Ladies and gentlemen, on behalf of the Supervisory and Executive Board, I would like to warmly welcome all of you and hereby call today's 2024 Annual General Meeting of Merck KGaA to order. My name is Michael Kleinemeier. Pursuant to Article 23, paragraph 1, sentence 1 of the Articles of Association, as the new chairman of the Supervisory Board, I am chairing this annual general meeting. After roughly 10 years, Mr. Wolfgang Büchele has stepped down as chairman of the Supervisory Board, and the Supervisory Board has elected me as its new chair. First, I would like to welcome you, our shareholders and shareholder representatives. I am pleased by the great interest you are showing in our company by participating in this virtual annual general meeting. Let me also welcome all media representatives following our AGM on the Internet.
The 2024 AGM is held as a virtual annual general meeting. The decision to do so this year again was taken by the Executive Board after careful deliberation. Thanks to the virtual form of the meeting, it's easier for our shareholders to participate actively. In addition, the decision for the virtual format reduces the burden on the environment, since no one has to travel to attend the meeting. Moreover, we are reducing the costs for the company and by that, also for the shareholders. Today's AGM will be conducted along the same lines as last year's meeting. Again, this year, we will transfer the advantages of an on-site, face-to-face AGM to the virtual format and uphold shareholders' rights to the best of our abilities.
As is the case with an in-person AGM, all properly registered shareholders and their proxies have extensive rights to speak, submit motions, and to request information today. We are reintroducing the possibility for a direct dialogue between management and shareholders. As the meeting chair, I have determined that you must exercise your right to request information exclusively through video communication and as part of your statement. Moreover, I confirm the executive board's decision, that you must make your request for information in accordance with Section 131, paragraph 4, sentence 1 of the Stock Corporation Act, exclusively through video communication as part of your statement. This makes it easier for other shareholders to follow all statements, questions, and answers in sequence via the video broadcast of the AGM. You must exercise all rights to speak, to submit motions, and to request information via the investor portal.
Shareholders and their proxies receive access to said portal by entering their personal login details provided from their access medium. Further technical recommendations and notes have been published on the AGM's website when the meeting was first convened. Should there be any interruptions to the broadcast for technical problems, we ask for your patience. If we cannot reestablish the transmission, we will keep you informed via the investor portal. If you have any questions about the investor portal, or if you have technical problems, may I ask registered shareholders to contact our hotline by phone or email. You will find contact details in the investor portal and displayed here. The hotline will be available until the end of this annual general meeting. As a further option to promote exchange of views, shareholders and their proxies were able to submit comments to the company until April 2024...
until April 20, 2024. All duly submitted statements are available on the investor portal. As announced when the AGM was first convened, we already published the speech by Ms. Garijo on April 18, 2024, in order to give you the possibility to refer to the contents of her speech in your questions and contributions. You were able to exercise your voting rights already before the AGM and are still able to do so today on the investor portal until I close the vote on the agenda items. I will notify you again when I do so. Up to this point, you may still submit voting proxy forms, as well as proxies and instructions to the company's proxies. Here with me are the Chair of the Executive Board, Ms. Belén Garijo, Dr. Kai Beckmann, CEO Electronics, Peter Günter, CEO Healthcare, and Dr.
Matthias Heinzel, CEO Life Science, as well as Ms. Helene von Roeder, CFO. The members of the Supervisory Board are also in attendance and can get in touch with me and the other members of the executive board if required. The candidates for today's election to the Supervisory Board have also joined us. They will briefly introduce themselves personally to you later during the meeting. Let me welcome Dr. Carla Kriwet, Ms. Barbara Lambert, Professor Dr. Stefan Palzer, and Ms. Susanne Schaffert. Ms. Katja Garcia Vila, who also stands for election as a member of the Supervisory Board, cannot be with us in Darmstadt today, as she is needed as the CFO of Continental AG at their respective AGM, also taking place today. I myself, I am also standing for election to the Supervisory Board. Finally, let me welcome the officiating notary, Dr.
Albach, who is keeping the minutes of the annual general meeting, and Dr. Sandmann, the Group General Counsel. Lastly, let me welcome the proxies appointed by the company. Ladies and gentlemen, I would first like to address the formalities that must be attended with the agenda before we deal with the agenda in accordance with the law and our statutes. Today's virtual annual general meeting was convened via the publication of the agenda in the German Federal Gazette on March 15, 2024, in the required form and within the stipulated period. A printout of the notice of the meeting, published in the Federal Gazette, is attached to the minutes prepared by the notary. The information stipulated by Section 125 of the German Stock Corporation Act was submitted by the executive board within the stipulated period and as prescribed by law.
Moreover, the notice of this annual general meeting was forwarded to those media that can be assumed to disseminate information throughout the entire European Union. Since the AGM has first been convened, the annual financial statements for fiscal 2023, including the proposal of the executive board for the appropriation of the net retained profit, the consolidated financial statements, the combined management report for Merck KGaA, and the group, as well as the report of the Supervisory Board, have been available on the website of the company. The company has not received any motions to supplement today's agenda, so only the agenda as published must be dealt with. Shareholders have not made use of the possibility to submit counter motions to the company prior to the annual general meeting.
Since the AGM was first convened, the documents and information specified in Section 124 A of the German Stock Corporation Act have been available on the website of the company. Copies of these documents are available to the notary. I thus ascertain that this general meeting was convened in the required form and within the stipulated period. The required register of attendees will again be kept electronically this year. This register includes the company's proxies present here and the shareholders they represent, the shareholders represented by authorized third parties, and all shareholders joining electronically via the investor portal. This means that depending on the proxies you submit or withdraw to or from the company's proxies, and depending on the number of shareholders and shareholder proxies joining online, official shareholder presence will change.
I would now like to inform you of the presence as it currently appears from the register of attendees. The register will be available for inspection on the investor portal after the AGM. After the voting results have been determined, I will inform you of the presence again. Attendance of the base capital of the company, amount of EUR 168,014,927.60. In 129,242,252 shares are represented. 92,054,385 shares with as many votes, which corresponds to 71.22% of the base capital. In addition to that, postal ballot for 679,703 shares have been handed in, which corresponds to 0.53% of the base capital.
Stockholders registered for the annual general meeting were able to exercise their voting rights prior to the meeting by postal ballot or by instructing and authorizing the company's proxies. Until voting is closed, you may still submit voting proxy forms, as well as issue proxies and instructions to the company's proxies. I will expressly draw your attention to the final opportunity to vote and issue instructions as soon as this time comes. Pursuant to Article 23, paragraph two, sentence two of the Articles of Association, it is my duty as chairman of this AGM to specify the manner and order of voting. As at past AGMs, voting will be based on the addition procedure. That means the votes cast in favor of and the votes cast against will be counted. Abstentions do not have any impact on the result and are not counted separately.
Voting shall take place in one voting session after all agenda items have been dealt with. Please note that this virtual annual general meeting can be followed live not only by registered shareholders, but will also be broadcast in full length to the public via the Internet. Shareholders and shareholder proxies and shareholder representatives not following the virtual AGM via public broadcast on the Internet and not via the investor portal, will not be automatically re-recorded and electronically present at the AGM. Electronic presence at the virtual AGM and exercising shareholders' rights at the meeting is only possible via the investor portal. After the annual general meeting, only my introductory remarks, the oral report of the Supervisory Board, and the speech by the Chair of the Executive Board will be available on the Internet.
Subsequent to these introductory remarks, we'll now begin with today's agenda, and I will call up agenda items 1 to 10. The agenda, including the proposed resolutions by management regarding agenda items 2 to 10 have been published in the Federal Gazette. I would now like to begin with agenda item 1: presentation of the annual financial statement approved by the Supervisory Board, as well as the consolidated financial statements approved by the Supervisory Board and the combined management report, including the explanatory report on the information in accordance with Section 289a, Section 315a of the German Commercial Code, HGB, for fiscal 2023, and the report of the Supervisory Board. I ascertain the following: The documents have been available on the company's website since the date on which the annual general meeting was convened and can still be accessed there.
The annual financial statements of Merck KGaA were audited by Deloitte GmbH Wirtschaftsprüfungsgesellschaft, München, including the management report. The audit did not lead to objections. The auditors issued an unqualified audit opinion on the annual financial statements and the combined management report for Merck KGaA, as required by law. In addition, Deloitte audited the calculation of Merck KGaA's participation in the profits of E. Merck in accordance with Article 27, paragraph 2 of the Articles of Association. In addition, Merck KGaA prepares consolidated financial statements for the Merck Group in accordance with International Financial Reporting Standards, IFRS, as well as the supplementary rules applicable under the German Commercial Code. In addition to the combined management report, Deloitte also audited the consolidated financial statements. For the consolidated financial statements, the auditors issued the unqualified audit opinion reproduced in the annual report of the Merck Group.
The annual financial statements of Merck KGaA, the consolidated financial statements of the Merck Group, and the combined management report, as well as the corresponding audit reports of the auditors, were presented and distributed to the Supervisory Board. In accordance with Article 14, paragraph 2 of the Articles of Association, the Supervisory Board examined the annual financial statements of Merck KGaA, the consolidated financial statements, and the combined management report, as well as the report of the auditor presented in accordance with Article 27, paragraph 2 of the Articles of Association.
On completion of its examination at its meeting on February 27, 2024, the Supervisory Board raised no objections and thus approved the annual financial statements of Merck KGaA, as well as the consolidated financial statements of the Merck Group and the combined management report prepared by the Executive Board, as well as the report presented by the auditors in accordance with Article 27, paragraph 2 of the Articles of Association. Ladies and gentlemen, let us now continue with the report of the Supervisory Board. You will find the full report on pages 218-223 of the annual report for 2023. Allow me to highlight the following: The cooperation with the Executive Board in fiscal 2023 was again characterized by intensive trusting exchange.
The Executive Board provided the Supervisory Board with regular written and verbal reports on the business development of Merck KGaA and the Merck Group. In particular, the Supervisory Board was informed about the market and sales situation of the company against the backdrop of macroeconomic developments and geopolitical tensions. In particular, the Supervisory Board was informed about the financial position of the company and its subsidiaries, along with their earnings development, as well as the corporate planning. Within the scope of quarterly reporting, the sales and operating results were presented for the Merck Group as a whole and broken down by business sectors. Apart from the Supervisory Board meetings, the chairman of the Supervisory Board also maintained a regular exchange of information with the chair of the Executive Board. The Audit Committee chair submitted a thorough report to the Supervisory Board on past Audit Committee meetings.
Apart from the audit of the annual financial statements and the latest business developments, the focus of the Supervisory Board meetings was on the strategic considerations of the group and its businesses. The Supervisory Board also dealt with the work of the Research and Development Committee of the Board of Partners of E. Merck KG. Additional topics of importance for the Supervisory Board included the organization of the 2023 AGM in virtual form, Merck's global strategy, as well as a comprehensive training on sustainability. My dear ladies and gentlemen, this is all from my side. Now, I would like to turn the floor over to Ms. Belen Garijon , of the Executive Board. She is going to report to you on the past fiscal year and speak about the company's future business developments. The floor is yours, Ms. Garijo
[Foreign Language] . Before we begin, I want to extend my special thanks to Michael Kleinemeier for stepping in as the chair of the Supervisory Board in such a short notice. I would also like to thank our former chair, Dr. Wolfgang Büchele, for his dedicated service over many years. I want to also congratulate him on his new role as the chair of the Board of Partners of E. Merck KG. Ladies and gentlemen. Throughout the 356-year-long history of Merck, we have consistently proven our ability to anticipate and adapt to changes in the world around us. Indeed, ever since Friedrich Jacob Merck took over a pharmacy here in Darmstadt in 1668, resilience has been a cornerstone of our success.
Last year provided us with multiple opportunities to demonstrate our resilience to the world once again. Today, I want to talk to you about how we have navigated the challenges of 2023 and why I believe you should continue to place your trust in our long-term promising future. Last year, many significant geopolitical, social, and economic headwinds, as well as very challenging market conditions, impacted our Life Science and Electronics businesses. Yet, despite the challenging market environment, Merck delivered a robust performance during 2023. There were four decisive elements behind this outcome. Number 1, the operational performance of our multi-industry business model, which allowed us to navigate these headwinds better than some of our industry peers. Number 2, our innovation pipeline across our three business sectors, which continues to serve as an engine for long-term growth.
Number 3, our sustainability performance, which demonstrates our commitment to using innovation and our business culture to make a positive impact, impact for colleagues, communities, and the environment. And number 4, last but not least, the commitment of our people and teams, who once again demonstrated their dedication to Merck's customers and patients. On behalf of the executive board here with me, I'd like to thank our 63,000 colleagues for their hard work and relentless efforts. So let's discuss our operational performance in 2023, reflected by some of the financial indicators you have on the screen. It is important to note that we delivered as expected and within the guidance that we have communicated to the markets. Our group net sales declined on a reported basis by 5.6% to EUR 21 billion in 2023. Organically, net sales declined 1.6%.
In Life Science, sales and earnings were mostly impacted by two factors: the expected decline in COVID-19-related sales, and importantly, the high inventories at customer level, who consequently placed less new orders in process solutions. In Electronics, we continued to be affected by a prolonged industry-wide downcycle in semiconductor materials. However, our semiconductor solution business still outperformed the reference market. The strong performance of our healthcare business partially compensated for these temporary challenges in Life Science and Electronics. In particular, our so-called Wave One launches, mainly Bavencio and Mavenclad, were once again the key growth drivers for our pharma business. All in all, our EBITDA pre came in at EUR 5.9 billion, declining 14.2% as reported, and organically by 9%. EPS pre stood at 8.49.
Our group EBITDA pre-margin came in at 28% versus 30.8% in 2022, reflecting the loss of the very highly profitable COVID-19-related sales mainly, and some other factors. Overall, we were able to further reduce our net debt by more than EUR 800 billion in 2023 to around EUR 7.5 billion. Now, I would like to turn your attention to some key, key developments in our three sectors, starting with Life Science. Sales in our Life Science business sector declined 10.6% to EUR 9.3 billion, or -7.9% organically. This was largely due to the two market-related factors that I previously mentioned. In addition, the currency effects also had a negative impact of up to 2.7% on sales.
If we look at the individual business units, both Process Solutions and Life Science Services declined more than 14% organically. Science and Lab Solutions, which generates around half of the sales of Life Science in 2023, saw an organic sales decline of 0.6%. 2023 was a tough transitional year for Life Science, yet the market fundamentals for our Life Science business remains strong across the business sector, and we remain confident on our solid position to secure mid and long-term growth. Therefore, we must continuously invest to secure our future position, and we did so in 2023. As one example, we recently announced a new investment of EUR 300 million into a new bioprocessing production center in South Korea. This new site will be the largest investment by Merck's Life Science business sector in Asia Pacific.
It will also create around 300 additional jobs by the end of 2028, when the site becomes operational. And here in Germany, we opened 2 new mRNA drug substance manufacturing sites in Darmstadt and Hamburg. This makes us the first company to offer integrated services along the entire value chain of mRNA development, manufacturing, and commercialization. We also further consolidated our position as a fully integrated partner for mRNA, as well as several other novel drug modalities, where we help customers treat and potentially cure serious diseases such as cancer, heart disease, and autoimmune conditions, which means scientific progress in pharma starts with Merck Life Science. Moving into our Healthcare business sector, our net sales in healthcare increased 2.7% as reported to EUR 8.05 million. Excluding currency effects, net sales of healthcare jumped by a strong 8.5% organically.
Key growth drivers included our oncology medicine, Bavencio, and Mavenclad, our treatment for relapsing multiple sclerosis. Bavencio delivered organic growth of more than 23%, while Mavenclad generated an organic growth of nearly 16%. With this growth, Mavenclad reached blockbuster status in 2023, as it surpassed $1 billion in sales. But what truly makes us very proud is knowing that it has already helped over 83,000 multiple sclerosis patients worldwide. Our fertility franchise grew by 15% organically due to a strong underlying growth of our portfolio. We also saw solid contributions from our metabolism, cardiovascular, and endocrinology, the so-called CM&E franchise. Of course, we were strongly disappointed by the news that Evobrutinib did not meet the primary endpoint in the clinical studies of phase 3 EVOLUTION trials. Attrition in phase 3 is part of the business model of any biopharma business.
We are therefore absolutely sharply focused on developing our pipeline further, which continues to hold great potential. For example, we continue to make good progress in the development of xevinapant, our late-stage, first-in-class candidate that is being evaluated in the curative setting of locally advanced squamous cell carcinoma of head and neck. This is an area that has not seen any significant innovation when it comes to treatment for the last 20 years. The next step in this program is the interim analysis of our phase III study called TrilynX. I would also like to underline Enpatoran, an investigational novel immune receptor antagonist, which is currently under investigation as a treatment for lupus in phase II clinical trials. Our current pipeline is strong, and we have multiple clinical development programs underway with potential first-in-class assets, such as the next-generation antibody-drug conjugates.N And we continue to make important progress in building our future pipeline with multiple strategic collaboration and in-licensing activities. In 2023, this included AbbVie for a rare disease and Hengrui, for example. We remain confident that our focused leadership approach in healthcare represents very solid basis for long-term growth. Let's now move on to our third business sectors, electronics, where we serve as a strong and reliable partner to our global bases of customers. As I mentioned previously, 2023 was a challenging year also for electronics and for the electronics industry in general. Overall, our electronics business sector experienced an 8.8% decline in sales to reach EUR 3.66 billion. Organically, excluding the currency effects, sales declined by 5.1%.
If you look at the individual business units, our Semiconductor Solutions business reported an organic sales decline of 3.9%. At the same time, we faced persistent price pressure and low capacity utilization by our customers in the liquid crystals field. Consequently, organic sales in the Display Solutions business unit declined by 9.2%. We are, anyway, confident that we will see the market pick up in 2024, and we have already seen early promising signals of improvement. A good example is our Semiconductor Materials business, which delivered two quarters of sequential growth already in the second half of 2023. Plus, we see chip inventories on the decline already. Demand is building once again for logic chips and leading-edge memory, which is exactly where we play. Our modern digital world will continue to be transformed by artificial intelligence, next-generation semiconductors, and high-performance computers.
The constant innovation will require our material intelligence. That is the kind of advanced materials and integrated solutions that we are very well-positioned to provide, and this is why we will continue to confidently invest to support our long-term growth, also in electronics. Our global diversification continues to be a key strength of Merck. 90% of our net sales were very well-balanced across our three most important markets: North America, with 28%, Europe, 29%, and Asia Pacific, 33%. Our broad global footprint not only reduces Merck's exposure to local economic events. The ongoing regionalization of our operations also brings us even closer to customers and to patients and makes us more responsive to their needs. We thank our customers and partner worldwide for their continued trust. It is also important to recognize the support of our shareholders.
We are therefore very pleased to announce our proposal for a dividend of EUR 2.20 per share at today's annual general meeting, which is consistent with the previous year. This proposal underscores our commitment to providing sustainable value to our shareholders, even in challenging times. At the same time, it also clearly illustrates our confidence in the long-term growth prospects of our company. Looking ahead, we expect economic and geopolitical headwinds to persist this year. Yet, we are confident that our group will gradually return to organic growth during 2024. In Process Solutions, sales should recover in the second half of the year. The semiconductor materials market is expected to improve gradually in 2024 compared with 2023, with the turning point expected to be in the second half of the year as well.
