[Non-English content] Ladies and gentlemen, shareholders. On behalf of the Supervisory and the Executive Board, I would like to warmly welcome you all. I hereby call this annual general meeting of Merck KGaA. Pursuant to Section 23, Paragraph 1, Sentence 1 of the Articles of Association, I am sharing the annual general meeting. First, I would like to welcome our shareholders and shareholder representatives. I am pleased by the great interest you are showing in our company by participating in the virtual AGM. Let me also welcome the media representatives following our AGM on the Internet. I would have loved to welcome you all in person. However, this year again, it is not possible under the prevailing circumstances. Due to the ongoing COVID-19 pandemic, our AGM, again, is not taking place at Frankfurt Jahrhunderthalle, but as a virtual event without physical attendance of shareholders and their proxies. In view of the unchanged spread of the coronavirus, to keep everyone safe, we have to limit the format of the AGM to this virtual event. We are aware of the fact that a virtual general meeting entails some restrictions of shareholder rights. In particular, you cannot enter into a dialogue with the Executive Board as usual during the general debate. In order for shareholders to exercise their rights adequately also in our virtual AGM, the company offers a number of options which we have even expanded compared to last year's AGM. Particularly, shareholders and their proxies have the option to submit statements to the company by April 2021, which we have published in the Investor portal. All the video statements will also be shown during the AGM. In addition, registered shareholders were able to submit questions to the Executive Board up to one day before the AGM, and we will answer those questions in detail and comprehensively after Mr. Oschmann's speech. We published Mr. Oschmann's speech as announced in the invitation to the AGM already on April 15, 2021, so you could refer to it for your questions or statements. This, we hope, will improve the exchange with you. You were able to exercise your voting rights already prior to the AGM, and you may continue to do so today until I close this feature after all questions have been answered. Until then, you can also still grant proxy authorizations and give instructions to the proxies appointed by the company. If you have any questions regarding the Investor portal, I would like to ask registered shareholders to contact our hotline by phone or email. Please find the contact details on the Investor portal or refer to your screens now. The hotline will be available until the end of this AGM. Due to the current official contact restrictions, we have limited the number of people who are present here to only a few. All physical attendees have been tested for a COVID-19 infection with a negative result and will keep the necessary distance from one another. We have implemented a strict hygiene and safety concept in order to safely conduct this AGM. Alongside me, the Executive Board members are present: our Chairman, Mr. Stefan Oschmann, the Deputy Chair, Belén Garijo, CFO, Mr. Marcus Kuhnert, as well as Kai Beckmann, the CEO Electronics, Mr. Peter Guenter, CEO Healthcare, and Dr. Matthias Heinzel, CEO Life Science. The members of the Supervisory Board who are not present will follow the meeting online and, if required, can contact me or the other members of the Executive Board. This does not apply to Ms. Gabriele Eismann, who apologizes for being indisposed today. I would like to welcome the officiating Notary, Mr. Albach, who will record the minutes of this General Meeting, and Ms. Friederike Rotsch, the Head of our Group Legal Department. Last but not least, I would like to welcome the proxies. A warm welcome to all of you. Ladies and gentlemen, I would like to first address the formal matters that are to be handled in accordance with German law and the Articles of Association before we deal with the agenda. Today's virtual AGM was convened via the announcement of the agenda in the German Federal Gazette on March 11th, 2021, in due form and within the stipulated period. A printout of the invitation from the Federal Gazette will be attached to the minutes by the notary. The information stipulated by Section 125 of the Stock Corporation Act was submitted by the Executive Board within the stipulated period and as prescribed by law. Moreover, a notice of this AGM was forwarded to those media that can be assumed to disseminate information throughout the entire European Union. The annual financial statements for 2020, including the proposal of the Executive Board for the appropriation of net retained profit, the consolidated financial statements, the group management report, and the report of the Supervisory Board have been available on the company's website since the date this AGM was called. Because the company has not received any motions to supplement today's agenda, only the agenda as published must be dealt with. None of the shareholders did avail themselves of the opportunity to submit countermotions prior to this AGM. Since the invitation of the AGM was published, the documents and information specified in Section 124a of the German Stock Corporation Act have been available on the website of the company. One copy of each of these documents has been made available to the notary. I hereby ascertain that this AGM was called in due form within the stipulated period. The compulsory list of participants is maintained by electronic means this year. There, the proxies appointed by the company and present here as well as the shareholders they represent will be entered. Depending on the proxy authorizations granted or revoked in the course of today's AGM, the attendance will vary. I would like to announce the current presence as it is apparent from the list of participants for the moment. I will inform you again of the presence after determining the voting results. Of total share capital of the company amounting to EUR 168,014,927.60 divided into 129,242,252 non-par value shares, 89,496,271 non-par value shares are represented with an equal amount of votes. This corresponds to 69.4% of share capital. Beyond that, we have received absentee votes of 1,092,468 non-par value shares corresponding to 0.85% of the share capital. All shareholders registered for the AGM were able to exercise their voting rights already prior to this AGM, either by absentee vote or by instructing and authorizing the proxies appointed by the company. Right up to the beginning of the voting procedure, shareholders may grant proxy authorizations and give instructions to the proxies appointed by the company via the Investor portal or exercise their voting rights by absentee vote. I will expressly point out the last opportunity for you to cast your vote and give instructions when the moment has come. Pursuant to Section 23, Paragraph 2 of the Articles of Association, it is my duty as Chairman of the AGM to specify the manner and order of voting. As at past AGMs, voting will be based on the addition procedure. This means the votes cast in favor of and the votes cast against the proposed solutions will be counted. Abstentions do not have any impact on the result and are therefore not counted separately. Once we have covered all agenda items, we will take a vote on all of them in one go. In accordance with the COVID-19 Act, properly registered shareholders were able to submit their questions via the Investor portal until the end of April 21, 2021. We will answer the questions submitted after the speech of the Chairman of the Executive Board, Mr. Stefan Oschmann. We will answer all questions received, and we will answer them in as much detail and just as comprehensively as at an AGM with physical presence. We will mention the names of the persons asking the questions only if they request this. Please note that not only the registered shareholders can follow this virtual AGM live, but the full AGM is also being transmitted to the general public via the internet. However, after the end of the AGM, only my introductory remarks, the report of the Supervisory Board, and the speech of the Chairman 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. You have today's agenda along with the proposed resolutions by the management on Agenda Items 2 to 10. Let me first start with Agenda I tem 1, presentation of the annual financial statements 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 of the German Commercial Code for fiscal 2020 and the report of the Supervisory Board. I ascertain the following documents have been and remain available on the company's website since the date on which the annual AGM was convened. The annual financial statements of Merck KGaA, as well as the combined management report, were audited by the KPMG AG Wirtschaftsprüfungsgesellschaft in Berlin. The audit did not yield any objections. The auditors issued an unqualified audit opinion on the annual financial statements and the combined management report for Merck KGaA. KPMG audited the calculation of Merck KGaA's participation in the profits of E. Merck KG in accordance with Article 27, Paragraph 2 of the Articles of Association. Merck KGaA prepares a consolidated financial statement for the Merck Group in accordance with the International Financial Reporting Standards, as well as the supplementary rules applicable under the German Commercial Code. In addition to the combined management report, KPMG also audited the consolidated financial statements and the combined management report. 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 the 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, the Supervisory Board examined the annual financial statements of Merck KGaA, the consolidated financial statements, and the combined management report, as well as 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 26, 2021, 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 turn to the report of the Supervisory Board. This report is available to you on pages 200 and 204 of the annual report for 2020. Let me, however, highlight the following here. Four Supervisory Board meetings were held in fiscal 2020. The Executive Board provided the Supervisory Board with regular written and verbal reports on the business performance of Merck KGaA and the Merck Group. In particular, the Supervisory Board was informed about the current and potential future impacts of the COVID-19 pandemic, the market and sales volume situation of the company against the background of macroeconomic development, the financial position of the company and its subsidiaries, along with their earnings development, as well as 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 sector. Furthermore, the Supervisory Board dealt with the report of the financial statements auditor on the half yearly financial report. Apart from the audit of the annual financial statements and the latest business developments, the focus of the Supervisory Board meetings was on the COVID-19 pandemic, as well as strategies, concepts, projects, and corporations by Merck in order to deal with the pandemic, but also the regular reports by internal auditing, as well as reports on compliance and data protection. The Supervisory Board also dealt with the work of the Research and Development Committee of the Board of Partners of E. Merck KG. Additional important Supervisory Board topics included the organization of the virtual annual general meeting, the results of the self-assessment, the auditor rotation, admissible non-audit services by the auditor, the company's risk management, as well as corporate governance developments. Ladies and gentlemen, that is all from my side for now. I now turn the floor over to Stefan Oschmann, the Chairman of the Executive Board of Merck KGaA. He's going to report to you on the past fiscal year and speak about the company's future business developments. The floor is yours, Mr. Oschmann. Dear shareholders, I would like to warmly welcome you to our 2021 annual general meeting. Thank you very much for your interest in Merck. This is already our second virtual event of this kind. The premiere took place last May. The pandemic back then was becoming less intense in Germany. That was a few months before the so-called second wave. It is a challenge for all of us, our society, our economy, and especially patients and medical personnel. No doubt, 2020 was a very difficult year for the world. At the same time, it was a year of science and of research. It was a year of collaboration. Scientists are collaborating during the pandemic more closely than ever before to develop therapies for patients all over the world. They developed vaccines against the virus across borders in record time. Altogether, more than 260 vaccine projects in total have been initiated according to the estimates of the World Health Organization. This is tremendous. Developing vaccines and getting them approved usually takes up to 10 years, but for COVID-19, it took just a few months. That is an impressive achievement. Multiple vaccines have now been approved in the European Union and the United States and in other parts of the world. We made significant contributions to those approvals. More about that later. One thing is certain, the global community has made important progress, first and foremost, thanks to science and research. Crises have created new prospects. Individual spots of light became rays of hope. That was also the year 2020. The pandemic showed that science and research are the engine of progress in our society. Today, I will report to you on how Merck is helping to shape this progress today, tomorrow, and after the pandemic. We have many reasons to be confident. I will also talk about those. Today's annual general meeting is my last one as Chairman of the Executive Board and CEO of Merck. I will later take a look somewhat further back over the last 10 years. How has our company changed during this time? I will say this now, today, we are benefiting from this transformation, particularly during the current crisis. Last year, we proved our strength in a very demanding environment, despite all the turbulence. Our figures show this clearly. In business terms, 2020 was another very good year for Merck. We achieved superb results. Our net sales increased organically by 6% to a total of EUR 17.5 billion. We thus not only achieved our targets, we exceeded our expectations. Why were we successful? Because we have the right products? Yes. Because we set the right course? Yes. Because customers and patients trust us? Yes. Yes to all these. Above all, because we have superb employees who are doing fantastic work for Merck. Almost 60,000 people every day around the globe. Their dedication was and is unique, especially during these difficult times. Coming into work in production on site, despite the challenges incidents figures, because it's a matter of manufacturing life-saving medicines, as well as products needed for vaccine production or to advance digital solutions, especially now during the pandemic. This is all the more important. This is what has been driving our people for more than one year. Wherever possible, we made adaptations allowing employees to work from home. Even before the pandemic, Merck pursued new avenues here, and this is now paying off. It hasn't been an easy time, as everybody who is caring for children and working at the same time knows. We are getting through this together. All of us at Merck, during a crisis, the true meaning of pulling together is revealed. I would like to cordially thank all our employees, also on behalf of the entire Executive Board. Our workforce is at the heart of our success. Our business model is a further important success factor. We are building on three strong business sectors, all of which stand for innovation and through which we operate in attractive markets. We initiated this very early on. We made far-sighted strategic decisions instead of being forced to do so. We put the roof on before it started raining, then the storm came. We weathered it well. I am confident that this will continue to be the case. Our ambition remains unchanged. We want to become the leading science and technology company. In 2020, we generated the strongest growth in three areas, medicines for difficult-to-treat diseases, excipients for the production of vaccines, and materials for the manufacture of microchips. This is made possible by cutting-edge science and first-rate scientists. Through their work, they have enabled progress around the world and enabled us to achieve growth. I don't want to conceal the