Dear ladies and gentlemen, on behalf of the supervisory and executive, I would like to warmly welcome all of you here to call today's annual general meeting of Merck KGaA. My name is Wolfgang Büchele, and pursuant to Article 23, paragraph 1, sentence 1 of the Articles of Association, as the Chairman of the Supervisory Board, I am chairing this annual meeting. First of all, I would like to welcome you, our shareholders and shareholder representatives. I am pleased by the great interest you're showing in our company by participating in this virtual AGM. Let me also extend a warm welcome to all media representatives who are following our AGM online. The AGM 2023 is held as a virtual annual meeting. The decision to do this year again, was again taken by the Executive Board and the Supervisory Board after careful deliberation.
Thanks to the virtual form of the meeting, it is easier for our shareholders to participate actively. At the same time, we're also protecting the health of all those involved with this decision. Moreover, by reducing travel to the AGM, we are reducing the burden on the environment as well as the costs for the company and thus also for shareholders. Today's annual general meeting is, however, not held exactly the same way you've experienced in past years. It has been adapted based on a law that came into force recently and applies this year for the first time. With the ensuing changes, we can transfer the advantages of an on-site face-to-face annual general meeting to the virtual format and further improve implementation of shareholders' rights.
If you, as our shareholders, approve of today's proposal that the Company may hold the AGM in virtual form in the coming 2 years as well, I can guarantee the following. We will take a new decision each year whether to hold our AGM virtually or in person, taking into account the interests of the Company and its shareholders. Taking this decision, we will in particular consider the items on the proposed agenda, the objective of having as many shareholders participate as possible, aspects of sustainability, as well as our experience with previous AGMs. As is the case with in-person AGMs, all properly registered shareholders and their proxies have extensive rights to speak, to submit motions and to request information. We are reintroducing the possibility for a direct dialogue between management and shareholders.
As the meeting chair, I've determined that you must exercise your right to request information exclusively through video communication as part of your statement. This makes it easier for other shareholders to follow all statements, questions, and their 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 with their access medium. Further technical recommendations and notes have been published on the AGM's website when the meeting was first convened. If you have any questions about the investor portal, may I ask registered shareholders to contact our hotline by phone or email. You will find the contact details in the investor portal and displayed here.
The hotline will be available until the end of the annual general meeting. As a further option to promote the exchange of views, shareholders and their proxies were able to submit comments to the company until April 22nd, 2023. This opportunity has not been used. As announced in the invitation to the AGM, we already published a speech by Ms. Garijo on April 17th, 2021, in order to give you the possibility to refer to the contents of her speech in your questions and opinions. 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 issue proxies and instructions to the company's proxies. Here with me are the Chair of the Executive Board, Ms. Belén Garijo, CFO Dr. Markus Kuhnert, as well as Dr. Kai Beckmann, CEO Electronics, Peter Guenter, CEO Healthcare, and Dr. Matthias Heinzel, CEO of our Life Science business sector. The members of the Supervisory Board are also in attendance and can get in touch with the other members of the Executive Board and with myself if required. Furthermore, let me welcome the officiating Notary, Dr. Albach, who is keeping the minutes of the annual general meeting, and Ms. Dr. Rogg, Group General Counsel. Lastly, let me welcome the proxies appointed by the company. Thank you also for joining this meeting.
Dear ladies and gentlemen, I would like first like to address the formalities that must be attended to before we deal with the agenda. Today's virtual annual general meeting was convened via the publication of the agenda in the German Federal Gazette on March 7th, 2023, in the required form and within the stipulated period. A printout of the invitation from 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. Furthermore, the notice of this annual general meeting was forwarded to those media that can be assumed to disseminate information throughout the entire European Union.
The annual fiscal meeting for the fiscal year, including the proposal of the executive board for the appropriation of the net retained profit, the consolidated financial statements, the group management report, and the report of supervisory board have been available on the website of the company since the date on which the annual general meeting was convened. The company has not received any motions to supplement today's agenda, only the agendas published must be dealt with. Shareholders have not made use of the possibility to submit countermotions to the company prior to the annual general meeting. The invitation to the annual general meeting was published, 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 annual general meeting was called in the required form and within the stipulated period. The required register of attendees will again be kept electronically this year. The company's proxy is present here, and the shareholders they represent will be included in this register of attendees, as well as 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 joining online official, shareholders presence will change. I would now like to inform you of the presence as it currently appears from the register of attendees. After the voting results have been determined, I will inform you of the presence again.
From the share capital of the company amounted to EUR 168,014,927.60, divided into 129,242,252 shares. 93,362,723 shares are represented by the same number of votes. This corresponds to 72.24% of the capital. We also have mailing votes for 417,732. This is 0.32% of the capital. Shareholders registered for the annual general meeting were able to exercise their voting rights prior to the meeting by absentee voting 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 issue instructions to the company's proxies via the investor portal. They can exercise their voting rights by mail. 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 2, sentence 2 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 is, the votes cast in favor of and the votes cast against the proposed resolution will be counted. Abstentions do not have any impact on the result and are therefore not counted separately.
Voting shall take place in one voting session after all agenda items have been dealt with. Please note that this annual general meeting can be followed live by registered shareholders and will also be broadcast in full to the public via the internet. After the annual general meeting, however, only my introductory remarks, the report of the Supervisory Board, and the speech by the Chair of the Executive Board will be available on. Begin with today's agenda. I will call up agenda items 1 through 8. The agenda, including the management regarding agenda items 2 to 8, are available to you.
I would now like to begin with the agenda item 1, presentation of the annual financial statements approved by the supervisory board, as well as the consolidated financial statements approved by the supervisory board and the combined management report, including the explanatory report on the information in accordance with Section 289 A, Section 315 A of the German Commercial Code for fiscal year 2022 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 KPMG AG, Wirtschaftsprüfungsgesellschaft, Berlin, like the management report. The audit did not lead to any objections.
The auditors issued an unqualified audit report on the annual financial statements and the combined management report for Merck KGaA. KPMG audited the calculation of Merck KGaA's participation in the profits of E. Merck in accordance with Article 27, paragraph 2 of the Articles of Association. Merck KGaA prepared consolidated financial statements for the Merck Group in accordance with International Financial Reporting Standards, as well as the supplementary rules applicable under the German Commercial Code. To the combined management report, KPMG 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 28th, 2023, the Supervisory Board raised no objections and thus approved these 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 of paragraph 2 of the Articles of Association. Ladies and gentlemen, let's begin the report of the Supervisory Board. You will find the full report on pages 233 to 239 of the annual report for 2022. Allow me to highlight the following. The cooperation with the Executive Board in fiscal year 2022 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 current and potential impact of the COVID-19 pan-pandemic, the market and the sales situation of the company against the background of macroeconomic developments and the Ukrainian conflict in Ukraine, 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 sector. 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 topic of sustainability as critical factor for success and a strategic priority. The Supervisory Board also dealt with the work of the Research and Development Committee of the Board of Partners of E. Merck KG. Further important items on the Supervisory Board's agenda was organizing the virtual AGB, restructuring the financial controlling process, business development in China, as well as cybersecurity and pertinent measures.
Ladies and gentlemen, that is all from my side for now. I now turn the floor over to Ms. Belén Garijo, Chair of the Executive Board. She's going to report to you on the past fiscal year and speak about the company's future business developments. The floor is yours, Mrs. Garijo.
Let me start with a question. What does it take to thrive in times of rapid change and uncertainty? In a company like Merck, you have good chances to find answers to this question. Why? Over the past 355 years, the people of Merck have already experienced tectonic shifts. Think of the industrialization of our society, early scientific breakthroughs like the discovery of penicillin, not to forget many challenges like the cholera epidemic and multiple international conflicts. We would not be here today presenting solid results if change and challenges didn't bring out the best of Merck, our ability to thrive in times of uncertainty. If we look at the history of this organization, we quickly find two reasons that have always given us the ability to grow. First, the way change works as an impetus for innovative ideas.
Second, how potentially adverse external circumstances fuel our resilient spirit. We succeeded in doing this again in 2022. It was a good year for Merck from a business perspective. Importantly, our diversified business model once again proved to be the cornerstone of our resilience. Despite our ability to find a stability and growth, the turbulent times we are living in do not pass us without a trace. There is no end in sight to Russia war of aggression on Ukraine. The pandemic continued to cause harm across many parts of the world. As a consequence, rising prices of raw materials, rising prices of energy and logistics were a major burden for companies and customers alike. All these factors have put our people and our communities under significant pressure in 2022.
While there continue to be causes for concerns across markets and across the world, we will continue to do what we do best, focusing on our strengths and our purpose to advance human progress by accelerating our science and technology leadership. By doing so, to tackle the big challenges of our time, like accelerating personalized treatments for hard-to-cure diseases or enabling connectivity, global connectivity and digital living. Today, I want to talk to you about how we navigate through a world of uncertainty, how we have performed on our key financial figures, and how we continuously drive our progress to build a sustainable future. Before we look ahead, I want to shine the light on our overall business performance during 2022. Last year, Merck generated a 6.4% organic increase in group revenues.
Together with significant tailwinds from foreign exchange effects and a small portfolio effect related to the acquisition of Exelead, sales grew by more than EUR 2.5 billion in comparison to 2021 to reach EUR 22.2 billion. Nearly 90% of our organic sales growth was driven by what we have identified as our Big 3 businesses. First, Process Solutions and Life Science Services, and here, for those of you who are less familiar with our portfolio, we commercialize products and services for the production of biologicals, vaccines, and pharmaceuticals. Second, new Healthcare products, such as our anti-cancer drug Bavencio or Mavenclad, our innovative treatment for Multiple Sclerosis patients. It is approved in more than 80 countries. Last but not least, Semiconductor Solutions. This business focuses on the development and commercialization of solutions for the important industry of semiconductors.
EBITDA pre rose to EUR 6.8 billion at the group level in fiscal 2022. In terms of growth, that represented 6.1%. Positive foreign exchange effects and negative effects from our portfolio influenced this development. In 2022, our EBITDA pre-margin was at almost 31% on sales. Last year, I presented our midterm financial growth ambition to you. We call it 25 by 25. Means EUR 25 billion in sales at group level by 2025. It is indeed an ambitious target, I am happy to report that we are well on our way to delivering on that. How? Once again, by focusing on our Big 3 growth pillars, by keeping an eye on our cost and by strategically allocating our capital behind potential growth opportunities.
Indeed, we have the option to further accelerate our growth through potential acquisitions and potentially in-licensing deals. As you may know, we have developed over the years in relation to our good performance between EUR 15 billion-EUR 20 billion capacity now available to progress our inorganic agenda. With this in mind, let me briefly summarize the foundation that we have built in 2022 to ensure our future growth. Let's start with Life Science. Here, as I mentioned already, we provide lab materials, innovative technologies and services to make research and biotech production simpler, faster and safer. We deliver more than 300,000 different products to more than 1 million customers every year. In 2022, Life Science once again generated a very strong year. Organic sales growth reached 8.2%. Net sales, EUR 10.4 billion.
All this despite the anticipated significant decline in our COVID-19 related demand, which already significantly went down in 2022. The core business of Life Science, meaning the total sales excluding the COVID-19 related demand, achieve organic growth in the mid-teens % range. We also continued to invest on expanding capabilities of our sites across the United States, Europe, and Asia. For example, in Cork, in Ireland, we announced an investment of around EUR 440 million to expand our membrane and filtration manufacturing capabilities. This itself represents the largest investment in a single site ever for our Life Science business sector. With our investment, we are creating the basis for future organic growth. At the same time, we diversify and continue to regionalize our production and supply chains.
If we look briefly at each of the business units, Process Solution was once again the key growth driver for Life Science. Process generated an organic growth of close to 11%, reflecting excellent core business performance, especially in our bioprocessing business unit. Now, moving into Healthcare, here, also patients at the center of our work, and with every advance, we contribute to creating, improving, and prolonging lives. Today, we serve patients in around 150 countries, making us one of the largest midsize companies in the pharmaceutical industry. As of 2022, more than 94 million people a day, per day, receive our medicines. Not included, those who benefit from our additional global health programs, such as the Praziquantel program. In 2022, our Healthcare sales rose by 5.5% organically to achieve EUR 7.8 billion.
New medicines contributed very significantly to the growth of revenues. Our immuno-oncology drug, Bavencio, generated an organic sales increase of 58%. Sales of Mavenclad for the treatment of relapsing Multiple Sclerosis grew by 17% organically. Erbitux, which is aimed to treat advanced colorectal and head and neck patients, is now a blockbuster. This term is used in the industry to describe medicines with sales exceeding the EUR 1 billion mark. Erbitux in 2022 exceeded the EUR 1 billion mark for the first time since it was launched in 2004. Another proof of our resilience, nearly 20 years later, today, we still manage to grow these brands because of the impact that it makes to patients. In 2022, we also made in Healthcare important progress on our pipeline.
An example include our BTK inhibitor, Ibrutinib, which is in phase 3 studies for relapsing Multiple Sclerosis and Xevinapant, which is being investigated as a treatment for head and neck tumors in 2 phase 3 studies. At the end of last year, in our R&D call, we announced our ambition to launch 1 new Healthcare product or a major indication every 1.5 years on average, bolstered by more than 50% external innovation. We are building on our expertise in the underlying biology of our focused therapeutic areas of oncology, neurology, and immunology. This is including our industry-leading antibody drug conjugate technology. ADCs are an emerging class of medicines designed for the highly specific targeting and destruction of cancer cells. At the same time, they preserve healthy cells.
We are a pioneer in this space, involved in 50% of the commercially approved ADCs on the market today. Let's now move into our 3rd business sectors, Electronics. Here, we continue to serve as a strong and reliable partner to global base of customers. Our main focus here is on materials and solutions for the electronic, for the Electronics market. We realigned our portfolio toward the accelerated digitalization and the growth of data, the immense growth of data. This drives the need for more and higher sophisticated semiconductor chips and also displays. We have become, at Merck, one of the most relevant suppliers of materials and solutions for the semiconductor and display industries, and we are very well placed to further expand from this position. In addition, our functional solutions for innovative surfaces of all kinds make life more colorful.
Financially, the electronics business sector reported an organic sales growth of 3.7%, generating sales of EUR 4 billion in the year 2022. The fastest growing business was once again the Semiconductor Solutions business. It grew organically by 15.4%, significantly above the market and also significantly above our midterm guidance. Semiconductors now accounts for two-thirds of the sales of the electronics business sector. Our team in electronics has successfully delivered, despite the very challenging supply situation, the unprecedented demand for our products, and the need to increase capacity simultaneously. Our strong performance across all the regions is a testament to our commitment to growth globally and to delivering global innovation. I want to take a moment to highlight the exceptional performance of our teams in LATAM, in Europe, in Middle East and in Africa, as well as in Asia-Pacific in the last year.
Their strong organic growth played a very important role in our global success. Notably, our Asia-Pacific region continues to be key in contributing to sales. It accounts for nearly 35% of our total group revenues. Our balanced global presence is also reflected in Europe and North America. Every region contributes around 28% of our sales. On behalf of the executive board, my colleagues here with us today, I want to thank our talented teams, our talented people at Merck, who really have stayed very focused on our customers and our patients. I also want to thank our customers and partners for their continued trust. We are eager to building on our achievements in the months ahead. Our very solid overall performance and the financial stability have enabled us to continue our streak of robust growth and profitability.
As a testimony to our unwavering commitment, we are very proud to propose a dividend of EUR 2.2 per share for all Merck shareholders, so that they can fully partake in our ongoing success. These proposals, this dividend proposal represents a 19% increase in the dividend payout versus last year's earnings. Looking ahead, we remain confident in our ability to continue delivering strong results and creating value for all our stakeholders. I don't need to tell you the global macroeconomic situation remains a major challenge in 2023. More specifically, the slowing semiconductor market, the decreasing COVID-19 related demand, and persistently a high inflation that will pose challenges to us in 2023. 2023 is going to be a true transition year to then accelerate once again to our midterm goal.
For fiscal 2023, we expect a slight to solid organic growth in net sales. Excluding COVID-19 related sales, we project solid to strong organic growth. That means if we exclude the impact of COVID-19 sales, the group would actually deliver solid to a strong organic growth. For EBITDA pre, we anticipate a moderate decline to about a stable development organically. Based on our current assumptions, the currency effects that were very positive in 2022 are expected to be negative this year at between -1% and -4% on both our top line and our bottom line, sales , and EBITDA pre. Despite the challenging environment, our Big 3 businesses will remain a key in driving our future growth.
At the same time, we have to continue to have a close eye on our internal and external cost to be able to fund our future growth. We have to focus on what most supports our businesses. This is particularly true for what we call our enabling group functions, those functions supporting the business and the customers. Ladies and gentlemen, you can see we are focusing on the future. We have our mid and long-term goals firmly in sight, and we are working on doing better every day. Simply put, good work, combined with resilience and a clear purpose will lead this company to excellence. I believe we have all the ingredients at Merck to create a lasting impact for humanity through science and technology innovation. This is why we continue to research, we continue to invest in our new technologies.
In those areas where we may already be leaders today. Obviously, in those areas where we believe we have a right to win in the future. Let me take the example of our Life Science business. More recently, advances in mRNA technology have revolutionized genetic medicine. The accelerated research during the COVID-19 pandemic made this possible, and we are convinced that these advances will potentially change the future of medicine. Today, mRNA vaccines are currently in development to combat diseases such as HIV, influenza, and malaria. Merck provides a critical component for vaccines. This is known as lipid nanoparticles. These silent heroes that enable the delivery of cutting-edge therapies into cells. mRNA technologies has even greater potential. It could help us develop new treatments for a wide range of conditions, including infectious diseases, genetic disorders, cancer, and other illnesses.
As a company with more than 20 years of experience in developing critical components for mRNA therapies, we have recently expanded our manufacturing capabilities to be able to fulfill future demand. In February 2022, we acquired Exelead, a company that can support all stages of mRNA therapy development, from preclinical testing to commercial manufacturing. We now offer a complete portfolio required for the development of an mRNA-based therapeutics. We are quite excited to be part of this growth story. It is also vital to embrace a multidisciplinary approach to science to help solve many of humanity's biggest challenges. We call this new scientific mega-trend bioconvergence. It harnesses a diverse mix of expertise, processes, and technologies across biotech, software, and engineering. We as a company are in a sweet spot to leverage this in the future.
For example, our biotech and digital competencies are being matched with partners that have expertise in complementary areas, such as medical devices, to enable the new market of bioelectronics. Together, we are creating a new generation of implantable or wearable devices that can potentially enable more targeted treatments, and most importantly, remote monitoring solutions for patients. Such bioelectronic solutions could allow us to help prevent chronic diseases and reduce symptoms or side effects of medicines, such as pain. Beyond this, bioconvergence can contribute to developing a new wave of precise and personalized medicines. This future is only possible thanks to our ability to combine multiple biological and clinical data points for a patient using artificial intelligence, using bioanalytical and sequencing tools. As you can see, and despite much uncertainty and challenges in the world, we are well-positioned and hope to continue to deliver breakthroughs and growth.
