Gedeon Richter PLC (RICHTER) Earnings Call Transcript & Summary

My name is Robert Rethy, I'm heading Investor Relations and SM ESG at the company. And we have the usual lineup of senior management here for this call. So let me welcome Gabor Orban, our Chief Executive Officer; Istvan 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 -- and one of the technical details that I would kindly ask everyone to mute their phone, why not asking a question at the end in the Q&A session. Otherwise, we will be following the usual format for this call. So a brief presentation from Gabor and then a Q&A session where you will have a chance to ask questions either using the raise your hand function of Microsoft Teams or you can put your question into the chatbox. We are also going to 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 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% and 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 U.S. worth broadly speaking, EUR 40 million in the whole of 2024. So 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 line with plan would have been possible. We achieved in constant currencies EUR 712 million, which is still a 15% increase constant currencies on the previous year, higher than revenues. And 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. But if you focus or zoom in on Q4, this was the most important contributor to the shortfall in profitability in the last quarter. In half 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. But in growth rates, EBIT growth was significantly above that of the previous year. If you remember, the difference was 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 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. And then earnings per share was up by 50% at HUF 1,307. 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 is also reflected in the fact that Ryeqo is our fastest-growing brand today. It grew -- outgrew even our plans going in the full year at over EUR 40 million. 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&D platform, which is expected to work on early-stage discovery projects related to women's health, addressing unmet need in this area, 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, but also PCOS being 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 NOACs, novel oral anticoagulants, 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. 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 this successful drug on Medicare and 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 know we saw it coming. And in every long-term projection provided by our partner, this -- the impact 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 USD 200 million. 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 data set. 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, health care 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. And 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, and 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 equivalents by 4% on a cumulative basis. Now 4% may not sound like a big deal, but in the end, it is because volumes grew in the same period in at close to 20%, which means that the social impact, the positive social impact, the social benefit of our efforts 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. 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 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 on the -- 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 headline terms. The impact of the exchange rate, like I said, went from negative in the first quarter to gradually to HUF 20 billion -- HUF 26 billion tailwind by the end of the year. Most of it came from the U.S. dollar against the HUF 12 billion, but euro 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. 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 a 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 GenMed, close to double digits even 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-on-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. So an admin cost project and the 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 Liege Women's Health original discovery platform, also making sure that the acquired projects continue to advance in the pipeline. That's what R&D expenses were augmented by towards 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. And even Q-on-Q, 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. So I'll leave it to Istvan Hamecz to explain it to you.

Good morning. Let me bring you through the bridge from clean EBIT to net profit. As Gabor mentioned, yes, all the steps were 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 and other expenditure was much lower than last year. So that explains that EBIT grew by 38% despite clean EBIT only grew by 18%. And last year, we saw a large negative financial income due to mainly FX losses. This year, FX brought us gains. So that's why the net profit grew by 51% despite EBIT grew only 38%. So all the major steps were positive. Let me call your attention that last year, this extraordinary tax were officially not discarded, but was made eligible to become part of the global minimum tax, and that 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 increase was much slower. So it explained that operative cash flow more than doubled compared to last year. And from operating cash flow 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 HUF 10.8 billion. We spent on M&A HUF 133.5 billion. Foreign debt was the -- as you may remember, basically the first half of the year. So in this fourth quarter, there was no major event. We paid [ HUF 79.1 million ] dividend. And still in the first quarter, we had the share buyback program, we spent HUF 6.9 billion. So 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. And finally, an outlook for 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 Vraylar revenues, the underlying business needs to grow slightly above 10%. Having grown 13% in -- from '23 to '24, 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 have 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 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 clean -- the new definition of clean EBIT. Here, things are made -- our work is made no easier by the fact that significantly lower milestone income is expected in '25 than in '24. It's not because we -- 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. And 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 make sure that we can deliver on that objective also. In CNS, I've already mentioned that there's a USD 200 million drag on AbbVie's revenue coming from this brand as a consequence of the Medicare Plan D benefit redesign, double-digit volume growth should offset some of that. And this is how a USD 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, 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 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 towards the very end of the year and submission in the second half tocilizumab. At the same time, the pharmaceutical capacity or biosimilar manufacturing capacity expansion in Bovenau should really now be translated in this year in higher CDMO revenues. Finally, in General Medicines, the NOACs continued 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. So this is what we have in front of us in 2025, and the team is enthusiastic and excited to make that happen. And now back to you, Robert.

R&D.

R&D. Okay. I have one more slide to interpret for you, not the easiest of all, but -- 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 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 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.

All right. So thank you very much, Gabor. This concludes the formal presentation. So now we are ready to take your questions. [Operator Instructions] And I think the first question, as usual, comes from Alistair Campbell.

