© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Thank you very much, and I want to welcome all of you to SHOP APOTHEKE's Earnings Release Call. I hope that after the presentation, you will agree with Jasper and me that SHOP APOTHEKE had indeed another strong quarter and we did another step on our growth trajectory.However, before we walk you through the details of our performance in Q1, I'd like to acknowledge the questions that you might have around the announcement by the gematik last week regarding the rollout of electronic prescriptions in Germany. I'm sure that this will come up during our Q&A session as well. Later in the presentation, we're going to share our thoughts regarding this announcement most importantly, however, SHOP APOTHEKE EUROPE, we will be ready for e-prescriptions when they start in earnest.Yes, well, I think this is the fourth time, we are doing this from our new headquarters here in Sevenum, and it's actually the first time we are doing this by a video webcast. Based on some feedback that we have received from you, we're going to handle our -- the Q&A session a bit differently. This time and unless we hear something different from you, we want to do this also for future webcasts, we're going to switch to questions back to audio. You'll remember in the past, we did this by via chat function, we want to do it again by audio. We want to make sure that we will be able to answer all of the questions that you have, including some follow-ups on your side.So when we get to the Q&A session, for those of you who want to ask a question, please use the dial information that was part of the invitations that you all received. When you ask the question, please turn off the audio of your webcast to avoid an echo. For everybody else, so if you don't want to ask a question, nothing changes, just stay on the webcast.So we're going to start as usual with the highlights of our performance in the first quarter followed by an update on our strategy, some of the milestones we reached in the first quarter. And as you will see, we have considerably shortened and condensed our presentation to ensure that we will have sufficient time for your questions.Well, let's have a look at the first quarter. We delivered we think another quarter of strong growth. Our top line went up by more than 22% and reached EUR 284 million. Furthermore, for the fifth quarter in a row, we delivered a positive adjusted EBITDA margin this quarter of 2.0%, which by the way is fully in line with the plans -- internal plans that we have for this year.When you look at our top line performance of 20% growth, I think that can only be fully appreciated if you consider a couple of headwinds that we experienced in the first quarter of this year. #1, of course, the Rx bonus ban had a negative impact on our Rx business. #2, the absence of a regular cough-and-cold season related to the social distancing measures and the generally higher hygiene standards negatively impacted both our Rx as well as our OTC portfolios.But to keep this in perspective, the -- overall, if you look at the OTC market in Germany for the first quarter covering both stationary pharmacies as well as the online pharmacies declined year-over-year by 17%. We could decouple ourself from this negative development. Our OTC business in Germany actually went up a little bit but again, that's the context in which we operated in the first quarter. And last not least and I think that's also obvious to all of you, Q1 last year was simply a though quarter to compare ourselves against. Despite these headwinds, again we grew by 22% and the growth was purely organic in nature.Our active customer base increased by 36% versus March last year and we are over 500,000 active customers versus the end of last year. Jasper is going to share a little bit more color around the successful placement of our convertible bond earlier this year. But in parallel to driving our top line, we didn't lose sight of executing our strategy. We continued as I already mentioned with our preparations for the e-prescription launch in Germany and we strengthened our expertise in the area of digital medication management with the acquisitions of SMARTPATIENT in January. And then just a few weeks ago with the acquisition of MEDAPP in the Netherlands.So if we look at the 2 reporting segments on the right-hand side, this time we're going to start with International segment which went up really significantly by 71% year-over-year. International segment, if you're not yet familiar with it, covers Belgium, France, Italy, and the Netherland, and all of these markets posted very significant year-over-year growth.In the DACH segment, the 3 countries also increased and increased nicely, all the product segments increased with one exception and again you're familiar with this already, our Rx business in Germany declined 17% year-over-year.Looking at the Rx development, we need to keep in mind that Q1 last year of course included March, and in March last year, many, many of the chronically ill patients in Germany rush to their doctors before the first lockdown in order to stock up on their prescription medications. So we had very strong Rx sales in March last year. March was actually one of the very -- the strongest months, Rx months in the history of SHOP APOTHEKE. Only the month of July was even stronger and again this was after the lockdown when patients went back to their doctors to renew their prescriptions.When you look at these 2 segments, it's notable that the relative share of the International segment has increased over the last 12 months. A year ago, the international segment accounted for a little bit more than 13% of our overall sales. This year in the first quarter, the International segment actually accounted or is approaching 20%. So significant growth in these international markets, and I know we don't talk too much about them or haven't talked too much about them in the past, but also going forward for the foreseeable future, we see significant growth potential in these international markets.Our active customer base reached 6.8 million or close to 7 million by the end of March. Our Net Promoter Score actually compared to Q4 last year went up by 1 point from 70 to 71 