Redcare Phamacy Unsp/Adr

Thank you very much. And I want to welcome all of you to Shop Apotheker's earnings release call. I hope that after the presentation, you will agree with Jasper and me that Shop Apotheker had indeed another strong quarter and we did another step on our growth trajectory. However, before we walk you through the details of our performance in Q1, I'd like to acknowledge the questions that you might have around the announcement by the Gematik last week regarding the rollout of electronic prescriptions in Germany. I'm sure that this will come up during our Q&A session as well. Later in the presentation, we are going to share our thoughts regarding this announcement. Most importantly, however, Shop Apotheke Europe, we will be ready for e-prescriptions when they start in earnest. Yes, but I think this is the fourth time we're doing this from our new headquarters here in Severnum, and it's actually the fourth time we are doing this via video webcast. Based on some feedback that we have received from you, we're going to handle the Q&A session a bit differently. This time and unless we hear something different from you, we want to do this also for future webcasts. We're going to switch the questions back to audio. You remember in the past we did this by our chat function. We want to do it again. We want to make sure that we will be able to answer all of the questions that you have, including some follow-ups on your side. So when we get to the Q&A session, for those of you who want to ask a question, please use the DAL information that was part of the invitations that you all received. When you ask a question, please turn off the audio of your webcast to avoid an echo. for everybody else. So if you don't want to ask a question, nothing changes. Just stay on the webcast. So we're going to start, as usual, with the highlights of our performance in the first quarter, followed by an update on our strategy, some of the milestones we reached in the first quarter. And as you will see, we have considerably shortened and condensed our presentation to ensure that we will have sufficient time for your questions. Well, let's have a look at the first quarter. We delivered, we think, another quarter of strong growth. Our top line went up by more than 22% and reached 284 million euros. Furthermore, for the fifth quarter in a row, Phamacy Unsp & Adr When you look at our top line performance at 22% growth, I think that can only be fully appreciated if you consider a couple of headwinds that we experienced in the first quarter of this year. Number one, of course, the RX bonus ban had a negative impact on our RX business. Number two, the absence of a regular cough and cold season related to the social distancing measures and the generally higher hygiene standards negatively impacted both our Rx as well as our OTC portfolios. But to keep this in perspective, the overall, if you look at the OTC market in Germany for the first quarter, covering both stationary pharmacies as well as the online pharmacies declined year over year by 17%. We could decouple ourselves from this negative development. Our OTC business in Germany actually went up a little bit. But again, that's the context in which we operated in the first quarter. And last but least, and I think that's also obvious to all of you, Q1 last year was simply a tough quarter to compare ourselves against. Despite these headwinds, again, we grew by 22% and the growth was purely organic in nature. Our active customer base increased by 36% versus March last year, and we're over 500,000 active customers versus the end of last year. Jasper is going to share a little bit more color around the successful placement of our convertible bond earlier this year. But in parallel to driving our top line, we didn't lose sight of executing our strategy We continued, as I already mentioned, with our preparations for the e-prescription launch in Germany and we strengthened our expertise in the area of digital medication management with the acquisitions of Smart Patient in January and then just a few weeks ago with the acquisition of MedApp in the Netherlands. So if we look at the two reporting segments on the right-hand side, this time we're going to start with international segment, which went up really significantly by 71% year over year. The international segment, if you're not yet familiar with it, covers Belgium, France, Italy, and the Netherlands. And all of these markets posted very significant year over year growth. In the DAF segment, the three countries also all increased and increased nicely. All the product segments increased with one exception. And again, you're familiar with this already. Our RX business in Germany declined 17% year over year. Looking at the RX development, we need to keep in mind that Q1 last year, of course, included March and in March last year, Many, many of the chronically ill patients in Germany rushed to their doctors before the first lockdown in order to stock up on their prescription medication. So we had very strong Rx sales in March last year. March was actually one of the very, you know, the strongest months, Rx months in the history of shop apotheke. Only the month of July was even stronger. Again, this was after the lockdown when patients went back to their doctors to renew their prescriptions. When you look at these two segments, and I'll Phamacy Unsp Adr actually accounted or is approaching 20%. So significant growth in these international markets. And I know we don't talk too much about them or haven't talked too much about them in the past, but also going forward for the foreseeable future, we see significant growth potential in these international markets. Our active customer base reached 6.8 million, so close to 7 million by the end of March. Our Net Promoter Score actually compared to Q4 last year went up by one point from 70 to 71 and you might have heard Jasper and me talk about this in the past. We closely monitor and more importantly we manage our Net Promoter Score because it's the best measure to assess the overall satisfaction of our customers with the end-to-end Phamacy Unsp Adr Our average shopping basket went down by roughly €1.60 versus a year ago. This is purely a mix effect because we saw we had the decline in our RX business. The RX business has significantly higher average basket values. By the way, when you just look at the non-RX Phamacy Unsp Adr Phamacy Unsp Switching to our web traffic. The orange line shows the total number of weekly visits to all of Shop Apotheca's websites. We see the January jump to above 5 million weekly visits and we have stayed at this elevated level. By the way, if you look at the Phamacy Unsp I want to talk about the blue bars. Just briefly, the blue bars indicate our year-over-year traffic growth versus the exact same week a year ago. And again, looking at the first quarter this year with the exception of the first week of March, which was a little bit of an Anomaly. Throughout the quarter, we saw year-over-year growth in excess or far in excess of 40%. By the way, in March, Shop Apotheke's German website was the fourth most frequently visited healthcare-related website In Germany, not a surprise, the number one position was the Robert Koch Institute. And when you compare, when you look at the pharmacy websites, Shop Apotheke in the month of March was once again clearly in the pole position. Well, before I head over to Jasper to walk you through the financials of the first quarter, a quick look at the evolution of our quarterly orders and our repeat order share. So you see the increase here. They reached 5.1 million, increased compared to a year ago by 23%. So that's pretty much in line with our top line growth. Our repeat order share remains in the 80% range. That's what we're aiming for. We think that is a healthy mix of loyal returning customers and new customers that we have continued to gain and want to continue to gain going forward.

