Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on MERCK KGAA. We currently have 7 research reports from 1 professional analysts.
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Significant higher D/A and moderate guidance given
09 Mar 17
Merck’s FY sales clearly rose +17% (organic: +3%) to €15,024m, but the gross profit margin declined from 68.3% to 65.4% mainly due to the acquired business, which contributed +16% to the sales increase. EBITDA strongly rose +32% to €4,415m and net income attributable to shareholders jumped +46% to €1,629m. Operating CF was driven by the stronger operating basis and the higher D/A (+28%), partly offset by the significantly higher NWC outflow (€-1.049m after €-349m). The latter was triggered by higher business activities (mainly Sigma) and the neutralisation of disposal results. After the previous year’s payment for Sigma-Aldrich, 2016 investing CF came in at a more moderate level (€-503m after €-11,936m), which is also true for the financing CF (€-1,908m after €7,164m), which saw the first net gross debt repayments (€-1,460m) after net gross debt issuance (€8,594m). Management proposes a +14% higher dividend of €1.20 (vs €1.05 for 2015) per share at the AGM on 28 April 2017. For 2017, management provides a moderate qualitative guidance expecting a slight to moderate organic sales growth and sees EBITDA pre-one offs about stable, which means a low positive or low negative percentage variation.
Healthcare and Life Science see profitability push; guidance lifted
15 Nov 16
Q3 sales strongly grew +19% to €3,724m, primarily driven by the Sigma-Aldrich acquisition as organic growth was levelled out by negative FX developments. The gross profit margin dropped from 69.9% to 66.4% as a consequence of the acquisition. EBITDA strongly increased by +23% to €1,110m and net profit attributable to shareholders went up +26% to €457m. After the weak development in Q2, operating CF caught up in Q3 (+22% to €1,067m) based on the strong operating performance and additionally helped by higher NWC inflow (€172m after €157m). Lacking some higher income from the disposal of other financial assets and divestments, investing CF swung back from €418m to €-223m despite lower capex (€-208m after €-246m). Financing CF (€-702m after €2,217m) had been dominated by net gross debt issuance (€2,278m) in preparation for the acquisition in the previous year’s quarter, whereas the reported quarter saw net gross debt repayment (€-640m). In the light of the strong Q3 figures, management again adjusted FY 2016 guidance, now seeing sales at €14.9-15.1bn (unchanged), EBITDA pre one-offs at €4,450-4,600m (vs. €4,250-4,400m) and EPS pre one-offs at €6.15-6.40 (vs. €5.85-6.10).
Good organic growth, but strong increase in NWC
04 Aug 16
Q2 sales was again pushed by the Sigma-Aldrich acquisition (+19%) and was additionally helped by the strong organic growth in Healthcare and Life Science (+5%), coming in +18% higher at €3,805m. The gross profit margin declined from 68.5% to 65.4%. EBITDA strongly rose +27% to €1,069m, but net profit attributable to shareholders dropped by 9% to €312m. Despite higher D/A, operating CF weakened 5% to €311m due to higher NWC outflows (€-494m after €-366m). Lacking cash–in from the Sigma-Aldrich hedging and some other proceeds which helped the previous year’s figure to end up at €1,860m, investing CF in the reported quarter swung to €-114m. Financing CF (€357m after €174m) was mainly hit by bond repayments. Management adjusted its recent FY 2016 guidance, now seeing sales at €14.9-15.1bn (€14.8-15.0bn), EBITDA before one-offs at €4,250-4,400m (€4.1-4.3bn) and EPS before one-offs at €5.85-6.10 (€5.65-6.00).
Healthcare back on track?
19 May 16
Clearly pushed by Sigma (portfolio: +20%), Merck’s sales rushed upwards +21% (organic: +5%) to €3,665m whereas the gross profit margin declined from 68.0% to 64.3%. EBITDA jumped +60% to €1,282m, also benefiting from the sale of the rights to Kuvan®, and net profit attributable to shareholders more than doubled, helped by a slightly lower tax rate. Operating CF did not fully reflect the operating performance (+26% to €352m) as the neutralisation of the gain on disposal of assets (€-388m after €-15m) were the party pooper. NWC outflow were €-279m after €-312m. Mainly due to the lower net inflow from the disposal of financial assets (€114m after €453m), investing CF moved from €392m to €284m. Primarily due to the absence of a net bond issuance of €-2,363m, financing CF swung from €2,288m to €-572m. Management shared some more details on its FY 2016 guidance, seeing sales at €14.8-15.0bn, EBITDA pre one-offs at €4.1-4.3bn and EPS pre one-offs at €5.65-6.00.
