Merck KGaA posted a reported 2% jump in organic net sales for 2024, marking a promising return to expansion across all three of its business segments. The German science and technology powerhouse recorded impressive sales figures of 21.16 billion euros for the year ended December 31, 2024, which not only surpassed the previous year's total of 20.99 billion euros but also exceeded the FactSet consensus estimate of 21.13 billion euros.
While total attributable profit saw a slight decline, falling to 2.78 billion euros from 2.82 billion euros a year earlier, the overall financial outlook remains strong. Within the healthcare sector, organic net sales soared by 7%, reaching 8.5 billion euros. This growth was bolstered by disciplined cost management practices and a decrease in research and development expenses.
The impressive performance can largely be attributed to the success of its oncology drug Erbitux and the multiple sclerosis treatment Mavenclad, which have both shown significant market demand. On the other hand, the life sciences segment faced considerable year-over-year comparisons, especially following the heightened demand during the pandemic.
However, a substantial recovery was noted in the second half of the year, despite full-year organic sales slipping by 3.3% to stand at 8.9 billion euros. Contrarily, the electronics division embraced a renaissance of growth, with organic sales increasing by 4.6%. This was mainly driven by a rising demand for semiconductor materials associated with artificial intelligence applications, marking a key area for future growth. Belén Garijo, Chair and Chief Executive Officer of Merck, emphasized that the challenges encountered in recent years have been transformed into opportunities.
The company has focused on strengthening its supply chains and making strategic investments in regions such as Europe, the United States, and Asia. Looking ahead to 2025, Garijo expressed confidence that Merck will continue to deliver profitable growth, thanks to its innovation-driven portfolio that is well-positioned to capitalize on global macro trends.
These trends include complex biologics, novel modalities, and advancements in semiconductors tailored for the AI era. In light of this solid performance, the board plans to propose an unchanged dividend of 2.20 euros per share for 2024 at its upcoming annual general meeting. As for the upcoming fiscal year, Merck is optimistic, anticipating net sales to fall between 21.5 billion euros and 22.9 billion euros in 2025, reflecting an organic growth range of 3% to 6%.
Following this positive momentum, Merck shares experienced an uptick of over 2% during trading on Thursday morning..