Earnings Call: Q4 2020

Mar 3, 2021

Well, good morning, everybody. Jasper and I, we want to welcome all of you to the release of Shop Abertacker's full year 2020 financials. And of course, we also want to provide you with an outlook for the current year for 20 21. Before we get into the detail, over the last few months, I came to realize that some of you are not only closely monitoring how Shop A Boutique does and Shop A Boutique's numbers, but at least one person also seems to monitor the ties that I'm wearing. And I realized I was told that for the last two webcasts, I wore the same tie. So hopefully, you know, I'm responding to our investors' needs and I want to show a greater variety in the ties I'm wearing going forward. Well, as I already mentioned, this is the 3rd time we do the webcast from our new facility, our new headquarters, our new distribution center right here in 7M. As we said before, it's literally just a stone throw away from our old facility, even though this was within the boundaries of the city of Venlo. But compared to the last time we talked to you, I can assure you it's much busier here today because we are literally in the midst of transitioning our logistics activities from the old to the new facility. Before we jump into Taejian. Let me just take a step back and let me remind everybody what drives Shop A What gets us up in the morning and what gets us going? What is our mission? What is our ultimate aim? At the end of the day at Shop Abortaker. We want to make a meaningful contribution to enabling our customers to better manage their healthcare needs. Or as we stated here on the chart, we want to enable everyone to live the healthiest life possible. Well, with this, we have a busy agenda as we always do. We're probably going to take around 20 minutes go through everything that we have prepared for you. Jaspen and I were going to start by sharing with you the review of what happened last year, including the financials. And then we're going to shift gears and we're going to look forward towards 2021, even though we're already in 2021 talking about some of our key strategic initiatives. And of course, then Jasper is going to conclude by sharing with you the outlook, the financial outlook for 20 21. At the end, we're going to, of course, answer your questions. Once again, we don't have Simply at this point of time, we don't have the technical capability to entertain live audio questions. So we would ask you one more time to submit your questions by clicking on the question mark on your screen on the left hand side. And at the end of the meeting, we're going to answer as many questions as we possibly can in the time that's left. So again, talking about the highlights of 2020, I think all of you would agree with us that this 2020 was truly an extraordinary year, a year that we're not going to forget during our lifetime. Unfortunately, it looks like the corona pandemic is going to cover more than just a 12 month period. But at some point of time, this is also going to be behind us. We're all confident that we're on the right track. But before I talk to you about ShopUp Takers' accomplishments, because we're now talking to our shareholders and to other members of the financial community. Also want to one more time express our Yaspers and mine and management's deepest gratitude and appreciation to all of those who made the numbers that we have the privilege simply to share with you who make this possible. Of course, I'm talking about the teams and the employees Shop Abertaker across the value chain, across the location, across all the departments. Also for them, Last year wasn't an easy year, but because of their drive, their commitment, we were able to be there when our customers wanted us to be there for them. Well, again, shifting gears again, looking at the numbers, you're already familiar with the strong growth in the Q4, 38%. When you look at the whole year, it's pretty much the same picture. Shop Abertaker in 2020 compared to 2019 grew by a solid 38%. Our sales reached 968 €1,000,000 I don't want to steal just too much of your thunder, but I dare to say that our guidance will indicate that we are clearly going to cross the €1,000,000,000 threshold in 2021. Through our continued investments, almost continued investments in our brand and in customer acquisition. When I say almost continued, I'm we had a there was an exception in the second half of March and the first half of April last year when we reduced our online marketing to almost 0 at the start of the corona pandemic. But over the remainder of the year, we continue to invest. And as a result of this, we added 1,600,000 active customers to our customer base, which reached 6,300,000 unique active customers by the end of December. And needless to say that all of our growth last year was fully organic. The strong top line performance cascaded through our P and L and we ended the year. Across the year, we generated an adjusted EBITDA margin of 2.2%. Again, going back a year, At this time, we had guided towards a breakeven at the adjusted EBITDA level. So we clearly did better than our original guidance. And as Jasper had mentioned in previous earnings releases, even without the corona effect, which certainly contributed. But even without the corona effect, we would have generated a positive adjusted EBITDA margin last year. From my vantage point, even more impressive than the percentages are the sheer the plain euros. In 2019, we had an adjusted EBITDA loss of €13,500,000 Last year, we had a profit of almost €22,000,000 which translates into a year over year improvement of €35,000,000 Looking at operating cash flow, operating cash flow, even more impressive than improvement. We had a negative operating cash flow in 2019 of almost €31,000,000 In 2020, we had a positive operating cash flow, and Jasper is going to share more details, of almost €18,000,000 So an improvement. Operating cash flow improvement year over year by €48,000,000 And in parallel, we strengthened our balance sheet with 2 initiatives that Jasper led on behalf of Shop Aptaker. We retired. We did an early conversion of our old convertible bond, €135,000,000 in November, and we replaced it with a new convertible bond in early January, totaling 225 €1,000,000 I dare to say, Jasper, truly amazing conditions. Again, just one highlight for the €225,000,000 we're not paying any interest, 0. And I think that's a strong sign of trust from the financial community. As a result of this, I think we can, with a lot of confidence, based on a strong balance sheet look into the future. Parallel to achieving strong results last year, We also executed a very focused strategy and we're going to talk more about this, getting ready for the introduction of e prescriptions, our