Sartorius Aktiengesellschaft (SRT3) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. I am Lothar Kappich. And as the Chairman of the Supervisory Board, I am opening this year's Annual Shareholders Meeting of our company. On behalf of the Supervisory Board and the Executive Board, I would like to extend a very warm welcome to you all. I am pleased that wherever you are right now, you are following this event via the Internet in sound and vision. I would like to extend a particularly warm welcome to our shareholders and our shareholder executives and the ladies and gentlemen of the press. Your coverage of our company has helped keep our shareholders informed about the performance of our business during the current year. And we would like to thank -- I would like to thank you for your contribution based on the positive experiences that we've had for the virtual Annual General Meeting with the executives, this year is again opted for this format and [indiscernible] to reach our shareholder base, which is clearly in character very well. This is why the AGM does not only begin at 12:00 p.m. and has [indiscernible] in the streams. Against this background, we are pleased that the legislator continues to announce virtual shareholder meetings to be held without the physical presence of shareholders or their proxies at the meeting venue. The decision of the Executive Board and Supervisory Board on the format of this year's AGM was made on the basis of the new Section 118A of the German Stock Corporation Act in conjunction with Section 26N of the Introductory Act of the German Stock Corporation Act. I am at the premises of Sartorius at Annastraße 29 in 37075 Goettingen, Germany as the venue for the AGM as defined by the German Stock Corporation Act. And I would like to welcome the members of our Supervisory Board, who are all here today. The Executive Board is also present. And I would like to welcome Dr. Joachim Kreuzburg as Chairman; Dr. René Fáber; and Gerry Mackay. We'd also like to welcome Dr. [ Matthias Reinhart ], notary public, who's office is in Goettingen, and he's taking the minutes of today's meeting. In addition, the company's proxies are present at the venue of the AGM. Ladies and gentlemen, before we move on to our agenda, I would like to inform you that there have been no changes in the composition of either the Supervisory Board or the Executive Board since the date of our last AGM. The composition of the Supervisory Board and its committees in 2022 can be found in detail in the Pages 248, 250 of the annual report. For eligible shareholders and their proxies, the entire annual general meeting will be broadcast today on the password-protected Internet service, which I will refer to hereafter as the AGM portal for all other participants. Part of this event will be broadcast live in the freely accessible area of the company's website at www.sartorius.com/agm. As in previous years, this broadcast will end after the speech by the Chairman of the Executive Board. A recording of this part of the AGM can also be viewed afterwards at the aforementioned Internet address. Now to the formalities of this Annual General Meeting. This meeting was convened in due form and time by publication in the Federal Gazette on February 17, 2023. The printout of the Federal Gazette is in the hands of the officiating notary and will be attached to the minutes. The same applies to a file copy of the Europe-wide distribution of the convening notice. In addition, I would like to point out that since the date of the publication of the invitation in the Federal Gazette, all necessary further information on the AGM has been available on the company's website at www.sartorius.com/hauptversammlung. And as confirmed that today's Annual General Meeting has been convened in due form and time in accordance with the formal requirements of the law and the Articles of Association. The company has received neither motions for additions to the agenda, no counter-motions or election proposals to be made available. Ladies and gentlemen, I would now like to explain to you some special features relating to the holding of today's AGM as a virtual AGM. Compared with the last virtual AGMs this has -- excuse me, this year's virtual AGM is being held on a new legal basis. This led to a number of changes in the process and then the structure of shareholder rights. The company has set up the aforementioned AGM portal for electronic exercise of shareholder rights. It can be accessed via the Internet at www.sartorius.com/hauptversammlung, and it's available in German and English. The personal access data was sent to the eligible shareholders or their proxies after they fulfill the requirements for participation in the AGM. The shareholders who are entitled to attend in their proxies have the opportunity to connect to the Annual General Meeting electronically via the AGM portal and to follow the entire Annual General Meeting live in picture and sound and they can also exercise their shareholder rights there via the AGM portal. They can, among other things, exercise their voting rights and make use of the right to speak and to untake information in accordance with the procedure provided for this purpose. Ordinary shareholders entitled to participate and their proxies may even now during the AGM exercise their voting rights via the AGM portal by means of electronic portal voting or grant power of attorney and issue voting