Merck KGaA · XETR:MRK
Merck KGaA — Merck KGaA, Darmstadt, Germany — Q2 2022 Earnings Presentation
43 slides from Merck KGaA's earnings presentation, Aug 4, 2022
Slide 1: Continued strength amid a challenging macro environment
Continued strength amid a challenging macro environment Merck KGaA, Darmstadt, Germany Q2 2022 results Belén Garijo, CEO Marcus Kuhnert, CFO August 4, 2022
Slide 2: Disclaimer
Disclaimer Publication of Merck KGaA, Darmstadt, Germany. In the United States and Canada the group of companies affiliated with Merck KGaA, Darmstadt, Germany operates under individual business names (EMD Serono, Millipore Sigma, EMD Performance Materials). To reflect such fact and to avoid any mis
Slide 3: Agenda
Agenda Executive summary Financial overview Outlook & Guidance 2 Merck KGaA, Darmstadt, Germany Q2 2022 Results Presentation | August 4, 2022
Slide 4: Executive summary
Executive summary 01
Slide 5: Highlights Q2 2022
Highlights Q2 2022 Operations Financials Life Science: ▪ Life Science delivers 10% organic growth & another record quarter, driven by core business performance in Process Q2 organic sales: growth of +6.6% Solutions (org. growth >20% excl. declining COVID-19) ▪ Largest growth contribution to group (o
Slide 6: All sectors contribute to 6.6% organic sales growth
All sectors contribute to 6.6% organic sales growth; Sales and EBITDA pre further supported by significant positive FX effects Q2 YoY Net Sales Q2 YoY EBITDA pre Organic Currency Portfolio Total 9.5% 0.3% €1,782 m Life Science 10.4% 7.4% 1.1% 19.0% €1,576 m 3.2% Healthcare 1.4% 6.2% 0.0% 7.6% Electr
Slide 7: Europe fastest growing major region in Q2
Europe fastest growing major region in Q2 with strong performance across all three sectors Regional breakdown of net sales [€m] Regional organic development Europe +12.2% org. ▪ APAC: Semiconductor Solutions main 29% growth driver, further supported by Bavencio® in Japan ▪ Europe: Process Solutions,
Slide 8: Financial overview
Financial overview 02
Slide 9: Q2 2022: Overview
Q2 2022: Overview Key figures Comments [€m] Q2 2021 Q2 2022 Δ ▪ Sales up +14%, driven by FX tailwinds on top of strong organic performance Net sales 4,870 5,568 14.3% ▪ Life Science drives organic EBITDA pre EBITDA pre 1,576 1,782 13.1% growth, boosted by FX tailwinds Margin (in % of net sales) 32.4
Slide 10: Q2 2022: Reported figures
Q2 2022: Reported figures Reported results Comments ▪ Life Science primary organic driver of [€m] Q2 2021 Q2 2022 Δ +12% EBIT growth, further boosted EBIT 1,049 1,177 12.2% by favorable FX effects amid inflationary pressures Financial result -95 -55 -41.9% ▪ Improved financial result primarily Profi
Slide 11: Life Science Q2: Core business drives 9th consecutive quarter of sequential growth
Life Science Q2: Core business drives 9th consecutive quarter of sequential growth and another record quarter Life Science P&L Net sales bridge [€m] IFRS Pre 10.4% 7.4% 1.1% €2,648 m €2,225 m Q2 2021 Q2 2022 Q2 2021 Q2 2022 Net sales 2,225 2,648 2,225 2,648 M&S * -505 -609 -505 -598 +0.0% Q2 2021 Or
Slide 12: Healthcare Q2: Bavencio and Mavenclad growth more than offsets decline
Healthcare Q2: Bavencio® and Mavenclad® growth more than offsets decline in established portfolio against elevated comps Healthcare P&L Net sales bridge [€m] IFRS Pre €1,788 m 1.4% 6.2% 0.0% €1,924 m Q2 2021 Q2 2022 Q2 2021 Q2 2022 Net sales 1,788 1,924 1,788 1,924 * M&S -391 -417 -389 -415 Q2 2021