and you might have heard Jasper and me talk about this in the past. We closely monitor and more importantly we manage our Net Promoter Score because it's the best measure to assess the overall satisfaction of our customers with the end-to-end customer journey. And again you compare this to other retail verticals or if that's disclosed with some of our competitors, I think we can be really proud of the 71 that we achieved in Q1. And of course, we are not standing -- we don't want to stand still.Our average shopping basket went down by roughly EUR 1.60 versus a year ago. This is purely a mixed effect because we saw -- we had the decline in our Rx business, the Rx business has significantly higher average basket values. By the way, when you just look at the non-Rx basket year-over-year, we saw a considerable increase from a year ago. And the last remark on this chart. On the bottom right, you see that we continue to add products to our RedCare line of own-brand products, which by the way is developing nicely and according to expectations.Switching to our web traffic. The orange line shows the total number of weekly visits to all of SHOP APOTHEKE's websites. We see the January jump to above 5 million weekly visits and have stayed at this elevated level. By the way, if you look at the left-hand side, the first quarter of last year, the weekly visits, they are hovering between 3 and 4 million and in the first quarter of this year, that increased to 5 million to 6 million.I also want to talk about the blue bars just briefly. The blue bars indicate our year-over-year traffic growth across the exact same quarter -- the exact same week a year ago. And again looking at the first quarter this year with the exception of the first week of March was a little bit of anomaly. Throughout the quarter, we saw year-over-year growth in excess of our -- in excess of 40%. By the way, in March SHOP APOTHEKE's German website was the fourth most frequently visited health care related website in Germany. Not a surprise the #1 position was Robert Koch Institute and when you compare -- when you look at the pharmacy websites, SHOP APOTHEKE in the month of March was once again clearly in the tall position.Well, before I hand over to Jasper to walk you through the financials of the first quarter, a quick look at the evolution of our quarterly orders and our repeat order share. So you see the increase here of our Q1 orders have reached 5.1 million increase compared to a year ago by 23%. So that's pretty much in line with our top line growth. Our repeat order share remains in the 80% range, that's what we're aiming for. We think that is a healthy mix of loyal returning customers and new customers that we have continued to gain and want to continue to gain going forward.Jasper, handing it to you.
Yes. Okay. Thank you very much, Stefan, and good morning to everybody on the call today. On this slide, all the key P&L lines as summarized this quarter versus the same quarter last year and this quarter versus the last Q4 quarter. Before I go into the details of the numbers you're seeing here, I take one step back and just remind us of what happened last year.So last year 2020, we have the guidance at the start of the year to break even for the first time on the adjusted EBITDA level by breaking even, so around 0. And the general expectation based upon the seasonality that you always see with SHOP APOTHEKE, there was an expectation of slightly negative adjusted EBITDA margin in the first quarter of last year.But because of strong internal performance and also the arrival of COVID, we actually had a very strong quarter last year. We achieved an adjusted EBITDA margin last year of 2.1%, which was then a positive surprise to the market and to the analysts. And also a little bit later, we actually raised our full year guidance based upon that new normal. So that was last year, a high margin because of actually an absence of marketing in a couple of weeks of March because we decided to stop marketing, the cost of the amount was so high and also our efficiency was really high and where we all in the head office helped getting the orders out to bring the medicines to people in the start of the COVID period. So there was last year.So if I take this helicopter view, there you're seeing that we increased sales by 22%, that's an increase of EUR 52 million and this increase despite the headwinds from Rx bonus been very important, fewer people being ill and fewer people going the doctor. In this quarter, we actually achieved same profitability as we did last year. So that's my perspective and also compared to our internal plans, 2.0% in the first quarter is entirely online for the -- more than 2.3% expectation for the current year.So sales increase of 22%, we did this with a very strong increase of gross profit margin. Later I will show the bridge on the next slides. Selling and distribution expenses reflect that we decided to really focus on marketing and acquiring new customers, which we did successfully and also the fact that we operate 2 facilities because of the capacity.The adjusted EBITDA expenses that you see here are up versus last year 0.4%. But if you look to the right, it's actually slightly better than it was prior quarter 4. All in all, quarter 1 versus quarter 1 last year, the profit in adjusted EBITDA in absolute terms is slightly higher EUR 0.8 million, the margin is slightly lower minus EUR 0.1 million. And my last remark here is if you look at the fully loaded straightforward P&L EBITDA at the bottom, you see a slight increase of the adjustments that we had this quarter. But that's reflective of the fact that we had increased cost of our ESOP program but also because we had one-off non-operational costs related to our 2 acquisitions and issuance of new convertibles bonds. So all in all, 2.0% on track of our guidance. We made investments in growth and we achieved a better gross profit margin.Please the next slides. Yes, then a bridge of the increase of 4.1% so I start at the left. Last year already significantly above 20% for the first time which we increased this year again on top of the sourcing improvements in 2019 and 2020. This quarter again 0.3% improved conditions on everything that we source. And