Earnings call transcript: DocMorris Q1 2025 sees robust revenue growth

DocMorris AG reported a strong start to 2025, with significant revenue growth across its business segments. The company's Q1 results showcased a 13% year-over-year increase in total revenue, driven by substantial growth in prescription (Rx) and teleclinic services. The market responded positively, with the stock price surging by 14.36%. According to InvestingPro data, the stock remains significantly below its 52-week high of $115.96, having fallen over 78% in the past year. InvestingPro's Fair Value analysis suggests the stock is currently fairly valued.

Key Takeaways

• Total revenue grew by 13% year-over-year in Q1 2025.
• Prescription revenue increased by 52%, highlighting strong demand.
• Teleclinic services saw over 100% growth, reflecting successful digital health initiatives.
• Stock price surged 14.36% following the earnings announcement.
• EBITDA guidance for 2025 remains cautious, with a range of -€35M to -€55M.

Company Performance

DocMorris AG demonstrated robust performance in the first quarter of 2025. The company capitalized on the growing digital health market, particularly in Germany, with significant growth in both prescription and teleclinic segments. This performance aligns with DocMorris's strategic focus on expanding its digital health ecosystem and increasing market penetration.

Financial Highlights

• Revenue: Increased by 13% year-over-year.
• Rx Growth: 52% increase, underscoring strong demand for prescription services.
• Teleclinic Revenue: More than doubled, indicating successful digital health initiatives.
• Non-Rx Growth: 7% increase, showing steady performance in non-prescription areas.

Outlook & Guidance

DocMorris provided a cautious yet optimistic outlook for 2025. The company expects over 10% revenue growth for the year, with an EBITDA guidance range of -€35M to -€55M, excluding €15M for incremental Rx marketing. The mid-term goal includes achieving a 20% revenue CAGR and EBITDA breakeven by 2026. Analyst consensus from InvestingPro shows mixed sentiment, with price targets ranging from $19.94 to $70.38, reflecting the company's volatile market position (Beta: 1.88).

Executive Commentary

Walter Hess, CEO of DocMorris, emphasized the company's commitment to being a "24/7 health companion" for customers. He highlighted the strategy of sustainable, self-funded growth and expressed confidence in achieving a 10% online prescription penetration.

Risks and Challenges

• Competitive Pressure: As a leading digital health company, DocMorris faces competition from other major players in the European market.
• Market Adoption: The German digital health market is still in early adoption, posing challenges in consumer education and awareness.
• Regulatory Environment: Changes in healthcare regulations could impact the company's operations and growth trajectory.

Q&A

During the earnings call, analysts inquired about the timing of EBITDA breakeven, which was clarified as having flexibility within 2026. The company also confirmed a strong start to Q2 with continued Rx growth and expressed optimism about the German coalition agreement's support for digital health services.

Full transcript - DocMorris AG (DOCM) Q1 2025:

Conference Moderator: Hello, ladies and gentlemen, and welcome to the DocMorris AG Q1 Results 2025. At this time, all participants have been placed on a listen only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Walter Hess.

Walter Hess, CEO, DocMorris AG: Yes. Thank you very much, and welcome to everybody to today's conference call, which will be hosted by Daniel Wurst, our CFO and myself. We are happy to share good news today about our Q1 figures and the fully underwritten capital raise of the 200,000,000. In these challenging times, we think it is important to mention that we as a leading European digital health company with online pharmacies and telemedicine are neither dependent on the economic environment nor on goods from The USA. In Germany, the biggest market in Europe, we are really best positioned with our brands and with our ecosystem.

And just at the starting point of an exceptional growth with with prescribed medication and telemedicine services. And by the way, both for the first time are mentioned positively and are supported by the coalition agreement of the new German government as they have released just yesterday. And as you will see later and certainly already recognized, we have chosen a strategy for sustainable and at the same time profitable growth funded by our own operating cash flow. This brings us directly to Slide number four with the key messages for today's call. In the first quarter, we could accelerate our Rx growth to 52% and non Rx growth to 7%, which brings us to an overall growth of 13% year over year.

