Redcare Phamacy Unsp/Adr

Good morning to everybody joining today's call. I'm very happy that I can present the quarter one numbers of shopper particular Europe to you this morning. And I'm here today together with Monica Ambrosi from Investor Relations. I quickly wrap the moment here. I will keep it short. Phamacy Unsp & Adr Phamacy Unsp & Adr We achieved a 22% total sales growth. It's the post-corona period. We are showing that we have been growing double digit pre-corona during Corona and after Corona. And this quarter one was in total 22% higher than last year. So our company grew by one fifth in total size. And we did so with an adjusted EBITDA margin, which was significantly up. And certainly in the next slides, I will explain to you more about that development. To start with the first bullet, double digit growth, pre-Corona, during Corona, after Corona, in our two segments and even in all our seven countries. Non-RX and RX were both almost growing at the same pace. Double digit total 22 as I said already and non-RX 23%. The total performance was driven by a continuous growth of our active customer base, that means keeping our existing customers loyal, increasing their frequency and at the same time also welcoming a significant amount of new customers. Our total base of customers that are active, so placed a purchase over the past 12 months, increased in just one quarter, this quarter one, from 9.3 to end at 9.7. And we had, again, a quarter with a very high customer satisfaction score. We carefully tracked this on a daily base, and again, total shop uptake was at the net promoter score north of 70. Second bullet, peculiar for this quarter, Efficiency gains significantly compared to the same quarter last year, and also compared to the last recent quarter, quarter 4 last year. The adjusted EBITDA margin this year was a positive 2.4%, which is 380 basis points up from the same quarter last year. As a result, our operating cash flow was a positive 44 million, and please don't do that times 4, of in total 37 million, and for example last year Q1 the working capital inflow in Q1 was also 30 million. But as we will see later, this operating cash flow also included an EBITDA of 9 million, so an EBITDA cash-in of around 7 to 8 million. And while achieving more customers, happy customers and significantly improved financial results. Bullet number four, we are also really happy with some external increased acknowledgement we are getting for our sustainability efforts. Later more on that, but to keep it short for now, it's always flattering if an external renowned institution, in this case MSCI, is increasing our rating, our ESG rating from a double A to a triple A. That's the highest possible score according to MSCI and it brings us in the global benchmark in the top four. There are a couple of things we can mention which we also achieved in quarter one. I'll point out one and that was our intention to start a strategic partnership with Galenica and to create together a leading online pharmacy in Switzerland. Also more on that later. On this slide, the sales. As I said already, total growth 22, non-ORX 23, so both well north of 20%, achieving a total of 372 million of sales. The DAG segment increased by 23%. Our international business consisting of the Netherlands, Belgium, France, and Italy increased by 19%, and that was still 13%

Thank you Jasper. So let's take a look at our customer key performance indicators for the quarter, which either improved or remained at very strong levels in quarter one. Starting with the active customer base, as Jasper already mentioned, we had an increase of 0.4 million in the active customer base from quarter four to quarter one. which was an increase of 1.4 million over the prior year's quarter. So we now boast 9.7 million active customers. And this was an increase seen across all of our markets. This several hundred thousand increase in active customers every quarter has been a feature over the past four quarters, a consistent increase. And this continuous increase in active customers wouldn't be possible if our customers were not happy and returning customers, which is why we really focus very much on delivering strong, excellent service. And we see this again from a very high net promoter score over the first quarter of 71. So happy customers. And then finally, we can just take a look at the average shop and basket value for the first quarter of the year. We also saw a slight increase compared to last year from around at 57 euro to around at 58 euro in this quarter. So we've been talking about customer satisfaction. It certainly builds customer loyalty. And as a result of this, the strong sales growth that we reported was very much driven by a high rate of returning customers, which in the first quarter was at a high 84% among the highest it has been in the past. So these are not new customers, these are returning customers. Then if we speak about our number of orders, we can see that the strong momentum which started in 2022 continued in the first quarter of the year, where our logistics facility very efficiently and seamlessly processed over 7 million orders in the first quarter of the year. And again, if we look back over the last four years, every first quarter we have seen an increase in orders of around 1 million. So this is a very strong underlying increase. What makes the performance even more solid, as Jasper has already mentioned about corona, This is not demand as a consequence of corona. This is demand after corona. And even with a bit of seasonality, it reflects a strong structural increase. Over to you.

