The Supervisory Board again properly executed its duties in fiscal 2025 in accordance with the law, the Articles of Association of Merck KGaA, Darmstadt, Germany, and its rules of procedure. The rules of procedure are published on the company website. In particular, the Supervisory Board monitored the work of the Executive Board diligently and regularly.
Cooperation with the Executive Board
The cooperation with the Executive Board was characterized by an intensive dialogue on the basis of mutual trust. During fiscal 2025, the Executive Board provided the Supervisory Board with regular written and verbal reports on the business development of Merck KGaA, Darmstadt, Germany, and the Group. In particular, the Executive Board also informed the Supervisory Board about the market and sales situation of the Group in the context of macroeconomic developments, and the financial position of Merck KGaA, Darmstadt, Germany, and the Group, along with their earnings development and corporate planning. Within the scope of quarterly reporting, the sales and operating results were presented by the Executive Board for the Group as a whole and broken down by business sector. The Chair of the Supervisory Board also maintained a regular exchange of information with the Chair of the Executive Board outside the Supervisory Board meetings.
Key topics of the Supervisory Board meetings
A total of five Supervisory Board meetings were held in fiscal 2025. These comprised four regular meetings in person and one virtual ad hoc meeting on a planned acquisition. At four of these five meetings, the Supervisory Board intensely discussed the reports of the Executive Board, as well as talking about corporate development and strategic issues together with the Executive Board. The Chair of the Audit Committee reported comprehensively on the previous meetings of the Audit Committee at these meetings of the Supervisory Board and the insights of its audit. Furthermore, in fiscal 2025, there were two informational events (held virtually) for the Supervisory Board regarding personnel decisions within the Executive Board of Merck KGaA, Darmstadt, Germany.
At the meeting in February 2025, which was held in person, the Supervisory Board intensively addressed the Annual Financial Statements and Consolidated Financial Statements for fiscal 2024, the Combined Management Report, the reports of the auditor (Deloitte GmbH Wirtschaftsprüfungsgesellschaft, Munich, “Deloitte”), including the audit report on the non-financial statement for fiscal 2024, and the proposal for the appropriation of net retained profit. The Executive Board reported on the Annual Financial Statements and the Consolidated Financial Statements. The auditor (Deloitte) explained the audit reports including the focus areas of the audit. Deloitte addressed the audit of the Combined Sustainability Statement, which was prepared for the first time under the full application of the European Sustainability Reporting Standards (ESRS). The Supervisory Board has approved, upon the recommendation of the Audit Committee, the Annual Financial Statements prepared by the Executive Board, the Consolidated Financial Statements of the Group, the Combined Management Report of Merck KGaA, Darmstadt, Germany, and the Group, as well as the report submitted by the auditor in accordance with Article 27 (2) of the Articles of Association of Merck KGaA, Darmstadt, Germany. Furthermore, the Supervisory Board approved the report of the Supervisory Board, confirmed the objectives of the Supervisory Board with respect to its composition and the profile of skills and expertise. The Supervisory Board also resolved upon the Declaration of Conformity with the German Corporate Governance Code, and the Statement on Corporate Governance. The Supervisory Board also approved the proposals to be made to the Annual General Meeting. These included the approval of the new compensation system for the Members of the Executive Board. The Executive Board reported on business performance in the fourth quarter of 2024, and the full year 2024, outlined the plans and objectives for fiscal 2025 and discussed these with the Supervisory Board.
In an extraordinary meeting in April 2025, the Executive Board informed the Supervisory Board and engaged in a detailed discussion with them regarding the planned acquisition of SpringWorks Therapeutics, Inc.
The meeting in May 2025, which was held in person, focused on the report of the Executive Board on business performance in the first quarter of 2025 and the forecast for fiscal 2025. The Executive Board discussed developments in the first quarter of 2025 and provided an outlook concerning expected business performance in 2025 as a whole. The Supervisory Board extensively discussed the contributions of the individual business sectors to the company’s financial performance, as well as the impact of geopolitical developments. An additional topic was the the Group Data, Digital & IT strategy. Furthermore, due to Sascha Held’s resignation as of June 30, 2025, Anne Lange was elected as the new Vice Chair of the Supervisory Board, and Sven Vollrath, who succeeded Sascha Held in the Supervisory Board as substitute member, was appointed as a new member of the Audit Committee, each effective as of July 1, 2025.
At the meeting in August 2025, which was held in person, the Executive Board reported on business performance in the second quarter of 2025 and discussed this in detail with the Supervisory Board. Another topic was the engagement of the auditor (Deloitte), who was commissioned to conduct the formal and material audit of the Compensation Report for fiscal 2025. In addition, the auditor (Deloitte) was also commissioned to audit the (Group) Sustainability Statement for fiscal 2025.