And also Teleclinic again confirms its strong growth path with far more than 100% and continuously improving attractive margins. The outlook for 2025 and mid term underlines our strategy of sustainable, self funded profitable growth. In 2025, we plan with more than 10% revenue growth and an EBITDA target of minus CHF35 million to minus CHF55 million, which includes EUR15 million incremental Rx marketing, which results in an improvement to minus EUR20 to minus EUR40 million without this additional investment. Mid term, we plan with a 20% revenue CAGR with EBITDA breakeven in the course of 2026 and positive free cash flow in the course of 2027. Four weeks ago, we announced a plan to increase our capital base by CHF 200,000,000.

Today, in a real rough environment, we are really pleased to inform you that this CHF 200,000,000 has been fully underwritten by a banking syndicate and the capital increase will be launched after the AGM in May. Slide number five displays the accelerated Rx growth of 52% in Q1 And the continuous growth of ERx revenues is significant with an increase of 2.5x year on year and projected acceleration quarter over quarter throughout the whole year of 2025. Let's move to Slide number six. Also the profitable non Rx business, which consists of revenues coming from OTC and BPC products, including private label, marketplace and services such as retail media and teleclinic businesses. And also they together grew by 7% in Q1.

Particular pleasing is the development of our services with a revenue growth of more far more even than 100% at highly attractive margins. And on the next slide, you see, again, regarding Teleclinic, we have exciting news to update you. Beside the fact that TeleClinic is a fast growing platform, which more than doubled its revenue in Q1, they also won the first representation of medical doctors in ambulatory care. And this happened in the region of Lower Saxony. It's called Kvaufau Nidosanxen, KVN.

And they want it as a strategic partner and customer on the platform. But what does this mean concretely? The KV Nidosaxon will use in the future the TeleClinic platform for their medical on call service. Specifically, any call that requires referral to a medical doctor must first be evaluated by a telemedicine physician from the Teleclinic platform. With regard to the potential, we talk about a population of more than 8,000,000, so more than 10% of the Germans in Lower Saxony with more than 14,000 doctors.

This partnership stands to improve the overburdened German healthcare system and represents a significant step of TeleClinic into the German standard of care. So let me conclude the business update with a confirmation of our strategy. Our aim is to be the 20 fourseven health companion for our customers and patients, enabling everybody to manage their health in one click, anytime and anywhere. We are continuously developing one platform centered around customer and patients' needs. We do it by combining online pharmacy, telemedicine, marketplace, health services and content and strategic partners.

A successful example of our ecosystem approach, you will find on the bottom right of this slide. By partnering with providers of weight loss injections such as Eli Lilly and combining telemedicine, online pharmacy, health services and content, We offer a seamless end to end customer experience with secured availability of products and health support. And this has already resulted in an increased sales by almost 10 times since we have started this service on our ecosystem. Yeah. We are convinced that this is the future of health care, and we are at the forefront of it.

And with that, I would like to hand over to Daniel now.

Daniel Wurst, CFO, DocMorris AG: Thank you, Walter, and also a very warm welcome from my side. First of all, I would like to provide you with some further information on the forthcoming 200,000,000 capital increase, followed by the guidance for the financial year 2025 as well the midterm guidance. Let's move to the capital increase. And allow me your first statement. We are happy, a little bit relieved or heavily relieved and but also a little bit proud that we managed in such a, let's say, call it, challenging market environment over the last days that we could secure the underwriting of the EUR 200,000,000 cap increase.

A syndicate of banks consisting of Bank of America, UBS and Zurich Kantorobank has fully underwritten the volume of €200,000,000 and therefore, the capital increase is secured. The capital raise bill, as announced, happened by way of discounted rights issue with greater subscription rights for shareholders. Final terms will be published in the morning ahead of the AGM on '8 which will take place on 08/2025. Of course, the equity raising is subject to shareholder approval at the same mentioned AGM on August. Execution of the transaction is planned immediately following the AGM, which means that the transaction should be closed in May, assuming a stable market environment.

The gross proceeds of around EUR 200,000,000 will be used to fund the incremental ORIX growth by adding targeted marketing spend until reaching positive free cash flow in the course of 2027 and additionally to secure a potential repayment of the outstanding €95,000,000 convertible bond, which will become due in September 2026. Now let's move to the outlook. I would like to reemphasize what Walter has just said before. Our midterm outlook is geared towards sustainable and profitable growth to achieve internal funding of the operations by our own. The milestones to reach this, you see that in the middle in the ellipse of the slide, The milestones to reach this are to become EBITDA breakeven in the course of 2026, followed by positive free cash flow generation in the course of 2027.

