Great. Thank you so much, Nairobi.

Good afternoon, and thanks for joining us today. I'd like to welcome all of you to our fourth quarter full year 2021 conference call.

With me on the call today are Werner Baumann, our CEO; and Wolfgang Nickl, our CFO. The divisions are represented by the responsible Management Board members.

Slightly different layout for the fiscal year. Werner will begin today's call with the highlights of 2021 and frame the year ahead of us.

We will then have Rodrigo, Stefan and Heiko comment on the respective business performances and the divisional outlook for 2022. Wolfgang will wrap it up with an overview of the group performance and outlook before we open up for the Q&A session.

As always, I would like to draw your attention to the cautionary language that is included in our safe harbor statement as well as in all the materials that we have distributed today. With that, I'll hand it over to you, Werner.

All right. Thanks, Oliver, and good afternoon, ladies and gentlemen.

It's my pleasure to welcome you to our conference call. Before we go into the business performance, let me start with what is certainly top of mind for all of us.

With the Russian invasion in Ukraine, the geopolitical order has shaken. And we are deeply shocked and concerned about what is happening to the Ukrainian people.

This war is no less than a threat to our freedom and democracy. And we, as Bayer, condemn in the most vigorous way this Russian attack.

While we hope that concerted political actions will help to improve the situation as soon as possible, we as a company try to step up as a reliable partner and a good corporate citizen true to our vision, help for all, hunger for none. Of course, the safety of our employees is now our top priority.

And we are taking all appropriate measures to protect our 700 colleagues in the Ukraine. At the same time, we are doing everything we can to further ensure the supply of our products to the civilian population, including vital medicines and agriculture products to safeguard food supplies.

And of course, we are prepared to step up our humanitarian help with financial support and donations of our medical products, as we have shown during the COVID pandemic. Now there's certainly no smooth transition, but let me take a step back and comment on some key macro factors relevant for our business last year.

We saw a particularly favorable agricultural market dynamics, with high soft commodity prices and tight global supply leading to increased levels of glyphosate prices. In Pharma, elective treatments increased again after COVID-19 restrictions in 2020.

And for Consumer Health, we saw continued growing demand for preventive health solutions. On the downside, we noted increasing inflationary pressure and volatility of global supply chains across industries.

Let me also provide a very brief update on the status of the glyphosate litigation. In December, the U.S.

Supreme Court requested the views of the Solicitor General in the Roundup Hardeman case. Notwithstanding what the brief concludes, there are 2 potential outcomes.

If the Supreme Court decides to review the Hardeman case after input from the Solicitor General, and finally, rules in our favor, this will effectively end the glyphosate litigation. If the Supreme Court denies accepting the case for review or finally rules against us, we will activate the voluntary claims administration program in our five-point plan to help bring closure to the litigation.

From a financial point of view, we have incorporated this specific scenario already into our provisions in 2021. Now let's move on to our business performance.

I'm very pleased to share that we have overachieved our updated guidance, which we communicated with our Q3 earnings release. While 2021 started as a transitional year for Bayer, we ended 2021 with strong momentum that provides an excellent base for further growth and earnings expansion in 2022.

Overall, and supported by a positive market environment, we did much better than expected at the beginning of the year. We substantially increased our top line by 9%, with strong contributions from all divisions.

Crop Science strengthened its market position, with market share gains specifically in corn and continued expansion in fungicides. We also saw strong price increases across the board, particularly for our glyphosate-based products, driven by tight global supply.

Pharmaceuticals generated another year of healthy growth for our key products, Eylea and Xarelto, despite the first impacts from volume-based procurement in China for Xarelto. We also reentered the U.S.

market in cardiology and saw pleasing contributions from our launch products. Consumer Health delivered industry-leading growth across regions and categories, with a focus on excellence in execution and innovation.

The substantial volume growth, strong price performance and the contributions from our ongoing performance programs contributed positively and more than offset inflationary pressure and cost normalization after an exceptional 2020 while enabling us to invest in launches and innovation. However, still reported performance in Europe was held back as we faced significant foreign exchange headwinds of roughly EUR 1 billion in top line and approximately EUR 500 million in bottom line.

Now let's look at innovation, which is key for our future growth. We have made significant progress on our innovation agenda and are looking ahead to a promising 2022.

For Pharmaceuticals, we have achieved important approvals in entire commercialization stage for our new products, resulting in a very much derisked late-stage pipeline. For our new products, Nubeqa, KERENDIA and Verquvo, we see ongoing strong launch momentum and planned further rollouts in 2022.

To that end, we just recently received the approval to market KERENDIA in the European Union. And just a week ago, for our prostate cancer drug, Nubeqa, we did raise our peak sales expectation for -- from more than EUR 1 billion to now more than EUR 3 billion.

We also made great progress on our early-stage pipeline with our cell and gene therapy platform and strengthened our drug discovery capabilities with the acquisition of Vividion Therapeutics. For #1 product, Xarelto, we saw the positive patent ruling confirming our once-daily administration patent in the EU.

With that, we will now have extended exclusivity until 2026 in Europe for our most important pharma product, which complements the 2027 exclusivity extension we already achieved in the U.S. In Crop Science, we successfully commercialized hundreds of next-generation corn and soybean seed products and advanced short-stature corn.

We also made significant progress on our digital platform, including the successful launch of our carbon farming initiative, expansion of our Orbia digital ag-market place in Brazil and entered into important collaboration agreements with Microsoft and other external partners. In Consumer Health, we saw successful launches of Bepanthen dry skin and Aleve ex topical pain as well as regulatory clearance for the 2022 Rx-to-OTC switch of Astepro in the U.S., the first and only steroid-free nasal decongestant in the market.

