Dear ladies and gentlemen, a very warm welcome to this Merck 2024 Capital Markets Day. My name is Constantin Fest, and I'm here for, I'm doing investor relations, as you all know, and it's my pleasure to welcome all of you here in Darmstadt, as well as the great number of virtual participants around the globe. The first thing is a legal topic, obviously. Please note that major parts of this event will be recorded in terms of audio, in terms of video, and if you do not agree, please contact the IR team immediately. Now, as of today, we would like to start with the keynote presentations held by Merck's CEO, Belén Garijo, as well as Merck's CFO, Helene von Roeder, which will be directly followed by a Q&A session. So, three spotlight sessions will provide insights on recent developments in the sectors that we are operating in. In the afternoon, our guests on site here will have the opportunity to dive deeper into the sectors with the respective leadership teams. Now, before Belén starts the day with a strategic update followed by Helene, who will address the financial perspective, allow us to show you a short video. The size of things, it's all about perspective. That's what we believe in. We don't evaluate things by their size, but by their impact on lives every day. By daring to dream big, we turn the micro into the extraordinary. Or in other words, in our company, there's nothing small in what we do. What the human eye can barely glimpse through a microscope can transform millions of lives. What size is this needle? Big enough to help bring millions of babies to this world. We helped create this atomic-sized marvel, paving the way for AI that could reshape mankind's future. Together, we can shape the future by taking bold steps that create lasting impact for generations, sparking discovery, elevating humanity. With this, I would like to directly welcome on stage Belén Garijo, CEO of Merck, to start the day. Belén. Good morning and a very, very warm welcome to all of you to our Capital Markets Day 2024. I hope you enjoyed our vision video. We are very proud of it. And, indeed, there is nothing small in what we do at Merck. And we aim to spark discovery and elevate humanity. We are very, very pleased with this. You are the first audience, external audience, that have seen our new vision that was recently launched to our internal teams. But first of all, let me thank you for joining this event, both live here in Darmstadt and virtually all around the world. As Konstantin mentioned, Helene and I look forward to sharing with you our updates, strategic and financial. And then, of course, we will be delighted to spend a significant amount of time answering your questions to then give the floor to the spotlight sessions where the sector CEOs will take the stage along with their leadership teams. So here you have the agenda and what I'm going to cover during the introduction. First of all, I really would like to focus on our journey in 2024, on our return to growth, structural growth, both in 2024 and beyond. Then I will touch on our ability to compound value as a result of our innovation. And last but not the least, I will share our outlook for the midterm. Now, last year, next slide, we promised we would return to growth in 2024. And as we discussed last night and in many occasions with you, we are on track to deliver on that goal. And this is true across our three business sectors. Artificial intelligence is driving significant growth in Electronics. Healthcare is growing across all franchises, and this is driven by recent launches. And in Life Science, Process Solutions business has seen a robust increase in order intake both year on year and sequentially. For the second half of the year, we expect this momentum to continue. For Life Science, that means that sales will be sequentially stronger. We anticipate Process Solutions will translate the order momentum we have seen in the first half into a gradual sales recovery. Healthcare will continue to generate profitable growth, and we also anticipate sustained AI-driven growth in Electronics. As a result of this, I am very pleased to confirm the group guidance that, as you recall, we raised just a few months ago. In addition, we have also progressed on our inorganic growth priorities over the last 12 months. First of all, we have strengthened our oncology pipeline with a series of external innovation deals. Importantly, we have enhanced our bioprocessing business through the acquisition of Mirus, bringing us a step closer to offering a full integrated solution for viral vector-based cell and gene therapies. And meanwhile, we have also broadened our Electronics offering in AI through the acquisition of UnitySC. Importantly, I am delighted that we were able to announce the Surface Solutions business divestment. This was signed in July, and the closing is expected in the course of 2025. The value of this deal is not only on the financial, and the selling price that we got, if you compare this with other recent transactions, but is most importantly a strategic move because this will further focus Merck's portfolio around innovation and the transformation of our Electronics sector into a pure play is now really in sight. Having delivered our growth commitments, let's focus on next year and beyond. Merck is very rightly positioned to reach new sales heights beyond 2024. For Life Science, we are confident of a solid exit rate to 2024, heading towards our midterm ambitions. And this is important as, as you know, Life Science is driving the organic sales growth of the group in the midterm. And while we don't have a crystal ball, we are expecting next year to be more normalized and bridging to our midterm ambition. In Healthcare, we have a resilient foundation from all our established franchises, mainly CM&E and fertility. And within our innovative franchises, we also continue to expect growth from major brands like Mavenclad, Erbitux, Tepmetko. Here, we have a solid early-stage pipeline and further plans to invest in both internal as well as external innovation, where we plan to double down. On the latter, our preferred approach remains licensing activities now at an accelerated speed, and we have good capabilities for that, while we will be on the lookout for potential acquisitions involving lower-risk, accretive deals, as we said before. Last but not least, in Electronics, there are strong growth catalysts with AI and with advanced nodes, and this sets the company to make further progress. The recovery of the wider semiconductor market will be a tailwind for our business sector. In brief, all three of our business sectors are well-positioned in the near and midterm. But this return to growth is only part of the story. I really would like to spend a little bit of time on something that might have been overlooked during the transitional period. And this is our Merck's ability to deliver sustained value creation. Over 15 years, we have delivered 8% CAGR in sales. Just to make it a bit more tangible, it took us 11 years to grow sales from EUR 10 billion to EUR 20 billion. Assuming a growth rate of 8% CAGR, it would take six years to get to the next EUR 10 billion. Underpinning this growth is a strong organic sales growth engine with a CAGR of 5%. We are convinced that organic growth is the most important foundation for ongoing value creation. Please keep that in mind. Let's focus on what else is part of that formula because it's not just a byproduct of sales growth. Value compounding is best represented by a broader set of outcomes. In addition to sales, we should see growing EBITDA, free cash flow, and EPS. And that is always our goal because as we drive growth in all these metrics, we can continue to reinvest in our business and create even more value. Merck's financial strength is evident in our consistent ability to grow EBITDA at a faster pace than sales and EPS even faster than EBITDA. Our historical ability to deliver ever-growing profit margin within our revenue is a source of compounded value. By delivering 12% CAGR over 15 years, that alone has created more than 400% growth in EPS. That and our growing dividend payments have driven about 550% TSR, total shareholder return. These returns, if you wonder how it compares with references, outperform the DAX, the STOXX Europe 600, and key pharma and Life Science indexes. We deliver this as a diversified company with a multi-industry strategy. On the growth of free cash flow, we will see higher cash generation in the future as our CapEx investment progressively normalizes. We invested, as you know, significant CapEx to execute on rich structural growth opportunities. A bit more on this later. How have we achieved such an attractive growth? This all boils down to what we call humbly the Merck value creation recipe. Merck's ability to consistently deliver organic growth is the most fundamental pillar of our value creation recipe. The critical ingredients of innovation combined with technology leadership and attractive megatrends will drive organic growth. In terms of capital allocation, we seek to lower capital intensity in the long term, and this will obviously result in stronger cash flows. We will invest in external acquisitions, especially in Life Science, if and only if we see the right value-creating opportunity. At the same time, we will continue to be very, very focused and disciplined in such transactions, and we are proud of our portfolio management track record, both in terms of acquisitions but also high-value-creating divestitures. So this completes the four steps for value compounding: driving organic growth, spending profitability, converting cash flows, and reinvesting for inorganic growth. Now, let's dive into innovation. By investing in our own discoveries, we create the flywheel effect of value creation. Innovation refreshes our products and allows us to extract even more profitable growth. Innovation comes in both breakthrough, so large leaps, and incremental innovation. We attempt to deliver innovation wherever we choose to compete. Let's take an example. Life Science is an innovation leader in novel modalities. We are especially proud of our ADC offering with a strong platform across the value chain, including linkers, payloads, and bioconjugation. Healthcare is building an exciting pipeline of ADCs and DNA damage response inhibitors. That has to be definitely strengthened by accelerated external innovation. Furthermore, in Electronics, we have added next-generation thin film technologies such as selective deposition. Now, let's focus a bit more on the markets where we play. In Life Science, we are positioned to take advantage of major megatrends such as novel modalities. This is a market that is expected to grow between 5% and 7%. We have seen record approvals in biologics by the FDA in 2023. Strong later-stage pipeline and the introduction of artificial intelligence will accelerate new breakthroughs. We have a strong and expanding offer for fast-growing novel modalities. Our portfolio demonstrates leadership with its breadth, which we look to expand by building critical mass in areas where we set the industry gold standard, such as, once again, ADC production, and this is why we are forecasting a range of 7%-9% organic growth in the midterm, outpacing the Life Science market by 200 basis points. Helene and Matthias will discuss with you later a bit more on our expectation. Moving on to Healthcare. The global pharma market, as all of you know, will continue to be driven by innovation everywhere, not only in developed markets, but also in markets like China. Innovation remains the critical component for long-term growth, and within this market, we have a very solid foundation. Within our established franchises, we have executed on regional opportunities, and we have built a CM&E franchise into an almost EUR 3 billion business sustainably. And this has been driven mainly through our early expansion to China and other emerging markets of that portfolio back in 2012. However, keep in mind that in the past five years, over 70% of the Healthcare growth has been driven by new product launches. We are positioned for growth in oncology and N&I. And in the latter, the most advanced R&D focuses on two assets: Enpatoran for cutaneous and systemic lupus and Cladribine for myasthenia gravis. In oncology, as I mentioned already, we have a broad R&D focus on targeted therapies, mostly ADCs and DDRs. Healthcare is and will remain a strong source of cash generation for Merck. Furthermore, beyond internal innovation, we will further drive growth in Healthcare with support from external innovation, primarily through licensing but potentially M&A, and Peter will share more details in the spotlight later on today. Completing with Electronics, in Electronics, we are at the center of the most important innovation in computing power for years: artificial intelligence. We expect the semiconductors market to grow by 5%-7%, driven mostly by the integration of AI, so let's first look at the semiconductor segment of Electronics. Our semiconductor portfolio is positioned towards leading-edge applications, which comprise more than 60% of our semiconductor sales today. Around 10% of semiconductor sales are related to AI and growing. Therefore, we are expecting to benefit from semiconductor innovation such as three-dimensional densification. Importantly, 80% of Electronics are in the Semiconductor Solutions, up from around 60% in 2021 when we last discussed our forecast. With a weight into semiconductors, we are comfortable raising our Electronics midterm sales growth target to 5%-9%. Let's turn to sustainability. All our sustainability initiatives have significantly reduced already our environmental impact, as well as minimized the upstream footprint of our products for our customers. We are committed to leading by example and setting new standards in sustainable practice. We have made great progress here. We are ahead of our targets in emission, water, and waste reduction. For 2023, we exceeded our targets to reduce water and waste, and therefore, we have set new, more ambitious future targets. We today develop over 2,500 more sustainable products in Life Science in 2023, which is representing a 30% annual increase versus 2020. We aim to accelerate this momentum through the end of the decade. Of course, please don't miss the opportunity to join our team during our ESG lunch session today, where you can see more details of what we are saying. Now, let me pick up the thread on capital allocation around capital investment and M&A. We are investing for resilience, for innovation, and for growth, and looking at the recent supply chain disruptions, including COVID-19, mostly during COVID-19, you can understand why this is a top priority for us, and this is the reason why we invested to make Merck even more resilient with our local-for-local strategy. We have made very significant progress on our network and capacity expansion priorities, with most projects that you see on the slide either completed or to be completed by the end of 2025. Merck is now, today, a more resilient global player than ever before, and we are set for growth. This also means that beyond 2025, we see a period of lower capital intensity. As sales increase and CapEx drops, obviously, we will enhance cash generation. Now, I want to explore what this means for our M&A strategy. I have been loud and clear that Merck's priority is to execute on Life Science M&A, and we continue to plan to allocate a substantial percentage of our M&A firepower to Life Science. On Healthcare, our inorganic strategy is to accelerate external innovation. I mentioned this several times during the introduction, and this will primarily take the form of in-licensing to increase optionality of our pipeline, mainly our later-stage pipeline, but we would also consider M&A in Healthcare, if limited, to clear-cut, low-risk deals that would create value from very early on. We continue to pursue a string of pearls strategy across the key growth areas of our portfolio. In the past few months, you have already seen us executing on that. We told you in 2022 that we are ready to look at transformational M&A again, but we are in no rush. And we must execute on the right target at the right time for the right price, as we have always done. We will remain, and this will surprise none of you, extremely disciplined. To this point, as you know, we have strict guardrails on M&A, which may be known by some, but Helene will cover this later in the morning. Let's review the sector ambitions that I have shared already. We expect Life Science to deliver 7%-9% growth, which is above market and reflects slight revised expectations for the growth coming in China. We expect Healthcare to grow slightly on the base case and should be able to return to mid-single-digit growth supported by external innovation. And we expect Electronics to deliver growth between 5% and 9% thanks to our very competitive Semiconductor Solutions business, which brings us back to the group view, where we expect to build on the prospect and trends that I have just outlined. On organic sales, we expect growth at around historic averages. We also envision an EBITDA margin expansion and improving cash generation potential for the reasons I detailed before. And on M&A, we see potential upsides, obviously depending on available opportunities. Taken together and to close, this is what I see. Number one, we have successfully returned to growth, and this growth is poised to be sustainable across our three major businesses. Number two, Merck is solidly positioned with our multi-industry business model and a very diverse portfolio to capitalize on the anticipated growth opportunities. We are confident in our ability to invest in innovation that continually renews our product offering, underpinning our growth. And this is not only Healthcare, but it's also true for the three sectors. And it's also crucial for creating compounded value. As we move forward, our commitment to delivering value for our investors and owners, driving groundbreaking innovation and achieving sustainable growth remains unwavering. Our vision of sparking discovery and elevating humanity is not just a statement. It's the core of our strategy and the driving force behind everything we do at Merck. With this, I would like to thank you for your attention and now invite Helene to the stage to continue to share our exciting plans for the future. We'll come back later. Thank you. So thank you very much, Belén, and a warm welcome from my side to this year's Capital Markets Day. It's my second Capital Markets Day. So I've been more than a year with Merck, and I have to tell you, it's an amazing company, great people, and the culture is second to none. Now, to be honest, compared to last year's Capital Markets Day, I am much less nervous, but I'm really, really looking forward to the next hours we can spend together and discuss Merck. So let's go. It's my great pleasure to share my views on Merck's financials today. The agenda is pretty quickly summarized. It's all about growth, returning to sales growth, our unique ability to deliver structural growth, and how that turns into profitable and cash-generative growth. And with that, let's first start with our improving near-term financials, which are on the next slide. As Belén just said, Merck is definitely delivering on the commitment to return to growth in 2024. And as you're all well aware, and you can see from the chart on the left, we do expect to see a significant increase in organic sales growth in the second half. Now, on the right, as we translate sales growth into EBITDA growth, it comes at strong incremental margins. And that is testament and demonstrating the work of the teams have done into creating high operational leverage. This does underpin the full-year guidance we gave in August, and I'm really pleased to reconfirm it today. So our 2024 guidance ranges sales of EUR 20.7 billion-EUR 22.1 billion, EBITDA pre of EUR 5.8 billion-EUR 6.4 billion, and EPS pre of EUR 8.20-EUR 9.30. But as we look across our business sectors, we will confirm that all three will drive organic growth in the second half. We are confirming that we expect order intake and sales Process Solutions continuing to improve sequentially while recovery remains gradual. The demand situation in pharma and academic customers, especially in North America, remains challenging, which is actually affecting our SLS business. Hence, we see the sector guide on organic sales growth trending around the bottom end of the range. On Healthcare, we continue to see growth driven by CM&E, oncology, and Mavenclad. And in Electronics, as Belén just said, the AI inflection that we saw at Q2 