Redcare Phamacy Unsp/Adr

Thank you very much and good morning to everybody and a very warm welcome from our side. Let's have a look into the agenda of today. First of all, we would like to talk about financial performance, then Rx and regulatory updates, and then guidance. If we start with the financial performance, let's look into the highlights of the Q1 of 2026. Our revenues are 18% year over year up, We show strength in both segments with 19% for DACH and 16% for international. Our active customer base reached 14.2 million, up 1.1 million year over year. And also our average basket size is up 9% year over year. Non-Rx revenue up 10% to 533 million. And then that's important and we will talk about this later. Growth in Germany accelerated from 5% in the Q4 of last year to 9% in Q1. Group Rx revenues are up 36% and in Germany 55% to 168 million. And also the ERX NPS further increased from 73 in Q4 of last year to now 76 in Q1 2026. Our adjusted EBITDA margin improved 0.4 percentage points year over year, reaching now 1.7%. Here we are fully on track to achieve our full year guidance. If we look into the segments, again, same number but some more details, 19.1% in the DACH segment, driven by 35.5% Rx and 8.1% non-Rx. Whereas in the international segment, we have 15.7% growth. Let us have now a more detailed look into the German market. Good news, overall we see a strong rebound in the German non-RX business. As explained in the March earnings call, we had two main reasons for the low growth in Q4 of last year. First of all, the very strong basis in Q4 of 24 due to the branding and marketing push and also softer markets. In Q1 of this year, we see an acceleration from 5% to 9% and an even further acceleration in April to 11%. Very good news. Main reason for the turnaround are adjustments in our marketing mix, plus some improvements in the still soft market environment in March. Having said this, I would like to hand over to Henrik.

Thank you, Olaf, and a very warm welcome as well from my side. So as Olaf showed, we had a very good start into 2026. We have been able to compensate or more than compensate the year-over-year decrease in gross margin by scaling and optimizing our business. We have increased in Q1 our adjusted EBITDA by 58% year-over-year. This compares to an implicit guidance if you combine the revenue guidance and the margin guidance of about 50% year-over-year for the full year. At the same time, we have increased our EBITDA margin by 0.4 percentage points year over year. Obviously, our full year guidance is at least 5% such points of margin improvement. So this could be perceived as that we would not be on track for our profitability objective, but I will show in the following slides why we are very confident to be able to achieve our guidance on all metrics. So let's start with gross margin. Our gross margin is mostly driven by margin compression in the non-AX business. This is due to competition in an overall soft market environment. However, the story has changed during Q1. What we saw in the first half of Q1 was that there were still soft market environments and pricing pressure, and in the second half, We have seen stronger demand and we were able to increase our prices and hence our margins. I want to underscore that we have not achieved the top-line acceleration in DE by reducing prices. We will continue to optimize our pricing and we do this increasingly with the help of AI. Please note that until Q4, we will be lapping prior year periods without the RX bonus scheme in place. This adds to the gross margin dilution due to the increasing share of Rx in our revenue mix. An important call out on this slide is the headwind from retail media, the minus 0.5 percentage points that you see here. Our high margin retail media business did not have a good start. The start was soft as we struggled to deliver all scheduled campaigns in time to recognize the revenue. So this was despite an actually strong order intake for retail media. We consider this largely a one-off effect that we will catch up upon during the rest of the year. Moving to SDNA. Our selling distribution and administration expenses in percentage of revenues have decreased by 2.8 percentage points year-over-year. We have reduced our marketing expenses significantly, especially for brand and TV. We will continue with our strategy to use the RX bonus as our best lever to attract and retain RX customers. We still do TV, but at a lower level, and we invest instead in more targeted online campaigns. The operation scaling, the minus 0.8 or 0.8 percentage points improvement that you see on this chart have two drivers. I want to call this out because it's important. 50% of this improvement is the real scaling, that is lower cost per order. And then the other half is mostly coming from a mix effect. So a higher share of our X orders, which have a higher basket value and therefore a lower cost rate. You see as well an 0.5 percentage points headwind and other mix, and about half of this headwind is related to IT. We continue to invest in IT, We want to reduce our tech debt and we need to enable scaling by automation and AI. We are committed to building a strong business for the long term and we are not optimizing for short term profitability. Let's look at the business by segment. In DACH, you can see that we have, whilst we grew top line by 19% year over year, we have achieved strong growth of our X business in Germany and Switzerland and despite Of that, we have an improvement of 0.8 percentage points in our EBITDA margin. So despite the strong growth of the low margin business, we have seen a significant scaling effect, increasing 0.8 percentage points. So this shows how our business can scale when we optimize marketing mix and when we leverage our increasingly efficient operations. Next slide, please. In international, we didn't have a good start into 2026. and the international performance is therefore weighing on our Q1 profitability overall. The good news is that this is mostly driven by two one-time effects. So first, we tested higher prices in Q1 2025, especially in Belgium, and then in Q2 2025, we reduced these prices again. So this will going forward not be an ongoing lapping effect. Secondly, the delay in the delivery of advertising campaigns that I mentioned above was especially concentrated in international, and this as well reduced our gross profit margin. So without these two effects, we would actually have been breaking even in international already in Q1, and therefore we continue to target break even for international for the full year 2026. Let's go back to group level. So if we combine the 0.8 percentage points improvement in DACH and the 1.4% deterioration in international, we end up at only 0.4 percentage points improvement on group level. But as I said, this is fully on track with seasonality, our plans. And if you remove the one-off effects in international, our group margin would actually have been at 2% in Q1. Let's move to cash flow. To better reflect our free cash flow, we have split in this chart our financing cash flow into two pieces. Operational financing and what I call here for lack of a better word, pure financing. Both are classified in IFS as financing, but they are of different nature. So operational financing is related to leasing buildings and to customer payments that create as well costs that are categorized under financing costs. The pure financing costs here are completely unrelated from operations and in this quarter are driven by the redemption of our old convertible bond. So what you can see here is that our operational free cash flow, according to this definition, has been only slightly negative in Q1 and shows a significant improvement quarter over quarter. With this, I hand it back to Olaf for an update on our Rx business and the regulatory environment. Thank you very much.

