Hello, everyone, and welcome to this presentation of ALK's 2023 results and the outlook for 2024. Thank you all for joining us. Let's turn to slide number 2, with an introduction to today's speakers and agenda. My name is Per Plotnikof. I'm Head of Investor Relations. With me today are CEO Peter Halling and CFO Claus Steensen Sølje. First, we'll share highlights from Q4 and the full year, and then we'll go over to market trends and financials, and we will also provide a strategy status before we cover the full year outlook. We will end the presentation with the customary Q&A session. And to get started, I'll hand over to Peter on slide number 3. Please go ahead, Peter.
Thank you, Per, and thank you all for joining this call. So during the Q3 call in November, after only two weeks as CEO, I outlined a few priorities for the near future. First and foremost, we should keep full focus on building business momentum, sales momentum, and keeping the overall momentum for the company. Secondly, we should continue to prioritizing resolving the challenges we were facing. These were important prerequisites prior to turning our attention to ALK's long-term development. Now, I am actually very positive that we did maintain momentum in Q4 and navigated the challenge as well. Consequently, Q4 revenue was up 10% on growth in all regions.
Global tablet sales grew by 19%, and European tablet sales exceeded expectations slightly, with 12% growth, driven mainly by new patients, which again, further creates good momentum, and a good foundation for the growth in 2024. Looking at EBIT, in Q4, it was up 37% to DKK 194 million, mirroring a higher sale from efficiencies. Results were in line with the most recent forecast and outlook, bringing the EBIT margin up to 14%. Now, during the Q3 call, I also shared a few personal observations regarding ALK. I'm glad to say that these observations still stand after three months in the office. ALK is uniquely positioned to transform the allergy market and become relevant for millions of people. Our people are talented and passionate, and the organization is truly tuned in on growth.
Now, looking ahead, we have ample opportunities to strengthen ALK's market position, sustain top line growth, and further improve earnings. However, we must pursue these opportunities in the right order, at the right pace, and with the right allocation of capital and manpower. To ensure this, we are currently conducting a routine review of the business strategy, which I'll come back to later. Now, let's turn to slide 4, and then I'll head up on a few full year highlights. Full year revenue was up 9% in local currencies, despite the headwinds we were facing from stagnating European tablet sales in the first half of the year. The significant shortfall of Czech sales caused by the supply challenges that were well known to the market, the ongoing inflationary pressure, and the one-off rebate increase in our main market, Germany.
Considering these challenges, we are satisfied with the level of solid growth we saw last year. On a full year basis, the EBIT result increased by 50% to DKK 666 million, with an EBIT margin of 14%. Since 2019, earnings have improved by close to DKK 700 million. While we remain committed to deliver on our short-term priorities, we are equally committed and focused on pursuing strategic initiatives to safeguard the long-term growth of the company. We made progress in many of these topics on our strategic agenda in 2023, particularly with the efforts to extend the reach of the respiratory tablets to new relevant markets and additional patient groups, especially children. 2023 also saw progress on our sustainability agenda.
We've set a new science-based CO2 reduction targets in line with the Paris Agreement, and these have further been confirmed by the Science Based Targets Initiative. By 2030, we aim to reduce emissions by 42% at own facilities, with further reductions from our suppliers. Finally, looking ahead, we expect to see continued top and bottom-line growth in 2024. We'll detail this further in the presentation, but before then, I'll hand it over to Claus and the market trends on slide five.
Thanks, Peter. Let's start with the recent trends in European tablet sales. You're all familiar with the background. Sales growth stagnated in the first half year after a soft 2022 initiation season, where we enrolled fewer new patients than expected. In response to this, we launched a series of initiatives to rebuild sales growth, and these initiatives started showing their effect in Q3. Q4 added to this momentum. European tablet sales were up 12% in Q4, so the sales growth in Europe for the second half year reached 13%. This was particularly attributable to a higher inflow of new patients. We estimate that a number of new patients on tablets in 2023 increased well above 10%. We have been able to mobilize more patients digitally.
