Merck KGaA · XETR:MRK
Merck KGaA — Merck KGaA, Darmstadt, Germany — Q1 2024 Earnings Presentation
36 slides from Merck KGaA's earnings presentation, May 15, 2024
Slide 1: Off to a Good Start
Off to a Good Start Merck KGaA, Darmstadt, Germany Q1 2024 results Belén Garijo, CEO Helene von Roeder, CFO May 15, 2024
Slide 2: Disclaimer
Disclaimer Publication of Merck KGaA, Darmstadt, Germany. In the United States and Canada the group of companies affiliated with Merck KGaA, Darmstadt, Germany operates under individual business names (EMD Serono, Millipore Sigma, EMD Performance Materials). To reflect such fact and to avoid any mis
Slide 3: Agenda
Agenda Executive summary Financial overview Outlook & Guidance 3 Merck KGaA, Darmstadt, Germany Q1 2024 Results Presentation | May 15, 2024
Slide 4: Executive summary
Executive summary 01
Slide 5: Highlights: Positive order development in PS, Strong HC and EL
Highlights: Positive order development in PS, Strong HC and EL Operations Group Financials Life Science: ▪ Sales down -13% org. compared to prior year, when destocking was not yet fully visible ▪ Solid start to year with order intake up QoQ and YoY in PS; Q1 organic sales: -1.2% confirming sales inf
Slide 6: Strong HC and EL performance largely compensate for LS
Strong HC and EL performance largely compensate for LS Q1 YoY Net Sales Q1 YoY EBITDA pre Organic Currency Portfolio Total €1,587 m Life Science -12.6% -1.2% 0.0% -13.8% €1,454 m -5.2% -3.2% 0.0% Healthcare 10.1% -2.6% 0.0% 7.5% Electronics 6.3% -3.2% -0.1% 3.1% Group -1.2% -2.0% 0.0% -3.3% Q1 2023
Slide 7: Financial overview
Financial overview 02
Slide 8: Q1 2024: Overview
Q1 2024: Overview Key figures Comments [€m] Q1 2023 Q1 2024 Δ ▪ Sales down -3% with slight FX headwinds and slight organic decline Net sales 5,293 5,120 -3.3% ▪ HC and EL sales growth largely EBITDA pre 1,587 1,454 -8.4% compensate decline in LS Margin (in % of net sales) 30.0% 28.4% -1.6pp ▪ HC EBI
Slide 9: Q1 2024: Reported figures
Q1 2024: Reported figures Reported results Comments ▪ EBIT declines, driven by lower LS [€m] Q1 2023 Q1 2024 Δ sales and EBIT margins, compensated EBIT 1,035 931 -10.0% partially by EBIT growth in HC and EL ▪ Unfavorable financial result mainly Financial result -23 -32 42.1% due to pensions and bonu
Slide 10: Life Science Q1: Sales down v.s. strong comps and COVID-19 non-repeats
Life Science Q1: Sales down v.s. strong comps and COVID-19 non-repeats Life Science P&L Net sales bridge [€m] IFRS Pre €2,487 m 0.0% €2,144 m Q1 2023 Q1 2024 Q1 2023 Q1 2024 -12.6% -1.2% Net sales 2,487 2,144 2,487 2,144 M&S -568 -551 -569 -545 +0.0% Q1 2023 Organic Currency Portfolio Q1 2024 Admin
Slide 11: Healthcare Q1: Strong start into the year supported across franchises
Healthcare Q1: Strong start into the year supported across franchises Healthcare P&L Net sales bridge [€m] IFRS Pre €1,905 m 10.1% 0.0% €2,048 m -2.6% Q1 2023 Q1 2024 Q1 2023 Q1 2024 Net sales 1,905 2,048 1,905 2,048 M&S -381 -398 -380 -395 Q1 2023 Organic Currency Portfolio Q1 2024 Admin -76 -75 -7
Slide 12: Electronics Q1: Positive start, full market inflection still expected in H2
Electronics Q1: Positive start, full market inflection still expected in H2 Electronics P&L Net sales bridge [€m] IFRS Pre €901 m 6.3% €928 m Q1 2023 Q1 2024 Q1 2023 Q1 2024 -3.2% -0.1% Net sales 901 928 901 928 M&S -158 -138 -158 -138 +0.0% Q1 2023 Organic Currency Portfolio Q1 2024 Admin -33 -37 -
Slide 13: Balance sheet
Balance sheet Assets [€bn] Liabilities [€bn] 48.5 49.5 49.5 48.5 Cash & cash equivalents 2.0 2.2 4.0 4.1 Receivables Inventories 4.6 4.7 28.1 26.8 Net equity Intangible assets 24.4 24.7 10.0 9.9 Financial debt Property, plant 3.0 3.4 Payables/refund liabilities 9.1 9.2 & equipment 2.2 2.3 Provisions
