Good morning, and welcome to Zur Rose. Let me please start with a brief glance on the geopolitical situation with a horrible war just in front of our door, which personally makes me really concerned. Humanitarian suffering and the limited, especially the limited ability to influence the situation are really hard to endure. For that background, we do what we can. We help in all ways possible, especially with medication and other needed material, but quite significantly. Today actually is the last time that I will be opening this conference, as I stand for election as chairman of board, and Walter Hess will take over by the first of May. Walter is really the perfect fit for this position with long-standing experience within Zur Rose and especially excellent management skills.
I'm personally fully convinced he will continue and further accelerate the success story together with a great management team. The real story starts right now. With the opening of the EUR 50 billion RX market in Germany, we via the introduction of the electronic prescription, we will speak furthermore on that topic. Today, you will also see Marcel, who will present our numbers and an outlook to you in just a minute. 2021 ended with a lowlight when the German government decided to postpone the mandatory introduction of the electronic prescription. This was really a political swing that caught us as fully unexpected. We invested heavily in the eRx readiness, which is reflected also in our numbers. We were, by the end of last year, and now still are, fully ready and geared up to drive electronic prescriptions from the first day onwards.
Nevertheless, we achieved great things in 2021. New record in brand awareness of DocMorris as a result of our marketing campaign. The new DocMorris app with great functions and excellent user experience. Actually, the app achieved already 1.3 million downloads we are really proud of. We also entered two strategic operations with leading pharma companies, just to mention a few highlights. Yesterday, we learned that DocMorris and Medpex covered the first two positions in the latest evaluation of Stiftung Warentest, which we see as a proof of our strong customer centricity. In a nutshell, we remain fully convinced about electronic prescription as key growth and profitability driver for the future given the latest developments. Extended test phase proves electronic prescriptions work, and no technical problems occur with the infrastructure.
On the regulatory side, despite all negative process, confirmation on electronic introduction continues. Nevertheless, the delay causes a big impact on our business plan and requires action. We are taking the situation as it is, but also as an opportunity to now focus on operational leverage and execution. We already took some steps last year, integration of Vitalsana and apo-rot, and then the go live of our new distribution center in Heerlen, which will take place in the next months with a high degree of automation, which will help us to improve operational performance. We have quite some work ahead of us, but Walter, the whole team and myself in the new role are fully committed for execution and very much excited for the electronic prescription opportunity.
Before I hand over to Marcel, I also want to highlight that we issued our first sustainability report in line with GRI standards this year. We will continue to improve our disclosure and are available for any sustainability-related questions. Now over to Marcel, please.
Thank you, Walter, and hello also from my side. I want to start by highlighting two key points concerning the financial years 2021. First, as Walter mentioned, we were fully convinced to see an eRx launch on the first of January 2022, and thus invested heavily in eRx readiness and marketing to achieve the best possible starting position. Second, a significant setback on the German non-Rx online market caused us to reduce our 2021 sales targets and also had an impact on our profitability. Let's go into the 2021 performance, starting with the group sales. We achieved our revised sales targets with a growth rate of 14.8% in local currencies. In Switzerland, we realized a solid and sustainable growth rate of 5.7%.
In Germany, we were able to grow 19.4% on our external revenues. This includes the continued slight decrease of the RX business as a result of discontinued marketing and the bonus ban, and also includes the contribution from the Apotal acquisition, which we did in summer 2020. The OTC and BPC business developed strong in a very challenging market, which grew significantly lower compared to previous year. Segment Europe achieved 22.3% growth. This somewhat slower growth compared to prior periods is a result of the very strong demand in the previous year, driven by the COVID effects. Let's now look at the development of our underlying KPIs. The key development here is the growth of our active customer number to 12.4 million.
Compared to last year, it is an increase of 1.9 million customers. For better transparency, we decided to show the basket size and order frequency now separately for RX and OTC. Our average RX basket, which consists of our Swiss and German RX business, is at EUR 115, with slight declines in 2021 as a result of low value basket in connection with state reimbursed self-tests in Switzerland. The OTC basket also saw slight declines over the period, driven by smaller COVID-related baskets. Our repeat order rate remains at a high level of 74%, which shows the significant loyalty of our customers. In terms of site visits, we saw an increase of almost 10% compared to previous year, and almost 15% compared to the twelve-month period ending June 2021.
