Merck Outlines Resilience and Growth Strategy, Targets Fiscal 2024 for Sales Uptick

(IN BRIEF) Merck, a leading science and technology company, has announced its expectation to return to organic sales growth in fiscal 2024. This was revealed during the company’s Capital Markets Day. Despite challenging market conditions in its Life Science and Electronics sectors, Merck anticipates stable sales in fiscal 2023. The company reaffirmed its medium-term growth targets across its three business sectors—Life Science, Healthcare, and Electronics. These targets are based on expected compound annual growth rates for organic sales development. Merck’s diversified portfolio positions it to benefit from key global trends, and its global presence aims to reduce dependency on specific markets and regions. This announcement reflects Merck’s commitment to long-term growth and innovation.

(PRESS RELEASE) DARMSTADT, 19-Oct-2023 — /EuropaWire/ — Merck (ETR: MRK), a German multinational leading science and technology company in healthcare, life science, electronics, has unveiled its plans for fiscal 2024 and reaffirmed its medium-term growth targets across its three business sectors during its Capital Markets Day announcement.

Belén Garijo, Chair of the Executive Board and CEO of Merck, said: “Merck’s business model has been put to the test over and over again in previous years and proven itself resilient. Even in challenging circumstances, we see ourselves optimally positioned to continue to generate attractive growth rates in the future. Our multi-industry set-up and diversified geographic footprint enable us to leverage key megatrends – such as the growing demand for specialty medicines, novel modalities as well as artificial intelligence. We are confident that we will be able to resume our growth course in fiscal 2024.”

Thanks to its set-up with three business sectors, Merck expects to see on average stable sales in fiscal 2023, despite a difficult market environment in Life Science and Electronics. The company still assumes an organic sales development of −2% to +2%, leading to net sales of €  20.5 billion to € 21.9 billion in total. In the first half of 2023, the strong growth of Healthcare largely offset the organic sales declines in Life Science and Electronics.

Returning to Growth in Fiscal 2024

Merck is poised to return to organic sales growth in fiscal 2024, signaling a promising outlook. Several key factors are expected to contribute to this turnaround:

• Life Science: The company anticipates a more modest decline in Covid-19-related sales compared to fiscal 2023, offering a positive growth trajectory.
• Process Solutions: Inventory destocking by key customers is expected to conclude early in 2024, with sales rebounding in the first half of the year.
• Healthcare: Merck foresees growth normalization in line with its medium-term aspirations, reflecting the strong performance in the first half of fiscal 2023.
• Electronics: Incremental recovery is anticipated in the semiconductor materials market within the Electronics business sector in 2024.

Medium-Term Growth Targets Confirmed

Merck is resolute in its commitment to its medium-term growth objectives for its three core business sectors. The company projects the following compound annual growth rates for organic sales development:

• Life Science: 7% to 10%
• Healthcare: Mid-single digit percentage range
• Electronics: 3% to 6%

Merck attributes this confidence in its medium-term growth potential also beyond 2025 to an optimal positioning: With its diversified portfolio, the company benefits from key megatrends. In the Life Science business sector, this includes the growing market for complex and novel modalities such as viral vectors, antibody-drug conjugates and mRNA.

In the Healthcare business sector, Merck develops and commercializes specialty pharmaceuticals for oncology and neurology, among others. These include the medicines Bavencio (cancer) and Mavenclad (multiple sclerosis), both of which have shown strong growth in the first half of fiscal 2023. In addition, Merck is conducting clinical trials with the pipeline assets xevinapant (head and neck cancer) as well as evobrutinib (multiple sclerosis).

With its industry-leading range of semiconductor materials, the Electronics business sector expects positive growth impetus in the medium term from the further implementation of artificial intelligence and the Internet of Things (IoT).

Furthermore, Merck underscores its global reach and resilience by maintaining a strong presence in economically vital regions. For instance, in fiscal 2022, the company generated around 35% of its sales in the Asia-Pacific region. According to World Bank data, this region was responsible for around 35% of global gross domestic product (GDP) in 2022. Merck is also well-positioned in other key regions. In fiscal 2022, the company generated around 29% of sales in North America, corresponding to the region’s 28% share of global GDP. In 2022, Europe accounted for around 28% of Group sales and around 17% of global GDP.

Through its global footprint, Merck is also increasing its resilience and becoming less dependent on individual markets, segments and regions.

Capital-Markets-Day-2023-EN.pdf

For more information, please contact Esther Döringer

+49 151 1454 7809

All Merck press releases are distributed by e-mail at the same time they become available on the Merck website. Please go to www.merckgroup.com/subscribe to register online, change your selection or discontinue this service.

About Merck

Merck, a leading science and technology company, operates across life science, healthcare and electronics. More than 64,000 employees work to make a positive difference to millions of people’s lives every day by creating more joyful and sustainable ways to live. From providing products and services that accelerate drug development and manufacturing as well as discovering unique ways to treat the most challenging diseases to enabling the intelligence of devices – the company is everywhere. In 2022, Merck generated sales of € 22.2 billion in 66 countries.

Scientific exploration and responsible entrepreneurship have been key to Merck’s technological and scientific advances. This is how Merck has thrived since its founding in 1668. The founding family remains the majority owner of the publicly listed company. Merck holds the global rights to the Merck name and brand. The only exceptions are the United States and Canada, where the business sectors of Merck operate as MilliporeSigma in life science, EMD Serono in healthcare, and EMD Electronics in electronics.

SOURCE: Merck KGaA