For both group net sales and EBITDA pre, we are expecting a slight to moderate organic growth. While the attention of Merck will be focused on returning to growth during 2024, this will also be an important year for our world, as many critical elections are going to be held. It is my personal belief that we must especially stand behind Europe and encourage active participation in the upcoming EU elections. Democracy, freedom, equality, and human rights are, and must remain, at the core of our identity. These values are not only the foundation of our society, but also provide very fertile ground for innovation, for growth, and for competitiveness. The key here is to further nurture the power of diversity to build a stronger and more united Europe.
Beyond 2024, I believe that we at Merck remain firmly positioned for long-term growth and impact. The world is being rapidly redefined by a series of mega trends. These include novel modalities in life science, growing patient needs for cancer, neurological, and immunological treatments in health care, the certain growing importance of artificial intelligence and big data in electronics, and rising global demand for sustainable innovation. It makes me very proud to say that Merck is uniquely positioned at the heart of these mega trends as a leading global science and technology company. Our multi-industry business model, a strong global footprint, and diverse team come together, help us transform how people live, work, and connect. We remain fully committed to not only creating value within each business sector, but also across the sectors as one Merck.
Artificial intelligence in drug discovery, digital twins, smart manufacturing, and bioelectronics are just some of the innovation areas in which our cross-sector synergies could become a competitive advantage for Merck. Furthermore, I'm proud of the progress being made by our teams to accelerate our sustainability leadership worldwide. We've come a long way in our environmental and climate protection goals, and we stay on track to achieve our three core sustainability goals. Number 1, by 2030, we aim to have fully integrated sustainability into our value chain. Based on this, we expect to achieve climate neutrality and significantly reduce our resource consumption by 2040. To name a few highlights of our progress, during 2023, we reduced our direct Scope 1 and indirect, so-called Scope 2 greenhouse gas emissions by nearly 17% compared with the previous year.
We also obtained more than half of our electricity purchased worldwide from renewable sources for the first time. Following the signing of virtual power purchase agreements in 2023, we now expect renewable energy to cover 100% of our current electricity purchases in Europe, more than 90% in North America, and 70% worldwide as of 2025. On our way to gender parity by 2030, we increased the percentage of women in leadership position worldwide to a record high of 39%, and we were amongst the world's top five pharmaceutical companies enabling access to our medicines in low and middle-income countries. Our commitment to global health is an important part of our sustainability strategy, and a prime example of this is the fight against schistosomiasis, a devastating neglected tropical disease. As you may know, since 27...
Since 2007, Merck has donated 2 billion praziquantel tablets for medical treatment. This means over 800 million patients being treated, mostly school-age children in 47 countries across sub-Saharan Africa and some parts of Asia. In December, we received great recognition for this. The European medical authorities gave a positive opinion for a new pediatric treatment option for small children aged 6 years and under for praziquantel. Yet, we still have a long way to go. I am also delighted that we have exceeded our waste and water targets in 2023 and have now introduced new water and waste management targets and strengthened our commitment to to biodiversity and circular operations. Ladies and gentlemen, despite all the challenges, we have delivered. However, there is also much more to be done.
I hope I have given you a comprehensive overview of where we stand and our strong potential for long-term growth. To conclude, my three key takeaways. Number one, 2023 was a transitional year full of challenges, but we were able to once again prove the resilience, the strong resilience of Merck. Number two, we will gradually return to growth in 2024, and we are already seeing the first signs of recovery in the different business sectors as well as the markets. Number three, most importantly, we are very well positioned to drive sustainable growth towards the long term, and this is driven by our belief that we can play strong in these mega trends in all our key markets. I briefly mentioned Friedrich Jacob Merck at the start of this presentation.
This year, the Merck family, which holds 70.3% of the capital of our operative company, transitioned smoothly to the twelfth generation of family management. Mr. Johannes Baillou is now the chair of the family board, succeeding Dr. Frank Stangenberg-Haverkamp, who retired recently. Professor Dr. Simon Thelen was elected as the new vice chair of the family board and the Board of Partners. Their continuous commitment to think in generations underscores our own long-term ambitions to be a 21st century pioneer in science and technology. Our priorities are very clear: sustainable growth, leadership, and delivering value to customer and patients worldwide through our diverse, globally based Merck teams. Most importantly, we want to enable people to have longer, healthier, and more sustainable lives. Our multi-industry setup and science and technology portfolio positions will help us deliver on these outcomes for the generation to come.
Which is the reason why I want to close this presentation with one final number, if you allow me to do so. And it's a number that I believe is more impactful than any others we have shared with you so far, and the number is 117.79 million. And this is how many patients we have been privileged to serve last year across the world with our own portfolio of healthcare products. At this time, I want to thank you for your attention, and I'm really looking forward to the questions and our debate.
Thank you, Ms. Garijo. Dear ladies and gentlemen, you can also read the speech of Ms. Garijo online. As I said, it was published on the company's website on April 18, 2024. I would like to thank you, Ms. Garijo, also on behalf of the meeting, for your comprehensive and insightful report of the past fiscal year, which for Merck was shaped by strategic transformations. I would like to express my thanks and recognition to the entire Executive Board for the business achievements in a challenging fiscal year, 2023. My recognition, of course, also applies in particular to the employees of our company, without whom Merck would have never been so successful. This includes the managers, the superb experts in the various units, and of course, the entire workforce, including their representatives, who did an excellent job last year.
Ladies and gentlemen, before I move on to the agenda item number 2, I would like to correct, to correct, make one correction on the report of the Supervisory Board. I said Merck KG inadvertently and not Merck KGaA. So the correct wording of this paragraph is: The Supervisory Board adopted the final financial statement of Merck KGaA, the consolidated management report, and the report of the auditor in accordance with Article 27 of paragraph 1 of the Articles of Association. Thank you very much. Excuse me. So now I would like to move on to agenda items 2, 2 to 10. They can be seen here.
They are: the resolution on the adoption of the annual financial statements for fiscal year 2023. The resolution on the appropriation of net retained profit for fiscal year 2023. The resolution on the approval of the actions of the executive board for fiscal year 2023. The resolution on the approval of the actions of the Supervisory Board for fiscal year 2023. The resolution on the election of the auditors of the annual financial statement and consolidated financial statements for fiscal 2024, as well as the auditors for the audit review of the interim financial statements and management report of the group as of June 30th, 2024. The resolution on the approval of the compensation report for 2023, the Supervisory Board elections. The resolution on the compensation of Supervisory Board members, including the compensation system, as well as the corresponding amendments of the Articles of Association. And the resolution on the amendment of the Articles of Association in connection with the German Financing for the Future Act.
You will find the agenda items, as well as the corresponding proposed resolutions and further explanations in the notice of this meeting, which has been published on our website. Ladies and gentlemen, let me now turn to agenda 8, the elections to the Supervisory Board. The mandates of those members of the Supervisory Board elected at the 2019 AGM, namely Ms. Renate Köhler, Professor Dr. Helga Rübsamen-Schaeff, Dr. Daniel Thiel, and myself, will expire with the closing of this year's AGM. At the same time, Ms. Barbara Lambert's mandate also expires. She had been appointed by the court as a replacement member of the Supervisory Board following the resignation of Helene von Roeder in August 2023. Mr. Wolfgang Büchele has resigned from his office as a member of the Supervisory Board with effect from February 13, 2024.
On behalf of the company, I would like to thank all members of the Supervisory Board, now leaving their office, for their outstanding collaboration. Mr. Büchele, as chairman of the Supervisory Board for many years, you have moved alongside the development of the company. Thank you very much for that. I'm pleased that we were able to find outstanding new candidates for the Supervisory Board, who will support Merck on our successful onward journey. The Supervisory Board proposes the election of the following persons as representatives of the shareholders to the Supervisory Board: Ms. Katja Garcia Vila, then myself, Mr. Michael Kleinemeier, Ms. Dr. Carla Kriwet, Ms. Barbara Lambert, Professor Dr. Stefan Palzer, and Dr. Susanne Schaffert.
Taking into consideration the specific objectives, the Supervisory Board has defined with respect to its composition, the profile of skills and expertise for the entire board, as well as the diversity policy, these are the most suitable candidates. Their profile of expertise and skills was the main point of focus during the selection process. We particularly selected them for their in-depth knowledge of the key areas for Merck, that is, Life Science, Healthcare, and Electronics. Another criterion was their experience in corporate leadership and supervision of a company. We also considered their business experience in Merck's main regional sales markets. The candidates' complementing professional and personal experience will benefit the work of the Supervisory Board. In particular, Ms. Garcia Vila and Ms.
Barbara Lambert have expertise in the field of accounting and auditing of financial statements within the meaning of Section 105, Stock Corporation Act. Following the election of the candidates proposed by the Supervisory Board, the Supervisory Board would consist of four women and four men on the shareholder side, including the delegated members, so that the minimum requirement would remain fulfilled. Furthermore, all candidates are to be regarded as independent. The corresponding declarations of all candidates' independence can be found on the company's website. The Supervisory Board has assured itself that the proposed candidates will be able to meet the expected time requirements to perform their board duties as members of the Company Supervisory Board.
Detailed CVs of all Supervisory Board candidates, briefs on individual candidates, as well as other information regarding the elections to the Supervisory Board, have been published together with the notice of the AGM. In addition, the CVs and briefs can be found on the company's website. I would now like to give e ach candidate an opportunity to introduce themselves. Since I would like to follow the order the candidates are named in the invitation, I will first play Ms. Garcia Vila's introduction, which we recorded yesterday here in this studio, and I will follow Ms. Garcia Vila with my own introduction. Please, the video. Dear shareholders.
[Foreign Language]
Today, I'm delighted to present myself to you as a candidate for a member of the Supervisory Board for Merck. Merck has the aim to be a pioneer in science and technology in the 21st century. The passion for this drives more than 60,000 employees in more than 60 countries. You work on solutions for some of the greatest challenges of our time in order to design a sustainable future. Technology, internationality, and sustainability are also the driving forces of my professional career. In the future, I would like to share with you my competencies in order to support you as a member of the Supervisory Board. Why am I qualified for this responsible task?
For more than 16 years, I have worked in leading positions in an internationally important company, which is also a DAX-listed company. I have a lot of experience and competence in finance, as in controlling, in accounting, as in tax, assurances, mergers and acquisitions, and funding. This expertise and my abilities in communication will means the success of our company on the capital market. One of my important tasks is the digitalization. It is a red thread through my whole career.... I wasn't only responsible for finance, but also for digitalizations wherever I worked. And today, I'm responsible for the IT area in my company. I want to leverage efficiencies and enable progress. For me, it was always clear that the digital transformation is a great opportunity for our companies.
Another thing that accompanies me as CFO are ESG topics, in reporting, as well as when it comes to the demands of the capital market. So sustainability isn't important for me personally only, but also in my professional environment. Ladies and gentlemen, dear shareholders, as you can see, I have a comprehensive range of competencies. I am passionate, and I'm curious. That works well with Merck, because I'm also convinced by the positive force of science and technology. I feel obliged to progress, which is why I would be delighted to gain your trust today and become a member of the supervisory board. Thank you very much.
Thank you very much, Ms. Garcia Vila, for your inspiring video. Dear ladies and gentlemen, it's a pleasure to be able to briefly introduce myself and discuss the most important steps of my professional journey so far. I've been a resident in Heidelberg since 1989. I'm married and have three children and two grandchildren. I grew up in Eastern Westphalia and finished my business degree with a focus on business information technology in Paderborn. After various positions in private business, I found my way to SAP in Walldorf. With SAP, I held various global management positions in development and consulting, as well as in building country and regional branches. I switched to a company that SAP had a stake in, and as a board member there, supported the company in transitioning into the intelligence AG.
I also made an essential contribution to boost this IT service provider's international business. When I returned to SAP, I was appointed to the extended board in 2014, and a year later became a regular board member of SAP SE. I retired in 2020 on account of age. During my 30 years at SAP, I gained deep insights of how to digitalize corporate processes across 24 industries, as well as of the global management of an internationally active company. Since 2020, I've supported companies in their digital transformation in my capacity as managing director of e-mobilitens GmbH. Also, in 2020, I reduced my work for the GmbH to managing my personal stakes in order to free up sufficient capacity for the work on the supervisory board of Merck KGaA.
Over the past five years, as a member of the supervisory board of Merck KGaA, I've gained a deep knowledge of this, this company and its businesses. I've contributed my expertise in business management processes, digitalization, AI, and global markets, sustainability, actively supporting Merck's transformation. The company's huge momentum and capacity for innovation have been a particular source of awe and motivation. That's it about myself. May I now ask Dr. Carla Kriwet, candidate for the election to the supervisory board, to step up to the lectern and introduce herself?
Thank you very much, Mr. Chair. Ladies and gentlemen, dear shareholders, let me also welcome you and wish you a good morning. My name is Carla Kriwet. I'm 53 years old. I'm married, and I'm mother of three teenagers. I am an economist by training and have worked for 25 years in leadership positions. I worked in companies such as the Boston Consulting Group, Linde Healthcare, Philips, BSH, and Fresenius Medical Care. During this time, I worked in... I lived and worked in different European countries, but also in the US, in Asia, and Africa. At the moment, I'm chairwoman of Affidea, one of the leading radiology and radiotherapy companies, and I'm senior advisor for the private equity company, EQT, and I'm also a business angel for some startups in medical, technological, and biotechnology.
I have an experience as a member of the supervisory board because I worked in the supervisory board of Carl Zeiss Meditec, of the Carl Zeiss AG. At the same time, I have worked as a voluntary member of the Supervisory Board of Save the Children Germany, which is an aid organization. So I have particular expertise in M&A, digital and sustainability. I've worked seven years at Philips, and in the end, I was able to be the leader of connected medical care. That means patient monitors, but also the hospital IT of Philips. Of course, cyber IT is also an important topic here. As CEO of BSH, together with the executive board, I drove forward digitalization as well, and sustainability.
So we renewed the area of sustainability, set major targets, and defined what sustainability means for us across all the chain of delivery, supply chain. I believe in science, progress, and business and social responsibility. I would be delighted if I could serve Merck as well with my experience, and if you, if I will gain your trust, dear shareholders, and I would be delighted if you elected me as a member of the supervisory board of this wonderful company. Thank you very much. Ms. Kriwet, thank you very much for-
Now, dear Ms. Lambert, we're now looking forward to your introduction as candidate for the Supervisory Board.
Thank you very much. Dear shareholders, ladies and gentlemen, my name is Barbara Lambert. I grew up not far away from Düsseldorf. I'm German, but for private reasons, after my graduating from school, I moved to Geneva and finished school of economics. I am an I've been a member of expert commissions, and I'm an auditor and have had 20 years of experience in this area because I worked for Ernst & Young and was also responsible for mergers and acquisitions. I worked at Ernst & Young and was responsible for Swiss and international mandates for quality control and special audits.
The last 10 operative years of my professional career, I spent at Banque Pictet & Cie in Geneva, which is a private bank and asset manager, who has has been in possession of a family for the last 200 years. First, I was head of Group Internal Audit, and then I was member of the executive board as group chief risk officer, and I was responsible for risk, compliance, and information security. In 2017, I was responsible for sustainability and for renewing and finding a strategy for this area. Since then, as a member of the supervisory board, I contributed to support the company when it comes to the new regulatory laws in sustainability. In the actual geopolitical environment, I have invested a lot of my time in sustainability, which is also personally important to me.
After 30 years of auditing and operating, I've decided to become a professional, full-time, exclusive member of supervisory boards for important companies and interesting companies. For me, it is important to have enough time, even if there are risks and special situations. In the last few years, I proved that I hold true to my word. My four actual mandates are Supervisory Board of Credit Suisse and UBS, Implenia, German boards, and at Merck, I was the leader of the economic committee. Before that, I was at Ernst & Young Switzerland, Banque Pictet, and I was a member of the Supervisory Board in Synlab, Munich. Therefore, I have gained more than 10 years of experience as a member of the supervisory board and as a chair of audit committees.
As a financial expert, I have proven knowledge in accounting, statutory statements, and sustainability, particularly when it comes to reporting. I would be happy, in the future, to remain a member of the supervisory board of Merck and also member of the audit committee, because I would make a stable foundation for sustainability and the growth of the company. Thank you very much.
Thank you very much, Ms. Lambert, for your introduction. May I now ask the next candidate for the election of the Supervisory Board, Professor Dr. Stefan Palzer, to step up to the lectern and introduce himself? Thank you very much, Mr. Chair. My dear ladies and gentlemen, my name is Stefan Palzer. I am 54 years old. I have German and Swiss citizenship, born in Trier, married, and have two daughters. As member of the group and Chief Technology Officer of Nestlé, I'm in charge of technology, research, development, and innovation in the group. This includes implementing our clinical studies and the regulatory authorization approval of our products, including products of clinical nutrition and pharmaceutical products, and as well as products for veterinary purposes.... on my background and my career.
After a professional training, I studied food technology, food engineering at the Technical University of Munich, then in engineering. I got my PhD and my habilitation later. I studied business administration with a focus on production, economy, and marketing. During my 20-year career activity in the industry in various functions, research, development, but also marketing, I gathered experience with different types of products and technologies. Many of these technologies and products are also relevant for the different divisions covered by Merck. For example, the processing, biotechnology, bioprocessing methods like, for example, the precision fermentation and the culture incubation-based activities. I also studied the different conditions in Europe and other continents in terms of economy and social affairs.
As a young product engineer in these countries, I industrialized new technologies, and I keep visiting these countries regularly. Because of our activities in the area of preventive but also therapeutic food, I'm also have many skills in the area of human technologies. I am familiar with Merck for many years, and I follow with great interest the development of the company, but I also know Merck from the perspective of the customer. In many of our laboratories, we are using Merck products. How can I help Merck become even more successful? On the one hand, my wide and deep knowledge of the different technologies and products can be helpful for the three divisions of Merck. Also, my experience with international markets can also help for the geographic expansion of Merck.
However, I can also support the company in the area of sustainability and ESG. This concerns the choice of suitable technologies, as well as the quantification of progress and the reporting. To sum it up, I can only confirm and strengthen that I'm highly motivated to contribute to the success of this exciting company, and I will be very happy to be elected to the supervisory board. Thank you very much. Professor Palzer, thank you for introduction, for introducing yourself. Lastly, may I now ask Dr. Susanne Schaffert, candidate for the election to the supervisory board, to step up to the lectern and introduce herself.
Thank you very much, Mr. Kleinemeier. Ladies and gentlemen, dear shareholders, I'm delighted to be able to present myself today. My name is Susanne Schaffert. I'm 57 years old, and I'm proud mother of a 21-year-old daughter. I am a Ph.D. chemist. I have more than 25 years of experience in the international pharma business. Until May 2022, I was a chair and CEO, head of oncology at Novartis in Switzerland. In my 3.5 years as a member of the executive board, I was responsible for oncology, which has net sales of EUR 15 million, and I was responsible for commercialization and development of the global portfolio, working closely together with R&D.
