Dear ladies and gentlemen, welcome to the Merck Investor and Analyst Conference Call on the first quarter 2022. As a reminder, all participants will be in a listen-only mode. May I now hand you over to Constantin Fest, Head of Investor Relations, who will lead you through this conference. Please go ahead, sir. Thank you very much, Kevin. Very warm welcome to this Merck Q1 2022 results call. My name is Constantin Fest. I'm Head of Investor Relations here at Merck. I'm delighted to have here today with me, Belén Garijo, CEO of the group, as well as Marcus Kuhnert, CFO. Also joining for the Q&A part of this call are Matthias Heinzel, CEO of Life Science, Peter Guenter, CEO of Healthcare, as well as Kai Beckmann, CEO for Electronics. We would like to now run you through key slides of this presentation, followed by our Q&A. With this, I'd like to directly hand over to Belén Garijo, Group CEO, in order to kick off this presentation. Over to you. Thank you very much, Constantin, and welcome everybody also from my side to our Q1 earnings call. Please go to slide five of the presentation, starting with the highlights. Overall, we came strong out of the gate with our life science sector being the key driver. Organically, our revenue for the group increased by almost 8%, and EBITDA pre was up by 1.6% against tough comparables in 2021. Paired with significant currency tailwinds and a small portfolio effect, reported sales and EBITDA pre amounted to EUR 5.2 billion and EUR 1.6 billion, respectively. While EPS pre of EUR 2.41 was up 11% year-on-year. Given mounting supply chain and inflationary pressure, the operating environment is increasingly challenging, as you very well know. However, thanks to the outstanding commitment of our global teams, we are navigating these challenges reasonably well, and we continue to make significant progress with our strategic agenda. Based on the strong Q1 performance and a positive outlook for the remainder of 2022, we are now confirming our full year guidance. As usual, at this time of the year, we are getting more specific, anticipating net sales in a range of EUR 21.6 billion-EUR 22.8 billion and EBITDA pre of EUR 6.6 billion-EUR 7.1 billion, with EPS pre of 9.60-10.50. More details on our assumptions later in the presentation. Turning to slide six, an overview of our performance by business sectors. As you can see, all our three business sectors contributed to strong organic sales growth in Q1. Our key growth engines, so-called Big Three, Process Solutions, and the new Healthcare launches, are very well on track. Those account for almost 90% of the growth in the quarter. Life Science was once again the key driver with sales raising to 10% organically, followed by Healthcare with almost 7% and Electronics with 5%. Currency was a significant tailwind across the board, adding 4.4 to the group revenues and 6.4 to group EBITDA pre. The acquisition of Exelead, which closed, as you know, end February, also contributed slightly to sales, while drag is slightly on earnings due to phasing. Within Life Science, growth was entirely driven by the strength of the core business, while the COVID sales were slightly dilutive to growth and significantly down from Q4 levels. Despite lowering COVID sales, Process Solutions continues to stand out with 13% organic growth. Applied Solutions is on par this quarter, also delivering a remarkable 30%, while Research Solutions was up by 2% against the results comparables of Q1 2021. Solid organic growth in Healthcare was driven by 50%, 50% growth from recent launches, mainly MAVENCLAD and BAVENCIO, while the established portfolio remains stable. From a franchise perspective, oncology was the highlight of the quarter with organic growth of almost 30%. In electronics, our semi business delivered very strong organic growth of 16%, more than offsetting the decline in display, while surface was slightly up. Regarding earnings, EBITDA pre came in at EUR 1.63 billion, leading to a strong margin of 31.3%, slightly down year-on-year. The margin in life science, however, increased with EBITDA pre-growth of over EUR 130 million in absolute terms. Moving on to slide seven, you see the regional breakdown of the sales and overall, a performance that is broad-based with organic growth across all the regions. This is yet another strong testament to the global relevance of our very well diversified portfolio. Among our largest regions, Europe was the fastest-growing in Q1, with sales up 11% organically, followed by Asia Pacific with 7%, and North America with 5%. Life science delivered double-digit organic growth in all of these regions, while self-care and electronics were up in Europe and Asia Pacific. Overall, our geographic footprint remains nicely balanced, with a significant exposure to strategic growth markets in Asia Pacific at 36% of our sales, followed by Europe and North America, both at 28%. With this, let me hand the call over to Marcus for some additional detail on our Q1 results. Marcus, over to you. Thank you very much, Belén, and welcome also from my side. I'm now moving on to slide nine for an overview of our key figures for the first quarter. Overall, we had a strong start to 2022, with double-digit growth in sales and earnings per share pre. Taking into account significant currency tailwinds and a small portfolio effect from the acquisition of Exelead, net sales increased 12.2% to EUR 5.2 billion. EBITDA pre was up by 7.8% to EUR 1,629 million, and EPS pre rose 10.6% to EUR 2.41. Operating cash flow came in at EUR 840 million, down 31% year-on-year, mainly due to phasing effects on payables and tax positions. Net financial debt increased by EUR 475 million compared with the end of December, mainly due to the acquisition of Exelead, while our net debt to EBITDA pre ratio remained stable at 1.4x. Let me briefly comment now on our reported results on