The Darmstadt-based pharmaceutical and life science group can continue to increase sales and profits.
(Photo: dpa)
Frankfurt Merck is benefiting from the high demand for products used in drug manufacturing and electronic materials for the semiconductor industry. The group was able to increase sales and profits again in the second quarter. The Dax group grew organically by 6.6 percent.
Including positive exchange rate effects, sales increased by 14.3 percent to 5.6 billion euros, as the company announced on Thursday morning. At the start of the stock exchange, the share rose by 0.3 percent to EUR 184.25.
Despite higher raw material and logistics costs, the adjusted operating profit (Ebitda) increased by 3.2 percent, including positive currency effects the profit even grew by 13.1 percent to 1.78 billion euros.
Merck confirmed its organic growth targets for the year. Sales are expected to increase between six and nine percent this year and adjusted profit (Ebitda) between five and nine percent.
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However, the company is now assuming stronger positive exchange rate effects for the year as a whole and has therefore increased its forecast for sales and profits. Merck now expects sales of between 21.9 and 23.0 billion euros and adjusted operating profit of 6.75 to 7.25 billion euros.
Merck posts record quarter for drug products
Merck boss Belén Garijo sees the globally diversified business as a strength of the company. Despite major external challenges in the operational environment, the group continued to generate growth. The company was able to pass some of the cost increases on to customers through price increases.
The CEO was satisfied with the results.
(Photo: imago images/sepp spiegl)
Merck benefited from a record quarter in its largest division, the Life Science business. The drug manufacturing products and services business grew 10.4 percent organically, despite a fall in pandemic-driven demand, as expected by the company.
Merck supplies many materials and preliminary products for the manufacture of the Covid-19 vaccines. In the past financial year, the pandemic had generated additional sales of 1.15 billion euros in this business area. This year, Merck CEO Garijo expects pandemic-related sales of around EUR 700 million.
Including positive currency effects and the acquisition of the US contract developer Exelead, sales in the life sciences segment increased by 19 percent to EUR 2.6 billion. Adjusted profit rose 21.3 percent to one billion euros.
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The pharmaceutical business developed less dynamically, even if the comparison with the same quarter of the previous year is somewhat distorted by temporarily higher contract production in 2021. Organically, the pharmaceuticals division grew by 1.4 percent, including currency effects the division grew by 7.6 percent to 1.9 billion euros.
Pharmaceutical division posts higher profit due to currency effects
The growth drivers were the cancer drug Bavencio and the multiple sclerosis drug Mavenclad. The fertility business, on the other hand, declined. Excluding currency effects, the pharmaceutical division’s adjusted operating profit fell by 9.5 percent. Due to exchange rates, it rose by 3.9 percent to 604 million euros compared to the same quarter of the previous year.
In the Electronics division, the high demand for materials for semiconductor production ensured growth. However, the liquid crystal business shrank. Overall, the division grew by 16.3 percent to 996 million euros in sales – organic growth was 7.4 percent.
Adjusted profit fell 1.9 percent organically. However, positive currency effects more than compensated for this: Overall, the division’s EBITDA rose by 13.7 percent to 293 million euros. In this area, too, the increase in costs was partially offset by price increases.
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