For the avoidance of doubt, we have assumed a steadily increasing ORIX penetration based on the current run rate. While we are all sure that there will be an inflection point in consumer adoption in the next years, that means then the resolving prescriptions via CordLink will become the usual way. But that kind of we have not factored in our midterm plan. That's important to know when you look at the guidance. Additionally, both also mentioned that we have not factored in the positive the potential positive effect of yesterday's correlation agreement.

If it's implemented as written and published yesterday, that would result in an over 2% increase of margin contribution margin in the Rx business. Given the increase of the fixed amount per Rx package of EUR 1.15, That has also not yet been reflected neither the short, long term midterm plan. Let's move to the short term outlook. We forecast the revenue growth on group level of over 10%, whereby, ORIX will contribute with over 40% to the overall growth. Adjusted EBITDA will be in the range of minus 35 to EUR 55,000,000.

And very important, including additional incremental EUR 15,000,000 of marketing spend for ORIX, which will be part of the use of proceeds of the CAT increase. Our EBITDA guidance would have improved significantly to a range of minus EUR 20,000,000 to 40,000,000 if you would not have considered and taken into consideration this additional EUR 15,000,000 of marketing spend, which would also be the basis when we started into the year 2025. And this minus EUR 20,000,000 to 40,000,000 would then compare to the minus EUR 49,000,000 negative EBITDA, which we have achieved in 2024. CapEx spend will be in the range of 35,000,000 to EUR 40,000,000, which is slightly higher than what we have seen in the year 2024. Mid term guidance, I think that's the short term guidance.

That's the first step to achieve to bring us to EBITDA breakeven and then further on to cash flow breakeven of positive free cash flow generation. The midterm guidance aims for a 20% compounded annual growth on group level, which is back end loaded. That means we do not have kind of a sequential 20% increase every year. But at the beginning, that will be lower and then will substantially increase over the years, the the the revenue growth. And the reason for that is, first of all, the cohort customer logic where we are now building the cohorts, and then they will pay off over proportionally in the years to come.

And secondly, the scaling of our service business, which is, for the time being, developing extremely fast and promising, but there you will see a substantial scaling on the top line but also on the bottom line. The average annual CapEx spend will be 35,000,000. You could now ask why how can you achieve such huge growth without increasing the absolute amount of CapEx. The reason for that is that we have already a substantial a very high automatization rate in our distribution and fulfillment, which means that our two existing warehouses in Haarlem has already right now a capacity of 30,000,000 orders on an annual basis. We are currently running at roughly 22,000,000 orders and could easily, without adding any additional capacity, increase to 50,000,000 orders a year, which covers comfortably the midterm plan and the volumes of our midterm plan.

The reason for this is that we can with internal optimization and further efficiency measures, we can basically almost double or triple the existing capacity which we have there. Therefore, CapEx goes mainly into tech investment and not very much in PP and E. In the midterm, we continue to target an EBITDA margin of around 8%. And now you will ask how do we get there and that's the reason why we have slightly adapted a slide which should look very familiar to you because we have shown that over the last years. We have slightly adapted it that we have included services given their substantially becoming more important, beat on a top line, but especially on a on a bottom line level, and to make that more transparent for you.

Based on this unit economics, which you have which you see outlined on the slides, you can then easily derive our EBITDA target margin of around 8%. We have also kind to illustrate our path to positive free cash flow. We provided you with a bridge showing the development of the operating cash flows and CapEx, including the resulting cash balances by end by starting of this year and by end of the midterm period. The waterfall chart, which you see here, implies full repayment of the outstanding 95,000,000 convertible bonds, which is expiring on September 26. As you can see, the inflection point to positive operational and free cash flow will happen in 2022.

You see in 2027, you will see operational cash flow basically equals CapEx. Having said this, that means that from 2028 onwards, DOCMORIs will generate substantial free cash flows on an ongoing basis. That's basically the delta between the green bar and the orange bar. And with this substantial free cash flow generation, which will add up and pile up, you will see you can realize that we could even think of redeeming or repaying paying back the outstanding 200,000,000 convertible bond, which will become due in 2029 by our own cash generation. But 2029, that's pretty some years to go, and we will definitely not at this point in time decide how we tackle and handle this potential repayment.