new logistics center, the expansion of our same day offering under the label shop abotique. And now the commencement of the cooperation with Saba, one of the leading online doctor service providers and Europe. Well, again, looking at our 2 reporting segments, the DACH region, we had in Q4. We showed growth of 34% versus Q4 2019. When you look at this over the course of the full year, You see growth of 32.5 percent in the DACH region. This includes growth of our ARIX business in Germany by 17.6 percent by the end of last year. Our Rx business in Germany amounted to almost 220 €1,000,000 So again, looking at the overall growth of 32.5% and the Rx growth, and we are very proud of last year's Rx growth of 17.6%. That gives you an indication that the non Rx business grew at a much faster pace then the 32.5% for the whole segment. Our international segment, which is comprised of Italy, France, Belgium and the Netherlands in Q4 grew by 68%. For the full year, the segment grew by 78% drop in Q4 can be attributed to some challenges that we faced, I think, especially in November with getting all of our packages in time to our customers in Belgium. For the full year, sales in the international segment amounted to €153,000,000 We're also very proud of our NPS, of our net promoter score. Last year, we maintained strong NPS of 70. But those of you who are familiar with other retail verticals, you will Recognize that 70 is already a very strong result. To be transparent, at the beginning of last Here we had aimed to improve our NPS a little bit more. But in hindsight, and again with all the dynamics around the corona pandemic, We're very happy. We're very satisfied that we succeeded in maintaining a very strong NPS of 70. And as you all know, that only happy customers are returning customers and that's one reason why we closely monitor our NPS performance. In terms of The average shopping basket value, virtually no change versus last year, around €68 From some of you throughout last year, we had received questions. Well, should we expect a drop in our average shopping basket value because of the number new customers and the dynamics of the corona pandemic. Obviously, that was not the case. Well, the next chart I really like to look at from time to time and what you see on this chart is the web traffic. And this covers all of our web shops. So not just the web shop in Germany, but right across all of the markets. What you see here are the weeks the 104, 105 weeks from the 1st week of 2019 through the last week of 2020. So in the middle, you have the 1st week of 2020. The orange line indicates the total number of visits per week. And you see a steady growth. If you put a regression over the orange line for the year 2020, you would see continuous steady growth. And this is also true for the time from the beginning of the corona pandemic. That's the spike around the beginning of Q2 that you see in the blue bars here till the end of the year. Looking at the blue bars, the blue bars indicate our percentage growth, the web traffic percentage growth versus the same week a year ago. And this relates now, of course, to the scale on the right hand side of the chart, the percentages. As I already mentioned, you see the spike at the beginning of the Q2, meaning at the beginning of the corona pandemic. But even if you then look towards the end of 2020, in every single week, our web traffic grew by 50% or more. So not just our top line went up, but also the customer number of customers went up and the number of visitors to our websites increased significantly. One last remark and you only see it and it's something that We are also proud of you see it here in the footnote, in January 2021. Shopabortaker.com, this is our German web shop, was the number 3 most frequently visited website in Germany in the healthcare segment. Number 1 was the website of the Robert Koch Institute, which is the vaccination, the public vaccination agency in Germany, not a prize. Number 2 was netdoctors. De, which is a site that provides general medical advice. The number 3 most frequently visited website in Germany in the health category was Shop Apotheker. And again, that is something that doesn't just happen by accident. Well, before I hand it over to Jasper to walk you through the financials of 2020, let's have a quick look at our orders and how they developed. You look at 2020, the quarterly distribution, no surprise, but we were glad to see that we reached our peak in the Q4 with a little bit more than 4,300,000 orders. For the whole year, orders amounted to 16.6 1,000,000, which translates into a growth versus 2019 of 36%. So again, largely in line with our top line growth and the green line here indicates the share of repeat orders, which held steady at 83%, which is largely in range where we want the share of repeat orders to be. We're always referring to the 80% range. And with this, Jesper, I'm sure you have something to say about the financials. Absolutely. Thanks a lot, Stefan, and good morning to you all. On this slide, according to me, a set of very strong numbers a reflective of the exceptional year as Stefan just with a lot of passion explained to you all. Thanks a lot for that. Before I go into the numbers, I also want to tell you that this morning, we did not only release our numbers for the press release on our website. There's also annual report. And at the same time, I'm also proud to mention that we also released the numbers according to Isef, so the European single electronic format. There was a possibility provided by Europe to delay the implementation, but We wanted to be a front runner there. So our numbers are also available in the new European standards. Then to the numbers. I will discuss with you shortly everything from sales up to including EBITDA. It's 3 columns from quarter 4 last year and this year and then its full year. And after this, in 2 slides, I will dive into a little bit more detail the gross margin and the selling and distribution expenses as a percentage of sales, the bridge from last year to this year. But first, high level the numbers. If you start with sales, I don't want to repeat too much, but the numbers are too nice to not mention them again. So I take the opportunity there. Our sales increase in the Q4 was €73,000,000 to €264,700,000 which was a year over year growth of 38%. In the full year, our growth was in total 260 €7,267,000,000 higher than the year before. And we were indeed very close to the €1,000,000,000 sales in 2020. And it was a growth of unrounded 38.1%. These sales were achieved with a much different gross profit margin compared to 2019 and compared to 2018. I think ShopUp Take has always reported gross profit margins that were just below the 20%. In 2020, each consecutive