continues into the second half of the year. In short, we are now emerging from the transitional growth period in 2023, and we're now heading back into what we would call structural growth. And that is very much driven by improving market dynamics, as you can see on the next slide. In 2023, after a relatively muted phase, FDA approvals hit an all-time high. And for new molecular entities, there was a rebound even from the lower levels of 2022. But what is much more important, we also saw a step change in approvals for biologics. And that is the key market trend that plays into our portfolio areas of strength. On top of that, biotech funding rebounded and has already exceeded 2023 levels after only nine months in this year. Thus, in the critical areas of pharma and biotech, the structural growth drivers of the market remain completely intact. However, there's a change. We currently see a stronger focus on later-stage clinical development projects, which is impacting our Science and Lab Solutions business. Let's move on to Electronics. Hyperscalers continue to increase spending on cloud AI, which is trickling down into demand for leading-edge silicon. It is very much driving demand for advanced logic nodes, high-bandwidth memory, and metrology. And as you already heard, this is good news for Electronics business, as we are indeed overrepresented in AI. Yet, the wider market is actually recovering at a slower pace than the industry expected, but importantly, it continues to support growth. Now, if you look at industry forecasts, they anticipate gradual growth in memory and see the analog recovery pushed into 2025. Good news is this will be tailored for future growth. So taking all of this together, the path of recovery from the transitional period is actually now pretty clear. And importantly, we are moving back to executing on structural growth. I'm now moving on to the next section where I give more details on midterm growth across our three business sectors. Starting with Life Science, and as Belén said earlier, we are reconfirming market growth and the ability of Life Science to be able to deliver above that market growth. Now, we have refined our midterm sales growth ambition to a range of 7%-9%. The key component of this is in Process Solutions, where we have revised growth ambitions from low teens to about 10% annual growth, as we expect growth in China to be more moderate midterm versus our previous expectations. In Science and Lab Solutions, we confirm our midterm ambition, overcoming softer near-term demand for North American pharma companies and academic research spending. This is reflected in the shift I just mentioned earlier into more later-stage clinical developments. But Matthias and team will lead you through the drivers in their spotlight sessions in Life Science. So let's go to Healthcare. In Healthcare, we have compounded growth over many, many years by leveraging a unique product portfolio. And that is actually built on the foundation of our geographically diversified CM&E and fertility franchises. Now, we are facing a maturing growth profile in Mavenclad and Bavencio. A midterm, hence a midterm slight growth for CAGR, for our Healthcare business, is still attractive. Healthcare is highly profitable and cash-generative, allowing us to reinvest while we are actively working on re-accelerating growth in this segment. And as Belén just mentioned earlier, we do strongly believe that innovation remains a critical component to ensuring long-term growth in the global pharmaceutical industry. So let me confirm, we have the ambition to return to a mid-single-digit growth percentage in the long term. Now, that will be driven both by our innovative and further de-risk pipeline and supported by external innovation, primarily through in-licensing, and I'm sure you're curious to hear Peter providing more color and details later, so last but not least, Electronics. In Electronics, we are accelerating our growth ambitions. As the future of the business is semiconductors and Display, we will provide you a mid-term ambition on that basis. Remember, we have announced that we are selling Surface. The mid-term sales growth upgrade to a range of 5%-9% is mainly driven by the increased weighting of our semiconductors in our portfolio. When we last upgraded it in 2021, it was around 60% of the Electronics portfolio, and it's now around 80%, with Display actually making up the difference. There is an acceleration in semiconductors midterm ambition from a range of 7%-10% to a range of 7%-11%. And that is, you've also heard that before, driven by the increased weighting of AI. Now, when we previously upgraded, AI was 5% of the market, and it was growing at mid-20s. Now, it's 10% of the market, and it's still growing at mid-20s. So that's another percentage point of weighted growth in Electronics. On Display, we have growth areas in OLED and premium liquid crystals. And these are now large enough so that they will soon compensate for declining areas in the standard liquid crystals business. So consequently, we see growth around stable. And there's future long-term upside from metrology and AR/VR, which we don't yet include in our midterm ambition. But I do know that Kai and team are super excited about the space, and you will hear more from them later. Bringing this together, all three of our sectors generate midterm organic growth. And that is, as Belén just mentioned, the most important driver of Merck's ability to compound value. I will now share how Merck leverages sales growth into profitable and cash-generative growth in the next section. So Merck has improved EBITDA margins since 2019 with the shift of portfolio towards Life Science. And in 2023 and 2024, we have absorbed idle costs from the underutilization, both in our Life Science and Electronics business sectors. But once we grow back into our shoes, we do see margin expansions upside from the 28% historic average. And also, do bear in mind that Merck made a conscious decision to increase capacity in Life Science and Electronics from 2021 onwards. That clearly resulted in even lower levels of asset utilization during the transitional period of 2023. But now, we are set to harvest the fruits of this long-term-oriented investment decision. But enhancing margins is not just from increasing utilization of our asset base. We also have many activities to structurally improve our cost base. And with that, let's look at the next slide. As we told you, at our capital markets day in 2021, we leverage organizational agility through our shared business function, which Merck Business Servicess. Now, over the years, we have now created what we think is a strategic asset. It is a tool to drive the entire organization towards more efficient operations and optimized processes. When Merck last updated you on this function, we had created 80 million productivity savings and a scope of around 900 people. Now, those were the low-hanging fruits. Since then, we have added another 30 million productivity savings and increased the scope to 3,000 employees. But what I really care about is that moving forward, we have Merck Business Servicess a tool to continuously create additional productivity savings on an ongoing basis. So how are we doing that? Now, we are creating the foundation for the broad use of AI, machine learning, and robotic applications in the financial and also in the non-financial data. So what are we doing? We're elevating our processes with the key focus on creation of reliable and strategic data assets, which then can be used for better steering and targeting. You know the saying, "Garbage in, garbage out." Well, what do we need? We need data quality. We need accuracy. And my actual total personal favorite is we need a good master data governance. And that is a huge ongoing process. We've come a long way, but I can promise you the journey does not stop here and today. It will simply not stop. This is on costs. But let's not forget, our wider digital activities are key to Merck's transition into an even more profitable business. Let's go on to the next slide. Our goal is the deployment of industrialized AI use cases. We are leveraging the use of e-commerce and Life Science, where it is accretive to both growth as well as margins. But it also enhances customer intimacy as we evolve it from a transactional tool to an immersive online platform for our customers. We're also using smart factories where we're digitalizing plants and we're utilizing pools of data to empower our business to assist customers with their challenges, such as quality control as well as yield. And we're not only doing that for ourselves, but we are also offering it as a business model to our customers. Now, we've proven in Athina and Electronics that better data empowers quality control and yield. And data and digital feeds our innovation potential by increasing connections and insights that inspire new ideas. And that is why it will be a key component of reducing our capital intensity, both on CapEx and working capital, as we're preparing for a new phase of lower capital investment intensity. As Belén mentioned, we made the deliberate choice to invest in our business capacity. And as you can see from our footprint, our investments in network reach and capacities are actually pretty close to completion. And that will clearly result in lower CapEx as a percentage of sales after 2025. And you all know, reducing capital intensity will result in more cash generation. So let me bring all of these items together onto the next slide. So when we take together our efforts on EBITDA margin expansion and reducing our capital intensity, we see an inflection in our free cash flow margins from 2025 onwards. Simply, improved cash conversion is key to funding our M&A ambitions and to enhance our ability to future deleveraging quicker. So let me say more on M&A, and I'm now on the next slide. At the risk of boring every single one of you, I will be repeating our financial criteria for M&A, which are IRR above WACC and EPS accretion. But let's talk a little bit about the sellers. Seller valuation expectations were higher in 2022, and our patient approach to M&A has actually served us pretty well. But as we look at the markets now, I feel they finally have found a footing on the trajectory of interest rates, and the certainty is starting to filter through valuations and, in our opinion, creating more opportunities. As Belén said, we will continue to remain disciplined and we're ready to act at the right time. As a CFO, synergies and integrations are critical to extracting value from M&A. And the good thing is Merck does have robust processes and a very strong track record of integrating large businesses. So with that final ingredient, let me conclude on value compounding in the next section. As you already heard, we will return to attractive midterm growth around historic levels. We are relentlessly focused on improving our margins. We will benefit as we grow back into our shoes following capacity expansions with an eye on cost scalability. And thus, we see margin upside. We will restore the free cash flow generation ability after a period of deliberate over-investment. Now, that will create more cash for M&A and enhance Merck's ability to deleverage faster. And when considering all of this together, Merck intends to accelerate EPS growth and returns. So let's go to the executive summary on the next slide. So Merck focuses on an increasingly efficient and scalable cost base. We are moving into an area of lower capital intensity and hence will propel profitable and cash-generative growth. And with this, we will continue to execute well on M&A to drive value compounding while we remain disciplined on our guardrails. And with that, thank you very much for your time and attention. And I'm handing over back to Konstantin. Well, thank you very, very much, Belén and Helene. Thank you very much for your presentations. Now we are slowly but surely coming to the Q&A sessions with our CEO and CFO. I think you know the drill. We would kindly ask our audience here in the room to actually prepare for asking your questions. I would ask to then please raise your hand. Also, just use the mic on your desk once it's your turn. With this, I think we are ready. I would also like to invite you, Belén, back on stage for the Q&A. Yo u see it? Yeah. Okay. Good. All right. First question directly in the back, Emily. Hi. I think you need to push the button. Hi, Emily Field from Barclays. Thank you. One on Life Science and then one on Healthcare. The first one on Life Science, Belén, you mentioned 2025 growing at a more normalized rate, but obviously this year is well below that. So sort of do you think that, and the street is modeling above that midterm range for next year? So it's sort of taking the two collectively. It falls into that range. Just want to think about 2025 versus 2024. And then just on Healthcare, I was wondering if you could provide some more context over what you consider a de-risked asset as you're looking at acquisitions. Is that based on phase of development or more an established mechanism of action? Thank you. Yeah, both. Let me start there because that's a simple one. That's the straightforward one. So Emily, what we consider a de-risked asset in licensing is a later stage with a strong proof of concept or earlier stage, but already proven mechanism of action. So we are staying away overall from the first-in-class notion. Now, and with complementing that with potential bolt-ons, I think I detailed that in the presentation. Basically, early value creation and lower, once again, either commercialized products or later stage products. On Life Science, I mentioned that the exit rate is going to be helping us bridge to the mid-term guidance. And this is definitely resulting from the progression that we have seen in order intake and the expected recovery gradually of our business in the second half of this year, then bridging to the mid-term guidance in 2025. Next question, Sachin. Hi, Sachin Jain from Bank of America. Just two questions on similar topics. I'm going to broaden the question on 2025, if I may. You gave some high-level comments. Last year, you gave a bit more detailed comments from 2024. So I just want to ask the question this way. So 2H growth, you've talked about acceleration. The midpoint of guidance implies about 4 or 5%. How sustainable is that 2H growth into 2025? What are the key pushes and pulls? And then the second question on the externalization strategy in pharma. As you move to a more external strategy, what are the implications for your own R&D spend? You sort of indicated moving towards high teens. Is that now more a sustainable spend level going forward? Thank you. I mean, at this time, we are operating at a low R&D ratio to sales already. I would even dare to say it's a bit too low. We are aiming to manage to keep around 18%-19% R&D cost to sales. But also, you have to take into consideration, Sachin, that this depends as well on the number of in-licensing and the implications of development cost. Big picture. Peter will provide additional details today, but our intention, as for many, many years, so you know the way we have been operating our R&D cost. Now, we have, I believe, gone to the other extreme. We are very efficient. We are very efficient on structure, and the majority of our R&D spending is going to projects, right? So as the number of projects raises, either on our internal research or coming from the outside, we will keep the ratio in those ranges that I mentioned. For 2025, I think it's a bit early to guide for 2025, but I believe what we have said is that for Life Science in particular and also for the group, we believe that historical levels of growth will be sustainable. Matthew. Thank you. It's Matthew Weston from UBS. Two questions from me, please. The first around your Healthcare business and the real strength of the established portfolio that you have. A lot of the challenges have come from the pipeline. What can you do to drive increased growth in the established products, whether it be incremental investment or bolt-ons, to really supplement an area of strength in Merck's Healthcare? And then, Helene, you highlighted margin expansion as a goal, but you didn't give us any numerical drivers of that. I just wonder if you could help frame, I guess, some pushes and pulls around margin. Is it really revenue leverage is what the key driver is, or are there more cost focuses? Is there a mixed component? I think it would be great to try and understand some elements of quantification around the potential for margin improvement over time. Do you understand? I understand. So again, what are the pushes and pulls? I mean, ultimately, as we said, it's like as we have sales growth and as we are sort of like growing back and have less idle capacity in our fabs, we will by virtue and naturally see margin expansions. But on top of that, I mean, as you all know, it is like we are living in the time where we can use data and digital much more efficiently, both on process optimization and less ultimately manual labor, but also better targeting of customers. Those are the three elements we're trying to put together for margin expansions. Now, I'm not going to give you a numbers target, but I think if you actually look already at our numbers, you can see the green shoots of all that coming together and actually working quite well. Back to the CM&E portfolio, the growth of that portfolio came from a very intentional decision to move an aging franchise in Europe to growth markets, particularly to China. So the majority of that growth today is coming from those markets. What are we doing about it? I mean, we have focused on life cycle management, example, Pergoveris in fertility. And eventually, we will be considering local or regional opportunities in those markets that are strategic for that portfolio. Matthew, we have to stay very focused. We cannot go everywhere. We are managing the business for cash in the majority of the markets with those specific exceptions in which we may see life cycle management opportunities or opportunistic collaboration partnerships with other companies that could leverage and capitalize on our strengths. Example, China, no more. I think Richard has several answers. We hav e Richard, then Falko, then Rajesh. Step by step. Richard first. No, you. Thanks. Thanks, Konstantin. Thanks, Belén. Richard Vosser, J.P. Morgan. Maybe a question on the semis growth outlook. Obviously upgraded, but how much of that is an upgrade related to the acceleration from the recovery that we're expecting in the midterm? And how much is structural? So structural beyond that recovery, do we still think 7-11, or is it lower in the very long term? And what's also driving the improvement that you see that's been pushed out into 2025 from some of the non-AI parts of the business? And then second question, just to Process Solutions to delve maybe a little bit deeper, just other parts of that business. I think you said on 2025 that you're recovering towards the midterm growth levels. So are there bits of the business that are slower recovering, and how do you see those, like equipment and stuff like that? Thanks. So on the first question, as I mentioned already in the introduction, the majority of the growth that we envision is coming from the integration of AI. For the moment, I think the rest of the market will also recover gradually, and we will benefit from whatever is to come. Nevertheless, we feel, I mean, if your question is, is there more upside, right? We feel very comfortable with the midterm guidance that we are putting forward. Those are rigorously assessed by our teams, and definitely, I'm absolutely sure that with Kai and the team, you will be able to get additional granularity and perspective on this. So on your second question, Richard, remind me. Process Solutions is 10% growth in the midterm. That's obviously lower, but are you thinking 2025 is towards that level? I think you said that. So what parts of the business are? I think what I said is that based on the momentum that we have seen in order intake, we will definitely see a gradual revenue uptake and that the second half of 2024 will be sequentially higher than the first half, right? I also said that the exit rate to 2024 will help us bridge gradually to the midterm guidance. And I will repeat what I said to Sachin. We will definitely come back with our qualitative and quantitative guidance for 2025 in due time. Okay. Next, we have Falko, then Rajesh, and Florent also. Thank you. It's Falko Friedrichs from Deutsche Bank. My first question, sorry, going back to this Life Science point. So when you said that next year is a