fact that we weren't completely unfazed by the pandemic. Among other things, this was due to the closure of fertility clinics. Couples who wanted to have children could not receive fertility treatment. Sales declined here in the second quarter. Research laboratories had to close, which is why we sold fewer chemicals and laboratory tools in the first half of the year. At the same time, demand for automotive coatings and cosmetics declined. We also operate in these markets. It's also true that individual businesses have reached their pre-pandemic level again. What does this mean for the bottom line? Our strategy has paid off. Our sales and earnings reveal this. At the same time, we have shown a high degree of cost discipline. This is also paying off in the most literal sense. We reduced our debt more quickly than planned. This was important after the acquisition of Versum Materials. It gives us room for maneuver so that we can make crucial investments in science and research, indispensable for us. Our development is reflected in the capital market's response. The Merck share price increased by 33% last year. That is further evidence of our success. It shows what makes us stand out, reliability, continuity, prospects, and above all, growth. As Merck shareholders, you should share in this success. We therefore propose to the annual general meeting today a dividend of EUR 1.40 per share. Please allow me to take a look at the individual business sectors. In our healthcare business, patients are at the center of everything we do. Our aim is to improve, prolong, and help create life. This is possible thanks to innovative medicines and therapies, above all for serious diseases. Our oncology medicine, BAVENCIO, is one example. We received further approval for it last year in the United States and in Europe for certain forms of urothelial carcinoma. MAVENCLAD is used in the treatment of multiple sclerosis, a disease of the central nervous system. In 2020, it was approved in additional countries. It now has more than 80 approvals globally, including in the European Union, United States, Australia, Canada, and Switzerland. BAVENCIO and MAVENCLAD are both making a growing contribution also in business terms. Their share of organic sales is increasing. We are also making progress with the development of additional medicine. For instance, with the active ingredient evobrutinib. We are developing it for the treatment of relapsing remitting multiple sclerosis. Another example is the active ingredient tepotinib. The Japanese regulatory authorities approved that medicine in 2020. We are commercializing it under the name TEPMETKO. Physicians can use it to treat certain forms of lung cancer. It was the first regulatory approval of this kind anywhere in the world. This year, TEPMETKO was also approved in the United States. Developing new medicine offers tremendous opportunities. At the same time, it harbors risks. It's all part of the process. One example is bintrafusp alfa, an innovative immunotherapy that we developed in-house. It is designed to help the body's own response to fight cancer. We are currently investigating the efficacy of the treatment in various studies. We decided to discontinue one clinical trial based on a recommendation from an independent committee that monitors the data from the study. Another study has ended, but multiple other studies are still underway. We believe in our ambitious goal. We aim to generate EUR 2 billion in sales of new products from our healthcare business sector next year. This will be a key growth driver for Merck. At the same time, we want to continue to drive profitable growth with products from our core franchises. For example, in general medicine and fertility. This is also one of our priorities. The preconditions for this are good. Our research work is very promising. Thanks to our collaborations, we will become even better. Take, for example, our recent in-licensing agreement with Debiopharm of Switzerland for the drug xevinapant, which we plan to develop further and commercialize. xevinapant is currently being investigated in a clinical study for use in treating head and neck tumors. We already have the right products on the market today and in development for tomorrow and beyond. Our healthcare team is highly motivated. And with Peter Guenter, we have the right person leading this business sector. He's an expert with superb knowledge of the pharmaceutical industry. Peter Guenter joined us at the beginning of January. I would like to warmly welcome him as a member of the Executive Board. Let's move on to Life Science. Here, too, we have obtained reinforcement. Matthias Heinzel assumed responsibility for this business sector on April 1. We are pleased to welcome him as an International Executive with proven experience. Peter and Matthias, I wish you both every success with these exciting tasks. Our mission in Life Science is clear. We support scientists in their work through new product services and technologies. We are a key supplier to the global research community and a close partner to leading scientists. Globally, we rank among the top three companies in the industry in terms of sales. Our portfolio comprises more than 300,000 products, including laboratory tools, antibodies, and the precursors needed for biopharmaceuticals. Demand for solutions to manufacture pharmaceuticals is unabated, not least due to the pandemic. This area of business remains our key growth driver. Our colleagues are working day and night to meet the strong demand. New shift models have been introduced that enable us to make even better use of our capacities. Above all, however, we have made additional investments in order to manufacture even more urgently needed products. Take single-use bioreactors, for example. They are crucial when it comes to manufacturing vaccines. We have invested considerably to expand our production output in the United States. In addition, a few weeks ago, we also announced the construction of an entirely new production facility at our site in Molsheim, France. Thierry Breton, EU Commissioner with responsibility for vaccine development, was present. This shows the importance of what we are currently doing. Think of membranes and filters. Membranes are important components of filters, which ensure sterile drug production. We have also invested in this technology, both in the United States and at our global headquarters in Darmstadt, Germany. A EUR 140 million state-of-the-art membrane plant is currently being constructed here. This is money well spent. An investment in cutting-edge technologies that the world needs. We will remain a strong, innovative, and reliable partner for our customers, offering them solutions that suit their needs. Our new M Lab Collaboration Center in Shanghai is the latest example. We opened it last July. It is the ninth of its kind and the largest in the world. Customers can optimize their production processes here in pilot projects. They can try out new ideas before implementing them on a large scale, saving both time and money. This is particularly important in China, where their biotechnology market is growing rapidly. Research in Asia is setting new trends, for example, in cell and gene therapies, which can improve the treatment of serious diseases. The same applies to digitization. The laboratory of the future is more connected than ever before. Data fuels research, and data analysis offers tremendous advantages in terms of competition, and above all, when it comes to helping patients. These are just two of many markets with a promising future. We intend to and will play a leading role in China and around the world in the future as well. Let's move on to Electronics, our third business sector, and a business that is very exciting and rewarding because it is decisively shaping digitization. Why? Our products make it possible to manufacture microchips, for example, today. They are practically ubiquitous. New applications are emerging each and every day. This business sector also includes our business with liquid crystals and OLED materials, which are used in displays. We are the market leader here. We supply technologies to other companies so that we can advance digital living together, especially in the semiconductor market, where we also hold a leading position. As you certainly know, this business sector was called Performance Materials until recently. The renaming to Electronics is a clear sign of our strategic direction. This is a logical step as our sales show. Today, almost 90% of our sales in this business sector are generated in the electronics market. This is thanks not least to our acquisition of Versum Materials. Many colleagues have already been working together very successfully for months without ever having met in person. Digitization also makes this possible. We make an important contribution to technological progress. Take the Internet of Things, for example. An increasing number of objects contain sensors that are connected to the internet. Think about autonomous driving. Microchips are an essential component everywhere. We are now approaching the limits of what's physically possible when it comes to the development of semiconductors. Pioneering materials, and thus our contribution, will become all the more significant. There are many indications that demand for semiconductors will remain high. To name just one example, even after the pandemic, many of us will continue to work remotely. People are equipping themselves for this. It is clear to me that a great deal of potential exists here. We are well on the way to unlocking and leveraging it. We are obtaining new orders, and we are continuing to invest in the growth of our business. Here, too, it's worth looking at China or at Taiwan, Korea, Japan, the United States, or Darmstadt. We have invested in all these places, for instance, in new technology centers for semiconductor and OLED materials. At Merck, we are focusing on groundbreaking new technologies, for example, on the computer of tomorrow. Among other things, this technology is based on the laws of quantum mechanics. This makes it incredibly fast. Another research field is the use of artificial intelligence, for instance, to develop new medicines even faster. Ladies and gentlemen, we are proud of what we have achieved together in recent months, and we remain optimistic. The businesses that were impacted by the pandemic have been recovering since the second half of 2020. We expect that this development will continue worldwide. What does this mean for our expectations for the coming year? We forecast strong organic growth of sales, and we predict the same for earnings before interest, taxes, depreciation, amortization, and adjustment. We expect that the recovery will continue. What makes us optimistic is that more and more vaccines are available and more and more people are getting vaccinated. As a science and technology company, we're not only contributing to the fight against the pandemic in numerous ways, we are convinced that vaccines are indispensable to help protect people's health and to effectively contain the coronavirus. Imagine if we didn't have any vaccines and what the global situation would be like then. No, we better not imagine this. Vaccines will make it possible to restore the stability of society and the economy. I firmly believe in this. Nevertheless, our forecast is overshadowed by greater uncertainty than in normal fiscal years. That's clear and something we've learned in 2020. The fight against the pandemic is not over yet. We must be prepared for the unexpected. That's why as a science and technology company, we're helping to overcome this crisis in many different ways. We're collaborating closely with partners around the world on the development of more than 50 potential vaccines, including the vaccine developed by BioNTech. It is based on the so-called mRNA technology. A vaccine strengthens the body's own immune response to pathogen genes. With mRNA, this does not happen through attenuated or inactivated viruses. Instead, the cells receive genetic blueprints for a protein, meaning a component of the virus. The cells then produce this protein, the body elicits its response to the virus. It's a complex and entirely new process, yet highly effective. Studies clearly confirm this, which is not surprising since researchers have been intensively working on this technology for many years. Recently, we strengthened our strategic partnership with BioNTech. We're united by a firm belief in mRNA technology. This also applies to oncology and immunology, in other words, therapies for cancer and disorders for the immune system. Our contribution to this technology is significant. We're a key supplier for raw materials. Only very few manufacturers can produce large quantities of special types of fats, so-called lipids, in top quality. These are essential for vaccines because they encase the sensitive mRNA as it is transported into the body. In other words, without lipids, these vaccines would not be possible. That's why we're working together with BioNTech to accelerate the delivery of these raw materials, especially now, when it's essential to manufacture as much as possible. We'll also increase the quantity of lipids we produce by year-end. This involves complex processes and technologies. Globally, only very few companies are equipped to do so. In addition, we recently acquired AmpTec, a company- based to manufacture mRNA. This important acquisition will additionally strengthen our expertise in the field of mRNA. We also supply raw materials for more than 35 COVID-19 testing solutions, and we're supporting the development of more than 20 therapies to fight the coronavirus, always in collaboration with strong partners. The pandemic also has shown that we will only create new prospects together. That's why we're building on partnerships, for example, with the European organization, CARE. This is a partnership between research industry and the public sector, and it's the largest project of its kind in Europe. Its aim is to accelerate research into the coronavirus. We are also conducting coronavirus research in our own laboratories. We're currently investigating the efficacy of our own compound M5049, which could prevent a dangerous immune response in patients with COVID-19. Ladies and gentlemen, these contributions are important to us. They are part of our responsibility, but none of them would mean anything if production operations came to a standstill during the pandemic. We have done everything possible to prevent this from happening. Why? Because we know that we're needed more than ever. Patients, scientists, and customers rely on us day in, day out. We've therefore taken extensive measures in order to protect the health of our colleagues on-site as best as we can. We've kept our production activities and supply chains up and running. We're very proud of having successfully accomplished this feat, which is only possible with a strong team. We are very happy that the number of infected employees has remained comparatively low. Yet, we call to mind today all our colleagues at Merck who have fallen ill. Especially to employees who died due to the pandemic. We will honor their memory. They remind us to take the dangers seriously. We're protecting our workforce, we're continuing to work in a focused manner, and we're driving our strategy for what those were and are our priorities during this time. Above all, we're growing further and will continue to do so in the future. We're keeping a close eye on our costs and are purposefully expanding our businesses further. This involves a high degree of responsibility. It is the only way to achieve the progress that people will benefit from. We take on responsibility for our employees, for our products, for the environment, for society. We see sustainable actions as a prerequisite for our economic success. Many people, including our customers, our employees, and you as our shareholders, expect this of us, and rightly so. Sustainability is becoming increasingly important. We have formulated specific goals. In 2030, Merck will achieve human progress for more than 1 billion people through sustainable science and technology. By 2030, we'll integrate sustainability into all our value chains, and by 2040, Merck will achieve climate neutrality and reduce its resource consumption. In the first step, we will cut our direct greenhouse gases emissions by half by 2030, and we want to obtain 80% of our purchased energy from renewable sources. Our sustainability strategy does not exist in a vacuum. It also helps