Dear, ladies and gentlemen, welcome to the conference call of Terese Group AG. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen only mode. After the presentation, there will be an opportunity to ask questions. May I now hand you over to Walter Oberhenst, CEO, Oberli Zurow, through this conference.
Please go ahead, sir.
Thank you very much. Good afternoon, everybody, and welcome to the ROCE Group's 2020 results conference. I'm joined by Marcel, who will discuss the numbers. And as a result of the recent change in the management team, Our new Head Germany, who is Walter Hess, who I'm really happy to introduce to you today. Walter is actually a long standing member The executive board with a proven track record in the Swiss business as well as parts of the German business in the past.
In his function, he has proven excellent exclusion capacity, ability to form and scale partnerships in the context of platform strategies And also new business models. He has a great network in the channel and also Swiss healthcare system, and we are all confident that Walter is Perfect fit to lead us through the upcoming growth phase initiated by the introduction of electronic prescriptions in Germany. We now share with you first hand insights on the developments around the ERX opportunity But also brand integration and logistics capacity. I will then give An update on technology and new business before Marcel will finish with our 2021 and mid term financial outlook. So let me now start with my personal summary of 2020.
A quick word to start on the financial performance, which Marcel will With a sales growth of 14.4% in local currency, we exceeded our target for 20.20. On the earnings side, we also achieved our target with an adjusted EBITDA before our cost investments of minus €900,000 Nevertheless, EBITDA reported came in at minus €70,000,000 largely driven by extraordinary non recurring FX that Master will explain. Important to notice that on a like for like basis, We achieved an operational improvement of €30,000,000 Our focus has to remain on growth given the opportunities in our markets And it is crucial to invest now to fully capture the opportunities ahead of us. Overall, 2 main themes shaped this year, which in my opinion has been one of the most important years in the history of CEROSA. In the big picture, I see the preparing for the ARX opportunity and the developing and also investing in our tech Capabilities which beats the cornerstone into metamorphosis on e commerce to a tech company With a clear platform ecosystem focus.
Out of the many highlights in 2020, I would like to discuss 3. First, the regulatory changes around the production of the ERX triggered by COVID-nineteen, especially the mandatory electronic format for prescriptions already starting in 2022. I see these changes as a turning point in the history of e commerce pharmacy, whereas in the past, the protection of brick and mortar was Common theme in legislation, a new regulation has to be seen as the starting of reshaping the whole industry to become digital. Finally, we had to wait a long while for these changes. The second highlight to pick out is the extension of our take capabilities as demonstrated by the acquisition of Deleklinic, which added a new business model to the group.
The combination of the digital doctor visit and our digital medication services fully enabled by eRx will also We'll allow us to offer relevant solutions along the digital patient journey. We believe that telemedicine has a bright future by its And furthermore, we'll create a lot of synergies to our base business and with Teversa. Via COVID, telemedicine has also seen an accelerator in acceptance, which Boosted overall telemedicine. Again, we invested heavily in our tech capabilities And the results can already be seen with the multiple contributions of our subsidiary, EfTech, to enable The ERX back end infrastructure, then our first fully in house developed app and Within the successfully launched of cooperation of better joint venture with CSS, Allianz and VISANA as a proof of the accuracy of our efforts. I see indeed a third highlight within the changes in our team.
Walter brings his knowledge in building based networks to Germany and his track record in operational excellence will further improve our execution In sum, 2020 has been a very important year With course setting key milestones in the areas of ERX technology and our management set up to fully focus on the DRX introduction, execution and to continue on our growth trajectory. With these opening remarks, I'd like to hand over to Marcel, who will explain the financial development. Thank you, Walter. Good afternoon. I'd like to start with the achievements of our Our communicated targets for 2020, as you can see, we delivered on sales and also on EBITDA, With sales growth of 14.4 percent year on
year, we exceeded our target of over 10%, Like we already communicated also in January. On the profitability side, we achieved our target of breakeven response to an operational improvement compared to previous year of roughly €30,000,000 on a like for like basis and shows that Our established business models of e pharmacy is a sustainable one and I will explain extraordinary In terms of the impact of the growth initiatives in detail later in the presentation. But let's start with group sales growth of this 14.4%. Overall, the impact of COVID-nineteen on our sales development was a slight tailwind in 2020 with extra demand and impact In our business models and segments, in Switzerland, we achieved a growth rate of 7 point 1%, which is ahead of expectations and also above market growth. Both B2B and the B2C business Performed very well, driven by higher volumes from existing customers and new customer growth as well.
In our largest segment in terms of sales, Germany, we were able to grow by 16.5%. This is in local currency and includes NASDAQ's and up or down. Main drivers of this growth were our waste business, Despite a flat development in our paper RX business as well as strong performance of our OTC business And the acquisition of Agotal, which is included in the numbers since the closing of the acquisition in August. Especially our core brands grew at the strong pace. The 3rd segment, Sprott, Delivered a very strong performance in sales of 73.5 percent in local currency.