quarter, we were significantly north of 20% sales of the margin. If you look at Q4, last year Q4 2019 gross profit margin was 19.8%. We improved by 3.8 percentage points to 23.6 percent, more on this on the next slide. And for the full year, We achieved a 3 percentage points improvement to 22.7%. These sales and these margin were achieved by selling and distribution expenses as a percentage of sales of in Q4 18.4%. Well, I'm now presenting for the 4th time the numbers of shop up taker. We have this column better worse, in between bracket is worse and otherwise it's better. And it's the first time we have something in between brackets this year. But actually this was exactly what I tried to guide you and the markets on. And we are operating at this moment 2 facilities at the same time. And we continued with our marketing expenses and this is exactly internally according to what we were expecting. So it is 0.7% worse than it was in quarter 4, 2019. And over the full year, in addition to the better gross profit margin, we also improved our selling and distribution expenses as a percentage of sales by 0.6 percentage points. The adjusted administrative cost, as always, The adjustments at ShopUp Takeers are clear and limited. We only correct for the employee stock option cost and for 1 of third party costs related to certain projects. Now certain project was the new logistics center and certain capital market transactions. If you then look at the adjusted base on the administrative cost, you see both in Q4 and in Q3 that we leveraged the This has been an improvement as a percentage of sales of respectively 0.2% and 0.3%. All the numbers I just mentioned, they then boil down, they sum up to the adjusted EBITDA. And in Q4 2019, This was a minus 1.8%. It improved this year to 6,100,000 1,800,000 to 6,100,000 An improvement of €7,900,000 And for the full year, the number that Stefan also already pointed out from a minus €13,600,000 to a positive €21,600,000 Margin wise, A minus 1% in Q4 last year, which was then considered a very strong number, the Q4 of last year. But from a minus 1%, we improved to a plus 2.3% this year. And for the full year from a minus 1.9% with a 3 times raised guidance, We ended up even north of 2% at exactly 2.2% of sales. Because of the adjustments that I mentioned already with the administrative costs, you see the fully loaded EBITDA is showing exactly the same developments. Quarter 4, the year with improvement of €7,000,000 and for the full year an improvement of €38,000,000 To the next slide, please. Yes. Then the full year bridge of the gross profit margin. So we improved for the full year 2020 compared to the year before from 19.7 percent to 22.7%. The major building block here It's the block of 2.7 percentage points of net pricing and product mix. There's a lot in this. But the key here is that in the total optimization of the commercial proposition to our customers. We have gotten significantly more sophisticated. So we only use vouchers when they are really needed. We try to optimize the product mix that we are having and we are also balancing our promotions that we're having. A total improvement of 2.7% year over year. The other of minus 1.1 is mainly related to quarter 2 and quarter 3. But I also mentioned that we had to take a write off of corona related articles. To be more specific on face masks, in hindsight, we source them at prices that were too high when we were really wanting to have those products in order to deliver them to our customers. This impact should not directly be added to the 2021 expectations because we of course in the 2.7% also had a positive impact from the high margin corona specific assortment. So those are the 2 major blocks. And then we have 0.8 positive impact from country and our ex OTC mix And we're growing internationally even faster than we're growing. In Germany, that's having a positive mix impact. And the fact that Rx was growing with only 17.6%, which according to us was a strong number, but OTC is growing faster than 40% is resulting in this mathematical push of 0.8%. Not at all mathematical, but fundamental is the 0.6% improvement from sourcing. This is not only because of better conditions, 1 on 1 on products with our pharma partners. This also includes impact from the fact where in cooperation we can get the total chain more efficient. In those cases, there is something to win for a supplier and something to us and we're not only gaining euros, but we're also reducing CO2 by making the supply chain more efficient. The next slide, this slide is on the operational cost as a percentage of sales. So that's an improvement year over year of 0.8%. First of all, marketing. Marketing as a percentage of sales improved by 0.2%. But remember that indeed in March April we virtually had no marketing. So managing everything, marketing as a percentage of sales is roughly flat or perhaps even increased somewhat. So we were really grabbing the opportunities when we saw them by increasing our sales and our leading positions. That is shipping, packaging and payments minus 0.1%. This is only due to the fact that shipping to international is more expensive and we're growing faster there. So this is only mix. And to me by far the most impressive number on this slide is the 0.2% improvement of operational labor. So in this very challenging year with all the unexpected searches in demand from our customers. We were able to keep our operational labor Flat's actually even improving 0.2, while everybody who's running an operation knows that If you operate at max capacity, you also incorporate certain inefficiencies. In this operational labor here, We were able to give our operational people 2 times the past year at the start and at the end also a corona bonus Not to management, not to senior or executive management, but to the people who did the real work. And in the operational labor in the second half of the year, we have absorb the fact that we are operating 2 facilities at the same time. Other, An improvement of 0.5 percent is everything else that I did not mention, which is growing at a slower pace than our sales growth. So this is scalable. Here again, the adjusted EBITDA numbers in 1,000,000 of euros and as a percentage of sales, I mentioned them already for the last time from minus €1,800,000 last year in Q4 to plus €6,100,000 and a A €35,200,000 improvement for the full year from a minus 1.9% margin to a positive 2.2 Next, please, Karim. What does it mean for our cash? We started 2019 with a cash balance of €130,000,000 If you look at our balance sheet, you see this is the sum of our cash balances and our current other financial assets because we can turn them into cash within a day. So we started with €130,000,000 with the expectation