Ladies and gentlemen, welcome to the Merck Investor and Analyst Conference Call on Third Quarter 2022. As a reminder, all participants will be in a listen only mode. I'm now handing over to Constantin Fest, Head of Investor Relations, who will lead you through this conference. Please go ahead, sir. Thank you very much, Sandra. Dear ladies and gentlemen, a very warm welcome to this Merck Q3 2022 results call. My name is Constantin Fest, I'm Head of Investor Relations here. I'm delighted to have here today with me, Belén Garijo, Group CEO, as well as Marcus Kuhnert, Group CFO. We are also being joined for the Q&A part of this call by Peter Guenter, CEO of Healthcare, as well as Matthias Heinzel, CEO of Life Science, and Kai Beckmann, CEO of Electronics. The next couple of minutes, we would like to run you through the key slides of this presentation, and right after that, we'll be happy to take all of your questions. Having said that, I'd like to now hand over to Belén to kick off the presentation. Over to you, Belén. Thank you, Constantin. Good afternoon, everyone, and welcome to our Q3 Earnings Call. Let me start with the highlights on slide number five of the presentation. First and foremost, we had a strong third quarter, mainly driven by Life Science and Healthcare. Organically, group sales increased 7.1%, and EBITDA pre rose by 7.5%, so faster than sales. Together with significant currency tailwinds and a small portfolio effect related to Excelead, reported sales and EBITDA pre amounted to EUR 5.8 billion and EUR 1.8 billion, respectively. EPS pre of 2.68 was up 20% year-on-year. We delivered this growth despite a very challenging external operating environment, as you well know. Global economic activity is experiencing a broad-based slowdown. Inflation continues to rise to levels not seen in decades, and the risks to the global economic outlook remain very significant. Just think of the tightening financial conditions in most regions, the ongoing pandemic and of course, multiple geopolitical tensions starting with Russia's war in Ukraine. However, as recently discussed with all of you, at our recent Capital Markets Day, our company is highly resilient and solidly positioned to navigate these uncertain times. Based on our multi-industry setup, we are generally less exposed to macroeconomic downturns. Plus, we are focusing on markets with, robust underlying upward dynamics. We have an exceptionally strong financial backbone. We are executing on our growth strategy, and we continue to improve our supply chain resilience to cope with the challenges even better. As such, we are not only equipped to weather the current turbulent times, but we believe that we can emerge from this global crisis with additional competitive advantages in certain areas, such as semi materials. Q3 is simply another case in point. Despite major external headwinds in individual areas, specifically Display Solutions, we deliver strong growth. That was thanks to the excellent performance of our big three, our major growth engines. We also made further progress in delivering our strategic agendas with highlights including our EUR 130 million investment in Molsheim to strengthen our single-use franchise in Process Solutions, or the acquisition of the chemical business of Mecaro to continue to drive innovation in semis and also encouraging data updates for our Healthcare late-stage blockbuster potential candidates, evobrutinib and xevinapant. Above all, we confirm today our absolute guidance ranges for 2022 for both sales and EBITDA pre, as well as for EPS pre. With the year coming to an end, we now forecast group net sales in a range of EUR 22 billion-EUR 22.9 billion, EBITDA pre of EUR 6.8 billion-EUR 7.2 billion, and EPS pre of EUR 9.9-EUR 10.7. More details on our assumptions will be shared later. Moving to slide to offer a bit more color on our performance by business sector, you see that all three business sectors have contributed to our strong organic sales growth in Q3. The big three, Process Solutions and Life Science Services, Semiconductor Solutions and the new Healthcare launches are fully on track and accounted for close to 80% organic growth in Q3. Life Science had another strong quarter with sales up 9% organically. Healthcare also performed nicely with organic growth of 9% and Electronics was slightly up. Currency provided a significant tailwind across the board, adding 9% to both group sales and EBITDA pre. In addition, we had a small portfolio effect stemming, as I already mentioned, from the acquisition of Excelead. Within Life Science, growth was driven by continued strong performance of the core business, up 16% organically, which more than offset the anticipated decline of COVID-related sales against tough comparables. Process Solutions was once again the main contributor with organic growth of 11% and an excellent 31% organic growth excluding declining COVID sales. SLS, Science & Lab Solutions, delivered strong organic growth of 8%, while Life Science Services was muted at three percent due to some volatility in the CDMO business, which as you may recall, delivered significant growth in Q2, and Matthias may further comment during the question and answers if this is needed. The strong sales increase in healthcare was driven by 26% organic growth of recent launches and solid mid-single-digit growth in the established portfolio. Here, we got a benefit from lower comparables, some channel dynamics that can be also discussed during the Q&A, and a catch-up effect in emerging markets. In Electronics, our Semiconductor Solutions business, which meanwhile contributes 70% of the Electronics sector sales, continues to shine with organic growth of 15% against rising comparables. Surface Solutions was up 4% together with strong performance of semis offsetting a 32% decline in Display Solutions. Regarding earnings, group EBITDA pre amounted to EUR 1.81 billion in Q3, yielding a strong margin of 31.2% on par with prior year, despite significantly higher input costs. Let me conclude this part with a few remarks on our sales by region. In Q3, all regions have contributed to the positive organic development, led in absolute terms by growth of 10% in Europe and 7% in North America. Low single-digit growth in Asia-Pacific was mainly related to a significant decline in Liquid Crystals while other businesses performed strongly, including catch-up effects in China following the lockdowns in Q2. Our smallest regions are Latin America and Middle East and Africa, both generated strong double-digit growth. Overall, Q3 again demonstrates the advantages and the strength and the resilience of our globally diversified business. As we discussed with you at the recent Capital Markets Day, we will continue to drive regionalization of our manufacturing footprint and further strengthen our supply chains to serve regional demand, to improve our customer proximity, and to reduce our network risk. With this, let me hand it over to Marcus for additional information on our Q3 financials. Thanks, Belén, and welcome also from