instructions to the proxies of the company. The possibility to vote by electronic absentee auto grant power of attorney and issue instructions to the proxies of the company as well as to make corresponding changes or revocation will still exist via the AGM portal until the end of the respective voting in today's AGM. I will inform you in good time about this point in time. Voting during today's Annual General Meeting is no longer possible in any other way than via the AGM portal. In the run-up of the Annual General Meeting, ordinary shareholders also had the opportunity to exercise their voting rights for electronic absentee votes using the AGM portal or to authorize and instruct the proxies appointed by the company to exercise their voting rights. In addition, until the March 28, 2023 at 6:00 p.m., power of attorney and instructions to the proxies could also be submitted by letter or e-mail to the company's address stated in the invitation to the Annual General Meeting. A corresponding form was sent to ordinary shareholders entitled to participate with the access stated to the AGM portion and is also available for download on the company's website from the time of the AGM -- from the time the AGM was convened. Preference shareholders are not entitled to vote at today's Annual General Meeting. In accordance with the leave provisions, shareholders who has duly registered for the AGM or their proxies had the right to submit comments on items on the agenda in writing via the AGM portal prior to the AGM. This option was open until the March 23, 2023. Ordinary and preference shareholders or their proxies who are electronically connected to the Annual General Meeting have the right to speak at the meeting via video communication. Since the beginning of the Annual General Meeting, shareholders or their proxies have been able to register to speak and then subsequently exercise their right to speak via video communication in the AGM portal via the virtual speakers table. I will go into more detail on the procedure for requesting and giving the floor later. Motions and election proposals pursuant to Section 118A Paragraph 1 Sentence 2 #3 of the German Stock Corporation Act as well as requests for information pursuant to Section 131 of the German Stock Corporation Act statement and the right to speak. Statements may be part of our speech. Pursuant to Section 131 (1f) of the German Stock Corporation Act shareholders or their proxies may request information from the Executive Board at today's Annual General Meeting on matters concerning the company provided that the information is necessary for the proper assessment of an item on the agenda, and there is no right to refuse to provide information. Shareholders or their proxies have the right to ask follow-up questions and all answers given by the Executive Board at the Virtual Annual General Meeting pursuant to Paragraph 131 (1d) of the German Stock Corporation Act. As Chairman of the Annual General Meeting, I hereby determine pursuant to Section 131 (1f) of the German Stock Corporation Act that the right information pursuant to Section 131 of the German Stock Corporation Act may be exercised at today's Annual General Meeting exclusively, by the way, video communication via the AGM portal. So within the scope of the right to speak just mentioned, the company has also decided to set up an additional question option in the run-up to the AGM beyond the legal requirements on a voluntary basis by means of electronic communication. Within the scope of this additional question option, shareholders entitled to participate or their proxies could submit the questions regarding the agenda in tax form via the AGM portal until March 24, 2023. I'd like to point out that this voluntary additional opportunity to ask question does not constitute a right to ask questions or to receive information. The Executive Board decided on dutiful discretion whoever and how to answer such questions submitted prior to the AGM meeting. The Executive Board has decided to answer the questions submitted in advance during today's general debate. Shareholders or their proxies who are electronic connectors to the AGM can also submit a request pursuant to Section 131 (4) of the German Stock Corporation Act via the corresponding fields in the AGM portal by means of electronic communication until the closing of the general debate. Furthermore from the opening of today's AGM until the end thereof, objections to 1 or more resolutions of the AGM may be declared by the corresponding fields and the AGM portal, and the event of a refusal to provide information request pursuant to Section 131 (5) of the German Stock Corporation Act for the question and the reason for the refusal to provide information to be recorded in the minutes may be submitted. The declaration of the request shall be transmitted to the notary public in each case. The list of participants will include the shareholders electronically connected to or represented at the meeting, including those who have granted the company's proxies, power of attorney and instructions to exercise their voting rights as well as the shareholders' representatives, electronically connected to the meeting at the latest before the first vote. I will announce the number of shares held by shareholders connected or represented. Some number of shares represented by the company's proxy and the number of electronic portal votes. The list of participants and