We also made significant progress regarding our sustainability goals and the sustainable development of our businesses. At Crop Science, we are advancing carbon farming, a completely novel field of business, which financially rewards farmers for adopting practices that improve carbon sequestration into the soy.

In Pharmaceuticals, we enabled access to modern contraceptives by investing more than EUR 400 million into facilities in Costa Rica and Finland. And at Consumer Health, we are investing EUR 100 million to make our products more sustainable.

We intend to make the packaging for all our consumer products recyclable or reusable by 2030. Looking ahead, we are focused on carrying the strong business momentum to 2022, translating into growth and earnings expansion.

We expect that momentum to be significantly skewed towards the first half of the year. On the downside, we anticipate inflationary cost pressures to persist and supply chains to remain stretched, resulting in a very volatile supply situation across industries.

Also, our plans assumed a stable geopolitical environment in Eastern Europe, which meanwhile changed dramatically. We will closely monitor and mitigate these risks to the extent possible.

For innovation activities, we expect further important news flow across divisions and our Leaps entity in 2022, including the news we shared with you 10 days ago on the Horizon's data for Nubeqa. Looking forward to keeping you updated, Stefan will also outline the major pipeline in pharma and the catalysts we are seeing for the coming year.

I'd also take the opportunity to welcome Rodrigo Santos for his first earnings call. It's great to have Rodrigo and the team as a successor to Liam.

And the business is off to a good start and a bright future under his leadership. And now over to you, Rodrigo.

Thank you, Werner, and thanks to all of you joining us today. I'm really excited to begin by sharing some excellent results from this past year.

We saw great progress in our pipeline, in our digital pharma solutions, well aligned with our objective to transform agriculture for a more sustainable future. At the same time, we clearly demonstrated the performance of a market leader with share gain in Corn Seeds & Traits in key markets, such as Brazil and Argentina, and taking the #1 brand position in the U.S.

This was supported by the launch of new hybrids and our next-generation and industry-first RNAi-based corn rootworm trait as part of the VTPRO4 offering in Brazil. In soybeans, we launched Intacta 2 Xtend with more than 800,000 acres in the first year in Brazil, and we expect it to grow to 6 million acres in the next season.

Meanwhile, in North America, we reached 16 million acres with Xtend Flex in the first year of commercialization, successfully defending our position as the #1 soybean with control system in North America. So I'm pleased to share that the combination of innovation and disciplined execution resulted in record sales for Crop Science in 2021, with growth across all regions and all business units.

The 11.1% sales growth was driven by higher prices for our Herbicides, coupled with combined expansion in Fungicides as well as by market share gains in corn and stronger pricing and volume gains in Soybean Seed & Traits. This performance, combined with our ongoing efficient measures, more than offset significant cost inflation as well as negative currency effects of EUR 387 million.

This led to a 4% overall increase in EBITDA before special items, with a margin of 23.2% or 24.3% at prior year currency rates, consistent with our guidance for the year. As we move to 2022, we have 2 primary objectives: to continue to perform and transform at the same time.

With these results and this innovation at our back, combined with high commodity price, we see strong momentum moving into 2022. As a result, we are guiding to a 7% sales growth and EBITDA before special items margin of 25% to 26%.

Overall, earnings growth is expected to come from stronger prices, share gains and new efficiency measures, which are expected to more than offset continued inflationary cost pressures, particularly in Crop Protection, where we like the rest of the industry are experiencing unprecedented supply chain challenges. Given these cost pressures and the value of our high-performance products create, we expect pricing to be the primary contributor to our sales growth for the year.

Roughly, half of the pricing growth is expected to come from Herbicides and about half from Corn Seeds & Traits and the rest of our core Crop Protection portfolio. The annual refresh of our Corn Seed portfolio and upgrades to the next-generation technologies in its exciting fungicides like Fox Xpro enabled that growth with 6% to 7% price increases globally.

While volume is not expected to be as significant as pricing, we do expect share gains in corn and strong demand from fungicides to contribute to our overall growth. In our models, we expect Herbicides price to be higher in the first half of '22 and lower on the second half, with possible improvement of the global supply of glyphosate.

This trend influences our total outlook with our total sales growth rate, expected to be above 7% for the first half and below that level for the second half of the year. Similarly, our EBITDA before special items margin is expected to expand strongly in the first half and compress in the second half, on the path to the 25% to 26% for the full year.

This year, however, is not expected to be without challenges. Our growth outlook is in this plan is constrained by potential competitive dynamics and some regulatory uncertainty, plus some potential supply challenges across all our Crop Protection portfolio.

Agriculture has always had its challenges and always will. But as the market leader in this business, our organization will focus on maximizing the opportunities that the innovation provides while working to minimize the risks.

I look forward to updating you on the performance against this plan and ongoing efforts to transform agriculture in the year ahead. With that, I will hand over to Stefan to share an update on the Pharma business.

Thank you, Rodrigo. More than happy to do that, and good afternoon to everyone.

Bayer Pharma's top line saw a strong recovery in 2021 after COVID-19 limited our patient's ability to get their medications in the prior year. Sales grew 7%, slightly above our upgraded guidance from August, driven by higher volumes that were up by 9%.

Around 60% of this increase came from our 2 flagship products. Eylea sales improved by 19%, driven by a double-digit increase across all regions, which was also supported by continuously growing adoption and higher shipments of the prefilled syringes that were launched in 2020.

Also, our biggest single sales contributor, Xarelto, showed a strong performance in 2021, growing 6% year-on-year. A healthy volume trend more than offset lower prices from volume-based procurement reductions in China, which started to take effect in September 2021 and were implemented in all provinces by October.

Concluding my comments on last year's key top line drivers, Adalat and Adempas both achieved around 20% growth in 2021. For Adempas, this included a onetime milestone payment of EUR 190 million that came in the fourth quarter driven by its strong market momentum that led to more than USD 1 billion of in-market sales in 2021.