With this slide showing Doc Mori's path of sustainable and profitable growth in combination with cash generation, we would like to conclude the presentation and are now looking forward to getting your questions. Many thanks.

Conference Moderator: And the first question comes from Volker Bosse, Baader Bank. Go ahead. Your line is open.

Volker Bosse, Analyst, Baader Bank: Good morning. Thanks for taking my questions. Volker Bosse, Baader Bank. I have a couple of ones. First, an easy one is the could you please provide us with the number of new customers or total active customers at end of Q1 twenty twenty five?

The KPI which you released historically, but that did not show this morning. Second one is, I think, more for clarification. You said you want to become breakeven on an adjusted EBITDA in the course of 2026. Is it right to understand that does not necessarily mean that you will be EBITDA positive on a full year basis in 2026? Just to get your thoughts by calling it in the course of 2026, what does it mean?

And the third one would be on the growth on the top line in Eric's growth, OTC growth. Could you perhaps give us your thinking why you think that you are significant below the growth rate of your closest peer here? And last but not least, perhaps a bit of midterm, long term question on the potential ERX penetration going forward. Just to get an idea, what do you expect given the momentum would you see in your assumptions just roughly? Do you think that the ERX penetration will be at 10% in five years or at 5% in five years, just the way of yes, the magnitude of speed which you see and what you have in your underlying calculations?

Thank you very much.

Walter Hess, CEO, DocMorris AG: Yes. Thanks a lot, Volker, for the questions, and let's just jump into it. I will start. The number of new customers by quarter, we do not disclose for competitive reasons. So this is the reason why we have not showed them in details.

But what you can read in our press release is that we grew in total from 10,300,000 to 10,500,000 active customers And of course, also, let's say, a relevant part of it is for Rx customers. On the EBITDA question,

Daniel Wurst, CFO, DocMorris AG: I would just give the word to Daniel. Yes. Happy to answer that. And you read it rightly. And in the course, it gives us some leeway that we will achieve EBITDA breakeven in 2026.

And you are right, we would not have written down in the course if we we would have guided you through a full year EBITDA breakeven in 2026. But having said this, it doesn't mean that it's not the aim, but for in the midterm guidance that is as you read it in the course, that means during the year 2026, we will become EBITDA breakeven.

Walter Hess, CEO, DocMorris AG: And the third question on the Rx growth top line. And of course, as always, I can and will not comment on competitors' performance or whatever they say and show. For us, it's important, and that's also an important message that we have chosen a a strategy, which you see also in the figures, of a sustainable growth path, which brings us, as just said, in course of 2026 to EBITDA breakeven, in the course of 2027 to cash positive so that we can grow self funded. And we think that's really important for us, for the company, for the investors, and this is what we have here taken a space for our planning. And with regard to the ERx penetration, your fourth question, so you can be assured, we are fully fully convinced that the the Rx share will go to 10.

Personally, I think it will go, furthermore because there is no reason why it should stop at 10. The question is when? The question is when will be the inflection point? And coming back to the third one, we have just, for the moment, taken in consideration the current dynamics that we see also in the whole market, so not only with us in the whole market and, which already gives a highly attractive plan with high value creation, within the next years.

Volker Bosse, Analyst, Baader Bank: Thank you, Mr. Hesper. To ask again, in long term, above 10%, I totally agree, but it's a bit of I mean, there are certain milestones which you have to which have to be passed up to beyond 10% or above 10%. Could you be a bit more precise given the current momentum which you see, as you said, where we stand in three years, in five years? Just roughly any figure would be helpful.

Thank you.

Walter Hess, CEO, DocMorris AG: Yes. Of course, we have as I always also answer to these kind of questions, We have our scenarios, and we have several scenarios with different online penetration shares. But I think what what will be a a big milestone and what, in our opinion, will be a a next inflection point is the repeat script. And, the repeat script is already now, in in into the law. So the law is in force, and it's now just up to the doctors and the insurance companies to negotiate the amount for of the fee that doctors get for, full year treatment, of chronic patients.

