Merck 2008 Annual Report Download - page 65

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60 | Merck Annual Report 2008
Product lines rounded off
In the current economic situation, we continue to focus on high-value, profitable pig-
ments. In 2008, we added new color tones to our portfolio of the high-growth product
lines Miraval® and Ronastar®, and we implemented the widespread launch of the new
Pyrisma™ product line. These pigments, which were developed in close cooperation
with our customers, offer very intense effects and cover a wide color range.
Functional pigments
Functional pigments performed very well, including pigments for laser marking and
antistatic applications (Minatec® range). These are used, for example, to prevent the
static charging of plastic floor coverings and for coating plastic parts. Sales of Candu-
rin® pigments, which are used for color coatings of foods and pharmaceuticals, were
also strong. While the focus is on decorative effects in the foods sector, pharmaceuti-
cal coatings are used to help patients to better identify their medications and to make
drugs more counterfeit-proof. Approval has been granted in the United States and
some other core countries. We are now focusing on countries where approval has not
yet been obtained.
Pigments make it difficult to
counterfeit drugs.
Corporate and Other
The segment Corporate and Other comprises Group administrative costs with respect
to holding companies, taxes as well as certain exceptional items not assigned to the
individual divisions. The operating result of the segment Corporate and Other totaled
€ –81 million in 2008 as compared with € –72 million in 2007. The financial result was
€ –156 million, which was much better than in 2007. Since 2007, the financial result
has been reported in full in the segment Corporate and Other. Free cash flow declined to
€ –581 million; free cash flow adjusted for acquisitions and disposals was € –470 million
as compared with € –406 million in 2007, mainly owing to high tax payments.
Corporate and Other | Key figures
€ million 2008 2007 ∆ in %
Total revenues 6.6 29 –77
Gross margin –2.7 2.5 –
R&D 0 0 –
Operating result –81 –72 –
Exceptional items – –32 –
Free cash flow (FCF) –578 –406 –
FCF before acquisitions
and disposals –470 –406 –