Yes, okay. Thank you very much, Stefan. And good morning to everybody on the call today. On this slide, all the key P&L lines are summarized this quarter versus the same quarter last year, and this quarter versus the last Q4 quarter. Before I go into the details of the numbers you're seeing here, I take one step back and just remind us of what happened last year. to break even for the first time on the adjusted EBITDA level, so around zero. Phamacy Unsp & Adr increased sales by 22%. That's an increase of 52 million. And this increase, despite the headwind from RX bonus ban and very important, fewer people being ill and fewer people going to the doctor in this quarter, we actually achieved the same profitability as we did last year. So that's my perspective. And also compared to our internal plans, 2.0% in the first quarter is entirely online Phamacy Unsp Adr Phamacy Unsp Adr Phamacy Unsp Achieved a better gross profit margin. Here's the next slide. Here's the bridge of the increase of 4.1%. So I start at the left. Last year already significantly above 20% for the first time, but we increased this year again on top of the sourcing improvements in 2019. Phamacy Unsp & Adr Phamacy Unsp & Adr is coming from the building I'm presenting from, so the new facility. But at the same time, everything from DACH is coming from the old facility. So we accept for six to nine months some inefficiency because we prioritize stability and capacity to grow. We expect in the end of the current year that we will have all orders coming from one facility, an automated facility. So that's the story of S&D. Next one, please. What does it mean for our cash? We started the year and we started the quarter with 128 million of cash, which includes short-term financial assets. And we ended the quarter 230 million higher at Capital movements. On one hand, in quarter one, we generally always see a favour of working capital because we start with the high yield Smart Patient. Financing, to make a long story clear, basically we could say this increase that you're seeing here is the result of the successful placement of our new convertible bond. And on the convertible bond, please remind that we had a convertible bond where we paid a coupon, an interest of 4.5%, but in a win-win situation with the large investors in our convertible bonds, 2020, so that bond did not exist anymore, and we placed a successful bond at the start of this year, where we paid a coupon of zero. But those modeling based upon the P&L, please know that because of IFRS rules, the accounting of a convertible bond is split in the value of a co-option, and the presumed bond coupon So you will see in our P&L still interest expenses related to this bond, but that's offset in the cash flow because we don't pay interest. It's a zero in the cash flow. So that's all another picture. One concluding remark, looking at this picture, I think we are in a real robust situation.