my side. Now switching over to slide nine for an overview of our key figures for the quarter. Overall, we had a strong Q3 with double-digit growth of sales and earnings. High single-digit organic growth was complemented by a major boost from foreign exchange, and as Belén mentioned, a small portfolio effect from Excelead. Thus, net sales increased 16.8% to EUR 5.806 billion. EBITDA pre was up 16.7% to EUR 1.81 billion, and EPS pre rose almost 20% to EUR 2.68. Operating cash flow came in at EUR 1.55 billion, up 5% year-on-year as positive effects from increased earnings were partly offset by higher tax cash out and also higher net working capital. Net financial debt increased by close to EUR 500 million compared with the end of December, mainly driven by temporary investment of excess cash. In other words, the purchase price for the acquisition of Excelead, higher CapEx, and the dividends have already been more than covered by the solid free cash flow generation year to date. Accordingly, the net debt to EBITDA pre ratio remains stable at a level of 1.4x. Please also note that headcount has increased 5% year to date to support our growth ambitions. Let me now briefly comment on our reported financial results. I'm on slide number 10. EBIT increased by EUR 187 million in the third quarter in absolute terms. This is EUR 71 million less than EBITDA pre-growth, mainly due to higher adjustments and higher D&A. The financial result improved by EUR 7 million as a better interest result was partly offset by higher LTIP provisions. The effective tax rate came in at 22%, which is at the lower end of our guided range. As a result, net income and reported earnings per share both rose by 21%. You may have seen that we have improved our interest result guidance for 2022. Please note that this includes a total of about EUR 40 million income related to the recent partial buyback of our hybrid bond and also new tax rules in Germany earlier this year. This will disappear in the next year. At the same time, we are trending towards the lower end of our effective tax rate guidance for 2022, and we expect to fall below the current corridor when we walk into 2023. As usual, we will provide concrete guidance on the interim result and effective tax rate in 2023 with our Q4 results in March. This is just a heads-up for you to help with the modeling and on balance, we expect these effects to be about neutral for EPS pre next year. With that, let's move on to the review by business sector, and I start with Life Science on slide 11. As you already heard it from Belén, Life Science had another strong quarter with sales up 8.7% organically. Growth in the core business was again an excellent 60% on par with Q2, and more than offsetting a slightly more pronounced impact of COVID of -7%. Total COVID-related sales were down by about 30% from the peak in Q3 last year, and sequentially about stable due to order phasing and fully in line with our expectations. Portfolio-wise, Process Solutions remained the key driver with organic sales growth of 11%. Here, the core business increased by a record 31%, while the impact from declining COVID sales was -20%. Lead times improved further in key portfolios such as single-use and filtration, supported by the ongoing ramp-up of new capacities. Order intake continued to decline as expected, and book-to-bill was slightly below one. This means we were able to reduce some of our still significant backlog, which is good news. Turning to Life Science Services, growth was muted this quarter at 3% organically. This reflects a 17% dip in the core business, more than offset by a positive impact from COVID-related sales of 20% due to order phasing. The more mature contract testing business continued to show double-digit growth, while the CDMO business was impacted by unfavorable batch phasing and attrition in the clinical pipelines of our customers. Science & Lab Solutions had a strong quarter with sales up 7.9% organically, supported by positive pricing and growth across almost all business lines. Lab Water and Biomonitoring again made it into double-digit territory. The core business was up 9% organically, while the COVID impact was small at a -1%. Geographically, we posted double-digit organic growth in almost all regions. From a customer perspective, sales in our largest customer segment, pharma and biotech, grew organically in the high single digits, while diagnostics and academia were up mid-single digits, and industrial and testing even exceeded the 10%. With regard to earnings, EBITDA pre came in at EUR 976 million, growing 10.8% organically with a strong margin of 36.4%. This was slightly down year-on-year by 20 basis points, mainly due to currencies. A favorable product mix in the core business, robust pricing and operating leverage were broadly offset at the margin level by a lower share of COVID business, ongoing strategic investments and input cost inflation. Moving on to healthcare on slide 12. Here, the quarterly sales cracked the EUR 2 billion mark for the very first time. Of course, this was supported by FX tailwinds. However, organic growth was also very strong. In fact, even slightly higher at 8.7% based on 26% growth of the recent launch products and a very solid 5% growth of the established portfolio. By franchise, oncology led the growth again with sales up 25% organically. This was driven by continued strong ramp-up of Bavencio, growing 51% organically year-on-year and 14% quarter-to-quarter. Let me also highlight the strong performance of Erbitux at 14%, including double-digit growth in China, post Erbitux head and neck inclusion in the NRDL earlier this year. The N&I franchise was up 2.3% organically, with 10% growth of Mavenclad more than offsetting a just -4% decline of Rebif. However, please note that Rebif benefited from one-off channel dynamics and lower comps in the third quarter. Our fertility franchise returned to growth with sales up 2.6%, mainly thanks to a fading impact from the lockdowns in China. Sales in CM&E increased 6% organically, supported by strong performance of Euthyrox and Saizen across regions, while Glucophage returned to growth. Regarding our pipeline, highlights include recent updates for our two late stage potential blockbuster candidates. For evobrutinib, we presented new data at ACTRIMS demonstrating sustained clinical benefit for people with relapsing multiple sclerosis. Through three and a half years of treatment, the first BTKI to do so. For xevinapant, we presented five year data at ESMO that showed survival rate nearly doubling in patients with unresected, locally advanced squamous cell carcinoma of the head and neck when added to standard of care. In addition, the second phase III study of xevinapant, the X-Ray Vision in SSCHN in resected cisplatin ineligible patients started and is now recruiting patients. We will talk more about xevi and evobrutinib and other assets in development at the R&D update call on the 21st of November. Regarding earnings, EBITDA pre amounted to EUR 711 million, leading to a strong margin of 