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18 | Merck Annual Report 2008
Key figures of the Merck Group
Operating
result
€ million
Exceptional
items
€ million
EBIT
€ million
FCF
€ million
EBITDA
€ million
ROS
%
Pharmaceuticals 655 –354 301 598 1,381 12.1
Chemicals 558 –46 512 474 645 26.3
Corporate and Other –81 0 –81 –470 –80 –
Total 1,131 –400 731 601 1,947 15.0
EBIT = Earnings before interest and tax
FCF = Free cash flow adjusted for acquisitions and disposals
EBITDA = EBIT before depreciation and amortization
ROS = Operating result/total revenues
Pharmaceuticals increases contribution to operating result
The Pharmaceuticals business sector, comprising the Merck Serono and Consumer Health
Care divisions, generated an 11% increase in total revenues to € 5,428 million. The major-
ity of this increase is due to higher sales of the drugs Rebif® und Erbitux®. Royalty income
grew by 25% to € 339 million. The operating result increased by 57% to € 655 million.
The business sector thus generated 54% of the total operating result*. In 2007, the business
sector accounted for 40% of the Group operating result*. Return on sales for the Pharma-
ceuticals business sector rose to 12.1% compared with 8.5% in 2007.
Total revenues of the Merck Serono division increased by 12% to € 4,987 million and
the operating result rose to € 594 million. The 66% increase in the operating result was
due to the good development of business and to the absence of high, one-time restruc-
turing and integration expenses for Serono in 2007.
*excluding the segment Corporate and Other
61
9 %
Pharmaceuticals | Operating result by division
€ million
594
91%
Consumer
Health Care
Merck Serono
4,987
92%
442
8%
Pharmaceuticals | Total revenues by division
€ million
Pharmaceutical sales higher
thanks mainly to Rebif® and
Erbitux®
In the North American market, which has grown significantly in importance since 2007
as a result of the acquisition of Serono, Group sales increased by 4.9% to € 1,015 mil-
lion in 2008, with the United States accounting for € 912 million of the total. Negative
currency effects also played a strong role here, resulting in a growth rate in the United
States of only 5.6%.
In Brazil, our largest market in Latin America, sales increased by 28% to € 248
million. However, in Mexico, our second-largest market in the region, sales declined
by 8.5% to € 166 million due to overstocking by pharmaceutical wholesalers. By con-
trast, Venezuela and Argentina delivered excellent performances, with growth rates
exceeding 25%.