Yeah, happy to. So thank you, Monica. Very clear to me. And here are then the key financials in the P&L, in the customary formats in the table. So let's start with column two and three, quarter one last year and this year. So our sales increased from 305 to 372, an increase of 67%. 1.1% up. The gross profit margin, and later a bit more on that, increased by 1.1 percentage points. And he's selling at distribution, so all our expenses as a percentage of sales increased by even double that amount, by 2.5 percentage points, reflective of scale and efficiency. At the same time, our administrative expenses also were stable at 2.9% of sales compared to 3.8 percentage points. In euros, from minus 4 to plus 9 is an increase of 13 million. And just for reference sake, also the fully loaded EBITDA, which was also a positive 5 million in the most recent quarter. The columns to the right that you're seeing here Though it is an apple and an orange, because at Shop Apotheke, as with most retailers, there is seasonality in the quarters. But still, quarter four, where we also achieved for the second quarter in a row a positive adjusted EBITDA. If you compare those numbers, you see at the top that our sales were significantly higher from 328, as Monica just explained, to a new record of more than 7 million orders. Our gross profit margin, quarter over quarter, was roughly comparable, slightly down 0.1%. But you see that actually half of the year-over-year increase that we achieved in efficiency and skill Phamacy Unsp & Adr The gross profit, an increase year-over-year, and to the right of this slide, roughly comparable to the past quarter. The year-over-year improvement of the gross profit margin is mainly in the first bucket, which is the product margin that we're having. And the product margin is really reflective of all the optimizations we continuously try to do in having the most relevant assortment, new assortment, showing the customers the assortment Phamacy Unsp & Adr Marketing was a big driver of the, if you compare it mathematically, year-over-year improvement of the selling distribution as a percentage of sales. But also the operating labour was something that made us really happy as Total Shop Apothecary. Let me start at the start. So in total a significant better S&D as a percentage of sales. But please keep in mind that quarter one 2022, so a year ago, was still a relatively marketing heavy quarter to us. We were still recovering from some low points we had in 2021 in Q3 and Q4. So also in Q1 last year, that was still the case. But you're really seeing that last year, Q3, Q4, this year Q1, we internally say the machine is running. Our model is working and we have significantly more effective marketing across all our countries, all our seven countries. Phamacy Unsp & Adr At a very high quality level, we are delivering our goods faster to our customers. At the same time, of course, we have also had wage inflation also in the operations, but still seeing the overall efficiency gains that we have been able to achieve here in this facility, the total operational labor costs were significantly better than last year, 0.6%. Again, repeating not only a year-over-year improvement, And with that we go to the cash. And we increased our cash balances by in total 32 million over the past quarter. So we increased from 180 to 212 million. The first two blocks is to Some 7 million from the, let's say, EBITDA, our operating results, very favourable largely from seasonality movements in our working capital, and then our investments and financing expenses in total leading to the end-bands. And then before we go to the second part of our presentation, also in the financial results, I would like to re-emphasise what I said by the MSCI rating in ESG. So a couple of comments here. First of all, October last year, 2022, we were three years ahead of plan, able to reduce our scope one and scope two CO2 emissions by more than 80%. So three years ahead of our planning. And it was not a reduction by 80%, but actually by 88%. And at the same time, a bit later, we as a company committed ourselves to the very important reduction in scope 3 by 2040 to try to be net zero there. But ESG is not the same as only a judgment whether we are a sustainable company. ESG in the definition of MSCI actually also focuses on how well is the company prepared for any risk