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Merck KgAa CFO expect higher costs to prevail in the coming quarters - YouTube
Channel: CNBC International TV
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looking on the global uncertainties
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macroeconomic challenges and of course
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the overall geopolitical situation i
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think it is fair to say that there are
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some
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cautioning remarks also in the guidance
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that if the china lockdown is actually
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going to spread far into the second half
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of the year and if more than just a few
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or a couple of provinces will finally be
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affected that might have an impact on
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our numbers but that is not the current
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scenario of our of our assumptions on
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the other hand when we look on elevated
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um freight logistics cost as well as
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energy costs we think that those costs
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will remain on a high level for the end
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or until the end of the year but at the
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same time we feel well prepared actually
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to counter those cost increases
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with own discipline cost management and
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also selective price increases wherever
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possible
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yeah very interesting marcus the line
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where you when you talk about trying to
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offset
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some of the impact from chinese
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restriction on manufacturing by moving
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to a more e-commerce focused model could
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you just unpack that for us what does
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that actually mean
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yeah that's there's not much rocket
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science behind it we have made i think a
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lot of experiences during the last two
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years when we experienced
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partially hard lockdowns in the kovy
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times you know it started some two years
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ago in asia the second quarter 2020 was
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heavily affected in the us and europe or
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was heavily affecting u.s and europe so
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we made we had a lot of learnings we
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made our experiences and we know that
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those kind of digital go-to-market
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models work we have a well-functioning
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e-commerce platform in life science
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where we already root today a major part
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of our of our sail through so that is i
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would say a natural countermeasure
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that we just
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revitalize in case that the lockdown
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scenario is going more tough
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marcus i just stumbled across a figure
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in the results today a fairly stunning
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26.6
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uh balanced in organic growth i'm sure
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you know what i'm talking about here the
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oncology franchise just give us a sense
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as to why growth is so strong in that
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area and will it continue from here
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um
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so
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there are two components actually which
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have driven this 27 organic increase in
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oncology first and foremost it is our
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new newly launched product bavencio
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which has basically doubled sales
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compared to the first quarter
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2021 so we have seen a 102 percent
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increase here at the same time the
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second contributor was our established
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product abitooks which also grew by
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almost 10 percent organically and here i
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think a major driver was a more recent
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um achievement that we would have been
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entering the nrdl in china with abi
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talks in
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in the indication of
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of head and neck cancer so that was also
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obviously a gross driver if we look
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forward we believe that we will
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continuously see abby talks growing on
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the one hand maybe not 10 every quarter
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but we are confident that we'll see
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further growth going forward and we are
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very optimistic that vavenzio remains a
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gross driver for oncology but also for
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healthcare
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for for the entire sector
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for the next couple of quarters actually
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marcus if we can just dig into the
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electronics business sector it feels as
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though you've got some of the usual
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suspects here that other sectors are
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facing too the margin pressure inflation
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and raw material costs just unpick that
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for us what are you seeing and what you
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anticipate in the coming months
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yeah so the anticipation is actually an
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ongoing pressure on certain p l lines
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from the effects that you rightly
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mentioned so to be a little bit more
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precise in the first quarter we have
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seen elevated raw material prices in
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certain areas which are important for us
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so for example oil based solvents as one
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example
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we have seen at the second or we have
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seen on top of that
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um pretty much elevated freight and
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logistics costs as well as high energy
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costs and actually we expect all these
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developments and factors
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to prevail for the next couple of
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quarters so definitely until year end
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the good news however is that this is
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somewhat baked into our guidance
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so high pricing levels on these input
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costs
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will not come as a surprise and we are
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thinking about a lot of counter measures
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in order actually to safeguard margins
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and to deliver the guidance that you
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have seen today
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