that the operating result would be roughly flat. And we knew we had a big investment coming, namely the first three quarters of our new logistic facility. What happened in reality, we had €30,000,000 because of the much better operating results we generated, €19,000,000 of cash. And this is the number actually that Stefan just mentioned, the 31 improvement of the operating result is plus €19,000,000 was the year before minus €60,000,000 €1,000,000 And then if you go to working capital, our working capital requirements, our need for working capital increased with only €1,000,000 in 2020, while our growth was 38%. There was also the year before €15,000,000 of cash needed and those 2 sum to the €31,000,000 that as Dave just mentioned. So cash from operations including working capital A positive €80,000,000 throughout the year. Then we get to the investments. The investments includes 3 quarters of the Vendo 2020 facility. And then we had a positive inflow of financing, which mainly relates to the April 7 capital raise of €65,000,000 but we also have interest expenses, lease expenses and we had accelerated interest expenses related to the earlier conversion of the in October and November. So, we ended the year with more cash than at the start of the year, namely 128,000,000 Here's the second and the last slides on cash flow. This is only from Q3 to Q4. So we ended the year at €128,000,000 and we started quarter 4 with €157,000,000 So What happened then in Q4, we had a positive operating result of €4,000,000 We had an increase of working capital, which is always the case in the Q4 because of seasonality. We have an elevated level of investments because we earlier reached a milestone for our distribution facility. So, we paid that and we had an elevated level of financing mainly related to the early redemption of the bonds. So we ended with €128,000,000 but also in this slide you see that already in the 1st 2 weeks of 2021 We had 2 major transactions. We acquired SmartPatients and Stefan will talk about that more in a couple of slides. And we had the successful placement of 225,000,000 of convertible bonds with a 0 coupon, meaning that at this moment, we have cash of more than €300,000,000 in our accounts. Thank you. Thanks, Jasper. Let's go to the next chart. So before I hand back over the microphone to Jasper to talk to you about some of our accomplishments along our sustainability journey and of course, the guidance for 2021. I want to share with you or talk about some of the initiatives that will allow us to, to transform shop up a taker from, you know, being pretty much an online retailer into the Europe's leading customer centric e pharmacy platform. When I started at ShopUpTicket two and a half years ago and since then, I'm sure I've talked to some of you about how impressed I was when in my interactions with a lot of people at ShopAbotekers, how The customer was always top of mind and the question, how can we meet and better meet our customer's needs was always top of mind. And that is something that struck me, as I said, from day 1. I already mentioned only happy customers are returning customers again with an NPS of 70. We have many customers that are returning to shop up and take it over and over again. Of course, it's a 1 on 1 of e commerce. Once you have gained Customers, we have to do our utmost to convince the customer to place a second, third and fourth order. So over the next couple of minutes, again, just a little bit about some of the key initiatives, of course, e prescriptions related to e prescriptions, the acquisition of Smart Patients. Smart Patients, we want to provide a little bit more color, where we are with our same day pilot and just a quick update on our new logistics center. As I said before, I will hand it over to Jasper again. So, if there has ever been in the history of Shop A Boutique, if there has ever been a top, top priority for us, It's certainly the preparation for the introduction of e prescriptions in Germany. We are using here a little bit of a reference from Formula 1 racing. Our ambition is, of course, that once e prescriptions start in earnest, We really want to be in a, in a poll position. We installed our task force and we, we called the task force the ERX first task force already in 2019. And since then, we continue to strengthen also in terms of resources. We strengthened the task force throughout 2020. Of course, Rx is nothing new for shop upper We've been doing this for many, many years. We understand the needs of an Rx customer. We have developed some targeted and tailored patient care programs that are really appreciated by the patients that are enrolled in them. I'm going to talk more about the acquisition of the my therapy app and smart patient, but I already want to state clearly that was not an opportunistic acquisition. That was and a clear pillar of our ERX strategy. We were convinced, we have been convinced for quite some time that sophisticated digital medication management will be a true value add in the ERX environment. Generally speaking, e prescriptions are nothing new for Shop A Boutique or digital prescriptions are nothing new for Shop A Boutique. Since we started the cooperation with Zava, one of the leading European online doctor service providers, We have been and we still are processing literally hundreds of digital prescriptions that have been sent by Zaba customers to Shop A Boutique. And with the experience that we have gained with handling all of these digital prescriptions, Our backend processes, our backend systems are well prepared for the start of electronic prescriptions in Germany. And last, certainly not least, we have, we have been, and we continue to talk to a lot of market participants and wherever it makes sense from our vantage point, but also wherever it makes sense and provides a benefit for our customers we have and we will continue to enter into partnerships with others. Just a quick word about the timing of e prescriptions. We're saying at the bottom. Shop Aptikar will be ready if e prescriptions launch on July 1. And based on everything that we have heard from Berlin, from the health ministry, from the Gematik, from other market participants in Berlin and beyond Berlin. Everything that we've heard today indicates that the Gimatic will be ready in time. They're going to launch the telematics infrastructure and e prescriptions around the middle of this year. Everybody acknowledges it's an ambitious timeline, but so far, again, based on everything that we have heard, the Gmatik seems to be on track. But of course, in earnest, e prescriptions are going to start once it will become mandatory for physicians in Germany to issue electronic prescriptions. So before I talk about the value Appetakers' value proposition