bridge to the medium-term targets, the way I understand the statement is that next year's growth is likely below the medium-term guidance. Is that the right way to think about your use of the word bridge? The second question is fairly similar. It's about the Electronics business. Would you say that for this segment, next year is also a bridge to the medium-term outlook, or could the full midterm guidance range be in play for Electronics next year? Thank you. Thank you very much. As you know, I am not an Anglo-Saxon, so I am very intentionally using bridging. And this is not lacking confidence, but rather expecting that the recovery will follow the order intake and that it will be a gradual progress and impact on revenues. That's basically what I can say. We cannot anticipate, once again, the 2025 numbers today, but we are confident, right? We are confident, and based on what I said, I repeat, we are going to bridge progressively to the midterm guidance, and this will start in 2025. For Electronics, I mean, same thing. We are going to see we have already benefit from the market recovery in the artificial intelligence piece. There is a next year of the market that will progressively recover, and we will basically benefit and will get additional tailwinds from that recovery. So we are extremely confident on delivering growth in the ranges that we have said, but we will come back with the 2025 specifics. Rajesh now. Hi. Rajesh Kumar from HSBC. Two questions, both on Life Sciences, if I may, and one clarification. First, a clarification on the FCF measures and capital intensity definition. Do you include the rate of investment in R&D in capital intensity, or do you exclude that? And M&A, is that included or excluded from FCF calculation when you show the growth? So let me do it quickly. R&D included, M&A not included. Okay. So if M&A goes up, capital intensity, which is falling organically, might be offset with M&A. We are thinking about FCF as a way to do M&A. Okay. Clear. Thank you very much. Life Sciences, all the major players sort of have come out with their guidance for the market, mid-single digit, but they all seem to be growing high single digit, right? Clearly, you're doing something wonderful, which the market is unable to. So can you help us understand what are the virtues of your scale or position in the market, which allows you to grow faster than the market of which you guys are a large part of? And the second one on Life Sciences is on visibility. I believe that during the pandemic, you were getting very long-duration visibility of your incoming orders, but a lot of your business is spot consumables, things like that, which do not necessarily come with a long-duration order. So how good is the order book or guide going forward compared to the past? Thank you. Very good. So on the first, once again, you cannot compare apples to apples, and the portfolio structure may be different. I think what is driving our superiority is probably lower exposure to instruments, which are recovering much lower than the rest of the categories, and our low exposure to China. Those two could actually make a difference already, right? And obviously, our portfolio leadership, our positioning in certain critical markets, and our ability to gain share. The next question was on how good a guide to the future are your order books compared to the past. I think our order book is solid, as Matthias would say. Let's put it that way. We are focused on order intake. That is the most important leading indicator for revenues. And of course, as order intake continues to progress sequentially and year on year, our order book becomes more solid. Can I just jump in? I mean, it's like pre-COVID, we had relatively short order times, like somewhere up roughly three months average, and then during COVID, as people panicked, they said, "Okay, I want to have longer order times because they thought they needed to pre-order," so in theory, we had amazing visibility about our delivery schedule into the future. In practice, what happened is that, of course, customers then decided that they may not need this one gazillion single-use bags that they had ordered with a two-year term. Now, what actually renders me as a CFO much more comfortable is that we're seeing the order lead times shortening yet again because we have much better visibility about supply chains. Our customers have much better visibility about supply chains. They have much better visibility about what they actually need to use. And hence, in theory, we have a less good visibility about the future sales. We actually are back into a much more normalized position around our order books. Florent. Good morning. Florent Céspedes from Bernstein. Two quick questions, please. First, on capital intensity. You say that you would like to decrease capital intensity going forward, but as CDMO business requires high CapEx, how this business fits with this ambition? Do we have to understand that you will be a little bit less active on this field? Second question is on M&A, big picture. As interest rates are a little bit, let's say, lower than last year, do you see versus last year better, more favorable environment? Do you see more opportunities? Any comments on this field would be great. Thank you. Should I do the capital intensity? Go ahead. Okay. As you rightly point out, I mean, Merck basically lives on high free cash flow conversion in order to do M&A. Of course, CDMO is a highly capital-intensive business. What is important, and I think some of you have been in the Life Science world, it allows us to really do R&D and understand what the challenges of our customers are. Our LSS business is what you are alluding to, is a key component in order to serve our customers better. What I can officially confirm now is we're not buying Catalent. Good. And? Let's say then a big picture around interest rates. I mean, my view is like volatility and uncertainty always drives valuations. And I think what we've gone through is with rising interest rates and high interest rates and actually many people not knowing where to stop and how their DCF models work, we had a lot of exuberance in terms of valuations. In my mind, at the moment, we are seeing interest rates sort of normalizing. People know what the trajectory of interest rates are. And as a result, it's much easier to determine what the DCF model actually spews out and that it makes sense. So I mean, the proof will be in the pudding, yeah? And the pudding is we do an M&A deal. But overall, I have to find that the whole discussions in the M&A space are becoming much more rational because people are now much more certain that whatever they have in their model makes sense. Actually, the parameters as input parameters are a solid footing and ground to take decisions upon. So we had James, then Oliver. Great. Thank you for my questions. It's James Quigley from Goldman Sachs. So just to align to the M&A comments as well. And you mentioned transformational M&A. We haven't seen that yet following the comments in 2022. So just looking back, so again, Helene you mentioned about price, but is it quality of the target as well potentially as part of the reason as to why you haven't done a transformational M&A yet? And as we're looking forward, it sounds Electronics is mainly bolt-ons, Healthcare mainly bolt-ons in licensing. Should we expect that into the near future as seller expectations continue to normalize? And secondly, a super high-level question on the three-pillar structure. And I appreciate changes are very unlikely here. But one of the key benefits of the structure or the key benefits of the structure are the cross-funding across the divisions. And Healthcare has obviously been a key cash generator there. But without potential for transformational acquisitions or with that lower probability, what are you citing as the key benefits now of that three-pillar structure, particularly what we've been seeing with the Healthcare business maybe having been underinvested in in the last few years? Thank you. So let me take the M&A question because, I mean, we have spoken at length on this topic and also repeatedly mentioned that our focus continues to be on organic growth. So, I mean, we are in permanent scouting for those opportunities that may be attractive. We don't see at this time the need to exclusively focus on transformational M&A. And if you see our trajectory in the recent months, we have been much rather focused on a string-of-pearls approach of innovative targets that can contribute to future growth, right? So, I mean, we have no gaps to fill. Rather, we are investing, as I said, our capital in resilience, innovation, and growth. And that's the way we are looking at this. For health, I mean, definitely, once again, the only area in which we may consider bigger deals is Life Science if we find the target. And it's not about the quality of the target. It's about the preferences that we may have, the availability, and importantly, the multiples. Right? That's one thing. For Healthcare, I repeatedly said in licensing and low-risk bolt-ons, for Electronics, innovative technologies with much less capital spending because we have invested significantly in capacity expansion. So that's what I c an say for M&A. Perhaps you can take the second question on cost. I don't know if the question is specific for Healthcare. Perhaps you can guide me a bit better so that I give you. So the second question was more about the three-pillar structure. So the key benefits of the three-pillar structures are the diversification and the cross-funding between sectors. But if each area is more focused on bolt-ons, then where are the key benefits that you're saying now of the three-pillar structure? Appreciating that nothing's really going to happen. I mean, I think the global diversification is good per se. And we have seen good illustrations of this in recent years, right? 2023 was a transitional year for Electronics and Life Science when we were really confronted by very hostile market conditions. Healthcare was shining and really helping the group. We are a globally diversified business and not only at sector level because we operate our portfolio assessment and portfolio choices below the sectors. We are very highly diversified below sectors. For example, in Life Science, we have Process Solutions Life Science Services, and Science & Lab Solutions. The same would be applicable to Healthcare and to Electronics, even when Electronics is becoming a pure play, semiconductors also by choice. We see direct benefits of global diversification as a choice. We see some potential synergies, not only on cost, because all the enabling functions Merck Business Services that Helene was speaking about during her introduction are really serving the three sectors. This is helping us manage the one Merck or the enterprise level in a much more efficient way. Besides that, and much more as a longer-term benefit from the multi-industry business model that we have, is that we are really tapping into an emerging trend, which is called bioconvergence, which may be giving us some competitive advantage in the future for some businesses, taking the benefits of the potential innovation emerging across sectors. One example, Bioelectronics. We are already working on that. The Healthcare team continues to partner to progress that project. Artificial intelligence in that discovery, we are doing that as well. That is more a long-term benefit from the multi-industry business model, but we already have today both risk diversification and cost synergies. One thing I'm really excited about is actually the whole Smart Manufacturing initiative where the three sector heads are working incredibly close together. It sounds really simple. I mean, as you know, it's like when you produce a drug or a chemical, you have process steps which are pretty well defined, and what we're doing now is to basically put sensors into all of these process steps and put it into a digital twin, and then we're working with the data models around optimization, measuring, etc., and what we're finding is that, and Karen, I mean, you will be amazing talking about that later. What we're finding is that especially that cooperation between the three, we can put much more value behind it. We can put much more money behind it, and we're really now finding that that segment, both for internal production, but also for offering it to our customers, is something we are getting quite excited about, so I think we are nearly out of time. Yeah, Oliver. Any questions more? I know Oliver had his hand up for a long while. So let's squeeze in a last question, and we'll take the other questions offline. And just one minute also in answering, please. Thank you. Okay. Thank you. Good morning. Basically, two questions, but one's very short. So Helene, you commented a couple of times on lower capital intensity. So I would like to see a little bit more color about that. So first, have I understood it correctly that absolute CapEx will be lower up from 2025? And secondly, from a operational perspective, higher growth in Life Science means also eventually more consumables and therefore, by definition, lower capital intensity. Is this the right way to think about that? That's the first one. Yes. So that's easy. Okay. Then the second one is basically also a follow-up to a previous question on the M&A strategy, basically highlight on Life Science and Healthcare. In Electronics, it appears that you just mentioned, okay, the idea towards innovative technologies in the previous answer. So what's the rationale of being a little bit more defensive for Electronics? Is it just the lack of adequate innovative assets, or is it the fact that returns for M&A in Life Science or Healthcare appear more attractive for you? Well, first of all, in Electronics, we have a podium position already in semiconductors, and we have a very competitive portfolio offering. Second, we want to continue to be integrating or internally developing new technologies that will make the next frontier of growth. We are not thinking of transformative M&A because we simply don't need it. Okay. Thank you. Good. Well, Belén, Helene, thank you very much for all these answers and also to all of you here. Thank you for the questions. Next item on our agenda are the spotlight sessions. So three dedicated sessions on each of our business sectors. And before that, we'll have a very short coffee break now and then start the spotlight sessions at 11:15 A.M. Thank you. Very good. Thank you. So, a very warm welcome back. We now come to the second part of this year's Capital Markets Day, the spotlight sessions. These are three dedicated sessions, one on each of the three business sectors. In this format, we'll provide you with first-hand insights on key focus topics by our business leaders, including colleagues from deeper within the organization. So, it's my pleasure to now host the Life Science spotlight session. This session will focus on Life Science, its organic growth perspective in a post-COVID world. I would like to ask our Life Science colleagues to come on stage, please. Before we get started, let me introduce the speakers for this session. We have Matthias Heinzel, Member of the Executive Board, CEO of Life Science; Sebastian Arana, Head of Process Solutions; and Karen Madden, Chief Technology Officer of Life Science. I would now like to start with a more general question, and that is to you, Matthias. We learned this morning that Life Science now operates in a somewhat, let's call it, evolving market environment. What is characterizing this post-COVID world? Yeah, thank you, Konstantin. Good morning. Great to see you all in this room here. Already, thanks for a lot of questions this morning to Belén and Helene. I hope we see all of you in the afternoon session, right, so we can elaborate a little bit more. And some of them, obviously, now on the spotlight, hopefully also put some more color. So, to answer your question, yes, certainly quite a dynamic environment in Life Science, right? The market is evolving, and I want to highlight a few things. So, why don't we start with China, right? In China, we do see a lower growth outlook, more cautious spending, more rationalized drug pipeline. And yes, local competition has intensified in the COVID period and post-COVID period, especially in some segments. So, we see certainly local Chinese companies offering, call it, decent quality at lower prices. So, while we still see China as the fastest growing market, those factors will kind of influence, and if you will, mute a bit the longer-term growth outlook. Secondly, let's talk about customers. I think also the way customers look at suppliers, what their value has evolved a little bit. They certainly look more for next-gen technologies. They prioritize a lot of supply chain resilience, backup plans from suppliers, right? And we all watch what's going on in the world. We see also academic and pharma customers look more for ESG. And I hope all of you are joining the session in the afternoon because you really get a sense for ESG, not a nice to have, but really a business driver. You will get the real story or the real content about the new offering, and there's a lot of pull. Helene mentioned digitalization, automation, that's another pull. And yes, pricing is an element. It has been always an element, but it's only one of the decision factors. So, certainly in the post-COVID world, I would say the market remains very well solid underlying with a few changes, lower growth in China, but certainly demand for higher innovative and sustainable solutions. So, thanks, Matthias. That's comprehensive. Another question. So, what are the consequences for the targeted markets and the market growth midterm as you define it? Yeah. Obviously, when we mentioned in the morning, we continue to expect the Life Science market around the 5%-7% annually over the midterm. And that's despite, obviously, the headwinds I just mentioned around China. We see other markets, right, like Korea, showing rapid growth. And that's certainly due to some government policies, investments in high-tech economies, and obviously a lot of demand from local companies and global players which are based here. So, we're really confident in our midterm market growth expectations. As I mentioned before, there's a strong demand for next-gen technologies, strong pipeline for later-stage molecules, and also especially for the novel modalities. So, as you know, we operate at scale in our main segments, especially Process Solutions, in Science & Lab Solutions, and obviously with a growing business also in process services. If we look at the drug development ecosystem overall, that accounts for more than 70% of our sales, and we have a strong position in academia, in pharma, in biotech, and our focus is even stronger on those segments, so, from a portfolio perspective, those customers use a wide variety of our broad portfolio. Some of them, some of you have seen, hopefully, in the morning early morning session in our world of Life Science, the real breadth of our portfolio and kind of the bridging from the more day-to-day demand of customers to really the next-gen technologies. Many of them need kind of the more bread and butter products, but also the next-generation offerings. We are confident to deliver above-the-market growth based on two factors. Number one, our really focus on those high-growth segments. I think some of you asked that question in the morning. The market is quite large, EUR 220 billion. Our focus is even more on those higher-growth segments. Secondly, it's about innovation. That's kind of in the core, the DNA of our company, of the Merck company. It's in the core of our business in Life Science. We kind of summarize it around portfolio leadership. Geographically, we are certainly tempering the expectation in China. But nevertheless, China, Asia overall, I mentioned Korea as another example, is still a high-growth area for us. So, while we are fine-tuning a bit our strategy for China, we're still very committed, and we are adapting, have adapted over the last couple of years, our approach to move for an in-region, for-region kind of approach. Thank you, Matthias. Let's now turn to Process Solutions. So, a question to you, Sebastian. What has changed in Process Solutions in the market, in the new normal post-COVID world? And how does this impact Process Solutions itself now and also in the future? Well, thank you for that question, Konstantin. Warm welcome to everybody. I'm happy to be here with you this morning. I think to answer your question, we need to distinguish between before COVID, after COVID, right? For the bioprocessing market, before COVID, we