Processing Life Science Solutions

Research evidence excerpt

Processing Life Science Solutions

lisation-driven demand in consumables as the backbone of JEFe 6.2% vs MSD to JEFeHSD7.3%Guidancevs MSD to MSD Guidance

growth. HSD Guidance

JEF Bioprocessing Survey Key Takes for MRK GR: Q1 reinforced the same industry

normalization narrative, albeit with a stronger contribution from consumables-heavy Process 25A Life Science Electronics Healthcare 29E

Solutions. Mgmt. highlighted +16% PS growth was driven by strong u/l demand, alongside a .Source: Company Data, Jefferies Estimates

“strong order book” and book-to-bill >1, consistent with survey evidence of improving budgets Chart 2 - Our SOTP DCF

180 (12)and 200 resilient consumables spend. Mgmt also indicated that part of the strength reflected 38 (23) 151 160 (EUR)

140 (23) 129temporary factors with growth expected to normalize towards c.10% beyond H1. This aligns 47 120 share

100with survey findings of modest stocking and stable, rather than accelerating, demand. Per 80

Value 6040 102

MRK GR KT from JEF Global HCC (HERE): 1) Q1 +16% on execution, wins and APAC phasing; 200

Science Share Discounttougher 2H comps ahead; 2) Academia stabilising but fragmented funding limits visibility, . Life Healthcare Electronics Others EV Adj. / DCF Val. -15.0% JEFe PT

implying gradual recovery; 3) Innovation supports share (LS 5% R&D target); 4) LS remains key Source: Jefferies Estimates

M&A focus with an increasingly attractive backdrop.

We see Life Science as the main value driver: We estimate LS accounts for c.58% of MRK

GR's Enterprise Value. We value LS at €102 EV/ sh. with a '27E EV/EBITDA multiple of 15.0x James Vane-Tempest * | Equity Analyst

which we believe is fair as: i) JEFe LS revenue growth '25-28 of 5.2% vs. JEFe core peers 6.7%; 44 (0) 20 7029 8275 | jvane-tempest@jefferies.com