us to meet the sustainable development goals of the United Nations. Our businesses make a very substantial contribution to five of these goals. There's no question that our objectives are ambitious. However, we're convinced that we will achieve them and go forward. At the end of 2020, we took fourth place in The Wall Street Journal ranking of the 100 most sustainably managed companies in the world. A total of 5,500 companies were assessed worldwide. Last year, the German magazine, STAND, presented Germany's 200 most sustainable companies who achieved second rank. Rating agencies also assess our sustainable actions where we positively, which is in incentive draft. Our responsibility to our employees is particularly great. We want to offer them the best possible conditions also for the further development. This will enable us to meet the challenges of today and after the pandemic as well. It's about future ways of working at Merck. We want to move forward in a world that is characterized by change. If anyone can do it, it's us. We're setting the course for this now combining all our efforts in the future ways of working, which is about what working at Merck will be like in the future. For this purpose, we'll create an even more flexible working environment. We offer individualized learning offers and new programs for managers supported by data and new technology. Achieving an even better work balance is something we also wish to make possible. This will help us to remain an interactive employer. Thinking for the long term, acting dynamically has always been our credo. It has paid off. This becomes clear when looking at the developments over the past 10 years. Take Merck shares, for example. From the end of 2010 to the end of 2020, our share price increased by 369%. That's 271 percentage points more than the DAX. When I joined Merck, our market capitalization was about EUR 13 billion. Today, it's more than EUR 60 billion. This underscores that Merck has a very strong foundation. It is stronger than ever. Many envy our positioning. Our strategy, spreading the risk across three strong businesses and relying on our own research. Take our healthcare business, for example. Following a long dry spell, we developed important active ingredients supported by a strong core business. Moreover, we had new indications over the last four years, for example. For every strategic realignment, we had a clear plan prior to it, by which I mean clear priorities that we want to explain and do explain, and ambitious goal we can achieve. This was the case in healthcare and in electronics and life science. Acquisitions have been and are further elements of our success. The same applies to divestments. We deliberately think in both directions. Let me look back a bit further. Since 2007, we have made acquisitions and divestments worth more than EUR 50 billion. I know of hardly any other company of our size that has been more active and successful in this regard. We have become a market leader in the life science field, thanks to the acquisition of Millipore in 2010 and Sigma-Aldrich in 2015. The acquisition of Serono in 2007 made us a leading global company in biotechnology. The divestment of our generics business was the starting point for special medicines. In 2017, we sold our biosimilar business. The divestment of our consumer health business followed in 2018. Last year, we sold Allergopharma. In addition, we are being strengthened by partnerships, for example, Pfizer and GlaxoSmithKline in oncology. Another good example is the joint venture with Palantir. We launched Syntropy together with the tech specialists from the U.S. Syntropy is a platform with which we want to accelerate the exchange of data in oncology research. Data are important, particularly in research. We're learning to process data even faster and make it usable also within Merck. This brings me to Electronics. Our acquisitions were pathbreaking, AZ Electronic Materials, Intermolecular, Versum Materials. These were all important investments in our future. The changes remain constant. Darmstadt site is one of them. In 2019, we announced that we'll invest EUR 1 billion. No other Merck site has so much expertise combined at one location. The last few years were characterized not only by structural changes in our business. Merck has also undergone a cultural change marked by curiosity and passion for research and discovery. This is embodied by numerous colleagues around the world. This is why we relaunched our brand in 2015. Our vibrant brand stands for the diversity of Merck, for vibrant science and technology, and for tremendous curiosity. It demonstrates pride and shows what makes Merck special. This is mirrored by the people who work for Merck. As our last global employee survey shows, our employees identify with Merck. They want to actively contribute to the success of the company. Merck is a strong company with a strong sense of solidarity. This is especially apparent during the pandemic and in other ways as well. The best example is the innovation center and the innovation hubs, which we have established over the past several years. This is where our curiosity meets groundbreaking collaboration, whether in China, Israel, the United States, or here in Darmstadt. Science is at the heart of everything we do. It's our driving force. This is how we achieve progress, through new products and technology, and it commits us to take responsibility and embody the values that make this company what it is. A look back shows that Merck is working on the right technologies in promising future markets with a robust strategy, supported by a culture of curiosity. In brief, a company with excellent prospects. Belén Garijo will succeed me on May 1st. The collaboration with her has been superb and marked by trust. I know that the company is in very good hands with her. Dear Belén, I wish you every success. You know it's a task that involves a great deal of responsibility, but very fulfilling. You have an amazing team behind you. It was a privilege to lead this wonderful company through major changes and to help set the course for a successful future. Many thanks for the trust you have placed in me over the past 10 years. Thank you for your attention. Please stay healthy. Thank you, Mr. Oschmann, for your impressive statement. Ladies and gentlemen, you can reread Mr. Oschmann's speech. It has been made available since April 15, 2021, on the company's website. Mr. Oschmann, you have given us a comprehensive and interesting report on the past fiscal 2020, which was very successful for Merck despite the pandemic. On behalf of the AGM, thank you. Let me use this opportunity to express my appreciation and recognition to all the members of the Executive Board for their performance in fiscal 2020. My appreciation naturally extends to the employees of our company, without whom this success wouldn't have been possible. To all managers, to our exceptional specialists in the different areas, and to all members of staff, including their representatives, who did an outstanding job last year. Ladies and gentlemen, let me now proceed with agenda items 2 to 10. You can see them on the screen now. They are the resolution on the adoption of the annual financial statements for fiscal 2020, the resolution authorizing the appropriation of the net retained profit for fiscal 2020, the resolution on the approval of the actions of the Executive Board and the Supervisory Board, the resolution on the election of the auditors for the current financial year, the resolution on the amendment of Article 13 of the Articles of Association concerning so-called transactions with related parties, the resolution on the compensation system for the Executive Board and the Supervisory Board, as well as the resolution on 11 control and profit and loss transfer agreements. For these agenda items, as well as the corresponding proposed resolutions, please also refer to the invitation published on our website. Ladies and gentlemen, let me explain the following on Agenda Item 7, resolution on the amendment of Article 13 of the Articles of Association concerning so-called transactions with related parties. Pursuant to Section 111, Subsection 1 of the Stock Corporation Act, certain transactions of a publicly traded stock corporation with related parties within the meaning of Section 111, Subsection 1 of the Stock Corporation Act require the prior approval of the Supervisory Board or a committee appointed pursuant to Section 107, Subsection 3, Sentences 4 to 6 of the Stock Corporation Act. These provisions are applicable not only to publicly traded stock corporations, but also to publicly traded corporations with general partners. In order to avoid any legal uncertainties, a clarifying provision should be added to our Articles of Association. For the exact wording of the proposed amendment, please refer to the AGM invitation. Ladies and gentlemen, today we will also vote on the approval of the compensation system for the Executive Board members under Agenda Item 8. The personal committee of the Board of Partners of E. Merck KG revised the compensation system for the Executive Board members with effect from January 1st, 2021, and thus adapted it to the specifications of the new Section 87a of the Stock Corporation Act. The most important amendments are now displayed on your screens, and the full compensation system is explained comprehensively in the agenda. An essential idea in amending the compensation system was to increase the long-term incentive effect in line with good governance principles. Changes in the compensation system mainly concern profit sharing, the long-term incentive plan, as well as the integration of the sustainability strategy. As far as profit sharing is concerned, the adaptation factor for individual performance was reduced, a threshold value for profit-sharing payment was introduced, and a new sustainability goal included in the catalog of criteria. Added to that, the compensation system for members of the Executive Board now mandates a personal investment in shares with a four-year holding period in order to generate a long-term incentive effect. In line with that, we also increased the duration of the long-term incentive plan from three to four years by introducing a one-year holding period. Additionally, as of 2022, measurable sustainability factors will be included in the key performance indicators of the long-term incentive plan. Apart from that, the maximum compensation for the members of the Executive Board was reduced. While doing so, the pensions and additional benefits are now also considered within the framework of the maximum compensation. Overall, the changes thus meet the requirements for an ambitious compensation system that includes a long-term incentive effect for sustainable business success and, at the same time, ensures responsible corporate governance. Agenda Item 9 concerns the resolution on the compensation of the Supervisory Board and the confirmation thereof, including the compensation system. According to new legal provisions, this AGM also has to resolve on the compensation of the Supervisory Board members. In February 2021, the Supervisory Board resolved to establish an audit committee to handle the monitoring of the statutory accounting process, the effectiveness of the internal control system, the risk management system, and of the internal audit system, as well as the audit of the full- year financial statements. In view of the high demands on the activities of the members of the audit committee, and in view of the competition for suitable candidates for the Supervisory Board, separate compensation for members of the audit committee shall be provided. In all other respects, the previous provisions on Supervisory Board compensation will not be affected. For details, please refer to the agenda. Finally, Agenda Item 10 concerns the resolution on approval of 11 control and profit and loss transfer agreements. Mr. Oschmann will now elaborate on the control and profit and loss transfer agreements. The floor is yours, Mr. Oschmann. Ladies and gentlemen, under Agenda Item 10, the Executive Board and the Supervisory Board of Merck KGaA propose that shareholders approve 11 control and profit and loss transfer agreements. I would like to briefly explain the agreements and the reasons why they were entered into. As the sole partner and controlling company, Merck KGaA entered into a control profit and loss transfer agreement on February 16th, 2021, with each of the following 11 companies: With Merck 42. Allgemeine Beteiligungs-GmbH, as well with Merck Allgemeine Beteiligungs-GmbH, numbered consecutively from 43 to 49, with Merck Wohnungs- und Grundstücksverwaltungsgesellschaft mbH, with AmpTec GmbH, and with AZ Electronic Materials GmbH. These companies are either directly or indirectly wholly owned subsidiaries of Merck KGaA. Since Merck KGaA holds 100% interest in AmpTec GmbH and AZ Electronic Materials GmbH, owned indirectly, an audit of the control and profit and loss transfer agreements was performed in accordance with the legal requirements by an expert examiner appointed by the court pursuant to Section 293b of the German Stock Corporation Act. The respective audit reports did not give rise to any objections and were published along with the other AGM documents regarding this Agenda Item on the website of Merck KGaA. The effectiveness of the control and profit and loss transfer agreements is subject to the approval of the AGM of Merck KGaA and the approval of the shareholders meetings of each subsidiary. The latter already granted their approval of each respective agreement on February 22, 2021. Each of the respective control and profit and loss transfer agreements stipulates that the controlled company is directly accountable to Merck KGaA, that it shall transfer all of its profits to Merck KGaA, and conversely, that it is entitled to the offsetting of its losses by Merck KGaA. Economic and tax reasons support the conclusion of such control and profit and loss transfer agreements. Subsequent to the conclusion of the agreements with the respectively controlled company, Merck KGaA forms for corporate income and trade tax purposes a consolidated tax group that makes the netting of profits and losses already possible as of the year of its establishment. If a subsidiary incurs as a loss, this lowers the taxes payable by the German part of Merck Group. This form of tax optimization cannot be achieved through alternative measures. Since Merck KGaA is the sole shareholder that wholly owns the controlled company, either directly or indirectly, due to the control and profit and loss transfer agreements, it is also not required to make any compensation payments or settlements to third-party shareholders. Therefore, apart from the aforementioned obligation of Merck KGaA to offset any losses incurred by the controlled companies, the agreements do not give rise to any special financial obligations. You can find more details on the control and profit and loss transfer agreements in the documents published on the company's website, especially the joint reports by the Executive Board of Merck KGaA and the management boards of the controlled companies, as well as the audit reports. That concludes my remarks on this Item. Mr. Büchele, I hand back over to you. Thank you, Dr. Oschmann. Ladies and gentlemen, we will now show the statements by shareholders. Ladies and gentlemen of the Supervisory Board, my name is Hendrik Schmidt, and I represent the DWS, Germany's largest fund manager and our investment clients. I would like to take the opportunity at this year's AGM to engage in a dialogue with you and the shareholders of Merck. 