With this, we have reached the final sales threshold that triggers milestone payments related to this product. Looking at our late-stage assets.

We successfully launched KERENDIA in the United States last September. Despite limited ability to reach health care providers during the COVID-19 pandemic, we are excited to report a launch uptake that is in line with other successful cardiovascular medicines that have been introduced in the U.S.

market, and we do expect this trend to continue. Only recently, the American Diabetes Association updated their guidelines with an A recommendation for the use of KERENDIA for patients with chronic kidney disease who are at increased risk for cardiovascular events or chronic kidney disease progression.

We also continued to make good progress with the rollout of Verquvo in the treatment of heart failure with reduced ejection fraction, following last year's approvals in the U.S., Japan and in the EU. The continued rollout of our new prostate cancer drug, Nubeqa, was particularly successful, generating sales of EUR 219 million in 2021.

In the second year after market launch, it is already one of our top 15 products. This strong performance is the result of Nubeqa's unique clinical profile, which was impressively confirmed by a consistent set of strong efficacy and tolerability data from Nubeqa's second successful Phase III ARASENS trial released 2 weeks ago.

With an EBITDA before special items of EUR 5.8 billion, equivalent to a margin of 31.5%, we also delivered on our earnings guidance in 2021. As already stressed last year, the 2020 margin was a tough comparison in the first place as it benefited significantly from cost containment we had initiated in the face of the evolving COVID-19 pandemic.

Also, higher investments into innovation and marketing of new products weighed on profitability in 2021. For 2022, we expect to grow divisional sales by 3% to 4%.

We see new launches increasingly contributing to top line and expect Eylea to continue playing out its market-leading position with mid-single-digit percent growth this year. Overall, sales growth in the division is expected to exceed by far the VBP pricing headwinds we are facing in China for Xarelto and Adalat this year.

Please be reminded that Xarelto sales in 2021 only included 4 months of adverse impact from China VBP, but they will fully materialize in this year. Going forward, while Xarelto is expected to continue growing in our largest region Europe, we're facing a more heterogeneous development in other regions, mainly due to softer pricing as well as ending exclusivity.

Closing my comments on VBP in China, Adalat is likely to see first impacts by the second half of this year. In terms of late-stage pipeline news flow, we've kicked off the year strongly, with a second set of very positive clinical Phase III data from Nubeqa's ARASENS trial and the EU approval for KERENDIA.

Continuing the launch dynamics of our late-stage pipeline assets and getting Nubeqa submitted for the indication extension in the metastatic hormone-sensitive prostate cancer is one of our key priorities this year. For Eylea, we are currently running 2 Phase III studies with an 8-milligram formulation, with the objective to potentially prolong injection intervals and improve patient convenience while keeping superior efficacy.

Data from these studies are expected to deliver results in the second half of this year. On top of this, our Factor XI program will be Phase III decision ready this year, with a highly competitive profile that could eventually be leading in the class.

Targeting Factor XI in the anti-coagulation pathway promises a novel and disruptive route to decouple prevention from cardiovascular risks, from bleeding risks. In addition, it could offer options to patients for which treatments are not available at all today.

In the early phase of our pipeline, we may see news this year that have the potential to be transformative in fighting Parkinson's disease in area of utmost clinical needs. With BlueRock stem cell-based therapy candidate, DA01, we're developing a treatment that uses authentic dopaminergic neurons to reinnervate the affected regions of the human brain and reverse the degenerative process.

We have included a total of 7 patients in the potentially groundbreaking procedure and expect interim data from the study in this year's second half. The ongoing investments into technologies as well as our progress in advancing our pipeline from early to late stage, to launches and rollouts reflect the consistent execution of our strategy to generate sustainable long-term growth.

At the same time, our ambition is to maintain attractive returns. With the EBITDA margin goal of around 32% before special items for this year, we're committed to deliver on both ends, supported by a stringent cost management and reallocation of resources.

And now it's Heiko's turn to update you on Consumer Health.

All right. Thank you, Stefan, and good afternoon, everybody.

It's a pleasure for me to go into Consumer Health performance in 2021 and also share you our outlook for 2022. Starting with '21, we delivered strong broad-based growth of 6.5% across all our regions and nearly all our categories.

We are consistently performing at the high end of our industry, which is really a demonstration of the quality of our Consumer Health business, our brands and our people. In short, our results prove our ability to execute on our strategy and outperform in an increasingly competitive environment.

The standout category performance was again Nutritionals. We have now seen strong double-digit growth in this category for the past 2 years with in particular, our power brands, One-A-Day and Redoxon, performing very well.

In addition, our growth was supported by successful launches behind brands like Bepanthen and Aleve, demonstrating our ability to strengthen iconic brands with innovation that win with customers and with consumers. Cough and cold was a tale of 2 halves.

The first half of the year was negative due to a historically weak flu season. But for the second half of 2021, we saw robust growth following the opening up of many countries.

However, the category finished 2021 slightly below prior year. All our other categories delivered mid- to high single-digit growth.

These broad-based contributions positioned us again ahead of the overall market in '21, which grew around 4%. Moving to the bottom line.

Continued disciplined operational execution of our strategy once again led to margin expansion. In 2021, we improved our profitability by 50 basis points to 22.5%, or in absolute terms, earnings before special items amounted to EUR 1.2 billion.

This margin expansion was driven by disciplined spending and pricing measures, compensating for the inflationary cost increases and still enabling us to invest in marketing and innovation behind our brands. Now let's look ahead and move to the outlook.

Consumer Health remains fully on track to successfully deliver on our growth strategy. In '22, we expect to grow 4% to 5%, with a further step-up in innovation.

Growth is likely to be front loaded for the first half of the year with an easier comp versus '21, especially in cough and cold. We expect earnings before special items to be within the 22% to 23% range.