any supplements wholly made available on the AGM portal. And as matters that was the formalities. Ladies and gentlemen, I would now like to go into more detail about the procedure for broadcasting and speaking at today's AGM. If you would like to speak after the Executive Board's remarks on the agenda, I would ask you to register your speech in the AGM portal via the virtual request to speak table so that you can then exercise your right to speak via video communication. Please follow the instructions in the AGM portal. We will contact the persons who have registered for contribution via this virtual table in order to check the technical functionality of the video communication. The camera and microphone that can be accessed from the browser must be available for speaking contributions. Shareholders or their proxies who have registered for contribution via the virtual registration table will then after a successful verification of the functionality of the video communication will be activated for their contribution via the AGM portal. If the functionality of the video communication cannot be ensured, we reserve the right to reject the contribution. Those shareholders or proxies who have been cleared to speak will be called to speak in due course and will then be connected to the meeting via video communication. Please note that your contribution will be transmitted live to the assembly via video and audio. Of course, you can also register to speak in the course of the debate in the managers described. However, I would be grateful if you could register as soon as possible so that I can estimate how many speakers we can expect in order to organize the schedule. Even if you have declared your intention to make a motion or an election proposal when registering your contribution in the AGM portal, you must please present it again orally as part of your contribution. I would like to point out already now that we wanted to conduct the debate in the form of a general debate. That means we will immediately cover all items on the agenda. I would therefore ask you to address all the items on the agenda on which you wish to speak. The votes on agenda items 2 to 10 will then be taken collectively after the general debate. You have time until the end of the voting to cast portal votes via the AGM portal or to issue change or revoke proxies and instructions to the proxies of the company. I will announce the end of the voting procedure again before end. After the results of the voting has been determined, I will establish the results and announce it to you. For the sake of good order, please allow me, as Chairman of the Meeting, to make the following remarks. The AGM, in particular, the general debate, is based on free speech and we therefore refrain from preparing scenographic minutes. Only the questions asked are recorded scenographically to assist the management in answering them. Only record the freely accessible part of the AGM up to and including the speech of the Executive Board. Apart from that, however, there is no video or audio recording, therefore, in particular, no film or audio recordings will be made of the general debate or of the answers given by the administration to the questions asked. I ask the understanding that you are also not permitted to make video or audio recordings of this AGM. Ladies and gentlemen, I now have the list of participants queued until 12 o'clock. 343,543 were present, and that was [ 0.47% ] of the basic capital of the Annual General Meeting, of the -- 34 million -- 74,880,000 for basic guarantee of that is divided in as many ordinary shares and the present 32,209,987. That was 43.02% of the registered capital, and the electronic votes cast for 372,276 ordinary shares. So in total, we had 43.51% of registered basic capital were presented through electronic portal vote or through a [indiscernible] and with proxies. For now the company has ordinary shares for the value of EUR 3,230,991 and preference shares for 3,250,174. And there is no voting rights attached to that. Notary public has also received a copy of the tenants data and the list of participants. The list of participants is immediately available for inspection in the AGM portal. If necessary, supplementary will be drawn up to determine the respect of tenants. After the announcement of the change in attendance, I will also hand over the announcement to notary [indiscernible] copy of the supplementary list will be made available for inspection in the AGM portal. We will now proceed with the discussion of the agenda, starting with the report of the Supervisory Board and the Executive Board, in particular, explaining the proposals mentioned on the agenda Item 1. Agenda item 1 concerns the presentation of the adopted annual financial statements and the approved consolidated financial statements as well as the combined management and group management report of the company and the report of the Supervisory Board in this case for the financial year 2022. In this regard, I note that these documents have been accessible on the Internet at the following address, in the convening of this Annual General Meeting, www.sartorius.com/hauptversammlung, and will also be accessible there during today's Annual General Meeting. I also note that the annual and consolidated financial statements for the year ended in December 31, 2022, as well as the combined management report and group management report prepared by the