slide 10. EBITDA increased by EUR 130 million in the first quarter in absolute terms, which is basically in line with EBITDA pre. The financial results improved significantly, mainly due to lower interest expenses from lower interest on tax liabilities and reduced financial debt. The effective tax rate came in at 22.4%, so on the lower half of our guidance range. Net income and reported EPS both increased by more than 17%. With that, let's move on to the review by business sector, starting with Life Science on slide number 11. Life Science had a strong start to the year with sales up 9.7% organically. Within this, the core business showed robust performance with organic sales growth of 11%, while COVID sales were slightly dilutive to growth and significantly below Q4 levels. From a portfolio perspective, Process Solutions remains a key driver with sales up 13% organically. Here, the core business increased by 15% organically, while COVID impact turned negative at around -2%. Bioprocessing led the growth, followed by actives and formulations. We increased capacity in bottleneck areas further, although output was temporarily impacted by supply challenges at the beginning of the quarter. The order intake continued to grow despite tough comps, and the order book remains strong. Research Solutions delivered organic growth of 2.1%, which is remarkable in light of very tough comparables. Solid organic growth in the core business of 5% was dampened by lower COVID sales, which were up sequentially, though, given temporarily higher testing activity amid the Omicron wave. Applied Solutions had an outstanding quarter, with organic growth of 13% in a strong market and broad-based performance across all business lines. As a reminder, our COVID sales in Applied are negligible. Geographically, we recorded double-digit organic growth in all major regions. From a customer perspective, we saw double-digit organic growth in industrial and testing and in pharma and biotech, while academia was slightly up and diagnostics down by double digits amid lower COVID demand. The lockdown in China did not impact Q1 much. However, we do expect a significant effect in Q2. With regard to earnings, EBITDA pre cracked the EUR 900 million mark for the first time, rising 12% organically with a record margin of 37.9%. +70 basis points increase in the margin reflect a positive product mix in the core business, as well as operating leverage and favorable pricing, partly offset by a lower share of COVID business and ongoing strategic investments. That said, please note that we continue to expect a slight margin contraction for the full year. Moving on to healthcare on slide 12. Healthcare also had a strong start into the year, with sales up 6.5% organically, driven by, as Belén just mentioned, a 50% growth of our recent launches and flattish sales in the established portfolio. By franchise, oncology was a star performer with organic sales growth of 27% up. This was fueled by continued strong launch momentum of BAVENCIO, especially in Europe, with sales more than doubling year-over-year and strong growth of Erbitux at +10%. Our N&I franchise reported slight growth of about 1% as the ongoing decline of Rebif at -15% was more than offset by further ramp-up of MAVENCLAD up +25% organically amid a flat U.S. MS market. The fertility franchise rose 4% organically in line with our midterm guidance, with growth of GONAL-f in most markets. Sales in CM&E increased by 2.5% organically, supported by strong Euthyrox and Concor performance, while Glucophage was down due to still tough comps related to the VBP program in China. In terms of our pipeline, let me focus first on evobrutinib. The war in Ukraine has posed a challenge to every pharma company that is running clinical studies in Ukraine and Russia. We are no exception in this regard. Therefore, we have taken additional measures to ensure the integrity of our studies, which include looking for patients outside of these countries. Also, for the pipeline, we have advanced enpatoran, our highly selective and potent dual TLR7/8 inhibitor to phase II development. Regarding earnings, EBITDA pre came in at EUR 5.9 million, down 7% organically with a margin of 29.5%. Please note that the 300 basis points margin contraction was mainly due to tough comps. In particular, Q1 last year included non-recurring income of around EUR 75 million, comprising of around EUR 50 million for two BAVENCIO milestones, some EUR 20 million from GSK deferred income, and about EUR 5 million from active portfolio management. Q1 this year included non-recurring income of only around EUR 15 million, stemming from active portfolio management and fully in line with our low double-digit million euro guidance. Adjusted for these differences in non-recurring income, the margin would have been about stable. That said, we confirm our full year guidance for income from active portfolio management in the low to mid double-digit millions and expect another low double-digit million EUR amount in the second quarter. Turning to Electronics on slide 13. Electronics had a solid start to the year with organic sales growth of 5.2%. Semiconductor Solutions remained the key growth engine, with sales up 16% organically, once again exceeding our midterm guidance. This strong performance was fueled by mid-teens growth in semi materials, given strong demand across all material categories and further contributions from project business in DS&S. Display Solutions sales were down -12% organically, mainly due to a continued decline in liquid crystals, which was accelerated by a lower utilization at some of our Chinese customers. Surface Solutions was roughly stable, with sales up 1% organically as growth in cosmetics more than offset the decline in coatings against tough comparables and amid challenges in the automotive industry. The EBITDA pre amounted to EUR 