then you see a 1.4 percentage points, which you have also seen a significant increase to past 3 consecutive quarters which we've named net pricing and product mix.So the total portfolio prices, vouchers, price reduction, and products that we offer to the customers had an additional contribution margin of 1.4 percentage points. So this together, a solid 1.7%. And if you then look at the country and our Rx-OTC mix, that will be -- is more mathematical impact from the fact that our Rx sales are down so not that relevant. And in other, there is a positive impact from the fact that SMARTPATIENT is having gross profit on their B2B business this quarter. So that's a gross profit.If we then go to the next slide please, the setting and distribution expenses actually went up significantly compared to the prior quarter last year. Marketing because we focused on but we are strong at doing successful marketing. We saw the MPS, we saw the inflow of new customers, we saw the impressive sales growth offsetting the impact of our Rx. And we also compare this to a very low marketing number that we had last year. So year-over-year increase of 2.7 percentage points.Shipping, packaging entirely due to the fact that international is growing faster because premix actually there is no increase in the operational level that's our deliberate choice to at this moment, we decided that last summer to operate 2 facilities at the same time. Everything from international it's coming from the building I'm presenting from. So the new facility, but at the same time, everything from DACH is coming from the old facility. So we except for 6 to 9 months some inefficiency because in prioritized stability and capacity to grow. We expect in the end of the current year that we will have all orders coming from 1 facility, an automated facility. So that's the story of S&E.Next one please, so this will be for our cash. We started the year and we started the quarter with EUR 128 million of cash, which includes short-term financial assets and we ended the quarter freeing that EUR 12 million – EUR 230 million higher at EUR 341 million of cash. I start at the left positive inflow from our operations of EUR 5 million basically reflect in the positive adjusted EBITDA with in addition to that good performance or favorable working capital movements.On one hand, in quarter 1, we generally always see a favorable working capital because we start with the high year end balances. But apart from that, you also see that on a structural base we improve in our receivables and our payables position. 5 plus 25 is an inflow of EUR 30 million in the first quarter. Then we have our investments that's not only our regular investments PP&E and IT, it's also in our distribution center and it is including the cash out of the 2 acquisitions of MEDAPP and SMARTPATIENT.Financing to make a long story clear, basically, we would say this increase that you're seeing here is the result of the successful placement of our new convertible bonds. And on the convertible bonds, please remind that we had a convertible bonds where we paid in full an interest of 4.5% which is an win-win situation with the large investments for our convertible bonds. We earlier redeemed this bond past October, November 2020. So that bonds did not exist anymore and replaced successful bonds at the start of this year where we paid the coupon of EUR 0. The DACH modeling based upon the P&L, please note that because of IFRS rules on the accounting of our convertible bond is split in the value of a account option and you presumed bonds, coupon. So you will see in our P&L still interest expenses related to this bond but that's what's happened to ash flow because we don't pay it faster, it's a EUR 0 cash flow. So that's P&L operation. One concluding remark looking at this picture. I think we are in a real robust situation.And with that, Stefan, back to you.
Thank you. So let's shift gears for a quick and concise update on some of our strategy topics. You have heard of SHOP APOTHEKE's ambition to evolve from predominantly being an online retailer to becoming Europe's leading customer-centric e-pharmacy platform. We have, of course, built our strategy around this ambition, and in the first quarter, we actually reached a couple -- we achieved a couple of milestones tied to this strategy. SHOP APOTHEKE has an active presence today in 7 European countries. We're of course solidly positioned in Germany, we have market-leading positions in Austria and Belgium and in the other 4 markets we see significant growth potential going forward.The basis for our -- the growth of our customer base is of course the overall satisfaction with SHOP APOTHEKE's offering reflected in our end-to-end customer journey which is measured as I mentioned a moment ago with our Net Promoter Score of 71. We talked about the strategic milestones that we hit in the first quarter of course, and you've heard about this before, we strengthened our capabilities but also our capacity in the area of digital medication management with the acquisitions of SMARTPATIENT in Germany and MEDAPP in the Netherlands. We remain convinced that sophisticated digital medication management will be a key driver, especially in an e-Rx world.Moreover, of course, the acquisition of MEDAPP was the first step of SHOP APOTHEKE to first Rx step beyond the boundaries of Germany. In terms of our -- the transition to our new logistics and everything is on track and remains on track. In January, we started the automation of our equipment -- of our new equipment and of our processes and we are about to commence the transfer of customer orders from customers in the DACH region from the old to the facility.I hope you agree with us that our strategy remains on track. Just a couple of words about the acquisition of MEDAPP in the Netherlands and to be precise in the City of Eindhoven. The addition of fits in 3 ways to SHOP APOTHEKE. #1, we strengthen our expertise in digital medication management; #2, we continue our expansion into promising European markets; and #3, with the Netherlands, we entered the second Rx market, and actually, it's the first e-Rx market for SHOP APOTHEKE.So let me say a couple of words about our path towards e-prescriptions. Starting