related to the three areas of ESG. And the total of that led to an increase of last year already from Phamacy Unsp & Adr As much as we have always been about the opportunity, the huge opportunity, the once in a lifetime opportunity of ERX in Germany. There's a great market opportunity there and we think we are very well prepared. A lot has happened the past years. We are totally ready. Many players in the ecosystem are ready. We are receiving e-scripts every day. from the government that things would be mandatory as of the 1st of January 2022. But there is new momentum in it. It's clear, for example, also in the conference of April 25 that the German Minister of Health, Mr Lauterbach, expressed that it is really on his agenda to also adopt the laws to make it possible to have really ERX as the standard in 2024. Still, that needs to be published. So on timelines, I cannot give you any more concreteness than you had before this meeting. I can only tell you what we see from our perspective. So we see the number of e-scripts last time we talked to you, there was on March when we released the full year numbers, it was 1.3 million. That increased to 1.7 million electronic prescriptions redeemed in total Germany. The average is around 7,500 to 8,000 per day, some fluctuations there. and we still expect as shop apotheker that it is very likely that there will be a lot more concreteness perhaps including even what we are anticipating a significant increase in the last half or at the start of 2024. We as shop apotheker are ready and I think our customers are also ready for a future in Germany with e-prescriptions. Now to something completely different that is We announced our strategic partnership where we would combine Phamacy Unsp & Adr Phamacy Unsp for Pharmacy in Switzerland. In the base, you can see that Kalenica is very strong with the Mediservice daughter in what is named in jargon specialty pharmacy. Kalenica is saying we are very strong in, let's say, being an e-commerce pharmacy and combining those two will lead to better products, better services, and according to us, best B2C proposition We are awaiting the regular competitive authorities approval. That timeline is unchanged compared to what we announced on March 30. We still expect the transaction to be able to be closed before the end of the first half of the year. On the next one, please some characteristics on the transaction. So what is basically happening in one transaction is that it may and at the same time Shop Apotheke is achieving in this Mediservice a 51% share and Galenica a 49% share. And it's of course clear that the current Mediservice business with annual sales of around 450 million euros is significantly larger than our current Swiss business. increase of our share capital. In addition to the 6%, Galenica indicated to us their wish to actually also reflect their strategic commitment to shop apotheke even more and wanted to acquire an additional 2% shares in shop apotheke, resulting in the end situation of having an 8% share in shop apotheke post transaction. And we, of course, were very happy with this commitment that was expressed by Galenica. All waiting for the approval, and then it's the intention to execute things. As I just explained, having a very strong B2C proposition in Switzerland, working together with two specialized partners, Kalenica and Shop Appeteker, and having welcomed another very much wanted investor in Shop Appeteker with 8%. The last slide. when we closed the transaction. It's a repetition also of what we disclosed on March 30 for those that didn't join the call. According to IFRS, that's the accounting of business combinations, we as shop apothekers It will be for half a year in our numbers and then of course next year for the full year a bit repeating what I just said current business of Mediservice so what's going to be on top of the shop upper taker numbers is on an annual base around 450 million of Swiss francs one on one with the euro around 450 million of euros and the business is operating at an Iberda, which is close to a free cash flow percentage of sales between 2% and 3% of sales. In addition, the last bullet, if the transaction closes, and we expect that it will happen in the coming weeks, for the 2% share in Shop Appeteker, we will receive a one-off cash-in of 29 million euros. It's about time I give it back to you.