Here, I had the very important task, together with my team, my global team, to develop cancer therapies, the CAR-T cell therapy and the first radioligand therapy, and I was able to commercialize them. These therapies are individual and are produced individually for every patient, so we don't have inventories for that. And therefore, we had to establish new distribution and logistics lines. In my portfolio, I also had to do with patents of strong products, and there my task was to navigate the business through this time and promote growth. Above all that, I was part in in-licensing processes. I had a 25-year career in Novartis and held different management positions. I was head of Novartis Oncology in Germany.
I was head of the European business of Novartis Oncology, and I was CEO of a biotech company within Novartis, which was independent. Maybe I should also tell you that I was also head of a global investor relations business. There, I gathered experience in governance, shareholder communication, ESG reporting, and sustainability. Since June 2022, I have worked exclusively as a member of supervisory boards. I'm an independent supervisory board member in two listed companies with Galapagos NV in Belgium and ArtBio in U.S. So I'm also in the Novo Holdings, Denmark, the Vetter Pharma in Ravensburg, and a startup, ArtBio, in the USA. I am focusing on business and on supervisory board mandates, which is why I have a good overview of a broad variety of biopharmaceutical companies. Since I do, don't have-...
operating jobs, I can fully give my time for Supervisory Board. I would be happy to give you my competence for the future of Merck and will be delighted if you would give me your trust and elect me as a member of the Supervisory Board. Thank you very much.
Dr. Schaffert, thank you, too, very much for introducing yourself. Ladies and gentlemen, the chair of the Supervisory Board will be elected by the members of the Supervisory Board. It is intended that I, Michael Kleinemeier, will propose myself for election as chairman of the Supervisory Board in the event of my re-election to the Supervisory Board. You may vote on the proposed candidates separately. I would now like to open the floor for discussion on all items of the agenda in the form of a general debate. If you would like to speak at today's AGM, you may do that through the investor portal. You can register for contribution on the investor portal. You will be given a link with an invitation to join a video conference. After the required technical checks, you will be sent to the virtual waiting room.
Please stand by there until I call you by name and until you will be connected live to the broadcast. During your contribution, you may ask questions, submit motions, and nominate candidates. In the interest of all shareholders and to guarantee speedy proceedings at today's AGM, please note that we will only allow contributions that are directly related to today's agenda. Please consider this when you speak. We have to deal with a total of 10 agenda items today. I have already received several requests for the floor. It is in the interest of all shareholders that contributions are not unreasonably long, so I'd like to ask all speakers to limit their questions and comments to a reasonable duration. In view of the requests to speak we have already received, I reserve the right to formally limit the general speaking time at a later point in time during the AGM.
After we've finished answering all your questions, we will proceed with voting on the items on the agenda and with determining the ensuing resolutions. Again, please note that you can exercise your voting rights on the investor portal of the company or change a vote you already cast until I close the vote. I will announce the closing of the vote ahead of time. Still, let me ask you, in your own interest, not to wait until the last minute with casting your vote or with issuing authorizations and instructions. Please also bear in mind that there may always be time lags when you're using an internet connection. Objections against resolutions by the AGM may be declared via the investor portal until the end of the meeting to be included in the minutes prepared by the notary.
Until then, you may also submit a request pursuant to Section 131, paragraph 5 of the Stock Corporation Act, that questions you asked, but to which an answer has allegedly been rejected, and the reason for this rejection be included in the minutes. All objections or requests will be forwarded to the notary. We are committed to answer all questions necessary to properly assess today's agenda as soon as possible during the general debate. I will now call the speakers by name, one by one. At the beginning of your contribution, kindly state your name and, if applicable, the organization you represent. Let me give first the floor to Mr. Andreas Povel. Thank you very much. Thank you, Mr. Kleinemeier, for giving me the floor. Thanks to Ms. Garijo for her information on 2023, a, as you put it, challenging year of transition.
Some of these questions have been addressed. Please bear with me that following up on some of these items has the purpose of going deeper into these topics or to make it more generally understandable. Let me start with a statement of DSW, the German Society for the Protection of Security Holders. I'm in the board of DSW. I'm here representing DSW and the shareholders represented by DSW. DSW continues to expect that AGMs are held in a hybrid format or as an in-person AGM. That is the declared wish of shareholders, and it is also my wish because today, again, I had some minor technical challenges. When can we expect that Merck will go back to an in-person AGM or to a hybrid form? How many shareholders were in 2023? How many did participate in the virtual AGM?
How does the participation compare to the presence or the attendance of earlier AGMs? In 2023, Merck, the year of transition, as you put it, in Life Science and Electronics, it has seen slumps in both turnover and the revenues. Positive results in Healthcare could not compensate for the challenges in Life Science and Electronics. How will Merck go back on the path of growth? What is the outlook 2024, and can the motto 25 by 25, that means in the year 2025, EUR 25 billion, can that still be achieved? Healthcare. Can healthcare in 2024 suffer another or compensate for an additional setback of Life Science and Electronics? What are the opportunities in Healthcare besides blockbuster Mavenclad and the old cancer medication, Erbitux and Bavencio, what are other potential blockbusters? What does the pipeline in Healthcare look like?
We've seen it earlier already, but what does it look like in detail? After the setback for the MS product, Evobrutinib, how many real phase III products do you have for oncology, immunology and global health? The question is, is R&D, research and development of the healthcare division, with approximately EUR 8 million turnover, and with all due respect, a medium-sized healthcare company, is that division strong enough to sustainably build an internal pipeline, which means to build it soon enough? Or wouldn't it need, as has happened in the past, urgently major acquisitions because the R&D costs and the time requirements cannot be matched. Life Science. Why was the allegedly unexpected destocking, reducing stock in Process Solutions in 2023, why did that take place? And in 2024, will there be more destocking? Are there any signs for possibly a restocking?
Are there any aftermath of the end of the COVID pipeline, and if so, what are they? Process Solutions is driving future element for Life Science. What future does Life Science Services have, and Science and Lab Solutions in current times, in times of cost-cutting and restructuring at Merck? Electronics. What are the reasons for the chip price decrease in electronics in a world of competitors that are hungry for chips to be leading... become world leaders in AI? What is the influence of the Chips Act on electronics and electronics location and location policy, with a special focus on China, Taiwan? What is the future of display and surface in current times of cost-cutting and restructuring? Now, a few thoughts on the resilience strategy, scalability and location policy with a special focus on the U.S. and China.
How current is and remains Merck's resilience strategy to produce where highest demand comes together with lowest production cost? Under the incentive system of the Inflation Reduction Act, have you thought about further extending and moving your production to the US? What location advantages or disadvantages remain for Germany regarding energy, regarding regulation, taxes, investment incentives and ESG? Does Merck possibly run into scaling problems when the production, in accordance with the resilience strategy, is split into different regions, especially for healthcare? And how far are with Merck's commitment in China, how is that related to increased risks related to increasing concerns of the Western world vis-a-vis China, or a further escalation of the Taiwan conflict?...Digitization strategy is for the three areas of Merck. Is there a sustainable digitization strategy regarding digital products, digital working, digital mindset, sorry, digital processes, and the digital mindset? FX management.
Currency losses in all three areas in 2024, and the fourth quarter 2023, especially regarding the devaluation of the Argentine peso. The outlook for 2024 in Life Science electronics is moderate adverse, and the outlook for healthcare is significant adverse. So the question arises: Does the new FX strategy, which has been implemented for 4 years, is that still successful? Regarding finance, deleveraging, and acquisition. In the next 24 years, are there any then we have financing to almost EUR 5 million, over billion, 2024 1, 2.3 in 2025, and 2026, EUR 1.4 billion. What about the refinancing strategy, given current outlook on interest rates? What is the debt equity ratio you strive for? After those successful deleveraging activities in 2023, how high is the acquisition wallet, the volume that is available for possible acquisition for strategic growth?
If so, where will be the focus, on which of the three divisions and in which regions? The investor relations strategy, and especially the current stock price and the market capitalization of Merck. The stock price in 2023 has dropped by almost 20%. The bad result in 2023, especially in Life Science and Electronics, and the loss of a potential blockbuster in Phase III in healthcare, have contributed to that, obviously. But traditionally, undervalued is the market... Or the market undervalues traditionally, the portfolio company, Merck, because it's not a pure healthcare company, it's a portfolio company, and in the market, it's possibly not really understood by the market. How will Merck deal with these challenges in the future?
How do you explain to your investors if the sum of the three individual companies, healthcare, life science, and electronics, electronics have a higher value in the appreciation than the total value of the entire company? About the dividend policy, shareholders thank you for maintaining the dividend after the otherwise very disappointing year, 2023. With EUR 2.2, the dividend payout is at the upper end of the payout ratio of Merck, 20%-25%. But it is the wish of shareholders, represented by DSW, that the payout ratio moves towards 50%. Talking about compensation, just a critical question, and that's, rejected. Is the adaptation of the compensation for the supervisory and executive board appropriate, well-balanced after a year of major challenges, a year of transition, a year 2023? And finally, about ESG. Great. The ESG report, very well presented.
EU taxonomy criteria, very well met. But is ESG for Merck a location advantage or is it a disadvantage? Or to put it differently, besides all the regulatory aspects, how does Merck turn ESG into a business? ESG as a business, a topic that is particularly relevant for BlackRock, Vanguard, JPMorgan. That's what they focus very much in the context of ESG, because they see ESG... Don't want to see it any longer from an ideological point of view. What impact does this have, especially the climate strategy, what impact does it have on the business model, on the long-term strategy, and the performance of Merck overall? And finally, what is the cost-benefit analysis of the climate strategy? What does that look like at Merck? I thank you, and I apologize for the length of my contribution.
... Mr. Povel, thank you very much for your comment. Now, I hand the floor to Ms. Cornelia Zimmermann.
Ladies and gentlemen, my name is Cornelia Zimmermann. I represent Deka Investment, one of the biggest four societies in Germany, subsidiary of DekaBank from Sparkasse. The Merck share has had a minus of almost 20%, and therefore was not very enjoyable for us as investors. In compared to the indexes for comparable businesses, Merck was not as profitable in the share. The circumstances definitely were not ideal. The situation around the pandemic, when growth seemed to be unstoppable and customers kept a lot of stock, is over. There was a trend reversal in 2023. The customers were destocking, and we had a decrease in requests. That hit the whole industry hard, and we had to see that Merck, as well as the competitors, did not know enough about the stocks of their clients. They were not prepared for the reduce in revenue.
Ms. Garijo, it seems that the entire industry is flying, flying without clear views, and we would like to know whether this is really still necessary in times of modern data processing. What are you doing to better anticipate developments and demand in the future? Do you see opportunities to increase transparency in regard to demand, maybe also through technical solutions? Ladies and gentlemen, the product Evobrutinib has promised a lot for Merck and for investors. In December 2023, we had the information that the last clinical trial phase was not cleared by the product. The Merck share, therefore, dropped by 9%—more than 9% in December, and the year-over-year comparison made it an underperformer due to this. Ms. Garijo, did you put too much pressure on one product?
Not just for the guidelines for growth as well as for Evobrutinib, didn't you expect that it would be great all the time? Wasn't this too big a risk to take? How are you going to close the gap that this blockbuster product, or what you thought would be a blockbuster product, did not deliver? Were there weaknesses in the study design that led to the product to falter in the clinical trials? Ms. Garijo, you have three business sectors: Life Science, Healthcare, and Electronics. You're driving on three parallel paths. We are wondering how you are going to react, focusing on the detractors in Healthcare, and how are you going to keep the balance between Healthcare and Life Science? Life Science is more profitable than Healthcare, and the risk is lower.
Based on the Evobrutinib developments, isn't it a good idea to focus more on Life Science? Ms. Garijo, Mr. Kleinemeier, we're wondering every year, how is it possible for you to publish your results later than it is usual in the market? This procedure is not one that matches a business of your size. Please also concern yourselves more with your shareholders, your business partners, and their... and your customers' stocks. You will notice that you're not matching the market here. Mr. Büchele passed over his mandate after 10 years to Mr. Kleinemeier. Rules of good governance create the necessity for a follow-up candidate to be defined earlier. Dr. Büchele is now going to be part of the business Board of Partners and will have a different responsibility again. For us, as shareholders, we're not as excited about this early change anymore.
Merck has been very competitive and has had a lot of recruiters on board to find the best candidates in the past. Mr. Kleinemeier, can we hope that this, this practice that was very successful can be used again with the new Board of Partners? Ms. Lambert, with her financial expertise, will be the new chair of the auditing board. We're excited about this, but she's also got the role with three other businesses. How will Ms. Lambert be possible to have this complex position for three parallel businesses? Ladies and gentlemen, Merck, as a healthcare business, has an important responsibility for medically difficult situations in countries where there is not enough medical support. Access to healthcare is the key word here. Merck has an important contribution here to provide medicine and to help with the tackling of schistosomiasis and malaria. Providing medical care-...
Makes Merck a top 20 competitor in the business segment. We are definitely impressed by Merck and its employees. However, with healthcare business, there are only a few countries covered with low income, especially countries in the Sahel and the African Horn section. Competitors cover, on average, six countries. How are these countries, low-income countries, part of your strategies, and how many products have been created, especially with those in mind? We also think it is important for companies to produce their sustainability goals before. Do you think it would be possible to have these published earlier in the future? Your performance with access to healthcare, how much are you considering it with the variable bonus payments? PFAS create insecurities.
The effect they have on humans and the environment with these products that are not able to be broken down is hard to estimate. In the EU, there is a ban on these products that will be created probably. How many PFAS are produced by Merck, and can these substances be replaced at Merck? Which risks do you see to eliminate the risks created by PFAS? And how do you consider your production of these PFAS to be affected by EU regulations? On our voting behavior, we are going to vote positive in all aspects, in the sense of administration, on all voting points. We hope that you're going to be successful with your strategy development. Hope you'll have a long-term view, and we hope that all the employees will be very successful, and we're very grateful for you doing your best every day.
Ms. Zimmermann, thank you very much for your contribution. Upon request of an understanding, request of our speaker, I will change the order of the speakers. I will tell you right away whose turn it is. Now, after Markus Kienle, I would like to call upon Marion Carstanjen, then I'll call Matthias Gaebler. Now I hand over to Markus Kienle.
Dear Mr. Kleinemeier, dear Ms. Garijo, dear ladies and gentlemen of the management and dear shareholders, my name is Markus Kienle. I am employed in Frankfurt on the Main and a member of the chairman of the German Association for the Protection of Capital Investors. Ms. Garijo, last year you already told us that 2023 wouldn't be, wouldn't run as well as the previous year, and that we plan more cautiously. In the last fiscal year and considering the framework conditions, you made a solid result, and using the capital on segment level, you showed how resilient your business model still is. However, the resilience of your business model doesn't result in approving the actions of the management.
The SdK will not approve of the actions of the management for the very reason that, yet once again, without necessity, it's. You're doing a virtual AGM. After three or four years of virtual AGMs, it would really appropriate to return to an in-person annual general meeting. You are not doing that, and now we have to live with the fact that at least the SdK does not approve of your actions. The decision about not approving the actions, and I want to point this out clearly so that there's no misunderstanding, it's not doesn't mean that we disapprove of the economic performance of the fifth, last fiscal year. It's only a digital decision which is based on the criterion which format of the AGM the company has chosen to go.
Before ever I start the analysis of the figures of the last year, I would like to extend my gratitude to all the employees and ask you to forward this gratitude to the workforce. Now, back to the figures. The net income before tax is 19%, after tax it's decreased by 15%, and the return fell from 13% to 11%. I see that the result figures fell much more in percentage than the net sales. Why is revenues-- Why did they fall as three times as much as the turnover? If the reason for the answer to the first question is that along with the good end results, also cost the increase. Please let me know what cost items contributed to this cost increase.
Why can the cost increase not forwarded to the customers? Are there segment-specific difference in this capability? And if so, please tell them. How, with what measures, do you want to counteract these cost increases? What is the role of AI for cost management? How far are you in this path? You need to change your forecasts in various segments in this current year and partially in the third quarter. What were the particularities in last year, and what measures are you taking to make us better planning for the future. Life Science shows a decline due to the pandemic, to the demand, which and along with electronics, Liquid Crystals and semiconductor were also weak. And nobody was able to hope and think that the pandemic would continue forever.
How do you want to balance or stop the pandemic, the decline in segment Life Science or find or return to growth? Or do we have to get used to a lower net sales level? Despite growth of 2% in terms of the cost of capital, the cost of capital increased by 0.7% in Life Science. What parameters during the cost of capital change, and for what reason? Is one or two maybe, or the reason in the cross-segment deterioration of the cost of capital in the increase of the basic test and the risk-free basic interest rate by the ECB.
After according to the mechanics that the ECB has shown during determining the interest rate, the increase of the basic interest rate should result in a reduction of the market risk class. The cost of capital of the segment and the fixed, did you actually earn this money? How will, among other things, the cost of capital segment change, the Life Science segment change if in June 2024, there will actually be the base rate will be decreased by 0.25%. Do you plan to reduce capacities in Life Science? How, with what measures do you want to counter the weakness of the in these semiconductor business unit? And how long will this weakness continue in your plannings? The Electronics, like in the previous fiscal year, contributed 18% to the net sales.
Do you assume that this portion, due to the continued price and competitive pressure in liquid crystals in the coming years, will reduce? And if so, to what forecasted value? Healthcare is the only of the three segments which shows organic growth. Despite events effects, effects which hit three, also three segments. The segment was able to grow after deduction of these negative AV headwinds of only 3%. Nonetheless, we have to state that some drugs which previously contributed to growth, Rebif, for example, do not drive growth anymore. To further revive this segment, every one and a half years to set a new drug approval. In view of the long development part of medicines up to the approval maturity, is your product pipeline filled sufficiently in order to reach this scale?
Please share this, share us this forecast after new approvals and the approval of new indications. What net growth do you plan for the next three years in healthcare? You have a strong position also in oncology. You are developing a medicine called xevinapant. BioNTech also wants to approve oncological medicines to become strong again. How far have you gotten to the development, and what costs have incurred for the development so far? How do you view your position compared to BioNTech in terms of oncology of cancer medicine? The further development of Evobrutinib needs to be stopped. What costs incurred for the development of this drug until you had to stop it? The candidates suggested for the supervisory board are accepted by SdK, except by Mr. Kleinemeier for Schaffert, which are overboarded. The SdK for operative activity, like Mr.
Kleinemeier, it accepts up to three external mandates because... And the, and the chair is counted double, and the, the mandates of Mr. Kleinemeier are not in the group because he's not a legal representative of Merck KGaA. No exclusive criteria is it, that Mr. Kleinemeier, at the same time, is part of the partner board of Merck KGaA and has a potential conflict of interest. The reason is deeper in the legal construction as KGaA, KGaA, and the multiple, multiple relations between KGaA and the E. Merck KG, which such a double membership of the KGaA seems to be good, and a change of the KGaA structure into a pure AG structure cannot be hoped for, for reasonable. The candidate, Ms. Schaffert, the situation is different.