2020 was shaped by the global COVID-19 pandemic at Merck too. As a pharmaceuticals and chemicals company, it has had various effects on Merck's earnings. As a whole, the company has emerged from the fiscal year in excellent shape. We would like to thank the Executive Board and the Supervisory Board for their work. What factors influence organic growth in the performance materials business sector? Will the transformation of the business sector result in further reorganization, and if so, to what extent? An outflow of funds is expected for pending legal disputes with JNC Corporation in South Korea. How much is the outflow of funds currently expected to be? A critical view is to be taken of the composition of the Supervisory Board regarding its independence. We do not share the opinion of the company that all members are independent. Even the members appointed under the provisions of the Articles of Association are not to be considered independent. The Chairman of the Supervisory Board has already been a member of the board for over 10 years, and so no longer meets our independence criterion. The members proposed by the major shareholders and thus attributable to the Merck family should be noted here. In our view, the Supervisory Board therefore does not meet our requirement that at least 50% of shareholder representatives be independent. We notified the Supervisory Board of this in writing at the AGM in April 2019 and believe that strong succession planning is also in the interest of minority shareholders. However, as the terms of all shareholder representatives do not expire until the 2024 annual general meeting, we expect the topic of succession planning to be addressed in time. When will the nomination committee discuss this issue, and what do you think about the introduction of a staggered board, so staggering the terms of Supervisory Board members? We expressly welcome the changes and improvements made to the Executive Board remuneration system and will agree to the proposed system today. In particular, we are delighted that sustainable criteria will be directly incorporated in the long-term remuneration components from 2022 onwards. How far have you got with preparing the relevant performance indicators described in the annual report? How many KPIs will be taken into account in the Executive Board compensation in the future, and how will they be weighted? As of May first, you, Mr. Oschmann, are handing over the management to Ms. Belén Garijo. We would like to thank you for your hard work in the interest of the company and for ensuring that Merck is future-oriented and soundly positioned. We wish you much success and good fortune in your future work. At the same time, we welcome you, Ms. Garijo, as the first Chairwoman of the DAX group. We are looking forward to a constructive dialogue with you and wish you all the best for your work. Finally, we would like to thank all employees who have worked to ensure the company's success in the past fiscal year, even in these difficult times, and would ask that you please pass this thanks along. Dr. Büchele, Dr. Oschmann, members of the company administration, fellow shareholders. My name is Markus Kienle. I am a lawyer and trusted advisor, and I'm part of the board of the SdK. A challenging yet successful year 2020 lies behind our company. The dominant theme of 2020, and potentially also 2021, was the COVID-19 pandemic and the containment thereof. Global supply chains and business models were subjected to a stress test that you mastered well, despite the fact that COVID-19 pandemic also led to adverse effects in some segments of our company. Nevertheless, you remained on a success track. You increased group sales and earnings, even though the growth margin declined. You demonstrated cost discipline in a difficult environment and streamlined cost structures, which played a considerable role in improving your operating results, EBIT by 40%, and profit after tax from continuing operations by more than 50%. Although rates of increase such as these are not likely to be repeated every year, you have made the company more robust by achieving a tighter cost structure. You have delivered high double-digit. We would like to thank you for all the hard work the staff has done this year. We'd like to pass this statement to hand over this task. It's not only to assess the current fiscal year, but also say farewell to Mr. Oschmann. You have steered the company as Chairman of the Executive Board for decades. In your report of the Executive Board, you highlight the fast-motion development of Merck KGaA over the years, including some deep-seated changes. You have contributed substantially to the further development of Merck KGaA and played a role in securing the very stable positioning that Merck KGaA enjoys today. Let's not forget that you did so while always being subjected to the latent risk of personal liability. We have the impression that you are handing over to your successor and your colleagues a company in good condition. It is now up to them to continue, or perhaps rather move forward on this journey by making the necessary adaptations for future developments. Please accept our thanks for your work and all the best for your future. Thank you. Mr. Kienle, Mr. Schmidt, thank you for your statements. Ladies and gentlemen, we will now answer the questions submitted prior to the AGM by shareholders and shareholder representatives. For this, let me hand over to Mr. Oschmann. Thank you, Mr. Büchele. Before I start answering the questions, I would like to say that questions regarding the Supervisory Board and the compensation is answered on my behalf by Mr. Büchele. I will start with Mr. Roth's question. You were asking who's responsible for organizing the AGM. Responsibility for planning and organizing our virtual AGM lies with a cross-functional team comprising employees from the group's communication and security departments, legal department, accounting department, Investor Relations, IT department, and external technical service providers. You asked why you received a notice that when visiting our website, you got an untrusted website when accessing it. From the context of your question, we could see that the web address was incomplete, which led to the error. If you enter the complete address as indicated, including the /HV or AGM, you have direct access to the AGM page. We changed that following your early notification. We also created a short URL, www.merck.de/hvagm, accordingly for direct access. Mr. Roth, you also asked why it was difficult to find how to access the Investor portal on our website. Thank you for your early comment, which we have gladly taken into consideration. We improved the navigation immediately after you had pointed that out by placing a reference on our AGM page, where prominently on the home page, on landing page itself, and under Investors. You also find it more easily on our website. You can enter keywords such as AGM and Merck or HV in Germany in a search engine, also leads you easily to our website. The next questions will be answered by Mr. Kuhnert. Yes, thank you. Good morning to you, and we will now answer Mr. Schmidt's question, DWS Investment GmbH. Mr. Schmidt, you asked about the factors influencing organic growth in the performance materials, now electronics business sector in the past fiscal year. Net sales in the electronics business sector declined in 2020. That is adjusted for exchange rate and portfolio effects by 3.2%. COVID-19 pandemic impacted our Display Solutions and Surface Solutions businesses in particular, leading to an organic decline in sales of 11.7%, respectively 13.5%. The effect was felt most strongly in the second quarter, with an initial recovery in both businesses towards the end of the year. Our Semiconductor Solutions businesses recorded organic growth of plus 14.3%. This is due to a general recovery in the semiconductor market, along with increased demand for new technologies, making it possible to work from home during the pandemic. Due to the decline in sales and corresponding effects of underutilization, our EBITDA pre-performance indicator decreased by - 7.5% organically in fiscal year 2020. Mr. Schmidt, you asked whether transformation in the business sector performance materials, now electronics, will lead to further internal reorganization measures and to what extent this is expected to happen. We announced our new strategy for this business sector about three years ago and started our Bright Future transformation program. The goal was and is to get the business onto a growth path again and secure solid profitability. The acquisition of Versum Materials was an important element of this growth strategy, and integration is well underway. In the context of Bright Future, a range of initiatives were implemented to increase efficiency and reduce costs, but also to foster cultural change. In the same context, an important milestone in this respect was the recently announced renaming of the business sector, which will now be called Electronics. At the moment, we're focusing on moving ahead with the ongoing reorganization. In addition, we're carefully monitoring our business performance and will take new proactive measures where this is considered necessary and reasonable. You asked about the expected cash outflows resulting from litigation with JNC Corporation in Korea. The patent infringement action on the part of JNC that was still pending until recently, as well as the patent nullity proceedings on the part of Merck in Korea, were settled in late March of fiscal year 2021 by means of an out-of-court agreement between both parties. Based on this agreement, Merck will not have to make any payments to JNC. I'll pass the floor to Mr. Büchele. Mr. Schmidt, you asked when the Nomination Committee would deal with the composition of the Supervisory Board and succession planning. In your opinion, the composition of the Supervisory Board should be critically assessed as regards the independence of its members. Only the members seconded based on the Articles of Association were to be classified as non-independent. Moreover, the Chair of the Supervisory Board has been member of this body for more than 10 years, which is why, according to you, he does no longer meet the criteria for independence. In addition to that, there are the members proposed by the principal shareholder and belonging to the Merck family. According to DWS, the Supervisory Board does therefore not meet the required minimum share of independent shareholder representatives of 50%. Convincing succession planning would also be in the interest of the minority shareholders. Mr. Schmidt, we consider our Supervisory Board members to be independent, even though some of them have a share in the general partner, Merck KG, hold a function in one of its bodies, or have been seconded to the Supervisory Board. Due to its high capital investment and its function as general partner, E. Merck KG has the same interest in the compliance and efficiency of the business operations of Merck KGaA as the limited shareholders. Long-standing membership in the Supervisory Board does not comprise independence per se either. On the contrary, years of experience substantially improve the quality of the work performed in the Supervisory Board. The mandates of the representatives of the shareholders expire by the date of the AGM in 2024. Therefore, the nomination committee will presumably deal with the planned election of a new Supervisory Board and the corresponding succession planning in 2023. Moreover, independence is reviewed annually in the context of our declaration of conformity with the German Corporate Governance Code. Mr. Schmidt, you asked what we think of introducing what is called a staggered board. That is, staggered mandates for Supervisory Board members. Staggered terms of office do not necessarily add value to supervisory activities. On the contrary, frequent changes in the Supervisory Board can even have a negative impact on corporate governance. The Supervisory Board would suffer from frequent changes of its members, as this affects the continuity of cooperation. Management decisions are often long-term, which requires consistency of support from at least the majority of the Supervisory Board. Furthermore, frequent elections cause considerable effort and costs. Mr. Schmidt, you asked how far we have come when it comes to preparing the relevant performance indicators for the sustainability criteria in the context of the compensation system for the Executive Board. Next year, we will include a clearly measurable sustainability factor in the long-term compensation of the Executive Board. We're currently identifying and defining the relevant metrics, the so-called KPIs, for the target achievement of our sustainability strategy. Due to the complexity of the subject, we were taking a careful approach and will be using the following month to define a relevant and robust sustainability factor. You asked, furthermore, about the number of KPIs and their respective weighting that will be considered in the Executive Board compensation in the future. The Executive Board's share in the profit depends on the earnings after tax of the E. Merck Group. In addition, a so-called modifier is applied. Long-term variable compensation. The long-term incentive plan depends on three financial targets: the relative performance of the shares against the DAX with a weighting of 50%, the EBITDA pre-margin with a 25% weighting, as well as organic growth with a weighting of 25%. In addition, a clearly measurable sustainability factor will be included from 2022 onwards. In total, there will be four indicators supplemented by individual and sustainability goals, whose number and characteristics may vary. Mr. Oschmann. Mr. Oschmann has the floor. Mr. Oschmann, you asked how many questions we have received, how many we answer, and what is the criteria for us? Via the Investor portal, until the end of 21st April 2021, 70 questions were handed in, and all the handed-in questions are fully answered without making any choice with regard to the content. It's in the best interest of our company, and we're pleased, and we want to give a very good picture, full picture of Merck KGaA. Now, Mr. Pavel. Next is Mr. Pavel Glukhikh from the DXC. You wanted to know the target of generating EUR 2 billion in additional sales from the pipeline by 2022 is not being adjusted upwards. Achieving EUR 2 billion of incremental revenue from our R&D pipeline by 2022 is already a very challenging target with which we want to underpin the realization of our global specialty innovator strategy. BAVENCIO and MAVENCLAD are the main growth drivers contributing to the EUR 2 billion. In addition, we expect a positive impact from TEPMETKO, which already has approval in Japan and the U.S. for the treatment of adult patients with metastatic non-small cell lung cancer, whose tumors have a genetic alteration in the mesenchymal epithelial transition factor known as MET exon 14 skipping. COVID-19 related disruptions in the specialty therapy market have recently made it more difficult to realize the commercial potential of innovative specialty products. Patients tended to remain on their existing therapies more often, a switch to alternative therapies was postponed. We were not able to completely escape this general market effect, making the target even more ambitious. Mr. Pavel, you further asked about the status of the approval processes for MAVENCLAD, BAVENCIO, and other pipeline products. In March last year, TEPMETKO was approved in Japan for advanced so-called NSCLC. That is the metastatic non-small cell lung cancer with this described genetic modification was approved. In February, the federal FDA approval for the U.S. market followed this year. We have submitted the EU marketing authorization application, and the European Medicines Agency is currently reviewing our application. In June 2020, the FDA granted us U.S. approval for BAVENCIO as first-line maintenance therapy in patients with locally advanced or metastatic urothelial carcinoma. This is a certain type of bladder cancer and followed by EU approval in this indication in January 2021. Approval procedures for our products, BAVENCIO, TEPMETKO, and MAVENCLAD are underway in other countries in order to make our innovative drugs available to patients there as well. Mr. Pavel. Mr. Pavel, you asked how Merck Healthcare can grow organically through our research and development, R&D. We have an attractive pipeline. Compared with the very large pharmaceutical companies, Merck naturally does not have access to the same financial resources. We are therefore constantly prioritizing our investments and directing our resources to areas where we see high added value for our patients. We are also currently working on using more predictive indicators, such as biomarkers, to select patients in whom the drugs are expected to have the best efficacy. This can reduce study costs and study duration, and we can also bring new drugs to market with a smaller R&D budget. Mr. Pavel, on your question about how the cooperation strategy is paying off in R&D. R&D collaborations are the rule rather than the exception in the pharmaceutical industry. Just take a look at BioNTech/Pfizer for the COVID-19 vaccine. Both strategic considerations and practical aspects play an important role. Sometimes, a company cannot bring the full value of the medicine to patients on its own. In our Pfizer collaboration for BAVENCIO, the relevant pivotal studies