Bayer Aktiengesellschaft (BAYN) Earnings Call Transcript & Summary

Good morning, good afternoon, and good evening, everyone. Welcome to our Capital Markets Day. My name is Oliver Maier. I'm the Investor Relations lead at Bayer. And I'm very honored and excited to be a host for the 2 event days. We are streaming live from our Communication Center here in Leverkusen, the Baykomm. Due to the ongoing COVID-19 pandemic, we are unfortunately not able to meet in person this year. However, we created a virtual event platform to engage in the best way possible with you and provide a bit of an interactive conference atmosphere. Please feel free to provide feedback around the event as we can only learn for the future. At this point, I would like to shout out a big thank you to my whole Investor Relations team and also everyone that helped in the preparation of this event in front of the camera as well as behind the camera, as this has been a huge and a very complex undertaking. It's a great honor to introduce you to Ariane de Hoog. She's with me on stage this morning, Ariane works for our pharma division. And she gained a lot of experience actually as being an anchor in her previous work life. And Ariane, therefore, will guide you through the next 2 days as our moderator. So Ariane, again, thank you from my end. Thanks so much for your help and your support. It's very much appreciated.

Well, thank you, Oliver It's such a great pleasure to be here today. A very, very warm welcome from my side as well. And at this stage, I'm going to encourage you to have a look at our virtual platform because there, you can find the agenda, you can follow the presentation. You can also have an exchange on our chat lounge. You can follow the Leaps exhibition, a little bit more about that later on. And you can view all the related material, events and presentations in our resource center. So in case you require any assistance at any point in time, feel free to contact our Investor Relations Help Desk.

Great. Thank you so much, Ariane. And before we go over and have a look at the agenda, I'd like to draw your attention to the cautionary language that is part of our forward-looking statements of the safe harbor statement and also part of the material that we have distributed and made available on the event platform today. Now let's have a quick look. Ariane commented on the agenda today. So we will open the day with an opening presentation of our CEO, Werner Baumann. Following will be a divisional presentation of the divisions for pharma, for Crop Science as well as Consumer Health with the respective management members and accompanied by some pharma executive team members like Marianne De Backer, our Business Development Lead and Licensing; as well as Christian Rommel, our new Head of R&D for pharma, who joined us in February from Roche. So Christian definitely got a jump-start on that one. Wolfgang Nickl, our CFO, will then give you an update on our financials and our midterm targets before Werner Baumann will then wrap up the day. After the summary, we will then go into the Q&A sessions that we've prepared, what we call the coffee breaks, and they will start at 5:50 p.m. CET. And if I'm correct, I'm pretty much done with my housekeeping items, Ariane. And why don't you pick it up from there?

Thanks so much, Oliver. You know what, let's get started. We, at Bayer, set forth to transform the industries we operate in with breakthrough innovations in health and nutrition, while contributing to a more sustainable society. This is why we always speak about, Health for all, hunger for none. And on that note, I am so pleased to introduce our CEO, Werner Baumann, to you. He's going to explain this transformation strategy and also present our midterm plan to set the stage for the future of our company. Werner, over to you.

So good morning, good afternoon, and good evening to all of you. And a warm welcome to Bayer's Capital Markets Day. It's really great to have you join us today. Of course, it would have been much better to meet in person. But unfortunately, this is not possible for the time being, but let's hope that we can do so soon again. Before we start with the program, let me introduce our new Board member Sarena Lin to you. Sarena joined our company as a Chief Transformation and Talent Officer very recently on February 1. And with that, Sarena, the floor is yours.

Good afternoon, everybody. It is my great pleasure to have the opportunity to introduce myself to our Capital Market audience today. You are an important stakeholder group to us here at Bayer, and I can't wait to meet you. My name is Sarena Lin. I joined Bayer's Board of Management effective February 1. I'll be serving as the Chief Transformation and Talent Officer and be responsible for strategy and business consulting as well as human resources. And I will also serve as the Labor Director. Prior to Bayer, I was at Elanco Animal Health, where as part of the Executive Committee, I helped the company spun off, IPO-ed and also eventually led the acquisition and the integration of Bayer Animal Health. Before that, I spent many years at Cargill, first, as the Head of Strategy and Business Consulting, then eventually as Cargill's President for the compound animal feed business. Prior to that, I spent more than a dozen years at McKinsey, where I led large transformation strategy work for many global clients. Now a lot of people ask me, why did I join Bayer? And I think Bayer's vision, Health for all, hunger for none, spoke for itself, especially during the time that we live in. Whether it's a pandemic, whether it's climate change, science is now front and center in everything we do. Bayer is a leader in innovation, and they got tremendous opportunity to really bring that vision to life, and I can't wait to be part of this journey. On the personal front, I grew up in Taiwan. I lived many years in the U.S. My husband is German, and we really look forward to bringing the family to Germany and start our next chapter in our lives and explore the culture and the heritage of the country. Last but not least, I really want to share my excitement of being part of this great company. I look forward to shaping and driving the transformation journey, and I can't wait to work with you. Thank you.

All right. Thanks, Sarena. As we now start our Capital Markets Day, I'm sure I can speak for all of us. COVID-19 is affecting everyone personally and also professionally. And the pandemic will have a lasting impact on society. It will change our everyday lives from how we travel, all the way to how we work. Things have been difficult for all of us, I guess, over the last 12 months, but there are also some positive things I want to highlight now. First of all, I'm deeply impressed by the engagement and solidarity I've seen amongst our employees around the world. Beyond that, global supply chains have proven to be resilient and adapted actually very quickly to the COVID-related challenges to meet customer demands. Moreover, the impressive acceleration of digitalization as well as the broad and flexible use of technology is very inspiring and encouraging as we transition into a new and different new normal. As far as our company is concerned, we are excited to be here today with you. We will discuss our strategy. We will lay out our transformation and our midterm plan that will set the stage for the exciting future development of Bayer. Our plans will drive further improvements and increased value for our owners. We are today a leading life sciences company. We are well positioned at the intersection of health and nutrition, and we have attractive growth prospects, earnings and cash flow potential. Our strategy is to build and operate leading businesses in our core areas within health and nutrition. Our strategy is aligned with longer-term societal megatrends, and our strategy also has sustainability as an integral block of all -- for all our businesses. We expect our growth and shareholder value to be driven by 4 factors: First, the long-term megatrend tailwinds that are propelling growing demand in the life sciences; second, technological breakthroughs across our divisions that are driven by the Bio Revolution; third, our focus on sustainability as a value driver; and last, accelerated transformation and further efficiency gains in our operations. Several megatrends support our business dynamics for the next decades. It is evident that a growing and aging population requires innovation to restore and preserve people's health and to secure sufficient supply of affordable food. And the increased pressure on our ecosystems require solutions to use natural resources more efficiently and responsibly. Furthermore, the acceleration of the Bio Revolution will have substantial implications across the life sciences. The convergence of biological sciences and data analytics is massively accelerating the pace of innovation. For human health, a deeper understanding of genetics and disease biology in combination with the accelerated development of computing and artificial intelligence has led to the emergence of precision medicine and gene therapies, which are poised to really change the paradigm of medicine going forward. In the future, these and other new technologies will help not only treat but potentially really cure or even prevent disease. In agriculture, the Bio Revolution will offer new opportunities to help address important health and nutrition needs. For example, the growth of plant-based protein and lab-grown meat or take the development of high-yield seed varieties that will reduce the plant's need of fertilizer, crop protection and water, which helps to reduce the environmental impact of agriculture altogether. Sustainability is an integral part of our business strategy and our growth plans, and it is also an integral part of our incentive systems. We pursue our vision, health for all and hunger for none, with measurable achievements against clearly set commitments. We drive more inclusive growth and help more people thrive while at the same time, decreasing our ecological footprint along the entire value chain. Let me also highlight that with our decision to become climate neutral on our own operations by 2030, we are, as a matter of fact, leading the way in decarbonization. Another great testimony to our vision is the collaboration with CureVac on their COVID-19 vaccine candidate. We are literally working 24/7 with CureVac to help bring this pandemic to an end and, thus, allow people to really return to their normal lives. Societal megatrends and the accelerating Bio Revolution will change the dynamics of the markets we operate in. We do expect our markets to show broad-based growth with attractive market profitabilities. Our markets are innovation driven. They are highly regulated, and they are characterized by significant barriers to entry, all very attractive attributes. Now in pharmaceuticals, companies are expected to adapt their business models in response to therapies that will cure rather than treat over an entire lifetime. In agriculture, the emergence of outcome-based business models and tailored solutions is expected to accelerate. Our sustainability efforts will also lead to new business models, for example, by helping farmers getting paid for carbon sequestration or by providing them with new plant varieties that can fixate nitrogen from the air and, thus, they don't need fertilizer. We are well positioned to take advantage of these dynamics for the benefit of consumers, farmers, patients and ultimately for you, our owners. Now it goes without saying that society is not a static system, but constantly evolving. And we, as a company, are anchored in the middle of society. Our products are part of everyday life, which requires us to change and evolve as well. Now at Bayer, we have a long history of evolution and transformation. I just described the societal megatrends that will shape our businesses, but we have the power to impact our industries as well. Our aim is to transform our industries with breakthrough innovations in health and nutrition and to contribute to a more sustainable society. Now to fully leverage our impact, we are now accelerating the transformation that we started about 2 years ago. Let's take a look back. At our Capital Markets Day in December 2018, we laid out the path towards becoming a leading life sciences company in the world. We set high expectations. And quite frankly, we have fallen short of delivering our growth and earnings aspirations. We do take full responsibility for these misses, actually regardless of whether they are a result of factors that are outside of our control or a result of our own operational shortcomings. No excuses and full stop. Of course, we faced macro-driven headwinds. For example, the pandemic or the impact of -- on our Pharmaceutical business or the massive foreign exchange headwinds. But there are other issues that are company-specific. Be assured that we are laser-focused on resolving them. And here's what we do. Let me start out with our Crop Science business. Yes, we have delivered on the integration synergies, but we are not satisfied with the market growth and our in-market performance, in particular in North America. External headwinds with registration loss for XtendiMax in June 2020 have negatively impacted our operations. And now here is what we do. Our short-term action plan is focused on strengthening our product offering. Major drivers are the recent 5-year registration of XtendiMax with VaporGrip technology in the U.S. and the launch of new soybean varieties in the U.S. and Brazil during this year. In addition, we are rolling out a flurry of new products in crop protection and our seeds business. Last but not least, we have taken important steps to lower our cost base. Those measures position us strongly going forward as we move beyond 2021. We do plan to return to above-market growth over the cycle and set the stage for game-changer innovations, like short-stature corn and HT4 in soy, as well as the first really new mode of action for post-emergent weed controls in the last 30 years. In Pharmaceuticals, our blockbusters, Xarelto and EYLEA, are further maturing within their life cycles. We remain fully on track towards maximizing their value. But we must replenish our marketed product portfolio and strengthen our pipeline to develop sustainable long-term growth. And here is what we do. We are well underway with the launch of our late-stage pipeline assets, finerenone, Nubeqa and Verquvo. We acquired KaNDy Therapeutics and AskBio to name just 2, gaining access to highly attractive assets and have entered into many partnership agreements with partners such as Atara Biotherapeutics. In the consumer business, we have successfully delivered the turnaround. This has resulted in an attractive growth and margin trajectory over the past 18 months. While this is very good, it is not yet good enough. And here is what we do. We will further build on this positive momentum. We have again significantly upgraded our innovation funnel and our commercial capabilities. Our focus is now on sustainable, profitable, above-market growth at the top of our industry, and we have a strong and proven leadership team and a clear action plan in place. Lastly, our litigation issues. We have made good progress on settling our current cases with the recent filing of them and, of course, the recent filing of the settlement proposal for the future cases. We expect the court ruling on preliminary approval towards the end of the second quarter. And it goes without saying that we remain strongly committed to resolution that addresses the litigation on reasonable terms. Now let me come to the areas where we have made actually very good progress in the past years. First, we delivered on our commitment to divest on nonstrategic assets actually at very attractive prices. We have adjusted our cost base ahead of time and above expectations. We also promised to turn around our Consumer Health business. And as I just mentioned, our Consumer Health business has moved from an industry underperformer to an industry outperformer much faster than we expected. Furthermore, sustainability has become an integral part of our business strategies, and it will drive value going forward. We set bold 2030 targets in line with the UN Sustainable Development Goals. We also established a Sustainability Council with renowned experts in their fields. Lastly, we promised to strengthen our pharma pipeline and to intensify external growth with innovative external assets. Today, we can see our late-stage pipeline move into launch phase with new potential blockbuster drugs. Let me also underline that in 2020 alone, we concluded 25 transactions, among them acquisitions in the gene and cell therapy space, in women's health, and in personalized nutrition, and they all significantly strengthen our midterm growth potential. Now coming to the mid- to long-term potential of our businesses. We really live up to our purpose of Science for a Better Life as we continue to strengthen our innovation capabilities and accelerate our transformation. Indeed, Crop Science, Pharmaceuticals and Consumer Health are all science-led and innovation-driven. And we are at the very forefront of the Bio Revolution in life sciences. As different technologies become more and more interdependent, it can really take advantage of our world-class expertise in chemistry and build on our knowledge in biology, biotechnology and the data sciences. These technologies and scientific breakthroughs are highly relevant to all of our businesses. Our Leaps organization is a key pillar when it comes to access to breakthrough innovation for the entire company. In Pharmaceuticals, we are expanding into new modalities beyond small molecules. We build innovation platforms with breakthrough technologies that could cure currently untreatable diseases with significant patient populations. It is our goal to deliver innovative treatments for patients and transform our long-term innovation potential in this area. And as a matter of fact, I'm not only talking about the far distant future here. We are seeing first proof points already. We do have 2 potentially regenerative treatments for Parkinson's disease in clinic development already. In Crop Science, we are combining different technologies into smart, digitally enabled solutions to create new or enhanced value for farmers and make agriculture more sustainable. For example, our short-stature corn, which was launched recently in Mexico. It is much more resilient against stalk lodging and green snap. It is also more sustainable as it uses less water and nutrients at comparable yields. Another very good example is Unfold, a new company we set up together with Temasek. Unfold uses our vegetable crops germplasm to develop new seed varieties and agronomic advice for vertical farms. And I could literally go on and on and on with more examples. All this makes us very optimistic for the future. Let me now provide a brief overview of our midterm targets up to 2024. And of course, my colleagues will provide more details in their sessions. First of all, we planned solid growth as our financial KPIs, all of which are based on December 2020 foreign exchange rates. Number one, net sales are expected to get to 30 -- EUR 43 billion to EUR 45 billion by 2024. Core earnings per share will be in the corridor of about EUR 7 to EUR 7.50. Our free cash flow is projected at around EUR 5 billion, and we will manage net debt into the level of about EUR 28 billion to EUR 30 billion by the end of 2024. Now let me sum up by saying that we are very optimistic for the future. Bayer operates leading businesses in highly attractive markets. We are laser-focused on addressing our current issues. We have well-defined plans to accelerate value creation for the next years to come. And beyond, we have laid the foundation for sustainable innovation-driven growth for the mid- and longer term. We have a clear plan that the Board of Management and our entire senior leadership are fully committed to and that I am fully committed to. We have the right team in place to deliver. And you will have a chance to form your own opinion on the quality and execution capabilities of our top management team during the sessions to come. I'm now looking very much forward to our discussion with you at our Capital Markets Day. And with that, thank you very much.

