Merck KGaA (MRK) Earnings Call Transcript & Summary

Ladies and gentlemen, on behalf of the Supervisory and the Executive Board, I would like to warmly welcome all of you in here by call today's 2024 Annual General Meeting of Merck KGaA to order. My name is Michael Kleinemeier, pursuant to Article 23 Paragraph 1, Sentence 1 of the Articles of Association. As a new Chairman of the Supervisory Board, I am chairing this Annual General Meeting. After roughly 10 years, Mr. Wolfgang Buchele has stepped down as Chairman of the Supervisory Board, and the Supervisory Board has elected me as its new Chairman. First, I would like to welcome you, our shareholders and shareholder representatives. I am pleased by the great interest you are showing in our company by participating in this virtual Annual General Meeting. Let me also welcome all media representatives following our AGM on the Internet. The 2024 AGM is held as a virtual Annual General Meeting. The decision to do so this year again was taken by the Executive Board after careful deliberation. Thanks to the virtual form of the meeting. It's easier for our shareholders to participate actively. In addition, the decision for the virtual format reduces the burden on the environment since no one has to travel to attend the meeting. Moreover, we are reducing the cost for the company and by that, also for the shareholders. Today's AGM will be conducted along the same lines as last year's meeting. Again, this year, we will transfer the advantages of an on-site face-to-face AGM to the virtual format and uphold shareholders' rights to the best of our abilities. As in the case with an in-person AGM, all properly registered shareholders and their proxies have extensive rights to speak, submit motions and to request information today. We are reintroducing the possibility for a direct dialogue between management and shareholders. As a meeting chair, I have determined that you must exercise the right to request information exclusively through video communication and as part of your statement. Moreover, I confirm the Executive Board's decision then you must make your request for information in accordance with Section 131, Paragraph 4 Sentence 1 of the Stock Corporation Act, exclusively through video communication as part of your statement. This makes it easier for other shareholders to follow all statements, questions and answers in sequence via the video broadcast of the AGM. He must exercise all rights to speak, to submit motions and to request information via the investor portal. Shareholders and the proxies receive access to that portal by entering their personal lock in details provided from their access medium. Further technical recommendations and notes have been published on the AGM's website when the meeting was first convened. Should there be any interruption sort of broadcast for technical problems, we ask for your patience. If we cannot re-establish the transmission, we will keep you informed via the investor portal. If you have any questions about the investor portal or if you have technical problems, may I ask registered shareholders to contact our hotline by phone or email. You will find contact details in the investor portal and displayed here. The hotline will be available until the end of this Annual General Meeting. As a further option to promote the exchange of views, shareholders and the proxies were able to submit comments to the company until April 28, 2024. All duly submitted statements are available on the investor portal. As announced when the AGM was first convened, we already published the speech by Ms. Garijo on April 18, 2024. In order to give you the possibility to refer to the content of her speech in your questions and contributions. If you were able to exercise your voting rights already before the AGM and are still able to do so today on the Investor Portal until I close the vote on the agenda items. I will notify you again when I do so. Up to this point, you may still submit voting proxy forms as well as issue proxies and instructions to the company's proxies. Here with me are the Chair of the Executive Board, Ms. Belen Garijo; Dr. Kai Beckmann, CEO Electronics; Peter Guenter, CEO of Healthcare; and Dr. Matthias Heinzel, CEO, Life Science as well as Ms. Helene von Roeder, CFO. The members of the Supervisory Board are also in attendance and can get in touch with me and the other members of the Executive Board, if required. The candidates for today's election to the Supervisory Board have also joined us. They will briefly introduce themselves personally to you later during the meeting. Let me welcome Dr. Carla Kriwet, Ms. Barbara Lambert, Professor Dr. Stefan Palzer and Mr. Susanne Schaffert. Ms. Katja Garcia Vila who also stands for election as a member of the Supervisory Board cannot be with us in Darmstadt today that she is needed as the CFO of Continental AG at their respective AGM, also taking place today. I myself, I am also standing for election to the Supervisory Board. Finally, let me welcome the officiating notary, Dr. Alber, who is keeping the minutes of the Annual General Meeting and Dr. Sandmann, the Group General Counsel. Lastly, let me welcome the proxies appointed by the company. Ladies and gentlemen, I would first like to address the formalities that must be attended with the agenda before we deal -- before we deal with the agenda in accordance with the law and statute. Today's virtual Annual General Meeting was convened via the publication of the agenda in the German Federal Gazette on March 15, 2024, in the required form and within the stipulated period. A printout of the notice of the meeting published in the Federal Gazette is attached to the minutes prepared by the notary. The information stipulated by Section 125 of the German Stock Corporation Act was submitted by the Executive Board within the stipulated period and as prescribed by law. Moreover, the notice of this Annual General Meeting was forwarded to those media that can be assumed to disseminate information throughout the entire European Union. Since the AGM has first been convened, the annual financial statement for fiscal 2023, including the proposal of the Executive Board for the appropriation of the net retained profit, the consolidated financial statements, the combined management report for Merck KGaA and the group as well as the report of the Supervisory Board have been available on the website of the company. The company has not received any merchant supplement today's agenda. So only the agenda as published must be dealt with. Shareholders have made use -- shareholders have not made use of the possibilities of mid counter motions to the company prior to the Annual General Meeting. Since the AGM was first convened, the documents and information specified in Section 124a of the German Stock Corporation Act have been available on the website of the company. Copies of these documents are available to the notary. It does ascertain that this general meeting was convened in the required form and within the stipulated period. The required register of attendees will again be kept electronically this year. This register includes the company's proxies present here and the shareholders they represent. The shareholders represented by authorized third parties and all shareholders joining electronically via the investor portal. This means that depending on the proxies, you submit or withdraw to or from the company's proxies and depending on the number of shareholders and shareholder proxies joining online, official shareholder presence will change. I would now like to inform you of the presence, as it is currently appears from the register of attendees. The register will be available for inspection on the investor portal after the AGM. After the voting results have been determined, I will inform you of the presence again. Attendance after base capital of the company amount of EUR 168,014,127.60 in 129,242,252 shares are represented 92,054,385 shares with as many votes, which corresponds to 71.22% of the base capital. In addition to that, postal ballot for 679,703 shares have been handed, which corresponds to 2.53% of the base capital. Stockholders registered for the Annual General Meeting were able to exercise their voting rights prior to the meeting by postal ballot or by instructing and authorizing the company's proxies. Until voting is closed, you may still submit to voting proxy forms as well as issue proxies and instructions to the company's proxies. I will expressly draw your attention to the final opportunity to vote and issue instructions as soon as this time comes. Pursuant to Article 23 Paragraph 2 Sentence 2 of the Articles of Association, it is my duty as Chairman of this AGM to specify the manner and order of voting. As at past AGMs, voting will be based on the addition procedure. That means the votes cast in favor of and the votes cast against will be counted. Abstentions do not have any impact on the result and are not counted separately. Voting shall take place in 1 voting session after all agenda items have been dealt with. Please note that this virtual Annual General Meeting can be followed live not only by registered shareholders, but will also be broadcast in full length to the public via the Internet shareholders and shareholder proxies and shareholder representatives not following the virtual AGM via public progress on the Internet and not via the investor portal will not be automatically recorded and electronically present at the AGM. Electronical presence at the virtual AGM and exercising shareholders of rights at the meeting is only possible via the investor portal. After the Annual General Meeting only my introductory remarks, the audit report after supervisory report and the speech by the Chair of the Executive Board will be available on the Internet. Subsequent to these introductory remarks, we will now begin with today's agenda, and I will call up agenda items 1 to 10. The agenda including the proposed resolutions by management regarding agenda items 2 to 10 have been published in the Federal Gazette. I would now like to begin with agenda item 1. Presentation of the annual financial statement approved by the Supervisory Board as well as the consolidated financial statements approved by the Supervisory Board and the combined management report, including the explanatory report on the information in accordance with Section 289a, Section 315a after German Commercial Code HGB for fiscal 2023 and the report of the Supervisory Board as obtained the following: The documents have been available on the company's website since the date on which the Annual General Meeting was convened and can still be accessed there. The annual financial statements of Merck KGaA were audited by Deloitte GMBH [indiscernible] including the management report. The audit did not lead to objections. The auditors issued an unqualified audit opinion on the annual financial statements and the combined management report for Merck KGaA as required by law. In addition, Deloitte audited the calculation of Merck KGaA's participation in the profits of Merck in accordance with Article 27 Paragraph 2 of the Articles of Association. In addition, Merck KGaA prepares consolidated financial statements for the Merck Group in accordance with International Financial Reporting Standards, IFRS, as well as the supplementary rules applicable under the German Commercial Code. In addition to the combined management report, Deloitte also audited the consolidated financial statements. For the consolidated financial statements, the auditors issued the unqualified audit opinion reproduced in the annual report of the Merck Group. The annual financial statements of Merck KGaA, the consolidated financial statements of the Merck Group and the combined management report as well as the corresponding audit reports of the auditors were presented and distributed to the Supervisory Board. In accordance with Article 14 Paragraph 2 of the Articles of Association, Supervisory Board examined the annual financial segments of Merck KGaA, the consolidated financial statements and the combined management report, that's what the report of the auditor presented in accordance with Article 27 Paragraph 2 of the Articles of Association. On completion of its examination at its meeting on February 27, 2024, the Supervisory Board raised no objections and thus, approved the annual financial statements of Merck KGaA as well as the consolidated financial statements of the Merck Group and the combined management report prepared by the Executive Board as well as the report presented by the auditors in accordance with Article 27, Paragraph 2 of the Articles of Association. Ladies and gentlemen, let us now continue with the report of the Supervisory Board. You will find a full report on Pages 218 to 223 of the annual report for 2023. Allow me to highlight the following: The cooperation with the Executive Board in fiscal 2023 was again characterized by intensive trusting exchange. The Executive Board provided Supervisory Board with regular written and verbal reports on the business development of Merck KGaA and the Merck Group. In particular, the Supervisory Board was informed about the market and sales situation of the company against the backdrop of macroeconomic developments and geopolitical tensions. In particular, the Supervisory Board was informed about the financial position of the company and its subsidiaries, along with the earnings development as well as the corporate planning. Within the scope of quarterly reporting, the sales and operating results were presented for the Merck group as a whole and broken down by business sectors. Apart from the Supervisory Board meetings, the Chairman of the Supervisory Board also maintained a regular exchange of information with the Chair of the Executive Board. The Audit Committee Chair submitted a thorough report to the Supervisory Board on past Audit Committee meetings. Apart from the audit of the annual financial statements and the latest business development, the focus of the Supervisory Board meetings was on the strategic considerations of the Group and its businesses. The Supervisory Board also dealt with the work of the Research and Development Committee of the Board of Partners of E. Merck KG. Additional topics of importance for the Supervisory Board included the organization of the 2023 AGM in virtual form, Merck's global strategy as well as a comprehensive training on sustainability. My dear ladies and gentlemen. This is all from my side now. Now I would like to turn the floor over to Ms. Belen Garijo, Executive Board. She is going to report to you on the past fiscal year and speak about the company's future business developments. The floor is yours, Ms. Garijo.

[Foreign Language] Before we begin, I want to extend my special thanks to Michael Kleinemeier for stepping in as the Chair of the Supervisory Board in such a short notice. I would also like to thank our former Chair, Dr. Wolfgang Buchele for his dedicated service over many years. I want to also congratulate him on his new role as the Chair of the Board of Partners of E. Merck KG. Ladies and gentlemen, throughout the 356-year long history of Merck, we have consistently proven our ability to anticipate and adapt to changes in the world around us. Indeed, ever since Friedrich Jacob Merck took over a pharmacy here in Darmstadt in 1668, resilience has been a cornerstone of our success. Last year provided us with multiple opportunities to demonstrate our resilience to the world once again. Today, I want to talk to you about how we have navigated the challenges of 2023 and why I believe you should continue to place your trust in our long-term promising future. Last year, many significant geopolitical, social and economic headwinds as well as very challenging market conditions impacted our Life Science and Electronic businesses. Yet despite the challenging market environment, Merck delivered a robust performance during 2023 and there were 4 decisive element behind this outcome. Number one, the operational performance of our multi-industry business model, which allowed us to navigate these headwinds better than some of our industry peers. Number two, our innovation pipeline across our 3 business sectors, which continues to serve as an engine for long-term growth. Number three, our sustainability performance, which demonstrates our commitment to using innovation and our business culture to make a positive impact for colleagues, communities and the environment. And number four, last but not least, the commitment of our people and teams who once again demonstrated their dedication to Merck's customers and patients. On behalf of the Executive Board here with me, I'd like to thank our 63,000 colleagues for their hard work and relentless efforts. So let's discuss our operational performance in 2023, reflected by some of the financial indicators you have on the screen. It is important to note that we delivered as expected and within the guidance that we have communicated to the markets. Our group net sales declined on a reported basis by 5.6% to EUR 21 billion in 2023. Organically, net sales declined 1.6%. In Life Science, sales and earnings were mostly impacted by 2 factors: The expected decline in COVID-19-related sales and importantly, the high inventories at customer level who consequently placed less new orders in Process Solutions. In Electronics, we continue to be affected by a prolonged industry-wide down cycle in semiconductor materials. However, our semiconductor solution business is still outperformed the reference market. The strong performance of our health care business partially compensated for these temporary challenges in Life Science and Electronics. In particular, our so-called wave 1 launches, mainly Bavencio and Mavenclad were once again the key growth drivers for our pharma business. All in all, our EBITDA pre came in at EUR 5.9 billion, declining 14.2% as reported and organically by 9%. EPS pre stood at EUR 8.49. Our group EBITDA pre margin came in at 28% versus 30.8% in 2022, reflecting the loss of the very highly profitable COVID-19-related sales mainly and some other factors. Overall, we were able to further reduce our net debt by more than EUR 800 billion in 2023 to around EUR 7.5 billion. Now I would like to turn your attention to some key developments in our 3 sectors, starting with Life Science. Sales in our Life Science business sector declined 10.6% to EUR 9.3 billion or minus 7.9% organically. This was largely due to the 2 market-related factors that I previously mentioned. In addition, the currency effects also had a negative impact of up to 2.7% on sales. If we look at the individual business units, both Process Solutions and Life Science Services declined more than 14% organically. Science and Lab Solutions, which generates around half of the sales of Life Science in 2023, saw an organic sales decline of 0.6%. 2023 was a tough transitional year for Life Science, yet the market fundamentals for our Life Science business remains strong across the business sector. And we remain confident on our solid position to secure mid- and long-term growth. Therefore, we must continuously invest to secure our future position and we did so in 2023. As 1 example, we recently announced a new investment of EUR 300 million into a new bioprocessing production center in South Korea. This new site will be the largest investment by Merck's Life Science business sector in Asia Pacific. It will also create around 300 additional jobs by the end of 2028 when the site becomes operational. And here in Germany, we opened 2 new mRNA drug substance manufacturing sites in Darmstadt and Hamburg. This makes us the first company to offer integrated services along the entire value chain of mRNA development, manufacturing and commercialization. We also further consolidated our position as a fully integrated partner for mRNA as well as several other novel drug modalities where we help customers treat and potentially cure serious diseases such as cancer, heart disease and autoimmune conditions, which means scientific progress in pharma starts with Merck Life Science. Moving into our health care business sector. Our net sales in health care increased 2.7% as reported to EUR 8.05 million. Excluding currency effects, net sales of health care jumped by a strong 8.5% organically. Key growth drivers included our oncology medicine Bavencio and Mavenclad, our treatment for relapsing multiple sclerosis. Bavencio delivered organic growth of more than 23%, while Mavenclad generated an organic growth of nearly 16%. With this growth, Mavenclad reached blockbuster status in 2023 as it surpassed the $1 billion in sales. But what truly makes us very proud is knowing that it has already helped over 83,000 multiple sclerosis patients worldwide. Our fertility franchise grew by 15% organically due to a strong underlying growth of our portfolio. We also saw solid contributions from our metabolism, cardiovascular and endocrinology, the so-called CM&E franchise. Of course, we were strongly disappointed by the news that evobrutinib did not meet the primary endpoint in the clinical studies of Phase III EVOLUTION trials. Attrition in Phase III is part of the business model of any biopharma business. We are therefore absolutely sharply focused on developing our pipeline further, which continues to hold great potential. For example, we continue to make good progress in the development of xevinapant, our late-stage first-in-class candidate that is being evaluated in the curative setting of locally advanced squamous cell carcinoma of head and neck. This is an area that has not -- that has not seen any significant innovation when it comes to treatment for the last 20 years. The next step in this program is the interim analysis of our Phase III study called TrilynX. I would also like to underline enpatoran, an investigational novel immune receptor antagonist, which is currently under investigation as a treatment for lupus in Phase II clinical trials. Our current pipeline is strong, and we have multiple clinical development programs underway with potential first-in-class assets such as the next-generation antibody drug conjugates. And we continue to make important progress in building our future pipeline with multiple strategic collaboration and in-licensing activities. In 2023, this included Abbisko for a rare disease and Hengrui, for example. We remain confident that our focused leadership approach in health care represents very solid basis for long-term growth. Let's now move on to our third business sector, Electronics, where we serve as a strong and reliable partner to our global base of customers. As I mentioned previously, 2023 was a challenging year also for Electronics and for the electronics industry in general. Overall, our Electronics business sector experienced an 8.8% decline in sales to reach EUR 3.66 billion. Organically, excluding the currency effects, sales declined by 5.1%. If you look at the individual business units, our semiconductor solutions, business reported an organic sales decline of 3.9%. At the same time, we faced persistent price pressure and low capacity utilization by our customers in the liquid crystal field. Consequently, organic sales in the Display Solutions business unit declined by 9.2%. We are anyway confident that we will see the market pick up in 2024, and we have already seen early promising signals of improvement. A good example is our semiconductor materials business, which delivered 2 quarters of sequential growth already in the second half of 2023. Plus, we see chip inventories on the decline already. Demand is building once again for logic chips and leading-edge memory, which is exactly where we play. Our modern digital world will continue to be transformed by artificial intelligence, next-generation semiconductors and high-performance computers. The constant innovation will require our material intelligence. That is the kind of advanced materials and integrated solutions that we are very well positioned to provide. And this is why we will continue to confidently invest to support our long-term growth also in Electronics. Our global diversification continues to be a key strength of Merck. 90% of our net sales were very well balanced across our 3 most important markets. North America with 28%, Europe 29% and Asia Pacific 33%. Our broad global footprint not only reduces Merck's exposure to local economic events, the ongoing regionalization of our operations also brings us even closer to customers and to patients and makes us more responsive to their needs. We thank our customers and partners worldwide for their continued trust. It is also important to recognize the support of our shareholders. We are, therefore, very pleased to announce our proposal for a dividend of EUR 2.20 per share at today's Annual General Meeting, which is consistent with the previous year. This proposal underscores our commitment to providing sustainable value to our shareholders even in challenging times. At the same time, it also clearly illustrates our confidence in the long-term growth prospects of our company. Looking ahead, we expect economic and geopolitical headwinds to proceeds this year. Yet, we are confident that our group will gradually return to organic growth during 2024. In Process Solutions, sales should recover in the second half of the year. The semiconductor materials market is expected to improve gradually in 2024 compared with 2023 with the turning point expected to be in the second half of the year as well. For both, group net sales and EBITDA pre, we are expecting a slight to moderate organic growth. While the attention of Merck will be focused on returning to growth during 2024, this will also be an important year for our world as many critical elections are going to be held. It is my personal belief that we must especially stand behind Europe and encourage active participation in the upcoming new elections. Democracy, freedom, equality and human rights are and must remain at the core of our identity. These values are not only the foundation of our society, but also provide very fertile ground for innovation, for growth and for competitiveness. The key here is to further nurture the power of diversity to build a stronger and more united Europe. Beyond 2024, I believe that we, at Merck, remain firmly positioned for long-term growth and impact. The world is being rapidly redefined by a series of megatrends. This include novel modalities in life science, growing patient needs for cancer, neurological and immunological treatments in health care, the certain growing importance of artificial intelligence and big data in electronics and rising global demand for sustainable innovation. It makes me very proud to say that Merck is uniquely positioned at the heart of these megatrends as a leading global science and technology company. Our multi-industry business model, a strong global footprint and diverse team can together help us transform how people live, work and connect. We remain fully committed to not only creating value within each business sector, but also across the sectors as 1 Merck. Artificial intelligence in drug discovery, digital twins, smart manufacturing and bio electronics are just some of the innovation areas in which our gross sector synergies could become a competitive advantage for Merck. Furthermore, I'm proud of the progress being made by our teams to accelerate our sustainability leadership [indiscernible]. We come a long way in our environmental and climate protection goals. And we stay on track to achieve our 3 core sustainability goals: Number one, by 2030, we aim to have fully integrated sustainability into our value chain. Based on this, we expect to achieve climate neutrality and significantly reduce our resource consumption by 2040. To name a few highlights of our progress. During 2023, we reduced our direct Scope 1 and indirect so-called Scope 2 greenhouse gas emissions by nearly 17% compared with the previous year. We also obtained more than half of our electricity purchased worldwide from renewable sources for the first time. Following the signing of virtual power purchase agreements in 2023, we now expect renewable energy to cover 100% of our current electricity purchases in Europe, more than 90% in North America and 70% worldwide as of 2025. On our way to gender parity by 2030, we increased the percentage of women in leadership position worldwide to a record high of 39%. And we were amongst the world's top 5 pharmaceutical companies enabling access to our medicines in low and middle-income countries. Our commitment to global health is an important part of our sustainability strategy. And a prime example of this is the fight against schistosomiasis, a devastating neglected tropical disease. As you may know, since 2007, Merck has donated 2 billion praziquantel tablets for medical treatment. This means over 800 million patients being treated, mostly school aged children in 47 countries across Sub-Saharan Africa and some parts of Asia. In December, we received great recognition for this. The European medical authorities gave a positive opinion for a new pediatric treatment options for a small children age 6 years and under for praziquantel. Yet, we still have a long way to go. I am also delighted that we have exceeded our waste and water targets in 2023 and have now introduced new water and waste management targets and strengthened our commitment to biodiversity and circular operations. Ladies and gentlemen, despite all the challenges, we have delivered. However, there is also much more to be done. I hope I have given you a comprehensive overview of where we stand and our strong potential for long-term growth. To conclude, my 3 key takeaways: Number one, 2023 was a transitional geared full of challenges. But we were able to once again prove their resilience, the strong resilience of Merck. Number two, we will gradually return to growth in 2024 and we are already seeing the first signs of recovery in the different business sectors as well as the markets. Number three, most importantly, we are very well positioned to drive sustainable growth towards the long term and this is driven by our belief that we can play strong in these megatrends in all our key markets. I briefly mentioned Friedrich Jacob Merck at the start of this presentation. This year, the Merck family, which holds 70.3% of the capital of our operative company transitioned smoothly to 12th generation of family management. Mr. Johannes Baillou is now the Chair of the Family Board, succeeding Dr. Frank Stangenberg-Haverkamp, who retired recently. Professor Dr. Simon Thelen was elected as the new Vice Chair of the Family Board and the Board of Partners. Their continuous commitment to thinking generations underscores our own long-term ambitions to be a 21st century pioneer in science and technologies. Our priorities are very clear: sustainable growth, leadership and delivering value to customers and patients worldwide through our diverse globally based [indiscernible]. Most importantly, we want to enable people to have longer, healthier and more sustainable lives. Our multi-industry setup and science and technology portfolio positions will help us deliver on these outcomes for the generation to come, which is the reason why I want to close this presentation with one final number if you allow me to do so. And it's a number that I believe is more impactful than any others we have shared with you so far. And the number is 179 million. And this is how many patients we have been privileged to serve last year across the world with our own portfolio of health care products. At this time, I want to thank you for your attention, and I'm really looking forward to the questions and our debate.

