Merck 2014 Annual Report Download - page 143

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138 GROUP MANAGEMENT REPORT → Report on Expected Developments
FORECAST FOR THE PERFORMANCE MATERIALS BUSINESS SECTOR
PERFORMANCE MATERIALS →
FORECAST 2015
€ million Actual figures for 2014 Forecast for 2015 Key assumptions
Sales
2,059.6
– Slight organic
increase
– Strong portfolio
effect
–
Continued good volume increase in liquid crystals, amid the customary price decline
for established products
– Strong portfolio effect due to the inclusion of AZ Electronic Materials for a full
fiscal year
EBITDA pre
one-time items
894.8
– Low double-digit
percentage increase
– Strong portfolio effect
– Scheduled realization of synergies from the acquisition of AZ Electronic Materials
– Positive foreign exchange effects
Business free
cash flow
699.6 – Low double-digit
percentage increase
– Increase in EBITDA pre one-time items
– Considerable investments in future technologies
Sales
Merck KGaA, Darmstadt, Germany, expects low double-digit per-
centage growth in the Performance Materials business sector in
2015 compared with 2014. Slight organic sales growth is antici-
pated, supplemented by a strong portfolio effect due to the inclu-
sion of AZ Electronic Materials for a full fiscal year. In the Liquid
Crystals business, the Group assumes continued good volume
growth amid the customary price decline for established products
in this industry. This forecast is in line with the expectations of
Display Search, a market research firm for the display sector,
which continue to anticipate a strong increase in the surface area
of global flat-panel displays produced in 2015.
The Group does not expect any significant new technologies
or product launches in the liquid crystals field in 2015. The com-
pany anticipates moderate organic sales growth in Pigments &
Functional Materials and Integrated Circuit Materials overall.
EBITDA pre one-time items
For 2015, the Group forecasts a low double-digit percentage in-
crease in
EBITDA
pre one-time items compared with 2014, resulting
from a strong portfolio effect, the planned realization of synergies
from the acquisition of AZ Electronic Materials, and positive for-
eign exchange effects. The company is planning to maintain the
profitability of liquid crystals at a high level.
Business free cash flow
In 2015, the Group expects a low double-digit percentage improve-
ment in business free cash flow compared with 2014 as a result of
the increase in
EBITDA pre one-time items. This increase takes
account of the fact that the company will make considerable
investments in property, plant and equipment for future technol-
ogies in 2015.