Thank you so much, Werner. Those are fantastic insights. So much that we learned from that. And on that note, if you have any questions for Werner, we are going to have a half hour Q&A later today to answer your questions. So please, do input your questions into the chat room. You'll see it on the right side of your screen, and I will ask those questions on your behalf later on. So we just learned about our plans to accelerate value creation and, of course, also our commitment to deliver on them. Now what is the Pharmaceuticals Division have to contribute to this? I am so extremely pleased to welcome Stefan Oelrich. He's our President of the Pharmaceuticals Division, and he's going to be joined by Christian Rommel, Head of Pharma R&D; as well as Marianne De Backer, who is our Head of Pharma Strategy and BD&L. And they're going to provide an overview of our business and also insights into the ongoing transformation process. So with that, over to you, Stefan.

Thank you, Ariane, for your introduction, and welcome, everybody, to today's presentation about our Pharmaceuticals business. I'm truly excited to provide you today with a strategic update on our business, insights into our ongoing transformation process and also our path forward to create value towards 2024 and beyond. Let me first start with our management team at pharma, which has changed quite a bit since I rejoined pharma back in 2018. In fact, about 50% of my leadership team has been replaced since then. With me today as new team members, you just heard, are Marianne De Backer, who joined us from J&J as Head of Strategy and Business Development and Licensing as well, of course; and Christian Rommel, who came to us just a few weeks ago from Roche to head up our research and development group. This new team is dedicated to drive the transformation of our pharma business to manage the upcoming loss of exclusivity for both Xarelto and EYLEA, but most importantly, to return the franchise to growth thereafter. This team will be focused on redefining how we bring breakthrough innovation and medicines to patients. While we successfully delivered on our late-stage pipeline with 3 potential blockbuster products, we will focus now on realizing the full potential of these medicines as well as of our marketed product. Our aim is clearly to provide the resources needed to successfully commercialize that pipeline, and we plan to continue our investment in innovation. This, of course, may result in a reallocation of resources to free up the required funds for the most promising innovation projects. As we broaden and expand into new modalities, we have entered into the field of cell and gene therapies. It bears the potential for the pharma industry to tap into unprecedented opportunities of the emerging Bio Revolution in this area. We will be at the forefront here and have implemented a comprehensive cell and gene therapy strategy last year. Last but not least, external innovation has always been one of the growth pillars for pharma, and external innovation will play an even greater role in the future for us. We've defined 5 strategic focus areas that guide our transformation. In the area of portfolio and pipeline, we really need to maximize the value of our current portfolio and manage the loss of exclusivity for Xarelto and EYLEA. With Nubeqa, finerenone and our latest addition, elinzanetant, we will bring 3 potential blockbuster products to the market. Verquvo, which was just recently introduced in the United States adds another $500 million in peak sales potential. These medicines should support the top line during the loss of exclusivity phase and drive growth thereafter. Historically, our strength clearly lies in small molecule research and development, and we need to protect this strength as we can and as we go along. But on the other hand, we will continue to broaden our access to new modalities to take advantage of breakthrough innovation such as cell and gene therapy. Digitalization across the entire value chain will also have a major impact on how we do things in the future. In the past 2 years, we've made significant progress in this area as well. Be it on the one hand, with our collaborations in R&D, or by developing digital health solutions on the other with our investment into One Drop. Oncology represents an important pillar for our future growth as well. We aspire to build into an at-scale oncology player in our areas of focus. Driving growth and maximizing the value of our in-line brands will be just as important as pushing for growth with new product launches. To sustain future business expansion, we need to evolve our regional strategies, especially in China and in the United States. Both countries represent, by far, our largest pharmaceutical markets. Obviously, managing the loss of exclusivity for Xarelto and EYLEA will be one of the key tasks for us. Both products are on track to deliver their peak potential of more than EUR 5 billion for Xarelto and more than EUR 2.5 billion for EYLEA. Already now, these products belong to the leading brands in the industry. Due to its compelling efficacy and safety profile, EYLEA clearly remains an important treatment option in the treatment of retinal diseases. We expect further growth out of EYLEA. This should be mainly driven by continued generation of real-world evidence across key markets and wider acceptance of EYLEA's treat-and-extend dosing regimen. EYLEA will lose exclusivity between 2020 and 2025 in key markets. We would expect more moderate genericization dynamics given that it's a biological product. This is especially true for ex U.S. markets where we own the marketing rights for EYLEA. Despite the emerging competition, we will definitely maintain a leading market position. Let's now take a closer look at Xarelto. In 2020, Xarelto recorded sales of about EUR 4.5 billion. It is now the world's #4 brand in the pharmaceutical industry overall. It also remains the most comprehensively licensed NOAC, with the strongest real-world experience as almost 74 million patients are estimated to have been treated since Xarelto was launched basically a decade ago and even longer than that. The loss of exclusivity for Xarelto will not be a singular event but will span over several years across the main markets. It already started at the end of last year in China. In Europe, the compound patent will expire in September of 2023 and in the U.S., in August 2024. Both may come with 6 months of pediatric extension of exclusivity on top, and we're making good progress there. In addition to these compound patents, we have been granted a U.S. patent, which does cover the once-daily use of Xarelto. Based on the settlement, licensed generics may enter the U.S. market in 2027. The regional sales distribution of Xarelto reveals that more than half of Bayer sales are generated in Europe. Just 11% are coming from the U.S. This component represents mainly the royalty income that we get from J&J. The regional sales distribution is an important factor to keep in mind when assessing the potential impact of the loss of exclusivity for Xarelto. Historic genericization patterns of other small molecules reveal that post patent expiry, sales are decreasing moderately over time in many parts of Europe and in many emerging markets as well. While the U.S., the sales decline can be very pronounced. We expect a staggered impact of the loss of exclusivity for Xarelto on our top line. This is well reflected in our long-term business projection, which can be divided into 3 main phases. Now the first phase comprises the time until the loss of exclusivity for Xarelto. Our overarching goal during this phase is to drive further growth of our franchise. In addition, we already expect to generate significant sales contributions from our launch products, Nubeqa, finerenone and also Verquvo. During the second phase, we expect a moderate sales decline with a top line trough in 2024. Compared to 2023, and we would expect a low to mid-single-digit decline in overall pharmaceutical sales. More importantly, we plan to return to growth thereafter. This stands somewhat in contrast to market estimates. For us, this raises the question what we may not have communicated sufficiently to the market to bring both projections into closer alignment. Now looking at the midterm period of '20 to '27, we expect sales of our marketed products to decline by about EUR 3 billion overall, which will be largely driven by the decline in Xarelto sales. The anticipated sales decrease for EYLEA is expected to be mainly compensated by growth of our IUD franchise as well as of Stivarga and Xofigo. During the same period, sales of our potential blockbusters, Nubeqa, Vitrakvi and finerenone as well as of Verquvo should gain momentum. We expect combined sales of these products of around EUR 4 billion until 2027. We also calculate first risk-adjusted sales from elinzanetant and the P2X3 receptor antagonist into our projection. This will be complemented by increasing sales from AskBio, including their license income and the contract development and manufacturing business. Beyond 2027, we expect the full value of the cell and gene therapy platform to crystallize and our midterm pipeline, like the Factor XI inhibitor portfolio, to enter the market. During the same period, we do expect the sales decline for Xarelto to bottom out. Thus, during the past 2 years, we established 4 main building blocks to lay the foundation for our future growth. These do include our late-stage pipeline of cardiovascular disease and women's health, namely Verquvo, finerenone and our latest, elinzanetant. Another building block for creating sustainable value clearly is oncology. With 3 product launches during the last years, we have significantly advanced our presence in select areas of the field. In addition, we expect substantial growth contributions from our cell and gene therapy platform. On top of this, external innovation, in-licensing and bolt-on acquisitions will remain an important element to replenish our pipeline and to add to long-term top line growth. During the remainder of my presentation, we will provide you with more insights in how we plan to develop these foundational building blocks for future growth. Now with that, I'm going to start handing over to some of my colleagues that have joined me here. Let me put on a mask. That have joined me here on stage. So please come on with me. So I will be most happy to introduce to you Marianne De Backer, our Head of Business Development, Licensing and Strategy; and also Christian Rommel, our latest addition as Head of Research and Development, who is absolutely unbiased on everything because he still has this fresh look, I hope, at things. And I hope he can share some of the excitement that he had when taking a closer look at our pipeline. With that, hand over to you, Christian.