289 million, up in reported terms but down 6% organically. The margin declined 160 basis points year-on-year to 30.2%, mainly due to gross margin pressure from inflationary developments. Before handing back to Belén, let me also comment briefly on our balance sheet and cash flow statement. You can see on slide 14, our balance sheet expanded slightly compared with the end of December. Main drivers behind this development were strong growth of the business and FX. In addition, the acquisition of Exelead, which was fully financed from existing cash resources, resulted in some shifts on the asset side, especially in a reduction of cash and cash equivalents. The difference between purchase price and equity at the moment sits entirely in the intangible assets as goodwill. On the liability side, we saw a decline in pension provisions due to actuarial gains, which together with retained earnings and positive at exit tax, drove net equity higher. As a result, the equity ratio improved further from 47% to almost 50%. Turning to cash flows on slide 15. Operating cash flow came in strong at EUR 840 million, although it was down significantly compared to Q1 last year, mainly due to phasing and with respect to tax positions and payables. Cash out for investing activities significantly increased, primarily driven by the acquisition of Exelead, as well as higher CapEx to support our growth ambitions. Last but not least, the difference in financing cash flow can be explained by higher repayment of financial debt. With that, let me hand back to Belén on update on ESG and the outlook. Thank you, Markus. I'm now on slide number 17 to share with you a brief update on ESG and mention an important milestone that we have achieved on our roadmap. In the past couple of months, we have been intensively evaluating our path towards climate neutrality by 2040. You may remember that as part of this ambition, we set targets for limiting our Scope 1 to 3 greenhouse gas emissions by 2030. The following emission targets have now been confirmed by the Science Based Targets initiative as being science-based. With our absolute production target of -50% for both the Scope 1 and 2 emissions, we even exceed the SBTi requirements to limit global warming to 1.5 degrees. For Scope 3 emissions, SBTi confirmed an intensity reduction target of -52% in relation to gross profit. To achieve our goals, we have started various initiatives and invested in technologies for the reduction of process-related greenhouse gas emissions, the purchase of renewable electricity and energy efficiency. In addition to our climate targets, we have launched several programs to further improve our waste score. For example, our SMASH Packaging initiative in Life Science will now be extended by additional projects like smarter in-film packaging in electronics and the so-called Slim Pack in our fertility franchise. More details can be found in our sustainability report of 2021, which was published a month ago. With this, let me go straight to the outlook. Before I give you the numbers, let me refer to the comments that I made earlier about the increasingly challenging operating environment. Now I am on slide 19. As you may remember, we already addressed the topic of rising inflationary and supply chain pressures during our Q3 earnings call back in November 2021. Well, since then, the situation has further evolved, to say the least. In particular, the war in Ukraine and the recent lockdowns in China have created new challenges and added to the existing ones. While we are obviously preparing for different scenarios, this chart summarizes some of the key assumptions and mitigating actions that serve as the basis for our guidance. For example, we assume energy supply shortages will last throughout the remainder of the year, but will be limited to EMEA, with no outages expected. We anticipate continued volatility and upward pressure on input costs, but assume only very minor raw material shortages. With regards to the lockdowns in China, we assume that the situation will normalize around the end of Q2, and that we will be able to make up for the lost business, especially in Life Science and Electronics afterwards in H2 this year. To be clear, should the lockdowns in China extend significantly beyond June, we believe that this is still covered by our guidance range. In response to these challenges, we are considering alternative sales and production channels. We are passing on higher input costs via price increases when and wherever this is possible. We have also increased our safety stocks for critical raw materials, and of course, we are actively monitoring our suppliers. Rest assured that as a science and technology company, we continue to act from a position of strength when it comes to navigating these challenging situations. Our margins are attractive, our end markets are strong, and our systems and processes are designed to flexibly adapt to a rapidly changing environment and effectively protect our business. With that, going to slide number 20, let me take a closer look at the numbers. We now expect group net sales in 2022 in a range of EUR 21.6 billion-EUR 22.8 billion, with EBITDA pre in a range of EUR 6.6 billion-EUR 7.1 billion, and EPS pre in a range of 9.6-10.5. This is based on organic sales growth of 6%-9% and organic EBITDA pre-growth of 5%-9%, in line with our qualitative guidance that we provided to you in March. Currency is expected to continue to provide tailwinds between 3%-6% for sales and 4%-8% for EBITDA pre, ahead of the 1%-4% and 2%-5% guided before. This is mainly due to the further strengthening of the US dollar. For some additional color by business sector, please go with me to slide number 21. As you see here, we continue to expect organic sales and earnings growth in 2022 to be supported by all three business sectors. We also still expect Life