Healthcare remains weak, Life Science becomes the new shining star
08 Mar 16
Q4 sales strongly rose +16% to €3,464m, but gross profit margin slightly weakened from 67.0% to 66.8%. EBITDA stood unchanged at €803m, but net profit attributable to shareholders more than halved (-55% to €126m). Operating CF clearly dropped by 37% to €718m, seeing much lower NWC inflow (€71m after €465m). Reflecting the payment for Sigma-Aldrich, investing CF ended up at €-14,605m (€-1,144m) and financing CF rose from €1,519m to €2,833m. Management will propose a slightly higher dividend (€1.05 after €1.00 per share) at the AGM on 29 April 2016, paying out roughly 40% of the calculated EPS. For FY 2016, management expects slight organic growth fuelled by Sigma and sees EBITDA pre one-offs to increase in the low double-digits.
Healthcare’s continued weak dynamics
12 Nov 15
Merck’s Q3 sales rose +7% to €3,121m and the gross profit margin improved from 67.5% to 69.9%. EBITDA strongly increased (+15% to €901m), partly helped by higher D/A, and net profit attributable to shareholders jumped +46% to €364m. Operating CF increased +20% to €872m driven by the stronger operating performance and reporting higher NWC inflow (€158m after €128m). Investing CF swung from €-364m to €418m seeing much lower investments in financial assets (€-52m after €-1,346m) and lower inflow from the disposal of other financial assets (€580m after €1,142m), which gives a net inflow. Financing CF swelled from €90m to €2,217m, propelled by a €2.0bn bond repayment. Having received the final EU approval for the Sigma-Aldrich takeover on 10 November 2015, management adjusted its guidance, now expecting sales of €12.6-12.8bn (of which €300m is attributable to Sigma; previously: €12.3-12.5bn) and EBITDA pre one-offs of €3,580-3,650m (of which €80-90m is attributable to Sigma; previously: €3,450-3,550m), which looks fairly unchanged for core Merck.
N+1 Singer - Morning Song 21-03-2017
21 Mar 17
accesso Technology (ACSO LN) Full year results in line, but key trading months still ahead | Augean (AUG LN) Double digit growth in ’16, good start to ‘17 | Earthport (EPO LN) Interims show continued top line strength | Goals Soccer Centres (GOAL LN) Good momentum under new team. It’s now all about delivery | IQE (IQE LN) FY’16 results prompt further upgrades | Microsaic Systems (MSYS LN) Challenges in 2016, strategy remains in place | mporium Group (MPM LN) Funds raised to help execute strategy | RhythmOne (RTHM LN) Dawn of the independents | ScS Group (SCS LN) Strong progress on key growth initiatives albeit comps now toughen | Sinclair Pharma (SPH LN) FY results: EBITDA ahead, Instalift™ gaining pace | Vectura Group (VEC LN) FY (9-month) results
N+1 Singer - EKF Diagnostics - Final results & potential buy back
20 Mar 17
FY16 prelims are slightly ahead of our latest expectations, those having been increased materially over the course of H2’16 as the strength of the recovery in trading became apparent. In order to maximise shareholder value, the directors are currently examining a potential break up of the group. This would also involve a delisting from AIM. A buy back offer at 21.5p would therefore be made to those investors that wish to exit now rather than holding their shares for the two years plus it would likely take to achieve a potentially higher realisation value for the businesses.
Good results, but further restructuring complex for investors
20 Mar 17
EKF Diagnostics FY 2016 results are slightly ahead of expectations, with both higher revenue and better EBITDA. Management has also announced plans to split the company into two separate companies, Point of Care and Laboratory Diagnostics, with the prospect of a delisting to manage the process. The primary metric for valuation of the two businesses is different consequently we believe that the separation is likely to generate significant value. However, in anticipation of the volatility likely given the restructuring announced this morning, despite the strength of the results, we reduce our recommendation to HOLD and maintain our 21p target price.
N+1 Singer - Morning Song 22-03-2017
22 Mar 17
Carador Income Fund (CIFU LN) Premium rating restored, high levels of refinancing activity | Cello Group (CLL LN) Outlook getting brighter – watch Pulsar | Eckoh (ECK LN) Largest ever US secure payments win | eg solutions (EGS LN) Full year results in line | Futura Medical (FUM LN) Licensing deal for CSD500 in Portugal | Verona Pharma (VRP LN) Global agreement with QuintilesIMS to support development of RPL554 | Xaar (XAR LN) 2016 results slightly ahead, reduced visibility in 2017