We do everything we can to compensate rising input costs with efficiency measures as well as a focus on pricing. At the same time, we plan higher investment in the brands behind our launches as well as in research and development.

One major growth driver in '22 and beyond will be the launch in the U.S. of a new brand called Astepro.

It is the first and only steroid-free antihistamine nasal spray for allergies approved as an over-the-counter product. This Rx-to-OTC switch represents a significant milestone for our business as it strengthens our leading allergy portfolio and offers a differentiated solution to the 50 million Americans who suffer from allergies.

In conclusion, we look forward to another exciting year for our Consumer Health business at Bayer. Over the past 3 years, we have delivered growth at the forefront of our industry and improved margins at the same time.

We are well placed to win in this market with our leading brands, broad geographic footprint and a proven track record to win with consumers. And with that, I will hand it over to Wolfgang, who will guide you through our financials.

Thank you, Heiko. I will now walk you through the group financials for '21 and combine what you have heard from my colleagues in the group outlook for fiscal year 2022.

Group net sales came in at EUR 44 billion, a 9% growth over the prior year. This is EUR 1 billion above our updated guidance and includes a significant but anticipated currency headwind of EUR 1.1 billion.

The weakness of the U.S. dollar and the Brazilian real against the euro has the biggest effect, but the Japanese yen, Turkish lira and Russian ruble also contributed.

Earnings before special items of EUR 11.2 billion declined by 3%, resulting in a margin of 25.4%, in line with our latest guidance. Negative currency effect of about EUR 500 million weighed on group EBITDA, representing a 50 basis point margin decline versus the prior year.

For our underlying operations, we were by and large able to compensate inflationary pressure on input costs with adjusted pricing and efficiency gains while increasing investments into innovation and product launches. Inflation particularly impacted our cost for energy, active ingredients, freight and labor.

As an example, the global container freight cost for a 40-foot container increased from roughly USD 2,000 in 2020 to roughly USD 10,000 in 2021. Furthermore, as communicated last year, we restored our cost profile on the short-term incentives in a year-over-year comparison, cycling over 50% payout in 2020.

Core earnings per share grew by 2% to EUR 6.51 and are roughly EUR 0.20 above the upper end of our latest guidance, including currency impact. Positive contribution from Crop Science and Consumer Health compensated for lower Pharma and reconciliation results as well as a higher core tax rate.

Better financial result combined -- contributed more than EUR 0.30, thanks to lower interest rates for new financing and favorable currency effects as well as a positive remeasurement for our 2 Leap investments. The largest difference between core earnings per share of EUR 6.51 and earnings per share of EUR 1.02 relates to increased provisions for the glyphosate litigation and expenses related to our restructuring programs, as shown in the backup of the slide deck.

Our free cash flow came in at EUR 1.4 billion. This represents a 5% increase over the prior year despite EUR 400 million higher net settlements and increased tax payments.

The strong cash performance was mainly driven by disciplined working capital management, particularly in Crop Science. Compared to our updated guidance, we saw lower-than-anticipated net settlement payments, which came in at EUR 4.3 billion for the full year.

These factors are also the reason why our net financial debt came in EUR 2 billion better than our latest guidance. The increase of net financial debt year-over-year from roughly EUR 30 billion to EUR 33 billion is mainly driven by the financing of the Vividion acquisition of EUR 1.2 billion, negative foreign exchange effects of EUR 900 million and dividend payout of EUR 2 billion, which more than consumed the free cash flow.

I would like to close our presentation with our group guidance for 2022. Let me start by pointing out that our guidance reflects our current business and does not include any impact of the planned sale of the professional part of our Environmental Science business.

Please also note that an arbitration with BASF, as regularly reported in the risk section of the annual report, will likely be concluded towards mid-2022, but possibly even sooner, with strong arguments in defense of our case and, therefore, not taken any provisions. As in previous years, we focus on the guidance at constant currencies, or in other words, at average actual 2021 exchange rates.

The estimated FX impact, if we would use month and December '21 spot rates, is reflected in the right column and shows a tailwind for net sales of roughly EUR 1 billion and EUR 0.10 on core EPS. We estimate Bayer Group sales to be at approximately EUR 46 billion, an increase of around 5%.

While we significantly invest into future growth, particularly in Pharma and Consumer Health, we expect to see margin expansion through strong top line growth and further contributions from our efficiency programs. Our EBITDA margin before special items is anticipated to increase to approximately 26%, bringing absolute EBITDA before special items to around EUR 12 billion.

Based on the divisional projections, we expect a strong phasing of top line and profitability towards the first half of the year, with an anticipated normalization in the second half. For core EPS, we lift our guidance to approximately EUR 7 at constant currencies.

For the core tax rate, we continue with our guidance of approximately 23% for the time being. In case we see the proposed introduction of minimum taxes or attempted tax rate rises by government facing high pressure to refinance COVID-19-related expenditures, this level would become increasingly challenging.

Our reconciliation result is anticipated with minus EUR 500 million to minus EUR 600 million. The reflected increase versus the prior year was mainly driven by the planned start of an upgrade of our system infrastructure.

We keep our strong focus on cash generation and FX free cash flow to increase to a range between EUR 2 billion and EUR 2.5 billion. This includes total anticipated net payouts for litigation settlements of approximately EUR 2.5 billion, consisting of phased payouts for glyphosate-related settlement agreed to prior to the Supreme Court requesting the opinion of the U.S.

government on the Hardeman case. Excluding settlements, we target an underlying free cash flow of around EUR 4.5 billion to EUR 5 billion.

Our net financial debt is forecasted to be in the range of EUR 33 billion to EUR 34 billion. Please note that we have listed other major KPIs in the appendix of our investor presentation.