And with that, Sterhan, back to you. Thank you. So let's shift gears for a quick and concise update on some of our strategy topics. You have heard of Shop Apotheke's ambition to evolve from predominantly being an online retailer to becoming Europe's leading customer-centric e-pharmacy platform. We have of course built our strategy around this ambition and in the first quarter We achieved a couple of milestones tied to this strategy. Shop Apotheke has an active presence today in seven European countries. We are, of course, solidly positioned in Germany. We have market-leading positions in Austria and Belgium. And in the other four markets, we see significant growth potential going forward. is, of course, the overall satisfaction with Shop Apotheca's offering reflected in our end-to-end customer journey, which is measured, as I mentioned a moment ago, with our Net Promoter Score of 71. We talked about the strategic milestones that we hit in the first quarter. Of course, and you've heard about this before, we strengthened our We remain convinced that sophisticated digital medication management will be a key driver, especially in an ERX world. Phamacy Unsp of our processes and we are about to commence the transfer of customer orders from customers in the DACH region from the old to the new facility. I hope you agree with us that our strategy remains on track. Just a couple of words about the acquisition of MedApp in the Netherlands, and to be precise, in the city of Eindhoven. The addition of MedApp fits in three ways to shop Apotheke. Number one, we strengthen our expertise in digital medication management. Number two, we continue our expansion into promising European markets. And number three, with the Netherlands, we entered the second ARX market. And actually, it's the first ERX market for shop apotheca. So let me say a couple of words about our path towards e-prescriptions. Starting with the announcement from the Gematik last week, which from our vantage point was reassuring in a couple of ways. Number one, the Gematik confirmed that it will start up the telematics infrastructure in July as it had promised. Number two, it confirmed its readiness for the ERX mandate, and that's when e-prescriptions are going to start in earnest on the 1st of January next year. And principally, it confirmed that the mandate will indeed stay in place. And in terms of the decision to start with a test region in the Berlin-Brandenburg We actually think that was a smart move because based on the experience that all the market participants are going to gain, we're going to end up with a better overall user experience and that can only help with the adoption and the use of electronic prescriptions when once again e-prescriptions are going to start in January next year. Phamacy Unsp & Adr based on everything that we have seen so far, we really, we have no doubt that the Gematik, they have hit all of the milestones of their, you know, admittedly tight and ambitious ERX roadmap. And based on everything we know today, we have no reason to doubt that this will hold true for the remaining steps as well. We at Shop Apotheke, we, of course, with our RX Task Force, which has been in place Phamacy Unsp & Adr Before I, on the next chart, before I hand over again to Jasper, just a couple of words about some changes on our supervisory board. Jan Pütel, who had been at the helm of our supervisory board since the IPO, he, for purely personal reasons, he decided not to go for another term. Jan has really been instrumental, not just with the IPO itself, but he also helped us and the management team to avoid some of the potential post-IPO pitfalls of fast-growing companies. So Jan, thank you very much for your leadership, and we're very happy that you will stay involved with Shop Apotheke as one of our major shareholders. Björn Söder, who has been on the supervisory board since the IPO. He's going to take over as the chairperson of the supervisory board. Björn is going to ensure continuity on the supervisory board, and we are looking forward to working with Björn in his new capacity. And last but not least, we are also happy to welcome Henriette, Henriette Poiker, to the supervisory board. Henriette has a wealth of experience Media Relations in Public Affairs and Investment Banking. And we are really excited to benefit from all the insights that she is going to bring to the table. So, Henrietta, a warm welcome from all of us. And again, we're looking forward to working closely with you in the future. With this, I'll hand it over to Jasper again. Yeah, super.

Yeah, with pleasure. on the healthcare and COVID-related impact markets, we did not only actually deliver, according to me, a very solid or perhaps even a very strong quarter one results, but we also feel comfortable enough that we could actually reiterate today our guidance for 2021 and for the longer term in all aspects. Phamacy Unsp is the 1st of January 2022, as you all will know. So sales around 20%, adjusted EBITDA between 2.3% and 2.8%. And we expect to make investments, of course, excluding the capex that we did spend on the acquisitions of MedApp and Smart Patients in quarter one, but on other investments of around three in an end-to-end situation where we combine the significant investments in growth with even a slight uptick in our margins at the same time. I would propose to go to the next slide and another one please to the Q&A. I was asked to ask you So, Emma, please let us know if there's any question.

Certainly. If you'd like to ask a question, you can do so now by pressing star 1 on your telephones. That's star 1 if you would like to ask a question. We will now take our first question from Alexander Till from Jefferies. Please go ahead. Your line is open.