At the Supervisory Board meeting in November 2025, which was held in person, the Executive Board provided an overview of business performance in the third quarter of 2025. The background to this business performance was then discussed in detail by the Supervisory Board. Another key topic was the report on the Global Leadership Summit (GLS). The Head of Group Reporting then reported on the transactions of Merck KGaA, Darmstadt, Germany, with related parties within the meaning of section 111a et seq. of the German Stock Corporation Act (AktG). There were no transactions requiring the approval of the Supervisory Board in accordance with section 111b (1) AktG. In addition, the auditor (Deloitte) was mandated to audit the EU country-by-country income tax report. The Group’s cyber risk landscape and significant regulatory developments in the field of cybersecurity were examined. In addition, the climate transition plan was presented, which was developed as part of the Group’s sustainability strategy to meet the evolving EU regulations and due diligence requirements, as well as the expectations of investors and customers.
The Supervisory Board regularly concludes its meetings without the members of the Executive Board being present. Additionally, the employee representatives gather for a preparatory meeting ahead of each Supervisory Board meeting. The employee representatives also gather immediately after each Supervisory Board meeting to discuss the topics addressed at the meeting. Among other things, this includes a discussion of which topics should be put on the agenda for the next Supervisory Board meeting.
Committees
The Supervisory Board of Merck KGaA, Darmstadt, Germany, had an Audit Committee and a Nomination Committee in fiscal 2025.
Audit Committee
The Audit Committee meets four times a year. Further meetings are convened as and when necessary. The Audit Committee is generally responsible for accounting and auditing matters. This includes sustainability reporting and auditing the sustainability reports. In particular, its responsibilities include auditing the Annual Financial Statements, the Consolidated Financial Statements, and the respective reports of the auditor, as well as the half-year financial report and the quarterly statements. The Audit Committee discusses the assessment of audit risk, the audit strategy and audit planning and the results of the audit with the auditor. The Chair of the Audit Committee, Barbara Lambert, regularly discusses the progress of the audit with the auditor and reports back to the Audit Committee. The other responsibilities of the Audit Committee include assessing the performance of the auditor, and especially the auditor in charge of the engagement. The Audit Committee is also tasked with sustainability. This topic was assigned to it by the Supervisory Board in April 2023. The Chair of the Audit Committee, Barbara Lambert, has particular expertise in the area of sustainability and hence can be considered an expert.
The Audit Committee prepares the negotiations and resolutions of the Supervisory Board on the approval of the Annual Financial Statements of Merck KGaA, Darmstadt, Germany, Consolidated Financial Statements of the Group, and the proposal to the Annual General Meeting on the election of the auditor. The adoption of the Annual Financial Statements is not the responsibility of the Audit Committee or the Supervisory Board but of the Annual General Meeting. The Audit Committee also ascertains the independence of the auditor, determines the focus areas of the audit and concludes the fee agreement. Furthermore, the Audit Committee monitors the accounting process, the effectiveness of the internal control system, the risk management system and the internal auditing system as well as compliance. The Chair of the Audit Committee and the auditor also engage in a regular dialogue outside of the meetings of the Audit Committee.
At the meeting in February 2025, which was held in person, a report was presented on the Consolidated Financial Statements for fiscal 2024 as well as on the Annual Financial Statements of Merck KGaA, Darmstadt, Germany, for fiscal 2024. The Audit Committee subsequently engaged in an intensive review of the Consolidated Financial Statements and Annual Financial Statements for fiscal 2024. This included a discussion of the (Group) Sustainability Statement which was prepared under the full application of the first set of European Sustainability Reporting Standards (ESRS). The auditor (Deloitte) reported on the audit of the financial statements and discussed the focus areas of the audit. The meeting reviewed and resolved on the proposal on the appropriation of net retained profit to be submitted to the Supervisory Board, including the dividend payment by Merck KGaA, Darmstadt, Germany, for fiscal 2024. In addition, the written Report on Risks and Opportunities was presented to the Audit Committee, which then examined and discussed it. The Head of Group Internal Auditing then presented the report from Group Internal Auditing for 2024 and discussed this with the Audit Committee. The compliance and data protection report was presented, explained and discussed. The declaration of auditor independence was acknowledged and evaluated. The details of the non-audit services approved in fiscal 2024 were discussed.
At the meeting in May 2025, which was held in person, the report on the net assets, financial position, and results of operations of the Group for the first quarter of 2025 was presented. The Audit Committee then discussed the report in detail. The Audit Committee also discussed the start date of the audit period with the auditor (Deloitte). The auditor provided an overview of the planning for the audit of the financial statements 2025, the contractual terms and the non-audit services.