Growth in today's world means more than just creation of financial value. For us, growth also means substantially contributing to human progress while also reducing our environmental impact. For us, the only way to grow in the future is to grow sustainably. This is simply part of our responsibility. It is a promise to future generation. It is a promise to the communities in which we operate. As a global industrial company, this is not always easy. There is no question about that. I am convinced that with the technological know-how that we have at Merck and the commitment of our teams, we can really make a difference all over the world. Allow me to give you a few concrete examples from the year 2022.
As part of our global health strategic priorities, it is our ambition to eliminate schistosomiasis as a public health burden by 2030, which is around the corner. Schistosomiasis is one of the most devastating parasitic diseases in the world. Our commitment to the elimination of schistosomiasis has been recognized in the 2022 Access to Medicine Index. We rank 5th among the 20 largest pharmaceutical companies, and these efforts also include the development of an Arpraziquantel. What is Arpraziquantel? This is a potential new treatment option for the estimated 50 million preschool-aged children that suffer from schistosomiasis. Looking at our greenhouse gas emissions, our target is to reduce those by 2030, and this has been certified by the independent Science Based Targets initiative. These targets will help ensure Merck plays its part to achieve the primary goal of the Paris Agreement to limit global warming to 1.5 degrees.
Let me give you some examples once again of milestones that we have already achieved in our operation, helping us make further progress. In May 2022, our first virtual power purchase agreement in the U.S. has gone live, covering 100% of our U.S. Life Science electricity consumptions from renewable sources for 12 years. In February, we announced a partnership with the Darmstadt-based energy provider E NTEGA a solar park at our site in Gernsheim that can generate up to 7 gigabytes hours of green electricity per year. The solar park saves up to 3,500 tons of CO2. This is also one further step in bringing us closer to our goal of achieving climate neutrality by 2040. In 2022, we already reduced our greenhouse gas emissions by nearly 10%.
Last year, our electricity purchase from renewable sources increased from 30% in 2021 to 47% at the end of 2022. Also in Latin America, in Brazil, our sites were fully powered by renewables for the first time. We continue to look at new approaches to minimize environmental impact, not only for us, but also for our partners. Micron Technology, for example. Micron is an industry leader in innovative memory and storage solutions. Together, we are developing gases with a low global warming potential which can be used in the future production of semiconductors. It is simple. If we don't commit ourselves to sustainability, we won't have a healthy and thriving world to operate in. Both our culture and our sustainability efforts are closely connected. You can see this with our STEM initiatives.
Here, we are targeting underrepresented communities, driving curiosity, and connecting with the next generation of science and technology leaders. Culture supports growth. This is where it all begins. We at Merck are committed to further developing a high impact culture where our people belong, where our people thrive, and where our people grow. To this end, we focus on talent development and leadership culture, as well as diversity, equity, and inclusion. DE&I in short. For Merck, DE&I is intentional and purpose-driven. We believe that it drives competitive advantage. It really strengthens our ability to innovate. It's a people and a business imperative. This is why we develop a long-term ambition and set that plan to guide or take that ambition to guide our actions. Excuse me. Our DE&I strategy focusing on 3 dimensions. First, we focus on gender.
We made great progress in recent years. 38% of leadership roles across Merck are today held by female. This represents an 11% move since 2015. An achievement we are truly proud of. Building on this effort, we are now aiming for gender parity in leadership positions by 2030. We announced that a couple of years ago. Culture and ethnicity is our second area of focus as part of our Diversity and Inclusion strategies. We want to ensure that the diversity of our company matches the diversity of the communities and the customers in which we work, live, and serve. In the United States, for example, we aim to increase the number of leaders who are members of underrepresented racial and ethnical groups from 20% to 30% by 2030.
This is bringing me to our third focus area as part of this DE&I strategy, and this is inclusion. We are connecting all our employee networks to focus their efforts and make sure that we can progress in the execution of our strategy faster. Running campaigns to increase awareness and understanding of the topics, and connecting the dots between this and our overall sustainability strategy. With significant geopolitical tensions on the rise, we are flexible to adapt to better capture business opportunities. Being a value-driven company is a competitive advantage, and this is going to be absolutely critical for our long-term success. Larry Fink, the CEO of BlackRock, said recently the Russian invasion has put an end to globalization, the globalization that we have experienced over the last 3 decades. Overall, you can see that business will become more and more complex.
In this context, values will be more important than ever before. We as a company will make sure to be prepared for any scenario, short, mid, and long term. Our management teams continues to regularly monitor the opportunities and risks of our business activities in Germany and abroad. Of course, this is a priority for the board. As a global player, we strongly believe in free trade and the advantages of free trade for communities and society. At the same time, we must continue to de-risk our investment, and this will be done as part of rebalancing our regional footprint. Throughout our 355 years of history, we have always understood how to build resilience through diversification, not only across business sectors, but also and importantly across geographies. This is why we are very well positioned to succeed over the long term.
Ladies and gentlemen, we have achieved a lot, but there is also much more to be done. I hope this is giving you a comprehensive overview of where we stand as a company and the incredible potential that we have at Merck. Let me now recap. First of all, we deliver very solid results in 2022. Second, we have a clear ambition to become the global 21st century science and technology pioneer. Our midterm financial growth target can be summarized as 25 by 25. We expect 80% of this growth to come from our Big 3 businesses. Third, in an environment of huge uncertainty, we are guided by the Merck uniqueness that enables us to embrace the full power of science, the full power of technology to create a more sustainable future for our company and for the world.
If we want to compete, if we want to innovate, and if we want to grow, I am convinced we have to diversify our way of thinking within this high impact culture that we are building at Merck. These are the key pillars of our organizational resilience. Before I close, I want to thank you very warmly and sincerely thank you for your continued support and the trust that you can put on my colleagues of the board and on me. I can assure you that we will do everything that it takes to keep Merck on the path of success. Thank you very much for your attention.
Thank you, Mrs. Garijo. Ladies and gentlemen, you can also read the speech of Mrs. Garijo online. As mentioned, it was published on the company's website on April 17th, 2023. Mrs. Garijo, you gave us both a comprehensive and interesting report on the past year, which was another successful year for Merck. For this, I thank you on behalf of the meeting. I would like to express my thanks and recognition to the entire Executive Board for the business achievements in fiscal 2022. My recognition, of course, also applies to the employees of our company, without whom Merck would have never been so successful. 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, I will now move on to agenda items 2 to 8.
They can be seen here. They are the resolution on the adoption of the annual financial statement for fiscal 2022, the resolution on the appropriation of net retained profit for fiscal 2022, the resolution on the approval of the actions of the Executive Board for fiscal 2022, the resolution on the approval of the actions of the Supervisory Board for fiscal 2022, the resolution on the approval of the compensation report for 2022, the resolution on the revocation of an existing authorization and the creation of a new authorization to issue warrant and/or convertible bonds, profit participation rights or participating bonds, or a combination of these instruments, and authorization to exclude the subscription rights with the simultaneous revocation of the current contingent capital 2 and creation of a new contingent capital 2, and corresponding amendments of the Articles of Association.
The resolutions on amendments to the articles of association in connection with the virtual annual general meetings. You can find the agenda items as well as the corresponding proposed resolutions and further explanations in the invitation, which has been published on our website. Ladies and gentlemen, 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 register to do so in the investor portal. On the investor portal, you will be given a link 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 and submit motions.
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 eight 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. Let me ask all speakers to limit their questions and comments to a reasonable duration. In view of the requests to speak we already received, I reserve the right to formally limit the speaking time at a later point. After 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. I will announce closing ahead of time, but I ask you in your own interest not to wait until the last moment with casting your vote or with issuing instructions. We are committed to answer all questions necessary to properly assess today's agenda as soon as possible during the general debate. I will 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 now give the floor to Mr. Andreas Pawel, who is speaking on behalf of DSW Deutsche Schutzvereinigung für Wertpapierbesitz e.V. The floor is yours.
Thank you very much, Mr. Büchele, for the opportunity to take the floor as a representative of the German Protection Association for Securities Holdings. I am a banker. My name is Andreas Pawel. I have been with Merck for many years and have a great interest in the company. Congratulations to Belén Garijo and her team for a great year with solid results in 2022, despite the huge challenges we all know. I would like to touch upon the last item of this annual general meeting, virtual AGMs. The format in which we met today. The German Protection Association for Securities Holdings regrets that less than half of the DAX companies in 2023 returned to meetings in presence. That's completely different to other countries, particularly in the Anglo-Saxon world.
We hold the opinion that in presence we have a more lively, more critical dialogue between the shareholders and the company, and this can be made better when we're in presence. When we meet in presence, it builds trust in the company and the company leadership, and it guarantees the rights of the shareholders and the adherence to the shareholder rights. What is particularly important in Germany, it improves the stakeholder culture in Germany. 3 questions. When is Merck going to return to AGMs in presence? Why do you not want to conduct the AGMs in presence? When will we be able to not only take part virtually?
When it comes to the item, this is why we won't agree with the item on agenda number 8, because even if this will hold true only for the next few years, we will vote against it because this is only a virtual AGM. How can we vote on a virtual AGM in a virtual AGM? Second, personal experience shows there's a problematic access to the floor. This does not really adhere to the rights of stakeholders. Only when AGMs are held in presence, there is an actual exchange of opinions between the stakeholders among the stakeholders themselves. Our association recommends that structural measures can only be decided on in in-person AGMs. This is what I wanted to say about virtual AGMs.
Now I have other questions. Four questions about strategy and Big 3, second, finance and shareholder value, and third, compensation and ESG. First of all, I would like to talk on Big 3, Life Science, Electronics and Process Solutions. Please, I would like to have some more information in the framework of Healthcare about sustainable growth of blockbusters for cancer, Bavencio and MS Mavenclad. My question is what opportunities does the medicine LMS Evo, Evobrutinib and Xevinapant have in the future to become blockbusters themselves, particularly when it comes to Evobrutinib, considering the current discussion in the U.S. with FDA and the stop of the phase III study. When it comes to R&D investments, how can we sustainably ensure new blockbusters to come? What about current patents? What about the pipeline of new products?
What is the, what is the chance for new phase 1, 2, and 3 admissions? Can you compensate shortfalls in R&D? About Life Science, the effect, COVID-19 effect, has passed. You, Mrs. Garijo, already talked about it. There is no chance to compensate this in our 3, in your 3 Big 3 areas. How will growth take part without COVID in 2023? How is this reflected in your strategy 25 by 25? Question number 2 for Life Science. Process Solutions is the future driver of Life Science. You already explained that today as well. How long are the 2 other areas, Life Science Services and Science & Lab Solutions, will provide cash flow or are these 2 areas maybe?
Will they be at this position in the future? Third Big 3 area, electronics. What we talked about is what is the regional growth strategy in semi, in the semiconductor business, particularly when it comes to the regional growth strategy focused on USA, Asia, China, South Korea, Taiwan, and Japan, and Europe, of course. Versum Semiconductor business is the future driver of semiconductors. We heard, two-thirds of semiconductors are of electronics are semiconductors. That's great. The other two areas, display and surface, how long are they also going to be a cash flow provider? Will they be at this position in the near future? What is Versum's USP in this very tough semiconductor market, competitive market? How can you hold your position there and grow it? What is the USP?
This particularly when it comes to the KI developments in China. I have a few questions. The alarm call for geostrategic challenges. Besides organic growth, you could also focus on strategic growth. You have capital, free capital of EUR 50 million-EUR 20 million, but where are you going to innovate, in which industries or areas? When it comes to sales, compared to the U.S., Europe in the breakdown on the regions, Europe has only contribute 28% to Merck's growth, compared to Asia and the U.S. Does Europe have disadvantages as a location because of taxes, because of regulations, and maybe even because of ESG? I'm getting back to this.
Because of supply-side inflation, which is harder to handle. Then a demand side inflation we have in the U.S. How do you deal with these location disadvantages? In these disadvantages in Germany, how does Merck make use of advantages of places, particularly for example, in the U.S., we have energy costs. They are self-sufficient, and then they have subsidies in order to be attractive for foreign investors, and they have an attractive tax structures. When it comes to the geo-strategy of Merck, how do you handle the de-globalization tendencies, decapping, the reshoring tendencies? How does this influence the decision for sites and places to do business?
Your resilience strategy, the regional production in the 3 regions, EU, China, and U,S., where regionally the customers are, how can you, in your regional focus, become a program of scale? When are you going to be too small to compete in the regions? What about the commitment in China, which is growing? China accounts for about 35% of the revenue. How does this increase the risks for the rest of the world compared to China, and what do you think about a possible further escalation in the Taiwan conflict? Today, we heard that Olaf Scholz plans when it comes to exports of chemicals which are used for the semiconductor industry, that he wants to limit exports to China.
Actually, these materials of Merck are actually part of every semiconductor in the world. This is maybe provocative, but important to ask. The Wissmann model, could this, in the future, be a Merck model, too? How would Merck, how does Merck perform when it comes to digital work, digital mindset, digital production, and how does Merck compete or relate to its competitors or compare to its competitors? Finance and shareholder value. How and why did you enlarge your inventory in 2022, and with that, your working capital, and how did they influence the working capital? In 2023, how is the cash flow management going to be optimized? First, de-leveraging went very well at Merck after the recent financing and acquisition. There is room for strategic growth.
You said EUR 15 million-EUR 20 million are there to be invested. What is the releveraging strategy when it comes to larger M&A transactions? How is funding risical? What to say about funding risk when it comes to pension provisions in the eye of rising interest rates? Your ESG strategy was very successful for 2022, too. You also had an additional profit from that. When we know for 2023 that you will have a currency, a negative currency effect of about 4%, particularly because of the weakening US dollar and of the Renminbi in China, which is now the largest region, what can you proactively do to mitigate this the loss you already expect? When it comes to dividend and share price of Merck.
Year to date, the share, Merck's share is much weaker than the index with about 8%. Of course, Merck, the last, the share value has doubled in the last few years and quadrupled in the last 10 years and outperformed the DAX index. Does the market understand Merck? Does the market understand the Big 3? Do they understand the opportunities linked to this? Is Merck just perceived as a value company, as a pharma company, and is not linked to semiconductors, and with that, perceived as a growth company with its diversified portfolio?
Is the risk/return diversification topic not just costs, and it's not honored by the market? When it comes to shareholder value, in particular, 80% of the capital, which is goodwill, maybe also is also a result of many successful acquisitions in the past. Isn't there a potential risk? What are the depreciation risks in the end? About the dividend, sorry, but this is necessary. We have 20% more dividend. The payout ratio is only at 21.9%, and the target number is about 20%-25%. Couldn't you go up to the upper limit a bit more, maybe 23%?
When we talk about shareholder value conglomerate strategy of Merck, and here the Big 3 and their risk return optimization, is the when it comes to the division into three of the business units, is this really good for the risk return performance? How is the performance of the three divisions compared to the optimum benchmarks? How do they compare to competition in the market? What is the optimal capital allocation to the three divisions, respectively? Now about compensation ESG. When it comes to compensation, the particular elements of compensation and the target compensation within, are within market comparison or market average. But are the pensions for former board members also in the market average?
Now when it comes to to social governance, why is this less than 20% of a keep KPI for compensation? In conclusion, we of the Society of, for Security of Shareholders, the border of business is ESG, but the limit of ESG is the performance of companies and the economy. A few questions on your ESG strategy. Of course, you are innovative. You have an innovative first-mover strategy and a comparative advantage. What are risks and costs, in particular when it comes to the ESG strategy, and what are the real opportunities? Will EU taxonomy be a disadvantage in places to do business, or will it be an advantage?
How are you use your innovation power to leverage ESG as a business case and not just, and to position it not just as a regulatory nuisance? If ESG is a business case, how is it reflected in the board comparison and in your strategy? Will Merck be able to leverage this, its ESG strategy as a comparative advantage? Can it communicate it better in the market and generate shareholder value with that, and not only costs? Thank you very much for the opportunity to ask the many questions which are important to the shareholders I represent. Thank you very much in advance, Mrs. Garijo and your team, for answering my questions. I close with the best wishes for 2023 and for 2025. For 25 by 25.
Thank you very much.
Thank you very much, Mr. Pawel. I've got Ms. Marion Kostinik. Ms. Kostinik, the floor is yours.
Good morning, ladies and gentlemen. My name is Marion Kostinik. I'm a lawyer in Frankfurt and CEO of the Investoren Communication Group e.V., based in Frankfurt as well. On the results of 2022, the Investoren Communication Group e.V. can only congratulate Merck and their high dividend payment and good chances for share improvement is not offered by many companies. That is what the Handelsblatt newspaper has written in April. After EUR 3 billion of net sales in 2002, we managed to achieve EUR 2.2 billion in this year. An improvement to EUR 3.5 billion is expected.
Merck has a equity ratio of 45% with an equity of EUR 26 billion. Net debt of EUR 9.6 million. The important KPI of the EBITDA pre was up by 6.9% to EUR 6.8 billion. We shareholders will get a dividend payment of EUR 2.20. Is the impression correct that chances are taken when they are identified and resilience has been mentioned several times in the speech of the CEO and the business report. What is the importance of resilience at Merck? The ECG would like to thank Merck for their good quality of the business report. Pharmaceutical sales was up by 11% in 2022.
Pharmaceuticals research lags behind expectations for many years. This is supposed to change. Productivity is supposed to double, and it's about sites and people and investment. How is this goal going to be achieved? What kind of investments will be required? What are the advantages of sites and what kind of subsidies might be considered? Patients are concerned about a lack of supply of pharmaceuticals like antibiotics or medication for children. Even with cancer and diabetes medication, there are shortages that might endanger people's lives. Has the federal government asked Merck to these shortages? Managers of Bayer, Hoechst and Boehringer are no longer very fond of the site in Germany. That is what the Dr. Büchele, in March 2023. One reason was the law was adopted in autom to rerstict
Belén Garijo, and dear shareholders. I'm Markus Kiefer. I'm a lawyer in Frankfurt and a member of the SdK, for the Protection of Investor Rights. First of all, I would like to thank Merck and all the people for the performance achieved in this year. The good figures of the past year are very important, and I will come back to the figures at a later stage. I first want to comment on the virtual AGM. After 3 years of virtual AGMs, we actually expected to organize the AGM 2023 in person again and not rely on this new law that has been adopted on virtual AGMs.
A virtual AGM has no interaction and is actually a digital AGM and does not meet the purpose. Shareholders cannot share views and shareholders are participating in a passive way and because the shareholder is the key person at an AGM, and that is why this is not a virtual AGM is not compatible. Because shareholders are just onlookers and the AGM only focuses on the executive management. The arguments for a virtual AGM are not really convincing. A virtual AGM is not interactive and is compared with an in-person AGM, that is not really true. If costs were compared of a virtual and the in-person AGM, the difference would not really be big.