were seeing mAbs being mainstream for modalities, and we were seeing the early approvals and benefits of new modalities like cell gene therapies, promising the future of what will come with novels. Growing investment levels in Life Sciences were propelling the biotech environment, and we were seeing increased demand for outsourced manufacturing like CDMOs. During COVID, well known, there was a lot of supply chain manufacturing disruption, creating increased lead time that our customers needed to increase orders or over-order pattern. That created manufacturers and suppliers like us needed to invest in more manufacturing capacity to supply that demand, right? Now that COVID is behind us, what are the main shifts in the industry? I would say number one, we see the increased benefits of novel modalities being ADCs, mRNAs, VGTs with very exciting new therapies coming into the market. Number two, we see dual sourcing or multi-sourcing as a new trend. Everybody's working in supply chain resiliency strategies to prevent future challenges in their supply chain. And number three, like Matthias was mentioning, we see an increased competitive landscape in general industry with regional and local competitors, especially in areas and countries like China. And lastly, I would say an increased relevance in the CDMOs in the bioprocessing space, right? Those are the major trends. But answering the second part of your question, what are the implications for Process Solutions? I would say number one, we need to continue to invest in innovation and differentiate our portfolio, both in our core mAbs technologies and also in new modalities. That's number one. Number two, we need to continue to evolve our go-to-market model and making sure we're serving our customers, especially our key accounts, with a flawless commercial execution. And number three, I would say continue our multi-year regionalization supply chain plan to build on that supply chain resiliency that our customers need. So, Sebastian, you mentioned the expansion of portfolio leadership as a cornerstone how you want to win this environment. So, maybe a question to you, Sebastian, also Karen. Can you provide proof points, give examples what you actually mean by that? Great question. Thank you so much. So, let me start saying that Process Solutions will continue to drive innovation through portfolio leadership in the next coming years. We're super well positioned to drive value through innovation, right? This will be done by strengthening our core competence in things like Merck's antibody development templates to continue to radically reduce time and cost when customers are manufacturing mAbs, but also continue to innovate in the entire workflow. Everything from upstream, cell lines, cell culture media, chemical products, single-use up to downstream filters and fill and finish. We'll continue to innovate in the entire workflow for bioprocessing. We're heavily invested in R&D. We have over 500 talented employees globally supporting our actual portfolio and our new products, and we aim to continue to deliver multi-year new product introduction that will yield benefits and growth for our customers in all our franchises. But maybe Karen can give us a bit more color in some of these. Yeah, sure. Thanks, Sebastian. Happy to do so. So, such a pleasure to be here and see all of you, and thank you very much. I want to build on Sebastian's points. We're going to continue really to double down and innovate on the mAbs or the monoclonal antibodies manufacturing workflow that we have with breakthrough innovations and really focusing on a few key areas, one around intensification, perfusion, and digitization. I think a really good example of that is our BioContinuum platform. What it's comprised of is actually several products that are put together to help evolve these biomanufacturing processes towards more intensified and continuous bioprocessing. What's in the BioContinuum platform? It's actually comprised of several innovations. One is our new Mobius iFlex bioreactor that has the flexibility of being run both in fed batch and also in perfusion modes. This, of course, can be used in combination with our novel Ultimus film products. Some of you saw that today in the ADC bioreactor as well. But importantly, it also can be used with our in-process analytical technologies, including our MAST aseptic sampling technology, which really helps bring quality control or QC to the manufacturing floor, which will enable our customers to start to actually do real-time batch release. And so, these innovations, both today that we have and in the future, will help our customers really produce the highest quality monoclonal antibody therapies and other biological molecules. Thank you, Karen. That sounds really exciting, right? But also, we want to continue to innovate in novel modalities like VGTs that are genetically modified viruses to deliver therapeutic genes to patient cells. Till now, VGTs have been largely used in limited to rare disease and smaller patient populations. But we're very excited because there are promising therapies in a growing number of more common indications like cancer, age-related macular degeneration, and Parkinson's diseases, giving, for example, VGT a great future for our business and for the industry as well. We strongly believe in a template approach, having a full portfolio so we can help our customers in that productivity and process improvement over time. And we're leveraging our mAb innovation engine and capabilities to develop our VGT expertise in the next coming years. But maybe Karen can give us a little bit more examples on what we're doing here in VGT. Yeah, sure. So, we have a great starting point, right? Because we're starting and leveraging our really already strong and established capabilities that we have in cell line development, cell culture media, and also filtration technologies. We're using these really to support or serve as the basis for our innovation and the development of this VGT template. Really, the ultimate goal of this is so that our customers can really streamline, simplify, and speed up the production of these incredibly important new therapies that are coming down the pipeline. I want to give you two examples. One is around our own internal innovation that we've done in this area. Again, some of you saw this in the world of Life Science, our Pellicon capsule technology, which is a first-of-its-kind spiral wound TFF technology that really allows you to have very consistent performance and to scale very predictably. It comes in a plug-and-play format that gives incredible flexibility and speed and efficiency to our customers. That's a terrific in-house technology that we've developed. But the other one I want to cite is one that came externally. So, this is Mirus Bio. We just talked about the acquisition of this. And as we've seen in the market there, the number of applications that are relying on the delivery of nucleic acids into cells is growing. And in fact, that's actually a really hard part of the process. It's incredibly complex and difficult to do. And the Mirus Bio technology and the products that we've acquired there, the VirusGEN transfection platform, along with the RevIT AAV enhancer, really help our customers to do this transfection process in a better way. And when used in this way, our customers can get two to four times greater viral titer out of these processes, and as importantly, with very high quality of the virus. We just now heard that innovation is really key to achieve our goals from both of you. Karen, can you talk more about what your plans are in that regard? What proof points are, please? Yeah, yeah. Everybody knows I like to talk about the subject. First of all, we really do take a holistic approach, right, across all of these different modalities across both products and services. Importantly, our goal is really to be the partner of choice for our Life Science research, biotech, and pharma customers. Let's just start with that. Our objective is really to try to harness or advance leading-edge science with a focus on the attractive segments that Matthias just talked about. What does that mean? It means that we're going to continue to innovate around our core products that Sebastian just described. So, for example, around our monoclonal antibody portfolio, while at the same time pioneering new directions or what I like to call vectors in emerging attractive areas. So, what does that mean for us? So, first of all, it means that we're going to build on that legacy position, and we put in place a very rigorous portfolio framework where we can achieve, I'd say, a good balance of both the short-term investments that we want to make and balancing that with longer-term and potential higher-impact projects. So, let me talk about where we're making some of those investments. And here come the innovation vectors. And these innovation vectors are really at the intersection of this cutting-edge science, these attractive markets where we feel we can play and win, and of course, what are our customer needs? I won't go into too much detail around them, but you've heard us talking about them in different ways: Smart Manufacturing, the BioContinuum, but really that's about enabling a lab and a facility of the future that's more continuous, more autonomous, that increases efficiencies. Novels, we've been talking about them today: ADCs, mRNA, cell and gene therapies, tremendous promise. The other area that we're investing in is next-generation biology, where we can help our customers understand biology in a much more granular way, even at the single-cell level. We're working in that area. And then, of course, sustainability, which you're going to hear about over the lunch, is really underpinning all that we're doing and Belén referred to that we have designed for sustainability now embedded into all of our Life Science R&D processes. And then finally, you can't talk about innovation without talking about AI and digital and bringing new digital solutions to our customers. Thank you, Karen. Now, Matthias, the organic growth perspective for Life Science, they still seem to look excellent, right? Also in a post-COVID world. Still, we narrowed down our midterm guidance range on organic sales growth to seven to nine from the seven to ten that we had before. So, Matthias, can you explain the rationale behind that change, please? I will do that, Konstantin, but I want to wrap up the innovation session because we talked a lot about innovation. And having the benefit from the dinner last night, I want to address some of the questions which I think were very useful. Innovation is a good thing. It's a good thing for our business. We are driving it. It's a good thing for our customers. It will help them achieve medical breakthroughs. It will help them to, if you will, increase the pie or the total market. It will help us to get a better share of the pie. It will help us to keep competition at distance, and I really look forward to expand that kind of dialogue with all of you in the afternoon because I picked up some questions, right, from some of you around innovation, and since we lose some of the people on the live stream, I really want to make that point very clear. We drive innovation. You heard a lot about here, and it's net positive. It will help us to grow our business, and it will help us to expand our margin, so now to your real question. Yes, we have slightly adjusted our midterm growth ambition to the 7%-9%, right? And that's obviously related to a large extent to our expectation around China, which I mentioned before. We adjusted our Process Solutions midterm guidance to around 10%. Talking about China, we've adjusted that to a mid- to high-single-digit from before kind of a low-double-digit. So that's kind of an influencing factor. With the slightly raised outlook of Process Solutions, we still expect to achieve the 7%-9%. And obviously, we continue to expect to grow above the market, which I mentioned before. And just to give you one mechanic, the Process Solutions and process services business is only 40% of the Life Science market, but it's more than 50% of our own business. So some, if you will, this mixed effect and this higher focus on the higher growth areas will allow us to really grow above the market. So we have so far largely only talked about organic growth. And Matthias, what role does M&A play in your strategy? Yeah, obviously a big topic, right? It's part of our daily job, of our daily spending our time. And we use M&A to really accelerate and boost our organic growth strategy, right? We talked a lot about organic growth. Innovation is in our hand, but we certainly want to drive bolt-ons and more sizable acquisitions in our business. In PS, Process Solutions, we certainly look for additional areas which help us to basically future-proof our bioprocessing portfolio, especially in the areas of novel modalities. And you heard the name Mirus Bio before, right? That gives you a good proof point that we really found the ideal kind of additional element in helping us to complement our VGT offering. So more to come, right? We're on it, right? The whole executive board is on it. And stay tuned. We will do the right deal at the right value. We know exactly what we want. Matthias, Karen, Sebastian, thank you very much for sharing these insights. This concludes the LS session. Thank you. Thank you. Thank you. So now we're ready for the Healthcare session. Next on stage for the spotlight, we have Peter, Peter Guenter, member of the executive board and CEO of Healthcare. Yes, let's have a seat. So Peter, welcome on stage. It's good to have you with me here today. I also know that you brought a few slides with you, so I'm getting ready for a good exchange here. So Peter, let's get directly to the point. The recent pipeline setbacks were tough. In light of these events, how are you looking at the growth prospects of the Healthcare business? Yeah, well, thank you, Konstantin, and good morning to everybody in the room and, of course, all the people connected digitally to this event. To your question, obviously, Konstantin, it was tough. Let's not put too much shadow around that, but it's clear that not only tough for us, but also obviously for Healthcare professional caregivers and last but not least for patients. And it also reminded for us that even if you have a strong proof of concept and you go with confidence in that phase three, that it's still part of innovation, it's still part of R&D, that indeed a phase three can fail even with a strong proof of concept. Especially, of course, when you look at certain heterogeneous diseases, when you look at first-in-class assets versus potential best-in-class asset without unprecedented biology and so on and so forth. Actually, when you look at general POSs in our industry, you take, for example, small molecules in solid tumors, even with a positive POC, your probability of a positive phase three readout is actually only a little bit higher than 50%. Now, the good news is that even with those setbacks, and you can see that on the slide, and as also mentioned earlier by Belén, we do continue to see slight growth for Healthcare moving forward in the midterm, and that really illustrates that unique blend of portfolio that we have between our more mature products and the more innovative products. They really complement each other very, very nicely. So we're not really exposed to a kind of a patent cliff, and we'll comment a little bit later on that, even if, of course, we are knowledgeable on the fact that there are some increasing headwinds for that, let's say, latest launch portfolio. Actually, I would dare to say that fertility and CM&E, they are not just resilient, they're actually providing growth. So it's a really solid base for adding innovation to that very solid platform, which is the more established products. And it's all about leveraging our global footprint. It's all about leveraging our commercial excellence and our commercial presence. Now, obviously, let's not be mistaken about that. Yes, of course, we need innovation, as mentioned by our Life Science colleagues, for really sustainable long-term growth. In the slide behind, you see, when you look at it at a more long-term perspective, that we do expect that our pipeline de-risked at the 20% PTRS, yeah, that's what you see here, will indeed continue to reach long-term, that mid-single digit growth again. We have a couple of great assets in our pipeline, like Enpatoran, but also more de-risked external innovation. We have a couple of interesting assets there with Pimicotinib and TGCT and Cladribine capsules in generalized myasthenia gravis. I would also dare to say that over the last two years or so, we have really started to work in the direction of a more de-risked pipeline. We had a lot of first-in-class and difficult to treat diseases a couple of years ago, and you see an increasing number of proof points that we try to steer that portfolio into a more balanced risk-reward type of balance. We will continue to do more of that in the future. Right, Peter, there were quite a lot of points, so let's get through them one by one. You touched on the established franchises, so that is CM&E and fertility. What is it that makes them not just resilient, but even growing? Well, you know, it's really a very unique and a kind of diversified portfolio within. Let me start with CM&E, and you see a rather busy slide, but let me help you walking through that slide. The first thing is, and that's probably the most important thing, is that 80% of our portfolio in CM&E is actually in developing markets. And we're talking about a portfolio of nearly EUR 3 billion here, right? So it is kind of a wonderful geographic diversification, but also within the CM&E with different TAs within, so kind of a diversification within Healthcare. So we are there operating in markets where local presence really has a strong impact, and also typically where there are still huge degrees of underdiagnosis in many of these diseases. Let me give you two examples. You see Euthyrox on that slide. So we are by far market leader if we exclude Japan and the U.S., so with 48% market share with Euthyrox. So every market expansion, we will benefit to a large extent of any market expansion in that field. In many of these developing markets, more than 50% of patients with hypothyroid diseases are still undiagnosed and therefore untreated today. So you see that there is a significant opportunity there, and we can also discuss this more in detail into the breakout session of this afternoon. Another example is Glucophage, which is still the most important product within that CM&E portfolio. And it is expected in those developing markets that the incidence of, or the prevalence of diabetes will continue to grow by another 20% between now and 2030. So significant volume uptake. And of course, you know that Glucophage metformin remains a cornerstone of the early treatment in diabetes type 2. And actually, of course, there is a lot of competition there, but what we also try to do, and we do it successfully, is to migrate into the pre-diabetes space. So that's a little bit our Blue Ocean strategy, if you will, for Glucophage, and it's working really, really well. So we have already 70 countries where we have now the license of pre-diabetes for Glucophage. Yes, Peter, and I'm aware there's still an analyst session to follow. So to conclude on the established franchises, let's have a brief really look on the fertility franchise. Try to be crisp, Kai, don't worry. So we see actually a very common denominator here across the countries in the world. So yes, birth rates are declining, so you could say this is potentially headwind, but it's also a big, big, big concern for the economies of these countries. The second point, and that's the most important point, there is definitely a growing degree of infertility. We see the cycles going up in many countries, and this is essentially driven by delayed parenthood and also some lifestyle changes, so in light of these challenges, we see many governments also coming with increasing support to support IVF procedures. I was in South Korea the other day, and actually infertility, or let's say decreasing birth rates, lowest birth rate in the world, 0.73, has been declared a national emergency by the South Korean government, and we see immediately that accompanying support to better support patients to get IVF treatments immediately results in increasing cycles, so it was interesting to see that. We also believe that we have the largest portfolio of the infertility companies. We are market leader with Gonal-f, as you know, in the FSH segment. We are