Thank you, Stefan. Ladies and gentlemen, it's a pleasure for me to be here today and to update you on R&D at pharma. During today's presentation, I will give you my initial high-level view on key R&D projects. More details are to come in tomorrow's pharma R&D presentation. Looking at the late-stage pipeline, I was really excited about the level of progress, differentiation as well as the potential impact that comes along with Nubeqa, finerenone and KaNDy NT-814. Each of these products has blockbuster potential. Nubeqa is an androgen receptor antagonist for the treatment of non-metastatic, castration-resistant prostate cancer, also referred to as CRPC. The distinct profile of the molecule translated into significant overall survival benefit and showed a favorable and differentiated safety profile. Besides non-metastatic CRPC, we expanded the clinical program into the much larger metastatic hormone-sensitive prostate cancer setting. The first trial in this indication is expected to be completed later this year. The launch of Nubeqa in the first indication is in full swing, and early launch experience is exceeding our expectations. We continue to expect peak sales of at least EUR 1 billion for the product. You will hear more about it from my colleague, Robert LaCaze, who is leading this success. Finerenone is a novel, selective, nonsteroidal mineralocorticoid receptor antagonist. In the first pivotal Phase III trial, it demonstrated renal and cardiovascular benefits in patients with chronic kidney disease and type 2 diabetes. We applied for approval in this indication in key markets and the FDA granted priority review. We now also investigate finerenone in patients with heart failure with preserved left ventricular ejection fraction. Again, we expect peak sales for the product of at least EUR 1 billion. Elinzanetant, formerly KaNDy NT-814, is a potential nonhormonal treatment of vasomotor symptoms during menopause. Up to 75%, on other words, 3 out of 4 women going through menopausal transition experience such symptoms. Given the limitation of the current standard of care, which is hormone replacement therapy, new treatment options are indeed needed. Based on exciting Phase II data, we plan to start Phase III this year. Given the high unmet need, the novel therapy could generate peak sales of more than EUR 1 billion globally. And it's not only these late-stage asset, which got me really excited. Also, our early- and mid-stage pipeline comprises several attractive, scientifically sound and differentiated opportunities. We already talked about finerenone and elinzanetant. In our mid-stage pipeline, our Factor XI inhibitor portfolio represents one of the broadest in the industry. Blood coagulation Factor XI, could be a promising target for new approaches in anticoagulation with potential to reduce bleeding risk. Our portfolio includes an oral, an antibody and an antisense approach, which are currently all in Phase II development and progressing well. We are pursuing a multi-indication opportunity with our P2X3 receptor antagonist. P2X3 receptor is a major regulator of afferent nerve fiber signaling and a prominent mediator of pain. We currently investigate our P2X3 in Phase II across different indications, such as chronic cough, overactive bladder, endometriosis and neuropathic pain, which reflects the broad potential this asset may have. Among our early pipeline assets, we have some exciting projects in oncology. In the field of precision molecular oncology, I would like to highlight the EGFR exon 20 inhibitor and the ATR inhibitor. Mutations in exon 20 of the epidermal growth factor receptor gene are important oncogenic drivers in non-small cell lung cancer and correlate with poor patient prognosis. Our EGFR exon 20 inhibitor is currently in IND-enabling studies and may have the opportunity to address a significant unmet medical need. ATR is a central DNA damage response kinase activated by replication stress and DNA lesions. Inhibition of ATR kinase in tumor cells may lead to cell death and, thus, may offer a new approach for the treatment of cancer. Our asset demonstrated compelling preclinical activity as a single agent and in combination with immunotherapies, such as PD-1 checkpoint inhibitors and DNA repair blockade via PARP inhibitors. I am, in particular, excited about our unique access to targeted thorium conjugates, which may represent a completely new platform for the -- potentially several cancer therapies. Thorium conjugates combined the alpha radiator, thorium-227, and antibody, peptide or small molecule to direct high-energy alpha radiation to the targeted tumor cells. Bayer did a great job in building an industry-leading platform in cell and gene therapies, which will propel our presence in this areas forward. Marianne will talk about this later in her presentation. Already today, collaborations and use of external innovation are integral to our innovation strategy. That is why we work within a network of alliances with start-ups, top-ranked academic institutes, industry and other partners. Our partnership on cardiometabolic risk with a Broad Institute, the successful strategic collaboration with Evotec in the area of women health and the already mentioned collaboration with Atara in oncology, are just a few examples to name here. In the future, we will further enhance our focus on external input to drive our innovation model at pharma. Now like many of you, we are, too, excited about and committed to digital innovation. The opportunities resulting from applying data science and artificial intelligence in drug discovery and clinical development are tremendous. They may not only increase the speed in bringing new drugs to the market, they may also enhance efficiency, insights and patient outcomes in clinical trials. We all know R&D will look differently in the future. And I am excited that we have already established promising drug discovery collaborations in this field. Medical conditions never exist in isolation. Individual circumstances influence the ability to implement treatment and advice. Through integrated care, we want to address such patient-specific circumstances. We are approaching digital health beyond the doctor's office into the realm of everyday life. Patients will be equipped with digital solutions, allowing them to move from treating diseases towards managing their own health and staying healthy. With One Drop, we are building on an existing diabetes management platform and plan to jointly develop integrated care solutions for cardio, renal diseases, women's health and oncology. The One Drop transaction was one of many deals executed last year by the Pharmaceutical business development and licensing team under the lead of my colleague, Marianne. With that, I would like to hand over to her so that she can share insights into the work she is doing. Marianne, please?

Thank you very much, Christian, and a warm welcome from my side. It's a real pleasure to be here today to provide you with an update on our business development and licensing activities. Over the past year, we have significantly increased our focus on external innovation to accelerate replenishment of our pipeline and to broaden access to new modalities. As you might have seen, despite the pandemic and the associated lockdowns, we could show an unprecedented deal flow for Bayer Pharmaceuticals last year, with more than 25 transactions signed covering the entire spectrum, from collaborations combined with equity investments through Leaps, to licensing agreements, to acquisitions. Importantly, these alliances were very carefully curated to help drive growth in our 5 strategic focus areas. We have continued to augment our core therapeutic areas, for example, in the women's health care space through the acquisition of KaNDy Therapeutics. We have broadened our oncology pipeline. We have grown our commercial footprint in China, and we have ventured into the digital health arena. Strategically, though, the most important step we made last year was to build a leading cell and gene therapies business. Through a series of partnerships, we laid the foundation for world-class therapeutic platforms with application potential across many diseases for which there is a high unmet medical need. Traditionally used modalities, as you know, fall short in adequately treating many diseases today. Particularly when the target is, for example, an undruggable protein or the disease is multifactorial or the disease is caused by one or more gene defects. Cell and gene therapies offer us now the possibility to address these and really the root cause of disease and may even offer us curative approaches. Based on early evidence, we believe that this field will dramatically alter the standard of care across multiple conditions to the benefit of patients. Bayer's cell and gene therapy strategy is based on 4 distinct yet interlinked platforms. So let me take you briefly through them. First, with the acquisition of AskBio last year, we brought into Bayer one of the truly most advanced and industry-leading gene augmentation platforms based on adeno-associated virus or AAV technology covered by over 500 patents. It has already demonstrated clinical as well as commercial applicability across a whole slew of therapeutic areas. Next to that, AskBio also has a revenue-generating contract development and manufacturing organization, which we believe will contribute not just to our own products but also help fill an important global demand gap for development and manufacturing of gene therapies. Secondly, with the acquisition of BlueRock in late 2019, we acquired a pioneering induced pluripotent stem cell or iPSC platform, which allows us to generate differentiated cell therapies in the fields of neurology, cardiology and immunology. And BlueRock's first breakthrough program, as you heard, is in Parkinson's disease and is initiating first-in-human studies. Now next to our gene augmentation and stem cell platforms, last year, we also entered into an exclusive and strategic collaboration for a CAR-T cell therapy platform with Atara Biotherapeutics. And here, we aim to develop truly the next-generation mesothelin-targeted CAR-T cell therapies for the treatment of solid tumors, and we will start with the treatment of lung cancer. Atara is a true pioneer in allogeneic, which means donor dependent or off-the-shelf T-cell immunotherapy. And this collaboration is a fundamental element of our strategy in this area of cell therapy. Finally, gene editing. It's a cross-functional, enabling technology that is necessary for most gene and cell therapies. And also here, we have access to the latest CRISPR/Cas9 technologies, for example, through a series of external partnerships. Our governance model allows for our partners, such as AskBio and BlueRock, to operate with great autonomy and to be fully accountable to develop and progress their portfolio and their technology while benefiting from the broad capabilities and the global reach we have at Bayer. In our view, this is bringing together the best of both worlds, biotech and big pharma, and positions us, Bayer, as a true partner of choice. Now as a result of all these partnering activities, we have been able to bring together a vibrant pipeline of cell and gene therapies. We have 6 clinical assets across multiple disease areas such as Pompe disease, which is a rare and often fatal metabolic disorder; congestive heart failure; hemophilia and solid tumors. As mentioned before, for Parkinson's disease, which is a progressive degenerative disease affecting over 7.5 million people globally and for which there is still a very substantial unmet medical need, we actually have 2 pioneering approaches: one through AskBio's delivery of glial-derived neurotrophic growth factor, AAV therapy; and one through BlueRock's dopaminergic neurons derived from iPSCs. So more to come on that from my colleagues tomorrow. We expect this pipeline also to continue to grow in the years to come as we have several preclinical assets in IND-generating studies. Our partnering achievements in 2020 have also been reflected in several rankings. The acquisition of AskBio, for example, was among the top 10 largest biopharma M&A deals in 2020. The acquisition of KaNDy Therapeutics ranked among the top 20 largest deals. And additionally, we had the most transactions in the area of use of artificial intelligence in drug discovery. External innovation and new business development is an integral part of how we do our business, and we will continue to look for external opportunities to complement our in-house activities and expertise and to drive further growth. With that, I would like to hand it back to Stefan.

Well, thank you, Christian. Thank you, Marianne. I think this gives you a really good sense of why we're really excited about the future. So let's change gears here for a second and take a closer look at oncology, which represents one of our most exciting and promising future growth drivers for the Pharmaceuticals business. In the last 5 years, we doubled our oncology portfolio and have significantly advanced our selected presence in those areas like prostate cancer and others. Our oncology portfolio now comprises 6 marketed products and a compelling early and mid-stage pipeline. Our commitment is to build an at-scale player, as I said before, in key areas of oncology. A centerpiece of our strategy to achieve this goal will clearly be Nubeqa. For the first time, we have a true product with blockbuster potential in our oncology portfolio. We're really excited by the initial launch uptake, and we are optimistic that Nubeqa delivers its peak potential of more than EUR 1 billion. For Vitrakvi, the global launch is progressing. Vitrakvi demonstrated pan-tumor potential in TRK fusion cancers with an impressive overall response rate of 71% in adults and over 90% in children. The challenge for Vitrakvi is, of course, the identification of the right patient given that for that, you need genetic testing. We're working diligently to increase testing rates, and we are convinced that Vitrakvi will deliver substantial contributions to our top line in oncology. We will also continue to work on our oncology pipeline and proceed the most promising assets. Some of them were already mentioned by Christian, and he knows 1 or 2 things when it comes to oncology. To achieve our long-term growth aspirations, we also have to continue to invest in next-generation technologies, like we did with Atara. You just heard it from Marianne. We will continue to look for potential in-licensing opportunities and external growth opportunities through bolt-on acquisitions, all through our impact investment arm, Leaps by Bayer. I mentioned earlier that one of our strategic focus areas is to evolve the regional strategies in the U.S. and China to sustain future growth. Now the regional composition of our portfolio differs quite a bit compared to the pharma market. Because of our lack of marketing rights for our 2 flagship brands in the U.S., we have an underrepresented sales contribution coming from the U.S. market. In fact, we've had these rights -- or should we have these rights actually, or should we have had these rights, we would most likely be one of the top 10 pharma companies. We are a Europe- and China-centric pharma company at this point with a relative low sales contribution coming from the U.S., as I just said. This imbalance relative to the market is mainly the result of that lacking U.S. rights for Xarelto and EYLEA. In fact, and now I'm repeating myself, we would have been really a top company in the world. So at the same time, all of our current U.S. launches perform at or above our expectations, as demonstrated in the area of women's health care oncology and such medicines as Adempas, where we are true leaders in the field. We expect that ongoing portfolio evolution will change our geographic imbalance significantly and therewith constitute an important leverage point in the future. With the upcoming launches for which we hold global commercial rights, that commercial footprint in the U.S. will significantly expand. With the acquisition of KaNDy Therapeutics, we are capitalizing on our strength in women's health, where we are clearly the leading company. The same holds true for radiology. And in oncology, Nubeqa is a key growth opportunity for us, as you just heard, and our early launch success in the middle of the pandemic confirms that. We will also expand our position into the cardio-renal market with finerenone and also through the co-promotion of Verquvo. This should all contribute to building that position in the U.S., which is still the most valuable pharmaceutical market globally. At our last Capital Markets Day in 2018, I highlighted the growth opportunity for us coming out of China, and I'm really happy to report that we exceeded our set goals ahead of time. Even though the market environment has significantly changed since then, we still see significant potential for growth. The Chinese pharmaceutical market holds a lot of potential for future growth. This growth is based on strong market fundamentals. Disease diagnosis and the treatment rates are still comparably low. Together with an aging population and increasing prevalence in chronic disease, it will drive future growth. We, therefore, aim to sustaining future growth in China through a dual-track strategy. On the one hand, we're targeting to keep our strong market position of established products and a -- an established product portfolio by truly leveraging that significant volume opportunity that comes with it. I think we have very nicely demonstrated that over the past 12 months with Glucobay. On the other hand, we're pursuing an innovation-driven growth strategy by addressing unmet medical need. In total, we're expecting 5 to 7 new product launches by 2025. So there again, a flurry of new things for a market like China. We have now talked a lot about our 5 strategic focus areas and the opportunities associated with each of them. What all of them have in common is that they contribute to our vision, Health for All, Hunger for None. The same holds true for our sustainability, which is fully embedded in our strategy. In 2019, we have announced measurable sustainability targets, which are also linked to our incentive scheme. We are planning to provide 100 million women in low- and middle-income countries with access to modern contraception by 2030. We are implementing patient affordability programs around the world to broaden access to our pharmaceutical products. This is clearly part of our comprehensive sustainability measures and commitments from 2020 onwards, and all of them are in line with the Sustainable Development Goals of the United Nations. Well, we now talked a lot about the ongoing transformation of our Pharmaceuticals business. But how does all of this translate into our financial outlook and our midterm targets? Our midterm financial targets fully account for the impact of the loss of exclusivity of Xarelto. As announced with our full year's results end of February, for 2021, we expect sales to grow by about 4%. Until 2023, we expect sales growth to range between 3% and 5%, reflecting the uptake of our new launches and further grow from our main products, Xarelto and EYLEA. In 2024, we expect to see the trough of the top line impact from Xarelto's loss of exclusivity in main European markets. Compared to 2023, we aim to limit the impact to a low to mid-single-digit percentage decline in sales. More importantly, we also expect to return to growth thereafter as new launches are expected to mitigate the top line impact of the loss of exclusivity. Profitability-wise, we do expect the adjusted EBITDA margin to range between 32% and 34% until 2023 through continued stringent cost management while investing into growth. For 2024, we expect an adjusted EBITDA margin of about (sic) [ above ] 30%. So ladies and gentlemen, let me summarize. The transformation of our pharmaceutical business is in full swing, and we are truly excited about the future prospects of our business. We expect limited impact from the loss of exclusivity of Xarelto as it is reflected, you just heard it, in our new midterm financial targets. We have laid the foundation for sustainable long-term growth thereafter, which will be driven by 4 main building blocks. We have successfully established a cell and gene therapy platform, and we will continue to invest in potential breakthrough technologies. We are also evolving our regional strategies, especially in the U.S. and also in China to develop and exploit new growth opportunities for us in these geographies. And in total, all of this is guided by our commitment to sustainability to achieve our vision of Health for All, Hunger for None. Ladies and gentlemen, this concludes our presentation about the strategic update of our pharma business with insights into our ongoing transformation process and our path forward to create value towards 2024 and beyond. We are now looking forward to answering your questions during the Q&A sessions later today. With that, I hand it back over to you, Ariane.