with the announcement from the gematik last week, which from our vantage point was reassuring in a couple of ways. #1, the gematik confirmed that it will start up the telematics infrastructure in July as it had promised. #2, it confirmed its readiness for the e-Rx mandate and that's when e-prescription are going to start in earnest on 1st of January next year and principally confirm that the mandate will indeed stay in place.And in terms of the decision to start with a test region and building a Brandenburg area, we actually think that was a smart move because based on the experience that all the market participants are going to gain, we're going to end up with a better overall user experience and that can only help with the adoption and the use of electronic prescriptions when once again e-prescriptions are going to start in January next year. We're going through in all likelihood, the process to systems, then potential errors will have been found during this pilot phase. And again the gematik will be able to offer a better overall customer experience.Based on everything that we have seen so far, we really -- we have no doubt that the gematik, they have hit all of the milestones of their admittedly tight and ambitious e-Rx roadmap. And based on everything we know today, we have no reason to doubt that this will hold true for the remaining steps as well. We at SHOP APOTHEKE, we of course, with task force which has been in place literally since 2019. We will be ready whenever a customer also a customer in the test region decides to send the prescription our way, we'll be able to receive it and we will be able to process it and to dispense the medication.Before I -- on the next chart, before I hand over again to Jasper, just a couple of words about some changes on our Supervisory Board. Jan Pyttel who have been at the helm of our Supervisory Board since the IPO, for purely personal reasons, he decided not to go for another term. Jan has really been instrumental not just with the IPO itself, but he also helped us and the management team to avoid some of the potential post-IPO pitfalls of fast growing company. So Jan, thank you very much for your leadership and we are very happy that you will stay with SHOP APOTHEKE as 1 of our major shareholders.Bjorn Soder, who has been on the Supervisory Board since the IPO, he's going to take over as the Chairperson of the Supervisory Board, Bjorn is going to ensure continuity on the Supervisory Board and we are looking forward to working with Bjorn in his new capacity. And last but not least, we are also happy to welcome Henriette, Henriette Peucker to the Supervisory Board. Henriette has a wealth of experience in media relations, in public affairs, and investment banking and we are really excited to benefit from all the insights that she is going to bring to the table. So Henriette, a warm welcome from all of us and again, we're looking forward to working closely with you in the future.Well, that's all. Handing over to Jasper again.
Yes, super. Yes, with pleasure. Here, it's the guidance that we have and actually in the -- from a relative perspective, at turbulent times, all the capital markets, all the market on the health care and COVID-related impact markets. We did not only actually deliver, according to me, a very solid or perhaps even a very strong quarter 1 results but we also feel comfortable enough that we could actually reiterate today our guidance for 2021 for the longer term in all aspects.So that means for the current year 2021, we expect to continue to grow around 20% on a full year base. The full year adjusted EBITDA growth versus last year, 2.2% to 2.3% and 2.8%. And just to remind this, around 20% just if I go back to the sales, we have always stated in our guidance that we did not expect a significant increase from e-Rx already at the start of e-Rx. We always said this, around 20% is not including the significant pick up in e-Rx in 2021 because the more important date is when it's national wide and the ambition there is the first of January 2022. As you all well know, our sales were around 20%, adjusted EBITDA between 2.3 and 2.8%. And we expect to make investments. Of course, excluding the CapEx that we did spend on the acquisitions of MEDAPP and SMARTPATIENT in quarter 1 with all other investments of around 3.5% of sales and our longer-term target profitability our business model for the future is unchanged of an EBIT margin in excess of 6%.So confirmation that our expectation at this moment is that we expect to continue to grow faster this year and that we think we are in an end-to-end situation where we combined the significant investments in growth even -- despite uptick in our margins at the same time.I would propose to go just the next slide. And another one, please. Through the Q&A I was asked to ask you, please, if you ask questions mute your webcast, otherwise they will interfere with each other. So Emma, please let us know if there's any question.
[Operator Instructions] We will now take our first question from Alexander Thiel from Jefferies.
3 questions from me, please. I will leave the margin discussions to the others. My first question would be on your underlying customer structure. Do you see a change in the customer acquisition cost and quality of customer as you can see a trend in the conversion rate from previously stable at around 9% to 7% in the first quarter? My second question is related to your current trading. Could you share some insights how the current OTC and Rx movement is evolving? And additionally, I know you don't disclose on the country level anymore, but could you give us more color on how the country's split evolved in the DACH region to get a better understanding of the underlying OTC momentum in Germany versus Austria and Switzerland? And my last one would be on the noise in the market. I mean we kind of expected some noise in the press around the rollout, but I also heard a lot of factually wrong points being pushed. I mean one of the endpoints being pushed is definitely related to your customer journey and I want to address this point directly. I mean we had some noise that you might not be able to proceed at printed QR code in your app, what's your take on that?