in bladder cancer and kidney cancer were conducted by our partner, Pfizer. The study in Merkel cell carcinoma was conducted by us. Without this division of tasks, we would not have achieved the same success. In addition, strategic collaborations allow us to reduce financial risk, which is an important aspect in programs require high R&D expenditure. Next question will be answered by Mr. Kuhnert. Mr. Pavel, you asked how Merck is driving the other areas in life science against the backdrop of the very good development in Process Solutions. We saw a recovery in demand from customers in academia and Applied Solutions and Research Solutions starting in the second half of 2020 and expect the strength to continue. In addition, the portfolio is benefiting from strong COVID-driven demand in diagnostics. We are expanding our share of the diagnostics market and accelerating innovation in several areas here, including digitization and e-commerce. We are also seeing an increasing trend towards virtual ways of working in research and development in the laboratory business. We are developing and implementing platform solutions and services that support the digitization of laboratory workflows. You also asked how Merck is advancing the Display and Service divisions against the backdrop of the good development at Semiconductor Solutions, or whether these would no longer be part of the core business. The sales development of Display Solutions is strongly influenced in the medium term by a price decline for liquid crystals. The OLED business, on the other hand, has been growing strongly for years, and together with new display technologies such as LC Windows, will contribute to the further sales growth of Electronics. We plan to continue investing heavily in this area, especially in research and development. In Surface Solutions, we are concentrating our investments on promising innovations and efficiency improvements, also expect sales growth here, at least a slight one in the future. We regularly evaluate the growth potential of all our businesses and adjust our capital allocation accordingly. In this light, our strategic focus will be on Semiconductor Solutions. Back to Mr. Oschmann. Mr. Pavel, you asked about the optimal regional distribution of business in certain regions. As a global science and technology company, Merck is active in all the regions you mentioned. While group headquarters is located in Europe, our growth in the three business sectors is primarily driven by business development in the North America and Asia regions. This geographically broad basis for our growth is in line with our principle of not being overly dependent on individual regions, nor on individual customers or industries. We therefore view our broad growth base as positive, also against the backdrop of risk return criteria. Mr. Pavel, you asked about advantages and disadvantages for our business due to the COVID-19 pandemic. Corona had a mixed impact on our businesses in 2020. In healthcare, fertility was initially negatively impacted in the second quarter as there were significantly fewer fertility treatments. However, the business was already growing again in the fourth quarter. In life science, Process Solutions, in particular, benefited from a significant increase in demand. The other two business units, Research Solutions and Applied Solutions, had to contend with a slight decline in demand in the second quarter due to closed laboratories and severely restricted travel by our customer service team. Since the third quarter, these businesses have been growing strongly again. In the Electronics segment, semiconductors benefited from a strong increase in demand for chips, which was also due to Corona. Demand for pigments was negatively affected by Corona. It recovered in the automotive industry, it remained at a lower level in the cosmetics industry. In the long term, we expect continued strong demand for chips and thus for the products and services of Semiconductor Solutions due to the further increase in digitization, which was accelerated, once again, by Corona. The strong demand for our products from the life science business unit, Process Solutions, will also continue to grow strongly in the long term. At the same time, we expect that the short-term negative effects that COVID-19 partially had on our business in 2020 will no longer negatively impact our business as early as 2021. Dear Mr. Pavel, you asked to what extent artificial intelligence plays a role in the development of personalized medicine. Artificial intelligence technologies are indeed being applied to more and more steps along the entire pharmaceutical value chain. In research, they help us to characterize biological processes and the disease process in order to identify new drug targets. Once new drug targets have been identified, AI helps to identify and optimize drug candidates, for example. In clinical development, AI plays an important role in identifying so-called predictive biomarkers. This makes it possible to select targeted therapies suitable for the respective patient. This technology is also an important tool in the planning, execution, and evaluation of clinical studies. For instance, in the analysis of X-ray images. Mr. Pavel, you asked about Merck's portfolio strategy. The conglomerate structure enables Merck to realize various advantages beyond the pure synergy calculation. The main ones are risk diversification and thus low dependence on individual business cycles, as well as sustainable growth and an investment strategy that is optimally aligned with the achievement of our goals. We currently have business areas in all three sectors that act as key growth drivers, the so-called big three. These are our pipeline in healthcare, the business segment, Process Solutions in life science, and in electronics, the Semiconductor Solutions business segment. Portfolio management is actively practiced at Merck, as the past has shown, depending on business strategy and market situations. For example, acquisitions and divestments were always made from a group perspective with a view to the entire portfolio and thus to long-term value enhancement. Particularly in the challenges here 2020, Merck was able to achieve a strong business result despite the Corona crisis. In our view, this confirms the resilience of the conglomerate structure. Mr. Kuhnert is going to answer the next question. Dear Mr. Pavel, you also asked about the optimal debt equity ratio at Merck and the resulting need for further strategic growth. We do not manage our business according to the debt equity ratio principle. For us, net debt to EBITDA pre and operating cash flow in relation to debt are key debt ratios that we use as a basis for determining the possible financing scope for strategic growth. With a net debt to EBITDA pre ratio, we were already just ahead of our target with a ratio of 2.1 by the end of last year. We had almost reached our target of 2, announced after the Versum acquisition. With the operating cash flow to debt ratios, we are also already back in areas that correspond to our current rating with Moody's, S&P, and Scope. Even though the rapid deleveraging following the Versum acquisition has brought us back to a comfortable level of debt, this does not immediately give rise to the need for rapid further strategic growth via M&A. In principle, we are very well-positioned with our portfolio to continue to participate in the growth markets in the future. Merck has been a very active and successful portfolio manager for a long time now, and active portfolio management will remain part of our strategy in the future. We are constantly evaluating our portfolio and weighing the risks, opportunities, return profiles, and other parameters of different areas and investments. However, you will understand that we do not talk about specific targets in advance. Dear Mr. Pavel, you asked about the regions and currencies in sales and earnings that were and are particularly affected by currency devaluations and how successful our new foreign exchange strategy is. In fiscal 2020, our revenue and earnings were particularly affected by currency devaluations in North and South America. Based on the size of contributions to revenue and earnings, this was primarily the U.S. dollar, but the Brazilian real, Argentine peso, and Mexican peso also contributed due to stronger devaluations. For 2021, we currently see a weaker U.S. dollar compared to the previous year. In recent months, also the Turkish lira and the Argentine peso depreciated strongly. With our new foreign exchange strategy, we want to limit currency losses on our expected 12-month cash flow in foreign currency, the so-called cash at risk, to a maximum of 5% year- on- year. The strategy is implemented through so-called layers. In layer 1, we hedge 20% of the U.S. dollar, the Japanese yen, the Korean won, and the Taiwan dollar with 12-month forward transactions. In layer 2, we hedge a further 20% of our cash flow exposure via currency options. Here, we take a much broader approach to the selection of currencies and use a large number of other currencies in which we have exposure in addition to the U.S. dollar. In layer 3, we increase our hedging ratio in steps up to 90% in all currencies that are material for Merck should the cash at risk approach the 5% limit. One small exception here, we generally do not hedge the Argentine peso due to the prohibitively high hedging costs. In the past fiscal year, we experienced strong currency devaluations, and the trigger points for increasing the hedging ratio to 90% were reached. The new foreign exchange strategy proved to be very robust and reliable during this phase, and we were able to limit currency losses to around 3.8% year-on-year in the financial year. Mr. Pavel, you asked about the limits and costs of CSR, that is corporate social responsibility. We all see the major changes in the social, ecological, and economic environment. These sustainability challenges must be addressed as called for by the United Nations Sustainable Development Goals. Our business is making a contribution to this because the challenges can only be met with the involvement of companies. A sustainable company uses its core business practices to create long-term value for itself, its stakeholders, and society in environmental, social, societal, and financial terms. This definition sets the strategic scope and boundary that we can apply in relation to sustainability. Sustainable entrepreneurship and profitable growth are not mutually exclusive, but rather interdependent. That is why last year we anchored sustainability as a fixed component of our corporate strategy. For us, what is stipulated by the legislator is the necessary regulatory minimum condition and the lower limit. As a company, we have no strategic leeway here. This is covered and ensured by compliance-based mechanisms. We have not given a forecast regarding additional costs and revenues resulting from the implementation of the strategy. You also asked how CSR affects bottom-line guidance and shareholder value. We believe that responsible use of resources and management of sustainability risks will already reduce costs and losses in the medium term. We are not only thinking of rising CO2 and raw material prices, disposal or capital costs, but also of risks that may result from climate change, but also from loss of reputation or potential legal disputes. We also anticipate positive financial development from additional sustainable products and services for which we see a growing market. As a science and technology company, we are well- equipped for this. Mr. Pavel, you asked what Merck's new biotech strategy influenced by COVID-19 looks like. The pandemic has shown that the pharmaceutical industry and biotech and life science companies can very quickly develop new technologies and also so-called new modalities for the treatment of different diseases. This is clearly demonstrated by the development of mRNA-based COVID-19 vaccines. We are very well- positioned for these changes, for example, through our offerings in the single-use area, through our formulation technologies, or with our offering in the field of contract manufacturing and development. In our life science division, we support the development and production of vaccines and new therapies. We play a key role in this by supplying chemicals and consumables for bioprocesses and products in the field of diagnostics. The rapid development and approval of COVID-19 vaccines, for example, has demonstrated the importance of end-to-end offerings. The pandemic has confirmed our strategy and future direction in this regard. We also see ourselves very well- positioned in mRNA as a future area of application. Mr. Pavel, you asked how the benefits of platform management are evolving for life science. Since 2018, we have made large investments in our e-commerce business and are seeing the results of this strategy in our life science division. Our website, sigmaaldrich.com, is among the leaders in the life science industry as measured by traffic. With the global launch of our new e-commerce platform in 2021, starting in China, we will offer our customers a new and faster online experience. We are driving digitization in laboratories and the biopharma industry through platform solutions and services. Examples include our new Bio4C Software Suite in biopharma. As part of the acquisition of BSSN Software, we acquired software that connects all the devices in the laboratory and thus facilitates laboratory work. We offer SYNTHIA retrosynthesis software that enables scientists and researchers to significantly accelerate the drug discovery process. Mr. Pavel, you asked what unique selling proposition Versum has in the semiconductor market and how Merck can maintain or expand that in the long term. As Merck Electronics, we decided to acquire Versum Materials because we see immense potential for future profitable growth in the combination of our semiconductor materials product portfolios. By combining Versum's products with our Merck portfolio, we have become one of the companies with the broadest and most innovative product portfolio. We have been able to closely integrate our businesses, will continue to expand our innovation expertise, and will thus become an important partner for our customers. I will now come to the questions of Mr. Jürgen Matthes, Deka Investment. Mr. Matthes, you asked about the role of the electronics business sector in our portfolio. Merck also believes in a risk diversification strategy and thus in reduced dependencies on individual business cycles, as well as in sustainable growth and an investment strategy ideally tailored to the achievement of our goals. The electronics sector focuses on global trends such as digitization, data-based economy, smart manufacturing 4.0, and others, which constitute a strong foundation for this business. Synergies between electronics and healthcare, in particular, can be leveraged in the area of forward-looking technologies, such as in the area of neuromorphic computing or bioelectronics. Synergies are not our priority, but rather the attractiveness of the electronics business as such. Mr. Matthes, you asked about the promising trends in the pharmaceutical and biotech manufactured market for our Process Solutions business unit and the active ingredients Merck can use to participate here. Process Solutions support our customers in the development, manufacturing, purification, formulation, and quality assurance of their life-prolonging and life-saving therapies, both traditional and novel therapeutics. We expect low double-digit market growth for the monoclonal antibody therapeutic area. Here, we continue to focus on innovations such as BioContinuum Platform, our next generation platform. This platform enables control, connection, and optimization of the individual production steps. Our Bio4C Suite, a digital key element of this platform, addresses the increasing trend of digitization in the biopharma industry. At the same time, we expect novel treatments, including gene and cell therapies, to grow by more than 25% based on a lower baseline. In novel modalities, we offer both products and services by expanding our viral vector manufacturing capabilities. Here, we create standardized production process templates to accelerate, scale, and optimize production. In contract development and manufacturing, our business is currently focused on specific market niches where we see potential and high customer demand. These include monoclonal antibodies, viral vectors, antibody drug conjugates, and high potent