Merck KGaA targets higher growth

At its virtual capital markets day on 9 September, Merck KGaA announced that it aims to increase group sales by 6%/year to about €25 billion/year by 2025. To this end, investment, which will increase by 50% in the  years 2021-2025 compared to 2016-2020.

“We will continue to consistently and purposefully invest in areas that make us strong,” said CEO and executive board chair Belén Garijo (pictured). Merck will also seek targeted acquisitions, which are most likely to be small to medium-sized.

About 80% of planned sales growth is to come from the ‘Big 3’ businesses, which include the Semiconductor Solutions business within the Electronics business sector. The others are the Process Solutions business within the Life Science sector and new products from the Healthcare sector. These areas will receive over 70% of the investment.

Under the newly announced ‘Level Up’ growth programme, planned growth for Electronics is revised upwards from 3-4%/year to 3-6%/year from 2021 to 2025. About 80% of this will come from Semiconductor Solutions. Electronics will address four mutually reinforcing key priorities, it said: scale, technology, portfolio, and people and capabilities. It is thus investing in digital business models and data analysis competencies, as well as more capacities near to its customers, especially in the US, Korea, Taiwan, China and Germany.

The medium-term growth forecast for Life Science has also been revised upwards, from 6-9%/year to 7-10%/year. Much of this will be driven by the Bioprocessing business within Process Solutions. “Merck is also planning to expand the business with services for the contract manufacturing and development of therapies in a targeted manner, both for established and new modalities,” it said.

In Healthcare, Merck expects medium-term average annual organic sales growth in the mid single-digit percentage range. New products should contribute around 75% to growth in the years up to 2025.