Merck Kgaa · XETR:MRK
Merck Kgaa — Q2 2020 Earnings Presentation
22 slides from Merck Kgaa's earnings presentation, Aug 6, 2020
Slide 1: Top Line reflects Covid-19 impact, Bottom line well managed
Top Line reflects Covid-19 impact, Bottom line well managed Merck Q2 2020 results Presentation for the media Stefan Oschmann, CEO Marcus Kuhnert, CFO August 6, 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 3 Merck Q2 20 Results Presentation | Aug 6th, 2020
Slide 4: Executive summary
Executive summary 01
Slide 5: Highlights
Highlights Operations Financials Healthcare: Oncology and General Medicine growing despite pandemic, Fertility demand lowered Q2 organic sales: decline of -2.5%; as anticipated, recovery of Mavenclad® ramp-up started in June, Bavencio® U.S. launch in UC 1L; Q2 organic EBITDA pre: decline of -11.5% M
Slide 6: Versum portfolio effect and Process Solutions drive sales growth despite Covid-19 decline
Versum portfolio effect and Process Solutions drive sales growth despite Covid-19 related organic decline in Healthcare and Performance Materials Q2 YoY Net Sales Q2 YoY EBITDA pre Organic Currency Portfolio Total 1,139 8.8% 1,074 Healthcare -7.4% -2.3% -0.9% -10.6% -11.5% -3.1% Life Science 6.3% -0
Slide 7: All regions impacted by Covid-19; signs of recovery in APAC
All regions impacted by Covid-19; signs of recovery in APAC dragged down by Display Solutions & Fertility Regional breakdown of net sales [€m] Regional organic development Europe -4.2% Moderate decline in APAC as double- org. digit growth in Life Science and 27% Semiconductor Solutions offset a la
Slide 8: Financial overview
Financial overview 02
Slide 9: Q2 2020: Overview
Q2 2020: Overview Key figures Comments [€m] Q2 2019 Q2 2020 Δ Versum portfolio effect and strong growth Net sales 3,971 4,119 3.7% in Process Solutions drive sales above last year, despite materializing Covid-19 EBITDA pre 1,139 1,074 -5.7% impact across most business units Margin (in % of net sal
Slide 10: Reported figures
Reported figures Reported results Comments [€m] Q2 2019 Q2 2020 Δ EBIT decline driven by lower non- 618 491 -20.6% recurring income, higher depreciation EBIT & amortization from Versum PPA and Financial result -61 -102 67.4% impairments in Performance Materials Profit before tax 557 389 -30.2% F
Slide 11: Healthcare: Savings in M&S and R&D offset lowered Fertility demand and Mavenclad drag
Healthcare: Savings in M&S and R&D offset impact from lowered Fertility demand and Mavenclad® drag amid Covid-19 Healthcare P&L Net sales bridge €1,677 m €1,499 m [€m] Q2 2019 Q2 2020 Net sales 1,677 1,499 -7.4% -2.3% -0.9% Marketing and selling -599 -409 +0.0%Q2 2020 Administration -84 -81 Q2 2019
Slide 12: Life Science: Strong resilience continues in Q2; Process growing 20%
Life Science: Strong resilience continues in Q2; Process growing 20%, Applied & Research impacted by Covid-19 but recovery visible in June Life Science P&L Net sales bridge €1,705 m 6.3% 0.0% €1,806 m [€m] Q2 2019 Q2 2020 -0.4% Net sales 1,705 1,806 Marketing and selling -490 -488 +0.0%Q2 2020 Admin
Slide 13: Performance Materials: Versum portfolio effect and accelerating Semi growth
Performance Materials: Versum portfolio effect and accelerating Semi growth more than offset declining Display and Surface amid Covid-19 Performance Materials P&L Net sales bridge 50.1% €814 m [€m] Q2 2019 Q2 2020 €589 m 1.8% Net sales 589 814 -13.7% Marketing and selling -66 -134 +0.0%Q2 2020 Admin
Slide 14: Balance sheet
Balance sheet Assets [€bn] Liabilities [€bn] 43.8 43.8 43.8 43.8 Cash & cash equivalents 0.8 1.5 3.5 3.5 Receivables 3.3 3.5 Inventories 18.0 17.9 Net equity Intangible assets 26.3 25.8 14.1 13.2 Financial debt 2.6 Payables/refund liabilities 2.4 Property, plant 3.3 Provisions for employee benefits
Slide 15: Cash flow statement
Cash flow statement Q2 2020 – cash flow statement Cash flow drivers [€m] Q2 2019 Q2 2020 Δ Profit after tax driven by lower EBIT Profit after tax 471 289 -182 Higher depreciation & amortization from Versum PPA and impairments in D&A 453 559 106 Performance Materials Changes in provisions -47 -54
Slide 16: Guidance
Guidance 03
Slide 17: Our assumptions on the development of the Covid-19 pandemic have remained largely the same
Our assumptions on the development of the Covid-19 pandemic have remained largely the same since May Previous assumptions Current assumptions (communicated in May) (communicated in August) Impact across all regions Impact across all regions Cases expected to peak in Q2 Situation eases in H2 Recovery
Slide 18: Active crisis management and resilient portfolio allowed quick 8-week recovery
Active crisis management and resilient product portfolio allowed quick 8-week recovery time Organic sales growth - Merck Group Increased visibility of Covid-19 impact +11% Strongest correlation with mandatory workplace closures +7% Fertility: closure of clinics N&I: closure of practices, limit
Slide 19: Covid-19 guidance given in May overall accurate, slight upgrade
Covid-19 guidance given in May overall accurate, improved visibility warrants slight upgrade Merck Group: Up to mid single-digit percentage sales impact full year Countermeasures in place: confirm 50 to 60% of net sales impact to hit EBITDA pre Recovery visible in June, expected to continue in
Slide 20: Merck Group Full-year 2020 guidance
Merck Group Full-year 2020 guidance Net sales: Slight to moderate organic growth, Versum growth contribution in mid single-digit percentage range; FX between 0% to -2% YoY; ~€16.9 – 17.7 bn EBITDA pre: Slight to moderate organic growth, mid single-digit percentage range growth from Versum; FX headwi
Slide 21: Merck Group 2020 business sector guidance
Merck Group 1 2020 business sector guidance Net sales EBITDA pre Healthcare Slight organic growth Organically about stable Covid-19 significantly impacting Significant adverse FX impact Fertility performance Sustained performance of new products Net sales EBITDA pre Life Science Strong o
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