A very big thanks to the 3 of you. So much exciting news. [Operator Instructions] So we are going to have a short break now, about 5 minutes. But after that, we're going to continue with the presentation of Liam Condon. You can see he's ready to go back there, our President of the Crop Science Division. So stay tuned. [Break]

Welcome back, everyone. Now let's take a look at our Crop Science Division. And it's such a great pleasure to have Liam Condon here with us today. He is, of course, the President of our Crop Science Division. And over the next 30 minutes, he's going to explain why Crop Science as an innovation leader is well positioned to shape agriculture but also drive sustainable growth. So on that note, I hand over to you.

Good afternoon, and welcome, everybody. It's a real pleasure to be with you today. As Werner shared earlier, we're on the cusp of a bio-revolution that is poised to create significant value, value for consumers, customers and owners, as we drive the transformation of agriculture and help create a more sustainable food system. Now in many areas, we have made significant progress since we last met in person and set our midterm ambitions for 2018 to 2022. But we did not deliver on our financial commitments. I take accountability for this irrespective of many aspects that were outside of our control. There are some explanations but no excuses. We were too optimistic on general market growth, which was held back by unpredictable market events and extreme currency headwinds. In addition, we had to deal with some regulatory challenges in our product portfolio, and we lost market share in our soybeans business in North America. While we failed to achieve our original ambition, we still delivered strong competitive performance and even increased market share in corn and crop protection in North America. We also gained share in Brazil and are on the path to return North America soybeans to growth in 2022. Our business fundamentals are strong across all dimensions and allow us to take advantage of the much better market environment that has recently emerged. Our primary goal in the midterm is to grow above market with industry-leading profitability. As mentioned during our fiscal year 2020 earnings call, we consider 2021 a transitional year. And if the market grows more than forecast, we will also grow more, and we'll revise our guidance as appropriate. Let me now talk about the next phase of leadership, innovation and above-market growth in Crop Science with our midterm plans. As the established leader in the agricultural input space, we are strongly positioned to benefit from a better market environment as we spearhead the bio-revolution and execute on our strategy. We are the leader in sales, profitability and R&D investment, with sales of nearly EUR 19 billion and a clean EBITDA margin that exceeds 24%, all fueled by an R&D innovation investment that is 2x our peer average. With consistent high-yielding performance in our iconic DEKALB and Asgrow brands, we have earned the #1 position in corn and soybean seed and traits globally, and we enjoy leading positions in vegetables as well as cotton seeds. Together, our seed and trait technologies reached more than 350 million acres annually, which we continually refresh with 4 key new traits moving into the market this year alone. This leadership extends to our crop protection portfolio with our top 3 positions in herbicides, insecticides and fungicides. In addition, we have an industry-leading biologicals portfolio in crop protection and seed treatment with market penetration of over 80 million acres in row crops and the leading position in horticulture. Our exceptionally strong portfolio is complemented by our leadership in digital farming, which allows farmers to take smarter agronomic decisions and increases transparency of performance. Our digital platform, Climate FieldView, now reaches more than 150 million subscribed acres and is enabling both tailored solutions and new business models. Looking forward, we see an attractive and growing agricultural input market fueled by multiple megatrends. By 2050, we estimate there will be at least 2 billion more people on this planet, requiring 50% more food from the same or a smaller footprint. When coupled with climate-driven harvest losses and increasing sustainability awareness, we must innovate to produce more with less. Our leading position in this growing market is a strong starting point, but success for us means outgrowing the market. We will drive superior growth by better commercial execution, particularly in North America, as well as delivering world-class innovation and products and digital solutions while setting new standards for sustainable agriculture. These 4 core pillars remain core to the purpose of what we do, which is all about shaping agriculture for the benefit of farmers, consumers and the planet. Let's start with our first pillar. Our plan is to deliver 2% growth in 2021 and then accelerate to 3% to 5% growth in sales, exclusive of currency and portfolio changes, from 2022 to 2024. At the same time, we will expand our EBITDA, before special items, margin to 27% to 29%. To do that, we are focused on 5 key deliverables: first, to achieve strong annual sales growth in crop protection with integrated offerings, new products and price; second, to increase corn sales through the annual deployment of new hybrids along with the launch of new insect control traits in the Americas: third, to transition and upgrade the Americas to next-generation soybean trait technology; fourth, to expand our position in all other seeds with the ThryvOn trait launch we have in cotton and new vegetable seed offerings; finally, our fifth driver focuses on effective cost management and efficiency management. Now let's take a deeper dive into each of these growth drivers, starting with crop protection. We are transitioning from volume to value as we move towards selling sustainable productivity to growers. This begins with a leading portfolio in terms of value, reach and environmental impact. Bayer's current crop protection portfolio has a very low environmental impact relative to its high market share, as recently confirmed by a preliminary assessment from an independent academic consortium. This strong starting point underlines progress towards our long-standing environmental commitments. We constantly develop new products and formulations, and then combine this portfolio with our leading seed and trait products to provide integrated offerings like Bayer PLUS that promotes the beneficial use of multiple modes of action and rewards our loyal customers. Through our digital farming platform, we can tailor that offering to a grower's unique operation with the right products used exactly where they need to be. In parallel, we are pioneering outcome-based business models to drive the shift from selling inputs to selling outcomes. We'll achieve our midterm growth in crop protection through a combination of innovation, product stewardship and price-volume measures around best-in-class overall solutions. Let's take a brief look at our plans in each indication. In herbicides, our plan to deliver a compounded annual growth rate in sales of 3% to 4% until 2024 is focused in the Americas and comes largely from a balance of price and volume from our existing portfolio. We are laser focused on executing the recovery of XtendiMax with VaporGrip sales in the U.S., where it pairs with our dicamba-tolerance traits in soybeans and cotton to create the leading weed control platform in both crops. This is backed by the 5-year registration we received from the EPA last fall, along with all the necessary state registrations. Besides new product solutions, such as Corvus, a pre-emergence selective herbicide in corn, and Alionse and -- Alion and Provence herbicides, novel technologies for weed control in sugarcane and fruits, we also drive for improved pricing, with a major focus on soft-currency countries, in particular Brazil. We plan to recover the majority of currency losses within 2 to 3 years across our crop protection portfolio. Let's move to fungicides next, where the innovation is particularly compelling, especially for Latin America and Europe. We're currently planning for a compounded annual growth rate of approximately 6% to 7% until 2024, and the following 3 products are key contributors. Fox Xpro continues to upgrade our Fox family of fungicides in Brazil for excellent control of Asian rust, the industry's only offering to include 3 different actives in one product. We will upgrade this again in 2022 with the launch of Fox Supra. For cereals, we are particularly excited about iblon, which offers the most reliable control of multiple leaf diseases. It launched in 2020 in New Zealand and is earmarked to expand to multiple markets, including Europe, Australia and Argentina. Finally, the Luna family rounds out our featured key drivers. This convenient and reliable solution for high-quality food and yield potential preservation expands our strong position in fruit and vegetable fungicides. To complete our discussion of crop protection, I'll close out with 2 new insecticides which are particularly interesting for Asia and Latin America. Velum/Verango sets the standard for soil-applied sustainable nematicide solutions across horticulture crops globally. We are on track for strong market share gains with this product. Meanwhile, Vayego, launched in 2020, shows great potential for growth across Asia and has shown efficacy in corn, horticulture and rice, staple crops in the region. When combined with the rest of the portfolio, they drive our expected compounded annual growth rate of approximately 6% to 7% in insecticide sales until 2024. For those of you following along on the audio stream with our handout, we've depicted several of the new crop protection products just discussed on slides 11 to 13 in the presentation. Now let's switch gears and move to corn, seeds and traits on Slide 14, where we expect a 3% to 4% compounded annual sales growth until 2024. We hold leading share positions in nearly every key corn market around the globe. Our strong innovation capabilities are key to the annual refresh of this portfolio, which is critical for the growth of this franchise. We'll launch at least 150 new hybrids a year through the end of 2030, which is unmatched in the industry also in terms of performance, as we see again in ongoing trials. Bob Reiter will share more about this in his update tomorrow. This growth in corn is further supported by key launches of new insect control trait stacks in the next 2 years, both of which will include our new RNAi-based corn rootworm trait known as Corn Rootworm 3, the first in the industry. In Brazil and Argentina, we're launching VTPRO 4 this year for the 2021/'22 season as an upgrade to our current corn trait offering, VTPRO 3. This new trait stack has received all necessary regulatory approvals and includes an additional mode of above-ground insect control to combat evolving resistance. We plan to convert and grow our current 15 million-acre trait footprint over the next few years. In the U.S., the new corn rootworm trait will be added to SmartStax to be launched under the brand name SmartStax PRO in 2022. We also plan to upgrade our current 15 million SmartStax acres through our brands and a broad licensing approach. Let's now turn to our global soybean seed and traits business next, which generated roughly EUR 2 billion in annual sales in 2020. As mentioned already, 2021 will be a transition year due to the U.S. competitive situation, and we'll return to a compounded annual growth rate of 1% to 2% thereafter with the upgrade of the Americas with new trait offerings. XtendFlex is quickly replacing Roundup Ready 2 Xtend in the U.S., where it will reach approximately 15 million acres in 2021, its first year on the market. It's strongly positioned to remain the #1 weed control system in North America when combined with Roundup Ready 2 Xtend. This latest offering adds glufosinate tolerance to Roundup Ready 2 Xtend soybeans to provide additional weed control flexibility. Additionally, in our germplasm trials, our newest top-volume XtendFlex soybeans have a 4-plus bushel-per-acre yield advantage compared to Enlist. This performance, coupled with 14 days residual activity and control of significantly more weeds than the Enlist system, gives us confidence in our growth plan. Let's move to South America next, where we will upgrade Intacta Roundup Ready 2 PRO with Intacta 2 Xtend. All regulatory approvals have now been secured and launch is underway in Brazil. This trait package, built on the performance of first-generation Intacta, adds 2 proteins for insect control, important for insect resistance management as well as adding tolerance to dicamba. We're targeting a strong transition across our existing footprint in Brazil, which plans roughly 90 million acres of soybeans annually. The trait has been broadly licensed and will be priced at a premium. You can review slides 17 to 19 in the handout to learn more about each of these technologies and the tailored solutions we have in development. I'd like to close out our overview of seed and traits growth drivers with a look at our other seed businesses, especially vegetable seeds and cotton, as shown on Slide 20. These businesses' sales will grow in the range of 4% to 5% annually. For our vegetable seeds business, we've made some changes to our strategy and now focus on 4 key customer segments: protected culture, smallholders, processing and open field. We've seen some early success from our new strategy and expect above-market growth going forward, particularly in China and India, and underpinned by our hallmark annual refresh of the global portfolio. In cotton, the strong growth is driven by 3 key factors: first, the recovery of high-value acres in Australia; second, share growth in the U.S.; and third, the launch of our ThryvOn technology trait. This trait is the first of its kind to protect against piercing, sucking insects in any crop. We're preparing for a Stewarded Ground Breakers Field Trial introduction in the U.S. this year. It will be paired with Bollgard 3 XtendFlex technology and also priced at a premium. We expect it to have a fit across the U.S. cottonbelt with potential to expand to other geographies. Before we move to the next chapter on innovation, I'd like to briefly cover our commitments on synergies and efficiencies. Part of our industrial logic for bringing together Monsanto and Bayer was our expectation that we could secure significant synergies, and we've actually made good on that promise. We now expect to achieve our planned synergies 1 year earlier, in 2021. On top of that, we expect to deliver additional efficiencies with a new program by the end of 2024. Altogether, these combined programs will contribute roughly half of the planned clean EBITDA margin improvement by 2024. To achieve these savings, we are transforming our way of working and anticipate savings from an acceleration of digital connectivity and optimization of the physical footprint of our business. We also accelerated our sales synergies. The Bayer PLUS program is an important driver of expected growth in crop protection and helped us gain market share in the U.S. Based on this experience, we look forward to driving further sales synergies around the world. Our investment in innovation and our pipeline provides the foundation for continued future growth as we help feed a growing population without starving the planet. We are at the beginning of a decade where we will advance and transform agriculture with unmatched innovation. This translates into better outcomes across the entire value chain and deliver superior value. We expect a peak sales potential of up to EUR 30 billion, half of which will be incremental to our current business footprint. As depicted in the handout on Slide 23, we will launch around 100 new crop protection formulations within this decade. Beyond that, we are very excited about our new mode of action herbicide and a new PPO herbicide, both of which have trait pairings already in the making. These herbicides have the potential to set new standards in a segment that has, for decades, lacked significant innovation. We will also launch around 430 new hybrids and varieties across corn, soybeans and vegetables annually. These launches sustain and improve our leading seed portfolio, which is further enhanced by game-changing traits like short-stature corn and soybeans with tolerance to 5 different herbicides, both of which are expected to be industry firsts. Let's look at those next. Short-stature corn will change the way corn is produced. Shorter than corn grown today, as seen in the center rows of this photo from our 2020 VITALA commercial beta in Mexico, it has several beneficial features. First, it has unparalleled production stability in high winds, as evidenced by our still-standing plots of short-stature corn in Iowa following last summer's devastating windstorm. See for yourself in our handout on Slide 25. Second, it allows for extended in-season crop access due to its shorter height, which enables tailored solutions for precise late-season applications of fertilizers or crop protection. Finally, we see a more sustainable future with this technology. There is a potential to use less nutrients with late-season access as well as less land and water, with the opportunity to plant at higher densities, as seen with our VITALA beta. This product has true global potential with unique benefits that address diverse needs worldwide. And with 3 technological approaches, breeding, biotech and gene edited, it has a more than 220 million-acre opportunity. For North America alone, we see an incremental peak sales opportunity of EUR 1 billion related to the premium and share gains this technology could drive. There's significant upside potential from the rest of the world that we have not yet factored in, a true blockbuster in the making. We're also developing a full-system recommendation for short-stature corn, fully optimized with Climate FieldView, as depicted on Slide 26. This will be the result of the convergence of new short corn technology, next-generation crop protection and digitally enabled tailored solutions. Short-stature corn truly is the next big thing in agriculture. By about the middle of the decade, we plan to launch our fourth generation of herbicide tolerance in soybeans, which we currently refer to as HT4. This industry first will offer tolerances to 5 different herbicides. We're adding HPPD and our very own 2,4-D tolerance trait to our XtendFlex product, offering the most flexibility for weed control of any soybean product in the marketplace. You can see the exceptional efficacy in this photo with healthy HT4 soybeans next to a row of clearly dead soybean plants without the same herbicide tolerances. Not only will this offer exceptional weed control, but we expect best-in-class genetics to optimize yield and enable tailored solutions. Similar to short-stature corn, we're developing a full soybean weed management system that will include HT4 at its foundation, paired with proprietary chemistries and a digital prescription, as seen on Slide 29. With a fit across more than 180 million soybean acres in the Americas, we anticipate high demand across our footprint, yielding an incremental peak sales potential of approximately EUR 500 million. This brings us to the third pillar of our strategy, pioneering the digital transformation. To do this, we are focused on expanding our industry-leading platform, Climate FieldView, which currently boasts more than 150 million subscribed acres and operates in 23 countries. We plan to use this platform to enable tailored solutions and unlock growth from new digital business models. These new models range from solutions that showcase our portfolio and predict seed and chemistry performance to ones that will allow us to partner on outcomes with our customers. Additionally, digital technology is essential to enable incentivization of carbon sequestration in agriculture, a new market that we are developing with a pioneering approach. And lastly, it's a means of accessing the more than 550 million smallholder growers around the globe, a virtually untapped market where we'll do good and we'll grow our business at the same time. Put all of this together, and we envision that by 2030, all of our sales will be enabled by digital enhancements. To bring us one step closer to this goal, we have been intensifying and diversifying our testing and development activities for new solutions across multiple crops and regions. We're looking at options to tailor corn placement and density with return on investment guarantees with our Seed Advisor product. And in other cases, we're targeting fungicide applications in row crops with products like Delaro fungicide in corn, showing growers the added value with their own data in FieldView. Digital technology that can help standardize how carbon is measured, verified and reported with Climate FieldView is yet another way we can unlock value for growers. When paired with our global sales organization to assist in the adoption of climate-smart practices and a new generation of products that yield more and sequester more carbon, we see the potential to create a continuous cycle of new value creation in carbon farming for growers, Bayer and society. At today's price for carbon, the market opportunity is roughly $3 billion for Brazil and the U.S. alone with tremendous growth opportunities. And we are working with regulators around the world to make carbon farming a reality. We've currently enrolled more than 1,000 growers in several pilots, and we envision a sales opportunity of at least EUR 500 million by 2030. This creates a perfect segue to the final pillar of our strategy, to set new standards for sustainability. As you can see on Slide 36, our goals are unchanged since our announcement at our first Capital Markets Day back in December 2018, as is our commitment to delivering on them. We just discussed one of our central efforts to advance a carbon-zero future for agriculture. And the Leaps investment in Joyn Bio presents yet another pathway to reach this target. You'll hear more about this exciting initiative in our Leap sessions tomorrow. I announced at the outset of our discussion today that we have measured our baseline for environmental impact, which was done by the University of Denmark, and it's clear we have a best-in-class crop protection portfolio. The chart shared here and on Slide 37 depicts our strong competitive edge, and we will continue to reduce our environmental impact going forward. Finally, I'll close out my time with you today discussing our efforts to empower 100 million smallholders by 2030, no small feat and no small opportunity. Today, we estimate we reach nearly 45 million smallholders, who generate roughly EUR 1.7 billion of our annual revenue. That's about 9% of our 2020 sales, and we think we can grow this to at least EUR 3 billion by 2030 by empowering 100 million smallholders. We're focused on the low- to middle-income countries with a special emphasis on China and India, who both have huge populations with great challenges in sustainable agriculture. Building on our existing strengths, we will drive 4 core initiatives. These include: value chain partnerships; digital smallholder solutions; portfolio differentiation with tailored, more affordable crop protection products; and finally, licenses and biotech approvals to enter new markets in Asia and Africa, with a strong focus on public-private partnerships. Looking to India specifically on Slide 40, this is a tremendous example of how we are well positioned to serve the potential in this market. This includes aligning our vision and deliverables to the government's goals of doubling farmer incomes and driving sustainable agricultural solutions. As the market leader already serving 20 million smallholder farmers today in India, we look forward to strong growth, and this is all based on our smallholder strategy. Our important work in these markets is driving growth and takes us right back to the vision I outlined at the outset: to provide Health for All and Hunger for None as we seek to shape agriculture and create a sustainable, healthy food supply. Our plans translate to 3% to 5% annual sales growth from 2022 to 2024 based on the current and underlying market growth assumptions, as shared earlier. If the market grows faster than 3% per annum, you can expect us to outperform and grow faster as well. For modeling purposes, please keep in mind the significant currency headwind we expect in sales in 2021, with over half of that impact in the first quarter should currency rates remain at levels seen at the end of 2020. This could be roughly EUR 1.1 billion in Crop Science, resulting in estimated reported sales of approximately EUR 18 billion for 2021 at the 2% growth rate we outlined. You can see all this on Slide 42, where we also include our expected sales growth rates for our strategic business entities, as shared earlier. Simultaneously, with new products, pricing uplift and contributions from our new efficiency program, we expect to expand our clean EBITDA margin from 23% in 2021 to 27% to 29% by 2024. This equates to a more than 10% compounded annual growth rate for EBITDA from 2021. Let me wrap up and summarize the main takeaways of my presentation. We did not deliver on our 2018 financial aspirations and take accountability for that. Still, we maintained and selectively increased our competitive strength with a strong and intact underlying business. Unmatched innovation, the leading digital platform and our exceptionally strong market positions will deliver above-market growth and leading profitability for the guidance period. Finally, our strategy is driving the transformation of agriculture and will help ensure a sustainable food system as we move towards our vision of Health for All, Hunger for None. Thanks for your time today, and I really look forward to taking your questions and meeting with you in the year ahead.