Science to be the fastest growing sector in terms of sales, followed by Self-Care and Electronics. Within Life Science, we see an improved outlook for the core business, offsetting our reduced COVID expectations. This is simply strong testament to the quality and sustainability of growth in our Life Science sector, our largest business sector. Regarding COVID, we now expect COVID sales in Process Solutions of up to EUR 700 million versus the up to EUR 900 million that we previously announced. While we confirm our guidance for below EUR 100 million in Research Solutions. We also still expect the margin in Life Science to be slightly down year-over-year. For Healthcare, our quantitative guidance is in line with our qualitative statements from March. In electronics, we have become slightly more cautious on margins due to the inflationary pressures that we are expecting. With that, thank you very much for your attention, and we will now be happy to take all your questions. Thank you. One remark from my side. I would kindly ask you to limit yourselves to a maximum of two questions per person. This will allow all of your questions to be heard in the first place. Thank you very much. Let's start with the Q&A, please. Thank you. We will now begin our question and answer session. If you have a question for our speakers, please dial star one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you find your question answered before it is your turn to speak, you can dial star two to cancel your question. If you are using speaker equipment today, please lift the handset before making your selection. One moment, please, for the first question. The first question today comes from Matthew Weston of Credit Suisse. Thank you very much. Two questions, please. The first is on life science growth. Belén, I fully hear your optimism about the growth trajectory of the business, but I'm a little bit confused about making the numbers add up. In Q1, you did 10% organic growth, and it was an easy comp for COVID. Marcus has already mentioned that China will be a noticeable drag in 2Q, but your guidance suggests that the underlying growth must be really going to accelerate in life science in the second half of the year. I'd just really love to understand what's driving that acceleration. Is it new capacity that you added? Is it good visibility on the order book? Any commentary would be really reassuring. Then the second question, you mentioned that extended Chinese lockdown is included within your guidance range or captured within your guidance range. I'm very interested around German energy rationing, and I realize it may not happen, but I would love to understand what proportion of your business relies on German domiciled manufacturing, and what can you do to try and protect it given the uncertainty as we go into year-end. Hi, Matthew. Let me get the second question, and then I will ask Matthias to comment on life science growth. I assume you are referring to the gas, the potential gas embargo in Germany. If there would be a gas embargo, of course, our main risk would be in Europe and Darmstadt makes 50% of our gas consumption in Europe. Obviously, from the very beginnings of the conflict of the war, we have been articulating our mitigation plan, and we are now very highly confident that we are very well prepared to avoid any disruption on our production sites in Darmstadt. Perhaps Kai can offer a couple of more details on what is within that plan. Hey, Matt. This is Kai speaking. Our plans foresee to replace our gas consumption by other energy sources, including oil and the grid for electricity. With that, I think we are confident to cover full scope in order to stay productive with our production in Darmstadt. Matthias? Hello, Matthew. It's Matthias. Let me cover your question. Indeed, I mean, we are fully confirming our guidance for the year for Life Science for 7%-10%. It's indeed important that we dissect COVID demand dynamics from the core business. As we have demonstrated in this quarter, although COVID is declining, we have offset that with a very strong core business growth. Essentially, PS core is two points above the overall number for Process Solutions and also Research Solutions, where we show the 2% for the total business. If I extract the core business, we are up 5%. A key driver for our confidence into the full year is also, like you mentioned, the order intake and the order book. If I look at the order intake, so all the orders coming into the quarter, booked in the quarter, they are still going up. Order intake is slightly up year over year. It's slightly up sequentially. While it's declining for the COVID portion of the business, it's substantially up for the core business. If I take that all together, yeah, I mean, we are navigating, as Belén mentioned, a lot of the macro challenges, but we're very confident in our core business. We also, as we mentioned before, have a growing base of capacity, which is coming online. This growing core demand is meeting now our growing capacity. Thank you. Thank you, Ram. Our next question comes from Richard Vosser of JP Morgan. Hi. Thanks for taking my question. One question on the Ukraine impact on clinical trials. Marcus, you highlighted looking for additional patients as one of the measures across your clinical trial program, which makes sense. How should we think about the timeline impact, and in particular on ibrutinib, if you can say anything as to that. Just some more color there would be very helpful. Maybe also a pharma related question on Mavyret. You highlight you know 15% increase in demand of new patients in the U.S., which looks good. How are the ex-U.S. dynamics on Mavyret in terms of new patients, returning patients? That would be helpful too. Thanks very much. Yeah, Richard, thanks for your question. I'll tackle both. First on ibrutinib, as Marcus mentioned