We have broadened the prescriber base and increased prescription depth, and we have worked with doctors to extend the initiation season to mitigate conflicts with common respiratory infections and other epidemics. The disease burden remains well recognized, and market access is improving. We still have a lot of work ahead of us, and we must be certain that we have drawn all relevant conclusions from the soft 2022 initiation season... but we are on the right course, and growth prospects for 2024 are promising. Now let's turn to slide 6 and the global sales trends. Overall sales in Europe were impacted by the two, by the two temporary factors, which Peter referred to: the supply shortage of the adrenaline pen Jext, and the mandatory rebate increase in Germany. Fortunately, Germany has lifted the rebate increase here for 2024, and Jext supply is normalizing as planned.
Despite this, revenue in Europe was up 6%, driven particularly by SCIT, while tablet sales regained momentum in the second half year. We solidified ALK's position as market leader after growth in most markets, except for the UK and Spain, where Jext shortages lowered sales. Sales in North America increased by 9% on growth across all product lines, which I will come back to in a minute. Revenue from international markets increased by 23% after double-digit growth in product shipments to the region's largest markets, Japan and China. In-market sales in both markets also grew by double digits. Now let's turn to the product categories on slide 7. Global tablet sales increased by 11% on double-digit growth in international markets, 6% growth in Europe, and 26% growth in North America tablet sales.
Canada saw robust double-digit growth throughout the year, while sales growth in the USA picked up in the second half year, driven by increased volumes from existing prescribers and improved realized selling prices. Global sales of SCIT and SLIT drops sales were up 12%. SLIT drops sales increased slightly, while SCIT sales saw double-digit growth in both China and Europe. European growth was driven by improved pricing and market share gains, especially in the venom segment. North America SCIT sales grew 7%. Finally, sales of other products declined 9%, mainly due to the Jext issues in Europe. Now let's move on to slide 8 and the full year financials. Overall revenue was up 9% in local currencies and 7% in reported at DKK 4.8 billion. A gross profit of DKK 3 billion, yielding a gross margin of 63%.
The margin benefited from higher sales and production efficiencies, but this was partly offset by higher shipments to Torii at lower margins. Since 2019, we have raised the gross margin by 5 percentage points, and further improvements remain a top priority. Reducing the capacity cost to revenue ratio is another focus area. Capacity costs include R&D, sales and marketing, and administration. This ratio is down 10 percentage points since 2019, and there is still room for further improvement. Last year, overall capacity costs increased by 3% to approximately DKK 2.4 billion. Sales and marketing expenses were up 5% in support of various growth initiatives. R&D expenses were down 7%, reflecting the completion of large-scale clinical trials of the respiratory tablets.
Finally, administrative costs increased 20%, but this was mainly reflected the one-off cost due to the leadership changes. EBIT was up 50% in local currencies and 42% in reported at DKK 666 million. The EBIT margin improved from 10%-14%, reflecting higher sales, improved gross margin, and a lower capacity cost to revenue ratio. Finally, free cash flow improved to DKK 292 million, driven by increase in earnings, but also some timing of payments, including taxes. A decent set of results despite a difficult year. This year has been ALK's best performance so far. We will now move to slide 9, and I'll hand it over to Peter for an update on ALK's progress in 2023 and key priorities for 2024.
Thank you, Claus. Let me start out by providing a brief update on ALK's progress in 2023. After having grown for many years, the patient base was stable in 2023, with around 2.4 million people on treatment with ALK products. A net increase of approximately 200,000 AIT patients. It was offset by a similar net decrease in Jext patients due to the limited product supply. The efforts to connect digitally with patients also progressed. Close to 1 million people used our digital services to find a doctor in 2023. Moreover, as Claus mentioned, we saw and are very pleased with the success in restoring growth in tablet sales in Europe. The partnership with Torii is performing well, and we saw good growth coming from Japan. The scope has been expanded to include ALK's grass allergy tablet.
This comes in parallel with the ongoing work to further expand the supply chain and manufacturing capacity to meet the increasing demand for existing tablets, particularly the tablet against Japanese cedar pollen allergy. We also saw double-digit growth in tablets in North America, where we focused on building new prescriber groups, especially among children doctors. Jext sales saw double-digit growth in both China and Europe, and preparations for the launch of the house dust mite tablet in China are ongoing. We continue to strengthen the organization locally and expand the prescriber base, while we are waiting the outcome of the regulatory review of the ACARIZAX. With regards to children, sorry, we have submitted the first regulatory filing based on last year's success with pediatric trials with the house dust mite tablet and the tree tablet.