Slide 13: Electronics Q2: Strong Semi performance amid inflationary environment
Electronics Q2: Strong Semi performance amid inflationary environment Electronics P&L Net sales bridge 7.4% 8.9% 0.0% €996 m [€m] IFRS Pre €857 m Q2 2021 Q2 2022 Q2 2021 Q2 2022 Net sales 857 996 857 996 M&S * -137 -163 -136 -162 +0.0% Q2 2021 Organic Currency Portfolio Q2 2022 Admin -30 -33 -28 -31
Slide 14: Balance sheet
Balance sheet Assets [€bn] Liabilities [€bn] 48.7 48.7 45.4 1.6 45.4 Cash & cash equivalents 1.9 4.4 Receivables 3.6 4.5 Inventories 3.9 26.0 21.4 Net equity 26.4 Intangible assets 24.6 10.8 Financial debt 11.8 3.2 Payables/refund liabilities Property, plant 3.4 7.2 7.6 3.6 Provisions for employee b
Slide 15: Cash flow statement
Cash flow statement Q2 2022 – Cash flow statement Cash flow drivers [€m] Q2 2021 Q2 2022 Δ ▪ +17% profit after tax; growth driven by Profit after tax 747 870 123 strong business performance in Life Science, further boosted by favorable FX D&A 422 532 110 and improved financial result ▪ Delta in chan
Slide 16: Outlook & Guidance
Outlook & Guidance 03
Slide 17: Group full-year 2022 guidance
Group Full-year 2022 guidance Net sales: Organic: +6% to +9% YoY FX: 5% to 8% YoY ~€21.90 – €23.00 bn EBITDA pre: Organic: +5% to +9% YoY FX: 6% to 10% YoY ~€6.75 – €7.25 bn EPS pre: ~ €9.85 – €10.75 16 Merck KGaA, Darmstadt, Germany Q2 2022 Results Presentation | August 4, 2022
Slide 18: 2022 business sector guidance
2022 business sector guidance1 Net sales EBITDA pre Life Science ▪ Organic: +7% to +10%; FX: 5% to 8% YoY ▪ Organic:+7% to +10% YoY ▪ ~€10,150 m to €10,750 m ▪ FX: 4% to 7% YoY ▪ Strong core business, PS main growth driver ▪ ~€3,700 m to €3,900 m ▪ COVID-19 sales of up to ~€450 m in PS and up to ~€2
Slide 19: Appendix
Appendix
Slide 20: Additional financial guidance 2022
Additional financial guidance 2022 Further financial details Corporate & Other EBITDA pre ~ -€560 m to -€610 m Interest result ~ -€140 m to -€180 m Effective tax rate ~22% to 24% Capex on PPE1 ~€1.6 bn to €1.7 bn FY 2022 hedge ratio ~50% Hedging/USD assumption at EUR/USD ~1.16 2022 Ø EUR/USD assumpt
Slide 21: Credit details
Credit details Maturity profile as of June 30, 2022 Credit rating information Coupon [€m / $m] 3.250% 0.125% LT LT ST Rating Outlook Rating Rating Since 1.625% 1.875% 1,600 A3 21.10.21 Stable P-2 1.625% 3.375% 2.875% 1.000 0.500% 0.875% 0.005% 500 0.375% A 29.05.13 Stable A-1 2.375% 1.000 750 750 80
Slide 22: All sectors drive 7% organic net sales growth in H1
All sectors drive 7% organic net sales growth, EBITDA pre up 2%, driven by Life Science H1 YoY Net Sales H1 YoY EBITDA pre Organic Currency Portfolio Total 8.0% 0.1% €3,411 m €3,087 m 2.4% Life Science 10.1% 6.1% 0.7% 16.9% Healthcare 3.9% 4.7% 0.0% 8.5% Electronics 6.3% 7.5% 0.0% 13.8% Group 7.2% 5
Slide 23: H1 2022: Overview
H1 2022: Overview Key figures Comments [€m] H1 2021 H1 2022 Δ ▪ Sales up +13%, driven by strong organic Net sales 9,501 10,766 13.3% performance and FX tailwinds EBITDA pre 3,087 3,411 10.5% ▪ Life Science drives organic EBITDA pre Margin (in % of net sales) 32.5% 31.7% -0.8pp growth, boosted by FX
Slide 24: H1 2022: Reported figures
H1 2022: Reported figures Reported results Comments ▪ Life Science primary organic driver of [€m] H1 2021 H1 2022 Δ +12% EBIT growth, further boosted EBIT 2,092 2,350 12.3% by favorable FX effects amid inflationary pressures Financial result -154 -89 -41.9% ▪ Improved financial result primarily Prof