Additional cost cannot be an argument against shareholders meeting each other in person once a year compared to all the other costs that are incurred. We cannot understand that you want to save costs with shareholders. It's also good corporate governance if administration shares views with the shareholders in person once a year. The argument of sustainability with regard to virtual AGMs with not causing travel costs is not really reliable. Because if you take this in argument, people are not supposed to meet each other in person at all. I mean, people can use the train, for example, to travel to an AGM. This argument is not really a supporting one.
You also put up forward the argument that with virtual AGMs, more people will attend the AGM, but we could not actually see in statistics that the number of participants in a virtual AGMs would be higher. I mean, the other option is a hybrid AGM, and that is something you could actually achieve if you wanted. In our view, the hybrid AGM is the future format for AGMs because that would actually allow all those involved in AGMs to that would be to the best of their interest. Because the supervisory board has to organize meetings in person at 75%.
Health protection is also an argument that is not really acceptable. I mean, whom do you want to protect from whom? Health protection. If the argument of health protection would actually mean that people are not supposed to meet each other at all. Please tell us why you decided not to organize a AGM in person, Dr. Büchele. How can you explain that the supervisory board is supposed to meet in person, but the AGM as a virtual meeting, is the AGM may be less important than the supervisory board meetings? What will be the cost of this year's AGM, and would a presence AGM have been more expensive? Was the decision on a virtual AGM unanimously?
What was the share of approval on a virtual AGM? We would also like to know how many shareholders actually attend the virtual AGM and how this number changes over the AGM. We will not agree to future virtual AGMs. We want to have this limit in 4 times in crisis because virtual AGMs are only acceptable in, as I said, in times of crisis or when. In times of crisis, still requirements have to be met. There is a risk that AGMs are only organized within the limits of the law. First of all, it is important to have interactivity across the entire AGM.
The virtual AGM has been limited to the most important items, and structural measures are not included here. We also would like to have different formats of questions, either do that beforehand or during the AGM. To have this parallel allows more contributions to the AGM. The documentation of questions handed in beforehand would be good because it would help to solve disputes. We don't have to write down questions and answers to questions, which is always difficult. Questions can also be actually part of a discussion. Questions have to be necessary, but of course, we also need to have the answers to that. Questions and answers have to be given to questions one after the other and not in blocks.
Dr. Büchele, what about technical interruptions? The company has to take responsibility and not to shift responsibility to a technical service supplier. We want to limit virtual AGMs to times of crisis. For the same reason, we... In our view, virtual AGMs can only be an exception. What about the content of the virtual AGM in future? Why are you not relying on the possibility provided by the law? Why is a virtual AGM not fully interactive? You said in your invitation that there are reasons to have in-person AGMs. Have you already decided to do virtual AGMs for the next 2 years?
The figures presented are quite good, but there is room for improvement. Revenues and sales were up by 13%, and growth was up, the operating result was up by 7%, and after taxes, plus 9%. 14.3%. That was about equity. There are differences. While Life Science and Electronics with sales and EBIT accrue double digit, one, Healthcare compared to EBIT was rather low. Why is earnings increase in Healthcare lagging behind the other segments? For Healthcare, you said a growth rate of 0%. Does it mean that as for Healthcare, no growth is expected and not even price increases were passed on to the market? Why is the capitalization interest rate lower in Healthcare than in the other segments?
What are the reasons for an increase of the value by 10x in Healthcare? At segment level, you don't show profit figures. What are you planning to do? With a share of sales of 35%, how APAC is contributing considerably. The Supply Chain Due Diligence Act, is that critical? What is the share of China for sales and EBIT? What is the average margin with our business in China? For Life Science and Electronics, it's 1.7 to 1.2% interest rate. What is the mechanism behind that? Can you please explain?
Because a higher capitalization interest rate leads to less cash and depreciation, and there are impairments that are higher compared to the previous year. What is the reason for that? 2022, you did three acquisitions, Exatec Inc, in chemicals, and Erbi Biosystems . For the latter two, we haven't got a purchase price allocation yet. Have you got one and what is it? As for the Exatec acquisition, you said that it's fully consolidated. 2022, a plus of sales of EUR 9 million. From the acquisition, Exatec had a contribution of EUR 75 million. When was the acquisition? by the end of 2021 or 2nd of February 2022? What return are you expecting?
I wish you all success and good luck in the new financial year. In the eye of the geopolitical and challenges, this is not an easy task. Thank you for your attention.
Thank you, Mr. Kiefer. For your questions, we are of course going to answer in detail. The next question is by Matthias GÄBLER. Mr. GÄBLER, you have the floor.
Thank you, Mr. Büchele. My name is Matthias GÄBLER. It was very difficult for me to get access to your virtual AGM. Why do you have such a difficult process to access and didn't do it like the other companies? When I had my access data, I wasn't able to dial in. What consequences are you going to draw for this?
I wasn't able to participate in the first hour. I don't know why. It's because of your access office. Maybe more shareholders than just me were affected by this and weren't able to participate. When it comes to the share course, you're about 10% below last year, there's still room for improvement. You have been at EUR 230, now we're at EUR 160. There is still room for improvement. Can you tell me three reasons why to keep the share or even why to rebuy shares? What are the three largest risks for the share price? I have many questions, and I'm going to start with ESG. By when in Germany and globally you want to be climate neutral, and what are your achievements so far?
When are you going to achieve this across all the supply chain? Can you give us some information on this? How many square meters of real estate do you have across Germany? Maybe just an estimated number. When it comes to the regulation and the political regulations and the energetic renovations, we have a restructuring we have to do in energetic restoration we have to do in our real estate. How does this affect you? How are you going to deal with these new regulations and directives? Leaving real estate and go to the current topic of property tax. How many declarations did you submit? What were the highest and lowest numbers for property tax, and where do you have your property?
Did you already receive the notice by the tax authority? Are you going to reject and how did you deal with that so far? Now about your staff. How does people work from home, and how did it develop so far, and what is the maximum rate for you? When it comes to attractiveness, employee recruitment, make it quite attractive when it comes to work balance. People are more and more demanding. They want to have a good life balance and the market really change. Maybe you have a few examples from your recruiting experience. When it comes to remuneration of the board, who is auditing these remunerations and who is checking how much money is taken out in which month?
I just say the board, I know your structure, but it's just for simplicity. You would say the remuneration is this or that, it doesn't matter whether it's a few thousand EUR more and less. Maybe you can give us some information on this. You had a correction publication in the German Federal Gazette where the AGM was published. I think just a frame was missing and a table, but not the numbers. What was actually changed? Why did you make a corrective post there? For me, it was quite confusing. When it comes to remuneration of the board, how many employees do you have? How much do they earn? Is this only restricted to the German staff or is it compared worldwide?
How do the employees disperse to income? Like, 20,000-30,000 EUR, 30,000-60,000 EUR, 60,000-90,000 EUR, 90,000-120,000 EUR, 120,000-2,050,000 EUR, 250,000-300,000 EUR. Maybe you can just give us some figures on that. How many employees are gaining how much money? What was the highest gross wage in your company. Don't tell me about privacy, I think you can just tell us the figure. How did you consider the legal matters, you know, about VW, you know what I'm talking about here. Here in Germany, what is the electricity price for kilowatt hours?
How much do you use, and do you also buy electricity in Leipzig? Did you also have negative electricity prices, and if yes, in what range? What range are you going to use the energy price break? For example, when it comes to a restriction of viable remunerations or dividends. How did the total risk within your risk management develop or worsen? What will be the 3 largest investments in the current financial year, and what risks are there? What about the development of the personnel costs when it comes to inflation? We all read the news every day. Inflation is about 10-12%, and this is what is demanded by workers' representatives.
Are you going to be able to pass through these costs to your customers, or how are you going to deal with this? Did you have any security risks and cyber security risks and what learnings did you gain? Of course, we don't want details, but maybe just an overview of this topic. What do you do for when it comes to data security, considering the fact that more and more people are working from home? If employees are not working from their office but from home, which is a new risk when it comes to data protection and data security, what do you do with it? When do you use mobile phones or technology of Huawei, and how do you deal with the common risk?
What and what lawyers of what office are represented here? When it comes to the virtual AGM, if it really is a contribution to climate protection, which I doubt because live streams also use a lot of electricity. What was the total kilometers done by cars and planes for business trips by Merck? Before you don't use the money for the shareholders, you should have a look at the supervisory board and look how they behave when it comes to ESG criteria. What are your plans for next year? If I ask you, maybe give me not a very comprehensive answer. Did you already reserve rooms for the AGM 2024 or gave an option?
How many shareholders have-- were dialed in this year in your AGM? How many from abroad, and how many shareholders participated in the last AGM that in presence? Mr. Büchele, when I look at your participator list, there are only about 100 participants present now. That's very, that's a very low number, and I think this reflects the opinion of most shareholders that they don't like virtual AGMs at all. You should consider that too. What, what are the cost estimates for this year's AGM, and is it really less than in presence? What were the costs for the last AGM in presence? And if you don't know the numbers for today yet, maybe you know it for last year. How many shareholders did participate? Because even if you.
We think or we assume that the cost will be more or less at the same level. We also have the technical difficulties. There have also been AGMs, for example, yesterday at AGM, where we had a large break because there were technical difficulties. Do you have active projects at the moment in Russia, and how do you deal with that? One step back to the virtual AGM and the investor portal. At Beiersdorf, there was a point you were able to click on, and then you could receive a present. Didn't you follow this positive example? I have a question about the shareholder register. How many shareholders does the company have?
What is the quota for natural and jurisdictional persons, legal persons, and how is the distribution in age? That do young people invest in your shares, and how many are 100 years old or even older? When it comes to the business leadership, what was the best success in the last year, and what are the 3 main problems you see? This is all from me for now. Thank you very much to all the employees for the good which are responsible for the good results, and thank you to the shareholders, for your attention. We give the word back to you, Mr. Büchele.
Thank you very much, Mr. GÄBLER. I do not have any further requests for the floor, so I'd like to start with answering the questions. Ladies and gentlemen, I hear that the answers have not been prepared yet, so we will now break for 15 minutes, which means that the AGM will continue at 12:17 P.M. 15 minutes break until 12:17 P.M. Excuse me, 12:07 P.M. Thank you very much.
Ladies and gentlemen, it's 12:22 P.M. We will now continue the AGM with answers to your questions. Let's start with the questions of Mr. Pawel. Mr. Pawel, you were asking when Merck will return to in-person AGMs. The decision on the format of the AGM will for each AGM taken considering the interests of the company and its shareholders. Decision will be taken every year. At the current point in time, no decision has been taken which format will be used by the company for the next AGM. You were asking why members of the supervisory board can participate virtually in the AGM.
The virtual participation of members of the supervisory board in a virtual AGM is a consistent continuation of the broadcasting of, or transfer of the AGM into virtual format. Members of the supervisory board have a rather passive role in general at the AGM. As a rule, the supervisory board speaks through its chairperson. Furthermore, the right of shareholders for information is a right aimed at the executive board, not the supervisory board. Thus, a physical presence of members of the supervisory board, especially in the context of a virtual AGM, is not equally required in our opinion. Now, for the next question, I will hand over to Mr. Matthias Heinzel.
Mr. Pawel, you were asking about the growth in the Life Science segment without COVID. For Life Science, we are confident regarding the growth perspectives beyond the pandemic. In our midterm forecasts, we consider an average annual turnover growth of 7%-10%. I return to Mr. Guenter.
The likelihood of ibrutinib and Xevinapant to reach blockbuster status for ibrutinib after the recent discussion with the FDA. Both products are currently in their final registrational trials. For ibrutinib, we are currently in discussions with the FDA after a partial clinical hold for the study. The initiation of new patients on ibrutinib is currently paused worldwide, while the fully enrolled phase III ibrutinib studies continue as planned. We do not expect a negative impact on the timing of the readouts. Once registered, and in case the very positive results from previous studies can be confirmed in the registrational trials, both products have the potential to become blockbuster drugs following the expected benefits they would bring to many future patients. For the next question, I pass on to Matthias Heinzel.
Mr. Pawel, you were asking about the three business units of Life Science, how they compensate for the special effect of COVID, which is now discontinuing. For our 3 business units, we focus on a strong growth in the core business. In fiscal 2022, the Life Science business unit saw a total increase of 8%, which represents a strong organic growth. This includes a reduction of COVID-related turnover to around EUR 800 million versus the previous fiscal year. We could compensate for the reduction of COVID-related demand through a strong organic growth in our Life Science core business of more than 40%. We could more than compensate for that. Our business units contributed to the strong organic growth in the core business.
For fiscal 2023, we're expecting a COVID-related total turnover of around EUR 250 million after the aforementioned approximately EUR 800 million in fiscal 2022. For our core business, we assume a solid to strong growth. Mr. Pawel, you were asking how long Science & Lab Solutions and Life Science Services will continue to serve as cash flow providers, and if these two business units are at disposal. In fiscal 2022, we introduced a new business structure for Life Science consisting of the three pillars: Process Solutions, Life Science Services, and Science & Lab Solutions. The new organizational structures enables a stronger focus on our customers, the optimization of our go-to-market strategy, our capacity and supply chains, as well as the achievement of growth in the rapidly growing service markets, and it supports our high ambition for a long-term profitable growth.
All three areas provide important contributions to achieving these ambitions. I return to my colleague, Mr. Beckmann
Mr. Pawel, you were asking how long the areas Display and Surface Solutions would continue to serve as cash flow providers and if those would be at disposal. Besides Semiconductor Solutions, our biggest business with a strong growth potential, we have the other two units, Display and Surface Solutions, and they will continue to be managed under the aspect of cash flow optimization. Display Solutions has been shaped from a reduction in business with liquid crystals for a few year now. The business unit continues to invest in future technologies like OLED materials and our iRise Smart Windows technology. Currently, we believe that our display business will return to growth in the midterm. Surface Solutions continued its successful course past year, which started with the COVID-19 pandemic.
Since more COVID restrictions later in China have restricted cosmetics business, contributed to a strong growth. As part of our strategic planning, we regularly check our business portfolio and our capital allocation regularly. Should we reach the conclusion that other business under the management of other owners would develop better and could maximize the value for Merck, we would consider selling the respective business. Mr. Pawel, you were asking about the USP of Versum and how we want to continue that. In the more than 3 years since the acquisition of Versum, we have successfully integrated the business into Merck, and thus have made our Semiconductor Solutions business a worldwide leading partner of the semiconductors industry. Our portfolio covers all important processes of manufacturing of semiconductors. This broad portfolio, in conjunction with our industry-wide leading research budgets, our patent portfolio, and our worldwide network of production sites, is a USP.
Modern chips, like for AI, are not possible or hardly imaginable without our materials. In our Level Up program, we work on extending our production capacities, strengthening our R&D work, and on extending new capabilities. Athinia is a joint venture with Palantir to evaluate data from production processes. It's a good example that shows that a platform for new data exchange with chip manufacturers, it's establishing a position there and offering new approaches for solutions based on AI. Mr. Pawel, you were asking about our regional growth strategy in the semiconductor business. There's agreement that in the long run, the demand for chips will increase severely. Our business serves customers from all regions of the world, which means that we grow in regions where chip manufacturers invest. Currently, chip production capacities in the regions South Korea, Taiwan, and China are massively extended.
With our growth program Level Up, we invest, among others, in local production capacity near our customers, which strengthens the resilience of our supply chains. On the other hand, we grow together with our customers, the chip manufacturers. The new initiative, like the EU Chips Act, will foreseeably lead to an extension of production capacities in Europe. We're in a very good position to supply to chip manufacturers. I hand over to Mrs. Garijo.
Dear Mr. Pawel, your question, your first question, refers to our approach for inorganic growth. Please note that M&A are a very important driver of our long-term value creation strategy, with a focus on innovation-driven technology, in high-potential, highly attractive markets in order to accelerate our growth. Acquisitions are being considered globally. The investment must be a strong strategic fit with our group strategy and our group direction. Our capital investment strategy is based on a systematic portfolio management and a very well-defined capital allocation process. The capital allocation strategy aims at prioritizing investments in businesses with the most promising growth, risk profile, and value creation potential. These are what we call our Big 3. I have mentioned this during the introduction.
Namely, Process Solutions together with Life Science Services, the new Healthcare products, and Semiconductor Solutions. We are, of course, willing to invest in other attractive areas if we identify any suitable opportunity fulfilling those criteria that we have defined. In Life Science, we see ample opportunities for inorganic growth. Given the highly attractive markets we play in, we are considering transactions across all sizes. In our electronic business sectors, we will focus on novel technologies, mainly, and I would say only in the semiconductors space. In Healthcare, we will continue to actively look at in-licensing opportunities, and potentially smaller M&A options that could bring additional optionality to our pipeline. Moving into your next question, Mr. Pawel.
The question refers to the current conditions in the European Union in terms of regulation, taxes, inflation, et cetera, and potential disadvantages for our business in the European Union and potentially Germany. As a global science and technology company, we are committed to serve our customers and patients best. We want to be in the region for the region, this strategy delivers great benefits to our customers, and at the same time, build more resilience on our side. Besides financial, taxation, and other regulatory aspects, our regional strategy builds on multiple criteria, such as customer proximity, talent and capabilities availability, and infrastructure, just to name a few. We are aware of the implications arising from changes in this criteria. We constantly monitor our portfolio from a risk-return perspective, and we adjust as we see needed.
Mr. Pawel, your next question referred to advantages in our U.S. business due to favorable conditions in energy taxation and regulations. Let me emphasize once again that our localization strategy, and consequently the selection of individual sites, builds on multiple criteria for which we assess potential implications across the entire value chain. Let me give you a few examples. As I mentioned already, customer proximity from a commercial perspective is an important criterion. Supply chain resilience from an operational standpoint or capabilities availability are crucial parameters that we take into consideration when making decisions for localization. Implications arising from differences in energy prices, taxation and regulations are obviously also part of the debate and of the comprehensive assessment and our group-wide monitoring efforts.
Coming back to your question and talking about the U.S., we deem the U.S. market as strategically important and see our business well-positioned to deliver further growth across the three business sectors. Moving into your very important question on globalization, most importantly, de-globalization. You referred to the influence of de-globalization, decoupling, and reshoring on geostrategic, meaning localization, location decisions. As you know, we have successfully transformed Merck over recent years into a globally diversified science and technology company, which is, I believe, uniquely positioned in fast-growing markets. In our today's world, which is characterized by global disruptions, specifically geopolitical tensions, but also macroeconomic uncertainties, we benefit more than ever before from this diversification through a strong financial backbone and great presence, and portfolio diversification, customer diversification, and geographies.
Additionally, strategic foresight and scenario planning are important dimensions to resilience and deeply anchored in our strategic decision-making process. As a result, we see our company extremely resilient and solidly positioned to deal with challenges in a very effective way. Mr. Pawel, you also ask about the implication on our location strategy. Let me tell you that localization was and will remain an important pillar of our strategy. As a global company, we will continue to serve our customer best by following this in-region, for-region approach that I mentioned already, also to enhance the resilience of our supply chains. Finally, as common practice, we regularly assess, monitor, and review our existing portfolio of operations from this risk-return perspective, and of course, we adjust our strategy whenever we consider this necessary.