For the fiscal year 2021, we proposed a dividend payment of EUR 2 per share, which is subject to approval by the AGM. The payout ratio of approximately 31% remains within the target corridor of 30% to 40% of our core EPS.

And with that, Oliver, I'll hand the call back over to you to start on the Q&A.

Thank you so much, Wolfgang. Thank you all for the comments and for the insight.

[Operator Instructions] And with that, Nairobi, I think you may open up the lines for questions.

Rodrigo, wondering if I could ask you to speak a little bit more about glyphosate pricing, and I'll do my 2 questions in one. The first would be, if could you just talk about how you're thinking about how you're pricing your product versus where the Chinese prices have gone, given just sort of the parabolic nature of the Chinese price increase?

Historically, you tend to try to price $1 to a gallon above the Chinese. But I think if you were actually going to do that, your pricing will be a lot higher than what seems to be embedded in the guidance.

So what's the strategy? And then, I guess the second part of my question is, you talked about in the back half of the year, you're expecting prices to be down sequentially.

Is that also sort of implying that as we get into 2023, on a year-over-year basis, prices will be probably be lower than 22%, but probably still higher than '21? Or how should we be thinking about that in our models?

Thank you, Vincent. So let me talk a little bit about glyphosate.

So if you take a look on our outlook of 2021, we end up with our Herbicides with around 15% growth. That's basically driven by price.

As you remember, we had the volume impact because of the Hurricane Ida. If you think about 2022, we see the same scenario, right?

So in the opposite direction that we had in '21 where we had a lower price in the first 6 months and a higher price on the second half of the year, this year, we are expecting the opposite. We're going to have a higher price on the first 6 months and a lower price for the remaining of the year.

At least this is what we see today. We -- of course, we're going to continue working very close to that to see if we can capture any additional opportunities on that one.

I just want to also reinforce with the opportunity is that we are guiding for 2022, half of our price increase coming from the Herbicides and half of our price increase coming from Corn Seeds & Traits, Fungicides and Insecticides. So we are taking advantage of that market opportunity with the disciplined execution to drive that price increase for the year.

So overall, we see a strong first 6 months, and we are projecting a lower for the remaining of the year. But we're going to try to capture any opportunity that we see in the market.

No, I will pass it along. Those are my 2.

Peter Verdult, Citi. 2 questions.

Heiko or Werner, you see Consumer businesses valued at 5x sales. How do you think about ensuring Bayer's Consumer businesses that's proper recognition?

Because you're executing well, but we're not getting much recognition for that in your current share price. I think secondly, Rodrigo, just to sort of piggyback on sort of Vincent's question.

Just in terms of some of the headwinds you talked about regulatory, competitive and supply issues, last year, you talked about a lost core license regulatory withdrawal in the Luling plant. I think you quantified that as sort of 3% headwind.

Could you give us some sense as to what these headwinds could be if they came to pass?

Pete, it's Oliver. I had the hardest time to understand the first question, to be honest.

Any chance you could reiterate that or if not using a headset or something? Just checking.

Yes. Oli, sorry.

Let me try the first one again. It's very quick.

I just thought given we are seeing Consumer businesses valued at 5x sales in the market. How does Heiko or Werner think about ensuring that the Bayer Consumer Business is properly valued given the current share price and how well the Consumer business is performing?

All right. Peter, let me take you at all, let's say, the first question.

There's no doubt that our stock is not appropriately valued. And you've heard us say that several times, which is not limited to the Consumer business, but cuts across the board.

And against the strong performance that we've seen in 2021 and also the perspective of 2022, let alone the fact that we are looking at a glyphosate scenario that we have fully provided for, for the case that we see -- we hope and expect that the value comes back into our stock and that includes all businesses. We've also seen that relative to the consolidation in the market, not everything that was announced, did finally materialize.

Our performance in Consumer Health speaks for itself. Heiko will now touch on it again.

So we don't have any issue holding our ground, and we continue to believe that we are the best owner and operator of that business.

Yes. Maybe just to add a couple of words to Werner.

I think it shows that Consumer Health is just an extremely attractive business and that's why we're in it. And obviously, if you combine that then with the performance that's at the forefront of the industry, then it's obvious that we have a very, very strong Consumer Health business with very good brands, with a very good geographic performance and also a very solid performance.

So all in all, I think it just confirms that this is the right industry to be in and that's why we're in it.

Pete, I think that covers the Consumer Health. Can you actually ask your second question again because that was also hard to understand?

Sorry. Despite being told not to be on headset, I was on a handset.

Hopefully, you can hear me clearly now. Second question was just to Rodrigo.

Just following on from Vincent's question. You talked about some potential headwinds in terms of competitive supply and regulatory.

You had similar headwinds last year. I think you quantified them, I think you lost a corn license.

You had a regulatory withdraw in Europe, and you had the plant closure in Louisiana. I think you quantified that about 3%.

Just wanted to get a sense from Rodrigo if some of those headwinds come to pass. What sort of quantification are we thinking about in terms of those headwinds?

So thank you. Thank you on that one.

Let me say this upfront. So when we look to the market, similar to what I heard from the entire industry, I think the key risk that we foresee is global supply.

I think that's the one that we are looking very close. We had one that we shared with you that about glyphosate, was a marginal one to the full year.

But that's the one that I think that we are looking very close. We are monitoring.

It's very hard to anticipate when it comes from a supplier of us. But that's the one that we are watching closely, right?

So that's probably the key one that, I would say, that the entire industry will be facing this year, not even considering the geopolitical situation that we are talking a little bit earlier today. On the regulatory and the competitive dynamics, we're going to have that competitive dynamics, especially in soybean U.S.

and some of that impact also in terms of global regulatory that we have. We may see something that -- but I would say that if I would highlight the one that we are looking close is the global supply that I just mentioned.

