Merck’s Consumer Health division breaks $1bn barrier through transition of Neurobion and Floratil brands from Merck Serono

Merck’s Consumer Health division has significantly increased in size following its incorporation of Neurobion®, a leading global brand in the vitamin B segment, and Floratil®, a leading brand in Brazil in the probiotic antidiarrheal segment, from the Merck Serono division. The additions increase annual sales of Consumer Health by approximately 55% to over $1 billion (> € 740 million).

“The inclusion of the Neurobion and Floratil brands into Consumer Health will further strengthen our presence in emerging markets and add two leading brands to our portfolio. We see a lot of potential in building both of these brands through a consumer centric approach. This is also an important step in our journey towards developing a minimum of 3% total share per key market and at least 3 strong brands, focusing on our strategic investment markets.” said Udit Batra, CEO and President of the Consumer Health division.

The Neurobion and Floratil brands are in leadership positions in their respective categories, with the majority of business conducted in fast growing emerging markets in Latin America and Asia. The transfer is the result of a cross divisional analysis which identified both brands to benefit from inclusion in the Consumer Health portfolio. The future ‘consumerization’ of Neurobion and Floratil is expected to generate additional value for the Merck Group.

The transfer will allow the Neurobion and Floratil brands to benefit from Consumer Health’s significant consumer focused brand expertise, while it enables Merck Serono to even more focus on innovative prescription medicines. The changes also lead a shift in the Consumer Health division’s emphasis to emerging markets. Total sales for Consumer Health from emerging markets will increase from 28% to 51% following the move. The operational integration of the Neurobion and Floratil brands was completed on December 31, 2013.

“The transition of these brands is a reflection of the division’s successful track record in delivering consistent growth and value for key consumer brands” said Stefan Oschmann, Member of the Merck Executive Board & CEO Pharma, with responsibility for the Merck Serono and Consumer Health divisions. “The changes allow our Consumer Health business to continue its shift in focus toward emerging markets.”

Merck’s existing Consumer Health Division (excluding Neurobion and Floratil) today posted full year figures for 2013, which illustrated an increase of profit (EBITDA pre one-time items) of 8.5% to € 72 million, based on organic sales increases of 5.6% (countered by a negative foreign exchange impact of -4.7%) to € 477 million. Europe and Emerging Markets were the main drivers of strong organic increases. Four of the eight strategic brands (Cebion®, Sangobion®, Kytta® and Femibion®) delivered double-digit organic growth rates and gained market share in the division’s key regions, while the Bion®, Nasivin® and Sedalmerck® brands all posted growth rates in the mid-to-high single digits. The division’s cost structure benefited from measures implemented as part of the company’s “Fit for 2018” transformation and growth program, alongside better resource allocation, changes to the product portfolio and an exit from unprofitable markets.