Executive Board, audited by KPMG AG Wirtschaftsprüfungsgesellschaft, Hanover, the auditor selected since the last AGM and have received an unqualified audit certificate. Following its own review, the Supervisory Board approved the financial statements of Sartorius AG and the group for the year that ended December 31, 2022, as well as the combined management report and the group management report prepared by the Executive Board and the Supervisory Board in the meeting of February 10, 2023. In doing so, it follows through the recommendation of the Audit Committee, which have dealt in detail with these financial statement documents and the audit findings of the auditors on February 9, 2023. Thus, the annual financial statements of Sartorius AG have been adopted in accordance with section 172 of the German Stock Corporation Law. Therefore, in accordance with the legal provisions, no resolution is planned for agenda Item 1. Ladies and gentlemen, before I now give the floor to the Executive Board, I would like to briefly report on the 2022 business year from the perspective of the Supervisory Board. A detailed written report of the Supervisory Board is included in the annual report on Pages 12 to 16. Therefore, please allow me to focus on selected aspects in my explanations. In 2022, in this business year, a total of 6 meetings of the Supervisory Board took place. At these meetings, the Supervisory Board dealt in detail with the economic situation and the strategic orientation of the group. In particular, the Supervisory Board was informed promptly and comprehensively where the Executive Board bought all significant business transactions as well as all, as about all central issues of business, development strategy, risk situation, risk management, internal control systems and the net assets, financial position and results of operations of the company and the group. Furthermore, the main topics of the consultation were the following: various financing topics, in particular, the conclusions of a new syndicated loan agreement. Various corporate strategy topic as well as strategic initiatives and projects. The acquisition of the British company, Albumedix, the self aviation of the Supervisory Board and the adjustment of the competence profile and rules of procedure. Various topics related to Executive Board remuneration and the company's progress in the areas of sustainability strategy and sustainability programs. Further individual topics of the Supervisory Board's deliberations in the past financial year are mentioned in the written report of the Supervisory Board. I would like to point your attention to this report. Ladies and gentlemen, now I'd like to ask the Chairman of our Executive Board, Dr. Kreuzburg, to explain the 2022 annual financial statements. Dr. Kreuzburg will also discuss the development of the group as a whole and outline the prospects for the future. Dr. Kreuzburg, I would now like to ask you to give your presentation.

Yes. Thank you, Mr. Kappich. Dear shareholders and shareholders, the guests, ladies and gentlemen, I'd like to welcome you as well on behalf of the Executive Board, and I'm very glad that internationally, you're participating so lively in our general meeting. And I hope that this newly developed virtual format is actually in your own interest. I'd like to tell you about the business model of Sartorius in the first part of my speech. In the second part, I'd like to talk about the results of the past fiscal year 2022 and also direct our gaze into the future and point out future perspectives. Like I said, please let me start with the more general part. And I'd like to speak about the perspective of Sartorius. Our business purpose, our mission, as it were, is completely directed to the topic of health. Health, and I think everybody, even before the pandemic, will be in agreement with that as one of the most important global topics. What makes me say that? Well, for example, the part of the ageing population, the older part of the world population over the next 2.5 decades will double to 2.5 billion people. And there's a high correlation between age and the need for medication and medical services. Also, the minority of children worldwide has access to vaccines. So as you can see, it is still a very relevant global topic. Within this topicality, bio pharmaceutics and the bio pharmaceutical industry are central agent and are central building block of fighting ailments, diseases and illnesses and preventing them. But also there's a whole lot of challenges in this area as well. And if we want to condense it very much, it's always very strongly about time and cost. So it's very time-intensive and cost-intensive to both develop and manufacture medication. As you can see here, developing a new drug and getting it out on the market, usually costs EUR 2.5 billion. And the time the first steps in the laboratory until the rollout of the market so that the patients actually receive it takes about 10 years. Still, you have to state or maybe that's the reason why you have to state that there are many unique possibilities for therapies today that were not available a few years ago, even -- but in the beginning, they are very, very important. And so they're only available to a very small part of the patients who might benefit from them. For example, 3 examples from rheumatism, blood cancer and hemophilia. So in rheumatism, I mean, here in these 3 areas, lots of new therapies