Merck, a leading science and technology company, grew significantly in the third quarter. In comparison with the year-earlier quarter, Group net sales increased by 9.7% to € 4.4 billion. The increase was primarily due to double-digit percentage organic growth in the Life Science business sector and acquisition-related increases in the Performance Materials business sector.

 

EBITDA rose to € 1.7 billion, which was 53.0% higher than in the third quarter of 2019. Among other things, this increase was attributable to the strong operating performance of the businesses as well as income from the release of a provision amounting to € 365 million for potential damages from the patent litigation with Biogen Inc.

 

The company has revised its forecast for the full year 2020 and refined its expectations for net sales as compared with the most recent forecast published in the half-yearly financial report as of June 30 to a narrower range of between € 17.1 billion and € 17.5 billion. In addition, the company now expects higher EBITDA pre of between € 5.05 billion and € 5.25 billion.

 

“The superb results of the third quarter once again underscore the strength of our diversified business model. First and foremost, our medicines Mavenclad and Bavencio, our Process Solutions business with products and services for drug manufacturing, and our Semiconductor Solutions business contributed substantially to the growth of Merck. We are achieving success with our three innovation-driven business sectors even in difficult times and are making important contributions to the fight against the pandemic,” explained Stefan Oschmann, Chairman of the Executive Board and CEO of Merck. Among other things, the company is supporting more than 50 potential Covid-19 vaccines, supplying products and reagents for diagnostics and is investigating an active pharmaceutical ingredient for the treatment of patients with Covid-19 pneumonia.

 

The increase in Group net sales by 9.7% in the third quarter stemmed from organic growth of 7.2%, which was driven by the Life Science and Healthcare business sectors. Group sales rose by 6.9% due to portfolio changes. This was offset by negative foreign exchange effects of -4.4%. The 53.0% rise in EBITDA pre over the year-earlier quarter was due particularly to an organic increase of 52.6%. This also included income from the aforementioned release of a provision. Excluding this income, EBITDA pre rose organically by 19.8%. Acquisitions were responsible for an 8.2% increase in EBITDA pre. This was amid negative foreign exchange effects of -7.8%. The operating result (EBIT) soared by 91.9% to € 1.2 billion. Net income grew by more than 100.0% to € 805 million. Earnings per share pre were € 2.34, or 73.3% more than in the year-earlier quarter.

 

In the third quarter, Healthcare net sales declined by -3.1% to € 1.7 billion in comparison with the year-earlier quarter. Organically, the business grew by 3.2%. However, negative foreign exchange effects had an adverse impact of -5.1% as did a negative portfolio effect of -1.2% from the divestment of the Allergopharma allergy business in the first quarter of 2020.

 

The company has raised its forecast for earnings per share pre and now expects this in a range of between € 6.50 and € 6.80. This includes € 0.63 due to the release of a provision for the aforementioned patent dispute.