Merck KGaA

Q2 net sales increased from EUR 5.255 billion to EUR 5.434 billion, up 3.4% reported and 4.1% organically. EBITDA pre increased from EUR 1.46 billion to EUR 1.6 billion, with organic growth of 9.3% and margin expanding to 29.4% from 27.8% year over year. EPS pre rose 6.9% to EUR 2.16. Operating cash flow increased 6.7% to EUR 605 million, and net financial debt was EUR 9.2 billion at June 30, mainly due to the dividend payment. Full-year 2026 guidance was raised: group organic sales growth is now expected at 1% to 3% and reported net sales around EUR 21 billion to EUR 21.8 billion; EBITDA pre is now expected at EUR 5.9 billion to EUR 6.3 billion; EPS pre at EUR 7.90 to EUR 8.60. By segment, Life Science organic sales growth is now guided to 5% to 7%, Healthcare to minus 4% to minus 2%, and Electronics to 6% to 9%; Electronics EBITDA pre is now expected around EUR 1 billion.

Kai Beckmann framed the quarter as proof that Merck’s new strategy is starting to show through, with disciplined execution, selective investment, and a focus on more integrated solutions. He pointed to Bio-Techne, the new metrology and inspection site in France, and pipeline milestones in rare disease and oncology as examples of where the company is putting capital behind its growth priorities. His tone was constructive and confident, while still emphasizing tough comps in 2027 and the need to stay disciplined on integration and cost control.

Helene von Roeder highlighted the main financial drivers: sales up to EUR 5.434 billion, EBITDA pre up to EUR 1.6 billion, EPS pre up to EUR 2.16, and operating cash flow up to EUR 605 million. She said the EBITDA pre increase was driven primarily by Life Science and Electronics, while EPS pre rose despite higher interest costs tied to SpringWorks financing; full-year interest cost guidance was slightly reduced. She also noted net financial debt of EUR 9.2 billion at June 30, mainly from the dividend payment, and said underlying cash generation has improved, with fast deleveraging a priority after the planned Bio-Techne acquisition closes.

Analysts focused heavily on the durability of Life Science Process Solutions growth, the 2027 organic growth outlook, Pergoveris approval uncertainty, MAVENCLAD erosion, and whether Electronics strength can persist. Management said Process Solutions should finish 2026 in the upper end of the 8% to 12% range, with no destocking expected in 2026 but possible inventory effects in 2027; book-to-bill remained above 1 and order lead times were back to pre-COVID norms. On Pergoveris, Danny Bar-Zohar said the FDA submission was accepted but approval remains uncertain because the package is based largely on legacy data and prior discussions with the FDA did not produce a path forward; he said the best-case label would resemble the EU or Canadian label. On MAVENCLAD, management said U.S. sales were roughly flat in Q2 but generic erosion is expected to step up, while ex-U.S. growth remains strong; on Electronics, they said AI-driven demand and memory constraints should continue into 2027.