2 questions, please. One clarification question for Rodrigo.

You were saying you expect most of the growth coming from pricing, as you outlined a few times now. How much of the price have you taken already and how much is to come in the year?

And then when you say you are expecting to take market share, but you don't say -- you don't expect volume uptake. How does that work?

Is that minor share gains that you're expecting, hence, volume uptake not being that significant? And then a question for Werner.

Looking at the annual report, the outstanding glyphosate cases are 138,000. When we started this process, it was 125,000, clearly, a small uptick since then.

I was just wondering whether you could speak to the dynamic of new peak cases coming in sort of the cadence, that would be helpful.

So let me go to the second part of your question about Crop Science that are very straightforward. The main driver of growth for 2022 is pricing, but we also see some volume gains in terms of market share for corn and also some fungicide expansion that we're seeing, particularly in Lat Am as Fox Xpro and the new launch that we have.

But the main driver is pricing, let me go to the first part of your question. So we are taking like an average of 6% to 7% a global average price increase for our Crop Protection products, excluding glyphosate and also our Corn Seeds & Traits.

When you think about the Northern hemisphere, North America and Europe, that's the pricing that we are running, the campaigns we are implementing as well for the tropical areas, more Latin America and APAC, that will come on the second part of the year. But I would say that considering all the innovation that we are bringing to the market, all the 500 seed deployments that we are putting in the market this year, I'm confident that this price for value that we are putting in the market, we're going to be able to implement and execute for the full year.

All right. Thanks, Rodrigo.

So Michael, to your question on the glyphosate cases, yes, as of February 1, we have about 138,000 cases. The case count increases very, very slowly.

You will have probably seen that advertising activity has come down substantially. And with the 138,000 in mind, we have settled 107,000, which also includes the cases that are not eligible because they don't meet the criteria.

So there's a remainder of roughly 30,000, so not a big difference compared to the number before. And just to make sure that everybody understands what the dynamic on the 30,000 is, we decided to not entertain any further settlement discussions for the time being as we wait for the recommendation of the Solicitor General and then how this Court's review further unfolds.

So there's no settlement activity at this point in time.

Sachin Jain, Bank from America. I've got 2 follow-up questions, if I may, both fairly straightforward, I think.

First, on KERENDIA, obviously, you pointing to a strong launch. Stefan, do you think it'd be a top 15 product in '22 or any color you can give on sales structure for this year?

And then secondly, you -- in your preparatory comments cited the Factor XI Phase III decision by midyear. I just had a couple of clarification questions around this, if I may.

Firstly, given you've got multiple assets, could you progress more than one? You mentioned potential differentiation on achieving efficacy without bleeding.

Do you have any data in-house that supports that as yet? And then you mentioned potential for us to be best in class.

Why do you think that's the case?

Okay. Thank you, Sachin.

That's a long 2 questions. So KERENDIA, unfortunately, have a shorter answer.

So it's a little early to tell you more for this year. We're very confident with the uptake.

A lot is -- obviously, holding is -- in standing in the balance of increased access and really giving everyone an opportunity beyond our programs that support patients to actually be fully reimbursed by payers. So this is an ongoing effort and will very much shape our sales curve for this year.

But besides that, we're very optimistic about KERENDIA. Whether it makes it into the top 15 this year or next year remains to be seen for the time being.

On Factor XI, so I don't know if I caught all of the gist of your question, but let me try to -- if I heard you right. First one was whether we're looking into progressing multiple Factor XI opportunities during the year because we have 3 different medicines that are currently in Phase II.

So this is still something that we're discussing because we're very happy with what we're seeing, especially on our oral program. So obviously, we're only going to be launching a Phase III into the injectables.

If the profile of our oral cannot reach certain patients that would also benefit from an injectable. So -- but we're very pleased with what we're seeing.

You know that I can't give you much more before we publish this at a scientific meeting, which is foreseen in the -- at the American College of Cardiology that's upcoming. And we've obviously taken a look at some of what our competitors have shown.

And so we have our data on file. And that makes us quite optimistic across the different indications that we intend to pursue and what we've seen so far.

So I think we have a strong contender, which speaks to the experience of our organization in developing anticoagulants. I mean let's not forget that we designed those programs that made Xarelto what it is today.

Just one on the guidance, one on the Pharma margins. So on the guidance, when I work through on a divisional basis, it makes the group margin look a little bit conservative.

So we're working through on the divisions, that suggests around -- about a 26.5% margin, which is a 26% margin for the group. Is that taking a little bit of conservatism?

Or is there something that I'm missing when doing that calculation? And on the Pharma margin, about 50 basis points or so increase in 2022 as you continue to invest for growth.

But how long are you -- how far along are you with that investment? Should we expect the margin to start to slowly increase from here?

Or is a lot of the costs already in the base, giving potential from 2023 onwards to show greater gross margin expansion?

Yes, James, this is Wolfgang. Let me do the group one and then Stefan will do the pharma one.

You're right, I mean, we're talking about rounding here. I mean we said EUR 12 billion roughly in EBITDA and EUR 46 billion.

If you do the exact math, it's 26.1%. We had around 26%, so it could be a little bit less, could be a little bit right.

And if you would go exactly to the midpoint of everything and that appears to be the math that you have just done, you would be above 26.1%. So we'll find out at the end of the year whether it was conservative or not.

But at this point, we believe it's around 26%.

Thanks on the -- on the Pharma margin, so first of all, I know that you probably know this, but there are a lot of moving parts here in terms of our full year accounting of launch investments plus also in a shift of resources towards R&D. Just be reminded of some of the acquisitions that we did that need to be all digested inside of our R&D line.

So despite of all of this, with some of the savings programs that we have and tightening our belt, we're getting to the 32% guidance. This is what we had also given in our midterm guidance, and we stand by that.

