name is Robert Reti. I'm heading investor relations and ESG of the company. And, we have the usual line up of senior management here for this call. So let me welcome Gabor Orban, our chief executive officer, Ystlan Hometz, our chief financial officer, and Laszlo Kovac, our head of controlling, with me for this conference call. Before we start, let me just walk you through the the usual technical details And one of the technical details that I would kindly ask everyone to mute their phone, while not asking a question at the very end in the q and a session.
Otherwise, we will be following the usual format for this call. So a brief presentation from Gabor and then a q and a session where you will have a chance to ask questions either using the raise your hand functionality of Microsoft Teams or you can put your question on the into the chat box. We are also gonna be recording this call as usual, and the recording will be put on our web page later on. And finally, a cautionary statement at the very end of the presentation about forward looking statements and how to take them. And with that, I handle hand it over to Gabor who will explain, the details of our results of last year.
Hello, everyone. Thank you very much for joining us this morning. We look back on a very busy and productive year, 2024. Thank you for, participating in this session with us, where we can dive into details a bit more. The first thing, of course, to note is how we fared compared to guidance.
Well, we had a very ambitious commitment last year to grow the business at double digit rates in constant currencies. Low to mid teens is what we agreed to deliver. And my assessment is that we did get there. In the end, constant currencies, growth was 10%, the headline rate 13%. The FX tailwind, which in the end was a tailwind.
It didn't the year didn't start out like that, but at the end of the year, it was a 3.1 percentage point additional growth coming from FX. I'm especially proud of, the revenue figure in light of the shortfall compared to plan in the royalty flow coming out of The US, worth broadly speaking €40,000,000, in the whole of 2024. So factoring that in, I think we can comfortably say that farmer revenues at constant currencies came in in line with plan. When it comes to clean EBIT, this shortfall was even more pronounced, of course, because the same amount is compared to a lower, lower figure. We wanted to get between $7.25 and $750,000,000, which had it been for, royalties coming in line with plan, would it be possible?
It we achieved, in constant currencies, 7.12, which is still a 15% increase, constant currencies, on the previous year, higher than revenues. And it and it includes the impact from M and A, which had not been factored in at the time of giving you the guidance, which in the end turned out to be negative. What, if you focus or zoom in on q four, this was the most important contributor to the shortfall in profitability in the last quarter. In half terms, we have an $845,000,000,000 turnover in the full year, clean EBIT of two eighty, and EBIT a bit lower coming in at two sixty. But in growth rates, EBIT growth was significantly above that of the previous year.
If you remember, the the difference was, in in the previous year was very significant. What I'm most proud of is the free cash flow, result that we can provide to you today at $244,000,000,000 half, up by $160 compared to the previous year. We'll walk you through the main components of the free cash flow developments last year. And then earnings per share was up by 50% at $1,300 half. There's a lot of detail given here, which is supposed to help you read through the slides.
I'm not going to go through all this, but rather would discuss what for us is the most important mission driven, content here in this presentation. Last year, we really managed to deliver on our promise to provide access to health to a growing number of patients globally. And we did that in all four of our business units in broadly equal measure. In women's health, there are two important things to highlight. The first one is that we delivered targeted endometriosis therapy to women in Europe, on an unprecedented level.
Never before was endometriosis treated at this level of, in this quality of science, at this level of therapeutic value added than with Reaco in 2024. And this was also reflected in the fact that Reaco is our fastest growing brand today. It's our it grew outgrew even our plans, going in the full year at over €40,000,000. Secondly, and this has more to do with the future, by acquiring and building the team in Liege for original women's health drug discovery, an R and D platform which is expected to work on early stage discovery projects, related to women's health, addressing unmet risk in this area. It's hugely underserved, therapeutic area, by the way.
Just think of the disease modifying treatment for endometriosis or think of the thirty four percent fertility, success rate in fertility interventions. But but also, PCOS being a a a sub therapeutic area which is badly in need of new therapeutic solutions. In general medicines, our efforts were centered on the group of medicines known as NOEX, novel oral anticoagulants, a specialized, therapeutic segment in blood and cardio. We launched two new generic alternatives to drugs that are used widely globally, David Gautran and Riva Ruxoban. This is an ongoing effort because we don't get to launch in every country at the same time.