This was possible to a significant increase in the number of active customers, which now Stands for above €1,000,000 Next, I want to share the development of KPIs of our B2C and Marketplace Business across all segments. On left hand side, we see the key development in the growth of the Number of active customers, 10,500,000 corresponding to a growth rate of 52%. It was driven by a strong organic increase in customers of 2,500,000 And 1,100,000 added via the Apotal acquisition. Due to continued higher growth in the German OTC as well the European marketplace business with typically more Commoditized products and slightly smaller baskets compared to Rx and B2C in Switzerland, The average overall basket price decreased from €57,000,000 to €54, Same holds true also for the order frequency, which is now at 2.2 times a year. Our repeat order rate remains at the high level of 76%, which shows the significant loyalty of our customers.
The decrease was driven by the large number of new customers, especially in our Europe and Germany segment. In terms of site visits, we saw an increase from €216,000,000 to 244,000,000 In the 12 month period ending end of 2020. Beside Sales growth, operational improvements, investments for growth initiatives and extraordinary effects were the key drivers in the P and L. This P and L shows the adjusted numbers without extraordinary items, but including expenses for both initiatives. With this, we want to show the operational performance on a comparable level to previous year.
One comment about the sales. We want to we will continue to show both the reported Sales line as well as the sales line, including netbacks and Aperdal, which shows the best view on our growth performance. As the focus for the next 2 years is on ERX readiness and flexibility in terms of existing capacity, We do not expect the full integration of the 2 brands in this time period, and therefore, the operating structure will remain the same. The gross margin was a strong driver in 2020. We achieved an expansion from 15.4% to 17% on group level and largest contribution came from the improvements in the German OTC gross margin.
Stronger growth in business models with lower basket sizes, as you have seen in the KPI overview before, led to this increased gross margin, but also to increased variable cost pressures, such as personal expenses and distribution. Marketing expenses were slightly higher as a percentage of sales because of an increasing Marketplace Europe business with a higher marketing ratio. This leads to an improvement at the adjusted EBITDA level of 0.9 percent or CHF9 1,000,000 to previous year. Expenses in additional growth initiatives Such as ERH European Expansion and Telemedicine of roughly EUR 30,000,000 are also included in these line items. I will explain the impact on EBITDA on the next slide in more detail.
Below EBITDA, depreciation increased as a result of a harder base due to acquisitions And also higher spending in batch development and finance expense has increased Due to the interest rates of the bonds and convertible bonds, the 2019 straight bond for the first This time has a full year impact of SEK 5,000,000, whereas the convertible bond interest amounted year to date to SEK 3,600,000. Now let me lead you through the EBITDA impact. This chart gives you a chance to compare the performance of our established business compared to last year. It therefore shows adjustments, but also investments in growth initiatives where the revenue and profit We will generate value in the future. For transparency reason, we decided to define an adjusted EBITDA level To show the operational performance compared to previous year, irrespective of the influence of special items and one offs.
The bars on the left hand side of each shows a reported EBITDA, Which reduced from minus 13.8 percent in 2019 to minus 78.4 percent in 2020. This is not really comparable because it includes significant one offs in each year. Starting in 2019, the most significant adjustment We evaluation of Ermalt components, especially in connection with the acquisition of Metpegs and the disposal of to the Met Base joint venture in Switzerland, leading to an adjusted EBITDA of minus 40.2%. In 2020, on the right hand side of this chart, share based retention package for founders was the largest position Included in the Amundae bar, which leads to a total positive adjustment of 17.9% €1,000,000 sorry, €70,900,000 at €3,500,000 integration cost Caused by the bundling of activities in Helfen and Manheim and the integration of Bitazana. These extraordinary positions resulting out Maybe significant improvement compared to previous year.
In addition to this, due to an interim ruling of CCJ as of end of last week, which It was unfavorable for our VAT statement. We reassessed our risk position and increased it broadly €13,700,000 Let me give you some background on this. The legal proceeding goes back to change in the billing process with German insurance companies in 2013. Since then, Doc Morris was no longer able To apply the Rx bonuses as a reduction in the tax base as it was the case previously. This is a disadvantage compared to German pharmacies.
The legal proceeding is still ongoing and will now continue in Germany, That has no impact on our ongoing business. Other adjustments with CHF 12,100,000 related to COVID-nineteen product price decreases In 2020, after these adjustments, we achieved improvement compared to previous year of €9,000,000 at Our financial target for 2020 was to achieve breakeven before investments Additional growth initiatives or in other words, but even in the performance of our established business. The growth initiatives each be a significant potential for future earnings. The 3 investment categories are Segment Europe, Which is in a strong growth phase, ERX, where we expect first impact on sales after the climatic launch in July And new business, which mainly accounts for the expenses in scaling our telemedicine platform, TeleClinic. These investments amounts to CHF 30,300,000 with a margin of 0.1% and an absolute number of minus €900,000, we are in line with our profitability target for the year.
This comparable figure for last year was minus CHF 30,800,000. We therefore achieved operational improvement With our run rate analysis, we show What our profitability would look like assuming full integration of acquired businesses. On the first line of the chart, you see our 2020 figures. As just explained, we see the starting point Like for like level at the Medicare margin of minus 0.1%. The second line shows our run rate Based on the current sales, the improvements are driven by increasing gross margins, lower picking costs in more efficient logistics operation, Better efficiency in marketing as well as from the realization of organizational synergies.