for e prescription customers in the future. Let's look one more time at the potential that's in front of us and our competitors. On the left hand side, you see the total market size based on 2019 IMS data. The 2020 data is not yet fully available. But in 2019, the RX market amounted to €50,000,000,000 in Germany. This is at AVP. Sorry, I have to torture you with a German term, Aboteigingferkausprais that includes VAT. But again, just in order of magnitude, at this pricing level, We talk about €50,000,000,000 to €52,000,000,000 Also based on IMS data, the OTC The market in 2019 amounted to around €7,000,000,000 So now switching to the right hand side, looking at the online share of the OTC market and there are different data points, but it's everything that we are seeing. It's the online share is around 20%. Of course, this is not only Shop Appetaker, there's Shop Appetaker and our direct competitors. When we look at the Rx market, of course, and that is not a surprise to you, a very different picture with an online share from 1 to 1.5%. We by no stretch of the imagination do we want to lead you to believe that the Rx online share is going to resemble the OTC market anytime soon. But based on the projections of market experts and some of them are, of course, participating in this call. The projections seem to converge around the 8 to 12% range, a couple of years after the introduction of e prescriptions in Germany. And we as Shop Aperticker, we can get our arms around this range of 8% to 12%. Again, just to provide some context, Our share Shop Apertakers share of the 1% to 1.5% last year amounted to around €220,000,000 So again, thinking about the value proposition for ERX customers going forward, Shop Abortica has been one of the pioneers in the mail order Rx market. We've been doing this for many, many years. And as a pharmacy, we have learned what is important for Rx customers if they receive their orders via mail delivery. At the same time, of course, we have a deep expertise in e commerce. We have scaled up the shop, our taker over the years to almost a €1,000,000,000 And our aim with, with, the ERX opportunity is simply to bring our pharmacy expertise and our e commerce expertise together to provide the best in class customer journey, customer experience for our ERX customers. That is, there are no surprises for you. It's about the customer centricity I was referring to earlier. It's about the convenience that people Appreciate, especially, but not only during a pandemic, it's the ability to order 20 fourseven. It's the flexibility in terms of how you submit your prescription, how you pay for your copays. Very important. And that's really a change for, for all of us. It's the breadth of the assortment that we can bring to bear in an e prescription environment. Keep in mind, Right now, when a customer sends a prescription to us, it's a paper format and it's really cumbersome to add other products to this, to the Rx basket. In the future, all of this is going to happen in the digital space. So it will be very easy, very convenient for a customer if she submits a prescription, an e prescription to Shop Aperticket to add OTC product to add beauty and personal care products to the same basket. And on the next couple of charts, I'm going to talk more about the role that medication management, digital medication management is going to play in our ERX strategy. So again, having talked about SmartPatient, we are Very excited about this acquisition that was concluded at the beginning of this year. And as I mentioned, this was not an opportunistic acquisition. We have been convinced for quite some time that digital medication management will be A true value add for our customers will be something that is critical to our success in the ERX market. And the more we work with, The more we learn from the smart patient team, the more convinced we are getting. At the end of the day, sophisticated digital medication management is going to allow our customers, our especially the chronically ill patients to have better health outcomes. Digital medication management helps them to adhere to drug therapy. It helps them to have better persistence with their drug therapy. In other words, to take the medication that has been scribe to them by their doctor regularly and to stay on medication for as long as the doctor has described that there is a lot of scientific data out there that clearly indicates that better clearance, better persistence, not a surprise to anybody results in better therapy outcomes, better health outcomes and digital medication management is a conduit to achieve these better health outcomes. Furthermore, of course, with the MyTherapy app. And I'm going to talk about more and more about the my therapy app on the next chart. This will give us a shop up at take an opportunity to interact with our customers not just once a month, but several times per day. So Let's have a look at the My Therapy app, what it looks like right now. We just want to give you here an idea And it might be misleading to think about my therapy simply as an app because it's much more. It's a platform that already today consists of several different modules. You're going to you're seeing here some examples. And the more we think about this. And the more we work with the smart patient team that has developed expertise in medical digital medication management over 8 to 9 years. That is something that we ourselves would not have been able to replicate within a reasonable period of time. But going forward, the smart patient team, they're going to develop drug specific content so we can provide targeted advice on the medications that our patients are taking. We can provide advice on how to better manage their disease, all of this, the pill reminder functionality. The additional advice and information we can provide to our customers, we are deeply convinced this will be a real value add for our customers, and it is one of the pillars of our ERX strategy. Another building block for our ERX strategy is Not a surprise at our same day delivery service. What you see on this chart, the dark blue dots is are the areas where where we were live with our same day delivery at the end of last year. The Rheinhruh area, the most populous area in Europe, the Stuttgart metro area, the Munich area and Berlin. And by the end of this Here, we're going to be live in all of the metropolitan areas of Germany, again, not just for OTC, but this is also a building block for our TRX strategy. So, and before I hand over again the microphone to Jasper, just a quick update on our new logistics center. I already mentioned it's much busier here today than the last time we talked to you. In October, the first customer order left our new facility on its