34% supported by currency. Organic EBITDA pre growth of 11% exceeded sales growth amid controlled cost development, including R&D phasing and the one-off channel dynamics mentioned earlier. In terms of income from active portfolio management, we recorded a low single-digit EUR million amount in Q3, and hence now close to EUR 40 million in the first nine months of the year. Accordingly, we raise our full-year guidance for income from active portfolio management from a low- to mid-double-digit to a mid-double-digit EUR million amount. This means we may see a further modest contribution in the first quarter. Looking to 2023 and thinking about pushes and pulls for the margin, I'd like to say the following. On the one hand, wage inflation could become more significant, and we are ready to invest in pre-commercial activities for the evobrutinib launch. On the other hand, we should see some margin support from a higher share of new products and cost discipline, including R&D. The net effect remains yet uncertain, and we plan to give you more color with our Q4 results in March. Turning to electronics on slide 13. For the first time, Electronics cracked the EUR 1 billion mark in terms of quarterly sales, supported by FX, while organically, sales were only slightly up by 0.4% in the third quarter. Semiconductor Solutions, our key growth engine in Electronics, continues to perform strongly with organic growth of 15% against rising comps. This was fueled by high teens growth in semi materials, supported by volumes and pricing, and with growth across all material categories, including thin film, patterning, and specialty gases. Important underlying drivers to mention include new nodes and fabs in leading edge. In addition, we saw further growth in DSNS, fueled by strong equipment sales. Growth was not as high as in previous quarters due to annualization of the large projects, which we first flagged in Q3 2021. At the same time, we have already signed a new large turnkey project of a similar size. Sales at Display Solutions were down 32% organically, mainly due to a significant demand slowdown in the display value chain, especially for Liquid Crystals and hence much lower plant utilization at key customers. Surface Solutions generated solid organic growth of 4% as softness in industrials was more than offset by strong sales in coatings and cosmetics. EBITDA pre amounted to EUR 302 million, implying a solid margin of 29.1%. Down, however, 260 basis points year-on-year despite the support from foreign exchange due to the very challenging macroeconomic conditions. Organically, EBITDA pre declined -14.8%, primarily due to Display Solutions amid inflationary pressures and capacity ramp-up for future growth. Importantly, please note that the semi margins remain intact. Before I hand back to Belén for the outlook, let me briefly comment on our balance sheet and cash flow statement. As you can see on slide 14, our balance sheet expanded by EUR 5.5 billion compared to the end of December. The main drivers behind this development are business growth and currencies. On the asset side, cash and cash equivalents decreased, largely driven by temporary investment of excess cash that will be reversed by the end of the year. Receivables and inventories increased on higher sales, inflationary effects, higher safety stocks and FX. The intangibles were higher on FX and the acquisition of Excelead. On the liability side, financial debt slightly increased due to the issuance of a new bond. Pension provisions were down, primarily due to actuarial gains from rising interest rates, and net equity increased thanks to growth and profit after tax, actuarial gains, and positive FX effects. As a result, the equity ratio improved further from 47% at the end of December to 56% at the end of September. Turning briefly to our cash flows on slide 15. Operating cash flow in Q3 came in at EUR 1.55 billion, up EUR 85 million year-on-year. This reflects higher earnings and strong cash conversion of 86%, but also higher working capital, in particular, higher inventories due to inflationary effects and higher safety stocks. Cash out for investing activities was roughly stable, although CapEx increased by EUR 89 million year-on-year to support our organic growth initiatives. Last but not least, the difference in financing cash flow can be explained by higher net repayments of financial debt in the year ago period. With that, let me hand back to Belén for the outcome. Thank you, Marcus. Please move to slide number 17 to review the full year guidance for the group. First of all, let me reiterate, our Q3 results has been very strong. Again, we have shown resilient growth in a challenging external operating environment. Looking ahead, we believe these headwinds will remain for some time, and eventually may get even stronger. Nonetheless, we remain firmly committed to our mid-term ambition of 25 by 25, and fully confirm our absolute sales and earnings target corridors for 2022. In fact, we have become a bit more precise now guiding to group net sales in 2022 in a range of EUR 22-22.9 billion. EBITDA pre in a range of EUR 6.8-7.2 billion, and EPS pre in a range of EUR 9.9-10.7. This is based on organic sales growth of 6%-8% and organic EBITDA pre-growth 5%-9%. While we have tweaked slightly the upper end of the organic sales growth guidance, our organic EBITDA pre-growth remains unchanged versus our communication in August. Also, our currency assumptions remain the same as before, and we expect tailwinds of 5%-8% for sales and 6%-8% for EBITDA pre. Let me now share a bit more details on our guidance by business sector in slide number 18. As you can see, we continue to expect organic sales growth in 2022 to be supported by all three business sectors. However, we now expect organic EBITDA pre-growth to be driven by Life Science and Healthcare. In electronics, we have become more cautious on both organic sales and EBITDA pre development in 2022, and this is mainly due to the significantly lower demand for Liquid Crystals materials related to lower fab utilization at customer level. We remain very confident in the strong performance of Semiconductor Solutions this year. I already mentioned Semi makes 70% of the revenues of electronics, but as we told you at the Capital Markets Day, we anticipate a potential market slowdown next year. At the same time, the midterm outlook for Semi remains highly compelling, given, first, the strong underlying megatrend. Second, our proven ability to overtake the market in this segment. Turning to Life Science, we confirm our organic sales growth guidance and continue to see the core business as the main driver. Please note that we expect growth of the core business to normalize around Q4 and into next year. Our COVID assumptions remain unchanged. That is, we expect COVID-related sales in 2022 of up to EUR 450 million in Process Solutions, up to EUR 250 million in Life Science Services, and around EUR 100 million in Science & Lab Solutions, so a total of EUR 800 million, which is what we have communicated previously, in