Merck (MRK) Q1 2025 earnings summary

Executive summary

• Achieved solid, profitable growth in Q1 2025, with net sales up 3.1% to €5.28 billion and EBITDA pre up 5.8% organically, as all business sectors contributed despite macroeconomic uncertainty.

• Life Science, Healthcare, and Electronics all posted organic sales and EBITDA pre growth, with margin expansion in Healthcare and Electronics.

• Regional diversification supported resilience, with strong growth in Europe, Asia-Pacific, Latin America, and Middle East & Africa, offsetting a decline in North America.

• Robust order intake and the announced acquisition of SpringWorks Therapeutics for $3.4 billion position the pharma sector for accelerated growth.

Financial highlights

• Net sales increased by 3.1% year-over-year to €5,280 million, supported by acquisitions and slight FX tailwind.

• EBITDA pre rose 5.6% to €1,535 million, with margin expanding to 29.1%; EBIT grew 8% to €1,006 million.

• EPS pre increased 2.9% to €2.12; reported EPS was €1.69, up 5.6%.

• Operating cash flow declined 46.3% to €556 million, mainly due to higher receivables, inventories, and tax payments.

• Net financial debt decreased slightly to €7,121 million; equity ratio improved to 61%.

Outlook and guidance

• 2025 sales guidance: €20.9–22.4 billion; EBITDA pre: €5.8–6.4 billion; organic sales growth expected at 2–6%, EBITDA pre at 2–7%.

• FX expected to impact revenues by -3% to 0% and EBITDA pre by -5% to -2%.

• EPS pre guidance: €7.90–9.00, with effective tax rate guided at 21–23%.

• Sector guidance: Life Science sales +2% to +6%, Healthcare +2% to +6%, Electronics +1% to +6%.

• Guidance incorporates tariff risks and mitigation measures; no tariff-related recession included.