Merck Kgaa · XETR:MRK
Merck Kgaa — Merck KGaA, Darmstadt, Germany — Q1 2022 Earnings Presentation
38 slides from Merck Kgaa's earnings presentation, May 12, 2022
Slide 1: Off to a strong start: Q1 2022 results
off to a strong start Merck KGaA, Darmstadt, Germany Q1 2022 results Belén Garijo, CEO Marcus Kuhnert, CFO May 12, 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 Strategic review Financial overview ESG update Outlook & Guidance 3 Merck KGaA, Darmstadt, Germany Q1 2022 Results Presentation | May 12, 2022
Slide 4: Executive summary
Executive summary 01
Slide 5: Highlights Q1 2022
Highlights Q1 2022 Operations Financials Life Science: ▪ 10% organic growth & sequential step-up driven by core business performance amid declining COVID-19 demand Q1 organic sales: growth of +7.8% ▪ Largest growth contribution to group (org. +€207 m) Q1 organic EBITDA pre: growing +1.6% ▪ All busin
Slide 6: All sectors contribute to strong organic sales growth
All sectors contribute to strong organic sales growth; Sales and EBITDA pre further supported by significant positive FX effects Q1 YoY Net Sales Q1 YoY EBITDA pre Organic Currency Portfolio Total €1,511 m 1.6% 6.4% €1,629 m Life Science 9.7% 4.8% 0.2% 14.7% -0.2% Healthcare 6.5% 3.0% 0.0% 9.5% Elec
Slide 7: Strong Life Science and Healthcare are primary growth drivers across all regions
Strong Life Science and Healthcare are primary growth drivers across all regions Regional breakdown of net sales [€m] Regional organic development Europe +10.7% org. ▪ APAC: Semiconductor Solutions main 28% growth driver, supported by Process Solutions and Bavencio® ▪ Europe: Process Solutions, Bave
Slide 8: Financial overview
Financial overview 03
Slide 9: Q1 2022: Overview
Q1 2022: Overview Key figures Comments [€m] Q1 2021 Q1 2022 Δ Net sales 4,631 5,198 12.2% ▪ Sales up +12%, driven by strong organic performance and FX tailwinds EBITDA pre 1,511 1,629 7.8% ▪ Life Science primary driver of organic Margin (in % of net sales) 32.6% 31.3% -1.3pp EBITDA pre growth; FX up
Slide 10: Q1 2022: Reported figures
Q1 2022: Reported figures Reported results Comments ▪ EBIT growing +13% despite lower [€m] Q1 2021 Q1 2022 Δ non-recurring income in Healthcare amid inflationary pressures EBIT 1,043 1,173 12.5% Financial result -59 -34 -41.9% ▪ Improved financial result primarily driven by reduced interest expenses
Slide 11: Life Science Q1: Core business drives sequential growth & another record quarter
Life Science Q1: Core business drives sequential growth & another record quarter Life Science P&L Net sales bridge IFRS Pre 9.7% 4.8% 0.2% €2,445 m [€m] €2,131 m Q1 2021 Q1 2022 Q1 2021 Q1 2022 Net sales 2,131 2,445 2,131 2,445 M&S * -501 -552 -500 -552 +0.0% Q1 2021 Organic Currency Portfolio Q1 20
Slide 12: Healthcare Q1: Doubling Bavencio sales and continued Mavenclad growth
Healthcare Q1: Doubling Bavencio® sales and continued Mavenclad® growth drive +6.5% organic growth in the sector Healthcare P&L Net sales bridge [€m] IFRS Pre €1,639 m 6.5% 3.0% 0.0% €1,795 m Q1 2021 Q1 2022 Q1 2021 Q1 2022 Net sales 1,639 1,795 1,639 1,795 * M&S -370 -376 -365 -375 Q1 2021 Organic
Slide 13: Electronics Q1: Strong Semi performance continues to drive sector growth
Electronics Q1: Strong Semi performance continues to drive sector growth Electronics P&L Net sales bridge 5.2% 6.0% 0.0% €957 m [€m] IFRS Pre €861 m Q1 2021 Q1 2022 Q1 2021 Q1 2022 Net sales 861 957 861 957 M&S * -135 -156 -135 -156 +0.0% Q1 2021 Organic Currency Portfolio Q1 2022 Admin -34 -28 -33
Slide 14: Balance sheet
Balance sheet Assets [€bn] Liabilities [€bn] 45.4 46.2 46.2 45.4 Cash & cash equivalents 1.9 1.3 3.6 4.1 Receivables 3.9 4.1 Inventories 23.0 21.4 Net equity Intangible assets 24.6 25.3 10.6 10.8 Financial debt 3.2 3.2 Payables/refund liabilities Property, plant 3.6 7.2 7.3 3.1 Provisions for employ
Slide 15: Cash flow statement
Cash flow statement Q1 2022 – Cash flow statement Cash flow drivers [€m] Q1 2021 Q1 2022 Δ Profit after tax 748 884 136 ▪ +18% profit after tax growth driven by strong business performance, improved D&A 424 430 6 financial result and lower tax rate ▪ Delta in other assets & liabilities driven Change