our previous calls. Also, as we mentioned at the Capital Markets Day, we expect total COVID sales to decline further by at least 50% in 2023. Earnings wise, we have become slightly more optimistic about organic EBITDA pre-growth in Life Science in 2022, mainly due to slightly lower OpEx. For healthcare, the story is very simple. We fully confirm our organic growth guidance for both sales and EBITDA pre, with recent launches staying the main drivers of growth for healthcare. With it, with this, let me thank you for your attention and your patience, and now we will be happy to take your questions. Thank you. We will now begin our question and answer session. If you have a question for our speakers, please dial star one one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you're using speaker equipment today, please leave the handset before making your selection. One moment please for the first question. First question comes from the line of Richard Vosser from J.P. Morgan. Please go ahead, your line is open. Hi. Thanks for taking my questions. Two, please. Firstly, just on the Life Science or the Process Solutions business, wondering if you could give us a flavor of the underlying book-to-bill ratio. I understand it's under below one for the overall business, but ex-COVID, how does that look? Linked to that, just given I think you said a bit of normalization of the order intake over into 2023. Bearing that in mind, but the very significant order book that you still have at a good level, you know, how do you see that translating into growth over the next 12, 24 months? The second question is just on the semi materials business in electronics, you know, very, very strong growth again. I think you've been pointing towards the idea of wafer volumes declining into 2023. How should we think about the next few quarters of that business as we go forward? Thanks very much. Hey, Richard Vosser, it's Matthias. Let me take your first question around PS and the book-to-bill. Indeed, I mean, over the last several quarters, we have had very elevated book-to-bill ratios for the entire PS business, way above 1.3, 1.4. And obviously, that was a result of our long lead times. As the lead times are now coming down, we had expected and communicated that before that the book-to-bill ratio would be for a few quarters below one, and that's what we have seen already in the last quarter, where it was close to one. Now, it's coming down. We still see a very strong kind of core business. We had 24% core last quarter. We have 31% this quarter. We are very confident given the business prospects that continue to see a strong business growth in the core, but it will kind of normalize. I would give you as one anchor point, certainly our medium-term guidance, actually for total Life Science, but especially also for Process Solutions. I would suggest over the next few quarters that we will see kind of a normalization towards that medium-term guidance. Thanks, Richard, for the question. It's Kai speaking. Let me answer your semi question. The picture that we see ahead of us, maybe I would like to give you some flavor on our composition of the different areas in semi. First of all, as was presented, we have another turnkey project in DSNS that gives us a lot of additional opportunity in order to kind of avoid a cliff after the end of the current P3 project that we have announced a year ago. Now we have a continuous trajectory of additional turnkey opportunities. Second, the order book for our equipment business in DSNS is full. We're building new capacity, so we are not impacted by any equipment investment downturn since we can sell as much as we can produce right now. That's a good sign. Third, we see in the current environment, predominantly the memory trailing edge memory nodes going down in capacity. That is leading to the MSI decline that you were referring to. That is our smallest area we service. So in trailing edge memory, that's a very small portion of our business. This is why we are less impacted by that. That has led in the past quarter since we integrated Versum to an outperformance of the MSI of above 800 basis points. That is, by and large, the number we have seen every quarter on quarter for the past two years. That would, in turn, mean the current projection for next year being down at -5% MSI development. We are not as pessimistic as that number would suggest. I think I gave you all the reasons why our composition should be rather strong. Thank you very much. Thank you. We will now take the next question. It comes from the line of Rosie Turner from Jefferies. Please go ahead. Your line is open. Hi. Thank you so much for taking my questions. Two from me, if I may. Sorry, just going back to semis. I think you've got a comment on slide 38 around the shifting of the DSNS project, so into next year. Can we just clarify that that provides a decent level of support then for 2023, kind of regardless of the rest of the semis business? Just thinking about the deal that we discussed at the Capital Markets Day, I think the plans to kind of execute a transformational deal. Has there been any progress made there? Are the assumptions behind that still the same going forward? Thank you very much. Thanks, Rosie, for the semi question. I take the semi question first. DSNS, the shifting is next year. There's a rather technical situation. What has shifted is the recognition of the revenue in the P&L since we have an accounting that is based on project progress and that we have to consider here. It's already kind of being invoiced, however, not booked in the P&L, rather technical. That was, of course, foreseen in the initial projection of our landing in 2022. That is now captured in 2023. However, we only talk about one quarter here. The rest is additional businesses in 2023, as I mentioned in my earlier answer. I have Belén on the next one. Hello, Rosie. It's Belén. Thank you for your question. As you know, during our Capital Markets Day, we were providing, you know, quite a nice update on our plans. At that time, we spoke mainly about the financial capacity that has now grown to around EUR 15 billion-EUR 20 billion, based on our good performance in recent quarters and years, and that this was giving us the chance To move from exclusive bolt-on approaches and in licensing for pharma, for example, to eventually considering bigger moves if the opportunity presents. Our pipeline continues to grow. We continue to be very focused at the executive board level, progressing our efforts and obviously what you can expect is that we stay within our strategic frame and that we accelerate potentially our organic outlook with inorganic moves around our big three pillars. Perfect. Thank you very much. Thank you. We will now take the next question. One moment, please. It comes from the line of Sachin Jain from Bank of America. Please go ahead. Your line is open. Hi there, Sachin Jain, Bank of America. Two sets of questions, please. One electronics and one process. Big picture question on electronics. Belén and Kai, you've