Thank you, Ms. Garijo. Dear ladies and gentlemen, you can also read the speech of Ms. Garijo online. As I said, it was published on the company's website on April 18, 2024. I would like to thank you, Ms. Garijo also on behalf of the meeting for your comprehensive and insight for the report of the past fiscal year, which for Merck was shaped by strategic transformations. I would like to express my thanks and recognition to the entire Executive Board for the business achievements in a challenging fiscal year 2023. My recognition, of course, also applies in particular to the employees of our company without whom Merck would have never been so successful. This includes the managers, the superb experts in the various units, and of course, the entire workforce, including their representatives who did an excellent job last year. Ladies and gentlemen, before I move on to the agenda item #2, I would like to correct -- make one correction, the report of the Supervisory Board. I said Merck KG inadvertently, not Merck AA. The correct wording of this paragraph is the Supervisory Board adopted the final financial statement of Merck AA. The, consolidated management report and the report of the auditor in accordance with Article 27 of the paragraph with the Article of Association. Thank you very much, excuse me. So now I would like to move on to agenda item about 2 to 10. They can be seen here. They are: The resolution on the adoption of the annual financial statements for fiscal year 2023; the resolution on the appropriation of net retained profit for fiscal year 2023; the resolution on the approval of the actions of the Executive Board for fiscal year 2023; the resolution on the approval of the actions of the Supervisory Board for fiscal year 2023; the resolution of the election of the auditors of the annual financial statement, the consolidated financial statements for fiscal 2024 as well as the auditors for the audit review of the interim financial statements and management report of the group as of June 30, 2024; the resolution on the approval of the compensation report for 2023; the Supervisory Board elections; the resolution of the compensation of Supervisory Board members including the compensation system as well as the corresponding amendments of the Articles of Association Act; the resolution of the amendment of the Articles of Association in connection with the German Financing for the Future Act. You will find the agenda items as well as the corresponding proposed resolutions and further explanations in the notice of this meeting, which has been published on our website. Ladies and gentlemen, let me now turn to agenda 8, the elections to the Supervisory Board. The matters of those members of the Supervisory Board elected at the 2019 AGM, namely Ms. Renate Koehler, Professor Dr. Helga Rübsamen-Schaeff, Dr. Daniel Thelen and myself will expire with the closing of this year's AGM. At the same time, Ms. Barbara Lambert's mandate also expires. She had been appointed by the court as a replacement member of the Supervisory Board following the resignation of Helene von Roeder in August 2023. Mr. Wolfgang Büchele resigned from his office as a member of the Supervisory Board with effect from February 13, 2024. On behalf of the company, I would like to thank all members of the Supervisory Board now leaving their office for their outstanding collaboration. Mr. Büchele as Chairman of the Supervisory Board for many years. You have moved alongside the development of the company. Thank you very much for that. I'm pleased that we were able to find outstanding new candidates for the Supervisory Board, who will support Merck on our successful onward journey. The Supervisory Board proposes the election of the following persons as representatives are the shareholders of the Supervisory Board. Ms. Katja Garcia Vila then myself, Mr. Michael Kleinemeier, Ms. Dr. Carla Kriwet, Ms. Barbara Lambert, Professor Dr. Stefan Palzer and Dr. Susanne Schaffert. Take into consideration the specific objectives, the Supervisory Advisory Board is defined with respect to its composition, the profile of skills and expertise for the entire Board as well as the diversity policy. These are the most suitable candidates. Their profile of expertise and skills was the main part of focus during this election process. We particularly selected them for their in-depth knowledge of the key areas for Merck, that is Life Science, Health care and Electronics. Another criterion was their experience in corporate leadership and supervision of a company. We also consider their business experience in max main regional sales markets. The candidate's complementing professional and personal experience will benefit the work of the Supervisory Board. In particular, Ms. Garcia Vila and Ms. Barbara Lambert have expertise in the field of accounting and auditing of financial statements within the meaning of Section 105 Store Corporation Act. Following the election of the candidates proposed by the Supervisory Board, the Supervisory Board would consist of 4 women and 4 men on the shareholder side, including the delegated members, so that the minimum requirement would remain fulfilled. Furthermore, all candidates are to be regarded as independent. The corresponding declarations of all candidates independence can be found on the company's website. The Supervisory Board has assured itself that the proposed candidates will be able to meet the expected time requirements to perform their duties as members of the company's Supervisory Board. Detailed CVs of all Supervisory Board candidates, briefs on individual candidates as well as other information regarding the elections to the Supervisory Board have been published together with the notice of the AGM. In addition, the CVs and briefs can be found on the company's website. I would now like to give each candidate an opportunity to introduce themselves. Since I would like to follow the order, the candidates are named in the invitation. I will first play Ms. Garcia Vila's introduction, which we recorded yesterday in the studio, and I will follow Ms. Garcia Vila with my own introduction. Please, the video, dear shareholders.

[Interpreted] Today, I'm delighted to present myself to you as a candidate for as member of the Supervisory Board for Merck. Merck has the aim to be a pioneer in science and technology in the 21st century. The passion for this drives more than 60,000 employees in more than 60 countries. You work on solutions for some of the greatest challenges of our time in order to design a sustainable future. Technology, internationality and sustainability are also the driving forces of my professional career. In the future, I would like to share with you my competencies in order to support you as a member of the Supervisory Board. Why am I qualified for this responsible task. For more than 16 years, I have worked in leading positions in an internationally important company, which is also a DAX-listed company. I have a lot of experience and competence in finance as in controlling and accounting as in tax, assurances, mergers and acquisitions and funding. This expertise and my abilities in communication will mean the success of our company on the capital market. One of my important tasks is the ticket utilization. It is a red thread through my whole career. I didn't -- I wasn't only responsible for finance, but also for digitalizations wherever I worked. And today, I'm responsible for the IT area in my company. I want to leverage efficiencies and enable progress. For me, it was always clear that the digital transformation is a great opportunity for our companies. Another thing that accompanies me as CFO are ESG topics in reporting as well as when it comes to the demands of the capital market. So sustainability isn't important for me personally only, but also in my professional environment. Ladies and gentlemen, dear shareholders, as you can see, I have a comprehensive range of competencies. I am passionate, and I'm curious that works well with Merck because I'm also convinced by the positive force of science and technology. I feel obliged to progress, which is why I would be delighted to gain your trust today and become a member of the Supervisory Board. Thank you very much.

Thank you very much Ms. Garcia Vila for inspiring video. Dear ladies and gentlemen, it's a pleasure to be able to briefly introduce myself and discuss the most important subs of my professional duties so far. I've been a resident of Heidelberg since 2009, '10 and [indiscernible], I'm married and I have 3 children and 2 grandchildren. I grew up in Eastern Westphalia and finished my business degree with a focus on business information technology in Paderborn. After various positions in private business, I found my way to SAP in Waldorf. With SAP, I held various global management positions in development and consulting as well as in building country and region branches. I switch to a company that SAP SE had taken and as a Board member, they supported the company and transitioning into the Intelligence AG. I also made an essential contribution to boost this IT service providers international business. When I returned to SAP, I was appointed to the extended Board in 2014 and a year later became a regular Board member of SAP SE. I retired in 2020 on account of age. During my 30 years at SAP, I gained deep insights of how to digitalize corporate processes across 24 industries as well as of the global management of an internationally active company. Since 2020, I've supported companies in their digital transformation in my capacity as Managing Director of E-Mobiligence, GMBH. Also in 2020, I reduced my work for the GMBH to managing my personal stakes in order to free up sufficient capacity for the work on the Supervisory Board of Merck KGaA. Over the past 5 years as a member of the Supervisory Board of Merck KGaA, I've gained a deep knowledge of this company and its businesses. I've contributed my expertise and business management process digitalization, AI and global markets, stability actively supporting Merck's transformation. The company's huge momentum and capacity for innovation have been a particular source of awe and motivation. And that is about myself. May I now ask Dr. Carla Kriwet, candidate for the election to the Supervisory Board to step up to the elector and introduce herself.

Thank you, Mr. Chair. Ladies and gentlemen, dear shareholders, let me also welcome you. Wish you a good morning. My name is Carla Kriwet. I'm 53 years old. I'm married and a mother of 3 teenagers. I am an economist by training and have worked for 25 years in leadership position. I worked in companies such as the Boston Consulting Group, Linde Healthcare, Philips, BSH and Fresenius Medical Care. During this time, I worked in -- I lived and worked in different European countries, but also in the U.S., in Asia and Africa. At the moment I'm Chairman of Evidia, one of the leading radiology and radiotherapy companies. And I'm senior adviser for the private equity company, EQT. And I'm also a business angel for some start-ups in medical technological and biotechnology. I have an experience as member of Supervisory Board because I worked in the Supervisory Board of Carl Zeiss Meditec of the Carl Zeiss, AG. At the same time, I have worked as a voluntary member of the Supervisory Board of Save the Children, Germany, which is an aid organization. So I have a particular expertise in M&A digital and sustainability. I've worked for 7 years at Philips. And in the end, I was able to be the leader of connected medical care that means patient monitors, but also the hospital IT of Philips. Of course, cyber IT is also an important topic here. As CEO of BSH together with the Executive Board, I drove forward digitalization as well and sustainability. So we renewed the area of sustainability, set the major targets and defined what sustainability means for us across all the chain of delivery -- supply chain. I believe in science, progress and business and social responsibility. I would be delighted if I could serve Merck as well with my experience. And if you -- if I will gain your trust, dear shareholders, and I will be delighted if you elected me as a member of the Supervisory Board of this wonderful company. Thank you very much.

Now, dear Ms. Lambert. We're now looking forward to your introduction as a candidate for the Supervisory Board.

Thank you very much, dear shareholders. Ladies and gentlemen. My name is Barbara Lambert. I grew up not far away from Düsseldorf, I'm German, but for private reasons, after my -- graduating from school, I moved to Geneva and finished school of economics. I've been a member of expert commissions, and I'm an auditor and have had 20 years of experience in this area because I work for Ernst & Young and was also responsible for mergers and acquisitions. I worked at Ernst & Young and was responsible for Swiss and international mandates for quality control and special audits. The last 10 operative years of my professional career, I spent at Banque Pictet & Cie in Geneva, which is a private bank and asset manager who has been in possession of a family for the last 200 years. First, I was Head of Group Internal Audit. And then I was a member of the Executive Board as Group Chief Risk Officer, and I was responsible for risk, compliance and information security. In 2017, I was responsible for sustainability and for renewing and finding a strategy for this area. Since then, as a member of the Supervisory Board, I contributed to support the company when it comes to the new regulatory laws in sustainability. In the actual geopolitical environment, I have invested a lot of my time in sustainability, which is also personally important to me. After 30 years of auditing and operating, I have decided to become a professional full-time exclusive member of Supervisory Board for important companies and interesting companies. For me, it is important to have enough time even if there are risks and special situations. And in the last few years, I proved that I hold true to my word. My 4 actual mandates are Supervisory Board of Credit Suisse and UBS Implenia, German -- and at Merck, I was the leader of the Economic Committee. Before that, I was at Ernst & Young, Switzerland, Banque Pictet and I was a member of the supervisory report in SYNLAB, Munich. Therefore, I have gained more than 10 years of experience as a member of the Supervisory Board and have a share of audit committees. As a financial expert, I have proven knowledge in accounting, statutory statements and sustainability, particularly when it comes to reporting. I would be happy in the future to remain a member of the Supervisory Board of Merck and also member of the Audit Committee. Because I would make a stable foundation for sustainability and the growth of the company. Thank you very much.

Thank you very much Ms. Lambert for your introduction. May I now ask the next candidate for the election of the Supervisory Board, Professor Dr Stefan Palzer to the elector and introduce himself.

Thank you very much, Mr. Chair. Ladies and gentlemen, my name is Stefan Palzer, I am 54 years old. I have German and Swiss citizenship, born in Trier. Married, and have 2 daughters. As a member of the group and chief technology officer of Nestle. I'm in charge of technology research and development and innovation in the group. This includes implementing all clinical studies and the regulatory approval of our product, including products of clinical nutrition and pharmaceutical products as well as products for veterinary purposes. On my background and my career. After a professional training, I studied food technology -- food engineering at the Technical University in Munich, done engineering. I have got my PhD and my habilitation later. I studied business administration with focus on products economy and marketing. During my 28-year career activity in the industry in various functions, research and development, but also marketing, I gathered the experience with different types of products and technologies. Many of these technologies and products are also relevant for the different divisions covered by Merck. For example, processing -- bioprocessing versus like, for example, the precision fermentation and the culture incubation based activities. Also, the -- I was -- I also studied the different conditions in Europe and other continents in terms of economy and social affairs. As a young product engineer in these countries I industrialized new technology. And I keep visiting these countries regularly. Because of our activities in the area of prevent, but also therapeutic food. I'm also -- I've many skills at the time in the area of human technologies. I'm familiar with Merck for many years and I follow with great interest all other companies, but also know Merck from the perspective of the customer in many of our leverages, we are using Merck products. How can I help Merck become even more successful? On the one hand, my wide and deep knowledge of the different technologies and products can be helpful for the 3 divisions of Merck. Also my experience with international markets can also help for the geographic expansion of Merck. However, I can also support the company in the area of sustainability and ESG. This concerns the choice of technologies as well as the qualification of progress and the reporting. To sum it up, I can only confirm and strengthen that I'm highly motivated to contribute to the success of this exciting company, and I will be very happy to be elected to the Supervisory Board. Thank you very much.

Professor Palzer, thank you for your introduction -- for introducing yourselves. Lastly, I may now ask Dr Susanne Schaffert, candidate for the election to the Supervisory Board to step up to the elector and introduce herself.