Shall I start?
Yes, go ahead.
Yes? Okay. Thanks a lot, Alex, on the -- appreciate a lot your questions. I'm not aware, we are not aware of any change in the behavior of our online customers. We are actually happy with the inflow of new customers. In quarter 1, it was very positive. What we are seeing is that our existing customers actually did spend somewhat less in the first quarter but we know there -- Okay. Can you still hear me, Alex, on there?
Yes. I can hear you.
Oh, you can hear me, then it's just something here. There's something happening with the webcast. I hope that people can still hear us. No, the existing customer's work were of course impacted by the absence of no flu and cold but also why unfortunately fewer people going to the doctor. But we were able to offset that with successes on each of our country's inflow of new customer. So no change there in cohort behavior that we are aware of and also no change in conversion we had of course, apart from the conversion that we've seen in Rx specifically. Current trading, yes. Also would like just to stick to our guidance of growing full year 20%. But I will nevertheless share a bit more color. It's wishful thinking that our Rx will increase significantly in the second quarter. The start of quarter 2 was comparable to the end of quarter 1, that's what we see in our Rx but we remain confident that we and our balanced portfolio are able to deliver on the full year guidance of growing around 20%. With your question on DACH and the countries, I think that one I would then give you?
Yes, go ahead.
Okay. Yes, in DACH countries indeed, I don't want to be too formal there but under the strict -- certain rules that we have, we reported 2 segments, that DACH and international, and we have achieved double-digit growth in each individual country too. So that's some color over there, but discussing more of the specific countries, that's not the language that we have talking. What you can see for the numbers and that's perhaps where you were looking for, it's mathematically of course the case. If our peak is lower 17% with our total DACH is increasing by 15% still, that means that everything but our -- in the free countries in DACH have been very successful growing. I hope it's helping you somewhat, Alex, otherwise let me know after Stefan addresses your question on noise in the markets.
Yes. Thank you. Yes, so noise in the market, there's always been a lot of noise in the market because until it's happened, there is a certain degree of uncertainty. But let's look at the facts. We just received a confirmation based on some of the noise that of course we also picked up on, that we will be able to receive electronic prescriptions from the Berlin Brandenburg test region if a customer chooses to send an electronic prescription to us. So again that will allow us to test our processes and our systems. As an online pharmacy, we will be able to participate in this test region as well. In terms of -- and I think that was at the core of your question, Alex, on the, how will we receive the electronic prescription or how will we access the prescriptions. Well, I can only refer to a public document that is available to all of us and those are the e-Rx specifications as accomplished by the Gematik. And the Gematik talks about 2 primary ways of transmitting QR code. #1 through the Gematik, the central e-Rx app from the Gematik. And secondly, and that's explicitly written in the specifications that it says that in addition, a transmission of the QR code via messenger services is permissible as well. We are all waiting of course for the directive from the Health Ministry. All I can say is based on all the context that we have, we don't foresee that there will be any significant change from what the Gematik published but again we are waiting for the final a directive from the Health Ministry. If we answer your questions, Alex.
Yes, I think that basically confirms what I've also heard from my connections I had before. And also the data point for you, I think the management of CompuGroup responsible for the part of the doctor connection, I mean they just confirmed on their earnings call that they also see no risk for the rollout and basically confirm this January on 2022.
Alex, we had the confirmation from the CompuGroup a little bit earlier. Our contacts, they said, well, the 1st of October I think was initially the requirement. It'd be really tough but they will be ready by 1st of January with their practice software.
We will now take our next question from Volker Bosse from Baader Bank.
Volker Bosse with Baader Bank. Congratulations on the great top line momentum you showed in the first quarter. I would like to ask 3 questions, and first of all, I would start with the same-day delivery progress. How many pharmacies signed up as a partner to your platform and could you give an update on same-day delivery? And the second question is on the international business. I know you don't break it down but however, could you perhaps provide some highlights, lowlights in regards to product categories or countries to get a bit more granularity in the bonus lot of international? And of these last one, the third one. Yes, I also want to come back to the centric question regards to mandatory introduction of the e-script and is that is going to happen or not, I hear the noise? There is on the one hand, there is noise about technical issues in the time to decide from outside if it's right or wrong. But I hear you and I hear the confirmation of Gematik. But however, there is also some noise about the solution which is now primed for introducing e-script is potentially or perhaps not consumer-centric enough. It was arrived by [indiscernible], the President of the company asked to come. Would you agree on that as well? And all you have to see how the process will be managed finally, how do you look at the consumer-centric way of the introduction because at the end the consumer has accepted the e-strip and as you can see on the e-strip as a contingence to it in order to drive the penetration going forward.
