Dear, ladies and gentlemen, welcome to the conference call of Storozer Group AG. At our customers' request, this conference will be recorded. As a reminder, all participants will be in a listen only mode. And after the presentation, there will be an opportunity to ask questions. May I now hand you over to Leitur Oberheemflee, who will lead you for the conference.
Please go ahead.
Thank you very much. Good afternoon, ladies and gentlemen, and a very warm welcome to Zuora's Group's Half Year twenty twenty one Results Conference Call. So Rode is in the middle of the really most defining time that I personally have experienced in my 20 years, 8 years Since the foundation of that company and I'm happy to provide the latest update on our path to electronic prescriptions And beyond, where we are very much on track. With me today are Marcel and Walter, who will present the financials And especially, the latest ERX update first hand. First half year was really an exceptional period in several concerns, and I'd like to highlight a few points in particular.
We are first able to accelerate our growth performance once again with Q2 growth of 26 0.2% on group level and impressive 35% in Germany. Our active customer base Grew to $11,700,000 which was an increase of $3,600,000 compared to last year. We always aim for the biggest possible customer base at the forefront of ERX, and therefore, are really excited now About that great number, what a starting point. On the ERX front, we were able to launch our new Doc Morris app, Including the scanner function and delivers the ERX server for Gematix as part of YVM on time For the launch of the test phase, which started already in July, we see the development in making everything ready for the ERX, furthermore, fully on track. As already explained at our full year results call, We initiated a large TV campaign with the initial focus on branding.
And I'm happy to say today that we achieved our targets With an uplift in unaided brand awareness by 8 percentage points. Additionally, and obviously, most importantly, Customers state, Doctor. Morris as the most relevant brand when being asked about which company come to their mind when Thinking about ERX. 8 brand awards, which we have won, including renowned Red Dot And new Your Festival awards prove the brand building capabilities within Rose. In terms of new business, we were able to launch our 1st ecosystem partnership with Novo Nordisk by implementing Doc Morris Adipositas Care at the end of the Q1.
We also made another step Regarding integration with the completion of the transition of our growth to Docomois. Last but Very much not least, I'm extremely happy about the addition of Madam Uddakri as Group CTO. The first three weeks now with him on board has already shown that he is very deep in the topics that concern us the most And that he has relevant experience and insight that he will apply to help us reach our mission. I'm fully convinced that he is the right person to help us drive the transition from an e commerce pharmacy to Leading the Escar ecosystem and also to improve our products, such as the Domaris app continuously and really very fast. As already explained at our Capital Markets Day in June, I see actually 5 key pillars for the future success That I want to reiterate today.
1st and at least in the short term, the biggest and most important topic is obviously the The opportunity that the introduction of the electronic prescription in Germany is bringing to us. This is the largest growth driver for the next years And the main factor was to reach our midterm targets. We just visited Aporteia and Sweden this week to better understand The dynamics of electronic prescription in that market, where the Rx online penetration has jumped to 12% after COVID-nineteen. These learnings coming from Sweden confirm our confidence in our target in Germany once again. All disruption in the past had always been in favor of the customer.
Doing things better for them was always the main driver. People are dealing with really too many challenges in their journeys, and the efficacy of medication is By far, not where it could be. Here comes in our approach with combining medication with digital services What will lead to a better adherence and therefore better outcomes. There is so much place for improvement. Let us empower people to manage their health in a much more convenient, personalized and effective way.
Therefore, our vision is to Create a role where everyone can manage their health in one click. This means to build the health care ecosystem of Europe, Providing personalized and seamless health journeys specifically designed towards the needs of chronically ill people. We are really up to boost our core business as well as create new business models based on tech and data. Tech is more and more in the core of our business as well as we see technology as the key enabler to reach our vision. With Madhu joining our team, we work we took another big step to get closer to our ambition.
All of us at Tsurozi are committed and really excited to execute on that strategy And great value for customers, employees, partners and with that, our shareholders. I now hand over to Marcel, who will explain the financial performance of the 1st 6 months of 2021.