mentioned a lot of times macro uncertainty, clearly regarding the decline in the electronics EBITDA for 2022, and there are various scenarios for decline, I guess, next year. I wonder if you could commit to group EBITDA growth for 2023, even if electronics is under macro-driven pressure, given other divisions and productivity initiatives. Then secondly, for Matthias on process, two-part question. One, underlying business accelerated sequentially 24%-31%. What's driven that? I guess I'm trying to understand if it's accelerating, why is it normalizing fourth quarter and then early into next year. You talk about normalization to low- to mid-teens. Just to be clear, that's, I think, ahead of where Danaher has guided for their normalization next year at high single digits. Just checking you're comfortable with that. Thank you. Hello, Sachin. Thank you for the questions. Let me address partially the first one, stating what we have already communicated before, that we are expecting our Electronics business to move on a margin of around 30%. Now perhaps Kai can add a bit more color on the levers. Sachin, it's worth mentioning that the margin situation at Semi is quite stable despite all the effects that we have mentioned earlier. I think it was presented in Marcus's slides. The pressure that we have seen this year that has led to the change in our guidance, it comes from the absolute contribution of Display Solutions. That is under pressure right now. We hope from the current data that is softening that situation in the course of next year. That's at least the market data that we receive. That this part is easing while, of course, the inflationary environment stays. However, margins in Semi Solutions are quite stable. That gives us definitely confidence for next year. Yeah. Hey, Sachin, it's Matthias. Related to your PS question. Yeah, indeed, we have seen a temporary acceleration of our PS business, 24% last quarter, 31% this quarter. It's really a result of two effects, right? We have brought new capacity online, ramping up that capacity. At the same time, with COVID kind of declining, we are able now to dedicate that plus additional capacity more to core kind of business growth. We continue to expect to see that for next couple of quarters. However, it will be normalizing over the next several quarters. Again, I mentioned in the mid-term guidance, I didn't imply anything already for 2023. Expect for PS a very strong growth, core growth in 2023 and beyond. At the same time, we need to acknowledge that the COVID kind of deceleration, and Belén mentioned the more than 50% decline next year, will kind of be overlaid to that core growth. Thank you. Thank you. We will now take the next question. It comes from the line of Peter Verdult from Citi. Please go ahead. Your line is open. Thanks. Peter Verdult, Citi. Two questions, please. Sorry to Peter and Marcus Kuhnert, but it's Semis and Life Science again. First, Matthias, could you just quantify ballpark the benefit you got in Q3 from the forward purchasing ahead of the price increases you put through in October? Perhaps just high level on pricing trends in Life Science, could you provide some ballpark figures for the percentage increases you've enjoyed in 2022 for the whole portfolio, and if you are willing to, for Process Solutions in particular? Just anything you could say about how you feel about the outlook of pricing going forward. The reason for the question is I think Sartorius is talking about 7% pricing next year. I just wanted to bounce that off you in terms of consistency. Then Kai, sorry to come back to electronics, but just to be clear, the first two months of Q4, you've seen no softening in the trends of semis, and it's absolutely 100%, a displacement dynamic that has caused the change in guidance. Just wanna make sure that is, I've understood that correctly. Thank you. Hey, Peter, let me take the first question. I mean, indeed, pricing is a big lever for us, right, to offset inflation, and we have built good pricing momentum. I think I mentioned before, I feel we have a good strong pricing capabilities. Ballpark for the full year. It's still in the range which I indicated before. We are about 2.5x historic levels, right? Historically it was about 1.2. Keep in mind we're talking about net price effect, right? Obviously, the list price increases are higher, but then it counts what really sticks at the end, and that's around 2.5x across. Obviously we'll do that in all our three businesses in PS, SLS, and Life Science Services. To your question around the pull-forward effect in SLS. It's small. It has an impact, but it's a small pull-forward because typically when you raise price, there's some anticipation from customers, and they place order earlier. But it's not a major effect in our numbers. Let me take the semi question. The change for the guidance was primarily on top line, the DSNS phasing situation that I explained in detail earlier and on EBITDA growth, the display situation as you stated. These were the two factors by and large that has moved the needle for the ending of the year. Thank you. Thank you. We will now take the next question. It comes from the line of Wimal Kapadia from Bernstein. Please go ahead. Your line is open. Well, great. Thank you very much for taking my questions. Maybe just coming back to earlier comment from you, Kai, on semis being stable from a margin perspective. You've historically suggested decent pricing power in semis in recent quarters. I'm just curious if that actually changes in an environment where MSI is declining. It sounds like you still have this pricing power, but is that affected when the market is deteriorating? Then maybe just our last question on pharma. Some of the older brands look particularly strong. You know, you flag emerging markets as being a key growth driver. I guess, is there any particular one-offs you would call out in there? Is that just good underlying performance and should we really expect that level of momentum to continue in the upcoming quarters? Thank you very much. Let me, Wimal, take the semi question first. The growth comes from three factors, not just from the pricing side. It is a mix effect because we are faster growing our strongest business Thin Films that has a positive mix contribution. Second, we have a very strong volume growth underlying. On top comes the pricing situation in selected areas where we counter inflation. That's a combination. This is, I think, a pretty resilient picture. There's not a picture which is only dependent on a single event as you may have suggested. Yeah. Wimal, to your question on pharma. I think Marcus has singled out clearly the one-time effect on rebate channel management. That besides that there is nothing else that is really type of one-off, right? You see that actually the performance is across the board. We have the contribution of the launches. We have a very healthy 6% growth of the CM&E business. We have a fertility coming back after the impact of the lockdown in Q2, and we are again trending upwards towards our mid-single digit guidance for the mid-term. Still with the caveat of potential volatility depending on you know, basically what happened in China with additional lockdowns. You have seen also very healthy performance for Erbitux. We have mentioned to you in the Capital Markets Day that the product is really used more and more as a backbone for other therapies. We have plenty of studies ongoing, either by ourselves, by other colleagues. I would say it's a pretty decent performance basically across geographies and across franchises. Great. Thank you. Thank you. We will now take the next question. It comes again with Gary Stevenson from BNP Paribas Exane. Please go ahead. Your line is open. Oh, great. Thank you for taking the questions. Firstly, if I could just follow up on the electronics margin, please. 