Merck KGaA Posts Weak FY23 Results; Sees Organic Growth In FY24

(RTTNews) - German science and technology major Merck KgaA reported Thursday weak profit and sales in fiscal 2023 amid a challenging market environment. Higher sales in Healthcare business sector were more than offset by weakness in Life Science and Electronics.

Looking ahead for fiscal 2024, Merck expects return to organic growth with slight to moderate organic growth in sales and EBITDA pre, with Healthcare as the main driver.

Further, the Executive Board and Supervisory Board will propose to the Annual General Meeting on April 26 a dividend of 2.20 euros per share, same as last year.

Belen Garijo, Chair of the Executive Board and CEO of Merck, said, "Now, we are fully focusing on gradually returning to growth during fiscal 2024, while defining our strategic roadmap to ensure long term profitable and sustainable growth for Merck."

In fiscal 2023, profit after tax fell 15.1 percent to 2.83 billion euros from last year's 3.34 billion euros. Earnings per share were 6.49 euros, down 15.2 percent from last year's 7.65 euros.

On an adjusted basis, earnings per share pre were 8.49 euros, compared to last year's 10.05 euros.

Operating result or EBIT fell 19.3 percent to 3.61 billion euros from last year's 4.47 billion euros last year. EBIT margin was 17.2 percent, down from 20.1 percent last year.

EBITDA pre fell 14.2 percent year-over-year to 5.88 billion euros, EBITDA margin pre dropped to 28 percent from 30.8 percent last year.

Net sales for the year declined 5.6 percent to 20.99 billion euros from 22.23 billion euros a year ago. Group net sales decreased 1.6 percent organically.

According to the company, the weak results reflected difficult market conditions, including the significant decline in Covid-19-related demand as expected, persistent inventory destocking by key customers of Merck in Process Solutions, as well as the cyclical slowdown in demand for semiconductor materials.

Sales of the Life Science business sector decreased 10.6 percent from last year to 9.28 billion euros. In the Electronics business sector, sales decreased 8.8 percent. In the Semiconductor Solutions business unit, sales decreased organically by 3.9 percent.

Net sales of the Healthcare business sector increased 2.7 percent to 8.05 billion euros, and the growth was 8.5 percent organically.

In Germany, Merck KGaA shares were trading at 158.95 euros, up 0.41 percent.

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