The forecast of the Group for fiscal 2024 published in the Annual Report for fiscal 2023 comprised the forecast for the Group as well as the forecast for the three business sectors: Life Science, Healthcare and Electronics.
Net sales
We forecast slight to moderate organic net sales growth for the Group in fiscal 2024. As expected, the Healthcare business sector was once again the strongest growth driver compared with the previous year, with Mavenclad® and products from the Oncology and Cardiovascular, Metabolism & Endocrinology franchises making the main contributions. For Life Science, we reported a gradual recovery in organic net sales growth over the course of the year in comparison with the previous year. There were no longer any significant contributions from demand for products in connection with Covid-19. In the Electronics business sector, we witnessed a turnaround in parts of the semiconductor market, although a comprehensive market recovery did not emerge by the end of fiscal 2024. The anticipated decline in Display Solutions business also had a negative impact, as did project business in the Semiconductor Solutions business unit, which is typically subject to stronger fluctuations owing to its dependency on major individual orders. Overall, we recorded organic net sales growth of 2.0% in fiscal 2024, thereby falling within the forecast range of +2% to +5% that we most recently specified in the second quarter and confirmed in the third quarter. At the start of the year, we forecast overall exchange rate effects of between -3% and 0%. This was based in particular on the expected development of the US dollar and some Asian currencies. At ‑1.3%, exchange rate effects in fiscal 2024 fell within this range, which we subsequently confirmed in the second and third quarters. The slightly positive portfolio effect was negligible at 0.1%. All in all, net sales amounted to € 21,156 million (2023: € 20,993 million), representing a year-on-year increase of 0.8%. This was below the mid-point of the forecast range of € 20,700 million to € 22,100 million and thus was consistent with the more specific forecast issued together with the figures for the third quarter (trending in the lower half of the range).
Life Science
In our Life Science business sector, the expected recovery began in the second half of 2024, after sales in the first half of the year were initially still affected by the reduction of increased inventories on the customer side. However, this recovery was slower than originally anticipated and will continue in some areas in 2025. Accordingly, Life Science reported an organic decline in net sales of ‑3.3% in fiscal 2024. This was below the forecast range of between -2% and +2% that we specified in the second and confirmed in third quarters and it was also below our original forecast of a slight organic decline to slight organic growth. While the Process Solutions and Life Science Services business units recorded a downturn in organic net sales, the Science & Lab Solutions Business unit recorded a slight organic sales growth. All in all, net sales in the Life Science business sector fell by ‑3.9%, to € 8,916 million (2023: € 9,281 million), including a negative exchange rate effect of ‑0.7% and a positive portfolio effect of 0.1%. This was slightly above the lower end of the forecast range of € 8,800 million to € 9,500 million and consistent with the more specific forecast issued at the end of the third quarter (trending slightly above the lower end of the range).
Healthcare
We originally forecast moderate to solid organic sales growth for our Healthcare business sector compared with the previous year. We then quantified this organic net sales growth forecast at between +4% and +7% with the publication of the quarterly statement for the first quarter. We raised this forecast to between +6% and +9% with the publication of the interim report on the second quarter and confirmed it with the figures for the third quarter. The business sector achieved this forecast with organic growth of 7.0% in fiscal 2024. This development was driven in particular by products from the areas of Oncology as well as Neurology & Immunology, especially our recently approved product Mavenclad®, as well as Cardiovascular, Metabolism and Endocrinology products. Taking into account a negative exchange rate effect of-2.0%, net sales in the Healthcare business sector increased by 5.0%, to € 8,455 million (2023: € 8,053 million) in fiscal 2024. This was slightly below the mid-point of the forecast range of € 8,200 million to € 8,750 million and in line with the more specific forecast issued together with the figures for the third quarter (trending slightly below the mid-point of the range).
