Redcare Phamacy Unsp/Adr

And gentlemen, welcome to the Red Care Q1 2025 earnings release analyst and investor call. I'm Moritz, the call's call operator. I would like to remind you that all participants will be in a listen-only mode and the conference has been recorded. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. Your presenters today are CEO Olaf Heinrich and CFO Jasper Enhorst. At this time, it's a pleasure to hand over to Monika Ambrosi. Please go ahead.

Good morning. This is just a reminder that if you should have an issue accessing the webcast, you should please go to our website to find the link under the events and publications page and the webcast recording. Thank you. Over to Olaf.

Yes, thank you very much, Monika, and hello to everybody. Very warm welcome from my side. Sorry if there are any inconvenience with the technology, but I think especially with this hint from Monika that it should work out for all of you. So again, very sorry for that. Let's have a look into the agenda of today. So first, we would like to talk about financial performance, then about a general update, and then by the end of the presentation briefly touch on outlook and guidance 2025. So let's start with the financial performance first. We had a successful start with continued fast growth into 2025. Group sales are up 28% and it's fully organic and driven by ERX reaching 717 million in Q1 of this year. If we look into the different categories, Non-Rx, strong growth at 20%. And if we look into the Rx, Rx in Germany increased 191% compared to last year. But even quarter over quarter, we see a double digit growth. So from Q4 of last year into Q1 of this year. And we will talk about the market share development later in the presentation. We also are happy to report a return to the positive EBITDA, reaching 1.3% in Q1 of this year. That's a two percentage point swing from the last quarter of last year. And it's driven really by ongoing operational strength, including Rx growth. And on the other hand, we continue to invest into the ERX opportunity. We are also happy to confirm our full year guidance 2025 on all elements. If we can go to the next slide, what you can see here is our typical split to national and international. Again, it's a growth of 28% on group level. And for the first time since a couple of quarters, if you just look from a pure organic way, we are growing faster in DACH than we do in international. So it's a 28.5% in DACH and 26.2% in international. And again, it's driven by Rx. only into the non-Rx. International still is in the lead with a 26.2%. And then we see DACH at 17.4%. If we go to the next slide, you see that we have very good, continue to have a great development on our customer base. So we added another 0.6 million active customers in the first quarter of this year, primarily driven by ERX. ending up now on 13.1 million active customers. If we look into the NPS, we can see that it's at 64. We consider this a strong number. I mean, comparing this also to other businesses and industries. But nevertheless, it came down from the previous level of 70 in the first quarter of last year. And there are two main reasons for that. First of all, We're adding a lot of new customers to our business. And new customers usually with the first order, they have a lower NPS. And then because of having more new customers, it's simply a structural effect, which we can see here. And the other one is that we are adding a lot of new customers in our relatively new business area. So we are talking about Rx and the marketplace. And this is a new journey. also to our customers, but also to us. And here we see there is great opportunity because what we can see is if it works all well, especially on the Rx side, we see a potential for great NPS. But on the other hand, we also see that there are some areas for improvement. So that is what we are currently working on. So therefore, we are confident that we can bring this level up to previous levels. Before we go to the next, if you can go back one slide, because there's one great message missing, and that is on the basket development. So if you look into the baskets, you can see compared to last year, really the positive impact, one of the positive impacts of the Rx business. The basket is significantly up, and as you all know, a high basket is one of the success drivers in an online business. Monika, if you now can please go to the next slide. On the next slide, this is our typical audit slide and what you can see now, we have a new high at 11.5 million orders in the first quarter of 2025. Most important to us is that we achieved the step up, which we always need at the beginning of the year. And it's a clear confirmation of, again, that all of the customers we acquired in the previous years and quarters, I mean, they have a good quality because they are returning. And at the same time, we also succeeded with our new customer acquisition in Q1. This all together leads to the 11.5 million orders. So we are really happy about that we did this, that we did this lift up. It's a very good basis into 2025 and also helps us in achieving our guidance. You can see that also our share of repeat orders is at 89%. So again, also confirms Phamacy Unsp