Thanks so much for those interesting insights, Liam. Once again, we learned so much. [Operator Instructions] So now let's head over to our third division. Why does Consumer Health have everything it takes to win in an increasingly volatile and also competitive market environment? We are now joined by Heiko Schipper. He's our President of Consumer Health, and he's going to address this question for us and share insights in how he turned this business around from an industry underperformer to an outperformer since 2018. Over to you, Heiko.

Thank you, Ariane. Well, good morning and good afternoon and good evening to all of you. My name is Heiko Schipper, and I lead our Consumer Health business. The last time I was speaking at a Bayer Capital Markets Day was December 2018, and then I presented our view that consumer health industry offers excellent opportunities for sustainable value creation, thanks to its attractive growth and margin dynamics. Furthermore, I made the case that we were well placed to win in this market provided we would, first, make sharper portfolio decisions and, secondly, execute better across the value chain for the benefit of our consumers. That was 27 months ago. And since then, the systemic relevance and the potential of the consumer health industry has only become stronger. We have all become aware of the importance of everyday health and the need for all of us to take our own health in our hands. While the attractiveness of the consumer health market hasn't changed, what has changed is our position in it. We have made important strategic choices and executed our plan successfully to move from an underperformer to an outperformer. We are a global leader in consumer health, well positioned for sustainable, profitable growth and led by a management team with a track record of delivery. Today, I'm going to share with you what we plan for the next 4 years. I will outline our market outlook, our position in the market and our game plan to sustainably create value. Finally, I will close with our midterm guidance. So let's first look at the markets in which we operate. Consumer health remains relatively unconsolidated markets. There are attractive growth and margin opportunities across categories and geographies. We hold a strong position -- #3 position in the industry. With a top 5 position in all of the key categories, we are very relevant for consumers across the entire health spectrum. Moreover, we have 15 power brands, with brands like Aspirin, Claritin and Bepanthen connecting deeply with consumers all over the world. This scale across the different consumer health categories is important as we partner with our key customers. Not only are we well positioned from a category perspective, we also enjoy a healthy geography mix. The consumer health market has delivered consistent growth in all regions of the world, and we hold the top 5 position in 7 of the 10 biggest OTC markets. This allows us to expand our leading brands and capture opportunities globally. As you can see, we have a well-balanced category and geographic portfolio mix, which helps to deal with volatility much more effectively. Let's take a short look back at our track record since our last Capital Markets Day. In late 2018, we started executing our turnaround plan, which we call Fit To Win. Following the sale of our Rx Dermatology, our sun care and our foot care businesses, we created a renewed focus on our core OTC business. Secondly, our plan outlined a major step-up in our execution across the entire value chain. We quickly saw strong results. We moved from an industry underperformer to an outperformer. In 2018, we still trailed our peer group by 360 basis points in growth. But already in 2019, we started accelerating, moving 120 basis points ahead of our peers. And in 2020, we truly outperformed, growing at 5.2%, a 390 basis points beat. We accelerated growth in all 4 of our regions and globally gained market share in 2020. Importantly, we were able to turn around our U.S. business, in the biggest and most competitive consumer health market in the world. Looking at our categories, we were able to gain market share in 5 of 7 of them. At the same time, we were also able to significantly improve our profitability, thanks to higher growth and strict cost control. These positive, broad-based results came faster than we had anticipated when we presented to you 27 months ago. They are a testimony to both the strength of our Consumer Health business and our people, who are focused behind a clear plan to win in this attractive market. Now let us move to the coming years and first take a look at the market prospects. The market has shown very consistent growth over the past years, roughly between 3% and 4%. For the coming years, we expect the market to grow between 2% to 4%. 2021 in particular is expected to be lower as we will continue to see reduced incidence of cold and flu due to the social distancing. However, in 2022, we should return to the historical growth rates of our industry. We see 6 key growth drivers shaping this development in the upcoming years. First and most prominently is the accelerated trend towards preventive health care. The pandemic has heightened our appreciation of the value of self-care. Particularly, categories that help consumers stay well like nutritionals are benefiting from this trend and are expected to outgrow the overall market. Looking at the geographic trends, we expect to see broad-based growth as the global population is aging and health awareness is increasing in all the regions of the world. Let's now turn to the sales channels. It goes without saying that e-commerce is a channel that saw huge growth during the pandemic. We expect this trend to continue. However, other channels are also showing healthy developments. Clearly, an omnichannel approach is essential to winning across the market. Further, the importance of trusted, science-based brands has been reemphasized in the past 12 months. Science, efficacy and quality are more important than ever before. We also expect that advances in digital technologies will continue to have a profound impact on the consumer health space. Across the value chain, digital transformation is posing opportunities for companies to operate faster, with more data and more accuracy at lower costs. Finally, we see national health care systems under increasing levels of pressure. With resources limited, governments will promote higher levels of self-care to foster prevention and encourage public health. We believe that our business is well positioned to play into these developments. Earlier, I mentioned our Fit To Win game plan. It has been the key driver behind our strong performance over the past 2 years. It has mobilized our entire organization behind a clear plan to win. We are now in version 2.0 of the plan. Building on our success, it outlines how we can create sustainable, profitable growth in the years ahead. And I will give you some further insight into the plan, covering where to play and how to win. So let's walk through each of those elements, starting with where to play. As I said earlier, we make portfolio decisions in order to be active in the markets, categories and segments where we see the most potential to drive disproportionate growth. We are constantly looking for new, attractive growth areas. The consumer is changing, and we must respond to that with speed. Let me give you an example to illustrate what I mean with that. We see an increasing demand for more personalized nutrition solutions, and that potential is what led us to acquire a majority stake in Care/of, a leader in personalized nutrition. Care/of combines a health questionnaire with a science-based algorithm to create a highly personalized nutritional supplement offering, which consumers received mailed to their home in a personalized pack, truly a fantastic consumer experience. Care/of has been able to build a loyal, mostly millennial customer base, and we believe we have a strong growth potential with this business for the future. Beyond which segments to be active in, another important where-to-play decision is which countries to prioritize. Firstly, we will maintain a high focus on the United States. It remains by far the largest market, and we are a leading player with a strong local organization. We continue to be very optimistic about this market, and we will continue to invest to gain share here. Our market share positions are also strong in EMEA and in Latin America. In Asia Pacific, however, we believe our share of the market can be improved. We are a top 5 player in China, well positioned in nutritionals and dermatology with a very well-developed e-commerce business, but we see opportunities to now accelerate our business here. We also see potential to increase our presence in new growth markets like, for example, Southeast Asia, an attractive market of 700 million consumers. Here, we have built a successful foundation and will expand on our presence through deeper distribution and innovation. Additionally, we plan to advance our business in India. The market is worth more than EUR 2 billion. Previously, we were operating under a licensing model in this market. Now we plan to enter with our own operating company and build this up as a growth market. With these higher investment levels in this part of the world, we expect Asia to be an important contributor to our future growth. Now I would like to move to how to win. Innovation is the lifeblood of our brands and our business in general. Inspired by Bayer's purpose of Science For A Better Life, we invest in consumer-preferred science. This has been a major area of focus for our organization in the past 2 years. We have strengthened the innovation pipeline for our existing brands. We have also identified interesting Rx-to-OTC switch candidates and expect to launch 2 of those in the next 4 years. When thinking longer term, we have built a partnership, for example with Azitra through our Leaps program. Together, we are working with the skin microbiome to deliver skin care solutions that could one day help wounds heal faster, speed up recovery from eczema and strengthen the skin as the immune system's first line of defense, a very good example of how the bio-revolution can benefit consumer health. Lastly, we acquired majority stakes in companies that play in high-growth and innovative segments where we were not yet present ourselves. I already mentioned Care/of in personalized nutrition, but we also acquired Matys in the U.S. naturals segment. Consequently, the value of our innovation pipeline is now much stronger, approaching EUR 1 billion in value. Now let me share with you some examples of innovation behind our power brands. Firstly, we will continue to drive consumer-preferred new formats that make the product experience more effective and/or more pleasant. As an example, I can mention here the recently launched Claritin Cool Mint Chewables, the first allergy medication in a chewable format and using menthol, offering allergy sufferers relief and a pleasant and soothing sensation. The product has been very well received by consumers and led to market share gains for this important brand. We will also bring our iconic brands to new market segments. In the next months, we will be entering the large dry skin segment with our science-based Bepanthen power brand. Today, 60% of the consumers in this dry skin segment are unhappy with their current brand. There is clearly a need for a science-based brand with solid efficacy. This is where our Bepanthen derma range comes in. The product line has been carefully developed with high-quality ingredients that work with the body to provide both immediate relief from dry skin symptoms and lasting repair. It does this by restoring the skin's cell renewal process. In rigorous clinical testing with 2,000 patients, Bepanthen derma showed a 23% increase in ceramides in the skin. This increase triggers an improvement in the skin's protective layer, which limits moisture loss and protects against damage. After 4 weeks, patients were able to claim a 64% increase in the skin's hydration level. The unique combination of leading science and strong benefits for the consumer make this an -- innovation an excellent example of our purpose: Science For A Better Life, or in this case, science for a better skin. Next to innovation, we believe that connecting successfully with our consumers and customers is an important driver of our growth. We continue to invest in modernizing our marketing and sales activities. And this is a very dynamic area as consumers and customers are changing rapidly. We see digital as a big impact driver here. As such, we have made significant progress in refreshing our brands and being more data driven in our marketing activations. From 2018 to 2020, we doubled the percentage of our marketing activities dedicated to precision marketing. We have found that this enables us to reach consumers much more efficiently with personalized communication increasing impact. When it comes to sales, we have made important progress in becoming more customer centric and more data driven. We are also accelerating our e-commerce business. In 2020, our e-commerce growth dramatically increased to high double digits. And we expect it will continue to be an important growth driver, and we target 15% of our overall business coming from e-commerce by 2024. The final pillar of our how to win approach is optimizing costs and cash. In our business, we are continuously looking to make the best use of our resources. We are consistently zero basing our costs as well as our organization so that we are best set up to win. Our SG&A spend is now down to 23% after being as high as 26% only 3 years ago. It will remain an area of focus in the years to come for us. And finally, we have stepped up our focus on cash generation in the division. This initiative started in 2020 with strong first year results. Our 12-month average working capital in a percentage of net sales decreased considerably from 2019 to 2020. We see further opportunities to improve in the coming years. Efficient use of our resources also allows us to make bigger and more impactful investments to areas that we believe will drive future growth. One of those areas is our digital transformation. We will invest up to EUR 250 million over the coming 4 years in this area. This very material investment is mission-critical as it will fundamentally change and add value to each part of our operation. Earlier, I mentioned the impact digital has had on our marketing and sales, but we can also see big upsides in our supply chain. For example, more accurate demand and supply planning will increase customer service. Deliver savings through that and also require lower inventories, which reduces our working capital. In R&D, we are focusing on creating solid efficacy data for our products. And in some cases, we can use real-world data to generate claims up to 90% faster and more efficiently. These are big changes, and we are making into our operations and to make it truly successful requires a major digital upscaling across our entire organization. This has been a priority for us and will continue to be so. In 2020 alone, we were able to train the over 1,000 leaders in Consumer Health on how to create value with digital technologies and new ways of working. In my view, a truly fantastic investment for the future. Our second area of higher investment is sustainability. COVID has highlighted just how valuable health and nutrition are. We believe our sustainability ambition to expand access to everyday health to 100 million people by 2030 is more relevant than ever. We are now operationalizing this ambition by integrating sustainability into each area of our operation. We will expand access to everyday health for 100 million people in underserved communities through new product solutions and tailored go-to-market models. We will also partner with other stakeholders as we announced with the Nutrient Gap Initiative. This is a very important initiative to help underserved pregnant women and infants with critical micronutrients so they can have a healthy start to life. We partner here with Vitamin Angels to reach more people with product solutions and health education. We do this because we're convinced that good business and sustainability go hand-in-hand. Now let me come to our midterm guidance on a constant currency basis. At Consumer Health, we target annual CPA growth in the 3% to 5% range until 2024. With that, we aim to outperform the market. On the bottom line, we aim to continue our progression towards an EBITDA level in the mid-20s, driven by our growth while maintaining tight cost control. Together with the optimization of our working capital, this will lead to higher cash flow contribution. Now to conclude, I'm excited if I look at the future of this business and our plans to grow it and create sustainable value for our stakeholders. First, we're doing business in a highly attractive market where Bayer has been successful for more than 100 years. Second, we know what it takes to win in Consumer Health. Our iconic brands, our scientific rigor, our commitment to quality, proximity to the consumer and our ability to innovate at scale put us in a very strong position to continue to outperform. And finally, I believe we have a leadership team with a track record of successfully executing our plan. Our organization, all our people are talented, diverse, purpose-driven and determined to win. I thank you for your attention, and I look forward to your questions during the virtual coffee break later on.