Mr. Pawel, you ask whether our resilience strategy, meaning regional production and supply in the three regions, EU, China, and the U.S., could become a scale problem for Merck based on respective local customer demand. That means being too small to compete in any of the regions. Let me be very strong and extremely resilient group, this is the outcome of our strategic focus on international operations as a globally diversified science and technology company. With our worldwide multi-industry setup, we are already serving diverse attractive end markets with long-term growth drivers and are hence less exposed to macroeconomic downturns. As a global player, we strongly believe in free trade, as I also mentioned during my introduction, the advantages of free trade for communities and for society.
We also believe firmly on bilateral and multilateral cooperation. We hope that common sense and citizens interest will prevail so that we can operate in a free trade environment. At the same time, in order to anticipate potential challenges to the supply chains, we continue to increase our supply chain resilience further through operating with a globally diversified footprint. We believe that the U.S., China, and Europe will remain the largest global markets with attractive long-term drivers and that there is no global world without one or the other. That is why we have implemented our regionalization strategy over the last few years, on which we as a global player are delivering on.
To be precise, in all three regions, we believe to have sufficient capacities in place to generate efficient growth while we are always striving to expand our production network in full sync with our. Mr. Pawel, you also asked about our China engagement and potential risks due to increasing reservations of the Western world regarding China. Look, one-sidedness generally leads to misjudgment and prevents a balanced strategy, which is urgently required when dealing with China. We, as Merck, has a strong roots in the region and look back to a successful history of almost 90 years of presence in China. Today, we are deeply embedded in the local ecosystem with almost 5,000 employees at 11 sites.
Recent investments, such as the EUR 100 million expansion of single-use manufacturing in Wuxi, are part of Merck's strategy to diversify our regional footprint in Asia Pacific, also in close alignment with the regional customer base. This is part of our effort to enhance our public health infrastructure in China. As a global player, I insist we strongly believe in free trade and the advantages for communities and society. We indeed believe on bilateral and multilateral cooperation, and we hope that common sense will prevail. At the same time, we will continue to increase our supply chains resilience and operate with a globally diversified footprint. U.S. and China, in our opinion, will remain the largest global markets with attractive long-term drivers. There is no global world without one or the other.
Mr. Pawel, you also referred to potential risks for Merck associated with an escalation in the Taiwan conflict. We are monitoring the geopolitical environment very closely. Strategic foresight is an important dimension of resilience and deeply anchored in our strategic decision-making process. In our group-wide scenario planning, we consider potential future states, what we call new realities, including different degrees of escalation between the U.S. and China in the spotlight of the conflict and Taiwan as a proxy. We have defined appropriate contingency plans, which include a combination of proactive and reactive mitigation measures. We remain strong supporters of our in-region, for-region strategy and will follow this strategic path moving forward. Mr. Pawel, you ask about our self-classifications in the discipline of digital products, digital work, digital processes, and digital mindset.
Merck actively works on digital transformation initiative to best serve our patients, customers, and partners by enhancing our operations, products, and services. Regarding digital products, Merck is developing and offering various digital solution to our customers all across our three business sectors, such as Edison, Athinia, Bio4C, SyGen, SYNTHIA®, Syntropy, et cetera, et cetera. On digital health, we emphasize launch-ready digital health solutions for our late phase 3 assets, Xevinapant and Evobrutinib. In terms of digital work, Merck has been promoting a digital work culture that emphasizes collaboration, but also agility and innovation. The company has invested significantly and will keep in digital tools and platforms to facilitate remote work, virtual collaboration, and global knowledge sharing across our employees.
Regarding digital processes, Merck has been and will keep implementing digital technologies such as automation, artificial intelligence, and complex data analytics to optimize our business processes, to reduce costs, and to improve general operational efficiency. These digitized processes enable Merck to respond more quickly to changing market conditions and to customer needs. Regarding our digital mindset, Merck has fostered a culture of data, digital innovation, and experimentation. We encourage our employees to explore new digital technologies and ideas, and to challenge the status quo when we can do better. Merck also promotes a customer-centric approach to digital transformation, which involves the understanding of our customer needs and potential pain points, and develop digital solution that actually address those needs. We have a dedicated data culture team promoting and supporting the change of culture and mindset and skill set, which is also very important across the company.
Overall, we are classified as a company actively embracing digital transformation across various disciplines, including digital products, digital work, digital processes, and digital mindset. The company's digital initiatives aim to enhance our customer's experience, improve operational efficiency and drive innovation and growth. With this, I'm going to hand it over to Marcus Kuhnert for the next question.
Well, thank you very much, Belén. Mr. Pawel, in your question, you were asking about increasing demands and stock-keeping costs for 2022, and we're asking what we do to optimize cash flow and working capital. The increased price level due to the inflation development led indeed to an increase in purchasing costs, and thus an increase in the book value for raw materials, unfinished goods, and operational substances in the stock. To compensate for the increased purchasing prices, Merck implemented price increases. Passing on of price increases in the Life Science and Electronics business units is, as a rule, more easily possible than in the price-regulated environment of the Healthcare business unit. To reduce the risks from interruptions in the supply chain, partly stocks were increased.
The scales would increase the risk of a later need to depreciate the value if these stocks cannot further be processed or sold. Demands from suppliers and services have grown as part of our business growth. For 2023, we're planning to optimize our cash flow management, in particular in the area of net working capital. Our focus is there, especially on changing the stock assets, especially all other directly controllable elements of the operative cash flow are continuously being monitored. Mr. Pöppl, you were asking about our acquisition and financing strategy in the case of larger M&A transaction. You mentioned the word re-leveraging. For us, in fiscal 2023, we see financing leeway in the range of EUR 15 billion-20 billion for M&A activities. Besides the use of existing liquidity, we have some financing options available.
It is likely that like in the past, an M&A would be financed through loans from banks. Of course, we would make sure that we have a balanced profile of our obligations with the possibility to use our strong operative cash flow to pay back that in the first 3 years. Mr. Pöppl, you commented that the book values of the business and company values based on acquisitions in the past conserved compared to the equity of the company are high, and you were asking about the impairment and risk. As you justly stated, the business company values in the annual statement are rather high. The value reduction risk has been considered limited in the past. In this context, we refer especially on the sensitivity analysis of the 3 significant assets for the impairment test, long-term growth rate after taxes, the net payment streams.
It must be considered that the currently very dynamic macroeconomic environment with increased interest rates, supply chain bottlenecks, and economic risk compared to the previous year, would certainly lead to an increase of impairment risks for business and company values, but also for other assets. We are monitoring this development and any indicator for impairment very closely. How possible impairments will affect the stock price of Merck is something that we can difficult evaluate, but it might depend on the magnitude of the impairment, the reason of the impairment, and the market expectations. Mr. Pöppl, you were asking about our dividend policy, especially against the background of a lower stock price development. As you know, we pursue a sustainable policy. The current dividend represents a stable development of...
Based on a possible of stable development of the business environment, it provides the basis for future dividends. It also refers to the development of the profit of the company. We aim at a target corridor of 20% to 25% of the profit per share pre. We have ambitious growth goals and larger acquisitions are not excluded for the next few years. To do that, we need financial flexibility.
Still, we propose a dividend of EUR 2.20 per share for fiscal 2022. This proposal is at 21.9% of the result per share pre in the mid of the corridor and corresponds to a significant increase of 19% versus the previous fiscal. The previous year dividend is meant to be the basic value for the years to come, so it's a kind of obligation that we want to live up to in the future. Tim is supposed to ask for our assessment and for the management of the risk of pension provisions in view of increasing interests. Increasing interests also affect the amount of the pensions and also of the assets made provided for that. Generally, the receivables or the liabilities for pensions are settled, and the liabilities for pensions lead to payments only in the future.
The higher the interest, the lower the pension liability. For the pension assets, on the other hand, increasing interests result in a lower assets since bonds and their market value will decrease and shares react negatively to increasing interests. We noticed this at Merck 2022. The receive liabilities due to the raised interest fell from 6 to EUR 4.3 billion. The pension assets went down from EUR 3.6 billion to EUR 2.6 billion. The provisions for pensions fall from EUR 3 billion to EUR 1.7 billion. Increasing interests result at Merck for a reduction of the pension provisions and have a positive effect. If interests are to fall in the future, pension provisions can then also be increased.
Due to the long terms of these liabilities and to the relative low amount, EUR 1.7 billion, the financial risk for Merck is to be assessed quite low. Tim has probably asked how we tackle the challenges of FX volatility. We can't make any statement on the amount of the FX effects in this year because there are so many factors affecting them. Based on today's courses, however, prices, the FX changes would have negative effects on our results. We are following a proactive hedging strategy in order to safeguard against the volatility of FX. With our FX strategy, we want to limit these losses to our expected 12-month cash flow in cash at risk to a maximum of 5% compared to the previous year.
The implementation of such strategy is done by 3 so-called layers within individual hedging corridors and trigger points to safeguard up to 90%. Even we consider natural counter effects within our portfolio. For example, currencies where we are short on. In layer one, we're hedging 20% of our risk via future deals with due dates of 12 months with US dollar, Korean won, and Taiwan dollar. In layer two, 20%, especially are secured by options in US dollar and Chinese renminbi, again, with due times of 12 months. Depending on the development of the FX courses, the hedging ratios can be increased in course of a year of layer three up to 90% in order to reach our target to limit the cash at risk to 5% compared to last year.
Currently, about 50% of our expected cash flow in foreign currency are hedged for the next 12 months. Mr. Pawel asked for the meaning of the Big 3 for Merck and whether the market understands and honors this. The Big 3 include our Process Solutions and Life Science Services business units in Life Science business sector, and new products in our Healthcare business and Semiconductor Solutions. The Big 3 stand for about 80% of the growth, sales growth in the next years, therefore, they are logically the focus of an investment policy of our company. They are the main contributors for our sales growth. Correspondingly, we expect that our focusing on the Big 3 midterm will be honored by the capital market. You were also asking for the purpose of diversification of the Merck Group, the three-pillar strategy.
In other words, the diversification of Merck, of course, increases its complexity for investors who are only want to invest in one industry or one investment style. This seems to be unfavorable for us. However, it offers additional financial flexibility. Over the, in the past, this was recommended itself in times of crisis. Here we've seen that in some areas, we had good results. A condition for good result as a diversified company, however, is a clever management of the different areas and of the cost by active portfolio management, effective capital allocation within the group, as I've said above, at the example of the Big 3. mainly invest main investments into the Big 3 and preventing cross subsidies of underperforming units, especially for our long-term investments. This means that the resulting resilience of our company offers benefits.
Therefore, I hand over to Mr. Guenter.
Well, you asked what will drive the sustainable growth of our drugs, Bavencio in cancer and Mavenclad in Multiple Sclerosis. We expect both drugs to continue showing growth in the near-term future and in line with the life cycle stage of the products. For Bavencio, the growth will be primarily driven by an increased usage of Bavencio as first-line maintenance treatment for advanced urothelial carcinoma. This is a field in which Bavencio became the standard of care. For Mavenclad, we also see an extended usage in the already approved indication in the field of relapsing MS, as more and more physicians see the benefits of Mavenclad. This is also driven by the study results related to Mavenclad, which we presented during major congresses in 2022, such as ACTRIMS, AAN and ACTRIMS related to quality of life, safety, and efficacy.
Mr. Pawel, you asked if our R&D investments can secure a sustainable delivery of new blockbuster products. In the near term, we expect potential major approvals with our pipeline products, Ibrutinib in the field of MS and with Xevinapant in the field of oncology. Both products are in the final registrational studies and could become blockbuster drugs once approved. As part of our ongoing R&D transformation, we aim to launch one major new Healthcare product or indication every 1.5 years on average. To achieve this, we will also selectively use external innovation by applying targeted licensing. Especially in the oncology field of the so-called DNA repair mechanism space, and with ADC products, we believe to be very well positioned. Dear Mr. Pawel, you asked for the patent expiry dates for major Healthcare products. Regarding Xevinapant, the regular 20-year patent term will expire in April 2028.
We expect to obtain patent term extensions by up to five years in the major markets, such as the U.S. and EU, up to April 2033 maximum. For Mavenclad in the EU, we generally have protection via data exclusivity until August 22, 2027. The basic patent protection is until December 20, 2025, but will be prolonged via patent term extension in 18 European countries until 2030. The 18 countries are Austria, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Spain, France, Greece, Iceland, Italy, Lithuania, Luxembourg, Latvia, Sweden, Slovenia, Slovakia, and Switzerland. On Mavenclad in the U.S., we have patent protection until October 16th, 2026. Regarding Ibrutinib, the regular 20-year term of the compound patent will expire in June 2032.
We expect to obtain patent term extensions of up to 5 years in major markets like the U.S. or the EU, which will extend the protection until 2037. For Bavencio, the regular 20-year term of the compound patent will expire in November 2032. Dear Mr. Pawel, you ask about insights to the Healthcare R&D pipeline. Our Healthcare R&D pipeline is very strong. Today, we have multiple clinical development programs underway with potential first in class or best in class assets, such as Xevinapant, Ibrutinib, and Peposertib, next generation ADCs and our DDR portfolio. These assets have the transformative potential to deliver significant long-term growth. Mr. Pawel, you asked for the chances of new approvals for our development pipeline in current phases 1, 2, and 3.
With our pipeline products, Ibrutinib and Xevinapant, which are both in the clinical phase 3, we do have a near-term opportunity to launch new leading drugs in their respective fields. Typically, chances of approval in this late stage development are above 50%. We also feel well positioned in the field of the so-called DNA repair mechanism, currently in phase 2, as well as with ADC products currently in phase 1. At the same time, we will continue to look for external partnering opportunities to selectively strengthen our development portfolio across the clinical Mr. Pawel, you asked about the sustainability of our R&D pipeline and how we can cope with potential shortfalls. With our pipeline products, Ibrutinib and Xevinapant, which are both in the clinical phase 2 stage, phase 3, we do have a near-term opportunity to launch new leading drugs in their respective fields.
We also feel well positioned in the field of the so-called DNA repair mechanism, currently in phase II, as well as with the ADC products, as mentioned, currently in phase I. At the same time, we will continue to look for external partnering opportunities to selectively strengthen our development portfolio across the clinical stages. To sustain growth and create even higher value over the long term, we aim to double our R&D productivity and plan to launch a new drug or major indication on average every 1.5 years. To achieve this, we will build on our established expertise in the underlying biology of our focused therapeutic areas of oncology, neurology, and immunology and leverage technological capabilities.
We expect to maintain the outputs of our internal discovery engine with more than 50% of future launches resulting from external co-development partnerships and strategic in licensing of assets for further in-house development. We will remain the focus on therapeutic areas and market segments where we can really make a difference. By building on our existing strengths and maximizing synergies within our in-house discovered pipeline and with external assets, we will secure sustainable R&D productivity that leads to innovative medicines for patients in need. With that, I would pass on the word to Kai Beckmann.
Against the backdrop of an article from yesterday about alleged export restrictions to China for chemical semiconductors, you were asking whether the Wissmann model might be a Merck model. We ask for your understanding. We generally do not comment on rumors and speculations, and we see the article released yesterday as such. I hand over to Mr. Büchele. You were asking about the reasons against an in-person or a hybrid AGM. We see fundamental advantages in the virtual format of the AGM. The legislator has extended significantly the rights of shareholders in virtual AGMs. Format of the virtual AGM has been made very close to in-person AGMs. Just like conventional in-person AGMs, virtual AGMs, as defined by the new format, allow for direct interaction between shareholders and management during the AGM, through live contributions by the shareholders.
Shaping of AGM in a hybrid format is, in our opinion, affected with technical disadvantages and some legal uncertainties. As opposed to a purely virtual format or an in-person format, the hybrid format does not offer any real advantages. Besides that, it corresponds to the actual practice of other companies that are a member of the DAX to not hold AGMs in a hybrid format. Mr. Pawel, you were asking whether the pensions for the members of the board are comparable to market values. In accordance with our company format, committed company on shares, it's not the board, but the Executive Board who are personally liable partners who conduct the business. We refer your question and all further questions regarding the compensation of the board to the compensation of our Executive Board. As is the practice in DAX companies, it's a contribution.
The value of the company pension is monitored as part of the regular monitoring of the compensation of the members of the Executive Board. The height of the annual contribution for pension follows what is usual practice in DAX. Compared to other DAX companies, the amounts for the chairperson is in the median comparable to the market. Mr. Pawel, you were asking whether individual compensation elements or the total compensation of the Executive Board are comparable to values in the market. The HR Committee takes into account the comparative groups described in the compensation report and the support of an independent consultation company. They check regularly if these. We have to take into account that the position of the members of the Executive Board as personally liable partners explains different compensation height and structure.
The target compensation of the executive board, last time it was monitored for fiscal 2022, was based on the size positioning of Merck-derived market usual bandwidth of DAX. In a conventional comparison, the target compensation of the chair of the executive board was at the bottom edge of comparable market values. Mr. Pawel, you were asking whether the share of ESG goals accounts for more than 20% of the variable target compensation of the executive board. The compensation system foresees relevant ESG KPIs, both in the profit sharing, also in the long-term incentive plan. ESG is reflected in all variable compensation parts. The ESG criteria can have an impact on both variable compensation elements of ±20% on the payout amount.
Accordingly, the share of the ESG of the variable target compensation is higher than 20%. I hand over to Mr. Heinzel. Sorry, I hear Mr. Heinzel has no more questions, so Belén Garijo, please.
Thank you. Mr. Pawel, you also asked about our three-sector business model and the constitution from the risk-return perspective. What I can say about this is that in today's world, highly characterized by global disruptions and macroeconomic uncertainties, we see our resilient setup as a strong asset with great and tangible benefits resulting from Merck's diversification strategy. All our three businesses operate in global markets with long-term growth drivers, while we successfully foster technologies in global markets with long-term growth drivers, while we successfully foster technology exchange across sectors. bioconvergence is one example to mention. This allows us to deliver efficient growth, margins and cash flow and builds a strong financial position, from which we benefit in multiple ways. Mr.
Pawel, you ask about ideal benchmarks for our three business sectors and their performance in the market. We steer our business based on three major KPIs. This include net sales, EBITDA pre and operating cash flow. For each of our sectors, we monitor relevant peers closely, whom we benchmark our performance against. To give you a few examples, in Life Science, a major peer is Danaher. In Healthcare, peers like Bayer, and in electronics, companies like DuPont. A comparison across the KPIs shows that we have a very competitive positioning across relevant peers in the three sectors, which naturally is different and diverse by sector and KPI. In summary, we perform differently in the quantiles based on the respective defined market and KPIs, and we manage the group as a portfolio of individual science and technology business by ensuring appropriate composition of road candidates and cash contributors.
Mr. Pawel, your question refers to the optimal capital allocation for our three business sectors. Part of this I have already addressed in previous questions, but I will emphasize that our investment strategy is based on a systematic and very rigorous portfolio management and capital allocation process. The capital allocation strategy aims at prioritizing investment in businesses with the most promising growth and value creation potential. Once again, this is what we call the Big 3. In this context, M&A stays a very important driver of our long-term value creation strategy. Here, the main focus on our Big 3 innovation-driven technologies in highly attractive end markets to accelerate growth, while we are, of course, willing to potentially invest in other attractive areas if suitable opportunities are identified.