in the beginning, it is obviously not a surprise to you. It's a challenging situation from a clinical trial perspective, and that is a generic thing within the industry and definitely not limited to Merck. A couple of points on the mitigation. First of all, we mentioned before that we have put in place a number of proactive measures, for example, increasing study medication stock levels in the affected regions. What we also did is work hard to ensure that we keep patients on study in the affected territories, for example, by moving them to areas where they can continue to participate in our study, whether that is in Ukraine or, by the way, outside of Ukraine. Now, to really answer your question, and to Marcus' point, we have indeed decided to add additional patients outside of these countries. We also took the opportunity, and that's important, to amend our protocol to make it event-driven, which we believe is the best approach under these circumstances. This design, which by the way, is commonly used in MS trials, as you know, it was submitted to major health authorities, and it will allow us to leverage more data from the remaining patients in the trial and help to mitigate the impact caused by those circumstances. Regarding timelines, you heard us speaking before the war about having the clinical trial data in-house in Q4 2023, and we are still aiming for this, given all the mitigating measures and the change in protocol, which I just explained to you. Of course, given the fact that the protocol is now event-driven, the exact date would depend on the accrual of the necessary events like the other key competitors in the BTKi space. Regarding your question on Mavyret, you mentioned indeed new patients up 15% in the U.S. Let me make you a little correction here. This is the new patients globally. This is not necessarily in the U.S. To give you a little bit more color, in the U.S., high efficacy market still depressed, as you have also heard from some of our peers in that market. The good news is that we keep our market share, contrary to, for example, S1Ps, who are losing market share against the anti-CD20s. On the other side of the Atlantic in key countries in Europe, we have strong positions, and we continue to reinforce those positions because we continue to gain market share in the dynamic segment of the high efficacy market. Overall, you know, with the EUR 189 million, we came in right spot on the consensus. I'm optimistic, you know, as the year unfolds, to see the fruits of this relatively good dynamic in new patient starts. Thanks very much. The next question comes from Gary Steventon of BNP Paribas Exane. Oh, great. Thank you for taking the questions. Just to follow up on Mavyret and perhaps the healthcare guidance, please. It looks like the healthcare top line guidance might be slightly widened, just translating the previous solid into the new 4%-7% range. So it'd be helpful if you could share your thoughts here and what kind of recovery for Mavyret might be assumed in a 4% growth scenario versus 7% or really what the key swing factors are for that perhaps slightly widened healthcare guidance. Then, a question on Life Science and China as well, please. I think it'd be helpful if you could just remind us of the sales exposure for each of the three divisions to the Chinese market. Specifically on Life Science, you recently announced the investment in single-use capacity for bioprocessing. So I'm just wondering how this sits within the network. Is it mainly to service the domestic Chinese market? And if so, kind of how a significant driver of future growth do you think China should be? Or is it more to shift production out to kind of European and U.S. markets on a relative basis which might support margins longer term? Thank you. Thanks. I'll take the first question. Within the 4-7, it's not really one single product or one single reason. There are plenty of things where we are in a range, right? Especially with recent launches. It's so Mavyret obviously is part of that variability of the range. Also BAVENCIO, we still have a lot of launches to come, so we don't know exactly when pricing and reimbursement occur. This is, you know, always a little bit variable. For example, I can tell you in the case of BAVENCIO that we just got the reimbursement in Spain in May, and we got a reimbursement in Italy in April. We continue to roll out the product as we speak. Of course, this comes with a certain degree of variability. Then perhaps the last element I would add to that is the fertility in China. Although fertility in China is less than 20% of the worldwide sales of fertility, of course, we may see in certain parts of China, for example, Shanghai, a temporary effect of the lockdowns on the fertility business. All right. Thanks, Peter Guenter. It's Matthias Heinzel here. Let me then cover your two questions on Life Science. First of all, around China. Overall, our regional split is in a way that total Asia is about 25% of total Life Science, and China is about 10%. That's spreading across our entire business from Process Solutions, Research Solutions, and Applied Solutions. First of all, I mean, we are fully operational in our plants in China and in Tonglu, Wuxi, right? We are fully operational. However, as most of the other companies, we are impacted by the lockdown, especially in the Shanghai area. That's certainly having a short-term impact on us, especially as we look into the Q2. There was no impact in Q1. Obviously, getting stuff out of the warehouses is currently a bit challenged. Depending on how long that goes, we expect that to recover for the full year. That is all kind of baked into our guidance. Then the second part of your question around single use. As of today, we have a strong footprint in the U.S. in our facility in Danvers for single use. We have announced a global expansion into