My name is Róbert Réthy. I'm heading Investor Relations and ESG at the company, and we have the usual lineup of senior management here for this call. Let me welcome Gábor Orbán, our Chief Executive Officer, István Hamecz, our Chief Financial Officer, and Laszlo Kovacs, our Head of Controlling, with me for this conference call. Before we start, let me just walk you through the usual technical details. 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&A session. Otherwise we will be following the usual format for this call.
A brief presentation from Gábor, and then a Q&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 into the chat box. We are also gonna be recording this call as usual, and the recording will be put on our webpage later on. Finally, a cautionary statement at the very end of the presentation about forward-looking statements and how to take them. With that, I hand it over to Gábor, 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.
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 U.S. Worth, broadly speaking, EUR 40 million in the whole of 2024. Factoring that in, I think we can comfortably say that pharma 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 figure. We wanted to get between EUR 725 million and EUR 750 million, which had it been for royalties coming in in line with plan would have been possible.
We achieved in constant currencies HUF 712 million, which is still a 15% increase constant currencies on the previous year, higher than revenues. It includes the impact from M&A which had not been factored in at the time of giving you the guidance, which in the end turned out to be negative. If you focus or zoom in on Q4, this was the most important contributor to the shortfall in profitability in the last quarter. In HUF terms, we have an HUF 845 billion turnover in the full year. Clean EBIT of HUF 280 billion, and EBIT a bit lower, coming in at HUF 260 billion. In growth rates, EBIT growth was significantly above that of the previous year.
If you remember, the difference was in the previous year, this is very significant. What I'm most proud of is the free cash flow result that we can provide to you today at HUF 244 billion, up by HUF 160 billion compared to the previous year. We'll walk you through the main components of the free cash flow developments last year. Earnings per share was up by 50% at HUF 1,300. 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 Ryeqo in 2024, and this was also reflected in the fact that Ryeqo is our fastest-growing brand today. It outgrew even our plans going in the full year at over EUR 40 million.
Secondly, this has more to do with the future, by acquiring and building the team in Liège for original Women's Health drug discovery, an R&D platform which is expected to work on early-stage discovery projects related to Women's Health, addressing unmet needs in this area. This hugely underserved therapeutic area, by the way. Just think of the disease-modifying treatment for endometriosis or think of the 34% fertility success rate in fertility interventions. Also, PCOS being a subtherapeutic area which is badly in need of new therapeutic solutions. In general medicines, our efforts were centered on the group of medicines known as NOACs, novel oral anticoagulants, a specialized therapeutic segment in blood and cardio.
We launched two new generic alternatives to drugs that are used widely globally, dabigatran and rivaroxaban. 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 1.7 million people in the world treated with cariprazine. It's a great source of pride for us. 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 U.S., which means pricing authorities and pricing measures are being undertaken in order to curb the financial burden of this successful drug on Medicare and the payers more broadly. Again, this is a source of pride, but at the same time, 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 saw it coming, and in every long-term projection provided by our partner, the impact from this was included already.
The short-term implication is the Medicare Part D benefit redesign, which according to AbbVie's communication impacts next year's numbers by $ 200 million. That said, our partners' commercial efforts and professionalism will continue to make the drug available to a growing number of patients. 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 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, ustekinumab, 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 1, 2, and 3, and the numbers show that at the group level we've been able to reduce GHG, CO2, expressed in CO2 equivalence by 4% on a cumulative basis.
4% may not sound like a big deal, but 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 3-4 years, while the side effects, the collateral costs for society and the planet have been reined in. 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. The headline number is 13. QoQ, this is 9% which is largely due to the fact that Q4 2023 was a high base to compare to.
Don't see 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 Q4 2023. As you see from the graphic 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 about HUF 20 billion- HUF 26 billion tailwind by the end of the year. Most of it came from the US dollar against the half, $12 billion. Euro, HUF 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 ex- Vraylar CNS. 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 business segment that is expected to deliver the most growth in the coming few years. Solid growth also from Women's Health and 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 IP, the other two by technology. I'm referring to Ryeqo, Drovelis, Lenzetto and EVRA. We have 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-over-quarter. If we account for FX and also the impact from the M&A activities or M&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 G&A, but also in sales and marketing. An admin cost project and a commercial excellence project are both underway to make sure that costs are kept in check. Finally, R&D is also a driver of operating expense growth. This is again in line with plan except for the M&A-related R&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 Liège Women's Health Regional Discovery Platform. Also making sure that the acquired projects continue to advance in the pipeline. That's what R&D expenses were augmented by toward the end of the year.