Hi, good morning, Stefan and Jasper. Three questions for me, please. Thank you very much for making the Q&A open line again. I really appreciate it. I will leave the margin discussions to the others. My first question would be on your underlying customer structure. Do you see a change in the customer acquisition cost and quality of customers, as we can see a trend in the conversion rate from previously stable at around 9% to 7% in the first quarter? My second question is related to your current trading. Could you share some insights how the current OTC and RX movement is evolving? And additionally, I know you don't disclose on the country level anymore, but could you give us more color on how the country split evolved in the duck region to get a better understanding of the underlying OTC momentum in Germany versus Austria and Switzerland? And my last one would be on the noise in the market. I mean, we kind of expected some noise in the press around the rollout. But I also heard a lot of actually wrong points being pushed. I mean, one of them points being pushed is definitely related to your customer journey. And I want to address this point directly. I mean, we heard some noise that you might not be able to proceed a printed QR code in your app. What's your take on that? Thank you very much.

Shall I start? Yeah, go ahead. Yeah, OK. Thanks a lot, Alexander. I appreciate a lot your questions. I'm not aware, we are not aware of any change in the behavior of our underlying customers. We are actually happy with the inflow of new customers in quarter one, it was very positive. What we are seeing is that our existing customers actually did spend somewhat less in the first quarter, but we know that, okay, let me see, can you still hear me, Alexander?

Yeah, I can hear you, yeah.

Oh, you can hear me, then I'll just continue. There's something happening The inflow of new customers. So no change there in cohort behavior that we are aware of, and also no change in conversion there. Of course, apart from the conversion that we see in RX specifically. Current trading, yeah. I also would like just to stick to our guidance of growing fully at 20%, but I will nevertheless share a bit more color. It's wishful thinking, thinking that our RX will increase significantly to the end of quarter one. That's what we see in our X. But we remain confident that we, in our balanced portfolio, are able to deliver on the full year guidance of growing around 20%. We had a question on DAG and the countries. I take that one and then you do that? Okay. Yeah, in DAG and countries, indeed, I don't want to be too formal there, but I want to stick to certain rules that we have. We report in two segments. That's DAG and international. Phamacy Unsp Adr very successful growing. I hope that's helping you somewhat, Alex. Otherwise, let me know after Stefan Question on noise in the market.

Thank you. Noise in the market, there's always been a lot of noise in the market because until it's happened there is a certain degree of uncertainty. But let's look at the facts. We just received a confirmation based on some of the noise that of course we also picked up on that we will be able to receive Phamacy Unsp at the core of your question, Alexander. How will we receive the electronic prescription or how will we access the electronic prescriptions? Well, I can only refer to a public document that is available to all of us. And these are the ERX specifications as published by the Gematik. And the Gematik talks about two primary ways of transmitting the QR code. Number one, through the Gematik, the central ERX app from the Gematik. And secondly, and that's explicitly written in the specifications, it says that in addition, a transmission of the QR code via messenger services is permissible as well. We are all waiting, of course, for the directive from the Health Ministry. All I can say is, based on all the contacts that we have, we don't foresee that there will be any significant change from what the Gematik published. But again, we are waiting for the final directive from the Health Ministry. Did we answer your question?

Okay, thank you very much. Yeah, I think that basically confirms what I've also heard from my connections I had before. And also as a data point for you, I think the management of Combo Group, responsible for the part of the doctor connection, I mean, they just confirmed on their earnings call that they also see no risk for the rollout and basically confirmed this January 1, 2022. So thank you very much. I will jump back into the queue. Thank you.

You know, we had the confirmation from the Compute Group a little bit earlier, you know, for our context. They said, well, the 1st of October, that was initially, you know, the requirement. That will be really tough, but they will be ready by the 1st of January with their practice software.

Thank you. We will now take our next question from Volker Boss from Badr Bank. Please go ahead. Your line is open.

Yes, hello, gentlemen. Yeah, congratulations on the great top line momentum you showed in the first quarter. I would like to ask three questions. And first of all, I would start with the same day delivery progress. How many pharmacists signed up as a partner to your platform, and could you give an update on same day delivery? And the second question is on the international business. I know you don't break it down, but however, could you perhaps provide some highlights, lowlights in regards to product categories or countries to get a bit more granularity in the bold block of international? And last but not least, the third one. Yes, I also want to come back to the central question in regards to mandatory introduction of the e-script and if that is going to happen or not. I hear the noise. There's on the one hand, there is noise about technical issues. I mean, it's hard to decide from outside if it's right or wrong, but I hear you and I heard the confirmation of . But however, there's also some noise about that the solution which is now found for introducing the e-script is potentially or perhaps not consumer-centric enough. It was a rise by Klaus Erhardt, the president of the Bundeserztekammer. Would you agree on that as well? On all what you have seen, how the process will be managed finally, how do you look at the consumer-centric way of the introduction? Because at the end, the consumer has accepted the e-strip and has to see the e-strip as a convenient tool in order to rise the penetration going forward. Thank you.