the only company with Pergoveris to have a recombinant FSH plus LH combination. So that is one very good example of life cycle management within our more established portfolio. And I don't know if you know this, and we're very proud of that at Merck, we estimate that we have now round about five million babies in the world that were born with the help of our fertility products. So we're very, very proud of that. So in reality, we're very confident in the continued outlook for this fertility business. And one proof point actually is that we're also working on an expansion for the capacity. So pretty clear. Thanks, Peter. Now let's turn to the innovative franchises. How do they contribute to growth in the midterm? Well, Belén touched upon it, right? I mean, if you look at the last five years, our so-called recent launches, actually they have contributed 70% of the growth of Merck Healthcare in the last five years. So there is no way out. If you want to have a sustainably growing company, you need innovation. So let's start first with the commercialized products in the innovation franchise. So let me start with Erbitux. It's an amazing story. It's an incredible story. If you look at the core indications, which are head and neck and colorectal cancer, there are today more than 200 active trials with Erbitux, of which 20 actually are studies with registrational intent. So where Erbitux typically acts as the backbone, and so it shows how interesting Cetuximab, Erbitux has become in many of those tumor types. So we do believe, thanks to that very strong backbone, that Erbitux will continue to contribute to our growth. Switching to Bavencio, obviously, we have been enjoying a very strong double-digit growth over the last couple of years, but we're also not naive. Yes, of course, you are aware that there is increasing competition. And we do see, of course, the growth of Bavencio maturing over the midterm. This being said, and we can also discuss this in more detail in the breakout session, we do believe that for many patient segments, actually, and many doctors confirmed that to us, that the superior safety profile of chemotherapy followed by Bavencio is really opening perspectives also for Bavencio, and we are confident that we will remain an important player in the bladder cancer space. Now, turning to N&I, obviously a bit of a mixed bag with Rebif and Mavenclad, but if you look at the strong growth of Mavenclad the last couple of years, it's actually, again, a tribute to the commercial execution capabilities we have at Merck Healthcare. We project a kind of a staggered decline midterm, and you know that actually the LOE timing is different. So we first have the U.S. in the second half of 2026, and then in Europe, it's kind of starting in 2027 in some countries, and then we have countries with SPCs where we see then the LOE occurring rather in 2030. So it's not really a patent cliff, it's more a patent slope with a gradual decline of Mavenclad. Thanks, Peter. So then thinking long term, where do you expect the growth to come from? In addition, what's different now to maybe a year ago? Yeah. If you compare it to last year, you see actually some pipeline progress in what I would say more de-risked areas. We will continue to drive that portfolio in that direction where we have a kind of a more balanced risk-reward profile. Let me give you an example here, which is the refreshed N&I approach. We have a program, as you know, to develop Cladribine capsules in myasthenia gravis. It's a very well-characterized molecule, obviously, which we know extremely well. We have been allowed by FDA and EMA to go straight into phase three with this molecule. You also know that myasthenia gravis is actually a disease that is very well understood from the biology perspective. If you look at the success rates of phase three, it's very high success rates. The endpoint, which is very well characterized as regulatory approval endpoint, only takes you 24 weeks to do the study. That gives you a bit of a flavor of how we're trying to de-risk our portfolio. In the mid stage, we do continue to lower the risks. I can announce you a scoop now. I'm very happy to share that for Enpatoran, we have now a very strong and unambiguous proof of concept in cutaneous lupus. I'm referring here to the cohort A of the Willow study. You know that there is cohort B that passed futility last year, and there we will have the readout early next year. We have very good news on the cutaneous lupus cohort. That's really interesting. That's great news. What about oncology? If you look at the slide, I think another good proof point of that de-risking strategy is Pimicotinib. Actually there you have a de-risking on the biology because the mode of action is precedented, but also on the partnering. The way we constructed the contract with Abbisko is also part of the de-risking because, as you may remember, it is an option deal for ex-China, and it is a straight deal for China. I think that de-risking does not mean that we cannot be bold anymore. I think that if you look at the early oncology pipeline, there, of course, we have still a couple of first-in-class endeavors with, of course, inherently higher risk. Even in there, if you think about the PARP1 deal that we did with Hengrui, of course, we know that PARPs work. It is a precedented mode of action. Challenge being the fact that they are not selective. Now we have a selective PARP 1, so the promise is there that we can combine the efficacy of PARP 1 with better combinability because more selective, therefore less toxicity, therefore a larger therapeutic window to combine, so that's another example, even in those earlier stages of our portfolio, that we also think about how we can increase probability of success. Now, on the ADCs, you remember that in the R&D update call earlier this year, that was actually central to the R&D update call, and we intend actually to follow our lead, the anti-CEACAM5, so M9140, with one other molecule this year, and then up to four new ADCs in the next three years, and of course, by doing that, we're also spreading the risk. We see how the studies read out, and we will pick the winners there. To sum it up, I think we have a pretty solid early stage pipeline and some fairly advanced, relatively de-risked asset in the later stage. How does external innovation fit into this picture? I think Helene and Belén mentioned it. It is clear that if we want to return to long-term and sustainable mid-single digit growth or even beyond, we need to support that internal growth by external innovation. Reinforcing the pipeline by adding more assets, but also, again, in a smart way to get to that good balance between risk and reward is part of the journey. And from a criteria perspective, what we want to do is, of course, to continue to look for opportunities within our strongholds, but also looking at potential adjacencies where there is higher medical need, perhaps a little bit less competitive intensity, where there is pricing potential, and also a relatively concentrated and focused go-to-market model. We continue to aim minimum 50% of our innovation engine coming from the outside. Well, Peter, thank you so much for sharing all these aspects and that, I think, in record time. Any closing remarks? Well, I think I would leave you with these four points on the slide here. First of all, we have a unique and a very resilient and diversified portfolio within Healthcare, number one. Number two, we have a proven track record in commercial execution. I think that's very important, both for mature brands, but also we have proven to be successful with our launches. Number three, you can expect us to drive innovation by leveraging both internal and external innovation. Then number four, we will continue to de-risk the pharma pipeline. With the combination of these four elements, I think we are really well set up for future success. Well, Peter, thank you so much for your time and the insight into the Healthcare strategy. Thank you. Thank you. Following this spotlight session on Healthcare, I'm delighted to invite Kai Beckmann and the Electronics team on stage. Please join me. Please let me introduce first the speakers of this session. We have Kai Beckmann, member of the Executive Board and CEO of Electronics, John Langan, Chief Technology Officer, and Georgina Janvier, head of strategic projects and public affairs. Good to have you here. Let's directly kick it off. Kai, Electronics has undergone an incredible transformation on your watch as both an Executive Board member of Merck and the CEO of Electronics. So I have to say the business is quite unrecognizable from when I joined over 10 years ago. How have you got there? How have you got here? What is behind that significant upgrade to the midterm ambition? Yeah, concerning. Before I start, first of all, it's great to see all of you. I'm really excited. And Peter, I could have listened for even longer. So how can we compete with enabling people having babies? So that's such a great story. And as we say in German, the dogs bite the last one. So that's the way typically on the timeline. But to pick up on your question, so I think on this chart you see a bit the journey that we had over the past 10 years. And I think it's important that we are now in the middle of an industry, which is pretty exciting as an absolutely integral partner to the leading edge company in this industry. And this is the company with the broadest portfolio across all different dimensions of what's needed to make a semiconductor and all the related solutions to that. And we did the math. This is more a fun fact maybe to take home. We did the math on all our different contributions we make to this industry, and we calculated what's the probability that we would be in any electronic device that you can find in retail. So from a TV to a smartphone, from a washing machine to a computer or even to a car. And probability is over 99% that we will be involved in some step somewhere to make this whole device work. I think it's a pretty exciting data point, and it shows that the portfolio is pretty extensive. We have actively transformed the sector over the past years, and we had a conscious decision to focus on high-value products with a broad industry relevance. So not to have like a one-trick pony, it's a pony that can do tons of tricks. Probably it's a full bunch of ponies that we have here. And so we have decided to focus ultra-sharp on the Electronics industry. And of course, a lot of that was inorganic, as you can see on that chart. We started from scratch 10 years ago, just over 10 years ago with AZ Electronics, and then have sped up that process with Versum and Intermolecular in the later stage. That made us a very strong strategic partner with the focus on the semiconductor world. Meanwhile, if you take the core business, as we recall, the business without Surface Solutions of the core, it's 80% focused on the semiconductor industry. The core projection we made is midterm for semiconductor; it's 7%-11%. There's a notch upgrade to that because of the focus of our portfolio on leading edge technology need for AI. This is then driving the sector growth to 5%-9%. To take the question from earlier, we're not choosing the easy way. This is trough to trough or peak to peak, so we're not taking advantage of any recovery. This is a typical trough to trough or peak to peak curve. However, it's a K-shaped. It's not a corridor. It's always important in a cyclical business. If it's a corridor, it's getting tough. It's a K-shaped. That's always important to note. Path is clear. Customers say we're entering the age of materials. That makes us excited. I think in summary, there is no way to drive further digitization without getting us somewhere involved. The biggest driver of all is what we all experience with artificial intelligence. That's the biggest driver that kind of keeps us busy. I think you've just said what is on everyone's mind, and that is AI. What does this actually mean for Merck? How does the semiconductor industry plan that at a materials level? What is Merck's role? Thanks, Konstantin. I'm going to take this one. Well, first and foremost, Merck's role is absolutely critical. We're critical to help AI become possible. AI is only possible because of the huge developments that have been made in the semiconductor industry. AI drives huge complexity within this industry. We need more processing power. We need smaller, smarter, faster, more energy-efficient chips. What's really great for us, as Kai just mentioned, the customer has said it's the age of materials, and this complexity needs us. Complexity is good for Merck. To make AI happen, we have a few areas that we kind of focus on as an industry. The first one is miniaturization. We want to get small, as much stuff as we can in a small space. We want to go vertical. And then we want to package chips together in a system, which is called by the industry heterogeneous integration. And all of this together, we at Merck have kind of coined a phrase called 3D densification. So let's unpack this a little together. Let's look at the first one, miniaturization. So here, as I said, it's about getting as much as we can into a small space. And when you can't go any smaller, when we get to one atom or two atoms thick, then it's like engineering the performance of that material so you can get more out of it. So Merck's technology has been so helpful in this as the years have gone by. And this is very, very clear from our Thin Film portfolio. I was just speaking to the head of our thin film division, and we were just chatting about some customer problems, and at the end of it, we realized we have undisputed technology leadership, and it's just so lovely to sit here and be able to say we have undisputed technology leadership. But it's proven by 275 patent families, a product portfolio of over 100 different materials, and technology leadership in dielectrics and metallics. I mean, I know I haven't looked at John too much, but I know that John's probably raring to tell you some innovation examples. So come on, John, tell us about miniaturization. Yeah, so it is miniaturization that's driving the capabilities of the chip that's fueling AI, right? And as Georgina mentioned, when you say miniaturization, we're talking at the atom level, right? So materials we had before, insulators, conductors, no longer perform adequate function at these scales. So we need new materials. If we look at memory, it's been clear for years as the DRAM storage capacitor where the bit lives got smaller and smaller. We've had to change those materials from silica or alumina to hafnia or zirconia and alloys and laminates of those materials. Those all require new precursors because at this scale, it's the chemistry that drives the material deposition or processing. Same thing for the metals, the insulators. So we've used tungsten and copper, but at these scales, we're transitioning to things like ruthenium or molybdenum. The difficulty is a lot of the low-hanging fruit has been picked, and the materials that we use now are harder to deliver in many cases. In fact, the molybdenum precursors are most commonly solids. And so we have to deliver the solids. So fortunately, we have the containers, we have the delivery system equipment so that we can really deliver a high-quality product to the customer. Yeah, thanks, John. I mean, as we're kind of saying, at some point, we reach the limit of small. You can't go smaller than the atom kind of thing. So once we've reached the limit of small, then what can we do next? Think about New York City. You can only expand so far at a certain point in time to get more people in. We've just got to go up. So we've got to start going vertical, building skyscrapers. And what was game-changing about skyscrapers is the new construction techniques that we needed. It was the new materials that we needed. We needed glass. We needed steel. Well, the same is kind of true in semiconductors. We need advanced processes and materials to enable aspect ratios of over 40 to 1. I mean, the Burj Khalifa, which is the world's tallest building, has an aspect ratio of 9 to 1. So we're talking here like stacking five Burj Khalifas on top of each other. I mean, it's kind of mind-blowing. And this is what we did in memory. And now we're starting to do this in logic because around 13 years ago, we introduced FinFET transistor architecture. And now we're at the 3 nanometer and 2 nanometer introducing Gate-All-Around. It's really quite exciting. So John, tell us about that. Yeah, I think one of the key things you hit on for building skyscrapers, we not only need new materials, we talked about some of them, but we also needed new construction techniques. And that's really what's most exciting and challenging for us as we go vertical in the memory space. We've been there for a while with V-NAND technology. But in logic, to make things like FinFETs and Gate-All-Around, you need new process chemistries. And you need new methodologies, things called atomic layer deposition or atomic layer etching or selective deposition, where, again, we use the chemistry that is our strength and core competency to really drive the architecture that makes these chips vertical and really drives the performance that we need. But that's two of the, but the last one is really a novel architecture around heterogeneous integration. Kai, I know this is something you are passionate about or most excited about. Absolutely. I think the explanation is Moore's Law is coming to an end. We're hearing that since 35 years, by the way. Every few years, it comes up, Moore's Law is at the end. It has always a way out. And that's called now heterogeneous integration as the next frontier. And maybe to borrow one from Karen, it's a bit the heterogeneous integration looks a bit like ADCs. So you've got that kind of the antibody, you've got a linker, you've got a payload, and you've got to work the whole thing together. And it's much more complex than just doing one of these at a time. This is what we would call heterogeneous integration. And maybe let's get a bit deeper into what does that mean from a technology point of view, John. Yeah, you know for the longest time, we were trying to put all of this functionality together in one system. And that has driven miniaturization. But now what we see is if we're really going to go vertical, if we're going to try and put memory and computing as close as possible that really lights up AI, then we now have the flexibility to make specific components of the chips individually and then bond them together at an atomic layer so they then act as a single chip again. And so this is really a very enabling, game-changing methodology. But it's something that's just emerging. And we're seeing lots of development, lots of materials required to make that happen. So clearly, complexity is good for Merck. I understand that AI is a strong driver of growth in our semiconductor business. And in that first slide, I also saw you returning to growth in Display. What is it that's driving our Display business? Yeah, I think I'd like to address that because I think it's around innovation and technical excellence and capabilities. I think we saw where the core historical business around liquid crystal still has some very exciting high-end applications that require leveraging all this expertise. And actually, what I've appreciated since I've been part of Merck, since the Versum acquisition, is really the deep technical expertise we have in that area and things like organic chemistry and light management materials, which really are required to keep the most advanced Display applications for LC, for OLED materials. There are certain key layers in there that we have really world-leading expertise in to make the devices brighter, to last longer. We're actually bringing together our thin films technology to develop encapsulation materials for OLED, so really limiting. But the thing that really gets me excited about the future of the Display business is around augmented reality. Where increasingly, we're going to see form factors that are just much more capable and enable, but they're going to require new materials, new materials platforms. A lot of those materials are based on our liquid crystal expertise, but there are things like reactive mesogens, which are polymerizable materials that make really the critical waveguides that bring the light from the engine to your eye. And so I think there's a lot of opportunities there. I mean, John, I'm incredibly excited. I am personally ready to throw away the cell phone, put on the glasses, and live with my head up for a while. Hopefully, it'll help my neck. But you said a