It's not a big bang. It's a gradual process of rolling out those therapies and making them available to a growing number of patients globally. In CNS, we have now one point seven million people in the world treated with cariprazine. It's a great source of pride for us. Not it's, of course, a mixed blessing because the success of this drug now also caught the attention of U.
S. Authorities. It's among the top 15, most important, original, drugs in The United States, which means pricing authorities and pricing measures are being, undertaken in order to curb the, financial burden of of of of this successful drug on Medicare and, and and the and the payers more broadly. Again, this is a source of pride, but at the same time, I I wish we had not had to face these consequences. The silver lining is all of this was in line with plans.
It was no surprise. We know we we saw it coming. And in every long term projection provided by, our partner, this the impact from from this was included already. The short term implication is, the Medicare plan d benefit redesign, which, according to AbbVie's communication, impacts, next year's numbers by 200,000,000. That said, our partners' commercial efforts and professionalism will continue to make the drug available to a growing number of patients, and so volume growth is expected to come in double digits.
Finally, biotechnology and autoimmune osteoporosis therapies, we have made very important progress in, advancing our pipeline. Last year, we submitted the most complicated file ever, without a partner in two indications with a large clinical study, supporting the dataset. Denosumab is on its is on its way to, Launch in the second half of this year, again in Europe. That's always the case with the fragmented nature of reimbursement systems and payers and so on, healthcare systems, this will be a gradual process like you've seen in other situations. That said, it's one of the most impactful initiatives from us to broaden access to otherwise very expensive and high-tech therapies.
Secondly, a licensed compound, ostekinumab, will be brought to the market by us again in the second half of the year and tocilizumab submission is the third item on our to do list when it comes to biotechnology, again, with a meaningful impact on patient access, in Europe and Japan. All of this was done in the context of lower greenhouse gas emissions. The most, let's say, painful effort last year was the calculation methodology the adoption of the new calculation methodology in line with science based targets initiative, understanding stakeholders, investors' demands in particular to incorporate this methodology into our, publishing, not just publishing, into our, ESG, approach. This message came loud and clear, so we did that 2024. It now covers scope one, two, and three.
And the numbers show that at the group level, we've been able to reduce GHG CO2, expressed in CO2 equivalents by 4% on accumulated basis. Now, 4% may not sound like a big deal, but it in the end, it is because volumes grew in the same period, at close to 20%, which means that the social impact, the positive social impact, the social benefit of our efforts, well, has been positive in the past three, four years, while the side effects, the the the collateral, costs for society and the planet have been, reined in. So we are proud of that too. To give you a bit more detail on the financial, results, I've already told you that 10% growth, was recorded in, revenues net of FX effects. And the headline number is 13.
Q on q, this is 9%, which is largely due to the fact that q four twenty twenty three was a high base to compare to, don't see a a slowdown in our, underlying growth into it. Don't read into it any such trend because it's not there. It's a high base q q '4 '20 '20 '3. As you see from the graphic on the up in the upper right corner, in geographic terms, the growth was broad based. We see growth in every region, both in FX adjusted terms and in headline terms.
The impact of the exchange rate, like I said, went from negative in the first quarter to gradually to, to 20,000,000,000, 20 6 billion, tailwind by the end of the year. Most of it came from the US dollar against the half, 12,000,000,000. But euro, half and other, cross currency developments also impacted revenues positively. If we drill down to the individual segments, the picture looks balanced. All of them grew double digits.
So the low teens that we agreed to deliver this year were met by all of our business units with the strongest growth coming from XRailar CNS. But, as you know, this is a smaller category. Bio, we are proud of the 17% growth that was delivered here. Even FX adjusted, it's as much as 12. So strong dynamic, which is good news for the future because this is the by, the business that is expected to deliver the most growth in the coming few years.
