AI Terminal
Merck & Co., Inc.
Quarterly Report • Nov 18, 2024
284_10-q_2024-11-18_55b09380-9edf-4e0a-b7dc-5effe6e72052.pdf
Quarterly Report
Open in ViewerOpens in native device viewer
Quarterly Statement
2024 3rd Quarter
Merck Group
Key figures
| € million | Q3 2024 | Q3 2023 | Change | Jan.-Sept. 2024 |
Jan.-Sept. 2023 | Change |
|---|---|---|---|---|---|---|
| Net sales | 5,266 | 5,173 | 1.8% | 15,738 | 15,768 | -0.2% |
| Operating result (EBIT)1 | 1,097 | 983 | 11.6% | 2,821 | 2,988 | -5.6% |
| Margin (% of net sales)1 | 20.8% | 19.0% | 17.9% | 18.9% | ||
| EBITDA2 | 1,546 | 1,418 | 9.0% | 4,404 | 4,361 | 1.0% |
| Margin (% of net sales)1 | 29.4% | 27.4% | 28.0% | 27.7% | ||
| EBITDA pre1 | 1,618 | 1,446 | 11.9% | 4,581 | 4,586 | -0.1% |
| Margin (% of net sales)1 | 30.7% | 27.9% | 29.1% | 29.1% | ||
| Profit after income tax | 812 | 740 | 9.6% | 2,117 | 2,246 | -5.8% |
| Earnings per share (€) | 1.86 | 1.70 | 9.4% | 4.85 | 5.15 | -5.8% |
| Earnings per share pre (€)1 | 2.30 | 2.07 | 11.1% | 6.56 | 6.64 | -1.2% |
| Operating cash flow | 1,458 | 1,255 | 16.2% | 3,355 | 2,731 | 22.9% |
| Net financial debt1, 3 | 7,553 | 7,500 | 0.7% | |||
| Number of employees4 | 62,255 | 63,297 | -1.6% |
003b Merck Header XX
1 Not defined by International Financial Reporting Standards (IFRS).
2 Not defined by International Financial Reporting Standards (IFRS); EBITDA corresponds to operating result (EBIT) adjusted by depreciation, amortization, impairment losses, and reversals of impairment losses.
3 Figures for the reporting period ending on September 30, 2024, prior-year figures as of December 31, 2023.
4 Figures for the reporting period ending on September 30, 2024, prior-year figures as of September 30, 2023. This figure refers to all employees at sites of fully consolidated entities.
Merck Group
| Net sales by quarter | |||||||
|---|---|---|---|---|---|---|---|
| Merck Group | ||||||||
|---|---|---|---|---|---|---|---|---|
| EBITDA pre by quarter | ||||||||
* This document is a quarterly statement pursuant to section 53 of the Exchange Rules for the Frankfurt Stock Exchange. It is not an interim report as defined in International Accounting Standard 34. The accounting and measurement policies applied to this quarterly statement generally derive from the same accounting and measurement policies as used in the preparation of the consolidated financial statements for fiscal 2023, except for new amendments to standards required to be applied. However, those amendments to standards had no material impact on the financial statements. This quarterly statement contains certain financial indicators such as operating result (EBIT), EBITDA, EBITDA pre, net financial debt and earnings per share pre, which are not defined by International Financial Reporting Standards (IFRS). These financial indicators should not be taken into account in order to assess the performance of Merck in isolation or used as an alternative to the financial indicators presented in the consolidated financial statements and determined in accordance with IFRS. The figures presented in this quarterly statement have been rounded. This may lead to individual values not adding up to the totals presented. It is our aim to ensure that our communication is inclusive and so we strive to use language that is both non-discriminatory and easy to read. This report attempts to use gender-neutral language, which may not yet be consistent in all instances. Even if masculine forms are used, all genders are explicitly meant. The Annual Report for 2023 has been optimized for mobile devices and is available at https://www.merckgroup.com/en/annualreport/2023/.
Significant events during the reporting period
Acquisition of Mirus Bio LLC, USA
On August 1, 2024, after meeting all acquisition conditions, Merck acquired all shares in the life science company Mirus Bio LLC, USA, (Mirus Bio) for a purchase price of US\$ 600 million (€ 554 million) in cash from Gamma Biosciences US Holdco LP, USA.
Mirus Bio specializes in the development and commercialization of transfection reagents. Transfection reagents, such as TransIT-VirusGEN® from Mirus Bio, are used to introduce genetic material into cells and thus play a key role in the production of viral vectors for cell and gene therapies. With the acquisition of Mirus Bio, Merck is pursuing the strategic goal of offering solutions for every stage in the production of viral vectors.
Acquisition of Unity-SC SAS, France
On July 18, 2024, Merck announced its intention to acquire Unity-SC SAS, France, a provider of metrology and inspection instrumentation for the semiconductor industry. The agreed purchase price before the customary adjustments amounts to € 155 million. Additional contingent payments, which are tied to the achievement of certain milestones, have also been agreed. The transaction closed on October 31, 2024 after the necessary regulatory clearances as well as the satisfaction of other customary closing conditions.
Termination of xevinapant program for locally advanced head and neck cancer
On June 24, 2024, Merck announced the discontinuation of the clinical trials of the active ingredient candidate xevinapant, which had been in-licensed from Debiopharm International SA, Switzerland, in fiscal 2021. The pivotal Phase III trial (TrilynXTM) investigated xevinapant combined with chemoradiotherapy in patients with unresected locally advanced squamous cell carcinoma of the head and neck (LA SCCHN). Further Phase III and Phase Ib trials investigated various combinations with radiotherapy or chemoradiotherapy in the relevant patient populations with LA SCCHN. The decision was based on a scheduled interim analysis of the TrilynXTM study, which found that it was unlikely to meet its primary endpoint.
The termination of the program led to an impairment loss of € 140 million on an intangible asset, which was recorded under other operating expenses, as well as the recognition of a provision amounting to a mid-doubledigit million-euro figure for subsequent costs, the addition of which was disclosed in research and development costs.
Merck signs agreement to sell Surface Solutions business
On July 25, 2024, Merck announced that it had signed an agreement to divest the Surface Solutions business unit of the Electronics business sector to Global New Material International Holdings Ltd., Cayman Islands. The agreed purchase price before purchase price adjustments for cash and financial liabilities amounts to € 665 million. The agreement comprises the majority of the global production, sales and development activities of the Surface Solutions business. The transaction is subject to regulatory approvals in all key markets, as well as the establishment of independent Surface Solutions legal entities in certain jurisdictions. Accordingly, the transaction is expected to close in the second half of 2025. Sales of the Surface Solutions business and assets of the Electronics business sector to be disposed of, including goodwill to be disposed of on a pro-rata basis, each comprised less than 2.5% of the corresponding value of the Merck Group in the first nine months of 2024 and on the reporting date.
On the balance sheet date, the assets and liabilities of the disposal group were reclassified to assets held for sale or liabilities directly related to assets held for sale.
