Merck, a leading science and technology company, has reported a strong performance in the fiscal year 2022, delivering profitable growth despite challenges.
The company’s group net sales increased by 12.9% (organically: 6.4%) to €22,232 million compared with the previous year, driven by all regions and business sectors, particularly Life Science. The Big 3 businesses – Process Solutions and Life Science Services, new Healthcare products as well as Semiconductor Solutions – accounted for almost 90% of the organic growth in sales. The company’s EBITDA pre-rose by 12.2% (organically: 6.1%) to €6,849 million, and the EBITDA pre-margin was 30.8%.
Merck’s earnings per share pre came in at €10.05, an increase of 15.3% over the previous year. Based on this, the Executive Board and Supervisory Board will propose to the Annual General Meeting on April 28, 2023, a dividend of €2.20 per share, equivalent to €0.35 or 19% more than in the previous year.
In a statement, Belén Garijo, Chair of the Executive Board and CEO of Merck, said: “We delivered profitable growth in fiscal 2022 despite challenges. The strong development of the Life Science core business more than offset the expected decline in Covid-19-related demand. Other strategic growth engines, namely new Healthcare products and our Semiconductor Solutions business unit, also performed well in fiscal 2022.”
Merck’s organic sales increased by 6.4% in the fiscal year 2022. Positive foreign exchange effects of 6.1% resulted mainly from the development of the U.S. dollar and the Chinese renminbi. The acquisition of the biopharmaceutical contract development and manufacturing organization Exelead, Inc., USA (Exelead), increased sales by 0.4%. EBITDA pre-showed organic growth of 6.1% amid a positive foreign exchange effect of 6.4% and a slightly negative portfolio effect of ‑0.3%.
Merck continued with the global expansion of its capacities in 2022, creating the basis for further organic growth while diversifying and regionalizing its production and supply chains. The company invested in expanding the Life Science sites in Cork, Ireland, Rockville, Maryland, USA, Molsheim, France, as well as Wuxi, China. Healthcare laid the cornerstones for the Translational Science Center and the Launch & Technology Center in Darmstadt, Germany. In February 2023, Electronics celebrated the groundbreaking of its integrated production facility for specialty gases and semiconductor materials in Kaohsiung, Taiwan.
Merck also invested in inorganic growth in 2022, successfully completing the acquisitions of the biopharmaceutical contract development and manufacturing organization Exelead, Inc., USA, as well as the chemical business of Mecaro Co. Ltd., a Korea-based supplier to the semiconductor industry.
In Healthcare, Merck presented strong data from its pipeline in 2022 with regard to Phase II studies for xevinapant (head and neck cancer) and evobrutinib (multiple sclerosis). In addition, the company announced in-licensing agreements for its Oncology franchise with Nerviano Medical Sciences S.r.l. as well as a collaboration agreement for antibody-drug conjugates with Mersana Therapeutics, Inc.
Merck’s Life Science business sector saw a double-digit growth in its core business, which more than offset the significant decline in Covid-19-related demand. The Process Solutions business unit delivered the highest organic growth rate within the business sector, accounting for around 44% of Life Science sales in fiscal 2022.
On the other hand, the Healthcare business sector saw new medicines drive sales growth. In partnership with the World Health Organization (WHO), Merck provided praziquantel tablets for the treatment of the neglected tropical disease schistosomiasis in 80 million patients, mainly school-aged children. The immuno-oncology drug Bavencio generated an organic sales increase of 57.9%, while sales of Mavenclad for the treatment of relapsing multiple sclerosis increased by 47.4% organically.
Merck’s Semiconductor Solutions business unit also performed well in fiscal 2022, driven by strong demand for chips across various industries, particularly in the automotive sector. The business unit’s organic sales growth was 6.8%, and its EBITDA pre-margin was 28.9%.
Overall, Merck’s strong performance in fiscal 2022 was driven by the growth of all regions and business sectors, particularly the Life Science business sector. The company’s innovative power and global diversification were key pillars of its resilience, allowing it to achieve profitable growth despite the challenges posed by the pandemic.
“Our innovative power and global diversification are key pillars of our resilience,” said Belén Garijo. “Thanks to our broad positioning, we are confident to achieve our mid-term financial target of € 25 billion in sales by 2025 based purely on organic growth – with the option of further accelerating our growth through potential acquisitions and in-licensing deals.”