Tariff risks + Weak US Dollar: Germany's Merck lowers its performance forecast for this year.

Due to the weakening of the US dollar and the uncertainty of tariff policies, German technology group Merck KGaA announced on Thursday that it is lowering its sales and profit growth expectations for the year. The company's latest forecast shows that organic sales growth for the full year will be between 2-6% and organic growth in adjusted EBITDA will be between 2-7%. This expectation is below the previously set sales growth target of 3-6% and profit growth range of 3-8%. Merck stated in a statement that the new guidance reflects the "current macroeconomic and political environment" as well as the overall pressure of foreign exchange fluctuations on its three major business segments, and also includes a slight adjustment in the largest business segment, the life science division, due to the uncertainty of tariff policies. In the first quarter of this year, the company's adjusted EBITDA rose to 1.5 billion euros, and sales increased to 5.3 billion euros, both in line with the average analyst expectations compiled by Bloomberg. After experiencing the fading of the pandemic dividend and the failure of two key drug developments last year, Merck resumed its growth momentum, and CEO Belen Garijo is working to accelerate this recovery process. In the healthcare sector, the multiple sclerosis treatment drug Mavenclad and the cancer drug Erbitux have become growth engines, with the latter benefiting significantly from the expansion of the Chinese market. This performance, along with the temporarily reduced research and development costs, alleviated the market competition pressure faced by the bladder cancer treatment drug Bavencio. The company's acquisition plan of SpringWorks Therapeutics Inc. (SWTX.US) aims to strengthen its pipeline layout, with the transaction expected to be completed in the second half of this year and expected to immediately contribute to revenue after the delivery. The life science business, which is the core of Merck's growth, has shown signs of recovery after a long period of stagnation following the pandemic, mainly due to double-digit growth in the process solutions business that supports drug production. However, the reduction in US research funding has suppressed demand in other areas of this business. In the electronics business, despite the overall rebound in the semiconductor market not yet being realized, the continued demand driven by artificial intelligence continues to bring positive trends for the company.