Thank you, Jasper. Well, it's not that long ago, just over a little bit more than a month and a half ago that you and I presented on the rebranding and renaming of shop Apotheke Europe, the corporate. Well, today we can report that following the 100% approval by our shareholders at the annual general meeting that was held last week, we were all going to move forward with this exciting change and rebrand the corporate, from Shop Apotheke Europe NV to Red Care Pharmacy NV. So the process will be that we change the articles of association to reflect this new corporate name for the corporate. While we do that, we are not changing the names of the local Euro brands. So just to reiterate that the names of the shops across the other countries remain the same. And just maybe to summarise why the new corporate brand is very important for us is that for us it provides us with an improved corporate vision which is going to unite all of our locations and it will also position us better and best for the future long-term growth and value creation of the business. Internally, it also means, importantly, that we will have a stronger employer brand, which better reflects who we are, and that is a truly European pharmacy and the leading e-pharmacy in Europe. Meanwhile, our customers are going to continue to receive the same excellent quality service that they are used to from the local HERO brands, as I just mentioned earlier, with nothing changing there. And in addition to this, there will be no extraordinary costs because the costs have already been absorbed in the past. So our shareholders also benefit and all our stakeholders benefit from this change in the corporate brand. Jasper, do you want to maybe just touch on

Indeed, we had the March meeting to inform all our stakeholders last week, April 26, formal approval with 100% of the votes, which was very nice to achieve. And now we can really start to kick off internally our employer branding, reinforcing who we are as shop apotheker for our existing and for potential new people who want to join the shop apotheker journey. Important on this slide, because it's mainly the financial community we're talking to this morning, is that on June 13, we will also change the name and the ticker symbol at the Frankfurt Stock Exchange from SAE to RDC Red Care. And then the next slide, which is the last slide of the presentation. Of course, we don't have a slide on it, but we absolutely reconfirm, as we do in each quarter, our mid to longer term adjusted EBITDA expectation Phamacy Unsp of 8%. If you now focus on full year 2023, I think the big picture is of course that we were providing you this guidance before we had the strong It's easier for us to achieve the full-year guidance than at the moment we gave you the full-year guidance. Having said that, the world isn't Ceteris Padibus and we already gave you a guidance in a certain range. So I'm reiterating this, a growth, again, double digit of non-RAFs at the midpoint of 15%. So that's between 10% and 20%. Free cash flow aiming for a black zero, but in a range of minus to plus 20 million. and everything here with a clearly positive adjusted EBITDA. This guidance here is excluding a potential surge, so a fast increase, of earrings that could still happen later in the year, and it does not yet include any guidance related to the transaction with Galenica, and that the expected date of the closing of Galenica will not be too far away from the present It's very likely that we will update you with a guidance reflecting the new situation as good as possible with the Q2 results in an updated 2020 free guidance. So this is our guidance. We're very happy with the Q1 results that we achieved. I think Monika, you said it and I couldn't have said it better. It's not only the financial results, but all the KPIs are also positive in the countries. High customer satisfaction, Increase of our active customer base everywhere. Increased effectiveness that we're having and very effective and well working and appreciated propositions across our countries. So with that, I think it's time to go to the questions if there are any. The operator, can you introduce please?

Yes, thank you very much. Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by 1 on the touch-tone telephone. Please follow the registration link on the webcast page to receive the dialer numbers. So please, anyone who has a question may press star followed by 1 at this time. If you wish to remove yourself from the question queue, you may press star followed by 2. In the interest of time, please limit yourself to 2 questions only. And our first question is from the line of Alexander Thiel from Jefferies. Please go ahead.

Hi, Alex from Jefferies. Good morning, Monica and Jasper. A couple of questions from my side. I would like to take them one by one. Firstly, very strong EPTA numbers in Q1. How should we think about the seasonality for the upcoming two quarters? And attached to that, could you give us an indication for the full year 23 adjustment level? We will see excluding the Swiss joint venture. Thank you.

Thanks Alex, and good to talk to you again. You said I have a lot of questions, please try to limit them to two or three to also allow that quite so many people ask questions, if that's possible. As to your EBDA, yes, we had some tailwind, some benefit of the return to normal in certain countries of the cold and flu season, but that did not explain our strong results of quarter one It was a little bit better because of that. What I want to say with that, we didn't have any positive or negative significant unusuals in our quarter one result. Quarter one result was as it was. So then you ask, what does that mean for quarter two and quarter three? Well, it depends on the competitive situation, the balance of growth and margins. But actually, you want to continue as we are doing at the moment. The best prediction for tomorrow is always today. And today we're showing you the quarter one results. The only thing that we always know is that in quarter two and quarter three, our sales in absolute terms are generally lower than quarter one and quarter four. So we have a little bit less scale of our total cost. But in total, we will continue as we are doing and we feel comfortable between 0.5 and 2.5. And though I don't want to more specify the exact guidance that we're giving there, I mean, mathematically, it's at the moment unlikely, because we are not aware of any special actions that we will do, that we at this moment, it's less likely that we will end up anywhere close to the low point of the guidance range. That's not our expectation.

Phamacy Unsp-Adr Phamacy Unsp-Adr Phamacy Unsp-Adr Phamacy Unsp-Adr

that will really fade away to less than half the rate we had last year. Then the Appli stock options that will also be slightly lower than it was last year. And number three, other costs also not that much. So what I will do the best prediction for this year, if you do the adjustments of the first quarter, thanks for.

Okay, that's very clear. Coming to my last question, could you comment on your current trading? It looks like that your web and app traffic continues to perform extremely well in April. Thank you.