2021 was the year in which we achieved ERX readiness and grew external revenue by 14.8% despite the significant backdrop of the German non-RX market compared to previous year. The gross margin came in below previous year as a result of the very strong increase driven by the COVID pandemic in 2020, and the slowdown of the German non-RX market as a result of missing flu season and tough comparison base. It is in line with pre-pandemic levels. Personnel and distribution expenses both slightly reduced as a percentage of revenue. The largest difference compared to previous year is our marketing spend, which increased to CHF 118.8 million and a percentage of 6.9% versus 4.1% in 2020. This increase has mainly two reasons.
First, our TV campaign to boost awareness ahead of the eRx launch, and second, the less dynamic non-RX market, which required higher performance marketing spend to achieve both. This led to an Adjusted EBITDA of -CHF 128.9 million. I will explain the bridge from 2020 to 2021 earnings and adjustments in more detail on the following two charts. Depreciation increased as a result of higher base due to acquisitions and higher investments in tech developments. The net financial results was impacted by the negative exchange rate effect and the results of joint ventures in Switzerland. On this chart, I will explain the drivers of the result compared to previous year in more detail and build a bridge from 2020 Adjusted EBITDA of -CHF 31.2 million to 2021 of -CHF 128.9 million.
The first bar shows the achievement of eRx readiness together with the eRx-related TV marketing push worth CHF 34.2 million in order to achieve the best possible position ahead of the eRx launch. The slower market growth in the German non-RX market led to increased customer acquisition costs and lower average gross margin with an impact of CHF 18.7 million. We invested more in tech capabilities and user experience to enable faster scaling in all parts of the company's business and continue building the leading online platform and apps. In the second half of 2021, we successfully carried out the rebranding of our French DoctiPharma platform to DocMorris, and also initiated our OTC business in France with a combined effect of CHF 13.4 million.
As explained at the Capital Markets Day last year, our new businesses, telemedicine platform as a service and partnerships bear a high future margin potential, which is why we increased our spending in these initiatives by CHF 9.9 million compared to 2020. In sum, these effects led to Adjusted EBITDA of -CHF 128.9 million. The EBITDA adjustments in 2021 reduced significantly compared to previous year. M&A-related adjustments amounted to CHF 9.6 million. Integration includes mainly the apo-rot integration amounted to CHF 2.2 million, and several other smaller one-offs of CHF 1.9 million. Total adjustments amounted to CHF 13.8 million compared to CHF 47.2 million in 2020. Our balance sheet remains in a good shape.
Our solid cash position is at CHF 277 million compared to CHF 300 million at year-end 2020, and includes obviously the proceeds from our capital increase in December 2021. We achieved a sustainable reduction of net working capital by CHF 28 million during the period. The management of these positions will stay in our focus also for next year. Other positions of the balance sheet remained broadly in line with previous year. Equity ratio stays with 38.2% on a solid level. Now I hand over to Walter Hess, who will give you an update on our strategic priorities for 2023.
Hello and welcome also from my side. I would like to give you first strategy update and afterwards to explain our key priorities for 2022. How important and absent digitalization in the healthcare sectors is, we all experienced during the pandemic over the last three years. With our digital health ecosystem, we can contribute to more integrated and more digitalized healthcare systems. For our patients and customers, we want to become the preferred digital health destination. We will achieve it by consequently understanding and fulfilling their needs and wishes. It will be enabled by a best-in-class platform with the technology as the core layer for operations, services, and brands, and will lead us to profitable growth and will create value add for patients, customers, partners, shareholders, and employees. A precondition for great success is that we have the best people in the right place.
Therefore, to attract best talents is one of the key priorities of our company. I'm very pleased and happy to announce today that Matthias Peuckert will join our company on first of April this year. He will become Head of Germany and CEO of DocMorris, and therefore be my successor in these two functions. Matthias is a proven and excellent e-commerce expert with 14 years of experience with Amazon and 4 years as CEO of windeln.de. In addition to Matthias and Madhu Nutakki, our CTO, who joined the company in last August, we further strengthen our senior management team with a digital marketing expert who already started in February this year, also coming from Amazon, with a data and science specialist coming from Nissan, and an expert in health procurement coming from the PHOENIX group.
He will also run our transformation program, which I will just show you afterwards, and in that function, reporting directly to me. All of the senior managers have proven and strong track records from their previous careers and have a core strength in execution, which is one of the key success factors for our company. The situation which has arisen due to the extension of the eRx test phase gives us the opportunity now to leverage on the synergy potentials we have and to set the base for profitable growth in the future. We manage cash in a manner that we can immediately accelerate on our growth activities once eRx will start. Therefore, we have defined three key priorities for this year. Number one is to keep the best eRx starting position. Number two is on operational leverage.
