Merck Proposes Dividend Increase to AGM After a Year of Key Strategic Moves – Foundation Set for Further Organic Growth

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Major highlights of 2014 include offer for Sigma-Aldrich, alliance with Pfizer and integration of AZ Electronic Materials 

Merck proposes a dividend increase of € 0.05 to € 1.00

Darmstadt, Germany, April 17, 2015 – Merck, a leading company for innovative, topquality high-tech products in healthcare, life science and performance materials, completed strategically important moves in 2014 to secure the future growth of the company. At the 20th Annual General Meeting (AGM) being held today in Frankfurt am Main, the company will propose to its shareholders a dividend increase of 5 cents or 5.3% to € 1.00 per share.

 

“We made a promise and we delivered on that promise,” Karl-Ludwig Kley, Chairman of Merck’s Executive Board, told shareholders. “Today we are strongly positioned in our three business sectors Healthcare, Life Science and Performance Materials. And we are poised for further organic growth after having established not only strong business sectors, but also innovation and growth platforms.”

 

Merck completed its efficiency program and achieved savings of € 360 million in 2014. At the same time, through its “Fit for 2018” transformation and growth program, the company achieved three important milestones in order to secure sustainable, profitable growth in the future. In 2014, Merck completed the acquisition of the high-tech material manufacturer AZ Electronic Materials and agreed on the acquisition of the U.S. life science company Sigma-Aldrich. In November 2014, the company formed a strategic immuno-oncology alliance with Pfizer in order to develop Merck's anti-PD-L1 antibody avelumab.

 

Over the course of the year, the Merck share price rose by around 20%, thus achieving the highest increase in value in the DAX 30, the German blue chip index. The share price high of € 80.40 in 2014 was reached at the end of November. The upward trend has continued in 2015, during which the share price has clearly exceeded the € 100 mark.

 

In March, Merck reported on the results of 2014, which saw sales growth of 5.5% to € 11.3 billion (2013: € 10.7 billion) driven by good organic growth. EBITDA pre onetime items increased by 4.1% to € 3.4 billion (2013: € 3.3 billion), likewise due to good operational performance and the acquisition of AZ Electronic Materials.

 

The proposed increase in the dividend to € 1.00 per share reflects the successful development of Merck. The total dividend payment takes into account the 1:2 share split in 2014 as well as the capital resources required for the company's further transformation steps.

 

For 2015, Merck expects a slight increase in organic sales over the previous year amid moderately positive foreign exchange effects. Due to the inclusion of AZ for a full fiscal

year, a slight positive portfolio effect is also expected. Owing to the expected operating development and positive foreign exchange effects, Merck also forecasts a slight increase in EBITDA pre one-time items and business free cash flow in 2015. “If the acquisition of Sigma-Aldrich is completed by mid-2015 as planned, growth will be higher," said Kley. “In this case, we expect double-digit growth rates in net sales. EBITDA pre one-time items and business free cash flow would also increase sharply compared with 2014.”

 

Merck will publish a detailed forecast with the announcement of the results of the first quarter on May 19. This report will also for the first time reflect the new structure of the company comprising the three business sectors Healthcare, Life Science and Performance Materials.

 

Merck is a leading company for innovative and top-quality high-tech products in healthcare, life science and performance materials. The company comprises six businesses – Merck Serono, Consumer Health, Allergopharma, Biosimilars, Merck Millipore and Performance Materials – and generated sales of € 11.3 billion in 2014. Around 39,000 Merck employees work in 66 countries to improve the quality of life for patients, to foster the success of customers and to help meet global challenges. Merck is the world’s oldest pharmaceutical and chemical company – since 1668, the company has stood for innovation, business success and responsible entrepreneurship. Holding an approximately 70% interest, the founding family remains the majority owner of the company to this day. Merck, Darmstadt, Germany holds the global rights to the Merck name and brand. The only exceptions are Canada and the United States, where the company operates under EMD Serono, EMD Millipore and EMD Performance Materials.

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