This realization of the synergies leads to a 100 EBITDA margin of between 2% 3%. With our operational full year results, we are fully in line with our path to profitability targets. Firstly, we managed To improve our gross margin, secondly, we implemented 1 organization for the German segment and integrated service functions And thirdly, we focus our marketing expenses on dog Morris and netbacks and are pursuing profitable growth. The key changes in the balance sheet were driven by the launch of the convertible bond in March last year, Leading to a higher cash position and higher financial liabilities and the capital increase in July, which Our equity base and also add it to the cash position. On the other hand, we invested in the acquisition of And increasing payables, we could keep our net working capital stable And this is despite the COVID related increase in inventories.
Overall, the balance sheet With an increased equity ratio of 41.6 percent and €300,000,000 of cash, clearly has the financial We're going to invest in our strategic initiatives, especially the ERX opportunity, which Walter will now Elaborate on in the next part of the presentation.
Thank you, Marcel, and welcome to everyone. It is a pleasure to meet you via the phone today, and I'm looking forward to future interactions with you, for example, at our Capital Markets Day, Which will take place in the Q2 of this year. Let's dive right into the most exciting topic And biggest opportunity for our company, which is the future growth, which will be driven by the introduction of the electronic prescriptions, which will be the mandatory model in Germany starting in 9 months from now. Just to remind you of the potential of the opportunity, you can see on this chart the size of the online market In different penetration scenarios, today the online Rx market is roughly €600,000,000 In size, which equals an online penetration of 1.4%. If this moves up to 5%, The online market would be a bit more than €2,000,000,000 at 10%, a level that It has already been reached in Sweden.
It would be €4,300,000,000 and 20%, which equals Online penetration on the OTC side in Germany, the online market would be more than €8,000,000,000 As stated in the guidance, we expect that online penetration can reach a level of around 10% in the next 3 to 5 years.
Let's take a look
at the current roadmap of German Government and Gematik. Gematik is still targeting to launch the National DRX infrastructure in July of this year. Other important elements of the roadmap are the rollout of the ERX capabilities and the connection to the telematic infrastructure of all stakeholders involved, especially the physicians and pharmacies. Another key element is the publication of the specifications of the Gematik APIs, which will define the ways in which 3rd party apps can access e scripts on behalf of their users. Our expectation is that the specifications will be published in the Q2 of this year.
Lastly, the handling and adoption of identification and authentication processes We'll play an important role in how the take up of the different anticipated customer journeys such as paper printouts, Overall, the roadmap leads anyway to multiple implementation scenarios for which we need to prepare. That's why our core focus remains on ensuring readiness for all potential scenarios. We are mapping the journeys for all of the before mentioned scenarios and will be ready The ramp up and scale up Our digital healthcare ecosystem has initiated with our app launch in December, the extension of the digital Customer journey with telemedicine as well as our first ecosystem partnership are key success factors, enabling us to differentiate towards the customer with a unique and valuable offering. Thanks to our involvement in the leading ERX pilot projects in the pre thematic phase, We have already been able to learn about which preparations are needed in the back end systems at our locations and are on a good track To be ready when discrete volume starts to pick up. Staying with the theme of Readiness, The solutions provided by our subsidiary Ehealthtech are playing a major role in ensuring implementation of Electronic Prescriptions in Germany with holistic solutions ranging from modules For physician and pharmacy information systems up to server solutions, Ehealthtech has converted its pioneer role To become a re leader in the development of ERX technology.
This also led to being selected To develop the National Earexor for Gematik as a partner of IBM. The Airytec's Dalchland project led by Technicolkampenkase has been fully operational now since last December, with the 1st eScrypt handle via insurance apps. The scaling of DRX in the preganoptic phase Has been limited by the lack of general reimbursement scheme, which will only be available once The Gneumatic infrastructure is live as of mid of this year. Overall, Important building blocks for ERX, both back end and front end, have been created and developed by us in the pragmatic phase. These play an important role in the ERX ramp up, both in the creation of the national ERX infrastructure As well as in our internal readiness.
We believe that our efforts in the pragmatic phase have significantly In anticipation of the big opportunity ahead of us, We are convinced that the right time to drive awareness for our brand to meet especially chronically ill people is right now. We started with a viral Christmas campaign with more than 147,000,000 views worldwide. And as some of you might have seen on German National TV, we have initiated a big marketing campaign in February This year to activate customers ahead of the ERX launch. And we already see that the response to the campaign after The 1st week is very promising and the game of new customers exceeds already our expectations up to now. The image on the chart shows the lead campaign image and the claim of the campaign, which is the Smaughesund The new way to healthy.
At the end of last year, We launched our digital healthcare ecosystem platform with the Doc Morris Plus app, which has been fully developed In house as a joint effort of our tech teams in Berlin and Barcelona. The number of downloads and partners are constantly increasing, while we are expanding and improving the platform. In addition to the marketplace function, we are integrating value add services such as telemedicine, Same day delivery and click on collect to ensure customer journeys from diagnosis to delivery. And of course, our roadmap also includes DRx readiness for all potential journeys as well as further improvements to a seamless Customer experience. At the beginning of this week, the same day delivery option went live with additional partners offering this service.