were developed. But here, an annual therapy or even where healing is possible, we are talking about millions of expenses. And that has to do with a high degree of cost inside the process chain, not necessarily the profits. Our contribution to work on these challenges and to tackle these challenges and to master these challenges are 2 or maybe 3 topics that I'd like to point out to you. The first 1 you see here. It's about the first phase of the -- well, let's call it, the value chain, yes, of the medication development. And an example from our portfolio here from the laboratory area concretely comes from or especially from the area of bio analytics. And that is that part of the laboratory area that we've built up over the past 5 and 6 years. One example is the cell selector, where you can very much significantly speed up the development of cells. I mean 5 weeks may not sound that much, but it's a 2-digit acceleration of this phase, okay? And often, it's about automation, the systematic gathering of data and the intelligent use of such data in order to be able to be able to sort out candidates that are not promising. The second example is about the production of pharmaceuticals. And here, the point is often to get bigger output and a bigger proportion of usable output. At these 2 things, you can see how substantially the time can be reduced. It's the first example. Actually, a product that came into a group of companies via an acquisition. And the second example below is one of a very successful own development. And in both cases, we have significant time reductions, and those time reductions translate into cost reductions in the production phase of a bio pharmaceutical drug. Well, I said 2 or maybe 3 things we can contribute to mastering these challenges. And the third point is actually resource usage. The technologies we offer, and you know that are to a considerable point, I mean, flexible, disposable technologies that allow for conducting experiments and also using production sites and changing production sites in a very quick and easy way. Compared to the previously dominating technologies that were like fermentation system based on [indiscernible] steel, here, the water and energy consumption could be reduced by 30%. It depends, of course, on the individual process, but it shows how the ecological footprint have reduced for our clients. So we can say that on this journey, we contribute to more good health, to more people. And this the core of our business purposed addresses one sustainability goal. Sustainability, as you know, is more than climate protection, even though climate protection, for good reason, is placed in the center of today's current debates often. But the United Nations have, for good reason, established and defined 17 sustainability goals. And the third one is good health and well-being for the entire humanities, of all members of humanity. And so with our business purpose, we are completely addressing 1 of these sustainability goals. Now due to the big need for improvement, but also the big potential for improvement in today's situation in terms of time and cost and due to the dynamic development within the industry overall, innovation are very crucial. So the innovation that we contribute are also crucial to our own further development. And for many years, our activities in that have been based on 3 pillars. On the one hand, it is our own developments in areas where we are very competent, for example, bio-analytical products and quite a few more but we also are entering into partnerships into corporations, as you can see in the middle and the lower layer. You see here, for example, new materials, but also 3D cell printing technology, where we are partnering with the top experts around the globe that can be other companies. It can be academic institutions in order to be able to generate innovations in the best and fast possible way. Then the third pillar is acquisitions. That may sound surprising. But for us, acquisitions are, in fact, innovation oriented and innovation driven, not so much volume driven. Of course, we want to promote and support our growth, but it's not so much of the size of such acquisitions, but the degree of innovation. And here, you see a few examples of companies that we've acquired recently, I mean, in the last year. To finish this chapter, I'd like to point out our business model to you. And I think the business model is very interesting, and it strikes a good balance between stability on the one hand and potential for growth on the other. On the one hand, because we, with our business can actually address the entire value chain of our clients. So there is no great dependence on any one particular process step. So it's not only the value chain, but also the process side is very big, but we have a high degree of recidivist turnover, if you want. I mean, repeat sales, if you will. I mean, we have a high degree of repeat business and so a high stability. And that's also very interesting in terms of profitable growth. You see 18% of average growth over the past decade. And economies of scale that are related to that. That means nearly 1.5 percentage point increase in EBITDA margin per year over the past decade. Ladies and gentlemen, I'd now like to talk about the fiscal year 2022 in a little bit more detail. I think you can say that 2022 was a very successful year. And again, it was a very intense year full of work. You can summarize