Clean EBIT came in at 14% higher than in the previous year if we adjust for FX, 18% if we don't. That adds up to HUF 280 billion. Even QoQ, 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, temporary and one-off glitch in the last quarter. Below the line, there's lots going on, mostly good. I'll leave it to István Hamecz to explain it to you.
Good morning. Let me bring you through the bridge from Clean EBIT to net profit. As Gábor mentioned, yes, all the steps were positive compared to last year. Clean EBIT grew in nominal term 18.3%. Given that the extraordinary tax was phased out, the other revenue, other expenditure was much lower than last year. That explains that EBIT grew by 38% despite Clean EBIT only grew by 18%. Last year, we saw large negative financial incomes due to mainly FX losses. This year, FX brought us gains. That's why the net profit grew by 51% despite EBIT grew only 38%. All the major steps were positive. Let me call your attention that last year, these extraordinary tax were officially not discarded, but was made eligible to become part of the global minimum tax. That's introduced a lot of complications.
From this year on, we will have a clean sheet, that's why you saw these big swings in EBIT and taxes and whatever. 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. Compared to last year, net working capital increase was much slower. It's explained that operative cash flow more than doubled compared to last year. From operative cash flow to free cash flow, the major item which we improved a lot is CapEx. That declined by 15%. It was not a coincidence. That was part of the plan. 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 HUF 10.8 billion .
We spent on M&A HUF 133.5 billion. That was the, as you may remember, basically the first half of the year. In this fourth quarter, there was no major event. We paid 79.1% dividend. Still first quarter, we had the share buyback program. We spent HUF 6.9 billion. Overall, we almost come back despite very strong free cash flows due to this increased M&A activity. We ended the year basically the same cash level as we had last year.
Thank you very much, Hamecz. Finally, an outlook on 2025. We expect 2025 to be the first year when ex-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 ex-Vraylar revenues, the underlying business needs to grow slightly above 10%.
Having grown 13 in from 2023- 2024, this is a 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. Should take us at constant currencies between EUR 2.3 billion and EUR 2.4 billion in terms of pharma 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 the new definition of Clean EBIT.
Here, our work is made no easier by the fact that significantly lower milestone income is expected in 2025 than in 2024. It's not because the probability of success or whatever is seen differently. 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. Like I said, there are action items put in motion already to make sure that we can deliver on that objective also. In CNS, I've already mentioned that there's a $200 million drag on AbbVie's revenue coming from this brand as a consequence of the Medicare Part D benefit redesign.
The double digit volume growth should offset some of that, and this is how a $3.5 billion net sales outlook has been communicated to you already by AbbVie. In Women's Health, we continue to expect significant sales growth from Ryeqo and it's, like I said, driven by geographic extension as the product is being rolled out into new geographies, including Australia and France. Also, the penetration of existing markets is a key objective for the commercial teams. Secondly, the work we've already done in building our U.S. 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. At the same time, the pharmaceutical capacity or biosimilar manufacturing capacity expansion in Debrecen should really now be translated in this year in higher CDMO revenues. Finally, in general medicines, the NOACs continue to drive performance with the Russian and U.K. 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. This is what we have in front of us in 2025, and the team is enthusiastic and excited to make that happen. Now back to you, Róbert.
R&D?
R&D. Okay. I have one more slide to interpret for you. Not the easiest of all, but 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 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 I 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 Gen Med, of course, churn is more typical and more ordinary, should be expected. There are a number of projects that have moved into phase II 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 Gen Med 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.
All right. Thank you very much, Gábor. This concludes the formal presentation. Now we are ready to take your questions. Again, either use the raise your hand function or put your question to the chat box. I think the first question, as usual, comes from [Alistair Campbell]. Alistair, go ahead please.