Slide 16: ESG update
ESG update 04
Slide 17: Group confirmed as "1.5°C Company" by SBTi
Group confirmed as “1.5°C Company” by SBTi SBTi certification of Work on SBTi roadmap towards Aiming for Scope 1-3 targets climate targets 2030 climate neutrality by 2040 Scope 1+2 Scope 3 Renewable energy Absolute reduction of Intensity reduction of kg Scope 3 Source 80% of purchased Scope 1+2 GHG1
Slide 18: Outlook & Guidance
Outlook & Guidance 05
Slide 19: Well positioned to navigate operating challenges amid highly dynamic geopolitical situation
Well positioned to navigate operating challenges amid highly dynamic geopolitical situation Input price pressures & War in Ukraine COVID-19 lockdowns supply chain disruptions ▪ High degree of uncertainty ▪ Inflation rates rising worldwide ▪ Global trend: shift to endemic ▪ Russia sanctions might inc
Slide 20: Full-year 2022 guidance
Full-year 2022 guidance Net sales: Organic: +6% to +9% YoY FX: 3% to 6% YoY ~€21.6 bn to €22.8 bn EBITDA pre: Organic: +5% to +9% YoY FX: 4% to 8% YoY ~€6.6 bn to €7.1 bn EPS pre: ~ €9.60 to €10.50 20 Merck KGaA, Darmstadt, Germany Q1 2022 Results Presentation | May 12, 2022
Slide 21: 2022 business sector guidance
2022 business sector guidance1 Net sales EBITDA pre Life Science ▪ Organic: +7% to +10% ▪ Organic:+6% to +10% YoY ▪ Strong core business, Process Solutions ▪ FX: 3% to 6% YoY COVID-19 sales of up to ~€700 m ▪ ~€3,600 m to €3,850 m ▪ Process Solutions as main growth driver Net sales EBITDA pre Health
Slide 22: Appendix
Appendix
Slide 23: Additional financial guidance 2022
Additional financial guidance 2022 Further financial details Corporate & Other EBITDA pre -€510 m to -€570 m Interest result ~ -€110 m to -€150 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 assumptio
Slide 24: Credit details
Credit details Maturity profile as of March 31, 2022 Credit rating information Coupon [€m / $m] 3.250% 0.125% LT ST Since Outlook Rating Rating A3 21.10.21 Stable P-2 1,600 1.625% 3.375% 1.625% 2.875% 0.875% 0.500% A 29.05.13 Stable A-1 1.375% 0.005% 500 0.375% 1.000 1.000 750 750 800 550 600 500 60
Slide 25: BIG 3 - Process Solutions: Double-digit growth rate against high comps
BIG 3 - Process Solutions: Double-digit growth rate against high comps and fading COVID-19 demand Sales development [€m] - org. growth [%] 1 1 1,257 1,251 1 1,184 ▪ Continued strong core business performance 1,142 drives entire Q1 organic growth 1 1,053 ▪ COVID-19 sales stable YoY; significant 38% s
Slide 26: Research Solutions: normalizing growth against strong comps
Research Solutions: normalizing growth against strong comps, returning to mid-term guidance Sales development [€m] - org. growth [%] 1 634 1 688 646 31% 1 631 1 611 24% ▪ Organic growth rising to +2% despite tough comps ▪ Core business with robust growth above business unit mid-term guidance ▪ COVID
Slide 27: Applied Solutions: Record absolute sales and double-digit growth
Applied Solutions: Record absolute sales and double-digit growth Sales development [€m] - org. growth [%] 498 506 449 454 ▪ Excellent start to the year with double- 432 digit organic growth in a strong market ▪ Core business main driver with robust performance across all business lines ▪ COVID-19-re
Slide 28: Healthcare organic growth by franchise/product
Healthcare organic growth by franchise/product Q1 2022 organic sales growth [%] by key product [reported €m] 201 -15% 227 218 -5% 217 242 10% 219 200 5% 186 138 8% 126 128 16% 107 189 25% 147 128 102% 62 Q1 2022 Q1 2021 28 Merck KGaA, Darmstadt, Germany Q1 2022 Results Presentation | May 12, 2022
Slide 29: Neurology & Immunology: Q1 Mavenclad sales up +25% organically
Neurology & Immunology: Q1 Mavenclad® sales up +25% organically, amid flat U.S. dynamic market Sales development N&I, [€m] Dynamic market volume [R3W] 1 ® ▪ Mavenclad new patient up ~15% vs. Q4 2021. Sales flat org. org. org. org. org. sequentially driven by low number [€m] -4.3% 15.3% 0.9% -5.2% 0.