Europe, went live with our multi-site facility with kind of two steps. Now we announced the single use capabilities built up in Wuxi, China. Indeed, at the end of the day, we wanna have a very strong global footprint. Essentially the China facility should serve then the highly growing market out of China. Okay, thank you. The next question comes from James Quigley of Morgan Stanley. Hello, thanks for taking my questions. I've got a couple on margin development. In electronics, would you be able to give us a little bit more color on EBITDA development? You mentioned that maybe the bottom end of the guidance is nudged down a little bit. But can you give us an idea some more sort of details on your pricing initiatives in semis and any other levers you have in or may not have in Display Solutions and Surface Solutions? In pharma, you mentioned in the release that R&D was down in absolute terms, so how should we expect this to trend through the rest of 2022? Can you talk to your flexibility for investment in pharma, that comes with the termination of the Ventrafast program in lung cancer. Do you have any plans to accelerate investment in certain areas or leave flexibility for in-licensing or the R&D attached to in-licensing? Or should we expect that R&D savings continue to be an EBITDA driver? Any thoughts here would be great. Thank you. James, I take the electronics question first. You asked about the margin development. In semi we do have pricing levers, and we have stable margin development in semi while we already start, of course, investing into future growth with additional R&D investments, as well as our capacity investments, which definitely weigh on margins too. There is currently no margin progression. However, we enjoy stable margin. The display margin development is continued impacted. This is not a situation that is based on the inflation. That is the market development that we have reported for a couple of quarters, meanwhile a couple of years. This is at present not anymore fully compensated by the semi development. In Surface, we do have a positive pricing environment too. In Surface, we even expanded our margin slightly, which is in part based on our transformation activities and on cost initiatives in Surface too. There's a combination of different factors that, in a mix, has led to the margin assumptions that we have put forward in our guidance. Yeah, James. The question on R&D spend, what you should expect moving forward is the ratio that we have today is going to be more or less stable as a percentage to sales. As you know, there is lots of moving parts, right, in the R&D spend. To your point, indeed, Ventrafast is out. You have seen in the catalyst that we have both entanerone in 2 phase II studies, that we will start exepenafamcib initiation trial during summer. You know, I think that when we look at the portfolio of R&D, that we have enough flexibility to continue to do what we have to do and to maximize the assets that we have. At the same time, making sure that our ratio to sales remains more or less in the ballpark that you see now. Great. Thank you. Our next question comes from Sachin Jain of Bank of America. Just two quick questions, please. Firstly, for Process Solutions COVID sales, can you just comment on the phasing of COVID sales you expect across the year? I think the first quarter was EUR 150 million-ish. Should we expect that to full run rate for the remaining quarters? Just want to get an idea of what drag to expect from COVID going forward, given different phasing in 2021. The second one is just an update on MAVENCLAD patent term extension. I think it was rejected in the U.S. when you appealed it, and you're still pending to hear from a couple of European countries, Germany and U.K. Any update there would be very helpful. Thank you. Yeah. Hey, Sachin, it's Matthias. Let me answer your first question. Indeed, I mean, we are expecting more of a flattish kind of development with COVID, maybe even a slight decline over the quarters, and that's what we have kind of used for our adjusted kind of top-line guidance. At this point, and of course, all depends on how the virus and the rollout of the virus kind of develops. But with Omicron prevalent, milder symptoms, we expect that this rather remains flattish, and not kind of growing throughout the year. Yes, Sachin, your question on MAVENCLAD, the patent situation, the short answer is there is no update. In the U.S., the patent term extension appeal is still pending. As you know, in Europe, we have obtained a certain number of SPCs in some key countries, such as Spain, France, and Italy. The other requests for the SPCs are still pending. These are processes country by country, and so we have to wait, and you know what comes out in the future. Thank you. We can go to Keyur Parekh of Goldman Sachs. Hi. Two questions, please. The first one, just wondering if you can give us a bit more precise guidance about the overall from a quarterly perspective. Clearly, you're flagging some headwinds into the second quarter and a recovery kind of into the second half of the year. Just wondering, as we think over kind of year-over-year for the second quarter, kind of how you would characterize it. Separately, kind of from a cost inflation perspective, I think kind of slide 19 talks to it a bit. Just wondering, kind of if you can be a bit more quantitative of what is kind of priced in or what is kind of assumed in your guidance, especially relative to input cost. Thank you. Hi. Look, we usually don't give a precise quarterly guidance, right? The challenges that we spoke about on Q2 are exclusively referring to the China lockdowns, which, you know, didn't have any influence on our business, or very little influence on our business in Q1. Obviously, we have made assumptions as for life science and electronics and healthcare. As Matthias mentioned