Consumer Health Division of Merck KGaA in Turnaround

06.12.2013 -

The Consumer Health division of Merck KGaA has made "substantial progress" in raising profitability levels to those of other global over-the-counter drug competitors, the company said. The improvement in profit margins pre-one-time items as a percentage of sales was 18.4% in Q3 2013, well up on the 14.2% margin of September 2011.

Driver of the turnaround was said to be the strong focus on strategic brands and better allocation of resources in key markets. For the first nine months of 2013, on the back of organic sales growth of 14.6%, EBITDA pre one-time items rose 22% year-on-year to €58 million, and the Darmstadt, Germany chemicals and pharmaceuticals group said it is lifting its earnings forecast for the full year to €73-77 million.

Given this "impressive performance," Merck can now look at how to further support organic growth, particularly in emerging markets, where its "strong brands" have significant potential, said Stefan Oschmann, member of the managing board with responsibility for Consumer Health and ethical phamaceuticals arm Merck Serono.

Oschmann said the company's strategy is to develop at least three strong brands generating a 3% total share per key market in 20 strategic investment markets.