The European regulatory filing for ACARIZAX for young children was accepted for review by the authorities the week before last. Moreover, the development of the tablet for peanut allergy progressed well, as we reported three weeks ago. In addition, we made a provisional decision to extend the ongoing trial to examine the tablet's efficacy. Now, let's turn to slide 10 and look ahead. So looking ahead in 2024, our key strategic must-win battles will probably not come as a big surprise to many of you. We need to keep momentum and help more people with allergies to better lives, and in doing so, thereby will grow our revenues and improve earnings. Key to this will be sustaining double-digit growth in tablet sales, with growth in all of our sales regions.
Moreover, we must succeed with the regulatory filings for children use in Europe and North America, and for adult use in China. As mentioned, we expect the ACARIZAX to become available for young children in Europe sometime 2024-2025, and in North America in 2025, again, subject to regulatory approvals. Likewise, we expect the tree tablet to become available for young children in both Europe and Canada in 2025. These product launches are important catalysts for future revenue growth, not least in Europe. Furthermore, we still see a possible approval of ACARIZAX in China in 2024. Overall progress in the wider allergy space is also expected in 2024, with further results anticipated from the clinical development of the peanut tablet. Regarding the development of new adrenaline auto-injectors, there's much going on in this space, and ALK's anaphylaxis strategy is therefore under review.
We still see an untapped potential for Jext, but we need to further refine our anaphylaxis strategy. Stay tuned, and more to come later on. ALK has overall a strong foundation, and the strategic direction for the company remains unchanged. The current framework, with the four well-known focus areas, was established in 2017, and has been unchanged ever since, except for the addition of the New Horizons priorities in China in 2021. The time is right for a service check of the strategy, as I mentioned during my introductory remarks, and as we mentioned a number of times in between. Without preempting the outcome, we particularly look into three things: smart prioritization, simplification, resource optimization. At first, we ensure that we have the right economic foundation to pursue ALK's many strategic priorities.
We face a vast opportunity space, and it's key to secure that we progress things in the right order, at the appropriate pace, and with the correct allocation of capital and people. Careful prioritizations will allow us to pursue true high-potential growth levers, while other initiatives will be given lower priority. Secondly, we're looking into how to best streamline and enhance the business platforms and operations, aiming to increase scalability and thereby positioning ALK for solid long-term growth. And thirdly, we will be identifying ways to free up financial resources and manpower to fund initiatives to sustain ALK's growth, not only in the short and mid-term, but also after 2030. Improving earnings is crucial. It creates a strong foundation for the company that allows us to invest in more R&D, sales and marketing activities, while also rewarding shareholders.
Finally, I would like to emphasize that we do not expect to change ALK's overall financial ambitions following this review. We continue to target annual organic growth of 10%. Likewise, we continue to improve earnings, and our ambition of raising the EBIT margin to a level around 25% remains unchanged. It will not be easy, but the review is expected not to change, sorry, the ambitions. The review is meant to support these ambitions. We expect to share the outcome at an upcoming Capital Markets Day during Q2, where we also intend to share new long-term strategic aspirations towards 2030. With these updates, I'll hand it over to you, Claus, and the full year outlook on slide 11.
Thanks, Peter. We expect revenue to grow by 9%-12% organically in 2024, based on the following assumptions: Global tablet sales are expected to increase by double digits. European sales are rebounding, and growth in Europe is expected at a level well above last year. Likewise, North America and international markets are expected to deliver continued sales growth for tablets, although growth in Japan will be somewhat lower due to intermediate capacity limitations at Torii. Combined SCIT and SLIT-drop sales are projected to grow, driven by SCIT, albeit at a somewhat lower growth rate than last year, where improved pricing fueled growth in Europe. Sales of other products and services are expected to resume growth, led by Jext.... All in all, broad-based growth across all product groups and all sales regions.