Thank you very much, Mr. Kleinemeier. Ladies and gentlemen, dear shareholders, I'm delighted to be able to present myself today. My name is Susanne Schaffert, I'm 57 years old, and I'm proud mother of a 21-year-old daughter. I am a PhD chemist. I have more than 25 years of experience in the international pharma business. Until May 2022, I was a chair and CEO Head of Oncology at Novartis in Switzerland. In my 3.5 years as a member of the Executive Board, I was responsible for oncology, which has a net sales of EUR 15 million. And I was responsible for commercialization and development of the global portfolio, working closely together with R&D. Here, I have the very important task together with my global team to develop cancer therapies, the CAR-T cell therapy and the first radioligand therapy, and I was able to commercialize them. These therapies are individual and are produced individually for every patient. So we don't have inventories for that. And therefore, we had to establish new distribution and logistics lines. In my portfolio, I also had to do with patents of strong products, and there my task was to navigate the business through this time and promote growth. Above all that, I was part in in-licensing processes. I had a 25-year career in Novartis and held different management positions. I was head of Novartis Oncology in Germany. I was head of the European business of Novartis Oncology, and I was COO of a biotech company within Novartis, which was independent. Maybe I should also tell you that I was head of a global investor relations business. There I got experience in governance, shareholder communication, ESG, reporting and sustainability. Since June 2022, I have worked exclusively as a member of Supervisory Board. I'm an independent Supervisory Board member in 2 listed companies with Galapagos AG in Belgium and Art Bio in ARTBio, U.S.A. I'm also in the Novo Holding Denmark, the Vetter Pharma in Ravensburg, and start-up in the U.S.A. I am focusing on Supervisory Board mandate, which is why I have a good overview of broad variety of biopharmaceutical companies. Since I don't have operating job, I can fully give my time for Supervisory Board. I would be happy to give you my confidence for the future of Merck and we'll be delighted if you would give me your trust and elect me as a member of the Supervisory Board. Thank you very much.

Dr. Schaffert, thank you too very much for introducing yourself. Ladies and gentlemen, the chair of the Supervisory Board will be elected by the members of the Supervisory Board. It is intended that I, Michael Kleinemeier propose myself for election as Chairman of Supervisory Board in the event of my reelection to the Supervisory Board. You may vote on the proposed candidate separately. We'd now like to open the floor for discussion on all items of the agenda in the form of a general debate. If you would like to speak at today's AGM, you may do that through the investor portal. You can register for contribution. On the investor portal, you would be given a link with an invitation to join a video conference. After the required technical checks, you will be sent to the virtual waiting room. Please stand by there until I call you by name and until you will be connected live to the broadcast. During your contribution, you may ask questions, submit motions and the nominate candidates. In the interest of all shareholders and to guarantee speedy proceedings at today's AGM, please note that we will only allow contributions that are directly related to today's agenda. Please consider this when you speak. We have to deal with a total of 10 agenda items today, I have already received several requests for the floor. It is in the interest of all shareholders that contributions are not unreasonably long. So I'd like to ask all speakers to limit their questions and comments to a reasonable duration. In view after request to speak, we have already received a reserve the right to formally limit the general speaking time at a later point in time during the AGM. After we finished answering all your questions, we will proceed with the voting on the items on the agenda and worth determining the ensuing resolutions. Again, please note that you can exercise your voting rights on the investor portal of the company or change a vote you already cast until I close the vote. I will announce the closing of the vote ahead of time. Still, let me ask you in your own interest not to wait until the last minute with casting your vote or with issuing authorizations and instructions. Please also bear in mind that there may always be time lags when you're using an Internet connection. Objections against resolutions by the AGM, may be declared via the investor portal until the end of the meeting to be included in the minutes prepared by the notary. Until then, you may also submit a request pursuant to Section 131 Paragraph 5 of the Stock Corporation Act that questions you asked, but to which an answer has allegedly been rejected and the reason for this rejection be included in the minutes. All objections or requests will be forwarded to the notary. We are committed to answer all questions necessary to properly assess today's agenda as soon as possible during the general debate. I will now call the speakers by name, one by one. At the beginning of your contribution, kindly state your name and if applicable, the organization you represent. Let me give first floor to Mr. Andreas.

Thank you very much. Thank you, Mr. Kleinemeier for giving me the floor. Thanks to Ms. Garijo for her information on 2023, as you put it, challenging year of transition. Some of these questions have been addressed, please bear with me that following up on some of these items has the purpose of going deeper into these topics or to make it more generally understandable. Let me start with a statement of DSW to trim society for the protection of security holders, I'm in the Board of DSW. I'm here representing DSW and the shareholders represented by DSW. DSW continues to expect that AGMs are held in a hybrid format or as in person AGM. That is the declared wish of shareholders. And it is also my wish. Because today, again, I had some minor technical challenges. When can we expect that Merck will go back to an in-person AGM or to a hybrid form. How many shareholders were in 2023? How many did participate in the virtual AGM? How does the participation compare to the presence or the attendance of earlier AGMs? In 2023, Merck, the year of transition, as you put it in life science and electronics, it has seen slumps in both turnover and revenues, positive results in healthcare could not compensate for the challenges in life science and electronics. How will Merck go back on the path of growth. What is the outlook 2024 and can the motto 25 by '25. That means in the year 2025, 25 billion, can that still be achieved. Can healthcare in 2024 suffer another -- compensate for additional setback of life sciences and electronics. What are the opportunities in healthcare besides blockbuster Mavenclad and the old cancer medication Erbitux and BAVENCIO, what are other potential blockbusters? What does the pipeline in healthcare look like -- we've seen it earlier already, but what does it look like in detail? After the setback for the MS product, evobrutinib, how many real Phase III products do you have for oncology, immunology and Global Health. The question is R&D, research and development of the Healthcare division with approximately EUR 8 million turnover. And with all the respect, medium-sized healthcare company. Is that division strong enough to sustainably build an internal pipeline, which means to build it soon enough or would it need as has happened in the past, urgently major acquisitions because the R&D costs and the requirements cannot be matched? Life Science, why was it lately unexpected destocking, reducing stock in process solution in 2023. Why did that take place? And in 2024, will it be more destocking? Are there any signs for possibly a restocking? Are there any aftermath of the end of the COVID pipe? And if so, what are they? Process Solution is driving future elements for life science. What future does life since services have and science and lab solutions in current times in terms of cost cutting and restructuring at Merck? Electronics. What are the reasons for the chip price decrease in electronics in a world of competitors that are hungry for CHIPS to be leading -- become world leaders in AI. What is the influence of the CHIPS Act on electronics and electronics location and location policy, what's the special focus on China and China, Taiwan? What is the future of display and surface in current times of cost-cutting and restructuring. Now a few thoughts on the resilience strategy, scalability and location policy, with a special focus on the U.S. and China. How current is and remains Merck's resilience strategy to produce where high demand comes together with lowest production costs. Under the incentive system of the inflation Reduction Act, have you thought about further extending and moving your production to the U.S.? What location advantages or disadvantages remain for Germany regarding energy, regarding regulation, taxes, investment, incentives and ESG? Does Merck possibly run into scaling problems when the production in accordance with the resilience strategy is split into different regions, especially for healthcare. And how far are with Merck's commitment in China, how is that related to increased risks related to increasing concerns after Western World vis-a-vis China or a further escalation of the Taiwan conflict. Digitization strategy is for the 3 areas of Merck. Is there a sustainable digitization strategy regarding digital products, digital working, digital mindset -- sorry, digital processes and digital mindset? FX management. Currency losses in all 3 areas in 2024, in the fourth quarter '23, especially regarding the devaluation of the Argentinian peso. And the outlook for 2024 in Life Science and Electronics is moderate adverse. And the outlook for healthcare is significant adverse. So the question arises, does the new FX strategy, which has been implemented for 4 years, is that still successful? Regarding finance, deleveraging and acquisition. In the next 24 years, are there any -- we have financing to almost EUR 5 million -- of EUR 1 billion in '24, EUR 2.3 billion in '25 and in '26 EUR 1.4 billion. What about the refinancing strategy given current outlook on interest rates? What is the debt equity ratio you strive for? After those successful deleveraging activities in 2023, how high is the acquisition wallet, the volume that is available for possible acquisitions for strategic growth. And if so, where will be the focus on which of the 3 divisions and in which regions. The Investor Relations strategy and especially the current stock price and the market capitalization of Merck. The stock price in 2023 has dropped by almost 20%. The bad results in 2023, especially in Life Science and Electronics and a loss of a potential blockbuster in Phase III in healthcare have contributed to that, obviously. But traditionally, undervalued is the market -- or the market undervalues traditionally the portfolio company, Merck, because it's not a pure healthcare company, it's a portfolio company. And in the market, it's possibly not really understood by the market. How will Merck deal with these challenges in the future? How do you explain to your investors if the sum of the 3 individual companies, healthcare, life science and electronics -- electronics have a higher value in the appreciation than the total value of the entire company? About the dividend policy. Shareholders, thank you for maintaining the dividend after the otherwise very disappointing year 2023, with EUR 2.2 the dividend payout is at the upper end of the payout ratio of Merck 20% to 25%. But it is the wish of shareholders represented by DSW that the payout ratio moves towards 50%. Talking about compensation, just a critical question. And that's what we rejected. Is the adaptation after compensation for the Supervisory and Executive Board appropriates were balanced after a year of major challenges, a year of transition, year 2023. And finally, about ESG, great. The ESG report very well presented, EU taxonomy criteria very well met. But is ESG for Merck, a location advantage? Or is it a disadvantage? Or to put it differently, besides further regulatory aspects, how does Merck turn ESG into a business -- ESG as a business, a topic that is particularly relevant for BlackRock, Vanguard, JPMorgan. That's what they focus very much in the context of ESG because they see ESG -- don't want to see it any longer from an ideological point of view. What impact does this have, especially the climate strategy, what impact does it have on the business model on the long-term strategy and the performance of Merck overall? And finally, what does the cost benefit analysis of the climate strategy? What does that look like at Merck? And I apologize for the length of my contribution.

Mr. Povel, thank you very much for your comment. Now, II hand the floor to Ms. Cornelia Zimmerman.

Ladies and gentlemen, my name is Cornelia Zimmerman. I represent Deka Investment, one of the biggest form of societies in Germany, subsidiary of Deka Bank from Sparkasse. The Merck share has had a minus of almost 20% and therefore, was not very enjoyable for us as investors. And compared to the indexes for comparable businesses, Merck was not as profitable in the share. The circumstances definitely were not ideal. The situation around the pandemic when growth seems to be unstoppable and customers kept a lot of stock is over. There was a trend reversal in 2023. The customers not -- were destocking, and we had a decrease in requests. That hit the whole industry hard, and we had to see that Merck as well as the competitors did not know enough about the stocks of their clients. They were not prepared for the reduce in revenue. Ms. Garijo, it seems that the entire industry is fine without clear views, and we would like to know whether this is really still necessary in times of modern data processing. What are you doing to better anticipate developments and demand in the future? Do you see opportunities to increase transparency in regard through demand, maybe also through technical solutions. Ladies and gentlemen, the product, evobrutinib has promised a lot for Merck and for investors. In December 2023, we had the information that the last clinical trial phase was not cleared by the product. The Merck share, therefore, dropped by 9% -- more than 9% in December. And the year-over-year comparison made it an underperformer due to this. Ms. Garijo, did you put too much pressure on one product, not just for the guidelines for growth as well as for evobrutinib, didn't you expect that it would be great all the time. Wasn't this too big a risk to take? How are you going to close the gap that this blockbuster product or what you thought would be a blockbuster product did not deliver. Were there weaknesses in the study design that led to the product to falter in the clinical trials? Ms. Garijo, you have 3 business sectors: life science, healthcare and electronics. You're driving in 3 parallel paths. We are wondering how you are going to react, focusing on the detractors in healthcare? And how are you going to keep the balance between healthcare and life science? Life science is more profitable than healthcare and the risk is lower. Based on the evobrutinib development, isn't it a good idea to focus more on life science? Ms. Garijo, Mr. Kleinemeier, we're wondering every year. How is it possible for you to publish your results later than it is usual in the market? This procedure is not one that matches a business of your size. Please also concern yourselves more with your shareholders, your business partners and their -- and your customers' stocks. You will notice that you're not matching the market here. Mr. Buchholz passed over his mandate after 10 years to Mr. Kleinemeier. Rules of good governance create the necessity for a follow-up candidate to be defined earlier. Dr. Buchholz is now going to be part of the Board of Partners and will have a different responsibility again. For us, as shareholders, we're not as excited about this early change anymore. Merck has been very competitive and has had a lot of recruiters on board to find the best candidates in the past. Mr. Kleinemeier, can we hope that this practice that was very successful can be used again with the new Board of Partners? Ms. Lambert, with her financial expertise will be the new Chair of the Auditing Board. We're excited about this. But she's also got this role with 3 other businesses. How will Ms. Lambert be possible to have this complex position for 3 parallel businesses? Ladies and gentlemen, Merck as a healthcare business, has an important responsibility. For medically difficult situations in countries where there is not enough medical support. Access to health care is the key word here. Merck has an important contribution here, to provide medicine and to help with the tackling of schistosomiasis and malaria. Providing medical care makes Merck a top 20 competitor in the business segment. We are definitely impressed by Merck and its employees. However, with healthcare business, there are only a few countries covered with low income, especially countries in [indiscernible] and the African -- and the African Horn Air section. Competitors cover, on average, 6 countries. How are these countries, low-income countries, part of your strategies? And how many products have been created, especially with those in mind. We also think it is important for companies to produce their sustainability goals before. Do you think it would be possible to have these published earlier in the future. Your performance was accessed to health care. How much are you considering it with the variable bonus payments? PFOS creates insecurities. The effect they have on humans and the environment with these products that are not able to be broken down is hard to estimate. In the EU, there is a ban on these products that will be created probably. How many PFOS are produced by Merck and can these substances be replaced at Merck? Which risks do you see to eliminate the risks created by PFOS? And how do you consider your production of these PFOS to be affected by EU regulations. On our voting behavior. We are going to vote positive in all aspects in the sense of administration on all loading points. We hope that you're going to be successful with your development of the strategy, I hope you'll have a long-term view, and we hope that all the employees will be very successful, and we're very grateful for you doing your best every day.

Ms. Zimmerman, thank you very much for your contribution. Upon request of an understanding, request of our speaker, I would change the order of the speakers. I will name -- I will tell you right away who's turning this. Now after Markus Kienle, I would like to call upon Marion Castanek, then I'll call Matthias Gibler. I now hand over to Markus Kienle.

Dear Mr. Kleinemeier, Ms. Garijo, dear ladies and gentlemen of the management and dear shareholders, my name is Markus Kienle, I am employee of [indiscernible] and a member of the Chairman of the [indiscernible]. Ms. Garijo, last year, you already told us that 2023 would be -- wouldn't run as well as the previous year and that we planned more cautiously over the last fiscal year. And considering the framework conditions, you made a solid result. And using the covenants on segment, the value showed how resilient your business model still is. However, the resilience of your business model doesn't result in approving the actions of the management. The SEK will not approve of the actions of the management for the reason that we get once again without necessary -- without necessity, it's -- you're doing a virtual [indiscernible] after 3 or 4 years of virtual [indiscernible], it would really appropriate to return to an in-person Annual General Meeting. You are not doing that now we have to deliver the fact that at least the SEK does not approve of your actions. The decision about not approving the action, I do want to point out clearly so there is no misunderstanding. It's not -- doesn't mean that we disapprove of the economic performance of the last fiscal. It's not only a digital decision which is based on the criterion, which format of the AGM the company has chosen to go. Before ever, I start the analysis of the figures of the last year. I would like to extend my gratitude to all the employees and ask you to forward this gratitude to the workforce. Now back to the figures. The net income before tax was 19%; after taxes, it's decreased by 15%. And the return fell from 13% to 11%. I see that the result figures fell much more in percentage than the net sales. Why is the revenues, well they fall at 3x as much as the turnover. If the reason for the answer to the first question has been along with a good results, also cost the increase piece, let me know what cost items contributed to this cost increase? Why can the cost increase now forwarded to the customers? In the other segment specific difference in this capability? And if so, please tell them how with what measures do you want to contract these cost increases? What is the role of AI for cost management? How far are you in this path? You need to change your forecast in various segments in this current year and partly in the third quarter. What were the particularities in last year? And what measures are you taking to make a better planning for the future. Life science shows a decline due to the demand, which -- and along with electronics, liquid crystals and semiconductors were also weak and nobody was able to hope and think that the pandemic would continue forever. How do you want to balance or stop the decline in the segment, life science or return to growth or do we have to get you to lower net sales level. Despite growth of 2% in terms of the capital cost, the capital costs increased by 0.7% in life science. What [indiscernible] the cost of capitals change and for what reason? It's one of the two worthy reason in the cross-segment deterioration of the capital costs and the increase of the basic test of the risk-free basic interest rate by the ECB. According to the mechanics that the ECB has shown during deterioration of the interest rate, the increase of the basic interest rate should result in a reduced -- in reduction of the mark risk. The capital cost of the segment -- did you actually earn this money? How will, among other things, the cost of capital segment change the life science [indiscernible] the base rate will be decreased by 0.25 versus your plan to reduce capacities in life science. How with what measures do you want to counter the weakness of the -- in the semiconductor business? And how long will this weakness continue in your planning? The electronics, like in the previous fiscal year contributed 18% of the net sales. Do you assume that this portion due to the continued price and competitive pressure in the -- also in the coming years were reduced. And if so, to what forecasted value? Healthcare is the only -- of the 3 segments, which shows organic growth despite balance FX effects, which hit 3 of 3 segments. The segment was able to grow after reduction of these negative headwinds of only 3%. Nonetheless, we have to say that some drugs which previously contributed to growth, Rebif, for example, do not drive growth to further drive this segment. Everyone [indiscernible] to set a new -- get a new drug approval. In view of the long development part of medicines up to the approval of maturity, is your product pipeline fill sufficiently to reach the scale? Please share us this forecast after new approvals and the approval of new indications. What net growth do you plan for the next 3 years in healthcare? You have a strong position also in oncology. You're developing a cancer medicine [indiscernible]. Biotech also wants to prove oncological but it seems to become strong again. How far have you got to the development and what costs have incurred for the development so far? How do you view your position compared to biotech in terms of cancer medicine? The further development of evobrutinib need to be stopped. What costs incurred for the development of this drug until you had to stop it? The candidate suggested for the Supervisory Board are accepted by SEK except Ms. Susanne Schaffert which overboarded the SEK for operative [indiscernible] not in the group because he's not a legal group representative of Merck KGaA. No exclusive criteria? Is it that Mr. Kleinemeier at the same time is part of the partner Board of Merck KGaA and has a potential conflict of interest. The reason is different that legal construction as KGaA and the multiple relation between and the Merck KGaA, which such a double membership at least seems to be good. And the change of the KGaA structure into a pure AG structure cannot be hopeful for the reason above. The candidate, Ms. Schaffert the stage is different. This candidate acts as a professional Supervisory Board. And these people, the SEK accepts up to 5 external mandates. The candidate filed with the mandate with KGaA had -- would have 7, and these are too many. [indiscernible] the year, you just retired from the Supervisory Board in order to take on the chair of the Board of partners in KGaA. Let me also make a summary. First of all, thank you very much for your [indiscernible] and Supervisory Board of KGaA, even though your Supervisory Board reports in terms of the dividend were not -- were very unsubstantiated at least not in the [indiscernible] any other and maybe 4 companies in the free traffic. Your successor can and will do it better, hopefully, since Kleinemeier [indiscernible] Supervisory Board and also the chair. He may actually comment on this. We cannot accept that you didn't finish your term office and you didn't fulfill the applications towards the shareholders since the relation that acts between [indiscernible] KGaA exist, we do not understand why you didn't at least continue the simple as a simple you made it as a simple member of the Supervisory Board until the end of the notice period. Thank you very much and all the best for your future. Not only the Supervisory Board is changing personally, but also the compensation amount will be radically changed. Firstly, I would like to clearly state, we welcome the fact that the systems have only fixed remuneration as like the SEK which supported has been retained. The purpose of a meeting payment as an incentive for the participation meeting so that the fulfillment of legal obligation, which should be covered by a basic remuneration causes problems in understanding. Secondly, however, the immense increase of the combination needs to be explained, however, it cannot -- it's true that good control costs money and should cost money. Nobody is interested in poorly paid Supervisory Board members who don't carry out their obligations. However, such an increase to provide for resolution. And the only reason the increased requirements for the members in view of the restricted program of the Supervisory Board of the KGaA is simply too little. Of course, we would have asked for explanations what comparative sizes were done. And [indiscernible] companies systematically has a problem because all companies in the [indiscernible] are for the AGs and they cover the full program of the Supervisory Board and the behavior of others doesn't justify own actions. The fact that this is such a strong increase is due to the low level of the previous remuneration, but it doesn't replace a good explanation. What did you compare -- what group did you comply with for what reasons? Why is the amount of this group adequate and not excessive? Why do you have a -- why do you consider a special meeting payment for [indiscernible]. Why is the effective of the basic remuneration for the Chair of the Supervisory and is representative from Supervisory Boards, which I want to know on AGs, why is that appropriate? My dear, Ms. Garijo, wish you and your team good luck for the charter work and the courage, because the courage helps -- are helped by the courage. Thank you very much, specifically for your contribution.

