At the Darmstadt site, modesty is no longer an ornament.

Merck's new boss, the Spaniard Belén Garijo, prefers to make it clear that she prefers to think big in the coming years.

“Our ambition is to become the world's leading science and technology company of the 21st century,” said the chairman of the management on Thursday on the occasion of a capital market day of the Dax group.

Thiemo Heeg

Editor in business.

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The pharmaceutical and tech manufacturer is pouring this goal into a medium-term strategy that includes ambitious business plans up to 2025.

Accordingly, sales should increase from 17.5 to around 25 billion euros - that is an average of more than 6 percent per year.

All three major business areas should contribute to growth.

Divestments are not planned, but heavy investments and possibly also acquisitions.

The news was well received on the stock market.

In a less turbulent equity environment, Merck topped the Dax winners list with a price increase of almost 2 percent in the afternoon.

Analysts found that their own forecasts were often well below the new revenue targets of the Darmstadt-based company, which is steeped in tradition.

Self-powered growth and acquisitions

According to Garijo, around 80 percent of the planned sales growth will come from the so-called "Big 3" businesses, i.e. from the life science sector, which offers products for pharmaceutical research and recently benefited from high demand in the wake of the corona pandemic, from new healthcare Products and from the Electronics division, which includes the business with special materials. So far, an increase in sales of up to 19.7 billion euros has been targeted for 2021.

At the same time, investments are expected to increase by more than half between 2021 and 2025 compared to the previous five-year period. More than 70 percent of the money is to flow into the three major business areas. In addition to spending on research and development, from which the pharmaceutical division in particular should benefit, Merck plans to invest around two billion euros annually in systems and technologies from 2023 onwards. In 2021, this sum should be around 1.5 billion euros, said CFO Marcus Kuhnert.

While the focus is on self-sufficient growth, Garijo and her management team are not ruling out acquisitions, on the contrary. As already known, in Darmstadt, targeted small to medium-sized takeovers are more likely than large ones that would change the group significantly. Although the Dax group is basically also open to big deals, this is "not the right time" for this at the moment, Garijo emphasized. "Because we operate from a position of strength and are well positioned for further growth." It can also be assumed that an amount in the high single-digit billion euro range will be available for acquisitions from the end of 2022, it said. In spite of the higher investments, nothing will change in the previous dividend policy, said Kuhnert.

Merck had already raised its forecast for the fiscal year several times, as the group is benefiting from significant, corona-related demand. Now Garijo set higher goals for some branches. After acquisitions worth billions, such as recently that of the US semiconductor supplier Versum Materials, the company had given top priority to debt reduction until the coming year. "In view of the rapid reduction in net financial debt, Merck's financial flexibility has increased significantly again," it said.