it under the room of saying, well, on the one hand, you say, again, we had a great increase in sales, 15% to EUR 4.175 million. And again, moving into a geographical split that are more or less harmonizing, 37% were made in the Americas, 37% in Europe and 26% in Asia. And this increasingly also reflects the proportion of the markets we address. Slightly different growth rates in the respective areas in the past year, but that has to do with basis effect that played a role here, a high degree of corona vaccine production in 2021, also in 2022, but also decreasingly took place in Europe. The EBITDA margin increased to 20% to EUR 1.4 billion and also a strong increase in the result per share, EUR 957 or EUR 958 for preferred soccer carbon stock. So the second point, high profit margin. And the third point is, as you see it in the header, is a normalization has set in. And since Q3 2021, we're talking about that. When we pointed out that the very high and sometimes, I mean, we are talking about increases of 50% increases per quarter in order intake were not only based on the high additional demand for corona vaccines or also corona test, but a significant part of that was that customers of ours actually ramped up their warehousing capacities and the stocks that they hold in order to protect themselves against disruptions in the supply chain. It was clear that this effect would turn to the other side again, and this process actually started around the middle of last year, and it's still running. I will come to that again in a minute. So order intake is lower by 10%, EUR 4.007 billion cleared against exchange rates. And we reported that last year. And last year already, the direct corona turnover was EUR 220 million with the producers of vaccines, corona vaccines, the year before, it was EUR 500 million. So you have to see that our 15% turnover increase took place although the corona business was already plunging. Now 2 divisions that we have here, both of them with above average development, compared to the market and as you can see that one you -- take a look at our competitors numbers. Bioprocess Solution increased by EUR 3.3 billion. And so they've actually, you see here the effect that we told about, the order intake, I don't have to repeat that. The operative EBITDA clearly increased to EUR 1.2 billion margin, 21%. The operative margin was EUR 35.7 as per we forecast. Lab Products & Services division, also very good year, EUR 848 million, plus 12% discounting currency effects. Order intake increased by 7% to EUR 885 million. The EBITDA, the operative EBITDA was EUR 222 million. So the operative margin increase was 26.2%. So that's also hit the goal, as you can find a whole lot of more results also with cash and cash flow and so in our annual report. But I don't want to refer on this in detail because you can clearly look that up in the annual report and you can also get it online in order to get the very detailed information. Now our proposition to pay our dividends, which is later on, our agenda point 2, the appropriation of the retained profit. We proposed to actually increase the payout by EUR 0.18, that is about 15%, which would mean EUR 1.43 compared to EUR 1.25 for the carbon stock. And EUR 1.44 compared to EUR 1.26 for the preferred stock, which would mean the total payout is slightly less than EUR 100 million and the quota of 15%, very small changes only to the previous years. During the past year, again, we had a very intensive and very extensive investment. So EUR 503 million in all, 12.5% is our investment quota. And that took place in a whole number of locations. So with one exception that I will point out to you in a second. We are developing existing locations. And particular exception of that is South Korea, where in Songdo, near to Seoul, we are building up a new location from where we will be serving the very important South Korean and Southeastern Asian market with the exception of China. And China, for many years, we follow the China for China approach. The products we produce for China is nearly all produced inside China. We are exporting into China, but hardly anything out of China. And what is important for China as well is often, it's an extension of production, substantial extension of production capacities even. But we're also investing in the research and development infrastructure to a great degree. With all these investments, it also plays a role that increasingly, we're also investing in renewable energies or we're trying to increasingly use renewable energy sources. We see 2 examples here. On the right, it's Bangalore in India, which is, of course, very good for using solar energy. And on the left-hand side, in [indiscernible], we make good use of the fact that here, we have geothermal sources by actually drilling deep into the earth, and we are using that as much as we can. Now 1 year ago, we said that our overarching sustainability and climate protection goals is through to the year 2030. As you can see in the graph, it means that for all 3 scopes, as you call it, which means the entirety of the emissions that are spread out across the entire value chain of our products. I mean not only that, which happens inside their own fabrication and manufacturing facility, but also everything that comes first and what happens after, we set ourselves the goal of 10% intensity reduction per year. Intensity means CO2 equivalents per turnover. Because I think