'Cause when you refer to the around 30% margin guidance, you know, we've seen margins move up to the 32% level back in 2019. Now if the pressure's on display, it seems kind of sensible that that definition of around also extends 200 basis points or so to the downside. Just wanting to hear how confident you are that electronics margins can be kept within those, say, + to -200 basis points guardrails around that 30% level over the near term, and whether there's any levers you can talk to that you have at your disposal to protect the divisional margin from deteriorating further. If I could also ask on Life Science Services. You mentioned here the near-term volatility with the unfavorable batch phasing, which I guess is, you know, just part of the business, but also attrition in the clinical pipeline. On phasing, just anything you can point out to us for Q4, given we're almost halfway through the quarter now. On pipeline attrition, one of the larger CDMOs made a comment on seeing customers prioritize the development of earlier stage assets and calling it a cash conscious decision, seeing that across large pharma customers and biotech customers. Just wanted to ask here whether you were seeing any impact there too, or whether the attrition is more just amplified by the business being smaller and customer concentration. Thank you. Gary, let me just reiterate what I have said before to basically the same question. We are reasonably confident, as I said before, that we will be able to deliver on the Electronics margins of around 30% as we have said before. Despite the pressures that we have experienced in Display because we believe that sooner or later, the Display impact that we are taking right now is going to be reversed in the coming quarters. Gary, it's Matthias. Let me address your question around LSS and maybe in a context, right? LSS consists of two businesses. One is our testing business, which is well established. We have several hundred customers. It's very robust, resilient growth. Then we have indeed our CDMO business, which is the other half, a little bit more than that. We're really starting from a much smaller scale to really grow their business. We're very confident. As we mentioned before, given the smaller scale and also the smaller number of customers, we are just kind of, if you will, fluctuating a little bit more. As you mentioned, and you also echoed, we're a little more depending on individual customer programs, right? The result of those programs. That's essentially kind of explaining the volatility, which we will see also through the next couple of quarters. That does not jeopardize kind of our long-term belief and commitment into the business. That's basically the CDMO story, right? It's not to also address that element of your question. Biotech funding has a certain impact that we are not seeing a major impact, right? By and large, we have large pharma customers in our CDMO business, smaller biotechs. Yeah, they may look a little bit more about spreading out the cost, but it's not a major impact on the LSS growth. Okay. Thank you very much. Thank you. We will now take the next question. It comes from the line of James Quigley from Morgan Stanley. Please go ahead. Your line is open. Great. Thank you for taking the question. One on life sciences, one on pharma. A follow-up on pharma even. In the Science & Lab Solutions business had another quarter of really strong growth. But how are you thinking about the core growth outlook in the short to medium term with some potential headwinds like biotech funding still not recovering, and potentially recessionary impacts on things like academic funding. The NIH funding seems to be trending in a negative direction, which has historically been important for the research solutions business, and then also any potential impact on the applied segment from the global downturn. In pharma, follow-up to one of our discussions on the Genmed portfolio, particularly CM&E was pretty solid this quarter. Sort of thinking forward, is there any reason why those growth rates should start to slow? I know there was a fairly easy comp for some of the products within the CM&E franchise. But is there any other effects that might potentially lead to these growth rates slowing down? Just one very quick one on Mavenclad as well. Could you give us an update on how Mavenclad is performing geographically? The split of U.S. and ex-U.S. sales and then any comments on market share in the different regions given that Ocrevus and KESIMPTA were growing faster? Thank you. Hey, James, it's Matthias. Let me start with your SLS question. Indeed, I think we are performing very nicely in SLS this year. Very good growth in Q3 with 7.9%. Here, certainly, it's also worth highlighting our strong pricing momentum. I think I explained that a little bit before, but it applies especially also in our SLS business. We also see some effect in China, right? Post the lockdown, which we've seen in the prior quarters. We see a nice growth there picking up. Yeah, we're very confident about our SLS business. But also here, I would expect that we kind of migrate over time to our midterm guidance, which we provided, the low- to mid-teens. To address your question around a recession, I consider this a very resilient business, right? We're very widespread regionally. We have quite a huge customer base in different sectors, right? It's academia, it's pharma, it's industrial. So again, I just wanna repeat what I said. It's low- to mid-single-digit, the mid-term guidance. Sorry, I think I made a mistake. It's low- to mid-single-digit and we are very confident to achieve that, right? Thank you. Yeah. Thank you, James for the question. On CM&E, you know what you have seen in this quarter with the +6% is actually close to our guidance that we gave you for the midterm, which is mid-single digits. We are obviously very happy with this quarter. There's no reason to believe that this momentum would stall in the future. It is kind of a diversified franchise within healthcare. Many ups and downs, but you have seen in the slides that, you know, products like Euthyrox plus 12% size and double-digit, the Concor growing four percent. It's really a very nicely growing portfolio. I remind you