Merck increases profits in 2018 thanks to sale of consumer health branch

BERLIN, March 7 (Xinhua) -- Net profits of Merck increased by over one quarter to a total of 3.4 billion euros (3.8 billion U.S. dollars) in 2018, annual business figures published by the German chemical and pharmaceutical company on Thursday show.

The strong growth in net profits would have been mainly due to the sale of Merck's Consumer Health branch for 3.4 billion euros to Procter Gamble from the United States, according to Merck.

Earnings before interest and taxes (EBIT) for the company, however, decreased by over 28.7 percent to 1.7 billion euros in 2018. Last year's high earnings had partly been caused by the sale of Merck's biosimilars business, the company explained.

The turnover of Merck, one of the oldest chemical and pharmaceutical companies worldwide, rose slightly to 14.8 billion euros. The company said strong organic turnover growth in all business sectors was offset primarily by negative currency effects caused by the weaker U.S. dollar and a "significant devaluation of Latin American currencies".

"2018 was a year of transition and investment for Merck. We achieved solid results in a dynamic market environment and achieved the financial targets we had set for ourselves," said Stefan Oschmann, chief executive officer (CEO) of Merck.

For 2019, Merck is anticipating only "slight" negative currency effects compared with the previous year while earnings before interest, taxes, depreciation and amortization as well as adjustments (EBITDA pre) should see a "pronounced organic percentage growth in the low teens range", and turnover is expected to grow "moderately".

Oschmann added that the company's aim for 2019 was to "resume sustainable growth of our key indicators" such as the EBITDA pre and net profits.

Merck is still planning to acquire Versum Materials, an American electronic materials company for high-purity chemicals and gases. Following Versum Materials' rejection of Merck's first offer of about 5.2 billion euros, Versum announced that it will follow its initial plan to merge with its American competitor Entegris.

In a letter published on Tuesday, Merck appealed to Versum shareholders to change the mind of Versum's management as Merck is convinced that it had made the better offer for the acquisition of Versum. "Versum's management should consider the interests of its shareholders and work with us," read the letter from Merck.