Thank you so much, Heiko, for showing us why Consumer Health has everything it takes to win in this market. So in case you have any questions for Heiko, now is your chance. [Operator Instructions] And I will ask them on your behalf on the Q&A session later on. [Operator Instructions] So after another very short break, 5 minutes, we're going to here from our CFO, Wolfgang Nickl. There he is, ready to go. And he's going to share everything we heard so far how this translates into group financials and midterm targets. So stay tuned.

The final presentation of today is going to be presented by our CFO, Wolfgang Nickl. Wolfgang, it's so great to have you here with us today. And we're still looking forward to hearing more about what new midterm financial plan looks like. Stage is yours.

Hello, and a warm welcome from my side as well. I hope you have enjoyed hearing from my colleagues today. I'm excited to be here to discuss how our transformation strategy translates into financial performance over the next 4 years. But before we start, one technicality. All underlying assumptions, such as the exchange rates are captured in the handout. So I will not go into any detail during my presentation. Also earlier today, Werner talked about the commitments we made during our last capital markets day in 2018. Since then, we have delivered on the announced portfolio and efficiency measures. We also made promising bolt-on acquisitions in line with our strategy. However, we are not on track to deliver on the financial ambition we had for 2022. I added a chart to the handout that shows a review of the EUR 10 core EPS target that we had set for ourselves. Of course, this guidance was based on our full portfolio back then. So we have to adjust about EUR 0.50 for the contributions of our divestments. We also had adverse currency effects reducing the EPS by roughly EUR 1. From a business perspective, the introduction of volume-based procurement in China reduced our growth in Pharma. And for Crop Science, we had a lower market growth and also a more competitive environment than we originally expected. However, we are partially mitigating this with further efficiency measures. Now looking at where we stand and focusing on the elements that we influence, we're extremely excited about Bayer's growth and value-creation prospects. While 2021 will be a transition year for us, we have a robust plan to accelerate our transformation to drive innovation and attractive returns in the medium term. So how do we accelerate our transformation to create value? First, we have a clear path to deliver top line growth through innovation. Second, we've launched a new transformation program to drive profitability. This will also help us to fuel future growth as some of the savings will be reinvested. Third, we focus on cash and further increase our strong cash-generation capacity. Fourth, we will generate value by delivering on our ambitious sustainability targets to help more people thrive and decrease our ecological footprint. And finally, the remaining, we will remain disciplined in our capital allocation. We will delever our balance sheet, pay dividends and continue to invest in bolt-on acquisitions. So it all starts with growth. Let me recap what my colleagues have just shared. Our markets are highly attractive with midterm growth rates of 3% in Crop Science, 5% to 6% in Pharma and 2% to 4% in Consumer Health until 2024. 2021 is a transition year for us due to several near-term headwinds across our businesses. On Crop Science's top line, we see, for example, the effects of the late registration of dicamba. In Pharma, we have the full year price effect of volume-based procurement in China and dampers milestone that was already achieved in 2020. I have displayed the currency and portfolio-adjusted growth in the handout to reflect our operational performance. But as you know, we anticipate negative currency headwinds on sales of around EUR 2 billion for 2021 when we apply year-end 2020 rates. This then translates into roughly EUR 18 billion of sales for Crop Science, roughly EUR 17.5 billion for Pharma and approximately EUR 5 billion for Consumer Health. Looking forward, our divisions have compelling growth prospects. After returning to market growth in 2021, we expect our Crop Science business to translate R&D leadership into above-market growth between 2022 and '24. This translates into a currency and portfolio-adjusted sales growth in the range of 3% to 5%. From 2025 on, innovation from our industry-leading pipeline is expected to further expand our market leadership. Liam just shared that we plan to launch around 100 new Crop Protection formulations within this decade. We also bring to market over 400 new hybrids and varieties across corn, soybeans and vegetables annually. And of course, for the second half of the decade, we're very excited about our game-changing traits. This are Short Stature Corn and what we call HT4, soybeans with tolerance to 5 different herbicides. Crop Science's EBITDA margin is expected to reach between 27% and 29% in 2024, driven by higher growth and additional efficiencies. In Pharma, we expect robust growth until 2023 with 3% to 5% CPA growth before the loss of exclusivities of Xarelto and Eylea. In 2024, we expect a low- to mid-single-digit decline of revenue before gradually returning to growth. Stefan just outlined that significant growth is expected to come from our late-stage pipeline in our cardiovascular diseases and women's health. But also in oncology, we have significantly advanced our presence with 3 product launches in the last 3 years. Plus, we expect substantial growth from our new cell and gene therapy platform. Here, our first assets may come to the market in the middle of the decade. Farmer profitability will be in the range of 32% to 34% until 2023 and above 30% in 2024 as we step up our investments and mitigate LOE effects. And last but certainly not least, in Consumer Health. We expect to sustainably outperform the market with growth of between 2% and 3% in 2021 and then 3% to 5% until 2024. Heiko just presented the Fit to Win game plan, which continues to be a key driver behind the strong performance of Consumer Health. Our iconic brand, proximity to the consumer and ability to innovate put us in a strong position to continue to outperform and that it accelerate growth in the medium term. We expect to improve our adjusted EBITDA margin towards the mid-20s by 2024. Building on our robust growth plans, we will drive profitability and grow our margin. As announced in September, we have launched a new transformation program. And this is in addition to the Bayer 2022 synergy and efficiency program that is already in place. The aim of this new program is to continue and to accelerate our transformation into a leaner and more agile company. We are freeing up resources to reinvest into innovation and growth as well as to increase our profitability. The annual growth contributions across all businesses and enabling functions are expected to be more than EUR 1.5 billion per year as of 2024. For the Bayer 2022 synergy and efficiency program, we are ahead of our plan. We've already realized roughly 70% of the EUR 2.6 billion committed cross-contributions in 2020 versus the original commitment of 50%. Going forward, we will combine the new program with the outstanding cost savings from Bayer 2022. The total onetime costs relating to the additional measures are expected in the same magnitude as for the original Bayer '22 program, which has a onetime cost factor of 1.7 of the total cross-contribution. We have proven that we can execute complex transformation programs, and we will build on this record with the new program. Let's now turn to cash. Top line growth and profitability improvements will no doubt would help our cash generation capacity going forward. I would like to walk you through 4 additional focus areas. Our divisions improved free cash flow by optimizing working capital ratios and CapEx. For example, we have dedicated programs on the receivables management and on payable optimization to drive our operational cash flows. To emphasize this, its importance, free cash flow is now also integrated as a key performance indicator in our short-term incentive plan for all managerial employees. Beyond this, we are focusing on overarching measures like the optimization of our fixed asset portfolio. For example, we just recently sold buildings in Berlin, in Leverkusen, in Pittsburgh and other places. Based on the learnings during COVID-19, we will use more flexible ways of working. This helps us to better meet the needs of our employees and customers while generating additional funds from less office space. As previously announced, we are planning to divest our professional environmental sciences business and continue to look at further opportunities below the divisional level. Litigation payouts and special items from the efficiency program will continue to have an offsetting impact in our free cash flow in the coming years. In 2021, the litigation payouts alone are estimated approximately EUR 8 billion. In 2024, we estimate around EUR 1 billion for litigation payouts and special items. Now how does all of this add up? We have taken the actions to drive profitable growth until 2024. Of course, our performance will somewhat also depend on external factors. For example, it is difficult to predict how the pandemic will further impact markets and eventually also our business. To account for some of this natural variability, we have defined corridors for our midterm targets. We expect sales in 2024 between EUR 43 billion and EUR 45 billion. Our core EPS is expected in a range between EUR 7 and EUR 7.50. And we plan to increase our free cash flow to roughly EUR 5 billion. As mentioned earlier, this still includes settlement payouts and special items totaling roughly EUR 1 billion. If you now consider that 2024 is a year impacted by the less of exclusivity, I think you would agree that this is a business with substantial free cash flow potential beyond this planning horizon as well. All these figures are based on end of December 2020 exchange rates. I would like to reiterate that currency fluctuations will also affect our results. For instance, a 5% appreciation or depreciation of our currency basket versus the euro would lead to a swing of about EUR 0.40 in core EPS. Let me also mention that our midterm targets reflect our current business and do not include any adjustment for potential divestments like our Professional Environmental Science business. Let me continue by highlighting that our priorities reach beyond pure financial metrics. Our ambitious sustainability targets are an integral part of our strategy, and we have defined a clear road map on how to achieve them. The associated financial impacts are fully included in our plan. It is also important to note that our sustainability targets are now reflected in our long-term incentive plan. We are committed to maintain our disciplined capital allocation guardrails. We use free cash flow and net proceeds from divestments to pay dividends, delever our balance sheet and invest in bolt-on acquisitions as well as Leaps. Regarding divestments. We announced in September of 2020 that we evaluate the sale of nonstrategic assets below the divisional level. Divestment beyond Environmental Science are currently in discussion and will be communicated at the appropriate time. Let's turn to the specifics on capital allocation. First, we focus on delevering our balance sheet after a temporary increase in leverage in 2021 due to the EUR 8 billion litigation payouts this year. The aim of our financial strategy is to regain A category ratings over time. Second, we will continue to provide for dividends, which remain an important element of our shareholders' return profile. We will maintain our dividend policy and plan to pay out 30% to 40% of our core EPS. The remaining funds will be invested in bolt-on acquisitions, especially in Pharma and Consumer Health. We plan to arrive at a net financial debt of between EUR 28 billion and EUR 30 billion by 2024 and at that time, expect to see a leverage ratio below 3. And just to underline, this would be, again, on a going concern basis and does not yet include potential divestment proceeds or further bolt-on acquisitions. To generate value, both growth and returns are essential drivers. We've already elaborated on growth. Let's now look at our return on capital employed or, in short, the ROCE. On the horizontal axis, you see the capital turnover. The y axis depicts our profitability. The lines represent all combinations that give you a specific return. Obviously, our target is to cross the cost of capital line of 6.2% and move as far as possible to the Northeast. Last year, our business was heavily impacted by significant special charges within both the Crop Science and the Pharma divisions. This led to an ROCE of minus 16.5%. Looking ahead, we intend to earn our cost of capital in 2022 and markedly exceed them by 2024. Given its importance, ROCE is now also reflected as a key performance indicator in our long-term incentive plans. To conclude, we have a clear plan to create value. Despite the loss of exclusivities, our new midterm guidance shows solid growth with good prospects for long-term blockbusters in the area of Crop Science and Pharma. We will drive profitability expansion to which our additional transformation program contributes with a strong capacity to generate cash with significant cash flow potential. Furthermore, we have started to execute selling businesses below the divisional level to generate additional funds. This allows us to delever our balance sheet while paying attractive dividends and continuing to invest in strategic opportunities inorganically. With this, I would like to hand it back over to you, Ariane.