that especially in emerging markets, the number of patients treated for certain of those diseases remains extremely low. There is, in essence, a continued volume opportunity that of course we are trying to take. Even if you don't ask the question on fertility, don't forget that in the established products, we also have a dynamic fertility business, also a mid-single-digit guidance that we gave you. Finally on MAVENCLAD, actually the dynamics that we are seeing since a couple of quarters have not fundamentally changed in Q3. We see a relatively stable U.S. business. Less of an opportunity for us in first line, but we do gain market share in the oral market base, mostly, not exclusively, but mostly in the second line in the U.S. and ex-U.S., where the label really allows us to compete on a level playing field. In the first line, we really do a good job, I believe. You know, we continue to gain market share. We are actually leading the market in some countries in Europe, like Spain as an example. Therefore we see indeed a significantly more dynamic brand in ex-U.S. as compared to U.S. But in total, as you have seen, the brand is still growing. Right. Thank you. Thank you. We will now take the next question. It comes from Michael Leuchten from UBS. Please go ahead. Your line is open. Thank you very much. Michael Leuchten from UBS. Just going back to Matthias. I think people are sort of slightly misinterpreting the book-to-bill ratio, given there are two components in it. One is the lead time, but obviously there is the risk at least of some inventory being in the channels. I just wondered if you could talk to the visibility you do have on that. You did say at the CMD that you're not worried about it, but I just wondered, given how uncertain times are, is there actually visibility and how are you able to measure it? Thank you. Yeah. Thank you. Look, the book-to-bill ratio below one is something we expected, right? I wanna echo what I said before, right? Given the extremely high order book or very high order book we have accumulated over time. With the lead times coming down, the book-to-bill ratio will come down below one for the next several quarters. We do have good visibility indeed. It depends a little bit by business, right? Obviously, but in PS we have a pretty good visibility, given the lead times of still three to six months. Again, that gives us confidence. Again, I wanna provide confidence that even book-to-bill below one for a few quarters are not jeopardizing our commitment and confidence in the long-term growth of the business. Thank you. We will now take the next question. Please stand by. The next question comes from the line of Florent Cespedes. Sorry. Florent from Société Générale. Apologies, sir. Florent, please go ahead. Your line is open. Florent, your line is very faint. Can you hear me? A bit better now, yes. Thank you, sir. Yeah. Now we hear you. Okay, good. Apologies. Thank you very much. Two quick questions. First, on Display Solutions, could you please give a little bit more color on why you believe that you should see a little bit less deterioration going forward? Because is there any new capacity there? Is there any further pricing pressure going forward? Some color would be great on this front. Second question is on pharma. Could you give a little bit more color on the situation in China for your different products and also a specific point on fertility in China and also in other countries? Thank you very much. Yeah, Florent, let me take the display question first. On display, what we see right now is in the markets we participate, we haven't lost any market share. It's solely related to utilization of fabs of our customers. They are down to a level that we haven't seen before. Even some lines are completely closed right now because of reduced consumer demand. That is not gonna last forever. That will return to a normal utilization of the fabs in the course of next year, date to be seen. It gives us confidence, since we haven't lost market share, that gives us confidence on the way forward, that once they ramp up again, that we participate in the ramp up again, as our business is concerned. Yeah, Florent. Thanks for your question, Florent, on China. I think that we all have to be aware that the lockdown situation is not over. There are still some smaller provinces with lockdowns, and as we know that our fertility business is a bit more exposed to those lockdowns. In general. But again, we have seen a more dynamic situation in Q3 as compared to Q2 for fertility. But the situation remains obviously relatively fluid. On the other side of the spectrum, obviously, with Erbitux we are much less exposed, if exposed at all, to lockdowns. Actually, as I have mentioned also I think at the last call, we have a very positive momentum for Erbitux in China. We have now not only the CRC indication, but also the head and neck indication on the NRDL since the beginning of this year. That's definitely a positive. Last but not least, I would also highlight some of the CM&E brands. Our thyroid business quite dynamic, our Concor business quite dynamic, and also Glucophage that is now past, I would say the bottom of the wave of the VBP process. Lots of moving pieces, but overall, satisfactory performance. Thank you very much. Thank you. We'll now take the next question. It comes then from Falko Friedrichs from Deutsche Bank. Please go ahead. Your line is open. Thank you very much. My first question is on the return of this display business, a follow-up to the previous question. Is it realistic to assume that this return of the business could happen in the first half of next year, or should we rather expect that to happen in the second half? My second question, can you speak a bit about the Bavencio performance in Q3 and whether all of that was in line with your expectations? Thank you. We can take that first, Peter. Yeah. Well, Bavencio, thanks for the question. You see that quarter after quarter we have a nice growth, whether you compare versus the same period last year or whether you compare sequentially. This is actually the sum of two effects, I would say. Number one, in countries where we have already launched, we continue to see momentum building on the use of chemotherapy in patients that are eligible for platinum. The adoption as the new standard of care of the maintenance regimen, and then of course, the use of Bavencio within that scheme. This is actually continuing to grow nicely. We have a second effect, which is of course the addition of what we could call late launch countries. To give you one example, we only had the pricing and reimbursement in Spain, I think it was around about five or six months ago, same in Italy. This is typically an effect you see in those later pricing and reimbursement countries. A pretty homogeneous performance again for Bavencio, U.S., Europe, Japan, other countries. Quite happy with that. I actually also at the latest ESMO conference, we were very excited to communicate that in a subgroup of patients who received the product now for