At the moment, we have onboarded roughly 20 pharmacy partners and are I'm targeting to increase them to about 200 by end of the year in order to offer a nationwide coverage for same day deliveries. On the Doc Moris site, we have integrated the link to telemedicine and teleclinic On the entry page as well as on more than 7000 Rx product pages directly. And we see in the 1st weeks since go live, we already see or in the 1st weeks that we go live, we already see That customers appreciate this full digital offering from diagnosis to delivery as it gives greater convenience to one of the major customer I would like now to highlight our progress in terms of brand integration and logistics 2 major success factors for our future growth. In Q4, We finalized our group wide branding project, which confirms Doc Morris as the lead brand of our group. In segment Germany, we have already started the transition towards a streamlined brand portfolio By first introducing the new branding with the before mentioned TV and Christmas campaigns and the first brand integration with The discontinuation of Vitalzana in Q4 2020.
We want to complete the brand integration over the next 3 to 5 years with a clear focus on optimal customer transition metrics. On this last slide of my part Of the presentation, I want to highlight that we are on track with the ramp up of our new logistic site in Harlan. As you can see in this recent picture, the installation of the warehouse automation is well underway and will be completed in the second half of the year. The degree of automation in the new warehouse will be at roughly 70%, Which will give us the potential for significant improvements of efficiency in the future. The new warehouse will add 15,000,000 parcels in capacity per year to scale our total capacity, including all sites in Germany to 48,000,000 parcels The additional capacity will be fully available in 2022, just in time for the launch of electronic prescriptions.
The multi site setup is giving us strategic advantages regarding capacity, I would like to conclude that we are on good track to take full advantage of the Earex opportunity ahead of us And are looking to significantly accelerate our growth over the next years. With that, I hand it back over to Walter, and I'm looking forward to answering your questions in the Q and A
Perfect, Alto. Let us come now to technology and also new business. As highlighted already before, technology has gained heavily in significance within ZEROSA. We have taken major steps on our pathway of evolving from an e commerce player to becoming a technology company. The foundation for this is our large and growing team of Tech experts located in our tech hubs in Berlin, Barcelona and Vipro, Zurich.
More than 200 employees are working highly motivated It's to evolve our technology with specific product focus on ERX, marketplace, telemedicine, Digital Health Journeys and our newest business Platform as a Service. Here, I would like to highlight our first ecosystem partnership, which will go live as soon as end of this month. Within this partnership, we want to offer solution for patients with obesity, which is a very common, But very rarely diagnosed a disease. Many times, obesity patients are stigmatized And do not have sufficient information about the disease itself, but also their treatment options. This is where we start with our journey by offering information and also physician access on the landing page, which we call The weight management hub.
From there, patients can opt for telemedicine and speak to a physician via the teleclinic platform. In case of an obesity diagnosis, a digital script for medication or a digital solution is issued And the patient can decide on which pharmacy, of course, including the Moeris, he wants to send his prescription to. To maximize user experience as well as adherence, we have designed an adherence monitoring program, which includes follow-up consultations, for example, via telemedicine and or other solutions. This is the 1st partnership in the ecosystem ramp up and it gives us 3 monetization layers. 1st, additional volume of telemedicine treatments 2nd, additional product revenue and 3, partnership fees.
Another solution which is already live is the Diga portal, which we are offering at TeleClinic. Digital health apps are reimbursed for by German health insurances, Which is a Novum in Healthcare. At teleclinic, we provide information about all the details available And interested patients can get access to a physician via the platform to discuss whether a specific data We absolutely support the usage of digital solutions to help chronic patients as a part of our ecosystem strategy and aim to further increase telemedicine visits via the teleclinic platform. The platform as a service model for our platform was introduced as we see growing interest From 3rd parties in our technology, starting in Switzerland. The launch of the insurance corporation to create an open platform On the basis of parts of our technology, as well as the mandate to create the ERX server as a partner of IBM in Germany Already 2 very concrete use cases.
This also means that Zuoraze is no longer perceived Just as a medication, but also as a technology provider who brings relevant solutions for the huge healthcare challenges of society. Our focus is this approach is to drive path with partners like insurance companies And in areas where we do not plan to operate our core business ourselves. While the contribution in 2021 will be small compared to our numbers, we do see relevant potential for scaling this very Our Europe segment as the tech hub of ZAROSE in which we are rapidly The marketplace model grew at the rate of 73.5% in 2020, Making it the fastest growing segment and reached active customers of more than 1,000,000 in the 12 month period ending At 31st December last year, I'm really happy about this. With the rapid expansion of sellers, As well as numbers of SKUs, we are well equipped to continue the growth path in this segment. We also took the first step of brand integration in the segment by introducing new logos, both in Spain and France, And adding the name of Doc Morris within the branding.
For 2021, the focus is on scaling the business And enabling a truly European healthcare ecosystem with the full implementation of new branding. We are also exploring expansion opportunities both in terms of adding additional product categories As well as geographies. I'm finishing by summarizing our key strategic Priorities for 2021. The 4 priorities are growth, Where we aim for 20% higher sales, the ERX opportunity, of course, and brand integration and logistics capacity as well as our path to profitability. Our key focus remains on growth.