We ended the quarter very strong, I can say that, and that didn't stop immediately at the start of the next quarter. But that's all I can say about the next quarter. Today it's about the results of quarter one, and we have the full year guidance. But I can be clear about it because it's also clear in all kinds of external resources that the momentum that we have seen for a couple of consecutive quarters, or perhaps it depends on the definition for a longer period already, that we are growing our web traffic

Perfect, thank you.

Yeah, thanks, Alex.

The next question is from the line of Volker Bossel from Baader Bank. Please go ahead.

Yeah, hello, good morning. Volker Bossel, Baader Bank. Thanks for taking my question. Congratulations on the great set of results. I would have two questions. First question is on the ERX sales, which increased by 15%, of course, coming from depressed levels. However, it seems that ERX sales has bottomed out. So is it fair to assume that ERX sales will continue to increase in the following quarters of the year 23 again? And the second question would be on ERX. You said there is a daily redemption of e-scripts amount of 7,500 to 8,000 per day. I think that is the market figure. So what is your share out of that market figure which you redeem on a daily basis? And follow to that also there was in the press some speculation that the CEO of Gematik, Mr. Like Deacon, could be forced to leave the position? How do you look at that, and what would that mean for the timeline of the e-script introduction as well as the e-script rollout, which is probably to come? Thank you.

Yeah, good morning, Volker. Thanks. Very clear, the first one on Rx. I think you're also giving a compliment to the company that we achieved a 50% Rx growth, so thanks for that. From my perspective, I wouldn't make too much out of it. Phamacy Unsp & Adr There are many customers who actually give that trust to Shop Appetaker for their prescription medications, but that we have some growth there on the low base. It's nice to have, but to me, it's not a key point in Q1. The key point to me is that we have been growing super strong as a total company. with increasing our base of loyal and happy customers, and even so at an increased efficiency. The RX increase with 3 million, it is what it is. And you can extrapolate that for the remainder of the year or not. I mean, it is for me not that relevant in quarter one, I have to say. Thank you. Yeah, and then the ERX, our share in ERX, I will not disclose. And the fact that are happening some things, perhaps in the gematic or the ministry, etc. I have not seen any official announcement there on these speculations. What to me is, taking the helicopter view, very relevant with ERX is that the system is working. The insurance companies are ready. We are ready. Pharmacies are ready. Doctors are ready. So it's working. That's good. That fact we have. And the other one is that, for what it's worth, also the Minister of Health, Mr. Lauterbach, is in every occasion where he can expressing his commitment to make ERAs the standard in Germany as soon as possible. Okay, now we're waiting. Okay, what does that mean in concrete terms? Where's the timeline? What does it mean? Okay, we don't have it. Those two, the first one, are the only facts. It is working. Those who are working are happy with it, all the stakeholders. And number two is, it seems to be that on the highest level in Germany, it is supported to be introduced as soon as possible.

Yeah. Yeah, crystal clear. Thank you very much. All the best. Thanks. Yeah, thanks, Paul.

The next question is from Jan Koch from Deutsche Bank. Please go ahead.

Thank you for taking my questions and congrats on the strong start to the year. I also have two questions please. The first one is on your gross margin that remained relatively stable quarter on quarter. Your average shopping basket declined frequently, but you mentioned a favorable product mix. Does that mean that you had a higher share of your own brand sales in Q1, or what was driving this? And my second question is on your allergy business. Given that we now have left the cold and cough season largely behind us, I'm wondering how important is the allergy season for you, and was this business still negatively impacted by COVID restrictions or general behavior trends last year?

Again, Monica, I think I take that. Jump in if you have to add. Jan, perhaps it was aimed to give some guidance and place things into perspective, but perhaps it's also a little bit confusing comparing not only to the same quarter last year, but also comparing to quarter four. There's of course a seasonality in its own in the quarters and the margin was roughly stable quarter over quarter. That is indeed correct. The average basket for the first time since I'm presenting was year over year slightly increasing from 37 to 38 euros. And what you are now referring to is the slight increase of the basket from quarter four to quarter one. I am not aware that anything is happening there that's worthwhile mentioning. So I will presume it has to be to do with the fact that we had in the quarter one even more new customers we welcomed than we had in quarter four. New customers tend to have a lower average basket. At the same time, again, our overall business was going a bit faster than our Rx business, and those two things might have dampened it a little bit. I think the key conclusions are the most important. We know what's commented on in the economy, inflation and things like that. Those things have until now a very limited negligible impact on the pharmacy business as we do it. Not really an impact of customers reducing their purchases. So I have not something to mention there. The fact that our gross margin was better, that is really all summarized in this. Management and from our commercial departments in giving the right promotion to the right people, in giving the right assortment to the right people. And you mentioned own brands. Well, that is one of the many elements in order to optimize our portfolio. The last one on the elegy. Well, I can only tell you that's not my area of expertise. I know there are some important things. This morning I received from Shop Apotheke as a customer a very attractive email on be prepared for the elegancy season. But the other parts, how much we expect and how much impact there was, I don't doubt anybody is having the exact answer what the impact of COVID was there. But we as shop apotheker are prepared at least to help our customers now at the start of the elegance season to find the right products.