This candidate acts as a professional supervisory board, and these people, the SdK, accepts up to five external mandates. The candidate for, with the mandate, with KGaA hats, would have seven, and these are too many. Mr. Dr. Buchele, after, during the year, you just retired from the supervisory board in order to take on the chair of the, of the board of, partners in KGaA. Let me also make some requests. First of all, thank you very much for your previous activity in the supervisory board of KGaA, KGaA, even though your supervisory board reports in terms of the dividend were not, were very unsubstantiated, at least not in the DAX and another, any other, maybe four companies in the free float. Your successor can and will do it better, hopefully, since Mr. Kleinemeier is the designated successor.
Not only in Supervisory Board, but also as the chair, he may actually comment on this. We cannot accept that you didn't finish your term of office, and you didn't fulfill your obligations towards the shareholders. Since the relation that acts between E. Merck KG and Merck KGaA exists, we do not understand why you didn't at least continue as simple, as a simple humanity, as, as the, as a simple member of the Supervisory Board at the, but until the end of the term. Despite of these critical points, Mr. Büchele, thank you very much. All the, all the best for your future. Not only the Supervisory Board is changing personally, but also the compensation amount will be radically changed.
Firstly, I would like to clearly state we welcome the fact that the system of an only fixed remuneration system, like the SdK, which supports it, has been retained. The purpose of a meeting payment as an incentive for the participation in meetings, so that the fulfillment of a legal obligation, which should be covered by a basic remuneration, causes problems in understanding. Secondly, however, the immense increase of the remuneration needs to be explained totally. It cannot... It's true that good control costs money and should cost money. Nobody's interested in poorly paid supervisory board members who don't carry out their obligations.
However, such an increase to provide it for a resolution, and giving the only reason, the increased requirements for the members in view of the restricted program of the supervisory board of KGaA is simply too little. Of course, we would have asked for explanations, what comparable sizes were done. And using DAX and the DAX companies systematically has a problem because all companies in the DAX are AGs, and they cover the full program of a supervisory board member, and the behavior of others doesn't justify own actions. The fact that this is such a strong increase is due to the low level of the previous remuneration, but it doesn't replace a good explanation. What did you compare? What group did you compare with? For what reasons?
Why is the amount of this group adequate and not excessive? Why do you consider a special meeting payment for category? Why is the effect of the basic remuneration for the chair of the supervisory, this constant representative, which you only know from supervisory boards, which you only know from AGs, why is that appropriate? My dear Ms. Gerich, I wish you and your team good luck for the challenging work and the courage, because the courage helps, the courage. Both people are helped by the courage. Thank you very much, Mr. Kühne, for your contribution. Before I hand over to Marion Carstanjen, I would like to clarify the order. After Ms. Carstanjen, Mr. Gaebler will speak and then Mr. Georgiadis. Ms.
Kostinik, you've got the floor.
Good morning, ladies and gentlemen. I am Marion Carstanjen. I am a lawyer in Frankfurt am Main, and I'm a chair of the executive board of ICG e.V. The ICG is very happy that there are so many female candidates, so many females in the executive board. So congratulations for Ms. von Roeder for being now in the executive board. We would also like to thank Mr. Kühne from all my heart for his work in the previous years. We were very happy with his work. In social media, the ICG saw that the correct name of Helene von Roeder is Helene Freifrau Roeder von Diersburg. What name is on her identity card? What form of name was signed before the notary and submitted to the court?
Is there a legal opinion on the use of the name, and if so, was foreign law, in particular Anglo-American law, also examined? On page 243 of the business report, there is an article of the Corporate Governance Code, which you worked out. We welcome this as ICG. In the supervisory board meeting of the supervisory board in April 2023, there was a change of the business statute for the audit committee, which has to deal with relevant questions of sustainability. To our understanding, this strengthens the significance of sustainability for the company. What we see is that Ms. von Roeder, as member of the supervisory board, has a tick in when it comes to qualification for sustainability. So what about CFO, Ms. von Roeder?
Because some time has passed since then. For the supervisory board, on the tenth of May, 2023, we had an annual training on sustainability, which is a measure which makes sense. Was Ms. von Roeder present there as a guest? In her speech, Ms. Garijo said the following: In the Life Science business sector, two factors in particular had an impact on sales and earnings. On one hand, the sharp decline in COVID-19 related sales, and on the other hand, the high inventory levels at our most important customers, who consequently placed fewer new orders. Nevertheless, the ICG believes that it has also noticed positive developments that would probably never have been initiated without COVID. The group's crisis resistance and strength has become more than clear, an important feature for investors, according to our association.
Where do you see today's business advantages of measures that you initiated as a result of the vehement fight against COVID? The regulations on working from home that are common today, and which many employees appreciate, might not have existed without COVID. How many employees use home office arrangements for working from home? Approximately how much did the company save in the reporting year as a result? On page 173 of the individual business statement, we saw when it comes to markets, it is noticeable that Germany, at EUR 971.2 million, remained almost the same as in the previous year at EUR 996 million. While sales in the rest of Europe fell by 58.2%, and those for North and Latin America by as much as 63.5%.
How can this be explained, and what could the change look like for 2024? For the reporting year, you say EPS pre is at EUR 8.49. The dividend proposal of EUR 2.20, therefore, also seems justified to the ICG. Does this mean a fundamental change in your dividend policy, which has remained constant to date? Thank you very much for your answers.
Miss Kostinik, thank you very much for your contribution. I call up the next speaker, Mr. Matthias Gaebler, who is the legal representative of Katharina Barbara Gaebler.
Thank you very much for giving me the floor. You introduce yourself. It would have been nice if you started your introductory speech in German, like your colleague at Bayer does that. He did that, too. He's not a German native speaker, but at least he tried. And if you cannot speak freely, you could at least read German off a sheet. So I'd be happy to get your answers in German. Mr. Chair, to speak of... You recorded the speech of Miss Garcia Vila yesterday. Couldn't she introduce herself today live? Because I have to ask my questions live with all the slips of the tongue here. I cannot record it and give it to you. A few words about the enleenle AGM, the virtual AGM. Mr. Kienle explained it in detail, and I see contact. This is just a clinical event.
You don't get any applause, and you don't get any boos, logically. There's no interaction. So if you offer a virtual AGM, why don't you voluntarily offer more? How can I contact Mr. Kienlez as a shareholder? How can I contact you? We know each other. We know it from WhatsApp and others, but can give a thumbs up, thumbs down. You can click on the applause symbol. So you could do more voluntarily without incurring major cost. And since you don't do it, I will do it. You can see it behind me. You see a watch, a clock, so every shareholder can actually check what the time lag is and also offer that you send me an email how you like the virtual AGM. You can comment on my contribution, and so I'm happy to take criticism.
Now to the most important topic: EUR 2.20 dividend. That's good. No complaints, no question, but the stock price is low. Since the last AGM, it was a rollercoaster ride between EUR 135 and EUR 170. We're currently at 150, so EUR 10 below the value at last year's AGM. So EUR 2.20 are too little compensation for that. You'd need a dividend of at least four times that to end up with a break even. So I'm asking you, Mr. Chair, for the stock price, please give me three reasons why we should stay invested in that stock or even buy additional stock at this price level. The board should not give a recommendation to buy, just give arguments that support buying that, something that goes beyond what's said in the business world.
When I talk about executive board and supervisory board, I understand that you have a different legal form, but it's easier for shareholders to use these terms, so I use them on purpose to make it easier. What are the three biggest challenges that might have a negative impact on the stock price? On request, do you still have printed management reports? Did you send them out voluntarily? You had 388 pages, which is very difficult to read as a PDF file. Many companies offer that voluntarily on request. I hope you did that, too. If not, you should do it at least in the future. The management report is easier readable this year, at least, but I found terms like "Mitarbeitende." Don't use that jargon. It doesn't do any purpose, serve any purpose.
And I will explain to you why the German word "Mitarbeitende" is suitable: because every employee has six weeks vacation, gets sick, female employees might even get pregnant during that time, during those times. These are still your employees, but the German participle does not apply because they do not provide any service to the company, and that shows how wrong the German term "Mitarbeitende" is. Let me ask you, how many A4 pages do the documents submitted to the AGM contain in total? And there's a missed ratio in the agenda. Compensation report of organs amounts to half of the agenda, and the dividend proposed only a few lines. I know that's legally required, but I think it's wrong ratio. Talking about the maximum compensation, EUR 11.5 billion for the chair, others EUR 9.5 million.
I believe that this is way too high and not appropriate. In direct comparison at Bayer, it's EUR 12 million, so you're slightly below Bayer, but I believe Bayer is in different league than Merck. No offense intended. So I think it's just a missed ratio. So the multiple of what is the average or the average employee compensation, what's the multiple of that for the board members? What is the share of ESG goals for long-short or long-term compensation, and what ESG goals were defined concretely? How far is your progress regarding in Germany and worldwide regarding climate neutrality? Another question that is due to EU bureaucracy, the question is hard: What is the share of taxonomy-capable and taxonomy-conforms turnover, and is that in a meaningful ratio to the meaningfulness?
What was the time and financial effort to determine that, and to what extent will these turnovers increase in the next years? And there's this question: What added value does it give you as a company? What added value does it give me as a shareholder? I suspect it's zero. Please tell me, what is the most expensive product you have in your portfolio? What are the three best-selling products with the best turnover, and how many different products do you have in assortment in Germany in the reporting year? What were the disposal costs for hazardous waste, and did you also dispose that in the country where you manufactured the product, or does it flow into some dark channels, end up in landfills in Africa, as we see on the news? And that brings me to the second bureaucratic monster from the EU, the new Supply Chain Act.
We had something similar and comparable in Germany, so please don't say that it has not come into force yet, et cetera, but it will definitely face you in the future. I would like to give a concrete individual example to... You produce something and that must be distributed. My question: What cost is incurred, has been incurred by forwarders in Germany in the year of the report? That brings me to the Supply Chain Act, EU or Germany. How can you ensure an adequate compensation of the drivers? It's an open secret that on German autobahns, poor Eastern European underpaid devils sit behind the steering wheel. For me, this is actually a huge scandal, and in accordance with the Supply Chain Act, you'd be co-responsible. How do you deal with that topic?
This was just an individual example I picked to make it more tangible. In the reporting year, the new year, what will be the three biggest investments that you're planning? Of course, it's not nice if something goes wrong during the approval process, but this is part of the business model, so I will not further dwell on this. I believe that this is a risk that, as a shareholder, you just have to bear. What personal expenditure ratio increase do you expect for 2024 in Germany based on inflation and payroll demands? No matter whether you're in Germany, Deutsche Bahn, Lufthansa, they ask for two-digit increases in compensation. How will you deal with that, and will you be able to roll that over to the prices? What measures have you taken during the reporting year of the report regarding IT security? What costs were incurred?
Was there any attacks in the report year? What was the overall damage incurred? I understand that you don't want to make that public, but a ballpark figure is something that you could definitely name. Let me now just talk about the virtual AGM. I initially asked you why you don't offer more that can be offered on a voluntary basis. The only thing where you responded quickly, that was my criticism, is the chat, that you only called up one speaker. You want to be able to know when your turn comes. You implemented that, and that's commendable. But like I said, I would expect many more elements. I'll give you some examples, and you could go beyond that. I appeal to the company... to think about that, and not just talk about environmental protection and costs.
A face-to-face encounter cannot be replaced by anything else, and I believe we all agree on that. And I believe a good compromise would be to give international shareholders, opportunity to participate. But looking at the list of attendees, I noticed at first that only 40 people were listed in the list of attendees. So shareholders, already voted with their feet. So I recommend, and I put it in a question: Wouldn't it be possible for you, imaginable for you, to do that, to take turns one year virtual, one year in person? That would serve both parties. I will not ask a question about a hybrid AGM, because for cost reasons, that's ruled out, and it has additional risks beyond that. But I would like to ask you, don't say that you will decide that only in fall or next year in spring.
I can live with it if you say you want to do a virtual AGM for 2 years and in-presence meeting in the third year, but I expect a clear statement from you. Please tell me, how many shareholders have been dialed in today in the shareholders portal, highest number? How many of them dialed in from abroad? That's not an argument that people can participate from around the world. The AGMs I've been to, the register of attendees, if I look at that, then the interest is limited to the German-speaking countries. In individual cases, international shareholders are also dialed in, but that number is very low. Please tell me, how many people are active in your back office? How many of them are external, which lawyers, and how much the entire AGM will foreseeably cost? And this, please break it down by the major components.
This is, by the way, a question that I asked two days ago at Vitesco AGM, and they said that it also includes costs for catering, and I'm wondering: What is the cost for catering for you? First of all, I don't know whether it's how there can be a natural dividend if... Of course, that's not a natural dividend for shareholders, but of course, that's catering for you on site, so I want to ask about that. And that brings me towards the end of my contribution. One more item I'd like to criticize, and I don't understand that at all. Why is the registration to your AGM so faulty and such a hassle? I could not log in in accordance with your conditions, and I find that it's a very difficult process. You get an entry ticket.
Typically, you enter your entry code, and you get a number, and then you're done. No, for you, you have to enter a name, last name, you have to enter your place of residence, which all incurs fault and errors, and it didn't work for me. For the same reason, it didn't work last year, so your service provider didn't change anything. On the entrance ticket, the first name is printed out completely. You ask us, print out, to enter anything as it's printed out, but the shareholder portal cuts the first name off after the fourteenth character. That's something you need to know. And all I knew that last year, the same error occurred. So that unnecessary impediment on shareholders should... You should cease that. Why can't you have a dial-in like all other companies? Simple. Why don't you do it like Bayer AG does?
That would be a lot simpler. Let me ask, what are the three biggest problems, according to the board, and what was the biggest success event in the reporting year? And a technical comment from my side: I demand extensive explanation of the results in accordance with the German Stock Corporation Act and information in accordance with Article 125, paragraph 4, and 129, paragraph 5. To save costs, it's enough if you send that to me by email. So that's it. That's the end of my contribution. I thank you. Especially, I thank all employees worldwide who generate that result for us, for the shareholders, and I thank you for your attention and the patience you had. Thank you very much, and I return the floor to the chair.
Thank you very much, Mr. Gaebler, for your contribution. Now we move on to the last contribution by Mr. Georgiadis. I hope I pronounced your name correctly. You've got the floor.
Thanks a lot for the right to make a contribution. I hope you can all hear me.
Yes, we can hear you.
Dear shareholders of this year's AGM, thank you to those who follow my contribution attentively. I decided to make a contribution because I want to become a candidate for this advisory board. To get a better image for me, I would like to introduce myself, and I keep in the time frame. My name is Savvas Georgiadis. I'm 44 years old. I have the German and Greek citizenship. I was born in Cologne and grew up there. The center of my life is in Nuremberg currently. There, I live with my wife and my son, 4-year-old son. After training in the electric technician in handwork, I studied electrical technology with electronics focus in Cologne.
For sixteen years, I've been supporting as the managing shareholder, the automotive industry in developing vehicle functions, such as, for example, driver assistance systems, steering assistance, battery sensors, and electronic park brakes. In addition, I work as an honorary judge for the financial court in Munich at the Chamber of Commerce, and I'm part of the committee's trade and the, and another thing. Soft and hard skills. I have soft and hard skills of an engineer. Digitalization and artificial intelligence are my daily business. In addition, I have experience in international projects. An appreciative cooperation between the company, the shareholders, and the members are very important for me. I want to be a candidate in order to support the supervisory board with my great experience to the benefit of the company.
I would be very happy if I would be elected as a member to the Supervisory Board. I declare my independence, and I assure you that for the implementation of this job, I have enough time available. This applies to my closeness between the location of the company and my residence. Now I call upon everybody who have to do with the current staff who aren't happy with the current staff. Please support me for the election. You have the opportunity to change something. According to Article 137 of the German Stock Corporation Act, I make a motion for, before the vote of the candidates, to decide upon my proposal. Thank you very much for your attention. I hope that we have a successful AGM. Thank you very much for Mr. Georgiadis, for your contribution.
Dear ladies and gentlemen, since currently there are no other contributions, we'll take a break now of 15 minutes to prepare the answers to your questions. After the break, Ms. Garijo and other colleagues of the Executive Board, as well as myself, will address your questions in detail. The break will end approximately at 12:30 P.M. Let's continue. Dear ladies and gentlemen, we are continuing the AGM. Thank you very much for your patience. Ms. Garijo and colleagues, I would like to ask you to answer the questions. The first question is for me, and I would like to say that in coordination with the Executive Board, I will answer a question relating to the Supervisory Board. The Executive Board declared that they will exceed. That they will agree to my. Mr.
Povel said, when we can think that Merck will have an in-person AGM or a hybrid one. We haven't taken a decision on that due to the format of future AGMs. As for the AGM 2023, the executive board took the good experience for the AGM of last year into account. The choice for the virtual format was motivated by sustainability considerations because of the lesser load on the environment. In addition, virtual AGM enables a low-cost and economical participation over large distances, and it is in line with the interests of the shareholders. We will review every year again, which format is best suited for future events. Mr.
Povel also asked how many shareholders participated in last year's virtual AGM, and how this compares to the participation in previous AGMs. The highest presence in terms of shareholders represented since 2018 was reached during last year's AGM. In 2023, 93 million shares and 72.9% of the share capital were presented. At the peak, 100 participants participated in English and around 450 in German. In 2019, 86 million shares and around one point more shareholders were present, but the 66.96% of the share capital in the last year before the pandemic was still less than 72.59% in last April.
In summary, over the years from 2018, we see a continuous increase of the capital represented in our AGMs, which we are very happy about.
... To return to a growth trajectory in 2024 after the transition year 2023, and whether 25 by 25 is still achievable. So the first part of your question was addressed during my introduction, and I will now focus on the second part of your question on 25 by 25. So we called the 25 by 25 ambition in 2021 during our Capital Markets Day, when we talk about delivering EUR 5 billion-plus organic additional sales by 2025. Since then, we had many moving parts and plenty of assumptions making or driving that ambition positively or negatively. The pandemic, mostly the challenges in life sciences, in life science and electronics, in 2023 has been extremely important on that trajectory. So I would ask you not to take me to the mathematics.
This is a stretch aspiration, and we have mobilized, mobilized our teams behind this ambition, and we will also fight for this ambition. Regarding this year, we feel positive about our 2024 guidance, which foresees Merck returning to growth in net sales and EBITDA pre.
Mr. Povel, you asked whether healthcare would be able to compensate for a possible setback in life science and electronics in 2024. As we said, we continue to expect a difficult environment for life science in 2024, and we think that we will return to growth, which is also reflected in our guidance. We do not assume a setback, but we expect that the normalization will only take place within the course of 2024. For life science, we expect a difficult environment, which will be characterized by a further reduction in our customers' inventories. However, we expect business to normalize over the course of the year and return to growth in the second half of the year.
The electronics business operates in a cyclical business, but our growth indicators are giving the first positive signals. We expect the semiconductor market to return to growth at the beginning of the second half of the year. For healthcare in 2024, we expect further growth, and we expect the opportunity for xevinapant to contribute to long-term success.
sector. In the near term, we expect potential major approvals with our pipeline products, xevinapant and Pimicotinib, in the field of oncology. Both products are in the final registrational studies, and xevinapant could become a blockbuster drug once approved. We continue to follow the vision of doubling our R&D productivity and plan to bring a new drug or important indication to the market on average every 1.5 years. To achieve this, we will complement our internal pipeline by external innovation through targeted in-licensing and collaborations. Especially in the oncology field of the so-called DNA repair mechanism space and with ADC products, antibody-drug conjugates, we believe to be very well positioned. Our current portfolio, especially in the area of innovative products such as Bavencio and Mavenclad, will continue to contribute to short-term growth. Dear Mr. Povel, you asked which other blockbuster drugs we have in our pipeline.