This focus is not At all limited to the ERX opportunity, but also holds true for our OTC business as well as our Europe and Switzerland segments. We are, however, of course, expecting a clear acceleration once ERX becomes mandatory. With our marketing campaign in Germany, we are going for the Zalando effect of driving a change of behavior In relation to ordering Rx Pharmaceuticals. The Rx opportunity is clearly the core focus The organization, the whole organization, there is a lot to do as Walter explained, but we are ready and Excited to drive change and take full advantage of this once in a lifetime opportunity. I'm very happy that we were able to confirm Doc Morris as the umbrella brand for Europe, and we now will drive transition towards a simplified brand architecture with the first steps already taken with the Vitasana, Promopharma and Doctipharma transition.
As you might have noticed in this presentation, we also adapted the Zohrzygo branding and corporate colors to come closer to our lead customer brand and at the same time use colors that stand for growth and sustainability. Capacity expansion is furthermore a key factor and our new logistics site with a significantly greater degree of automation We'll enable us to scale and handle the expected large increase in demand. Lastly, we are also continuing to progress on our path to profitability. Just to reiterate, Our focus remains on growth, and we will increase spending in marketing significantly in 2021. But nevertheless, We also work hard on further operational improvements to add to the €30,000,000 that were achieved in 2020, But also on increasing speed to customer, which will become more and more important.
Lastly, new business models like As a service, we'll add revenue streams with higher profitability than our core business over time. Overall, I see Turosa in a great shape ahead of a very exciting of very, very exciting years With that, I hand back to Marcel for the financial outlook.
Thank you. As we just stated, our clear focus remains on growth, both in 2021 and the coming years. For 2021, we expect sales growth of around 20%, including MetPEx and Aprotal. 1st, ERX scales are expected after the launch of Kematic infrastructure currently targeted For July 2021 and to accelerate with the mandatory introduction in 2022. A large marketing push to drive awareness of our European lead brand, Doc Morris, was initiated in February, Which will result in increased marketing spending in 2021.
The breakeven on EBITDA is therefore Targeted within 12 to 18 months after 2021. In the midterm, which for us is the time horizon from 2024 to 2026, The goal is obviously also driven by this unprecedented momentum of the introduction of electronic prescriptions in Germany. We believe that online penetration of Rx can reach a level of around 10% with further potential beyond this time period. Towards the beginning of the guidance period, management expects to grow revenue to above €4,000,000,000 And the midterm EBITDA margin target is confirmed at around 8%. As Walter just mentioned, the implementation of the healthcare ecosystem is creating meaningful potential for additional revenue and profit I want to finish the presentation with our path to profitability slide.
Starting at the run rate margin explained earlier, we see the additional increase in profitability to come from scale effects And especially the rising share of ERX in our business mix. Prescription orders Have the highest contribution margins after arrival costs with a margin of 10% in the paper world with the potential to rise to 15% Driven by discontinuation of Rx bonus and streamlined digital processes. This will translate to an increase in gross margin and once we reach a larger scale also to a reduction in the marketing cost ratio. With that, I would like to conclude the presentation and open the Q and A session.
Due. Once a name has been announced, you can ask a question. And the first question we received is from Volker Bosse of Baader Bank, your line is now open. Please go ahead.
Yes. Hello, gentlemen. Thanks for taking my question and all the provided details so far. I would like to start with your earnings guidance. You say EBITDA breakeven in 12 to 18 months after 21.
Just for clarification, 21 plus 12 to 18 months means we are in 2023. So you expect Breakeven to be in 2023. And if you speak about EBITDA, do you speak about reported EBITDA, adjusted EBITDA or EBITDA before expenses in growth initiatives. And also regarding your guidance, This guidance for 'twenty three, what does it mean for 'twenty one? Obviously, of course, EBITDA will be negative in 2021, But where do we stand in 2021 versus 2020?
Is it an improvement to be Or perhaps the kind of range on that front for 2020 would be helpful. And another one on your midterm outlook. From my point of view, you increased The midterm sales guidance from €3,000,000,000 to €4,000,000,000 So far you spoke about €3,000,000,000 mid term sales, now €4,000,000,000 Is that right? Can you confirm this increase? And what drove your decision to upgrade here the midterm guidance from EUR 3,000,000,000 to EUR 4,000,000,000?
And just for clarification, you said in 3 to 5 years, in 2024 to 26, yes, that's what you said, In EUR 24,000,000,000, EUR 4,000,000,000, is this the earlier end of the midterm? And what does it mean for EBITDA margin reported 8%. Is it also then 24% or more than back end loaded to 2026? Sorry for all that question, but it would be helpful to get a bit more granularity also regard what means EBITDA margin 8%. This is an adjusted EBITDA or reported EBITDA?
And first finally, a CapEx guidance for 2021 excluding any Potential acquisition will be also helpful. Thank you. That's it. Sorry for the questions.
Thank you very much for this question. So let's try to answer. Starting with the EBITDA margin, 12 to 18 months after 2021. Your understanding is correct that, that means end of 2022, first half twenty twenty three. And the reason is that this is based on 2 layers.