Thank you, Walter, and good afternoon from my side. I'd like to start with emphasizing again the three highlights So from a financial perspective, first, the gain of market share in Germany resulting from the really impressive 35 And growth rate in the 2nd quarter support our strong position in preparation for the launch of electronic prescription. 2nd, the spending in the marketing campaign are showing promising returns and increase in active customers and increase in brand awareness, especially with an Rx focus and support our growth rates. And third, the significant reduction of net working capital by 2.5% of sales is leading to a more efficient use of capital. Let's go into more details, Starting with the group sales performance in the first half of twenty twenty one.
We once again accelerated our growth rate Truly compelling 20.8 percent in local currencies with a strong development in all segments. In Switzerland, we achieved a solid and Sustainable growth rate of 5.6%. In Germany, we were able to grow external sales by 30% With the important fact of increasing our market share. The Rx business continued to develop with low single digit declines despite discontinued Paper, prescription marketing and the bonus spend. The OTC and PPC business developed very strong, especially when taking the rather weak market development into consideration.
Segment Europe achieved 22.9% growth in local currency. This somewhat lower growth compared to prior periods It's a result of the very strong demand driven by previous year's hard lockdown in Spain. I would now like to highlight the performance of the 2nd quarter. On a group level, we achieved a very strong growth of 26.2%, Mainly driven, obviously, by our performance in Germany, where we achieved this really exceptional 35.6% growth. Switzerland and Spain both show atypical performances caused by previous year COVID impacts.
Let's dive into our KPIs. The key development here is the growth of The number of active customers to 11,700,000. Compared to last year, this is an increase of 3,600,000, A combination of $1,100,000 via Rapotal acquisition and $2,500,000
organic increase.
Due to the continued higher growth of the German OTCs as well as the marketplace business with typically more commoditized products And slightly smaller baskets compared to RX or B2C Switzerland, the average overall basket size decreased increased from €54,000,000 to €52,000,000 The same applies for the order frequency, which is at 2.2x per year. Our repeat order rate remains at the high level of 74%, which shows the significant loyalty of our customers. The decrease was driven by the large number of new customers. In terms of site visits, we saw a slight decrease To 234,000,000 in the 12 month period ending June 21. We see this as a result of the peak in Q1 2020 due to COVID-nineteen.
As we Stated in our full year results, this year is, in our view, a critical one in regards to building the strongest possible position ahead of the We increased our growth expenses significantly, especially on the marketing side, which resulted in accelerated growth And in an increasing brand awareness. This P and L on this slide shows the adjusted numbers without The gross margin came in below previous year, again, driven by the pandemic With a very strong increase in 2020 and the slowdown of the market, especially in Q1, as a result of the missing flu season. It is, however, in line with the second half of twenty twenty. Personal expenses developed in line with revenue growth Despite increased expenses for future growth. The main reason for the increase in marketing expenses Our marketing campaign that we launched to increase awareness ahead of the Eastgate launch, the marketing ratio is currently at 5.9%.
Distribution expenses show a slight improvement in relation to sales And other operating income and expenses include some cost of new business initiatives and developed in line with our expectations. We're led to adjusted EBITDA of minus CHF 42,900,000. I will explain the adjustments and the bridge Of 2020 to 2021 earnings in more detail on the following two charts. Depreciation increased as a result of a higher base due to acquisitions and also higher Spending in Tech Development. And the net financial results improved compared to previous year due to a positive exchange rate effect.
The adjustments On EBITDA level in H1 2021 reduced significantly compared to previous year. Any related adjustments amounted to CHF5 1,000,000, while integration mainly related to Our Board integration amounted to $1,200,000 Including other adjustments of $700,000 total adjustments Declined to $6,800,000 compared to $13,000,000 in 2020. This gives you a chance to understand the drivers of the earnings compared to previous year In more detail and build the bridge from H1 2020 adjusted EBITDA of minus 11,500,000 To H1 2021 of minus EUR42,900,000. First, We increased E script related expenses by $14,200,000 compared to last year in order to achieve the best possible position ahead of the ERX The amount is mainly attributable to the marketing campaign. 2nd, As explained at the Capital Markets Day, our new businesses, telemedicine, platform as a service and ecosystem collaborations We have a high future margin potential, which is why we increased our spendings in these initiatives by 6,000,000 As explained in the P and L, previously exceptional gross margin impact caused by the pandemic And the slow market development caused by the missing flu season this year led to a lower gross margin compared to H1 twenty And this is an impact of minus €9,200,000 on earnings.