way to a customer in Italy. At the end of January, we took into operation our new equipment with a much, much higher degree of automation and all of the customers to all of the customer orders from customers in our international segment. Again, Italy, France, the Netherlands and Belgium shipped, executed from our new facility. And this summer, we're going to have we will have transferred all of our activities from the old facility to the new facility, doubling our capacity. And at least for the next 2 to 2.5 years, We are not going to be constrained by any capacity limitations. And also this year, next year, again, if the demand fluctuates and peaks, we'll be well prepared for this. And Jesper? Yes. Great. Thanks. Yes, I'm really happy to share with you two slides on our progress on ESG, environmental, social and governance strategy or sustainability or the sustainability strategy. We really stepped up here in 2019, but our major step was actually in 2020. We as a board, but as a total company, We say we are committed to do the right things. And we installed in 2020 a clear internal structure with governance, with Ahead of Sustainability with targets and responsibilities. And the language we talk internally for this is because we care. And what do we care about? We care about health. And then we say always the health of our planet, You see on the left side, the health of our patients and the health of our employees. And if you talk about the health of our planet, Of course, a major impact there is CO2 reduction. It's about sustainable packaging. It's about reducing our carbon footprint. Then the health of our patient, that's of course in our DNA already for more than 20 years, but there's always room for improvement. So besides giving tools to Get a healthier life, an easier life if you are a patient. Here's also the areas of being applying the highest standards of data and data privacy. And then caring about the health of our employees that's We're finding everybody equal opportunities about diversity. We installed a pension insurance for our people in the operations here in Sendoh the past year. And of course, the safety of the workplace environment It was very important the past year with corona, but this is something where we on a continuous base want to focus on. So this is the strategy and quite some talks and words that did we do already something in concreteness at least to the next slide. Here are some highlights what we really did in 2020 on our sustainability agenda. Already in January last year, we committed ourselves to the UN Global Compact. In March, We joined the leaders for climate action and we cooperate in doing our fair share of avoiding that the world will increase by 2% of temperature. And then in July, this was rewarded with a significant upgrade by the MSCI index to a BBB from a below average to slightly above average. So that's the first step of our improvement that was recognized by the outside world in July. And throughout the year, the first half of twenty twenty, we work together with climate partners They have 20 years of experience in determining in all aspects of our operations what our CO2 footprint is. Then in addition to that, we also asked another independent testing body, TUV Rheinland, to also certify what we consider as our carbon footprint. And then we decided based upon that information in October to offset all our CO2 emissions, actually not only for CO2 emission according to scope 1, but scope 1, 23. But that's about offsetting. Even more important is, of course, that we also are the front runner in reducing CO2. And already from 2019 to 2020 in concreteness, We reduced the CO2, the carbon per parcel with 15% and we were able to do so. Give some examples because of all our standard deliveries in Germany with DHL are now green. And All our energy, our electricity in our German facilities come from renewable resources. And also there was an important impact for us moving to the facility where we are presenting now from which is according to the highest climate standards. Some other highlights, just a couple to share is internally, we rolled out programs in getting to speed and get their commitments and get their energy in having an impact on the health of our customers, people and planets. The last one is that I want to say that already for many years, we have a cooperation with an organization, a charity organization of which the name is Herzenwunchen, which is for seriously ill children. And over the past years, we already donated close to €600,000 to this organization. And what we decided to do at the start of 2021 when the bonus ban took effect in Germany is that we gave our ex customers the possibility to say, okay, instead of me giving the bonus, which is no longer allowed, We can make a donation to this charity organization and this is very successful. I want to finalize this slide is that The annual report that this moment that is more than we released is entirely and for the first time for us according to the GFI reporting standards. So sustainability is fully integrated in our annual report and I hope you pay attention to that. And if you have any remarks or questions on our progress in this area, Just reach out to us and we're happy to share with you. Thank you. Something completely different, the guidance for 2021, I think the header says it all, continued fast growth and margin improvements. That's actually our guidance. So we have a longer term guidance, which is at the bottom Then we have the guidance for the current year, which is I have to say super difficult because the world is very volatile as we all know. Where we felt comfortable enough providing you with this guidance. To start with the number 1 with the sales growth. So the big picture from a helicopter view is that last year our sales growth was 38% fully organically. And now we're promising that we expect that in this year on top of the 38%, We will grow again around 20% or more. We say this taking into account actually 3 items that I want to point out to you. Number 1 is of course as of March we are cycling peaks in COVID the month of last year. We took that in our guidance into account. Number 2 is as of mid December, we have to then own our exponuses. So we also took that into account. And the third one perhaps not familiar to all of you, but we Clearly see that in January February of this year of 2021, we see throughout Europe. We actually see that people are less ill. There is less of a cold and flu season and most probably, most certainly related to the social distancing because of the COVID measures. So this is not impacting us more or less than others, but just the whole industry, specifically in our H We'll most likely in January February have faced a decline in our