Before I hand over to Marion Castanek, I would like to clarify the order. After Ms. Castanek, Mr. Gibler will speak and then Mr. [indiscernible]. Ms. Castanek, you've got the floor.

Good morning, ladies and gentlemen. I am Marion Castanek. I am a lawyer in Frankfurt and [indiscernible], and I'm Chair of the Executive Board of [indiscernible]. The ICG is very happy that there are so many female -- candidates of so many females in the Executive Board. So congratulations for Ms. Von Roeder for being now in the Executive Board. We would also like to thank Mr. [indiscernible] from all my heart for his work in the previous year. We were very happy with his work. In social media, the ICG saw that the correct name of Helene von Roeder is [indiscernible]. What name is on her identity card. What form of name was signed before the notary and submitted to the court? Is there a legal opinion on the use of the name? And if so, was for law, in particular, Anglo American law also examined. On Page 243 on the business report, there is an article or the corporate conference code, which you worked out. We work on this as ICG in the Supervisory Board meeting of the Supervisory Board in April '23. There was a change of the business statute for the Audit Committee, which has to deal with relevant questions of sustainability. To our understanding, this strengthens the significance of sustainability for the company. What we see is that Ms. Von Roeder as member of the Supervisory Board has a tick in when it comes to qualification for sustainability. So what about CFO, Ms. Von Roeder, because some time has passed since then. For the Supervisory Board on the 10th of May 2023, we had an annual -- you had an annual training on sustainability, which is a measure which makes sense. Was Ms. Von Roeder present there as a guest? In her speech, Ms. Garijo said the following: in the life science business sector, 2 factors, in particular, had an impact on sales and earnings. On one hand, the sharp decline in COVID-19-related sales. And on the other hand, the high inventory levels at our most important customers who consequently placed fewer new orders. Nevertheless, the ICG believes that it has also noticed positive developments that would probably never have been initiated without COVID. The group's crisis resistance and strength has become more than clear an important feature for investors according to our association.

Where do you see today's business advantages of measures that you initiated as a result of the vehement fight against COVID. To regulations on working from home that are common today and which many employees appreciate might not have existed without COVID. How many employees use home office arrangements for working from home. Approximately how much did the company save in the reporting year as a result? On Page 173 of the individual business statement, we saw when it comes to markets. It is noticeable that Germany at EUR 971.2 million remained almost the same as the previous year at EUR 996 million, while sales in the rest of Europe fell by 58.2% and those for North and Latin America by as much as 63.5%. How can this be explained? And what could the change look like for 2024? For the reporting year, you say EPS is at EUR 8.49. The dividend proposal of EUR 2.20, therefore, also seems justified to the ICG. Does this mean a fundamental change in your dividend policy, which has remained constant today. Thank you very much for your answers.

I call out the next speaker, Mr. [ Matthias Gabler ], who is the legal representative of Kathryn [indiscernible] Gabler.

Thank you very much for giving me the floor. You introduced yourself. Would have been nice if you started your introductory speech in German, like your colleague at Bayer, does that -- didn't had to -- he is not a German native speaker, but at least, he tried. And if you cannot speak freely, you could at least reach German off sheet. So I'd be happy to get your answers in German. Mr. Chair, to speak of -- you recorded the speech of [indiscernible] yesterday, couldn't introduce herself today live because I have to ask my questions live with all the slips of tongue here. I cannot record it and give it to you. A few words about the virtual age, the virtual AGM, Mr. [ Kienle ] explained it in detail and as a contact. This is just a clinical event. You don't get any applause and you don't get any boost logically. There's no interaction. So if you offer a virtual AGM, why don't you voluntarily offer more, how can I contact [ Mr. Kienle ] as a shareholder, how can I contact you? We know each other from WhatsApp and others, but can you just give a thumps up, thumps down you can click on the applause simple. So you could do more voluntarily without incurring major cost. And since you don't do it, I will do it, you can see it behind me you see a watch, a clock. So every shareholder can actually check what the time lag is and also offer that you sent me an e-mail, how you like the virtual AGM, you can comment on my contribution. And I'm happy to take criticism. Now to the most important topic EUR 2.20 dividend. That's good. No complaints, no question. But the stock price is low. Since the last AGM, it was a [ roller coaster ride ] between EUR 135 and EUR 170. We're currently at EUR 150. So EUR 10 below the value at last year's AGM. So EUR 2.20 are too little compensation for that, you'd need a dividend of at least 4x of that to end up with a black 0. So I'm asking you Mr. Chair. For the stock price, please give me 3 reasons why we should stay invested in that stock or even by additional stock at this price level? And the Board should not give a recommendation to buy, just give arguments that support buying that. Something that goes beyond -- as said in the business world. When I talk about Executive Board and Supervisory Board, I understand that you have a different legal form, but it's easier for shareholders to use these terms, so use them on purpose to make it easier. What are the 3 biggest challenges that might have a negative impact on the stock price? On the request, do you still have printed management reports that you sent them out voluntarily. You had 388 pages, which is very difficult to read as a PDF file. Many companies offer that voluntarily on request. I hope you did that too, if not, you should do it at least in the future. The management report is easier readable this year, at least. But a fund terms like [ MEGABIT ] and don't use that [indiscernible]. It doesn't do any purpose -- serve any purpose. And I will explain to you why the term -- word [ MEGABIT ], I said it, because every employee has 6 weeks' vacation, gets sick, female employees might even get pregnant during that time, during those times. These are still your employees, but the German participle does not apply because they do not provide any service to the company, and that shows how wrong the German term [ MEGABIT ]. Let me ask you how many A4 pages does the documents submitted to the AGM contain in total and dismissed ratio in the agenda compensation report of organs amounts to half of the agenda and the dividend proposed on a few lines. I know that's legally required, but I think adds wrong ratio. Talking about the maximum compensation EUR 11.5 billion for the Chair. Others EUR 9.5 million. I believe that this is way too high and not appropriate in direct comparison at Bayer, it's EUR 12 million. So you're slightly below Bayer. But I believe Bayer is different league than Merck, no offense intended. So I think it's just a missed ratio. So the multiple of what is the average -- the average employee compensation, what's the multiple of that for the Board members. What is the share of ESG goals for short or long term [ compensation ] and what is G goals where defined concretely? How far is the progress regarding in Germany and worldwide regarding climate neutrality. Another question that is due to EU bureaucracy. The question is hard. What is the share of taxonomy capable and taxonomy conforms the turnover understand in a meaningful ratio to the meaningfulness? And what was the time and financial effort to determine that? And to what extent will these turnovers increase in the next years, Elisa's question. What added value does it give you as a company? What added value does it give me as a shareholder? I suspect it's 0. Please tell me what is the most expensive product you have in your portfolio? What are the 3 best-selling products with the best turnover and how many different products do you have in assortment in Germany in a reporting year? What were the disposal costs for hazardous waste. And did you also dispose that in a country where you manufacture the product? Or does it flow into some dark channels end up in land fields in Africa. As we see on the news and that brings me to the second bureaucratic monster from the EU, the new Supply Chain Act. We had something similar and comparable in Germany. So please don't say that it has not come into force yet, et cetera, but it will definitely face you in the future. And I would like to give a concrete individual example to you produce something that must be distributed. So my question, what cost is incurred -- has been incurred by forwarders in Germany and the year of the report. And that brings me to the Supply Chain Act, EU or Germany. How can you ensure an adequate compensation of the drivers. It's an open secret that on German out-of-bounds poor Eastern European underpaid they will sit behind the steering wheel. For me, this is actually a huge scandal. And in accordance with the Supply Chain Act, you'd be co-responsible how do you deal with that topic? This was just an individual example I picked to make it more tangible. In the reporting year, the new year, what will be the 3 biggest investments that you're planning? Of course, it's not nice if something goes wrong during the approval process, but this is part of the business model. So I will not further dwell on this. I believe that this is a risk that as a shareholder, you'd just have to bear. What personnel expenditure ratio increase do you expect for 2024 in Germany based on inflation and payroll demands no matter whether you're in German, Deutsche Bahn, Lufthansa, they asked for 2-digit increases in compensation. How will you deal with that? And will you be able to roll that over to the prices? What measures have it taken during the [indiscernible] the report regarding IT security, what costs were incurred. Was there any attacks in the report year? What was the overall damage incurred. I understand that you don't want to make that public, but a ball park figure is something that you could definitely name. And let me now just talk about the virtual AGM. I initially asked you why you don't offer more that can be offered on the voluntary base. The only thing where you responded quickly. That was my criticism, Mr. [ Chatterjee ] only called up one speaker. You want to be able to know when your turn comes. You implemented that commendable. But like I said, I would expect many more elements. I'll give you some examples, and you could go beyond that. And I appealed to the company to think about that and not just talk about environmental protection and cost a face-to-face encounter cannot replace by anything else. I believe we all agree on that. And I believe a good compromise would be to give international shareholders opportunity to participate. But looking at the list of attendees, I noticed that first, that only 40 people were listed in the list of attentive. So shareholders already voted with their feet. So I recommend, and I put it in a question wouldn't it be possible for you, imaginable for you to do that to take turns 1 year virtual, 1 year in person that would serve both parties. I will not ask a question about a hybrid AGM because for cost reasons, that's ruled out that has additional risks beyond that. But I would like to say that you will decide that only in fall or next year in spring. I can live with it, if you say you want to do a virtual AGM for 2 years and in presence meeting in the third year, but I expect a clear statement from you. Please tell me how many shareholders have been dialed in today and the shareholders' portal highs number, how many of them dialed in from abroad, this is not argument that how people can participate from around the world. The AGMs I've been to, they register for attendees. If I look at that, then the interest is limited to the German-speaking countries and individual cases international shareholders are also dialed in, but that number is very low. Please tell me how many people are active in your back office? How many of them are external, which lawyers and how much should the entire AGM will foreseeably cost and does please break it down by the major components. This is, by the way, a question that I asked 2 days ago at Majesco's AGM. And they said that it also includes cost for catering. And I'm wondering what is the cost for catering for you -- first of all, I don't know whether -- how there can be a natural dividend if -- of course, that's not natural dividend for shareholders, but of course that's catering for you on site. So I'll ask about that. And that brings me towards the end of my contribution. One more item I'd like to criticize. And I don't understand that at all. Why is the registration to your AGM so faulty and such a hassle. I could not lock in, in accordance with your conditions. And I find that it's a very difficult process to get an entry ticket. Typically, you enter your entry code and you get a number and then you are done. Now for you, you have to enter name, last name, you have to enter your residents, which all incurs fault and errors. And it didn't work for me, for some reason, it didn't work last year. So your service provider didn't change anything. On the entrance ticket, the first name is printed out completely. You asked us print out to enter anything as its print out. But the shareholder portal cuts the first name of after the 14th character, that's something you need to know. And all I know is that last year, the same error occurred so that unnecessary treatment on shareholders should -- we should see that why can't you have a dial-in like all other companies, simple. Why don't you do it like Bayer AG does, that would be a lot simpler. Let me ask, where is the 3 biggest problems according to the Board? And what was the biggest success event in the reporting year and the technical comment from my side, I demand extensive explanation of the results in accordance with the German Stock Corporation Act and information in accordance with Article 125 paragraph 4 and 129 paragraph 5 to save costs, it's enough if you send that to me by e-mail. So that's it. That's the end of my contribution, I thank you, especially, I thank all employees worldwide, who generate that result for us, for the shareholders. And I thank you for your attention and the patience you had. Thank you very much, and I return the floor to the Chair.

Thank you very much, Mr. [ Gabler ] for your contribution. Now we move on to the last contribution by Mr. [indiscernible], hope I pronounce the name correctly. You've got the floor.

Thanks a lot for the right to make a contribution. Dear shareholders of this year's AMG. Thank you [indiscernible] follow my contribution attentively. I decided to make contribution because I'm -- I want to become accounted for this advisory Board to give -- for you to get a better image for me. I would like to introduce myself and I'll keep in the time frame. My name is [indiscernible]. I'm 44 years old, I have German and Greek citizenship. I was born in Cologne and grew up there. The center of my life is in Nuremberg County, there I live with my wife and my son, 4-year-old son. After trading in the electric sensation in [indiscernible], I studied [indiscernible] with electronics focus in Cologne. For 16 years, I've been supporting as the managing shareholder, the automotive industry in development of vehicle sections, such for example, driver assistance systems, steering assistance, battery sensors and electronic park breaks. In addition, I work as an honorary judge for the financial court -- financial [indiscernible] at the Chamber of Commerce and I'm part of the committees, trade and [indiscernible], soft and hard skill, I have soft and hard because I'm an engineer, digitization and artificial intelligence are my daily business. In addition, I have experienced in international project. An appreciative cooperation between the company, the shareholders and the members are very important for me. I want to be a candidate in order to support the Supervisory Board with my great experience to the benefit of the company. I would be very happy if I would be elected to the member of supervisory. I declare my independence, and I assure you that for the implementation of this job, I have enough time available -- time available. This applies to my closeness between the location of the company and my residents. And now I call upon everybody. We have to do with the current staff, who weren't happy with the current stuff. Please support me for the election. You have the opportunity to change something. The [ cortical ] Article 137 of the German Corporation Act, I make a motion before the vote of the candidate to decide upon my proposal. Thank you very much for your attention. I hope that we have a successful AGM.

Thank you very much for Mr. [indiscernible] for your contribution. Dear ladies and gentlemen, since currently there are no other contributions. We'll take a break now of 15 minutes to prepare the answers to your questions. After the break [indiscernible] and other colleagues of the Executive Board as well as myself, we'll address your questions in detail. The break will end approximately at 12:30. [Break]

Ladies and gentlemen, we are continuing the AGM. Thank you very much for your patience. Ms. Garijo and colleagues, I would like to ask you to answer the questions. The first question is for me, and I would like to say that in coordination with the Executive Board, I'll answer question related to Supervisory Board. The Executive Board declared that they will exceed that we agree to my -- [indiscernible] said when we can think that Merck will own in person AGM or hybrid one. We haven't taken a decision on that due to the format of future AGMs. As for the AGM 2023, the Executive Board took the good experience for the AGM of last year into account. The choice for the virtual format was motivated by sustainability considerations because of the vessel out of the environment. In addition, in this virtual AGM enables a low stage and economical participation on large distances that is in line with interest of the shareholders. We will review every year, again, which format is best suited for future events. [indiscernible] also asked of how many shareholders participated in last year's virtual AGM and how the -- how this compares to the participation in previous AGMs, the highest presence in terms of shareholders represented, since 2018 was reached during last year's AGM. In 2023, 93 million shares and 72%, 0.9% of the share capital were presented. At the peak, 100 participants participated in English and around 450 in German. In 2019, 86 million shares and around -- more shareholders were present for the 66.96% of the share capital last -- in the last year before with the pandemic was still less than 72.59% in last April. In summary, over the years from 2018, we see a continuous increase of the capital represented in our AGMs, which we are very happy about.

Returned to a growth trajectory in 2024 after the transition year 2023 and whether [ 25 by '25 ] is this still achievable. So the first part of your question was addressed during my introduction, and I will now focus on the second part of your question on [ 25 by '25]. So we called the [ 25 by '25 ] ambition in 2021 during our Capital Markets Day. When we talk about delivering EUR 5 billion plus organic additional sales by 2025. Since then, we had many booming parts and plenty of assumptions making or driving that ambition positively or negatively. The pandemic, mostly the challenges in Life Sciences, in Life Science and Electronics in 2023 has been extremely important on that trajectory. So I would ask you not to take me to the mathematics. This is a stretch aspiration and we have mobilized our teams behind this ambition, and we will also fight for this ambition. Regarding this year, we feel positive about our 2024 guidance, which foresees Merck returning to growth in net sales and EBITDA...

Mr. Povel, you asked whether health care will be able to compensate for a possible setback in Life Science and Electronics in 2024. As we said, we continue to expect a difficult environment for Life Science in 2024 and we think that we will return to growth, which is also reflected in our guidance. We do not assume a setback, but we expect that the normalization will only take place within the course of 2024. For Life Science, we expect a difficult environment, which will be characterized by a further reduction in our customers' inventories. However, we expect business to normalize over the course of the year and return to growth in the second half of the year. The electronics business operates in a cyclical business, but our growth indicators are giving the first positive signals. We expect semiconductor market to return to growth at the beginning of the second half of the year. For health care, in 2024, we expect further growth, and we expect the opportunity for xevinapant to contribute to long-term success.