Let me share with you that in 2023, both our products, Mavenclad and Erbitux, have reached blockbuster status, meaning they achieved more than $1 billion sales on an annual basis. Our next potential blockbuster candidate could be xevinapant in locally advanced head and neck cancer. For this event-driven phase III study, we are coming closer to the threshold that we need to perform the interim analysis, and we expect to reach the required number of events in the second quarter of this year. However, it is too early to name further potential blockbuster candidates at this stage. Dear Mr. Povel, you asked about the status of our healthcare pipeline. Our pipeline remains very strong. Several clinical development programs are currently underway, with potential first-in-class or best-in-class assets, such as xevinapant and Enpatoran, and our next-generation ADCs.
These promising molecules have transformative potential, and we expect significant long-term growth. At the same time, we will continue to seek opportunities for external collaborations to specifically strengthen our development portfolio across clinical phases, as we recently successfully did through collaboration agreements with Hengrui Pharmaceuticals, Abbisko Therapeutics, and Inspirna. Dear Mr. Povel, you asked for an overview of currently ongoing phase three studies in the area of oncology, immunology, and our global health efforts. In oncology, xevinapant is currently being developed in different phase three studies for patients suffering from head and neck cancer, as mentioned before. In addition, Pimicotinib is currently being investigated in a phase three study in so-called tenosynovial giant cell tumor, or TGCT, and we expect a readout by the end of this year.
In immunology, we are planning to initiate a phase 3 trial later this year with oral Cladribine in the chronic autoimmune neuromuscular disease, generalized myasthenia gravis. In global health, we are undergoing registration in Europe with Arpraziquantel for the treatment of schistosomiasis. For more detailed information regarding our pipeline, please go to page 49 of our annual report 2023. Dear Mr. Povel, you asked whether Merck, as a mid-sized pharma company, is strong enough to build a sustainable pipeline to fuel healthcare growth and the role of external innovation in this context. We are very confident that our focused leadership approach is solid and provides a promising basis for long-term growth. At all stages of development, we have molecules with new and innovative modes of action that could redefine the standard of care in key therapeutic areas such as oncology and immunology.
Beyond our internal research, we complement our portfolio by targeted external innovation. We build on in-licensing or collaboration deals because this provides us the necessary flexibility to selectively complement our portfolio with best-fitting assets. During the last months, we gained momentum in the execution of our strategy and our so-called drug-hunting ability by bolstering external innovation. We have signed new collaborations and license agreements, for example, with Hengrui Pharmaceuticals, Abbisko, and Inspirna, as mentioned before. So all in all, we feel very solid and very well positioned to deliver more medicines to more patients faster and continue to fuel our healthcare growth.
[Foreign Language]
Povel asked why destocking for Process Solutions in 2023, it was existing, whether there will be any future destocking in the current year, and if there are any signs for restocking. To the pandemic, there were larger implications of the world, supply chains worldwide. At the same time, the demand of material and products increased for the development of the production of medicines and in particular, of vaccines against the coronavirus, COVID-19. There were also shortcuts, delivery shortcuts for many suppliers. We ourselves, during the pandemic, got to the limits of our capacities.
...Due to that, it seems to be understandable that the core focus is on the side of our, by our customers. It was on restocking. In the course of last year, however, there was an interaction of various factors which enhanced each other. The demand for products, especially for the production of vaccines against the new COVID virus, fell at the end of the pandemic. At the same time, the capacities for the suppliers for the biopharmaceutical production were built up, and delivery times started to come back to normal. At the same time, we saw an interest hike, and the topic working capital reduction became evermore in the focus of biopharmaceutical industry, and the macroeconomic uncertainties in China increased. This negatively affected the biopharmaceutical industry in China. All this together resulted in a destocking by our customers.
We expect that in the course of the first six months of the current year, destocking will come to an end, and that the order behavior of our customers will go back to normal. In this context, in the telephone conference on the overall financial report of figures for the fiscal year 2023 on the seventh of March this year, we mentioned the term a solid start into the current year. The normalization of the order behavior of the customers will reflect with a certain time lag in our net sales. Dear Mr. Povel, you asked whether there are any afterpains of the lessened COVID types. Well, one of the reasons for the destocking by our customers and their Process Solutions was also the strong demand decrease, especially for vaccines against COVID-19.
So our net sales, in context with the COVID pandemic, fell from EUR 800 million in 2022 to around EUR 250 million last year. For the current year, we're expecting only negligible net sales related to COVID. Therefore, we still keep saying keep seeing a headwind, which, however, is getting lower, and also afterpangs of the pandemic in the current year. We are confident that we will come back to growth in the course of this year in Life Science. Dear Mr. Povel, you asked about the future of Life Science Services and Science and Lab Solutions in current times of cost-cutting and restructurings, in view of the fact that Process Solutions is the growth driver. Let me, first of all, elaborate on Life Science Services business. With our portfolio, for example, the modalities ADC, in German...
Well, antibody-drug conjugates and mRNA, we are contributing in strongly growing markets, which will continue to make this business a growth driver in the future as well. Despite of cost awareness, we keep investing into our growth fields and we always look at any investments very. We scrutinize them, and therefore, we keep seeing a future for Life Science Services within Merck Life Science. This also applies to Science and Lab Solutions. This sector is a key component of Merck Life Science. Based on last year, it contributed around 50% of the net sales of Merck Life Science.
With our comprehensive and product-wide portfolio, we are taking leading position in the market, and this broad market coverage ensures that we keep being a firm component in attractive customer segment, which ensures stability and growth. Our targeted investment, the strategic market positioning, and the implementation and sales strength form the basis for further growth. Dear Mr. Povel, you asked where the price falls come, even though there's a large amount for chips in order to lead to artificial intelligence. I would like, first of all, to point out that the semiconductor market is a cyclical market, which currently is in a weak phase. Demand, especially for chips, significantly fell last year. Our customers in the market suffered of very strong price decreases.
This is very typical in the cyclical industry. In this environment, Merck developed well compared to our competitors. The decline in Semiconductor Solutions in the last fiscal year was substantially less than in the entire market. This was due, not due to falling prices as, more than, less than to the weaker demand for cyclical. In the long term, the perspective for growth is still high, and we hope for a short to mid-term recovery of the market. Megatrends like Internet of Things, big data, artificial intelligence keep contributing to this, and in the, on the end market, they result in a strong, growing, interesting demand in chips. Hi, you asked for the future of Display and Surface Solutions business at Merck.
Along with Semiconductor Solutions, our largest business with a strong growth for growth potential, the two units, Display and Surface Solutions, we look at them at cash flow demand. Display Solutions for many years has been characterized by a fallback of the business with liquid crystals, and therefore, we are investing into this business in the future technologies like OLED materials or AR/VR technologies for the application of virtual reality. We still assume that the display business, mid-term, in the mid-term, will return to growth... Revenues for Surface Solutions business fell organically slightly last year, while the business in the cosmetics after the COVID pandemic recovered. The revenues of industrial application of lacquer application fell due to the macroeconomic situation. During our group planning, we are reviewing our business portfolio and our big capital allocation on a regular basis.
If we come to a decision that business, under the leadership of other owners, will develop better and will increase the value for Merck, we would also consider disposal of this business unit. Mr. Povel, you asked about the impact of the Chips Act on electronics and our location policy, especially with a view of China and Taiwan. Both in the U.S. as in Europe, so-called Chips Acts were passed in order to reach technological sovereignty, competitiveness, and resilience. We are not directly affected by the U.S. Chips Act. However, we indirectly profit from the investments of our customers, the chip manufacturers in the U.S. Currently planned or already under construction chip constructions for production sites will result in an increase of demand.
And similarly, we profit from the investment programs in other regions, for example, the EU Chips Act in Europe. As to China and Taiwan, the US Chips Act does not directly affect our business. We keep investing in production capacities, and we observe the development of geopolitical conflicts and bilateral trade restrictions closely, and act in harmony with the last one. The economic impact, however, can... are still negligible. Thanks to our strategy of regional production and supply chain resilience, we are able to supply our customers in all important regions in a flexible manner.
... strategy with a focus on the US and China. You are interested to hear if it is up to date, assuming to produce where there is the highest demand or lowest production cost. Merck is and remains a very strong and extremely resilient company with a global footprint in science and technology. We own a diversified operation across various industries that is allowing us to serve highly attractive markets with long-term growth drivers, and is reducing our exposure to macroeconomic downturns. Furthermore, supply chain resilience is key to our global resilience strategy, and global trade, a cornerstone of our operations. In general, our strategy is to be close to our customers. We call this our in-region for the region approach. It has great benefits for our customers, while it's also increasing our resilience and optimizing our environmental footprint.
This also applies for China and U.S., which continue to be very important markets for us. Dear Mr. Povel, you ask if we have considered expanding and relocating production to the U.S. in light of incentives set by the Inflation Reduction Act. In the U.S., the Inflation Reduction Act mainly concerns us regarding the pharmaceutical implications and price setting put in place on the innovative healthcare industry. For our Life Science business, this seems largely neutral, and for the semiconductor business, investments in green technology and new industries are a move in the right direction. In principle, we aim for a prudent and balanced approach, avoiding a fragmented regulatory landscape. We continue multilateral cooperation and trade with current and new partners.
Please be aware that all relevant implications and measures are reflected in our strategic considerations and in our plans, including supply chain decisions. Mr. Povel, you ask about the advantages and disadvantages of Germany as an industrial location. Germany is a respected and reliable partner worldwide, both economically and politically. Germany needs global trade, and global trade needs Germany. Despite all the potential bureaucratic hurdles, the state structures and a strong social system ensure investment security and excellent working conditions. We see the will of the federal government to promote and strategically support key industries. For example, in the area of pharmaceuticals, biotechnology, and semiconductor productions, which, as you know, are areas in which Merck operates. This creates an environment that makes long-term investments attractive and secures Germany's innovative strength....
We at Merck have invested a great deal here in Germany in recent years, and we'll continue to do so. We have invested a total of EUR 2.5 billion between 2015 and 2025. Regarding the cost of energy, our operation is less energy intensive. That means, the pharmaceutical industry, in particular, pharmaceutical industry and life science. It is important to protect intellectual property and promote innovation in a very targeted manner. In our opinion, if the government now reduces bureaucracy and drives forward digitalization and the green transformation, Germany is in the way of being very well positioned for the future. Sehr geehrter Herr Povel.
Dear Mr. Povel, you also asked whether Merck could encounter scaling problems in production if, in accordance with the resilience strategy, production is divided geographically, and in particular, whether this also applies to healthcare. Like many companies, Merck has to weigh up the global field of tension in order to optimize the aspects you mentioned. Fortunately, Merck's product portfolio places it rather in the premium segment, so that production costs are not necessarily the most important success factor. For innovative products, reliability of supply and product quality are more important than economies of scale and production. This also applies to the healthcare sector, where patient safety and delivery capability rightly play a major role in ensuring patient care.
You ask about our China engagement and potential risks due to the increasing reservations of the Western world regarding China or the potential further escalation of the Taiwan conflict. First of all, we believe in multilateral cooperation and balanced strategies. This remains very important when dealing with China. At the same time, we will continue to increase our global supply chain resilience further, as I mentioned before, and operate with a diversified footprint. We recognize the significance of both US and China as major global markets, and we are closely monitoring the geopolitical environment, putting this very much at the center of our strategy. This includes potential risks and opportunities associated with the Taiwan conflict. Last, our decision-making processes are deeply anchored in strategic foresight. We have developed, contingency plans to address potential future scenarios.
As a result, we remain strong supporters of our in-region for region strategy and will follow this strategic path going forward. Dear Mr. Povel, you are asking about a sustainable digitalization strategy in the categories of digital products, digital work, digital processes, and a digital mindset. Overall, Merck classifies itself as a company that is actively driving digital transformation in multiple disciplines, including digital products, work, processes, and mindset. The company's digital initiatives aim to improve the customer experience, increase our operational efficiency, and importantly, support innovation and growth. Regarding digital products, Merck develops and offers already various digital solution for our customers in all three business sectors, such as Edison, a software that is aiming to increase R&D productivity for pharmaceuticals based on artificial intelligence, Athene, Syntropy, and more.
In terms of digital work, Merck promotes a digital work, a digital work culture that emphasizes collaboration, agility, and innovation. Regarding digital processes, Merck has implemented digital technologies such as automation, artificial intelligence, and of course, complex data analytics. We will continue to optimize our business processes, reduce cost, and improve operational efficiency. Regarding the digital mindset, we have fostered a culture of data, digital innovation, and experimentation. The company is encouraging the employees to explore new digital technologies and ideas and, importantly, to challenge the status quo. We are equally training our employees to become digital literates. Sehr geehrter Herr Povel, Sie fragten danach, ob dem Jahr 2019 neu eingef-
You were asking for the new strategy for risks and whether it's still applied or whether it has to be adapted. With our strategy-
... The goal has at least 40% of our risk for currency exchange, and it's only for 5% of the foreign currency to be applied. In the year 2023, we had a quote of 40%-45%, and we're able to reduce negative effects to below 4%, or at least keep them under it. We were able to reach our goal. Of course, we're going to check every year that we have achieved our goal. We have come to the conclusion that we don't need to adjust in a great manner. Hedging the Argentinian peso is not economical, and we have excluded it from our hedging strategy. This risk is managed by price increases in the country itself. Dear Mr. Povel, you have asked also about the bonds maturing in the next few years and how they should be financed.
It can be assumed that we will always have a certain level of external debt in the future. We will either refinance any maturities on the market by issuing new bonds or repay them using existing liquidity. This depends on the operational developments of the business and strategic considerations regarding external growth. If we issue new bonds, we will examine whether we should take on fixed or variable debt in the respective interest rate environment. You also asked what our target debt equity ratio is. We do not manage our business according to debt equity ratio and therefore do not have a target figure for this. To manage the net equity ratio, the EBITDA pre is a key indicator. Currently, our net debt to EBITDA pre is at a factor of 1.3, and therefore gives us high degree of financial flexibility.
Dear Mr. Povel, you inquired about our current M&A purchasing power after another year of successful deleveraging and our M&A priorities with regards to the business segments and the regions in which we operate. As you very rightly pointed out, Merck was able to further reduce our financial debt by more than EUR 800 million in 2023 to approximately EUR 7.5 billion, despite operating in a very challenging economic environment. Let me reassure you that M&A remains a top priority for the board, and it will continue to play a vital role vital importance in Merck's future growth strategy. Merck's successful track record in portfolio management is ultimately based on three key priorities that we always keep in mind.
The first one being right time, right target selection being the number two, and right price being number three. This is not in order of priority, but the three combined. With this in mind, we have the capacity to pursue more transformative moves as long as these acquisitions align with our strategic priorities. We are regularly scouting opportunities on a global basis and across all three sectors: Life Science, Healthcare, and Electronics, and we are willing to invest when suitable opportunities arise. However, keep in mind that we are not under pressure to rush after anything, given our confidence on our strong future organic outlook.
Dear Mr. Povel, you asked how we approach the challenge of explaining the investors that the sum of the three individual companies is higher than the value of the company as a whole. First of all, at the first glance, Merck's diversification increases complexity. For us as a company, on the other hand, a portfolio of three different businesses offers financial flexibility. This has proven its worth in recent years. The prerequisite for the success as a diversified company is a careful management of all three areas and the group. For our long-term investors, in particular, the resulting resilience of the company, and therefore also of the share price, definitely offers advantages. We are happy to explain the advantages of our corporate structure in the capital market. Dear Mr. Povel, you asked why the payout ratio of the dividend is not higher.
As you know, we follow a sustainable dividend policy, and we use this payout as the baseline for future dividends. Beyond that, our dividend policy is based on the development of the group. We intend to have 20%-25% of our result to have shared with our income. Our prognosis for the year 2024 is at 9.5% and is beyond the outlined area. With this, we fulfill the aspect of the proposed dividend being at least the amount of the year before. We have targets that we have set that are very steep. We need financial flexibility for this. We want to match our dividend policy. We do not want to adjust our dividend policy based on that.
Pleased that you like our sustainability report. You ask how Merck generates benefits or business from ESG. We believe that sustainable entrepreneurship and profitable growth go hand in hand. Our ambition is to embed sustainability across our entire value chain, so that it becomes a core competitive advantage in front of our customers. In 2023, we further enhanced our sustainability strategy. We have introduced new water and waste management targets, and we have strengthened our commitment to biodiversity and circularity. In parallel, we do a lot to help our customers and suppliers to advance their own sustainability targets. In 2023, we continued to differentiate our sustainability portfolio through our Design for Sustainability framework.
In our Life Science business sector, we offered more than 2,500 greener alternative products across our portfolio by the end of 2023, which represents a 34% increase in relation to 2022. With such products, we can position ourselves as a preferred development partner and solution provider for sustainability. As an example, from our Electronics business sector, we have continued expanding our portfolio of formulated cleaners and have committed to not using the highly toxic solvent NMP in new product development.
Mr. Povel, you were asking whether the adaptation of the compensation for the executive and supervisory boards for 2024 were appropriate and properly weighed after the year 2023, a year of transition. The last adaptation of the fixed compensation for the supervisory board took place for the last time in year 2013. In recent years, the workload of the members of the supervisory board had increased significantly. An attractive compensation forms an important foundation to win suitable candidates for the supervisory board and to be able to retain them. Even after the increase, the compensation is at the lower range of the comparative range of the DAX. The second question on the compensation, I will answer that later, Mr. Povel.
Pavel. Dear Mr. Pavel, you asked about the impact of the climate strategy on Merck's business model, the long-term strategy, and the performance of Merck, and how cost-benefit analysis of the climate strategy is presented. Our climate strategy will increasingly be an integral part of the business model. This will have an impact on our portfolio, operations, and the entire value chain. In 2024, we will prepare a detailed climate transition plan in accordance with the EU Corporate Sustainability Reporting Directive. Challenges for the industry will be tackled together with our stakeholders. Merck's ambitious climate strategy will contribute to the company's success by adapting to changing conditions and using those to ensure our competitiveness. Using the financial impact on various metrics in quantitative scenario analysis, we are assessing the climate-related risks and opportunities.
Preliminary results of this analysis show that the financial impact for Merck, for physical risk, is significantly lower than the ones of transition. These findings are now being used to define appropriate migration measures for the most important risks. In addition to risks, we also have examined the many opportunities that can be exploited as part of our climate strategy.
Let me add one thing, add one thing regarding your question. One detail might have been lost in the translation. You're asking about advantages, disadvantages of the location regarding energy. We would like to add the following: in our less energy-intensive key industries, like the pharmaceutical industry and life sciences, it's important to protect intellectual property and to support innovation in a targeted way. We move on to answering the questions of Mr. Kienle.