The first three columns is a comparison to the last quarter. That's an improvement of in total two percentage points. Our sales were 717 million in total, which was 6% higher than our prior record sales that we had in quarter four. With the higher sales, we at the same time realized one percentage point higher gross profit margin, later more on that, Better selling and distribution by 0.8% and also lower overhead as a percentage of sales. Adding everything up, there is an improvement from minus 0.7 in Q4 with two percentage points to 1.3% in the current quarter. Vendee of the year already at the first bullet Organic growth was 28% in Q1 this year, year over year. The gross profit margin was more or less stable at minus 0.1 percentage points, an increase of selling and distribution by 1 percentage point, and here actually an even larger improvement of overhead, which is growing at a slower pace than our total sales of 0.2 percentage point positive impact. Adding this all together, our margin at 1.3% this quarter was 0.8% lower than last year. Seeing our fast growth, you actually see that in absolute terms, our adjusted EBDA was only lower 3 million compared to last year, 12 million in 2024, 9 million this year. And on the next slide, here's some more color on the margins. Q4. You see that the gross profit margin increased with one percentage point quarter over quarter and that actually despite the fact that generally our gross profit margins are somewhat softer in the first quarter because of the seasonality with more OTC products selling in Q1. So despite this impact and improvement of one percentage point, there was nothing related to price increases or anything else we did there to was fully because of positive country mix that we are seeing and positive seasonality that we have in certain commercial income streams. And thirdly, also because of an increase of our platform sales. So compared to last quarter, one percentage point improvement in our gross profit margin. On the right side of the slide, the Apple to Apple comparison, namely year over year. And there you see that the margin is roughly stable and the two blocks in the middle gave the main explanation. On one hand, you see the impact of the increasing share of our X in Germany, but this is entirely offset by positive country mix for all those businesses that we have excluding our X in Germany. So that's more or less stable than the very small blocks number one and number four that you're seeing. The first one, the product margin, including mix. You basically see that we continue to realize underlying purchasing improvements across our portfolio, but a large part of that we give to our customers in good pricing. And in other, you also here see, so not only quarter over quarter, but also year over year, a driver being more platform sales. All in all, margins well under control and underlying a continuation of improvements. The next slide is the selling distribution and administrative expenses as a percentage of sales. Also here I start at the left, which is quarter four to quarter one, and you basically see that there's close to a of the cost performance. And actually underlying, there was a significantly greater improvement than that you're seeing here. But here in this case, the country mix is having a negative impact. Now the underlying improvements here was twofold. It was clearly a more effective marketing as a percentage of sales that we have been seeing quarter over quarter But at the same time, also here, we see the impact of scale. For example, what you mentioned already, the improvement of the average basket is helping with the quarter-over-quarter and of the year-over-year, driven by the success of our X. And you also see that our overhead is leveraging the vast sales growth. Here, the Apple-to-Apple tool, namely the year-over-year increase, it's up. the S&D as a percentage of sales versus the same quarter of last year by 0.8 percentage points. And actually there's only a part of it related to more marketing for our X because last year we also did more ERX marketing in the first quarter of the year and underlying the increase in marketing is actually fully offset by increased productivity that we realized increased average order value increased sale, for example, particularly in overhead. The reason for the increase here is actually only the country mix. What does it mean for our cash flow? As you're used to in our company, we generally have a positive cash flow in the first quarter of the year. And basically looking at this, this is to me a nice, clear and solid picture in all the elements. And I will discuss them now. So we started the year on the consolidated level with a little bit less than 180 million of cash. We realised a positive operating income, which is reflected in the operating inflow before changes in working capital of 7 million. Then you see a 30 million increase because of favourable working capital movements. largely seasonality, but underlying, you also see that our increase of our business and our improved terms are also giving a benefit, but a large part is seasonality in this case. And then investments up from the customary, roughly, ballpark of investments that you normally see in a quarter, which is, I would say, of course, related to the start of our ERIX automation project that you're seeing here. Then Financing, that's the only one which is a little bit more complex to explain. It's minus 10, where you perhaps would have expected roughly a minus 5, being our leases and then interest payments. What you see here, we as a company have to consolidate Mediservice because of IFRS. So the numbers are fully consolidated because of the good cash generation of Mediservice. There was a 10 million payout of dividend. to the shareholders there. In this case, 59% we as RedCare received and 49% our partner in Mediservice, Galenica. And because this is a consolidated picture here, the payment to Galenica or by Mediservice is reflected as a minus 5 million. All in all, we ended slightly above the 180 million at the end of the quarter. With that,