active pharmaceutical ingredients. Our acquisition of AmpTec also expands our capabilities with regard to the development and production of mRNA, which is used for vaccines, treatments, and diagnostics for COVID-19, as well as many other diseases. The next question is to Mr. Kuhnert. Mr. Matthes, you asked about a debt rate which is justifiable for Merck. Our long-term goal is a net debt, EBITDA, a pre-debt ratio. In the long term, we want a debt ratio of below 2. Exceptionally, for example, in the event of major acquisitions, we may exceed this debt rate. That is the 2. We will then do our utmost to be back within our target range within the next two to three years through considerable debt reduction efforts. Mr. Matthes, you asked how we will reach our sustainability target of achieving progress for more than 1 billion people through sustainable science and technology. Our economic success is based on innovations that arise from research and development, and this is where we will come in. We will systematically integrate sustainability criteria into our research and development projects, and thus ensure right at the beginning of the product life cycle that our product is sustainable during its production, use, and disposal. There's another aspect. We develop products and technologies that improve people's lives and bring progress. To measure this positive impact in society, we have developed a currently testing the sustainable business value method. Some examples. In the future, we will be even more present in life science research labs with our sustainable technologies, and also support the pharmaceutical and food industries in their work. Our products in the semiconductor and electronics industries also have a significant impact on the quality of life, and this will increase in the future. With our medicines, we improve the situation of millions of people. There are also new technologies under development at our company that have great sustainability potential. Think of cultured meat, for example. The next question will be answered by Ms. Belén Garijo. Good morning. The question from Mr. Matthes is Merck well-positioned according to my ideas, or do I have certain changes in mind? Dear Mr. Matthes, first of all, thank you very much for your question about my view on the company's further development opportunities. As you have seen today during Dr. Oschmann's presentation, Merck is very successfully entering the 2020s from a true position of strength. This has been thanks to the discipline and very successful implementation of our strategy in recent years under Dr. Oschmann's leadership. We have a very solid foundation as a science and technology company, and our globally diversified business model with three very strong business sectors is paying off. In recent years, we have been able to successfully generate value through our active portfolio management, also mentioned here today. We are reaping the benefits from a values and performance-oriented culture with a globally diverse team. We will continue to build on these very solid foundations. Please be reassured that we are keenly aware of the increasing requirements of the post-COVID-19 world and what it implies. Merck is solidly positioned to generate profitable and sustainable growth in the long term. I am truly honored to assume responsibility as the Chair of the Executive Board and CEO of Merck as May 1st. I stand ready to shape an even more successful future for our company together, of course, with the Executive Board and our employees worldwide. Mr. Matthes, you asked for the fastest increasing healthcare business in the coming years. In the next two to three years, we expect BAVENCIO and MAVENCLAD strong growth, oncology, neurology, and immunology should growth. Also for fertility and general medicine and endocrinology, we expect solid growth. An exception is fertility for 2021 due to the low COVID-related reference bases in 2020. We will have a strong growth rate in 2021. Mr. Matthes, you asked about our strategy for healthcare specialty products in the Chinese market. The conditions for the approval of innovative products in China have gradually improved in recent years. The most important element of our strategy is to recruit enough Chinese patients in our registration trials. We are already doing this for bintrafusp alfa or tipifarnib, for example, and plan to do the same for xevinapant. Furthermore, we are continuously looking for in-licensing opportunities that complement our existing portfolio. A good example is the innovative diabetes drug INVOKANA, which we are marketing from Johnson & Johnson for China and some other markets. Mr. Matthes, you asked about a new medical trend or trends in our four healthcare business units. In neurology and immunology, as well as oncology, we see similar trends. In both areas, there is still very high medical need despite the huge progress. There's a wide range of innovative approaches, and Merck too is active in the context of research and early development. Apart from new modes of action, DNA damage repair, for instance, where we are leading is an example. There is a trend towards personalized approaches, where biomarkers are used to select suitable patient populations. A good example is TEPMETKO. In the first indication, MET exon 14 mutation. Here, a very small patient group suffering from non-small cell lung cancer is targeted. In fertility, Merck is among the leading companies. A major development is comprehensive therapy improvement. Here we are active in various different ways. Introduction of digital tools that can be used by patients and physicians, marketing of devices and software solutions that we're jointly developing with partners. For example, mobile ultrasonic devices with Philips. Finally, as regards to general medicine and endocrinology, we're particularly active in the growth markets such as China, Latin America, Asia, and Middle East. Our core products, Glucophage, Concor, and Euthyrox address the growing medical demand and continue to enjoy a strong brand value. Mr. Matthes, you asked about the most promising pipeline products in healthcare. A large number of drugs are currently being tested in clinical trials. Particularly noteworthy are the trials for bintrafusp alfa, TEPMETKO, and evobrutinib, as well as the newly in-licensed compound xevinapant. For our already approved product, TEPMETKO, we're examining the expansion of its use for other indications. For evobrutinib, we have phase III studies going on for the efficacy of this oral BTK inhibitor in RS patients. Merck presented further promising data from the phase II study at 2021 annual meeting of the American Academy of Neurology. Our newly in-licensed compound, xevinapant, has shown very good data in a phase II trial against head and neck cancer. A phase III registration trial has already started, a pivotal study. Mr. Matthes, you asked whether our entry in xevinapant in late development phase was a new trend to save development costs. The decision to get into xevinapant is the result of our regular discussions about the strategic positioning of our portfolio. As a general rule, Merck is open for partnerships. Either we in-license projects entirely, or we look for support from bigger partners. For xevinapant, our partner, Debiopharm, was able to show that the substance has promising therapeutic effects in specific patients with head neck tumors when combined with radiotherapy. This is a disease where we have a lot of experience thanks to Erbitux. We can now use this experience from implementation of the approval trial and pivotal trial and ensuing marketing efforts. Mr. Kuhnert will answer the next question. Mr. Matthes, you asked about the top-selling laboratory products and services in the Research Solutions and Applied Solutions business units. Our Research Solutions business unit enables research and development activity through a very broad portfolio of about 250,000 products and services for biotech and chemical applications. Top-selling products here include biochemicals, antibodies, multiplex assay kits, and lab and production chemicals. Our Applied Solutions business unit holds the market leadership in several key areas, including water treatment, microbiological applications, and analytical solutions. Our equipment, consumables, and services are used to ensure health, safety, and accuracy in highly regulated areas such as pharma QC, IVD, and food manufacturing, as well as in clinical and industrial testing applications. As a key partner to IVD manufacturers, Applied Solutions also provides essential raw materials and expertise for diagnostic test development, upscaling, and manufacturing. Mr. Matthes, you asked to what extent the Bright Future transformation program has already been completed and what results can still be expected. The Bright Future transformation program was started approximately three years ago with a time horizon of about five years. It included strategic realignment initiatives to increase efficiency and cultural change. With the acquisitions of Versum Materials and Intermolecular, we reached an important milestone in implementing our strategy. The goal was to be more broadly positioned in the electronics market and to get the business sector onto a growth path again. This is also reflected in the business sector's new name, Electronics. Various cost-cutting measures were initiated in order to sustainably meet our profitability targets and changes in the market. The implementation of the cost reduction programs is proceeding according to plan and has the desired effects. The implementation of various measures will continue over the next few years. Mr. Matthes, you asked to what extent the Semiconductor Solutions business unit is currently benefiting from the strong demand for chips. After experiencing some weakness in 2019, the market for semiconductor chips and materials recovered in 2020 fiscal year. This recovery has been reinforced by the COVID-19 driven need for working from home and virtual working, and the associated increased investment by businesses and individuals in necessary equipment and technologies. Furthermore, catch-up effects after temporary factory shutdowns or supply chain disruptions led to increased demand for components such as microchips. A current example is the automotive industry. These effects lead to a good capacity utilization at our customers, such as chip manufacturers. We are participating in this development with our Semiconductor Solutions materials. Mr. Matthes, you noted that the Display Solutions and Surface Solutions business units taken together would contribute relatively little to the Electronics segment revenue growth in the next two years, and asked whether there would still be significant investment in these two business units in the next few years, or whether they were merely considered to be cash cows. The medium term sales performance of Display Solutions will be strongly impacted by a drop in prices for liquid crystals. The OLED business, however, has been growing strongly for years, and along with new display technologies such as LC Windows, it will continue to further revenue growth in electronics. Here we continue to plan high investments, most notably in R&D. In Surface Solutions, we focus our investments on promising innovations and also on efficiency gains. As a basic principle, we regularly assess the growth potential of all of our businesses and adjust our capital allocation accordingly. Against this backdrop, the strategic focus and investments is on Semiconductor Solutions. You asked to what extent the goodwill impairment test, the increasing influence of digitization, as well as ecological and social aspects play a role. The medium-term plans used in the goodwill impairment test and approved by the Merck Executive Board are the result of a comprehensive strategy process. This also includes the effects of a changing ecological, social, and technological environment, such as digitization on our business models, as well as the quantification of the expected monetary effects. In the electronics business, in particular, the expected effects of advancing digitization are of key importance, and therefore have a significant influence on our medium-term planning. However, ecological and social aspects also manifest themselves in our planning and are taken into account in the impairment tests, in so far as this is permitted in the conception of the relevant accounted standard IAS 36. You also asked to what extent there is a current risk of impairment goodwill. To put it in a nutshell, we currently consider an impairment risk in relation to the goodwill we recognize to be unlikely. Following the outbreak of COVID-19 pandemic, we performed unscheduled impairment tests on our cash generating healthcare and electronics units in the second quarter of 2020, as the pandemic was expected to have a negative impact on individual sub-segments such as fertility treatment or our Surface Solutions business. However, these impairment tests, as well as the tests performed as scheduled in the third quarter of 2020 for all three divisions, did not indicate the need for impairment of the goodwill. The recoverable amount exceeded the respective carrying amount by more than 15% for all impairment tests in fiscal 2020. In this context, we would also like to refer to the sensitivity analyses of the key assumptions that we performed and published in the annual report. You can find these analyses on pages 236 and 237 of the annual report. Mr. Matthes, you asked how the Supervisory Board is preparing for the audit obligation of certain key figures on sustainable economic activities under the new EU Taxonomy Regulation, and which persons or committees are dealing with this topic. We're currently preparing for reporting under the EU Taxonomy Regulation. This regulation contains criteria for determining whether an economic activity can be classified as environmentally sustainable. The entire plan Supervisory Board will deal with this topic in the plenary sessions and discuss it in its meetings. The disclosures in accordance with the EU Taxonomy Regulation will then, of course, also be audited by our auditor as part of our non-financial reporting. Mr. Oschmann has the floor. Mr. Matthes, you asked how well Merck is prepared for the possible new supply chain law in Germany. Today, our risk management already takes into account aspects that are expected in the future from the act on corporate due diligence in supply chains. We will be implementing further measures in the coming years. These include, among others, greater coverage in terms of markets and the number of suppliers, as well as systems for recording sustainability-relevant information. The aim is to further increase the transparency of our supply chains, preventing violations of human rights and environmental obligations wherever possible. You also asked how supply chains are monitored today. As part of our procurement activities at Merck, we apply a risk-based approach in which a regular review of our relevant suppliers takes place. Among other things, we include the country risk, the sustainability risk, as well as the spending volume with a relevant business partner, or in some cases, its significance on Merck's sales. In addition, Merck has been, since 2015, a member of the chemical industry sustainability initiative, Together for Sustainability, and thus has access to more than 1,250 valid scorecards for the sustainability assessment of our suppliers. Mr. Matthes, you asked about the processes in place to more accurately capture previously unreported Scope 3 data. Our goal is to use automated processes to calculate the corresponding CO2 equivalence from the primary data collected for the respective Scope 3 emission categories. For categories 1 and 2, raw material purchasing and capital goods, for instance, we use an expenditure-based approach. For logistics, categories 4 and 9, we use a distance-based approach. Other categories, such as waste disposal, are derived from internally recorded waste volumes. For the calculations, we also use emission factors from various sources, such as the U.K. Department for Environment, Food & Rural Affairs, which provides emission factors on an annual basis. Mr. Büchele, the next question is yours. Mr. Matthes, you asked finally about the reasons for implementing a possibility for the personnel committee to grant a compensation payment to a member of the Executive Board in extraordinary cases. You also asked for which cases or under which conditions this possibility is provided, and whether such payments