[indiscernible]. In the near term, we expect potential major approvals with our pipeline products, xevinapant and Pimicotinib in the field of oncology. Both products are in the final registrational studies and xevinapant could become a blockbuster drug once approved. We continue to follow the vision of doubling our R&D productivity and plan to bring a new drug or important indication to the market on average every 1.5 years. To achieve this, we will complement our internal pipeline by external innovation through targeted in-licensing and collaborations, especially in the oncology field of the so-called DNA repair mechanism space and with ADC products, antibody drug conjugates, we believe to be very well positioned. Our current portfolio, especially in the area of innovative products such as Bavencio and Mavenclad will continue to contribute to short-term growth. Dear Mr. Povel, you asked which other blockbuster drugs we have in our pipeline. Let me share with you that in 2023, both our products, Mavenclad and Erbitux have reached blockbuster status meaning they achieved more than USD 1 billion sales on an annual basis. Our next potential blockbuster candidate could be xevinapant in locally advanced head and neck cancer. For this event-driven Phase III study, we are coming closer to the thresholds that we need to perform the interim analysis, and we expect to reach the required number of events in the second quarter of this year. However, it is too early to name further potential blockbuster candidates at this stage. Dear Mr. Povel, you asked about the status of our health care pipeline. Our pipeline remains very strong. Several clinical development programs are currently underway with potential first-in-class or best-in-class assets such as xevinapant and [ Patran ] and our next-generation ADCs. These promising molecules have transformative potential, and we expect significant long-term growth. At the same time, we will continue to seek opportunities for external collaborations to specifically strengthen our development portfolio across clinical phases as we recently successfully did through collaborations agreements with Hengrui Pharmaceuticals, Abbisko Therapeutics and Inspirna. Dear Mr. Povel, you asked for an overview of currently ongoing Phase III studies in the area of oncology immunology and our global health efforts. In oncology, xevinapant is currently being developed in different Phase III studies for patients suffering from head and neck cancer as mentioned before. In addition, Pimicotinib is currently being investigated in a Phase III study in so-called tenosynovial giant cell tumor, or TGCT, and we expect the readout by the end of this year. In immunology, we are planning to initiate a Phase III trial later this year with oral cladribine in the chronic autoimmune neuromuscular disease, generalized myasthenia gravis. In global health, we are undergoing registration in Europe with praziquantel for the treatment of schistosomiasis. For more detailed information regarding our pipeline, please go to Page 49 of our annual report 2023. Dear Mr. Povel, you asked whether Merck as a midsized pharma company is strong enough to build a sustainable pipeline to fuel health care growth and the role of external innovation in this context. We are very confident that our focused leadership approach is solid and provides a promising basis for long-term growth. At all stages of development, we have molecules with new and innovative modes of action that could redefine the standard of care in key therapeutic areas such as oncology and immunology. Beyond our internal research, we complement our portfolio by targeted external innovation. We build on in-licensing or collaboration deals because this provides us the necessary flexibility to selectively complement our portfolio with best-fitting assets. During the last months, we gained momentum in the execution of our strategy and our so-called drug hunting ability by bolstering external innovation. We have signed new collaborations and license agreements, for example, with Hengrui Pharmaceuticals, Abbisko and Inspirna as mentioned before. So all in all, we feel very solid and very well positioned to deliver more medicines to more patients faster and continue to fuel our health care growth. You'll probably ask why destocking for Process Solutions in 2023 was existing, whether there will be any future destocking in the current year? And if there are any signs of restocking. To the pandemic there were larger implication of the world -- supply chains worldwide. At the same time, the demand of material and products increased for the development of a temporary vaccine or medicines and in particular, our vaccines against the coronavirus, COVID-19. There were also short cuts -- delivery short cuts for many suppliers. We ourselves during the pandemic got to the limits of our capacities. Due to that, it seems to be understandable that the core focus is on the side of our -- by our customers. It was on restocking. In the course of last year. However, there was an interaction of various factors which enhance each other. The demand for products, especially for the production of vaccines against the new COVID virus fell at the end of the pandemic. At the same time, the capacities for the suppliers for the biopharmaceutical production were built up and delivery times started to come back to normal. At the same time, we saw an interest hike and the topic for [indiscernible] became ever more in the focus of biopharmaceutical industry. And the macroeconomic uncertainties in China increased. This negatively affected the biopharmaceutical industry in China. All this together resulted in a destocking by our customers. We expect that the course of the first 6 months of the current year, destocking will come to an end and that the order behavior of our customers will go back to normal. In this context, in the telephone conference on the overall reported figures for the fiscal year 2023, and the 7th of March this year. We mentioned the term a solid start into the current year. The normalization of the order behavior of the customers will reflect with a certain time lag in our net sales. Dear Mr. Povel, you asked whether there are any after pens of the lessened COVID types. Well, one of the reasons for the destocking by our customers and their Process Solutions was also the strong decrease demand decrease, especially for vaccines against COVID-19. So our net sales in context with COVID pandemic fell from EUR 800 million in '22 to around EUR 250 million last year. For the current year, we're expecting only negligible net sales related to COVID. Therefore, we still keep saying -- keep seeing a headwind, which, however, is getting lower and also after [ payings ] of the pandemic in the current year. We are confident that we will come back to growth in the course of this year in Life Science. Dear Mr. Povel, you asked about the future of Life Science Services and Science and Lab Solutions in current times of cost cutting and restructurations, due to the fact that Process Solutions is the growth driver. Let me, first of all, elaborate on Life Science service business. With our portfolio, for example, the modalities, ADC in German -- well, antidrug antibody drug conjugates and mRNA, we are strongly -- we are contributing in strongly growing markets, which will continue to make this business a growth driver in the future as well. Despite of cost awareness we keep investing into our growth fields and what -- and we always look at any of us, since whereas we scrutinize them. And therefore, we keep seeing a future for Life Science Services, within Merck Life Science. This also applies to Science and Lab Solutions. This sector is a key component of Merck Life Science. Based on last year, it contributed about 50% of the net sales of Merck Life Science with our comprehensive and wide portfolio, we are taking a leading market -- leading position in the market and this broad market coverage ensures that we keep being a firm component in attractive customers and which ensures stability in growth. Our targeted investment, the GE market positioning and the implementation and sales strength for the balance basis for further growth. Dear Mr. Povel, you asked where the price falls come even though there's a large amount for chips in order to lead to artificial intelligence. I would like, first of all, to point out that the semiconductor market is a cyclical market, which currently is in a weak phase. Demand, especially for chips significantly fell last year. Our customers in the market suffered of very strong price decreases is very typically in the cyclical industry. In this environment Merck, develop well compared to our competitors. The decline in semiconductors solutions last fiscal year was substantially less than in the entire market. This was not due to [indiscernible] prices as more than -- less than to -- weaker demand for cyclical. In the long term, the perspective of growth is still high, and we hope for a short or midterm recovery of the market megatrends like Internet of Things, Big Data, Artificial Intelligence, keep contributing to this. And in the other market, they result in a strong growing interesting demand in CHIPS. You asked for the future of Display and Service Solutions business at Merck. Along with Semiconductor Solutions, our largest business with a strong growth potential, the 2 units, Display and Service Solutions, we look at the Merck catalog demand. Just for Solutions for many years has been characterized by a fallback of the business with [indiscernible]. And therefore, we are investing into this business, it is future technologies like online materials or AR/VR technologies for the application of virtual reality. We still assume that the display business in the midterm -- return to growth. Revenues for Surface Solutions business fell organically slightly last year, while the business in the cosmetics, after the COVID pandemic recovered, the revenues of industrial applications of like our applications fell due to the microeconomic situation, during our group planning, we are reviewing our business portfolio and our big capital allocation on a regular basis. If we come to a decision that business under the leadership of other owners will develop better and will increase the value for Merck we would also consider a disposal of this business unit. Mr. Povel, you asked about the impact of the CHIPS act on electronics and our location policy, especially with a view of China and China, Taiwan, both in the U.S. as in Europe so-called CHIPS act were passed in order to reach the extension technological sovereignty, competitiveness and resilience. We are not directly affected by the U.S. CHIPS is however, we've indirected profit from the investments of our customers, the chip manufacturers in the U.S. currently planned or already under construction -- chip construction for production sites will result in an increase of demand. And so what are we profit from the investment programs in other regions, for example, the EU CHIPS Act in Europe. As to China and Taiwan, the U.S. CHIPS Act does not directly affect our business. We keep investing in production capacities, and we observed the development of geo political conflicts and bilateral trade restrictions closely and act in harmony with the last one. The economic impact, however, can or still neglectable. Thanks to our strategy of regional production and supply chain resilience, we were able to supply our customers all the important regions in a flexible manner.

Strategy with a focus on the U.S. and China. You are interested to hear if it is up to date, assuming to produce, where there is the highest demand or lowest production cost. Merck is and remains a very strong and extremely resilient company with a global footprint in science and technology. We own a diversified operation across various industries that is allowing us to serve highly attractive markets with long-term growth drivers and is reducing our exposure to macroeconomic downturns. Furthermore, supply chain resilience is key to our global resilience strategy and global trade, a cornerstone of our operations. In general, our strategy is to be close to our customers -- we call this our in-region for the region approach. It has great benefits for our customers, while is also increasing our resilience and optimizing our environmental footprint. And this also applies for China and U.S. which continue to be very important markets for us. Dear Mr. Povel, you asked, if we have considered expanding and relocating production to the U.S. in light of incentives set by the Inflation Reduction Act. In the U.S., the Inflation Reduction Act mainly concerns us regarding the pharmaceutical implications and price setting put in place on the innovative health care industry. For our Life Science business, this seems largely neutral and for the semiconductor business, investments in green technology and new industries are a move in the right direction. In principle, we aim for a prudent and balanced approach, avoiding a fragmented regulatory landscape. We continue multilateral cooperation and trade with current and new partners. Please be aware that all relevant implications and measures are reflected in our strategic considerations and in our plans, including supply chain decisions. Mr. Povel, you asked about the advantages and disadvantages of Germany as an industrial location. Germany is a respected and reliable partner worldwide, both economically and politically, Germany needs global trade and global trade needs Germany. Despite all the potential bureaucratic hurdles, the state structures and a strong social system, ensure investment security and excellent working conditions, we see the will of the federal government to promote and strategically support key industries. For example, in the area of pharmaceuticals, biotechnology and semiconductor production, which, as you know, are areas in which Merck operates. This creates an environment that makes long-term investments attractive and secures Germany's innovative strength. We, at Merck, have invested a great deal here in Germany in recent years and will continue to do so. We have invested a total of EUR 2.5 billion between 2015 and 2025. Regarding the cost of energy, our operation is less energy intensive. That means the pharmaceutical industry, in particular, pharmaceutical industry and Life Science. It is important to protect intellectual property and promote innovation in a very targeted manner. In our opinion, if the government now reduces bureaucracy and drives forward digitalization and the green transformation, Germany is in the way of being very well positioned for the future.

Dear Mr. Povel, you also asked whether Merck could encounter scaling problems in production is in accordance with the resilient strategy, production is divided geographically and in particular, whether this also applies to health care. Like many companies, Merck has to weigh up the global field of tension in order to optimize the aspects you mentioned. Fortunately, Merck's product portfolio places it rather in the premium segment, so that production costs are not necessarily the most important success factor. For innovative products, reliability of supply and product quality are more important than economies of scale and production. This also applies to the health care sector where patient safety and delivery capability rightly play a major role in ensuring patient care. You asked about our China engagement and potential risks due to the increase in reservations of the Western world regarding China or the potential further escalation of the Taiwan conflict? First of all, we believe in multilateral cooperation and balanced strategies. This remains very important when dealing with China. At the same time, we will continue to increase our global supply chain resilience further, as I mentioned before, and operate with a diversified footprint. We recognized the significance of both U.S. and China as major global markets, and we are closely monitoring the geopolitical environment, putting this very much at the center of our strategy. This includes potential risks and opportunities associated with the Taiwan conflict. Last, our decision-making processes are deeply anchored in strategic foresight. We have developed contingency plans to address potential future scenarios. As a result, we remain strong supporters of our in-region, for-region strategy and will follow this strategic path going forward. Dear Mr. Povel, you are asking about a sustainable digitalization strategy in the categories of digital products, digital work, digital processes and a digital mindset? Overall, Merck classifies itself as a company that is actively driving digital transformation in multiple disciplines, including digital products, work processes and mindset. The company's digital initiatives aim to improve the customer experience, increase our operational efficiency and importantly support innovation and growth. Regarding digital products, Merck develops and offers already various digital solutions for our customers in all 3 business sectors such as AIDDISON software that is aiming to increase R&D productivity for pharmaceuticals based on artificial intelligence [indiscernible] and more. In terms of digital work, Merck promotes a digital work culture that emphasizes collaboration, agility and innovation. Regarding digital processes, Merck has implemented digital technologies such as automation, artificial intelligence and of course, complex data analytics. We will continue to optimize our business processes, reduce cost and improve operational efficiency. Regarding the digital mindset, we have fostered a culture of data, digital innovation and experimentation. The company is encouraging the employees to explore new digital technologies and ideas and importantly, to challenge the status quo. We are equally training our employees to become digital literates. You were asking for the new strategy for risks and whether it's still applied or whether it has to be adapted. With our strategy, the goal has at least 40% of our risk for currency exchange and it's only for 5% of the foreign currency to be applied. In the year 2023, we had a quote of 40% to 45%, and we're able to reduce negative effects to below 4% or at least keep them under it. We were able to reach our goal. Of course, we're going to check every year whether we have achieved our goal. We have come to the conclusion that we don't need to adjust in a great manner. Hedging the Argentinian peso is not economical, and we have excluded it from our hedging strategy. This risk is managed by price increases in the country itself. Dear Mr. Povel, you have asked also about the bonds maturing in the next few years and how they should be financed. And it can be assumed that we will always have a certain level of external debt in the future. We will either refinance any maturities on the market by issuing new bonds or repay them using existing liquidity. This depends on the operational development of the business and strategic considerations regarding external growth. If we issue new bonds, we will examine whether we should take on fixed or variable debt in their respective interest rate environment. You also asked what our target debt equity ratio is. We do not manage our business according to debt/EBITDA ratio and therefore, do not have a target figure for this. To manage the net equity ratio, the EBITDA pre is a key indicator. Currently, our net debt for EBITDA pre is at a factor of 1.3 and therefore, gives us a high degree of financial flexibility. Dear Mr. Povel, you inquired about our current M&A purchasing power after another year of successful deleveraging on our M&A priorities with regards to the business segments and the regions in which we operate. As you very rightly pointed out, Merck was able to further reduce our financial debt by more than EUR 800 million in 2023 to approximately EUR 7.5 billion despite operating in a very challenging economic environment. Let me reassure you that M&A remains a top priority for the Board. And it will continue to play a vital role -- vital importance in Merck's future growth strategy. Merck's successful track record in portfolio management is ultimately based on 3 key priorities that we always keep in mind. The first one being right time, right target selection being the #2 and right price being #3, and this is not in order of priority, but the 3 combined. And with this in mind, we have the capacity to pursue more transformative moves as long as these acquisitions align with our strategic priorities. We are regularly scouting opportunities on a global basis and across all 3 sectors: life science, health care and electronics, and we are willing to invest when suitable opportunities arise. However, keep in mind that we are not under pressure to rush after anything, given our confidence on our strong future organic outlook. Dear Mr. Povel, you asked how we approach the challenge. I'll be explaining the investors that the sum of the 3 individual companies is higher than the value of the company as a whole. First of all, at the first glance, Merck's diversification increases complexity. For us, as a company, on the other hand, a portfolio of 3 different businesses offers financial flexibility. This has proven its worth in recent years. The prerequisite for the success as a diversified company is a careful management of all 3 areas and the group. For our long-term investors, in particular, the resulting resilience of the company and therefore, also have the share price definitely offers advantages. We are happy to explain the advantages of our corporate structure in the capital market. Dear Mr. Povel, you asked why the payout ratio of the dividend is not higher. As you know, we follow a sustainable dividend policy. And we use this payout as the baseline for future dividends. Beyond that, our dividend policy is based on the development of the group. We attempt to have 20% to 25% of our results to have shared with our income. Our prognosis for the year 2024 is at 9.5% and is beyond the outlined area. With this, we fulfill the aspect of the proposed dividend being at least the amount of the year before. We have targets that we have set that are very steep. We need financial flexibility for this. We want to match our dividend -- we do not want to adjust our dividend policy based on that. Pleased that you like our sustainability report. You asked how Merck generates benefits of business from ESG? We believe that sustainable entrepreneurship and profitable growth go hand in hand. Our ambition is to embed sustainability across our entire value chain so that it becomes a core competitive advantage in front of our customers. In 2023, we further enhanced our sustainability strategy. We have introduced new water and waste management targets, and we have strengthened our commitment to biodiversity and circularity. In parallel, we do a lot to help our customers and suppliers to advance their own sustainability targets. In 2023, we continued to differentiate our sustainability portfolio through our design for sustainability framework. In our Life Science business sector, we offered more than 2,500 greener alternative products across our portfolio by the end of 2023, which represents a 34% increase in relation to 2022. With such products, we can position ourselves as a preferred development partner and solution provider for sustainability. As an example, from our electronic business sector, we have continued expanding our portfolio of formulated cleaners and have committed to not using the highly toxic solvent [ MMP ] in new product development. Mr. Povel, you were asking whether the adaptation after compensation for the Executive and Supervisory Boards for 2024 are appropriate. Probably after the year 2023, a year of transition, the last adaptation of the fixed compensation for the supervisory report took place at the last time in year 2013. In recent years, the workload of the members of Supervisory Board have increased significantly. An attractive compensation forms an important foundation to win suitable candidates for the Supervisory Board and to be able to retain them. Even after the increase, the compensation is at the lower range of the comparative range after tax. Now the second question on the compensation, I will answer that later, Mr. Povel. Dear Mr. Povel, you asked about the impact of the climate strategy on Merck's business model, the long-term strategy and the performance of Merck and how cost benefit analysis of the climate strategy is presented. Our climate strategy will increasingly be an integral part of the business model. This will have an impact on our portfolio, operations and the entire value chain. In 2024, we will prepare a detailed climate transition plan in accordance with the EU Corporate Sustainable Reporting Director. Challenges for the industry will be tackled together with our stakeholders. Merck's ambitious climate strategy will contribute the company's success by adapting to changing conditions and using those to ensure our competitiveness. Using the financial impact on various quantitative scenario analysis, we are assessing the client-related risks and opportunities. Preliminary results of this analysis show that the financial impact for Merck for physical risk is significantly lower than the ones of transition. These findings are now being used to define appropriate migration measures for the most important risks. In addition to risks, we often have examined the many opportunities that can be exploited as part of our climate strategy. Let me add one thing regarding your question and it might have been lost in the translation. You're asking me about advantages and disadvantages of the location regarding energy. We would like to add the following in our less energy-intensive key industries like the pharmaceutical industry and life sciences, it's important to protect intellectual property and to support innovation in a targeted way. And we move on to answering the questions of Mr. Kienle.

Mr. Kienle, you asked why the extractions have been falling as the revenue has been falling as much as the income.