Moving to earnings, the EBIT margin is expected to improve to 17%-19%, up from 14%, which can be attributed to revenue growth, scale benefits, and lower external costs in R&D. The gross margin is expected to improve slightly because of the product mix, but also because we are facing some inflationary pressures on the cost base. The capacity cost to revenue ratio is expected to further improve as we capitalize on existing platforms to enhance efficiencies and reduce R&D spend. R&D expenses are expected to decline to around 10% of the expected revenue versus 13% last year. Administrative expenses are expected to decline slightly, while sales and marketing costs are expected to see single-digit increases. Throughout the year, we will pay particular attention to optimizing and prioritizing initiatives, enabling us to strategically allocate resources to fund future growth.
To sum up, we expect 2024 to mark the sixth consecutive year of revenue growth and improved earnings. With this, I would like to hand it back to you, Per, and slide 12.
Thank you, Claus, and thank you, Peter. This concludes the main part of the presentation, and we'll now move on to the Q&A session. We will take questions in the order as in the system. Please limit your questions to a few before rejoining the queue so that everybody can have the opportunity to ask their questions. Operator, please go ahead.
Thank you. If you would like to ask a question, please press star then one on your telephone keypad. If you are using a speakerphone, we ask that you please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Today's first question comes from Jesper Ilsøe with Carnegie. Please go ahead.
Thank you so much. Couple of questions on European tablet sales. So we are soon entering the real pollen season. You are still stating these 10% or more in initiation trends. Can you just confirm that the trends you saw in the Q3 report has continued into Q4, so that it still sees the same more than 10% increase in initiation? And also on that topic, has there been any issues on the patient-doctor initiations like we saw the last initiation season? Just want to make sure that suddenly we have a couple of two good quarters right now, with de-risking on tablet sales, but then you run into the similar problem. So just any insights there will be appreciated. Thank you.
Thank you, Jesper. Claus here. It's a good question. There's no doubt that we are very happy with the momentum being back here in Q4, like we also saw in Q3. And at that point in time, of course, we talked a lot about, you know, which initiatives we have been driving, and especially this about making sure that the patients could get earlier to the doctor than what we have been seeing before. For now, we are seeing initiations, as you said, well above the 10%, which should keep the momentum into 2024. And right now we do not see any complications or matters relating to patients or doctors or pollen seasons that would change the momentum that we are expecting right now and seeing right now.
Thanks so much. Very clear.
Thank you. And our next question comes from Martin Parkhøi with SEB. Please go ahead.
Yes, good afternoon. Also a couple from my side. Firstly, on the gross margin, which you say is flat to slightly up in 2024 is your expectation. If we look into your 2025 ambitions of going somewhere up in the neighborhood of 25%, with the development we're seeing on the margin and the component of the margin development in 2024, are there any difference in how you expect to reach the almost or whatever 25% next year, as you have less impact from the gross margin, at least this year?
And then just on, on Japan, on the supply limitations you're seeing on Cedar this year, maybe you've already said it, but, maybe I've missed a couple of results today. But, where are we? When, when should we expect this to be, to, to be back on track, and, and what kind of growth rates are you expecting to, to be able to see in, in Japan in this year and then maybe over next?
Good. Thank you, Martin. Claus here for the comments. I will take the first one, and then Peter will take the next one. Yes, we appreciate your calling. We know you are busy these days, all of you. Related to how to reach the 25%, or I should say, approximately, also especially related to the gross margin, where we more say it's going to be flattish or a bit above, then there are a few elements. First of all, we got a little bit more out of 2023 than what we had expected, which was good. In 2024, we have a few things working a bit against us.
We both have some inflation, inflationary pressures, but we also have the integration of AllerQuest in the U.S. that are also impacting us a bit on the gross margin. We are still continue working. It's high priority to still find efficiency gains in our factories and manufacturing. So we hopefully can maybe compensate for some of this that we are seeing right now with inflation and AllerQuest, but it's too early to say something about that. Related to what else will drive it, and are we then seeing any changes on kind of the components that will help us to reach 25? That is the same that we are seeing also today.
So 10% or above on the total sales, very well driven by the tablets with a high margin that will help us there. And then quite low, you could say, capacity cost increases during both 2024 and 2025. And especially, as you know, the R&D going down from the higher level that we have seen the last couple of years. So it will still be the same metrics that we are looking at and working with. And despite that, we now see a gross margin being, you could say, slightly less improvement than maybe what we had hoped for, then we will continue working, finding efficiencies in the factories. I hope that explained. Peter?