Number three is on a growth focus with DocMorris. Let's start with eRx first. Since January 1, the mandatory eRx law is in place and in force. On December 20, we all know, the Ministry of Health declared to extend the testing phase, as the technology was not ready and not sufficiently tested. Meanwhile, the shareholders of Gematik have defined six quality criteria, which you will find on the right-hand side, of the screen, which have to be passed before eRx can go in a next phase. The next phase, which will be the nationwide rollout of the system, and therefore, all these criteria have to be fulfilled. The main criteria is, number one, that 30,000 eRx will have to be processed without any problem.
As of today, we already reached 5,700 eRx being processed without any problem. Frankly speaking, if the system already works for 5,700, it will also work for 30,000, for 100,000, for 1 million, or even more. The system, also based on our own experience and on the opinion from industry experts, is technically already ready, and we are confident therefore that the eRx scaling will start in the second half of this year. Let me remind you of the size of this opportunity and our position. Today, we are at roughly 1% of online market share, for prescribed drugs. If it goes up to 10%, as it was in Sweden already two years ago, we talk about a CHF 5 billion market.
If it goes up to 25%, where the OTC market in Germany already almost is, we talk about a EUR 12 billion market, so a huge market potential. There are many studies out in the market about eRX. One is from Sempora saying that 25% of the people indicated that they would redeem their prescriptions with an online pharmacy once eRX is in place. Another fact is that 80% of the medication is for chronic demand. Our assumption is that out of our customer base, far more than 2 million customers have the potential to be converted from OTC customers also to Rx customers. As Marcel has shown, we have invested in marketing and brand awareness to be prepared for eRX.
We have reached aided brand awareness of 71%, end of last year, which is an all-time high for us, and also of 26% for eRx. Why is eRx so interesting, and why is it the game changer? It's all about KPIs and unit economics. If we see the KPIs and compare them to OTC KPIs, of orders and of customers, Rx orders have a higher basket size. The customers have higher order frequency, higher retention rates, and higher customer lifetime values. If we see the unit economics and compare eRx contribution profit, contribution margin after fulfillment cost, only with pRx, it's already double as high, and compared to OTC orders, it's even five times as high. We are with DocMorris, but all other brands as well, fully ready for all of this eRx potential.
We have invested quite a lot last year in being prepared with technology, processes, and people. As of yesterday evening, we could process already on our systems 226 eRX prescriptions. I can assure you and confirm, we could process them without any problem, and we could bill them without any problem. Let us give you now a glimpse on how easy it is to redeem an eRX, at the same time purchase on an OTC product and use our services with our DocMorris digital health ecosystem app. DocMorris. Discover the new health with the DocMorris app. Download now. Let's move now to our second and equally important priority of operational leverage. Our target and our commitment is to reach EBITDA breakeven in 2024.
Therefore, we have set up an extensive transformation program, including measures to increase gross margin, leverage on performance improvements and structural synergies. With regard to gross margin, we will enhance our assortment, pricing and procurement strategy, and we'll launch our advertising services in Germany and France this year, as we have already done in Spain, two years ago. With regard to performance improvements, we will improve on marketing performance and operational performance, including DC-2, which I just would like to give you an update afterwards. On the side of structural synergies, we see significant efficiency gains through optimizing our organizational structure and consolidating and integrating our platform. All of the measures that we have planned, we will implement and execute within the next 12 months. This will be the base and contribute to reach the target of being EBITDA breakeven in 2024.
Marcel will show afterwards the impact of these measures on our PNL. We will update you about the progress regularly and on the occasion of a Capital Markets Day later this year. Let me give you a brief update on the go live preparation of our distribution center two in Heerlen. We are fully on track to go live in Q2 this year. Based on the really extensive testing which already started in November last year, and the set up of the two warehouses and distribution centers where we can run them autonomously from each other, we are confident that we will see a good go live in Q2 and a smooth ramp up in Q3.
Once we have taken live this new DC2, we will reach an automation degree of 70% in this warehouse and can leverage on a productivity improvement of more than EUR 10 million per year. This is again an important and significant contribution to reach the EBITDA target in 2024. This DC2 will also add 15 million of parcels additional capacity and more than double the capacity in Heerlen. Let's come to the third priority, which is the growth focus on DocMorris. Before we talk about the growth measures on DocMorris, we have to talk about 2021. The non-Rx online market last year saw a significant slowdown coming from 17% and 15% in the years before down to 3.6% in the last year.
