Merck Kgaa · XETR:MRK
Merck Kgaa — Q1 2020 Earnings Presentation
21 slides from Merck Kgaa's earnings presentation, May 14, 2020
Slide 1: Good start to the year despite first Covid-19 impact
GOOD START TO THE YEAR DESPITE FIRST COVID-19 IMPACT Merck Q1 2020 results Presentation for the media Stefan Oschmann, Chairman of the Executive Board & CEO Marcus Kuhnert, CFO May 14, 2020
Slide 2: Disclaimer
Disclaimer Cautionary Note Regarding Forward-Looking Statements and financial indicators 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 wor
Slide 3: Agenda
Agenda Executive summary Financial overview Guidance Merck Q1 20 Results Presentation | May 14th, 2020 3
Slide 4: Executive Summary
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Slide 5: Highlights
Highlights Operations Financials Healthcare: double-digit growth fueled by Q1 organic sales growth of +7.6%; ® Mavenclad ramp-up and General Medicine Q1 organic EBITDA pre growth of +14.5% Life Science: Process Solutions with double Guidance: digit growth while Academia and Applied end Net sales: €1
Slide 6: Healthcare and Life Science fuel strong organic top- and bottom-line performance
Healthcare and Life Science fuel strong organic top- and bottom-line performance; significant portfolio effect from Versum Q1 YoY Net Sales Q1 YoY EBITDA pre Organic Currency Portfolio Total 10.7% 1,181 Healthcare 15.3% -0.4% 0.0% 14.9% 14.5% 2.0% 929 Life Science 5.6% 0.9% 0.0% 6.5% Performance Mat
Slide 7: Organic growth driven by North America, Europe and Latin America
Organic growth driven by North America, Europe and Latin America Regional breakdown of net sales [€ m] Regional organic development Europe +9.7% • About stable APAC due to double-digit org. growth of General Medicine, more than offsetting Covid-19 related flat Life 30% Science and decline in Display
Slide 8: Financial Overview
FINANCIAL OVERVIEW
Slide 9: Q1 2020: Overview
Q1 2020: Overview Key figures Comments [€m] Q1 2019 Q1 2020 Δ • Net sales driven by organic growth of Net sales 3,746 4,370 16.7% Healthcare and Life Science, further fueled by portfolio effect from Versum EBITDA pre 929 1,181 27.2% Margin (in % of net sales) 24.8% 27.0% • EBITDA pre & margin increa
Slide 10: Reported figures
Reported figures Reported results Comments [€m] Q1 2019 Q1 2020 Δ • Higher EBIT driven by strong top line growth in Healthcare and Life Science EBIT 379 716 89.0% as well as consolidation of Versum and Financial result -113 -98 -12.5% divestment gain from Allergopharma* Profit before tax 266 617 131
Slide 11: Healthcare: Strong General Medicine supported by Covid-19 pull-in effect and ongoing Mavenclad uptake
Healthcare: Strong General Medicine supported by Covid-19 pull-in effect ® and ongoing Mavenclad uptake; improved margins from top line leverage Healthcare P&L Net sales bridge 15.3% -0.4% 0.0% €1,701 m [€m] Q1 2019 Q1 2020 €1,481 m Net sales 1,481 1,701 Marketing and selling -550 -423 Q1 2019 Organ
Slide 12: Life Science: Showing strong resilience, Process Solutions with double-digit growth
Life Science: Showing strong resilience, Process Solutions with double-digit growth, Research and Applied flat Life Science P&L Net sales bridge 5.6% 0.9% 0.0% €1,769 m [€m] Q1 2019 Q1 2020 €1,661 m Net sales 1,661 1,769 Marketing and selling -470 -498 Q1 2019 Organic Currency Portfolio Q1 2020 Admi
Slide 13: Performance Materials: Strong Semi more than offset by LC's decline
Performance Materials: Strong Semi more than offset by LC’s accelerated underlying negative trajectory and declining Surface amid Covid-19 Performance Materials P&L Net sales bridge 52.1% €900 m [€m] Q1 2019 Q1 2020 €604 m -5.4% 2.4% Net sales 604 900 Marketing and selling -66 -136 Administration -2
Slide 14: Balance sheet
Balance sheet Assets [€ bn] Liabilities [€ bn] 43.7 44.7 44.7 43.8 Cash & cash equivalents 0.8 1.5 3.5 3.7 Receivables 3.3 3.4 Inventories 18.6 17.9 Net equity Intangible Assets 26.3 26.5 13.9 13.2 Financial debt 2.4 2.6 Payables/refund liabilities Property, plant 3.1 3.3 Provisions for employee ben
Slide 15: Cash flow statement
Cash flow statement Q1 2020 – cash flow statement Cash flow drivers [€m] Q1 2019 Q1 2020 Δ • Profit after tax driven by higher EBIT Profit after tax 190 458 268 and Allergopharma disposal* gain, neutralized in other operating activities D&A 474 431 -42 ® • D&A lower mainly from expired Rebif Changes
Slide 16: Guidance
GUIDANCE
Slide 17: Our assumptions regarding the development of Covid-19 have changed significantly
Our assumptions regarding the development of Covid-19 have changed significantly post pandemic classification by WHO and subsequent events Previous Assumptions (as of mid Feb) Current assumptions (as of mid May) • Impact mainly in China • Impact across all regions • Outbreak peaks in Q1 • Cases expe
Slide 18: Covid-19 Update: new assumptions on financial impact
Merck Group Covid-19 Update: new assumptions on financial impact of Covid-19 Mid single-digit percentage Sales impact Group Global impact across many businesses Strong Q2 impact, also from Q1 pull-in Lasting until at least Q3 Highest anticipated impact in absolute terms Healthcare Bigges
Slide 19: Full-year 2020 guidance
Merck Group Full-year 2020 guidance Net sales: Slight to moderate organic sales growth, Versum growth contribution in the mid-single digits % FX between +1% to -2% YoY ~€16.8 – 17.8 bn EBITDA pre: Organically about stable, mid-single digit % growth from Versum FX headwinds of 0% to -3% YoY 1 ~€4,350
Slide 20: 2020 business sector guidance
Merck Group 1 2020 business sector guidance Net sales EBITDA pre Healthcare Organically about stable Slight organic decline Covid-19 significantly impacting due to Covid-19 fertility performance Slight to moderate Sustained performance of new adverse FX impact products Net sales EBITDA pre
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