Mr. Kienle, you asked why the extractions have been falling as the revenue has been falling as much as the income. That is because of this revenue was only being able to co-compensate with cost reductions in comparison to COVID years in part. We've had these effects. Mr. Kienle?... You were also asking what the cost, what cost positions affected the cost increases? These were especially production costs, but also salary costs. Moreover, Mr. Kienle, you asked about segment-specific differences that affected the ability to pass on cost increases. In the segment of healthcare, we have stronger regulations by the government and also from the federal states. In the not-so-clearly regulated areas, we can always change, make changes quicker, independent on the market situation. Mr. Kienle, you also asked why cost increases were not passed on to customers or could not be passed on.
In general, the ability to pass to or to manage inflation-related price increases and pass them on depends on the different segments. However, we were able to do this across Merck, mostly. With production costs, we have seen effects in our production manufacturing. The compensation can, however, not be made for fixed costs. You also asked for the measures where Merck was able or wants to take to react to cost increases. We have created a lot of efficiency programs. For example, making our activities more represented in shared activity services. Mr. Kienle, thank you for your question for AI in cost management and the successes that Merck has seen in this area. Artificial intelligence helps us to see patterns and trends, and helps us also to make our decisions better.
With quick data analysis and quick learning, artificial intelligence can see inefficiencies quickly and optimize the use of resources. In our expectations and what our experience, this can lead to clearer budgets and projections. Highly automated and high-quality data is necessary for the use of artificial intelligence. It is a strategic priority to make sure that we have these foundational elements. At Merck, we continuously invest in our cost management structures. We are always analyzing, so we can make our operational situation better. For example, process mining is a buzzword that I would like to know, to tell you here, okay? Artificial intelligence is being used to create prognoses for the future and for better cost situations. We want the potential of digital transformation to be realized. Mr.
Kienle, you also asked about the specific situations in 2023 and which measures we're taking so we can closely match our guidelines. The special situation in 2023 was especially made because the Life Science business has had the strong reduction. That was because of destocking with our customers, especially in the Process Solutions business. Our Electronics business also had to bear the consequences of a long-term cyclical decline. We're still working on the internal guideline process and making them leaner.
Mr. Kienle, you were asking about the decline in the Life Science segment caused by the pandemic. We want to stop that and return the segment back to a path of growth. We're expecting, in the course of the first half of 2024, and then after destocking of our customers for the areas Process Solutions, and we expect that the ordering behavior of customers will go back to normal. In this context, we had a phone conference on the whole year, it was for 2023. We talked about a solid start into 2024. The normalization of the ordering behavior of customers will be reflected in the turnover with a certain time delay. For the areas, Science and Lab Solutions and Life Science Services, we can say that they were less affected by the destocking our customers than Process Solutions.
Nonetheless, in our service business and in science and lab solutions, we feel a going down of the COVID-related demand, and there are the macroeconomic uncertainties, especially in China. Overall, for the Life Science segment, we expect a return to growth in the course of 2024. We believe there will be stronger dynamism in the second half of the year. We focus on attractive growth segments. We benefit from a special combination of different business units under one roof, and we benefit from our innovative power. For the mid- to long-term, we expect an attractive increase in turnover. Mr. Kienle, you were asking which parameters when determining the capital cost changed in the Life Science segment, in which way and for what reason? Furthermore, you were asking if the reason could be...
possibly be in the increase of the base rate and thus an increase of the risk-free base rate of the European Central Bank. We assume that you're referring with the question to the business report, and the cost of capital for the purpose of the annual tests, which are done in accordance with the IFRS stipulations on the specific date at the assessment point. For Life Science, the weighted capital cost has increased after taxes from 7.5% in 2022 to 8.2% in 2023. This increase goes back to the interaction of several factors. The biggest driver for the increase was actually the increase of the risk-free interest rate. Mr. Keeler, you were asking if the Life Science segment in the previous business year earned the capital costs.
In the previous business year, the return on capital of the group was greater than the capital costs. Please understand that we do not publish information about the return on capital of individual sectors. We understand ourselves as an integrated group. Portfolio and financing decisions are done at the group level with a long-term focus. Mr. Keeler, you were asking how the capital cost in the segment Life Science changed, should in June 2024, base rate should be decreased, for instance, by 0.25 percentage points. A decrease of the risk-free interest rate by 0.25 percentage points would decrease the capital cost of the annual depreciation tests for Life Science by eight-- could go down to 8%, based on the assumption that all other parameters of the capital costs remain unchanged versus the previous year. Mr.
Keeler, you were asking which measures we use to counter the weakness in the semiconductor market. First of all, in this context, I'd like to point out that the semiconductor market is a cyclical market. It regularly goes through phases of strong growth and phases of decreasing demand. In phases of market weakness, the underutilization of our equipment has a negative effect on our margin. During those times, we focus on reducing costs and increasing our efficiency, for instance, by revising our production processes. This allows us to keep up our investments in R&D and CapEx, mostly, and ensure that we are able to participate in future market growth. In the long term, the growth perspective is unchanged, positive, and we believe that market recovery will come in the short to mid-term. Mr. Keeler, you were asking whether we're planning to reduce capacity in the Life Science segment.
A few years ago, we agreed on an investment program for the Life Science segment with a scope of several years. Its purpose is to extend our capacities and technical capabilities. In addition to that, we're expecting a return to growth for the Life Science segment in the course of 2024. In the mid and long term, we believe that we will be able to achieve an attractive growth in turnover. This is driven by our innovative power, our focus on attractive growth segments, and through a unique combination of three different business units. It is our ambition in the mid-term to get an annualized growth, turnover growth of 7%-10%. We're active in markets for which we expect in the mid-term an average annual growth of 5%-7%.
Thus, we do not have any plans to reduce the capacity for the Life Science segment beyond smaller adaptations to changing market conditions. For the past three years, we've had a continuous increase of the investments for the Life Science segment. At the same, nonetheless, we expect a return or expected value to go down for 2024 compared to the previous year. Mr. Keeler, you were asking how long the weakness of the electronics unit would probably last. Semiconductor Solutions is, in electronics, the business with the largest share of turnover and a strong growth potential. The semiconductor market is a traditionally cyclical market, concurrently in a phase of market weakness. Like many market participants, we believe that the semiconductor market will recover in the second half of this year. Mr.
Keeler, you were asking how the turnover share of electronics in the total turnover of Merck develops against the backdrop of price and competitive pressure. The portfolio of electronics consists of businesses that are in different phases of their life cycle. Display and Surface Solutions are managed under the aspects of cash flow optimization. Semiconductor Solutions is, in electronics, the business with the strongest share of turnover and the greatest growth potential. We believe, like many other market participants, that the semiconductor market will recover in the second half of this year. The diversification of Merck Group across three different business units was always advantageous in the past. A targeted weight of individual businesses, it does not exist. Due to the size of Life Science and Healthcare, we do not expect that the weighting will change severely organically in the future.
It's about our pipeline and the short-term growth and earnings potential. As I mentioned earlier, in the near term, we expect potential major approvals with our pipeline products, xevinapant, Pimicotinib, in the field of oncology. Both products are the final registrational studies, and xevinapant could become a blockbuster once approved. We continue to be committed to our vision to doubling the R&D productivity, and plan to bring a new drug or important indication to the market on average every 1.5 years. To achieve this, we will both work with organic, our internal R&D and external innovation. Especially in the field of oncology, in the so-called DNA repair mechanism space, and with ADC products, we believe to be very well-positioned.
In addition, our current portfolio products, especially in the area of innovative products such as Bavencio and Mavenclad, will continue to contribute to short-term sales growth. Mr. Kienle, you asked how far advanced we are in the development of xevinapant and the associated costs. So we in-licensed xevinapant in 2021 from a Swiss biotech company, Debiozharm. We are now in two phase three trials. xevinapant might potentially offer a new treatment paradigm in locally advanced squamous cell carcinoma of the head and neck for patients with very limited treatment options. We expect to learn more about its progress from our interim analysis later this year. Until the end of last year, we invested roughly EUR 300 million in the clinical development of that asset. Dear Mr. Kienle, you asked about our competitive position in the field of oncology.
In the therapeutic area of oncology, there are many different therapeutic approaches that are increasingly tailored to individual types of cancer or tumor types. Therefore, there is basically a lot of room for different market participants. You named BioNTech as a competitor that focuses on the development of mRNA-based therapeutics. Merck already has important oncology products on the market with Erbitux, Bavencio, and Tepmetko. In addition, as I mentioned before, we have an extensive pipeline in the field of oncology that we try to complement with additional external innovation. Dear Mr. Kienle, you asked about the breadth of our pipeline in order to get our assets over the finish line. In addition, you ask about our prognosis on the future development and the ambition of one new launch every 1.5 years. We truly believe that our pipeline is very strong.
Several clinical development programs are currently underway. I mentioned before, xevinapant and Enpatoran and next generation ADCs. We do believe that these are really promising molecules that have transformative potential. Beyond these new products, we also look for new indications. In immunology, we are planning to initiate a phase three trial later this year with oral Cladribine in the chronic autoimmune generalized myasthenia gravis. Based on the data of previous trials with Cladribine, this could be the first oral disease-modifying treatment for people with this disease. We continue to follow the vision of doubling our R&D productivity and plan to bring a new drug or important indication to the market on average every 1.5 years. We will build on our established expertise in our focused therapeutic areas and utilize our technological capabilities.
As I mentioned before, this all complemented by external partnerships such as Hengrui, Abbisko, and Inspirna, that we signed off, recently, and in that sense, we are very confident with our target. Dear Mr. Kienle, furthermore, you asked how much we invested in the development of Evobrutinib. So the clinical development of Evobrutinib started more than 10 years ago, in 2014. Overall, we invested approximately EUR 1 billion. The costs were primarily to run the clinical studies, but also for manufacturing of a drug, as well as for our scientists and doctors managing all this work, including, by the way, the wind-down cost after the stopping of the program.
Dear Mr. Kienle, you asked whether a change of the structure from the KGaA structure to a clear AG structure is planned. There are currently no plans to change the legal form of the Merck KGaA.
Mr. Kienle, you are asking for the comparison group-groups which we use for the new remuneration of the supervisory board members, and for what reasons. On top, you want to know why the compensation amount is appropriate to the comparative group from our point of view. Well, during the review, the remuneration of the supervisory board of Merck KGaA was compared to the amount of a comparative group. Since Merck KGaA is DAX-listed, the companies in this index were used to compare. The amount of compensation of the comparison group represents the practice of the largest German stock-listed companies. From our point of view, it can be considered appropriate. Merck is a, is a partnership on, on shares, and therefore, the supervisory board has a little reduced competencies compared to a joint stock company.
Therefore, the compensation is at the lower end compared with the other DAX companies, considerations. Mr. Kienle, as for the future report of the supervisory board as to the direction of the company, we'll continue to set up the report of the supervisory board according to the legal requirements. Therefore, we try to fulfill the interest of information of our shareholders. Mr. Kienle, you asked why a special meeting compensation is considered necessary. We want to have highly qualified members of the supervisory, and remuneration, considering the governance structure of Merck KGaA, is raised to a competitive regular level of the market. Granting a meeting compensation is usual for the remuneration of supervisory board members in the German market. Mr. Kienle, you also asked-...
Why the increased factor for the basic remuneration of the chair of the Supervisory Board and its representative is a deputy are correct. Due to the increased responsibility and tasks, and the increased effort for higher differentiation, a higher differentiation between the chair of the Supervisory Board and the regular members was taken. A correct compensation of the chair of the Supervisory Board is supposed to ensure the best possible filling of the competence profile decided upon by the Supervisory Board. So much, we are done with the questions on Mr. Kienle. I have one addition on the question of Mr. Povel on the remuneration of the Executive Board. The question for the Executive Board compensation, it was decided upon in 2024. It was not adjusted, excuse me, in this year.
Only the payout of the long-term incentive component was shifted one year back. There were no changes in the compensation structure as such. Let's move on now to, the questions of Ms. Zimmermann.
Dear Ms. Zimmermann, you asked the questions: what Merck could do to enhance the transparency on future demand trends and whether a technical solution could be of help? We continuously review our forecasting processes and the tools that we apply. Recent improvements are, for example, a stronger use of scenario-based planning. In addition, we applied technological support enhancements to capture even more recent market information and trends. We are totally convinced that the future will bring further technology opportunities, given the high dynamic in this respect. Dear Ms. Zimmermann, you referred to recent setbacks in our Healthcare business and the potential implications on an imbalance with our Life Science business, for which you assume higher capital gains at lower risk. In addition, you would like to understand if the evolocumab failure would trigger a reinforced focus on Life Science going forward.
Let me tell you that our global specialty innovator approach in Healthcare, that Peter has detailed before, remains very solid and continues to set a promising foundation for our long-term growth. Despite the disappointment of the Evo failure, our pipeline holds significant potential, as stated by Mr. Guenter. This comprises internal and external innovation, including collaborations and in-licensing agreements. In general, our capital allocation strategy focuses on prioritizing investment in those businesses with the greatest potential for growth and value creation, and this applies to both Healthcare and Life Science, which remained important growth and cash contributors today and in the future.
Dear Ms. Zimmermann, you asked how it is possible that in the business year we publish our reports later than is regular for the market. With the publication of the business, we are still within the legal requirements. Please consider that as a leading technology and science business, we want to have the best transparency for our shareholders. With the quality for our reports, we don't want to compromise.
Dear Ms. Zimmermann, you asked whether the successful recruiting practice and succession planning for the top management of the new chair of the Board of Partners will be continued. Mr. Dr. von Bohlen, who is the new chair of the Board of Partners of the Merck. We are convinced that we continue the successful recruiting practice of the past.
Ms. Zimmermann, you asked about the publication of our sustainability targets. In order to measure our progress with regard to our sustainability targets, we have defined 13 key figures, with which we report on annually, and that usually are targeted to 2030. The overarching targets are mapped with corresponding sustainability indicators in the long-term incentive plan for the executive board. The target values for our sustainability indicators are published ex ante in the remuneration report at the time they are granted. You can find this information on page 194 of the German annual report.
Ms. Zimmermann, you are asking for the consideration of the performance and access to health and the variable remuneration. Our new sustainability strategy is integrating the variable remuneration of the management by the sustainability factor. As part of the sustainability factor, the number of people is also included, which are treated with our healthcare products. This also includes patients in countries with low, mid, or medium income. Last year, around 93 million patients received therapy with our healthcare products. Out of them, more than 57 million people, patients in countries with low, medium income. On top of it, we donated over 210 million praziquantel pills. That's enough in order to treat around 84 million children, schoolchildren suffering from bilharziosis last year.
You ask to what extent Merck currently uses and produces PFAS. Merck is not a manufacturer of PFAS in the sense of fluorinating longer carbon chains or producing fluoropolymers. We produce highly specialized PFAS from raw materials that fall under the PFAS definition. Across all three sectors, Merck produces and uses PFAS-containing products, which are to date essential for the manufacturing of pharmaceuticals and for the use in the biotechnology and electronics, industries. At the same time, responsible use in production is absolutely key and is of highest priority to us to prevent the release of PFAS into the environment.
Dear Ms. Zimmermann, you're asking how Ms. Lambert can manage the often complex topics at three enterprises at the same time. Ms. Lambert has long-standing experience as a member of supervisory and administrative boards and as head of the audit committee at companies belonging to DAX 40, being stock-listed in other international companies. She is a proven expert on the areas audit, financing, accounting, governance, risk management, including IT, security, and ESG. Her experience is based, among other things, on a 20-year-long career at an auditing company. On top of it, Ms. Lambert has been a long-standing member of the board of management of a large Swiss bank. Thanks to this exceptionally comprehensive professional experience, Ms. Lambert is well-suited to dedicate herself to her tasks as a professional member of the supervisory board and audit committee.
Still on PFAS, you ask if the PFAS substances can be replaced in our processes and our products. The industries in which we operate will face difficulties replacing all PFAS properties with greener alternatives, as PFAS provide unique properties not accessible with other chemicals. Currently, we therefore do not know when or even whether alternatives with the same technical properties for all relevant applications can be found. In general, introducing new materials and substitutions in manufacturing is not an easy task, as you may know, especially for processes already in high volume production. In many areas, it will therefore take more time to come up with definitive solutions. Potential PFAS substitutions will require lengthy re-qualifications processes, as new PFAS-free products may not always be simple drop-in replacements and in some cases may require a redesign of the whole systems and process.
We, nevertheless, are actively working on PFAS-free alternatives and are currently investing in additional resources in our research and development operations to use our innovation power to tackle future demand for PFAS-free products and at the same time, mitigate business risk to the extent that this is possible.
Dear Mrs. Zimmermann, you asked for background information on the Evobrutinib trial, including the design and execution of the study. In addition, you asked about the risk of pharmaceutical development in general and how we plan to compensate the loss of Evobrutinib in our pipeline. First and foremost, let me tell you that we share your disappointment by the result of the Evobrutinib trial. But I would also like to highlight that we are actually the first company to publish clinical data with this new class of drug, the so-called BTK inhibitors. As you know, our competitors also have studies underway with molecules from this class of active ingredients and a comparable study design, if not identical study design.
The study results confirmed the assumptions made at the beginning of the study regarding the activity of Ibrutinib, but surprisingly, the comparator drug performed far better than historically observed and assumed in the study. As a result, Ibrutinib could not show superiority over the comparator drug available on the market, therefore, the study objective was missed. In principle, the probability that the drug will not achieve the desired performance in an approval study or a registrational study is around 33%. That is the usual risk of pharmaceutical development, late stage. You also asked how we compensate for the loss of Ibrutinib in our pipeline. From a strategic perspective, we are confident that our focused leadership approach is solid and provides a promising basis for long-term growth. Our pipeline continues to have very significant potential.
At all stages of development, we have molecules with new mechanism of actions that could redefine the standard of care in key therapeutic areas such as oncology and immunology. xevinapant, I mentioned already in the field of oncology, which is now in phase 3. Our TLR7/8 inhibitor Enpatoran reached an important milestone in 2023 by completing the futility analysis in our phase 2 program for systemic and cutaneous lupus. At the same time, we have signed a couple of new collaborations, as I mentioned before, with companies such as Hengrui and Abbisko. We reacquired the rights to Bavencio from Pfizer last year, and here, too, we see further growth potential in the already approved indications. In addition, we are selectively conducting combination studies with Bavencio. In our development area, we are now focusing on implementing our strategy and especially on the timely execution of the ongoing studies.
All in all, we feel solidly and well-positioned in our pharmaceutical business.
Dear Ms. Zimmermann, I take your third question on PFAS, in which you ask: What are the options we see for getting the risk from PFAS under control? Across our businesses, we employ a holistic approach that presents a range of options for consideration with industry partners to responsibly manage PFAS. We actively advance substitution options as the primary goal. Where this is not possible or feasible, other options may be existing, exiting certain users, evaluating circular approaches whereby certain PFAS might be reused to avoid an end-of-life phase disposal or investigating potential abatement technologies. We are already offering first substitutions for the Electronics and the Life Science industry, and early collaborations with our customers are up and running.