Electronics
With the turnaround in the market for semiconductor materials originally expected to occur at the start of the second half of the year and an expected decline in the Display Solutions business and project business in the Semiconductor Solutions business unit, we forecast around stable to moderate organic net sales growth for the Electronics business sector at the start of the year. With the publication of the figures for the first quarter, we quantified this forecast at between 0% and +4%. We raised this forecast to between +4% and +8% in the interim report on the second quarter, having already observed a trend reversal in sub-segments of the semiconductor materials market in the second quarter that was expected to lead to further organic net sales growth in semiconductor materials. We confirmed this forecast together with the figures for the third quarter. With organic growth of 4.6%, net sales were in line with this forecast. Taking into account a negative exchange rate effect of -1.4%, net sales in the Electronics business sector increased by 3.4% year-on-year to € 3,785 million (2023: € 3,659 million). This was in the lower half of the forecast range of € 3,650 million to € 3,950 million and in line with the more specific forecast issued together with the figures for the third quarter (trending in the lower half of the range).
EBITDA pre
Our original forecast for the Group’s EBITDA pre for fiscal 2024 ranged from slight to moderate organic growth compared with the previous year. This assumption was based on the expectation of a moderate organic decline to slight organic growth in Life Science, low single-digit percentage organic growth in Healthcare and a moderate organic decline to moderate organic growth in Electronics. We originally expected negative exchange rate effects to impact EBITDA pre by between -1% and -4% compared with the previous year. With the publication of the figures for the first quarter, we quantified our EBITDA pre forecast at organic growth of between +1% and +7%, again under the assumption that negative exchange rate effects would impact EBITDA pre by between -1% and -4% compared with the previous year. Due to the net sales growth in the Healthcare and Electronics business sectors and, in particular, the expected development of EBITDA pre in the Healthcare business sector, thanks to the positive impact of the termination of the strategic alliance with Pfizer Inc., United States (Pfizer), effective June 30, 2023, and the subsequent regain of the exclusive global rights to develop, manufacture and commercialize Bavencio® as well as lower costs, especially in research and development, we raised our EBITDA pre forecast to between +4% and +10% with the publication of the interim report on the second quarter and confirmed this forecast together with the figures for the third quarter. Due to negative exchange rate developments, we adjusted our forecast for the impact of exchange rate effects to between -5% and ‑1% in the second quarter and confirmed this together with the figures for the third quarter. EBITDA pre amounted to € 6,072 million in fiscal 2024 (2023: € 5,879 million), representing a total increase of 3.3% compared with the previous year. This was slightly below the mid-point of our forecast range of between € 5,800 million and € 6,400 million, and hence in line with the more specific range (trending around the mid-point). At 6.9%, organic EBITDA pre growth also fell within our forecast range of between +4% and +10%. Exchange rate effects came in at the lower end of our forecast range at -3.6%. The slightly negative portfolio effect was negligible at ‑0.1%.
Life Science
In line with the expected organic net sales development (slight organic decline in net sales to slight organic growth in net sales), we forecast a moderate organic decline to slight organic growth in EBITDA pre in the Life Science business sector. We quantified our forecast for organic EBITDA pre at between ‑6% and +1% in the first quarter and confirmed this forecast with the publication of the figures for the second and third quarter. We expected earnings to be adversely affected by negative mix effects, which we intended to mitigate as far as possible through corresponding cost savings. Combined with the most recent forecast of a negative exchange rate effect of between -4% and 0% (originally: roughly stable to slightly negative exchange rate effect), the forecast range for EBITDA pre was between € 2,550 million and € 2,800 million. EBITDA pre in fiscal 2024 fell within this range, at € 2,589 million (2023: € 2,820 million). This represented a year-on-year decline of ‑8.2% (‑6.3% organic, ‑1.7% due to exchange rate effects, ‑0.2% due to portfolio effects). EBITDA pre was therefore also in line with the more specific forecast issued in the report on the third quarter (trending slightly above the lower end of the range).