I'll start, Jasper, and then you will chime in. On same day -- we talked about this in the past. We will cover all of the metropolitan areas in Germany by the end of this year. Perhaps it's going to happen and actually a little bit faster but again, our objective -- the overall objective is to cover all the metro areas in Germany by the end of this year. Our concept is to work with a limited number of partner pharmacies in those metro areas because it needs to be economically viable for these partners as well. If you have a large number of partner pharmacies that will make it difficult for them to see a financial return on their activities, we are identifying in some cases potential partners are approaching us, we are selecting a couple of partner pharmacies in each metro areas. In terms of the third question and the second question, Jasper, perhaps you want to say something about in again, going back to electronic prescriptions. Again we are literally in daily contact with our e-Rx or Rx first task force with a variety of players, of market participants. We have good and solid working-level context also with the Gematik. In terms of the technical aspect, we don't foresee any major problems based on everything that we know today. So in terms of the consumer, as you described, the centricity, I think the head of the German Physician Association, he was more referring to how convenient is this first for physicians and there is one question that remains to be addressed and that's how they can digitally authorize or assign electronic prescriptions. Right now they literally have to lock in and have to electronic sign every prescription individually, and when -- I assume you have listened to interview with the head of the gematik, Markus Leyck Dieken, and just a couple of days ago, he clearly stated at the so-called [Foreign Language] to work which will allow physicians to kind of a batch process to authorize a large number of electronic prescriptions at once, that is clearly on the agenda for the gematik. And Leyck Dieken, he can be clearly stated that they know in order to ensure acceptance from the physicians of electronic prescriptions, that's something that needs to be available with the e-Rx mandates on the 1st of January next year. Jasper, International segment?
Yes. Volker, just acknowledging last sentence to what said on the intro of your script there, Stefan. Because, Volker, you've also said that potentially will be a customer-centric and offer the solution but if there's one thing that the Gematik is always focused on is that this should improve the lives of all Germans, of all customers there. And the basic journey is you can indeed receive it digitally through the Gematik app. But you can also receive with on paper with a QR code and you can just use that QR code that's on the paper. So I think the central point here is actually that is customer-centric and improvement's over there. And then to international. Thanks a lot for your question, we don't get a lot of questions on international but not that the numbers get deeper and the growth, I would also understand that we get more questions there. Product categories and things like that, that's not a level we disclose, Volker. We know -- we don't have Rx except for the fact that actually a couple of weeks ago, we started Rx in the Netherlands but that's just the start, so it's everything with Rx. Apart from that, it's a comparable portfolio that we also have in the DACH region and what's very interesting. From our perspective is that we see different the approach is that needs to apply per country. Belgium and Italy and France are very different in this perspective. Already what a pharmacy is what can you sell in a drugstore, what are you not allowed to sell in the drugstore, what can you sell in the pharmacy, and what kind of marketing and can you do. So you basically see here that we basically have the same portfolio across all the countries of our products but the proposition we have to our customers, the depth is really in a detail there to be successful. Volker, that was it from our side, I think -- otherwise, we go for the next one.
We will now take our next question Olivier Calvet from Kepler Cheuvreux.
[Foreign Language] I also appreciate the movements and your interview, probably the best of both worlds. I would take my questions one by one if that's okay. I have the first one is again on e-scripts. I just wanted to confirm amid to what you're considering, what we're hearing on the side of doctors. Do you see any risk that there could be further delay to the introduction of these scripts or not? That will be the first one.
Well, Olivier, until it just happened there is always some risk, we don't foresee this. Again based on everything we are hearing, the Health Ministry and there was a statement from the Health Ministry, but also the Gematik, they confirm they stand by that e-Rx mainly as of 1st of January. We want to have elections this year. Again, there remain some uncertainty. I don't want to hide this but that's not what we are hearing from the decision makers.
And then I was just wondering, on the customer numbers, if you could shed some light on how many customers you add in the quarter, please, not the active customers but just the customers who were new in the quarter.
Indeed. The increase of the active customers is indeed net of new customers and churn of customers. So you're asking what's the gross amount, yes.
Yes.
That's not how we look at it. There is nothing spectacularly different from all the other quarters. We can only grow our active customer base as fast as we do, and if we're able to be very sticky to our existing customers and add new ones. So the fact that we were able to increase more than 0.5 million of customers in just the first 3 months in all the changing environment as we discussed extensively, now it's a very good sign also of the fact that we were able to keep many of our existing customers. But of course, internally we look at data, on the behaviors. There's nothing to hide, but it's not the language that we talk externally to split that out. For us it's important to increase the base of loyal active customers and to make those customers really happy and on the base of that active loyal customer base, we trying to add as many new customers and to make domestic e-Rx possible.