Solid growth also from women's health and gen gen med, close to double digits even, in adjusting for FX. In women's health, growth is driven primarily, and sales and marketing efforts are targeted mostly at the four protected brands. Two are protected by an by, ip the the other two by technology I'm referring to ria code ravelis lanzato and evra we have a good a good level of confidence that they can continue to penetrate the market in the next couple of years even more. Operating expenses, came in in line with plan if you consider the full year, but the last quarter was a bit of an outlier. Operating expenses grew by 36%, quarter on quarter.
If we account for, FX and also the impact from the m and a activities, or m and a transactions, opex implications, this comes down to less than half of that growth rate. Still above, revenue growth, which is, keeping us on the edge of our seat, no doubt, which is why we initiated already in the previous year, several corporate level projects to rein in, spending, especially in in in G and A, but also in sales and marketing. So an admin cost project and the commercial excellence project are both underway to make sure that, costs are kept in check. Finally, r and d, is also a driver of of, of operating expense growth. This is, again, in line with plan, except for the M and A related, R and D spend.
This is women's health, for the most part, exclusively, rather. And has to do with the initiation, so to speak, or the setting up of the Liage Women's Health original discovery platform. Also, making sure that the acquired projects continue to advance in the pipeline. That's what R and D expenses, were augmented by toward the end of the year Lean ebit came in at 14% higher than in the previous year if we adjust for fx 18 if we don't that that adds up to 280,000,000,000 half. And even q on q, it's a it's a similar dynamic.
Across segments, again, it was a healthy buildup of clean EBIT over the course of the year with a slight, let's say, a temporary and one off, glitch in the in the last quarter. Below the line, there's lots going on, mostly good. So I'll leave it to Ishtan Hometz to explain it to you.
Good morning. Let me bring you through the the bridge from clean EBIT to net profit. As Gabor mentioned, yes, all the steps are positive compared to last year. So clean EBIT grew in nominal term 18.3%. But given that the extraordinary tax was phased out.
The other revenue, other expenditure was much lower than last year. So that explains that EBIT grew by 38% DESPITE CLEAN EBIT ONLY GROW BY '18. AND, LAST YEAR, WE SAW LARGE, NEGATIVE FINANCIAL INCOMES DO TO mainly FX losses. This year, FX brought us gains. So that's why the net profit, grew by 51% despite EBIT grow only 38.
So all the major steps were positive. Let me call your attention that last year, these extraordinary texts were officially not discarded but was made eligible to become part of the global minimum tax. And that's introduced a lot of complications. From this year on, we will have a clean sheet. But that's why you saw these big swings in EBIT and taxes and whatever.
So this is the explanation behind that. In cash flow, the story is the same, that we had a very strong operational cash flow without net working capital. It was 59% compared to last year. And compared to last year, net working capital increased what's what what was much slower. So it's explained that operative cash flow more than doubled compared to last year.
And from operative cash flow to to free cash flow, the major item which we improved a lot is capex that declined by 15%. It was not a coincident. That was part of the plan. So that's why free cash flow almost tripled this year. The application of this free cash flow was that we acquired intangible assets at the tune of 10,800,000,000.0, Hungarian foreign.
We spent on m and a $133,500,000,000 Foreign debts was the, as you may remember, basically the first half of the year. So in this fourth quarter, there is no major event. We paid 79.1% dividend. And still, first quarter, we had the share buyback program we spent 6,900,000,000.0. So overall, we almost come back despite very strong free cash flows due to this increased M and A activity.
We ended the year basically the same cash level as we had last year.
Thank you very much, Homi. And finally, an outlook for '20 on 2025. We expect 2025 to be the first year when, VRAYLAR will no longer be a positive contributor to the rate of growth of the company in the sense that it will not increase the aggregate growth rate, but rather, grow slightly less than the underlying business. Overall, we expect to see 10% growth, which means that with high single digit growth in railar revenues, underlying the underlying business needs to grow slightly above 10%. Having grown 13 in, from '23 to '24, this is, bold and ambitious commitment.
But we feel that the work that we have done over the past couple of years to reinforce the business processes to the work that we've done investing into the product portfolio will make us, well equipped to deliver on that growth rate. It should take us at constant currencies between 2.3 and €2,400,000,000 in terms of farmer revenues. When it comes to clean EBIT, and again, this is a commitment, that is not easy to deliver on, especially that the methodology is changing, which I'll explain to you in a minute. Again, we, see a 10% growth, coming from a clean from the new newly new definition of clean EBIT. Here, things are made our our work is made no easier by the fact that significantly lower milestone income is expected in 'twenty five than in 'twenty four.