there's the most realistic and most tangible number that you can actually develop. And this reduction goal is more ambitious than that the European Union has actually set for themselves. And this, of course, accumulates over the years, which means by the year 2030, compared to the base year 2019, the emissions will have reduced by precisely -- pretty precisely 70%. I mean what happens in our own factories. We have 0 emission goal, if at all possible. And that's possible for 99%. There's only a very small fraction of processes where it's not possible. But for all the others, we go down to Europe. It means that we take a lot of cash in our hand to be very idiomatic about it. And is about 1% per turnover. Before, it was 0.5 turns. And these are also part of the medium-term remuneration of the Management Board here. Increasingly, we're also focused on topics like our ecological footprint, especially water and material efficiency. Water plays a role with part of our production processes. Here, for example, we'd like to see the membrane production, where we have a number of initiatives running to reduce materials. Also material efficiency, talking about plastics, not only in packaging, but plastics for us is often a functional product or a functional material. And here, too, we are thinking about how we can reduce our footprint further. And now the coming 3 slides, I'd like to take a look to the very important personnel. And in many ways, this is critical for our success. I mean, clearly, so not only because of demography, which means that only in inverted commas, you have a lack of well-trained personnel, but all staff and also because innovation is also a result of what people do. And so it's always to have the real people on board. But that also direct my view to the quantitative side. As you can see here, over the past years, we've grown by 2,000 people per year to now nearly 16,000 employees by the end of the year 2022, which means also not only an incredible amount of work on the HR department, but also on staff integration and on-boarding. We do that with a lot of passion. We're offering a lot of internal development possibilities. More than half of our leadership positions can be filled internally. And I intensively told about that the demand situation is normalizing. And now on the quantitative part of the staffing side, we're also taking a look at efficiency, integration and also streamlining capacities as we've already communicated by the way. And streamlining also means a moderate reduction of headcount in certain areas, but also especially in contract workers which is not necessarily reflected here in these numbers. I'd also like to talk a little bit about diversity among our staff. You can take, of course, different perspectives. One would be internationality. Nearly 120 nationalities are working first worldwide. But also if you take a look at individual locations, you often have a very internationally diverse staff. It's a pretty young structure actually due to the high hiring campaigns over the past years. The average year of 39 years is pretty young for a company that's been around for so long as Sartorius has. And then also, what is important, not only for the political discussion, but also for us, ourselves as we are here, the equality of opportunities for men and women. And we have a high proportion of women in leadership, 47% of female leadership personnel at the first level below the Board. And again, the internal development is in our focus here. Sometimes it means on the timeline, how fast can the improvements we made, but they are also much sustainable. Internally as well as externally some information on that. We do have year surveys of all of our employees. The next one will start in a couple of weeks. And we ask them a number of questions over and over to be able to compare the answers. And we have good, consistent results. For example, with regards to how proud people are to work for us and how much they like working for us. And another an important factor are external feedbacks that we get on the most important platforms and how we compare to other companies. And I think in general, that gives a positive image. Coming now to the end of my report on the past business year, I would like to talk about the development of the share prices in the last year. And here, not really surprising, we've seen certain declines, 38% -- 33% in the preference and ordinary shares. Why is that not surprising? Well, on one hand, we had a difficult market environment in the last 13 months now. And there was an increase of the interest rates and for growing companies that is especially important in how they are evaluated. And you also see the company comparing indices have double-digit declines. And since the mid of 2020 to end of 2021, at least we had high valuation factors in the bio pharmaceutical sector and in life sciences research companies, and this high evaluation factors have had to normalize. That was to be expected. And the other thing that's important for everyone who invests more long term is that the development of Sartorius share compared to our competitors can be seen long term really strong 3-digit growth compared to quite a moderate single-digit growth in the indices. So it's always important what kind of time period you look at. No comment on the end, I would like to look at the market trends and our expectations for the future and opportunities for the