The remaining €2,000,000 from Other line items are additional expenses that occurred as growth expenses overcompensated our operational improvements in these Our balance sheet remains in a good shape ahead of the Easter draw out. Our cash position is at above CHF 250,000,000 from CHF 300,000,000 at year end, Driven by our operational performance and the reduction of net working capital by 34,000,000 This reduction was driven by a stronger management focus, which led to a decrease of inventory, a decrease of receivables in relation to sales And an increase of payables and accrued expenses. Significant investments of $23,000,000 in our technology resulted in an increase of intangible assets of $12,500,000 Overall, the balance sheet with an equity ratio of 37.2 percent and $250,000,000 of cash A quick word on our financial outlook, which is well known. We confirm both Our communicated 2021 and also our interim targets. Our path to profitability also remain unchanged.
With this, I will hand over to Walter Hess, who will give you the latest Instac update and look forward to answer your questions in the Q and A session.
Okay. Thank you, Marcel, and welcome to everyone. I'm very pleased to provide you with a brief update On the most exciting short term initiative within our company, the introduction of Earex in Germany. Summarized, everything is and remains on track for the mandatory launch on January 1, 2022. And we are all really excited and stay very much focused to tackle this unique opportunity in the best way possible.
In July 2021, the launch of the test phase of Earex has happened, Fully in line with the schedule of the German government and Gematik. Right now, Gematik is in the process of extending the initial test phase to 50 physicians and 120 pharmacies. We, as Stock Morris and also the remaining brands in Germany are ready for ARX And are looking forward to receiving the first real e script very soon. In Q4, There will be the rollout of the ERX technology nationwide, so that all participants can test And will also be ready for 1st January when Earex will become mandatory in Germany. The leading providers of physician information systems remain positive that they will be able to roll out Their eRx modules to their customers, the physicians in time for the mandatory rollout.
One example, just recently, the ERX module of the CompuGroup TurboMed system Has been certified by the KVV Association of the Statutory Health Insurance Physicians, And therefore, the system is ready to be rolled out. Something that is still pending It's the publishing of the specifications of the 3rd party APIs, which was expected for mid of this year. However, we do not expect this ordinance to have a major impact on us as and bear in mind, We as a pharmacy are anyway connected directly to the telematics infrastructure based on our pharmacy license. So yes, of course, the schedule for Gematik and the other stakeholders involved is tight until the end of the year. But we are convinced that Gemartic will deliver, and we are also convinced That the auto participants have to deliver and will deliver as well.
Let's move now to our own readiness and roadmap. As explained at the Capital Markets Day, We will size the ERX opportunity with our health care ecosystem approach. To create a world Everyone can manage their health in one click is our vision, and it comes to life now. Last December, we launched the Doc Morris Plus app, renamed recently to Doc Morris Express As part of our Doc Morris e commerce platform, with the main scope to test delivery options And gain experience with same day deliveries by using our marketplace functions. And of course, Also to lay the foundation for our partner pharmacy network.
We remain on a good track To achieve our target of 200 pharmacist by end of the year, and we'll have onboarded about half of them by end of this month. Beginning of July, we have launched the new Doc Morris e commerce app, already including the new ERX sanctions, Like the convenient ERX scanner, which enables patients to simply scan the ERX tokens and place an order with us. By end of the year, we aim to include the Doc Morris Express service into our Doc Morris e commerce app, Just in time for the mandatory launch of ERX to provide best in class user experience for our customers. For the first time then, customers will really be able to redeem an ERX And at the same time, in the same buying process, purchase OTC and beauty personal products at best prices. And in addition, they have the choice to get the products delivered according to their needs, either within 24 hours, most of them up to 48 hours via mail order or same day or click and collect through one of our pharmacy partners.