It's not because we because, the probability of success or whatever is seen differently. It's simply the milestones that are potentially coming our way are just objectively lower and that's that. In terms of costs, of course, this implies that we cannot grow the cost level, including operating costs, higher than revenues grow. And like I said, there are action items put in motion already to to make sure that we can deliver on that objective also. In CNS, I've already mentioned that there's a $200,000,000 drag on Evvy's revenue coming from this brand as a consequence of the Medicare plan d benefit re redesign.
Double digit volume growth should offset some of that. And this is how a 3,500,000,000.0 net sales, outlook has been communicated to you already by AbbVie. In, women's health, we continue to expect significant sales growth from Reaco. And, it's, like I said, driven by geographic extension, as the product is being rolled out into new geographies, including Australia and France, but also, the penetration of existing markets is a key objective for the commercial teams. Secondly, the work, we've already done in building our US presence should accelerate, in 2025 in women's health.
When it comes to biotechnology, I've already explained what we've done and what the plans are, launch in two products, toward the very end of the year and submission in the second half of Lacidisolab. At the same time, the pharmaceutical, capacity or biosimilar, manufacturing capacity expand expansion in Guvano should really now be translated in this year in higher c dmo revenues. Finally, in general medicines, the nox continued to drive performance with the Russian and UK markets being at the top of the list of priorities. Also in, MS, we expect to see product launches that should both refresh the portfolio and also grow it in absolute terms. So this is what we have in front of us in 2025.
And, the team is is the Is enthusiastic and excited to make that happen? And now back to you ruby
r and d
r and d, okay, I have one more slide to interpret for you. Not the easiest of all, but, but and and a pretty busy one also in terms of what's happened to the pipeline in different business units over the recent months. What you'll find is a number of, projects getting terminated. It's a sign, I think I think the correct interpretation is we are and we remain strict and, mindful about terminating projects whose probability of success, scientific or commercial, does not attain our standards. This includes two phase one studies in neuropsychiatry.
That said, two newly initiated projects are shown in the preclinical phase in the same segment. Same is true in women's health connected with the setting up of the Liege, women's health discovery platform. In GenMed, of course, churn is more typical and more, should be expected. There are a number of projects that have been that have moved into the second phase or on from technology into clinical phase and some that get terminated at some point. The important thing is our track record in delivering general medicines products to the market, time to market, launch excellence has improved enormously.
Bioequivalent studies get completed one after the other on a large scale. And this gives us a lot of hope that in GenMed also we can continue to build the portfolio, we can continue to grow the business and capture a lot of the growth that's happening out there in the market.
Right. So thank you very much, Gabor. This concludes the formal presentation. So now we are ready to take your questions. Again, either use the raise your hands function or put your question to the chat box. And I think the first question, as usual, comes from Alistair Campbell. Alistair, go ahead, please.
Hi. Morning, everyone. Looking forward to seeing you next week. Just a couple of questions, please. On the guidance, the outlook is, you know, essentially saying margins will be flat year on year, but you've called out lower milestones.
I wonder if you can sort of broadly quantify that milestone step down, just give us a sense of what happens for the margins and costs for the rest of the business. So is it broadly halving in terms of milestone income, or or you sort of give an indication there would be useful? The other thing is, thanks for the detailed presentation this morning. What struck me, I think, was slide 37 where you you give the outlook for lots of exclusivities for general medicines part of the business over the next decade, really, which looks super promising. So with with that in mind, do you think that means that GenMed scenario, you think you can probably continue to grow at sort of high single digits, and sort of sustainable for the sort of medium term versus, I don't know, in my model, I have attenuating down to mid single digits. Thank you.
Thank you, Alastair. On the flat margins, Robbie will go into detail about, the kind of milestones that we expect to see. I don't think flat margins are mostly explained by the fact that milestones will be different from this year, last year to this year. The most important thing is the composition of growth. We're talking about, 99% profit content moving at 78% versus the rest of the business, growing at a much higher pace.