Thank you very much. Let's have a look into the general update. So we would like to talk briefly about the RX and then later Jasper will give some information on the convertible bond. But let's start with RX first. So what you can see here is the development of our market share, the monthly average and ending up in the last month of Q1. So that's in the March. 0.87% market share. So there are three messages in this slide. So first of all, I mean, we continue to grow quarter over quarter, now reaching the 0.87%. Secondly, there's a seasonality also in it. So you can clearly see it in this little dip in Q4, which is actually the month of December. So month of December started off very well, but the closer we get to the Christmas and holidays, the fewer sales we saw coming in. So it's clearly a pattern on seasonality. But then again, in January, we were back on the high levels of November, and then we continued to grow. So there is some kind of seasonality. And for those of you who have followed us also last year, we saw a similar pattern in summer of last year. The third message is, of course, I mean, with this ongoing growth, we show a path to even higher levels. And you know, in order to reach our guidance, we need on average, on average market share above 0.91% market share. And I think you can clearly show that we are on our way to that. So overall very good development on the market share. If we go to the next slide, this is a slide we introduced in October of last year already the first time. So, and it's just a confirmation of We saw we are successfully transforming our ERX business into an app-only business. So now we have reached 95% of our ERX orders placed via the app. Only minor pieces are on, let's say, we are still getting some kind of mail coming in either being Paperscript or QR code, or there's even also a small, very small portion on the Gammatic app. But overall, clearly developing into an app only business using Cardlink. Of course, the advantages of this one are pretty clear. If we look from a customer perspective, we really have this one-stop pharmacy at your fingertip. So all of the services are available. For example, availability checks, exchange of products, pricing, payment, everything you can imagine and it's secondly a fully digital journey so especially in the case of Rx you don't need a printout from the doctor you can simply use your EGK card in a lot of cases we see this with our chronically ill patients for a refill they even don't go to the doctor they call the doctor the doctor issues the script the script and the key for the script is on the card and so they can really have a fully digital journey not going to the doctor not seeing a physical pharmacy And then, of course, it's a personalized one-on-one communication. So we can really then give insights into, for example, pharmaceutical checks, but also order status. So there's a lot of things we can use, we can personalize, and customers are using that with us. And then, of course, from a Retka perspective, there are also advantages. We know once customers are using the app, we have a higher customer loyalty. And then, of course, also we have reduced marketing costs after the initial app installments. So that is also from a business model perspective helpful on our side. What I think is really important is that we also have the ability to have more agility in the product development. So we are working a lot on the product itself. So we have a lot of releases which we bring into the market. So sometimes it's only small improvements, but we are improving the product day by day. Step by step and this is an ongoing process and of course here app helps a lot. If we go to the next slide, this is a slide we reintroduced in March of this year showing you the development of the different cohorts and again we are comparing here non-Rx cohorts to Rx cohorts and the message is still the same than last time. We have great non-Rx cohorts. You can see the development over time, but we have even stronger Rx cohorts. So it's a continuation of what we saw last time. The gap has now increased on the sales side. It's a factor of 4.7 and on the cross-margin side is a factor of 2.8. And for those of you who are not familiar with it, what are we looking at here? So we are looking into the cohorts we generated in Q1 of last year. So we took all of the non-RX new customers, and then we looked into the follow-up performance of those customers. And you can see Q0 here is really then the first quarter of last year. And then we look quarter after quarter, how is this cohort developing? And I mean, the driver for that development, of course, is returning customers, so activation code, order frequency, basket values. Those are the drivers. And then we looked also same thing on the RX cohort. So all of the new customers we generated last year in Q1 and we looked into the follow-up performance. So it's a similar picture from last time and it confirms the story. Non-RX great, RX even better. Having said this, I would like to hand over to Jasper again.

