Merck KGaA (ETR:MRK) raised its full-year 2026 outlook for the third time after faster third-quarter sales growth in its Life Science and Electronics businesses offset pressure on its Healthcare portfolio.
The company now expects group net sales of EUR 21.5 billion to EUR 21.9 billion, up from its previous forecast of EUR 21 billion to EUR 21.8 billion. Its revised outlook assumes that the planned Bio-Techne acquisition closes in time to contribute sales in December, although the closing date has not been set.
Third-quarter reported net sales grew 5.8% year over year, while organic sales rose 5.1%, accelerating from 4.1% in the second quarter. EBITDA pre, the company’s adjusted earnings measure, increased 0.8% on a reported basis and 0.4% organically.
Chief Financial Officer Helene von Roeder said the earnings comparison was affected by one-time benefits in the prior-year quarter, including a gain from the sale of a priority review voucher and a EUR 59 million tailwind from legislative changes in South America. EPS pre was unchanged year over year.
Higher forecast includes Bio-Techne contribution
Merck raised its forecast for full-year organic sales growth to 3% to 4% from 1% to 3%. It now expects EBITDA pre of EUR 6.2 billion to EUR 6.4 billion, compared with EUR 5.9 billion to EUR 6.3 billion previously. The EPS pre forecast rose to EUR 8.30 to EUR 8.70 from EUR 7.90 to EUR 8.60.
Chief Executive Officer Kai Beckmann said the sales outlook reflected stronger underlying performance, more favorable foreign exchange effects and an assumed December contribution from Bio-Techne. Merck expects that contribution to add a high double-digit million-euro amount to Life Science sales in 2026 if the deal closes as assumed.
Von Roeder said Bio-Techne is expected to add close to 5 percentage points to reported group sales growth and about 10 percentage points to Life Science reported sales growth in 2027. She also said both the acquisition and the planned sale of Merck’s contract development and manufacturing organization, or CDMO, business to Lonza should immediately improve group and Life Science EBITDA pre margins after closing.
Operating cash flow rose almost 10% to EUR 1.66 billion in the quarter. Von Roeder said Merck could end the year clearly below three times net debt to EBITDA pre, even after the expected Bio-Techne closing.
Semiconductor demand drives Electronics growth
Electronics organic sales grew 13% in the third quarter, led by a 19% increase in Semiconductor Solutions. Management attributed the performance largely to higher volumes as customers expanded advanced chip production, supported by demand related to artificial intelligence.
Electronics CEO Benjamin Hein said higher prices for some raw materials also contributed. He estimated that the associated pricing effect would add roughly 2 percentage points to full-year 2026 organic sales growth in Semiconductor Solutions, but said that support should fade as raw material markets normalize during 2027.
Merck raised its full-year Electronics organic sales growth forecast to 10% to 11% from 6% to 9%. It now expects approximately EUR 1.1 billion in Electronics EBITDA pre, up from its earlier estimate of EUR 1 billion.
Optronics sales were broadly stable in the third quarter, but von Roeder said weaker consumer electronics demand could lead to a more pronounced year-over-year sales decline in the fourth quarter.
Life Science gains; Mavenclad pressure persists
Life Science organic sales increased 6.1%, including 10.5% growth in Process Solutions. Excluding tariff-related refunds to customers, Life Science growth would have been 7.3%, while Process Solutions growth would have been 12.6%, von Roeder said.
Life Science CEO Jean-Charles Wirth expects Process Solutions organic growth to moderate to around the mid-single digits in the fourth quarter because of timing effects, rather than a change in underlying market demand. He said full-year growth should be near the upper end of the company’s 8% to 12% range for the business.
Merck raised its 2026 Life Science organic sales growth forecast to 6% to 7% from 5% to 7%. Wirth said Bio-Techne would be treated as a portfolio effect and would not affect organic growth.
In Healthcare, growth in rare diseases and other franchises was offset by declining Specialty Care sales as U.S. sales of multiple sclerosis treatment Mavenclad eroded following loss of exclusivity. Beckmann said U.S. Mavenclad sales fell almost 50% sequentially in the third quarter and that a steep decline should be expected in 2027.
Merck narrowed its Healthcare organic sales forecast to a decline of 3% to 2%, from a previous range of a 4% to 2% decline. Von Roeder said the company remains committed to keeping the Healthcare EBITDA pre margin above 30%, despite Mavenclad pressure and spending on launches and clinical development.
Rare disease portfolio and deal updates
Beckmann said the U.S. Food and Drug Administration approved PIMJETMI, or pimicotinib, for patients with symptomatic tenosynovial giant cell tumors. The approval adds to Merck’s rare disease portfolio, which contributed to organic growth for the first time in the third quarter.
Healthcare CEO Danny Bar-Zohar said Merck plans launches of rare disease medicines OGSIVEO and Gomekli in approximately 15 countries each next year. The company reported year-over-year sales growth of 25% for OGSIVEO and 80% for Gomekli in the quarter.
Merck expects its planned acquisition of Silence Therapeutics to close in the first quarter of 2027, subject to conditions. The deal would add divesiran, a phase III-ready candidate for polycythemia vera. Bar-Zohar said Merck does not plan to continue pursuing Silence’s Lp(a) project.
About Merck KGaA (ETR:MRK)
Merck KGaA operates as a science and technology company in Germany. It operates through Life Science, Healthcare, and Electronics segments. The company's Life Science segment offers tools, chemicals, and equipment for academic labs, biotech, and pharmaceutical manufacturers, as well as industrial sector. This segment provides drug manufacturers with process development expertise and technologies, such as continuous bioprocessing; testing kits and services; reagents and services; testing solutions that analyze air, water, and soil; and testing and tools, as well as products that help test nutritional value and identify quality inconsistencies.