Slide 30: Oncology: Bavencio mUC 1L ramp-up drives 102% Q1 organic growth
Oncology: Bavencio® mUC 1L ramp-up drives 102% Q1 organic growth ® Sales development Oncology, [€m] Erbitux net sales, [€m] 300 273 261 ▪ Growth across regions org. org. org. org. org. [€m] 250 233 242 20.1% 49.0% 26.4% 20.6% 26.6% 219 ▪ Erbitux SCCHN1 included in 397 200 400 370 379 NRDL2 effective
Slide 31: Fertility: Growth of +4.3% in line with mid-term guidance
Fertility: Growth of +4.3% in line with mid-term guidance Sales development Fertility, [€m] Gonal-f® net sales, [€m] 200 191 190 200 200 186 org. org. org. org. org. [€m] 22.0% 87.6% 7.2% 8.8% 4.3% ▪ Gonal-f® org. YoY growth in 150 most markets 400 343 100 ▪ Lockdowns in China posing a 350 339 334 3
Slide 32: CM&E: Growth of +2.5%, supported by strong Euthyrox and Concor sales
CM&E: Growth of +2.5%, supported by strong Euthyrox® and Concor® sales; Glucophage with tough comps due to VBP1 ® Sales development CM&E, [€m] Glucophage net sales, [€m] org. org. org. org. org. ▪ Glucophage® organic decline [€m] -4.2% 0.6% -3.4% 2.8% 2.5% of -5.1% offset by +5.4% FX 250 217 213 225
Slide 33: Healthcare pipeline
Healthcare pipeline May 12, 2022 Phase I Phase II Phase III M1069 M6223 berzosertib xevinapant A2aR_A2bR antagonist anti-TIGIT mAb ATR inhibitor IAP inhibitor Solid tumors Solid tumors2 Small-cell lung cancer4 Locally advanced squamous cell carcinoma of the head and neck6 M1231 peposertib bintrafusp
Slide 34: 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 internal evaluation of data Decision on PhIII confirmatory February 2022 from PhII study, planned for H2 2022. study for EGFRm METamp in NSCLC Bintrafusp
Slide 35: BIG 3 - Semiconductor Solutions: Double-digit org. growth continues
BIG 3 - Semiconductor Solutions: Double-digit org. growth continues Sales development [€m] - org. growth [%] 1 1 601 573 581 ▪ Strong quarter for Semiconductor 24% 1 Solutions amid continued favorable 1 500 21% 475 market conditions 12% 16% ▪ Semiconductor Materials again biggest contributor with mi
Slide 36: Adjustments in Q1 2022
Adjustments in Q1 2022 Adjustments in EBIT [€m] Q1 2021 Q1 2022 Adjustments thereof D&A Adjustments thereof D&A Healthcare 10 0 4 1 Life Science 14 0 7 1 Electronics 17 3 11 0 Corporate & Other 6 0 6 0 Total 47 3 28 3 36 Merck KGaA, Darmstadt, Germany Q1 2022 Results Presentation | May 12, 2022
Slide 37: Financial Calendar
Financial Calendar Date Event May 12, 2022 Q1 2022 Earnings release 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 37 Merck KGaA, Darmstadt, Germany Q1
Slide 38: 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] ILJA DOERING GUNNAR ROMER FLORIAN S
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