And once this is solved, then the doctors will start to issue the repeat scripts, which means, for every chronic patient, which is well I'm gestated, sorry, for the the the German word, which is well adjusted. The doctors will issue two to four quarterly prescriptions with the first visit in the year. Doctors will get paid. And, this, of course, for us will open a huge possibility, then to to, really, offer the repeat script service, which by the way is already live in in our ecosystem, in our app. You already find it.

If you have a repeat script in Germany, you already can redeem it quarter by quarter via our app. So it's already there. And and we think this will change convenience and experience of the customer completely against what the experience was in the past.

Volker Bosse, Analyst, Baader Bank: Okay. Thank you.

Walter Hess, CEO, DocMorris AG: You're welcome.

Conference Moderator: The next question then comes from Christopher Jornan, HSBC.

Christopher Jornan, Analyst, HSBC: Coming back to the 2026 guide, I think the wording on in the course was pretty clear. It would just still and sorry to get back to the point, be interesting to hear your thought about how you think about quarterly progression because, I mean, you can signal to us now whether you would like us to assume that to be Q2, Q3 or rather a December type comment about the EBITDA just to have a bit of an indication on where the absolute number is really going to contend, whether it's going to be significant negative if you if, in theory, it could just be the last month of the last quarter in 2026, yes, just to get a bit of direction maybe. And then on the point about assuming a continuation of current trends, are you looking at the absolute growth in the Rx market? Or are you looking at your own performance? Because I think the one thing, and that's maybe a third question, I didn't quite get why the more than 40% growth wasn't part of the guidance comment.

What should we read into that? Yes, I'll leave you at that for now. Thanks.

Daniel Wurst, CFO, DocMorris AG: Let me start with your last question because that's always the one which you I remember the best. The 40% are basically part of the guidance. It's also on the slides and also in the media release, but I think it's not, let's say, in Hyphen official because then we also would have to guide on non Rx OTC and services, which we, for good reasons, are not doing and do not want to do. And therefore, knowing that the ORIX is of importance to the market, mentioned it, but not as the not as part of the official above 10% growth on group level. To the question how EBITDA breakeven will be achieved in 2026, I think that's the way to get there is clear and that there are definitely the drivers there are progression on better CM1 margin in our OTCBPC business, where we are making a big progress.

Then also the revenue and the over proportional bottom line development of Teleclinic and our other service businesses. And last but not least, I think if you would give me the confirmation that the politicians always speak to signed agreements, I. E. The coalition agreement, and that this, additional benefit will come. And then it's always the question at what point in time it will come, then I would be much more comfortable to give you an exact guidance when we will reach EBITDA breakeven.

And just you see there are so many both in the air, which we all catch, but the the the question is just when do we catch it? And that's the reason why, at this point in time, if I would tell you, be it the the second, the third, or the fourth quarter, that would not be as serious at this point in time. And therefore, I have to leave it with the in the course of of of '26. But but as I said before, the aim is definitely to do to become that rather sooner than later.

Walter Hess, CEO, DocMorris AG: Yes. And your second question on the trends, of course, it's, we we follow the market trend. And I think what you already see and what we also said, is it's it's not that we not takes it all market. But what the status in the market is still, it needs awareness. It needs education.

So it's, something that has not been seen in the German health system before that there is any digital process or anything digital in place. And it just needs time that people get aware that they they try it out. Then once they did it, they they see how convenient it is, and then the conversion will be much easier and much faster. And as I said before, the repeat script will be very important. And I think the gain of of convenience history history piece could will have a big impact.

We just we don't want, as maybe sometimes in the past, we figure in things that are not yet seen. And, that's why, yeah, even even with what we have now figured in, just to to repeat myself, it's already highly attractive and creates a high value. And, yeah, I think, maybe it just occurred that the new campaign, that we have started just underlines that. So we create additional awareness. We create additional education.

We see the figures. The KPIs from the campaign, it creates conversion so that it's it all goes in the right direction.

Christopher Jornan, Analyst, HSBC: Okay. One follow-up, if I may. On the Rx growth, is it possible for us to get an exit rate for March, maybe an early indication for April? Any more color on that would be great.