lot of things there, John. And just to kind of break it down in a way that I understand, it's like the reactive mesogen is the organic chemistry, the waveguide is the optics, then you've got our semi-material expertise, you've got our material sets, and you kind of package this all together and boom, you've got something really exciting. And it's really a full portfolio play I'm very happy and really strategically interested in seeing. It's a true convergence of what we've had and the beauty of what we've got in this Display business and then also our semiconductor expertise. You can even strategically take this technology further into optical interconnects. I don't know about you all, but some of you in your house, you've had optical internet fiber. You've been upgraded. And then you've got smarter, faster, better internet. I have not. But for those lucky ones who do, this is great. And now we need to start applying that even further. You need to start thinking about the fact that this is in your data centers already. And now on the chip level, at the chip, we're transferring so much data that we're going to need optical interconnects there too. If you think about it, a GPU today computes faster than data can transfer. Okay, so that's like a huge waste. If you think it's like having a supercomputer in your house that you can't even use yet. So this is a strategic opportunity I'm very excited about. It brings everything together to new product offerings. Right. I think it is something that will play to our strengths because of our history in light management materials, because of our history in semiconductor materials. It's going to require the full breadth of our portfolio in terms of materials, in terms of equipment for delivering and processing those materials. To characterize it, we're going to need metrology so we can measure what's happening. These are different systems that will have to be put together once again by heterogeneous integration. Okay, but didn't we just hear about heterogeneous integration semiconductors? Are we coming full circle to AI again? Tell me, Kai, what does AI mean for growth? Will I see this on my phone? I think, like Belén has shared earlier, the share of AI in the overall semiconductor space in terms of volume is still extremely low. We talked about 0.1% in terms of volume, while value we are ranging in the 10% range. There is still opportunity that is quite substantial ahead of us. I think that's always important to understand, looking at AI. The next frontier for AI is what we call AI at the edge. So currently, AI is a data center learning these large language models, training efforts there. AI at the edge means it's sitting on your phone and does inference on your phone on these large language models. That is the next frontier. It means the proliferation of AI-enabled semiconductors will be much, much higher in the future. That's the next frontier. So and why are we in that space? Thin films, we already discussed about that, but all across the different portfolio elements. And again, just be reminded that in terms of growth, bear in mind that the advanced nodes in the industry, they grow mid-teens on the long run, while the mature technologies grow only in the range of mid-single digit. That's the advantage of our portfolio is taking a benefit from the share of advanced node technologies. Very important to bear that in mind once we look into that. So maybe, Georgina, you can explain why is it so important? I mean, AI is super important, but it's not without its challenges. If you imagine, we also need to bring for the future of AI to happen, we need to bring the cost of computing down first as much as possible. And how can we do that? Basically, we need to support our customers with yield optimization. So anything we can do to increase yield, it increases productivity, it increases profitability. So we need to systematically kind of optimize for yield to win. This needs collaboration, right, John? It needs close customer intimacy. It does. So I hate to admit it, I've been in the industry 36 years. From day one, we've been talking about yield, right? Because it's been this journey of miniaturization, right? Today, the stakes are so much higher. To make an advanced AI chip requires 1,000 process steps, right? We're putting things down at the atomic layer. The materials that we provide have to be ready to meet that challenge day in and day out. We have to identify what materials we need. We have to provide them with higher quality sooner. We have to really enable our customers to ramp their processes. Because when our customers ramp the processes, when they hit that high volume yield, that's where we can also enjoy the benefit of that going forward. Clearly, it's a challenge. How can we help our customers? I talked about product quality. It's also about those new processes that we're talking about. Instead of patterning and etching and filling back in, if we can do selective deposition, where we in one step put the material where we need versus four or five or six steps, we can reduce the yield overall, and really, I think the final way is to leverage our broad product portfolio. We talked about it. We provide the materials, we provide the equipment to deliver the materials, and with our pending acquisition of UnitySC, we're now really expanding our capabilities in metrology. Because if you can't measure it, you can't fix it, so by having that full set of capabilities, I think we're going to bring a much more comprehensive solution, and then we talked about leveraging AI and data. So when we get the data from our customers, when we combine it with our data together, I think we can bring some really very comprehensive solutions to this problem. So with that, Kai, I think maybe you could finish by giving us a few kind of key perspectives from your vantage point. Absolutely. So I think this slide is one of my favorites. And it brings together all the different aspects we have just shared with you on the different parts of our portfolio spanning across different needs of the industry. So there is a layer of what we call horizontal integration, so spanning across all process steps of our customers with different material sets. And there's a vertical integration offering for one given problem, the required equipment, the required services, and the required materials. And we even expanded into some instruments in the metrology space. And if you take both together, we land in the upper right-hand corner. And if you just change the icons and the names on that slide, it is the blueprint of how Life Science was created in the past 25 years. That's exactly how Life Science was created to put all these different things together. So I think since Matthias and the team are driving that, so I can just look across the aisle and I see exactly how it's going. And we can just copycat from there. That's the exact way how we're going to drive progress in the semiconductor industry by helping solving the problems that our customers have across different dimensions horizontally as well as vertically. Very key to have that in mind. And so we have already today all the material areas that we have just been discussing. We have delivery systems, we have services, we have R&D services into molecular. We are now adding pending closing metrology instruments, especially for the most important area of heterogeneous integration. And all of that to help our customers with that portfolio to solve the challenges of artificial intelligence and to make these next steps happen. Thank you. Well, thank you very much for these valuable insights. Thank you to the Electronics teams. Thank you. And thanks a lot also for your questions during the whole morning and also for your attention. Now, just a few words on what's coming next. At 12:30 P.M., so pretty soon, we start with our ESG lunch session. This session will be webcast as well. For our guests on site who registered for the ESG lunch, please stay in the room where lunch will be provided and learn more about Merck's sustainability efforts from the ESG specialists that we have here. For those of you who did not register for the ESG session, please follow us to the other side of the street for an informal lunch. Again, thanks a lot for your attention, your interest in Merck. We will reunite both groups on site after lunch, and the afternoon sessions will start at 1:30 P.M. Thank you. Hello again. A very warm welcome to our 2024 ESG session, online and on site. My name is Eva Sterzl. I'm in the investor relations team and responsible for sustainability and corporate governance questions. You learned already from Belén this morning that sustainability is really important for Merck because of two aspects. One aspect is to reduce our negative impact on the environment and social and increase our positive impact. The second aspect is our customers. So our customers are increasingly requesting sustainable products. We have a broad portfolio in the meanwhile. You also learned that from Belén this morning, and we'll learn more in the next session. Those products will help our customers to be more sustainable, offering more sustainable services. And on the other hand, we are also improving our footprint we deliver to our customers. But I have a bunch of specialists here who are able to talk about that much better. So I will directly hand over to those, starting with Petra Wicklandt, our head of sustainability. Hello. At the beginning of our sustainability session, I would like to bring to your mind our sustainability strategy. The strategy is not new. It was developed in 2020, but it underwent a systematic review. The outcome was that we confirmed the three important pillars, so what you can see is that we still have the same focus areas. However, there are some minor changes. We have now given more focus on the integration of sustainability into the business. Also, you will see under pillar number two a stronger focus on social aspects of sustainability, and we also include important projects on circular economy, animal welfare, and biodiversity, as these are also very material and strategic topics for us. In the first pillar, the first pillar is really dedicated to our products. We want to achieve human progress with our products, and you see we have here two focus areas: sustainable innovations and technologies for our customers, and also creating a positive impact on health and well-being of our patients. In the second pillar, we focus on people and processes. Until 2030, we will fully integrate sustainability into our value chain. Sustainability will be integrated in all our working processes and decision-making processes, for example, in HR processes as well as in investment decisions. The next topic is that we are focusing on providing a diverse and inclusive environment to our people and our communities. And very important is also a sustainable and transparent supply chain. And the last pillar is then fully focusing on the planet. We have committed ourselves to climate neutrality until 2040. Merck has also signed a science-based target, a short-term target until 2030. And we also focus on water and resource intensity. And that brings me to the next slide. You see here that we have agreed and also communicated two new targets: water and waste. The previous targets had been reached ahead of time. So we now designed new targets. One is the water intensity target. It is now related to our net sales and not anymore to working hours. The waste goal now also includes circularity, which is a very important topic for us. The exact target is now for water that we want to improve the ratio of water intake by 50% until 2030. For circularity, we want to reach a 70% circularity rate until 2030. I also would like to give you three examples from each of those three pillars on our significant achievements. The first one is we are very proud that we have meanwhile crossed really the 2 billion donated tablets of Praziquantel. Here, we want to eliminate schistosomiasis, a tropical disease, and these tablets are donated in the endemic countries. The second example, and you will hear more about this, is what we have achieved in terms of gender parity. We have meanwhile reached 39% of women in leadership positions. The last one we are also very proud about, we managed to reduce our Scope 1 and 2 emissions by 30% since 2020. Last but not least, I also would like to mention that we are well on track with the implementation of the Corporate Sustainability Reporting Directive. In spring, we finalized already our materiality analysis according to the new regulation. We are making really good progress with our so-called sustainable data initiative. Here, we are developing a new digital data infrastructure that will help us not only this year, but also in the coming years with an automated and high-quality non-financial reporting. In the next report, in March 2025, it's the first time that we will report according to CSRD. And with this, I hand over to my colleague, Jean-Enno Charton, who will talk about ethics in governance and operations. T hank you. So hello, everybody. So I'm leading our in-house consultancy, you can call it, for ethics questions in the digital and in the biomedical space. And it may not be the sexiest topic, but I can show you sort of how we really make an impact with this, not just in reducing risks, but also really helping to position, especially our digital products in the market and giving us a competitive advantage. So for us, what we do is about responsible innovation. Because breakthrough innovations, as we do them in any kind of fields in our company as an innovator, they often enter new unregulated fields. And the question is, how do we develop these new things responsibly? How do we do the right thing before we really know what the right thing is to do? And why do we want to do this? Because this is for us really to foster long-term sustainable business success. It's just not thinking of the next quarter or next few years, but in this company, the long term. And as the leading innovator in science and tech, obviously, we have many of these innovations that we bring to the market. And we have developed ways to address these kinds of questions that arise in research, in development, but also in our businesses. And yes, I would like to show you a little bit of what we've been doing in the last 14 years because we've really advanced the governance and transparency in this field. We've become a cross-industry leader, especially in how do we actually get this into the processes and make the right decisions. And it means a little bit shown on the bottom, you can see it's okay, we really want to have these trustful relationships with sort of our customers, partners, to our society, and obviously also to us, our shareholders. And that's why we do all this. So obviously, we have this kind of in-house consultancy. We actually work with world-leading external advisors, academic advisors that help us really to find the best solutions. And we have developed ways for risk assessment. And then beyond that, obviously, also policy and trainings and awareness. And so how do we do this? How do we bring this in the governance? So actually, most of this started in our Healthcare business almost 15 years ago, looking, okay, how can we do biomedical innovations responsibly? And we got a group of experts together, external experts that helped us in responsible innovation. And over the years, these questions became more complex. Actually, Life Science came into play with the Sigma-Aldrich acquisition. We have a lot of new technologies and questions. And we realized we need a dedicated team. The team that I'm leading now are built up over the last five years that is really answering these kinds of questions. And so we do this together with the institution. We founded the Merck Ethics Advisory Panel for Science and Technology. And then since 2020, also since the advancements of data and AI, the Digital Ethics Advisory Panel. And what are these and how do they work? You can see a little bit of a depiction. Usually, the business comes with the questions to our office. Then we have a look. Okay, is this a question? Can we answer with the in-house expertise we have built up through the recent years? Or do we bring this to our experts? And then the experts give us advice to the business. And it does not stop here. It's sort of like a continued circle. Look at the advisors we have here. You can Google them. They're all stars in their field. I'm just going to highlight one. John Halamka, he is the ex-CIO of Harvard and personal advisor to Joe Biden during the 2020 election campaign for Healthcare. You can see important people. And they only do this because they see they have an impact. If they would just be showdogs, they would have already left this kind of panel, so this is an example, and now I'm just going to do a little bit that sets us most apart from other companies. This is really responsible handling of data and AI. Because obviously, you can see that in the last years, this has really gotten a focus, and for us, it's really the trust that we need to create with our customers and partners to actually be successful in this field. Because without the trust, for example, think of digital health, you will never be able to market these solutions, and here we can really draw on years of experience in bioethics and transfer these actually to digital ethics, and you see many things are listed down here and happy to answer any questions on them. Just to see, we really took them and implemented them into processes and tools that really detect risks and critical things early on. Why do we do this? Because actually in business negotiations, this often makes us the partner of choice in a highly competitive environment. We cannot outtech big tech or outresource big tech. But actually, I am just coming back from two days in Singapore, where I was part of the business discussions with the Ministry of Health, whether they want to use one of our new technologies. And you can see in this field that they rather work with somebody like us than with one of the big tech players. Because here they see, okay, you have these structures in place. You have been doing this for many years, and you want to do this responsibly. We'd rather do it with you than with one of the big tech players. And just to summarize it, I mean, all of what we have been doing, and we've received quite some awards and also good ratings for specialized ratings for how do we deal with AI. But we have also quite some peer-reviewed publications, seeing that we got quite some praise also, even from the very critical academic field on this. Thank you. And now I invite my colleague, Renée Connolly, on stage. Thank you so much. So I'm Renée Connolly, Chief Diversity, Equity, and Inclusion Officer. Honored to be here on behalf of Belén, the board, as well as our CHRO. I think what you're going to see today is that we're really focusing on our collective contribution to embed DE&I and belonging in all of our business processes, as well as all of our HR processes. We're making steady progress, and I would like the message to be, it's progress, not perfection, as with any area. We do take a global approach to our efforts here, and I think that the progress being made has been validated by some external maturity indexes that we've done as of late. I want to reinforce that we care deeply about our people, but we care deeply about the customers, our patients, as well as the communities in which we live and work, and we're really being advancing at a good, steady pace, I think, in a moderated fashion that allows us to listen to the employees' needs and the community needs, introduce benefits that are appropriate. One of the numbers that I'm very proud of on this slide is the 100%. We were the first DAX company to introduce 100% fertility benefit coverage. We've had nearly 500 employees already take advantage of this benefit. Being a leader in the fertility business, this speaks to how our diversity, equity, and inclusion efforts also are in line with our business imperative and our strategic goals and objectives as a company. I think health equity is another area, and I'll talk about that in just a minute. It is something that we look at. We're not only looking at it from an internal basis, we're also looking at what it requires for us to make sure that people have the access needed to the health equity availability within the world. 