RUSSIA AND M ERCK RUSSIA APRIL 2 0 17

Agenda

Country Facts / Merck in Russia

Biopharma

Life Science

Performance Materials

Human Resources

Summary of major projects in Russia

COUNT RY F ACT S

Country Facts Russia - Key statistics

Highlights

Area Total population (2013e):

17 million sq km (world largest country) 9 time zones (Crimea = 26 T sq km) 144 Mio (0% growth p.a.) Moscow largest city in Europe with 12 million

Government system: Federation and semi-presidential republic

Main religions: Russian Orthodox 41%, Muslim 7%, Christian 4%, others 35 %, Spiritual but not religious 25%, none 13%

GDP - real growth rate:

2012 = 3,4% 2013 = 1,3% 2014 = 0,6% 2015 = -3,8% 2016 = -0,2% 2017 = expected to be around 1,4% 2018 = expected to be around 1,4%

Inflation rate:

Moscow, one of the most expensive cities in the world 2015 = 15,55% 2016 = 5,4% 2017 = expected to be around 4,5% 2018 = expected to be around 4,2%

Country Facts Russia - Major Issues (Outlook)

The long term outlook, as World Bank, depends on: a) what may happen in the global outlook (political and/or

economical)

b) global energy price forecast (oil price level, considering Russian dependency on oil)

c) how Russia will master the adjustment of oil prices and the economic sanctions (so far so good !)

d) investment demand and consumers confidence

e) reform agenda (reduction of bureaucracy level)

Merck in Russia

Office on Sretenka Merck’s first price-list

The pharmacy was opened 119 years ago. In 2018 Merck Russia will be celebrating the 120th anniversary. We are planning to bring the Deutsche Philharmonie Merck to Moscow on that occasion.

Merck in Russia

Merck has been presented in Russia since 1898 which is looking back at a history of growth in the chemical and pharmaceutical businesses

Four main businesses: Biopharma Life Science Performance Materials Consumer Health (3rd parties) Opportunities in Russia are in both, chemicals and

pharmaceuticals: aging population, nascent pharmaceutical and chemical industry

Juergen Koenig President / General Director

Rogier Janssens Head of Biopharma Russia and CIS Olga Andreeva

Head of Human Resources

Alejandro Cohn CFO (Procurement, IS & Administration )

Heinz Schmidt Head of Life Science Russia and CIS

Elena Bessonova Head of Performance Materials

Tatiana Smirnova Head of Country Communication / Public Affairs

Merck Russia Organization

All businesses are under one roof (two legal entities: Merck LLC & SIAL LLC) Diversified Management Team by nationality (Brazilian, Argentinian, Dutch, Austrian, Russians) and by gender

Diversified Regional Responsibilities

Performance Materials: Russian Federation

Biopharma: Armenia, Azerbaijan, Belarus, Georgia,

Kyrgyzstan, Kazakhstan, Moldovia, Mongolia, Russian Federation, Ukraine,

Uzbekistan,Tadzhikistan, Turkmenistan

Life Science: Belarus, Kazakhstan, Russian Federation,

Ukraine

AM GE

AZ

MD

UA

BY

KZ MN

RU

TM UZ TJ KG

BY

UA KZ

RU

RU

What we do worldwide

Life Science Performance Materials

Healthcare

A wide range of specialty chemicals, such as liquid crystals for displays, effect pigments for coatings and cosmetics, or high-tech materials for the electronics industry.

Innovative tools and laboratory supplies for the life science industry that make research and biotech production easier, faster and more successful.

Prescription medicines to treat, for example, cancer, multiple sclerosis and infertility, over-the-counter pharmaceuticals for everyday health protection or to provide fast relief of colds and pain, as well as innovations in the areas of allergies and biosimilars.

HEAL T HCARE

Healthcare Our key therapeutic areas

Erbitux®

Colorectal cancer, head and neck cancer

Rebif®

Relapsing multiple sclerosis

Gonal-f®

Infertility

Luveris®/Ovidrel®

Female infertility

Saizen® Growth hormone disorders

Serostim®

HIV-associated wasting

Glucophage®

Type 2 diabetes

Concor®

Cardiovascular diseases

Euthyrox®

Thyroid disorders

Oncology Neurodegenerative diseases

Fertility Endocrinology CardioMetabolic disorders

Healthcare Our strong brands

Neurobion®

B vitamins to treat slight neuropathic pain

Seven Seas®

Protecting strong joints and basic health

Bion®

Probiotic vitamins for daily immune protection

Vigantoletten®

Vitamin D3 products to help with tiredness, fatigue and listlessness

Nasivin®

Nasal spray – clears the nose in 25 seconds

Sangobion®

For the prevention of iron deficiency in adults, children and babies

Kytta®

Help for muscle, joint and back pain

Floratil®

Probiotic treatment of diarrhea

Femibion®

Vitamins for women who wish to conceive, during pregnancy and while nursing

Apaisyl®

Specialized skincare products for mosquito bites and head lice

L IF E SCIENCE

Presence in countries

6 6

Life Science Business

total global revenues in 2015

€ 3 .4 Bn

Over1M customers globally4

visits to Sigma-Aldrich website alone

7 2 M

distribution centers2 13 0

manufacturing sites worldwide

7 2

employees 19 ,0 0 0

products Over 3 0 0 ,0 0 0

more unique web visitors than nearest competitor5

2 x

lines shipped annually ~18 M

Process Solutions

Applied Solutions

Research Solutions

Products and workflow solutions that streamline processes, reduce costs, and deliver consistent, reliable results