Walter Hess, CEO, DocMorris AG: Of course, not not in detail, because we cannot give competitive information. But what, what we definitely see, the the new campaign has a has a relevant impact, which is great. And of course, now we are beginning of the quarter and we are still in the old mode of doctors being remunerated, so the start of the quarter is important. And what I can say is that the start of the quarter is very good.

Daniel Wurst, CFO, DocMorris AG: And you see that on the previous slide where we little bit faded, but you see there's a substantial uptick on quarterly projection, and we had to fight against the lawyers that we can show this. This chart had to be kind of broaden the the shading and everything, but you see that there's a substantial uptick on a on a quarterly basis and which, yeah, you you can measure it, and maybe you will come to the right and then nobody you you see just per eye, if you look at it, that Q4 to Q1, there was already, I think, an uptick, but low single digit because Q4 is always a very strong quarter. And but then from Q1 to Q2, Q3 and Q4, you see an accelerating incremental sequential ORIX revenue growth.

Christopher Jornan, Analyst, HSBC: That's clear. Perfect. Thanks a lot.

Daniel Wurst, CFO, DocMorris AG: At this point in time, yes.

Conference Moderator: The next question comes from Jan Koch, Deutsche Bank.

Jan Koch, Analyst, Deutsche Bank: The first two are on the German coalition agreement. Obviously, that included a lot of positive aspects. One of them was that the future government plans to improve the framework and reimbursement for telemonitoring, telepharmacy, and video consultations, which would obviously be positive for you. Do you have any more insights in potential changes? And then secondly, it also included the phrase that they plan to standardize requirements for local and mail order pharmacies, and particularly regarding cold chain compliance and documentation.

Do you believe that the government could implement your requirements there? And then lastly, on the EUR 50,000,000 incremental RxMarketing spend you're planning, have you already spent some of that in Q1 as a run rate? Or do you now plan to sequentially increase that marketing spend?

Walter Hess, CEO, DocMorris AG: Yes. So on the first one, now we have just also read the the coalition agreement yesterday afternoon. And what we what we see, there is a lot of positive information inside for us, as you just also mentioned. And but we we do not know now for more. And also this coalition contract has finally to be signed by all the parties, So they have to go through their base, mainly the the socialists.

And we will see also who will be the the new minister of the health department, and then the work can start. But in general, we see it really as positive that telepharmacy and telemedicine for the first time ever are positively mentioned in coalition contract under unionists. The second one on the cooling, the cool chain, we already have high restrictions on cooled products. And we already do and have to follow high quality control standards. And it will be interesting to see how local pharmacies, if they have to also, hit the same standards, how they will handle it.

So from that angle, we think, we are already now on the safe side. And on the 50,000,000, additional marketing spendings,

Daniel Wurst, CFO, DocMorris AG: Daniel? I think there, the twenty fourth, the the base is is €35,000,000. We we intended to, before capital increase, increase that by another 5,000,000 to €7,000,000 Of course, before having secured the capital increase, we were very, let's say, we sold twice or three times before spending any euro for the for the marketing, and that will now be added up to this 15,000,000 incremental marketing spend. And, therefore, you could assume that the most of the 15,000,000 has not yet been spent, and they'll be spent in the in the course of the of the remaining year. But as said, that's kind of the the plan, and we are really or obvious and cautious about doing high marketing spending.

But I think compared to what we see left and right from us, that's still on a very, let's say, sustainable level and which is kind of working towards our sustainable growth, but also profitable growth in the short to midterm.

Jan Koch, Analyst, Deutsche Bank: Understood. One follow-up question, if I may, on your OTC business. The allergy season seems to be weaker, least here in Germany. Do you see the same on the ground? And how important is that business for your OTC business?

Walter Hess, CEO, DocMorris AG: Yes. So these categories, they have a smaller share of our revenues, so we don't see a major impact on it.

Daniel Wurst, CFO, DocMorris AG: Okay. Thank you.

Walter Hess, CEO, DocMorris AG: You're welcome.

Conference Moderator: The next question comes from Wes Kunz Research Partners. Please go ahead.

Wes Kunz, Analyst, Research Partners: Good morning altogether. Thanks for taking my questions. First question is regarding adjustments. Can you elaborate a little bit? Are there any in 2025 that you already know substantial?

