Merck (MRK) Q3 2024 earnings summary

Executive summary

• Achieved 3.8% organic sales growth to €5.3 billion in Q3 2024, with all business sectors contributing to profitable growth and Healthcare leading the acceleration.

• EBITDA pre increased organically by 16.9% to €1.6 billion, with the margin rising to 30.7%.

• Life Science returned to organic growth; Healthcare delivered solid sales and high profitability, driven by strong performances in Cardiology, Oncology, and Neurology & Immunology; Electronics benefited from AI-driven demand and advanced node applications.

• Confirmed 2024 guidance for sales, EBITDA pre, and EPS pre, with expectations to finish near the lower end of sales and midpoint of earnings corridors.

• Significant events included the acquisition of Mirus Bio and Unity-SC SAS, and the termination of the xevinapant program.

Financial highlights

• Net sales reached €5,266 million, up 1.8% year-over-year after accounting for negative FX effects.

• EBITDA pre was €1,618 million, up 11.9% reported and 16.9% organically, with the margin at 30.7%.

• EPS pre was €2.30, up 11.1% year-over-year; reported EPS was €1.86, up 9.4%.

• Operating cash flow was €1,458 million, up 16.2% year-over-year.

• Net financial debt stood at €7,553 million as of September 30, 2024, up slightly due to acquisitions.

Outlook and guidance

• 2024 sales expected in the €20.7–22.1 billion range, trending in the lower half; EBITDA pre €5.8–6.4 billion, trending around the midpoint; EPS pre €8.20–9.30.

• Organic sales growth for 2024 expected between 2% and 5%, EBITDA pre organic growth 4% to 10%.

• Life Science to end slightly above lower end of guidance; Healthcare slightly below midpoint; Electronics in lower half.

• Operating cash flow anticipated in the upper half of €4.0–4.6 billion.

• Effective tax rate for FY 2024 expected at 21–23%.