And this is what's creating, this dynamic of of, or pressure rather on, on both the gross margin and the bottom line. And what we're saying basically is despite the fact that we have an important revenue item with extreme high profitability going below the other one with the rest, we still maintain the level of profitability, gross margin, and clean EBIT, in relative terms, I mean, the margin itself, flat. I think this is a reflection of the effort in the underlying business. That's what it is. And also, internally, my message to the team is to say that the automatic, improvement in the margin, the overall margin, because radar feeds into the weighted average, is over.
This is the last year, 2024, when you see that happening. 2025, we're we're going to experience a different dynamic up until '29 when, again, something else happens. So, that's the most important driver of flat margins, I think. But Rubi can fill you in on the milestones.
And Milestones, I think. Lots of you give you the exact numbers, but it's gonna be, I think, '24, we overall, we had, like, a bit more than €50,000,000 milestones. So it was not just CNS in the last quarter, but also we recorded 10,000,000 in women healthcare from Fuji in the third quarter and, and also some smaller milestones in in the biological business. And I think it's gonna be less than half in '25.
Exactly. We expect to drop off around €40,000,000, a bit less, but that's a massive decrease because we had an incredible year in 2024 in terms of CNS milestones.
So meaning that we really have to work hard to offset the the fallout of the the milestones. And the second question was on GenMed and the
On GenMed and the yellow. We exactly. So we for a couple of years now, we see a real opportunity in GenMed. The drag on this part of the portfolio that came from price erosion and that came from the pressure on traditional brands, that was real. So for many years, between 2018 and 2022, we saw the the the portfolio get hit from various directions.
You will remember the Chinese, how to say this nicely.
Delisting.
Exactly. Delisting. The Russian price, shock, also some of the label restrictions that these traditional brands had to suffer.
Also, in in some cases, we've, we had, cost increases that we could not translate into prices. That period is or was over in 2023. And so what we see now is a positive price component in the evolution of revenues for the second year now. We see, those idiosyncratic shocks on those large brands abating slowly and the traditional part of the portfolio worth about 200,000,000 or so out of the 600 whatever in GenMet, stabilizing for the next years. Because we don't we did expect those shocks to come at one point, and they did.
And so, we don't we don't have that weighing over the Gen Med outlook anymore. What we see, on the other hand, is a healthy growth rate. Maybe not high t high single digits, but between mid and high. So, we we feel able and ready to capture that growth, yes. And we'll tell you more next week.
Yes. That's what I wanted to say that, Bencakowacha, our head of, GenMed, will be very happy to share the details how he envisages this growth, to continue over the next decade in generics. Next question is from, Victoria Lambert. Go ahead, Victoria.
Thanks. I just wanted to, get a better sense of what you're expecting from Mithra this year. So it looks like you have, filed your DONESTA, so just an update on what you expect from DONESTA and then, from the, contraception, the contraceptive product? Thank you.
Right. On the contraceptive product, first of all, thank you for the question. It's our fastest growing contraceptive, at the moment. In many markets, it's already market leader. And, the feedback on safety, efficacy, and just generally the, attitude of both patients and doctors to this drug is very, very positive.
So Grovelis continues to be an innovative product which is well liked and has a lot of, there's a clear runway in both US, Europe both, well, all of US, Europe, and Japan. As for Donesta, the file indeed has been submitted. It has been formally accepted, so it's under review now. We'll know more when the questions come. We'll see to what extent it can, be promoted for a broad range of menopause patients.
This is still a question mark. It will depend largely on what the label is going to be. I would not like to make any promises. We'll know more over the course of this year. It it the the feedback from authorities on Donetsk and Europe will also help us, navigate The U.
S. Submission. That is still pending for the moment. What else we expect from Mitra, though? We expect them to continue collecting royalties out of The U.
S. And Japan. Well, them, it's us, really, now. It's not Mitra anymore. We're trying to get rid of that name, even delete it from our memory, especially of those traumatized colleagues over there in Belgium.