During the pandemic, The population has become very used to download an app and scan and use QR codes with their smartphones. For example, to download their COVID certificates or to register in a restaurant. As a result, we believe that even more people will choose an online pharmacy to redeem their ERX already in the near future. A new study of Vidcom, published end of July only, Confirms that the digital health offerings became much more important for Germans due to corona And shows that 22% of them would choose an online pharmacy for their ERX. And exactly for them, we will have the right answer in place.
By bringing together e commerce, Health services and marketplace, we will be able to offer the most convenient customer experience For chronically ill patients and for acute demand, with flexible delivery options and state of the art health services and support. Let me now conclude my short presentation by once again reiterating How excited, committed and focused the whole team at the ROCE Group And I personally are for the ERX opportunity, which really is just ahead of us. With that, it is my pleasure to open the Q and A session and to look forward to your questions.
Ladies and gentlemen, we will now begin our question and answer session. After The first question is from Alexander Tiye, Jefferies, your line is now open. Please go ahead, sir.
Hi, good afternoon. I hope you can hear me. A couple of questions from my side. First question for Marcel on the improved working capital efficiency. Could you provide more details on what is driving this change?
And how should we account for Working capital going forward, if I remember correctly, your target is around 6% of sales. The second question would be for Walter Hess, would be on your logistics. How are you progressing with your new logistic hub? And how far are you currently with increasing the efficiency at the other 2 hubs? And my last question would be for Walter Oberhensley, perfectly fitted for a lawyer.
And it is on the accusation that has been pushed This is a market from a non carbon broker, which might imply that you're not complying with the ARIK's bonds ban, which has been enacted since December last year. Could you clarify once again what has been a difference between SHOP and your strategy that the broader market basically understands what's
Development and there, our stronger management focus on these topics leading to a higher turnover in inventory, Leading to reducing base outstanding in the receivables, and therefore, the main part of this Improvement is really sustainable and makes us fit for the ERX opportunity and are now below the communicate Targets of the 6% of sales. This also because in the future in the East Grid Topic, the net working capital will be a little bit higher because of the receivables from the insurance companies. But all together, I think this improvement was very important and again, made us fit for the future growth.
Walter Hess here. I can answer the second question. Yes. Our DC2 distribution center too is well on track. So we will start as planned with the test phase within the next 2 weeks.
And also as planned, we will go live We sit in the first half of next year. With regard to our activities For operational improvement, the focus in the last quarter was very much on the speed through the processes. And there we have really achieved very relevant improvements, which we also see in Fulfilling our service promise and increasing the orders which are delivered within next day delivery target.
Okay. So the question number 3, which is the Question about bonus spend. So I mean, what we can say is that we have a very, very loyal customer base. And secondly, we did after the bonus spend, the topic came into the picture, we decided not to acquire Rx customers anymore, which has two effects, maybe the ones you are asking for. But on the other hand side, we would not like to comment on Chobhapur DKK.
Okay. Thank you very much.
The next question is from Rupen Boyajian,
You were mentioning that from the technology, 3rd party applications We're missing and also that, if I understood correctly, Turosa is not so much affected. Could you again Give some more details about that or are you not affected at all or only slightly? And then maybe you can say something on The projected uptake of the BRX business in Germany for next year.
Yes. So the missing specification will specify The API guidelines for 3rd party apps. 3rd party apps is everything which is not Gematik, Gematikap. And therefore, We are concerned no, we are not concerned as we are a pharmacy and our app is a pharmacy app. And as a pharmacy, we are not it is not relevant for us What the 3rd party specifications would say, as I said, we are directly connected to the Gemartic server And can redeem the medication data directly To our pharmacy.
And the projection, what we can say is that We can just confirm, and we are very much convinced that within the next 3 to 5 years, Market share of online penetration will go up to 10%, and it starts 1st January on a mandatory base. And yes, so this is probably already consolidated.
