All four divisions of the Merck Group recorded increases in first-quarter 2010 revenues - most notably the Chemicals divisions - indicating that the company weathered the global economic crisis of 2009 and is now back on track. Merck Group total revenues rose 13% in the first quarter to EUR 2,099 million from EUR 1,859 million in the year-ago quarter as the Chemicals divisions returned to their pre-crisis levels and the Merck Serono prescription drugs division continued on its growth path. Revenues increased at a faster rate than production costs, resulting in a gross margin increase of 15% to EUR 1,612 million.
Research and development costs rose by 11% to EUR 347 million in the first quarter. A major element of the Merck business model is a focus on new, high-value products and solutions, which naturally require a greater investment in R&D. The Merck Serono division currently has a large number of expensive late-stage clinical trials underway. Amortization of intangible assets, mainly stemming from the purchase of Serono in 2007, decreased by 4.7% to EUR -141 million
Thus, with improved revenues and an improved gross margin, the operating result rose substantially by 49% in the first quarter to EUR 295 million from EUR 198 million in the year-ago quarter.
The Group's first-quarter core operating result, i.e. operating result excluding amortization of intangible assets from the Serono purchase, was EUR 432 million, an increase of 26% compared to EUR 343 million in the year-ago quarter.
The Group return on sales (ROS: operating result/total revenues) increased to 14.0% in the first quarter of 2010 compared to 10.7% in the year-ago quarter. Group core ROS (operating result excluding Serono-related amortization of intangible assets/total revenues) in the first quarter of 2010 was 20.6% compared to 18.5% in the year-ago quarter.
About Merck KGaAMerck is a global pharmaceutical and chemical company with total revenues of EUR 7.7 billion in 2009, a history that began in 1668, and a future shaped by approximately 33,600 employees in 64 countries. Its success is characterized by innovations from entrepreneurial employees. Merck's operating activities come under the umbrella of Merck KGaA, in which the Merck family holds an approximately 70% interest and free shareholders own the remaining approximately 30%. In 1917 the U.S. subsidiary Merck & Co. was expropriated and has been an independent company ever since.