Slide 14: Q1 2024: Cash flow statement
Q1 2024: Cash flow statement Cash flow statement Comments [€m] Q1 2023 Q1 2024 Δ ▪ Decline in profit after tax from reduced Profit after tax 800 700 -100 EBIT, unfavorable financial result and higher taxes D&A 456 454 -2 ▪ Changes in provisions include pensions Changes in provisions -8 40 48 and bon
Slide 15: Outlook & Guidance
Outlook & Guidance 03
Slide 16: Group full-year 2024 guidance
Group full-year 2024 guidance Net sales: Organic: +1% to +5% YoY FX: -3% to 0% YoY ~€20.6 – €22.1 bn EBITDA pre: Organic: +1% to +7% YoY FX: -4% to -1% YoY ~€5.7 – €6.3 bn EPS pre: ~ €8.05– €9.10 16 Merck KGaA, Darmstadt, Germany Q1 2024 Results Presentation | May 15, 2024
Slide 17: 2024 business sector guidance
1 2024 business sector guidance Net sales EBITDA pre Life Science ▪ Organic: -2% to +2% YoY ▪ Organic:-6% to +1% YoY ▪ FX: -2% to +1% YoY ▪ FX: -4% to +1% YoY ▪ ~€8.90 bn to €9.60 bn ▪ ~€2.55 bn to €2.85 bn ▪ Gradual sequential recovery during 2024 ▪ Returning to organic growth in H2 ▪ COVID-19 sale
Slide 18: Appendix
Appendix
Slide 19: APAC org. growth partially compensating declines in NA and Europe
APAC org. growth partially compensating declines in NA and Europe Regional breakdown of net sales [€m] Regional organic development Europe -3.6% org. ▪ North America: Wave 1 launches and 30% Semi Solutions partially mitigate Life Science decline ▪ Europe: Healthcare largely offsets sales North Ameri
Slide 20: Additional financial guidance 2024
Additional financial guidance 2024 Further financial details Corporate & Other EBITDA pre -€450 m to -€520 m Interest result ~ €-55 m to -85 m Effective tax rate ~ 21% to 23% Capex on PPE1 ~ €1.6 to 1.8 bn FY 2024 overall hedge ratio ~ 50% Hedging EUR/USD hedging @ ~ 1.10 2024 Ø EUR/USD assumption ~
Slide 21: Credit details
Credit details Maturity profile as of March 31, 2024 Credit rating information Coupon [€m / $m] 3.250% Last LT LT ST 0.125% Rating Outlook Rating Rating Change 1.625% 1.875% A3 21.10.21 Stable P-2 1,600 1.625% 3.375% 0.875% 842 0.500% 2.875% A 29.05.13 Stable A-1 0.375% 500 2.375% 750 750 800 500 50
Slide 22: Sustainability Report 2023 published: Progress in sustainability during a transitional year
Sustainability Report 2023 published: Progress in sustainability during a transitional year ▪ Discover insights about how Group is creating long-term sustainable value: view some 2023 highlights ▪ Using established reporting standards to provide transparency on progress towards our targets: ▪ Sustai
Slide 23: Clear metrics to drive execution and progress towards 2030 ambition
Clear metrics to drive execution and progress towards 2030 ambition Goal Metric 2023 (2022) Target 1 Percentage of newly published patent families with positive sustainability impact 28% (27%) n.a. People treated with our HC products and pharma products enabled by LS* Apr. 11 (n.a.) 1 bn people ambi
Slide 24: Process Solutions: Sales down versus high comparable
Process Solutions: Sales down versus high comparable Sales development [€m] - org. growth [%] YoY 1,022 ▪ Org. sales down amid still muted activity; 994 hovering around the trough ▪ Solid order intake, up YoY and QoQ in Q1’24 ▪ Book-to-bill up, to around 1 893 ▪ All key regions down org., NA in the
Slide 25: Science & Lab Solutions: Second quarter of sequential growth
Science & Lab Solutions: Second quarter of sequential growth Sales development [€m] - org. growth [%] YoY 1,276 ▪ Sales down mainly due to cautious spending in 1,182 1,170 NA pharma, China softness and US government 1,111 1,137 funding of academic research ▪ Biomonitoring and Lab Water Solutions up
Slide 26: Life Science Services: Batch phasing effects in Q1