Do you think it's going to start rather slow? Or do you expect a speedy start?
Yes. There, of course, we have several scenarios in our planning. There might be In relation of our active customer base, where we already have 11,000,000 active customers and By statistics, about 25% of them do have chronic disease. This would lead to a rather fast Take up, but we did not give guidance of the 1st month of development because it's really crystal ball What we strongly believe and are convinced is that this double digit online penetration will be achieved in the next couple of years.
Thanks a lot.
The next question is from Olivier Covey, Kepler Cheuvreux. Your line is now open. Please go ahead.
Yes, thank you very much. Hi, good afternoon, Walter and Marcel. I would have Five questions left. First one, what revenues from Apotel and Metpex did you consolidate in the reported revenues line, Please. And can you explain what is the mechanism?
Could you come back over the sales performance of METex and Aportal in particular this half year versus Last year, please, where obviously we didn't have Aperdal in the base. And just quickly remind us of what the structure of the contracts The line please, please. Second question would be on the warehouse situation. Can you remind us your thinking or Potential timing for the rationalization of your warehouse footprint, notably in the German geography, in particular. First question would be on the marketplace.
Can you explain to us how you will drive customers to your own offers versus Your partner pharmacies on the marketplace and confirm just acoustically I couldn't just Double check the number of pharmacies you plan to have on boarded by the end of the month. 4th question would be on the active customers in the German market, of those 10,300,000 you talked about, could you share the number of customers that are currently active Doc Morris customers, please. And finally, just to confirm on Rx, Could you just confirm that you've been respecting German law on Rx pricing in H1? And whether the Your commission's letter that you have received in July has changed anything to your strategy? Thanks.
Yes, thank you for your questions. Maybe I'll start with the performance of NetSpect and all the single brands. And there, we do not disclose the single brands because we steer the business on a segment level of Germany and allocate marketing spendings on the brands, which we have the best performance and the best KPIs. And For us, it's important to have the overall performance and dynamics and there that the KPIs we disclosed Show that we have a very good growth rate on external sales and external sales, as you know, is the sales to the customers And the recorded sales includes all the services and Deliveries to the pharmacies, and so that's the difference of this. Also in terms of active Customers, we do not disclose number of customers of single brands.
The second point was about the warehouse ramp up. And as Walter has mentioned, we will finish the additional distribution center end of this year, and then it's The rollout testing and scaling in the first half of next year in order to be ready and have the capacity In the ERX rollout and scaling.
Okay. And sorry, just to confirm, on the German Warehouses, can you give us any color on any rationalization that you plan there?
Well, overall, the capacity is in the focus, and that's why we do not integrate further warehouses in the short term because we think in this situation, it's most important to have the flexibility and the capacity To fulfill on the upcoming demand of prescription.
Okay. Thanks.
With regard to customer journey that you asked on our app, So the customers come in via our DocMoy's app or DocMoy's website, and then they will have the choice Either to purchase via mail order or they also will have the choice To you to choose same day or click and collect with our partners. And once they choose click and collect to our partners, then The orders will be transferred to them.
Okay. So just to confirm, so if I want aspiring, I just there's one product and then I choose when I depending on the method of delivery, which where it goes, right, To you or to the partner?
You can choose fiber once you choose the product, And you can also choose right at the beginning if you want to go for Sanjay or Click and Collect.
Okay. Thanks.
And with regard to number of pharmacies, so end of this month, we will reach close To 100 pharmacies, including the branch pharmacies.
Okay. So we do not give bonuses anymore for a long while actually and what the letter of the EU Commission concerns. So Actually, we see in this letter a confirmation of our strategy as the commission clearly points out that The bonus plan as it's marked in the last changes of law is not compatible with European law.
Okay. Thanks.
Okay.
And And the next question is from Michael Heiden, Robert Research. Your line is now open. Please go ahead.