1 is the new distribution center in Helen, which will Generate the synergies during 2022 when we increase volume in this automated warehouse. And the second one, of course, is the Accelerated growth of electronic prescription with higher growth margins will which will be take place in 2022 After the mandatory e script. Then to the second question of the EBITDA, Which can be expected in 2021. The reason why we did not give you an exact number, We want to keep our flexibility in order to spend more marketing in 20 21 when we see that scaling is possible. Compared to 2020, the Starting point is the adjusted EBITDA level with minus €30,000,000 and on top, We have the marketing spending, but also we'll generate some operational savings and economics of scale.
So we see a Slide better EBITDA 2021 on the reported level. You had also the question about Adjusted and reported EBITDA, we do not plan to have adjustments. So we do not see a big difference. Nevertheless, if there are some extraordinary topics and one off We'll appeal, then we will have the adjusted EBITDA here. Then the third question was about sales, our sales guidance in the midterm.
And it's not just a roll forward. It's also an increase. And the €4,000,000,000 as you I mentioned it's targeted at the beginning of the period, meaning 2024, and also The online penetration of electronic prescription, we see this potential of 10% in the previous Guidance with €3,000,000,000 we had the 5% online penetration. And for the On the 8% area, this is not specified in the mid term between 3 5 years. There, it depends also on the sales growth, And it will be in this period.
Then the last question was about CapEx in 2021, and here we see the maintenance levels, which we already had in 20 20. And of course, we are still investing in the new distribution center, which I have a message also was the case in 2020 and the investments are divided into these 2 years.
The net interest figures in CapEx, I'm sorry, on percentage of sales?
In percentage of sales, it's about 2%.
Okay. Thank you. Thank you very much.
The next question we received is from Alexander Thel of Jefferies. Your line is now open. Please go ahead.
Hi, good afternoon, gentlemen. Three questions from my side, please. The first one for Marcel. How should we account for the EBITDA ramp up in the future? You push Back to your breakeven to the end of 2022.
I mean, that was the previous question. But at the same time, the logistic integration should also be completed by 2022, Providing the operating leverage, so is it fair to assume that we can see a ramp up from the breakeven to around 8% in around 2 years,
So yes, the distribution center will be by the end of 2021, and we will put Volume into it in 2022, and so this breakeven is plausible for the second half of twenty twenty two. And then We see an acceleration of EBITDA margin towards this 8% due to economies of And also due to the scaling of Alex Tronic prescription. So after this implementation, we see More or less a linear development to this 8% target.
Okay. Thank you. Very clear. Second question For the new Walter on the call, first of all, welcome. I've seen you update your customer facing app today with the same day delivery function.
At what point in time could we expect to be in its full power functionality going forward? Thank you.
Yes. Thank you for the question. So we constantly add new partners, pharmacy partners. And I would say towards the Q4 in this year, we will see the full coverage and also the full Right now, so all the functionalities.
Okay. Very clear. Thank you. The last question for Walter. You're basically Ionea and the Online Pharmacy space in Europe, right?
And after a new company almost since the IPO, I think the overall Sorry, derisked significantly, but what kind of political decisions are still outstanding from your perspective that could impact the business in a positive or negative way?
So from our Point of view, all the regulatory projects are done so far, and we do not expect any others to come. So it stays with the conclusion that regulation is in favor to our business model and we do not expect Negative ones to come.
Okay, perfect. Thank you very much.
Thank
you.
The next question is from Michael Heide of Warburg Research. Your line is now open. Please go ahead.
Yes, good afternoon and thank you for taking my questions. I have 3 actually. The first one is On RxBONUS, which isn't allowed anymore in Germany since the beginning of this year, Do you see any impact of this new regulation on your Rx business in Germany at the moment? And What do you expect the impact to be on the full year? Do you actually expect before the ePrescripts are kicking in that the Rx business That's the first question.
The second question, do you still expect the GigE Matic To be on time, so that the introduction will be starting in the second half of this year. And if That would not be the case. Is there still any possibility that you could start earlier with your, Let's say the test, the TK project, so that you can already start even before the actual launch of the Gematik And then the third question is on your active customers or let's say on your Doc Morris Plus Marketplace app. Can you give us because you said you see increasing numbers of downloads and so on, but can you give us an indication on how many of your 10,000,000 Active customers are already using the new marketplace app. Thank you very much.
Okay. Maybe the first question about the Rx bonus, We do not see an impact so far, and it remains stable. And we also Assume throughout the year that there won't be the impact on our business. The second question about Geometric possible delay and do we have chances in the pregematic phase whenever geomatic Yes, we do. As we are in this CRX pilot project with Teekay Deeply involved, and we see an increase now of the business there And also of the e prescriptions.
Of course, it's still in the starting phase, but nevertheless, we are a partner there and we think It is still an opportunity also ahead of schematic start. And then with regard to the active customer base, As I said, we launched in December, and it's still at, of course, at a low level, but it will increase Also constantly, and we will see a real impact once the Electronics prescription will be mandatory. And for that moment, we think will be the real boost of it.
Can I maybe clarify on the Rx bonus? Because you said that you don't expect any impact on your business, but I would assume that your Rx business has been growing quite strongly also in 2020. Do you would you so that means if you say there's no impact, so you expect that the Rx business would still Grow double digit in 2021?
