Merck KGaA cautious on 2025 profit on currency effects, tariff uncertainty

By Ludwig Burger

FRANKFURT (Reuters) -German pharmaceutical and specialty materials group Merck KGaA on Thursday guided more cautiously for 2025 earnings, citing foreign-exchange effects and uncertainty over tariffs.

Earnings before interest, tax, depreciation and amortisation (EBITDA), adjusted for one-off items, would likely reach between 5.8 billion euros ($6.5 billion) and 6.4 billion this year, compared with 6.07 billion euros reported for 2024.

It had previously issued a target range of between 6.1 billion euros and 6.6 billion.

The shares were down 5.3% at a three-week low at 0923 GMT.

Finance Chief Helene von Roeder said in a call that weaker foreign currencies, which are a drag on the value of overseas sales, accounted for 80% of the mark-down in the group guidance.

"The slight adjustment to the guidance in Life Science, Merck’s biggest business sector, is also related to the current uncertainties around tariffs," the company said in a statement, referring to a division that makes biotech lab equipment and supplies.

On Wednesday, it dropped a surcharge on orders of lab equipment and substances within China following the U.S.-China agreement to pause sky-high tariffs on each other.

Uncertainty over trade conditions had prompted the family-controlled group to further move production and supplies closer to customers, a push that started during the COVID-19 pandemic, said CFO von Roeder.

"We have of course accelerated that work in order to localise the supply chain," but some division of labour across continents would remain, she said.

First-quarter adjusted EBITDA gained 5.6% to 1.54 billion euros, the group said, slightly ahead of an analyst consensus of 1.51 billion posted on the company's website.

Merck last month struck a deal to buy U.S. biotech company SpringWorks Therapeutics for $3.9 billion to add rare cancer therapies ahead of expected revenue losses linked to expiring drug patents.

($1 = 0.8935 euros)

(Reporting by Ludwig Burger, editing by Kirsti Knolle and Louise Heavens)