Well, I'll start, Jasper, and then you will chime in. Phamacy Unsp Adr in Germany by the end of this year. Our concept is to work with a limited number of partner pharmacies in those metro areas because it needs to be economically viable for these partners as well. If you have a large number of partner pharmacies, that will make it difficult for them to see a financial return on their activities. We are identifying, in some cases, potential partners are approaching us. We are selecting a couple of partner pharmacies in each metro area. In terms of the third question and the second question, Asper, perhaps you want to say something about, again, going back to electronic prescriptions. Again, we are literally in daily contacts with our ERX or RX First Task Force with a variety of players, of market participants. We have good and solid working level contacts also with the gematic. In terms of the technical aspect, we don't foresee any major problems based on everything that we know today. So in terms of the consumer, as you described the centricity, I think that the head of the German Physician Association, he was more referring to how convenient is this for physicians. And there is one Question that that remains to be addressed and that's how they can digitally authorize or sign electronic prescriptions right now. They literally have to log in and have to electronically sign every prescription individually. I assume you have listened to the interview with the head of the Gematik, Markus Leipiggen, just a couple of days ago. He clearly stated that the so-called COMFORT signature, which would allow physicians to kind of a batch to authorize a large number of electronic prescriptions at once. That is clearly on the agenda for the Gematik. And like Deacon, he clearly stated that they know in order to ensure acceptance from the physicians of electronic prescriptions, that's something that needs to be available with the ERX mandates on the 1st of January next year. Yes, Paul, in the national segment.

Yeah, hi, morning, Volker. Hi. Just add one last sentence to what you said on the intro of the script. Because, Volker, you also said that potentially it would not be customer-centric enough, the solution. But if there's one thing that the geomatic is always And the basic journey is you can indeed receive it digitally through the Gammatic app, but you can also receive it on paper with a QR code on it, and you can just use that QR code that's on the paper. So I think the central point here is actually that it is customer-centric and proven over there. And then to your international, thanks a lot for your question, because we don't get a lot of questions on international, but now that the numbers get bigger and the growth, I also understand that we get more questions there. Product categories and things like that, that's not a level we disclose, Volker. We know we don't have RX, except for the fact that actually a couple of weeks ago we started with RX in the Netherlands, but that's just the start. So it's everything but RX. Apart from that, it's a comparable portfolio that we also have in the DAG region. And what's very interesting from our perspective, is that we see how different the approaches that we need to apply per country. Belgium and Italy and France are very different in this perspective already. What a pharmacy is, what can you sell in a drugstore? What are you not allowed to sell in the drugstore? What can you sell in the pharmacy? And what kind of marketing can you do? So you basically see here that we basically have the same portfolio across all the countries of our products, but the proposition we have to our customers, the devil is really in a detail Thank you. We will now take our next question from Oliver Calveld from Kepler Chevrolet. Please go ahead.

Your line is open.

Yes, thanks. Good morning, Stéphanie. I also appreciate the move with audio and video, probably the best of both worlds. I will take my questions one by one, if that's okay. I have the first one is again on e-scripts. I just wanted to confirm a bit with you, you know, considering what we are hearing on the side of doctors, do you see any risk that there could be a further delay to the introduction of e-scripts or not? That would be the first one.

Well, Olivier, until it has happened, there's always some risk. We don't foresee this. Again, based on everything we are hearing, the health ministry, and there was a statement from the health ministry, but also the thematic, they confirmed they stand by the ERX mandate as of the 1st of January. We're going to have elections this year. Again, there remains some uncertainty. I don't want to hide this, but that's not what we are hearing from the decision makers.

Okay, fair enough. And then I was just wondering on the customer numbers, if you could shed some light on how many customers you had in the quarter, please. Not the active customers, but just the customers that were new in the quarter.

