Merck returned to profitable growth in 2024 and delivered on its guidance for the year.
Full-year net sales increased to € 21.2 billion (organically: +2.0%), EBITDA pre rose to € 6.1 billion (organically: +6.9%)
Strong fourth quarter: Net sales up 3.8% organically year-on-year, EBITDA pre up organically by 19.7%
Stable dividend proposed: € 2.20 per share
Forecast 2025: Net sales of € 21.5 – 22.9 billion and EBITDA pre of € 6.1 – 6.6 billion
Merck, a leading science and technology company, returned to profitable growth in 2024 and delivered on its guidance for the year. A strong performance of Healthcare, a rebound in Life Science and profitable growth in Electronics contributed to this. During the year, Merck also strategically sharpened its portfolio’s focus on future growth areas. After a strong fourth quarter 2024, the company is looking toward 2025 with confidence and expects continued profitable growth.
"Merck is back on a growth path with all three businesses. The challenges of recent years have been taken as an opportunity to strengthen our supply chains and invest in Europe, the United States and Asia. In 2025, we will continue to deliver profitable growth across our company. With our innovation-driven portfolio, we are ideally positioned to benefit from global macro trends such as complex biologics, novel modalities, and semiconductors for the AI era," said Belén Garijo, Chair of the Executive Board and CEO of Merck.
During the course of the year, Merck returned to profitable growth, with a strong fourth quarter 2024. Group net sales rose 3.8% organically year-on-year in the final quarter of 2024, while EBITDA pre saw an organic increase of 19.7%. Healthcare delivered organic EBITDA pre growth of 34.2%. Life Science and Electronics grew organically by 16.0% and 14.9% respectively.
For the full year, Merck delivered net sales of € 21.2 billion, an organic increase of 2.0%. Strong sales across all Healthcare franchises and in the Semiconductor Materials business played a key role in this. Life Science resumed growth during the second half of the year.
Group EBITDA pre reached € 6.1 billion in 2024, an organic increase of 6.9%. The increase in sales, temporarily reduced research and development expenses in Healthcare, and strict cost discipline positively impacted this achievement. The EBITDA pre margin was 28.7%, up 0.7 percentage points from the previous year. Importantly, operating cash flow grew by 21.2% to € 4.6 billion.
Earnings per share pre were € 8.63. The Executive Board and Supervisory Board intend to propose a stable dividend of € 2.20 per share to the Annual General Meeting on April 25, 2025.
Turnaround in Life Science
Merck’s Life Science business sector staged a turnaround in the second half of 2024. In particular, the first half of the year was overshadowed by inventory destocking by customers and tough year-over-year comparables in the wake of Covid-19. This caused full-year sales to decline to € 8.9 billion (organically: −3.3%) and EBITDA pre to € 2.6 billion (organically: −6.3%). In the fourth quarter of 2024, sales grew organically by 1.9%, while EBITDA pre rose organically by 16.0%.
The Science & Lab Solutions business unit, with its product and service offering for pharmaceutical, biotechnology and academic research, recorded sales of € 4.7 billion in 2024 (organically: +0.2%).
The Process Solutions business unit, which markets solutions for the entire pharmaceutical production value chain, saw full-year sales decline to € 3.5 billion (organically: −6.4%). In the fourth quarter, sales grew organically by 4.1%, making for a second successive quarter of growth.
Life Science Services offers customers a fully integrated portfolio of services for contract development and manufacturing (CDMO) of medications as well as testing services. In 2024, sales of the business unit declined to € 722 million.
Healthcare delivers strong growth again
Merck’s Healthcare business sector continued on its growth course. Both the innovation-driven and established franchises contributed to this. Full-year net sales increased to € 8.5 billion (organically: +7.0%). EBITDA pre grew to € 3.0 billion (organically: +22.7%). Strong sales growth, temporarily lower research and development expenses and cost discipline were the key earnings drivers.
Net sales of the Oncology franchise increased to € 2.0 billion (organically: +12.7%). Erbitux, which grew organically by 15.7%, was the main sales driver. With sales of € 1.2 billion, the oncology drug further consolidated its blockbuster status.