Impairment losses on assets
In the first nine months of 2024, impairment losses on assets amounted to € 253 million (January-September 2023: € 56 million). In the Healthcare business sector, these were due to impairment losses on property, plant and equipment amounting to € 13 million as well as impairment losses on intangible assets amounting to € 170 million. The latter were mainly attributable to stopped development projects with the termination of the xevinapant program leading to an impairment loss of € 140 million on an intangible asset. Furthermore, the Life Science business sector recorded impairment losses of € 34 million for property, plant and equipment as well as € 22 million for intangible assets. In the Electronics business sector, impairment losses of € 12 million were additionally recognized.
Course of Business and Economic Position
Merck
Development of net sales
The development of Group net sales across the individual business sectors in the third quarter of 2024 (quarter under review) was as follows:
Merck Group
Net sales by business sector
| € million | Q3 2024 | Share | Organic growth1 |
Exchange rate effects |
Acquisitions/ | divestments Total change | Q3 2023 | Share |
|---|---|---|---|---|---|---|---|---|
| Life Science | 2,210 | 42% | 2.1% | -1.2% | – | 0.9% | 2,191 | 42% |
| Healthcare | 2,133 | 40% | 6.2% | -3.0% | – | 3.2% | 2,066 | 40% |
| Electronics | 923 | 18% | 2.4% | -1.5% | -0.2% | 0.8% | 916 | 18% |
| Merck Group | 5,266 | 100% | 3.8% | -2.0% | – | 1.8% | 5,173 | 100% |
1 Not defined by International Financial Reporting Standards (IFRS).
In the third quarter of 2024, the regional breakdown of Group net sales was as follows:
Merck Group
| Net sales by region | ||||||||
|---|---|---|---|---|---|---|---|---|
| € million | Q3 2024 | Share | Organic growth1 |
Exchange rate effects |
Acquisitions / | divestments Total change | Q3 2023 | Share |
| Europe | 1,498 | 28% | 6.4% | -0.2% | – | 6.1% | 1,412 | 27% |
| North America | 1,423 | 27% | -0.6% | -1.1% | – | -1.7% | 1,447 | 28% |
| Asia-Pacific (APAC) | 1,770 | 34% | 2.6% | -1.4% | -0.1% | 1.0% | 1,752 | 34% |
| Latin America | 365 | 7% | 11.9% | -13.4% | – | -1.5% | 371 | 7% |
| Middle East and Africa (MEA) |
209 | 4% | 14.1% | -4.8% | – | 9.3% | 191 | 4% |
| Merck Group | 5,266 | 100% | 3.8% | -2.0% | – | 1.8% | 5,173 | 100% |
1 Not defined by International Financial Reporting Standards (IFRS).
Results of operations
The following table presents the composition of EBITDA pre for the third quarter of 2024 in comparison with the year-earlier quarter. The IFRS figures have been modified to reflect the elimination of adjustments included in the respective functional costs.
Merck Group
| Reconciliation EBITDA pre1 | ||
|---|---|---|
| ---------------------------- | -- | -- |
| Q3 2024 | Q3 2023 | Change | |||||
|---|---|---|---|---|---|---|---|
| € million | IFRS | Elimination of adjustments |
Pre1 | IFRS | Elimination of adjustments |
Pre1 | Pre1 |
| Net sales | 5,266 | – | 5,266 | 5,173 | – | 5,173 | 1.8% |
| Cost of sales | -2,122 | 2 | -2,120 | -2,162 | 10 | -2,151 | -1.5% |
| Gross profit | 3,144 | 2 | 3,146 | 3,011 | 10 | 3,022 | 4.1% |
| Marketing and selling expenses | -1,101 | -1 | -1,102 | -1,104 | 8 | -1,096 | 0.5% |
| Administration expenses | -309 | 31 | -278 | -312 | 34 | -278 | – |
| Research and development costs | -524 | 3 | -521 | -581 | 0 | -581 | -10.3% |
| Impairment losses and reversals of impairment losses on financial assets (net) |
-2 | – | -2 | -28 | – | -28 | -92.0% |
| Other operating income and expenses | -111 | 39 | -72 | -2 | -22 | -24 | >100.0% |
| Operating result (EBIT)1 | 1,097 | 983 | |||||
| Margin (in % of net sales)1 | 20.8% | 19.0% | |||||
| Depreciation/amortization/impairment losses/reversals of impairment losses |
449 | -2 | 447 | 435 | -4 | 431 | 3.7% |
| EBITDA2 | 1,546 | 1,418 | |||||
| Margin (in % of net sales)1 | 29.4% | 27.4% | |||||
| Restructuring expenses | 37 | -37 | – | 25 | -25 | – | |
| Integration expenses/IT expenses | 22 | -22 | – | 29 | -29 | – | |
| Gains (–)/losses (+) on the divestment of businesses |
– | – | – | -49 | 49 | – | |
| Acquisition-related adjustments | 6 | -6 | – | 4 | -4 | – | |
| Other adjustments | 7 | -7 | – | 19 | -19 | – | |
| EBITDA pre1 | 1,618 | – | 1,618 | 1,446 | – | 1,446 | 11.9% |
| Margin (in % of net sales)1 | 30.7% | 27.9% | |||||
| thereof: organic growth1 | 16.9% | ||||||
| thereof: exchange rate effects | -5.0% | ||||||
| thereof: acquisitions/divestments | – |
1 Not defined by International Financial Reporting Standards (IFRS).
2 Not defined by International Financial Reporting Standards (IFRS); EBITDA corresponds to operating result (EBIT) adjusted by depreciation,
amortization, impairment losses, and reversals of impairment losses.
- In the third quarter of 2024, the operating result (EBIT) increased in the region of 10% compared with the year-earlier quarter. The increase was primarily attributable to the positive business performance in the third quarter of 2024, which resulted in an increase in gross profit. By contrast, operating expenses increased slightly, due in particular to the increase in the negative net balance of other operating income and expenses, which resulted mainly from income recognized in the previous year from the measurement of contingent considerations as well as positive contributions from cash flow hedging in the year-earlier period. Despite the positive development in the third quarter of 2024, gross profit as well as EBIT and the EBIT margin declined in the first nine months of 2024 due to the development in the first half of 2024.
- The favorable organic development of EBITDA pre, the most important financial indicator used to steer operating business, was offset by negative foreign exchange effects, as a result of which EBITDA pre remained virtually unchanged at € 4,581 million (January-September 2024: € 4,586 million) in the first nine months of 2024.
• Earnings per share pre (earnings per share after eliminating effects of adjustments and amortization on purchased intangible assets presented in the foregoing table after income taxes) increased in the third quarter of 2024 to € 2.30 (Q3 2023: € 2.07). In the first nine months of 2024, EPS pre decreased slightly to € 6.56 (January-September 2023: € 6.64) due to the negative development in the first half of 2024.