Life Science Services: Batch phasing effects in Q1 Sales development [€m] - org. growth [%] YoY 220 ▪ Sales down mainly due to unfavorable batch 206 phasing, streamlining of the supply chain of one 188 of our customers in CDMO business, 178 ▪ Contract testing up low- to mid-single digit 157 org. ▪ C
Slide 27: Healthcare organic growth by franchise/product
Healthcare organic growth by franchise/product Q1 2024 organic sales growth [%] by key product [€m] 186 14% 167 287 19% 250 261 12% 237 158 4% 154 204 7% 197 221 5% 218 139 9% 130 140 2% 142 Q1 2024 Q1 2023 27 Merck KGaA, Darmstadt, Germany Q1 2024 Results Presentation | May 15, 2024
Slide 28: Oncology: Erbitux growing in all regions; solid Bavencio mUC 1L evolution
Oncology: Erbitux® growing in all regions; solid Bavencio® mUC 1L evolution ® Sales development Oncology, [€m] YoY Bavencio net sales, [€m] ▪ Growth in all major markets, org. org. org. org. org. 200 167 178 185 183 186 +14% org. [€m] 14.7% 17.8% 18.1% 18.4% 19.3% 150 ▪ Three quarters of sole global
Slide 29: N&I: Mavenclad sales up +12% org. driven by continued uptake in the US
N&I: Mavenclad® sales up +12% org. driven by continued uptake in the US ® Sales development N&I, [€m] YoY Mavenclad Y1+Y2 patients1 ▪ Continued U.S. prescription depth & breadth expansion2 org. org. org. org. org. [€m] -2.0% 12.2% -11.5% -1.3% 8.8% ▪ Most prescribed HE oral in the dynamic market3 se
Slide 30: Fertility: +8% org. sales growth, competitors' stock-out effects to moderate
Fertility: +8% org. sales growth, competitors’ stock-out effects to moderate Sales development Fertility, [€m] YoY Gonal-f® net sales, [€m] 250 org. org. org. org. org. 219 213 219 [€m] 6.7% 24.7% 14.0% 13.9% 7.7% 197 204 200 450 150 ▪ China: double-digit sales 409 growth post recovery from 400 386
Slide 31: CM&E: All segments contributing to +4% org. franchise growth
CM&E: All segments contributing to +4% org. franchise growth ® Sales development CM&E, [€m] YoY Glucophage net sales, [€m] org. org. org. org. org. [€m] 3.0% 0.9% 6.8% 4.8% 4.2% 250 218 235 233 221 ▪ Continued volume uptake in 197 800 200 all regions 724 720 150 700 677 665 689 100 50 600 0 Q1 2023
Slide 32: Group pipeline
Group pipeline May 15, 2024 Healthcare pipeline Phase 1 Phase 2 Phase 3 Registration xevinapant (IAP inhibitor) LA squamous cell carcinoma of the head and neck – unresected, cisplatin-eligible1 xevinapant (IAP inhibitor) LA squamous cell carcinoma of the head and neck – resected, cisplatin-ineligibl
Slide 33: Healthcare catalysts
Healthcare catalysts Q1 2024 Q2 2024 Q3 2024 Q4 2024 Cladribine capsules (Immune Reconstitution Therapy) Phase III generalised Myasthenia Gravis – study initiation Enpatoran Enpatoran (Oral TLR7/8 inhibitor ) (Oral TLR7/8 inhibitor ) Phase II CLE program Phase II SLE program – read-out – read-out Xe
Slide 34: Semiconductor Solutions delivering gradual recovery
Semiconductor Solutions delivering gradual recovery Sales development [€m] - org. growth [%] YoY 660 633 ▪ Overall, returning to growth driven by 604 602 612 strong Semi Materials growth ▪ Industry digesting high wafer inventory, resulting in mid-single-digit MSI decline in Q1 8% ▪ Semi Materials de
Slide 35: Adjustments in Q1 2024
Adjustments in Q1 2024 Adjustments in EBIT [€m] Q1 2023 Q1 2024 Adjustments thereof D&A Adjustments thereof D&A Life Science 17 0 26 0 Healthcare -4 -1 2 0 Electronics 19 10 12 0 Corporate & Other 74 0 29 0 Total 106 10 70 0 35 Merck KGaA, Darmstadt, Germany Q1 2024 Results Presentation | May 15, 20
Slide 36: Meet the team
CONSTANTIN FEST NADJA GROSSCHMIDT SUSAN KUEHN EET THE TEAM Head of Investor Relations Assistant Investor Relations Assistant Investor Relations +49 6151 72-5271 +49 6151 72-3321 +49 6151 72-3321 [email protected] [email protected] [email protected] DATE EVENT May 15, 2
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