Indeed, the increase of the active customers is in the net of new customers and churn of customers. So you're asking what's the gross amount Uh, yeah, that's not how we look at it, but it's nothing spectacular difference from all the other quarters. We can only grow our active customer base as fast as we're doing if we're able to. to be very sticky to our existing customers and add new ones. So the fact that we were able to increase more than half a million of customers in just the first three months in all the challenging environment that we discussed extensively now is a very good sign also of the fact that we were able to keep many of our existing customers. But of course, internally we look at that, Olivier, but there's nothing to hide, is the base of loyal, active customers and to make those customers really happy. And on the base of that active, loyal customer base, we try to add as many new customers and to make them as sticky as possible.

Just one additional thought there. When we look at the behavior of our pre-COVID cohorts and the Phamacy Unsp & Adr

Can you shed some light on the international customer development?

In each country, we had significant growth. We were successful adding new customers and increasing our active customer base. It's not like one country contributed much more than another country. It's really, we were happy with the overall performance and everything with our exchangeability. So all the countries added new customers.

Okay, fair enough. And I want to go back to slides 10 and 11, just on the sequential development of the gross profit margin and the selling and distribution costs. Just wondering on gross profit first, if you can help us think in terms of the quarter on quarter change in the gross margin. You know, it's pretty good that the RX bonus plan has a positive gross margin effect and a positive mix effect since you have lower sales in RX in terms of the share in the mix. Anything else to flag quarter-on-quarter? And I was also curious just to see how Smart Patient contributed to the gross margin development quarter-on-quarter.

Yeah. I think it adds insights if I tell you there is not an EBITDA positive impact from the bonus band. That's not there. And mathematically, our gross profit margin on the product is higher if you don't give the bonus. But we also gave an opportunity to our customers that because we were not allowed to give the bonus to them, that they could choose that we would give it to a charity, and that's a charity named Care. At the same time, you see that our marketing Phamacy Unsp & Adr The main reason why we now have incorporated and work together intensely with Smart Patient is their expertise on improving digital medication management for our customers and in making the users of their app our customers. But apart from that, they already had their own business and the business was developing the medicines So we have some sales from smart patients, we have some contribution margin there, but that's just because we disclosed so much in the bridge that it was helping our contribution margin over there. But the main impact for smart patients is going to be in the retail sales and in the retail gross margin. So that's the overall picture. And it was in this order of 1.1, it was a major part. In the gross margin isolated, the smart patient was a major part.

Okay, fair enough. And then slide 11, kind of the same question. Last year, you stopped marketing for about a month in Q1. This year, definitely was not the case. What about, you know, quarter-on-quarter Q420 to Q121? What happened there?

Generally, if you look at shop apothecary, you see that in quarter one, our marketing as a percentage of sales is higher than in the fourth quarter. It's generally a quarter where we focus a lot also because of seasonality and customer behavior on acquiring new customers. That was this year also the case. Phamacy Unsp&Adr Phamacy Unsp&Adr Phamacy Unsp&Adr And last year we had a couple of weeks without marketing, not an entire month. Olivier, because there are a lot of people waiting, can you limit to one last question?

Your very best question. Yeah, the very last question on Rx in Q2. Do you expect a continuation of the trend that we've seen in Q1 or something more towards the low single digits?

Well, it's too early, but we see a continuation of what we have seen in the first quarter. Again, we stated there is a negative impact from the RX bonus ban, which, you know, different topic. We remain convinced is a violation of European law, but it has an impact on our RX business. Yeah. Leave it at this.

Okay. Thanks a lot.

Have a good day.

Thank you. We will now take our next question from Alvaro Rao from Barclays. Please go ahead. Your line is open.

Hi. Thanks for taking my questions. I've got three, and hopefully I'm not beating a dead horse. But you talked about two ways of transmitting the QR code for eScript. And regarding the central eScript app in particular, based on your conversations with those close to the matter, do you have clarity on whether and how third-party apps will be able to connect to the Gammatic app directly? And, I mean, I realize it's not totally clear yet, but is there a date by which this should become quite clear? Second, do you have a sense of what proportion of doctors' practices and physical pharmacies already have the technology needed to actually implement eScripts? and how can we get comfortable that they'll be ready for the 2022 deadline? And then lastly, a bit of a boring question, what kind of net finance costs do you expect for the full year, both cash and non-cash?