So let's start with the key metrics of our RX business in Germany, which we continue to improve. I mean, first of all, the average basket size went up. If you look into Q1 of last year compared to Q1 of this year, from 113 to 135. And that is really driven by higher ASP, but also by more RX units in the baskets. and also more non-Rx units in the baskets. This you can also see in our mixed order rate went up from 36% to 42%. And what we are really happy about is the net promoter score because that's the direct feedback from our customers. We significantly improved from 58 in Q1 of last year to 76 in Q1 of this year. And this shows, I mean, we have really developed a very good value proposition towards our customers and is also recognized by our customers. Our customers are happy customers and therefore returning customers. So overall, very good development. If we go to the next slide, you can see there's still one open topic, I would call it that way, and that is the number of new customers and the development of our active RX customers, which is still a topic We have to solve. If you look into this one, you can see the development from the introduction of the e-script. At the beginning of 2024, we are steadily adding active Rx customers. But the main reason why the number is not growing faster is because we somehow struggled to increase the number of new customers per quarter. The new customers we acquire show a great quality. in terms of second order rate, frequency, AOV, but we are simply not adding enough new customers at acceptable cost to be able to further accelerate the growth. But the good news is within the next 12 months, additional redemption options and levels will go live. First of all, the introduction of the digital health ID based on POP will allow a fully digital journey on top of the existing EGK physical card solution. And next, the EU Digital Identity Wallet will be introduced beginning of 2027, which offers another digital way to redeem scripts. And then on top, doctors from July 2026 already on can switch for repeat prescriptions from a quarterly to a half year cycle for stable chronic patients having only one disease. This will make the journey for those patients completely digital. They don't even have to go to the doctor's office. They can order repeat scripts from home via an online pharmacy. So very good development ahead of us. But the main task remains, we need to convince more new customers about this product and the solution. And again, those customers who have the experience give us a very high NPS on our product. On the next slide, we would like to talk a little bit about regulatory and to give you an update on that. In Germany, the healthcare sector is under cross-pressure and subject to reforms. First of all, a fundamental healthcare reform, including budget cuts impacting all major stakeholders like doctors, hospitals, pharmacies, but also pharma and patients is underway. To us, most relevant are higher patient co-payments, but also higher pharmacy rebates towards payers. Secondly, the legislative process for the increase of the Fixum, known as script-based remuneration, as agreed upon in the coalition agreement has not yet been started. So we need to see how this develops over time. And additionally, a pharmacy reform is underway. This pharmacy reform entails, next to many other elements, a draft regulation on temperature control on the last mile, which is relevant to our online pharmacy business. The current draft wants to extend the sole responsibility of the pharmacist for the quality of the products, including temperature, on the last mile also to the logistics providers. From our perspective, this makes no sense at all, since we have successfully managed this topic in the last 25 years. Good news is also the EU Commission shares our view and has issued a detailed opinion on this, the strongest formal signal possible. The Commission does not see any necessity for such a regulation at all. As a result, Germany will have to adopt the current draft regulation to avoid a potential infringement procedure. Overall, please keep in mind that all of the mentioned reforms are still subject to change in the legislative process. So therefore, from our perspective, it does not make a lot of sense to speculate about potential outcomes. We will give you an update once we have more insights or final situations. Having said this, I would like to turn over to Henrik. Thank you, Olaf.