The following table presents the reconciliation of EBITDA pre of all operating businesses to the profit after tax of the Merck Group:
Merck Group
| Reconciliation Profit after income tax | ||
|---|---|---|
| € million | Q3 2024 | Q3 2023 |
| EBITDA pre of the operating businesses1 | 1,717 | 1,508 |
| Corporate and Other | -100 | -63 |
| EBITDA pre of the Merck Group1 | 1,618 | 1,446 |
| Depreciation/amortization/impairment losses/reversals of impairment losses | -449 | -435 |
| Adjustments1 | -71 | -27 |
| Operating result (EBIT)1 | 1,097 | 983 |
| Financial result | -54 | -46 |
| Profit before income tax | 1,043 | 937 |
| Income tax | -231 | -197 |
| Profit after income tax | 812 | 740 |
| Earnings per share (€) | 1.86 | 1.70 |
1 Not defined by International Financial Reporting Standards (IFRS).
Financial position
The composition and development of net financial debt were as follows:
Merck Group
| Net financial debt1 | |||
|---|---|---|---|
| -- | -- | -- | --------------------- |
| Change | ||||
|---|---|---|---|---|
| € million | Sept. 30, 2024 | Dec. 31, 2023 | € million | in % |
| Bonds and commercial paper | 8,587 | 7,802 | 785 | 10.1% |
| Bank loans | 340 | 283 | 56 | 19.8% |
| Liabilities to related parties | 1,746 | 1,196 | 550 | 46.0% |
| Loans from third parties and other financial liabilities | 57 | 68 | -11 | -15.6% |
| Liabilities from derivatives (financial transactions) | 14 | 77 | -63 | -81.8% |
| Lease liabilities | 649 | 515 | 134 | 26.0% |
| Financial debt | 11,393 | 9,941 | 1,452 | 14.6% |
| less: | ||||
| Cash and cash equivalents | 3,161 | 1,982 | 1,179 | 59.5% |
| Current financial assets2 | 679 | 459 | 220 | 47.9% |
| Net financial debt1 | 7,553 | 7,500 | 53 | 0.7% |
1 Not defined by International Financial Reporting Standards (IFRS).
2 Excluding current derivatives (operational) and contingent considerations, which are recognized in the context of business combinations according to IFRS 3.
As one of the three key performance indicators alongside net sales and EBITDA pre, operating cash flow developed as follows:
Merck Group
Operating cash flow
| € million | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| EBITDA pre1 | 1,618 | 1,446 | 11.9% |
| Adjustments1 | -71 | -27 | >100.0% |
| Financial income and expenses2 | -54 | -46 | 17.7% |
| Income tax2 | -231 | -197 | 17.5% |
| Changes in working capital1 | -13 | -35 | -62.8% |
| thereof: changes in inventories3 | 4 | 92 | -95.7% |
| thereof: changes in trade accounts receivable3 | 78 | 52 | 50.9% |
| thereof: changes in trade accounts payable/refund liabilities3 | -95 | -179 | -46.8% |
| Changes in provisions3 | 19 | 30 | -36.3% |
| Changes in other assets and liabilities3 | 180 | 143 | 25.8% |
| Neutralization of gains/losses on disposals of fixed assets and other disposals3 | – | -7 | -99.6% |
| Other non-cash income and expenses3 | 11 | -51 | >100.0% |
| Operating cash flow | 1,458 | 1,255 | 16.2% |
1Not defined by International Financial Reporting Standards (IFRS).
2In accordance with the Consolidated Income Statement.
3 In accordance with the Consolidated Cash Flow Statement.
Life Science
Development of net sales and results of operations
In the third quarter of 2024, the net sales of the Life Science business sector developed as follows:
| Life Science | ||||||||
|---|---|---|---|---|---|---|---|---|
| Net sales by business unit | ||||||||
| € million | Q3 2024 | Share | Organic growth1 |
Exchange rate effects |
Acquisitions/ | divestments Total change | Q3 2023 | Share |
| Science & Lab Solutions | 1,143 | 52% | 4.3% | -1.5% | – | 2.8% | 1,111 | 51% |
| Process Solutions | 896 | 40% | 3.7% | -1.1% | – | 2.6% | 873 | 40% |
| Life Science Services | 171 | 8% | -16.6% | -0.1% | – | -16.7% | 206 | 9% |
| Life Science | 2,210 | 100% | 2.1% | -1.2% | – | 0.9% | 2,191 | 100% |
1 Not defined by International Financial Reporting Standards (IFRS).
- The Science & Lab Solutions business unit, which provides products and services to support life science research for pharmaceutical, biotechnology and academic research laboratories and researchers as well as scientific and industrial laboratories, saw an organic decline of -0.7% in the first nine months of 2024. In general, the year-on-year comparison is impacted by a base effect, as the first half of 2023 was still driven by higher Covid-19-related sales and a more beneficial economic environment, leading to an overall organic sales decline in the first half of 2024. However, the third quarter of 2024 showed an organic increase, impacted by, among other things, a base effect in the year-earlier quarter that was driven by the roll-out of an ERP system. Including an unfavorable foreign exchange effect, the North America and Latin America regions made the strongest contributions to this organic increase in sales.
- The Process Solutions business unit, which markets products and services for the entire pharmaceutical production value chain, saw an organic decrease of -9.7% in the first nine months of 2024 due to the continued presence of pandemic-related sales in the year-earlier period as well as the ongoing effects of destocking by key customers. While the organic decline impacted the first half of 2024, Process Solutions made a favorable contribution in the third quarter, which was characterized by the initial phasing out of destocking. The increase in the third quarter of 2024 was mainly attributable to Europe.
- The Life Science Services business unit, which offers services for fully integrated contract development and manufacturing as well as contract testing services, recorded an organic sales decline of -8.9% in the first nine months of 2024. This was mainly driven by one of the customers of our contract development and manufacturing organization (CDMO) services adjusting its supply chain. In addition, sales of our CDMO activities declined organically due to Covid-19-related sales still positively affecting the previous year. Geographically, the decrease in sales was mainly attributable to Europe and North America, while the Asia-Pacific region contributed favorably in the first nine months of 2024.
The following table presents the composition of EBITDA pre for the third quarter of 2024 in comparison with the year-earlier quarter. The IFRS figures have been modified to reflect the elimination of adjustments included in the respective functional costs.
Life Science
Reconciliation EBITDA pre1
| Q3 2024 | Change | ||||||
|---|---|---|---|---|---|---|---|
| € million | IFRS | Elimination of adjustments |
Pre1 | IFRS | Elimination of adjustments |
Pre1 | Pre1 |
| Net sales | 2,210 | – | 2,210 | 2,191 | – | 2,191 | 0.9% |
| Cost of sales | -1,008 | 1 | -1,008 | -1,031 | 3 | -1,028 | -2.0% |
| Gross profit | 1,202 | 1 | 1,202 | 1,160 | 3 | 1,163 | 3.4% |
| Marketing and selling expenses | -543 | -1 | -544 | -556 | – | -555 | -2.0% |
| Administration expenses | -104 | 6 | -98 | -103 | 9 | -94 | 4.8% |
| Research and development costs | -92 | – | -92 | -90 | – | -90 | 1.7% |
| Impairment losses and reversals of impairment losses on financial assets (net) |
-6 | – | -6 | – | – | – | >100.0% |
| Other operating income and expenses | -45 | 20 | -25 | -15 | 2 | -12 | >100.0% |
| Operating result (EBIT)1 | 411 | 396 | |||||
| Margin (in % of net sales)1 | 18.6% | 18.1% | |||||
| Depreciation/amortization/impairment losses/reversals of impairment losses |
210 | – | 210 | 205 | – | 205 | 2.5% |
| EBITDA2 | 621 | 601 | |||||
| Margin (in % of net sales)1 | 28.1% | 27.4% | |||||
| Restructuring expenses | 14 | -14 | – | 4 | -4 | – | |
| Integration expenses/IT expenses | 8 | -8 | – | 10 | -10 | – | |
| Gains (-)/losses (+) on the divestment of businesses |
– | – | – | – | – | – | |
| Acquisition-related adjustments | 4 | -4 | – | – | – | – | |
| Other adjustments | – | – | – | – | – | – | |
| EBITDA pre1 | 646 | – | 646 | 615 | – | 615 | 5.1% |
| Margin (in % of net sales)1 | 29.3% | 28.1% | |||||
| thereof: organic growth1 | 7.1% | ||||||
| thereof: exchange rate effects | -2.0% | ||||||
| thereof: acquisitions/divestments | – |
1 Not defined by International Financial Reporting Standards (IFRS).
2Not defined by International Financial Reporting Standards (IFRS); EBITDA corresponds to operating result (EBIT) adjusted by depreciation, amortization, impairment losses, and reversals of impairment losses.