have already been made in the past. This possibility was implemented to enable the personnel committee to react appropriately to extraordinary events. This includes events that have a significant negative impact on the economy as a whole and have a negative impact on the consolidated profit and thus the profit participation. In this way, outstanding performance, particularly in a difficult economic environment, can be adequately rewarded in the course of events that are beyond the control of the members of the Executive Board. To date, no compensation payments have been made to members of the Executive Board. Mr. Kuhnert. We will now turn to the questions by Mr. Kienle from SdK. Mr. Kienle, you asked about the reasons for the strong improvement of the EBIT and the EBITDA margin. In addition to strong sales in fiscal 2020, the area of marketing and sales developed positively against the last year. A reversing of provisions for legal costs as well as expired scheduled depreciations of assets from the Serono acquisition had a positive effect on the result. Mr. Kienle, you also asked about the reasons for the lower gross margin year-on-year. The decline of the gross margin is based essentially from a negative currency effect of 1%, as well as slightly higher production costs, because we did not have full capacity in area of electronics. You also asked whether the decline of the gross margin was a sign for increasing price pressure on the markets. In 2020, there was, overall, in all businesses, no negative price effect on the gross margin of the group. Due to the pandemic, there were additional costs, however, in life science and electronics, for example, additional shifts in production. A further driver of the decline of the margin was a negative currency effect, as well as a negative mix effect from the Versum acquisition. We did not find a high price pressure to be one of the reasons. Mr. Kienle, you also asked about our expectation for the medium-term gross margin. A general increase in production costs will not negatively impact margin because of the economies of scale from the expected sales growth. We assume that our focus on innovation as well as consistent portfolio management will have a positive effect on the margin and will continue to do so. This is why we expect at least a stable gross margin, for example, because there are no currency effects. Mr. Markus Kienle, you also asked whether the reduction of marketing and sale costs are sustainable or only a consequence of the pandemic. The consequences of the pandemic have led to a significant reduction of our marketing and sales costs, especially in travel costs and events. There were also negative effects or counter-moving effects in logistics. Scarce transport capacities have led to a significant increase in freight rates. Our long-term measures in cost management have also led to a further reduction. In the future, we will maintain this high-cost focus and believe that the COVID-based savings can be maintained, for example, through digital events that we conduct. Your questions for the sales growth based on this ratio is difficult to answer because the marketing and sales costs include fixed and variable costs. Basically, however, we aim at a situation that marketing and sales ratio can be optimized through active cost management and adapted to the requirements of the business sectors. You also asked for the future potential for improvement of marketing and sales cost ratio. Because we have a high focus on cost management and we have a positive expectation of sales growth, we expect that our costs will not grow as fast as our sales. Mr. Kienle, you also asked about the expected organic growth of our blockbuster products, BAVENCIO and MAVENCLAD in the next three years. We expect for both products, a positive performance on the market in the next three years. At BAVENCIO, the area of bladder cancer will be a decisive growth factor due to the recent approvals in U.S., Europe, and Japan. We expect, especially in 2021, a high organic growth. Also for the years 2022 and 2023, we expect growth rates in the mid to upper double-digit range. For MAVENCLAD, we expect in 2021, organic growth in the upper two-digit percentage range, driven by the recovering dynamic high efficacy market in combination with increasing market shares. For the successive years, there will be a slight decline of the growth and will be in the lower double-digit range. You also asked about the patent terms of our products, MAVENCLAD and BAVENCIO. Let's talk about MAVENCLAD first. In Europe, the product exclusivity will last at least until Q3 2027, and in the U.S. at least until Q4 2026. Concerning BAVENCIO, the patent will expire at the end of 2032 and at the beginning of 2033, respectively in the U.S., so only about in 12 years. Another question by Mr. Kienle was how the market position of the block process will change after the term of the patent has expired. With traditional pharmaceuticals, the erosion due to generics happens quite fast. However, with biopharmaceuticals, and that's what our innovation specialty products are, this happens much more slowly. The next question by Mr. Kienle will be answered by Mr. Kuhnert. Mr. Kienle, you commented that the double-digit organic growth in Semiconductor Solutions was mainly due to the acquisition of Versum Materials and Intermolecular in 2029. The result in 2022 was due to that acquisition in 2009, and what kind of growth rates we expect in the next three years in Semiconductor Solutions? The contribution to sales growth in Semiconductor Solutions through the acquired Versum business was still reported as pro forma effect in the first three quarters of 2022 and starting from Q4 2022. One year after completion of the transaction, the business of Versum is now contributing to the organic growth. Please note that the semiconductor market as a whole in 2019 showed a phase of lower demand, which then recovered into 2020 based on COVID-19, and which naturally also benefited our original semiconductor business. Our medium-term guidance for Semiconductor Solutions, as already mentioned at the Capital Market Day in September 2022, a average yearly sales growth in the mid to upper single-digit percentage range. Mr. Markus Kienle, you also commented that the particular opportunity in semiconductor business is the continuous miniaturization, at the same time, the increase of the performance of the circuit boards. You asked where we are seeing the main application areas of increasingly smaller chips in the short and medium term. The main advantage of the small size of the chips is in lower manufacturing costs and reduced energy consumption. Already today, chips can be made so small that they fit in virtually any device, for example, watches, sensors, but also clothing. The high performance means new functions, for example, 5G connectivity, AI capabilities, and the reduced energy consumption will lead to a situation that chips are present in basically all areas of life. There are estimates that by 2030, the amount of connected devices will achieve 350 billion, so that chips will be virtually in any object that you might encounter. You also asked who the main competitors are in semiconductor business and where we see our USP in that sector. In the area of electronics materials are two classes of competitors. For example, on one hand, we have global companies with a broad portfolio, such as DuPont or Entegris. On the other hand, we have specialists in very specific technologies such as CMC or JSR. As we see it, our competitive edge lies in our strong portfolio, which is focused in the growth fields of electronics as well as in our innovative drive in our global footprint. Next question will be answered by Mr. Kuhnert. Mr. Kienle, you asked whether we are on track with our transformation program, Bright Future. The transformation program, Bright Future, was started about three years ago in business sector electronics, back then, Performance Materials for a term of about five years. It contained a strategic realignment, initiatives to boost efficiency and a cultural change. In acquiring Versum Materials and Intermolecular, we have achieved an important milestone in implementing our strategy. The object was to diversify our position in the electronics market and to get the sector back on track for growth. This is now also shown in the new name of the sector, Electronics. We also started a number of cost reduction measures in order to sustain and fulfill our profitability targets. The implementing of these measures is on track, and they show the desired effect. The implementation phase of these measures will continue to go on for the next couple of years. You asked about the amount of capital costs on group level. Mr. Kienle, please understand that we will not publish the group capital costs. In 2020, the capital costs for healthcare were at 5.5%, for life science at 6%, and for electronics at 5.7%. As a guidance for capital cost of the group, you can take the weighted medium of the capital cost from the three sectors. Another question from you was about the target on return on equity. You quite correctly commented that the return on equity is not a KPI we actively manage. We assess investments and performance of our business based on their respective overall return on investment. Here, our objective always is that overall return on investment is above the respective capital costs. Let me hand over back to Mr. Büchele. Mr. Kienle, you asked why we think it's appropriate to have a higher share of short-term variable compensation than of long-term ones. The profit sharing is based on a three-year period, the members of the Executive Board must invest 1/3 of the profit-sharing payment in shares and hold them for at least four years. The duration of the long-term incentive plans was increased to four years. The variable components largely are focused on the long term and designed sustainably and are in line with the requirements in Section 87, Subsection 1 and Sentence 1 of the Stock Corporation Act. You asked why we call the exercise target of the profit sharing ambitious, since we have exceeded the target significantly for each year since 2013. We have specifically chosen this model since all members of the Executive Board are personally liable as general partners of the company. Introducing exercise target is unusual, and it requires an additional performance effort. This strengthens the performance-based approach and the ambition of the overall system. Mr. Kienle, you also asked why we didn't implement earning back the capital costs as exercise target for all variable compensation elements. With the current targets, we've already implemented core financial KPI from our group management system. Earning back capital costs is the foundation of sustainable, successful management. We don't consider it necessary to additionally implement it as exercise target for variable compensation elements because it's just unusual against our benchmarks, and it would increase the complexity of the compensation system. You also asked how personal liability of members of the Executive Board as general partners is reflected in our compensation system. Because they are general partners and are personally liable as partners of the E. Merck KG, the entrepreneurial responsibility of our Executive Board members is naturally already high. Their personal liability is indirectly reflected as economic background in profit sharing. Mr. Kienle, you also asked as your last question which body within the Supervisory Board is in charge of approving transactions with related parties, whether it is the complete plenary of the Supervisory Board or only a committee. You also asked whether if it is indeed delegated to a committee, the same voting bans apply as if the whole Supervisory Board decides as a plenary. At Merck KGaA, the complete Supervisory Board, as a plenary body, is responsible to approve transactions with related parties. Of course, the same voting bans apply that you mentioned. This means that those members of the Supervisory Board cannot exercise their voting rights who have an interest as related parties in the transactions, or that may have a conflict of interest. Mr. Kuhnert. Now we will answer the questions by Marion Kostinek. She is the Chair of the Board of Investor Communication Group, ICG. Ms. Marion Kostinek, you asked about the continuation of our dividend policy in 2021. As already mentioned, we look back on a successful fiscal 2020. This growth also impacts dividend. In our sustainable dividend policy, we take our bearings from the earnings trajectory of the group. By proposing a dividend of EUR 1.40 per share in 2020, we are within the target corridor of 20%-25% of earnings per share pre-exceptionals. One of these exceptionals, also in 2021, we want to grow profitably. As reported on March 4th, we expect for 2021, a strong organic growth of sales revenue, mainly driven by the sectors healthcare and life science. Furthermore, for EBITDA pre, we expect a growth in the high single digits up to growth in the low teens, without taking into account the reversal of the provisions for the legal dispute with Biogen, the demand of EUR 365 million. Of course, you as shareholders also are to take a share in this success, and that is why we will continue to have a sustainable dividend policy based on the group earnings. Due to exceptional events, the dividend growth may diverge from this trajectory, of course. Possible triggers might be impacts from restructuring or significant macroeconomic developments. Ms. Kostinek, you also asked whether any medicines, medical products or patents could result from Merck's fight against the pandemic. You have mentioned it. We put in a lot of efforts in fighting the COVID-19 pandemic through donations. We also are assessing our TLR7/8 inhibitor M5049 in a study now to assess whether it can reduce the cytokine rush that patients with COVID-19 pneumonia may have. From such studies and similar ones, there could indeed result new medicines, medical products and patents. Next to using M5049 in the treatment of COVID-19, we also will use it in various immunologic infections. You also asked about patents in general. We hold more than 5,000 active patent family. We apply for patents for about 300 and 400 new inventions per year, and in 2020, even more than the year before. Germany usually is one of the countries we seek patent protection in, even though this often happens by way of an European patent. With around 60%, the focus of the patent applications of the Merck Group for years now have been in electronics. This is driven by the rate of innovation in the formulas for semiconductors and display applications. Mr. Kuhnert. Ms. Kostinek, you also asked about the challenges for Merck in logistics, bottlenecks and delivery delays in 2020. Our utmost priority is to make sure that patients have access to our medicines and customers to our solutions and products. That's why we monitor our global supply chains continuously in order to minimize the risks and repercussions in that area. The Corona crisis of 2020 also had repercussions on our logistics. Based on a scarcity of transport capacity, especially in air freight, we had to switch to more expensive charter flights. Based on that, we still have smaller delivery delays, but we were able to stick to our commitments. We did not have any large interruptions of our supply chains. There was no restriction in the production and no higher inventories. Delivery security, especially for our customers in life science, is important. Since the pandemic has started, our global teams are working around the clock in order to meet the increased demand for our life science products, those products that are being used in relation with COVID-19. We assess the capacities within our global network continuously and adapt our planning correspondingly. We also took proactive measures in order to meet the demands for COVID-19 products and in order to deliver other life-saving products. These measures also include the significant expansion of certain sites. For example, in Danvers in the U.S., where we also produce single-use consumables, or in Jaffrey, New Hampshire, where we produce filters, which is important for the purity of vaccines. We announced that our life sciences center in Molsheim in France, we will expand by a production plant of single-use consumables. Ms. Kostinek, you also asked whether working times have become more flexible during the pandemic. There will be location-independent roles and we will recruit experts from abroad in order to