Hi, good afternoon, and thanks for taking my questions. Many have been answered. But just to reconfirm, can you reconfirm From the Rx growth, you have seen or decline rather, you have seen I think you have given a number which I didn't catch. Then this question was also asked, but maybe asked a little bit differently. What's can you give us a feeling what the organic growth was In the first half.
Then a third question on what is the profitability growth going Into the second half, do you expect marketing expenses on a similar level than you have seen in H1 or are you planning even to increase your marketing efforts shortly ahead of the introduction of The mandatory ERX? Then also a question on the new app, The Doc Morris app, just for my understanding, I mean, if the trans if I have a The Doc Morris Plus app, let's say, will I be automatically transferred to the latest versions with the Rx Scan function or do I have to actively download the latest versions Once you I mean, every time it's renewed. And then last question, again, on your partner pharmacies. I mean, you've given us the target again. You're saying close to 100 at the end of the month.
I mean, maybe you can just give us the current So how many pharmacies you really actually do have at the moment? That would be very helpful. Many thanks.
Let me start with a more fruitful question. You asked about the Rx growth in the first half of twenty twenty one. And here, it's very sustainable and also comparable to the growth rates we had last year. It's in the minus Low single digit percentages, again, because we have very low partners and we did not acquire new customers with the Monetary incentive in the last couple of years. And so that's in line with our expectations.
In terms of organic growth, yes, as you know, we closed the acquisition of Aperdal in the second half of last year. So it's an accretory Part in the growth rates included. But again, for us, it's very important to have the market share as a group and As a strong starting point for the launch of the electronic prescription and the overall active customer base and there, We already also in this half year, we did a lot of progress. The organic growth rates Would be significantly double digit for the first half of this year. And the third question was about the profitability in The second half, here, we still need the flexibility in our marketing campaign depending on the development of the Access for electronic prescription of our German customers and cannot give an exact guidance because we still I believe also in our ramp up this year and then we will accelerate our marketing campaign.
In general, We believe that this will be the case, but we accelerate our spendings in marketing in the second half of the year.
With regard to the app, if you have today the Doc Morris Express app, Yes, you have to download the new Doc Morris app. And once we integrate Via an opt in that we will ask customers, we can then transfer based on the opt in the existing data. Regarding partner pharmacies, right at the moment, we are at 95 pharmacies, as I have said, including the branch pharmacies, so we are already quite close to 100.
Great. Thanks a lot.
You're welcome.
The next question is from Andy Schmidt, ZCapital. Your line is now open. Please go ahead.
Hi, gentlemen. I have a question on the balance sheet and your ability to finance Your growth through your breakeven target. A lot of people fear that There will be a cap increase rather sooner than later because you have made you are generating quite high losses At this point in time and also in H2 and COVID sort of next year, what can you tell us about that? What makes you confident that you don't need a cap increase?
Yes. We have it this $250,000,000 cash. We have the financial power For the electronic prescription opportunity, which is in our plan and which leads to our guidance. And for this, we feel quite comfortable. This is what we always said.
And if there are additional opportunities, we have to look at this and we have to plan this, but This is, at the moment, not part of our business plan.
But Given that now we are in 1st January and you start growing, what will change From this year, of course, we have the U. S. But do you think that your marketing spend per new customer, Customer acquisition costs will just go down that dramatically, that fast. Because if you again lose $60,000,000 $70,000,000 in the second half and then in the first half next year, yes, the balance sheet will be quite stretched.
Yes. But we have our business plan. We have our liquidity needs in this plan, and It shows that this existing cash position is enough for the EastGroup opportunity to terminate.
So the reason why you're confident that your losses will decrease significantly at the next year is because why? I mean, you won't tie you back on marketing next year, I guess. So What will be changing in 2022?
It's all in line with our guidance and what We said that we target breakeven 12 to 18 months after 2021. And if we look Into our unit economics and the contribution margins of electronic prescriptions, this leads to this business plan.
So the reason will be that new customers you gain through ORIX will cost you much less and Entire profit, that's the reason, right?
Especially the contribution margin of electronic On a prescription, as we have shown in the Capital Markets Day, it will be significantly higher and it leads to additional Positive cash flow, which we can spend again in our marketing campaigns.
