Merck (MRK) Q4 2025 earnings summary

Executive summary

• Delivered on 2025 financial guidance with stable net sales at €21.1 billion and organic growth of 3.1%, despite significant foreign exchange and geopolitical headwinds.

• EBITDA pre grew to €6.1 billion, up 0.6% reported and 5.6% organically, with margin improvement to 28.9%.

• Growth was driven by Process Solutions in Life Science, Rare Diseases and CM&E in Healthcare, and Semiconductor Materials in Electronics.

• Strategic acquisitions (SpringWorks, Hub Organoids, JSR Life Sciences chromatography) and divestment of Surface Solutions enhanced the portfolio.

• Achieved significant sustainability milestones, including a 60% reduction in Scope 1 and 2 emissions versus 2020.

Financial highlights

• FY 2025 net sales were €21.1 billion, down 0.3% year-over-year due to -3.7% FX impact; organic growth of 3.1%.

• EBITDA pre was €6.1 billion, up 0.6% reported and 5.6% organically; margin at 28.9%.

• EPS pre declined 3.4% to €8.34, mainly due to higher interest costs from USD bond issuance.

• Operating cash flow was €3.9 billion, down 14.3% year-over-year.

• Net financial debt increased to €8.6 billion, mainly due to the SpringWorks acquisition; leverage at 1.4x net debt/EBITDA pre.

• Proposed stable dividend of €2.20 per share, marking 15 consecutive years of stable or increasing dividends.

Outlook and guidance

• 2026 group net sales forecasted at €20.0–21.1 billion, organic sales development of -1% to +2%.

• EBITDA pre guidance for 2026 is €5.5–6.0 billion, organic growth of -4% to +1%, with margins around 28%.

• EPS pre expected in the range of €7.10–8.00, assuming no U.S. Mavenclad sales from March 2026 due to generics.

• Life Science expected to deliver mid-single-digit organic sales growth, Process Solutions to maintain around 10% growth.

• Healthcare faces challenges from key brand life cycles, especially Mavenclad, but expects growth in rare diseases, CM&E, and fertility.

• Electronics anticipates continued strong growth in Semiconductor Materials and stabilization in DS&S.