before, we are expecting Q2 to be highly dependent on the way the lockdowns evolve. We have distribution challenges, basically, so we are expecting to catch up on those sales in future quarters. This is the only specific challenge that I mention for Q2. Marcus, do you want to speak about the inflation? There's also not much to add from my perspective. As we outlined in the guidance, we believe that relatively high inflation is going to prevail throughout the entire year 2022, which is driven on the one hand by some raw material cost challenges. On the other hand, by elevated freight logistics costs and also energy prices, which has, by the way, also hit us in the first quarter. There, let's say on the inflationary side, there should be not so much news actually when we further move into the year. The major topic that might drag down the second quarter a little bit is, as Belén just mentioned, a more visible impact from the China lockdown, which we expect to relieve then step by step when we enter into the second half of the year. Thank you. We can go to Falko Friedrichs of Deutsche Bank. Thank you. Good afternoon. My first question is, could you precisely quantify the COVID-related sales in Q1? I'm sorry if I missed it. The second question is on the semiconductor materials business and, whether there's any risk that the demand side could potentially be negatively affected by everything that's going on around us on a macro level, the inflation, everything, or whether that is not so much of a risk going forward. Thank you. Yeah. Hey, Falko. It's Matthias here. As I mentioned before, I mean, we gave you an upper end of the guidance for our COVID number of about EUR 700 million. I think your colleague before asked and did the math around how Q1 kind of phases out over the year. That gives you kind of an indication how Q1 was. I mean, if you kind of annualize it, I think you're pretty close to that. Falko, I may take the semi question. We don't have any negative perspective from our customers on the demand side. It's the opposite. That's the case. They're running on a full utilization in their factories. They are still catching up with what is known as the chip crisis, and this backlog continues. The market forecast is on 8% growth in MSI or wafer starts, which is pretty intact. Here we are prepared for continuous high demand on the end use in all different areas of semiconductor. Okay, thank you. Our next question comes from Daniel Wendorff of Oddo BHF. Yes. Thanks for taking my questions, also too from my side. So one question on Life Science. Does the strong underlying demand development for your core business in particular also in Process Solutions maybe you can talk a bit about where this is coming from? You mentioned also the strong order development in Process Solutions. I would be interested in a number like order intake growth excluding the COVID part. So if you can help me there, that would be nice. Then a follow-up question on Falko's question really for electronics or Semiconductor Solutions. Is there any risk that you might see supply chain topics arising for you as a supplier and also depending on certain products? To my understanding, that was also part of the business in Display Solutions, but maybe you can provide more color here. Thank you. Hey, Daniel, it's Matthias. Let me address the first question. First of all, when we talk about our strong core business, it really goes across all the three businesses. Research, applied, and process solutions, they all had a very strong, if you will, core business growth, right? We usually talk about process solutions, but if you look at applied as well, that was very strong. Also research, if I take out COVID with 5%, really also about our mid-term guidance. It goes across sector. Obviously, we are strong in pharma biotech, but also in applied, for example, we have industrial testing, which goes out in the food and beverage industry. Also here we saw a very nice uptake. The key point is here, it really goes across all business segments and across all regions. Secondly, your question around Process Solutions. Actually, we are not splitting out our order intake into further details. As I mentioned before, we are seeing year-over-year still a slight order intake increase and also a sequential from Q4 to Q1, a sequential order intake increase with a very healthy still book-to-bill ratio. Then very important, the dynamics within this order intake and leading to a strong order book that the quality, if you will, and the speed of the business is much more now towards the core of the business versus COVID. Sequentially, if you ask me, the core business order intake is up substantially Q4 to Q1. Daniel, let me take the semi supply chain question. We're managing supply chains in, you know, a couple of quarters very, very tightly, and kudos to the supply chain team. Raw materials are tracked one by one, dual sourcing for whatever is possible, checking on dependencies, direct and indirect, and looking into port congestions last year, U.S., this year, China. We have not let down any of our customers with any missed delivery, so this is very, very tightly monitored. We don't have a crystal ball, but we don't foresee any limitations on our side. Of course, we stay in contact with our customers, whether they are dependent on other materials and may see shortages. Nothing of that was mentioned so far, and that's how we track supply situation. From today's knowledge, we don't foresee any shortages. Thank you. Our next question today is from Simon Baker of Redburn. Thank you for taking my two questions. Just continuing on the question of the semi cycle. One of my colleagues was at the SPIE Lithography conference a couple of weeks ago and got the impression that EUV uptake is probably slightly slower than some people expected. I just wanted to get your perspectives on