Slide 25: Life Science H1: Strong core performance across all businesses
Life Science H1: Strong core performance across all businesses, fueling record growth despite declining COVID-19 demand Life Science P&L Net sales bridge 10.1% 6.1% 0.7% €5,093 m [€m] IFRS Pre €4,357 m H1 2021 H1 2022 H1 2021 H1 2022 Net sales 4,357 5,093 4,357 5,093 M&S * -1,006 -1,161 -1,005 -1,14
Slide 26: Process Solutions: Double-digit growth despite fading COVID-19 demand
Process Solutions: Double-digit growth despite fading COVID-19 demand Sales development [€m] - org. growth [%] 1,149 ▪ Acceleration of core business drives double- digit organic sales growth in Q2 1 1 1,050 962 1 993 991 ▪ COVID-19 sales significantly down YoY, sequentially about stable ▪ Strong gro
Slide 27: Life Science Services: Robust performance drives double-digit growth
Life Science Services: Robust performance drives double-digit growth Sales development [€m] - org. growth [%] 1 262 266 ▪ Core business main driver of double-digit 27% organic sales growth in Q2; supported by strong demand and positive phasing in 1 189 1 196 25% CDMO business, and continuously robus
Slide 28: Science & Lab Solutions: Healthy growth despite fading COVID-19 demand
Science & Lab Solutions: Healthy growth despite fading COVID-19 demand Sales development [€m] - org. growth [%] 1,199 1,233 1 1 1 1,133 ▪ Strong core business drives mid single- 1,086 1,067 digit growth in Q2, supported by pricing ▪ COVID-19 business significantly down YoY, also declining sequential
Slide 29: Healthcare H1: Mavenclad & Bavencio drive organic growth
Healthcare H1: Mavenclad® & Bavencio® drive organic growth Healthcare P&L Net sales bridge [€m] IFRS Pre €3,427 m 3.9% 4.7% 0.0% €3,719 m H1 2021 H1 2022 H1 2021 H1 2022 Net sales 3,427 3,719 3,427 3,719 M&S * -761 -792 -754 -791 H1 2021 Organic Currency Portfolio +0.0%H1 2022 Admin -150 -152 -146 -
Slide 30: Healthcare organic growth by franchise/product
Healthcare organic growth by franchise/product Q2 2022 organic sales growth [%] H1 2022 organic sales growth [%] by key product [€m] by key product [€m] 146 274 61% 78% 87 148 258 500 -9% -1% 273 492 212 27% 401 26% 157 304 217 -19% 419 -17% 247 475 198 -5% 398 0% 200 386 228 -2% 445 -4% 213 430 139
Slide 31: Neurology & Immunology: Q2 Mavenclad sales up 27% organically
Neurology & Immunology: Q2 Mavenclad® sales up +27% organically, driven by consistent performance ® Sales development N&I, [€m] Mavenclad Y1+Y2 patients1 ® ▪ Mavenclad most prescribed oral HE drug in U.S. and EU-4 org. org. org. org. org. in dynamic market segment2 [€m] 15.3% 0.9% -5.2% 0.8% -1.2% ®
Slide 32: Oncology: Bavencio mUC 1L ramp-up drives organic growth
Oncology: Bavencio® mUC 1L ramp-up drives 8.1% organic growth despite tough comps due to prior year Erbitux® supply agreement ® Sales development Oncology, [€m] Erbitux net sales, [€m] ▪ Q1 2021 includes ~€50 m from temporary supply agreement org. org. org. org. org. 300 273 261 258 with Eli Lilly [
Slide 33: Fertility: China lockdown situation causing a Q2 decline
Fertility: China lockdown situation causing a Q2 decline of -2,7% Sales development Fertility, [€m] Gonal-f® net sales, [€m] 200 191 190 200 198 200 org. org. org. org. org. [€m] 87.6% 7.2% 8.8% 4.3% -2.7% 150 ▪ China depressed Q2 due to 400 lockdowns – recovery effect 100 343 339 341 351 expected f
Slide 34: CM&E: Growth supported by strong Euthyrox and Concor sales
