05 Financial performance Report of the Managers Transportation costs (in € millions) 2024 2023 Change Transportation costs 1,370 1,485 -7.7% As a % of sales 5.0% 5.2% Transportation costs came to €1,370 million in 2024, down 7.7% on 2023. The further year-on-year decrease was led by the same factors as in 2023: (i) the decline in volumes sold; (ii) the reduction in maritime shipping costs thanks to effective contract negotiations; and (iii) the Group’s performance in raising supply chain productivity, rationalizing finished product delivery modes and improving the proportion of local-to-local shipments. Sales and marketing expenses (in € millions) 2024 2023 Change Sales and marketing expenses 1,204 1,210 -0.5% As a % of sales 4.4% 4.3% Sales and marketing expenses stood at €1,204 million in 2024, virtually unchanged (down €6 million) from the year before, as the increase in payroll costs offset the impact of the decline in volumes sold. Research and development expenses (in € millions) 2024 2023 Change Research and development expenses 786 756 +4.0% As a % of sales 2.9% 2.7% Research and development expenses rose by €30 million yearon-year to €786 million, attesting to the Group's unwavering commitment to maintaining its technological leadership in delivering long-lasting performance in its products and services. It also reflects the development of synergies between its tire manufacturing and Polymer Composite Solutions businesses, both of which leverage shared fundamental research. General and administrative expenses General and administrative expenses amounted to €2,290 million, a €46 million year-on-year decrease as their disciplined management amply offset the impact of wage inflation. They represented 8.4% of sales for the year, up 0.2 points compared with 2023. Segment other income and expenses Segment other income and expenses represented a net expense of €90 million in 2024, up from a net expense of €74 million in 2023, mainly due to the successful implementation of the Bib’Action employee share ownership plan in 2024. Other operating income and expenses Other operating income and expenses correspond to items that are not taken into account by Management when measuring the performance of the operating segments due to their nature or their significant, unusual or abnormal characteristics. Other operating income and expenses represented a net expense of €747 million in 2024, versus a net expense of €920 million in 2023. These outlays mainly comprise the costs incurred in the industrial restructuring projects announced by the Group over the past two years. The €173 million year-on-year decrease reflects the fact that higher provisions were recognized in 2023 following the year-end announcements that certain production operations would be closed in the United States and Germany. In 2024, other operating income and expenses corresponded primarily to the provisions recognized following the announcement of the future closure of the plants in Cholet and Vannes, France. Other operating income and expenses are described in more detail in note 7 to the consolidated financial statements. 337 2024 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
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