Yes.

I've got 2, both for Wolfgang, I think. Could you quantify the EBITDA impacts from supply chain disruption and cost inflation last year?

And maybe give any indication where you think that will be recurring at a similar level in this current year? And then the higher reconciliation charge, the EUR 500 million to EUR 600 million, is that a recurring new level?

Or is that just a one-off higher charge in the current year?

Yes. Thanks a lot.

So on the EBITDA margin for last year, you will recall, there were several effects. One was the catch-up on STI and one was currency.

One was indeed the investments that Stefan just mentioned into growth in R&D. And then there were inflationary trends.

We have not spelled them out, and I don't think we will spell them out. But I can tell you, if I look at -- I gave you the little example on ocean freight.

I mean active ingredients and energy would be other elements. But I can probably give you this much in a division like Crop Science with high cox.

We're talking several hundred million euros. So it's quite substantial.

And of course, Rodrigo, just as Stefan, just as Heiko, will do their utmost to see what they can factor into the pricing and offset with other efficiencies. That's very clear.

As it relates to the supply chain issues we had last year, you will probably see by our growth numbers that they have not held us back super significantly. But in the Crop Science case, I think that's probably the most prominent.

We could have sold significantly more had we not had the Ida effect in Luling. Reconciliation, we're at EUR 488 million last year.

And as a reminder for everybody, that's kind of the central cost that we don't really have an appropriate key to allocate to the divisions. It's a bit volatile because there are also STI and LTI normalizations in there.

But the fact that we are a little bit up in 2022 stems from 2 main reasons. Number one, we are starting the upgrade of our ERP systems.

And this is a very general work so it's not specific to a division. So we put it in reconciliation.

The second thing is you can imagine that a company of our size pays quite a bit in insurance premiums. And we have seen that market much like every other company going up in prices quite significantly.

And that would be the second one. So for now, again, there are a couple of moving parts in there.

I would hope that we would keep it lower than that going forward. But right now, we'll be with '22, and we'll update you on the time after that.

in due course. I hope that answers your question.

Just a question on those inflationary cost pressures. Obviously, we can see energy prices going up and the geopolitical uncertainty.

So just -- could you just talk about what access you have to long-term contracts? How long they are?

And how you have thought about this or -- and the changes to those in your guidance? Second question, just to come back to those glyphosate numbers in terms of the case increases, obviously, a very low case increase.

Is that in line with the expectations you have for provisioning? And do you continue to see the case volume going down?

So just some thoughts about that provisioning and just give us some idea there.

Thank you. This is actually very difficult to answer, in general.

But we have a number of long-term contracts. Actually something that is coming in very handy when you look at that massive inflation that we see and cost pressure.

On the energy supplies, the fact that by now, we have long-term contracts for roughly 25% of our energy builds in renewables helped substantially to kind of curb the cost increases. Secondly, if we talk about -- generally about our energy footprint and with that, that significant cost increase that you see a lot of other people talk about, at our end, we are not that energy intense business anymore.

And overall, our energy costs here, which includes [ SEM ] and a few other things already, it's about EUR 0.5 billion, yes. So on a EUR 44 billion, EUR 46 billion top line, we will see increases, of course, but we assume that we will be able to absorb.

And as Rodrigo and Heiko have already talked about, we are also in a strong position when it comes to pricing due to the inflationary tendencies that we see over the place, and we will roll that over very aggressively. Now there are other areas where, let's say, the task at hand is different.

Even with higher costs that is coming to us, the name of the game is securing supply. Yes?

So Rodrigo talked about it earlier. We see ultra-stretched supply chains with very, very high risk of default.

And that is what we are managing in order to make sure that we can produce and supply, which is currently the focus, and that's what our procurement organization is working on. The second thing, on the case increases, well, we've just closed the books.

The books have been audited. And the provisions have passed the test of being appropriate.

So there's no significant move one way or the other that would inform our view on the appropriateness or non-appropriateness for this argument of the status of our provisions. Yes?

So we are very preserved for the set of futures, but also the current that have entered our calculation, so no change.

I would have 2, please. The first is just on the driving forces behind the guidance within Crop Sciences.

And I'm particularly thinking about what has happened since Monsanto was bought. Am I right in saying that negative FX effects have removed roughly EUR 1 billion of EBITDA in euro terms since late 2018 from Crop Sciences?

And to the earlier points about the competitive dynamic in soybean, if we were to return to an FX environment that were similar to 2018, does all of this come back? Or has some been sacrificed to drive market share gains?

My second question is on working capital. Can you just give a reminder of what typically you carry as a percentage of sales growth for Crop Sciences?

And Pharma, is it about 20% to 25%?

All right. Sebastian, the first piece is going to be answered by Rodrigo and then Wolfgang will take your second question on working capital.

So let me address the first piece. So I think that we are taking advantage of our full portfolio to the market.

We just announced recently our pipeline review when we advance like 500 seed deployments, but at the same time, more than 300 product registration on Crop Protection. That's why I mentioned about -- when I think about Crop Protection, we have a price increase similar to what we have in Corn Seeds & Traits at around 6% to 7% as an average globally.

There are places that we have in double-digit price and some other regions different. But we are taking full advantage of our entire portfolio to drive the growth that we are seeing this year.

I think that's one piece. On soybeans here, so let me divide the soybean discussion here.

So one is in South America in Brazil. We just launched, in fact, the 2 Xtend with 800,000 acres.

We are seeing to an increase to a 6 million thousand acres. We have a 5% price increase.

So we are seeing great dynamics again in Brazil. In U.S., it's more a competitive market, and we're going to be competing in the market as we had last year.

I think that the launch of Xtend flags with 16 million acres was very important for us. We defend our #1 position on the wheat control in North America.