Yeah, okay, I take it over and we are going to the convertible bot because right after Transactions, that is the placement of a new convertible bond. And with those proceeds at the same time, we have been buying back the largest part, more than 70% of our existing convertible bonds. We are very happy with the terms that we achieved and we are also very happy that we executed the transaction. For example, this morning you again see how volatile the markets are in total and we have now security for the many years to come. The existing bond that we had, we launched in January 2021. It had a maturity of seven years until 2028, but also an option right for the investors. early 2026. And that's why we wanted to roll it forward. And we want to do so, of course, a little bit ahead of the actual timing to not be in any stress or haste situation. So basically, we rolled forward with the new convertible bond, our debt maturity profile level that we had. We upsized it a little bit because when we placed the bond in 2021, actually, our company was then reaching one billion sales that year. As you know, we are now an annualized level of around 3 billion of sales. We have an internal target liquidity and liquidity that also if something happens that we are a little bit robust that we also have a flexibility to act if something appears that we can invest in further automation and in AI and actually with the growing business, it is important to realize relatively large with the seasonality towards the end of the year. So being a 3 billion company with the ambition for much more instead of a 1 billion company is requiring a higher target liquidity level, which we of course also in part have with revolvers we have with banks, but also it's always giving a stable feeling to have some of that at your direct access in all situations. The new convertible bond is also a seven-year put five. The conversion price was 174, which we consider a very good one. It was precisely 42.5% premium, but actually because of the premium redemption, so at the end of the convertible bond of 110%, the effective conversion price is 194 euros that we have in total. The annual coupon that we are paying is is 1.75, so 1.75%. So today, after having executed the transaction, we rolled forward our debt maturity. We have reached our target liquidity. And with that, we can look with a robust and stable feeling towards further executing our strategy. With that, we go to the outlook and guidance, though actually, A lot of work still needs to be done, but we started the year fully in line with our internal expectations. Total sales growth in excess of 25%, 25 versus 24. Our X in Germany in excess of 0.5 billion, which we just discussed. We started the year with a year-over-year increase of 191%. Of course, it was relatively low last year. also take into account for quarter four. We had the benefit in quarter one from having no Easter this year, but last year we had. We start now Q2 with having Easter in April. That could have some impact because you indicated already the impact of the holidays, but it's not impacting the underlying trend, of course, but that could have some impact in April and in Q2. We are on track there. Also the non-Rigs. which is actually nice risk mitigation for the total company because it's driven by all our seven countries is continuing to grow nicely double ditch and we start at around 20% for the full year we expect it to be in excess of 18% and any adjusted EBDA north of 2% between two and two and a half percent for the full year we reiterate today. With that, So is there any question, Monica or operator?

Ladies and gentlemen, at this time we will begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. In the interest of time, please limit yourself to two questions. Anyone with a question may press star and one at this time. One moment for the first question, please. And the first question comes from Christopher Yonen from HSBC. Please go ahead.

Yes, thanks for taking my questions. I would just like to pick your brain on the coalition paper and the proposed fixum increase in Rx. We know that your average Rx basket is, maybe from a composition perspective, slightly higher compared to what your main competitor has. Maybe you can give us a little bit of color how many packages you have on average, whether it's slightly below two or slightly above two. Maybe that already would help. Just trying to understand the impact this will have on the contribution margin. Assuming that this will go through, There seems to be a little bit of doubt at the moment, but let's see. If this goes through, can you, A, confirm that you have zero contribution from that in your current guidance? And, B, could you tell us about, if this were to come through still in 2025, what would you do with the money? Should we expect the incremental margin to basically fall through to the bottom line, or could there be the possibility of some incremental investment? How do you basically see that? Thank you.