Sales of the Neurology & Immunology franchise amounted to € 1.7 billion. This corresponds to organic growth of 2.3%. Mavenclad grew organically by 12.3%. The medicine for treating multiple sclerosis achieved sales of € 1.1 billion.
The Fertility franchise posted a slight organic growth of 0.8% despite tough comparables related to competitor stock-outs in the previous year. Sales came in at € 1.5 billion.
The Cardiovascular, Metabolism & Endocrinology franchise achieved sales of € 2.9 billion and organic growth of 8.5%.
Electronics returns to profitable growth
Strong AI driven Semiconductor Materials growth drove an organic sales increase of 4.6% in Electronics. The business sector generated net sales of € 3.8 billion in 2024. EBITDA pre increased to € 970 million (organically +6.9%).
Semiconductor Solutions was once again the sales driver for the sector. The business unit develops products and services for the semiconductor industry. Sales increased to € 2.6 billion (organically +7.8%). The main growth came from high-value materials for advanced nodes driven by the strong demand for AI chip systems and other technologies. Advanced nodes refer to manufacturing technologies with the smallest feature sizes. They enable chips with the highest computing power respective memory density while simultaneously reducing energy consumption.
The two other business units of Electronics recorded sales declines. Display Solutions – renamed Optronics in January 2025 – posted sales of € 748 million. In Surface Solutions, sales amounted to € 406 million.
Merck delivers strategic milestones
Strategic portfolio management was once again a key component of Merck’s growth strategy in 2024. Highlights included:
The company signed an agreement to divest its global Surface Solutions business. In doing so, Merck is sharpening its focus even more intensively on the semiconductor and display industries within Electronics.
Merck acquired the life science company Mirus Bio, a specialist for transfection reagents, which help introduce genetic material into cells and play a key role in the production of viral vectors. Merck is therefore complementing its offering for the development and manufacture of novel therapies such as cell and gene therapies.
By acquiring Unity-SC, Merck expanded its portfolio with high-precision metrology instruments. These improve quality and production yield, resulting in lower manufacturing costs of microchips. The company is thus strengthening its competencies in the field of optical technologies. This was also reflected in the renaming of the Display Solutions business unit to Optronics at the start of 2025.
In November 2024, Merck announced that the pivotal Phase III study of previously in-licensed drug candidate pimicotinib1 had met its primary endpoint. The study demonstrated a significant improvement in the objective response rate in patients with tenosynovial giant cell tumor.
Merck also made strategic investments in production as well as in research and development. Examples include:
€ 290 million: Opening of biosafety testing facility in Rockville, Maryland, USA
€ 70 million: Expansion of ADC manufacturing capabilities and capacity in St. Louis, Missouri, USA
€ 300 million: Advanced Research Center in Darmstadt, Germany
€ 300 million: Bioprocessing Production Center in Daejeon, Korea
€ 70 million: Advanced Materials Center in Shizuoka, Japan
Greenhouse gas emissions cut almost in half since 2020
Merck delivered on its strategic sustainability goals. The company intends to reduce its direct (Scope 1) and indirect (Scope 2) greenhouse gas emissions by 50% from 2020 to 2030. In 2024, Merck cut these emissions by 26%. This means the company has almost halved its combined Scope 1 and 2 emissions since 2020 and is confident that the 2030 target will be achieved significantly earlier than originally planned. One of the main reasons for this is the considerable reduction in process emissions from specialty gases with a high global warming potential. Further details can be found in the Sustainability Statement 2024. Merck implemented the European Sustainability Reporting Standards (ESRS) in full for the first time and on a voluntary basis.
Forecast 2025: Expecting profitable growth
For 2025, Merck anticipates net sales between € 21.5 billion and € 22.9 billion and an EBITDA pre of € 6.1 billion to € 6.6 billion. This corresponds to an organic sales growth of 3% to 6% and an organic EBITDA pre growth of 3% to 8%.
[1]Sponsor: Abbisko Therapeutics Co. Ltd.; Merck holds an exclusive license to commercialize pimicotinib in China, Hong Kong, Macau, and Taiwan, with option for rest of the world.
www.merckgroup.com