We're going to continue to do that for this year. So overall, when I think about the growth that we have for 2022, I think we are taking advantage of our full portfolio.

We are maximizing the opportunities where we see the opportunity and minimizing the risk that we were talking before. So that's a little bit of my overview on the Crop Science.

I hope that answers your question.

And now, Sebastian, I'll go into the working capital thing, and I'll do it more from a corporate perspective. First of all, we're quite pleased with what all the teams have done last year.

Our free cash flow was significantly better than what we had forecasted. For the total company, the working capital to sales ratio came somewhere from 37% to like 34%.

I think it's important when you look at this for crop in particular, that you also take the prepays in consideration because your traditional receivables, inventory and payables won't do the trick because we always have very significant prepays there. And if you take that into consideration, it's around the corporate average.

I hope that helps you with your question, Sebastian.

2 questions. Firstly, I wonder if you could tell us a little bit more about the impact of your business in Russia and Ukraine.

If the situation stays as it is, and it's obviously very difficult to get things in and out of Ukraine and Russia with sanctions. Could you just give us some sense of what the impact could be on your business?

And on a pharma question, Eylea is obviously doing extremely well. And you're telling us that part of this is the launch of the prefilled syringes.

We've recently had the 2-year data in from faricimab. I wonder if you could tell us how you feel Eylea, particularly perhaps the 8-milligram Eylea would compete with that 2-year data on faricimab?

And therefore, how long we can expect to see Eylea continue to grow ignoring anything to do with patent expiries?

And catering to the most -- let's say, the most fundamental needs all of us have and that is access to food and access to your health and health supplies. So with that, currently, there are no limitations when it comes to sanctions.

We, of course, will be subjected to the mandate of politics. And we will adhere and cater to those.

But as we speak, I think all of the sanctions are designed to hit those in power and to protect those who suffer from the situation most. And this is actually the civil population.

And our products are the ones that we have to continue to make available to these people because a lot of them are kind of on our medicines. And they need to have access to it and we'll go out of our way in order to provide it.

Secondly, the overall situation in Ukraine and Russia, of course, continues to change by the hour. We have strong crisis management resources and teams that report to the Board on the topic when it comes to supply, when it comes to you ensuring that we have logistics.

And transport is one of the bigger challenges right now. And then first things first.

First things are that we take care of our own people in these countries. And there are some very, very basic needs people have right now.

One is access to safe housing which means shelter that we are organizing and providing also with a lot of private initiatives of our people on the ground. And secondly, as you've seen the pictures in the news that people can't get a hold of cash.

We are providing our people in Ukraine with advanced cash payments so that they get by with, let's say, the most urgent needs that they have locally. And the rest of it, we have to play it by the hour really.

Jo, Stefan here. So thanks for your question on Eylea.

Glad to see that you're following this closely and especially our very, very positive growth momentum that we're seeing. So yes, we're following up on -- obviously, also on what's happening in terms of clinical data from faricimab, I think this looks good, and they're catching up to us.

I mean we're already at the given doses, have a 4-month dosing interval and with our treatment, treat and extend. So they're catching up to that now with what they have.

We're -- I think we're always one step ahead up to now. So in terms of growth, that's indeed a topic we will have to address, in terms of also peak sales that we can achieve with Eylea moving forward because we're impressed by how solid Eylea is.

And so I would think that we can expect continued growth in the coming years, only impeded by loss of exclusivity that will occur around 2025.

It's Falko Friedrichs from Deutsche Bank. I also have 2, please.

The first one is going back to your Crop Science guidance. So taking the 7% organic growth that you're pointing out, you mentioned it several times on this call that the majority of this should be price.

So is it fair for us to assume that the split is roughly 5% price and 2% volume in '22? And if that is correct, I still don't fully understand why the volume growth shouldn't be bigger this year.

And that's my first question. And then the second one is on Pharma.

I mean you mentioned that the volume growth for Xarelto should largely offset the VBP impact. So is it a fair assumption to assume low single-digit growth for the drug in 2022?

So let me address first the question here on that. Yes, you're fair to say that you reinforce the point that I made, yes, the main driver of our growth is pricing that we see that.

Some of the volume gain that we have in corn that I mentioned, especially in gaining market share and also the expansion of Fungicides. You also have some of the downside is included in the plan in terms of the cost increase and some other elements of that equation.

But overall, I would say that the far majority of that price -- of the growth that we have for '23 is pricing. Half of that coming from the Herbicide line and half of that coming from mainly all the other Crop Protection products and the corn.

That's right. That's right.

Yes. Thank you for your question.

On Xarelto, [ Marcus ], I think it's important that I give you more color on this one. So we did manage to compensate in '21 the price decreases by increased volumes.

For '22, given that we have a full year of VBP impact in China, this is going to be much, much harder. So what we do expect, given the importance of China that for this year, we may be facing a slight decrease even in Xarelto in '22.

We're obviously following this closely because Europe continues to be strong, but we're now seeing first impact, especially through China. So '22 is a tough year for us.

Okay. And a brief follow-up for Rodrigo, if I may.

Does your guidance assume that you're winning market share in corn, but losing market share in soy in '22?

So we are gaining market share in corn. We are not assuming that in soybean.

I think that we are not considering a significant expansion in soybean. That's fair to say.

When we think about the volumes that we plan, and especially for North America, different from what I mentioned about South America, right? So we always talk about soybean, I want to split that equation.

In South America, we are seeing a significant expansion of the Intacta 2 Xtend platform. We're seeing great momentum and we're going to continue to seeing momentum.

On the U.S. market, we are a more competitive environment that we are not planning a significant expansion on the plans.

Right. Thank you so much, Nairobi.

Much appreciated, and thanks to all for your time today and the attention. Greatly appreciate it.

And this closes our call for today. Stay safe, and we'll talk soon.

Thank you so much.