The meeting of the Audit Committee in August 2025, which was held in person, included a detailed discussion by members of the Audit Committee of the report on the net assets, financial position and results of operations of the Group for the second quarter of 2025. The auditor (Deloitte) presented the results of the audit review of the half-year financial report. The auditor also provided an update on process planning for the audit of the Annual Financial Statements and the planned focal points. Subsequently, the approval process for non-prohibited non-audit services and audit services was approved. Moreover, an update was provided on the transformation program aimed at strengthening the Group’s financial reporting. Further focal points included the update on the implementation of the IFRS 18 reporting standard, the Report on Risks and Opportunities for the first half of 2025 and the status report on the internal control system, which the Audit Committee discussed in detail.
At the meeting that was held in person in November 2025, a report was presented on the net assets, financial position and results of operations of the Group in the third quarter of 2025. The Audit Committee discussed the report on the third quarter of 2025 in detail. It then reviewed the contractual terms for the annual audit of the financial statements and evaluated the audit of the financial statements as well as non-audit services following an extensive presentation by the Head of Group Reporting. The preliminary focus areas for the audit of the Annual Financial Statements and the corresponding schedule were then discussed with the auditor (Deloitte). Finally, the report on Group Internal Auditing for the third quarter of 2025 and the status report on compliance and data protection were presented. An overview of the status of cybersecurity and important regulatory developments was also provided.
Nomination Committee
The Nomination Committee, whose task is to propose suitable candidates to the Supervisory Board for its election recommendations to the Annual General Meeting, did not convene in fiscal 2025.
Annual Financial Statements and Consolidated Financial Statements
The Annual Financial Statements of Merck KGaA, Darmstadt, Germany, prepared in accordance with German commercial law, the Consolidated Financial Statements of the Group, and the Combined Management Report for Merck KGaA, Darmstadt, Germany, and the Group for fiscal 2025, including the accounts, were audited by Deloitte GmbH Wirtschaftsprüfungsgesellschaft, Munich.
The auditor issued an unqualified audit opinion on the Annual Financial Statements of Merck KGaA, Darmstadt, Germany, in accordance with German Auditing Standards.
For the Consolidated Financial Statements of the Group prepared in accordance with IFRS Accounting Standards and for the Combined Management Report for Merck KGaA, Darmstadt, Germany, and the Group, the auditor issued the unqualified auditor’s report that is reproduced in the Annual Report of the Group.
In addition, the auditor audited the calculation of the participation Merck KGaA, Darmstadt, Germany, in the profit of E. Merck KG, Darmstadt, Germany, in accordance with Article 27 (2) of the Articles of Association of Merck KGaA, Darmstadt, Germany. The Annual Financial Statements of Merck KGaA, Darmstadt, Germany, the Consolidated Financial Statements of the Group, the Combined Management Report for Merck KGaA, Darmstadt, Germany, and the Group, and the proposal of the Executive Board for the appropriation of net retained profit were submitted first to the Audit Committee and then to the Supervisory Board together with the auditor’s reports.
The Audit Committee examined the Annual Financial Statements of Merck KGaA, Darmstadt, Germany, the proposal for the appropriation of net retained profit and the auditor’s report. It also examined the Consolidated Financial Statements of the Group and the Combined Management Report for Merck KGaA, Darmstadt, Germany and the Group, and acknowledged the auditor’s reports of Deloitte GmbH Wirtschaftsprüfungsgesellschaft, Munich. In particular, the Audit Committee focused on the key audit matters of particular importance in the audit opinion, the resulting risks for the financial statements, the approach adopted during the audit as described, and the conclusions drawn by the auditor (Deloitte). Following the final assessment, the Audit Committee raised no objections and recommended that the Supervisory Board approves the Annual Financial Statements for Merck KGaA, Darmstadt, Germany, the Consolidated Financial Statements of the Group, the Combined Management Report of Merck KGaA, Darmstadt, Germany, and the Group prepared by the Executive Board, and the report presented by the auditor in accordance with Article 27 (2) of the Articles of Association of Merck KGaA, Darmstadt, Germany.