39% was already mentioned by Petra. One of the dimensions we look at very closely is women in leadership. We're tracking nicely in the progress here. By 2030, the goal is to reach parity in women in leadership roles. I would like to say that standing as one enterprise is something that we're very committed to here. Although we have three business sectors that you've heard much of before, we look at DE&I as a business imperative within the organization. We have expanded since we published this for the first time in 2021 beyond the dimension of just women in leadership. We are also looking at culture and ethnicity, where we're tracking to meet both of those objectives of 30% of the share in leadership for culture and ethnicity in those two areas, and on the dimension of inclusivity, we measure two major things. One, we have introduced a proprietary inclusive leadership workshop, of which all of our people managers have to go through. That's approximately 10,000 people. We're at 92%, and all new people managers and people leaders are a requirement that they go through this. We are proud to say that we'll be introducing in 2025 an inclusive colleagues workshop where all of our employees, even on the manufacturing floor as well, are going through a workshop to understand how to be an inclusive colleague within the organization. And the last one that I'll mention here is that we're working very deeply on understanding the new generation of inclusive areas that we have to look at that are really important to our business, such as supplier diversity, which is a critical topic that we're working on right now, and other areas of health equity and access. I'd like to say in conclusion here that there are many areas I could have realized. We are working with the SEMI organization in our Electronics area. We are working with the LPA in our Life Science area and other organizations to ensure that we're building an equitable ecosystem, I would say. But health equity is something that you'll hear a little bit more about later as well in the presentation, and this is something we've committed and doubled down on the clinical trial recruitment, ensuring that our clinical trials are reflective of the communities in which it serves, as well as looking at health access. In 2025, we're very proud to say that we will be introducing My Health in Motion, which is a literacy availability mobile vehicle that will go to underrepresented communities to ensure information access and understanding, and we continue to do great work in the health equity area of disparities within MS and oncology with fellowships. I think that my takeaway message is our ultimate goal is a sense of belonging that we are moving forward for our employees, for the community, for our shareholders, as well as for our patients and customers, of course. And we do this with care, consistency, and we do it intentionally, sustainably, and consistently across our business. And with that, I'm going to introduce Jorge. Thank you. And now I'm going to give you some insights about how we manage sustainability in our supply chains. Nowadays, it's not enough for us in procurement to focus only on prices or quality or services. We also expect our suppliers to be responsible in the way they interact with the environment too. Constantly in procurement, we assess our strategies. We also challenge our processes. We improve our systems to be able to detect and prevent violations to ESG standards. This is not always easy. As you know, we operate in three different business sectors. We are a global company doing business in more than 140 countries. We have more than 50,000 suppliers, so you can imagine how complex our supply chains are. And yeah, managing this complexity really represents a big challenge for us. But we also like to see that as a great opportunity to protect the environment, protect the planet, and also the communities in which we operate. We have a lot of initiatives, but I think that I could say that we mainly work in two fronts, and they are very much aligned to the corporate strategy that Petra presented a few minutes ago. And here, we focus on making our supply chains more transparent, more sustainable. And two points are really paramount for us. The first one is ensuring compliance to laws and regulations related to environment and also related to social responsibility. This is not simple because the scope is growing every year. We dedicate a lot of resources, a lot of time on that, and I think we are doing a very good job there. And the other topic, which is extremely important for us, is respect for human rights. We do respect the human rights of the people working in our supply chains, but we also respect our suppliers and the suppliers of our suppliers to do the same. And for that, we have different mechanisms. And just to name a few of them, we have a supplier code of conduct that we ask our suppliers to acknowledge actively. And we also have some clauses in our contracts where we commit contractually our suppliers to also have responsible behavior. And then on the other front, we collaborate very closely in the companies' objectives of reducing emissions. Of course, we in procurement, we concentrate in emissions for our suppliers. And here we have established, together with our colleagues from the business, a very solid supplier decarbonization program, and I think we have been doing some good progress there. And of course, we need to measure how we perform in terms of sustainability. And we have a lot of KPIs, but I wanted to present one to you today. It is called the Sustainability KPI within Merck. This is a public KPI that you will find in our sustainability report, also in our website. And it's very simple, right? So we define which are our relevant suppliers. Those are the suppliers that amount to a big portion of our spend. We put on top or we add the suppliers that operate in a risky country or in a risky industry, right, and the objective is to have all these suppliers do an assessment, a sustainability assessment, right, so we mainly use an EcoVadis assessment because it measures a lot of dimensions like sustainability practices, human rights practices, ethics, sustainable procurement practices, right, and I think we are also in a very good position here, but also important to say that this KPI affects the remuneration of our top management here, right, and I think this is a very important topic as an evidence that our company takes the topic very seriously. And finally, we are always evolving our KPIs, and I just wanted to share with you, we are now evaluating a new KPI called the Sustainability Supplier Sustainability Score, which combines the assessments from the EcoVadis plus the decarbonization performance of our suppliers, right? We are still in a phase where we are going to fine-tune it, but we plan to deploy it in 2025. And I think this is going to be also a good tool for our sourcing teams then to identify the most sustainable suppliers and also to channel the volume, our purchasing volume, through them. And yeah, those are some of the initiatives that we work on, and I think they bring us closer to our ambition, which is embedding sustainability in every decision that we make. With that, I give the word to my colleague Harald, who is going to talk about global health and global health and health equity. Hello, my name is Harald Nusser. I've joined the company in June this year as the head for global health and health equity. Our company's vision is sparking discovery, elevating humanity, making tomorrow's world a healthier place. What does that have to do with what we do, and how do we define health equity? For us, driving health equity starts with ensuring communities have access to quality care and are provided the conditions they need to achieve their best possible health outcomes. That means that health equity is spanning across the entire value chain, including also enabling functions. And what we do here is we address the material topics, and those you have, of course, seen in similar presentations before, like availability, accessibility, affordability, the famous triple or quadruple A's, and of course, the material topic of a Healthcare-oriented company on innovation and patient safety. These are risk mitigation components on one hand, but on the other hand, we also want to do what's the right thing to do, creating value for our business and value to society. Because with that, we also tick the box of another material topic, which is talent, attraction, and retention. And we particularly, on the right side, with our community engagement, focus on multilateral partnerships or public-private partnerships. That's an eye chart. I'm aware of that. What I want to show with that slide is that we are collaborating in partnership with governments, with non-governmental organizations, with civil society, academia, and donors, and last but not least, other private sector organizations. We collaborate in order to increase innovation output with product development partnerships and consortia with different organizations, for example, to develop a pediatric better-suited formulation of our schistosomiasis treatment that we already have on the market. We also risk mitigate through de-risking development through co-funding and product development partnerships as well and we generate value, especially societal value, with our partnerships on the Global Coordination and Stewardship Committee, for example, where WHO plays an important role and where we make sure that including the donors, we increase transparency and accountability of products moving on downstream once they have reached the countries so that the communities who should benefit from those products are adequately reached. More concretely, that means, and you will be well aware of our schistosomiasis program, which focuses on morbidity control and selective countries' elimination efforts. On the left side, you see regarding our portfolio, we have WHO pre-qualification for the existing treatment, of course, and we have developed a new formulation with less bitter taste to treat school-aged children as well as adults. We have a new pediatric development where we soon have the first preschooler on treatment, where we for the next two years will focus on learning more about the implementation and what's really needed to make that a successful intervention. We are in the middle of a technology transfer to a local Sub-Saharan African drug production organization in Kenya, and we are looking into complementing the portfolio from a research and development perspective as well with a follow-up candidate. When it comes to the right side, it is important to also engage alongside the product, and that is with capacity strengthening efforts, with making sure that we reach the people who are most affected by that and not just have a boil-the-ocean approach, so to speak. And eventually, we want to complement our donation program with a not-for-profit sustainable access to medicine model allowing for further scalability. Thank you very much. And with that, I hand over to Jeffrey Whitford. Hello everyone. It's good to be back. And what I'm really excited to talk about is the continued progress that we're making in Life Science about transforming our portfolio. With 300,000 products, it is an epic challenge, but one that we really see interest from our customers to help understand how the materials they're going to use help reduce their Scope 3 footprint. This helps really reinforce it into our business. One of the examples that we've been talking about for some time is solvents in particular. This makes up about 10% of our purchase goods and services Scope 3.1 framework. So solvents typically made up of fossil fuels, right? That's one of the critical raw materials. We're trying to rethink what that means and how can we use bio-based materials, specifically waste, right? It becomes a very interesting feedstock that can transform and use materials that otherwise would be disposed of. And in this case, we take the waste from the whiskey manufacturing process, so pot ale draff, and that becomes the starting feedstock. It's injected with enzymes that then ferment, and then through that process, we come out with the bio-based options. The great thing about these bio-based options is not only are we increasing circularity, but we're also delivering on reduction of CO2 footprint. And we're doing this with drop-in materials, right? So we're taking into account hazard risk, but also sustainability. And with this, you can see those numbers delivering significant CO2 reductions, anywhere from 60% plus to 80% reduction. What we need to figure out is how do we continue to scale this, right? And that's where we create market signals. We're working with our customers to create demand that then drives those market signals that investment is needed to expand the production capabilities for these materials so that we're able to bring that within price alignment so that the cost isn't so astronomically different than what customers are used to with the traditional materials. And this is something that we believe there is a path to achieve, and it's not a far-term path, but really near-term, because this is really how we know we're going to make that transition happen from a product standpoint. And this is really where we're focusing in on one aspect of the portfolio that's relevant to our entire customer base to help them move along. That's just one part, and then you go to another interesting part of our portfolio. So our single-use materials that are used for biopharma production are critical to the growth of our organization. This is one of the focus areas that continues to be a growth driver in the long-term future. And for this, we are starting the process of changing the direction of travel for our product development. The Millistak+ product that you see on screen is the Lighthouse Project that is the first driver of what the future looks like for Process Solutions business. As you can see, there's a visual difference between the before and the after. The before is 160 grams of plastic and membrane material. The new version is 40 grams of plastic and membrane material. We also chose different materials that have increased recyclability, which we are pairing together with our work on end-of-life circularity. So once again, we pull all of these elements together, all the while delivering a 230% decrease in global warming potential for the material. These quantifiable figures and how we are embedding this into our product design process are fundamental into shaping and turning the direction that we're headed with product development. But it's one thing for us to just do this. It's another thing for us to connect the dots, and this is really where it becomes, I would say, exciting and interesting for me. I spend at least a day a week with customers talking to them about how sustainability is creating competitive advantage and helping them deliver on Scope 3 reduction, and we're doing that through a data tool called the Customer Sustainability Dashboard. We have begun the work to produce carbon footprint, the entire product portfolio. We have connected our scope 1 and 2 footprints for everything and have put that into the dashboard. We take our customers' purchasing data and connect those dots to be able to give them the trajectory of reduction that has happened over time. In certain cases, maybe it's increased, but in most cases, there are decreases, even as their sales may have increased with us. Really being able to demonstrate the connection that as your sales grow, your CO2 footprint doesn't have to grow. Because as Petra said, we as an organization are committed to driving sustainability into how we do everything, and this is really becoming a critical advantage for us in discussions with our customers to be able to provide data to showcase the progress that we're making as an organization. It's a really exciting, I think, tool that's going to give us more opportunities to then commercialize those developments coming out of R&D and connect them more quickly so that we can connect our commercial team members with our customers on these new developments, and with that, I'm going to turn it over to my colleague Miriam from Electronics. Thanks, Jeffrey. Welcome, everyone. My name is Miriam Torsdorf, Head of Sustainability and Safety for Merck Electronics. Let's have a look at sustainability focus areas at Merck Electronics. A little bit of context upfront, because for us, it is important to understand the key levers that advance sustainability in the semiconductor and broader Electronics industry, but it's also, of course, important to leverage exactly our key capabilities to activate and to support these levers. In the Electronics industry, exciting trends like AI are driving growth, technology progress, but of course, they also bring specific sustainability challenges. New, more capable materials are needed to create smaller, faster, more efficient chips, and all of that ideally with lowest possible energy demand and at lowest possible environmental footprint. Finding suitable candidates for these new materials and then introducing these new and more sustainable materials without any disruption into the typical complex and highly sensitive manufacturing processes of the Electronics industry is a key challenge or a tough task. We have to address that challenge and that task jointly with our business partners. This is why for us, collaboration and innovation are the key levers to advance sustainability and to drive sustainable product design in Electronics. Of course, we are looking into our own operations and on our own environmental footprint in the value chain, and that in the context of the broader sustainability strategy and our environmental targets. Across all of these levers, clear focus areas have been defined, which we consider currently needle movers to advance digital progress and to advance sustainability in the Electronics industry. Let's have a look at a couple of examples. One focus area is the development of new etching gases with lower global warming potential that would allow the reduction of F-gas emissions in manufacturing processes. Process gases still account for a large portion of emissions from semiconductor manufacturing, and being able to replace the traditional gases with new low GWP, as it's called, alternatives has a huge potential to reduce emissions: Scope 1 emissions at our customers, but also our Scope 3 emissions along the value chain. We also prioritize sustainability already in our material or product design when we adhere to strict criteria in assessing our R&D projects and their sustainability impact by applying our so-called SURE scorecard, and SURE here stands for Sustainability in R&D in Electronics. We're currently focusing on the application of the scorecard on all relevant projects, and as you can see, we're quite complete here. But then as a next step, we will have to review the quality of these assessments to make sure that we create a robust basis to identify sustainability-related risks and opportunities in our R&D portfolio. Now, AI or new technologies do not only bring new challenges to sustainability. AI also allows us to generate solutions or come to outcomes much quicker than in the past. And we leverage exactly that opportunity with our internal digital and data capabilities. First examples or projects show that we can quickly and successfully identify process improvements that allow us to optimize for resource consumption, emissions, or waste generation. And we look at our own greenhouse gas emissions. You have already heard about Merck's greenhouse gas emission reduction target and progress. And Merck Electronics plays a decisive role in achieving that ambition. We focus on NF3 abatement, and we have established central NF3 abatement capabilities at our relevant sites, and these capabilities allow us to reduce emissions in line with the defined roadmap for Merck. Now, let me come back to the importance of collaboration and partnership in our industry when it comes to sustainable product design or development. You see here just a couple of examples on how we collaborate with our industry partners to advance materials, create more sustainable solutions, or leverage new technologies. Joint prioritization and research in multidisciplinary, multi-stakeholder groups are as important as the transparent sharing of data and information, of course, in secure environments. Because that enables us to optimize beyond individual company boundaries, and it enables us to identify industry solutions along the value chain. So let me conclude with three important points. For us, collaboration and innovation are the key levers to advance sustainability and drive sustainable product development. Because the dialogue and the exchange with our partners enables us to co-optimize along the value chain and to