Great, thank you.

Yeah, thank you.

The next question is from the line of Sven Sauer from Kepler-Chevreux. Please go ahead.

Hello, thank you Monika, Jasper for taking my two questions. The first would be regarding the strong customer growth and web traffic growth that we have seen. I was just wondering, of course you probably don't have numbers to this, but to what extent do you think these numbers are inflated from the weakness of your current main peer and do you think these impacts Phamacy Unsp&Adr

Answer to the first one, no. Clear. We have increased our base of active customers across our seven countries. So it's really not coming from one competitor in one country. Perhaps if there's some softness of a certain competitor, then that will help you a little bit. But at the same time, there's a lot more of competition. That's really, it's not explaining our results. We are not aware of that. We don't see the impact there. So no further comments on that, Sven. I hope you will understand. The eHealthCard solution, from my perspective, we are happy with everything that helps to get doctors in Germany Phamacy Unsp & Adr to the two processes that are there already, printed out QR codes and the Gammatic B2C app. If there would be another method which would convince doctors in order to roll it out, that is really something that we welcome as a shop apotheker. At the same time, it's of course very important that there is a freedom of choice for the customer. Thank you.

The next question is from the line-up Olivier Calvé from Credit Suisse. Please go ahead.

Yes, hi. Good morning, Arthur and Monica. Just one question left. I think at the Galinka JV announcement call, you weren't asked about Migros' move in non-prescription in Switzerland, if I'm not mistaken. So I was just wondering if you could, you know, let us know how you see the competition developing in Switzerland going forward in light of this move.

Can you repeat a little because the line was not very strong. So you asked about the non-Rx in Switzerland, is that correct?

Yeah, non-Rx in Switzerland with Migros move.

Yeah, and we have nice momentum, nice proposition growing strongly in Switzerland and we as shop apotheker at the moment are doing that in healthcare related assortment because the sale of OTC online at the moment is not allowed in Switzerland. So in most countries in Europe, In some countries like Germany and the Netherlands, RX and OTC are both allowed. But in Switzerland, it's just the other way around. At the moment, RX is allowed and OTC not. How is it possible that we as shop apotheker have a fast growing business there? That's the beauty and personal care. That's the vitamins and other supplements that are non medications. So that's the business that we are having. Galenica is very strong in the RX business. Actually, 99.5% of the current sales of Mediservice are prescription sales. And for both of us, at the moment, it's not possible to do OTC in Switzerland. And of course, we, and I think also many customers in Switzerland, are hoping that this will change in the near future. But we are not aware of any concreteness of a timeline of having to change that.

Okay, just to clarify the question, I meant on the non-medication assortment in Switzerland?

Yeah, and then the question to that is?

You've seen migros move in the non-prescription part, no, sorry, non-medication part. Do you have any comments there in terms of how the competition is evolving?

No, yeah, no, not really. Okay. I don't know. Can you specify, are you referring to certain specific, a specific situation? We are seeing that we as shop upper take, indirectly, I just said, all of our countries are growing double digit, so in the competitive landscape in the countries also in Switzerland, we have been able to grow our own business organically by more than 10%. Okay, thanks. Yeah, okay, sorry, the line wasn't really strong, so I could not hear it immediately, your question. Thank you to my answer was clear now, I hope.

Yeah.

Our next question is from the line of Miro Zusak from JMS. Please go ahead.