- While gross profit for the Life Science business sector was lower in the first half of 2024 compared with the year-earlier period, it was higher in the third quarter of 2024 than in the year-earlier quarter. This was mainly attributable to operational efficiencies realized in production as well as the increase in sales, as the effects of destocking by key customers in Process Solutions are beginning to phase out. At 54.4%, the adjusted gross margin for the third quarter of 2024 was above the year-earlier quarter (Q3 2023: 53.1%).
- In the first nine months of 2024, marketing and selling expenses decreased organically, which was driven mainly by cost programs and efficiencies. Research and development costs decreased in the first half of 2024 and increased slightly in the third quarter of 2024 as a result of project spend. The net position of other operating income and expenses decreased in the third quarter of 2024 compared with the yearearlier quarter due in part to one-time effects, which positively impacted the year-earlier quarter, as well as the timing of this year's expenditure for legal advice and projects in particular.
- While EBITDA pre saw an organic decline in both the first and second quarter of 2024, it increased in the third quarter of 2024 compared with the year-earlier quarter and resulted in an EBITDA pre margin of 29.3% (Q3 2023: 28.1%).
Healthcare
Development of net sales and results of operations
In the third quarter of 2024, sales of the key product lines and products developed as follows:
| Q3 2024 | Share | Organic growth1 |
Exchange | Q3 2023 | Share | |
|---|---|---|---|---|---|---|
| 509 | 24% | 9.1% | -2.5% | 6.6% | 477 | 23% |
| 301 | 14% | 13.8% | -2.8% | 11.1% | 271 | 13% |
| 180 | 8% | -1.0% | -2.2% | -3.2% | 185 | 9% |
| 419 | 20% | 6.7% | -2.1% | 4.6% | 401 | 19% |
| 265 | 12% | 19.8% | -2.3% | 17.6% | 225 | 11% |
| 154 | 7% | -10.1% | -1.9% | -12.0% | 175 | 8% |
| 377 | 18% | 1.1% | -3.6% | -2.6% | 386 | 19% |
| 209 | 10% | 3.3% | -5.0% | -1.7% | 213 | 10% |
| 755 | 35% | 7.8% | -3.4% | 4.3% | 724 | 35% |
| 247 | 12% | 8.2% | -2.9% | 5.2% | 235 | 11% |
| 160 | 8% | 14.6% | -1.8% | 12.7% | 142 | 7% |
| 161 | 8% | 11.5% | -3.6% | 7.9% | 149 | 7% |
| 84 | 4% | 0.5% | -5.6% | -5.0% | 89 | 4% |
| 73 | 3% | 78 | 4% | |||
| 2,133 | 100% | 6.2% | -3.0% | 3.2% | 2,066 | 100% |
| Net sales by major product lines/products | rate effects Total change |
1 Not defined by International Financial Reporting Standards (IFRS).
- In the third quarter of 2024, the oncology drug Erbitux® (cetuximab) recorded strong organic sales growth in the mid-teens percentage range to which every region, but in particular Asia-Pacific, contributed. Propelled by higher demand in all regions, Erbitux® also saw strong organic sales growth in the mid-teens percentage range in the first nine months of 2024. This was attributable to factors including weaker pandemic-related sales in China.
- In immuno-oncology, the oncology drug Bavencio® (avelumab) recorded roughly stable organic sales development in the reporting period compared with the year-earlier period. Declines in sales in the hightwenties percentage range in the North America region, caused by lower demand due to alternative treatments for patients with locally advanced or metastatic urothelial carcinoma (UC), could not be fully offset by the other regions in the third quarter of 2024. In the first nine months of 2024, Bavencio® recorded solid organic sales growth with similar regional dynamics as described above.
- Mavenclad®, for the oral short-course treatment of highly active relapsing multiple sclerosis, delivered strong organic sales growth in the high-teens percentage range in the third quarter of 2024. The North America and Europe regions made a particularly strong contribution to this favorable sales growth. Strong organic sales growth in the low-teens percentage range was also recorded in the first nine months of 2024, which was driven in particular by higher demand in the North America and Europe regions.
- Sales of the drug Rebif®, which is used to treat relapsing forms of multiple sclerosis (MS), decreased organically in the region of 10% in the third quarter of 2024. This was due to the ongoing difficult competitive situation in the interferon market as well as competition from oral dosage forms and highefficacy MS therapies, which are expected to cause further declines in sales in the future. In the first nine months of 2024, Rebif® recorded a lower organic decline in sales in the high single-digit percentage range as a result of positive effects from changes in inventories in North America in the first quarter of 2024.
- In organic terms, the Fertility product line recorded roughly stable sales in the quarter under review compared with the year-earlier period. Gonal-f ®, the leading recombinant hormone for the treatment of infertility, delivered moderate organic sales growth, while other products from the Fertility product line recorded a slight organic decline in sales overall. In the first nine months of 2024, the Fertility franchise recorded moderate organic sales growth, driven especially by the North America and Asia-Pacific regions.
- The Cardiovascular, Metabolism and Endocrinology franchise, which commercializes products to treat cardiovascular diseases, thyroid disorders, diabetes, and growth disorders, among other things, delivered strong organic sales growth in the third quarter of 2024. Sales of the diabetes medicine Glucophage® grew strongly, driven primarily by the Asia-Pacific and Latin America regions. The beta-blocker Concor® saw favorable organic sales growth in the mid-teens percentage range, while the thyroid medicine Euthyrox® recorded a sales increase in the region of 11% compared with the year-earlier period. Organic sales of Saizen® were roughly stable compared with the year-earlier quarter. Overall, the Cardiovascular, Metabolism and Endocrinology franchise delivered strong organic growth in the high single-digit percentage range in the first nine months of 2024 as a result of both increased demand and stock-outs of a competitor product to Saizen®.
The following table presents the composition of EBITDA pre for the third quarter of 2024 in comparison with the year-earlier quarter. The IFRS figures have been modified to reflect the elimination of adjustments included in the respective functional costs.