future. First of all, we can say that the market that we focus on will continue to have strong growth drivers. If you see on the left-hand side, some of them are listed. We still have good R&D pipelines, that are very broad now. We're doing only focus on monoclonal antibodies that used to be the main modality for cancer therapies that were so successful over the last years, but we also have the new modalities, gene therapy, cell therapies, so kind of a broad deep pipeline and then bio-similars has been an important role in increasing role in single-use products, still penetrating the market and innovation, as I already mentioned, the dynamic, the impetus that drives growth is still part of the picture. If you look towards the right of the side, you can say that our portfolio, which we keep growing and also with our global reach, we're in a very comfortable position. We can meet our customers' needs. We have a strong team out there on the market or also internally in our processes. So we think that we are ready to seize the opportunities that come from this market growth, is expected does want to go on 2023. On average, that's important to say. Because as already said, we do see lots of one-off effects, lots of ups and downs in these years. And 1 word on that. Of course, there are changes at 1, 2 or 3 years ago, were not expected. For example, the globalization, which is happening in some areas and can already be felt in some sectors. We can't -- let's tell you how much that will be the case in our markets. For example, what about the trade between the Western world and China in the future, will it remain open, will there be some roadblocks. And now I'd like to point your attention to the ups and downs around this basic growth curve. Here, once again, it's important to look at the right timeframe. In the last 2 or 3 years, we've seen exponential growth rates, especially in the years 2020, 2021, strong double-digit growth, especially in the [indiscernible] process sector. And I have already pointed out that on top of the strong decline that has to do with COVID business, the COVID test production and the COVID vaccine production. Another important topic was the -- were the inventories, what this curve shows us that, this is a yellow line. That is our projected and I think very realistic growth curve. In 2019, we have forecast that for the time period 2019 to 2025, and then the wide bars are the actual results on 2021 and 2022. We were above that quite by -- quite a lot. At the end of 2022, we are 1 year ahead of our midterm planning because of these one-off effects, not because the basic trends changed. They're also very positive, so very strong. So that means that now in 2023, we see a return to this positive and basic growth path, but it also means that the curve will flatten somewhat. Give you a couple more numbers. They were also published. But still kind of show the trend that I'm talking about. In the period before 2019, starting in the 2010 years, we had an average growth of 13% and then we were 19%, 25%. Now we want 18% if you factor out price effects. So we already have a faster growth between 2019 and '22. So the first half of this period that we're now looking at, we were at about 30%. That shows again how much this initial first phase of this midterm perspective is ahead of schedule. And you really need to keep that in the back of your mind if you now look at our forecast for 2023. This is displayed on this slide. At the beginning of the year, the end of January, we've published that we do expect a slight growth in and stable margins. That means sales increase in a low single-digit area. And if you factor out the extra COVID business, which will be close to 0, then it would be high single-digit growth, because there will still be a decrease in our drawback -- the drawdown in inventories. Inventories were built up, but that already played a role in the end of 2022 and it will also still play a role in the first half of 2023. So we expect the 2 halves of 2023 to be very different. And kind of in lab products and service, we have a moderate high single-digit growth and then high single-digit growth if you exclude COVID-related businesses. And now I would like to talk to you about our ambitions for 2025. For the first time in 2019, we have to find some numbers. I mean that was EUR 4 billion of lower margin than the one that you see here, then we have already increased our target to EUR 5 billion because we've seen that the basic trends were stronger than expected. And now we increased that by an additional 5%, which is inflation adjusted because we have adapted our prices in both factors, BPS and LPS, EUR 4.2 billion and EUR 1.3 billion. And our increased margin targets were not increased again, 36% for BPS, 28% for LPS, 34% for the group. So I do really think that's a promising positive outlook for the future. Ladies and gentlemen, I would like to thank you for your attention, and I am looking forward to the general repeat and your questions. Thank you very much.

I would like to thank Dr. Kreuzburg for his presentation and the explanations on the annual financial statements 2022, the current developments, as well as the future prospects of our group. This concludes the freely accessible live transmission on the Internet. I would like to thank you for your interest in our company. [Statements in English on this transcript were spoken by an interpreter present on the live call.]