Higgs sales. So we take that into account and then still say we want to grow as a company significantly double digit around 20%. That's the sales guidance for the year. Adjusted EBITDA margin, we achieved in 2020 a positive 2.2. This is not a one off. No, next year we want to do that again and even improve by 0.5% approximately in the range of 2.3% to 2.8 Then we added a new guidance because we always only had sales EBITDA and that's the guidance on investments on CapEx. We expect that in 2021 in the current year around 3.5% of sales will be investments will be CapEx and this includes our last phase of the Fendal facility where we are presenting from. That's the guidance there. And the long term target profitability unchanged, we expect that our longer term target profitability will be at 6% EBIT or more. That's it. Let's quickly go to the Q and A. So Jasper and I will take turns in reading the questions. So we have a question from Olivier Calvet from Kepler Cheuvreux. Rx here today, are you Expecting any impacts from the absence of a flu season or from COVID related excess mortality this quarter, why Why not? Well, let me I'll take the first cut at this. I don't know about the excess mortality, whether that is having any impact on the overall market. But certainly, and Olivier, you are familiar with this, We have seen a significant drop in prescriptions in January. We don't expect, 1st indicators actually tell us that this will continue in February as well. And this has an impact on the overall market and has an impact on Shop A Boutiqueurs as well. And again, that is, as Jaspo mentioned, that is reflected in our top line guidance for 2021. Okay. If you can go a little bit more up that we take a question from somebody else. Carmen, please. Okay. It's from Christian from Hauck. Hi, Christian. Good morning. Again, many NIS forecasting 10% in 2025, 26% in exchange to the East Prescript Lounge next year. Do you feel comfortable with the mid time assumption of around 10% in 2025 or 2026? Or do you think it's too aggressive, Stefan? And you will answer that. Yes. I think we answered this in the presentation. And now we, we, we, we get comfortable with the projections that come because, yeah, from, from analysts and other market observers, like you an 8 to 12% market share a couple of years after the launch of e prescriptions. That is something that we are very comfortable with. So we don't think that's too aggressive. We think it's reasonable. Okay. Can you continue please? We're looking at no continue up please, Carmen. We just want to take a mix of questions from a variety of participants. Okay. Please, Gerard from Van Burenberg. Same day delivery, how does that work from a logistic perspective in areas that are further away from vendor? For example, Stuttgart, How do you do that? Do you have used a partner? Shall I take this one? Yes. Okay. Thanks, Sagerie, for your question. Yes, indeed. In the Rhein Ruhr, we do it from our facility in the Invenor and Seifenem. But in the Stuttgart, in the Berlin, in the Munchen area, We do this together with our partner physical pharmacies. So we work together with existing pharmacies there in a win win situation, Customer is happy. Local pharmacy is happy, and we are happy with that. Yes, so that's how we do the logistics in the large country of Germany. You pick the next one. Yes. So we have a question from Andreas Wiehmann from Commerzbank. Good morning profitability. I don't know whether you're saying good morning to us or to profitability and they ask what is driving higher EBITDA margin in 2021 marketplace. How big is the marketplace today? What could be the share in 2 to 3 years? Jesper, do you want to take a cut at this? Yes, The EBITDA margin improvement that we foresee for the year 2021 to make it very short is driven by better commercial, better gross profit margin. That's the main reason. It is not coming from leverage of marketing. It's not coming from leveraging operational expenses as a percentage of sales because actually the 1st 6 months we will continue to operate 2 facilities. It's coming from further gross profit margins, better sourcing, optimization and also immediate income. And then the second one of your question is, How big is Marketplace today and what could be the share? Shall I do that also? Yes. Okay. Marketplace is very successful because ShopUp Takeers now to us is a pure example of Marketplace. We work together with partners, the physical pharmacies and we offer because of this cooperation, all the services to our customers, namely they can also choose for same day delivery. So from that perspective, it is really well. In the number, it's also impressive. If you look at our P and L, you round it to 30 because the other numbers are so big. So that's what marketplace is. In 2021, we're still going to launch the marketplace of products. That's not live yet. So that will not have a significant impact in 2021. Also because we really prioritize now ERX, mechanization of our fulfillment center and the rollout of NOW. So we don't expect Marketplace in the first half for products in the first half of twenty twenty one. Then your more important question, what Could be the share of Marketplace in 2 or 3 years. Well, we are working on this Andreas because we think there could be a very large impact, but we don't have any guidance there. Well, let's take a question from Andreas Teal from Jefferies. And Andreas has four questions for us. Let's see whether we how far we get. How should we account for the new logistics side in terms of operating leverage? Could you give us more insights into the potential increase in the degree of automation of potential leverage in the second half of twenty twenty one. Now, let me take a, throw something out there. Alexander, the degree of automation, we talked about this before in our old facility. Admittedly, it was close to 0. It was a very efficient but very, very manual process. In our new facility. The degree of automation is going to get close to 50%, And we expect in the Q4 to see an impact on our cost per order. The impact will be significant, But so far, we have not shared exactly what we are projecting. The second Question, could you briefly touch on your market share in Austria and the contribution to growth in the DAS segment in 2020 and your estimates for 2021 so we get a better understanding of the Germany standalone performance and should we assume a slightly lower growth rate based on your dominant market share? Yes. Yes. No, we report and that's of course a very strict and IFRS guidance, very important in 2 business segments. That's also how we steer the business internally. It's a DACH segment and it's the international segment. So, trying to get a more precise view in a country is not