Thanks.
So, Martin, if I got your question right on Japan, so basically, we expect growth to continue in Japan. I think what you were referring to is the supply challenges that has been-
Mm-hmm.
with the cedar pollen. This is ongoing, and this is something we expect to resolve in the coming years. We are working very closely together with Torii in terms of resolving it, optimizing, and getting enough capacity, because the demand is there in Japan, which is obviously exciting. We still expect to get pretty decent growth in Japan and especially international markets overall, and we'll continue to see that also going forward, even though we're waiting on the capacity. So, I think all in all, it's positive. Just so you know, Torii will come with their result tomorrow, and also provide guidance there.
Thank you.
Thank you. And our next question comes from Michael Novod with Nordea. Please go ahead.
Thank you very much, Michael from Nordea. A couple of questions as well. So, first of all, on the European tablet sales, not to sort of continue to dig into it, but can you try to sort of quantify what, what well above, sort of means, 13%, 17%, 20%? Just so we get sort of a, a feeling. You, you often, are able to give a bit more clarity to, to this. And then a question on the anaphylaxis strategy. Can you already now sort of talk about what this means to sort of, review of, sort of the prior potential timelines that were given?
Or should we just say we factor out this completely, and then just await what kind of strategy you will then update us on at the CMD? Thank you very much.
Thanks, Michael. Claus here. I will take the first one, and then Peter will take the anaphylaxis strategy. You're right about the EU chapter. There we are saying well above, and you are also right that we have before guided more precise on the tablet sales. We have decided this time not to be precise guidance in what we are coming with here. So we are staying with the well above, and you are right, that can then be very high, but of course, it has to be within reasons. We are quite optimistic when you look at the Q3 and Q4 uptake, now the 14% in Europe and in Q3 and 12% in Q4.
And also with the well above 10% new initiations of the patient side. But for now, we would like to stay with the well above the 10%, and it's going to be well above than what we did here in 2023. But that's what we would like to guide for when it comes to the tablet sales.
Thanks, Claus. Just on the anaphylaxis overall, we made no decisions yet. As I stated, it's part of our ongoing strategy review, so we'll be able to talk more about it sooner when we are ready at the CMD. I think that's what I can say at this stage in terms of where we stand on anaphylaxis.
Okay. Thanks.
Thank you. Our next question comes from Peter Sehested with ABG. Please go ahead.
Yes, thank you. I also have one, two questions. My first one is actually on the increased admin costs here in Q4. In the report, Q4 report, you really don't mention any specific one-offs for Q4. So the sort of paranoid analyst would suggest this is part of ongoing operations, and my immediate suspicion falls on the strategic review and if those costs are associated with that. I mean, having a background in private equity, you have probably also used you know, consultants, et cetera, in the past. So first of all, since the amount is very, very big, can you confirm that this is the case?
If that is the case, since the amount is very big, it sounds like you know, more than just a 360 review of the company, but you know, 760 or whatever, 720, in-depth review. Can you also tell us if that will sort of look at the Americas, et cetera, and I have a potential follow-up question for that. Thank you.
Okay, Claus, will you take the admin cost? I can answer the strategy piece. Yeah, I can do that. You're completely right. There are some one-off costs that we have seen in actually several of our quarters during the year for admin, both in Q2 related to the exit of former management and also some extraordinary costs here in admin costs in Q4, also related to some of our activities within the U.S. and so on, with ALK-Abelló and so on. But that's what we have right there. Related to the strategy comments, I'll leave it to you, Peter.
... So, it's always difficult, Peter, when you get questions on what does it mean, strategy review? It is a 360. As I said early on, the strategic direction remains unchanged. The intent is to ensure that we support delivering on the ambitions, and this is basically what we do in the strategy review. We wanna find the necessary growth levers, both for top and bottom line, and we wanna ensure that we are set to go to deliver on our ambitions overall. So what you put into that, I'll leave it to you, but we are, of course, ensuring we get the help we need to get things done.
Good. My follow-up question would pertain to the previous comment you made about, you know, prioritizing on two high growth projects and then deprioritizing another one. Is it fair to assume that one of the high prioritizing areas is the peanut allergy study? You could potentially have some comments about the release you put out earlier about the protocol amendment. And secondly, could a future, another high priority growth area be related to the announcement that was out yesterday? I guess it's not, since it's very, very early stuff, but nevertheless, just to get some flavor on that. Thank you.