CM&E: Growth of +2.7%, supported by strong Euthyrox® and Concor® sales ® Sales development CM&E, [€m] Glucophage net sales, [€m] ▪ Glucophage® organic decline org. org. org. org. org. of -2.1% offset by +8.9% FX [€m] 0.6% -3.4% 2.8% 2.5% 2.7% tailwinds 250 213 225 218 228 209 691 200 ▪ Slight sales
Slide 35: Company pipeline
Company pipeline August 4, 2022 Healthcare pipeline Phase 1 Phase 2 Phase 3 Registration Marketed6 evobrutinib (BTK inhibitor) Relapsing multiple sclerosis enpatoran (TLR7/8 antagonist) Cutaneous lupus erythematosus enpatoran (TLR7/8 antagonist) Systemic lupus erythematosus xevinapant (IAP inhibitor
Slide 36: Healthcare catalysts
Healthcare catalysts Q1 2022 Q2 2022 Q3 2022 Q4 2022 Tepotinib Tepotinib (c-Met–inhibitor) (c-Met–inhibitor) EC approval in NSCLC METex14 Based on evaluation of data from Decision on PhIII confirmatory February 2022 PhII study, planned for H2 2022. study for EGFRm METamp in NSCLC Bintrafusp alfa (TG
Slide 37: Electronics H1: Organic sales growth above mid-term guidance
Electronics H1: Delivering organic sales growth above mid-term guidance, EBITDA pre impacted by inflationary pressures Electronics P&L Net sales bridge [€m] IFRS Pre €1,718 m 6.3% 7.5% 0.0% €1,954 m H1 2021 H1 2022 H1 2021 H1 2022 Net sales 1,718 1,954 1,718 1,954 M&S * -272 -319 -271 -317 H1 2021 O
Slide 38: Semiconductor Solutions: 20% organic growth and another record quarter
Semiconductor Solutions: 20% organic growth and another record quarter Sales development [€m] - org. growth [%] 653 1 601 573 1 581 ▪ Another strong quarter for 1 24% Semiconductor Solutions amid 500 21% 20% continued favorable market conditions 12% 16% ▪ Semiconductor Materials again biggest absolu
Slide 39: Cash flow statement
Cash flow statement H1 2021 – cash flow statement Cash flow drivers [€m] H1 2021 H1 2022 Δ ▪ +17% profit after tax growth driven by Profit after tax 1,495 1,754 259 strong business performance in Life D&A 846 962 116 Science further boosted by favorable FX and improved financial result Changes in pr
Slide 40: Adjustments in Q2 2022
Adjustments in Q2 2022 Adjustments in EBIT [€m] Q2 2021 Q2 2022 Adjustments thereof D&A Adjustments thereof D&A Life Science -6 0 30 0 Healthcare 11 3 91 90 Electronics 10 5 11 0 Corporate & Other 97 0 30 0 Total 112 8 163 90 39 Merck KGaA, Darmstadt, Germany Q2 2022 Results Presentation | August 4,
Slide 41: Adjustments in H1 2022
Adjustments in H1 2022 Adjustments in EBIT [€m] H1 2021 H1 2022 Adjustments thereof D&A Adjustments thereof D&A Life Science 8 0 37 1 Healthcare 21 3 95 91 Electronics 27 7 22 0 Corporate & Other 103 1 37 0 Total 159 11 191 93 40 Merck KGaA, Darmstadt, Germany Q2 2022 Results Presentation | August 4
Slide 42: Financial Calendar
Financial Calendar Date Event August 4, 2022 Q2 2022 Earnings release October 6, 2022 Capital Markets Day November 10, 2022 Q3 2022 Earnings release March 2, 2023 Q4 2022 Earnings release May 11, 2023 Q1 2023 Earnings release August 3, 2023 Q2 2023 Earnings release 41 Merck KGaA, Darmstadt, Germany
Slide 43: Investor Relations contacts
CONSTANTIN FEST SVENJA DJAVAHERI PETRA HOLTZ Head of Investor Relations Assistant Investor Relations Assistant Investor Relations +49 6151 72-5271 +49 6151 72-3744 +49 6151 72-3321 [email protected] [email protected] [email protected] ADRIAN GORSKI GUNNAR ROMER FLORIAN
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