Healthcare
Reconciliation EBITDA pre1
| Q3 2024 | Q3 2023 | Change | |||||
|---|---|---|---|---|---|---|---|
| € million | IFRS | Elimination of adjustments |
Pre1 | IFRS | Elimination of adjustments |
Pre1 | Pre1 |
| Net sales | 2,133 | – | 2,133 | 2,066 | – | 2,066 | 3.2% |
| Cost of sales | -556 | – | -556 | -540 | – | -540 | 3.0% |
| Gross profit | 1,578 | – | 1,578 | 1,526 | – | 1,527 | 3.3% |
| Marketing and selling expenses | -416 | – | -416 | -405 | 6 | -400 | 4.0% |
| Administration expenses | -73 | 4 | -69 | -79 | 5 | -74 | -5.9% |
| Research and development costs | -330 | 3 | -327 | -391 | – | -391 | -16.3% |
| Impairment losses and reversals of impairment losses on financial assets (net) |
4 | – | 4 | -28 | – | -28 | >100.0% |
| Other operating income and expenses | -21 | – | -21 | 31 | -49 | -18 | 16.9% |
| Operating result (EBIT)1 | 742 | 653 | |||||
| Margin (in % of net sales)1 | 34.8% | 31.6% | |||||
| Depreciation/amortization/impairment losses/reversals of impairment losses |
88 | – | 88 | 70 | – | 70 | 24.7% |
| EBITDA2 | 829 | 723 | |||||
| Margin (in % of net sales)1 | 38.9% | 35.0% | |||||
| Restructuring expenses | 3 | -3 | – | 3 | -3 | – | |
| Integration expenses/IT expenses | 3 | -3 | – | 5 | -5 | – | |
| Gains (-)/losses (+) on the divestment of businesses |
– | – | – | -46 | 46 | – | |
| Acquisition-related adjustments | – | – | – | – | – | – | |
| Other adjustments | – | – | – | – | – | – | |
| EBITDA pre1 | 836 | – | 836 | 685 | – | 685 | 21.9% |
| Margin (in % of net sales)1 | 39.2% | 33.2% | |||||
| thereof: organic growth1 | 27.0% | ||||||
| thereof: exchange rate effects | -5.1% | ||||||
| thereof: acquisitions/divestments | – |
1 Not defined by International Financial Reporting Standards (IFRS).
2 Not defined by International Financial Reporting Standards (IFRS); EBITDA corresponds to operating result (EBIT) adjusted by depreciation, amortization, impairment losses, and reversals of impairment losses.
- In the third quarter of 2024, gross profit after the elimination of adjustments saw a moderate increase, whereas the gross margin was at the level of the year-earlier period, amounting to 73.9% (Q3 2023: 73.9%). Gross profit after eliminating adjustments also increased moderately in the first nine months of 2024, resulting in a gross margin of 74.6% (January-September 2023: 75.5%).
- While administration expenses in the third quarter of 2024 went down significantly in comparison with the year-earlier quarter and remained roughly stable in the first nine months of 2024, marketing and selling expenses increased moderately during the same period. Among other things, this development occurred against the backdrop of the termination of the strategic alliance with Pfizer Inc., USA, (Pfizer) to co-develop and co-commercialize the oncology medicine Bavencio® with effect from June 30, 2023, as a result of which the company increasingly had to invest in its own sales activities during the course of the quarter.
- The research and development costs after eliminating adjustments declined in the mid-teens percentage range in the third quarter of 2024, which was primarily attributable to reduced development activities after the termination of the development programs for xevinapant in the second quarter of 2024 and evobrutinib in the fourth quarter of 2023. For the aforementioned reasons, research and development costs after eliminating adjustments also declined in the period from January to September 2024.
- The negative net balance of other operating expenses and income after eliminating adjustments grew by € 3 million in the third quarter of 2024 compared with the year-earlier period. After the elimination of adjustments, other operating income in the reporting period remained below that of the year-earlier period due to recognized income from the measurement of assets at fair value in the third quarter of 2023 and reversals of impairment losses on non-financial assets. In the first nine months of 2024, the negative net balance of other operating expenses and income after the elimination of adjustments was lower than in the year-earlier period, which was primarily attributable to the royalties to Pfizer in connection with Bavencio® now being included in cost of sales.
- In the third quarter of 2024, EBITDA pre saw a strong organic increase in the mid-twenties percentage range, leading to an EBITDA pre margin of 39.2% (Q3 2023: 33.2%), which resulted primarily from the aforementioned reduction in research and development expenses. In the first nine months of 2024, EBITDA pre also saw a favorable increase in the mid-teens percentage range, which resulted in an EBITDA pre margin of 35.8% (January-September 2023: 32.9%).
Electronics
Development of net sales and results of operations
In the third quarter of 2024, net sales of the Electronics business sector developed as follows:
| Electronics | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Net sales by business unit | ||||||||||
| € million | Q3 2024 | Share | Organic growth1 |
Exchange rate effects |
Acquisitions/ | divestments Total change | Q3 2023 | Share | ||
| Semiconductor Solutions | 642 | 69% | 7.0% | -1.8% | -0.3% | 4.9% | 612 | 67% | ||
| Display Solutions | 182 | 20% | -8.7% | -0.7% | – | -9.4% | 201 | 22% | ||
| Surface Solutions | 98 | 11% | -2.9% | -1.2% | – | -4.1% | 103 | 11% | ||
| Electronics | 923 | 100% | 2.4% | -1.5% | -0.2% | 0.8% | 916 | 100% |
1 Not defined by International Financial Reporting Standards (IFRS).
- The Semiconductor Solutions business unit, which comprises the Semiconductor Materials and Delivery Systems & Services (DS&S) businesses, generated strong organic sales growth in the third quarter of 2024, continuing the trend in the period from January to September 2024. The main contributor to the growth was Semiconductor Materials, which delivered double-digit organic growth in the third quarter of 2024 as the semiconductor market recovered from a weak 2023, driven in part by advanced nodes. DS&S recorded lower sales from large projects than in the previous year when it generated record sales and provided a partial hedge to the Semiconductor Materials business; this tempered the growth of Semiconductor Solutions in the first nine months of 2024 as several major projects are reaching the final stages of completion and new project starts are expected only in 2025.
- Net sales of the Display Solutions business unit, consisting mainly of the business with liquid crystals, photoresists for display applications and OLED materials, decreased in the third quarter of 2024. Sales declined organically in the low single-digit percentage range in the first nine months of 2024. This was driven primarily by continued pricing pressure on liquid crystals.
- The Surface Solutions business recorded declining sales in the third quarter of 2024 due to weaker demand for cosmetics and industrials. This decline was only partially offset by solid organic growth in the coatings business line. In the first nine months of 2024, Surface Solutions recorded slight organic growth in sales due to strong growth in coatings.
The following table presents the composition of EBITDA pre for the third quarter of 2024 in comparison with the year-earlier quarter. The IFRS figures have been modified to reflect the elimination of adjustments included in the respective functional costs.
