Darmstadt, Germany / Molsheim, France, December 5, 2012 – Merck presented today details about its Life Science Tools division Merck Millipore at an event with analysts and investors in Molsheim, France.
“Over the past three years, we have transformed our life science tools business into a top 3 franchise in the industry and broadened the addressable market and geographic reach of the division. We are excited about the future prospects of the Merck Millipore division,” said Bernd Reckmann, Member of the Executive Board of Merck, at the event. “We will capitalize on the division’s strong position to create a sustainable platform for profitable growth.”
In 2011, Merck Millipore generated total sales of approximately € 2.4 billion, making it Merck’s second largest division. The division has nearly tripled its sales since 2009 and has significantly improved its profitability.
“Today, we have a broad product portfolio with the scale and geographic reach that will enable us to benefit from global industry trends such as increasing volumes of biologic drugs,” said Robert Yates, Head of the Merck Millipore division. “We are one of the largest R&D investors in the industry and see opportunities to expand our offering for both laboratory and drug-production customers. Finally, as part of the company-wide ‘Fit for 2018’ program, we are working to make the division more efficient and improve our profitability.”
Merck announced today that it expects the Merck Millipore division to deliver net cost savings of approximately € 40 million by 2017. These savings will be generated primarily through more efficient production and logistics costs and will result in one-time costs of approximately € 160 million between 2013 and 2015.
Unlike most of its peers in the Life Science tools sector, Merck Millipore generates approximately 90% of its sales from consumable products, more than double the industry average of approximately 40%. In contrast to more discretionary instrumentation, consumable products are typically part of operational spending of customers and tend to be less sensitive to cost cuts during economic downturns.
“Merck Millipore is differentiated by several characteristics that makes it unique compared to other players in the sector,” said Matthias Zachert, Chief Financial Officer of Merck. “Based on its diversified group of customers and its high consumables exposure, the division generates a recurring revenue stream that leads to stable, attractive cash flows with a low risk profile. As management team, we believe the Merck Millipore business is very attractive and today’s event is intended to make this attractiveness transparent to investors and analysts as part of our continued dialogue with the capital markets.”
The event will be webcast live on the company’s Investor Relations website beginning at 8:30 a.m. CET and all presentations will be posted to the website at the conclusion of the event.