Perhaps, just one additional thought here. When we look at the behavior of our pre-COVID cohorts and the COVID cohort, we don't see any difference. So this -- in terms of the stickiness that you were referring to, really we don't see a change in the behavior in the churn in the activation quota of the customers that we have gained since the start of the corona pandemic.
And also last year's summer, when all the terraces in the German cities were full again when it was a temporary opening up, we did not see that there was any change of new customers being not that sticky, on the contrary, I would say. Yes.
And can you shed some light on the international versus DACH customer development perhaps?
In each country, we had significant growth. We were successful adding new customers and increasing our active customer base with the exception of Rx in Germany. And it's not like one country contributed much more than another country. It's really, we were happy with the overall performance ad everything with Rx in Germany. So all the countries add new customers.
And I want to go back to Slide 10 and 11 just on the sequential development of the gross profit margin and the selling and distribution costs. Just wondering on the gross profit first, if you can help us think in terms of the quarter on quarter change in the gross margin. It's pretty good, the Rx bonus ban has a positive gross margin effect and a positive mix effect and to grow our sales in Rx in terms of sharing the mix. Anything else to flag quarter-on-quarter and I was also curious just to see how our SMARTPATIENT contributed to the gross margin development quarter-on-quarter.
Yes. I think that's insights if I tell you. There is not an EBITDA positive impact from the bonus ban. That's not there. Mathematically our gross profit margin of the product is higher if you don't give a bonus. But we also gave an opportunity to our customers that because we were not allowed to give the bonus to them, that they could choose -- that we will give it to a charity and it's a charity named CARE. At the same time, you see that our marketing Rx continues. So bottom line, there is not a positive impact in the quarter because of having no bonus to Rx, that's not the case. If we would have continued to growing Rx, that actually in euros, our bottom line would have been better. That's basically -- so I think the key message there. Then with SMARTPATIENT, I can't disclose anything on that but in total pitch according to me it's not very relevant. The main reasons why we now have incorporated to work together intentionally with SMARTPATIENT is their expertise on improving digital medication management for our customers and in making the users of their app our customers. With -- apart from that, they already have their -- our own business and the business was developing the medicine-specific apps for the pharmacy industry and they get paid for that. And that's what you see in the gross margin. So we have some sales from SMARTPATIENT. We have some contribution margin there but this was just we disclose some of the option in bridge that it was in order, it was indeed, it was helping our contribution margin over there. But the main impacts of SMARTPATIENT is going to be in the retail sales and in the retail gross margin. So that's the overall picture. And it also in this order of 1.1%, it was a major part. In the gross margin isolated. In SMARTPATIENT, it was a major part.
And then, Slide 11. Again it's the same question. Last year, you stopped marketing for about a month in Q1. This year definitely was not the case. What about quarter-on-quarter Q4 '20 to Q4 -- to Q1 '21, what's happened there?
Generally, if you look at actual uptick and you see that in quarter 1, our marketing as a percentage of sales is higher than the fourth quarter. It's generally the quarter where we focus a lot also because of seasonality and customer behavior on acquiring new customers. That was this year also the case. We will also continue probably within the balance -- within our guidance to focus as much on growth as possible and in quarter 4, you actually saw that our sales growth was much more which was making our -- there was lot of the negative Rx which is also making the percentage of quarter 4 look better compared to quarter 1. But there was nothing happening. This is actually -- now we did what we are really good at. We did focus a lot marketing in quarter 1 and we are continuing to do that. And lastly, we had a couple of weeks without marketing not an entire month. Olivier, a lot of people are waiting, can you limit to your -- to one last question, please. Your very best question.
Yes, the very last on Rx. So in Q2, do you expect the continuation of the trends that you've seen in Q1 or something more towards the low single digits?
Well, it's too early but we see a continuation of what we have seen in the first quarter. Again, we stated that there is a negative impact from the Rx bonus ban, which different topic, we remain convinced is a violation of European law. But it has an impact on our Rx business. Yes, we leave it at this.
We will now take our next question from Alvira Rao from Barclays.
I've got 3, and hopefully, I'm not beating a dead horse, but you talked about 2 ways of transmitting the QR code free scripts. And regarding the Central e-script up in particular, based on your conversations with those close to the matter, do you have clarity on whether and how third-party apps will be able to connect to the Gematik app directly? And I mean I realize it's not totally clear yet, but is there a date by which this should become quite clear? Second, do you have a sense of what proportion of doctors practices and physical pharmacies already have the technology needed to actually implement e-script and how can we get comfortable that they'll be ready for the 2022 deadline? And then, lastly a bit of boring question. What kind of net finance cost do you expect for the full year, both cash and non-cash?
Stefan, I take the boring one then and you the first 2.
Yes, okay.