Looking forward to seeing you next week. Just a couple of questions, please. On the guidance, the outlook is 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 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 give the outlook for loss of exclusivities for the general medicines part of the business over the next decade, really, which looks super promising. So with that in mind, do you think that means that GenMeds area 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 know in my model, I have it attenuating down to mid-single digits.

Thank you, Alistair. On the flat margins, Robert 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 or pressure rather 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 Vraylar feeds into the weighted average is over. This is the last year, 2024, when you see that happening. 2025, we are 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 Robert can fill you in on the milestones.

On milestones, I think Laszlo will give you the exact numbers, but it's '24, overall, we had like 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 health care from Fuji in the third quarter and also some smaller milestones in the biological business. And I think it's going to be less than half in '25.

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.

So meaning that we really have to work hard to offset the fallout of the milestones. And the second question was on GenMed and the...

GenMed and the [ NOA ] 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 portfolio get hit from various directions. You will remember the Chinese how to say this nicely...

Delisting.

Exactly, delisting. The Russian price and 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 [ 200 million ] or so out of the [ 600 million ], whatever in GenMed 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 have that weighing over the GenMed outlook anymore. What we see, on the other hand, is a healthy growth rate, maybe not high single digits, but between mid and high. So we feel able and ready to capture that growth, yes. And we'll tell you more next week.

That's what I wanted to say that Bence Kovács our Head of GenMed, we 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, Victor.

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 contraption, the contraceptive product.

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 Drovelis continues to be an innovative product, which is well liked and has a lot of -- a clear runway in both U.S., Europe -- both -- well, 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, then is us really now. It's not Mithra anymore. We are trying to get rid of that name even deleted from our memory, especially of those traumatized colleagues over there in Belgium. But 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 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. So that's -- that will entail R&D spend, which is higher than what you got used to in years prior to '24.

And just a reminder on the -- when you think Mithra is going to be like EBIT accretive or contributing to your margins? And then just -- this is outside of Mithra. Just to think about like the phasing of growth this year because last year, your women's health care 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.

Yes. On the phasing, I'll leave it to my learning colleagues here to discuss this. 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 -- 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 Mithra will be EBIT generating very soon unless the pipeline evolves to -- at a speed that requires temporarily funding on top of what's earned from royalties, et cetera. It's also -- please consider that this entity is no longer receiving royalties from us, right, because we repurchased our own royalty stream. So if you add that into 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&L center. It's women's health as a P&L center, and that's what we are optimizing for.

On phasing, I think two things came to my mind that the first one is what you mentioned, Victoria, is that 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 Medicare plan the redesign that's happening right at the beginning of the year. So the price impact may be happening early this year. So again, probably a tougher start of the year, but we shall see we don't give like quarterly guidance.

Just one tiny follow-up, and that's just the Bemfola. It looks 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.

Next one online, I think James Vane-Tempest.

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. And then I guess, the visibility you have on those going forward because if the base is [ HUF 265 billion ], et cetera, and you're guiding to 10% in constant currencies, are you embedding in the type of write-downs you had in 2024? Can you help us sort of 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, James. You just answered 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 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. 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 are 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'm 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 '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 but at a lower level 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 kind of underpin how the fundamental business is doing outside of that?

I cannot comment on the half. But yes, the guidance includes action on the inventory write-offs and the results of which contribute to the increase in EBIT, yes.

And one quick follow-up if I can. Obviously, we've got the CMD next week, but I was just wondering if you can describe the savings programs for the ex-Vraylar business and the potential for gross margin and cost efficiencies. Any kind of high-level comments, but I imagine there will be some more detail next week and if that's going to be leaned on a particular segment within the company.

Yes. 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 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 finished products, those have added up to a sizable saving already and we'll continue to do so, especially because we're rolling this out to non-Hungarian affiliates and also 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&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 answer your question? Okay.

So next question comes from Gabor Bukta.

Thanks for the presentation. I have two questions. First relates to the costs. So I observed that you had much higher sales and marketing costs, especially in the women's health care and the generic segment. 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 give any guidance how you will think about the dividend policy?

Thank you for your questions, Gabor. 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.

Sales and marketing costs in women's health, which [indiscernible].

Altogether, we see a combination of different factors. Some of them is purely timing. You could see that from Q3 to Q4, there was a shift in those costs. And in this period, especially in the women's health care space, there was a significant weakening of the forest towards euro, so around 7% on average if you compare it to the last year's last quarter. So these two factors somewhat increased this number. On the other hand, in Germany, what we see, we made some investments in the last month of the year, which we hope that we will have a return in the first part of 2024, some campaigns and some kind of extra costs were spent there. So we do not see a shift in trends. And as Gabor already mentioned, we have projects going on to make sure that these are not trend-changing increases in these kind of costs.

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 on a year-over-year basis.

It's still a phasing issue, and we'll pay more attention to and put a tighter control on 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, and this is what we'll do in 2025.

I'm 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. 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 going to 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.