(RTTNews) – German science and technology giant Merck KgaA on Thursday reaffirmed its profit and revenue forecast for fiscal 2023, but at the lower half of the range, after reporting weak third-quarter profit and revenue in a tough market environment. Furthermore, the company expects a return to organic sales growth in fiscal 2024. Shares rose about 5 percent in morning trading in Germany.
Belen Garijo, Chairman of the Board and CEO of Merck, said: “We remain disciplined and on track to achieve not only our fiscal year 2023, but also our medium-term objectives. In 2024, we expect to return to organic sales growth.”
According to the company, the strong organic development of the healthcare business in the quarter was offset by market weakness in the Life Science and Electronics segments.
For the 2023 financial year, the company continues to expect earnings per share to be between 8.25 and 9.35 euros, a trend in the lower half of the range.
EBITDA pre is still expected to decline organically by 9 percent to 3 percent, to a total of 5.8 billion euros to 6.4 billion euros, a trend in the lower half of the absolute range.
The company continues to expect Group organic net sales to increase by 2 percent to 2 percent, reaching a total of EUR 20.5 billion to EUR 21.9 billion, slightly below the midpoint of the absolute range.
Excluding Covid-19 activities, the Group’s turnover is still expected to grow organically by 1 to 5 percent.
In the third quarter, profit after tax fell by 20 percent to 740 million euros, compared to last year’s 926 million euros.
Earnings per share amounted to 1.70 euros, a decrease of 19.8 percent compared to 2.12 euros a year ago. Earnings per share before amounted to 2.07 euros, compared to 2.68 euros a year ago.
EBITDA fell by 20.2 percent to 1.45 billion euros, compared to last year’s 1.81 billion euros. This was mainly due to lower sales volumes and the proportionately lower sales share of high-margin products in the Life Science and Electronics business sectors.
EBITDA before margin was 27.9 percent, compared to 31.2 percent last year.
The group’s net turnover fell by 11 percent to 5.17 billion euros, compared to 5.81 billion euros a year earlier. Net turnover fell organically by 4.1 percent.
Healthcare sector net sales increased organically by 7.4 percent, supported by all franchises.
Meanwhile, the Life Science sector recorded an organic net sales decline of 13.2 percent as lower Covid-19 related demand and destocking by key customers negatively impacted the business.
In the third quarter, turnover in the Electronics business sector fell organically by 4 percent.
In Germany, Merck KGaA shares traded at 154.95 euros, up 4.66 percent.
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