That is because of this revenue was only being able to compensate with cost reductions in comparison to COVID years in part. We've had these effects. Mr. Kienle, you are also asking, what the cost -- what cost positions affected the cost increases. These were especially production costs, but also salary costs. Moreover, Mr. Kienle, you asked about segment-specific differences that affected the ability to pass on cost increases. In the segment of health care, we have stronger regulations by the government and also from the federal states. In the not so clearly regulated areas, we can always change -- make changes quicker and dependent on the market situation. Mr. Kienle, you also asked why cost increases were not passed on to customers or could not be passed on. In general, the ability to pass -- to manage inflation-related price increases and pass them on depends on the different segments. However, we were able to do this across Merck mostly. With production costs, they have been -- we have seen effects in our production manufacturing. The compensation can, however, not be made for fixed costs. You also asked for the measures where Merck was able or wants to take to react to cost increases. We have created a lot of efficiency programs. For example, making our activities more represented in shared activity services. Mr. Kienle, thank you for your question, for [indiscernible] and cost management and the successes that Merck has seen in this area. Artificial intelligence helps us to see patterns and trends and helps us also to make our decisions better. With quick data analysis and quick learning, artificial intelligence can see inefficiencies quickly and optimize the use of resources. In our expectations and what our experience, this can lead to clearer budgets and projections. Highly automated and high-quality data is necessary for the use of artificial intelligence. It is a strategic priority to make sure that we have these foundational elements. At Merck, we continuously invest in our cost management structures. And we're always analyzing so we can make our operational situation better. For example, process mining is a buzzword that I would like to know to tell you here. Okay. Artificial intelligence is being used to create prognoses for the future and for better cost situations. We want the potential of digital transformation to be realized. Mr. Kienle, you also asked about the specific situations in 2023 and which measures we are taking, so we can closely match our guidelines. The special situation in 2023 was especially made because the life science business has had a strong reduction. That was because of destocking with our customers, especially in the process solutions business. Our electronics business also had to bear the consequences of long-term cyclical decline. We're still working on the internal guideline process and making them leaner. Mr. Kienle, you were asking about the decline in the Life Science segment caused by the pandemic. We want to stop that and return the segment back to a path of growth. We're expecting in the course of the first half year of 2024 and after destocking of our customers for the area of process solutions, and we expect that the ordering behavior of customers will go back to normal. And as context, we had a phone conference on the whole year for 2023. We talked about a solid start into the year 2024. The normalization of the ordering behavior of customers will be reflected in the turnover with a certain time delay. For the areas, Science and Lab Solutions and Life Science Services, we can say that they were less affected by the destocking our customers than process solutions. Nonetheless, in our Service Business and in Science and Lab Solutions, we feel a going down of the COVID-related demand. And there are the macroeconomic uncertainties, especially in China. Overall for the segment Life Sciences, we expect a return to the growth in the course of 2024. We believe there will be stronger dynamism in the second half of the year. We focus on attractive growth segments. We benefit from a special combination of different business units under one roof and the benefit of our innovative power. For the mid and long term, we expect an attractive increase in turnover. Mr. Kienle, you were asking which parameters when determining the capital cost changed in the Life Science segment, in which way and for what reason. Furthermore, you were asking if the reason could possibly be in the increase of the base rate and thus an increase after risk-free base rate of the European Central Bank. We assume that you are referring with a question to the business report and the cost of capital for the purpose of the annual tests, which are done in accordance with IFRS stipulations on a specific date at the assessment point. For Life Science, the weighted capital cost has increased after taxes from 7.5% in 2022 to 8.2% in 2023. This increase goes back to the direction of several factors. The biggest driver for the increase was actually the increase after risk-free interest rate. Mr. Kienle, you're asking if the Life Science segment in the previous business year earned the capital costs. In the previous business year, the return on capital of the group was greater than the capital costs. Please understand that we do not publish information about the return on capital of individual sectors. We understand results have met a graded group. Portfolio and financing decisions are done at the group level with a long-term focus. Mr. Kienle, you were asking how the capital cost in the segment Life Science changed? Should in June '24, base rate should be decreased, for instance, by 0.25 percentage points? A decrease of the risk-free interest rate by 0.25 percentage points would decrease the capital cost of the annual depreciation tests for Life Science by -- could go down to 8% based on the assumption that a lot of parameters of the capital costs remain unchanged versus the previous year. Mr. Kienle, you were asking which measures we use to counter the weakness in the semiconductor market? First of all, in this context, I'd like to point out that the semiconductor market is a cyclical market. It regularly goes through phases of strong growth and phases of decreasing demand, in phases of market weakness. The underutilization of our equipment has a negative effect on our margin. During those times, we focus on reducing costs and increasing our efficiency, for instance, by revising our production processes. This allows us to keep up our investments in R&D and CapEx mostly and ensure that we are able to participate in future market growth. In the long term, the growth perspective is unchanged, positive, and we believe that market recovery will come in the mid -- short to midterm. Mr. Kienle, you're asking whether we're planning to reduce capacity in the Life Science segment. A few years ago, we agreed on an investment program for the Life Science segment with the scope of several years. Its purpose is to extend our capacities and technical capabilities. In addition to that, we're expecting a return to growth for the Life Science segment in the course of 2024. In the mid and long term, we believe that we will be able to achieve an attractive growth in turnover. This is driven by our innovative power, our focus on attractive growth segments and through unique combination of 3 different business units. It is our ambition in the midterm to get an annualized growth -- turnover growth of 7% to 10%. We're active in markets for which we expect in the midterm and average annual growth of 5% to 7%. Thus, we do not have any plans to reduce the capacity for the Life Science segment beyond smaller adaptations to changing market conditions. For the past 3 years, we've had a continuous increase of the investments for the Life Science segment at the same -- nonetheless, we expect a return -- expect value to go down for 2024 compared to the previous year. Mr. Kienle, you were asking how long the weakness of the electronics in it would probably last? Semiconductor solutions is in electronics, the business with the largest share of turnover and the strong growth potential. The semiconductor market is a traditionally cyclical market currently in phase of market weakness. Like many market participants, we believe that the semiconductor market will recover in the second half of this year. Mr. Kienle, you were asking how the turnover share of electronics in the total turnover of Merck develops against the backdrop of price and competitive pressure? The portfolio of electronics consists of businesses that are in different phases of their life cycle. Display and service solutions are managed under the aspects of cash flow optimization. Semiconductor solutions in electronics, the business was the strongest share of turnover and the greatest growth potential. We believe, like many other market participants, that the semiconductor market will recover in the second half of this year. The diversification of Merck Group across 3 different business units was always advantages in the past. A targeted weight of individual businesses does not exist due to the size of life science and health care. We do not expect that the weighting will change severely organically in the future. Asking about our pipeline and the short-term growth and earnings potential. As I mentioned earlier, in the near term, we expect potential major approvals with our pipeline products, xevinapant and pimicotinib in the field of oncology. Both products are the final registrational studies and xevinapant could become a blockbuster once approved. We continue to be committed to our vision to doubling the R&D productivity and plan to bring a new drug or important indication to the market, on average every 1.5 years. To achieve this, we will both work with organic, our internal R&D and external innovation. Especially in the field of oncology, in the so-called DNA repair mechanism space and with ADC products, we believe to be very well positioned. And in addition, our current portfolio of products, especially in the area of innovative products such as Bavencio and Mavenclad will continue to contribute to short-term sales growth. Mr. Kienle, you asked how far advanced we are in the development of xevinapant and the associated costs. So we in-licensed xevinapant in 2021 from a Swiss biotech company, Debiopharm. We are now in 2 Phase III trials. xevinapant might potentially offer a new treatment paradigm in locally advanced squamous cell carcinoma of the head and neck for patients with very limited treatment options. We expect to learn more about its progress from our interim analysis later this year. Until the end of last year, we invested roughly EUR 300 million in the clinical development of that asset. Dear Mr. Kienle, you asked about our competitive position in the field of oncology. In the therapeutic area of oncology, there are many different therapeutic approaches that are increasingly tailored to individual types of cancer or tumor types. Therefore, there is basically a lot of room for different market participants. You named BioNTech as a competitor that focuses on the development of mRNA based therapeutics. Merck already has important oncology products on the market with Erbitux, Bavencio and Tepmetko. In addition, as I mentioned before, we have an extensive pipeline in the field of oncology that we try to complement with additional external innovation. Mr. Kienle. You asked about the breadth of our pipeline in order to get our assets over the finish line. In addition, you asked about our prognosis on future development and the ambition of one new launch every 1.5 years. We truly believe that our pipeline is very strong. Several clinical development programs are currently underway. So I mentioned before, xevinapant and enpatoran, a next-generation ADCs. We do believe that these are really probing molecules that have transformative potential. Beyond these new products, we also look for new indications. In immunology, we are planning to initiate a Phase III trial later this year with oral cladribine in the chronic autoimmune generalized myasthenia gravis. Based on the data of previous trials with cladribine, this could be the first oral disease-modifying treatment for people with this disease. We continue to follow the vision of doubling our R&D productivity and plan to bring a new drug or important indication to the market on average every 1.5 years. We will build on our established expertise in our focused therapeutic areas and utilize our technological capabilities. As I mentioned before, this all complemented by external partnerships such as [indiscernible], Abbisko and Inspirna that we signed off recently. And in that sense, we are very confident with our targets. Dear Mr. Kienle, furthermore, you asked how much we invested in the development of evobrutinib. So the clinical development of evobrutinib started more than 10 years ago in 2014. Overall, we invested approximately EUR 1 billion. The costs were primarily to run the clinical studies, but also for manufacturing of a drug as well as for our scientists and doctors managing all this work, including, by the way, the wind down cost after the stopping of the program. Dear Mr. Kienle, you asked whether a change of the structure from the KGaA structure to a [ clear ] AG structure plan. There are currently no plans to change the legal form of the Merck KGaA. Mr. Kienle, you were asking for the comparison group, which were used for the new remuneration of the Supervisory Board members and for what reasons? On top, you would wanted to know why the compensation amount is appropriate to the comparative group from our point of view? Well, during the review, the remuneration of the supervisory Board of Merck KGaA was compared to the amount of competitive group. Since Merck KGaA is delisted, the companies in this index were used to compare. The amount of compensation of the comparison group represents the practice of the largest German stock-listed companies. From our point of view, it can be considered appropriate. Merck is a partnership on shares. And therefore, the Supervisory Board has little reduced competencies compared to [indiscernible] company. Therefore, the compensation is at the lower end compared with other [indiscernible] countries. Mr. Kienle, you asked the future report of the Supervisory Board [indiscernible] of the company. We'll continue to set up the role of Supervisory Board according to the legal requirements. Therefore, we try to fulfill the interest of information of our shareholders. Mr. Kienle, you asked why a special, say, meeting media compensation is considered as. We want to have highly qualified members of the Supervisory Board and remuneration [indiscernible] global structure of Merck KGaA is raised to a competitive regular level of the market. Granting and meeting conversation is usual for the remuneration of Supervisory Board members in German market. Mr. Kienle, you also asked why this increase factor over the basic remuneration of the Chair of the Supervisory Board as representative is the deputy are correct. Due to the increased responsibility and tasks and the increased effort for high differentiation -- high differentiation between the Chair of the Supervisory Board and the regular members was taken. Correct compensation of the chair of the Supervisory Board is supposed to ensure the best possible feeling of the company's profile decided upon by the Supervisory Board. So much we are done with the questions on Mr. Kienle. We have one addition on the question of Mr. Povel on the compensation the Executive Board.

And the question for the Executive Board compensation, it was decided in 2024.

It was not adjusted, excuse me, in this year. Only the payout of the long-term incentive component was shifted 1 year back. There were no changes in the compensation structure as such. Let's move on now to the questions of Ms. Zimmerman.

Dear Ms. Zimmerman, you asked the questions what Merck could do to enhance the transparency on future demand trends and whether a technical solution could be of help.

We continuously review our forecasting processes and the tools that we apply. Recent improvements are for example, a stronger use of scenario-based planning. In addition, we applied technological support enhancements to capture even more recent market information and trends. We are totally convinced that the future will bring further technology opportunities given the high dynamic in this respect. Dear Ms. Zimmerman, you referred to recent setbacks in our health care business and the potential implications on a disbalance with our Life Science business, for which you assume higher capital gains at lower risk. In addition, you would like to understand is the evobrutinib failure would trigger a reinforced focus on Life Science going forward? Let me tell you that our global specialty innovator approach in health care that Peter has detailed before remains very solid and continues to set a promising foundation for our long-term growth. Despite the disappointment of the evo failure, our pipeline holds significant potential, as stated by Mr. Guenter. This comprises internal and external innovation, including collaborations and in-licensing agreements. In general, our capital allocation strategy focuses on prioritizing investment in those businesses with the greatest potential for growth and value creation. And this applies to both Healthcare and Life Science, which remain important growth and cash contributors today and in the future. Dear Ms. Zimmerman, you asked how it is possible that in the business year, we publish our reports later than is regular for the market. With the publication of the business, we are still within the legal requirements. Please consider that as a leading technology and science business, we want to have the best transparency for our shareholders. With the quality for our reports, we don't want to compromise. Dear Ms. Zimmerman, you asked whether this successor recruiting practice and succession planning for the top management, whether it was chair of the Board of [indiscernible] was continued -- will be continued. Mr. Dr. [indiscernible] the new Chair of the Board of [indiscernible] of the Merck. We are convinced that we continue this recruiting practice of the past. Ms. Zimmerman, you asked about the publication of our sustainability targets. In order to measure our progress with regard to our sustainability targets, we have defined 13 key figures with which we report on annually. And that usually are targeted to 2030. The overarching targets are mapped with corresponding sustainability indicators in the long-term incentive plan for the [indiscernible] Board. The target values for our sustainability indicators are published [indiscernible] in the remuneration report at the time they are granted. You can find this information on Page 194 of the German annual report. Ms. Zimmerman, you are asking for the consideration of the performance and access to health and the favorable remuneration. That sustainability strategy is integrated to variable remuneration of the management, [indiscernible], factor the number of people is also included, which are treated with our health care products. This also includes patients of countries with lower or medium income. Last year, around 93 million patients received therapy with our health care products. Out of them, more than 57 million patients in countries with low medium income. On top of it, we donated over [ 210 million ] praziquantel pills that's enough in order to treat around 84 million school children from suffering from bilharziasis last year. You ask to what extend Merck currently uses and producers PFAS. Merck is not a manufacturer of PFAS in the sense of fluorinating longer carbon chains or producing fluoropolymers. We produce highly specialized PFAS from raw materials that fall under the PFAS definition. Across all 3 sectors, Merck producers and uses PFAS containing products which are to date essential for the manufacturing of pharmaceuticals and for the use in the biotechnology and electronics industries. At the same time, responsible use in production is absolutely key and is of highest priority to us to prevent the release of PFAS into the environment. Dear Ms. Zimmerman, you're asking how Ms. [indiscernible] can manage the often complex topics at 3 enterprises at the same time? Ms. [indiscernible] has long-standing experience as a member of Supervisory and Administrative board and as Head of the Audit Committee at companies belong to DAX 40, being stock less in other international companies. She's had a proven expert of the areas of audit, financing, accounting, governance, risk management, including IT, security and ESG. Her experience is based, among other things, on a 20-year long career at an auditing committee -- auditing company. On top of it, Mr. [indiscernible] has been a long-standing member of Board of Financial of a large Swiss bank. Thanks for this exceptionally comprehensive professional experience, Ms. [indiscernible] is well suited to dedicate herself to her ask as a professional member of the Supervisory Board and Audit Committee. You asked if the PFAS substances can be replaced in our processes and our products. The industries in which we operate will face difficulties replacing all PFAS properties with green air alternatives as PFAS provide unique properties not accessible with other chemicals. Currently, we, therefore, do not know when or even whether alternatives with the same technical properties all relevant applications can be found. In general, introducing new materials and substitutions in manufacturing is not an easy task, as you may know, especially for processes already in high-volume production. In many areas, it will, therefore, take more time to come up with definitive solutions. Potential PFAS substitutions will require lengthy requalifications processes as new PFAS-free products may not always be simple drop-in replacements and, in some cases, may require a redesign of the whole systems and process. We, nevertheless, are actively working on PFAS-free alternatives and are currently investing in additional resources in our research and development operations to use our innovation power to tackle future demand for PFAS-free products and at the same time, mitigate business risk to the extent that this is possible. Dear Ms. Zimmerman, you asked for background information on the evobrutinib trial, including the design and execution of the study. In addition, you asked about the risk of pharmaceutical development in general and how we plan to compensate the loss of evobrutinib in our pipeline. First and foremost, let me tell you that we share your disappointment by the result of the evobrutinib trial. But I would also like to highlight that we are actually the first company to publish clinical data with this new class of drug, the so-called BTK inhibitors. As you know, our competitors also have studies underway with molecules from this class of active ingredients and a comparable study design, if not identical study design. The study results confirmed the assumptions made at the beginning of the study regarding the activity of evobrutinib, but surprisingly, the comparator drug performed far better than historically observed and assumed in the study. As a result, if evobrutinib could not show superiority over the comparator drug available on the market. Therefore, the study objective was missed. In principle, the probability that the drug will not achieve the desired performance in an approval study or a registrational study is around 33%. That is the usual risk of pharmaceutical development late stage. You also asked how we compensate for the loss of evobrutinib in our pipeline. From a strategic perspective, we are confident that our focused leadership approach is solid and provides a promising basis for long-term growth. Our pipeline continues to have very significant potential. At all stages of development, we have molecules with new mechanism of actions that could redefine the standard of care in key therapeutic areas such as oncology and immunology. Xevinpant, I mentioned already in the field of oncology, which is now in Phase III. Our TLR7/8 inhibitor, Enpatoran, reached an important milestone in 2023 by completing the futility analysis in our Phase II program for systemic and cutaneous lupus. At the same time, we have signed a couple of new collaborations, as I mentioned before, with companies such as Hengrui and [indiscernible]. We reacquired the rights to Bavencio from Pfizer last year. And here too, we see further growth potential in the already approved indications. In addition, we are selectively conducting combination studies with Bavencio. In our development area, we are now focusing on implementing our strategy and especially on the timely execution of the ongoing studies. All in all, we feel solidly and well positioned in our Pharmaceutical business. Dear Ms. Zimmerman, I take your third question on PFAS in which you asked what are the options we see for getting the risk in PFAS under control? Across our businesses, we employ a holistic approach that presents a range of options for consideration with industry partners to responsibly manage PFAS. We actively advance substitution options as the primary goal. Where this is not possible or feasible, other options may be exiting certain users, evaluating circular approaches, whereby certain PFAS might be reduced to avoid an on-life phase disposal or investigating potential abatement technologies. We are already offering first, substitutions for the electronics and the life science industry and early collaborations with our customers are up and running. Furthermore, Dear Ms. Zimmerman, you have asked how high we estimate the risk that our production will be affected by European Union PFAS bands. Well, first of all, let me tell you that Merck supports the ambition for smart and targeted PFAS regulation, and we are monitoring upcoming regulatory proposals very, very closely. We found that there are substantial gaps within the proposals, including technical faults and strategic faults. The final scope of the planned regulation has not even yet been finalized. For the industry overall, the biggest risk from the operational perspective is originating from the ban of fluoropolymers in chemical production facilities and the nonderogation of precursors of derogated PFAS, which qualify as PFAS themselves. The concrete impact on Merck businesses cannot be calculated until the scope is made clearer and derogations as well as importantly, time lines have been determined. Dear Ms. Zimmerman, you asked how broad the scope of Merck access to health currently is and how many low-income countries are part of our strategy? Our access to health strategy reflects our commitment to drive health equity. It covers all 140 low and middle income countries as classified by the World Bank, including all 26 low-income countries. We look at how Merck can help address the health system barriers to the availability, accessibility and affordability of our products through innovations and collaborations. Dear Ms. Zimmerman, you ask how many products we have designed specifically for low and middle-income countries and how this portfolio will be developed further? Our access to health strategy will enable access to over 170 million patients per year in low and middle-income countries by 2030. This covers existing and upcoming products, focusing on therapeutic areas such as head and neck, colorectal and bladder cancers as well as thyroid disorders. In 2023, we received a positive scientific opinion from the European Medicines Agency on Praziquantel, which we developed for the treatment of schistosomiasis in preschool-aged children. Moreover, we also have a malaria program in Phase II in our R&D pipeline.