Healthcare
We originally forecast organic EBITDA pre growth in the low single-digit percentage range for our Healthcare business sector. This original forecast was higher than the forecast moderate to solid organic net sales growth. This was due to the termination of the strategic alliance with Pfizer effective June 30, 2023, and the subsequent regain of the exclusive global rights to develop, manufacture and commercialize Bavencio®, as well as lower costs, especially in research and development, as a result of the failure of evobrutinib to meet its primary endpoint, as demonstrated by the results of the clinical trials published on December 6, 2023. With the publication of the figures for the first quarter, we increased this forecast range to organic EBITDA pre growth of between +13% and +18%. We then raised it further to between +18% and +23% in the interim report on the second quarter, in response to stronger operating performance and lower costs, especially in research and development. We retained this forecast with the publication of the figures for the third quarter. Combined with the most recent forecast of an exchange rate effect of between -6% and -2% (originally: slight to significant negative exchange rate effect), this resulted in a forecast range for EBITDA pre in the Healthcare business sector of € 2,850 million to € 3,050 million. At € 2,995 million in fiscal 2024 (2023: € 2,543 million), EBITDA pre fell within the upper half of this range and hence in line with the more specific forecast issued in the report on the third quarter (trending in the upper half of the range). This represented a year-on-year increase of 17.8% (22.7% organic, ‑5.0% due to exchange rate effects).
Electronics
For the Electronics business sector, we originally forecast a moderate organic decline to moderate organic growth in EBITDA pre in fiscal 2024. In addition to the expected growth in net sales, we anticipated a favorable mix effect in net sales, as well as positive effects from active cost management, but we expected the sale of a portfolio of licenses and patents in fiscal 2023 to have an opposing effect. With the presentation of the figures for the first quarter, we quantified our forecast range for the organic development of EBITDA pre at between -3% and +4%. We raised this forecast to between +5% and +11% with the publication of the interim report on the second quarter and retained it with the figures for the third quarter. This largely reflected the growth in net sales in the Electronics business sector after we already observed a trend reversal in sub-segments of the semiconductor materials market in the second quarter. Combined with the most recent forecast of an exchange rate effect of between ‑2% and +1% (originally: roughly stable to moderate negative exchange rate effect), this resulted in a forecast range for EBITDA pre in the Electronics business sector of € 950 million to € 1,020 million. At € 970 million in fiscal 2024 (2023: € 913 million), EBITDA pre was slightly above the lower end of this range and hence was in line with the more specific forecast issued in the report on the third quarter (trending slightly above the lower end of the range). This represented a year-on-year increase of 6.2% (6.9% organic, ‑1.0% due to exchange rate effects, 0.2% due to portfolio effects).
Corporate and Other
The expenses for Corporate and Other in EBITDA pre amounted to €-482 million in fiscal 2024. This was slightly below the mid-point of the published forecast range of between € ‑450 million and € ‑520 million and hence in line with the more specific forecast issued in the report on the third quarter (trending around the mid-point). The original forecast for fiscal 2024 provided for higher expenses due to lower foreign currency hedging gains. Expenses increased by 21.4% compared with the prior-year figure of € ‑397 million.
Operating cash flow
We originally anticipated moderate to strong growth in the Group’s operating cash flow in fiscal 2024 (2023: € 3,784 million). We quantified this forecast at between € 3,900 million and € 4,500 million with the publication of the figures for the first quarter. As we expected the development of the operating cash flow to be largely in line with operating performance, we raised the forecast range to between € 4,000 million and € 4,600 million in the interim report on the second quarter and confirmed this in the report on the third quarter. The operating cash flow amounted to € 4,586 million in fiscal 2024, which was in the upper half of the forecast range. This corresponded to the more specific forecast issued together with the figures for the third quarter (trending in the upper half of the range). The increase of 21.2% was primarily due to the positive development of EBITDA pre and changes in other assets and liabilities.