Stefan, I take the boring one then, and you the first one. Go ahead. No, no, no, don't repeat. Oh, yeah. Let's start on the financing. The key of the financing cost of Quarter 1 Alvera is that there's nothing particular in Quarter 1. So I don't know if you can extrapolate it one-on-one, but it is just what it is. And what's included in it, it's financing, but it's what I just said, the accounting treatment also of our preferable bond, which you see here, which is non-cash, but which is in our P&L. That's one part of the financing expense. Phamacy Unsp & Adr

in terms of the connection to the Gematik app. You know, there was a statement from the Gematik in the past that so-called value-add apps, they will be able to connect. At this point of time, you know, it was supposed to happen, you know, in relatively, you know, short order, but we don't have a firm date there yet. More important for us is, again, when 90% of, initially, 90% of the prescription, of the electronic prescriptions Once the physician has uploaded the prescription to the telematics infrastructure, meaning the cloud, the physician will print out a copy of this electronic prescription. And the most important piece of information on this printout will be the QR code. And we think the major way to transmit the QR code to a pharmacy of physical choice will be either via messenger apps or also via, for example, the apps of the various service providers, including Shop Apotheke. Again, we are all waiting for further clarity, a definitive clarity with the with the directive from the Health Ministry, but that's our understanding right now. In terms of readiness, again, there are two major players. Of course, we have the pharmacists. I don't foresee any issue that they are not going to be ready well in advance of the ERX mandate coming into effect. In terms of the physicians, Again, that was a reassuring statement that we heard from Alexander. We had heard it, as I mentioned, some time ago already, that the largest provider of physician software will be ready for the 1st of January this year.

There is a software Component.

Again, that is the physician software. Again, we get more and more confident. Probably some small providers might not be ready, but the vast majority of physicians should be covered. There is a hardware component, the connectors, that based on what we have heard so far, that should not be an issue. So again, on the critical path is more the software component, but it looks promising.

Thank you. Thank you. We will now take our next question from Gerhard Argonis from Berenberg. Please go ahead. Your line is open.

Good morning. Also two questions in respect to the ERX, please. First of all, do you have an expectation when the directive from the health ministry should come?

It is our understanding that this directive will have to be notified to the European Commission. It's supposed to come into effect on the 1st of October, again, based on everything that we've heard so far. So really, in order to be able to notify the European Commission, It should come within a very short period of time. We don't have a firm date. As you know, it was supposed to come much, much earlier, but now they're really under the gun because they need to adhere to the notification period.

Okay. And if I hear you correctly, what you expect in the first step is that the vast majority of e-prescriptions will be printed into a PDF. There is a QR code. And then I would guess that in your app you would have a scan function where you could scan this QR code, and that's how people would send it to you?

Again, I want to leave it a little bit open. There will be alternative means according to the gematic specifications of transmitting this beyond the central gematic app.

I'm just wondering, I guess the rumors are about the gematic app itself being an app that you don't need anything else. So, you know, in real life, how would it look like on my mobile phone? Do I have the App and the App anyway to transfer the QR code between the two, or does it have to come out in a print and then go back into ? Any news maybe about a restriction of you being allowed to scan it in because they could be fraud? I mean, anybody could scan in a QR code, so I think that that's...

Everybody could scan in the QR code, but the prescription can only be mailed to the person that's Included in the electronic prescription. You might have seen what the print is going to look like, similar to the paper prescription today. Of course, there's the name, there's the address. We, as the service provider, as the pharmacy, it doesn't matter who sends the QR code to us, because you have some patients that might not be able to handle the QR code via the smartphone, so a relative might do it for them. But we can only mail the prescription to the individual that's included in the electronic prescription. Again, the assessment that initially 90% or more of the prescriptions will be printed out, meaning that the patient will initially not access these prescriptions through the Gematik app, that is an estimate that came actually from the Gematik.

Okay, thank you.

Thank you. Okay. I think that's it. So thank you very much for your interest in shop apotheke. Again, hopefully you agree with Jasper and with me. We had a strong quarter. This is a very interesting and exciting time for all of us because something that has been in the making in Germany literally for almost 20 years is coming to fruition within the foreseeable future. We're very excited about this. We will be ready for electronic prescriptions. And again, we don't want to lose sight of this. This will be an important growth driver for Shop Apotheke, but there is much more to Shop Apotheke being, you know, a customer-centric e-pharmacy. And again, we've seen some interesting, exciting developments outside of ARIX and outside of Germany in the last quarter. And I'm sure we'll be able to share more exciting news with you at our next call. And I think that's in early August, Jasper. Thanks everybody and you know how to find us if you have more questions.