And I see this wording of adjustments falls away in 2026, '20 '20 '7. Does that mean we won't have any more adjustments? Can we expect that? Then the next question is on your EBITDA breakeven outlook or more or less breakeven outlook in 2026. Does that also imply a reduction of marketing spend of this €95,000,000 that you have in twenty five million again?

Or is that not part of this €45,000,000 as I take the midpoint of your expectation of EBITDA in '25 improvement that you also spend less on marketing? And then the last question is on your midterm goal of 8% EBITDA. What does midterm exactly mean? Is midterm '29, '2 thousand and '30? Or can you maybe be a little bit more precise on that?

Daniel Wurst, CFO, DocMorris AG: Okay. Maybe I'll take this question. Thank you, Urs. It's a potential adjustments for 2025, and since you have spotted that right, because we know of some adjustments in '25. Unfortunately, they run against us in hyphen because the unadjusted EBITDA would be better than the adjusted one.

No. As we mentioned, we are we intend to sell to nonoperational real estate. One was the the warehouse in Holley, which we successfully did by mid March and which results in a in a positive EBITDA contribution of over 3,000,000 Swiss francs that will be adjusted to against us, I. E, we we we won't that won't be shown in the adjusted EBITDA. And then we have a second real estate here in Switzerland, where we are very far advanced in negotiations, and that would also give an adjustment positive adjustment on a reported basis, but the negative adjustment on adjusted basis of a low single digit million.

Against that, I think we there will be maybe one legal case, but I think at the end, as of today, now being aware that the year is only three months old or three and a half months old, that come could be other adjustment, but nothing that we are aware at this point of time. And you spotted that rightly. We have we are not talking about adjusted EBITDA in the midterm because I once learned that you can only put in adjusted if you have adjustments or you have to put it in if you have structural adjustments in your EBITDA reporting. And Doc Morris has no structural adjustments on the EBITDA level, for example, kind of striping out any share based compensation for management at all rounds into EBITDA. And therefore, given that I do not know any adjustments which will come in in the midterm, I cannot also state the 8% as adjusted and therefore these are clean 8% and if there would be any adjustment that would then be reported if that would be the case.

Then you ask about marketing. I think that's a good and fair question. I think just to be clear, we have no intention at all to cut marketing. The EBITDA and free cash flow will be achieved with with an ongoing marketing expenses we have factored in for $2,025,000,000 euros an additional €15,000,000 for ORIX. There will be also some additional ORIX marketing in in '26, not double digit, but mid single digit amount.

And also OTC will have, in absolute terms, additional marketing expense, but not in relative terms compared to sales. Therefore, if that would be your implied question, we do not cut down or we do not have to cut down marketing expenses to achieve EBITDA breakeven and then going forward free cash flow breakeven. That's all factored in incremental marketing expenses for ORIX and ordinary course of business marketing expenses on non ORIX, meaning OTC and services. Have I missed okay. You yeah.

I'm sorry. Your fourth question, what's the how many when is the endpoint of the midterm guidance? For me, midterm is five years. And since we are in the middle of a year, that's then, if you calculate that forward, that will be something between '29 and and '30. And I think that's how I can respond to your question.

Wes Kunz, Analyst, Research Partners: Maybe just to clarify, that means in '26, the marketing will be at least €95,000,000 in the year and the years thereafter. And is that correct?

Daniel Wurst, CFO, DocMorris AG: I do not know exactly where you have this 95,000,000 from. Will be significantly higher already in '25, and then they'll slightly head up in 2020.

Wes Kunz, Analyst, Research Partners: Okay. Thanks a lot.

Daniel Wurst, CFO, DocMorris AG: You're welcome.

Conference Moderator: Okay. So thank you, everyone, for the Q and A session. I'd now like to hand it back to you, Mr. Hess and Mr. Wust, for some closing remarks.

Walter Hess, CEO, DocMorris AG: Yes. Thanks a lot. So thanks for joining the call, taking time for us. We know that you have many other things to do as well in these days. And just to summarize, we are really happy and with some Swiss modesty also a bit proud that renowned banks have in these days underwritten our transaction.

And we can just reconfirm that we have really a fantastic team, which is very motivated and very much committed to execute this plan now. And with that, I wish you a good day and, looking forward to meeting you, in person in the next days on the roadshow. Thank you very much.

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