Merck, with diversification of productions and supplies laid the foundation for further growth

Merck’s announced investments include the expansion of its life science sites in Cork (Ireland), Rockville (Maryland, USA), Molsheim (France), as well as Wuxi (China)

In 2022 Merck continued with the global expansion of its capabilities, laying the foundation for further organic growth, through the diversification and regionalization of its production and supply chains. This is what emerges from the presentation of the economic data for 2022.

Merck’s announced investments include the expansion of its life science sites in Cork (Ireland), Rockville (Maryland, USA), Molsheim (France), as well as Wuxi (China). The ‘Healthcare’ sector laid the foundation for the Translational Science Center and Launch and Technology Center in Darmstadt, Germany. In February 2023, the Electronics Industry celebrated the grand opening of its integrated manufacturing plant for specialty gases and semiconductor materials in Kaohsiung, Taiwan.

Additionally, Merck invested in inorganic growth in 2022, successfully completing the acquisitions of biopharmaceutical development and contract manufacturing organization Exelead, Inc., USA, as well as the chemical division of Mecaro Co. Ltd., a Korean supplier in the semiconductor industry.

In the Healthcare sector, Merck presented important data from its pipeline in 2022 regarding Phase II studies for xevinapant (head and neck cancer) and evobrutinib (multiple sclerosis). In addition, the company announced licensing agreements for its oncology franchise with Nerviano Medical Sciences Srl, as well as a collaboration agreement for antibody-drug conjugates with Mersana Therapeutics, Inc.

The ‘Life Sciences’ sector generated an organic increase in turnover of 8.2% in fiscal year 2022. Including the positive effects of foreign exchange of 6.4% and the increase in turnover of 0.8% resulting from the acquisition of Exelead, revenues increased by 15.4% over the previous year to €10,380 million. The core business recorded growth in the medium percentage range (i.e. around 15%), which more than compensated for the significant drop in demand related to Covid-19. Pre Life Sciences Ebitda grew by 14.4% to €3,760 million, thanks to an organic increase of 9.7%, currency effects of 5.0% and a slightly negative portfolio effect by -0.4%. The pre EBITDA margin was 36.2%.

In fiscal year 2022, Merck’s drugs were administered to 94 million patients worldwide. In addition, in collaboration with the World Health Organization (WHO), Merck has provided praziquantel tablets for the treatment of schistosomiasis, a neglected tropical disease, to 80 million patients, mainly school children. The net turnover of the ‘Healthcare’ sector increased by 10.6% reaching 7,839 million euros compared to the previous year. Organic revenue growth of 5.5% was accompanied by a positive exchange rate effect of 5.1%.

The new drugs have contributed significantly to the increase in turnover. Immuno-oncology drug avelumab generated organic revenue growth of 57.9%, cladribine sales for the treatment of relapsing multiple sclerosis grew organically by 16.9%, and cetuximab sales exceeded the €1 billion for the first time since its market launch in 2004.

Pre-sector Ebitda grew by 15.0% to 2,477 million euro. In addition to organic earnings growth of 3.3%, currency effects of 11.7% had a significant impact. The pre-Healthcare EBITDA margin was 31.6%.

The ‘Electronics’ sector recorded revenues of 4,013 million euros in fiscal year 2022. The 11.3% increase compared to the previous year reflects organic sales growth of 3.7% and a positive exchange rate effect 7.6%. Revenue from the Semiconductor Solutions business increased organically by 15.4%, well above the market and the company’s mid-term forecasts. This business unit now accounts for two-thirds of ‘Electronics’ sales. Conversely, the ‘display solutions’ business recorded an organic drop in sales of -20.1% due to weak demand and low customer usage, especially for liquid crystals.

Ebitda pre of the ‘Electronics’ sector increased by 5.7% to €1,192 million. Positive FX effects of 13.0% more than offset the -7.3% organic decline in pre-Ebitda. The pre Ebitda margin of the ‘Electronics’ sector was 29.7%.