So far answering Mr. Zimmerman's questions. We will now move to Ms. [indiscernible], please.

Dear Ms. [indiscernible], Thank you very much for your question. About my full name, my full name is [indiscernible] and is listed accordingly in my identity card and in the extract from the commercial register of Merck KGaA. You also asked whether there was a legal opinion on the use of my name. In ordinary legal transactions, it is not necessary for contracts to be signed with a person's full name for them to be valid. The decisive factor is that the signature can be attributed to a person. We do not see any legal risks in this regard that would require a legal opinion to be obtained. Ms. [indiscernible], you're asking if Ms. [indiscernible] participated in the training of the Advisory Board on topic of testability on May 10, 2023, as a guest. At that point in time mentioned by you after training, Ms. [indiscernible] had stepped down from her job as member of Supervisory Board and did not participate in the training. If you remember, the Executive Board participate at least once per year in the Merck Sustainability Board, the controlling body for sustainability at Merck. Members of the Merck Sustainability Board, most of them report directly to the Executive Board that ensures that all members of the Executive Board are tightly integrated into these topics. Dear Ms. [indiscernible] you asked how many of our employees use home office arrangements working from home arrangements and how much our company saved in the reporting year as a result. Even before the COVID-19 pandemic, Merck was aware of the importance of flexible working models and this for more than 10 years. If the work allows it and it does not violate applicable regulations, Merck employees can generally choose how they want to work. Taking Germany as an example, in 2023, 58% of employees made use of the flexible working arrangements. We will continue to maintain our presence at our local sites because personal interactions promote collaboration and strengthen our culture. Accordingly, the focus is not on making savings. You raised the question of advantages for our company because of the fight against COVID-19. Let me tell you that the pandemic forced us to work more virtually, which consequently enabled us to also work more flexibly. In addition, more virtual meetings means less travel, which saves time and cost and is even more healthy. And from a business and scientific perspective, COVID ERT asked to focus more on mRNA than we were doing before. This breakthrough technology holds great promise beyond COVID to provide potentially curative therapies for other infectious diseases or other diseases such as cancer and many trials are ongoing. This is where we aim to participate. In September 2023, we announced a EUR 28 million investment into the new GMP mRNA drug substance manufacturer sites, both at Darmstadt and Hamburg, adding a total of 75 new jobs. Therefore, we are a key provider to offer fully integrated mRNA services for all critical stages of mRNA development, manufacturing and commercialization through our Life Science sector. This is an advantage that we believe is here to stay. Dear Ms. [indiscernible], you asked about the development of Merck KGaA sales revenue from the perspective of the separate financial statements. Merck KGaA's total sales decreased in the 2023 financial year due to the transfer of the operating activities of life science and electronics to separate companies as of January 1, 2023. This has a particular impact on the company's foreign sales and largely explains the stability of sales in Germany. As a result of the transfer of operating activities, the relevance of sales from Merck KGaA has decreased and no longer represents a financial performance indicator. A forecast for the coming financial year is therefore no longer provided. Dear Ms. [indiscernible], you asked whether the proposal for the dividend means the change of the dividend politic. As you know, we pursue a sustainable dividend policy. Assuming stable development of the economic environment, the current dividend forms the lower limit for future dividend proposals. In addition, the dividend policy is largely based on the group's earnings performance. Among other things, we aim to distribute a dividend in the range of 20% to 25% of earnings per share before special items. Our proposed dividend of EUR 2.20 per share for the 2023 financial year is only just above the aforementioned rate of 25.9% of earnings per share pre exceptionals. This year's dividend proposal, therefore, expresses our confidence that we will continue to be able to pay a dividend in the range of 20% to 25% of earnings per share pre exceptions in the years ahead.

So far answering Ms. [indiscernible] questions. We will now move on to Mr. [ Kepler's ] questions.

Mr. [ Kepler ], you were asking why the presentation of the candidate for the Supervisory Board, Katja Garcia Vila, was recorded while she did not introduce herself live in today's AGM. Ms. Garcia Vila as today, acted as the CFO of Continental AG at the AGM of Continental AG, which takes place at the same time. That's why her introduction was recorded in Darmstadt on-site on Wednesday. Dear [indiscernible], you asked why you should continue to hold Merck's shares or, if necessary, buy more shares. From the point of view of the Executive Board, we see the following reasons in favor of this year. In 2023, we demonstrated resilience, and we expect to return to organic growth in 2024. We also believe we are optimally positioned to benefit not only from the long-term growth mega trends, we are also focusing on the most attractive segments within these mega trends. And our cash flow profile is of high quality and enables us to react flexibly to company acquisitions and thus further increase the value of the company. Mr. [indiscernible], you were asking how you could contact other shareholders and why there's no sum up or sum down function. Our AGM corresponds regarding the format with the pertinent legal regulations that do not foresee shareholders chats or possibilities to issue comments. It is certainly at your discretion to contact other shareholders. Mr. [indiscernible], you asked about the 3 biggest risks to our share price. Firstly, I would like to mention the product development risk typical of the research-based pharmaceutical industry. In addition, a negative trend in demand in the industries that are important for our electronics business, could have a negative impact on the Semiconductor Solutions divisions. In both the Life Science and Electronics segments, increasing geopolitical tensions with a tendency towards deglobalization could have a negative impact on our overall global business. However, this could also present opportunities that could be realized, for example, through a more regionally decentralized allocation of our product sites. Mr. [indiscernible], you also asked whether we sent out printed annual statements? For sustainability reasons, we do not send out printed annual statements anymore. So [indiscernible], you were asking about the total number of A4 pages of the documents presented to the AGM. All documents that have to be handed in are accessible to the notary and have been published on website of the company. We did not count the total number of pages. Mr. [indiscernible] you were asking about the share of bonuses of ESG targets for the short and midterm compensation -- excess compensation as a share of the total income and which ESG targets have been defined. The compensation system of the Executive Board proceeds relevant ESG KPIs, both for profit sharing and long-term incentive plan. ESG is considered in all variable parts of the compensation. ESG criteria for both variable compensation elements can have an inference of plus/minus 20% on the account to be paid out. That means that the share of the ESG targets, the total compensation can be around 15%, besides anchoring the sustainability targets in the catalog of criteria for profit sharing in business year 2023, [indiscernible] LTI tranche following ESG targets have been determined. In line with our sustainability strategy, we want to create added value for society in the long term. We want to support human progress from more than 1 billion people become climate neutral until 2040 and reduce our resource consumption. Also until 2030, we want to incorporate full sustainability in our value-added chains for those 3 overarching targets, the following indicators were linked to the compensation of the Board. The number of people who are treated with our healthcare products and pharmaceutical products made possible by Life Science. The number of relevant suppliers that are covered by a valid sustainability assessment. And thirdly, our greenhouse gas emissions, Scope 1 and 2 target values for these 3 indicators are published [indiscernible] in the Compensation Report. You will find the information on Page 194 of the German Management Report. Dear Mr. [indiscernible], you asked how much progress we have made in Germany and worldwide towards achieving climate neutrality? On the path to climate neutrality, we initially established structures worldwide to capture all emissions along the entire value chain and identify the significant sources as well as the potential levers to decrease emissions. We have achieved a 32% reduction in 2023 compared to our base year 2020. And this is measured against the direct and indirect greenhouse gas emissions recorded under Scope 1 and Scope 2. We can also demonstrate a 10% reduction in emissions beyond our direct control, the so-called Scope 3 emissions on a worldwide basis. We have achieved this, for example, through our very close collaboration with suppliers and with customers. In Germany, we are focusing on making new buildings climate neutral using the most innovative and most recent technology. An example is our new learning center, which is built according to the latest sustainability building standards, serving as an example for other global sites. Overall, we are on track to fulfilling our midterm climate targets and are well underway towards climate neutrality. Dear Mr. [indiscernible], you have asked about the product in the portfolio of our company, which has the highest price and which ones are the products with the largest sales? The 3 products with the largest sales in 2023 were Erbitux, Mavenclad and Glucophage. We would like to comment that the prices of our products across all our business sectors are not immediately comparable because in healthcare, a product can be assumed -- the product price can be assumed for one package, but also the yearly cost for therapy. And we offer not only products but also services, which don't have a price per item. In our Life Science business, we have filtration plans, which cost over EUR 1 million per item. But we also have a so-called custom GMP drug where we offer tailor-made substances, which cost over EUR 1 million per gram. Dear Mr. [indiscernible], you also asked how many different products we have in our portfolio alone in Germany? We can, of course, differently define and interpret the term product, depending from how many varieties you count as a product, so we would use the term product how it is used in the business sectors and markets to give you a feel of the breadth of our product portfolio. In the business sector Life Science, we offer about 90,000 different products in Germany. In healthcare, in Germany, we have about 30 different medical items. And in Electronics, in Germany, we have about 950 different products in our portfolio. Across our businesses, in total, it's about 91,000 different products we offer in Germany. Dear Mr. [indiscernible], you also asked how we implement the EU Supply Chain Act? When it comes to the requirements of the German Supply Chain Act, we developed further our approach for human rights. We strengthen the existing processes for risk identification and claim management. We make comprehensive risk analysis in order to develop matching strategies and measures. And we make the processes so that we can also integrate them to a European level. Mr. [indiscernible], you also asked which cost is reporting year [indiscernible] in Germany race in order to bring the product to our customers? To answer your questions, we looked at what we paid to inland transport service providers. We paid about EUR 60 million. Mr. [indiscernible], you also asked how we can ensure an adequate compensation for the drivers? You also asked how we make sure that the lorry drivers on German highways are paid according to German standards? Our Code of Conduct for suppliers describes in detail what we expect from our suppliers and partners. It regulates our demands when it comes to human rights, health and security, integrity of the company, environmental protection and improvement in management of suppliers. And we consider the ratings of independent rating agencies, which also consider work conditions and human rights. And then we also monitor the press and news. Our suppliers and transport are assessed in the framework of what I just told you. And then there are also contracts, of course. We make sure with that our transports are conducted according to the European and national regulations. For example, the EU Mobility Package and the working conditions which are regulated there. So we make sure that everybody adheres to that. Disposal cost for hazardous waste incurred in the reporting year. You also wanted to know if the disposal was carried out in the country where the product was manufactured? In our waste disposal, we strictly adhere to the applicable laws and regulations of the respective country in which the waste is generated. We only commission authorized waste disposal companies. In addition, we conduct our own inspections and pay particular attention to waste with hazardous properties. Waste disposal costs are part of the production cost and are not separately disclosed. Dear Mr. [indiscernible], you asked about the 3 largest investments in the current reporting year? Our 3 most important investments will be the expansion of production capacities for membranes and filtration products at Life Science, the Life Science site in Cork, Ireland. The expansion of the production site for the semiconductor business of electronics in Kaohsiung, Taiwan. And the construction of a new translational science centers -- research center for healthcare at the Darmstadt site. Dear Mr. [indiscernible], you also asked about measures and cost when it comes to IT security for the reporting year 2023? We have an ISO 27001 based information protection management system. Our governance framework includes organizational process-oriented and technical measures to protect information security. We rely on harmonized electronic and physical security controls. For example, also for access control or security monitoring, we also use an ISO 9001 certified quality management system, which also applies to the provision of IT. To reduce the risk of failure, we also operate multiple redundant data centers. And on group level, we have insurance solutions for e-crime events. At Merck, we consider cybersecurity a top priority and have made significant investments to implement robust safeguards against cyber attacks. Our approach to cybersecurity involves a strategy that includes investment in technology, staff training, risk assessment and ongoing monitoring. You can be assured that we have allocated significant resources to secure our digital infrastructure. It is important to us to protect our valuable data and assets from potential threats. Please understand that we do not disclose the cost of these measures. Dear Mr. [indiscernible], you asked whether we have already been damaged by cyber attacks? As with any other company, cyber criminals try to breach our defenses every day, be it through malware by email, social engineering or other technical means. Proactive countermeasures meant that no significant incidents occurred. Please also understand we do not disclose the cost of the measures. Mr. [indiscernible], you asked whether it can be managed to do the AGM virtually 1 year and in person in the second year? We have not taken the decision as to the format of future AGMs. As for the AGM of this year, the Executive Board considered, especially the good experience for the concept of last year's AGM. This means we will review, check every year again, which format is the best suited for future AGMs. Mr. [indiscernible], you asked how many people are involved in the back office today? How many of them are [indiscernible]? [indiscernible] and how many lawyers and which are lawyers? Here on site we have 38 colleagues from Merck from various divisions in the back office, along with them, there's an IT colleague and from our -- and one from our service provider Computershare, 3 people in the back office work at the legal department of Merck, they are lawyers. Dear. Mr. [indiscernible], you asked for the number of the shareholders dialed in, peak number, and how many of them have dialed in from abroad? The absolute number of the shareholders dialed into the AGM, cannot be recorded for taking reasons. Because the participants dialed in, whether they are proxies or shareholders and how much capital of the dialed-in users is represented at any point in time is not recorded. Currently, we can say which of the 2 streams offered -- how many participants were dialed in? At the moment, when you asked your question, 152 participants follow the transmission broadcasted in English and 357 in German. Mr. [indiscernible], you asked for the cost for today's AGM and what is breakdown into its key items? So we consider cost of roughly -- a little below EUR 500,000 for the AGM this year. The main items here are IT, IT infrastructure, event technology and the event set up. These 4 positions account for around 80% of the overall costs. Mr. [indiscernible], you asked for the catering cost of today's virtual Annual General Meeting? This cost, compared with IT, IT infrastructure and event technology, only a small share of the overall amount, around EUR 25,000, for catering and service personnel. And this ensures that we actually supply enough food for the employees who are active at the -- involved in the AGM. Sorry, #8. Here we go. Mr. [indiscernible], you asked about how many multiple of the average salary of the employee, which corresponds to the remuneration of the chair of the executive board? In the Remuneration Report, we published the average salary for the employee and the chair of the executive. Last year, the ratio was around 1 to 100. For the current 3 major issues or problems and one major success in 2023. Looking at the 3 major challenges. First of all, as I mentioned during my introduction, we are expecting the economic and the geopolitical headwinds will persist this year. But again, we are confident that our Merck group will gradually return to organic growth during 2024. Second, this year will be an important year for the world as many critical elections are being held. And as I said at the beginning as well, it is my personal belief that we, as citizens, must especially stand behind Europe and encourage active participation in the upcoming EU elections. European competitiveness is going to be absolutely key if we are to succeed in front of the 2 superpowers, U.S. and China. The key here is to build a stronger and more united Europe that is based on democracy, freedom, equality and human rights. And third, looking beyond 2024, the world is being rapidly redefined by multiple mega trends. In this case, it makes me proud to say that Merck as a leading global science and technology company is uniquely positioned at the heart of these mega trends. These are, for example, novel modalities, growing patient needs for innovative treatments, growing importance of artificial intelligence as well as adoption of artificial intelligence in multiple processes and big data as well as the rising global demand for sustainable innovation. Let me -- it's difficult to pick one success of 2023, but I will give it a try. I could give you many other examples. But I think the one outstanding success is that, in a very hostile year, full of challenges and headwinds, we got ongoing and persistent commitment of our around 63,000 colleagues who once again demonstrated the dedication to our company's customers and patients. So I want to take this opportunity on behalf of the Executive Board to thank all of you, 63,000 colleagues for the hard work and all the efforts that you have put behind our success in 2023. Dear Mr. [indiscernible], you asked about the share of taxonomy capable and taxonomy compliant sales? The share of taxonomy capable sales and in group sales is in 28.49%. The share of taxonomy compliant sales and in group sales is 0.03%. You also asked whether this ratio makes when it comes to informative value? The informative value is still limited because the production of pharmaceutica doesn't yet fall under taxonomy capability, but only compliance. You also asked how high the time and financial expenditure for the investigation was? The investigation was conducted by interdisciplinary project team from different areas which didn't need the help of external consultants and was able to fulfill the reporting obligation. The vast majority of the project members do not only work with the introduction of the taxonomy regulation. So we cannot say how much time and finance is exactly, it demanded. You also asked how much these expenditures will rise in the next few years? Because of the business model of Merck, we do not assume a rise of the share of taxonomy capable and taxonomy compliant sales. You also asked whether there was an added value of these indicators for the company and for you as a shareholder? The benefit for the shareholders and the company is not only because we have to comply with the regulation. It is -- the value is the transparency we can give to our customers, suppliers and staff. And our shareholders then are capable, if they have a focus on environment and climate, to base their investment decisions on it. So the value for the shareholders is in standardization and so that you know the environment risks better. You've asked those questions for our registration process for today's AGM. We thank you for your remarks, and we will discuss them with our service provider, Computershare. Dear Mr. [indiscernible], you asked how we have more personnel expenditures and how we deal with that? For us, the global personnel expenditure is the number we adhere to. In 2023, the worldwide personnel expenditure was EUR 6.5 billion. With that, we had a share of 31% of our group net sales. About 1/3 of personnel expenditure occurs in Germany. We expect that the salaries will rise -- that we can compensate the rise in salaries with price increases. We are at the end of our questions from Mr. [indiscernible]. Ladies and gentlemen. I would like to make a comment on the Item #8. Mr. [indiscernible] in his contribution, he made an application of the vote of himself to the Supervisory Board. You have the opportunity to make a position from your position during the debate. On top of it, we created an opportunity in the investor portal that you exercise your voting right by postal balloting or by mandating a proxy? Thank you very much. Dear ladies and gentlemen, there is another request to the floor, Mr. [indiscernible], asked our technicians, can we add him here? Yes. Mr. [indiscernible] go ahead.