We also see that part of the cohorts of the last two years, related to COVID and masks have reduced retention metrics, compared with other cohorts. Whereas the stickiness of the existing cohorts remain at the same high level. In combination with the fact to keep and allocate wisely our cash and being ready for the moment where eRx starts to accelerate, we will focus on double-digit growth on non-Rx with our core brand of DocMorris. With new customers, we will focus on new customers with Rx potential, so OTC customers which we can convert afterwards to Rx customers with a high CLV, also as a base for sustainable growth going forward. As mentioned before, part of the transformation program is the reinforcement of the marketing performance.
The areas where we have defined measures you see on the right-hand side in the circle, on the slide, and it will be added by strengthening the digital marketing team also, with cross-segmental competencies from within the company. With the non-core brands, we focus on profitability, and have an upside potential, on the market recovery on OTC in addition to eRx, in the second half of the year. One of the key assets of the DocMorris brand is the digital health ecosystem app. We offer a unique experience for our patients and customers by combining products and services for them from awareness to diagnosis to treatment and to adherence. You see the products and services shown on the right and left-hand side of our app screen.
This app has already been downloaded more than 1.3 million times within only a few months and have a high average of 4.7 star rating. Let me conclude this part and let me summarize. We are fully convinced and committed to capture the full potential of eRx immediately after it has started. This year, we set a strong focus on execution and leveraging the potentials we have within all our company, and we set the focus on growth with our core brand, DocMorris. I will now hand over back to Marcel, who will give you the information regarding the impact of the transformation program and give you the outlook for 2022 and beyond.
Thank you. As Walter Hess explained, we have defined clear measures to achieve EBITDA breakeven in 2024, independent of eRx scaling. The actual EBITDA includes significant spending for eRx readiness. We are fully convinced of the importance and strategic relevance to continue to invest this amount in order to keep the best position for eRx scaling. The explained focus on marketing spend on our main brand, DocMorris, and the reduction of channels with lower customer KPIs and gross margin will have an immediate impact on 2022 EBITDA. The contribution of the new distribution center will start post go-live in Q2 2022, and have the first full year effect in 2023. After 2022, one of the three important levers towards breakeven is gross margin improvement.
Here, we initiated to improve product mix, buying conditions, and pricing to introduce and scale advertising service businesses and to extend our assortment and private label offering. Some of the already initiated measures will start to have the main impact on our numbers post 2022. Performance improvements includes the reduction of our cost per parcels, driven by the new distribution center, and direct savings via realization of economies of scale in all our segments, as well as via our telemedicine and platform as a service business. Structural synergies are indirect cost reductions, which we will realize by organizational optimization and implementation of more shared services throughout the group. In sum, this will lead to breakeven in 2024, with significant potential on eRx scaling comes on top. This leads me to our financial outlook for 2022 and beyond.
We are confident that the German eRx market will ramp up in 2022, and this remains our core growth and profitability driver. As the timing is not yet confirmed, we exclude any eRx impact from the outlook for 2022. We target double-digit non-RX growth for our core brand, DocMorris. Group external revenues are expected to remain flat relative to previous year as we focus on operational leverage and profitability in the short term. Our current trading also is in line with this outlook. Driven by continued tech invest and maintaining eRx readiness, Adjusted EBITDA in the range of CHF -75 million-CHF -95 million in 2022 is expected. As a result of the eRx delay, we now expect to reach EBITDA breakeven in 2024. Our medium-term EBITDA margin target is confirmed at around 8%.
With that, I would like to open the Q&A session and look forward to your questions.
Thank you. If you would like to ask a question, please press star one on your telephone keypad. Please ensure the mute function on your phone line is switched off to allow your signal to reach our equipment. If you find your question has already been answered, you may remove yourself from the queue by pressing star two. But again, please press star one to ask a question over the phone. We will take the first question from Alexander Thiel from Jefferies. Please go ahead.
Yeah. Hi, good afternoon, gentlemen. A few questions on the guidance from my side, and I would like to take them one by one. First, on your flat revenue guidance for 2022, how should we understand the moving pieces there? I mean, you guide for DocMorris, which is a major part of the OTC business in Germany, to grow double digits, and I believe we can also assume that the Switzerland business will grow with 5%+. Excluding RX, how should we come up with a flat revenue performance year over year, basically? What are the moving pieces there?