But, there's there's a there's a there's a women's health early pipeline, which is being built and advanced. And next 2025 is all about moving those forward in the pipeline. And secondly, about looking for later stage projects, possibly also in phase one, that we could in license and continue to work on. No other company, in in in this space, really addresses those unmet need situations in the therapeutic areas that I mentioned, VCOS, endometriosis, and and women's health related oncology. So that's that will entail R and D spend, which is higher than what you got used to in years prior to '24.
Thank you. Just a reminder on the when you think meter is going to be like EBIT accretive or contributing to your margins? And then just this is outside of Mitra, just to think about like the phasing of growth this year because last year, your women's healthcare, was a lot stronger in the first half of the year versus second half. So just to get a sense on that phasing would be helpful.
-Yeah. On the phasing, I'll leave it to, my learned colleagues here to discuss this. We'll we have some homework to do on this front, clearly. When it comes to MITRA, which, again, I'd like to not call Mithra anymore, it depends on the amount of R and D spend that we allocate to women's health. Now, that has a num there are a number of factors, or variables that are still moving.
One is, are we going to work with a partner? And there are a couple of partners who are, being, who have shown interest in participating in some of those development projects that will generate the spend. Second, it matters to what extent externally acquired projects will fill the pipeline and require funding. For now, I can easily promise to you that, that that Mitra will be EBIT generating very soon, unless the pipeline evolves to a at a speed that requires temporarily funding, on top of what's earned from royalties, etcetera. You know, it's also, please consider that this entity is no longer receiving royalties from us, right?
Because we're we we repurchased our own royalty stream. So if you add that in to the mix, you see a better picture than what you'd otherwise see. So it's, we don't really think of the Belgian entity as a P and L center. It's women's health as a P and L center, and that that's what we're optimizing for.
On phasing, I think two two things came to my mind that the first one is what you mentioned, Victoria, is that we we will have a high base because of the, preshipments we had last year, 24 in the first half. And the second is that I think the the Medicare plan, the redesign that that's happening right at the beginning of the year. So that price impact may be happening early early this year. So again, probably a tough tougher start of the year, but we shall see. We don't give, like, quarterly guidance. Alright. Let's
Sorry. Sorry. Thank you. Just one tiny follow-up, and that's just the BEMFOLA. It looks in the presentation, it looks like that's back on track, work supply?
Yes. Supply is back on track. Last year, we we had to allocate some of the, shipments, but in the end we managed to fill, orders. That said, Bamfoola could not meet the target, that was, that was, that that the team had committed to this year. We'll have to work harder, and supply will not be a constraint anymore.
Thank you. Okay. Let's move on. James thank you, Victoria. Next one in line, I think, James Van Tempers. James, it's over to you.
Thanks very much. Just one question, Ashley, just to help me understand your your guidance. I guess, when we think about cleaning beds, I guess, firstly, I'm just I'm just curious to understand why the change in definition to have inventory and receivables impairments included as part of that. And then, I guess, the visibility you have on those going forward because, you know, if the base is, you know, two six five, etcetera, and, you know, you're guiding to 10% in constant currencies, are you embedding in, you know, the type of write downs you had in 2024? Can you help us understand, I guess, the, I guess, the philosophy to change that and what we should expect for those items, which are now included, to get to your 10% overall? Thank you.
Thank you, James. You just asked your your own question because, exactly, inventory write offs and receivables are in the center of, the attention here and the reason why they're included in the new definition of clean EBIT. You must remember that clean EBIT is the one of the most important KPIs, if not the most important for me and the team. And so it's important that, the items that that are included in Clebit, those are the items that the team will pay attention to, and we need renewed and and redoubled attention on, inventory write offs. I think 2024 showed that this can be a big number if we if we are not, aligned in our incentives, properly.
So, what we expect to see is two things. One, a cleanup was and a clean slate was made in 2024, so we have a better chance of reducing that number because we're not we don't have to deal with the legacy write offs. And secondly, we have a better mechanism put in place to deal with it. I I I I I am very confident that we made an important step forward with the supply chain mechanism function to be able to, operate at a lower level of inventory write offs and receivables impairments. So watch this number go down Okay.
24 to 25, and the team, be committed to keeping it down.