that and frankly how much it matters to Merck. Are you positively or negatively exposed to a faster rollout of EUV, or does it not really make much difference? Then secondly, on healthcare, at the end of April, there was a paper in Nature suggesting that somebody has found TLR7 gain-of-function genetic variants, which obviously augurs well for your efforts with enpatoran in lupus. I just wanted to get your perspectives on that and whether you are conducting or have conducted any sequencing in the planned phase II study that's started in Q1. Thanks so much. Simon, on the SPIE discussion on EUV, the delay is still a small portion of the materials business is related to EUV across the industry, not just for us. That delay of the adoption of EUV is not material. On the other side, we see an acceleration of node transitions on all our leading-edge customers. If you look across the industry, more of the opposite that we can see right now that's indicated, easily monitored by our R&D projects that even see some acceleration on, I don't know, going through 3D NAND layers, NAND, and smaller node sizes in advanced logic. I'm not pessimistic about the speed of innovation on our leading-edge customers. Yes, Simon, to your question, the answer is yes. I think that the Nature publication actually reinforces our hypothesis on TLR7/8 and the role that it plays in the pathogenesis of lupus. We really think it's playing an important role in both the innate and the adaptive immune responses. I think indeed the Nature publication only reinforced our postulation that TLR7/8 is involved in SLE pathogenesis. The WILLOW study, which is a proof of concept and a dose finding basket study, to evaluate the efficacy and safety of napataran in both systemic lupus and cutaneous lupus. We have recently dosed our first patients. We're very happy with that, and we estimate an enrollment of roughly 440 patients. Okay. Thanks so much. Ladies and gentlemen, our final question today comes from Florent Cespedes of Société Générale. Hello, Florent, your line is open. Hi, Yuri. Apologies. Thank you very much for taking my question. Florent Cespedes, Société Générale. Two quick ones. First, a follow-up on the guidance. Could you please give us a little bit of color on what could be the assumption that could bring you to the low end of the range of the guidance? We understand on the inflation side there should not be much during the rest of the year, so it seems that most of the uncertainties are coming from China and the current lockdown. That's my first question. My second is on fertility. You said that you have a kind of back to normal situation with a +4% top line growth for the first quarter. It seems that you are facing some challenges in China. Just if you could give us a little bit more color on the performance of this business? Thank you very much. Florent, let me address your first question. I mean, as you know, we are navigating a very complex environment and have activated multiple mitigation plans, leveraging alternative sales and production channels, passing on higher input costs via pricing fixes whenever and wherever this is possible, increase safety stocks. At the end, there is uncertainty in multiple points, right? I mentioned the China lockdowns. I mentioned that even if the China lockdowns extend significantly beyond June, we believe this is still covered by our guidance. The uncertainty and volatility of the environment asks for us to give you a reasonable view. What I believe is a very transparent view of our assumptions underpinning the guidance. This is what I can say for the first question. On the second question, Peter is going to address fertility. Yeah. Thanks, Belén, and hi, Florent. Look on fertility, first of all, we had a nice first quarter. The growth continues in what we call the post-pandemic phase with a 4.3%, which is in line with our midterm guidance. We're very happy with this first quarter. And then to your point on China, look, I already mentioned in the call, the China fertility business, total China fertility business is less than 20% of the global one. And of course, within that, you know, if they have a temporary lockdown in Shanghai, it is only a small fraction of that, relatively small fraction, right? Last but not least, we also have seen in the past that after lockdowns ease, that you also have a catch-up effect on the fertility. We saw that in last year in Europe and the U.S., for example. We would also anticipate the same. We're not particularly worried, but it's an attention point, I would say. Okay. Thank you very much. All right. This is [Terry]. Yes. I think these were all the questions. With this, I'm happy to hand over to Belén for any closing words. Belén, closing remarks. Yeah. Very quickly. Thank you, everyone, for your continued interest in Merck. In brief, we had a very strong start to the year with double-digit growth in sales and earnings. We confirm our organic growth targets for the year despite an increasingly challenging operating environment. Of course, we will remain laser-focused on executing on our strategic priorities. Please keep in mind what I said before, that as a science and technology company, we continue to act from a position of strength when it comes to navigating uncertain environments. Our margins are extremely attractive, our end markets are strong, and our systems and processes are designed to flexibly adapt to this rapidly changing environment and effectively protect our business. With this, I just wanted to announce that we will be hosting our Capital Markets Day in October sixth here in our headquarters in Darmstadt. Our IR team will follow up with details in due course. We will be delighted to welcome as many of you as possible. Thanks again and goodbye. Ladies and gentlemen, thank you for your attendance. This call has concluded. You may now disconnect.