Should I give it a try? I mean, you saw the development in the morning. So yes, there's a coalition agreement, but we really shouldn't really not speculate too much about the outcome of this coalition agreement in regards to our business. But what is in the coalition agreement, and you were talking about the Rx increase in remuneration, I mean, We don't really want to give some more details into our RX business and the baskets. The only thing I can say is, I mean, you know that you talked about the size of our RX basket. And if you look into just what happens in the market on average, yeah, I mean, this is public information. You can see that probably there's a certain value of an RX item. You can find this in public information and then If you then think at the same time that we are operating in a mass market, so that means we are by nature should be close to whatever the market average looks like. And then you can do a backwards calculation. But of course, you also need to make an assumption on the share of OTC in our mixed baskets. But I think that is probably the only thing I can say to that. We don't know when. this coalition will be in place and what this actually means to what has been written down on the pharmacy reimbursement. There could potentially be an impact for the end of this year, but could also maybe be the case only beginning of next year. That is, we can really not tell you anything more about that. And you know the way it works. There are so many things in a coalition agreement and then it depends on where the individual minister starts with, and we have no view into that one. So therefore, really difficult to answer, to give you some more details on your question. Jasper, anything else from your side?

No, fully clear. Yeah, fully clear what you're saying. And by definition, our guidance did not include this, in fact. Yeah, so guidance did not include it, and yeah, that's it.

Thank you very much.

And the next question comes from Christian Saales from Hauken Aufheuser. Please go ahead.

Hey, good morning, everyone. Thanks for taking my questions. I've got two, please. The first is on the marketing efficiency. So if I look at my modeling for the selling and distribution expenses, and if I let the fulfillment costs per order slightly increasing over the last three quarters, Phamacy Unsp & Adr Phamacy Unsp & Adr may be jeopardizing your 500 million RX revenue target. So that's the first question.

Okay. Let's give the first start. Good morning also, Christian. A little bit contrary to what you're saying, apart without disclosing our marketing tactics, and we also want to be agile there always, as you know, so I don't want to make too many forward-looking statements. Phamacy Unsp & Adr is the only relevant color that we can add there.

So by nature and by the model of the Rx customers, the marketing percentage of sales has to come down. That is the development we see and that is why we also feel comfortable in terms of because you asked for how to reach the guidance. That's why we feel comfortable that we are on a good way to reach our guidance. And at the same time, you saw The second question would be on the ITER shift effect. There was a positive shift effect in Q1 from ITER being in Q2 instead of Q1.

So probably your RX market share figure in April has been a little bit lower than in March, I could imagine. So could you provide any indication whether the drop is similar to the drop we've seen in December around Christmas? Or should it be rather more normalized somewhere in between?

Thanks. So, you know, I mean, we decided now to give the On a monthly basis, let's say market share development. So over the last year and also now for the first quarter of this year. But at the same time, we said we don't want to give any forward looking statements. So that's the reason why we don't have the April in it. And therefore, because of that, now we really do not want to look into the April numbers. I think it's fair to say that there is seasonality. And we mentioned this over Christmas. We saw this last year in summer. And you also see something like this, of course, happening over Easter. So that's reality. And therefore, of course, you would probably see some of the developments you mentioned in April. Nevertheless, we are talking about seasonality. The overall trend, which you can see if you draw a line month by month, is clearly showing Only into one direction is the growth direction.

Thanks so much, guys. All the best.

And the next question. Thanks. The next question comes from Volker Bosse from Baader Bank. Please go ahead.

