Merck lowers forecast: Geopolitics and exchange rates weigh on results!

Merck lowers forecast: Geopolitics and exchange rates weigh on results!

The Merck Group has lowered its forecast for the 2025 financial year due to the tense macroeconomic and geopolitical environment. While CEO Belen Garijo expressed confidence in sustainable growth through 2025 and beyond, exchange rate effects are expected to weigh more heavily on earnings across all three divisions. This requires adjustment, especially in the life science sector, where uncertainties regarding tariffs are significant, reports finance.net.

In the first quarter, Merck was still able to record growth in both sales and operating results. The updated sales forecast now calls for organic growth of 2 to 6 percent, which corresponds to sales of 20.9 to 22.4 billion euros. The company previously assumed growth of 3 to 6 percent, which corresponded to sales of between 21.5 and 22.9 billion euros.

Forecast adjustment in detail

Adjusted EBITDA is now expected to be between 5.8 and 6.4 billion euros, representing an organic increase of 2 to 7 percent. The previous forecast was for growth of 3 to 8 percent and EBITDA of 6.1 to 6.6 billion euros. These adjustments reflect the uncertainties that Merck expects in the coming years due to exchange rate developments and the geopolitical situation merckgroup.com.

The new estimates also take into account the expected volatility in the exchange rate ratio, which could fluctuate between $1.03 and $1.07 per euro. However, the divisions still expect organic sales growth. In the Life Science segment, an increase in particular is forecast from Process Solutions, while the Healthcare segment will see growth through products for cardiovascular diseases and oncology.

A look at the individual company divisions

• **Life Science:**
  – Umsatzerlöse: 9.100 bis 9.800 Millionen Euro
  – Organisches Wachstum: +2 % bis +7 %
  – EBITDA pre: 2.600 bis 2.900 Millionen Euro
• **Healthcare:**
  – Umsatzerlöse: 8.300 bis 8.900 Millionen Euro
  – Organisches Wachstum: +1 % bis +5 %
  – EBITDA pre: 3.000 bis 3.300 Millionen Euro
• **Electronics:**
  – Umsatzerlöse: 3.800 bis 4.200 Millionen Euro
  – Organisches Wachstum: +2 % bis +6 %
  – EBITDA pre: 1.000 bis 1.100 Millionen Euro

The EBITDA pre-growth is supported in all three areas. Operating cash flow will increase slightly compared to the previous year and could be around 4.6 billion euros. The impact from net working capital and cash receipts in the fourth quarter of 2024 is also expected to impact cash flow.