Furthermore, dear Miss Zimmermann, you have asked how high we estimate the risk that our production will be affected by European Union PFAS bans. Well, first of all, let me tell you that Merck supports the ambition for a smart and targeted PFAS regulation, and we are monitoring upcoming regulatory proposals very, very closely. We found that there are substantial gaps within the proposals, including technical faults and strategic faults. The final scope of the planned regulation has not even yet been finalized. For the industry overall, the biggest risk from the operational perspective is originating from the ban of fluoropolymers in chemical production facilities and the non-derogation of precursors of derogated PFAS, which qualify as PFAS themselves. The concrete impact on Merck businesses cannot be calculated until the scope is made clearer and derogations, as well as, importantly, timelines, have been determined.
Dear Mrs. Zimmermann, you asked how broad the scope of Merck Access to Health currently is, and how many low-income countries are part of our strategy. Our Access to Health strategy reflects our commitment to drive health equity. It covers all 140 low and middle-income countries, as classified by the World Bank, including all 26 low-income countries. We look at how Merck can help address the health system barriers to the availability, accessibility, and affordability of our products through innovations and collaborations. Dear Mrs. Zimmermann, you asked how many products we have designed specifically for low and middle-income countries, and how this portfolio will be developed further. Our Access to Health strategy will enable access to over 170 million patients per year in low and middle-income countries by 2030.
This covers existing and upcoming products, focusing on therapeutic areas such as head and neck, colorectal, and bladder cancers, as well as thyroid disorders. In 2023, we received a positive scientific opinion from the European Medicines Agency on Arpraziquantel, which we developed for the treatment of schistosomiasis in preschool-aged children. Moreover, we also have a malaria program in phase two in our R&D pipeline.
[Foreign Language] . So far, answering Miss Zimmermann's questions. We will now move to Miss Kostinik. Helene von Roeder, please.
Dear Ms. Kostinik, thank you very much for your question about my full name. My full name is Helene Dorothea Editha Freifrau von Roeder von Diersburg, and it is listed accordingly in my identity card and in the extract from the commercial register of Merck KGaA. You also asked whether there was a legal opinion on the use of my name. In ordinary legal transactions, it is not necessary for contracts to be signed with a person's full name for them to be valid. The decisive factor is that the signature can be attributed to a person. We do not see any legal risks in this regard that would require a legal opinion to be obtained.
Ms. Kostinik, you were asking if Ms. von Roeder participated in the training of the Supervisory Board on the topic of sustainability on May 10, 2023, as a guest. At that point in time mentioned by you, after training, Ms. von Roeder had stepped down from her job as member of the Supervisory Board, did not participate in the training. Every member of the Executive Board participates at least once per year in the Merck Sustainability Board, the controlling body for sustainability at Merck. Members of the Merck Sustainability Boards, most of them report directly to the Executive Board. That ensures that all members of the Executive Board are tightly integrated into these topics.
Dear Ms. Kostinik, you asked how many of our employees use home office arrangements, working from home arrangements, and how much our company saved in the reporting year as a result? Even before the COVID-19 pandemic, Merck was aware of the importance of flexible working models, and this for more than 10 years. If their work allows it, and it does not violate applicable regulations, Merck employees can generally choose how they want to work. Taking Germany as an example, in 2023, 58% of employees made use of the flexible working arrangements. We will continue to maintain our presence at our local sites because personal interactions promote collaboration and strengthen our culture. Accordingly, the focus is not on making savings.
You raised the question of advantages for our company because of the fight against COVID-19. Let me tell you that the pandemic forced us to work more virtually, which consequently enabled us to also work more flexibly. In addition, more virtual meetings means less travel, which saves time and cost and is even more healthy. And from a business and scientific perspective, COVID urged us to focus more on mRNA than we were doing before. This breakthrough technology holds great promise beyond COVID to provide potentially curative therapies for other infectious diseases or other diseases, such as cancer, and many trials are ongoing. This is where we aim to participate. In September 2023, we announced a EUR 28 million investment into the new GMP mRNA drug substance manufacture sites, both at Darmstadt and Hamburg, adding a total of 75 new jobs.
Therefore, we are a key provider to offer fully integrated mRNA services for all critical stages, of mRNA development, manufacturing, and commercialization through our Life Science sector. This is an advantage that we believe is here to stay.
Dear Ms. Kostinik, you asked about the development of Merck KGaA sales revenue from the perspective of the separate financial statements. Merck KGaA's total sales decreased in the 2023 financial year due to the transfer of the operating activities of Life Science and Electronics to separate companies as of January 1, 2023. This has a particular impact on the company's foreign sales and largely explains the stability of sales in Germany. As a result of the transfer of operating activities, the relevance of sales for Merck KGaA has decreased and no longer represents a key financial performance indicator. A forecast for the coming financial year is therefore no longer provided. Dear Ms. Kostinik, you asked whether the proposal for the dividend means a change of the dividend policy. As you know, we pursue a sustainable dividend policy.
Assuming stable development of the economic environment, the current dividend forms the lower limit for future dividend proposals. In addition, the dividend policy is largely based on the group's earnings performance. Among other things, we aim to distribute the dividend in the range of 20%-25% of earnings per share before special items. Our proposed dividend of €2.20 per share for the 2023 financial year is only just above the aforementioned rate at 25.9% of earnings per share pre-exceptionals. This year's dividend proposal therefore expresses our confidence that we will continue to be able to pay a dividend in the range of 20%-25% of earnings per share, pre-exceptions, in the years ahead.
So far, answering Ms. Kostinik's questions. We will now move on to Mr. Gaebler's questions. Mr. Gaebler, you were asking why the presentation of the candidate for the supervisory board, Katja Garcia Vila, was recorded, why she did not introduce herself live in today's AGM? Ms. Garcia Vila is today active as the CFO of Continental AG at the AGM of Continental AG, which takes place at the same time. That's why her introduction was recorded in Darmstadt on site on Wednesday.
Dear Mr. Gaebler, you asked why you should continue to hold Merck's shares or, if necessary, buy more shares. From the point of view of the executive board, we see the following reasons in favor of the share. In 2023, we demonstrated resilience, and we expect to return to organic growth in 2024. We also believe we are optimally positioned to benefit not only from the long-term growth megatrends, we are also focusing on the most attractive segments within these megatrends. Our cash flow profile is of a high quality and enables us to react flexibly to company acquisitions, and thus further increase the value of the company.
Mr. Gaebler, you were asking how you could contact other shareholders and why there's no thumb up or thumb down function. Our AGM corresponds regarding the format with the pertinent legal regulations that do not foresee shareholders chats or possibilities to issue comments. It is certainly at your discretion to contact other shareholders.
Dear Mr. Gaebler, Gaebler, you asked about the three biggest risks to our share price. Firstly, I would like to mention the product development risk typical of the research-based pharmaceutical industry. In addition, a negative trend in demand in the industries that are important for our Electronics business could have negative impact on the Semiconductor Solutions divisions. In both the Life Science and Electronics segments, increasing geopolitical tensions with a tendency towards de-globalization could have a negative impact on our overall global business. However, this could also present opportunities that could be realized, for example, through a more regionally decentralized allocation of our product sites. Dear Mr. Gaebler, you also asked whether we we send out printed annual statements. For sustainability reasons, we do not send out printed annual statements anymore.
Mr. Gaebler, you were asking about the total number of A4 pages, of the documents presented to the AGM. All documents that have to be handed in are accessible to the notary and have been published on the website of the company. We did not count the total number of pages. Mr. Gaebler, you were asking about the share of bonuses of ESG targets for the short and mid-term compensation, success compensation as a share of the total income and which ESG targets have been defined. The compensation system of the executive board foresees relevant ESG, KPIs, both for profit sharing and the long-term incentive plan. ESG is considered in all variable parts of the compensation. ESG criteria for both variable compensation elements can have an influence of ±20% on the account to be paid out.
That means that the share of the ESG targets and the total compensation can be around 15%. Besides anchoring the sustainability targets in the catalog of criteria for profit sharing in business year 2023, should LTI tranche following ESG targets have been determined. In line with our sustainability strategy, we want to create added value for society in the long term. We want to support human progress for more than 1 billion people, become climate neutral until 2040, and reduce our resource consumption. Also, until 2030, we want to incorporate full sustainability in our value-added chains.
For those three overarching targets, the following indicators were linked to the compensation of the board: the number of people who are treated with our healthcare products and pharmaceutical products made possible by Life Science, the number of relevant suppliers that are covered by a valid sustainability assessment, and thirdly, our greenhouse gas emissions, Scope 1 and 2. Target values for these three indicators are published in the compensation report. You will find the information on page 194 of the German Management Report.
Dear Mr. Gaebler, you asked how much progress we have made in Germany and worldwide towards achieving climate neutrality. On the path to climate neutrality, we initially established structures worldwide to capture all emissions along the entire value chain and identified the significant sources, as well as the potential levers to decrease emissions. We have achieved a 32% reduction in 2023 compared to our base year, 2020, and this is measured against the direct and indirect greenhouse gas emissions recorded under Scope 1 and Scope 2. We can also demonstrate a 10% reduction in emissions beyond our direct control, the so-called Scope 3 emissions, on a worldwide basis. We have achieved this, for example, through our very close collaboration with suppliers and with customers.
In Germany, we are focusing on making new buildings climate neutral, using the most innovative and most recent technology. An example is our new learning center, which is built according to the latest sustainability building standards, serving as an example for other global sites. Overall, we are on track to fulfilling our midterm climate targets and are well underway towards climate neutrality.
Sehr geehrter Herr Gäbler, Sie fragten nach dem Dear Mr. Gäbler, you asked about a product in the portfolio of our company which has the highest price and which ones are the products with the largest sales. The three products with the largest sales in 2023 were Erbitux, Mavenclad, and Glucophage. We would like to comment that the prices of our products across all our business sectors are not immediately comparable. Because in the healthcare, a product can be assumed, the product price can be assumed for one package, but also the yearly cost for therapy. And we offer not only products, but also services, which don't have a price per item. In our Life Science business, we have filtration plans, which cost over EUR 1 million per item.
But we also have a so-called custom-made GMP drug, where we offer tailor-made substances which cost over EUR 1 million per gram. Dear Mr. Gaebler, you also asked how many different products we have in our portfolio alone in Germany. We can, of course, differently define and interpret the term product, depending from how many varieties you count as a product. So we would use the term product, how it is used in the business sectors and markets, to give you a feel of the breadth of our product portfolio. In the business sector Life Science, we offer about 90,000 different products in Germany. In Healthcare in Germany, we have about 30 different medical items. And in Electronics in Germany, we have about 950 different products in our portfolio.
Across all businesses, in total, it's about 991,000 different products we offer in Germany. Dear Mr. Gaebler, you also asked how we implement the EU Supply Chain Act. When it comes to the requirements of the German Supply Chain Act, we developed further our approach for human rights. We strengthen existing processes for risk identification and claim management. We make comprehensive risk analysis in order to develop matching strategies and measures, and we make the processes so that we can also integrate them to a European level. Mr. Gaebler, you also asked which costs in reporting year for speditions in Germany raised in order to bring the product to our customers. To answer your questions, we looked at what we paid to inland transport service providers.
We paid about EUR 60 million. Mr. Gaebler, you also asked how we can ensure an adequate compensation for the drivers. You also asked how we make sure that the lorry drivers on German highways are paid according to German standards. Our code of conduct for suppliers describes in detail what we expect from our suppliers and partners. It regulates our demands when it comes to human rights, health and security, integrity of the company, environmental protection, and improvement and management of suppliers. We consider the ratings of independent rating agencies, which also consider work conditions and human rights. And then we also monitor the press and news. Our suppliers and transport are assessed in the framework of what I just told you. And then there are also contracts, of course.
We make sure with that, that our transports are conducted according to the European and national regulations, for example, the EU Mobility Package and the working conditions which are regulated there. So we make sure that everybody adheres to that.
Disposal cost for hazardous waste incurred in the reporting year. You also wanted to know if the disposal was carried out in the country where the product was manufactured. In our waste disposal, we strictly adhere to the applicable laws and regulation of the respective country in which the waste is generated. We only commission authorized waste disposal companies. In addition, we conduct our own inspections and pay particular attention to waste with hazardous properties. Waste disposal costs are part of the production cost and are not separately disclosed.
[Foreign Language] —Dear Mr. Gaebler, you asked about the three largest investments in the current reporting year. Our three most important investments will be the expansion of production capacities for membranes and filtration products at Life Science, the Life Science site in Cork, Ireland. The expansion of the production site for the semiconductor business of electronics in Kaohsiung, Taiwan, and the construction of a new translational science centers, research center for healthcare at the Darmstadt site. Dear Mr. Gaebler, you also asked about measures and costs when it comes to IT security for the reporting year 2023. We have a ISO 27001-based information protection management system. Our governance framework includes organizational, process-oriented, and technical measures to protect information security. We rely on harmonized electronic and physical security controls, for example, also for access control or security monitoring.
We also use an ISO 9001 certified quality management system, which also applies to the provision of IT. To reduce the risk of failure, we also operate multiple redundant data centers, and on group level, we have insurance solutions for e-crime events. At Merck, we consider cybersecurity a top priority and have made significant investments to implement robust safeguards against cyberattacks. Our approach to cybersecurity involves a strategy that includes investment in technology, staff training, risk assessment, and ongoing monitoring. You can be assured that we have allocated significant resources to secure our digital infrastructure. It is important to us to protect our valuable data and assets from potential threats. Please understand that we do not disclose the costs of these measures. Dear Mr. Gaebler, you asked whether we have already been damaged by cyberattacks.
As with any other company, cybercriminals try to breach our defenses every day, be it through malware, via email, social engineering, or other technical means. Proactive countermeasures meant that no significant incidents occurred. Please also, please also understand we do not disclose the cost of the measures.
Mr. Gaebler, you asked whether it can be imagined to do the AGM virtually one year and in person the second year. We have not taken a decision as to the format of future AGMs. So the AGM of this year, the executive board considered especially the good experience with the concept of last year's AGM. This means we will review, check every year again, which format is the best suited for future AGMs. Mr. Gaebler, you asked how many people are involved in the back office today, how many of them are external, internal, and how many lawyers, and which are lawyers? Here on site, we have 38 colleagues from Merck, from various divisions in the back office. Along with them, there's an IT colleague and one from our service provider Computershare.
Three people in the back office work at the legal department of Merck. They are lawyers. Dear Mr. Gaebler, you asked for the number of the shareholders dialed in, peak number, and many of them have dialed in from abroad. The absolute number of the shareholders dialed into the AGM cannot be recorded for technical reasons, but because the participants dialed in, whether they're proxies or shareholders, and how much capital of the dialed-in users is represented at any point in time is not recorded. Currently, we can say in which of the two streams offered, how many participants were dialed in. At the moment, when you asked your question, 152 participants followed the transmission broadcast in English and 357 in German. Mr.
Gaebler asked for the cost for today's AGM and for its breakdown into its key items. So we consider costs of roughly less, a little below EUR 500,000 for the AGM of this year. The main items here are IT infrastructure, event technology, and the event setup. These four positions account for around 80% of the overall costs. Mr. Gaebler, you asked for the catering costs of today's virtual annual general meeting. These costs, compared with IT infrastructure and event technology, are only a small share of the overall amount, around EUR 25,000 for catering and service personnel, and this ensures that we actually supply enough food for the employees who are active at the involved in the AGM. Sorry, number eight. Here we go. Mr.
Gaebler asked about the how many multiple of the average salary of the employee, which corresponds to the remuneration of the Chair of the Executive Board. In the remuneration report, we published the average salary for the employee and the Chair of the Executive Board. Last year, the ratio was around 1 to 100.
... for the current three major issues or problems and one major success in 2023. Looking at the three major challenges, first of all, as I mentioned during my introduction, we are expecting the economic and the geopolitical headwinds will persist this year. But again, we are confident that our Merck Group will gradually return to organic growth during 2024. Second, this year will be an important year for the world, as many critical elections are being held. And as I said at the beginning as well, it is my personal belief that we, as citizens, must especially stand behind Europe and encourage active participation in the upcoming EU elections. European competitiveness is going to be absolutely key if we are to succeed in front of the two superpowers, U.S. and China.
The key here is to build a stronger and more united Europe that is based on democracy, freedom, equality, and human rights. Third, looking beyond 2024, the world is being rapidly redefined by multiple mega trends. In this case, it makes me proud to say that Merck, as a leading global science and technology company, is uniquely positioned at the heart of these mega trends. These are, for example, novel modalities; growing patient needs for innovative treatments; growing importance of artificial intelligence, as well as adoption of artificial intelligence in multiple processes; and big data, as well as the rising global demand for sustainable innovation. You know, it's difficult to pick one success of 2023, but I will give it a try.
I could give you many other examples, but I think the one outstanding success is that in a very hostile year, full of challenges and headwinds, we got an ongoing and persistent commitment of our around 63,000 colleagues, who once again demonstrated their dedication to our company's customers and patients. So I want to take this opportunity, on behalf of the Executive Board, to thank all of you, 63,000 colleagues, for the hard work and all the efforts that you have put behind our success in 2023.
Dear Mr. Gaebler, you asked about the share of taxonomy-capable and taxonomy-compliant sales. The share of taxonomy-capable sales in group sales is 28.49%. The share of taxonomy-compliant sales in group sales is 0.03%. You also asked whether this ratio makes sense when it comes to informative value. The informative value is still limited because the production of pharmaceuticals doesn't yet fall under taxonomy capability, but only for compliance. You also asked how high the time and financial expenditure for the investigation was. The investigation was conducted by interdisciplinary project team from different areas, which didn't need the help of external consultants and was able to fulfill the reporting obligation.
The vast majority of the project members do not only work with the introduction of the taxonomy regulation, so we cannot say how much time and finances exactly it demanded. You also asked how much these expenditures will rise in the next few years. Because of the business model of Merck, we do not assume a rise of the share of taxonomy-capable and taxonomy-compliant sales. You also asked whether there was an added value of these indicators for the company and for you as a shareholder. The benefit for the shareholders and the company is not only because we have to comply with the regulation. It is the value is the transparency we can give to our customers, suppliers, and staff.
Our shareholders then are capable, if they have a focus on environment and climate, to base their investment decisions on this. The value for the shareholders is in standardization, and so that you know the environmental risks better.
You've asked this question for our registration process to today's AGM. We thank you for your remarks, and we will discuss them with our service provider, Computershare.
Dear Mr. Gabler, you asked how we have more personnel expenditures and how we deal with that. For us, the global personnel expenditure is the number we adhere to. In 2023, the worldwide personnel expenditure was EUR 6.5 billion. With that, we had a share of 31% of our group net sales... about one-third of personnel expenditure occurs in Germany. We expect that the salaries will rise, though that we can compensate the rise in salaries with price increases.
We're here at the end of our questions from Mr. Gaebler. Dear ladies and gentlemen, I would like to make a comment on the item number eight. Mr. Georgiadis, in his contribution, he made an application of the vote of himself to the supervisory board. You have the opportunity to make a position, form your position during the debate. On top of it, we created an opportunity in the investor portal that you exercise your voting right by postal balloting or by mandating a proxy. Thank you very much. Dear ladies and gentlemen, there is another request to the floor. Mr. Kienle asked our technicians, can we add him here? Yes. Mr. Kienle, go ahead. Thank you very much. The answer of one question I couldn't follow as to the oncology drug, xevinapant.