address industry challenges together, and data-driven tools support innovation, sustainable innovation, because at the end, not only more capable materials, but more sustainable materials are needed to drive sustainable digital progress. Thank you, and with that, I'm handing it over to Andreas. Thank you, Miriam. My name is Andreas Polomski, Head of Climate Action at Merck, with an update on climate action. We are fully committed to reach our long-term climate goals, being climate neutrality in 2040. On that path to underpin, we have set an approved SBTi near-term target by 2030 to reduce our Scope 1 and 2 emissions by 50% in 2030, coming from our baseline year in 2020. We also have set an emission intensity target for Scope 3, reducing the intensity per euro gross profit by 52%, and of course, we are also looking at the Green Deal and the respective net zero targets for 2050 here, but where do we stand in our journey reaching climate neutrality? As you can see here in the graph, we managed to reduce our Scope 1 and 2 emissions by 30%, coming from our baseline year 2020, while revenues were growing. Focusing only on Scope 2, we managed to reduce about 18.6% versus the last year, driven, yes, also by slightly reduced production volumes in the spec gas area, but mainly due to our just explained efforts in reducing and abating the NF3 footprint, which we have been piloting in the last years, now having full installation units up so that we can expect even further reductions in this area to come. Looking at the Scope 3 reductions, about 6% versus last year, driven by energy efficiency measures, but also by our growing percentage of procuring renewable energy up to 51% now, with a target in 2030 to reach at least 80% of that. Scope 3 intensity, also we can report a reduction here. This reduction is driven by using better data to calculate the footprint, so mainly primary data going forward, which is extremely important, but of course, also slightly supported by reduced spend. To underpin what has been said before, it is of utmost importance that we also work together with our suppliers to reduce the Scope 3 footprint. And the other element is around our own product, so to speak. We try to get a clear understanding of individual product carbon footprints to even more so be able along the value chain to identify sources of carbon within. Overall, we believe we have set the course to climate neutrality, so also covering the elements around strategy and governance. Here, clearly, right now, we are working on a net zero climate transition plan, which has been demanded by the CSRD requirements, really trying also to enable corporate climate capabilities within the organization and clearly aligning towards corporate strategy. So how do we anchor these elements of targets and measures in the organization? A few years back, we already introduced the so-called shadow price for our investment decisions. So this metrics and this methodology, we are refining step by step, as well as we are refining our incentive systems, respectively. So we already have incentives via GHG abatements for the executive compensation, but we are looking at a broader field as well. Last but not least, of course, we try to anchor decarbonization in R&D activities. So mainly what has been talked about, circular economy here. But we also once more look at the transparency of our existing product portfolio with the carbon footprints specifically to optimize. And this type of methodology we are also using for future products in R&D to depict where our sources of carbon and lower them as much as we can. Clearly, expanding green energy is a target which we implement in the organization. And last but not least, especially under Scope 3, it's clear it is only able to reduce this jointly together with customers, as Miriam said, and Jeff said, as well as with the suppliers. With that, I'm handing over to Till Langner talking about circular economy. Thank you. Thank you very much. Now to the probably most complex sustainability challenges of them all. Circular economy, with such a diverse portfolio and a global presence, becoming more circular is a multi-layered long-term endeavor. It's also a very promising endeavor as it decouples economic activity from the consumption of finite resources. A circular economy conserves non-renewable raw materials and is an essential contribution to increasing resource productivity, saving costs, and generating other economic benefits. Transitioning towards a circular economy is also critical to solve for both net zero emissions, as said before, but also limiting biodiversity loss. However, there is no one-size-fits-all approach. So circular economy strategies need to be tailor-made in order to match position in the value chain, competitive environment, business model, and also address the most relevant impacts. Circular business models can become a solution provider for our global challenges, but the transition will also encompass the whole value chain and require extensive collaborations. Identifying the biggest levers, assessing realistic approaches, and required collaborations, prioritizing based on impact and feasibility are all relevant steps towards a more circular business at Merck that we have started to take. Looking at the graph here, you can easily comprehend that, for example, in Healthcare, where our final products are usually consumed, it is essential to focus on upstream opportunities, assess our raw material source, improve production, and also the packaging. In Electronics, our materials often end up in highly complex end-consumer products such as cars and mobile phones. Though not impossible, recovering those materials is a global challenge for the worldwide economy. We approach this challenge with a dedicated corporate strategy, as well as with respective sector strategies, all as an integral part of the overall sustainability strategy of the company. Having set ourselves some ambitious waste and water targets, we now detail out the respective sector roadmaps and respective metrics to measure our progress. So as you have seen in previous presentations, there are already some great examples of how Merck can become more circular, create new business models and opportunities, and differentiate from competition with advanced solutions that not only tackle our resource consumption and global footprint, but also those of our customers and patients. So on the right, you can see three respective examples, one from each of our business sectors. So we provide bio-based solvents and Life Science generated from renewable resources. In Electronics, we take back OLED materials from our customers' Display production, recondition it, and then sell it to the same customer for the same process. And in Healthcare, we even team up with our competition to enable take-back infrastructure for Healthcare devices such as injection pens. So these are just some selected examples of circular solutions, and all of them demonstrate that often economic and ecologic benefits go hand in hand. So we are seeking ways to close the loop across our entire value chain and embed circular economy into every goal of Merck's sustainability strategy, creating shared value for the business and the society. For us, it's a driver of innovation and an essential framework for achieving our sustainability goals. Hence, we are actively promoting a sustainable, resource-efficient circular economy through different initiatives. As explained by Belén earlier today, we have developed multiple digital solutions to assess our portfolio and our product pipeline, R&D scorecards that are evaluated under one umbrella on a corporate level, assessing our whole portfolio, addressing multiple economy aspects and criteria, and also GreenSpeed as a tool to analyze our resource consumption and improvement potentials in the upscaling phase, allowing researchers to identify the most impactful measures to improving our product footprint, so we have started our journey to make Merck a more circular company. Thank you very much, and with that, I hand back over to Eva. Yeah, thank you very much to all of the speakers. I think that was a lot of stuff, a lot of insights, but maybe still, there are some open questions, so I hope the overload of information did not kill the discussion. For that, I would like to ask all the speakers on stage, please, and the audience to prepare for questions. If you have a question, just raise your hand, push the button so we can hear you in the room. So are there any questions? Hi, thank you very much for the presentation. I wanted to ask on the recycling side, specifically of the single bags used in bioprocessing, what happens to those after they get used? Are they at all recyclable, and what can be done to improve the sustainability of that part of the proc ess? Yeah, absolutely. So in the United States, in 2015, we introduced the first biopharma recycling program globally. To date, that program has yielded about 11,500 tons of recycled material. So it's a start, but that's mechanical recycling. So what we are working on currently are two pilots, one happening in the U.K. and one happening in Ireland, to address kind of the next phase of recycling, so moving us to advanced and hopefully longer-term enzymatic recycling. So the good news is the materials are able to be recycled. The challenge is the infrastructure is not developed in all of the places it needs to be. So we're collectively working on a systematic solution with the entire ecosystem to make sure that we can develop that so that the availability to be able to handle the recycling of those single-use bags is more widely available. And pending these pilots that are in starting phases, so we've got some first material that's going to be tested in the coming months, we're going to start to see those next steps. I think there's also an opportunity as we think about the regulatory environment and advocacy in terms of how materials can move, specifically in the E.U. in particular, because what you currently need to do is set up those systems on a country-by-country basis. So can we get to a place where those materials can be centralized more effectively so that we can decrease the infrastructure needs, but also get more consistent with being able to get that material back into the product development process? Because ultimately, the goal is to get back to a polymer or monomer that gets put back into the product where we see that come through. The first of that type of product that's going to start to come out from us happens in, I think, latest Q2 of next year, where we will start trialing that process of having the recycled plastic in the product, and I think that becomes the first marker of, once again, creating that market demand to increase the capabilities and infrastructure globally. Good afternoon, Florent Céspedes from Bernstein. Two questions, please. One on access to medicines. Could you give a little bit more color about what your strategy here beyond, let's say, the CV disease or the developing countries' diseases? Do you give access to your innovative products as well, so that's my first question. And my second question is about the greenhouse gas emission, how challenging it is to achieve your ambitious targets in 2030 or even 2040 when you have your business growing and notably on Scope 3 that you have to rely on your customer strategy as well. Thank you. Thank you. To address your first question regarding access to medicines for the innovative medicines, yes, we absolutely do. We look into demonstration programs. We set up specific engagements, public-private partnerships, and work selectively to also learn from the engagement. At the same time, it's also important not to overload a less developed health system because sometimes, from a population health perspective, there are things which are much more important to do to prevent premature deaths from diarrhea, for example. So it's a trade-off discussion, and we take this very seriously. Yeah, maybe with Scope 3 emissions. Dead on. This is the biggest challenge of the industry. Clearly, as we are not necessarily in the driving seat, we need to work jointly together. So looking at our current portfolio, we would say that reducing it to a net-zero aspiration is feasible and financially absolutely viable to do this. So we need to cooperate with our customers. So that's where the focus is on circular economy elements so that whatever we do, also talking about these shadow prices, right? So whatever we set in stone right now for locked-in carbon, we need to build everything as carbon-neutral as possible today. So that's a huge undertaking, but we are trying to put the metrics and steering elements in place so that this is a first-of-its-kind consideration every time. Any additional questions from the audience? Go ahead. Yeah. Hi. Thanks very much. It's so encouraging to see so many people behind this initiative with a really, really thoughtful approach. Would you say Merck is a leader in this approach to sustainability? I mean, obviously, you work with so many different customers. Obviously, there's going to be a huge spectrum. But would you say you're a real leader in driving this, or do you feel you're on par with your customers and it's very iterative together? Could you give any kind of color to that? Yeah, I can take this. We ask ourselves the same question, actually. So what we did is this year, a maturity assessment. So we compared ourselves really to other companies in the three different sectors. And we are really quite satisfied with the outcome. So I would say in many areas, we are really amongst the leading companies. I would not say we are the leader and much better than anybody else, but we are definitely a leader amongst the leaders, and we are now looking deeply into those areas because we have looked into sustainability according to the CSRD standards, so we looked at every standard, how we are doing there, and now we are looking in those where we think, "Here, we could improve," and we are calculating what would it cost us to improve in this area. What we have also seen is that actually it always depends when we see external comparison if they compare us with other Healthcare companies because other Healthcare companies are quite advanced, whereas other Life Science and other Electronics companies are less advanced. That is also what we observed. Can I just add one comment here? Because as you're saying, we're talking to a lot of customers, and beyond the internal assessments and ours, I would say self-critical assessment that was with a good outcome, it's also encouraging to see that we are approached by our customers because there are a lot of challenges, as I outlined out there, and not in all of the areas are solutions already available, but we are a trusted partner also for our customers to start identifying solutions, an d that, for me, is very encouraging. Jeffrey, do you want to add something maybe also on that from your experience in Life Science? Yeah, I think with the amount of time I spend with customers, it gives me a good pulse and the best feedback we can get, and this happened just a few weeks ago. A customer said, "You're light years ahead of everyone else." But I think to Petra's point, right, it can vary in certain applications, and I think we are quite hard on ourselves, and we are really focusing on raising the bar. So we don't take that and just say, "Everything's fine." I think we continue to say, "Where can we continue to push forward so that we continue separating ourselves?" Because I think as we talk about the Scope 3 element, this becomes a significant competitive advantage, and our effectiveness with being able to drive this into the business translates into increased share of wallet. So I think that's really where we're seeing that connection and using that to be, I would say, more aggressive and clear about the value creation for the organization. So this was very much from the environmental perspective, I would say. Renée, maybe you can add a few words on how we are compared with other companies on the DE&I topic. So similar to the discussion we had, we just completed a maturity assessment as well on the DE&I side, also scoring pretty nicely and making good progress. Surely on our culture and ethnicity pipeline work, we have some progress that needs to be made there. That's a gap for us. But some other areas that have really kind of come to the surface is in the area of disability and access for our employees with different abilities. That has been something where we scored very nicely. We're scoring in external surveys and others in a very high regard. And I think another area where we're looking much more closely into spaces like neurodiversity and what does it take for our employee base to be motivated to come to work. I think it was said earlier, and one of the things that we're seeing nice progress on is embedding it in all of our processes from a talent acquisition perspective. So from retention to attraction, what does it mean generationally and what's the differences? So we're feeling really good about where we are, but for sure, the work is never done. It's a complex world with 63,000 employees and many different customers and sectors. So we're comparing ourselves across the bases, but for sure on a good trajectory. To complete the picture. Yeah, so I can just say something, especially on the responsibility KPIs and how do we get it out, especially in our products. Actually, so with the work we're publishing and talking about, I get a lot of reach out from partners, from big strategic consultancies that call me personally and ask me, "How did you do it?" But also other industry leaders in Germany, automotive, big technology leaders, they come to us and ask, "So how do you do it? We want to learn from you." And actually, next week, we're going to host an event where 11 companies, among them like Bayer, SAP, Siemens, come to us to learn from us, "How do we do this? And can we exchange best practices to bring us together forward together?" Because we see this as a joint effort, but just to see that we're a little bit leading in this field. Yes, Richard. Just on the bioprocess equipment and integrating recycled material, excuse me, does that affect the quality at all of the material? How many times can you do it with a circularity? And I've got a second question as well, but maybe that one first. Yeah, this is part of the efficacy studies, right? So there's a lot of testing that needs to happen, and there's got to be validation of that material, specifically also with regulatory bodies because this does then go into the factor of making materials that are treatments, therapies, etc. So we're at the early stages of that. In certain cases where they're non-human contact, right, that's moving forward, and there's already a list of approved materials. So as we go through that, we're working through that process to ensure that we're able to have the regulatory clearance, but as well have al l of the efficacy from material clarity, length of time it can stay in service. So the very last question and a very short answer, please. I don't need to take it if there's another one. But I mean, it was just on the competitive advantage. Do you think that this goes in, you get a benefit like in five years and it all comes on, or do you think it's a gradual competitive advantage in terms of integrating these more circular equipment and carbon footprint? The reason why I would say it's more gradual is because it's less about the work that we're doing because we are already pretty far along, but it's really about the maturity of the customers and where they are in their sustainability journey because it's about changes that they're going to functionally make. I just had a conversation on Monday with one of our global strategic customers, and they indicated that if we can provide data on even a macro level about the efficacy from a CO2 standpoint, there's going to be changes starting to happen in their buying behavior. It really depends on where the customer's at. Some customers have yet to create a Scope 3 goal. If you don't have a Scope 3 goal, you're not yet really integrating the solutions that we're bringing to the table. So it really is more on the customer maturity standpoint, but I think the light switches are going to start flipping on pretty quickly just due to requirements from EU regulation. So thank you very much also for your questions and your interest. The rising interest of investors are really important to us because we need a lobby also within Merck. So thank you very much for that. Thank you to everybody who joined online. We can anytime continue the discussion. Thanks a lot.