In Life Science, we see ample opportunities for inorganic growth. Given the highly attractive markets we play in, as I mentioned before, we consider transactions across all sizes. In electronics, our focus is in novel technologies in the semiconductor space. In Healthcare, we continue to actively look at in-licensing and potentially a smaller acquisition to bring optionality to our pipeline. We are scouting for opportunities on an ongoing basis. This allows us to eventually accelerate our baseline growth and create additional financial value for all stakeholders. Once again, I will repeat that acquisitions are being considered on a global basis. With this, I hand back to Mr. Büchele if there are any question left.
I do not have any further open questions, which means that all questions for Mr. Pawel should have been answered now. In the meantime, I received another request for the floor by Mr. Kiefer, who wants to raise a motion on a point of order. I would briefly interrupt answering questions and give the floor to you, Mr. Kiefer.
Thank you very much, Mr. Büchele. I did not raise a motion on point of order. I requested the floor further. Please decide whether you want to continue with answering your questions or let me speak now. In that case, Mr. Kiefer, since you're already live, I'd like to ask you to speak, because in the event that you have further question, it will give us opportunity to answer them. Thank you very much. First of all, Mr.
Büchele, I need to state that the technical system you use, and I'm with GÄBLER here, is, to put it mildly, very complex. It seems to work that way that you have 2 technical systems run in parallel. One, a system if somebody wants to speak, and one for the case that somebody just wants to follow the AGM. There's a disadvantage, at least in my case. Not sure if the other speakers had the same problem. After you made your speech and the Zoom stream ended, you needed to log into the investor portal again with the log-in, with the access data, name, first name, email address, everything, you name it. You can't be serious. A technical system like that is horrible. During the 3, 4 years of virtual AGM, I've never seen anything like that.
If you'd included some interactive elements last year, you might have learned how to do it better this year. I'm not sure if this is a problem you have or the service provider for the AGM. If you want to know how to do it properly and friendly, then ask colleagues . They did a great job, and they did not cause these problems. That was my first point, and I have to state very clearly it really, really annoyed me considerably. I find it hardly understandable that it takes you approximately 30 minutes to prepare to answer questions. Why not? The company asked me to hand in my questions beforehand, which I believe makes sense. It gives the management time, lead time to research more complex questions and to include that in the answer.
I believe that at least most of the other speakers did that, too. Now, before you start a round of answers, interrupt for another half hour is something that I cannot understand given the background of what I just said. I have to say that the impression that you gave of the time pressure on the AGM does not correspond to fact. You pointed out that there's a large number of requests for the floor so that you should limit yourself to what's most essential. Context that the AGM needs to be held properly. There were just 4 requests for the floor, which is actually shamingly low. There were only a few explanations. One is that nobody is interested in Merck or that the AGM format failed. I believe it's the latter.
The virtual AGM format simply and plainly seems to be less than ideal and seems not to be in the best interest of the shareholders. One last point. While I was in the so-called waiting area, Ms. Garijo and Mr. Guenter, I can hear what they say only in English. I'm not that good in English that I would say that I properly understood the answers to these questions. I believe that since this is a German company, and I hold shares in a German company located in Germany, where the negotiation language and the official language is German, the lack of the ability to fluently speak and understand English might be considered as a lack in education.
I can live with that, but at the same time, I'd like to say that the questions I ask will be answered in a language that I can at least understand. Thank you for your attention.
Thank you very much, Mr. Kiefer. We will get back to your comments, but now we will continue with our answers, and we continue with answering Ms. Kostinik's questions. Belen?
Kostinik, you ask if we can leverage opportunities wherever relevant. I can assure you that based on our group-wide results-driven culture, dedicated to profitable growth, we always consider and make use of opportunities when they arise to increase efficiencies or accelerate our target achievements. This requires a good balance between being disciplined with our strategy, but also not being dogmatic when it comes to evaluating our potential business opportunities that may bring business value on the basis of a business case that is positive. We have that right balance. Dear Ms. Kostinik, you asked what meaning Merck attach to the targeted resilience. First of all, for 355 years and 13 generations, resilience has always helped our company to navigate through many wars, recessions and geopolitical conflicts.
From an economic or business view, we define resilience on three dimensions. First, institutional resilience. This is related to operating model and organizational structures, systems, technologies, teams, and mindset that allows you to anticipate a crisis, not only just to respond to it. We at Merck have raised leadership expectations, empowered our teams, and encourage everyone to constantly anticipate and whenever is necessary to challenge the status quo. Organizations that can build this style of culture-led institutional resilience should see change not only as a threat, but also as a tremendous opportunity to deliver better results and more value for our shareholders and investors and owners. Secondly, there is financial resilience. True value creation becomes possible when everybody shares a disciplined approach to capital allocation.
A common strategy for efficient targeted growth can also help unlock capital so that you can further accelerate your innovation pipeline. In addition, we link financial resilience to delivering upon our sustainability strategy. Third, and importantly, there is reputational resilience. This requires a commitment to strive for something that is bigger than yourself. Your purpose must reflect the aspirations of the customers that we serve and the society that we are part of. For over 355 years, our company, your company, has never stopped reinventing itself. This history of reinvention will continue in the years and decades to come. Our institutional, financial, and reputational resilience is giving us the encouragement to ensure that we continue our business in future, even stronger than today, for the benefit of our owners and other shareholders.
Now with this, I hand it over to Peter Guenter.
Yes. Thank you, Belén. Ms. Kostinik, you asked a question on R&D transformation and our plans to increase productivity in R&D, as Mr. Pawel also did it. As I mentioned before, 2022 was a very successful year for Healthcare, driven predominantly by the launches, but also very importantly, the growth of our more established products, such as the CMSE franchise and the fertility franchise. Apart, our pipeline is very strong. Today we have multiple clinical development programs underway with potential first-in-class drugs or best-in-class assets. As mentioned before, we are talking about products such as Xevinapant, Ibrutinib, and Patohan, our next generation Antibody-Drug Conjugates and the DDR portfolio. We truly believe that these assets have the transformative potential to deliver significant long-term growth.
To further sustain growth and create even higher value over the long term, we indeed announced a transformation of R&D in Healthcare with the aim of bringing more patients, more medicines to more patients faster. Following this vision, we aim to double the R&D productivity and plan to launch a new drug or major indication on average every 1.5 years while keeping our R&D spending roughly at the same level. We will build on our established expertise in our focused therapeutic areas and leverage our technological capabilities. We expect to maintain the output of our internal discovery engine with more than 50% of future launches resulting from external co-development partnerships and strategic in-licensing.
By building on our existing strengths and maximizing synergies within our in-house discovered pipeline and with external assets, we will secure indeed sustainable R&D productivity that leads to innovative medicines for patients in need. For all required decisions, we consider country-specific advantages and also the regulatory environment. For the next question, I will hand it back to Belén Garijo.
Thank you. Thank you, Peter. Dear Ms. Kostinik, you have asked if the German government has requested Merck to contribute to a German initiative to reduce supply shortages of medicines as they have been observed in some areas. As Merck, we were able to keep our supply reliability stable despite the recent supply interruptions that have been seen in other industries. We have been in a constant exchange with the German government on different topics, both on national but also at regional level. The topic of supply security is a topic which is mainly taken care of by the German Association of Research-Based Pharmaceutical Companies, of which we are a member as well. Currently, we have not received such a concrete request from the German government reflecting that our medicines are rightly supplied.
Ms. Kostinik, you referred to a newspaper article in the German Handelsblatt, which concluded that some pharma companies in Germany see the danger of the German market to lose attractiveness driven by mandatory rebates and price restrictions. You ask about our position in this regard. We agree that the most recent price reductions enforced by the so-called mandatory rebates have a very negative impact on the potential of innovation in the German pharmaceutical market. What is equally important is the general business environment from a regulation perspective, which is making it challenging to run our research and development activities as required.
We see also competitors have chosen to locate major R&D activities in other countries. The recent years have shown how important it is to operate in the right ecosystem to be able to further develop and our innovation. Most importantly, an ecosystem that rewards that innovation. Having said this, we will continue to be as a global company, we will continue to be definitely present in our global headquarters in Darmstadt, and we'll continue to invest in Germany. We are in constant dialogue with the German government to be able to improve the situation and make sure we don't compromise on future innovation in the German market. With this, I want to hand it to Kai Beckmann.
Mrs. Kostinik, you were asking whether the semiconductor development in the future would be driven forward even further, whether we want to do that, and which goals we set to ourselves until 2025. Semiconductor Solutions business unit is the largest carrier of turnover in the electronics business unit. It's one of the Big 3 growth drivers of Merck. It benefits not only from, but also enables with its products and services, the megatrends of digitization like Internet of Things, big data, and artificial intelligence. With our growth program, Level Up, we invest further in extending our production capacity and our R&D activities, in particular in the area of semiconductors. In the period between 2021 until 2025, in close coordination with the requirements of our customers, we want to invest more than EUR 3 billion, which means doubling the amount spent in the previous 5-year period.
I return to Belén Garijo.
Thank you, Kai. Ms. Kostinik, you asked for planned measures to retain well-skilled employees who are affected by planned job reductions in Darmstadt. Together with our works council, we have reached an agreement for the employees in Darmstadt that would be in the scope of our current transformation. Our primary goal is to offer those employees affected, continued employment opportunities within the company. We are respectful of the agreement that we signed with the unions. We leverage our internal job placement platform that has been well-established at Merck to re-skill and redeploy, potentially affected employees to other positions. The exclusion of operational redundancies until the end of 2025, as I mentioned already, is still, of course, valid. Overall, we continue to aim to retain and invest in our employees.
Dear Ms. Kostinik, you inquired about what is the share of disabled employees in Germany. For 2022, the rate for disabled employees was at almost 5%, precisely 4.9%. In general, we continue to strive for an inclusive environment for employees, customers, and visitors, and this includes, for example, investment into our sites and buildings. Furthermore, we conduct inclusive leadership trainings and offer employee networks for disabled employees globally. In Germany, we have signed an inclusion agreement to generally strengthen inclusion of disabled people. We offer a start into apprenticeship program for young disabled people and young people with chronic diseases, and we engage into cross-company initiatives in the industry. With this, I want to hand it back to Mr. Büchele.
Ms. Kostinik, you asked whether there's a use case of the Malus and Clawback rules according to the compensation system, and whether there have been revisions of those rules. The compensation system with the corresponding Malus and Clawback rules came into force on the January 1 of 2021. Since then, there have been no use cases nor any revisions of the rules. The members of our executive board, regardless of the compensation system, unlike as the board members of the stock corporations, are not simply employed members of a body. Each member of our executive board is personally liable with his private assets. With his private assets. Currently, the compensation system is reviewed for potential need for adaptation. A revised compensation system will be submitted to the shareholders as late as in 2025 at the AGM for approval.
I'll hand back to Miss Garijo.
You were asking how Merck deals with pollution rights, by this probably, you were referencing the EU Emissions Trading System. With power plants, at the Darmstadt and Gernsheim sites in Germany, Merck is covered by the EU Emissions Trading System. In the first two trading periods up until 2020, until 2012, Merck got a benefit from free emission rights. In the third trading period lasting until 2020, new allocation rules were implemented and Merck still got a benefit from free emission rights, but had to purchase first additional certificates. By now, the allocation rules for the fourth period spanning the years 21 to 2030 have been established. A first application for free allocation of emission rights until 2025 has been submitted. A purchase of additional certificates will remain necessary in the coming years.
However, through the ISO 50001 certification of the respective sites, as well as our corporate climate targets, we continuously work towards improving energy efficiency and reducing energy consumption, therefore reducing the need for emission certificates.
That's all.
Ladies and gentlemen, we come back to Mr. Pawel because now we've got the answers of his previous questions. Mr. Pawel, you asked whether ESG is considered as an approach in the target agreement of our members. Sustainable development and profitable growth go hand in hand. We can only remain competitive if we create added value for society. Therefore, sustainability is clearly anchored in the conversation. The sustainability targets can be seen during setting the factor, the compensation factor, and since the fifth year, 2022. In addition, the sustainability factor was introduced in the long-term incentive plan. I'll hand over to Belén Garijo.
Thank you very much. Dear Mr. Pawel, I am going to address questions 38, 40, 42, and 43, which remain to be answered, at 38. Dear Mr. Pawel, you were asking about the opportunities, risks, and costs that come with sustainability. For us, it is clear that sustainable entrepreneurship and profitable growth are not mutually exclusive, but rather mutually dependent. That is why we embedded sustainability as a firm element of our enterprise strategy. In terms of opportunities, we see a rising demand for alternative, more sustainable solutions and technologies. By early anticipating the fields where we can make a difference and contribute to the sustainability goals of our customers, we can establish Merck as a supplier of choice. To manage risks and costs, we embedded sustainability aspect into our risk management processes as well as investment decisions.
Risks, for example, could arise from rising energy costs, as we have seen happening in the recent months. Beyond this, we want to emphasize that there is no clear borders between sustainability-related and not sustainability-related costs, as in most cases, investments into sustainability are investment into business resilience, operational process enhancements. One example for a specific investment into sustainability is the addition of a fourth purification unit in our wastewater treatment plant in Darmstadt, increasing water quality beyond what is legally required. Another example, our investment into our electronics facility in Hometown in the U.S., where we produce specialty gases for the semiconductor industry and are now installing a specific abatement technology to reduce a significant part of Merck's process-related greenhouse gas emissions. Moving into number 40, dear Mr. Pawel, you also were asking if the EU taxonomy would be a location disadvantage.
Merck is in support of the EU efforts to promote sustainable activity and investment. The EU taxonomy is a very complex reporting regime that requires EU companies to collect and analyze a vast amount of data in order to be able to fulfill the corresponding reporting obligations. As such, it represents an additional effort that companies in other jurisdiction do not have to undertake. It will be important that investors correctly interpret the EU taxonomy reporting, that there will be similar reporting requirements also in other jurisdictions, so that investors have a comparable basis for their own decision-making. Back to you. 42. 42. Yeah, it's 42. 42 and 43. Moving into question number 42, dear Mr.
Pawel, you were interested in learning how Merck uses our innovation potential to position ESG as a business case instead of a period regulatory requirement. As I said already, we clearly see an opportunity in establishing Merck as a preferred supplier by early anticipating the fields where we can make a difference and contribute to the sustainability goals of our customers. One example from our Electronics business sector, in 2022, we established a partnership with one of our customers to develop and eventually produce gas solutions with low global warming potential, and that these are currently in a practical testing phase. I mentioned that already in my introduction. Another example for the Life Science sectors, we are leveraging our expertise to provide fit for purpose bioprocessing products and services for cultured meat production.
We are working on innovation projects to address specific technology challenges such as the cell culture, media, and bioreactor designs that are cost-effective and suitable for this emerging field. Moving into question number 43, dear Mr. Pawel, you also asked how Merck can be more efficient, even more efficiently on communicating ESG as a competitive advantage in the market to create enhanced shareholder value. Sustainability as a value driver is already an important element in our interactions with customers and investors, and I can tell you, I do focus the ESG discussions with investors. An example from our customer-oriented communication is our web-based tool, DOZN, that enables our customers to evaluate various products and processes for sustainability improvements and thus make more ecologically sustainable choices. In 2022, we counted approximately 1,500 users of this web-based tool from 60 countries.
We also use supply chain ratings, such as EcoVadis, to inform our customers about our own ESG performance. In 2023, the EcoVadis assessment, or as part of the EcoVadis assessment, we were awarded the Gold recognition level and were thus among the top 3% of all participating companies. By integrating sustainability into our research and development processes, as well as by assessing sustainability impact of our products, we are continuously improving the data foundation for communicating on the impact that we make, with our sustainability, with our sustainability initiatives. Thank you very much. I think this closes the questions from Mr. Pawel.
Thank you very much. All the questions from Mr. Pawel has been answered. We move on to the question of Mr. Kiefer. Mr. Kiefer, you asked why the AGM doesn't take place in person. As I've already said in the answer to the question of Mr. Pawel, we see benefits in the virtual format of the AGM. The format of the AGM has come very close to in-person meetings and allows, just like the conventional in-person AGP, the direct interaction between shareholders and management during the AGM by means of live contributions of the shareholders. You also asked from what health hazards the shareholders should be protected. The preparation of AGM naturally takes a certain lead time.
At the time when we were deciding about the way of the AGM, to held in at that time, the development of COVID-19 pandemic was not safe. We couldn't, and we couldn't foresee it safely. Therefore, in this respect, the virtual format was a safer choice for this year's annual general meeting. Mr. Kiefer, you asked why supervisory board meetings take place in presence, whereas the AGM takes place virtually, and whether the AGM is less important or decides among less important matters. As I've already said, we see principal benefits in the virtual format of the AGM, this includes especially the easier participation for shareholders, for minority shareholders, and for shareholders who cannot travel here or for whom it is a large effort.
Along with this, sustainability aspects like saving energy costs and the health protection of our, of our shareholders and employees play an entire role. These benefits cannot be transferred in the same measure to Supervisory Board meetings. Therefore, in our opinion, there is no contradiction in the value. AGMs are not less important, and they do not decide on less important matters than meetings of Supervisory Boards, but by nature, they have a different structure than meetings of Supervisory Boards. Mr. Kiefer, you also asked for the planned cost for this year's AGM and the costs that would occur in the case of an in-person AGM. Well, for the current year, we estimate that we have costs of around overall costs of around EUR 500,000.
The last in-person AGM in 2019, before the COVID pandemic, cost around EUR 1 million. Looking at the general price increase since then, since 2019, an in-person AGM today undoubtedly would have been even more expensive. Mr. Kiefer, you asked after the ratio of agreements in the executive board and in the supervisory board for the virtual AGM. The decision for doing the AGM virtually was taken unanimously, both in the executive as in the supervisory board. Mr. Kiefer, you asked for the future content of the virtual AGM with respect to the aspects which you mentioned, limitation to a limited emergency situations, possible interaction of the AGM and others. For the AGM for us, the comprehensive rights of the shareholders play an important role. The legislature has formally structured both ways alike.
Therefore, the scope of application of virtual AGM, we don't see that as limited to crises and emergency situations. The decision about the format of the meeting will be taken individually after technical, after good arguments. In the future, we'll also try to consider the needs of our shareholders and also target future formats towards them. Mr. Kiefer, you asked why the company doesn't use the opportunity to tighten the debt measure? We understand your question in the sense that you refer to the rule which has been created by the legislator to include in the articles of association a stricter deleveraging in order to exclude objections due to technical problems.