Yes, hi. Thank you for taking my question. I have two, if I may. The first one is, On page 11 of the presentation, you show basically the mix effect of the split between OTC and RX being zero. On the other hand side, the strong margin increase in the segment from 26.5% to 28.5% is explained by positive mix effects. Could you please elaborate on this? What's actually happening within the portfolio that you are able to increase or to expand your margin by this high amount? I suggest to take this first and then I have the second question afterwards.

Okay, thanks for your question and joining the call today. What you're seeing is that In some quarters, we used to see quite some mixed impact of Country on OTC and RX because the growth percentages were very different. Sometimes International was growing 80% and DAG was growing 10%, for example. And if you then have a different market, you can have quite a significant impact of mix and the same goes for OTC and RX. In this case, because RX was almost growing as fast as non-RX, DAG was almost the same. Phamacy Unsp as international was in the end, there was no impact for mix in countries and in OTC and in RX. If you then go to your probably the background Phamacy Unsp and then I'm actually reiterating what I was just saying to one of the other questions that have been asked. It is the reflection that we at Shop Appetek continuously try to optimize our assortment. more assortment, the relevant assortment, giving the right price incentives to the right customers, giving them not to other customers, focusing on existing customers and the loyalty. And in that whole mix that we are doing, we have been able to increase the profitability. So all in all, in selling our products that we were selling in quarter one, we did so at more than a one percentage point higher gross profit margin than we did last year.

Okay, impressive. The second one is on the selling and distribution cost in the international segment. It came down significantly versus the past from clearly above 30% now to 27% in terms of revenues. At the same time, the growth was less pronounced coming down from also higher rates in the past of clearly above, let's say, 30%, not last year, but the years before, down to 18%. Obviously, the two lines, they relate to each other. Can you tell us what's the strategy there and what we should expect going forward?

Yeah. Yeah. International are still of the magnitude that a change can lead quite easily to a quite significant change in the percentages. The numbers are smaller than they are in our DAG segment. So sometimes the changes in the percentages are more pronounced, but still there is a story behind what you are asking for. In International, it is clearly Phamacy Unsp & Adr With growth, it's also more the fact that we are getting there to more significant numbers. So it's more difficult to grow. Let's say two years ago, the segment was still significantly smaller than it is now. It's now a clear 20% of our total business. And it's not like we say we save there in order to get better margins. And that's why we reduce our growth in all of our seven countries that we are active. We have a market-leading position, or we have the ambition to get to a market-leading position. In all our countries, we don't see a slowdown of the shift from off to online. So we will continue to work as we always work on having those leading or getting towards a leading position, number one or two in a country. And that is the same strategy we also have in international. That did not change. Phamacy Unsp & Adr So there we were a little bit more careful, a little bit more cost and a little bit lower growth. And now you really see, as I also commented as shop apotheker in the trading update, that actually throughout quarter one, we already saw an improvement there. So that's some color I can give you on those market developments there. Our strategy is unchanged. What you're seeing is scale and efficiency that we are getting increasingly in those countries.

Okay, thank you. But if I may follow up on this one, I mean that the growth at 18 and a half percent was really basically, let's say, below what you've shown in the past. Now you mentioned the base of basically the scale of the operations, the base effect. Still, we're talking about, you know, very small sales, given the number of countries you book in this segment. And you grow much faster in Germany and Phamacy Unsp the rest of the DOH area. So can we expect that this segment is basically going to outgrow the DOH segment, excluding Oryx, or do you think this is going to grow in line with DOH going forward?

We give only guidance on growth as a total company and not on the segments. Phamacy Unsp but in this case I can give some color here if you look at growth as a percentage so the percentage growth of course that can fluctuate a certain period for example quarter one last year international was very strong perhaps that was a little bit less strong at the moment there but in the longer term the growth percentage Phamacy Unsp & Adr will, in the long run, in the mid-term, will be higher in international than it will be in DAG. And sometimes not, and sometimes yes. But if you take out the fluctuations, the growth percentage is more likely to be higher in international than it is in DAG.

Thank you.

You're welcome.

So this concludes our Q&A session, and I hand back to Jasper Enhals for closing comments.

Well, thanks very much, everybody. And we're exactly on time. We're saving ourselves four minutes. Thanks a lot for all your attention today and the questions. And that's it. I would like to end with what I started. Thank everybody at Shop Apotheke for working so dedicated and motivated every day Phamacy Unsp & Adr