Thank you so much, Wolfgang. So many new insights again. And this is your last chance. If you have any questions for Wolfgang, please enter them into the Q&A chat now as we are about to head into our 30-minute Q&A session. Now last, but certainly not least. Before we go into that Q&A, our CEO would like to briefly wrap up the first day of Capital Markets Day. So on that note, I'm very pleased to hand over once more to Werner.

All right. So thank you, Ariane. And with that, before we go into the Q&A, let me briefly summarize. First of all, you know our guidance. And while 2021 is going to be a transition year, we still see good growth across all of our businesses, which set up for a good and then stronger dynamic in the years thereafter. Having said that, we also know that we have to rebuild trust and regain your trust as we move through 2021, and rest assured, that we will deliver on it. And to the extent that is possible, we will also review our guidance with some of the positive tailwinds that we see that might provide some upside for the year. Now having said that, let's briefly look at what you've heard for the different businesses. First of all, in Crop Science, we are the market leader, we are the innovation leader, and we are set up to actually drive further growth and accelerate our growth in the years after 2021. We will regain market share. We will grow above market. And we are also poised to improve our profile to 27% to 29% EBITDA margin by 2024. Looking at Pharma, we are very, very well underway in maximizing the end-of-life cycle value of our biggest selling products, Xarelto and Eylea. In doing so, we are, in parallel, well underway with our new launch products, be it finerenone, be it Verquvo or Nubeqa. And we are investing heavily behind them in order to optimize their uptake and the growth trajectory for the next years to come. All of that together will provide a very, very good profile for the years to come. We see growth in 2021. And beyond that, 2022 and 2023, we will grow by 3% to 5%. Our margin is going to be between 32% and 34%. And even in the year 2024, when we see the biggest impact of the LOE of Xarelto, we will only see a small dip with a low to single-digit decline of our top line while our EBITDA margin will still remain above 30%. very importantly, we are, in parallel, investing heavily behind the drilling of our pipeline and for setting up our technology platforms for the years to come with the Cell and Gene Therapy Platform that we are building and some of the additional innovation that is to come and that will fuel our growth in the second half of the decade. In Consumer Health, we have successfully turned around the business. Beyond that, we have moved to the forefront of the industry in terms of growth, and we have significantly improved our capabilities. That makes us very optimistic for the years to come. So the ambition is to move to the forefront of the industry as the hands-down best business in the consumer health industry. Our growth profile is going to be above market growth for the next years to come. And our margin profile will also sequentially improve towards the mid-20s by the year 2024. In terms of overall corporate, it is very clear that we will stay disciplined in terms of our capital allocation. We have clearly set priorities when it comes to delevering to a level of about EUR 28 billion to EUR 30 billion by 2024. We will maintain our dividend policy at about 30% to 40% of core EPS as Wolfgang outlined just a few minutes before. And we will also stay very, very disciplined when it comes to further building our innovation pipeline and our funnel with select M&A and business development. Having said that, we are now looking forward to the Q&A session, and let's look forward to the discussion. Thank you.

Thank you so much, Werner. So now we will have a 10-minute break. And after that, we will see you back here for the Q&A where we're going to answer all of your questions. And after that, Oliver and I will return very briefly with some closing remarks. So we'll see you shortly. [Break]

Nice to have you back, and thank you so much for submitting all your questions throughout the day. So in this digital format, what's going to happen is I'm going to read the questions that you submitted on your behalf and ask them to our respective speakers. And we only have 30 minutes. So we may not get to every question. Our investor relations colleagues have stated they will make sure that they get back to you on any remaining questions after the event. So let's get started. The first question I have is from James Quigley, Morgan Stanley, and it's for Stefan Oelrich. On Nubeqa, to what extent do physicians feel Nubeqa is differentiated versus Erleada and Xtandi? Is Nubeqa benefiting from any off-label use in the hormone-sensitive setting? And what do you believe the relative contribution on from nmCRPC and hormone-sensitive prostate cancer in the EUR 100 billion peak sales target is?

So thank you for that question. So first of all, I think you can sense the excitement that we have around Nubeqa. We clearly feel that and we hear this also from our physician base, then there is a differentiation in terms of tolerability while having equal efficacy. And this is in a nonsymptomatic patient. And this is what matters to both patients and also to physicians because it gives them less hassle in following up with the patient. And we clearly get that. And that's based on strong efficacy data that we have. In terms of off-label use, I don't want to comment there. But what I can say is that on the overall part of non-metastatic in our peak sales, that's a very significant part. We're -- as you know, we're looking to get results from our next pivotal trial that would give us an extension of the indication into a metastatic setting, hopefully, later this year. And then we will also revisit the peak sales at that point. But we don't want to do that before we have the trial results in.

Next question comes from Richard Vosser, JPMorgan, and it's for Werner Baumann. On the glyphosate litigation, could you give an update on the expected time lines for Judge Chhabria ruling on the future settlement framework? And is this framework still in flux?

Yes. Thanks, Richard. First of all, we have already seen the briefs that were submitted by plaintiff lawyers and objectors. That was actually done last week. We now have until March 31 to respond. And Judge Chhabria has set the new date for the hearing on the preliminary approval on May 12. So we are good until May 12. There's a clear process in place. The settlement proposal remains as is as we have filed it. And we are looking forward to the approval hearing by and in front of Judge Chhabria.

We now have a question from several participants and it's for you, Liam. The questions are, is Bayer only a player who has a Short Stature Corn in the pipeline? And how competitive is the landscape for Short Stature Corn? And how many years of a head start do you actually have?

Yes. Thanks a lot. It's a great question. So Short Stature Corn is really important for us. It's the most valuable crop in the world. That is actually our biggest franchise. So I think it's important that Bayer leads innovation in this space. And right now, nobody else is really talking about Short Stature Corn. So that is an indication for us that if others are working in this space, they haven't made much progress because, otherwise, they'll be reporting on their results. So we already have our first product in the market in Mexico or VITALA beta. And was mentioned earlier, we have 3 technological approaches, a breeding approach, a biotech approach and a gene editing approach. So depending on the regulatory framework around world, we have 220 million acre opportunity. So we're really looking forward to the launch. Next launch will be in 2023 with the breeding version in the U.S. And that's already now in Phase III, of course, will be coming the market soon. So my assumption is we have a multiyear head start against all of our competitors.

So next question is from Richard Vosser from JPMorgan, and it goes to Heiko Schipper. And the question is, how do you expect to expand in consumer in Asia? Given establishment of brands actually take years, are you looking at an acquisition-driven approach?

Yes. As you heard, we believe that Asia is the part of the world where our market share needs improvement. And obviously, it's going to be an important region of the world for the future. However, we do already have a presence there. And we have quite a number of solid brands established either in China, in Southeast Asia and even in India where we've gone through a licensing approach. So our first element of creating that growth is through deeper distribution and having the existing brands reaching just more consumers, also bringing more innovation behind these brands. And then lastly, we will indeed also look at bringing some of our own brands into those markets. Those will take a little bit more time. So as you can imagine, our growth is -- for this phase, for the next 3 to 4 years, maybe coming from going deeper with our existing brands.

I have a question again from several participants. And Marianne De Backer, this one is for you. I know you've dialed in here. It seems as if you've increased your efforts in BD&L and Pharma quite substantially this year, what changes have been implemented to drive this uplift in the number of transactions that we have seen?

Sure. And thank you for that question. So first of all, as you might have seen, we have taken a much more strategic and deliberate approach to our business development activities. We also -- actually, last year, reorganized our business development organization to be fully aligned with our 5 strategic focus areas we talked about earlier. And we did a lot of effort in simplifying our processes and really making our governance very agile and allowing for fast decision-making. To give you one example, the AskBio acquisition in total from the very first call to the CEO to sort of closing or signing the agreement was a period of about 13 or 14 weeks. And from a nonbinding offer to signing was about 6 weeks. So that level of pace and agility is really what is necessary these days in a very competitive deal-making market. So with that, I think with our new strategy, with our new BD&L setup and then also with our proven success last year, that we are actually very well positioned to also attract future partners to Bayer. And we are looking forward to, as we mentioned, bringing much more innovation into the company in the course of this and the next years.

Thanks so much. Christian, thanks to you also for dialing in and joining us here. A question from you -- to you from several participants. Why are you developing 2 factor XI inhibitors in parallel in the same indication at end-stage renal disease? Are both supposed to go into Phase III and finally, to market?

Yes. I mentioned that this [ specific ] program, we have the broadest blood coagulation factor XI program ongoing. And it shows our commitment to the patients with the unmet need and the science here. We will make a data-driven decision. The programs, the studies are well underway. And we will look at the data and make a decision. But certainly, we can see the coexistence of an oral interparental in this space. So for us, there's a great opportunity, strong commitment to the target, to the patients. And we'll pursue the program, make data-driven decision.