Yeah, maybe starting with Switzerland. There, we expect growth between 5%-10%, which is very sustainable and on a good level, like the years before. In Europe, we target low teens as a projected percentage of growth. In Germany, it's slight declines with eRx and the market recovery as an upside potential. This leads on group level to a flat development on sales.
Okay. Second on your profitability guidance. I mean, you obviously don't guide on eRx for the top line, but how should we think about profitability? I mean, i.e., does it mean if eRx kicks off in the second half, we should assume a guidance change for top line and profitability? Because, I mean, on the presentation, page 28, you bake eRx readiness into your guidance, but one page later, you're basically saying any eRx impact is excluded from the outlook. Yeah, if you could clarify this one?
Yes, eRx is excluded from the outlook. Nevertheless, as I showed, we included in the EBITDA bridge that we remain on our spending for eRx readiness and also to keep the achieved brand awareness topic. A base marketing is included in the EBITDA. Again, we do not know the timing, and so we cannot include eRx impacts in our guidance at the moment.
The last one from my side. On your scale back in marketing, I mean, we have seen a doubling to around CHF 120 million in 2021. What number is currently baked into your guidance for 2022? And if you could comment also on your current trading in Q1, I mean, what market development have you seen in the OTC space so far? Because last year was really weak, and I mean, you highlighted it also in your presentation. Thank you.
Yes, we included in our 2022 EBITDA guidance a reduction of marketing spending, which I have shown in the bridge from 2020- 2021- 2022. Therefore, marketing spending will be below the 2021 level. This is one main impact to achieve the EBITDA guidance for 2022. On market development, we do not yet have any market numbers for the first quarter of 2022.
Okay. Understood. Thank you.
The next question comes from Chris Huon from HSBC.
Yes. Thanks everyone for taking my questions. I would also like to do them one by one if possible. First, I'd like to pick your brain on working capital and CapEx for the year. I mean, I would just try to understand your funding needs going forward. You closed the year with two rounded 280 cash on the books. At the midpoint, the EBITDA burn will be 85. There will be some CapEx on top this year. With the breakeven target now postponed by a year, I'm just trying to see if we get to a level where the cash on the books is maybe not comfortable enough to go without, you know, raising new equity or debt.
If you could give some color on predominantly working capital and CapEx, that would already be helpful. That'd be my first question.
Yes. Due to the fact that we have a flat sales development target for 2022, we do not see an increase of net working capital. In part, due to the fact that we manage on these positions, we target a slight decline. On investments on CapEx, we expect to be on a similar level to 2021.
Okay. That's clear. Coming to the current quarter, I think that was also missed previously. I mean, the quarter is almost over. Is there any color you can give. I mean, I'll happily take any comment on any market group. Anything you can share on the current quarter.
Yes. The current trading supports our full-year guidance, and is in line with what we expect for the full year.
Okay. In terms of Rx in Germany, I think this is probably by far the biggest driver of the suggested decline this year. Is there any sort of color you can give as far as your expectations are concerned on that?
Yeah. With the pRx concerns, yeah, there is a slight decline in the same range as last year. We are sure it will be more than compensated in the second half of the year once the eRx starts to ramp up.
Got it. Then the last question regarding the number of eRx you processed. Looking at, I think yesterday, or at the end of yesterday, it was 5,700 in total. Your share is 4%. I mean, how are you thinking in terms of, you know, your share of all of the total eRx issued so far? Do you think the sample size is still very much too small to draw any conclusions? Or, you know, how are your initial expectations on the sort of share of the eRx market in Germany so far?
Yeah. It's probably not yet really representative as,
Nevertheless, it's only 5,700 e-prescriptions. For us, we do not already take considerations or assumptions out of it. I think what is really, you know, more important is that it is growing day by day. The last few days, we are at the rate which would bring us latest, even if it would remain flat, latest in 4-5 months to reach the quality gates. We know that every day there are additional doctors joining. We see that there are additional doctors issuing e-prescriptions. Therefore we think the curve will continue to rise. We will see an earlier reach of the quality gates than the 4-5 months if it would now remain flat.
I think this is the real important part of the figures that are the table at the moment.