Go ahead. Let me start on the financing. The key of the financing cost of quarter 1, Alvira, is that identical for the cost in quarter 1. So I don't know if you can extrapolate it one-on-one. But it is just what it is. And whilst we included in its financing, but it's what I just said. The accounting treatments also of our convertible bonds like you're seeing here which is non-cash but which is in our P&L, that's one part of the financing expenses. Then there is the fact that we -- because of our cash balances, we pay a negative interest, that's in it with also our operating leases of the Herzenswunsche particularly our facilities here and the operating leases you account for and depreciation and in interest expenses as well. So that's those are main elements that are in net financing. If I think about it, I think that will be comparable going quarters to what you saw in quarter 1, yes.
Okay. We are in terms of the connection to the Gematik app and it was a statement from the Gematik in the past that so-called value apps, they will be able to connect. At this point of time, it was supposed to happen in relatively short order but we don't have a firm date yet. More important for us is, again, when a 90% of -- initially 90% of the prescription of the electronic prescriptions, once that physician has uploaded the prescription to the telematics infrastructure, meaning the cloud, this physician will print out a copy of this electronic prescription and the most important piece of information on the printout will be the QR code. And we think the major way to transmit the QR code to a pharmacy or his or her choice will be either via messenger apps or also via for example, the apps of the various service providers, including SHOP APOTHEKE. Again, we are all waiting for further clarity -- definitive clarity with the -- directly from the Health Ministry. But that's our understanding right now. In terms of readiness, again, there are 2 major players of course. We have to the pharmacies, I don't foresee any issue that there are not going to be ready well in advance of the e-Rx mandate coming into effect. In terms of the physicians, again, that was a reassuring statement that we heard from Alexander. We had heard it as I mentioned, some time ago already that the largest provider of physician software will be ready for the 1st January. This year, we don't -- if there is a software component, again, that is the physician software. Again, we get more and more confident. Probably some small providers might not be ready but the vast majority of physicians should be covered. There is a hardware component that connect us that's based on what we have felt so far that should not be an issue. So again on the critical path is brought the software component but it looks promising.
We will now take our next question from Gerhard Orgonas from Berenberg.
Also, 2 questions, respect to the e-Rx piece. First of all, do you have an expectation when the directive from the Health Ministry should come?
Well, yes. It is all one and the same that this directive will have to be notified to the European Commission. It's supposed to come into effect on the 1st of October. Again based on everything that we learned so far, so really in order to be able to notify the European Commission, it should come within a very short period of time. We don't have a firm date, as you know that was supposed to come much, much earlier but now they're really under the gun because they need to adhere to the notification period.
Okay. And if I hear you correctly, what you expect in the first step is that vast majority of e-prescriptions will the printed into a PDF, then the QR code, and then I would guess that in your app you would have a scan function where you could scan this QR code and that's how people would send it to you?
Again, I want to leave it a little bit open. There will be alternative means according to the Gematik specifications of transmitting this beyond the central Gematik app.
I'm just wondering, I guess the rumors about the Gematik app itself being an app that you don't need anything else. So in real life, how would it look like on the mobile phone? Do I have the and the SHOP APOTHEKE app anyway to transfer the QR code between the 2 or does it have system out in print and then go back into SHOP APOTHEKE? Any news may be about the restriction of you being allowed to scan it in because there could be fraud, I mean anybody could scan in the QR code, so I think that that's manageable.
Yes, everybody could scan in the QR code but the prescription can only be mailed to the person that's indicated, that's included in the electronic prescription. You might have seen what the print is going to look like, similar to the paper prescription today of course that's remained is the address, we as the service provider, as the pharmacy, it doesn't matter who the QR code to us because you have some patients that might not be able to handle the smartphone, the QR code via the smartphone. So a relative might do it for them, but we can only mail the prescription to the individual that's included in the electronic prescription. Again, the assessment that initially 90% or more of the prescriptions will be printed out. Well, meaning that the patient will initially not excess these prescriptions through the Gematik that is something, that is an estimate from the gematik.I think that's it. So thank you very much for your interest in SHOP APOTHEKE. Again, hopefully, you agree with Jasper and with me. We had a strong quarter. This is a very interesting and exciting time for all of us because something that has been in the making in Germany literally for almost 20 years is coming to fruition within the foreseeable future, we're very excited about this. We will be ready for electronic prescriptions.And again, we don't want new side of this, this will be an important growth driver for SHOP APOTHEKE but there is much more for SHOP APOTHEKE being a customer-centric e-pharmacy and again, we've seen some interesting, exciting developments outside of our rigs and outside of Germany in the last quarter and I'm sure we'll be able to share more exciting news with you at our next call. And I think that's in early August, Jasper.
Yes, absolutely, yes. After summer.
Thanks, everybody, and you know how to find us if you have more questions.
Yes, thanks for those.
Okay. Bye-bye.