part of the segment's reporting. What I can say about Austria and which is really reporting. What I can say about Austria and which is really relevant is that in Austria, we are by far the market leader there. Yeah. I see another question from Olivier, who is from Kepler Cheuvreux. And he is asking, can you explain to us why customers would order our eggs with you? I think that's in the context of no bonus. Yes. I think Olivier is referring to the overall line in the market in January and again, based on early indicators also in February. But Olivier, it's not just acute medications. People are delaying customer, doctor visits. So even if you are chronic, chronically ill patient, Some patients at least are trying to avoid going to the doctor and another driver is simply that surgeries are being delayed. And after the surgery, there's always some type of a follow-up medication that normally would be prescribed. Also, this is not happening at this point of time. So you're right, for acute needs of the typical antibiotics, Shop Apertaker probably wouldn't be the 1st pharmacy that customers could think of at this point of time. But where we look at the delay of doctor visits and the delay of surgeries. Of course, that is also something that's going to test and will continue to impact Chopard Akers. Okay. I look at the time. It's 4 minutes past 12 past time. Yes, I actually would propose that is continue for a minute or 3. People are still listening perhaps and people can of course drop off. Thanks a lot for your attention at least and joining the video. And let's do a couple of more questions I think we have one from Alvera. I think we have one from go a little bit further down, down, down. Alveera Rao from Barclays. How does monetization per unit economics work on ShopUp Take Now? Did you say they delivered your partnership with brick and mortar pharmacies? Yes, okay. I take it. Good morning again, Alvera. How it works is that the customer is willing to pay for this service. The pharmacy, the local pharmacy is happy with the additional sales. And the fact that we brought the customer to the attention of the pharmacy, means that we get a feel for the service that we provide there. So that's basically how it's going. Let me see if I See here in total, Cindy Delifi. Yeah. So customer is coming to our website, wants to order paracetamol. Normally you do that and you get it to 1 or 2 days in your post box. Now if you live in those areas, you can also select ShopUp Takeers now for delivery on the same day or on the very on the morning. You pay for that. There are a lot of people who are happy with that, same like paying €5 to get your pizza delivered at your home. So in some cases, people like to take the service. At the moment they do that, they order at the local pharmacy. The local pharmacy is preparing the prescription. We as ShopUp Takeers have organized the delivery the last mile from the pharmacy to the customer and we get a fee from the pharmacy and get the fee from the customer for delivery. That's how the units economics work. Yes. We have a question from Henrik Markman from, Montego. How are we going to convince the potential customer to use the digital services like smart patient services? Could we expect some higher marketing costs? Well, Enric, we think, you know, there are already 1,400,000 people who are using the My Therapy app today. And as I alluded to earlier, the more we Think about the opportunity that this offers now in connection with a pharmacist, and that's really a game changer from in terms of monetizing on this opportunity. There are many ways for us to make a compelling offer to our customers. I already mentioned there is drug specific content We can provide there is advice how to better manage your disease. In addition, and that's what people at this point of time think about when they talk about my therapy app. It's already today more than a pill reminder function, and it's going to be much, much more then a pill reminder function in the future. Okay. One of the last ones, I think, Ben from the Bank of America. Good morning again, Ben. There are a Couple of questions, let me quickly look through them, talk about please the revenue development in 2020 Per reporting segment, geographic segment, not the exact numbers because we only give guidance on the total. But I think directionally, it's fair to assume that international will grow double as fast as a percentage compared to DACH. I think that's directionally right. And then about the OpEx base, should be additional A and P and the cost lines in 20 let me see what is A and P in this case? Advertising promotion. Advertising promotion. How much yes, no, yes. It is part of our overall guidance where we say that EBITDA will improve according to our expectations to a level between a positive 2.3% to 2.8%. And the driver of that in 2021 compared to 2020 will not be the A and P lines. And number 3, then the last one, could you talk about the very impressive customer acquisition numbers? Thanks for that, Ben. And how they trended into 2021. We continue to focus on making our existing customers happy and also we continue to focus in acquiring new customers. We did that in 2018, in 2019, in 2020. And we will also continue to do that in 2021. So roughly, they are comparable. You continue to see a major tailwind from the lockdowns in Germany. Now we're seeing at this moment not an additional significant tailwinds from anything related to lockdowns. Yes. Yes, I would say We'll take one more. Yes. Go down. Yes. Go up, sorry. We have a question from Lennart Langling from Algypris Investments. What is your current view on the threat of new entrants, in particular Amazon? Now, Leonard, I can't really be very brief. We are not constantly watching what might Amazon do in the future. Our strategy is clearly a standalone strategy We are charged with and we are excited that we're going to provide our customers with a very, very compelling value proposition. Nobody knows what Amazon is doing right now, what they might be doing in the future, but it's not keeping us busy every day. So I have to leave it at this. And with this, I would suggest we'll conclude the call. Of course we couldn't get to all of your questions, but I, I have a feeling that all of you know how to get ahold of us. So please reach out to us. If you have more questions, we'd love to chat more with you. I hope you share with us that 2020 was an important milestone year for ShopAbortaker and 2020 one shapes out to be another good but important year with the introduction of e prescriptions in Germany. So again, thanks for your time and for your interest in Shop Aperticker. And please reach out to us if you have any more questions. Enjoy the rest of your day. Thank you. Okay.