Should we? I mean, once we go live, is it your expectation or fully live, let's call it that. Is it your expectations that, you know, we will see a very significant pickup? I mean, the number, the Sempora number, you know, the 25% general interest, do you expect a more positive shift also in the later stage of the trial phase, once you know, more people are onboarded? Or, what's your expectation near term?
Yeah. Well, in the next phase, we follow very closely what the Ministry of Health says, what gematik says. There, they now say all that once the quality gates have been passed, so there will be the nationwide rollout of the system. This means for a certain period of time probably, they will talk or tell to all the doctors and pharmacists to roll the systems out completely before then it will start after some months, probably really then at full speed. From there on, we have different scenarios prepared for ourselves. Let's say that the planning scenario is that within three to five years, we will reach 10% of online share.
Of course, we have scenarios, which also are different to be prepared for any case. The only thing what we see is all of the studies. I mentioned the Sempora study. All of the studies, I think the lowest said it will relatively fast go to 14% of the people redeeming eRx. There is no study I have seen which says it will be below after a certain time. That's why we are confident that there will be the ramp up. The speed of the ramp up, we will see, probably already after the first months, but definitely after the first year.
Perfect. Thanks a lot.
You're welcome.
We'll now take the next question from Volker Bosse from Baader Bank.
Hello, gentlemen. Volker Bosse, Baader Bank. Thanks for taking my question. I would have three, starting, first story.
Volker, sorry, we cannot hear you very well. Can you speak up, please?
Is it better now? Now I have the mic at my mouth. I think for 2022 a certain strategy change. Before you already said you are 100% top line focused with all brands capturing the maximum of the market potential. Now you move to short-term profitability focus. Would you agree on that observation? The second question would be on the group sales guidance. You said group sales will be flat. You just gave us a breakdown. DocMorris core to be up double digits. What does it mean for other brands? Which brands will, so to say, decline in sales in order to come up to the flat on group sales finally? The third one is on your EBITDA guidance.
I mean, before you already said, yeah, if we would not invest in growth and if we have the new warehouse on stream, we would be profitable now for 2022. You will not grow and the warehouse is on stream, but you still guide for a high double-digit million negative EBITDA. What is here the missing part to understand the argumentation? Thanks.
Yeah. Thank you. I will take the first question, and of course hand over to Marcel. Yes, that's correct. Up to now, we have focused a lot on growth and gaining and extending customer base. A customer base which then is the base also to convert the customers into Rx customers. Now with the extension of the test phase, but nevertheless, with the eRx really just ahead of us, we shift now to a path where we will follow profitable growth. As I've said before, we'll just now use the opportunity of this phase to leverage on the potentials we have. We have done a M&A acquisitions. We have potential on the structure, we have potential in marketing, in operations.
We will now just use this time to set the base for profitable growth and in addition, of all this transformation process, we then will have the eRx and will anyway come in a profitable growth situation in the future.
This leads to your second question. Therefore, we have to focus on our main brand, DocMorris, on our ecosystem brand, and in order to profitably focus on the other brands, and this in combination leads to a flat development on group level. Of course, if DocMorris is growing double digits, then some of the other brands have a slight decline because of the focus on high quality, high loyalty customer base. On the EBITDA level, our EBITDA includes also all the investments for eRx readiness and also marketing in order to keep our starting position on the highest level because we are fully convinced that this will move the needle to be the best in the eRx topic. That's why we think it's very important to have this amount spending for eScript.
On top, also the tech focus that we still develop on user experience, on customer-centric services, and to develop in our ecosystem. This will be the success factor for the future. That's why we are convinced that it's really important to spend on these levels and focus on operational leverage and performance improvements on the other topics.
Okay. Thank you. All the best. Thanks.
The next question comes from Gerhard Orgonas from Berenberg.
Yeah. Sorry, good morning. A couple of questions from me as well. You said that you are focusing the non-core brands on profitability. Can you tell us which one these non-core brands are? Or which ones you consider non-core?
The core brand is definitely DocMorris. We have medpex as let's say the second lead brand within our portfolio. The non-core brands definitely are Eurapon, apo-rot and Apotal.
Okay. I was wondering, and for the flat Germany guidance is also because your paper Rx revenues were pretty good last year, down from maybe the single digits or so. Is there any lag effect? Is there any effect from bonuses you may still have given last year that you see a more significant decline in the paper Rx business this year before eRx comes in?