I'd asked how far you got to the development and what costs have incurred for it. I would like to ask you to simply repeat this answer so that I can write it down. Then in general, I would like to remark that I'm not happy with the quality of the answers to the question that I've asked. Oh, sorry, that I'm very happy. They were very. They're very consistent, and they're meaningful. I'm very, very grateful for them. With one exception, a small exception, Mr. Kleinemeier, for you answering the question: What must be included in the supervisory board's report on dividend? What you answered here, to refer me to the fact we will do what is necessary, is not really helpful, and is not very friendly to the shareholders.
Of course, we can actually struggle about what items, what topics have to be laid down into what extension in the report. But if you become clear that the member of the supervisory board of KGaA, you will only have a very reduced program, and then the dividend, as long as, as I've been representing, the shareholders for the SdK. It's always a topic because every year you are below the payout ratio of compare, the comparable in index of the companies, which you use for the, as a benchmark for remuneration of your supervisory board. I think it's, it's not very reasonable to say, "Well, we've simply reviewed the proposal for the..." It is not sufficient, and after the comment of the Stock Corporation Act, it is not sufficient because the, the report must make it understandable that the correctness of this resolution was reviewed.
You are the body... You are the only body that's directly elected by the shareholders. So you have to represent the special interests of the shareholders, and through this report, Supervisory Board, this is one option for the shareholders to decide whether they approve the actions of the Supervisory Board or not, whether they re-elect it, yes or no. And this includes more than just saying, "Well, we have reviewed, and we don't have any objections." But what the shareholder wants to know: If this dividend is still so conflictive because you're reducing the rate, why are you of this opinion? That what is what the Executive Board suggests is appropriate. Why do you think there's a conversation between the interests of the management and the interests of the shareholders?
Why, in your opinion, this solution solves the conflict in a possible way? But this is not too much of a request, like as the fact that you actually comment on the fact that it will continue the practice of your predecessor, and you leave it at this single sentence. Thank you very much. Thank you very much, Mr. Kienle. We have another request for the floor by Mr. Gaebler. I'll ask our technicians whether we can bring in, bring him in. Not yet? Then we just wait for a second. Yeah, okay.
Uh, Gaebler?
Mr. Gaebler? Thank you, Mr. Gaebler. Mr. Gaebler, you are live. Live, you can speak. Thank you.
Mr. Kleinemeier, thank you very much for giving me the floor. I don't want to drag out the AGM. You want to finish soon. But as you know, shareholders rarely applaud. But I agree with Mr. Kienle, you really tried to answer the questions extensively and to add some substance. But there was one question that was about the motivation. It was question: How many pages the documents have? Your answer was: You didn't count it. You didn't determine the total number of pages. I wasn't asking whether you determined it; I was asking how many pages do these documents have? So answering this question, that is a very simple thing. You just sit down and add the pages. You might argue whether such a question makes sense or not.
I just want to get across, you have 388 pages in a management report, and you don't mail it on request. I'm one of those shareholders who like to hold it, who use highlighters to mark words. With a PDF on the screen, that's not very reader-friendly, and it means that in the future, that the shareholders, nobody will read those PDF files, which you need to create. So we'd like to ask you, answer this one question. I don't want to drag out. You can answer that outside the general debate at the very end, but just call out. Give me a ballpark figure and think about whether you might voluntarily. Maybe we're talking about 50 shareholders who would request a printed business report. Other companies do that voluntarily. You should offer that.
The second point, it's of course, access problems to today's AGM. I'm not asking you to discuss that with your service provider. It didn't work last year, so I want you to commit yourself and tell me that this will not happen again on a potential next virtual AGM. That's important to me, and that brings me to my last point: virtual AGM or in-person AGM. And again, your answer was a bit general, but I'd like you to commit yourself a bit more here. I want to rephrase it. I know there are standard excuses to protect the environment. No, travel expenses, environmental impact. Yes, there might be certain advantages. For me, the advantage is that I can be both here and on the Bayer AGM, which I couldn't do if it were in person.
But I have a concrete question to you: What is the personal encounter? How much is a personal encounter worth to you compared to protecting the environment? How would you weigh these? I think a personal encounter is, cannot be replaced through anything. And I think you, ladies and gentlemen, as you are here in that room, it's annoying to just stare at a screen. This is not real contact. So for you, the AGM becomes a very unfavorable event. You don't get any feedback at all, and I'd like to ask you if you do another one, do that every other year. Wouldn't be a problem for me if you said virtual for two years and then in person for the next year, and I think that would be the most, the best solution we should strive for, weighing all arguments.
That's where I want to stop, hoping that you do a good job again and get a good result for 2024. Thank you, Mr. Gaebler. There are no further requests for the floor. I suggest that we'll have another 15-minute break to answer the questions and for a bio break. Thank you. We will continue at 2:45 P.M. The AGM will continue at 2:45 P.M.
... Dear ladies and gentlemen, unfortunately, it takes us a bit more time to answer your questions, 10 minutes. Therefore, I'm extending the break until 3:00 P.M. sharp. Thank you very much for your understanding. ... Meine Damen und Herren, dear ladies and gentlemen, we continue the AGM. Thank you very much for your patience again. We would like to answer your questions carefully and comprehensively, and of course, this takes some time. Now, I would like to answer the question asked by Mr. Kienle, and I ask Mr. Peter Guenter to take the floor.
Yes, dear Mr. Kienle, I'm happy to repeat the answer to your question on how far advanced we are in the development of xevinapant and the associated costs. So we in-licensed xevinapant in 2021 from Debiopharm. We are now in two phase III trials, and xevinapant might potentially offer a new treatment paradigm in locally advanced head and neck cancer for patients which have today very limited treatment options. We expect to learn more about its progress from our interim analysis later this year. Until end of last year, we invested roughly EUR 300 million in the clinical development of this asset.
Herr Kienle, Mr. Kienle, you had further questions concerning our dividend. Our dividend proposal of EUR 2.20 per share for the business year 2023 is set at 25.9% of earnings per share before special interest, and with that slightly exceeds the above mentioned area. We have ambitious growth targets and are not ruling out even bigger acquisitions in the coming years. To achieve this, we need financial flexibility. For this reason, our dividend policy is understandable and in the group's best interest. We are of the opinion that by being transparent in our corporate governance and dividend policy, we are meeting the needs of our shareholders, as well as representing the interests of the group.
Vielen Dank, Frau von Roeder. Thank you very much, Ms. von Roeder. Now we move on to the questions by Mr. Gaebler. Mr. Gaebler has asked how many pages the documents to be submitted to the AGM by law and upon your request, we've determined this. The number of pages is a good 400 pages that must be made available to the meeting. Mr. Gaebler, you were asking for a promise that there won't be any access problem to the AGM. We don't have any information that there were any problems occurred, technical problems occurred during the access to the investment portal. We are trying, together with our service provider, Computershare, to keep the investor portal as easy for the shareholders as possible. Dear Mr.
Gaebler, you asked for the weight of personal encounters compared to environmental protection. Virtual exchange, both in private as in professional context, has become a new reality due to the COVID pandemic. This relativity is also reflected by the virtual format of the AGM. By the way, this is also the case in most AGMs of the DAX constituents. Based on their homepage, the majority of the 40 DAX companies do a virtual AGM. You've told us that due to this very format, you were able to participate both at our AGM and at Bayer's. Personal encounters, we appreciate very much at Merck. They were, are, and continue to be part of our everyday work. Personal encounters, virtual formats, both have their space in modern business communication and supplement each other. Therefore, each year we'll evaluate once again which format suits best.
So much for the questions from Mr. Kienle and Mr. Gaebler. I don't have any further requests for the floor. Dear ladies and gentlemen, no further requests for the floor. The technicians are confirming this. We've closed the list of speakers on the investor portal. I'm hereby closing the general debate, and I'm stating all the questions have been answered. Thank you to the speakers for their contributions and to the Executive Board for their answers. Ladies and gentlemen, we'll now start with the voting on the agenda items 2 to 10. On the agenda item eight, Mr. Georgiadis, in his contribution, put forward a countermotion to be elected to the Supervisory Board. During the general debate, he had an opportunity to make comments on this, on this motion. In the investor portal, we created the additional opportunity to comment on this countermotion, either by post-ballot.
To the motion, which was also brought forward by him, based on his proposal, based on Article 163, to have a vote before, before the general board. I will not accept that. The conditions of, paragraph 127 of the German Stock Corporation Act is not available, because this would be necessary only that the proposal by Mr. Georgiadis is submitted at least four, four weeks before the AGM, based on paragraph 126, sentence 1 of the Stock Corporation Act. Before the meeting, such a proposal was not submitted, however. The items of the agenda will now be presented in a short version.
For the last time now, you can actually hand out proxies to third parties for exercise of voting rights on the investor ballots, as well as proxies and instructions to the proxies and or to change them, or to exercise your voting rights by postal ballot. If you still wish to make use of this option, we now ask you to do so without delay. We will close the relevant functions in the investor portal shortly, and exactly at 3:10 P.M. Following this, the company's proxies will vote in accordance with your instructions by approving the votes stored in the system. The postal ballots received by the deadline have already been stored in the system. Statutory exclusions of voting rights for members of the Executive Board and Supervisory Board have been observed. The notary will monitor the voting process.
Resolution on agenda items 2 to 8 are approved if a simple majority of votes are cast in favor. In addition to a simple majority of votes cast, the resolution on agenda items 9 and 10 require a simple majority of votes cast in favor by the share capital represented at the time the resolution is adopted. We will now begin voting. The exact wording of the proposed resolutions, which is solely relevant for the vote-- The exact wording of the proposed resolution, which is solely relevant for the vote, is contained at the notice of the meeting published on the Federal Gazette on March fifteenth, 2024. I'm asking the technicians. Yeah, we need 5 more minutes. Okay? We'll wait for 5 minutes.
[Foreing Language]
I'd like to ask the company's proxy to prepare to release the votes stored in the system, and thus to vote on the individual agenda items in accordance with the shareholders' instructions. As previously announced, at 3:10 P.M., we will close the option to issue or change proxy forms or to issue or change proxies and instructions to the company's proxies via the investing portal or to exercise your voting rights by postal ballot.
[Foreign Language] W e wait briefly, roughly 2 minutes, until 3:10, 3:10.
[Foreign Language]
Ladies and gentlemen, I order that the vote on the individual agenda items will be closed. Voting through investor portal via postal ballots and giving proxy forms for third parties and proxy instructions to the representatives and proxies from now on are no longer possible. I instruct the technicians to consider this and ask the officiating notary to make a note of this. Now, I ask the proxies to release the votes stored in the system, and thus to vote in accordance with the shareholders' instructions on the individual agenda items. [Foreign Language]
The company's proxies have just released the votes stored in the system in accordance with the shareholders' instructions on the individual agenda items. The postal ballots have already been stored in the system. All votes have thus been cast. I hereby close voting on the agenda. The voting results on agenda items 2 to 10 are now being determined under the supervision of the notary. This will take some time. To accommodate this, we will break for 30 minutes until 3:40 P.M. 3:40 P.M. Thank you very much. Yes, up and running. Musik machen Sie noch aus. Sehr geehrten Damen. Sehr geehrte Damen und dear ladies and gentlemen, now, first of all, I would like to ascertain the presence, the shares present. You find this information on the screen.
Out of the share capital of the company amounting to EUR 169,440,927.60, divided into 129,242,252 no par value shares. 92,081,600 no par value shares are represented with the same amount of votes. This corresponds to 71.225% of the share capital. On top of this, postal ballots have been received for 682,908 no par value shares. This equals 0.35% of the share capital. Now, let's move on to the results of the votes.
On item two, I state and I announce the vote for 91,800,874,337 valid votes. This corresponds to 71.09% of the share capital. Positive votes, 901,742,945, and 133,826 votes against. This corresponds to 0.14%. The AGM... On agenda item two, the AGM accepted the result on the adoption of the annual financial statement for fiscal year 2022. The proposal of the Executive Board and the Supervisory Board, as published in the Federal Gazette on the fifteenth of March 2024, with the necessary majority votes.
Result of agenda item three: I state and announce for 92,760,979 shares for which valid votes were cast. The result corresponds to 71.77% of share capital. Positive votes, 92,632,834 equaling 99.86% of the votes, and 128,145 votes against, equaling 0.14%. On agenda item three, the main, the AGM adopted the resolution authorizing the appropriation of net retained up profit for fiscal 2024. The proposal of executive board and the supervisory board, as published in the Federal Gazette from the fifteenth of March 2024, with an extra majority of vote.
Result of the vote on the agenda item four, I state and announce for 91,328,476 votes for which valid votes were cast. The result of the vote was 70.66% of the share capital. Affirmative votes, 90,238,691, equaling 98.81%. Votes against, 1,089,785, equaling 1.19%. On agenda item four, the AGM adopted the fourth item. That's the resolution on the approval of the action of the executive board for fiscal year 2023.
It has adopted the resolution by executive and supervisory board, as published in the Federal Gazette on the fifteenth of March of this year, with a necessary majority of votes. Result of the votes on agenda item five, I state and announce for 90,169,898 shares for which valid votes are cast. The vote corresponds to 69.77% of the share capital. Affirmative votes, 88,312,189, equaling 97.94%. Votes against, 1,857,709, equaling 2.06%. For agenda item five, the AGM adopted the fifth item, resolution on the approval of the action of the supervisors report for fiscal year 2023.
The resolution by the executive supervisory board, as published in the Federal Gazette on the fifteenth of March 2024, with the necessary majority of votes. Result of the voting on agenda item six, I state and announce the vote for 92,731,829 shares for which valid votes were cast, and this corresponds to 71.75% of the share capital. Affirmative votes, 92,645,520, equaling 99.91%. Votes against, 86,309, equaling 0.09%.
On the agenda item six, the AGM, which is a resolution on the election of the annual auditor and the annual group auditor for the fiscal year 2024, plus of the auditor for the review of the six-month, of the interim account and the interim, interim management report for thirtieth of June 2024. It had adopted the proposal of the supervisory board, as published in the Federal Gazette on the fifteenth of March, with the necessary majority of votes. Result of the vote on agenda item seven, I state and announce the vote for 91,707,501 shares for which valid votes were cast, and this corresponds to 70.96% of the share capital.
Affirmative votes, 82,884,104, equaling 90.38%, and votes against, 8,823,397, equaling 9.62%. On agenda item seven, the AGM adopted the agenda item number seven, resolution on the approval of the compensation report for 2023. The resolution by Executive and Supervisory Board, as published in the Federal Gazette on the fifteenth of March, 2024, with the necessary majority of votes. Result of the votes on item number eight, Ms. Katja Garcia Vila. I state and announce the result for 92,520,527 shares for which valid votes were cast. This corresponds to 71.59% of the share capital.
Affirmative votes, 92,453,197, equaling 99.93%. Votes against, 67,327, equaling 0.07%. Thus, on agenda item eight, the AGM adopted election of the Supervisory Board member, Katja Garcia Vila, adopted the resolution of the Supervisory Board as published in the Federal Gazette on the fifteenth of March, with the necessary majority of vote. Result on agenda item eight, on Michael Kleinemeier. I state and announce the vote for 92,729,640 votes for which valid votes were cast. This corresponds to 71.75% of the share capital. Affirmative votes, 90,246,786-...
Equaling 97.32%. Votes against, 2,482,854. That's 2.68%. Thus, on agenda item eight, new elections on the Supervisory Board, Michael Kleinemeier by. The AGM adopted the resolution of the Supervisory Board, as published in the Federal Gazette on the fifteenth of March, 2024, with the necessary majority of votes. Result of the vote on agenda item number eight, referring to Dr. Carla Kriwet. I state and announce the vote for 92,520,516.69 shares for which valid votes were cast. This equals 71.59% of the share capital.
Affirmative votes, 92,544,909, equaling 99.93%. And votes against, 68,660, equaling 0.07%. On agenda item eight, new elections on the Supervisory Board, Dr. Carla Kriwet, the AGM adopted the resolution of the Supervisory Board, as published in the Federal Gazette on the fifteenth of March 2024, with the necessary majority of votes. Voting result on agenda item eight, new elections to the Barbara Lambert. I state and announce the vote for, 92,519,738 shares for which valid votes were cast. This equals 71.59% of the share capital represented. Affirmative votes, 84,400,209, equaling 91.22%.
Votes against, 8,419,529, equaling 8.78%. On agenda item eight, new elections on the Supervisory Board, Barbara Lambert, the AGM adopted the resolution of the Supervisory Board, as published in the Federal Gazette on the fifteenth of March 2024, with the necessary majority of votes. Voting result on agenda item eight, Professor Dr. Stefan Palzer. I state and announce the voting with 92,519,310 shares for which valid votes were cast, and this course equals 71.59% of the share capital. Affirmative votes, 92,542,985, equaling 99.93%. Votes against, 66,325, equaling 0.07%.
Thus, on agenda item eight, new election to the Supervisory Board, Professor Dr. Stefan Palzer, the AGM adopted the resolution of the Supervisory Board, as published in the Federal Gazette on the fifteenth of March 2024, with the necessary majority of votes. Voting result on agenda item eight, referring to Dr. Susanne Schaffert. I state and announce the vote for 92,520,013 shares for which valid votes were cast. This corresponds 70%-71.59% of the share capital. Affirmative votes, 87,863,589, equaling 94.97%. Votes against, 4,656,424, equaling 5.03%. So on agenda item eight, new elections of the Supervisory Board, Dr.
Susanne Schaffert, the AGM adopted the resolution of the Supervisory Board, as published in the Federal Gazette on the fifteenth of March 2024, with the required majority of votes. Voting result on agenda item nine. I state and announce the voting for 92,746,094 shares for which valid votes were cast. This corresponds to 71.76% of the share capital. Affirmative votes, 91,876,630, equaling 99.6%. Negative votes, 869,464, equaling 0.94%. Thus, on agenda item nine, the AGM, the resolution on the remuneration of the Supervisory Board, including the remunerations system, the corresponding amendment to the articles of association.
It adopted the proposal of the Executive and Supervisory Boards, as published in the Federal Gazette on the fifteenth of March 2024, with the necessary majority of votes and capital present. Voting result on agenda item number 10. I state and announce the voting for 92,758,404 shares for which valid votes were cast. This corresponds to 71.77% of the share capital. Affirmative votes, 92,748,203, equaling 99.99%. Votes against, 10,201, equaling 0.01%.
Thus, on agenda item number 10, resolution on amendments of the articles of association in connection with the Financing for the Future Act, the AGM adopted the resolution of the Executive Board and Supervisory Board, as published in the Federal Gazette on the fifteenth of March 2024, with the necessary majority of votes and of the capital. So now, I will start the closing meeting. Since the administrative proposal on the individual agenda items have reached the necessary majority of votes, the countermotion brought forward by Mr. Georgiadis on agenda item number 8 will be closed. Ladies and gentlemen, now I've the, all the items are closed. I would like to thank you on today's participation on your today's AGM and your interest in the development of our company. Our special gratitude goes to the employees of the company, which have contributed to the successful AGM.
I also congratulate the newly elected members of the Supervisory Board. I look forward to coming to see you back at the next year's AGM, and I'm closing this meeting. Remain confident. Thank you very much.