Thank you very much. They answered one question, I couldn't follow. As to the oncology drug, xevinapant, I had asked how far you got to the development and what costs have incurred for it? I would like to ask you to simply repeat this answer so that I can write it down. Then in general, I would like to remark that I'm not happy with the quality of the answers to the question that I've asked -- or sorry, that I'm very happy. They are very consistent and they are meaningful. I'm very, very grateful for them. With one exception, a small exception. Mr. [indiscernible], for you answering the question, what must be included in the Supervisory Board's report on dividend. What you answered here to refer me to the fact we will do what is necessary, is not really helpful. It is not very friendly to the shareholders. Of course, we can address to struggle about what items -- what topics have to be lay down into what extension in the report. But if you become clear that the member of the Supervisory Board of KGaA, you only have a very reduced program. And then the dividend as long as I've been representing the shareholders for the SAK. It's always a topic because every year, you are below the payout ratio of the comparable index of the company's which you use as a benchmark for remuneration of your Supervisory Board. I think it's not very reasonable to say, well, we have simply reviewed the proposal, but it is not sufficient. And after the comment of the Stock Corporation Act, this is not sufficient because the report must make it understandable that the correctness of this resolution was reviewed. You are the body -- you're the only body that's elected by the shareholders. So you have to represent the special interest of the shareholders and through this report the Supervisory Board. This is one option for the shareholders to decide whether they approve the actions of the Supervisory Board or not? Whether they are reelected, yes or no? And this includes more than just saying, well we have reviewed, and we don't have any objections. But what the shareholders wants to know if the dividend is still so conflictive because you're reducing the rate. Why are you of this opinion? That what is -- what the Executive Board suggests is appropriate? Why do you think there is a conversation between the interest of the management and rest of the shareholders? Why, in your opinion, this resolution solves the conflict in a possible way? But this is not too much of a request -- like -- the fact that you actually comment on the fact that the -- will continue the practice of your predecessor and you leave it at this single sentence? Thank you very much.

Thank you very much, Mr. [indiscernible]. We have another request for the floor by Mr. [indiscernible]. I will ask our technicians whether we can bring him in? Not yet. Then we just wait for a second. Mr. [indiscernible]? Thank you, Mr. [indiscernible]. Mr. [indiscernible], you're live, you can speak?

Mr. [indiscernible], thank you very much for giving me the floor. I don't want to drag out the AGM, you want to finish soon. But as you know, shareholders rarely plot. But I agree with [indiscernible], you really tried to answer the questions extensively and to add some substance, but there was one question that was about motivation. It was question, how many pages the documents have? Yes, whilst you didn't count it? You did not determine the total number of pages. I wasn't asking whether you determined it. I was asking how many pages do those documents have? So answering this question, that is a very simple thing. You just sit down and add the pages. You might argue whether such a question makes sense or not. I just want to get across -- you have 388 pages in the Management Report, and you don't mail it on request. I'm one of those shareholders who like to hold it and use highlighters to mark words, with a PDF on the screen that's not very reader friendly. And that means that in the future, that the shareholders -- nobody will read those PDF files, which you need to create. So we'd like to ask you answer this is one question. I don't want to drag out. You can answer that outside the general debate at the very end. But just call out, give me a ballpark figure. And to think about whether you might voluntarily -- but we were talking about 50 shareholders would request a printed business report. Other companies do that voluntarily, you should offer that. And the second point, it's of course access problems to today's AGM. I'm not asking you to discuss that with your service provider. It didn't work last year. So I want you to commit yourself and tell me that this will not happen again on a potential next virtual AGM. That's important to me. And that brings me to my last point. Virtual AGM or in-person AGM? And again, your answer was a bit general. And I'd like you to commit yourself a bit more here. I want to rephrase it. I know the standard excuse is to protect the environment, no travel expenses, environmental impact. Yes, there might be certain advantages. For me, the advantages that I can be both here and on the buyer AGM, which I couldn't do if it were in person. But I have a concrete question to you. What is the personal encounter? How much is a personal encounter worth to you compared to protecting the environment? How would you weigh these? I think a personal encounter is -- cannot be replaced through anything. And I think you, ladies and gentlemen, as you are here in that room, it's annoying to just stare at a screen. This is not real contact. So for you, the AGM becomes a very unfavorite event, did not get any feedback at all. And I'd like to ask you if you do another one -- to that every other year, from -- problem for me if you said virtual for 2 years and then in person for the next year. And I think that would be the best solution we should strive for weighing all arguments. And that's where I want to stop hoping that you do a good job again, get good results for 2024.

Thank you, Mr. [indiscernible]. There are no further requests for the floor. I suggest that we'll have another 15-minutes break to answer the questions and for bio-break. Thank you. We will continue at 2:45. The AGM will continue at 2:45. [Break]

Dear ladies and gentlemen, unfortunately, it takes us a bit more time to answer your question. 10 minutes. Therefore, I'm extending the break until 3 p.m. sharp. Thank you very much for your understanding. [Break]

Ladies and gentlemen, we will continue the AGM. Thank you very much for your patience. Again, we'd like to answer your careful -- your questions carefully and comprehensively. And of course, this takes some time. Now I would like to answer the question asked by -- the question asked by Mr. [ Kienle ] and I ask Mr. Peter Guenter to take the floor.

Yes. Mr. [ Kienle ]. I'm happy to repeat the answer to your question on how far advanced we are in the development of xevinapant and the associated costs. So we in-licensed xevinapant in 2021 from Debiopharm. We are now in 2 Phase III trials, and xevinapant might potentially offer a new treatment paradigm in locally advanced head and neck cancer for patients which have today very limited treatment options. We expect to learn more about its progress from our interim analysis later this year. Until end of last year we invested roughly EUR 300 million in the clinical development of this asset.

Mr. [ Kienle ], you had further questions concerning our dividend. Our dividend proposal of EUR 2.20 per share for the business year 2023 is set at [ EUR 25.9 ] of earnings per share before special interest and with that, slightly exceeds the above-mentioned area. We have ambitious growth targets and are not ruling out even bigger acquisitions in the coming years. To achieve this, we need financial stability. For this reason, our dividend policy is understandable and in the group's best interest. We are of the opinion that by being transparent in our corporate governance and dividend policy. We are meeting the needs of our shareholders as well as representing the interest of the group.

Now we move on to the questions by Mr. [ Gabler ] Mr. [ Gabler ] has asked how many pages the documents to be submitted to the AGM by law. And upon your request, we've determined this. The number of pages is a good 400 pages that must be made available to the meeting. Mr. [ Gabler ], you were asking for a promise that there won't be any access problem to the AGM. We don't have any information that any problems occurred technical problems occurred during the access of the investment portal. We are trying together with our service product Computershare to make the -- keep the investor portal as easy for the shareholders as possible. Dear Mr. [ Gabler ] you asked for the weight of personal encounters compared to environmental protection virtual exchange, both in private and professional context has become a new reality due to the COVID pandemic. This reality is also reflected by the virtual format of the AGM. By the way, this is also the case in most AGMs of the -- of tax constituents. Based on their home page, the majority of the 40 [ DexCom ] companies do a virtual AGM. You've told us that due to this very format, you were able to participate both at our AGM and at buyers personal encounters, we appreciate very much, at Mac. They were are and continue to be part of our everyday work. Personal encounters, virtual phones, both have their space and modern business communication and supplement each other. Therefore, each year, we'll evaluate once again, which format is -- suits best. So much for the questions from Mr. [ Kienle ] and Mr. [ Gabler. ] So I don't have any further requests for the floor. Dear ladies and gentlemen, no further requests for the floor, the technicians are confirming this. We've closed the list of speakers on the investor portal. I'm hereby closing the general debate, and I'm stating all the questions have been answered. Thank you to the speakers for their contributions and to the Executive Board for their answers. Ladies and gentlemen, we will now start with the voting on agenda items 2 to 10. On the agenda item 8, Mr. [indiscernible] and his contribution, put forward the countermotion to be elected to the Supervisory Board. During the general debate, you had an opportunity to make comments on this motion. And the investor portal, we credit additional opportunity to comment on this counter motion either by post ballot the motion, which was also brought forward by him, based on his proposal based on Article 163 to have a vote before the general vote. I will not accept that the conditions of Paragraph 127 of the German Corporation Act is not available because this would be necessary only that the proposal by Mr. [indiscernible] is submitted at least 4 weeks before the AGM based on Paragraph 126 Sentence 1 of the SOW Corporation Act. Before the meeting, such a proposal was not submitted, however. The items of the agenda will now be presented in a short version. For the last time now, you can actually hand out proxies to third parties for exercise of voting rights on the investor panels as well as proxies and instructions to the proxies and or to change them. Or to exercise your voting rights by postal ballot. If you still wish to make use of this option, we now ask you to do so without delay. We will close the relevant functions in the investor portal shortly and exactly at 3:10. Following this, the company's proxies will vote in accordance with your instructions by approving the vote stored in the system, the postal ballots received by the deadline have already been stored in the system. Statutory exclusion of voting rights for members of the Executive Board and Supervisory Board have been observed. The notary will monitor the voting process. Resolution on agenda Items 2 to 8 are approved if a simple majority of votes are cast in favor. In addition to a simple majority of votes cast that are on the agenda items 9 and 10 require a simple majority of votes cast in favor by the share capital represented at the time the resolution is adopted. We will now begin voting. The exact wording of the proposed resolutions, which is solely relevant for the vote. The exact wording of the proposed resolution, which is solely relevant for the vote is contained in the notice of the meeting published on the Federal Gazette on March 15, 2024. I'm asking the technicians. Yes, we need 5 more minutes. Okay. We'll wait for 5 minutes. [Voting]

[Foreign Language] I'd like to ask the company's proxy to prepare to release the votes stored in the system and as to vote on the individual agenda items in accordance with the shareholders' instructions. As previously announced, at 3:10 we will close the option to issue or change proxy forms or to issue or change process in the structure of the company's proxies via the investment portal or to exercise your voting rights by postal ballot. We wait briefly roughly 2 minutes until 3:10. [Voting]

Ladies and gentlemen, our order, that the vote on the agenda items will be closed. Voting for investor [indiscernible] via postal ballots and giving proxy forms for the third parties and proxies instructions to the representatives and proxies from now on are no longer possible. I instruct the technicians to consider this and ask the officing notary to make a note of this. Now and ask the proxies to release the votes stored in the system with us to vote in accordance with the shareholders' instructions on the individual agenda items. [Foreign Language] The company's proxies have just released the votes stored in the system in accordance with the shareholders' instructions on the individual agenda items. The postal ballots have already been stored in the system, all votes have thus been cast. I hereby close voting on the agenda. The voting results on agenda items 2 to 10 are now being determined under the supervision of the notary. This will take some time. To accommodate this, we will break for 30 minutes until 3:40 p.m. 3:40 p.m. Thank you very much. [Break]

Ladies and gentlemen. Now first of all, I would like to ascertain the present -- shares present. You'll find this information on the screen. One of the share capital of the company amounted to [ EUR 168,014,927.60 ] divided into 129,242,252, 92,081,600 no power value shares are representative in the same amount -- This corresponds to 71% -- 71.25% of the share capital. On top of this. postal ballots have been received for 682,908 no power value of share. This equals 0.35% (sic) [ 0.53% ] of the share capital. Now let's move on to the results of the votes. On top 2, I state and I announced the vote for 91,874,371 valid votes. This corresponds to 71.09% of the share capital. Positive votes 91,742,945 and 131,426 votes against which corresponds to 0.14%. The -- on agenda item 2, the AGM accepted the result of the reason on reduction of the [indiscernible] sales for fiscal year '22. The proposal of the Executive Board and the Supervisory Board as published in the Federal Gazette on the 30th of -- 15th of March 2024 with necessary majority votes. Result of agenda Item 3, I state and announce for 92,760,979 shares for which valid votes for cast result corresponds to 71.77% share capital positive votes, 92.632,834, equaling 99.86% votes and 128,145 votes against equaling 0.14%. On agenda Item 3, the main -- the AGM adopted the authorizing the appropriation that to an up profit for fiscal [ 2024 ], the proposal of Executive Board and the Supervisory Board as published in the Federal Gazette from the 15th of March 2024 with the net majority of vote. Result of vote on Agenda Item 4. I state and announce for, 91,328,476 votes, for which valid votes were cast, the result -- the result of the vote was 70.66% of share capital, the fair amount of votes 90,238,691, equaling 98.81% votes against both against 1,089,785 equaling 1.19%. And on agenda Item 4, the AGM adopted the fourth item that results on the Approval of the actions of the Executive Board for fiscal 202. It has adopted the resolution by Executive dividend Supervisory Board as published in the Federal Gazette on the 15th of March of this year with necessary majority of votes. Result of the vote on agenda Item 5. I state and announce for 90,169,898 shares for which valid votes are cast. The vote corresponds to 69.77% of the share capital affirmative votes, 88,312,189, equaling 97.94%, votes against 1,857,709, equaling 2.06%. For agenda item 5, the AGM adopted the fifth side and resolution on the approval of the act of the Supervisory Board for fiscal year 2023. The resolution by the Executive Supervisory Board as published in the Federal Gazette on the 15th of March 2024 with necessary majority of votes. Result of the voting on agenda Item 6. I state and announce the vote for 92,731,829 shares for which valid votes were cast, and this corresponds to 71.75% of the share capital. affirmative votes, 92,645,520, equaling 99.91%. Votes against 86,309 equaling 0.09%. On the agenda Item 6, the AGM which is the resolution on the direction of the auditor and the annual group auditor for the fiscal year 2024 plus of the auditor for the review of the interim account and the interim management report for 30th of June 2024, it adopted the proposal of the Supervisory Board as published in the Federal Gazette on the 15th of March with the necessary majority of votes. Result of the vote on agenda item 7. I state and announce the vote for 91,707,501 shares for which valid votes were cast, and this corresponds to 70.96% of the share capital affirmative votes 82,884,104 equaling 90.38% and as against 8,823,397 million, equaling 9.62%. On agenda item 7 the AGM adopted the agenda item 7 resolution on the approval of the compensation report for 2023. The resolution by executive Supervisory Board as published in the Federal Gazette on the 15th of March 2024, with the necessary majority of votes. Result of the votes on Item #8, Ms. Katja Garcia Vila. I state and announce, the result for 92,520,524 shares for which valid votes for cast. This corresponds to 71.59% of the share capital. Affirmative votes 92,453,197 , equaling 99.93%. And votes against 67,327, equaling 0.07%. Thus On agenda Item 8. The AGM adopted election of the Supervisory Board, Katja Garcia Vila adopted the resolution of the Supervisory Board as published in the Federal Gazette on the 15th of March with the necessary majority of votes. Result on agenda Item 8 on Michael Kleinemeier, I state and announce the vote 92,729,640 votes for which valid votes were cast. This corresponds to 71.75% of the share capital affirmative votes 90,246,786, equaling 97.32% both against 2,482,854. That's so 2.68%. Thus, on agenda item 8, new elections on the Supervisory Board Michael Kleinemeier by the AGM adopted the resolution of the Supervisory Board as published in the Federal Gazette on the 15th of March 2024 with the necessary majority of votes. Result of the vote on agenda item #8, referring to Dr. Carla Kriwet, I said announced. The vote for 92,520,569 shares for which valid votes were cast. This equals 71.59% of the share capital. Affirmative votes, 92,451,909, equaling 99.93%. And votes against 68,660 , equaling 0.07%. On agenda item 8, new elections on the Supervisory Board, Dr. Carla Kriwet, the AGM adopted the resolution of the Supervisory Board as published in the Federal Gazette on the 15th of March 2024 with the necessary majority of votes. Voting results on agenda Item 8, new elections to the Barbara Lambert, I said announce the vote for 92,519,738 shares for which valid votes were cast. This equals 71.59% of the share capital represented affirmative votes 84,400,209, equaling 91.22%. Votes against 8,119,529, equaling 8.78%. On agenda item 8 new elections on the Supervisory Board Barbara Lambert, the AGM adopted the resolution of the Supervisory Board as published in the Federal Gazette on the 15th of March 2024 with the necessary majority of votes. Voting results on agenda Item 8. Professor Dr. Stefan Palzer. I state and announced. The voting with 92,519,310 shares for which valid votes were cast, and this course equals 71.59% of the share capital. Affirmative votes, 92,452,985 , equaling 99.93%. Votes against 66,325, equaling 0.07%. Thus, on agenda item 8, new election to the Supervisory Board Professor Dr. Stefan Palzer, the AGM adopted the resolution of the Supervisory Board as published in the Federal Gazette on 15th of March 2024 with the necessary majority of votes. Voting results on agenda Item 8, referring to Dr. Susanne Schaffert. I say and announce the vote for 92,520,013 shares for which valid those were cast. This corresponds to 71.59% of the share capital. Affirmative votes 87,863,589 , equaling 94.9% votes against 4,656,424, equaling 5.03%. So on agenda Item 8, new elections of the Dr. Susanne Schaffert, the AGM adopted the resolution of the Supervisory Board as published in the Federal Gazette on the 15th of March 2024 with the required majority of votes. Vote result on agenda item 9. I state and announced the voting for 92,746,094 shares for which valid votes were cast. This corresponds to in 71.76% of the shareholder. Affirmative votes 91,876,630, equaling 99.6%. And negative votes 869,464 this equaling 0.94%. Thus on agenda Item 9, the AGM -- that's the resolution of the remuneration of the Supervisory Board, including the remuneration system, the corresponding amendment to the articles of association. It adopted the proposal of the Executive and Supervisory Board as published in the Federal to the 15th of March 2024 with the necessary majority of votes and capital present. Voting result on agenda item #10, I state and announce the voting for 92,758,404 shares for which valid votes were cast. This corresponds to 71.77% of the share capital. Affirmative votes 92,748,203 equaling 99.99%. Votes against 10,201 equaling 0.01%. Thus on agenda Item #10, Resolution on amendments of the articles of association in connection with the future financing Octo -- Act. The AGM adopted resolution of executive and visor Board as published in the Federal Gazette the 15th of March 2024 with the necessary majority of votes and of the capital. So now I will start the closing meeting since the administrative proposal on the individual agenda items have reached as a majority of votes. The counter motion brought forward by Mr. [indiscernible] on Agenda Item #8 will be closed. Ladies and gentlemen. Now I have -- all the items are closed. I would like to thank you on today's -- today's AGM and your interest in the development of our company. Our special gratitude goes to the employees of the company, which have contributed to the statistics of AGM. I also congratulate the newly elected members of the Supervisory Board. I look forward to working -- to come see you back at the next AGM. And I'm closing this meeting, remain confident. Thank you very much. [Statements in English on this transcript were spoken by an interpreter present on the live call.]