Hello, Volker Bosse, Baader Bank. Thanks for taking my question. I would be interested in the cross-selling activities between ARICs and non-ARICs products. So perhaps you can give us a bit of indication Phamacy Unsp& How do you see the cross selling progressing? How many Eric's customers put non Eric's products into the past that's also and how is that development developing? Do you see any trend here in that regard? And a second question is, yes, I know it's very small, the private label business, but perhaps you can give us an update on how many products are on private label Phamacy Unsp&Adr Phamacy Unsp&Adr Phamacy Unsp&Adr Phamacy Unsp&Adr

We do not want to give you any details into the composition of the Rx basket, not the number of Rx items in it, but also not the OTC part. And what we can say, and I think I said this last time as well, if you compare the situation to a normal brick-and-mortar pharmacy, usually people, if they enter a brick-and-mortar pharmacy, they receive a script, and then at the same time they purchase at a very high ratio Some OTC or some BTC products. And of course, our aim is to reach at least the same level and we are not completely there. So there is still, I would say, some room for improvement. On the other hand, please keep in mind, we do not want to push people into buying OTC because OTC, this is actually a healthcare product. So it is really the choice of the customer and therefore we are offering All of our product ranges and we see a development over time, but we are not at the level which is comparable from a brick and mortar situation. That's the only thing we can say. And sorry for not being able to give you more details on that one. On the second question, I would hand this over to Jasper.

Yeah. Hi, morning, Volker. On the private label, which we internally tend to name our own brands, we actually have four. It's NuFree. Phamacy Unsp & Adr Thank you very much and all the best.

And the next question comes from Olivia Calvet from UBS. Please go ahead.

Yes, thanks. Good morning, Olaf and Jasper. Thanks for taking my questions. The first one just on Rx. In terms of the Rx customer ads in the quarter, I know you haven't disclosed it this time around. But would it be fair to say that of the roughly 600,000 customers you added in the quarter, about half were Rx customers like you did in Q3 and Q4 last year? And you said also in an earlier question that marketing is not like a transaction base in Rx. Could you just confirm that all of the sort of 10 euro card link fee that you give is not included in your marketing spend? And the second question would be on the marketplace. You know, if you could clarify a little bit your comments on Net Promoter Score. We're still talking about mostly a non-Rx business, right? And if you could maybe give us a sense of the size and whether, I mean, it is not included in the active customers numbers, right?

First question. Yep, Rx customers.

I mean we decided not to release the numbers so we did this for the full year where we showed the development over last year and then decided let's not do this on a quarterly basis but I think and that's also what I presented earlier when I said we have 0.6 million active customers added primarily driven by ERX so I think it's fair to confirm at least what you say that at least half of it or something around that area is driven by RX. But we do not want to release those numbers on a quarterly basis. But again, we said primarily driven by ERX, so then that's the case. So that's, I think, for the market share.

The second one was on marketing. And what I can confirm is that if there is a voucher, In our case, that is, of course, it's also a sort of marketing, but it's our gross profit instead of in our marketing that we have there in total. And to place everything in the right context, what Olav and I just said about the awareness campaigns, that's, of course, a part of the marketing. But I think your question was related to the vouchers, so that's there.

On the NPS? Maybe I can give it a try on the NPS. So, yes, when we look into the marketplace, to our customers, but also to us. It's a relatively new journey. I mean, we have been in business for 20 years on the non-RX business. To some part, when we talk about a paper business also on RX, but marketplace is relatively new. And of course, I mean, we are learning as well as our customers are learning. So therefore, the journey from a customer perspective is our intention is that it's a one-stop kind of thing. And that is also the experience when you talk about being on the same front end, having only one payment and those kinds of things. But for example, because you asked that question on the marketplace and because by nature of the setup of the marketplace, we have two parcels being delivered to the customer. And here, for example, we experienced that customers expected one and received two parcels. And probably what it looks like, our communication in the order process Phamacy Unsp That is one of the examples, and there are a couple of more. But again, I mean, we localize those. We have a team sitting on that, really looking into all of the feedback. And of course, our ambition is also to have our marketplace level on the same level where we have our core business. And what I also said is, if it works out well and if we communicate well, we see on Rx as well as on marketplace also potential for very high customer satisfaction.

Okay, thanks.