No, of course in 2020, The RX business was quite stable.
Okay. You
see a continuation of the stability.
Okay, great. Thanks.
The next question is from Olivier Carveil of Kepler Cheuvreux. Your line is now open. Please go ahead.
Yes. Thanks very much. Just a follow-up on Arete, First of all, what can you quantify the current Rx sales that you see In Germany, compared to the last time you published data in 2018, please, How much higher are you today? Are you higher would be the first question?
Yes. Due to the fact that we stopped the marketing on the paper prescription process already years ago, we could keep this Sales level very stable over the last couple of years. So it's mainly the same number 2 years ago on the Prescription drugs business in Germany.
Okay. But you understand that looking at 2021, We don't have any comparison basis in 2020 right now to judge whether you accelerate or keep the business.
Yes. It's the same level and we keep it stable and we will provide the information as As soon as electronic prescription is available that you can see our growth rates on this level and we will find The right KPIs to show you the development.
Okay, fair enough. Another question would be on the gross margins. You were saying, just To confirm that you were seeing Rx gross margins go from 10% to 15% with the Rx bonus band. Is that correct?
No, that's not the gross margin. That's the contribution margin after variable costs, which has the potential On a digital process to increase to 15%, not the gross margin.
Okay. Fair enough. That makes more sense. Then I was just wondering on your Metpegs and Aportal and your warehouse footprint. If I understand correctly, you're not going to do a Full integration of the 2 brands in the coming 2 years, and you are keeping the German warehouses.
Can you come back On the integration plan of the front end and the back end, please, how will this work from a timing perspective, please?
Yes. As we have shown, we see on the front end side, on the brand side, a timeline of 3 to 5 years, Which we have defined for ourselves. And it will also be dependent on the growth rate, of course, And on the back end, we think capacity is really one of the key success factors in the future. And therefore, we think having the multi sites ready and Also connecting to the ERX server, this is an important part For the future to handle growth and to come to the profitable path.
Okay. Fair enough. And then I was just wondering on the marketplace, what share of Rx do you expect
It's difficult to say as marketplace in that form does at the moment not really exist. So It's a new development and we think we at the moment, we definitely are ahead of And we will stay ahead, but it's difficult to say already now to what
Okay. And I guess the same answer for the OTC business?
Yes.
Okay. And just to kind of clarify the midterm picture here, when you talk of CHF 4,000,000,000 target, Is this including the marketplace business or excluding the marketplace business?
That's including the marketplace business, But not on the GMV level, it's on our internal sales and yes.
Okay. Yes. I mean, marketplace sales are booked by the pharmacy, right? But would that how would that work for you?
Yes, the sales will be at the pharmacies and not in our books. And these Pharmacy sales of Baik and Motto is not included in our €4,000,000,000 target.
Yes. Okay. That makes more sense. Okay. Okay.
That's it for me. Thanks.
The next question is from Sebastian Vogel of UBS. Your line is now open. Please go ahead.
Hello, can you hear me?
Yes, we can hear you.
Perfect. I've got 3 questions. I will place them 1 by 1. The first one, there was an expert opinion last year that was put together by or for the German Ministry of Health. And in there, I read that the Netherlands and the Danish market, they see a market share of 1% for online pharmacies on the local Earex market.
Also, Eirix is there like market sharing of like 100%. I was wondering what makes the German market so different From, for example, the Dutch and Danish market that you say that in Germany there will be far higher market share as possible?
So actually, we cannot compare Germany to the Netherlands and Denmark, Because there is a completely different system. In the Netherlands, you have the steering wire, the physicians. And so we cannot compare Again, we cannot compare to Germany. But we are definitely sure that we can compare the Swedish model to the German one because It's very similar that the customer has the choice of where he gets the pharmaceutical form. And as you know, in Sweden, we have a penetration of 10% after a really short period of time.
And so we think we have good reasons to expect this 10% for Germany, Also given the fact that on OTC basis, we already have 20% in Germany, which numbers we do not see, neither in the Netherlands nor in Denmark.
Understood. Quickly, a second question that directly actually leads into that one. With regard to Sweden, in your earlier When you were referring to Sweden, if I'm not mistaken, you were using a blended number, I. E, 10% coming from OTC and Eric's. I don't know the 10% you were alluding to in your presentation today.
Is that an Eirix only number or is it a blended number as well?
It is still a blended number. There is no new number so far. But nevertheless, as we have discussions with on the Aportio, we are pretty sure that this number is correct.
Understood. And may I second the last question, with regard to the slide on Page 14, and you were showing the market penetration levels And the implication in terms of revenues on the market. I was wondering, that is including VAT, right, while your net Just to be on the safe side there.
Yes, you're right.
Perfect. Many thanks.
The next question received is from Elvira Rohn of Barclays, your line is now open. Please go ahead.
Hi. Thanks for taking my questions. I have got 3. So the first one is on your Doc Morris Plus Marketplace app, can you talk a little bit more around who manages the delivery there and what the unit economics of that might look like for you? Just trying to understand what the margin profile for that might be compared to your core business.