Electronics
Reconciliation EBITDA pre1
| Q3 2024 | Change | ||||||
|---|---|---|---|---|---|---|---|
| € million | Elimination of IFRS adjustments |
Pre1 | IFRS | Elimination of adjustments |
Pre1 | Pre1 | |
| Net sales | 923 | – | 923 | 916 | – | 916 | 0.8% |
| Cost of sales | -558 | 1 | -557 | -592 | 7 | -585 | -4.8% |
| Gross profit | 365 | 1 | 366 | 324 | 7 | 331 | 10.6% |
| Marketing and selling expenses | -140 | -1 | -141 | -144 | 2 | -142 | -0.5% |
| Administration expenses | -43 | 11 | -32 | -40 | 8 | -32 | -0.2% |
| Research and development costs | -74 | – | -74 | -75 | 0 | -74 | -1.1% |
| Impairment losses and reversals of impairment losses on financial assets (net) |
– | – | – | – | – | – | – |
| Other operating income and expenses | -12 | 7 | -5 | -13 | 9 | -4 | 10.9% |
| Operating result (EBIT)1 | 96 | 52 | |||||
| Margin (in % of net sales)1 | 10.4% | 5.7% | |||||
| Depreciation/amortization/impairment losses/reversals of impairment losses |
123 | -2 | 121 | 133 | -4 | 130 | -6.7% |
| EBITDA2 | 218 | 186 | |||||
| Margin (in % of net sales)1 | 23.7% | 20.3% | |||||
| Restructuring expenses | 8 | -8 | – | 10 | -10 | – | |
| Integration expenses/IT expenses | 7 | -7 | – | 9 | -9 | – | |
| Gains (-)/losses (+) on the divestment of businesses |
– | – | – | – | – | – | |
| Acquisition-related adjustments | 2 | -2 | – | 4 | -4 | – | |
| Other adjustments | – | – | – | – | – | – | |
| EBITDA pre1 | 235 | – | 235 | 208 | – | 208 | 13.2% |
| Margin (in % of net sales)1 | 25.5% | 22.7% | |||||
| thereof: organic growth1 | 15.0% | ||||||
| thereof: exchange rate effects | -1.7% | ||||||
| thereof: acquisitions/divestments | -0.1% |
1 Not defined by International Financial Reporting Standards (IFRS).
2 Not defined by International Financial Reporting Standards (IFRS); EBITDA corresponds to operating result (EBIT) adjusted by depreciation, amortization, impairment losses, and reversals of impairment losses.
- Adjusted gross profit for the Electronics business sector increased in the third quarter of 2024 compared with the third quarter of 2023, driven by the aforementioned increase in sales. At 39.6%, the gross margin after eliminating adjustments increased compared with the year-earlier quarter (Q3 2023: 36.1%) primarily as a result of higher volumes, mix effects, and the associated better coverage of fixed costs. In the first nine months of 2024, the adjusted gross margin grew to 39.4% (January-September 2023: 38.3%). The growth realized in the second and third quarters helped to offset the adverse business mix and the delayed effects of inflationary cost increases for raw materials seen in the first quarter of 2024.
- Marketing and selling expenses, administration costs and research and development costs were stable yearon-year in the third quarter of 2024. In the first nine months of 2024, marketing and selling costs improved primarily as a result of lower logistics costs, especially in the first quarter of 2024 compared with the previous year. Furthermore, the first nine months of 2024 saw an unfavorable development of other operating income and expenses compared with the year-earlier period as the one-time income from the disposal of OLED patents to the Universal Display Corporation, USA, was realized in the second quarter of 2023.
• EBITDA pre increased in the third quarter and first nine months of 2024 in comparison with the corresponding year-earlier periods, driven mainly by increased sales and gross profit. The EBITDA pre margin increased year-on-year to 25.5% in the third quarter of 2024 (Q3 2023: 22.7%) with the improvement stemming primarily from the increase in the gross margin. In the first nine months of 2024, the EBITDA pre margin remained relatively constant at 25.9% compared with the year-earlier period (January-September 2023: 26.0%). Excluding the effect of the disposal of OLED patents, the Electronics business sector would have shown an improvement in margins as the business increased its gross profit after the elimination of adjustments while maintaining good cost discipline on expenses in the areas of marketing and selling, administration, and research and development.
Corporate and Other
Corporate and Other comprises administration expenses for Group functions that cannot be directly allocated to the business sectors.
Corporate and Other
| Q3 2024 | Q3 2023 | Change |
|---|---|---|
| -151 | -118 | 27.6% |
| -122 | -92 | 33.3% |
| -100 | -63 | 58.8% |
1 Not defined by International Financial Reporting Standards (IFRS).
2 Not defined by International Financial Reporting Standards (IFRS); EBITDA corresponds to operating result (EBIT) adjusted by depreciation,
amortization, impairment losses, and reversals of impairment losses.
The year-on-year decline in the operating result, EBITDA and EBITDA pre in the third quarter of 2024 was due in particular to the positive currency result from cash flow hedging in the year-earlier period. In the first nine months of 2024, the operating result and EBITDA improved compared with the year-earlier period, which was primarily attributable to the higher expenses in the year-earlier period for a program to continuously improve processes and align the Group functions more closely with the businesses. EBITDA pre remained roughly stable in the first nine months of 2024 compared with the year-earlier period.
Report on Expected Developments
With the publication of the interim management report within the half-yearly financial report on June 30, 2024, we updated the forecast for the development of net sales and EBITDA pre for the Merck Group and the individual business sectors Life Science, Healthcare and Electronics and provided an estimate of Group operating cash flow in 2024. With this quarterly statement, we specify this forecast as follows:
Forecast for the Merck Group
Forecast for FY 2024
| € million | Net sales | EBITDA pre1 | Operating cash flow |
|---|---|---|---|
| Merck Group | ~20,700 to 22,100 In the lower half of the range Organic +2% to +5% Foreign exchange effect -3% to 0% |
~5,800 to 6,400 Around the mid point Organic +4% to +10% Foreign exchange effect -5% to-1% |
~4,000 to 4,600 In the upper half of the range |
| Life Science | ~8,800 to 9,500 Slightly above the bottom of the range Organic -2% to +2% Foreign exchange effect -3% to +1% |
~2,550 to 2,800 Slightly above the bottom of the range Organic -6% to +1% Foreign exchange effect -4% to 0% |
|
| Healthcare | ~8,200 to 8,750 Slightly below the mid-point Organic +6% to +9% Foreign exchange effect -4% to 0% |
~2,850 to 3,050 In the upper half of the range Organic +18% to +23% Foreign exchange effect -6% to -2% |
|
| Electronics | ~3,650 to 3,950 In the lower half of the range Organic +4% to +8% Foreign exchange effect -3% to 0% |
~950 to 1,020 Slightly above the bottom of the range Organic +5% to +11% Foreign exchange effect -2% to +1% |
|
| Corporate and Other | n/a | ~-450 to -520 Around the mid point |
1 Not defined by International Financial Reporting Standards (IFRS); EBITDA corresponds to operating result (EBIT) adjusted by depreciation, amortization, impairment losses, and reversals of impairment losses.
EPS pre € 8.20 to € 9.30, based on an underlying tax rate of 22%.
Fundamental assumptions
Against the backdrop of the ongoing highly dynamic development of macroeconomic, geopolitical and industryspecific conditions, the forecast continues to be subject to greater uncertainty and volatility in fiscal 2024 than is normally the case. In terms of expected inflation, we assume a slow normalization.
We also expect a persistently volatile environment as regards the development of foreign exchange rates. For 2024, we continue to forecast unfavorable development of exchange rates, albeit to a weaker extent than in fiscal 2023. In terms of the euro-U.S. dollar exchange rate, we confirm the assumptions made in the last forecast. In comparison with the previous year, the negative development will mainly be driven by individual Asian and growth market currencies. For the average euro-U.S. dollar exchange rate, we confirm our assumptions regarding the range of 1.07 to 1.11 for 2024 as a whole.