Thank you so much. The next question we have is from Jo Walton, Credit Suisse. And it goes to our CFO, Wolfgang Nickl. The question is free cash flow in 2024 of EUR 5 billion, presumably below consensus as Vara consensus of net financial debt around EUR 22 billion versus your guidance of EUR 28 billion to EUR 29 billion by 2024. Perhaps you can discuss why you cannot get a higher cash flow? Is this higher CapEx, higher cash flow and restructuring or higher ongoing working capital requirements?

Thanks for that question, Jo. That's a very good question. I'm glad you're asking about free cash flow. At the end of the day, it's all about cash. We're actually quite excited getting to the EUR 5 billion mark in 2024. Remember, that's a year when we still have special items. And there, we will be almost done with the tail end of the litigation settlement cash outs. But we still will have EUR 1 billion of special items in there, predominantly coming from the restructuring and from transformation programs. And it's also the year when we have the loss of exclusivity of Xarelto in the biggest market. So if you think a few years further on, you can see what free cash flow potential this company has. You mentioned working capital and CapEx. Both will go up slightly in absolute terms, but will go down as a percentage of sales. Like I said, we focus very heavily on both. And you always have to remember that in the CapEx portion, there's also the intangible portion in there, which is, of course, for our business development and licensing business. That's how we get under considering also dividend payments some bolt-on M&A activity to the EUR 28 billion to EUR 30 billion, I believe what we said, not EUR 28 billion to EUR 29 billion. Net debt in 2024, which represent the leverage under 3. And then we will develop from there.

I have a question here from Richard Vosser from JPMorgan, and it's actually for either you or for Werner Baumann. And the question is, what contribution does M&A contribute to the guidance targets in each of the divisional targets? And how should we think of the capital allocation priorities for the next 4 years?

Shall I start?

Yes. Maybe I'll start, and then Wolfgang is going to correct me. So the guidance we are giving is guidance that is actually going concern and our continuing business, which also means that the Environmental Science business for the time being, is also still included in our guidance. On the flip side, everything that comes in new and in addition would then have to be looked at in terms of its expense growth, profitability profile, yes, depending on what it is that we are acquiring, and that would then be a modifier to the guidance. And with that, I hand it over to you.

On the capital allocation part, let me dissect it for you. So if you start with what we said for the end of this year, we're just shy of EUR 36 billion in net debt. The free cash flow is EUR 5 billion in 2024. And we're working ourselves to that free cash flow, in total will be somewhere between EUR 13 billion and EUR 14 billion free cash flow for '22, '23, '24. So the capital allocation of these EUR 13 million, EUR 14 billion is EUR 6 billion goes to dividends, roughly EUR 6 billion if we're at 30%. Then to delever from the 35-ish, 36-ish area to 28 to 36 or so go to delevering. And then you have a EUR 1 billion or EUR 2 billion left for R&D -- sorry, for M&A. Before you do the -- you have already paid for the CapEx included licensing. But then you need to factor on top of that potential divestments that will create additional funds, they will go into M&A and those are delevering. That's the overall capital allocation formula.

Next question comes from Sebastian Bray, Berenberg for Liam Condon. What is the percentage of buyer Crop Protection sales from biological solutions? And what is the market share and implied growth PA?

Yes. Thanks a lot, Sebastian. It's a great question. We don't usually actually break out our sales in Crop Protection because we're pretty agnostic whether Crop Protection is achieved by chemical or by traits or by biological means. If we were to break it out, my guess is we're probably the biggest and fastest-growing biologicals company in the world. We had sales of biologicals in 2020 of about -- with just over EUR 200 million. In this guidance period that we're talking about, this will double. It will be at least EUR 400 million by 2024. But we see the real growth potential is actually the combination of biologicals with chemicals because the great advantage of chemicals is their efficacy. Biologicals are usually used from a product point of view. They're great for avoiding residues, particularly on fruit and vegetables later on. So if you use a chemical early and a biological later in the harvesting process, this tends to be a very, very effective and useful combination. Beyond that, you're going to hear also tomorrow if you tune in some of the great things we have in the pipeline, both from Bob on the biological side, but you're also going to hear about disruptive innovation that we have on the biological side, where we have a joint venture with Joyn Bio where we're actually talking about engineering microbes to fix nitrogen from the atmosphere into the roots of a plant and to basically massively reduce use of artificial fertilizers through that methodology. So I think we've got a stellar pipeline beyond the fact that we already have a very strong presence in biologicals today.

Great. Well, looking forward to learning more tomorrow. My next question is from Christian Faitz, Kepler Cheuvreux for Heiko Schipper. And it says could it be that SG&A spend, which was 23% in 2020 had been so much lower versus before, 25%, 26% because of the pandemic situation, i.e., lower personal contracts, et cetera.

Yes. That's a good question. And I understand that, obviously, with the pandemic there was quite some reporting on lower SG&A across industries. However, in our case, that is not the driver. It actually went down 300 basis points versus 3 years ago. And as part of our turnaround program, we took a very hard look at our organization to make it leaner, reducing layers and looking at alternative models. So that has been the biggest bucket of that. The second big bucket is also our corporate program Bayer 2022 that is also delivering to the divisions. So that's another important reason for the reduction. And then indeed, there is, of course, a contribution this year of lower travels, et cetera. But frankly, that is not that material in the whole P&L. So it is really those other drivers. It's not a one-off. It's something that we continue to be focused on and will favor to make that leaner versus investing in R&D and in our brands because that's what's driving the growth.

Next question is from Richard Vosser from JPMorgan. It's for Stefan Oelrich. The question is the regulatory hurdles for gene therapy seems to be increasing with controlled trials for approval and longer proof of duration of efficacy before approval. How do you see this impacting your path to market for AskBio products and the impact on Bayer's business?

Yes, that's actually indeed true. As we progress in this area of cell and gene, there will be more scrutiny on this type of modality. I think it very much depends which type of product you're developing and whether these are pathway diseases or are monogenetic diseases. So when you look at our current pipeline, we've seen this actually in the case of BlueRock that it took quite some discussions before we would get an IND to put these -- induced for stem cells into human brains, which we're starting as we speak. And the same will hold true, to some degree, on gene therapy. I think we've included this well in our estimates for the upcoming years. So we expect that we will have significant contributions from our cell and gene business in the second half of the decade. So again, if you think about us having now 6 products in the clinic already, that gives you an idea that there will be some time needed. Let's not forget, as we look at our cell and gene business, that we also have our manufacturing platform, which already continues to contribute significantly this year and will grow over the coming years. We really have something, I think, that makes us unique, both on having a clinical and preclinical pipeline on the one hand, with strong IP, but also having this manufacturing capability, which I think is the envy of many in the industry as we speak.

Great. Thank you. The next question is from Gian Marco Migliavacca from Neuberger Berman. It's for you, Liam. The question is soybean, seed and traits, what went wrong in 2020? And how are you getting lost share back again?

Yes. A very important question. So in 2020, there was a regulatory challenge against our registration for XtendiMax herbicide, which is used in combination with our soybeans, our Xtend system. And because of that challenge, we lost the registration temporarily. We then got a new registration end of October, and then had to go through a federal level registration, and then had to go through the entire state level registration process, and that took up until beginning of January before we had all the registrations in place. So in essence, we were basically locked out of the market for a certain period of time because farmers aren't going to buy your product unless they're 100% sure that all the components are going to be available. Now we have all the components in place. So we've got a 5-year registration for XtendiMax, completely new registration. We also got a registration now for the next-generation of soybeans with XtendFlex, which has been 3 herbicide tolerances plus leading genetics. So we're launching -- we're right in the phase now of launching this with XtendiMax in North America. And as was mentioned earlier in the presentation, in South America, we're ramping up now for the launch of Intacta 2 Xtend. And there, of course, insect protection is the key driver for any product, any soybean product in Brazil. So having a new product with 2 new modes of action here, this is a huge benefit. So we did have problems in 2020. They've all been addressed now from a regulatory point of view. The products are ready to go, and they're in the market, and now it's up to our commercial teams to make the most of them.

I have a question here from Sebastian Bray, Berenberg for Heiko Schipper. The question is, what are the primary drivers of the margin improvement guided in Consumer Health, cost or mix?

I think the most important one is growth. By growing your business and keeping your costs under control, you obviously get a nice leverage on your cost base. So I would say that's number one. And then I mentioned already keeping costs tight, continuously looking for efficiencies. We are continuously running 0-based programs, particularly on our indirect expense, but as I mentioned before, also on our organization. So combining these 2 growth -- higher growth and, on the other hand, tight cost control, you get to higher margins. And maybe lastly, obviously, our innovations that we're planning to launch we're, of course, looking for good gross margins on those. So they will also be an important driver of helping to lift our gross margins further.

Thank you so much. I think we have some questions coming in. If you don't mind, I'll reach over for these questions because it's fantastic we have the chance to answer so many. And a big thanks to all of you for asking so many questions today, creating such an engaging discussion here today. So the next question I have is from Keyur Parekh from Goldman Sachs for Wolfgang Nickl. And the question is given the big delta and original versus revised 2022 guidance, what gives you confidence in the 2024 guidance?

Yes. First of all, let me repeat really briefly what made up the delta. We guided for EUR 10, and you can see from the line that I showed that was somewhere in the 6s in 2022, if you want to make it comparable. First of all, we divested businesses that don't contribute anymore. Secondly, there was a pretty big also COVID-induced FX effect in there. We had regulatory issues in China and Pharma on the volume-based pricing. And we had some dislocations in the crop market. Based on everything that we look at, we really believe in these market growth rates, and we believe we have the innovation to grow with and above the market in all divisions. And I really believe those are solid plans on top of that. We control our own cost. We go through another transformation program. We've executed the last one, almost completely. And we also have the new one in front of us. So we feel very good that we can get to these EPS levels and free cash flow levels in 2024.

Thank you very much. I have a question from Alistair Campbell for Stefan Oelrich. The question is Bayer looks to rebalance geographically, particularly in the U.S. What sort of footprint will be required? And how much will that likely cost?

Well, let's be clear, there is a significant investment attached to our reentry, especially in cardio-renal in the U.S. But let's also not forget, we have a strong presence today in the U.S., both in oncology and also in women's health care as well as in areas like Adempas or in hemophilia. But that investment is significant. We've also explained that our guidance for the ongoing year is impacted by that investment. So it's a 3-digit million number that we're investing into these launches in the U.S. alone. So it is significant. But let's not forget, this gives us the leverage that we have been missing over past years. If you look at what we would have missed or what we could have had on Xarelto or Eylea had we retained U.S. rights, it would have really propelled us to a completely different level. We have this leverage now, and we have a strong track record in launching successfully in the U.S. So I'm confident that this is a really good investment.

Thank you. Now final question for today is very similar. The question that I just asked you and it also is for you, Liam. The 2022 guidance, what gives you confidence in the 2024 guidance in comparison to this?

Yes, also a great question. So I think there's basically 3 things that have changed. Number one, the market environment is completely different. The past 2 years, 2, 3 years have been completely depressed from a commodity price point of view. We had $3 corn. We had $8 soybeans. Now we're at $5.50 corn. We're at $14 soybeans. This is a very different market environment. I think it's important to remember with Bayer, our agricultural footprint, if acres go down because commodity prices are depressed or because of weather, we don't only lose sales on our own acres, we lose sales on our licensed acres. When the market turns and things become good again and there's an acreage improvement, we don't just earn on our own acres, we earn also on our licensed acres. So number one is the market's completely changed. Number two, the soybean situation, the competitive situation has changed, as I said, since 2020. We had a regulatory challenge. And we've not only gotten over that challenge. We've also gotten the approval now for very, very important new products with XtendFlex in North America and Intacta 2 Xtend in Latin America. So I think we're completely back in the game in soybeans. And when I say back in the game, I think I've got to remind everybody, we're still the market leader, and we're not talking about catching up to somebody else. We are the market leader. And now we're fully competitive again and looking forward to offering our products in the market. And the third one, and we'll be talking a lot about this tomorrow, we have a raft and came up a little bit today. We have a variety of new products coming. And all of these new products allow us because they're innovative because they create value for growers. They allow us to come in at higher price points in the market. And this is typically our strategy is to come in with the most innovative products, set a new premium price standard, and we have now a variety of new products in the rollout phase. So those 3 things for me are what are very different than the last 2, 3 years.

Fantastic. Well, that concludes our 30-minute Q&A session, and a big thanks to all of you for all those wonderful insights that you shared with us today. But we are not quite finished yet for today. You had the opportunity to register in advance for a coffee break with the panelists. And so we will continue with these meetings shortly at 5:50 p.m. CET. Please use the individually shared teams invitations to join those conversations. And of course, you're also invited to engage with the leads experts in the chat lounge. They're going to be available to answer all of your questions between 5 and 7 p.m. CET. And with that, I'll hand over to you, Oliver.

Thank you so much, Ariane. Thanks for the moderation. This was fantastic. Thanks for taking the time. We'd like to say thank you to everybody here today from the communication center in Leverkusen. We thank you for your participation, and we look forward to seeing tomorrow at the same time. I hope you enjoyed the day as much as we did and looking forward to seeing you tomorrow. Bye-bye.

Bye.