The Zhitong Finance App learned that thanks to the strong performance of its laboratory equipment and electronics business, Germany's Merck KGaA (Merck KGaA) released second-quarter earnings reports that exceeded expectations on Thursday and raised full-year profit and sales guidelines. The company expects adjusted EBITDA (profit before interest, tax, depreciation and amortization) for the full year to reach 5.9 billion to 6.3 billion euros (approximately 6.8 billion to 7.3 billion US dollars). The previous forecast range was 5.7 billion to 6.1 billion euros. The anticipated upper limit of net sales for the full year was raised to €21.8 billion, compared to €21.4 billion previously.
The German tech and medical group attributed the improvement in performance to the life sciences sector and electronics business increased momentum, while foreign exchange headwinds eased.
The new CEO, Kai Beckmann (Kai Beckmann), is focusing on the overall improvement of the Group's three business segments — healthcare, life sciences, and electronics. This is the second time that it has raised its performance guidelines since taking up the new position in May.
Its biggest move to date was the $11.3 billion acquisition of life science company Bio-Techne Corp. The deal was announced in June and is the largest merger and acquisition since Merck acquired Sigma-Aldrich for $17 billion in 2014. Merck previously said that the US company's laboratory proteins and instruments will complement the existing product portfolio and contribute to growth after the transaction is completed.
Adjusted EBITDA for the second quarter rose to 1.6 billion euros, exceeding the average forecast of 1.5 billion euros from market compilers; sales for the quarter also exceeded expectations of 5.4 billion euros.
As of Wednesday, Merck's stock price had accumulated an increase of 18% during the year, outperforming the almost flat healthcare sector in the European Stoxx 600 Index.
By business, the largest business segment, Life Science Process Solutions (providing pharmaceutical equipment), recorded double-digit growth, and the business continued to pick up since the post-pandemic inventory removal cycle.
Healthcare organic sales declined during the quarter, hampered by competitive pressure from the multiple sclerosis drug Mavenclad and the oncology drug Bavencio. Mavenclad faced an unfavorable patent ruling in the US, and generic drugs entered the market sooner than expected. However, Merck said on Thursday that it is now assumed that the drug will no longer generate sales revenue from August, which is a delay from the previous assumption of May. Demand for electronic AI-related chip manufacturing materials in the smallest business segment remains strong.
Note that the company is not related to Merck & Co. (Merck & Co.) of the United States. Although the two have the same origin, they have operated independently since World War I.