Net sales
We confirm our expectations for the Merck Group and forecast a return to organic sales growth of between 2% and 5% for fiscal 2024. As expected, the Healthcare business sector will once again be the strongest growth driver compared with the previous year, with Mavenclad® and products from the Oncology and Cardiovascular, Metabolism & Endocrinology franchises making the main contributions. We anticipate further gradual recovery for the Life Science business sector; accordingly, the year-on-year growth that set in at the start of the second half of 2024 is expected to continue in the remainder of the financial year. We do not expect any further significant contributions from demand for products in connection with Covid-19 in 2024. In the Electronics business sector, we are already seeing a trend reversal in parts of the semiconductor market, although we now expect the full market recovery to take place more slowly than originally anticipated, possibly extending into 2025. As expected, the continued market recovery that was forecast will result in further organic growth compared with the previous year. The expected declining Display Solutions business will have a negative impact as will the project business within the Semiconductor Solutions business unit, which is typically subject to stronger fluctuations owing to the dependency on major individual orders. We continue to assume foreign exchange effects between -3% and 0% and are specifying our net sales forecast for the Merck Group in the lower half of the forecast range of between € 20.7 billion and € 22.1 billion (2023: € 21.0 billion).
EBITDA pre1
For EBITDA pre, we confirm our forecast for organic growth of between 4% and 10%. Compared with the previous year, the increase is expected to be driven primarily by the Healthcare business sector. In addition to the expected sales growth, the termination of the alliance with Pfizer Inc., USA, effective June 30, 2023, and the subsequent regaining of the exclusive global rights to develop, manufacture and commercialize Bavencio® will have a positive effect on EBITDA pre. Lower costs, especially in research and development, will positively influence EBITDA pre. This is a result of the failure of evobrutinib to meet its primary endpoint as demonstrated by the results of the clinical trials program published on December 6, 2023. Expenses arising from the recognition of a provision for follow-up costs due to the termination of the clinical trials for xevinapant announced on June 24, 2024 are also reflected. EBITDA pre of the Life Science business sector is expected to be adversely impacted by negative mix effects, which we will mitigate as far as possible with corresponding cost savings. The development in the Electronics business sector follows the positive sales performance as well as expected beneficial effects from active cost management. The sale of a portfolio of licenses and patents in fiscal 2023 will have an opposing effect. The rise in costs in Corporate and Other will be mainly attributable to lower foreign currency hedging gains. The forecast foreign exchange development is still likely to lower Group EBITDA pre by between -5% and -1%. As such, we anticipate EBITDA pre around the mid-point of the range between € 5.8 billion and € 6.4 billion (previous year: € 5.9 billion).
Operating cash flow
The forecast for operating cash flow is generally subject to a higher fluctuation corridor than the forecast for EBITDA pre. We provide an estimate of the development of operating cash flow only for the Group as a whole.
The development of operating cash flow will largely be in line with the positive operating performance. Foreign exchange will have a negative effect. Overall, we confirm our forecast for operating cash flow and expect a figure in the upper half of the range between € 4.0 billion and € 4.6 billion. As regards the composition of operating cash flow, we refer to the "Consolidated Cash Flow Statement" in this report.
Supplemental Financial Information
Quarterly Statement ss of March 31, 2023 _ Supplemental Financial Information 21
Consolidated Income Statement
| € million | Q3 2024 | Q3 2023 | Jan.-Sept. 2024 | Jan.-Sept. 2023 |
|---|---|---|---|---|
| Net sales | 5,266 | 5,173 | 15,738 | 15,768 |
| Cost of sales | -2,122 | -2,162 | -6,352 | -6,273 |
| Gross profit | 3,144 | 3,011 | 9,386 | 9,495 |
| Marketing and selling expenses | -1,101 | -1,104 | -3,334 | -3,353 |
| Administration expenses | -309 | -312 | -977 | -1,015 |
| Research and development costs | -524 | -581 | -1,752 | -1,779 |
| Impairment losses and reversals of impairment losses on financial assets (net) |
-2 | -28 | -1 | -40 |
| Other operating income | 42 | 117 | 199 | 330 |
| Other operating expenses | -153 | -119 | -701 | -651 |
| Operating result (EBIT)1 | 1,097 | 983 | 2,821 | 2,988 |
| Finance income2 | 35 | 38 | 140 | 112 |
| Finance costs2 | -89 | -84 | -233 | -256 |
| Profit before income tax | 1,043 | 937 | 2,727 | 2,843 |
| Income tax | -231 | -197 | -611 | -597 |
| Profit after income tax | 812 | 740 | 2,117 | 2,246 |
| thereof: attributable to Merck KGaA shareholders (net income) |
809 | 739 | 2,110 | 2,238 |
| thereof: attributable to non-controlling interests | 3 | 2 | 6 | 8 |
| Earnings per share (€) | ||||
| Basic | 1.86 | 1.70 | 4.85 | 5.15 |
| Diluted | 1.86 | 1.70 | 4.85 | 5.15 |
1 Not defined by International Financial Reporting Standard (IFRS).
2 Previous year's figures have been adjusted.
Consolidated Statement of Comprehensive Income
| € million | Q3 2024 | Q3 2023 | Jan.-Sept. 2024 | Jan.-Sept. 2023 |
|---|---|---|---|---|
| Profit after income tax | 812 | 740 | 2,117 | 2,246 |
| Items of other comprehensive income that will not be reclassified to profit or loss in subsequent periods |
||||
| Net defined benefit liability | ||||
| Changes in remeasurement | -42 | 231 | 110 | 199 |
| Tax effect | 14 | -48 | -17 | -42 |
| Changes recognized in equity | -28 | 184 | 94 | 157 |
| Equity instruments | ||||
| Fair value adjustments | -13 | 28 | 2 | 136 |
| Tax effect | -1 | 1 | -4 | 1 |
| Changes recognized in equity | -14 | 28 | -2 | 137 |
| -42 | 212 | 91 | 294 | |
| Items of other comprehensive income that may be reclassified to profit or loss in subsequent periods |
||||
| Cash flow hedge reserve | ||||
| Fair value adjustments | 48 | -28 | 84 | 45 |
| Reclassification to profit or loss | -39 | -39 | -108 | -51 |
| Tax effect | 4 | 9 | 8 | 1 |
| Changes recognized in equity | 12 | -58 | -17 | -5 |
| Cost of cash flow hedge reserve | ||||
| Fair value adjustments | 6 | 1 | 5 | -16 |
| Reclassification to profit or loss | -3 | 5 | -1 | 18 |
| Tax effect | -2 | – | -1 | – |
| Changes recognized in equity | 2 | 7 | 3 | 3 |
| Currency translation difference | ||||
| Changes taken directly to equity | -1,006 | 622 | -265 | 46 |
| Reclassification to profit or loss | – | – | 4 | – |
