: amortization of intangible assets)1 (–) (–) (–) (–)
Gross profit1 318.3 183.7 502.0
Marketing and selling expenses1 – 213.0 – 71.8 – 2.4 – 287.2
(of which: amortization of intangible assets)1 (–) (–) (– 2.4) (– 2.4)
Royalty, license and commission expenses – 2.0 – 0.4 – 2.4
Administration expenses – 18.1 – 8.8 – 26.9
Research and development costs1 – 17.1 – 4.7 – 21.8
(of which: amortization of intangible assets)1 (–) (–) (–) (–)
Other operating expenses and income – 3.5 2.0 – 1.5
Operating result (EBIT) 62.2 99.9 162.1
Depreciation and amortization 8.6 8.6
Impairment losses 0.3 0.3
Reversals of impairment losses
EBITDA 71.1 99.9 171.0
One-time items 1.4 1.4
EBITDA pre one-time items (Segment result) 72.5 99.9 172.4
EBITDA margin pre one-time items (% of sales) 15.2 8.0 23.2
Net operating assets 258.2 156.1 414.3
Segment liabilities – 74.5 – 74.5
Investments in property, plant and equipment2 3.7 3.7
Investments in intangible assets2 0.4 0.4
Net cash flows from operating activities 67.1 79.1 146.2
Business free cash flow 83.9 88.6 172.5
1
The disclosure of amortization of intangible assets (excluding software) has been changed. See Note “Accounting and measurement principles”.
2
According to the consolidated cash flow statement.

32.5 KB

Nach oben