It continues at the same scale about of the second half of last year. The first half was less in our portfolio. The second half was a bit more, and it continues at the same level about of last year. It's due to the bonus ban. I think our focus really is on the eRx. We keep the Rx customers as retentioned as we ever can. The focus and the future will be eRx, definitely.
Can you give us an indication what the H2 decline was in paper Rx then? Double-digit percentage, right?
We do not comment on the details on that.
Okay. My last question is on the gross profit improvement. You expect a significant gross profit improvement between 2022 and 2024 just in the OTC business. It looks like, you know, maybe, I don't know, CHF 40 million or so. What is the driver for that?
Yeah. Here we have a lot of initiatives initiated measures starting on improvement on procurement and pricing and reduction of the low margin channels like price search engines or external marketplaces. Then, as Walter explained, we are increasing our ad services offerings which also increases our gross margin. Last but not least, we work on assortment and private label with higher margin. This in sum all together leads to this margin improvement for the EBITDA by even 2024.
All right. Thank you.
We will now take our next question from Michael Heider from Warburg Research. Please go ahead.
Yes. Hi and good morning. I have a follow-up also on your flat sales guidance. Again, sorry, but you said Switzerland is gonna grow 5%-10%, and then obviously DocMorris is growing double digits. Then the sales decline in non-core brands, is this now? Are you only talking about Germany? What is your I mean, can you give an indication on your international business? Is this expected to continue to grow as we have seen in the past?
I wonder, European business, we plan a sales growth in the low teens. We focus on the German market, and we hope we will continue on a double-digit basis, but not on the levels we have seen in the last years.
Okay, thanks. Another question on your midterm or long-term targets. You confirmed your 8% EBITDA margin. Before you also guided on revenues, you said that you expect to reach CHF 4 billion in revenues and that was like a timeframe you gave there and but you expected that to be at the beginning of the period, so that was around 2024. Can you confirm this guidance?
This also is very much related to the start of the mandatory introduction of e-scripts. We do not give an exact year for the CHF 4 billion, but we still believe in the 10% online penetration in the medium term with the result leads to this CHF 4 billion.
Basically the CHF 4 billion should be still reached in that time period, but maybe not in the first year anymore.
Yes, this could be plausible. Yes.
Yeah. Okay. Then, last, well, two more questions, sorry. First one, will you be able to integrate all your external sales in the year 2022, because the logistic center is planned to be opened in 2022, and I think that was one of the key issues here that you needed to shift all the volumes to Heerlen. So the question is, will there be a full integration and full consolidation of all external sales in this year?
No, we will not be able to fully consolidate. We will continue on the reporting as we did in the past.
Is that then planned for 2023?
Part of the transformation program is that we also leverage on the structural synergies and the synergies are also part of our M&A acquisitions. As I've said before, we will keep you informed and then regularly updated about the progress of the project. Yeah, this will be part of it.
Okay. Last question. Can you remind me of your total capacity now or once the logistics center will be up and running, please?
Yeah. Total capacity will be up to 48 million parcels per year as of the go live of the DC2 in Heerlen.
Okay, great. Thanks.
Welcome.
We will now take the last question from Lorenzo Margiotta from Bank of America. Please go ahead.
Two quick ones from me. One is on the OTC market. Excluding the issues you're discussing this year, with it being flat, do you confirm that you would expect that to be growing double digits again from 2023 onwards? Secondly, in the 2024 break even guidance, if Rx comes sooner than expected or is strongly additive in 2023, do you still think you could be profitable in 2023, or is that no longer a realistic target at all?
Yeah. Maybe on your first question. We assume that for this year, the growth might be more or less the same level as last year. This is our assumption. Therefore, we see an upside potential if the market grows, comes back or grows faster. On the EBITDA target for next year, what we confirmed and are committed to be at break-even in 2024, because the break-even was planned including the eRx ramp-up within close to 18 months, and this is now delayed. It will be in 2024, and we will make sure just to have break-even ready in any case this time.
Okay, thanks. That's clear. Just OTC from 2023 onwards, do you think that market will return to growth of recent past, or do you think it's now something that your business excluding eRx will grow slower?
No, we think that the post-COVID markets will recover completely and, despite its already at 23%-25% online share, we see there is much more growth potential also in the OTC business in the future.
Okay. One year impact from shifting towards DocMorris rather than a structural change in the story.
Yes. We think so.
Thanks.
Yeah. Thank you very much all together. Thank you for attendance and for your questions. With this, we close this conference call. Thank you so much.
Thank you.
Thank you.
Thank.