And the next question comes from Gerhard Orgonas from Berenberg. Please go ahead.

Good morning. I also have two questions, please. The first one, could you remind us about the size and the geographic exposure of your platform business? How important is this right now? And the second one is about the country mix. You've alluded quite a lot about it. There was a nice increase or improvement in profitability in international. What are the countries that are higher margin and why?

We don't disclose yet the full size of our marketplace business that we're doing, but we started close to four years ago. to Austria and actually at the end of last year, we also expanded it to both Italy and in Belgium. So we are in four countries. We are having a marketplace at the moment and not surprisingly in those countries where we have market leading strong market leading positions where we actually see that the benefit of being such a destination category for health and pharmacy related products is leading to a win-win where we can sell more to the Phamacy in total. You were asking for the size, but we don't disclose that yet, but it has become a relatively sizeable element where there is the direct impact of the sales and actually also indirect. We see it's also leading to increased traffic to all our websites with a nice cross-fertilization.

Maybe to add to that, when we talk, when we look into the SKUs, I think we are talking about 100,000 of SKUs we are adding via the marketplace. So it's relevant. And as you said, in various countries. So it's developing very well. But again, we do not want to release any more details on that one.

I mentioned it a little bit too much because mix what is mix exactly. But in this case, there is per country quite a difference between the gross profit margin and also S&D as a percentage of sales. Phamacy Unsp & Adr But we don't go any level deeper than the segments that we steer the business on and the segments that we report on. But I liked your remark at the end that you pointed out international. And indeed, in continuation of what we published also with the full-year earnings release and what we saw last year, there's a very significant increase in the margin in international. And we are rapidly approaching their break-even. We had that already before overhead, as we said last quarter, but now fully loaded, including overhead. I say it by heart, but I think last year Q1 it was minus 4.5% and it was now minus 0.9%. And that's fully loaded, including everything. So thanks for pointing that one out that we have. So on the country mix, there are relatively large differences per country, and that sometimes is leading for a bit more impact.

Okay, thanks.

Yeah, thanks.

And the next question comes from Martin Contessa from Jefferies. Please go ahead.

Yes, good morning. Thanks for taking the question. I take them one by one. The first one would be on your profitability. I think it was quite helpful that you gave us an indication that you would come up below the guided full year range of 2%. Could you also help us a little bit with the phasing going forward? Is it fair to assume that you're already bouncing back in the second quarter towards the range of two and two and a half percent? Or is this more second half story? And if so, can you please help us understand why?

Yeah, absolutely. Okay, one thing. We really have only a full year guidance and we gave this indication of Q1, but I don't want to go now to say something about Q2. We have a full year guidance of 2.5%, so that means that the remainder of the year will be stronger profitability than we had in Q1. Basically, three elements which structurally help and also should give comfort. First of all, Phamacy Unsp & Adr Number two is that a lot of marketing part of number one, B of number one, is that we tend to have a marketing agenda where we push more for new customers also in the first quarter of the year. And this means that the margin in Q1, like for example, you saw in 2023 is generally lower in Q1 than the remainder of the year. That's number one. Number two is basically that you will see an increasing impact of our efficiency and scale that we achieve continuously. So you will also see that throughout the year. And then number three, particularly what you already mentioned about the marketing also on our X, where you see that that is being leveraged by the base of loyal customers returning and having the same awareness marketing divided by more sales. So actually the sum What we are saying is that we will continue to execute our strategy, driving growth, always focus on efficiency and on scale to achieve that. But we're not going to do anything other different in how we approach our marketing strategy or how we balance sales and margins in total. We think with the continuation of what we're doing, we're very well on track Slightly ahead on track of internal planning with Q1, that's fair to say. So those are the elements. We will steer that it will be there. That's at the moment our expectation. And the last one is, of course, that you have also seen that, for example, the 23 or the start of 24, what our actually underlying business is doing in total. And that will be reflected on the surface again.