With regard to this new virtual format of the AGM, in order to see, to ensure, to ensure legal safety, we do not use this rule. You asked why the virtual AGM is not completely interactive. Just like the conventional in-person AGM, this year's virtual AGM enables, after the new format created by the legislator, the direct interaction between shareholders and management during the meeting via video communication. The management sees the live contribution of shareholders and their questions at the AGM, regards it as a good and an instrument. This strengthens the immediate interaction between management and shareholders. Specifically, you asked whether the decision in favor of the virtual AGM as a regular format for the next 2 yearss has already been decided.
Decision on the format of our meeting will be taken individually for each AGM, considering the interests of the group and their shareholders. This means currently it has not been defined which format the group will take for future AGMs. I now hand over to Marcus Kuhnert. Thank you very much, Mr. Büchele. My dear Mr. Kiefer, you asked for the Chinese proportion from, in sales and there's other kind. The sales portion of China in 2022 was 40% of the entire sales of the group, which is EUR 3.2 billion. Please understand that result contributions of individual countries, we do not publish. Mr. Kiefer, you asked for our business strategy in China, considering the requirements of the new Supply Chain Due Diligence Act. The requirements from this law were already fulfilled in 2022.
We integrate them in our processes. Among others, our supplier code of conduct was updated and our existing risk management for suppliers was adapted and extended. On this background, we are continuing to plan to invest in China and to cooperate in China with reliable partners. You asked for the average margin of our China business. Here, the same applies like for the contributions to the profit. Please understand that we will not publish these figures for individual countries. Dear Mr. Kiefer, you asked for the reasons why the result growth in Healthcare is weaker than for Life Science and Electronics. The indicator EBIT, which means earnings before tax interest, it includes effects like restructuring efforts and impairments on assets, which in Healthcare, compared to the other two sectors, were stronger last year.
If you look at our main steering indicator, the EBITDA pre, which means adjusted by special effects, the result of Healthcare organically grew by 3.3%. Now it's between the Life Science with organic growth of 9.7%, and the Electronics, which has an organic decline of 7.3%. Mr. Kiefer, you're asking what we do against the decline of sales in Display Solutions. Display Solutions for several years has been characterized by a decline of liquid crystal business. The business unit, however, invests in future technologies like OLED materials or our iRise Smart Windows technology. Currently, we assume that our display business in mid-term will go to growth. Mr.
Kiefer, you asked whether for the companies in Chemicals and Evonik Systems bought in 2022, a preliminary purchase price allocation is in place. You also asked for the case that you have this allocation, how much it is. A preliminary purchase price allocation is not available currently for these two companies. According to the rules of the IFRS 3 of a company fusion, Merck, as a purchaser of these companies, has up to 12 months time after the purchase to actually conclude the purchase price allocation. Within this, the current year, Merck will have set up a purchase price allocation and then provide the relevant information in the business report of 2023. Mr. Kiefer, you asked for the sales and profit contribution of Exelead.
Since it was taken over on the 22nd of February 2020, Exelead is included in the financial statement of the group. Between the 22nd, this February and the 31st of December 2002, Exelead contribute with these values that you mentioned to the sales and to the profit of the group. According to IFRS 3, theoretical sales and profit indicators must be published, which effective consolidation is already assumed by the 1st of January of a year. This means that, in addition to the values that are included in the financial statement from February 2nd to the 31st of January, we have to add the period from January 1st to the 21st of February 2022.
This short period of around seven weeks, the theoretical additional sales contribution of EUR 9 million and an additional negative contribution to the profit of EUR 2 million would have resulted. Dear Mr. Kiefer, you asked for the takeover moment of Exelead. There was a 22nd of February last year, the day where we had fulfilled all the conditions for the transfer. Dear Mr. Kiefer, you asked what yields Merck is planning for the acquisition of Exelead on the used capital. Like for other M&A transactions, as for Exelead transaction, we evaluate certain KPIs. The investment and value management configures looked at here include among others, the capital value, return on the interest rate, and the yield on used capital and the amortization period.
Exelead has fulfilled all the investment criteria, including the expected return on capital employed. On other more transactions related details, we don't comment. Dear Mr. Kiefer, you were right to say that in the framework of the impairment test of the business or company value of the Healthcare business sector, a growth rate of 0.0 has been applied. You were asking whether in long term in this area we don't expect any growth and not even the inflation would be forwarded to the market. We expect also in Healthcare long-term positive growth, and we assume that in the regulatory framework, price increases can be pushed through, even though if you said before, to a lower extent than in the other two business sectors.
The use of a growth rate of 0% for the derivation of the eternal rent in Healthcare is based on the IFRS accounting center IFRS. As at Healthcare, the so-called use value was used, which considers expansion investment and also the expected profit contribution prohibits these things. Due to this, in the framework of the impairment test, we use a growth rate of 0%. This is in line with the practice of other companies in our industry, in the pharma industry. Mr. Kiefer, you asked why the capitalization interest rate in Healthcare segment is way below the other two segments.
We assume that your question relates to the capitalization since that's just used in the impairment tests, which we have disclosed in the attachment of the group. The capitalization interest rate used in Healthcare due to the use beta factor and the so-called credit spread, was way under those of Life Science and Electronics. The beta factor derives in general from a group of comparing companies, that of Healthcare, from a group of comparable companies from the pharma industry. The beta factors, both as the so-called credit spread of the company, the pharma industry, is substantially lower than those of the comparable company, companies in Life Science and Electronics. As a result, we had a lower discounting factor. Mr.
Kiefer, you asked why, despite the increased capitalization interest used on impairment tests in the Life Science Electronics compared to the previous year, no depreciation was done on the company values, and you asked for explanations of the underlying mechanism. An impairment, indeed, according to the accounting rules of IAS 36, is only then applicable if the result of the unit is below its book value. Here, along to the capitalization interest rate that you mentioned, the amount of the expected future cash in plays a decisive role. Since both business sectors of the last years were very successful in the businesses and based on the assumption, the mid- and long-term expectations will be positive. The increase of the discount factor in the last business year didn't result in a need for impairment.
In other words, the amount last year, despite growing, increasing interest, was over the book value. Dear Mr. Kiefer, you've asked what was the reason for the increase of impairment of non-financial assets, other expenses. What was the reason for that? The impairments of non-financial assets in the last year compared to the previous year increased by EUR 164 million. The reason for this increase was basically impairments of other immaterial assets. EUR 158 million of this accounted of no immaterial assets not ready for use and were accounted to the Healthcare sector. A higher two-digit million EUR amount accounted for rise at the API category. It's only the impairments for other immaterial assets. The reasons for them were many small reasons. Mr. Kiefer, you asked for increased impairments in Healthcare.
The increase is, as I've mentioned before, due to impairments of the other immaterial assets. Especially to the impairment of not yet used material assets. As key driver is the impairment on the rights of the candidate berzosertib, which comes along, which we have, which will be 2 high two-digit million EUR amount. Now I hand over to Mr. Beckmann.
Well, thank you, Marcus. Mr. Kiefer, you were asking whether we're still making money in the parts segment Display Solutions. The simple answer to your question is yes. Display Solutions continues to be a very profitable business in the Electronics segment. Mr. Kiefer, you were asking whether we consider giving up the Display Solutions business unit. Part of our strategic planning, we continuously monitor our business portfolio and our capital allocation. We regularly review that. Should we come to the conclusion that discontinuing or giving up a business is the better alternative to increase the value for Merck, we would consider that step. I hand over to Mr. Büchele.
Mr. Kiefer, you were asking how many shareholders with which amount of the base capital locked into the AGM from abroad, how high the share of these shareholders is in the attendance, and how participation changed over the AGM.
At beginning of the AGM, the number of represented shares in the base capital was 72.24%. How many shareholders were locked in from abroad is not something that we measured, but we can say in which of the two streams, how many participants were locked in. About 100 participants followed broadcast in English at peak, and around 150 participated in the German-speaking broadcast. The attendance register informs registered shareholders about adds, additions and subtractions to the AGM. Mr. Kiefer, you criticized the time needed to prepare the answers. We assure you that we take our shareholders questions very seriously and try carefully and extensively as possible to answer every single question. We ask for your understanding that for this reason, answering questions might take a little bit more time. Mr.
Kiefer, you're criticizing broadcast of answers given in English in the waiting area, and that it could only be heard in English. In the waiting area, the AGM is shown in real time to give shareholders possibility to start with their presentation directly after they've been called up. Shareholders can, while they're in the waiting area, continue to follow the webcast in the language they selected. I want to assure you that we take the feedback of our shareholders on the AGM, take that very seriously, and we'll take that into account when we design future AGMs. I give the floor to Mr. Kuhnert to answer questions 69 and 78.
Thank you very much, Mr. Büchele.
They have already been answered. I hear that these questions have been answered, and that brings us to Mr. GÄBLER's questions. Mr. Kuhnert.
Dear Mr. GÄBLER, you were asking why, despite the price of the Merck stock decreased, you should hold Merck. Please, we have, like to ask for your understanding that we cannot give any recommendations to buy stock. I'd like to tell you what approach to invest in Merck. We are a resilient company, which it's reflected in a rather low operative volatility. Our growth outlook has been presented on the last capital market day in 2022, with ambition in 2025 achieve at least 25 billion turnover before purchases. For value increase acquisitions, we have foreseen a framework of EUR 15 billion-EUR 20 billion. Our previous track record in capital allocation speaks for us.
Based on the by us expected for the positive and healthy operative development of the company and our presence in attractive growth markets, we are confident that this will be reflected in the development of the stock price in the future, and it will be positive. What are the three biggest risks for our share? This is what you were asking. I'd like to first mention the inherent product development risk for the research and pharmaceutical industry. In addition to that, the negative development of demand in the electronics, in the industries that are relevant for our electronics business could have a negative impact, especially Semiconductor Solutions. Increasing geopolitical tensions and a trend to de-globalization could have a negative impact on our global business. Dear Mr. GÄBLER, you were asking about the square meters of the real estate of Merck KGaA in Germany.
In Germany, Merck KGaA has approximately 837,000 square meters. You were asking about the book value of the real estate assets in Merck KGaA. For December 31, 2022, we have a book value of EUR 608 million in property and buildings. The buying value of those buildings is EUR 2.84 billion. Mr. GÄBLER, you were asking whether our declarations on value tax, on property tax were handed in time. Our declarations were given, handed in time on January 31, 2023. Those were 52 declarations on real estate tax. You were asking about the average price for electricity in Germany. To ensure planability of electricity prices and to reduce price fluctuations, we adopt a hedging strategy, ensuring our electricity demand with fixed prices.
This way, achieve an average price that is in the framework of the market price and in line with our forecast. Mr. GÄBLER, you were asking whether we buy electricity at the European Energy Exchange in Leipzig and whether we could achieve negative electricity prices. Yes, through our partner, we buy electricity at the European Energy Exchange to follow our purchasing strategy. Based on our purchasing strategy, we buy some amount at the spot market. When negative prices occur for a few hours, we participate in that. Currently, negative prices cannot be seen very often. The negative prices for Merck do not have a major impact on the total cost. Mr. GÄBLER, you were asking how our overall risk potential in the framework of our risk management system has developed since the beginning of the pandemic, and what the volume is that is related to that.
We monitor our risk portfolio and the connected risk KPI based on a z- probability weighted amount of the damage. Since the beginning of the Corona pandemic, measured on our leading KPI risk capability, this has remained virtually unchanged at a very low level. We continue to state, as we did in the business report, that we believe that the existence of Merck is at a very unlikely risk. You were asking about the three highest and lowest property values in the framework of the property tax declaration. The highest levels are EUR 1,250 per square meter, EUR 1,200 per square meter and EUR 1,150 per square meter. The lowest three base values are EUR 85 per square meter, EUR 110 per square meter, and EUR 200 per square meter.
The main areas are Darmstadt, Biebesheim, Gernsheim, Hohenbrunn, Steinheim and Hamburg. GÄBLER, you were asking about our plans for increasing the personnel expenditure quota. In fiscal 2022, expenditures for personnel were approximately EUR 6.6 billion, and compared to the previous fiscal year, this is an increase of approximately 10%. The increase in expenditures for personnel resulted from an increased number of employees, approximately 70%, and an increased expenditures for pensions and salary increases. The share of total cost in 2022 amounted to 41%, approximately. In total, we expect that personnel expenditures will continue to increase. We plan to continue investments in our employees so that the number of employees will go up, and expenditures for salary increases resulting from the current market environment will also increase.
We expect that the share of the total costs will likely remain stable since other cost blocks will have analog increases. You asked whether we could hand over these increased prices to our customers. The possibility to hand forward increased prices to our customers depends on the sector. Price increases in the area of Life Science and parts of electronics are more easily passed on to our customers than in the Healthcare sector, where we are very much limited by price binding due to regulatory situation. Mr. GÄBLER, you were asking whether we've already received from the tax authorities information on property tax. Whether we proceed to take it to court. We've already received some of these information. We're currently objecting all of these as a precautionary measure to see if it's constitutional.
We also applied that this process might be rested. We're not planning to take this to court. Mr. GÄBLER, you were asking whether we use the energy price break. The executive board decided that the use of possible state subsidies based on the German law for the introduction of an electricity price break and law for the introduction of a price break for pipe-bound natural gas and heat will be refused for all German locations and connected companies. Mr. GÄBLER, you were asking about the total mileage of all business cars and flights of our executive board. Information on flight kilometers are not available due to lack of time. As an indicator, we can tell you the cost of all flights of the executive board. In 2022, they amounted in total to approximately EUR 22,000 compared to the previous...
The effects of the pandemic and the travel restrictions in 2021 will not give meaningful comparisons to the previous year. Flight costs for executive board in 2021 were around EUR 40,000. Furthermore, you were asking about the total mileage of all business vehicles of the executive board. We lease our business cars, and the planned annual mileage is between 15,000 and 30,000 kilometers per year. Due to the successive switch to hybrid electric vehicles, we see a continuous increase in the CO2 emissions of our business cars. This is where I would like to hand over to Mrs. Garijo.
Dear Mr. GÄBLER, you were asking for our target year for climate neutrality in Germany as well as in the global organization and covering the full supply chain. By 2014, we want to achieve climate neutral business operations along the entire value chain. This target includes both Scope 1 and 2, as well as our Scope 3 emissions from our entire value chain. Our focus is on the actual abatement of emissions. Compensation mechanisms are only considered for emissions that remain unavoidable in the long term. For this target, we don't differentiate geographically. In addition to the 2014 ambition, we define a global near-term target for the year 2030, also covering all the scopes. This target was approved by the so-called SBTI, Science Based Targets initiative, in full alignment with limiting global warming to 1.5 degrees.
You also ask where we are today. In 2022, we reduced our Scope One and Two greenhouse gas emissions by nearly 10%, emitting a total of approximately 1,667,000 metric tons of CO2 equivalents. Our Scope Three emissions in 2022 were 6.6 million metric tons of CO2 equivalents. The majority of our Scope Three emissions come obviously from our supply chain. To address those, we have launched the Global Supplier Decarbonization Program in 2021. Dear Mr. GÄBLER, you ask how high Merck's energy refurbishment requirements will be in the next 5 to 10 years. For an industrial company, this question cannot be answered to the decimal place. In addition to extensive maintenance and repair activities, building technology systems are regularly inspected for energy efficiency and are permanently optimized.
In parallel, energy checks have been carried out across the company for more than 15 years. Potential savings have been identified and measures derived and implemented. Dear Mr. GÄBLER, you ask what % of the real estate portfolio has an energy consumption rating of more than 150 and how this issue affect us. To answer this question, let us look at our real estate portfolio at our largest site in Darmstadt, which is representative for our real estate portfolio in Germany. For a representative cross-section of office buildings, the average value of climate-adjusted heating energy consumption is of 103.04 kWh per year and square meter. Compared with peer companies in Germany, we are below the industry average, according to a benchmark conducted by an independent institution.
Based on these buildings, less than 25% have a consumption value of more than 150 kilowatt hours per year and square meter. Dear Mr. GÄBLER, you ask how working from home has evolved from before the pandemic until today. Enabling employees to work in flexible arrangements supported by appropriate technology will support business needs and provide an engaging and attractive employee environment within a framework that meets our goal to achieve better outcomes while supporting each other. To meet this, we introduce a new global policy, from first of January 2023, with a guidance to work as a minimum three days in the regular workplace. Currently, the policy is in the process of being adopted on a global basis, obviously subject to local needs and when required, works councils or union agreements.
Any local deviation of the global policy will be communicated to employees after finalization. For Germany, the company is in continuous discussions with the Works Council on the topics of mobile working and activity-based working to meet the desire for more general flexibility in the workplace as addition to the 2 existing working time models, annual working areas and annual working hours, and My Work at Merck. Mr. GÄBLER, you asked if we observed changes in recruiting in relation to arising requirements in the area of work-life balance. Even before the COVID pandemic, Merck offered many employees maximum flexibility in terms of working hours and place of work through My Work at Merck policy.
This was revised and expanded in the course of the pandemic. We can therefore see a rather positive term, positive trend in the number of applications per position, namely an average of almost 32 applications per position in 2022, compared to 23.8 in 2020 and 22.6 in 2019. With this, I hand it over to Mr. Büchele.
For GÄBLER.
Mr. GÄBLER, you were asking why we use an extremely difficult system to dial in, and not like other companies, an easier one, why you could not dial in, and what the consequences will be that Merck withdraw from that. Together with our HV service provider and the media service provider, we did everything possible to make the process for our shareholders and their proxies as easy as possible. Besides that, there's a prominent technical support available to shareholders to support them in the event of technical problems. We are sorry to hear that your dial-in did not work directly. I've been assured that the technical support helped you instantly and you could request the floor. Like I said, the experiences from this AGM will be used when we design future AGMs.
Furthermore, you were asking what was the reason for us to correct our ad in the German Federal Gazette. Due to an editorial mistake in the Federal Gazette, Table El Tip Tranche 2022 subtitling of the compensation report for fiscal 22, which was printed under reports attachment and further information on the item, which was printed not clearly. We decided to have this table published again without any changes to the content. Dear Mr. GÄBLER, you were asking about the format of the AGM 2024. Legislator has given in-person AGMs and virtual AGMs formally equal rights. We see the application of virtual AGMs not limited to situations of crisis and emergencies. The decision on the format of the meeting will be taken for each AGM, as has been mentioned several times today, a new based on factual criteria.
In the future, we'll continue to take the concerns of our shareholders into account as well as possible and optimize future formats accordingly. Mr. GÄBLER, you were asking if we've made reservations for rooms for the AGM 2024. The answer is yes, we've made reservations for rooms for an in-person AGM 2024. Mr. GÄBLER, you were asking about gifts for shareholders. As part of our efforts for sustainability, we decided against such activities, and I ask for your understanding. Mr. GÄBLER, you were asking who decides or who checked the concrete amounts that are transferred to the executive board, and if a member of the executive board has checked the compensation they're entitled to and what they actually received.
As you certainly know, in our company, unlike other stock companies, it's not a supervisory board, but the partners of the Merck G are responsible for designing and checking the compensation system and the height and composition of the compensation for members of the executive board. The partners have forwarded this job to the HR committee. The HR committee is insofar responsible for the development and regular monitoring of the compensation system of the executive board, but also for determining and releasing the concrete amounts. The compensation report has been decided in cooperation of the supervisory and executive board following the specifications of Article 162 AktG and the recommendations of the German Corporate Governance Code. In this context, the executive board checks the compensation. The report was formally and materially audited by an auditing company.