Yeah. So this is Peter. I'll try to answer. I don't think I said number of projects we would prioritize or down prioritize, first and foremost. But I think what you allude to is obviously, it's key that we, with the filings we have now, on the pediatric side, that we ensure that we are ready to get in the market, when the time is right, and we get the approval. So that's obviously a big priority, and that goes for Europe, that goes for Canada and the US, obviously.
What you mentioned in terms of yesterday, I think you believe that, or you're mentioning, basically that we got the nice and exciting news that there are certain discovery around a type two memory B cell for IgE was discovered and that ALK is part of it. It's very early stage, and this was not what I was alluding to, even though we are obviously tremendously excited that our researchers are really doing some groundbreaking work. So I'm excited about that. So I think that's it. Then you could say, on the peanut side, we are obviously happy about the initial results we saw.
We are gonna await the phase one results, and then hopefully they will come out positive, and we can accelerate from there. But let's see.
But, just to follow up, I mean, I know it's three, but perhaps you could squeeze it in, relates to the, to the sort of phase two extension. I guess your ambition is to go directly to phase three if everything looks fine. That is the plan with that, right?
Yeah. Claus here. That's too early to say right now, but of course, you are right. We are very ambitious on the peanut trial, that if we have an opportunity to speed something up, then of course, we would love to look into that. But that also comes, you know, as Peter is saying, capital allocation, what kind of funding do we have? What we would like to use it for? So that would be a part of that prioritization process. But of course, we're very eager if we can get that closer to, or out to patient as soon as possible to help them, that would be fantastic.
Just to be clear, we, we obviously need to see the results, and this is what we're waiting on, but we are positive at this stage.
Perfect. Thank you very much for the added flavor. Much appreciated. Thank you.
Thank you. Our next question comes from Ben Jackson at Jefferies. Please go ahead.
Hi, this is Ben Jackson from Jefferies. Just wondering if we can push you slightly further on that, the follow on from the peanut allergy program. Are there any potential timings that you could give to us, on that? And then more so, how are you thinking about the commercial opportunity? And is there anything else that you have to consider during this program?
Yeah. So maybe I can help a little bit on the timing of the program that we're currently running. So the next part of the phase 1 component of this study, we expect to see results from in the fall of this year, in the second half of 2024. Then, if everything goes well, we will then progress into the phase 2 part of it, which will run through 2025 and have its data readouts in the beginning of 2026, if everything goes well. And then on the back of that, coming back to Claus's question, then we need to decide in terms of phase 3, et cetera, et cetera. So it's still some years out.
On the commercial potential, we know it's one of the allergies that is involved in severe anaphylaxis, so it's a potentially life-threatening allergies. We know that there are 2.5 million kids in Europe and US suffering from peanut allergy. We know that a large proportion of those have severe peanut allergies and live a very restricted life, and those are the patients that we're trying to help with this product. It's still early days. The peanut AIT market is still underdeveloped, as there are limited products available. These patients rely on strict avoidance and, of course, carrying an auto-injector.
It's also a market that needs to be developed and matured as we move along, but there's a significant number of patients that are in need of appropriate treatment options out there.
... Thank you!
Does that answer your question?
Yes, sir. Our next question comes from Thomas Bowers at Danske Bank. Please, Danske Bank, excuse me. Please go ahead.
Danske Bank. Yes, thank you very much. So just two questions from my side. So you have been talking a lot about the potential price increases for the tablets. So is this part of the 2024 guidance to the high end, and is there still actually a likelihood to see this materialize in the near future? So any color here would be appreciated. And then on OpEx and you're sticking to this 25% EBIT outlook for 2025. So we're looking at sort of a flat OpEx development now also with a more bumpy gross margin outlook.
How should we actually think of the SG&A investments into potential new regions, which you also have been talking about the last year or so? So I guess whether this imply that rather we should see rather limited investments, SG&A-wise, until we are beyond 2025. Thank you.