Not very clear, thanks. The second question would be maybe a bit more specific on the cash use of the incremental 75 million that you just raised. I understand this gives you a buffer or flexibility for your future growth, but can you be a bit more specific on how you're going to use this for the ramp up of RX? I understand that you need some 5% working capital for the RX growth. If I do the math and you're moving towards 500 million this year, Phamacy Unsp

Yeah, a lot of relevant elements of your question that we look at internally a lot. A part of that I will answer here in total. If you look back at the 225 million that we raised in 2021, then by the way, there was the expectation that RX would really be commendatory in the national standard. at the start of 2022. It took a little bit longer. But I think it's fair to say that we have carefully watched the money that we raised at that moment. We have a lot still on our balance sheet of the total 225 million that we raised. And we will do the same going forward with the money that we are raising now. It's not specifically meant for increased investments in ERIX, for example. That is not. It is the same. But what is more relevant is that what we were just saying is that we are a much larger company and we just need a different target liquidity that we have in total. It's also giving us the flexibility to, if we see good investment opportunity in automation or in AI to improve our efficiency, to act there. But it is about the exact proceeds We hope we don't need the cash, but you cannot predict the future. And the buffer, I don't know if I like the word, though content wise, it is the same as the stock liquidity that we have in total. We feel we have such a good strategy and such a great market opportunity in total, but you always need to repair the roof when the sun is shining and not when anything is happening, like it's raining. And also in this case, we are now in this status, we made a mix between really avoiding dilution and having too much cash, and at the same time having the right buffer for a company of our size. And that's what it is. And I don't know if you have anything to add there.

No, I mean, you know, we discussed this in length, the popping of it, and I think your answer is perfect.

And the next question comes from Jan Koch from Deutsche Bank. Please go ahead.

Hi, Olaf. Hi, Jasper. Thanks for taking my questions, and congrats on the strong results. I have two questions on your OTC business. I guess you have seen the news that pharmacies are no longer allowed to sell OTC products on Amazon due to data privacy concerns. Do you expect that this could be a tailwind for your OTC business over the coming months? Yeah, any color here would be helpful. And then secondly, you grew your non-RX business by 17% in the DAF region in Q1. But if I look at your web traffic, it didn't really grow much in Q1. Is that because the incremental growth in OGC in Germany is coming through your app instead of your website? And does this trend towards your app have any margin implications?

Let me try to answer the first one. Yes, we also read about the ruling on this Amazon data protection piece. But then there were also some articles out there saying that all of the, let's say, OTC online pharmacies are withdrawing from the marketplace at Amazon. Looking into that marketplace, there are still a couple of online pharmacies, also the large ones, offering OTC and BPC. So therefore, there's a topic out there. But so far, we haven't really seen that major players are withdrawing from that marketplace. So it might happen over time. We don't know. We don't know. It is also the individual strategy then of each online pharmacy, how they want to deal with this topic. So therefore, but again, I mean, the large players are still on it. So therefore in currently we don't we don't see any impact based on that. And the strategy going for the forward, the one of Amazon, how will they adopt or not? And what the individual pharmacies are going to do? We really don't know. So it's not in our calculation. And then the second question. Yes, of course. I mean, we showed you the development Phamacy Unsp&Adr Phamacy Unsp&Adr And we saw also within the last year and continuing into this year, a strong increase also of the share of orders being placed via our app. So therefore, just looking into the web traffic itself, as you already pointed out, is not the full story any longer. And we are doing this because we see a positive impact of this for our business and we will continue to push customers wherever possible, also on the non-Linux, into the app business.

OK, thank you. Thank you, Jan. Thanks. It's also fun, yeah.

And gentlemen, this was the last question. I would now like to turn the conference back over to Olaf Heinrich for any closing remarks.

Yes, again, first of all, sorry for those guys who experienced some difficulties getting into this call. Again, sorry for that. Shouldn't be the case. And besides that, I think we had a good presentation here and great questions. We really enjoyed it. Thank you much for all of the questions. And then we are looking forward to seeing you next time. Thank you very much.