You were asking about the number of shareholders in the stock register, entered in the stock register of the company and which quota refers to natural persons. The public stock of the company are owner stocks, and they're not registered in any stock register. You were asking about the distribution of our natural shareholders in different age decades. Public stock of our company are, as I said, bearer stocks. The stocks are not registered in a stock register, which means that the company has no overview of the age distribution of their natural shareholders. Mr. GÄBLER, you were asking how many employees are involved in creating the compensation, the comparative compensation for the compensation of the Executive Board. We looked at the internal comparison group, we see the workforce in Germany as a relevant comparative variable.
Analysis is done over a period of five years. In total, in the last analysis, data of 55,106 employees were included. On average, 11,100 employees were analyzed per year. You were asking about the distribution of income across employees in Germany. In 2022, the company employed
194 employees in Germany with a fixed salary between EUR 0 and EUR 30,000. 4,740 employees with a fixed salary between EUR 31,000 and EUR 60,000. 3,849 employees with a fixed salary between EUR 61,000 and EUR 90,000. 2,589 employees with a fixed salary between EUR 91,000 and EUR 120,000. 2,239 employees with a fixed salary between EUR 121,000 and EUR 250,000. 98 employees with a fixed salary between EUR 251,000 and EUR 500,000. 9 employees with a fixed salary of more than EUR 500,000.
Heidi?
You also asked how many people are in the back office and how many of them are external employees and what lawyers from what companies are there. Today, we have 40 people, employees of Merck in the back office. A lot of them we have external employees of our HV for service provider and the media service provider, and 1 lawyer from Linklaters. Mr. GÄBLER, you asked for the cost of this year's AGM and those of the last AGM in person. The cost of this AGM, as I said, will amount to around EUR 500,000 for this year. The highest factors are the IT infrastructure, and the event technology which account for 80% of the overall costs.
The cost for the last in-person AGM in 2019 was at around EUR 1.14 million. I'll hand over to Mr. Beckmann. Mr. GÄBLER, you asked for the number of all exempted work council members in Germany and the highest annual gross salary of such a council member. In the German companies of Merck, we have an overall of 99 work councils. Out of them 21 members are exempted from the responsibilities for their job at the work council. The joint work council in Darmstadt, Germany is 30, 37, and out of them 19 are exempted from the duties. Due to privacy reasons, we are not allowed to publish the compensation data, sorry, of individual country employees.
We ask for your understanding. Overall, we can assure you that Merck makes sure not to pay exceptionally high compensations to work council members. We also want to draw your attention to a system of the comparable people. This means there are no highest salaries, but only basic salary and bonus premium payments are done on the basis of comparable people and on the bonus calculation, the average bonus of the last 3 years before exemption. For example, the chairman of the work council gets an X pay scale salary like the corresponding comparable person. I hand over to Mr. Kuhnert now.
Thank you. Mr. GÄBLER, you asked for cost for IT security and learning effects from possible hacker attacks. We have a very modern network and IT security in the infrastructure, including controls, and we continuously develop both areas.
Overall, in last year, we spent more than EUR 5 million on this topic. In mobile end devices, an additional safety solution was installed on the devices. Costs amounting to EUR 250,000 incurred for that. Like every other company which relies on network connections, cybercriminals try to permanently breakthrough different be it social engineering, malware or other technical means. Proactive countermeasures result in no occurrence of any incidents. We learn from any attack attempt, even if it is unsuccessful. Now I hand over to. Who is missing? Belén, I think, it's your turn for the last questions.
Dear Mr. GÄBLER, you are asking if we use Huawei phones or technology. The use of those devices at Merck are not allowed. Defined Merck standard devices are from Apple, Samsung, Zebra, and i.safe. Let me continue with the next question. Dear Mr. GÄBLER, you asked about our biggest achievements in the last fiscal year and areas in which we see potential risks. Look, 2022 was characterized by rising macroeconomic and geopolitical uncertainties, as it is the case in 2023. The conflict between Russia and Ukraine, the global pandemic, rising prices in raw material, energy, and logistics were a major burden for global pressures and also for our customers. As mentioned this morning, we at Merck managed all these challenges extremely well, and it was a successful year from a business perspective. Let me share some highlights with you.
To meet growing demand and seize new emerging opportunities, our Life Science sector successfully continued to expand in the U.S., Europe, and Asia. In Healthcare, we continued to advance our pipeline and drove significant growth for the further ramp-up of Mavenclad and Bavencio, delivering organic growth overall. For Electronics, 2022 was a year in which we coped very well with challenging business conditions such as inflationary pressures, supply chain constraints, and weaker demand in Display Solutions. We are convinced about our positioning and see healthy midterm perspective thanks to our strong focus on innovation and significant reach in Semiconductor Solutions.
In summary, let me emphasize that our diversified, globally diversified business model once again proved to be an important building block of the resilience of our company. We continued to pioneer and outperform for our patients and customers and to care about our employees, patients and customers. We are very proud of that. Dear Mr. GÄBLER, you are asking about our ongoing activities in Russia. Well, let me give you a brief answer. Our activities in Russia are absolutely restricted to serving critical medicines, essential Healthcare-related business in order to continue serving the patients and honoring the responsibility that we have and the moral obligation that we have to serve those patients.
Obviously, in that context, we make sure we strictly comply with all international sanctions. We are reassessing our position on an ongoing basis in order to integrate potential new developments or new sanctions. Dear Mr. GÄBLER, you also ask for IT and data security. To ensure data security for access from the home office or abroad, all Merck employees have a Merck PC or laptop from which they connect to the network via a secure connection, which is called Virtual Private Network or VPN in short. The data traffic via the VPN connection is encrypted, which guarantees additional security. The employees must authenticate themselves when they are logging in, thus ensuring that only Merck employees can access the Merck systems. I think this it. I am done with the questions.
Wel come back to an open question by Mr. Kiefer, before I will give him the floor because he asked for. He want to make a contribution. Mr. Kiefer, you said that after your contribution, you needed to re-login to the investor portal. However, from the investor portal, you can directly go into the dialogue meeting when you make a contribution. This opens in a new browser tab. The speaker can go back to the still open investor portal without problems. He does not need to log in again. A new login is only necessary if the browser has, if the speaker's already has closed the portal before that. Now all the question by Mr. Kiefer have been answered. I'm not sure, Mr. Kiefer. Yes, I can see you here.
I give you the floor.
Thank you very much, Mr. Büchele. I'll try to evaluate some of your answers. Let's start with my first question. What you said is about the COVID-19 situation. At the time when we were thinking about the format of the AGM, and this year has not been completely clear, and the further development wasn't clear. I'm asking myself the question, how companies like Deutsche Post AG, their AGM will be next Thursday, or the SAP SE, their AGM will be in 2 weeks, also on a Thursday. How they were able to manage this that were in favor of such an in-person AGM. I think that the health protection of the employees and stakeholders in these companies is as important as for you?
Please tell me, how long is your lead time to actually rent certain facilities in order to carry out an AGM? Until when, by the latest, do you have to cancel these rooms in order not to have to bear the costs in case that you have to take a virtual AGM? The second topic, the different treatment of AGM meetings, AGMs and supervisory board meetings. You gave me a very formal answer, Mr. Büchele. You can do that, yes. It doesn't really fulfill my need for information. The central key question really is the key elements which apply to a virtual AGM, like preventing travel and protecting health. This applies in the same way for supervisory board meetings.
Here the question comes up, why don't you use the benefits of this virtual format for Supervisory Board meetings as well? Well, you can't be serious, Mr. Dr. Büchele. Well, the legislator has decided that a virtual AGM is has the same value as an in-person meeting. I think such a way of thinking we reject, and I think we have to talk about the content and say, well, where is it materialized? That relates it to the question of the format. Where is the difference between an Supervisory Board meeting and AGM? Now see, I move on. On my question on the measure of indebtedness, you said this is to ensure legal safety. I don't know whether this is an answer for your back office, but this is an absurd and an impertinent answer.
Legal safety you've also, if you write in that, the objection is with a simple negligence. If it has, well, a simple negligence. It doesn't change anything when the objection is what. What is important is the objection is in case. In terms of legal safety, it is the same thing. Maybe our external legal counsel should think about this. Make sure I'm also a specialist here. You also thought that a preliminary decision for the AGM format for 2024 and 2025, due to the rules of the Artix Association, has not been taken at all. I do not understand if what you've said in the agenda, where it says that there may be reasons to do in-person AGMs.
In our understanding, this is an exception from the rule, where it said the rule is a virtual AGM for the next years, unless there are special reasons to deviate from this format. If this were the case, if I think about your comments at the agenda, that is not true, that there's no preliminary decision. In the agenda, you already did a preliminary decision by describing an exceptional rule, a rule exceptional relationship. Dr. Kuhnert, thank you for your answers, as far as you've given them to me. Your restriction, your trade in terms of the figures for the earnings, I don't understand them for the following reason. 50% sales, that's not irrelevant.
On the backdrop of the current political discussions, the result of which you cannot influence, since the beginning of the new coalition, we are listening about a value-driven external policy, which has to redefine the relationship to China. I think for the shareholders, it's not without interest to know what are the effects if there may be substantial restrictions. What I could rephrase the question, where do we end in the EBIT? Not the EBIT pre, but the EBIT, if the China sales go down. In the answer to my question, how you look at China on the backdrop of the current discussions on the Supply Chain Due Diligence Act? The answer was a bit dodging.
Because you have to take a position, I think, that China is regarded as an unjust regime. Not individual companies. We don't have interest in individual companies doing unlawful things. We have a regime which is authoritative, despotic, and is an unjust regime. This regime, and you have to move in this regime, you have to assume that potentially. I'll wait until you listen to me again. In the general legislative framework of China, you have to be aware of the fact that formally, formal laws are not implemented in China and not carried out, not implemented. I move on to another remark. Mr. Dr.
Kuhnert, I do not understand at all that the planned yield on the Exelead acquisition, you don't want to tell me about it. I've never heard anything about this. Isn't this a very normal question that you ask, has this acquisition been profitable? Maybe you can give me a feel for why you can or do not want to tell me. If you don't want to tell me, which I understand, then please tell me whether the acquisition of Exelead at least fulfilled the profitability requirements, whether it's fulfilled or overfulfilled, or based on the sustainability. Well, not today, because you gave us the figures. My last remark. This sales and profit contribution of Exelead. Did I understand you correctly, Mr. Kuhnert?
That EUR 9 million sales and negative EUR 2 million profit contribution only applies to January 1, 2022 to January 31. From February 22 onwards, for the rest of the year, EUR 75 million to minus EUR 37 million apply. For me, this means, if I look at it from the beginning of the year until December 31, 2022, Exelead made a pro-profit contribution of EUR 84 million with a negative profit distribution of EUR 39 million. Is that correct, or did I misunderstand you? Thank you very much.
Thank you, Mr. Kiefer. We'll answer your question as fast as possible. I would like to ask you for some patience.
We can't do that in a second. We need a couple of minutes. In between, I have one answer for Mr. GÄBLER, one outstanding answer. You would ask how many shareholders today had dialed in maximum, and how many shareholders participated in the last in-person AGH. In 2019, around 1,000 shareholders and their proxies participated. Today, we had 550 participants maximum. Now I suggest a 5-minute break until we have answers to Mr. Kiefer, now questions. Mr. GÄBLER, I can see that you would also like to make a contribution. However, you're not activated in my system. Therefore, we will wait, and I would like to call you as soon as the technical questions are sorted out. Now we take a short break, 5 minutes.
My dear ladies and gentlemen, we continue the A annual general meeting. Now the meeting, Mr. GÄBLER has become available. Mr. GÄBLER, you've got the floor.
Thank you very much, Mr. Büchele. Thank you very much to the management for answering the questions. Some of it was okay with me. I have two or three additional questions and then some additional remarks. First of all, my question for the highest board council member's salary. This could be answered in more concrete manner. Data privacy. What I would like to ask you to give me is a ballpark figure. That's one of the questions. Is it below 200,000 EUR? This is, I think, a question to which you should answer yes or no. Just give me a ballpark figure. As I said, or you said this is acceptable for you and legally. I would have to agree with Mr. Kienitz. Mr. Kienitz, thank you for being so stubborn here and really fighting for the in-person AG-AGM.
We know that rooms have been reserved. I don't really believe Mr. Büchele. I'm asking you, though currently, what is your planning for 2024? Before I found it funny when you answered my question by yourself. Well, the natural dividend after the AGM for reasons of sustainability, we will not provide any natural dividends. Well, during an in-person AGM, there's something to eat and to drink. If I would like to pin you down here, this would mean that it won't not be an in-person AGM, because then otherwise you have to provide the shareholders of something to eat and to drink, and this would be contravene your sustainability idea. Maybe did you disclose your intentions here, Mr. Büchele?
I don't like this answer. You can save money in lots of areas, but not at the shareholders. You said the last AGM is EUR 1.1 million, twice as much as the virtual ones. What is EUR 500,000? If I ask you how much money you spend for marketing every year, if especially said 50% of the marketing expenses are for nothing, but I don't know which 50%. It shouldn't really fail on this. I would also like to talk about this data problems. I don't want to talk about it in depth, but my second contribution has almost failed as well. I really would like to ask you to do a follow-up on this and sort it out with our specialists, because next week I don't wanna talk to IT development.
I would really like to know so that I was right. I've got an explanation. I can tell you where the problem is, so that you can draw my consequences here. Of course, you read your answer, the usual method. It's not usual because I've experienced I go to 40, 50 AGMs every year. I think I do a bit more than you. As I said, it's a proposal which we go back to when this AGM is over. Another new item which I'm really angry about. Does nobody in your management take care? Your participants list which you made available to us has so many errors and faults. It's incredible. The first question, Mr. Büchele, have you looked at this list? No, I suppose not.
The first importance is a very small view. Only a small window opens. You can't size it to full screen, zoom it in. Within this small window, I have a zoom function which, however, is not useful if the window itself is so small. Do you want to prevent shareholders from looking at it on purpose? Because in an in-person AGM, it's this list of participants is there. This is not a new invention. We've had it for many years that the cover leave so many millions of share capital are represented. This information is not available at all. I have to take my calculator and make my calculations. The cover leaf is missing. Cover sheet is missing. You don't have an alphabetic order.
It's tedious to look through the shareholders. At the end, there are critical signs like Z and A, like additions and people leaving. You don't know what people, what shareholders are present. Please provide us for inspection this. Then you should add only the participants which are really participating. I'm asking my question. One side, has nobody checked this? I think your lawyer counsel in the back office, he will be totally confused. The participants list does not correspond at all the legal provisions. I'm asking concretely, how, for example, can it be that for the proxy of the company and all institutional participants, banks, protection associations, representatives who are also proxy, are only. You mentioned under SdK. The SdK cannot act here at an AGM.
Only Mr. Kiefer did it in person, but he's not mentioned everywhere. He's mentioned some places. According to the Stock Corporation law, I'm quoting this, it says, "A participant list needs a name and a place of residence as representative shares as read." Why don't you do that? As I said, that's not new, and I would like to take this to the minutes, and I'm also declaring that I object to all items of the agenda because this is real legal formal error, which could have been prevented, Mr. Büchele. I have a positive attitude towards you. Merck is a wonderful company, and you're very successful. Why are you making these errors if you spend so much money for virtual AGM? You have some legal counsels.
Therefore, I put forward the motion in the course of this virtual AGM to set up a correct, a correct participants list which complies with the legal requirements. This would be desirable. For the voting right representative who represents these 93,000 shares, it doesn't even mention the name nor the place of residence of the proxy. The Stock Corporation law doesn't provide any exceptions to the rule. Therefore, I'm asking myself, what did you do here? Finally, and then I'll won't continue. I'm representing the shares of my daughter. How can it be that I am making a contribution and my daughter at the beginning of the AGM also give me a proxy in the, in the HV portal? This is possible. However, if you click on it, you can't make a contribution for a proxy.
This is more than funny for me, more than strange for me. My daughter just didn't hand out the proxy so that I can make a contribution. There are some formal errors. I don't wanna continue on this. I offer you once you're done with this AGM, since the people are there on-site, to make a phone call and sort these things out and draw the conclusion. Thank you very much for your attention.
Thanks a lot, Mr. Kiefer. I will look at the participants list in detail now. I only see the thumb. This is correct, I'll look at it, and we received a motion. Apart from that, we'll take a 20 minutes break in order to answer all the questions of Mr. Kiefer and Mr. GÄBLER. This means we continue at 3:17 P.M.
Thank you very much, and we'll interrupt the AGM until 3:17 P.M.
Ladies and gentlemen, we will now continue with this year's AGM and we'll continue by answering the questions that Marcus Kiefer asked. Mr. Kiefer, you were asking why the blessings of the virtual AGM are not used for meetings of the Supervisory Board. Meetings of the Supervisory Board can, at the discretion of the Chair of the Supervisory Board, be held in virtual or in person. For this discretionary decision, there are a number of considerations
That need to be weighed carefully for each case. You asked about the difference regarding the format between a meeting of the supervisory board and the AGM regarding material law. The supervisory board and the AGM are two different organs of AGM- KGaA that are in many aspects different in terms of their legal foundation, material aspects, and their organization. I believe that this topic, at least for the time being, would now be sufficiently discussed. I can tell you that in the times of COVID, we frequently took recourse to virtual meetings of the supervisory board. In the past, we did that. I would also like to tell you that there are significantly fewer people involved in a meeting of the supervisory board than in an AGM.
Furthermore, you asked if after the information regarding future virtual AGMs, a ratio of rule versus exception was predefined. Neither the law nor the company see a relationship rule versus exception between the legally admissible formats of the AGM. A rule exception relationship is not included in the documents for the AGM. It was not intended. I would like to hand over to Mr. Kuhnert.
Thank you, Mr. Büchele. Mr. Kiefer, you were asking what the influence of a complete breakaway of the China business for our EBIT have. The EBIT contribution of our Chinese business is positive, but is below the turnover contribution of 14%. Regarding the EBIT of 2022, without the Chinese business would still be in excess of EUR 3.8 billion.
We ask for your understanding that we cannot give any more precise information at the country level, because this is information relevant for competition. Mr. Kiefer, you were asking whether your understanding that Exelead has a contribution margin of EUR 84 million and a profit contribution of minus EUR 39 million in the total year of 2022. If the acquisition had taken place as of the 1st of January 2022. Is that correct? Yes, your understanding is correct. The high negative impact on the profit contribution is because the higher cost of manufacturing due to the adaptation of the stock bought. There are also some depreciations in the context of the purchasing price allocation assets which were reassessed. Mr. Kiefer, furthermore, you were asking about the acquisition return on invest.
