Merck KGaA (ETR:MRK) executives told investors the company delivered “solid” organic growth in 2025 despite a challenging macroeconomic and geopolitical backdrop, pointing to a return to growth in Life Science, steady progress in Healthcare, and a second-half recovery in Electronics driven by AI-related semiconductor demand. Management also outlined 2026 guidance that embeds conservatism around U.S. MAVENCLAD erosion and excludes potential U.S. sales from Pergoveris.
2025 performance and Q4 snapshot
Group CEO Belén Garijo said the company met its latest guidance for the group and business sectors. In the fourth quarter, Merck reported group organic sales growth of +2.6% and organic EBITDA pre growth of +3.1%, supported by all three sectors. Garijo also highlighted improved leverage of 1.4x net debt to EBITDA pre, helped by strong cash generation, despite continued spending on capital expenditures and M&A.
Group CFO Helene von Roeder added that reported fourth-quarter net sales declined 3.1% to EUR 5.249 billion, with organic growth offset by foreign exchange headwinds. She attributed FX pressure primarily to the U.S. dollar and several Asian currencies, including the Chinese renminbi, Korean won, Indian rupee, and Japanese yen. EBITDA pre declined 3.2% to EUR 1.443 billion, with a stable margin of 27.5%. EPS pre was EUR 1.88, while reported EPS was EUR 0.73.
Von Roeder said EBIT declined year over year mainly due to R&D-related impairments in Healthcare, and the financial result reflected higher interest costs and lower interest income following the SpringWorks acquisition.
Life Science: return to growth and go-to-market changes
Garijo said Life Science returned to organic growth in 2025, driven by normalization in demand from Process Solutions customers after a de-stocking phase. In Q4, Life Science delivered organic sales growth of about 4%, with Process Solutions up nearly 10% organically (von Roeder cited +9.7%). Management said order intake remained strong with a book-to-bill ratio “comfortably above one.”
Science & Lab Solutions grew +1.2% organically in Q4, which von Roeder said was slower than Q3 due to the U.S. government shutdown affecting academic and government lab spending and softer conditions in China. Life Science Services declined -8% organically, attributed to high comparables and demand fluctuations at key customers.
Strategically, Garijo emphasized a January implementation of a new go-to-market model aligned to customer buying patterns, which she said has received “very, very positive” feedback. She also pointed to acquisitions—including the chromatography business of JSR Life Science and HUB Organoids—as examples of portfolio reinforcement.
Executives said Life Science reporting will change starting in Q1 to align with the new model. Process Solutions will remain unchanged, while two new franchises—Advanced Solutions and Discovery Solutions—will be created to group specific businesses.
Healthcare: rare diseases ramp and MAVENCLAD uncertainty
Healthcare posted Q4 organic sales growth of +3.3%, led by the CM&E franchise, which rose +7% organically. Fertility grew +3% organically, with Pergoveris up 22%; Merck said it recently secured approval for Pergoveris in China and continues working toward a potential U.S. launch in H2 2026.
In neurology and immunology (NNI), management said MAVENCLAD was up 16% organically in Q4, with only a small initial impact from the first generics launch in the U.S. in December. Oncology declined moderately as expected, with management citing increased competition for Erbitux in China from non-comparable biologics.
Merck also highlighted rare diseases as a new strategic pillar in 2025, supported by the acquisition of SpringWorks and global commercialization rights for pimicotinib, which was launched in China. In Q4, the consolidation of SpringWorks added 5 percentage points of portfolio-driven growth, and management said the rare disease franchise delivered 20% higher sales quarter over quarter, helped in part by stocking effects. The company therefore expects Ogsiveo sales to be modestly down quarter over quarter in Q1.
On guidance assumptions, Kai Beckmann said Merck’s 2026 outlook assumes no MAVENCLAD sales in the U.S. as of March 2026 and excludes potential U.S. sales from Pergoveris. Management said it chose not to speculate on generic entry timing and erosion patterns. Healthcare CEO Danny Bar-Zohar said one generic has final FDA approval and entered the market, another has tentative approval, and additional companies are developing generics. He added that MAVENCLAD’s dosing regimen creates additional uncertainty around erosion dynamics.
On Pergoveris, Bar-Zohar said the filing is being pursued under the Commissioner’s National Priority Voucher process with a rolling submission. Part 1 was submitted in November, and the company is preparing Part 2, after which the FDA review clock starts. He said adapting legacy ex-U.S. data to FDA requirements is a key variable, and Merck wants to “get it right” on its “one shot,” while still aiming for a potential launch in the second half of 2026.
Electronics: AI tailwinds and DS&S trough
Electronics sales declined -2% organically in Q4, which management attributed to Delivery Systems & Services (DS&S) headwinds reaching an expected trough. Semiconductor Materials again posted “stellar” growth in the mid-teens, supported by demand in AI and advanced nodes and market share gains through new customer qualifications. Von Roeder said an approximately EUR 100 million downside in DS&S flagged previously did materialize in Q4, and management believes DS&S bottomed out and will stabilize.
Electronics EBITDA pre margin rose to 27.2%, which management linked to the divestment of Surface Solutions and continued cost discipline, reflecting the “pure-play” electronics profile. Beckmann said 2026 Electronics EBITDA pre will also reflect one-time items, including a swing from a negative EUR 51 million impact in 2025 to a positive contribution totaling around EUR 60 million in 2026 from OLED IP sales and supplier compensation.
In Q&A, executives said customer debottlenecking efforts for AI and advanced nodes are continuing, supporting momentum into 2026. On augmented reality/virtual reality, Beckmann said the current business is small and not included in mid-term guidance, with future materiality dependent on customer roadmaps and adoption of higher-end devices.
2026 outlook and other updates
For 2026, Merck guided for group net sales of EUR 20.0 billion to EUR 21.1 billion, representing organic sales development of -1% to +2%. EBITDA pre is expected at EUR 5.5 billion to EUR 6.0 billion, equating to organic growth of -4% to +1%. The company introduced an EPS pre outlook for the first time, forecasting EUR 7.10 to EUR 8.00. Management also cautioned that Q1 will see a disproportionate FX headwind versus the full year.
Life Science guidance was described as mid-single-digit organic growth, underpinned by continued strength in Process Solutions, with management citing potential headwinds in China and uncertainty around biotech funding and academic research stabilization. Healthcare guidance reflects life-cycle pressures, particularly for MAVENCLAD, while Electronics is expected to benefit from semiconductor materials growth and DS&S stabilization.
Merck also highlighted sustainability progress, including a 60% reduction in Scope 1 and 2 greenhouse gas emissions versus a 2020 baseline, surpassing its 2025 target, and an expanded Life Science portfolio of “greener products,” which management said now exceeds 5,000 items with over EUR 300 million in combined sales.
About Merck KGaA (ETR:MRK)
Merck KGaA operates as a science and technology company in Germany. It operates through Life Science, Healthcare, and Electronics segments. The company's Life Science segment offers tools, chemicals, and equipment for academic labs, biotech, and pharmaceutical manufacturers, as well as industrial sector. This segment provides drug manufacturers with process development expertise and technologies, such as continuous bioprocessing; testing kits and services; reagents and services; testing solutions that analyze air, water, and soil; and testing and tools, as well as products that help test nutritional value and identify quality inconsistencies.
