Currency headwinds failed to drag on Merck KGaA in Q1. Organic growth remains positive, and management has confirmed the trend by upgrading its full-year guidance.
Despite a relatively strained macroeconomic environment marked by sharp negative FX effects, Merck KGaA has demonstrated resilience, outperforming expectations. Q1 revenue reached €5.1bn, down 2.8% y-o-y. Positive organic growth (+2.9%) was entirely offset by currency fluctuations relating to the dollar and Asian currencies. Regarding profitability, its margins improved slightly, reaching 29.8%.
The Life Science sector acted as the primary growth engine for the first part of the fiscal year, generating revenue of €2.3bn, representing organic growth of 8.3%. The Process Solutions division, driven by pharmaceutical manufacturing and the acquisition of JSR Life Science, posted organic growth of 16.2%.
The Healthcare segment remained stable but nonetheless faced the loss of exclusivity for certain flagship drugs, which was partially offset by recent launches. Revenue declined by 3.4% on an organic basis, despite strong growth in rare diseases (+4.4% via Ogsiveo) and fertility (Pergoveris +19.5%).
The Electronics division benefited from its exposure to AI-dedicated semiconductors. Revenue rose 4.2% to €817m, accompanied by a sharp increase in profitability.
Looking ahead, the group has raised its outlook, with annual revenue now expected between €20.4bn and €21.4bn (up from €20bn to €21.1bn), and adjusted EBITDA projected between €5.7bn and €6.1bn (up from €5.5bn to €6bn). The strategy remains unchanged, focusing on integrated workflows and high-value-added markets. The stock gained 7.54% as the markets opened, confirming that it liked what it heard.