X-Leap is an acquisition with a long-term investment in Life Science to strengthen our position in MRN. We do not have any factor-specific yield requirements. The yield requirement for all acquisitions is our group WACC, the weighted capital cost of 7.5% after taxes. With the acquisition of X-Leap, we will foreseeably have exceed this WACC starting in 2028. Somebody handed this in. Mr. Kiefer, you suggested to talk about the answer about the measure of forethought. After consideration, the company decided for the proposed resolution, as is regarding the regulation in the articles of association, because we believe that provides legal certainty in every aspect and accordance with the opinion of the company. You were asking how other companies can succeed in organizing an in-person AGM.
At the time of the decision, we could not assess how the situation with COVID-19 would evolve. We decided to err on the side of caution and choose the virtual format. Regarding your question, the lead time for rental of rooms, we can inform you that the lead time, as a rule, is 2 years. Cost-free cancellation is no longer possible after contract has been signed. There are reimbursement costs that are up to three months before the planned date receives that a full amount is payable. That brings us to the questions of Mr. GÄBLER. Mr. GÄBLER, you pointed out that you had, again, problems dialing in. Would like to assure you once more that we will follow up on that fact and derive possible improvements from that.
Furthermore, Earlier, you asked about gifts following this year's example of Beiersdorf. Our answer was that we will not follow this example this year for reasons of sustainability. We were not talking about a dividend in kind and cannot understand the conclusion that you drew from that. I consider catering on an AGM not as a gift, but rather since it's over noontime, just as a precautionary obligation of a group that you take care of the health of employees. Let us repeat that we have not yet decided on the format of the AGM 2024, so that only in the course of this year, depending on legal and health-related situations that will occur, we will then take this decision. Furthermore, you commented the lists of participants, that it would not comply with the legal foundation.
In the meantime, together with the notary and the legal counsel from Linklaters, we updated list of participants, looked at it first. The location of the representative or proxy will be added. During the course of this meeting, you will receive an updated list of participants. You furthermore commented that for SdK, Mr. Kiefer is not listed individually every time. This is a technical issue. If you want the individual proxies for Mr. Kiefer are listed individually. This is then aggregated in the so-called collective card, and behind that card is the name of Mr. Kiefer. The technical topic that we cannot solve instantly is the matter of the window size. Currently, this is limited. It's possible to zoom in the window, but it's not possible to increase the size of the window as such.
Should we have another virtual AGM in the future, we will take that into account so that the screen in the future can be used completely. An update of the list of attendance considering the legal necessities, which means indicating the location, will, as I said, happen during the course of this AGM. It will be provided online. The notary will include that information in the minutes so that we will definitely have full legal certainty. Now I would like to hand over to Mr. Beckmann.
Thank you, Mr. Büchele. Mr. GÄBLER, you were asking about whether the highest salary of the works council member is below EUR 20,000. The answer is yes. We confirm that the highest salary of the works council member is below EUR 20,000. Mr. Büchele, back to you.
Mr. GÄBLER you were asking if a decision has already been taken regarding the format of the AGM. Like I said, several times, we look at this at a case-by-case basis, which means that a final decision regarding the format of the AGM 2024 has not been taken yet as of today. Sometime during the course of this year, we will decide as soon as the lead time for the AGM starts and decisions have to be taken. At the current point in time, there is no decision either way. You said that during the virtual AGM, a correct list of participants in accordance with the Stock Corporation Act will be made available. The investor portal will provide that.
Our back office is working on that as we speak. The notary will ensure that we completely and utterly comply with the legal requirements. Furthermore, you pointed out that you had problems handling or requesting the floor with the authorization of proxy by your daughter. We're sorry that you experienced technical difficulties. We are even more happy that you had a possibility to take the floor and used it, and we try to optimize technical processes for further AGMs should they be virtual. I believe last answer I have, Mr. GÄBLER, back to the register of attendees that not all required information is included in the register of attendees. I think we have extensively answered that question. Like I said, during the course of this AGM, you will A register of attendees will be made available to you that will fully comply with the legal requirements.
The notary public will make sure that this is the case. That means that all questions have been answered. I would now ask the auditorium that in case there are still open questions, you'd need to request the floor. There are no further requests for the floor. Yes, there is one, Mr. GÄBLER, which just appeared here. We interrupt the meeting for another 5 minutes until Mr. GÄBLER is live. Thank you. We will continue with the event at 3:36 P.M.
Ladies and gentlemen, we will now continue with the AGM. In the meantime, Mr. GÄBLER declared that he will not take the floor again, there are no further requests for the floor. I ask again, is there further need for requests for the floor? If that's the case, you'd need to register now. I'm asking, are there further requests for the floor?
I will just wait until I get an answer from our technical service, and then I'll continue.
La dies and gentlemen, I have been informed that there are no further requests for the floor. We have closed the list of speakers on the investor portal. Let the minutes reflect that all questions have been answered. I thank the speakers for their contributions, and I thank the executive board for their answers. Ladies and gentlemen, we will now start with the voting on agenda items 2 to 8. The agenda items will now be displayed again on your screen as a short version. Until 3:55, you will have time, and this is your last opportunity to use the investor portal to issue or change proxy forms or to issue or change proxies and instructions to your company's proxies or to exercise your voting rights by absentee voting.
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 at 3:55 P.M. Following this, the company's proxies will vote in accordance with your instructions by approving the votes stored in the system. Absentee votes 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. Resolutions on agenda items 2 to 6 and 8 are approved if a simple majority of votes cast are in favor. The resolutions on agenda item 7 additionally requires a majority of at least three-quarters of the share capital represented at the time the resolution is adopted. Ladies and gentlemen, we will now begin the voting.
The exact wording of the proposed resolution, which is solely relevant for the vote, is contained in the notice of the meeting published in the Federal Gazette on March 7th, 2023. We'd ask the company's proxies 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, we will close at 3:55 the option to issue or change proxy forms or to issue or change proxies and instructions to the company's proxies via the investor portal or to exercise your voting rights by absentee voting. We will now wait until 3:55.
Ladies and gentlemen, I hereby order that voting on the agenda items be closed. You can no longer vote by absentee voting, nor submit proxy forms, nor issue proxies and instructions to the company's proxies via the investor portal. I instruct the technical department to take this into account accordingly and ask the notary to make a note of this. I'll 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. Ladies and gentlemen, 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 absentee votes have already been stored in the system. All votes have thus been cast. I hereby close voting on the agenda.
The determination of the voting results on agenda items two to eight, which is now taking place under notarial supervision, will take some time. We'll therefore break for approximately 15 minutes, and we will continue at 12 minutes past 4:00 P.M. I ask you for your understanding.
Science is at the heart of everything we do. It drives the discoveries we make and the technologies we create. Our work makes a positive difference to millions of people's lives every day. In Healthcare, we discover unique ways to treat the most challenging diseases, such as Multiple Sclerosis and cancer. Our Life Science experts empower scientists by developing tools and solutions that help deliver breakthroughs more quickly. In Performance Materials, we develop science that sits inside technologies and changes the way we access and display information.
Everything we do is fueled by a belief in science and technology as a force for good. A belief that has driven our work since 1668 and will continue to inspire us to find more joyful and sustainable ways to live. We are curious minds dedicated to human progress. Science is at the heart of everything we do. It drives the discoveries we make and the technologies we create. Our work makes a positive difference to millions of people's lives every day. In Healthcare, we discover unique ways to treat the most challenging diseases, such as Multiple Sclerosis and cancer. Our Life Science experts empower scientists by developing tools and solutions that help deliver breakthroughs more quickly. In performance materials, we develop science that sits inside technologies and changes the way we access and display information.
Everything we do is fueled by a belief in science and technology as a force for good. A belief that has driven our work since 1668 and will continue to inspire us to find more joyful and sustainable ways to live. We are curious minds dedicated to human progress. Science is at the heart of everything we do. It drives the discoveries we make and the technologies we create. Our work-
Science is at the heart of everything we do. It drives the discoveries we make and the technologies we create. Our work makes a positive difference to millions of people's lives every day. In Healthcare, we discover unique ways to treat the most challenging diseases such as Multiple Sclerosis and cancer. Our Life Science experts empower scientists by developing tools and solutions that help deliver breakthroughs more quickly. In performance materials, we develop science that sits inside technologies and changes the way we access and display information. Everything we do is fueled by a belief in science and technology as a force for good, a belief that has driven our work since 1668 and will continue to inspire us to find more joyful and sustainable ways to live. We are curious minds dedicated to human progress. Science is at the heart of everything we do.
It drives the discoveries we make and the technologies we create. Our work makes a positive difference to millions of people's lives every day. In Healthcare, we discover unique ways to treat the most challenging diseases such as Multiple Sclerosis and cancer. Our Life Science experts empower scientists by developing tools and solutions that help deliver breakthroughs more quickly. In performance materials, we develop science that sits inside technologies and changes the way we access and display information. Everything we do is fueled by a belief in science and technology as a force for good, a belief that has driven our work since 1668 and will continue to inspire us to find more joyful and sustainable ways to live. We are curious minds dedicated to human progress. Science is at the heart of everything we do. It drives the discoveries we make and the technologies we create.
Our work makes a positive difference to millions of people's lives every day. In Healthcare, we discover unique ways to treat the most challenging diseases such as Multiple Sclerosis and cancer. Our Life Science experts empower scientists by developing tools and solutions that help deliver breakthroughs more quickly. In Performance Materials, we develop science that sits inside technologies and changes the way we access and display information. Everything we do is fueled by a belief in science and technology as a force for good, a belief that has driven our work since 1668 and will continue to inspire us to find more joyful and sustainable ways to live. We are curious minds dedicated to human progress. Science is at the heart of everything we do. It drives the discoveries we make and the technologies we create.
Our work makes a positive difference to millions of people's lives every day. In Healthcare, we discover unique ways to treat the most challenging diseases such as Multiple Sclerosis and cancer. Our Life Science experts empower scientists by developing tools and solutions that help deliver breakthroughs more quickly. In performance materials, we develop science that sits inside technologies and changes the way we access and display information. Everything we do is fueled by a belief in science and technology as a force for good, a belief that has driven our work since 1668 and will continue to inspire us to find more joyful and sustainable ways to live. We are curious minds dedicated to human progress. Science is at the heart of everything we do. It drives the discoveries we make and the technologies we create.
Our work makes a positive difference to millions of people's lives every day. In Healthcare, we discover unique ways to treat the most challenging diseases such as Multiple Sclerosis and cancer. Our Life Science experts empower scientists by developing tools and solutions that help deliver breakthroughs more quickly. In performance materials, we develop science that sits inside technologies and changes the way we access and display information. Everything we do is fueled by a belief in science and technology as a force for good, a belief that has driven our work since 1668 and will continue to inspire us to find more joyful
Science is at the heart of everything we do. It drives the discoveries we make and the technologies we create. Our work makes a positive difference to millions of people's lives every day. In Healthcare, we discover unique ways to treat the most challenging diseases such as Multiple Sclerosis and cancer. Our Life Science experts empower scientists by developing tools and solutions that help deliver breakthroughs more quickly. And in Performance Materials, we develop science that sits inside technologies and changes the way we access and display information. Everything we do is fueled by a belief in science and technology as a force for good. A belief that has driven our work since 1668 and will continue to inspire us. Science is at the heart of everything we do. It drives the discoveries we make and the technologies we create.
Our work makes a positive difference to millions of people's lives every day. In Healthcare, we discover unique ways to treat the most challenging diseases such as Multiple Sclerosis and cancer. Our Life Science experts empower scientists by developing tools and solutions that help deliver breakthroughs more quickly. In Performance Materials, we develop science that sits inside technologies and changes the way we access and display information. Everything we do is fueled by a belief in science and technology as a force for good. A belief that has driven our work since 1668 and will continue to inspire us to find more joyful and sustainable ways to live. We are curious minds dedicated to human progress. Science is at the heart of everything we do. It drives the discoveries we make and the technologies we create.
Our work makes a positive difference to millions of people's lives every day. In Healthcare, we discover unique ways to treat the most challenging diseases such as Multiple Sclerosis and cancer. Our Life Science experts empower scientists by developing tools and solutions that help deliver breakthroughs more quickly. In performance materials, we develop science that sits inside technologies and changes the way we access and display information. Everything we do is fueled by a belief in science and technology as a force for good. A belief that has driven our work since 1668 and will continue to inspire us to find more joyful and sustainable ways to live. We are curious minds dedicated to human progress. Science is at the heart of everything we do. It drives the discoveries we make and the technologies we create.
Our work makes a positive difference to millions of people's lives every day. In Healthcare, we discover unique ways to treat the most challenging diseases such as Multiple Sclerosis and cancer. Our Life Science experts empower scientists by developing tools and solutions that help deliver breakthroughs more quickly. In performance materials, we develop science that sits inside technologies and changes the way we access and display information. Everything we do is fueled by a belief in science and technology as a force for good. A belief that has driven our work since 1668 and will continue to inspire us to find more joyful and sustainable ways to live. We are curious minds dedicated to human progress. Science is at the heart of everything we do. It drives the discoveries we make and the technologies we create.
Our work makes a positive difference to millions of people's lives every day. In Healthcare, we discover unique ways to treat the most challenging diseases such as Multiple Sclerosis and cancer. Our Life Science experts empower scientists by developing tools and solutions that help deliver breakthroughs more quickly. In Performance Materials, we develop science that sits inside technologies and changes the way we access and display information. Everything we do is fueled by a belief in science and technology as a force for good. A belief that has driven our work since 1668 and will continue to inspire us to find more joyful and sustainable ways to live. We are curious minds dedicated to human progress. Science is at the heart of everything we do. It drives the discoveries we make and the technologies we create.
Our work makes a positive difference to millions of people's lives every day. In Healthcare, we discover unique ways to treat the most challenging diseases such as Multiple Sclerosis and cancer. Our Life Science experts empower scientists by developing tools and solutions that help deliver breakthroughs more quickly. In performance materials, we develop science that sits inside technologies and changes the way we access and display information.Everything we do is fueled by a belief in science and technology as a force for good. A belief that has driven our work since 1668 and will continue to inspire us to find more joyful and sustainable ways to live. We are curious minds dedicated to human progress. Science is at the heart of everything we do. It drives the discoveries we make and the technologies we create. Our work makes a positive difference to millions of people's lives every day.
In Healthcare, we discover unique ways to treat the most challenging diseases such as Multiple Sclerosis and cancer. Our Life Science experts empower scientists by developing tools and solutions that help deliver breakthroughs more quickly. In Performance Materials, we develop science that sits inside technologies and changes the way we access and display information. Everything we do is fueled by a belief in science and technology as a force for good. A belief that has driven our work since 1668 and will continue to inspire us to find more joyful and sustainable ways to live. We are curious minds dedicated to human progress. Science is at the heart of everything we do. It drives the discoveries we make and the technologies we create. Our work makes a positive difference to millions of people's lives every day.
In Healthcare, we discover unique ways to treat the most challenging diseases such as Multiple Sclerosis and cancer. Our Life Science experts empower scientists by developing tools and solutions that help deliver breakthroughs more quickly. In performance materials, we develop science that sits inside technologies and changes the way we access and display information. Everything we do is fueled by a belief in science and technology as a force for good. A belief that has driven our work since 1668 and will continue to inspire us to find more joyful and sustainable ways to live. We are curious minds dedicated to human progress. Science is at the heart of everything we do. It drives the discoveries we make and the technologies we create. Our work makes a.
Ladies and gentlemen, the annual general meeting will now continue. I now have the voting results for agenda items 2 to 8. They are displayed on the screens. I will now read out the complete voting results, indicating whether the required majority was achieved. The complete voting results will be shown on the screen and submitted to the notary for the minutes. The results will be published in detail on the company's website after today's AGM. The following results pertaining to agenda items of 2 to 8 relate in each case to the management's proposed resolution, as published in the invitation to the annual general meeting on March 7, 2023, in the Federal Gazette. Ladies and gentlemen, please allow me to first announce the current presence. You can follow this information on your screens.
Of the base capital of the company to the amount of EUR 168,014,927.60, broken down into 129,242,252 shares. 93,371,732 shares with as many votes are present, which represents 72.5% of the base capital. Furthermore, absentee votes have been cast for 445,613 shares, which corresponds to 30.34% of the base capital. Ladies and gentlemen, I will now announce the voting results. Voting result on item 2. I hereby declare and ascertain that the AGM decided on item two, resolution on adoption of the annual financial statement for fiscal 2022.
Adopted the proposed resolution of the executive board and supervisory board as published in the Federal Gazette on March 7th, 2023 with the required majority. Voting results for item 3. I hereby ascertain and announce that the AGM regarding item 3 of the agenda resolution authorizing the appropriation of the net retained profit for fiscal 22 approved the proposed resolution by the executive board and supervisory board as published in the Federal Gazette in 2023 with the required majority. Result for item 4 on the agenda. I hereby ascertain and announce that the AGM regarding item 4, resolution on the approval of the actions of the executive board for fiscal 2022 approved the proposed resolution by the supervisory board, and the executive board has published in the Federal Gazette on March 7th, 2023, with the required majority of votes. Voting result for item 5.
I hereby ascertain and declare that the AGM regarding item 5, resolution on the approval of the actions of the supervisory board for fiscal 2022, has approved the proposed resolution by the executive board and supervisory board as published in the Federal Gazette on March 7, 2023, with the required majority of votes. Voting result for item 6 on the agenda. I hereby ascertain and declare that the AGM on item 6, resolution on the approval of the 2022 compensation report, has adopted the proposed resolution by the executive board and the supervisory board as published in the Federal Gazette on March 7, 2023, with the required majority of votes.
Voting result for item 7. I hereby ascertain and declare the AGM has, regarding item 7, resolution under revocation of an existing authorization, the creation of a new authorization to issue warrant and or convertible bonds, profit participation rights or participating bonds, or a combination of these instruments and authorization to exclude the subscription right with the simultaneous revocation of the current contingent capital 2 and creation of a new contingent capital 2 and corresponding amendment of the articles of association, has approved the proposed resolution by the executive board and supervisory board as published in the German Federal Gazette on March 7, 2023, with the required majority of votes.
Voting results on item 8.1 on the agenda. I hereby ascertain and declare the AGM has, regarding item 8.1, resolution on the addition of Article 21 of the Articles of Association authorizing the Executive Board to conduct annual general meetings, has approved the proposed resolution by the Executive Board and Supervisory Board as published in the Federal Gazette on March 7th, 2023, with the required majority of votes. Voting results on item 8.2. I hereby ascertain and declare the AGM has, regarding item 8.2, resolution on an amendment of the Articles of Association to enable participation of Supervisory Board members at the annual general meeting by means of audio and video transmission, approved the proposed resolution by the Supervisory Board and Executive Board as published in the Federal Gazette on March 7th, 2023, with the required majority of votes.
Ladies and gentlemen, all the items on the agenda have thus been dealt with. I would like to thank you once again for your participation in today's virtual annual general meeting and your interest in the work and development of our company. Finally, my special thanks go to the employees of the company who have contributed to the success of this annual general meeting. I look forward to seeing you again in good health at a Merck annual general meeting next year. This meeting is now closed.