Okay, perfect. And in other cost savings, what can you tell us about that? You integrated with Saldanha last year and now Aperoz as of 1st July or end of June. How much savings will that bring Annualized?
Yes. It is included in our chart where we Show what the run rate is when we have executed on the integration plans and also the synergies. And with this, we are able to achieve an EBITDA margin between 2% 3%. This is, on the one hand, synergies out of On the other hand, it's the dynamics of sales, cost reductions through our additional distribution centers, And these all come together to this EBITDA margin between 2% 3%.
Okay. Thanks. The next question is from Patrick Kolchsen of Patxi Aitikar talks. Your line is now open. Please go ahead.
Yes, good afternoon. Thank you very much for taking the question. I would like to know if you already know when you have to consolidate the first Turn over to Zaius from the marketplace segment, if it will be in 2022 or later and how much do you expect to come from this And maybe you could again explain the pricing model for RX on the marketplace. Are you getting a fixed fee or margin of the And finally, my question would be if you are going to brand or to deliver your partner pharmacies
Well, on the first question, as I've said, for us, the marketplace The offering of same day and click and collect is value added services for our customers. So therefore, we expect that relatively high share of the orders, The Rx or OTC, the customers will ask to deliver them at home next day, 48 hours latest. So we expect that the share through marketplace Yes. We'll not be over 50% at least. Regarding the pricing model is unchanged to last time.
So for our If they want to use the marketplace function, there is a license fee, which is unchanged To what it was before? And the third question, can you
please repeat again? If you're going to brand the pharmacies in some way?
No. This is not foreseen as of today.
Okay. Thank you very much.
You're welcome.
The next question is from Sebastian Bober, UBS. Your line is now open. Please go ahead.
Hello and good afternoon. The first one would be on the Swiss business. Your B2C business developed quite well in the Q2. I was wondering how much COVID self tests or any other COVID related measures have played into that one?
Yes, there was some demand on Topic related products, but we cannot quantify this. I think overall, the Growth in the Swiss business is very solid and sustainable and in line with what we always communicated as a target of the development of the Swiss In the mid single digit area and with this 5 more than 5%, we are fully in line with this.
Understood. And the next question would be on cash and balance sheet as well. What sort of cash level your business needs to run the underlying operations? And what sort of equity level you feel comfortable with? Or at what level would you expect or would you say your balance sheet would be looking stretched?
Yes, we do not disclose any target KPIs or covenants of our Our balance sheet, we of course, we want to have a healthy balance sheet with the power to be flexible and have the Financial power for the future. In terms of cash, the amount we need for the ongoing business It's about €50,000,000 but also here is the chance to do this via bank credit on net working capital, for example. So we have a strong balance sheet and a lot of options in this regard.
Understood. And one last question with regard to your German business, hence the including the one, the unconsolidated one. And when I'm comparing Q2 with Q1, you sequentially seem to be down. On the other side, The flu season has been not there in the Q1. At the same time, in the Q2, your competitors seem to have some logistics struggles.
Why had there been this sequential decline and not potentially sequential increase?
I do not really understand your question in terms of Both rates, we accelerated our growth in the second quarter and gained market share, so we are quite happy with the development.
In terms of absolute numbers, so if I calculate correctly, you had like something like $340,000,000 or $337,000,000 in the first half And you had like $319,000,000 in the second half in the second quarter, sorry, Q1 and Q2. So that's a sequential decline, right?
So that's the normal seasonality we have for the 4 quarters in the year. And important is The relation and the development compared to the previous year quarter.
But I mean, normally one part of the big seasonality is also the flu season that, As you said, didn't take place in the Q1.
Yes, that's true. But again, it's the seasonality and the comparison to premium here shows that we accelerated our growth rate in the second quarter.
Understood. Many thanks.
And there are no further questions at this point. So I hand back to the speakers for closing remarks.
Okay. Thank you very much for your attendance and for your many questions. Thank you for your interest and have a nice afternoon.