* Q4 adjusted EBITDA 795 mln euros vs average forecast of
* Sees flat adjusted EBITDA and revenue in 2014
* Expects negative forex effects to offset organic growth
By Ludwig Burger
FRANKFURT, March 6 Germany's Merck KGaA
, the worlds largest maker of liquid crystals for
display screens, reported an unexpected rise in underlying
profits on Thursday as the benefits of its cost cutting campaign
more than offset the impact of weaker foreign currency exchange
After a slew of setbacks in drug development, the group is
in the final phase of a restructuring effort, cutting more than
Fourth-quarter earnings before interest, taxes,
depreciation, amortisation and one-off items edged 0.7 percent
higher to 795.2 million euros ($1.1 billion), above the 784
million euros expected on average by analysts in a Reuters poll.
Merck said it expected adjusted EBITDA and revenues to be
flat this year as the effect of weaker currencies is likely to
cancel out slight comparable sales growth. This year will also
see another 100 million euros in charges related to its
restructuring programme, the group said.
It has been hit in particular by a weaker U.S. dollar,
Japanese yen and Latin American currencies.
Shares in Merck were indicated 1.2 percent lower in
pre-market trade, while Germany's blue-chip index DAX
was seen 0.3 percent higher.
While Merck's best-selling drug, Rebif, is gradually being
replaced by new orally administered treatments for multiple
sclerosis, the family-controlled company is defending its
dominant position in the liquid crystals market.
"The Liquid Crystals business unit benefited from the shift
in demand toward technically more complex liquid crystals that
are primarily used in large-sized, high-quality television
displays," the company said.
Meanwhile revenues from Rebif, which is injected, fell 1.5
percent to 1.86 billion euros ($2.56 billion) in 2013. Analysts
polled by Thomson Reuters expect Rebif sales to slide further to
$1.45 billion by 2019, while new oral treatments, such as Biogen
Idec Inc's Tecfidera take market share.
The group is in the process of taking over Britain's AZ
Electronic Materials for $2.6 billion to expand its
range of specialist chemicals for electronic gadgets and it has
signalled it is ready for more deals, possibly to strengthen the
weak development pipeline of its pharma business.