2nd, and apologies if I missed this, But how much do you expect CapEx to be in 2021? And how should we think about it beyond that? And last, are there any further stock based payouts
To the first question, well, to understand that the marketplace and the Doc Morris Plus is It's the front end of our digital health ecosystem, which includes on one hand the marketplace functionality, This also includes all other services, which will be added along the customer journeys. So we have to see it in the whole picture as it is just a part of it. But if it comes to the marketplace itself, we have 2 measures for ourselves. On one hand, we have a fee, which already also has been published of roughly €400 per month per partner. And on the OTC and BPC side, a provision at 10%.
This is one part and the other part is then The KPIs of gaining new customers, thanks to the marketplace function With share of wallet increasing and also the higher retention rate that we expect
And on the CapEx question, we About 2% of sales, and in 2021, the distribution center of the Netherlands will still be on top of this number.
Thank you. So how much do you expect the Netherlands DC spend to be on top The 2.2%? The 2%, sorry.
That's about EUR 15,000,000. It's half of the investment in the distribution center, which we communicated with €30,000,000 That's still the case.
Great. Thanks. And that last question just around whether there are any further stock based payouts
There are still some, but not in this dimension as 2020. It's about half the size For
2021. Thanks.
And the last question for today is from Peter Muller, a Private Investor, your line is now open, sir. Please go ahead.
Good afternoon. This is Svensson Miller. I have four questions. The first one would be on your revenue increase of 14.4% on Page 1. How much of that is from METPAX and Apotal?
The second question is a 50% increase in active customers. How much of these 50% do come from M and A activities. The third question would be on the significant employee increase, How much of these additional employees come from M and A? And the last questions are referred to sustainability and brands. First of all, what are the reasons for not rolling out the brand architecture in Switzerland?
And the last question would be, How relevant is sustainability as a topic for you? And how far beyond Reporting, do you intend to take the initiatives that you have running currently?
So maybe I start with the sales growth of 14.4% and the question, how much of this is out of Acquisitions are out of Metpegs and Aperdal. As we steer the business in total and steering it by KPIs and return on investments. So we do not disclose the sales of the single Brands, but maybe one number for Apotal, we communicated that they had Sales of €157,000,000 in 2019, and so you have an idea about the development in 2020. And Apotal is included in our 14.4% growth since mid of August, which was the closing date of the acquisition. And the second question was about active customers and the 50% increase.
Out of this 50% increase, euros 2,500,000 came out of organic growth and €1,100,000 Out of acquisition of Apotal. And the third question, I have to come back on this one. I do not have There's a number of employees in my head right now.
Maybe one additional question here. What is your hiring strategy Before becoming profitable in that context.
So actually, we do not have an explicit hiring strategy actually, but We do what is necessary in order to fulfill on our growth strategy. And of course, as we already discussed before, The integration and the synergies coming from there are very important topic. And so this is another Topic which we have to consider in this in the increase of employee number. Does that answer your question?
Yes. Thank you.
So maybe to then to continue with the reason for not taking the brand of Norils in Switzerland. So as the brand, the Jose, is that much established in Switzerland, especially within the doctors business, We are sure that we could not make the brand. COSEX in Switzerland has a big or a huge Number of doctors from the doctor side and here we don't see any value added with changing the brand. And then the next question about sustainability, we decided to invest here and to see Sustainability is more and more an important topic, also in context of our business model, Where we see that sustainability is very much connected to the business model itself. So far as The footprint is much better with our business model than with the Wix motor 1.
Okay. To answer your questions?
Yes. I just would like to see if you have any initiatives Specifically in mind to support
the importance of it.
Actually, it's all over the place. So especially in logistics, We see a huge potential for increasing the sustainability topic, and it's really all over.
Okay. Thank you very much.
So I can add the number of employees to your question before. Out of this 1900, about 100 are coming from Aputaal from the Aputaal acquisition. Thank you.
Thanks a lot.
The very last question for today is a follow-up of for Olivier Calvi of Kepler Cheuvreux. Your line is now open again. Please go ahead.
Yes. Thanks. Sorry for the additional questions. But I just was wondering Maybe on the Rx Bonus Plan, can you tell us perhaps where you stand in terms of using legal options Just the bonus plan. And are you being sued at the moment On that topic, whether you comply, I mean, I see what I see so far is that you comply on the website, but I just want to check What the legal situation is so far?
What I can say is that, again, it will need a case at the European Court. And yes, there is no visible case at the moment. And On the other side, we are compliant. We stopped giving Rx bonus.
Yes, so that's the situation at the moment.
Okay. Okay, great. And then just a final one. Can you perhaps talk a little bit about the development of your Swiss margins? I mean, if we look at your segment Reporting when you have this sort of 7% margin before allocating other operating costs, Maybe some color would be appreciated
there. So the development in Switzerland is very sustainable. We had this growth rate of 7% last year, which was over market. And in terms of Margin, it's very sustainable and a good development, but it's not this Big steps like we see or like we expect in other markets.
Okay. All right. Thanks for that.
Ladies and gentlemen, I hand Back to Nestor Overhensli for closing remarks.
Okay. So I conclude this conference and thank you very much
Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.