In accordance with Article 14 (2) of the Articles of Association of Merck KGaA, Darmstadt, Germany, the Supervisory Board examined the Annual Financial Statements of Merck KGaA, Darmstadt, Germany, for fiscal 2025, the proposal for the appropriation of net retained profit, and the auditor’s report presented in accordance with Article 27 (2) of the Articles of Association of Merck KGaA, Darmstadt, Germany, at its meeting in February 2026 to approve the financial statements. It also examined the Consolidated Financial Statements of the Group as well as the Combined Management Report for Merck KGaA, Darmstadt, Germany, and the Group, and acknowledged the auditor’s reports of Deloitte GmbH Wirtschaftsprüfungsgesellschaft, Munich. The discussion of the relevant agenda item at this meeting, which was held in person, was also attended by the auditors who sign the audit opinion on the Annual Financial Statements of Merck KGaA, Darmstadt, Germany, and the Consolidated Financial Statements of the Group. The auditors reported on their audit at this meeting. This was the case for the meeting of the Audit Committee. Based on the recommendation of the Audit Committee and its own review, the Supervisory Board approved the Annual Financial Statements for Merck KGaA, Darmstadt, Germany, for fiscal 2025, the Consolidated Financial Statements of the Group, the Combined Management Report of Merck KGaA, Darmstadt, Germany, and the Group prepared by the Executive Board, and the report presented by the auditor in accordance with Article 27 (2) of the Articles of Association of Merck KGaA, Darmstadt, Germany. The Supervisory Board gave its consent to the proposal of the Executive Board for the appropriation of net retained profit after conducting its own more detailed review. In view of the alignment of dividend policy with capital allocation and strategic measures, the Supervisory Board decided to support the proposal on the appropriation of net retained profit for reasons of financial stability, future investments, and shareholder interests.
Corporate governance and Declaration of Conformity
Corporate governance is a high-priority topic for the Supervisory Board. In its own estimation, the Supervisory Board has an adequate number of independent members. No conflicts of interest as defined by the German Corporate Governance Code involving Supervisory Board members occurred during the year under review. Dialogue with the stakeholder groups set out in the German Corporate Governance Code is an important aspect of opinion-forming within the company. Among other things, this takes the form of surveys in connection with the materiality analysis as well as direct discussions. The Supervisory Board takes the related suggestions extremely seriously, for example those of the investors. In fiscal 2025, the Chair of the Supervisory Board held two discussions with investors. He spoke with representatives of DEKA about the format of the Annual General Meeting, the new compensation system for the Executive Board presented at the 2025 Annual General Meeting, and Group’s communication strategy. In discussions with JO Hambro, the new compensation system for the Executive Board was explained in the context of alternative metrics related to profitability and efficiency. In addition, eight discussions between Investor Relations and investors (AGI, Amundi, BlackRock, DEKA, DWS, State Street, Union Invest) regarding the planned agenda items for the 2026 Annual General Meeting were held in preparation for the Annual General Meeting.
The Supervisory Board has an onboarding process aimed at enabling the quick and efficient induction of new members. Lastly, Sven Vollrath received appropriate training when taking up his position as of July 1, 2025.
After discussing corporate governance issues in detail, the Executive Board and the Supervisory Board adopted the updated Declaration of Conformity in accordance with section 161 AktG and issued it jointly in February 2026. The statement is permanently available on the website of Merck KGaA, Darmstadt, Germany. More information about corporate governance at Merck KGaA, Darmstadt, Germany, including the compensation of the Executive Board and Supervisory Board, can be found in the Statement on Corporate Governance.
Personnel matters and training
With the exception of the extraordinary meeting in April 2025 that was held virtually, and the in-person meeting in May 2025, the Supervisory Board attended all of the meetings in full during the fiscal year, with Sascha Held attending the meetings in February, April and May 2025 until his departure, and Sven Vollrath attending the meetings in August and November 2025 following his appointment. At the in-person meeting in November 2025, one member dialed in virtually to parts of the session. The members of the Audit Committee attended all meetings of the Audit Committee. Sascha Held again took part in the meetings in February and May 2025, while his successor, Sven Vollrath, took part in the meetings in August and November 2025.
To support further targeted training, the Supervisory Board is offered a training event with internal and external speakers at least once a year. In fiscal 2025, one training event took place on artificial intelligence (”AI”) on November 11, 2025. Key topics included an overview of relevant regulatory provisions and the responsibilities of company boards regarding AI, the Group’s data & AI strategy, and the Group’s planned actions as well as cybersecurity. The session also explored practical applications of AI across the various business sectors. The company generally covers the cost of training measures for the Supervisory Board.
The Supervisory Board member appointed in fiscal 2025 received the planned onboarding, which was prepared and conducted by employees of the Legal department. The onboarding process conducted in fiscal 2025 included not only legal aspects, but also training on the corporate management tool for the Supervisory Board and the Audit Committee.
Darmstadt, February 2026
The Supervisory Board of Merck KGaA, Darmstadt, Germany
Michael Kleinemeier
Chair