Hi. Morning, everyone. I'm looking forward to seeing you next week. Just a couple of questions, please. On the guidance, the outlook, you know, is essentially saying margins will be flat year-over-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. Is it broadly halving in terms of milestone income or 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 give the outlook for loss of exclusivities for the General Medicines part of the business over the next decade really, which looks super promising. With, with that in mind, do you think that means that Gen Med is an area you think you can probably continue to grow at sort of high- single digits and is sort of sustainable for the sort of medium term versus I know in my model I have it attenuating down to mid-single digits. Thank you.
Thank you, Alistair. On the flat margins, Róbert will go into detail about the kind of milestones that we expect to see. I don't think if 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 70% versus the rest of the business growing at a much higher pace. This is what's creating this dynamic of pressure rather, on both the gross margin and the bottom line.
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. Also, internally, my message to the team is to say that the automatic improvement in the margin, the overall margin, because ex-Vraylar feeds into the weighted average, is over. This is the last year, 2024, when you see that happening. 2025, we're going to experience a different dynamic up until 2029 when again something else happens. That's the most important driver of flat margins I think, but Róbert can fill you in on the milestones in.
Milestones I think László will give you the exact numbers, but I think in 2024 we overall had a bit more than EUR 50 million milestones, so it was not just CNS in the last quarter, but also we recorded EUR 10 million in Women's Healthcare from Fuji in the third quarter and also some smaller milestones in the biological business. I think it's gonna be less than half in 2025.
Exactly. We expect a drop of around EUR 40 million, a bit less, but that's a massive decrease because we had an incredible year in 2024 in terms of CNS milestones.
Meaning that we really have to work hard to offset the fallout of the milestones. The second question was on Gen Med.
Gen Med and the LOE. Exactly. For a couple of years now, we see a real opportunity in Gen Med. 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. For many years, between 2018 and 2022, we saw 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 some cases, 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 HUF 200 million or so out of the HUF 600 million whatever in Gen Med stabilizing for the next years because we did expect those shocks to come at one point, and they did, and 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- single digits, but between mid- and high-.
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 Bence Kovács, our Head of Gen Med, 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. It looks like you have filed your Donesta. 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. Drovelis continues to be an innovative product which is well-liked and has a clear runway in all of U.S., 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. The feedback from authorities on Donesta in Europe will also help us navigate the U.S. submission. That is still pending for the moment. What else we expect from Mithra though? We expect them to continue collecting royalties out of the U.S. and Japan. Well, them is us really now. It's not Mithra 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.
There's a scene, there's a Women's Health early pipeline which is being built and advanced. Next 2025 is all about moving those forward in the pipeline, and secondly, about looking for later stage projects, possibly also in phase I, that we could in-license and continue to work on. No other company in this space really addresses those unmet need situations in the therapeutic areas that I mentioned, PCOS, endometriosis, and Women's Health-related oncology. That will entail R&D spend, which is higher than what you got used to in years prior to 2024.
Thank you. Just a reminder on the when you think Mithra is going to be like EBIT accretive or contributing to your margins. Then just this is outside of Mithra, 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. 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 Mithra, which again I would like to not call Mithra anymore, it depends on the amount of R&D spend that we allocate to Women's Health. Now, that has a number of factors, or variables that are still moving. One is are we going to work with a partner? 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 Mithra will be EBIT generating very soon, unless the pipeline evolves to a speed that requires temporarily funding on top of what's earned from royalties, et cetera. You know, it's also please consider that this entity is no longer receiving royalties from us, right? We repurchased our own royalty stream. If you add that in to the mix, you see a better picture than what you'd otherwise see. We don't really think of the Belgian entity as a P&L center. It's Women's Health as a P&L center, and that's what we're optimizing for.
On phasing, I think two things came to my mind. The first one is what you just mentioned, Victoria, is that we will have a high base because of the pre-shipments we had last year 2024 in the first half. The second is that I think the Medicare Part D redesign that's happening right at the beginning of the year. The price impact may be happening early this year. Again, probably a tougher start of the year, but we shall see. We don't give like quarterly guidance. All right.
