Merck KGaA Announces CEO Handover After 10 Successful Years

Merck KGaA, Darmstadt, Germany, has emerged stronger following fiscal 2015. At the 21st Annual General Meeting being held today in Frankfurt am Main, the company will propose to its shareholders a dividend increase of € 0.05 or 5% to € 1.05 per share.

At the same time, the change in the executive chairmanship announced back in October 2015 will now take effect, as Stefan Oschmann will succeed Karl-Ludwig Kley as chairman of the Executive Board.

“At Merck KGaA, Darmstadt, Germany, a great deal has happened. By acquiring Sigma-Aldrich, we successfully completed the portfolio realignment of the past 10  years,” said Kley summarizing his final year as CEO. “Our pharmaceutical research is well on its way to achieving highly promising results. The new display technologies even exceeded our own high expectations.”

Merck KGaA completed fiscal 2015 with record figures. Sales and EBITDA pre-exceptionals were higher than ever before in the company’s nearly 350-year history. Net sales of the Group increased sharply by 13.0% to €12.8 billion in 2015 (2014: €11.4 billion). EBITDA pre-exceptionals, the key financial indicator used to steer operating business, climbed 7.1% to €3.6 billion.

Net income, i.e. profit after tax attributable to shareholders, declined in 2015 by 3.7% to €1.1 billion (2014: €1.2 billion). This was attributable to one-time expenses in connection with the Sigma-Aldrich acquisition and integration, as well as higher interest expenses to finance the acquisition.

The Groups’s net financial debt rose significantly to €12.7 billion as of the end of 2015 (Dec. 31, 2014: €559 million) due to the purchase price payment for Sigma-Aldrich. As was the case following major acquisitions in the past, Merck KGaA, Darmstadt, Germany, aims to use its strong internal financing power to quickly reduce its debt.

Following nine years as CEO of Merck KGaA, Darmstadt, Germany, Kley handed over the executive chairmanship of the company to Oschmann.

“Since taking office in 2007, Karl-Ludwig Kley has made tremendous accomplishments in transforming the company,” Wolfgang Büchele, chairman of the Supervisory Board of Merck KGaA, noted. “He displayed not only strategic vision, but also decisiveness in implementation. With his departure, one of Germany’s outstanding business leaders is leaving the company.”

As already announced in January 2016, two new members will be joining the Executive Board: Udit Batra, head of the Life Science business sector, and Walter Galinat, head of the Performance Materials business sector, Bernd Reckmann, a long-standing member of the Executive Board responsible for Life Science and Performance Materials, has retired.  

“In his 30 years at the company, Bernd Reckmann has not only made the Performance Materials business sector the market and technology leader in display materials, he also built the Life Science business up from humble beginnings to rank second worldwide,” said Büchele.

At the Annual General Meeting, Kley said farewell to and thanked employees, colleagues, customers and shareholders, as well as the Merck family, which holds around 70% of the company’s total capital.

“Without the support of the Merck family, the realignment of the past 10 years would have not been possible,” Kley said. “Over the past several years, my successor Stefan Oschmann and I have cooperated superbly. I know that the company is in good hands with him.”

Merck KGaA, Darmstadt, Germany, has changed tremendously during Kley’s term of office. Over the past 10 years, the company has invested more than €30 billion in acquisitions. A classic supplier of pharmaceuticals and chemicals has become a global science and technology company. In addition, the Group has grown strongly. During this period, Group sales more than doubled from €6.3 billion in 2006 to €12.8 billion in 2015, and the number of employees increased from 30,000 to 50,000.