Yeah. Thanks. Thanks, Thomas, from Danske Bank here. Your... Regarding your first question, at least I will take that one on the price increases. This is there is not really significant price increases baked into our forecast. We are constantly working on price increases in many markets, and we also constantly face, of course, with demands to lower them and see rebates. But 2024 as one year, we are not really expecting any significant another price increases or decreases, and it's also not baked into our numbers. So if anything is coming there, it will be positive.
On the OpEx part, related to 2025 and 25, I can just add here, we are, we are still aiming for that. It's still approximately 25% in 2025. We believe we have a good plan for that. We believe that with the momentum we see on the top line, both in general, but especially in our tablet business, high margin business, if we can get that to continue into 2025 also, and we can maintain the investment level as we have planned for now, then it should be doable to get close to those 25%. I'm not saying it's going to be easy or anything, like, like Peter also said before, it's not a walk in the park to jump so many EBIT points year on year.
But of course, we will make sure to maintain reasonable investment level at the same time, because we also had the pediatrics coming up in 2025, 2026, and so on. Of course, we want to continue to invest in that. So we will make sure that we balance our resource allocation, that we make sure we take the right choices. And as Peter said before, during the strategy review, we're also looking in to see if we can find some free funding that we can move around into different areas of the investment.
Great. Thank you very much.
Thank you. And our next question comes from Suzanne van Voorthuizen with Van Lanschot Kempen. Please go ahead.
Yes, thank you for taking my question. Perhaps I've missed this since my line was disconnected, but has the supply of Jext already normalized? And, also my second question is: How much upside do you still see in terms of tablet sales growth in Germany, given the changing landscape? Thank you.
So I can start out on Jext. And as we also commented on in the Q4, basically, we expect to see improvements in supply of Jext. We are seeing that normalizing. It's getting close to where it needs to be, but obviously, given the backlog, we need to ensure that the things are running accordingly. So the expectation is that Jext supply will normalize for the cartridges throughout the year, and that we can then pursue the opportunities that we also communicated about. I think on the second question, do you want to jump in there, Claus, or?
Yeah, I can do that. That was regarding, thank you for that, the tablet in Germany, and if there are still any kind of upsides related to that. There's no doubt that Germany is one of our key markets, like, like Nordic and, and some of the mid-size markets in Europe. We still have high expectations to those market, also to Germany. It is a market where they value evidence-based medicine and, also within allergy. So that basically means that both the doctors and the authorities, but also the insurance companies, are very much supporting exactly what we are offering, which is, of course, allergy medicine based on trials and evidence.
We are still expecting Germany to be a key market for us and still see significant growth there over the years to come.
Thank you. Ladies and gentlemen, as a reminder, if you'd like to ask a question, please press star then one. Today's next question is a follow-up from Jesper Ilsøe with Carnegie. Please go ahead.
Thank you for taking the follow-up. So, given the Catalent Novo deal, can you just, besides the comments you've made in media articles following the deal, can you just, highlight potential changes, if any, to your collaboration with Catalent? I believe you both have technology, but also supply agreements with Catalent. So perhaps can you talk to which sites you are collaborating? Is it one of the ones involved in transaction? And do you need to switch sites? So just your initial thoughts, and I appreciate it's very early on because the deal was just announced. So just any insights will be appreciated. Thank you.
Thank you. But this is Peter. So I'll just comment in general. So first and foremost, we've had more than 20 years of collaboration with Catalent. We have an excellent collaboration. We been in contact closely, and there are no outlook for change. So basically, we expect that everything will continue as and up until now, and that we'll continue to expand the collaboration with Catalent also going forward under the new ownership. I can also confirm that the 3 sites that Novo Nordisk acquired are non-related to our business with Catalent. So we are quite confident in terms of the continued supply.
Thanks so much. Okay.
Thank you. Ladies and gentlemen, this concludes our question and answer session. I'd like to turn the conference back over to the management team for any closing remarks.
Thank you very much, operator. And thank you all for all the good questions. And before we end today's calls, please have a look at slide number 14 with the upcoming news and events. Most events will be available on our investor site, and we'll provide additional info on the capital market day as soon as possible. And we hope to see you at one of those events. As always, you're welcome to give us a call if you have any additional questions. And with this, I will end today's session and wish you all a good day. Thank you and goodbye.
Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day. Day.