Products that meet the highest quality and purity standards with extensive documentation and services to ensure regulatory compliance

Most complete portfolio of solutions that enable scientific discovery

Life Science Our business fields

M USE® Ou r i n s p i r a t i o n f o r y o u r r e s e a r c h

The Muse® cell analyzer provides real-time data on important cell health parameters. There is no longer any need for time-consuming individual measurements of parameters such as cell count and viability, apoptosis and cell cycle. These values can now be read from the display easily, quickly and very precisely.

M IL L IF L EX® De t e c t i n g c o n t a m i n a t i o n

Safety and purity have top priority in pharmaceutical manufacture, which is why our products meet the highest quality standards. And we ensure that this applies to the final product as well. With our Milliflex® system, microbial contamination can be detected quickly and easily.

SAM PL ICIT Y® Us e f u l v a c u u m

The Samplicity® filter system can simultaneously vacuum filter up to eight samples within seconds. This saves scientists many manual work steps for sample preparation.

For this innovative development Merck received the R&D Magazine 100 Award for Laboratory Equipment in 2012.

M AKING SURE F OOD IS SAF E

Our analysis products are used by food manufacturers in order to continuously monitor the quality of their goods. For example, our high-purity reagents and chromatography systems support compliance with the very stringent international food regulations. We offer solutions to ensure that the food on supermarket shelves is really safe.

PERF ORM ANCE M AT ERIAL S

Performance Materials Our products

Liquid crystals and photoresists for LCD televisions, smartphones, tablet computers, and other displays

Dielectrics, colloidal silica, lithography, photoresists, yield enhancers, edge bead removers and other ancillary products for the production of integrated circuits

Materials for organic (OLED) and inorganic (LED) light emitting diodes and functional material for electronics and energy solutions

Integrated Circuit Materials

Display Materials

Advanced Technologies

Effect and functional pigments for coatings, plastics, foods or cosmetics as well as functional materials for specialist applications

Pigments & Functional Materials

HUM AN RESOURCES

Seniority and distribution by divisions

43%

12% 10%

6%

7% 22%

Seniority

< 1 year1-2 years2-3 years3-4 years4-5 years> 5 years

73%

13%

2% 12%

Distribution by divisions

BP

LS

PM

MGF

In Merck Russia and CIS the majority of employees joined during the last 2 years (55%). The headcount is around 300 employees. The turnover rate by end of March was 1,95 %.

100%

0%

H.E

S.E

Gender Balance, Age and Educational Distribution

22%

48%

23%

7%

20-29

30-39

40-49

> 50

67%

33%

F

M

Gender Age

In Merck Russia and CIS more women relative to man, 70% of employees are under 40 y.o. and 100% employees have higher education

Education

SUM M ARY OF M AJ OR PROJ ECT S

Merck Russia

Merck operates on the Russian market since 1898.

In 2018, we will celebrate the 350th anniversary of the company and the 120th anniversary in Russia. For that occasion, we are planning to invite the Deutsche Merck Philharmonie to perform in Russia.

Merck launched together with Goethe Institute in Russia and with the German Embassy in Russia the “Merck Literature Preis” (translations from German in to Russian in three categories), which was hand over in September 2016 at the residence of the German Ambassador in Moscow.

Merck Russia

All the three company’s businesses, namely Healthcare, Life Science and Performance Materials are represented in Russia.

Consumer Health business is organized by 3rd parties.

Since 2013, Merck has been implementing a new strategy for Russia, which includes localization projects and technology transfer, as well as repatriation of the major biopharma products from a 3rd party.

Merck supports the development of Russian pharmaceutical industry within the framework of the Federal program “Pharma-2020” and started localization of its strategically important products in Russia, in particular for cancer, multiple sclerosis, cardio and diabetes treatment in partnership with Russian companies.

Merck Russia

Merck is dedicated to the development in Russia and thus has recently consolidated operations of all its business units and central functions under the roof of one office in Moscow at Valovaya Street (Garden Ring).

Being a reliable employer the company invests in its local staff development and in particular within the last 3 years has more than doubled its local headcount and planning also further expansion in this area.

As part of the global integration of the Sigma Aldrich acquisition, Merck is also integrating Sigma Aldrich business in Russia.

Merck Russia

Merck would like to become a more active partner for the Russian government and is seeking opportunities to launch partnership cooperation's in healthcare with the federal and regional governments (awareness programs).

Merck is also seeking opportunities in the area of Life Science by signing in Russia and Kazakhstan Strategic Agreements with Government, Institutions (i.e. Kaluga, FEFU etc.)