Understood. But, obviously, from our perspective, we don't have visibility into that. So maybe asking the question a different way. Are you assuming some write offs at a but at a lower level
Yes.
In your guidance? So is it, say, half the number of what you had in 2024? Would that be a good sort of base number to put in there just to help us, you know, kind of underpin how the fundamental business is doing on outside of that?
Cannot comment on the half, but, yes, the guidance in includes action on the inventory write offs, and would the results of which contribute to the increase in EBIT. Yes.
No. So thank you. And one quick follow-up, if I can. Obviously, you've got the the the CMD and XB. But I was wondering if you can describe, you know, the savings program for the x-ray of our business and the potential for gross margin and and cost efficiencies.
Any kind of high level comments? But I imagine there'll be some, more detail next week, and if that's gonna be you know, leaned on a particular segment within the company. Thank you.
Yeah. Well, I think some of those, results are already visible. The main focus has been operations, our main our maintenance costs, the size of our physical infrastructure, energy. I mean, you see the energy volumes going down also in the context of the ESG efforts, but this translated into lower COGS also. Scaling the operations, manufacturing, larger volumes at with a similar headcount, similar, capacity that again helped unit costs come down.
And, through lead times and speed generally, both in supply chain but also in quality and and finished products. Those have, added up to a sizable saving already and will continue to do so, especially because we're rolling this out to, non Hungarian, affiliates and also in, the resizing of the API infrastructure. Still some, room to still some way to go. Commercial and, admin, programs I've already mentioned, so, I shouldn't say much more on that. But also, when it comes to r and d, we'll be, paying special attention to the fixed costs associated with r and d in the coming years in order to make room for, projects that actually build the portfolio.
And secondly, to make sure that we don't exceed a certain level of r and d to revenue ratio, which, from a capital markets perspective, would be would send would send the wrong signal. Does that more, and answer your question okay?
It does. Thanks.
Right. Thanks very much. So next question comes from, Gabor Bhutan.
Hi. Thank you for the presentation. So I have two questions. First, relates to the costs. So I observed that you had much higher sales and marketing costs, especially in the WMSR, current, the generic, segments.
And, it would be nice to hear more about how this line will develop in the future. And the second question is relating to the shareholder remuneration. Is there, or could you could you give any guidance, how you will think about the dividend policy?
Thank you for your questions, Gabor. The the shareholder remuneration question is really an issue that we'll tackle, at the Capital Markets Day next week. So please bear with us, and I'm asking for another couple of days, of patience from you. We'll come forward with a capital allocation framework which will address that. The second thing was, sales and marketing costs in women's selfish lots signal.
Altogether, we we see a combination of different factors. Some of them is is period timing. You could see that from q three to q four, there was, there was a shift, in, in those costs. And in this period, especially in the women's healthcare space, there was a significant weakening of, of the, for instance, towards euro, so around, 7% on average if you compare it to the last year's last quarter. So, these two factors, some, somewhat increased this number.
On the other hand, in German, what we see, we made some investments in the last month of the year, which we hope that we'll have a return in the first, first part of twenty twenty four. Some campaigns and some kind of extra cost were spent there. So we do not see a shift in trends. And as Gabri already mentioned, we have projects going on to make sure that these are not trend changing increases in these kind of costs.
Thanks, but I I couldn't observe any kind of, seasonality in terms in terms of the sales and marketing costs. If I compare the the reported quarter, to the to the previous quarters or in a year on year basis?
It's it's still a phasing issue, and we'll pay more attention to, and and and put a tighter control on intra year, the intra year profile of spending. I understand it has a, it has a negative, it makes a negative impression like, like a spending spree was going on in the last quarter. That's not what happened. We'll we'll have to control spending intra year, more tightly, and this is what we'll do in 2025.
Thank you very much.
Right. Not sure if there is anyone else who wants to ask a question. I think at some point, Brian, your answer up, but not any longer. If not, then thank you very much, for your attention and for being with us today.
And also we are very much hoping to see some of you next Wednesday here in Budapest or through the webcast, and also hope that we're gonna be able to answer a lot of potential open questions you may still have today. In the meantime, if you have anything burning, then just reach out to us at investor relations.