do domestic tasks. Of course, we aim at having domestic tasks done by staff based in Germany. At the same time, Merck is a globally active group, and internationality and the diversity of our teams is an important basis of our success. Because of this, and where we have to find the most suitable candidates, also people based outside of Germany will be domestic tasks. Of course, we will stick to all tax and social security regulations. Ms. Kostinek, you also asked about any limiting factors when using our flexible work time accounts for early retirement or the possibility of a sabbatical. Merck offers both a long-term account for early retirement but also a sabbatical model. The only conditions for the early retirement model is that the employee is not in probationary term anymore. The sabbatical model has as condition that you have to have worked for two years for Merck. In the early retirement model, allows for three years maximum. The condition is that the employee has access to retirement pension. The sabbatical model allows for a maximum of one year leave. Ms. Kostinek from ICG also asked about the costs of the virtual AGM compared to an AGM with physical attendance and if any savings could be donated to organization in Frankfurt. The virtual AGM this year will presumably cost half as much as the last one in attendance in 2019. Social responsibility is part of our identity, and we do that on a global and also on a local level. For that, we have decision processes so that no personal sentiments flow into the decision. We're not just doling out the money at our own will. We have our processes. We have a committee that's responsible and in charge to take decisions where to donate. We will tell them of the organization that you want these donations to go to. We also received the question about how Merck can guarantee compliance with legal working times within my work at Merck. It's true that working time regulations mandate employers to track working hours exceeding legally daily working hours. As the law stands, however, the employer can also transfer this mandate to the employees, which is exactly what we did. We provide our staff with electronic tool they can use to record their hours. This also means they don't have to record all hours, but only those exceeding legal daily working hours. The working hours during normal legal working times are not recorded. In addition, in many production areas, we also log working times by means of electronic time recording. With these two recording methods, we fully comply with working time regulations. We also got a question of how within my work at Merck we measure productivity of our employees if they are not working from the office. We basically place a high level of trust in our employees, especially about achieving the target agreed on with their line manager. Where they perform their task is irrelevant. We have established this in our performance and trust culture over many years now, which is also reflected in our annual report. The fact that our employees have remained very committed and performed at the same level or even better since the pandemic started shows how responsible they are and justifies impressively the trust we place in them. The next question will be answered by Mr. Büchele. One shareholder asked whether the attendance fee of a member of the Supervisory Board should be adjusted if they attend via video conference to a meeting from the comfort of their couch. Reducing the attendance fee is neither warranted nor appropriate. It covers the preparation for a meeting, and as you all will agree, there is no difference between a virtual and a physical meeting. This is why our Articles of Association do not stipulate a reduction of the attendance fee in case of a virtual meeting. Travel expenses, which do not incur in case of virtual meeting, are reimbursed separately anyway. Ladies and gentlemen, this concludes the round of questions. We have now answered all questions submitted prior to the meeting via the Investor portal in full detail. We will now proceed to vote on Agenda Item s 2 through 10. The items on the agenda are now again displayed on your screens. From now until 12:40 P.M., you may still grant proxy authorizations and give or change instructions to the proxies appointed by the company via the Investor portal, or exercise your voting rights by absentee vote. If you would like to avail yourself of this opportunity still at this point, please do so immediately. We will terminate the corresponding functions on the Investor portal in a few minutes at 12:40 P.M. After that, the proxies appointed by the company will vote according to your instructions by releasing the votes registered in the system. All absentee votes submitted on time have already been counted by the system. All statutory bans on voting by Executive and Supervisory Board members have been observed. The notary will supervise the voting procedures. Resolutions on Agenda Item s 2 through 9 are approved if a simple majority of votes cast are in favor. Achieving a simple majority of votes cast also means that the required simple majority of the share capital represented in the vote has been achieved, which is additionally required for the resolutions under Agenda Item s 7 and 9. In addition to a simple majority of votes cast, the resolution on Agenda Item 10 requires a majority of at least 75% of the share capital represented in the vote. We will now proceed to vote. The exact wording of the proposed resolution, which is the only valid wording for this vote, was published in the convening notice in the German Federal Gazette on March 11, 2021. May I ask the proxies appointed by the company to get ready to release the votes registered in the system, and thus vote on each agenda item as instructed by the shareholders. As announced earlier, we will close the option to grant proxy authorizations and give or change instructions to the proxies appointed by the company via the Investor portal, or exercise voting rights by absentee vote at 12:40 P.M. Ladies and gentlemen, I hereby order that voting on the items of the agenda now be closed. As of now, exercising voting rights by absentee vote and granting proxy authorizations and giving or changing instructions to the proxies appointed by the company via the web-based AGM is not possible anymore. May I kindly ask the engineers to act accordingly and the notary to record this. May I ask the proxies appointed by the company to release the votes registered in the system and thus vote on each agenda item as instructed by the shareholders now? I have just been notified that the proxies appointed by the company have released the votes registered in the system on each agenda item as instructed by the shareholders. Absentee votes have already been counted by the system. All votes have been cast. I will now close voting on the agenda. Counting the votes on Agenda Item s 2 through 10 under the supervision of the notary will take some time. We will have a break of about 30 minutes until 1:10 P.M. I hereby call the break of the meeting. Ladies and gentlemen, let me resume the AGM. I now have the voting results on Agenda Item s 2 to 10. The results will be shown on the screens. I will now read out the voting results, including the number of votes cast, as well as the corresponding yes and no votes. The complete voting results will be shown on the screen while I read them and submitted to the notary for the minutes. Furthermore, the results will be published in detail on the company's website after today's AGM. The following results on Agenda Item s 2 to 10 refer to each resolution proposed by management, as published in the notice of convening this AGM in the German Federal Gazette on March 11th, 2021. Ladies and gentlemen, let me now first announce the updated presence. The numbers will be shown on your screen. Of the share capital of the company, amounted to EUR 168,014,927.60, divided into 129,242,252 non-par value shares, we have represented 89,498,207 non-par value shares with a corresponding number of votes. This corresponds to 69.25% of share capital. Beyond that, we have received absentee votes for 1,098,664 non-par value shares, which corresponds to 0.85% of share capital. Let's now turn to the voting results. Voting results on Agenda Item 2. I ascertain and announce, of the 90,184,897 shares for which valid votes have been cast, this corresponds to 96.78% of the share capital. There were 90,167,683 votes in favor, 99.89% and 17,214 votes against corresponding to 0.02%. Under Agenda Item 2, the AGM has adopted resolution proposed by the Executive Board and Supervisory Board on the adoption of the annual financial statements for fiscal 2022, as published in the Federal Gazette on March 11th, 2021, with the required majority of votes. Voting results on Agenda Item 3. I ascertain and announce, of the 90,585,437 shares for which valid votes have been cast, this corresponds to 70.09% of share capital. There were 90,375,523 votes in favor, 99.77%, and 209,914 votes against, corresponding to 0.23%. Under Agenda Item 3, the AGM has adopted the resolution proposed by the Executive Board and the Supervisory Board on the resolution authorizing the appropriation of the net retained profit for fiscal 2020, as published in the German Federal Gazette, with the required majority of votes. Voting results on Agenda Item 4. I ascertain and announce, of the 89,368,752 shares for which valid votes have been cast, this corresponds to 69.15% of share capital. There were 88,923,395 votes in favor corresponding to 99.5%, and 445,403 votes against, or 0.5%. Under Agenda Item 4, the AGM has adopted the resolution proposed by the Executive and Supervisory Boards on the approval of the actions of the two boards as published in the German Federal Gazette with the required majority of votes. Voting results on Agenda Item 5. I ascertain and announce. Of the 88,437,289 shares for which valid votes have been cast, this corresponds to 68.5% of share capital. There were 78,409,833 votes in favor corresponding to 88.56%, and 10,127,465 votes against corresponding to 11.44%. Under Agenda Item 5, the AGM has adopted the resolution proposed by the Executive and Supervisory Boards on the amendment of the Article 13 of the Articles of Association concerning so-called transaction with related parties as announced in the German Federal Gazette with the required majority of votes. Voting results under Agenda Item 6. I ascertain and announce, of the 90,550,693 shares for which valid votes have been cast, this corresponds to 70.06% of the share capital. There were 79,749,905 votes in favor. That's 88.07%, and 10,800,735 votes against, corresponding to 11.93%. Under Agenda Item 6, the AGM has adopted the resolution proposed by the Executive Supervisory Boards on the resolution of the election of the auditors for the current and financial year, as published in the German Federal Gazette on March 11th, 2021, with the required majority of votes. Voting results on Agenda Item 7, I ascertain and announce, of the 90,566,818 shares for which valid votes have been cast, this corresponds to 70.08% of the current capital. There were 19,549,730 votes in favor and 17,088 votes against, corresponding to 0.02%. Under Agenda Item 7, the AGM has adopted the resolution proposed by the Executive and Supervisory Boards on the amendment of Article 13 of the Articles of Association concerning so-called transactions with related parties, as published in the Federal Gazette, with the required majority of votes. Voting results on Agenda Item 8, I ascertain and announce, of the 89,569,126 shares for which valid votes have been cast, this corresponds to 69.3% of the share capital. There were 78,000,787 votes in favor, 78.08%, and 11,568,399 votes against. That's 12.92%. Under Agenda Item 8, the AGM has adopted the resolution proposed by the Executive Supervisory Boards on the resolution on the compensation system for the Executive and the Supervisory Board, as published in the Federal Gazette with required majority votes. Voting results under Agenda Item 9, I ascertain and announce. Of the 88,736,396 shares for which valid votes have been cast, this corresponds to 68.66% of share capital. There were 88,419,702 votes in favor. That corresponds to 99.64%, and 316,694 votes against, corresponding to 0.36%. Under Agenda Item 9, the AGM has adopted the resolution proposed by the Executive and Supervisory Boards on the compensation system for the Executive Supervisory Board, as published in the German Federal Gazette on the 11th of March 2013, with the required majority of votes. Voting results on Agenda Item 10. I announce and ascertain of the 90,014,494 shares for which valid votes have been cast, this corresponds to 69.65% of share capital, 90,007,982 votes in favor. That's 99.99%, and 6,512 votes against, which corresponds to 0.01%. Under Agenda Item 10, the AGM has adopted the resolution proposed by the Executive and Supervisory Board s on 11 control and profit and loss transfer agreements as published in the Federal Gazette with the required majority of votes. Ladies and gentlemen, we have now dealt with all items on the agenda. Let me thank you again for attending today's virtual AGM and for your interest in the work and development of our company. Our special thanks go out to all members of staff who have made this AGM a resounding success. Before I officially close the event, please allow me to say a few personal words at the end of this year's annual general meeting. As I'm sure you've heard, Mr. Oschmann will leave his position as Chairman of the Executive Board as of April 30th, and Ms. Garijo will succeed him. For this, I would like to ask Belén Garijo and Stefan Oschmann to join me on stage. Dear Mr. Oschmann. An important chapter in the corporate history of Merck is ending on the 30th of April. A very successful chapter, as you noted most impressively in your speech today. For 10 years, you played a leading role in the successful transformation of Merck. The first five as CEO Healthcare and the second five as Chairman of the Executive Board. You did this with entrepreneurial foresight and tremendous passion for research, innovation, and digitization. Trust in science, push for tech, that was and is your credo. That's another reason why Merck is in a better shape than ever before. As a global science and technology company, focusing on the right innovation fields and I'm sure will continue to do so. A company that creates added value for society, for patients, customers, and researchers worldwide and equally so. A company led by its unique culture of curiosity. You have succeeded in making Merck Fit for the Future. I remember when you started, there were a lot less in the workforce. To inspire them and for the journey embarked on, a new journey together with you. The impact of your work was already significant prior to the pandemic. The current crisis has again impressively highlighted the importance of all your efforts. On behalf of the entire Supervisory Board, but also personally, I would like to cordially thank you for this. Thank you, Mr. Oschmann, and all the best for the future. Due to corona, we have to keep our distance, dear Ms. Garijo, dear Belén. You have also already made tremendous contributions to Merck in recent years, especially for the healthcare business. Therefore, the entire Supervisory Board is all the more delighted that as of May 1, Merck will be led by a fantastic Executive, a globally recognized expert, and above all, an outstanding personality serving as Chair of the Executive Board and CEO of Merck. Our company is in excellent hands with you. Thanks to your secure knowledge of science and your ambition, you have become a role model for many employees and researchers. That has happened during a time in which science and the work of Merck have rarely been in the global spotlight to such an extent. This is another reason why we are very optimistic about the future. The global community is at the threshold of stunning technological developments. We at Merck can help shape this transformation with you at the helm. I wish you all the very best and every success and the bit of good luck that's always needed. Mr. Stefan Oschmann, Belén Garijo, I believe it's now time to pass the baton. It's a bit hard for Stefan Oschmann to let go of the baton, but I think that's normal. Ladies and gentlemen, this brings us to the end of our AGM. I'm looking forward to seeing you again in good health next year, and I hope that by then, we will all be able to have physical attendance. I hereby close this meeting. Thank you very much.