| Changes recognized in equity | -1,006 | 622 | -261 | 46 |
| -992 | 571 | -275 | 44 | |
| Other comprehensive income | -1,034 | 783 | -184 | 338 |
| Comprehensive income | -222 | 1,523 | 1,933 | 2,584 |
| thereof: attributable to Merck KGaA shareholders | -226 | 1,522 | 1,928 | 2,579 |
| thereof: attributable to non-controlling interests | 3 | 1 | 5 | 5 |
Consolidated Balance Sheet
| € million | Sept. 30, 2024 | Dec. 31, 2023 |
|---|---|---|
| Non-current assets | ||
| Goodwill | 18,093 | 17,845 |
| Other intangible assets | 5,845 | 6,551 |
| Property, plant and equipment | 9,415 | 9,056 |
| Investments accounted for using the equity method | 3 | 3 |
| Non-current receivables | 25 | 28 |
| Other non-current financial assets | 1,090 | 981 |
| Other non-current non-financial assets | 128 | 115 |
| Non-current income tax receivables | 9 | 9 |
| Deferred tax assets | 1,606 | 1,514 |
| 36,213 | 36,102 | |
| Current assets | ||
| Inventories | 4,405 | 4,637 |
| Trade and other current receivables | 3,988 | 4,004 |
| Contract assets | 120 | 104 |
| Other current financial assets | 699 | 499 |
| Other current non-financial assets | 622 | 633 |
| Current income tax receivables | 356 | 473 |
| Cash and cash equivalents | 3,161 | 1,982 |
| Assets held for sale | 578 | 62 |
| 13,929 | 12,393 | |
| Total assets | 50,142 | 48,495 |
| Total equity | ||
| Equity capital | 565 | 565 |
| Capital reserves | 3,814 | 3,814 |
| Retained earnings | 22,145 | 20,228 |
| Gains/losses recognized in equity | 1,799 | 2,073 |
| Equity attributable to Merck KGaA shareholders | 28,323 | 26,680 |
| Non-controlling interests | 70 | 75 |
| 28,393 | 26,754 | |
| Non-current liabilities | ||
| Non-current provisions for employee benefits | 2,068 | 2,192 |
| Other non-current provisions | 240 | 277 |
| Non-current financial debt | 7,884 | 9,239 |
| Other non-current financial liabilities | 136 | 147 |
| Other non-current non-financial liabilities | 11 | 17 |
| Non-current income tax liabilities | 39 | 39 |
| Deferred tax liabilities | 907 | 1,130 |
| 11,286 | 13,042 | |
| Current liabilities | ||
| Current provisions for employee benefits | 71 | 83 |
| Current provisions | 593 | 575 |
| Current financial debt | 3,508 | 702 |
| Other current financial liabilities | 199 | 1,005 |
| Trade and other current payables | 1,950 | 2,545 |
| Refund liabilities | 854 | 877 |
| Current income tax liabilities | 1,673 | 1,433 |
| Other current non-financial liabilities | 1,518 | 1,479 |
| Liabilities directly related to assets held for sale | 97 | – |
| 10,463 | 8,699 | |
| Total equity and liabilities | 50,142 | 48,495 |
Consolidated Cash Flow Statement
| € million | Q3 2024 | Q3 2023 | Jan.-Sept. 2024 | Jan.-Sept. 2023 |
|---|---|---|---|---|
| Profit after income tax | 812 | 740 | 2,117 | 2,246 |
| Depreciation/amortization/impairment losses/reversals of impairment losses |
449 | 435 | 1,583 | 1,373 |
| Changes in inventories | 4 | 92 | -36 | -337 |
| Changes in trade accounts receivable | 78 | 52 | -96 | -50 |
| Changes in trade accounts payable/refund liabilities | -95 | -179 | -193 | 75 |
| Changes in provisions | 19 | 30 | 41 | 76 |
| Changes in other assets and liabilities | 180 | 143 | -52 | -465 |
| Neutralization of gains/losses on disposal of fixed assets and other disposals |
– | -7 | -9 | -153 |
| Other non-cash income and expenses | 11 | -51 | – | -35 |
| Operating cash flow | 1,458 | 1,255 | 3,355 | 2,731 |
| Payments for investments in intangible assets | -98 | -34 | -381 | -144 |
| Payments from the disposal of intangible assets | 1 | 5 | 9 | 135 |
| Payments for investments in property, plant and equipment | -456 | -428 | -1,294 | -1,296 |
| Payments from the disposal of property, plant and equipment | 18 | 4 | 35 | 18 |
| Payments for investments in other assets1 | -1,504 | -359 | -1,834 | -2,397 |
| Payments from the disposal of other assets2 | 894 | 471 | 1,595 | 2,252 |
| Payments for acquisitions less acquired cash and cash equivalents (net) |
-554 | -9 | -554 | -9 |
| Payments from other divestments | – | – | 6 | – |
| Investing cash flow | -1,698 | -350 | -2,417 | -1,441 |
| Dividend payments to Merck KGaA shareholders | – | – | -284 | -284 |
| Dividend payments to non-controlling interests | – | – | -9 | -11 |
| Profit withdrawal by E. Merck KG | – | – | -747 | -868 |
| Proceeds from new borrowings of financial debt from E. Merck KG and E. Merck Beteiligungen KG |
17 | – | 683 | 697 |
| Repayments of financial debt to E. Merck KG and E. Merck Beteiligungen KG |
– | -100 | -137 | -100 |
| Changes in other current and non-current financial debt3 | 711 | -202 | 754 | -191 |
| Financing cash flow | 727 | -302 | 261 | -758 |
| Changes in cash and cash equivalents | 488 | 603 | 1,198 | 531 |
| Changes in cash and cash equivalents due to currency translation |
-12 | 2 | -19 | -19 |
| Cash and cash equivalents at the beginning of the reporting period |
2,685 | 1,761 | 1,982 | 1,854 |
| Changes in cash and cash equivalents due to reclassification to assets held for sale |
– | – | – | – |
| Cash and cash equivalents as of September 30 (consolidated balance sheet) |
3,161 | 2,365 | 3,161 | 2,365 |
1 The lines "Payments for investments in financial assets" and "Payments from disposal of non-financial assets", which were presented separately in the previous year, have been summarized to improve clarity and transparency.
2 The lines "Proceeds from the disposal of other financial assets" and "Proceeds from the disposal of non-financial assets", which were presented separately in the previous year, have been summarized to improve clarity and transparency.
3 The lines "Changes in other current and non-current financial debt" as well as "Payments from the issuance of bonds" and "Repayment of bonds", which were presented separately in the previous year, have been summarized to improve clarity and transparency.
Subsequent events
On October 1, 2024, Merck exercised the right to early termination for two issued hybrid bonds, each with a nominal volume of € 500 million. The repayment to the bond creditors will take place in December 2024.
After regulatory clearances and the satisfaction of other customary closing conditions, the acquisition of Unity-SC SAS, France, was completed on October 31, 2024.
Subsequent to the balance sheet date, no further events of special importance occurred that could have a material impact on the net assets, financial position or results of operations.
Darmstadt, November 8, 2024
Belén Garijo
Kai Beckmann Peter Guenter
Matthias Heinzel Helene von Roeder
Financial Calendar
March 6, 2025 Annual Report 2024
April 25, 2025 Annual General Meeting
May 15, 2025 Quarterly Statement Q1
August 7, 2025 Half-yearly Financial Report
Published on November 14, 2024 by Merck KGaA Frankfurter Strasse 250 64293 Darmstadt, Germany Telephone: + 49 6151 72-0 www.merckgroup.com
DESIGN
nexxar GmbH, Vienna, Austria www.nexxar.com