Merck KGaA · XETR:MRK
Merck KGaA — Berenberg European Conference 2016
18 slides from Merck KGaA's conference presentation, Dec 8, 2016
Slide 1: Merck – Berenberg European Conference
MERCK – BERENBERG EUROPEAN CONFERENCE Belén Garijo, CEO Healthcare Pennyhill Park – December 8, 2016
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 Business overview & Strategy recap Healthcare – Funding for success Life Science – Focusing on profitable growth Performance Materials – Strength and innovation Outlook & Guidance 3
Slide 4: Portfolio of three high-tech businesses
Merck Group Portfolio of three high-tech businesses Healthcare Performance Life Science Materials Leading in specialty Leading life science Market leader in pharma markets company specialty materials • Biologics and small-molecules • Tools and services for biotech • Innovative display materials rese
Slide 5: Strong businesses with attractive margins
Merck Group Strong businesses with attractive margins % of sales Margin1 % of EBITDA pre 46% 33.5% 45% Q3 2016 Q3 2016 Sales: EBITDA pre2: €3,724 m €1,174 m 30.5% 33% 37% 22% 17% 43.7% Healthcare Life Science Performance Materials 1EBITDA pre margin in % of net sales; 2Including Corporate/Others (-€
Slide 6: Clear set of priority goals to be realized by 2018
Merck Group Clear set of priority goals to be realized by 2018 Performance Healthcare Life Science Materials ~40% ~35% ~25% EBITDA EBITDA EBITDA pre* pre* pre* Maximize growth of existing Focus on seamless integration Drive innovation and franchises and deliver cost synergies technology leader
Slide 7: Current performance: Good organic growth and product mix drive profitability
Healthcare Current performance: Good organic growth and product mix drive profitability Healthcare P&L Comments [€m] 9M 2015 9M 2016 • Rebif still impacted by ramp-up of competition in Europe, while U.S. pricing and PDP* in Brazil support performance Net sales 5,197 5,089 • Erbitux shows moderate or
Slide 8: Average organic growth of ~+4% for >20 consecutive quarters
Healthcare Until 2018, continued and sustainable growth of in-market portfolio Historic organic sales growth development 6,0% 4,4% 4,4% 4,7% Average Organic growth of ~+4% for >20 4,0% 4,0% 2,0% 1,6% consecutive quarters 0,0% 2012 2013 2014 2015 2016 (9M) 9M 2016 organic sales growth and qualitative
Slide 9: Well on track to deliver pipeline sales of >€2bn in 2022
Healthcare Well on track to deliver pipeline sales of >€2bn in 2022 Growth initiatives Potential pipeline sales > €2 bn* and pipeline Deliver the pipeline Existing business < €50 m* 2014 2018E 2017 2018… …2022 Key Key investments investments Increase R&D costs in 2017 expected to exceed 2016 R&D spe
Slide 10: Focused pipeline: two compounds in registration in EU and US
Healthcare Focused pipeline: two compounds in registration in EU and US Immunology Immuno-Oncology Oncology Phase I • BTK inhibitor (SLE) • Avelumab (solid tumors) • BTK inhibitor (hematol. malignancies) • M9241 (NHS-IL12) • Tepotinib (solid tumors) • M7824 (TGF-beta trap) • DNA-PK inhibitor (solid
Slide 11: For Avelumab, combinations will drive our differentiation strategy
Healthcare For Avelumab, combinations will drive our differentiation strategy Combinations • Phase III: Ovarian 1L & Plat. Res. Ref.* Monotherapy (Avelumab + Chemotherapy) • Phase III: RCC 1L (Avelumab + Inlyta) • Phase I/II: Advanced malignancies (Avelumab + 4-1BB / + OX40) • Phase Ib/II: Ovarian •
Slide 12: Newsflow: upcoming pipeline catalysts
Healthcare Newsflow: upcoming pipeline catalysts Atacicept Phase III decision Early 2017 Avelumab (MCC) Expected EMA & FDA decision H1 2017 BTK inhibitor (RA) Phase II data readout Q2 2017 M7824 (PD-L1 – TGF-beta) Phase I interim data mid 2017 Cladribine tablets Expected EMA decision Q3 2017 Sprifer
Slide 13: Synergy upgrade driven by fast 2016 execution and top-line synergies
Life Science Synergy upgrade driven by fast 2016 execution and top-line synergies EBITDA pre impact of synergy ramp-up [€m] Sources ~5 ~105 ~185 ~280 Cost synergy update (for 2016) +20 • Faster implementation of synergy measures in all areas • 2016 expected total cost synergies of ~€105 m +15 • Inte
Slide 14: The four pillars are set for future profitable growth
Performance Materials The four pillars are set for future profitable growth Mid-term Business unit % sales Products growth trend Liquid crystals (LC) and photoresists for TVs, ~50-60% smartphones and tablet computers Display Materials Other display and non-display applications (e.g. LC Windows)
Slide 15: We are well on track to deliver on major priorities for 2018
Merck Group We are well on track to deliver on major priorities for 2018 1 Net debt reduced by ~€1 bn Group Strict financial discipline supports rating Solid performance of in-market portfolio Healthcare Focus on pipeline and launch preparation in 2017 Sigma-Aldrich synergies raised Life Science Org
Slide 16: Upgrade of full-year 2016 guidance
Merck Group Upgrade of full-year 2016 guidance Merck guidance for 2016 Net sales: ~ €14.9 – 15.1 bn EBITDA pre: ~ €4,450 – 4,600 m EPS pre: ~ €6.15 – 6.40 16
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Slide 18: Investor Relations contacts
CONSTANTIN FEST SVENJA BUNDSCHUH ALESSANDRA HEINZ Head of Investor Relations Assistant Investor Relations Assistant Investor Relations +49 6151 72-5271 +49 6151 72-3744 +49 6151 72-3321 constantin.fest@merckgroup.com svenja.bundschuh@merckgroup.com alessandra.heinz@merckgroup.com ANNETT WEBER NILS V