more than 12 months, that the mean overall survival was still not reached, and that the mean progression-free survival was actually 26.7 months without any new safety signals. We really have strong clinical benefit in this group of long-term responders. Falko, I take the display question. It's impossible to predict from today's standpoint whether this is in first or second half. Just be reminded, this is 20% of electronics and 4% of the group. I think we are not that nervous when exactly this will return. Okay. Thank you. Thank you. We will now take the next question. It comes from the line of Oliver Metzger from Oddo BHF. Please go ahead. Your line is open. Yeah, good afternoon. Thanks a lot for taking my questions. The first one is also on the Display Solutions. Basically, you talked a lot about the expected recoveries some when. If I look on the underlying momentum for business, also for over a multiyear perspective, there is a clear downward trend right now with some potentially too strong acceleration to the downside. What does this mean for the scale of business? Are there any measures to rescale the business just as the business continues to be negative for a while? Second question is on the COVID-related revenues. Your guidance stands still at EUR 700 million. If you compare with fears about the resurgence of infection rates, or incidences nowadays, also the slowing vaccination booster rates, it seems that the COVID-related revenues have lower support than a couple of months ago. According to my calculations, you had a EUR 160 million tailwind, COVID tailwind in Q3. What I'm questioning is why you still stick with EUR 700 million, because earlier this year you mentioned a EUR 170 million quarterly run rate, and my calculation ends at a lower amount. Oliver, let me thank you. Thank you, Oliver. Let me reiterate what Kai Beckmann just said. Putting the Display Solutions discussion into perspective, right? Because at the end of the day, you know, our Electronics business today is made of semiconductors. It's driven by semiconductors. The future of electronics is with semiconductors, which today represents already 70% of the revenues and is growing, as you have seen in the report of Q3, growing double digits solidly above market and very well positioned to compete. Now, Display Solutions would represent between 3% and 3.5% of the total group, right? If you take that into consideration, when is the customer behavior going to come back to a more normal pattern? Doesn't matter too much. I mean, we cannot predict when we are going to be on how fast this is going to ramp up. What we are saying is that it's not going to make a difference to our midterm perspectives and the commitments that we have made to the market already. For COVID, I turn it to Matthias. Yeah. Thanks, Belén. Yeah, let me address the COVID question indeed. We are reconfirming our numbers for Process Solutions up to EUR 450 million, LSS up to EUR 250 million, and about EUR 100 million for SLS, which would give you for this year, about EUR 800 million. Obviously, we have pretty good visibility about that. Having said that, obviously, we see a substantial decline and we gave you an indication of more than 50% decline for next year. Obviously, that's based on the order intake, which was before also talked about. Yeah, clearly for this year, we confirm our numbers of EUR 800 million with the composition I just explained. Okay, thank you. Thank you. Thank you. We will now take the next question. The last question for today comes from Simon Baker from Redburn. Please go ahead. Your line is open. Thank you for taking my questions. Two if I may please. First on Life Science. You've talked extensively about lowered lead times, but unless I missed it, you haven't given us any indication of by how much those lead times have changed. Anything you could give us on the change in lead time. Because I was wondering if as far as the book-to-bill ratio is concerned, we've been focusing on the impact of the numerator, but I was just wondering if the increase in capacity and the reduction in lead times has also been helping to bring down the book-to-bill temporarily. Secondly, on semiconductors, there've been a number of suggestions and reports in the market that there is a slowing of the ramp in 3 nm rollout. I'd be interested to know what you've been hearing and your exposure and the importance to near-term growth of the 3 nm ramp up. Thanks so much. Yeah. Thanks, Simon. It's Matthias. Let me address your lead time question. Indeed, the lead times across the portfolio in several areas have come down more than 50%. I don't wanna talk about individual product lines, but NovaSeptum, for example, our sampling bags went from 26 weeks to 13 weeks to give you an indication. I think we are making good progress, and we're also making good progress with bringing the new capacity online. This combination obviously has the impact on the book-to-bill, which I explained. But we certainly need the next several quarters to overall, across the entire PS portfolio, to bring the lead times to a level which we had before. Again, we are making good progress. In many areas, we have come down more than 50%, but we're not at the pre-COVID level. Yeah, Simon, on the 3 nm delay. It's a pretty normal situation that new nodes or the latest technologies getting delayed, kind of, the closer the launch date is expected. There is nothing new. Even maybe on top of that, during downturns, what we have seen in the past downturns of the semi industry is there is an acceleration of node transitions typically. Since our customers have more tool time as they're running below utilization, they use the tool time to then start up new technologies. All those players who are predominantly focused on high-end technologies, that is our portfolio, have an advantage in these downturn situations because there's an acceleration of node transitions. I'm rather on this side of the picture optimistic. The 3 nm, the technology itself, that doesn't really matter in the larger scale. Great. Thank you very much. Thank you. I think these were all the questions that we had. With this, I'd like to hand over to Belén for closing remarks. First of all, thank you very much for participating in our earnings call. I mean, if you take into consideration the macro environment and the implications on input costs on our business, I believe the way we have delivered in Q3 can be qualified as very strong growth, resilient growth. This really, once again, speak of our diversified business model giving us resilience. At the same time that we continue to deliver short-term solid quarterly results, we continue to drive and implement and execute on our strategic agenda. While we believe the external headwinds are unlikely to soon, we have fully confirmed our guidance for this year and remain firmly committed to our midterm growth ambition. With this, I look forward to meeting many of you in the coming meetings and conferences, and goodbye for now. Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.