Sorry. Thank you. Just one tiny follow-up, and that's just the Bemfola. In the presentation, it looks like that's back on track with supply.
Yes, supply is back on track. Last year we had to allocate some of the shipments, but in the end we managed to fill orders. That said, Bemfola could not meet the target that was 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.
Thanks.
Thank you, Victoria. Next one in line, I think [James Vontobel]. James, it's over to you.
Thanks very much. Just one question, actually, just to help me understand your guidance. I guess when we think about Clean EBIT, I guess firstly I'm just curious to understand why the change in definition to have inventory and receivables impairments included as part of that. Then I guess the visibility you have on those going forward because, you know, if the base is, you know, 265, et cetera, 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 sort of understand, I guess the philosophy to change that or 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 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 or of the most important KPIs, if not the most important for me and the team. It's important that the items that are included in Clean EBIT, those are the items that the team will pay attention to, and we need renewed and redoubled attention on inventory write-offs. I think 2024 showed that this can be a big number if we are not aligned in our incentives properly. What we expect to see is two things. One, a cleanup was a clean slate was made in 2024.
So we have a better chance of reducing that number because we don't have to deal with the legacy write-offs. Secondly, we have a better mechanism put in place to deal with it. 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. Watch this number go down.
Okay.
2024-2025. The team, be committed to, keeping it down.
Understood. 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 lower level?
Yes.
In your guidance? 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?
I cannot comment on the half, yes, the guidance includes action on the inventory write-offs, and the results of which contribute to the increase in EBIT, yes.
Understood. Thank you. One quick follow-up, if I can. Obviously we've got the CMD next week, I'm just wondering if you can describe, you know, the savings program, the ex-Vraylar business and the potential for gross margin and cost efficiencies. Any kind of high-level comments, I imagine there'll be some more detail next week, and if that's gonna be the shit, 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 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 effort, 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. Through lead times and speed generally, both in supply chain but also in quality 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. Had still some way to go. Commercial and admin programs I've already mentioned, I shouldn't say much more on that.
Also when it comes to R&D, we'll be paying special attention to the fixed costs associated with R&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&D to revenue ratio, which from a capital markets perspective, would be, would send the wrong signal. Does that more.
Thank you.
And that answer your question? Okay.
Yeah, it does. Thanks.
Right. Thanks very much. Next question comes from [Gábor Bukta].
Hi. Thank you for the presentation. I have two questions. First, relates to the cost. I observed that you had a much higher sales and marketing costs, especially in the Women's Healthcare and the generic segments. It would be nice to hear more about how this line will develop in the future. The second question is relating to the shareholder remuneration. Is there, or could you give any guidance how you will think about the dividend policy?
Thank you for your questions, Gábor. The shareholder remuneration question is really an issue that we'll tackle at the Capital Markets Day next week. 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.
Sales and marketing costs in Women's Health, which László will.
Yeah. Altogether, we see a combination of different factors. Some of them is pure timing. You could see that from Q3- Q4, there was a shift in those costs. In this period, especially in the Women's Healthcare space, there was a significant weakening of the forint towards euro, so around 7% on average if you compare it to the last year's last quarter. These two factors somewhat increased this number. On the other hand, in general, what we see, we made some investments in the last month of the year, which we hope that will have a return in the first part of 2024. Some campaigns and some kind of extra costs were spent there. We do not see a shift in trends, and as Gábor already mentioned, we have projects going on to make sure that these are not trend-changing increases in these kind of costs.
Thanks, I couldn't observe any kind of seasonality in terms of the sales and marketing costs, if I compare the reported quarter to the previous quarters or in the year-over-year basis?
It's still a phasing issue. We'll pay more attention to and put a tighter control on intra-year, the intra-year profile of spending. I understand it has a negative. It makes a negative impression like a spending spree was going on in the last quarter. That's not what happened. We'll have to control spending intra-year more tightly. 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, [Bram], your hands were up, but not any longer. If not, then thank you very much for your attention and for being with us today. We are very much hoping to see some of you next Wednesday here in Budapest or through the webcast. 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. Otherwise, see you next Wednesday. Thank you very much. Bye-bye